Caseflicks

Supreme Court of Minnesota • 2004

State Ex Rel. Department of Natural Resources v. Hess

684 N.W.2d 414 | 2004 Minn. LEXIS 465

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Takeaway

In short, this case holds that a railroad deed conveying a described strip of land "so long as" it is used for railway purposes created a fee simple determinable, and the Marketable Title Act later extinguished the unrecorded possibility of reverter, giving the state absolute title to the trail corridor.

Background

In 1898, Thomas and Harriet Walker and W.T. and Clotilde Joyce deeded the Brainerd and Northern Minnesota Railway Company a 100-foot-wide railroad corridor, with additional wider strips in places. The deed stated that the grantors "grant, bargain, sell and convey" a "strip, belt or piece of land" to the railroad and its successors. It further provided that the conveyance would continue "so long as" the strips were used for right-of-way and railway purposes, but would "cease and terminate" if the railway was removed.

The railroad's successor, Burlington Northern Railway Company, operated a line on the corridor until it discontinued service in 1985 and removed the tracks, ties, and bridges in 1986 or 1987. In 1991, Burlington Northern quitclaimed the corridor to the Department of Natural Resources for $1.526 million. The DNR opened the Paul Bunyan State Trail on the corridor later that year.

Duwayne Hess and Brian and Amelia Sandberg owned parcels adjoining or crossed by the trail. They began blockading portions of it in 1998 and, in the Sandbergs' case, used part of the corridor in connection with driveway construction. The DNR brought a quiet-title action. The district court granted summary judgment to the DNR, holding that the 1898 deed conveyed a fee simple determinable and that the Marketable Title Act extinguished the grantors' possibility of reverter, leaving the DNR with fee simple absolute title. The court of appeals reversed, concluding that the deed created only an easement that Burlington Northern had abandoned. The Minnesota Supreme Court granted review.

Issues

Issue #1

Whether the 1898 railroad deed conveyed an easement or a fee simple determinable.

Holding

The deed conveyed a fee simple determinable, not merely an easement.

Reasoning

A fee simple determinable is an estate in land that automatically ends upon a stated event, leaving the grantor with a possibility of reverter. Language such as "so long as," "until," and "during" ordinarily signals that kind of estate. An easement, by contrast, gives only a right to use another's land and does not transfer an estate in the land itself.

The Court read the deed as a whole, beginning with its operative grant. The grantors did not merely give the railroad permission to pass over their property; they "grant[ed], bargain[ed], s[old] and convey[ed]" a defined "strip, belt or piece of land" to the company, its successors, and assigns. That language strongly indicated a conveyance of an interest in land.

The habendum clause reinforced that conclusion. It said the conveyance would remain in force "so long as" the land was used for right-of-way and railway purposes, but would "cease and terminate" if the railway was removed. The phrase "so long as" is conventional language of a determinable fee, showing that the railroad received title subject to a condition that could end its estate.

The words "right of way" did not compel a contrary result. That phrase can mean either a right of passage or the physical strip of land used for a railroad bed. In this deed, it described the purpose for which the corridor was conveyed, not necessarily the legal character of the interest transferred. Minnesota law does not impose a presumption that a railroad conveyance mentioning a right of way is always an easement.

Other features of the instrument supported a fee interest. The deed described a corridor 100 feet wide and additional strips that widened it in some locations, suggesting a transfer of a substantial parcel rather than a limited use right. It also separately gave the railroad a "right" to erect snow fences beyond the corridor. The parties' different wording for the snow-fence right and the corridor conveyance indicated that they understood the difference between granting a use right and conveying land.

The grantors' apparent release of dower rights, although partly illegible, also tended to support a conveyance of a fee interest because an easement ordinarily does not require a relinquishment of dower. In addition, a 1901 deed by the Joyces excepted from a later conveyance the land previously conveyed to the railroad. That later treatment showed that the grantors understood the 1898 transaction as having transferred the land itself, rather than merely burdening it with an easement.

Earlier Minnesota railroad cases, especially Norton and Zahner, supplied only limited guidance. Those decisions did not need to distinguish an easement from a fee simple determinable because, before the Marketable Title Act, either interest would have ended when railroad use ceased. The present dispute made that distinction consequential, so the Court focused on the particular language and circumstances of this deed.

Issue #2

Whether the Marketable Title Act extinguished the grantors' possibility of reverter and gave the DNR fee simple absolute title.

Holding

Yes. Because no timely notice preserving the possibility of reverter was recorded, the Act extinguished it, and the DNR owns the corridor in fee simple absolute.

Reasoning

The Marketable Title Act seeks to make title ascertainable from the recorded chain of title during the preceding 40 years. It generally bars enforcement of an old claim or interest unless the claimant records a statutorily adequate notice within 40 years after the instrument, event, or transaction creating that interest.

The DNR met the first requirement for invoking the Act: it held a claim of title based on a recorded source of title that had been of record for more than 40 years. The 1898 deed, recorded in 1900, conveyed the railroad a fee simple determinable, and that estate constituted a qualifying source of title under the Act.

The successors to the original grantors failed to meet the second requirement necessary to preserve their claim. No one recorded a notice asserting the possibility of reverter within the statutory period. The Act therefore created a conclusive presumption that the reverter interest had been abandoned and extinguished it.

Once the possibility of reverter was extinguished, the conditional limitation on the railroad's estate no longer burdened title. Burlington Northern could thus convey the corridor to the DNR, and the DNR held the disputed portions of the Paul Bunyan State Trail in fee simple absolute. With no material factual dispute remaining, summary judgment for the DNR was proper.

Dissents

Chief Justice Blatz

Reasoning

Chief Justice Blatz concluded that the 1898 deed conveyed an easement, relying principally on Norton v. Duluth Transfer Railway and Chicago Great Western Railroad v. Zahner. In his view, Norton involved materially identical granting and habendum language and held that the railroad received only an easement. He rejected the majority's view that those precedents were unhelpful because the easement-versus-determinable-fee distinction did not affect their outcomes at the time.

The dissent stressed that the parties' 1898 intent must be derived from the deed and contemporaneous law, not from the later-enacted Marketable Title Act. The deed limited the railroad's interest to the period during which the strips were used for a railroad right of way and omitted language such as "forever." Under Norton and Zahner, those limitations showed an intent to grant a use right rather than title to the land.

Chief Justice Blatz also read the snow-fence provision differently. The deed gave the railroad a separate right to build snow fences on both sides of, or within 150 feet of, the track center line. In his view, granting this additional use right within the 100-foot corridor made little sense if the railroad already held title to that corridor; it instead suggested that the principal railroad right was itself an easement.

The dissent found the majority's reliance on Walter and out-of-state decisions misplaced. Walter concerned a school-site trust with express reverter language and materially different deed terms. The cited out-of-state decisions either lacked the deed's limiting language or did not meaningfully involve a right-of-way restriction like the one at issue.

Because the railroad's interest was an easement, Chief Justice Blatz would have held that Burlington Northern abandoned it by discontinuing rail service and removing the track, ties, and bridges in 1986 or 1987. Those affirmative acts were plainly inconsistent with continued railroad use, and the deed expressly stated that the interest would terminate if the railway was removed. Burlington Northern consequently had no interest left to convey to the DNR in 1991.