Rosecrans v. Pacific Electric Railway Co.

— Plaintiffs appeal from a judgment of dismissal entered upon an order sustaining a demurrer to their complaint.

Plaintiffs are the successors in interest of Carl F. and Lillian T. Rosecrans, husband and wife, who were the grantors in a deed dated September 17, 1907, which conveyed to H. E. Huntington, the predecessor of defendant, Pacific Electric Railway Company, a corporation, a right of way for a railroad across the real property therein described. It is stated in said deed that for the consideration of $1 and other valuable consideration, the grantors grant to the grantee the right of way for a railway; that the grant is given and accepted “upon the following conditions” which are “hereby made to be binding upon” the grantee “his heirs and assigns forever. ’ ’ The conditions are that the grantee or his assigns shall construct and operate an electrical railway on a specified grade over the right of way and have it com

“Each of the aforesaid conditions is made for the benefit of first party, his heirs and assigns, and shall bind second party, his heirs and assigns and the right of way hereby granted.” (Emphasis added.)

Plaintiffs’ action is one to quiet their title against defendants, alleging that defendants and their predecessors had operated an electric railway on the right of way from 1908 to 1940, but since said time defendant Pacific Electric Railway Company has failed to operate or run passenger

The above-quoted clause in the deed which is here involved, is clearly a ctindition subsequent rather than a covenant. It is true, that as the breach of a condition subsequent involves a forfeiture, a clause in a deed imposing obligations or restrictions on the grantee, will be construed as a covenant rather than a condition subsequent when that can reasonably be done. (Gramer v. City of Sacramento, 2 Cal.2d 432 [ 41 P.2d 543 ] ; McBride v. Freeman, 191 Cal. 152 [ 215 P. 678 ].) However, such construction will not be given contrary to the intention of the parties. (Knight v. Black, 19 Cal.App. 518 [ 126 P. 512 ].) Where the words employed show a clear and unmistakable intention on the part of the grantor to create a condition subsequent it will be upheld. (Firth v. Marovich, 160 Cal. 257 [ 116 P. 729 , Ann.Cas. 1912D, 1190] ; Firth v. Los Angeles Pacific Land Co., 28 Cal.App. 399 [ 152 P. 935 ].) The use of the words such as “upon the express condition that” are appropriate to create a condition subsequent. (Victoria Hospital Assoc. v. All Persons, 169 Cal. 455 [ 147 P. 124 ].) And likewise, evidence of the intention to create a condition subsequent is found in a provision for forfeiture and right of reentry or power of termination. (Fitzgerald v. County of Modoc, 164 Cal. 493 [ 120 P. 794 , 44 L.R.A. N.S. 1229 ].) In the instant case not only was the clause involved stated to be an express condition, but right of reentry was given, it was expressly stated that the clause was a condition and not a personal covenant, and the granting clause stated that the right of way was granted for an electric railway. The clause did therefore constitute a condition subsequent. (See Parsons v. Smilie, 97 Cal. 647 [ 32 P. 702 ] ; Fitzgerald v. County of Modoc, supra; Miller v. Sham, 50 Cal.App. 702 [ 195 P. 743 ]; Johnston v. City of Los Angeles, 176 Cal. 479 [ 168 P. 1047 ] ; Firth v. Los Angeles Pacific Land Co., supra; Title Guarantee & Trust Co. v. Garrott, 42 Cal.App. 152 [ 183 P. 470 ] ; Romero v. Department of Public Works, 17 Cal.2d 189 [ 109 P.2d 662 ].)

In support of the judgment defendants invoke the rule that a condition involving a forfeiture should be strictly construed against the one relying upon such condition. (Civ. Code, §§ 1442, 1069; Michaelian v. Elba Land Co., 76

We believe that the solution of the problem depends upon the correct interpretation of the condition in the light of the deed as a whole in order to ascertain the intention of the parties. Looking at the face of the deed alone there are several factors which clearly indicate an intention that the service required by the condition was to be maintained perpetually. There are many things to be done or not done by the grantee as heretofore outlined. They are of a nature which are clearly of benefit to the grantors. A comprehensive scheme is set forth with relation to the operation of the railroad, the maintenance of the right of way, and the relation of the right of way to the adjoining property such as grades, street crossings, culverts and the like. It indicates a definite plan embracing future contingencies. The plan contemplates permanency in the improvement and use of the right of way, rather than mere temporary expediency. Under such circumstances it is not to be supposed that it was intended that the conditions need be complied with for any such limited period as ten, twenty or fifty years. A railroad is of a permanent character. Likewise, its effect upon the property adjoining the right of way is wide reaching and permanently affects the nature of the development of that property, its value, and population trends. The condition in question requires that the specified passenger service must be both established and maintained. Effect should be given to both of those words. Even if establishment be construed to mean merely to commence, mere commencement will not suffice to satisfy the condition. It must also be maintained. The initial construction of the railroad is required in other clauses of the deed. It is specified that the grantee “shall build, construct and operate a first class electrical railway . . . and have said railway constructed, and completed on or before” January 1, 1908. Another clause requires the stop

Reliance is placed upon the case of O. T. Johnson Corp. v. Pacific Electric Railway Co., 19 Cal.App.2d 306 [ 65 P.2d 368 ]. There the clause provided that upon the completion of the railroad and the commencement of the operation of passenger trains thereon, regular passenger trains shall be operated at certain specified minimum intervals. There was no requirement contained in the documents there involved that passenger service be established and maintained. The language there employed together with the other clauses may have been susceptible of the construction placed upon it by the court that perpetual passenger service was not re

Defendant discusses, as bearing upon the issue here involved, the public nature of the service rendered by a railroad company, the public interest involved, its right as a public utility to continue to use the right of way, the right of eminent domain implicit therein, and action by government regulatory bodies in reference to its operations, and the impossibility of it performing the condition because of such regulation. Those are matters of defense to be asserted by defendant if desired. We are not now required to and do not here pass upon their merit or soundness. The appeal is from a judgment entered after demurrer sustained and it cannot be said that merely because defendant railroad company is still operating that those questions must now be determined. We hold only that the complaint states a cause of action in view of the provisions of the deed there pleaded.

The judgment is reversed.

Shenk, J., Curtis, J., Traynor, J., and Peters, J. pro tern., concurred.