Concord & Bay Point Land Co. v. City of Concord

• Decision Date: 25 January 1991
• Docket Number: No. A049035,A049035
• Citation: 280 Cal.Rptr. 623,229 Cal.App.3d 289
• Court: California Court of Appeals Court of Appeals
• Parties: CONCORD AND BAY POINT LAND COMPANY et al., Cross-Complainants and Appellants, v. CITY OF CONCORD, Cross-Defendant and Respondent.

Page 623

280 Cal.Rptr. 623

229 Cal.App.3d 289

CONCORD AND BAY POINT LAND COMPANY et al., Cross-Complainants and Appellants, v. CITY OF CONCORD, Cross-Defendant and Respondent.

No. A049035.

Court of Appeal, First District, Division 5, California.

Jan. 25, 1991.

Kevin D. Lally, Cox, Garrett, Nagle & Lally, Martinez, for cross-complainants and appellants.

Kenneth C. Scheidig, City Atty., Gary Rinehart, Oakland, for cross-defendant and respondent.

LOW, Presiding Judge.

This appeal is from summary judgment deciding title to a parcel of land in Concord in favor of the City of Concord (City) and against the Concord and Bay Point Land Company. (C & BPL). ¹ We affirm.

C & BPL was incorporated in California in 1910. In 1911 C & BPL, for a consideration of $10, conveyed interests in three parcels of land to the Oakland and Antioch Railway, which was later absorbed by the Sacramento Northern Railway (the Railway). This litigation concerns only a portion of "Parcel Three." The deed provides:

"THIS INDENTURE, Made this 17th day of February, in the year 1911, A.D.,

"BY and BETWEEN CONCORD AND BAY POINT LAND CO., a corporation, ... party of the first part, and OAKLAND & ANTIOCH RAILWAY, ... party of the second part.

"WITNESSETH:

"That the said party of the first part, for and in consideration of the sum of ten dollars ($10.00), lawful money of the United States, to it in hand paid by the said party of the second part, the receipt whereof is hereby acknowledged, has granted, bargained, sold, conveyed and confirmed, and by these presents does grant, bargain, sell, convey and confirm, unto the said party of the second part, and to its successors and assigns forever, that certain property situate in the County of Contra Costa, State of California, and being more particularly described as follows, viz:--

"......

"ALSO,--PARCEL THREE:

"A strip of land sixty (60) feet in width through the property of the said party of the first part, situate in the County of Contra Costa, State of California, being thirty (30) feet on each side of a center line described as follows, viz:

"[Description omitted.]

"......

"TO HAVE AND TO HOLD, all and singular, the said premises, together with the appurtenances, unto the said party of the second part, and to its successors and assigns forever, upon the following terms and conditions.

"......

"PARCEL THREE--is to be used for a right-of-way for an electric railroad.

"And upon the failure of said Railway Company to use the said property for the purposes designated, all right, title and interest hereby conveyed shall revert to the Concord and Bay Point Land Co."

Between 1911 and 1941 the property was used for the route of an electric railroad. In 1941 passenger service was discontinued. In 1957 the freight service was converted from electric to diesel locomotives. In 1973 the Railway applied to the ICC to abandon the line; permission to abandon was granted in 1974. Most rails and ties were removed from the property in 1975.

The Railway sold the subject parcel, along with other portions of the rail route, to the City in 1974. In 1975 the City agreed to allow AC Transit to use part of the property as a bus storage yard. The property was used for storage of AC Transit buses from 1975 to September 30, 1983. In 1985 the City leased the storage yard to the Blue Devils Parent Association, a private group, for storage of buses, trucks and equipment.

C & BPL was suspended from doing business in California in 1918, for failure to pay license taxes. In 1960, its 50-year corporate charter expired. In 1986 the executor of the estate of one of C & BPL's principals obtained a limited certificate of corporate revival for the purpose of winding up C & BPL's affairs. On December 17, 1987, C & BPL served the City with a "Notice of Exercise of Power of Termination," demanding possession and reconveyance of the subject property. The City filed a quiet title action September 9, 1988, and C & BPL filed its cross-complaint November 22, 1988.

I

The first question to be answered is whether the 1911 deed conveyed a fee on condition subsequent or merely an easement.

The parties refer us to a number of general principles to assist in the analysis: A grant of real property is presumed to convey a fee simple title unless it appears from the grant a lesser estate was intended. (Civ.Code, § 1105.) Grants are to be interpreted in favor of the grantee, but reservations in favor of the grantor. (Civ.Code, § 1069.) Deeds for railroad rights-of-way are "usually construed as giving a mere right of way [i.e. easement], although the terms of the deed would be otherwise apt to convey a fee." (Johnson v. Ocean Shore Railroad Co. (1971) 16 Cal.App.3d 429, 433, 94 Cal.Rptr. 68.) Where an instrument is ambiguous as to whether a fee or easement was intended, the absence of monetary consideration or its nominal value suggests only an easement was intended. (Tamalpais etc. Co. v. N.W.Pac. R.R. Co. (1946) 73 Cal.App.2d 917, 927-928, 167 P.2d 825.) The surest guide, however, is the rule that a deed, like a contract, is to be interpreted so as to give effect to the intent of the parties as expressed in the language of the instrument as a whole. If unambiguous, that language should itself govern our interpretation. (Civ.Code, § 1066; White v. State of California (1971) 21 Cal.App.3d 738, 756-757, 99 Cal.Rptr. 58.)

The language of the 1911 deed unambiguously shows the intent to convey a fee simple subject to a condition subsequent. The granting clause ("WITNESSETH") does not itself restrict the grantee to any particular use and contains language of inheritance. The description of parcel three begins, "A strip of land sixty (60) feet in width ...," indicating that it is the land itself, and not merely an easement over the land, which is conveyed. A further portion of the description adds that the grant includes all "tenements, hereditaments and appurtenances thereunto belonging ... and the reversion and reversions, remainder and remainders ... thereof," language which is very likely to be surplusage where an easement alone is conveyed. The habendum clause ("TO HAVE AND TO HOLD") repeats the language of inheritance found in the granting clause. The only restriction on parcel three, that it be used for "a right-of-way for an electric railroad," is expressly termed a "condition" of the grant. On failure of the condition, moreover, "all right, title and interest hereby conveyed shall revert" to the grantor.

The deed conveys an estate of inheritance in the land itself, unrestricted except for a future condition, upon the failure of which the property conveyed reverts to the grantor. This is a fee simple subject to a condition subsequent; the reversionary interest held by the grantor is a power of termination. (See Civ.Code, §§ 762, 768, 885.010; 4 Witkin, Summary of Cal.Law (9th ed. 1987) Real Property, §§ 240, 332, pp. 444-445, pp. 531-533.)

The language is not apt for conveyance of a mere easement. First, the deed clearly grants an estate in land; an easement is an interest in the land of another rather than an estate in land. (4 Witkin, op. cit. supra, § 434, p. 614.) Second, the uses for railroad purposes of the three parcels are stated to be "conditions" of the grant, rather than restrictions or limitations on the scope of an easement. Third, by this deed the grantor retained only a future (reversionary) interest in the property; if only an easement had been granted the grantor would have been left with a present interest. As C & BPL itself states in its brief, an easement which is abandoned by nonuse or use outside its limitations does not "revert" to the grantor, it is simply extinguished. (Johnson v. Ocean Shore Railroad Co., supra, 16 Cal.App.3d at p. 435, 94 Cal.Rptr. 68.)

The only linguistic support for C & BPL's position comes from the use of the term "right-of-way" in the clause describing the purpose to which the land was to be put. A right-of-way, of course, may be an easement to pass over land, but the term "is also used to describe that strip of land upon which railroad companies construct their road bed, and, when so used, the term refers to the land itself, not the right of passage over it." (Black's Law Dict. (5th ed. 1979) p. 1191.) A comparison with the conditions governing the other parcels conveyed indicates it was here used in the physical rather than legal sense.

C & BPL correctly states that the habendum clause of a deed may be employed to limit or define the grant; if it appears from the entire instrument that such was intended, the limitation contained in the later clause will prevail over broader language in the granting clause itself. (Boyer v. Murphy (1927) 202 Cal. 23, 30, 259 P. 38.) Here the condition appended to the habendum clause does indeed modify the grant, making it a fee simple subject to condition subsequent rather than a fee simple absolute. The use of "right-of-way" in the habendum clause does not, however, convert the intended estate from fee to easement: use as a right-of-way is expressly stated to be a "condition" of the otherwise unrestricted conveyance of land; and "right-of-way" appears here to be used in the physical sense, as the location of a railway roadbed.

Citing numerous turn-of-the-century form books (and a Contra Costa County form deed of the period), C & BPL argues that the usual form of a description clause for conveyance of a fee simple in 1911 was "all that parcel of land ..." or "all that certain piece or parcel of land ...," while the deed at issue here reads, "that certain property...." From this difference C & BPL would have us conclude that it intended to convey only an easement, not the land itself. We reject the argument for two reasons. First, the description clause here did use the word "land": Parcel Three is described as a "strip of land." Second, we have taken judicial notice of several other recorded deeds executed by C & BPL in the same period. In...