Opinion
No. 107,539.
2013-01-11
BOARD OF EDUCATION OF UNIFIED SCHOOL DISTRICT NO. 383, Appellant, v. City of MANHATTAN, Appellee.
Appeal from Riley District Court; Paul E. Miller, Judge. Richard H. Seaton, of Seaton, Seaton & Gillespie, L.L.P., of Manhattan, for appellant. Katharine J, Jackson, city attorney, for appellee.
Appeal from Riley District Court; Paul E. Miller, Judge.
Richard H. Seaton, of Seaton, Seaton & Gillespie, L.L.P., of Manhattan, for appellant. Katharine J, Jackson, city attorney, for appellee.
Before GREEN, P.J., LEBEN and ARNOLD–BURGER, JJ.
MEMORANDUM OPINION
LEBEN, J.
In 1887, E.B. Purcell and Elizabeth Hoyt Purcell deeded three tracts of land to the City of Manhattan. The deed reflected the purpose of the property transfer—for the city to build and maintain a public waterworks on the land—and also required that the city provide free water to Manhattan's public schools in perpetuity, meaning forever. But the deed also provided that the land would revert to the Purcells' heirs—as if the deed had never been executed—if the city no longer used the land for a public waterworks.
In 1985, the city stopped using the water-treatment plant built on the Purcell land, and the city demolished the water-treatment facilities there in 1999. But when the city decided in 2010 to stop supplying free water to the Manhattan school district, the district sued, contending that the commitment to supply free water remained in force. The district court ruled in the city's favor, and the school district has appealed to this court.
We agree with the district court that the Purcell deed provides that the city's obligation to provide free water ends when the city stops using the land to produce water for its residents. Any other reading of the deed would ignore the provision that in the event the city quits using the property to produce water for its residents, the land itself reverts to the Purcells' heirs. It is undisputed that the city has ceased using the land to produce water, and the city's obligation to provide free water to the Manhattan public schools has ended as well. We therefore affirm the district court's judgment.
Factual and Procedural Background
The facts of this case are straightforward and undisputed. E.B. Purcell and Elizabeth Hoyt Purcell conveyed three tracts of land to the City of Manhattan in 1887. The deed required that the city build and maintain a public waterworks system to supply water to Manhattan residents. The deed also required that the city supply water “in perpetuity” to churches and public schools in the city. But the deed also contained what's known as a reverter clause, which provided that the land would revert to ownership by the Purcells or their heirs “in the event of the non-use[ ] or abandonment of said premises ... for the uses and purposes” set forth in the deed:
“This indenture, Made this first day of September in the Year of our Lord One Thousand Eight Hundred and Eighty Seven, between E.B. Purcell and Elizabeth Hoyt Purcell, his wife, of Manhattan City, Riley County, State of Kansas, of the first part and Manhattan City, Kansas, of the second part.
“Witnesseth, That said part of the first part in consideration of One Dollar to them in hand paid, the receipt whereof is hereby acknowledged, and in further consideration that said Manhattan City shall construct, operate and maintain, or cause to be constructed, operated and maintained a System of Public Water Works for the purpose of supplying Water to the inhabitants of the said Manhattan City, Kansas, on the premises hereinafter described, and shall in perpetuity supply free water to all churches and public schools and to the Young Men's Christian Association, in said Manhattan City, do by these presents grant, bargain, sell and convey to the said Manhattan City, Kansas, the following described Real Estate, situate in the County of Riley and State of Kansas, to-wit:
“[Three paragraphs describing the tracts of land are omitted.]
“To Have and to Hold the above granted and bargained premises with the appurtenances in perpetuity, for the uses and purposes aforesaid and for no other, and in the event of the non-use[ ] or abandonment of said premises by the said second party for the uses and purposes aforesaid, then this grant [is] to cease and determine, and the premises described [are] to revert to and rest in the parties of the first part, their heirs, executors and administrators as fully to all intents and purposes as if this conveyance had never been executed.”
None of the tracts is used to supply water to city residents today. The first of the three tracts contained the original waterworks facility, but it went out of service in 1985 and was demolished in 1999, leaving the first tract as a vacant lot. The second tract was the site of the city's reservoir, but it was abandoned and disconnected in 1965. The third tract was initially used as a roadway to the reservoir, but it is now used for general public travel, providing access to a residential area. So no part of the three tracts remains in use for the purpose of supplying water to Manhattan residents.
The city supplied free water, except for outdoor irrigation, to Manhattan public schools from 1887 until 2011. In November 2010, the Manhattan City Council passed a resolution providing that the city would no longer supply free water to the schools, churches, or the Manhattan YMCA as of July 1, 2011. The Manhattan school district (Unified School District No. 383) filed suit seeking a declaratory judgment that the city still had to provide it with free water. Both the city and the school district filed for summary judgment, or judgment without a trial.
The district court rejected the school district's argument that the city's obligation to provide free water remained in effect:
“The problem with [the school district's] argument is that the deed only requires the city to supply water as long as it uses the land for that purpose. Should it cease to use the land for that purpose, which it has done, the deed provides that the land reverts to the Purcells' heirs, whoever they may be. Whether those heirs can be found and whether they have a valid reversionary claim are issues to be decided another day.
“The only issue for decision today is whether the City of Manhattan is obligated to continue to provide free water to [the school district]. This court concludes that it is not.”
The school district has appealed to our court. Because we are reviewing a ruling on summary judgment where there are no material facts in dispute, we review the matter independently, with no required deference to the district court. Deutsche Bank Nat'l Trust Co. v. Rooney, 39 Kan.App.2d 913, 915, 186 P.3d 820,rev. denied 287 Kan. 765 (2008). In addition, the issue before us is determined by the terms of a deed, and we also engage in independent review of the interpretation and legal effect of written instruments, including deeds. National Bank of Andover v. Kansas Bankers Surety Co., 290 Kan. 247, 263, 225 P.3d 707 (2010).
Analysis
Both parties recognize that the case comes down to an interpretation of the Purcells' deed. The school district argues that the deed bound the city to provide free water “in perpetuity.” The district contends that the promise to provide free water is independent of the city's use of the land, in part based on that paragraph's location in the deed several paragraphs before the reverter provision that would return the land to the Purcell heirs if the city stopped using it for water treatment. But the city argues that the district court correctly interpreted the unambiguous language of the deed.
We begin with some key rules for determining the legal effect of a deed. The most important rule is that we look to determine the intention of the grantor—the party transferring the property—by giving effect to all parts of the deed, not by considering only some parts of the deed in isolation. See Central Natural Resources v. Davis Operating Co., 288 Kan. 234, 245–46, 201 P.3d 680 (2009); Stalcup v. Detrich, 27 Kan.App.2d 880, 884, 10 P.3d 3 (2000). As with contracts and statutes, we must consider the language used throughout the deed, interpreting each provision in harmony with other provisions in the deed. Magnusson v. Colorado Oil & Gas Corp., 183 Kan. 568, 572, 331 P.2d 577 (1958).
With this background, the interpretation of this deed can be easily resolved. While an early section does provide that the city “shall in perpetuity supply free water” to designated beneficiaries, including the school district, a later provision says that “in the event of the non-use[ ] or abandonment of said premises ... for the uses and purposes aforesaid, then this grant [is] to cease and determine, and the premises described [are] to revert to and rest in” the Purcells or their heirs “as if this conveyance had never been executed.” Thus, under the terms of the deed, once the city ceased using the property for water treatment, the land reverted to the Purcell heirs “as if this conveyance had never been executed.”
Two parts of that last section are important. The deed expressly provides for the land to “revert” to the Purcells' ownership (or that of their heirs). And at that point the reversion is “as fully to all intents and purposes as if this conveyance had never been executed.” Of course, if the conveyance had never been executed, the city would have had no obligation to provide free water to anyone.
The deed clearly contemplated that the land was transferred to the city in exchange for three things: (1) $1, apparently to satisfy any potential legal requirement that something tangible be exchanged to form a contract, (2) the city's agreement that it would build a waterworks on the land, and (3) the city's agreement to supply free water to local public schools and other designated parties. As the deed noted, “in consideration” of $1 and those promises, the Purcells “grant ... to the said Manhattan City ... the following described Real Estate ....“ But the sixth paragraph of the deed said that the city was “To Have and to Hold the above granted and bargained premises ... for the uses and purposes aforesaid and for no other.” And it continued that “in the event of the non-use[ ] or abandonment of said premises ... for the uses and purposes aforesaid, then this grant [is] to cease and determine, and the premises described [are] to revert to and rest in” the Purcells or their heirs “as if this conveyance had never been executed.” All of that seems pretty clear.
The school district makes two notable legal arguments against this interpretation. First, it argues that the city's promise to provide free water should be considered a “covenant” that runs with the land, not a “condition subsequent” that can terminate the land transfer altogether. Second, the school district argues that the parties treated the deed as if the requirement to provide free water stayed in effect even if the city stopped using the land to produce treated water. After all, the school district notes, the waterworks facility stopped producing water in 1985 and was demolished in 1999, but the city continued to provide free water without dispute until 2011. Ultimately, both arguments fall for the same reason: neither can overcome the plain language of the deed.
Let's start with the school district's argument that the city's promise to provide free water should be considered a covenant that runs with the land, not a condition subsequent. We should start by explaining these terms; each describes something that can be provided for in a deed. A covenant running with the land places designated restrictions on the land's use. For example, a covenant might provide that the grantor maintains the right to go across the property to reach other property still owned by the grantor. A condition subsequent is a condition that occurs after the grant of land that leads to forfeiture of the grant itself. Land might be given to a school district for use as a school, with a provision that the land reverts to the grantor if the land is no longer used for educational purposes.
Because the condition subsequent results in forfeiture of an interest that has already been conveyed, there's a default rule that where the language is ambiguous or doubtful, courts generally will treat a provision in a deed as a covenant, not a condition subsequent. See Kinney v. State, 238 Kan. 375, Syl. ¶ 1, 710 P.2d 1290 (1985). But like other default rules of interpretation, that rule falls away if the parties have used clear language that unambiguously creates a condition subsequent. See Carrothers Constr. Co. v. City of South Hutchinson, 288 Kan. 743, 751, 207 P.3d 231 (2009).
The Purcells have done so in their deed. Not only does the second paragraph show that the transfer of the land was directly tied to the use of the land as a waterworks and the provision of free water to certain parties, but the sixth paragraph contains an explicit provision that the property reverts to the Purcells or their heirs if the property ceases to be used for those purposes. The duty to provide free water is clearly connected to the land grant, and the duty to provide free water ends when the land reverts, something that happens automatically under the deed's terms.
The school district's second argument is that the parties have acted as if the city's obligation to provide free water remained in effect even after the city quit using the land for water-treatment purposes. Thus, the school district argues that the “operative construction” of the deed used by the parties themselves shows that the city's obligation endures. But the operative-construction principle also applies only in cases of actual ambiguity in a written instrument. See Heckard v. Park, 164 Kan. 216, 220, 188 P.2d 926 (1948). Here, the grantors' intention is clear from the deed itself, so there's no reason to resort to operative construction. See Central Natural Resources, 288 Kan. at 246, 201 P.3d 680. The city's act of providing free water for years it was not obligated to do so from 1985 until 2011 says nothing about the Purcells' intent in 1887.
In sum, the deed's language provided that the land grant was itself conditioned on the use of the property to treat water for Manhattan city residents, a use that has long since ended. The parties to this lawsuit are the city and the school district; no one has attempted to locate and join the Purcell heirs, nor have they sought to join the lawsuit. So we are called upon only to address whether the city has any continuing obligation to provide free water to the school district. It does not.
The district court's judgment is affirmed.