Northwest Realty Co. v. Jacobs, 273 N.W.2d—1

Supreme Court of South Dakota

1978

Chapter

4

Title

Non-Possessory Interests

Page

343

Topic

Express Easements:  Classifications & Manner of Creation

Quick Notes

Ted and Olive Jacobs purchased two lots on either side of a ditch. When the property owners (Ted and Olive Jacobs) filled a portion of the ditch, a realty company (Northwest Realty) which was a successor to the company which dug the ditch claimed fee title to the ditch and filed an injunction seeking to have the owners (Ted and Olive Jacobs)  remove the fill dirt. A judgment was rendered in favor of the realty company and the owners sought review. The court determined by examining the original conveyance that only a right of way easement was conveyed and not a fee title. Therefore, the realty company did not own the fee title to the ditch. The judgment of the trial court was reversed

4-Corners:  It writing ambiguous.  If Yes, then look at the rules of construction

Rules of Construction

o    The paramount rule of construction is that the intention of the parties, and the grantor in particular, is to be ascertained by a fair consideration of the entire instrument and the language therein, without undue emphasis on any particular part or provision of the document.

Words are to be construed

o    Words are to be construed in pari material (construed together) and a construction should be adopted which gives effect to all words.

o    Each word and provision should be given that significance which is consistent with, and will effectuate the manifest intention of the parties.

Grant Rule

o    A grant is to be construed in favor of the grantee.

Fee Simple is presumed

o    A fee simple title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended.

Right of Way

o    Where the term "right of way" is used in a deed it usually indicates that ONLY an easement or a right of passage is being conveyed or reserved.

o    In such a case the instrument should be construed as conveying an easement UNLESS the instrument, considered as a whole, indicates that the parties intended the passage of fee title.

Intention of parties are in doubt

o    If, however, construction of the instrument as a whole leaves the intention of the parties in doubt, consideration must be given to the situation and circumstances of the parties at the time of the execution of the deed in order to determine what was within their contemplation at that time.

Determining if Deed was conveyed in fee simple or an easement.

1.     the amount of consideration;

2.     the particularity of the description of the property conveyed;

3.     the extent of the limitation upon the use of the property;

4.     the type of interest which best serves the manifested purpose of the parties;

5.     the peculiarities of wording used in the conveyance document;

6.     to whom the property was assessed and who paid the taxes on the property; and  

7.     how the parties to the conveyance, or the heirs or assigns, have treated the property.

Public Policy

o         It is discourage to give in fee simple narrow strips of land, because the parcels are split which bring down the value as a whole.

o          (But that does not mean we cannot do it).

Book Name

Fundamentals of Modern Property Law: Rabin; Kwall, Kwall.  ISBN:  978-1-59941-053-1.

Issue

o         Whether the Smith-Iowa Ditch deed conveyed a fee title or only a right-of-way easement?  Easement.

Procedure

Lower

o         Judgment in favor of Northwest Realty Co.

Supreme

o         Reverse

Facts

Discussion

Key Phrases

Rules

Pl Northwest Realty Co.

Df Jacobs

Description

o          Northwest Realty Co. (plaintiff) sought an injunction requiring Ted and Olive Jacobs (defendants) to remove large amounts of fill dirt from the property in dispute.

o         Defendants counter-claimed seeking a judgment quieting title to the property in them and enjoining the plaintiff from interfering with defendants' use and enjoyment of the property in question.

Lower Court

o         From the judgment in favor of plaintiff, defendants appeal.

Supreme Court

o         We reverse.

Historical

o    Iowa Ditch Company began to obtain quit claim deeds along the course of the proposed irrigation ditch.

o    Various deeds obtained range from unconditional fee to easements with reverter to grantor clauses.

o    Smith executed and delivered a quitclaim deed to Iowa Ditch Company.

o    A flood, destroyed the head gate of the ditch and destroyed portions of the ditch itself.

o    Iowa Ditch decided to dissolve the corporation and delivered a quitclaim to the stockholders who owned adjacent property to the Ditch.

o    Later the land in question (the ditch) was conveyed the to Pl.

o    The Df - later acquired land acquired land on both sides of the ditch.

Rule of Construction

o    The paramount rule of construction is that the intention of the parties, and the grantor in particular, is to be ascertained by a fair consideration of the entire instrument and the language therein, without undue emphasis on any particular part or provision of the document.

Words are to be construed

o    Words are to be construed in pari material (construed together) and a construction should be adopted which gives effect to all words.

o    Each word and provision should be given that significance which is consistent with, and will effectuate the manifest intention of the parties.

Grant Rule

o    A grant is to be construed in favor of the grantee.

Fee Simple is presumed

o    A fee simple title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended.

Right of Way

o    Where the term "right of way" is used in a deed it usually indicates that ONLY an easement or a right of passage is being conveyed or reserved.

o    In such a case the instrument should be construed as conveying an easement UNLESS the instrument, considered as a whole, indicates that the parties intended the passage of fee title.

Intention of parties are in doubt

o    If, however, construction of the instrument as a whole leaves the intention of the parties in doubt, consideration must be given to the situation and circumstances of the parties at the time of the execution of the deed in order to determine what was within their contemplation at that time.

Determining if Deed was conveyed in fee simple or an easement.

1.     the amount of consideration;

2.     the particularity of the description of the property conveyed;

3.     the extent of the limitation upon the use of the property;

4.     the type of interest which best serves the manifested purpose of the parties;

5.     the peculiarities of wording used in the conveyance document;

6.     to whom the property was assessed and who paid the taxes on the property; and  

7.     how the parties to the conveyance, or the heirs or assigns, have treated the property.

Consideration

o    The record shows that Smith had acquired the entirety of Lot 4 consisting of 41 acres for $120 seven months prior to the grant in question.

o    In comparison, it may appear that the consideration given is more than nominal and is evidence of an intent to grant an estate in fee to Iowa Ditch.

Consideration is inconsistent

o    However, the consideration is not inconsistent with a perpetual easement of an irregular irrigation ditch that divides the property by a meandering trench.

Description is lacking, look more like an easement

o    The degree of precision of the description of the strip of land is lacking and is much more indicative of a grant of easement than a fee.

Could be 40 feet on either side

o    The description in the deed indicates that it is not to exceed 40 feet along the course of the survey.

o    The line on the survey is not designated as the center line, and, therefore, the actual ditch could be 40 feet on either side of that line.

Easement not definite

o    Easements do not require a definite statement of their width, dimensions, or exact location.

Fee title reasonable certainty

o    The conveyance of fee title requires a reasonable certainty of the boundaries.

"its successors and assigns forever."

o    No assistance, because it could create either a fee simple title or a perpetual easement.

Factor:  Over and Across

The deed recites that Smith did "grant * * * all of his estate, right, title, interest, claim, property and demand, of, and to * * * a strip of land * * * across lot four * * * to be used as a right of way for an irrigation ditch."

o    Court:  Although use of the terms "over and across," "across," or "over" when used alone in a deed does not imply an easement, when used in conjunction with a restriction of the use as a right-of-way, it is considered to be evidence that an easement was intended.

Factor:  Irrigation Restriction

o    The deed quite clearly restricts the use to a right-of-way for irrigation purposes.

o    In addition, it provides that part of the consideration of the grant is the providing of irrigation water for grantor's land "as soon as the ditch contains water."

o    Court:  There seems to be little doubt that the grantor's intention was to restrict the use of the strip of land to that of an irrigation ditch and irrigation purposes.

Factor:  Rights granted best served by an easement or a fee estate

o    A perpetual easement would provide Iowa Ditch with all the rights necessary for the construction and repair of an irrigation ditch.

o    The indefiniteness of the location of the strip could allow the corporation to deviate from the course of the original construction.

Court: 

o    The latitude of an easement would appear to suit the requirements of Iowa Ditch more than the original construction area, which title would be restricted to if a fee simple were intended.

o    The indefinite but restricted width and meandering length of the grant suggests that any use other than that of an irrigation ditch is unlikely.

Holding

o    The Smith-Iowa Ditch deed only conveyed a right-of-way easement.

o    The deed contained no specific measurement of the property conveyed.

o    The granting of an easement was consistent with the needs of Iowa Ditch as is the language in the instrument and the use of the land.

o    In addition, Iowa Ditch never paid the property taxes on the strip of land.

o    These factors and the public policy discouraging separate ownership on narrow strips of land.   Require reversal of the judgment of the trial court.

Quitclaim Deed

KNOW ALL MEN BY THESE PRESENTS:

That Jacob A. C. Smith of the County of Pennington in the State of South Dakota, party of the first part, in consideration of the sum of Fifty Dollars in hand paid by The Iowa Irrigation Ditch Company a Corporation with its principal office at Rapid City, County of Pennington and State of South Dakota, party of the second part, the receipt whereof is hereby acknowledged, do hereby grant, remise, release and quit-claim unto the said party of the second part, its successors and assigns forever, all his estate, right, title, interest, claim, property and demand, of, in and to the following real property, situate in the County of Pennington, State of South Dakota, and described as follows:

A Strip of land not exceeding forty (40) feet in width following the course of the survey of the Iowa Irrigation Ditch Co. as shown by the recorded plat thereof across lot four (4) Section five (5) in Township One (1) North of Range Eight (8) East B.H.M. to be used as a right of way for an Irrigation Ditch,

It is hereby agreed as a further consideration for payment of this right of way, that the party of the second part will furnish water at the regular established price fixed by said second party, for the purpose of irrigating all the land owned by the party of the first part, as soon as the ditch contains water that can be used for this purpose, and the party of the second part also agrees to place a bridge over said ditch at such place as the party of the first part may demand.

TO HAVE AND TO HOLD the same, together with all the hereditaments and appurtenances thereunto in anywise appertaining.

WITNESS my hand and seal this 26th day of April A.D. 1898.

Jacob A. C. Smith (SEAL)

Determining if Deed was conveyed in fee simple or an easement.

1.     the amount of consideration;

a.     in consideration of the sum of Fifty Dollars

2.     the particularity of the description of the property conveyed;

a.     A Strip of land not exceeding forty (40) feet in width following the course of the survey of the Iowa Irrigation Ditch Co. as shown by the recorded plat thereof across lot four (4) Section five (5) in Township One (1) North of Range Eight (8) East B.H.M. to be used as a right of way for an Irrigation Ditch,

3.     the extent of the limitation upon the use of the property;

4.     the type of interest which best serves the manifested purpose of the parties;

5.     the peculiarities of wording used in the conveyance document;

6.     to whom the property was assessed and who paid the taxes on the property; and  

7.     how the parties to the conveyance, or the heirs or assigns, have treated the property.

Rules

o     

Class Notes

IN PARI MATERIA.

o    Upon the same matter or subject.

o    Statutes in pari materia are to be construed together are to be construed together.

Sneaky

o    NW does not really want the property; they just want to be bought out.  That is why NW is arguing so strongly that they own the ditch in fee.

How to avoid litigation

o    You take out anything that is on the Fee Side of the Analysis.

o    I hereby grant of easement right of way for only one purpose irrigation.

o    Analysis

§  First, Analyze the 4 corners of the Document.  If clear, stay within and interpret the document accordingly.  If  not clear, have to go beyond the document to determine what was granted based  upon the factors.

§  Second, can you say that the document from corner to corner is ambiguous.

                                          i.    Rules of Construction

                                                      i.        The paramount rule of construction is that the intention of the parties, and the grantor in particular, is to be ascertained by a fair consideration of the entire instrument and the language therein, without undue emphasis on any particular part or provision of the document.

                                                     ii.        Each word and provision should be given that significance which is consistent with, and will effectuate the manifest intention of the parties.

                                                    iii.        A grant is to be construed in favor of the grantee.

                                                    iv.        A fee simple title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended. (Jacobs Easement Argument)

                                                     v.        Where the term "right of way" is used in a deed it usually indicates that ONLY an easement or a right of passage is being conveyed or reserved

                                                    vi.        If, however, construction of the instrument as a whole leaves the intention of the parties in doubt, consideration must be given to the situation and circumstances of the parties at the time of the execution of the deed in order to determine what was within their contemplation at that time.

Determining if Deed was conveyed in fee simple or an easement.

1.     the amount of consideration;

a.     Lots Either fee (or, perhaps perpetual easement)

b.    Not much - easement

2.     the particularity of the description of the property conveyed;

a.     Very particular fee

b.    Not particular - easement

3.     the extent of the limitation upon the use of the property;

a.     Few limitations Fee (general use)

b.    Lots of limitation easement (limited use)

4.     the type of interest which best serves the manifested purpose (irrigation ditch) of the parties;

5.     the peculiarities of wording used in the conveyance document;

a.      

6.     to whom the property was assessed and who paid the taxes (the owners in fee) on the property; and  

7.     how the parties to the conveyance, or the heirs or assigns, have treated the property.  (Jacobs filled the ditch, and make a parking lot, he treated it like he owned it)

§  If the document is ambigious, the court has to find out the general intent of the parties.

o    Public Policy

§  It is discourage to give in fee simple narrow strips of land.  (But that does not mean we cannot do it).

§  Why is this the case?  I does not increase the value, and it splits the parcels, which will bring down the value as a whole.

T-Analysis

NW Reality (Arguing for fee grant, and not easement)

o         Jacobs (arguing that easement was granted, not fee).

o         Paid $120 earlier for 41 acres (2.92/acre) and $50 or the strip of the land.  This indicates that a fee was intended most likely since the considerations is significant compared to what they had earlier paid for a much larger parcel in fee.

o         No accurate description was contained in the grant,  which cuts toward it being an easement.  The more descriptive it is, the more it indicates a fee grant, and not an easement

o         Bridge May the was part of the deal to buy it in fee

o         Water was shared indicating that it probably was an easement

o         Granting clause specified all his estate, right, title, interest, claim, property and demand a strip of land Sounds more like a fee conveyance, than easement.

o         Bridge may be this was negotiated to provide access

o         Strip of land sounds like a fee, but it was not described with leaps and bounds.

o         Strip  of land written vaguely, not identifying where it goes

o         To be used as a right of way used for a limited purpose as an irrigation ditch.  When you own in fee you get unlimited uses