Gange v. Hayes

• Decision Date: 07 November 1951
• Citation: 193 Or. 51,237 P.2d 196
• Parties: GANGE et al. v. HAYES et al.
• Court: Oregon Supreme Court

Page 196

237 P.2d 196

193 Or. 51

GANGE et al. v. HAYES et al.

Supreme Court of Oregon.

Argued and Submitted April 17, 1951.

Decided Nov. 7, 1951.

William S. Fort, Eugene (Husband, Fort & Johnson, of Eugene, on the briefs), for appellants.

Windsor Calkins, Eugene (Calkins & Calkins, of Eugene, on the brief), for respondents.

Before BRAND, C. J., and HAY, ROSSMAN, LUSK and WARNER, JJ.

WARNER, Justice.

This is a suit to quiet the title of the plaintiffs Gange in certain real property situated in Lane county, Oregon, hereinafter called Parcel C. The defendants Hayes answered, claiming a right to the title by reason of certain provisions in a deed, later referred to as the deed from the Diamond 'B' Ranch to the Lewis-Peters Lumber Company. From a decree in favor of plaintiffs and adverse to the defendants, the defendants appeal.

In 1924, the Diamond 'B' Ranch, an Oregon corporation, owned about 3,000 contiguous acres in Lane county, Oregon, which it operated as a stock ranch and which then included the parcel which is the subject of this litigation. For convenience we will hereinafter refer to the entire ranch, which was then operated as a unit, as Parcel A.

Parcel A, in the main, surrounds the town of Lowell in Lane county and has its southerly boundary for some miles along the north bank of the Willamette river, The main line of the Southern Pacific railroad crosses Parcel A in an easterly-westerly direction close to its southern boundary and on a line which generally reflects the meandering course of the river to the south. Approximately 200 acres of Parcel A lie between the south line of the railroad right-of-way and the north bank of the river, and the rest of the land constituting the ranch lies north of the railroad.

At that time the Lewis-Peters Lumber Company was the owner of timber situated on the south bank of the Willamette river. It appearing advantageous to establish a sawmill reasonably close to its holdings and with the facilities of the railroad nearby, the lumber company negotiated with the owner of Parcel A for approximately 25 acres of Parcel A, which were south of and adjacent to the Southern Pacific right-of-way. As a result of these negotiations, the Diamond 'B' Ranch on February 26, 1924, deeded 24.85 acres of Parcel A to the Lewis-Peters Lumber Company, a corporation. It is the reservations in this deed which are the focal point of our interest. In its essential provisions, it reads as follows:

'Know All Men by These Presents, That Diamond 'B' Ranch, a corporation, duly organized and incorporated under the laws of the State of Oregon, in consideration of Five Hundred Dollars ($500.00) to it paid by Lewis-Peters Lumber Company, an Oregon corporation, does hereby grant, bargain, sell and convey unto the said Lewis-Peters Lumber Company, a corporation, its successors and assigns forever, the following described piece or parcel of real estate lying and being in the county of Lane and the State of Oregon, to wit:

'* * * [Description by metes and bounds of a parcel of land containing 24.85 acres in Lane county, Oregon, and hereinafter referred to as Parcel B.]

'Together with the tenements, hereditaments and appurtances thereunto belonging, or in anywise appertaining; and also all its estate, right, title and interest, at law and equity therein and thereto.

'To Have and To Hold the Same to the said Lewis-Peters Lumber Company, its successors and assigns forever. And the said grantor does covenant to and with the said grantee, and its legal representatives and assigns forever, that said corporation is lawfully seized in fee simple of the above granted premises, and its successors shall, warrant and defend the same to the said Lewis-Peters Lumber Company, its successors and assigns forever, against the lawful claims and demands of all persons whomsoever.

'As an additional consideration for this deed, that the Diamond 'B' Ranch, or its assigns, shall have the privilege of crossing and recrossing this property on established roads, without interference, in the regular conduct of its business, and To also have the privilege of loading any materials, with the exception of lumber cut by another mill, in the way of timber, agricultural products, or cattle, that might be taken from the properties owned by the Diamond 'B' Ranch, or its successors or assigns, at any time on cars located on any private sidetracts [sic] now installed or to be later installed on this property.

'As a further consideration, it is understood and agreed, that if the Lewis-Peters Lumber Company, or its successors or assigns, should at any time or for any reason, cease operation of its lumbering or planing mill industries located on this property for a period of twenty four consecutive months, the Diamond 'B' Ranch at its own option to be exercised, can demand and shall receive a Warranty Deed back from the Lewis-Peters Lumber Company, its successors or assigns, for the above described property upon the payment of the original purchase price of Five Hundred Dollars ($500.00), less the annual rental of One Hundred Dollars ($100.00) per year, for the length of time title to the property as above described stands as a matter of record in the name of the Lewis-Peters Lumber Company, or its successors or assigns: but in no case shall the rental exceed the original purchase price of the property.'

As we advance in the opinion, we will refer to the reservation in the deed beginning with the words, 'As an additional consideration for this deed, that the Diamond 'B' Ranch, or its assigns, shall have the privilege of crossing and recrossing this property * * *,' as the 'first reservation'; and refer to the other reservation beginning with the words, 'As a further consideration, it is understood and agreed, that if the Lewis-Peters Lumber Company * * * cease operation * * *,' as the 'second reservation.'

The lumber company upon receipt of the deed of February, 1924, went into possession and constructed and operated a sawmill on Parcel B to and until sometime in February, 1943, when it forever ceased the 'operation of its lumber or planing mill industries' located on Parcel B and at the same time conveyed Parcel B to to plaintiffs' predecessors in title.

On the 28th day of April, 1945, the Steinkes, the then owners of Parcel B, carved from that parcel a unit of land with an area of approximately eight acres, which we designate as Parcel C, and conveyed the same by warranty deed to the plaintiffs, John A. Gange and Gretta C. Gange, his wife, who are now in possession and claim a fee simple title thereunder unencumbered by any of the reservations found in the deed from the ranch company to the lumber company given in February, 1924.

We turn now to the chain of title as asserted by the defendants Hayes.

On June 30, 1947, the Doutys, as successors to the title of all the remaining property in Parcel A, by warranty deed conveyed all their title in Parcel A to the defendants Hayes, excepting therefrom Parcel B, but without any reference to the reservations contained in the deed of February, 1924, from the ranch company to the lumber company.

The last instrument of interest in the order of its execution is a quitclaim deed from the Diamond 'B' Ranch to the defendants Hayes dated March 25, 1948, quitclaiming such interest as it then had in Parcel B.

The property in which the plaintiffs seek to have title quieted is Parcel C. The defendants in their further and separate defense to plaintiffs' complaint assert title an successors in interest to Parcel A and claim that, by reason thereof, they are the owners of the entire area comprehended by Parcel B, including Parcel C as a prior unit thereof. The defendants rest their claim of title to Parcel B upon the second reservation found in the deed of February, 1924, and support it with the assertions that when the Lewis-Peters Lumber Company ceased operating the lumber and planing industries located upon Parcel B and abandoned its further use for such purposes for a period of more than 24 consecutive months thereafter, the property reverted to defendants, as the successors in interest to the Diamond 'B' Ranch.

The matter of paramount interest centers in the second reservation of the deed. We will, therefore, give it our first attention.

If the second reservation can be interpreted as contended for by the defendants, plaintiffs' title to Parcel C must fail; but, on the other hand, if it is construed in either of the ways argued for by the plaintiffs, then defendants must retire in defeat.

The importance of this provision of the deed warrants repeating it again, so that attention may be centered upon its precise language and its real purpose and its legal significance better examined and understood. It reads: 'As a further consideration, it is understood and agreed, that if the Lewis-Peters Lumber Company, or its successors or assigns, should at any time or for any reason, cease operation of its lumbering or planing mill industries located on this property for a period of twenty four consecutive months, the Diamond 'B' Ranch at its own option to be exercised, can demand and shall receive a Warranty Deed back from the Lewis-Peters Lumber Company, its successors or assigns, for the above described property upon the payment of the original purchase price of Five Hundred Dollars ($500.00), less the annual rental of One Hundred Dollars ($100.00) per year, for the length of time title to the property as above described stands as a matter of record in the name of the Lewis-Peters Lumber Company, or its successors or assigns: but in no case shall the rental exceed the original purchase price of the property.' (Italics ours.)

It is defendants' position that the foregoing clause creates an estate upon a conditional limitation and that the cessation of 'the lumbering or planing mill industries located on this property [Parcel B] for a period of twenty four consecutive months' worked a...