Opinion ID: 901858
Heading Depth: 1
Heading Rank: 4

Heading: The 1890 Deeds with Reversionary Language

Text: [¶ 21.] The parties stipulated that the 1890 deeds conveyed to FEMV fee simple title in the disputed property. [15] They disagree, however, on whether the conveyances were of fee simple title subject to conditions subsequent or fee simple determinable with possibilities of reverter. The circuit court did not specifically identify which sort of estate the conveyances transferred. Rather, the court called the grants a right of way and held that upon proof of abandonment the plaintiffs would regain ownership of the property. [¶ 22.] Construction of a deed is a question of law. See Fisher v. Carolina S. R.R., 141 N.C.App. 73, 539 S.E.2d 337, 340 (2000); Ray v. King County, 120 Wash.App. 564, 86 P.3d 183, 186 (2004); see also Brown v. Hodges, 232 N.C. 537, 61 S.E.2d 603, 606 (1950). We examine the instrument as a whole to determine what type of conveyance was intended. Tripp v. F & K Assam Family, LLC, 2008 SD 78, ¶ 9, 755 N.W.2d 106, 109 (citing Meyerink v. Nw. Pub. Serv. Co., 391 N.W.2d 180, 182 (S.D.1986) (citing Nw. Realty Co. v. Jacobs, 273 N.W.2d 141, 144-45 (S.D. 1978))); see also Chevy Chase Land Co. v. United States, 355 Md. 110, 733 A.2d 1055, 1062 (1999). If the language of a deed leaves doubt on the intention of the parties, we will consider all the attendant circumstances existing at the time of execution. Tripp, 2008 SD 78, ¶ 9, 755 N.W.2d at 109 (citing Meyerink, 391 N.W.2d at 182 (citing Nw. Realty Co., 273 N.W.2d at 145)). [¶ 23.] A conveyance that creates a fee simple estate subject to a condition subsequent provides the grantor, heirs, and successors a power to terminate upon the happening of the stated event, i.e., when a condition is broken. Georgia, Ashburn, Sylvester & Camilla Ry. Co. v. Johnson, 226 Ga. 358, 174 S.E.2d 895, 897 (1970); Reichard v. Chicago, B. & Q.R. Co., 231 Iowa 563, 1 N.W.2d 721, 726-27 (Iowa 1942) (discussing estates in fee simple determinable and subject to conditions subsequent); Neb. Dept. of Roads v. Union Pacific R.R. Co., 241 Neb. 675, 490 N.W.2d 461, 464 (1992) (same); Lehigh Valley R.R. Co. v. Chapman, 35 N.J. 177, 171 A.2d 653, 657 (N.J.1961) (same, but land was taken by condemnation); Oklahoma City v. Local Fed. Sav. & Loan Ass'n, 192 Okla. 188, 134 P.2d 565, 569-70 (1943); see also Restatement (First) of Property § 45 (1936) (updated 2009); 28 Am.Jur.2d Estates § 166 (2009). [16] Language conveying this estate often uses terms such as upon express condition that, upon condition that, or provided that. Reichard, 1 N.W.2d at 727. [¶ 24.] In contrast, a fee simple determinable estate automatically expires upon the occurrence of the stated event. Georgia, Ashburn, Sylvester & Camilla Ry. Co., 174 S.E.2d at 897; Reichard, 1 N.W.2d at 727; Neb. Dept. of Roads, 490 N.W.2d at 464; Lehigh Valley R.R. Co., 171 A.2d at 657; Oklahoma City, 134 P.2d at 569-70; Oregon Dept. of Transp. v. Tolke, 36 Or.App. 751, 586 P.2d 791, 795 (1978); see also Restatement (First) of Property § 44 (1936) (updated 2009); 28 Am.Jur.2d Estates § 26 (2009). Classic terms creating a fee simple determinable estate are while, so long as, during, or until. Reichard, 1 N.W.2d at 727; Thypin v. Magner, 28 N.Y.S.2d 262, 263-64 (App.Term 1941). Courts have also noted that a fee simple determinable estate can be created without traditional terms when the purpose of the conveyance is limited and provides that upon the happening of a stated event the estate will revert to the grantor. Pfeffer, 4 Ill. Dec. 740, 360 N.E.2d at 1120 (determinable fee when defeasance language contains language of limitation); Oregon Dept. of Transp., 586 P.2d at 795. [¶ 25.] Although the distinguishing characteristics of these two estates are easily expressed and universally recognized, interpreting such language in deeds has led to conflicting holdings. See School Dist. No. Six v. Russell, 156 Colo. 75, 396 P.2d 929, 931 (1964) (noting confusion); Reichard, 1 N.W.2d at 727 (same). The confusion often arises because conveyances tend to employ terms and provisions common to both estates. Adding to the complexity in this case is the fact that the 1890 deeds involve a unique interest, railroad property. Nonetheless, our duty is to determine the intent of the parties from the documents as a whole. As one court remarked, Little importance is now attached to the use of particular or formal words in the creation of these estates. . . . Such arbitrary distinctions smack too much of the over-refined technicalities of early English real property law. To give importance to it is to `pay tithe of mint and anise and cummin, and omit the weightier matters of the law.' Reichard, 1 N.W.2d at 727 (citation omitted). [¶ 26.] Here, we have six 1890 deeds executed by private land owners to FEMV. [17] Each deed contains a granting and habendum clause. A granting clause makes up [t]he words that transfer an interest in a deed or other instrument, while the habendum clause defines the extent of the interest being granted and any conditions affecting the grant. Black's Law Dictionary (8th ed. 2004). In the granting clauses of all six deeds, the grantors indicate that they desire the construction of the railroad, and therefore, have given, granted, bargained, sold, conveyed, and confirmed certain property to the grantee, the railroad. [18] The stated consideration ranges from $40, $82, $100, $150, $155, $249, $399, to $420. Four deeds are entitled Warranty Deed, one, a Right of way deed, and one, a Deed. [19] All six deeds convey a strip of land, described in metes and bounds. However, the precise location of the strip is to be determined based on where the railroad is or will be located, and the conveyance is to be over and across the land described. [20] Finally, the habendum clause of each deed provides that if the railroad shall abandon said road the land conveyed shall revert to the grantors, their heirs, successors, and assigns. [21] [¶ 27.] Beyond these similarities, however, three deeds can be distinguished because they contain language in the granting and habendum clauses specifically limiting the conveyance for railroad purposes. [22] As a result of this difference, we analyze the six deeds using two sub categories: (A) those without limiting language and (B) those with limiting language.
[¶ 28.] The 1890 deeds from Morgan, Norine, and Pettit grant certain property to FEMV without any provision in the granting or habendum clauses limiting the use of the conveyed land. Specifically, the granting clauses convey the entire estates without exceptions, reservations, or specifications on the use of the land. What we must determine, therefore, is whether the reversionary language in the habendum clauses, providing that if the railroad abandons its road, all right, title and interest in the conveyed land shall revert to the grantors, their heirs and assigns, creates fee simple determinable estates or fee simple estates subject to a condition subsequent. [¶ 29.] Based on our review of the language of these deeds and the law related to determinable and conditional estates, we conclude that the parties intended to convey fee simple title subject to a condition subsequent. Although the grantors included reversionary language, the grantors in no way limited the use of the land conveyed for any particular purposes. There are also no restrictions, limitations, or reservations in the habendum clauses. [¶ 30.] Courts faced with similar language common to both estates  provided that (condition subsequent) and shall revert (determinable fee)  have held that a fee simple estate subject to a condition subsequent was intended. See Neb. Dept. of Roads, 490 N.W.2d at 466-67; Oklahoma City, 134 P.2d at 569-70; see also Concord & Bay Point Land Co. v. City of Concord, 229 Cal.App.3d 289, 280 Cal.Rptr. 623, 625-26 (1991) (conveyance upon the following terms and conditions was a fee simple subject to conditions subsequent despite existence of shall revert); Hannah v. Southern Pac. R. Co., 48 Cal.App. 517, 192 P. 304, 306 (1920); Mouat v. Seattle L.S. & E. Ry. Co., 16 Wash. 84, 47 P. 233, 234 (1896); see also Restatement (First) of Property § 45 cmt. m (1936) (updated 2009). These courts reach this conclusion, in part, because the language employed by the grantors only imposed conditions subject to penalty of forfeiture if breached and did not otherwise limit the purpose of the conveyance. The courts also noted that the mere existence of shall revert is insufficient to create a fee simple determinable estate. Neb. Dept. of Roads, 490 N.W.2d at 466 (granting clause and habendum clause do not limit the estate); see also Concord & Bay Point Land Co., 280 Cal.Rptr. at 626 (conveyance did not limit for any purpose in the granting clause); Oklahoma City, 134 P.2d at 570. [23] [¶ 31.] Because we conclude that the deeds without limiting language conveyed fee simple estates subject to a condition subsequent, we must now determine if any of the stated conditions have been breached. The only condition implicated in the Morgan, Norine, and Pettit Deeds is whether FEMV, its successors or assigns, shall abandon said road. . . . (Emphasis added.) NHRRA does not dispute that CNW ceased service of the railroad, but it contends that CNW and its successors in interest have never abandoned the road, in part, because CNW sold the property to the State. [24] [¶ 32.] To properly consider what actions can cause a breach of a condition, we do not interpret the word road in isolation. Rather, we consider all the words used to create the condition. The conditional sentence states, Provided, That if said railroad shall not be located and graded within ten years from the date hereof, or if at any time after said railroad shall have been constructed, the said party of the second part, its successors or assigns, shall abandon said road, or the route thereof shall be changed so as not to be continued over said premises the land hereby conveyed, and all rights in and to the same, shall revert to the said parties of the first part their successors and assigns. (Emphasis added.) Under this language, a breach can occur by less action than that required for complete abandonment of the property. The conditional sentence first requires that the railroad be constructed in ten years. It then states that after the railroad is constructed the road shall not be abandoned, or re-routed. Use of the terms road or railroad are not synonymous with property or interest. [¶ 33.] Therefore, while we agree with NHRRA that CNW's attempt to sell its interest in the property to the State exhibited an intent contrary to abandonment of the property, the question here is not whether CNW, its successors or assigns, abandoned the property. Rather, we must decide whether CNW's actions have breached the condition in the deeds that the road not be abandoned. Based on our review of the stipulated facts, when CNW removed all tracks and facilities in 1970, and no railroad service has since been conducted on that property, the condition was breached. [¶ 34.] NHRRA next claims that if a breach has occurred, plaintiffs' right of re-entry is barred by the Marketable Title Act, SDCL 43-30-3, and the statute of limitations, SDCL 15-3-3. First, the Marketable Title Act does not apply to cause the expiration of conditions subsequent. See SDCL 43-30-12 (This chapter shall not be applied to bar . . . conditions subsequent in any deed.). Second, unlike other states, South Dakota has no statute of limitations specifically related to breaches of conditions subsequent. See Cal.Civ.Code 885.050; 735 ILCS 5/13-102 (Illinois); MGLA 260 § 31A (Massachusetts); MD Code Real Prop. 6-103 (Maryland); MSA 500.20 (Minnesota); NY RP ACT & PRO 612; Va.Code Ann. 8.01-255.1. Moreover, SDCL 15-3-3 does not bar a claim for re-entry upon a breach of a condition subsequent. Rather, it provides the statutory time for a landowner to take land back from someone attempting to establish adverse possession. [25] Rotenberger v. Burghduff, 2007 SD 19, ¶ 18, 729 N.W.2d 175, 180-81. [¶ 35.] When NHRRA obtained title to the property described in these deeds, it became the owner in fee subject to the conditions stated. See In re Opening and Extending of N. Conduit Ave., 262 A.D. 70, 27 N.Y.S.2d 841, 843-44 (1941). Because CNW breached a stated condition in 1970, the heirs, successors, and assigns of the original grantors (plaintiffs) have the power to terminate the estate. NHRRA has not provided any reason why plaintiffs' quiet title suit cannot be maintained. [26] Therefore, the court did not err when it quieted title against NHRRA to the property in the Morgan, Norine, and Pettit Deeds.
[¶ 36.] Like the deeds without limiting language, the 1890 deeds from Burger, Grenfell, and Newman give, grant, bargain, sell, convey and confirm to FEMV certain property. Also similar is the language in the habendum clauses providing that if said railroad shall not be located and graded within two years from the date hereof or if at any time after said railroad shall have been constructed, [FEMV], its successors or assigns shall abandon said road, or the route thereof shall be changed so as to not continue of said premises, the land hereby conveyed, and all rights in and to the same shall revert to the said parties of the first part their successors and assigns. The significant difference, however, is the presence of limiting language in both the granting and habendum clauses of these three deeds: for the purpose of constructing a railroad thereon and for all uses and purposes connected with the construction and use of said railroad. . . . (granting clause) and for any and all uses and purposes connected with the construction, preservation, occupation and enjoyment of said railroad (habendum clause). [¶ 37.] Although the use of provided that is indicative of a conditional estate, the language of these deeds in whole persuades us that the parties intended to convey fee simple determinable estates. Unlike the Morgan, Pettit, and Norine Deeds, these deeds do more than impose conditions subject to penalty of forfeiture for a breach. These deeds expressly limit and restrict the conveyance for the purpose of railroad use. Thus, while the deeds do not employ traditional determinable fee language (so long as, during, and while), the presence of limiting language and the clause demanding automatic reversion reflects an intent to create fee simple determinable estates. [27] See Barnes v. Winford, 833 P.2d 756, 757 (Colo.Ct.App.1991); Georgia, Ashburn, Sylvester & Camilla Ry. Co., 174 S.E.2d at 897; Reichard, 1 N.W.2d at 728-29; Oregon Dept. of Transp., 586 P.2d at 795-96. [¶ 38.] A fee simple determinable estate automatically expires upon the occurrence of the stated event, requiring no legal action to vest title in the grantors, their heirs, successors, and assigns. See Herr v. Herr, 957 A.2d 1280, 1285-87 (Pa.Super.Ct.2008). In this case, the question whether a triggering event has caused the estates to expire implicates the same review conducted on whether the condition subsequent was breached in the Morgan, Norine, and Pettit Deeds. Just as we held that the condition was breached in those deeds, we conclude that the triggering event in the Burger, Grenfell, and Newman Deeds occurred in 1970, when CNW removed all its tracks and facilities and did not again use the road for railroad purposes. The occurrence of the stated event in 1970 caused the automatic expiration of the estate, and all title and interest in the property vested in the grantors, their heirs, successors, and assigns. [28] The court did not err when it quieted title against NHRRA to this property.