Brown v. Penn Central Corp

Brief Fact Summary.

The Supreme Court of Indiana ruled that when a landowner conveys access to a piece of land, this deed only creates an easement and does not convey fee ownership. 

Synopsis of Rule of Law.

When a landowner conveys access to a piece of land or another way, grants access to the property, then the landowner has only conveyed an easement and not fee ownership of the land. 

Facts.

Penn Central Corporation (Defendant) acquired a deed that previously was given to another railroad company. The deed granted the railroad access for a right of way as well as a small section for “depot and railroad purposes.” Shortly after receiving the deed Defendant stopped operating the railroad and ultimately abandoned it. However, they did lease out and collect rent from two occupants (Plaintiffs) who were still occupying the piece of land for railroad purposes. The occupants brought suit in order to quiet title. At trial, the trial court ruled in favor of the Defendants and determine that they owned the land in fee simple. Plaintiffs appealed and the intermediate court affirmed. Now the plaintiffs appeal to the supreme court of this state. 

Issue.

When a deed specifies that land may be utilized for a right of way for the railroad and the land can be used for railroad purposes, is the deed considered an easement? 

Held.

Yes. The Indiana Supreme Court ruled that the right of way or access to the land for railroad purposes is an easement and not a conveyance in fee simple. The Court also notes that in terms of public policy railroads should only be granted easements and not fee simple so in the event the railroad fails to utilize the property, the easement is destroyed. Therefore, the court held that the defendant no longer owned the land because they abandoned the easement. The trial court’s decision is reversed. 

Discussion.

The Court also notes specific language in the conveyance that points to the intention of the conveyor that the deed was meant to be an easement.