First National Bank of Oregon v. Townsend

Brief Fact Summary.

In this case, a deed was found unrecorded in the grantee’s personal effects after the death of the grantee. The deed was recorded by the Plaintiff, Townshend (Plaintiff), the personal representative of the grantee’s estate. The grantor was also deceased and had no heirs. The State of Oregon was the interested party on the grantor’s behalf, due to escheat. The deed was titled, “Warranty Timber and Mineral Deed,” but was confusing as to what the deed intended to convey (whether a timber and mineral interest was to vest in the grantee or whether a fee simple interest was to vest in the grantee).

Synopsis of Rule of Law.

When there is doubt as to whether the parties intended that a deed transfer a fee simple or a lesser interest in land that doubt should be resolved in favor of the grantee and the greater estate should pass.

Facts.

In this case, a deed was found unrecorded, in the grantee’s personal effects after the death of the grantee. The deed was recorded by the Plaintiff, personal representative of the grantee’s estate. The grantor was also deceased and had no heirs. The State of Oregon was the interested party on the grantor’s behalf, due to escheat. The deed was titled, “Warranty Timber and Mineral Deed,” but was confusing as to what the deed intended to convey (whether a timber and mineral interest was to vest in the grantee or whether a fee simple interest was to vest in the grantee). The deed did contain language, which granted to the grantee the right to enter upon the land and cut timber and mine ores without interference from the grantor. The consideration was listed as $200 “paid on all Trees and Minerals removed from his property.” However, the grantee, his heirs and assigns, were to pay all taxes levied after the deed and the land was to be “in quiet, peaceable, and exclusive possession
of the [grantee, his heirs and assigns] against all persons lawfully claiming the whole or any part thereof,” which the grantor would warrant and defend against. The lower court construed the deed as granting a fee simple interest in the grantee, in favor of Plaintiff, the grantee’s personal representative. The State of Oregon appealed.

Issue.

Did the deed convey a fee simple interest, or a limited interest in the timber and mining rights, with the fee simple interest retained by the grantor?

Held.

The deed conveyed a fee simple interest in the grantee. Affirmed.
Where a deed is patently ambiguous, the Court must first attempt to determine the intent of the parties from the language of the deed itself, taken as a whole, and from the surrounding circumstances. However, due to the deaths of the grantor and the grantee, the Court could find no extrinsic evidence of the parties’ intent.
When there is doubt as to whether the parties intended that a deed transfer a fee simple or a lesser interest in land that doubt should be resolved in favor of the grantee and the greater estate should pass.
The Court also found support for the proposition that if the intent of the parties cannot be discerned from the deed and there is, as here, an irreconcilable conflict between the granting clause and other parts of the deed, the estate conveyed in the granting clause will prevail.
The Court also found that escheat is not favored by the law. Typically, that principle arises in escheat cases where it is unclear whether the intestate died without heirs. The Court noted the rule regarding escheat, but chose to decide the case on the other bases.

Discussion.

When reading the deed, consider what the parties might have intended. It does seem clear, given the consideration, that the grantor was granting to the grantee the timber and mining rights upon the land. However, the remaining language of the deed, particularly the language in the conveyance, is quite ambiguous. Without any reference to extrinsic or parol evidence of the intent of the parties, the Court relied on the language of the conveyance itself, rather than the probability of the basis of the deal.