Opinion
Review Granted Oct. 14, 1994.
As Modified July 18, 1994.
Review Granted Previously published at: 39 Cal.App.4th 1666, 35 Cal.App.4th 359, 25 Cal.App.4th 1647, 30 Cal.App.4th 1557
Opinion on pages 443-455 omitted.
COUNSEL [Copyrighted Material Omitted] [Copyrighted Material Omitted]
[31 Cal.Rptr.2d 207] Fadem & Douglas, Jerrold A. Fadem, Golbert, Kimball & Weiner, George Kimball, Latham & Watkins, David F. Faustman, Kim N.A. Richards, Albert Choi, Burke, Williams & Sorensen, Los Angeles, and Carl K. Newton, City Atty., for petitioner City of Manhattan Beach.
Hill, Farrer & Burrill, William M. Bitting, Benjamin B. Salvaty and Dean E. Dennis, Los Angeles, for petitioner Atchison, Topeka and Santa Fe Ry. Co.
No appearance, for respondent.
Sullivan, Workman & Dee, Roger M. Sullivan and Joseph S. Dzida, Los Angeles, for real parties in interest.
OPINION
ARLEIGH M. WOODS, Presiding Justice.
This coordinated writ proceeding disposes of the petitions of the City of Manhattan Beach and the Atchison, Topeka and Santa Fe Railway Company (the City and Santa Fe; sometimes jointly referred to as petitioners) that arise from an action brought by John P. Farquhar et al. (real parties in interest), against the City and Santa Fe involving real parties' claim to a now abandoned railroad right of way running the length of the City and into the adjoining community of Hermosa Beach.
The relevant facts are as follows: In 1888, the Redondo Land Company (RLC) and one Charles Silent (Silent) conveyed to the Redondo Beach Railway Company, a predecessor of Santa Fe, a 100-foot wide right of way over 4,500 acres belonging to RLC and Silent in what is now the City. The deed provided that, in exchange for one dollar, RLC and Silent " remise, release and quit-claim unto [Redondo Beach Railway Company] ... the right of way for the construction, maintenance and operation of a steam railroad, upon, over and along" the subject property. Further, the deed imposed certain conditions including the maintenance of a side track, cattle guards and culverts, providing that " upon failure to comply with said conditions, or any of them, said right of way to revert to said parties of the first part and their successors in interest." Finally, the habendum clause provided: " To have and to hold all and singular the rights aforesaid unto said party of the second part and its assigns and successors forever, subject however to and upon the terms and conditions aforesaid."
On June 6, 1896, a deed from RLC to one Blanton Duncan conveyed to him property now in the City of Hermosa Beach across which ran a portion of the right of way and included that portion.
In May 1897, RLC and its shareholders began to partition most of RLC's remaining land, excluding 463 acres which the partition papers say were optioned to one Parvin Wright. Later in 1987, by way of an unrecorded indenture, which was signed by the RLC, Wright and Southern California Railway Company (another of Santa Fe's predecessors) Southern California Railway Company was relieved of its obligations regarding an existing station provided that it construct and maintain another station at Potencia. The document also abrogated and annulled such conditions as expressed in the 1888 deed upon the part of Redondo Beach Railway Company, the failure of which to perform created a reversionary interest in the RLC but otherwise provided that " the said deed shall remain a grant as therein expressed, free and discharged of all such conditions." On the same day it signed this unrecorded indenture with Wright, the RLC signed a grant deed with Wright for the land for the Potencia Station.
By August 1901, Parvin Wright had exercised his option only as to 40 of the 463 acres covered by his option. That same year, RLC filed a quiet title action as against certain Spanish land grant claimants to the remaining 423 acres included within the Wright option. A portion of the right of way passed [31 Cal.Rptr.2d 208] through this land. The legal description of the property in the first amended complaint excepted both the right of way and the 40 acres previously transferred to Wright. A default judgment was entered in favor of RLC based on the legal description of the first amended complaint that excepted the right of way and the land conveyed to Wright.
In 1954, Santa Fe sued the City in an action to avoid an increased property tax assessment on the grounds that it would not benefit from an improvement district that included the subject right of way. Santa Fe contended that it was the " owner of a right of way for railway purposes" across the affected property. The City conceded the point and in its findings of fact, the superior court found that Santa Fe's right of way was acquired " solely for the purposes of the construction, maintenance and operation of a steam railroad thereover. Said deed contained a reverter clause divesting [Santa Fe] of its interest thereunder in the event [Santa Fe] should cease using said parcels for railroad purposes."
In 1982, Santa Fe petitioned the Interstate Commerce Commission (ICC) proposing abandonment of the railroad line along the right of way. In its application before the ICC, Santa Fe represented that its use of the right of way was as " an easement for railroad purposes only." Santa Fe repeated this representation in a correspondence with the California Coastal Commission over the proposed abandonment. The proposed abandonment was approved and in 1986 Santa Fe removed its tracks.
In April 1986, the City and Santa Fe entered into a Park Acquisition Agreement (PAA) whereby Santa Fe quitclaimed the subject right of way for $4,200,000 and two residential properties.
Further terms of the agreement we discuss in part III of this opinion.
The instant action was commenced on December 31, 1987, when real parties filed suit. Their fourth amended complaint alleged causes of action to quiet title, for inverse condemnation and ejectment and damages. Both the City and Santa Fe answered.
The superior court trifurcated the issues of liability, heirship and damages. On December 23, 1992, the court issued its statement of decision on liability. It found that the right of way acquired by Santa Fe's predecessor via the 1888 deed was an easement; that Santa Fe's interest in the easement ceased upon its abandonment of the railway line; that the City's and Santa Fe's conduct with respect to the PAA constituted a taking by inverse condemnation for which they were jointly liable; and real parties had no interest in that portion of the right of way extending into Hermosa Beach, such property having been conveyed in fee to Blanton Duncan by the RLC.
Both the City and Santa Fe filed petitions for writ challenging the trial court's decision. We denied the petitions. The City and Santa Fe then filed petitions for review in the Supreme Court. By its orders of July 22, 1993, the Supreme Court granted the petitions and transferred the matter back to this court with directions to vacate our earlier orders denying mandate and to issue an alternative writ. We complied with that directive and issued the alternative writ.
I
The main issue before us is the propriety of the trial court's finding that the right of way conveyed by the RLC to the Redondo Beach Railway Company, Santa Fe's predecessor in interest, in the 1888 deed was an easement rather than a fee. The court found that its construction " is justified and supported by the intrinsic evidence of the language of the 1888 deed itself...." We agree.
Absent extrinsic evidence of meaning, the interpretation of a written instrument is a question of law resolution of which the appellate court undertakes independent of the trial court's construction. (Stevenson v. Oceanic Bank (1990) 223 Cal.App.3d 306, 315, 272 Cal.Rptr. 757.) However, where no extrinsic evidence has been introduced, the interpretation of the contract made by the trial court will be accepted by the reviewing court if that interpretation is reasonable or is [31 Cal.Rptr.2d 209] one of two or more reasonable constructions of the instrument. (Prickett v. Royal Ins. Co. Ltd. (1961) 56 Cal.2d 234, 237, 14 Cal.Rptr. 675, 363 P.2d 907.) " The cardinal requirement in the construction of deeds and other contracts is that the intention of the parties as gathered from the four corners of the instrument must govern. [ Citation.]" ( Machado v. Southern Pacific Transportation Co . (1991) 233 Cal.App.3d 347, 352, 284 Cal.Rptr. 560.) The issue presented in the instant petition is not novel and there are various tools of construction by which a court may determine whether the conveyance of a right of way to a railroad was intended by the parties to be an easement or a fee.
Although extrinsic evidence was introduced (see, infra ), the trial court found that it was not necessary to its interpretation which was based instead on the four corners of the deed.
Chief among these, " the general rule is that in construing contracts and deeds for railroad rights of way such deeds are usually construed as giving a mere right of way, although the terms of the deed would be otherwise apt to convey a fee. [Citations.]" (Highland Realty Co. v. City of San Rafael (1956) 46 Cal.2d 669, 678, 298 P.2d 15 [internal quotation marks omitted]; Concord & Bay Point Land Co. v. City of Concord (1991) 229 Cal.App.3d 289, 294, 280 Cal.Rptr. 623; Johnson v. Ocean Shore Railroad Co. (1971) 16 Cal.App.3d 429, 433, 94 Cal.Rptr. 68.) Additionally, the court considers " 1) whether the reference to a ‘ right of way’ is merely descriptive or acts to limit the grant; 2) the location of the limiting language; 3) whether the deed contains references to the interest conveyed as a fee or easement; 4) whether the conveyance includes words of inheritance such as ‘ tenements,’ ‘ hereditaments,’ or which describe interests in real property which are normally associated with a fee; 5) whether the interest is described as running ‘ over and across' the land of the grantor; 6) the reservation of rights to remove minerals or to cultivate the property in question; and 7) the amount of consideration paid." ( Machado v. Southern Pacific Transportation Co ., supra , 233 Cal.App.3d at p. 353, 284 Cal.Rptr. 560.) When the 1888 deed is examined in light of these indicia, it is clear that, as the trial court found, what was intended was an easement.
In Machado v. Southern Pacific Transportation Co ., supra , 233 Cal.App.3d 347, 284 Cal.Rptr. 560, the court rejected this rule of construction as unsupported by authority. ( Id. at pp. 355- 361, 284 Cal.Rptr. 560.) We cannot reconcile this conclusion with the language of our Supreme Court, quoted above, from Highland Realty and we must, therefore, respectfully disagree with Machado on this point.
For example, the phrase " right of way" is used no less than eight times in the deed to describe the interest being conveyed while the habendum clause refers to " the rights aforesaid." By contrast, in the Machado case, the deed in question referred to a " strip or parcel of land for a right of way," and " premises." ( Machado v. Southern Pacific Transportation Co ., supra , 233 Cal.App.3d at p. 351, 284 Cal.Rptr. 560.) In Machado , the reviewing court found that based on the use of these terms the interest conveyed was a fee rather than an easement. In distinguishing the earlier case of Johnson v. Ocean Shore Railroad Co., supra, 16 Cal.App.3d 429, 94 Cal.Rptr. 68, where the description of purpose preceded the grant of land, the Machado court noted " the Machado deed, by placing the description of purpose after the language granting land, creates greater emphasis on the grant of land...." (233 Cal.App.3d at p. 357, 284 Cal.Rptr. 560.) In contrast, in the instant case, there was no grant of land. Rather, what is granted is a right of way " over and through the lands of grantors ..." indicating that the use of the phrase right of way is a limitation rather than merely descriptive. Moreover, the " over and through" language itself indicates that the interest conveyed was an easement and not the underlying land. (Highland Realty Co. v. City of San Rafael, supra, 46 Cal.2d at p. 678, 298 P.2d 15.)
Furthermore, where, as in the instant case, " the limitation upon a grant appears in the granting clause itself, and not merely in the habendum or any other parts, the limitation ordinarily operates to confine the grant to that of an easement. [Citations.]" (Johnson v. Ocean Shore Railroad Co., supra, 16 Cal.App.3d at p. 433, 94 Cal.Rptr. 68.) The [31 Cal.Rptr.2d 210] absence of any language of inheritance also confirms that the conveyance was of an easement (Concord & Bay Point Land Co. v. City of Concord, supra, 229 Cal.App.3d at pp. 294-295, 280 Cal.Rptr. 623), as does the nominal amount of consideration paid (Machado v. Southern Pacific Transportation Co ., supra , 233 Cal.App.3d at pp. 353, 359, 284 Cal.Rptr. 560). We must conclude, therefore, that the interest conveyed by the 1888 deed was an easement only.
Petitioners fasten on the phrase " remise, release and quit-claim" in the deed and argue that, by its use of the word " quit-claim," the RLC intended to convey its entire interest in the property, not merely an easement. By emphasizing this word at the expense of the rest of the deed, petitioners violate a fundamental rule of construction which requires that " [t]he whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable...." (Civ.Code, § 1641.) Applying this rule supports the trial court's interpretation rather than petitioners'.
Moreover, while it is true that ordinarily a quitclaim deed " passes whatever interest, legal or equitable, that the grantor possesses at the time of its execution" (Howard Homes, Inc. v. Guttman (1961) 190 Cal.App.2d 526, 530, 12 Cal.Rptr. 244), it is also true that " [a] quitclaim deed of a particular interest in land will not operate as a conveyance of any interest other than that specified." (26 C.J.S., Deeds, § 118, p. 949, fn. and emphasis omitted.) While neither party has cited, nor has our own research disclosed, a California case on point, analogous authority from other jurisdictions supports the proposition that a quitclaim deed may convey no more than an easement for railway purposes.
For example, in Estate of Rockafellow v. Lihs (Iowa App.1992) 494 N.W.2d 734, the granting clause of the deed in question purported to " give, remise, release, convey, and quitclaim [to the railroad] ... for the purpose of constructing a railroad thereon and for all purposes [so] connected ... the right-of-way for the said road over and through the ... described tract...." (Id. at p. 735.) Similar language was repeated in the habendum clause. (Ibid.) The trial court granted summary judgment in favor of the estate of a property owner laying claim to the property described in the deed upon the cessation of railroad operations. The appellate court, citing the language in the granting clause that conveyed the right of way for purposes of construction and use of a railroad, agreed that the deed " conveyed to the railroad only an easement for railroad purposes." (Id. at p. 736.) Similarly, in Veach v. Culp (1979) 92 Wash.2d 570, 599 P.2d 526, the Washington Supreme Court concluded that a quitclaim deed that conveyed a right of way to a railroad conveyed only an easement. (Id. 599 P.2d at pp. 527-528.) These authorities are relevant to our earlier observation that a deed must be construed as a whole and the use of a particular word or phrase is not dispositive of the intent of the contracting parties. In the instant case, examination of the deed in its entirety compels the conclusion that the interest therein conveyed was an easement.
II
Although not necessary to its interpretation, the trial court went on to find that its interpretation of the deed was also supported by relevant extrinsic evidence. We emphasize that our construction of the deed does not require resort to extrinsic evidence. We discuss it only because it was addressed by the trial court.
The court cited evidence that other deeds issued by the RLC transferring or conveying property used language clearly indicating transfer of a fee interest. It could be inferred, therefore, that had RLC wanted to transfer such an interest in the 1888 deed it could have done so. Additionally, the court referred to the RLC's transfer of property to Blanton Duncan that included the property underlying the right of way. The court also cited Santa Fe's reference to the right of way as an easement in its 1954 lawsuit against the City over a property tax assessment and in the abandonment papers it filed before the ICC and in correspondence with the California Coastal Commission.
Petitioners argue that certain extrinsic evidence favors their interpretation of the deed. [31 Cal.Rptr.2d 211] Principally, they rely upon an 1897 indenture between the RLC, Santa Fe's predecessor railway, and Parvin Wright that required the railroad to maintain a station at Potencia and " abrogated and annulled" certain conditions to be performed by the railroad as set forth in the 1888 deed the failure of performance of which would have caused reversion. Petitioners claim this document constitutes a novation of the 1888 deed and by voiding the conditions and power of termination in that deed confirms that it was intended to convey a fee. They also refer to the 1901 quiet title action brought by the RLC against Spanish land grant claimants and involving 423 acres of land optioned to Parvin Wright. Both the verified complaint and the judgment exempt the right of way. Petitioners would have us infer that the reason the RLC did not seek to quiet title to this property was because it had conveyed it in fee to Santa Fe's predecessor by the 1888 deed.
The extrinsic evidence to which plaintiff refers either does not support its interpretation or is too attenuated to be of much relevance. The 1897 indenture falls into the first category as it was not a " novation" of the 1888 deed, as petitioners claim, but simply an abrogation of those conditions in the deed requiring the maintenance of a side track, culvert and cattle guards. The 1901 lawsuit falls into the second category because it is too tangential to be of persuasive value in interpreting the 1888 deed.
Therefore, at best, these documents present a conflict in the evidence which was resolved by the trial court in favor of real parties. Under the rule of conflicting evidence, we are bound by any reasonable construction by the trial court of the extrinsic evidence. (Stratton v. First Nat. Life Ins. Co. (1989) 210 Cal.App.3d 1071, 1084, 258 Cal.Rptr. 721.) Petitioners must demonstrate either that the extrinsic evidence on which the trial court relied conflicts with any reasonable interpretation of the instrument or that the evidence does not support the court's interpretation. (Glendale City Employees' Assn., Inc. v. City of Glendale (1975) 15 Cal.3d 328, 340, 124 Cal.Rptr. 513, 540 P.2d 609.) They have done neither, but instead simply ask us to reweigh the evidence. This is not our function.
Less than a week before argument, petitioners filed a joint request for judicial notice, or, alternatively, application to produce additional evidence on appeal. The material that was the subject of the request was a 1903 decree of dissolution of the RLC that states in part: " And it appearing further that all of the property of said corporation has been disposed of and that all of the business of said corporation has come to an end [¶ ] Now therefore it is ordered and adjudged [t]hat the said corporation, The Redondo Land Company, be, and the same is hereby dissolved, and its corporate existence ended[.]"
III
Santa Fe argues that the trial court erred when it held the railroad and the City jointly liable in inverse condemnation.5 Santa Fe contends that its involvement in the acquisition by the City of the property at issue was simply as a private seller.
The trial court, citing Breidert v. Southern Pac. Co. (1964) 61 Cal.2d 659, 39 Cal.Rptr. 903, 394 P.2d 719, determined, however, that Santa Fe and the City were jointly responsible for and liable for the taking " due to their active joint participation" in the PAA. We agree. In Breidert, plaintiff property owners sued the City of Los Angeles and Southern Pacific over the closing of a railroad crossing that [31 Cal.Rptr.2d 212] cut off plaintiffs' access to public streets. Southern Pacific argued that it was not a proper defendant to the action. The Supreme Court rejected the argument: " Since defendant railroad was an active joint participant in closing the crossing, it is a proper party to the present litigation. [Citations.]" (61 Cal.2d at p. 662, 39 Cal.Rptr. 903, 394 P.2d 719.)
In the instant case, the trial court found active joint participation by Santa Fe in the condemnation of the subject property for public use under the terms of the PAA. Specifically, the court cited the following terms of that agreement as indicative of Santa Fe's participation: its agreement to indemnify the City for a period of five years against any title claims affecting that portion of the right of way which it quitclaimed to the City; its reservation of the right to initiate eminent domain proceedings in the event of a title claim affecting that portion of the right of way it retained and the City's agreement to cooperate with Santa Fe in prosecuting such a proceeding; agreement by the City that Santa Fe was to receive redevelopment rights to that portion of the property which it retained; agreement by the City to rezone that portion of the property for commercial planned development and to rezone the property conveyed to it as open space recreation; agreement by the City to help Santa Fe acquire access to the property Santa Fe retained; agreement by the City to lease back 85 parking spaces to Santa Fe on land quitclaimed by the railroad; and the recital in the PAA that it " ‘ is for the purpose of carrying out the Project. City seeks to obtain certain public benefits as set forth herein. Santa Fe seeks to transform undeveloped property in City into developed property in accordance with the plan for the Project.’ " The court concluded: " The City and Santa Fe proceeded to implement their agreement as described above. Such course of conduct constitutes a taking of the subject property ... by inverse condemnation."
We agree that under the terms of the PAA, Santa Fe was intrinsically involved in the condemnation of the subject property for public use and, therefore, is jointly liable with the City under that theory of liability. Santa Fe's argument that it derived no benefit from the public use which the City made of the property quitclaimed to it, is belied by the terms of the PAA which, for instance, require the City to rezone its adjacent property as open space recreation and lease back parking spaces to Santa Fe. It is clear, furthermore, from the recital quoted by the court that the " Project" to which the agreement refers is a unified whole involving action by both the City and Santa Fe for its achievement.
For these reasons, the instant case is fundamentally different from Cantu v. Pacific Gas & Electric Co. (1987) 189 Cal.App.3d 160, 234 Cal.Rptr. 365, upon which Santa Fe principally relies. In that case, a group of property owners sued PG & E in inverse condemnation for damages caused to their homes by a landslide attributable to a trench dug by the utility for gas and electric facilities. The trench was dug pursuant to a contract between PG & E and the subdivision developer. The property owners prevailed on the issue of inverse liability. On appeal, however, the judgment was reversed. The appellate court found that the installation of the trench for line extension service was a private project not a public one. In support of this conclusion, it referred to the fact that the agreement to install the trench was with the subdivision developers, that PG & E did not exercise any eminent domain rights nor did it require prior governmental approval or a declaration of necessity to install the trench. (Id. at pp. 164-165, 234 Cal.Rptr. 365.) Furthermore, the court observed, " we have found no case imposing inverse liability upon a public utility ... where the utility did not act jointly with a governmental entity" (id. at p. 165, 234 Cal.Rptr. 365), thus recognizing that such joint action will support imposition of inverse liability. In the instant case, unlike Cantu, there is compelling indicia of joint action by Santa Fe and the City. Accordingly, imposition of joint inverse liability was proper.
The peremptory writ of mandate is denied. Real parties to have their costs.
EPSTEIN and CHARLES S. VOGEL, JJ., concur.
While we grant the request for judicial notice, it does not change the result we reach here, for two reasons. First, the proffered evidence is irrelevant to the central basis of the trial court's and this court's determination that the meaning of the 1888 deed can be adduced from the four corners of the document without reference to extrinsic evidence. Second, even to the extent we consider extrinsic evidence, this document is, at best, marginal. The 1903 Decree of Dissolution merely states in relevant part that it " appear[s] ... that all of the property of said corporation has been disposed of...." This general language appearing in a document filed some 14 years after the 1888 deed does not overcome the careful analysis of that deed by which the trial court reached its conclusion that only an easement was taken.