Brief Fact Summary. This case involves a dispute, in which, a church utilized a lot for parking, and this use was reserved in the deed, however, when it was conveyed to a third person, it did not contain the express reservation.
Synopsis of Rule of Law. The court will look to the intent of the grantor in determining whether a conveyance contains an easement to a third party.
Facts. McGuigan owned two lots abutting one another known as lots 19 and 20, which were situated across the street from the First Church of Christ, Scientist, Pacifica (Defendant). McGuigan allowed the church to use lot 20 for parking during church services; lot 19 had a building on it. McGuigan sold lot 19 to Peterson, who used the building thereon for an office. Peterson wished to resell the lot so he listed lot 19 with a realtor, Willard (Plaintiff). Plaintiff wished to purchase lot 19 and lot 20, so he and Peterson signed a deposit receipt for both lots. Peterson approached McGuigan about purchasing lot 20, so that he could sell it to Plaintiff. McGuigan was willing to sell the lot so long as the church could continue to use the lot for parking. The church’s attorney wrote a restriction clause into the deed from McGuigan to Peterson, which stated that the conveyance was subject to an easement for parking to benefit the church and that the easement was to run with the land so long
as the church property continued to be used as a church. Peterson received and recorded the deed to lot 20. At the sale of the lot from Peterson to Willard, Peterson’s deed to Plaintiff did not mention any easement, however, he told the Plaintiff that the church would want to continue parking on lot 20, Peterson did not tell Plaintiff of the easement clause in the deed he received from McGuigan. When Plaintiff became aware of the easement clause, he commenced this suit to quiet title to lot 20. At a bench trial, McGuigan testified that she would not have sold the property unless she had assurances that the church could continue to use the lot for parking. The trial court found that McGuigan and Peterson intended to convey an easement to the church, but that the clause they used in the deed was ineffective because of the common law rule that one cannot “reserve” an interest in property to a stranger in title. The Defendant appealed.
Issue. May the grantor, in deeding real property to one person, effectively reserve an interest in the property to another?
Held. Yes. Judgment reversed.
The court will not be bound by the feudal forms of conveyancing, but instead will recognize, as its primary objective in construing a conveyance, to try to give effect to the intent of the grantor. This is a holding that grants are to be interpreted in a similar fashion to contracts and not according to rigid feudal standards.
The court cites cases in other jurisdictions and in this jurisdiction, which contain numerous exceptions to the common law rule that one cannot reserve an interest in property to a stranger in title. The court is following the lead of Oregon and Kentucky by abandoning the rule altogether, rather than to continue to try and apply the common law rule piecemeal.
The Plaintiff contended that the old rule should apply in this case to deny the church an easement, because both the grantees and title insurers have relied on the old rule. The court pointed out that no title insurance was written on the deed, Plaintiff was aware of the church’s use of the lot for parking, and that Plaintiff did not even read the deed containing the reservation.
The court held that in applying the new rule to grants made prior to this decision, the court will decide whether to apply the old or new rule by balancing the injustice which might result under the old rule against the injustice which might result under the new rule.
The trial court found that the intention of the parties (McGuigan and Peterson) was to give an easement to the church, so the reservation clause was sufficient to create an easement.
Discussion. This case would be decided differently in many other jurisdictions.