City of Manhattan Beach v. Superior Court

• Decision Date: 25 April 1996
• Docket Number: S032449,Nos. S032448,s. S032448
• Citation: 914 P.2d 160,52 Cal.Rptr.2d 82,13 Cal.4th 232
• Court: California Supreme Court
• Parties: , 914 P.2d 160, 96 Cal. Daily Op. Serv. 2884, 96 Daily Journal D.A.R. 4783 CITY OF MANHATTAN BEACH, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; John P. FARQUHAR et al., Real Parties in Interest. ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; John P. FARQUHAR et al., Real Parties in Interest.

Page 82

52 Cal.Rptr.2d 82

13 Cal.4th 232, 914 P.2d 160, 96 Cal. Daily Op. Serv. 2884,

96 Daily Journal D.A.R. 4783

CITY OF MANHATTAN BEACH, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent;

John P. FARQUHAR et al., Real Parties in Interest.

ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent;

John P. FARQUHAR et al., Real Parties in Interest.

Nos. S032448, S032449.

Supreme Court of California.

April 25, 1996.

Rehearing Denied June 19, 1996.

Hill, Farrer & Burrill, William M. Biting, Benjamin B. Salvaty, San Marino, Dean E. Dennis, Los Angeles, Buchalter, Nemer, Fields & Younger and Marcus M. Kaufman, for Petitioner Atchison, Topeka and Santa Fe Railway Company.

No appearance for Respondent.

Sullivan, Workman & Dee, Roger M. Sullivan and Joseph S. Dzida, Los Angeles, for Real Parties in Interest.

ARABIAN, Justice. ^*

Although the era is long past when railroads dominated the landscape as well as the direction of this country's industrial, social, and political fortunes, their presence continues in legal struggles over control and ownership of property previously devoted to rail service. Typically, as in this case, the dispute concerns whether the railroad company acquired only an easement in the land over which its tracks once ran or a fee simple interest it can rightfully convey to others for non-railroad uses. Determining the nature of its tenure requires, in the first instance, careful examination of the language in the original conveyance. If the intent of the parties is clear, that will control. If not, extrinsic evidence may be considered to the extent it informs that intent.

Here, the terms of the deed in question are too ambiguous to conclude with certainty whether the grantor and grantee, predecessors in interest of those now before this court, intended the railroad company take the property in fee simple or acquire only an easement. Resorting to extrinsic evidence of the grantor's conduct subsequent to the conveyance, we find sufficient indicia that in deeding the property it meant to dispose of its entire interest. Accordingly, the Atchison, Topeka and Santa Fe Railway Company had full legal title to convey to the City of Manhattan Beach, which thus has no obligation to compensate the real parties in interest through eminent domain proceedings, condemnation, or otherwise.

I

This action seeking to quiet title, and for inverse condemnation, ejectment, and damages commenced almost a decade ago. The predicate facts, however, date back more than a century to 1887 when the Redondo Land Company (the RLC) acquired from Charles Silent approximately 4,500 acres of Southern California property situated primarily in what is now the City of Manhattan Beach (the City). To finance the sale, Silent took back a substantial note secured by a mortgage. Shortly thereafter in 1888, the RLC, predecessor in interest to all but two real parties in interest (the heirs), ¹ conveyed a portion of the property to the Redondo Beach Railway Company (the railway), predecessor in interest to the Atchison, Topeka The deed memorializing the transaction between the parties provided in part that the RLC and Charles Silent "for and in consideration of the sum of one dollar" "remise[d], release[d] and quit-claim[ed]" to the railway "the right of way for the construction, maintenance and operation of a Steam Railroad, upon[,] over and along the following tract and parcel of land, ... and described as follows, to wit, Being a strip of land of the uniform width of 100 feet, 50 feet thereof being on each side of and parallel to the center line of location of The Redondo Division of the California Central Railway, over and through the lands of grantors...." The document then set forth a detailed metes and bounds description of a several-mile course meandering through what would become Manhattan Beach and portions of Hermosa Beach. The total acreage constituted "an area of 32.46 acres of land, more or less." The grantors reserved and excepted "a space of 200 feet in length lying next adjacent to and midway between the ends of the side track now constructed upon said right of way and extending to the next adjacent boundary line of said right of way for the full length of said 200 feet."

[914 P.2d 163] and Santa Fe Railway Company (Santa Fe). The current controversy concerns the nature of the interest passed by that conveyance.

Certain conditions attached to "this grant": "that the side track now constructed upon said right of way shall be maintained and shall be used as a station to receive and discharge freight; that such convenient crossings, not less than four shall be made and maintained with sufficient cattle guards at such point on said right of way as may be necessary for the full use and enjoyment of the lands adjoining said right of way, and so as to give access to and from the lands on either side thereof; that such culverts shall be constructed and maintained as may be necessary for the free passage of water across the same, and so located that the lands adjacent to said right of way will not be flooded on account of the roadbed of said railroad forming an embankment...." Noncompliance with any of these conditions would result in a reversion to the grantors and their successors in interest.

The deed concluded with a habendum clause: "To have and to hold all and singular the rights aforesaid unto [the railway] and its assigns and successors forever, subject however to and upon the terms and conditions aforesaid." Both the president of the RLC and Charles Silent signed as grantors.

During the course of its existence over the next 15 years, the RLC entered into various transactions for the sale, option for sale, or partition of its remaining property, which will be discussed in greater detail as they become relevant. In 1897, the RLC, the railway, and one Parvin Wright, who held an option on 463 acres, signed an unrecorded indenture abrogating the reversionary conditions in the original deed as long as the railway maintained a station at Potencia, between Los Angeles and Redondo Beach. Unlike the earlier conditions, maintenance of the station did not include a reverter provision.

In 1896, the stockholders initiated partition and distribution of property and other interests of the corporation. To effectuate the process, the RLC conveyed the remainder of its holdings to a trustee, who in turn distributed the land to the stockholders through deeds identifying each parcel by lot number. In 1901, the RLC also instituted a quiet title action to resolve issues of title concerning Parvin Wright's option and claims by heirs of former Spanish and Mexican grantees. By 1903, RLC had concluded its business and formalized its corporate dissolution through judicial proceedings. The resulting order reflected a finding that "all of the property of said corporation has been disposed of." ²

The railway and its successors, the last of which was Santa Fe, continued operations until 1982, when all rail activity ceased. Santa Fe leased the property to the City in that year and eventually sold it in 1986. The strip now functions as a transportation corridor through the City with a median park and In 1987, the heirs instituted this action against the City and Santa Fe by which they sought to exercise powers of termination allegedly created by the 1888 deed due to abandonment of rail services, to quiet title to the property, and to claim damages for inverse condemnation. The trial court trifurcated the proceedings, first determining the nature of the estate granted by the RLC in the original deed and reserving questions of heirship and damages. In the first phase, the court concluded the RLC had not conveyed a fee simple interest but only an easement, which terminated when Santa Fe discontinued railroad operations. It further found Santa Fe as well as the City liable to the heirs for inverse condemnation.

[914 P.2d 164] jogging path lying between two major north-south thoroughfares.

The Court of Appeal summarily denied writ review. On petition for review by the City and Santa Fe, this court transferred the matter with directions to issue an alternative writ. The Court of Appeal upheld the trial court's findings as to both title and liability. With respect to title, the court agreed the terms of the deed itself adequately established the intent of the original parties to convey an easement only; it found relevant extrinsic evidence also supported that conclusion. On the question of Santa Fe's liability, the court reasoned it could be held responsible in damages under a park acquisition agreement entered into in 1986 by which it quitclaimed its interest to the City.

II

We begin our analysis of the parties' legal claims with some of the basic principles of law governing review in these cases:

With deeds as any other contracts, "[t]he primary object of all interpretation is to ascertain and carry out the intention of the parties. [Citations.] All the rules of interpretation must be considered and each given its proper weight, where necessary, in order to arrive at the true effect of the instrument. [Citation.]" (Burnett v. Piercy (1906) 149 Cal. 178, 189, 86 P. 603; Civ. Code, § 1066; see Civ. Code, § 1635 et seq.; Code Civ. Proc., § 1856 et seq.) "Extrinsic evidence is 'admissible to interpret the instrument, but not to give it a meaning to which it is not susceptible' [citations], and it is the instrument itself that must be given effect. [Citations.] It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence. Accordingly, 'An appellate court is not bound by a construction of the contract based solely upon the terms of the written instrument without the aid of evidence [citations], where there is no conflict in the evidence [citations], or a determination has been...