#24580-aff in pt, rev in pt & rem-JKK
2008 SD 78
IN THE SUPREME COURT
OF THE
STATE OF SOUTH DAKOTA
* * * *
MARVIN E. TRIPP and DONNA
TRIPP DE SCHEPPER, a/k/a DONNA
DE SCHEPPER, Plaintiffs and Appellants,
v.
F & K ASSAM FAMILY, LLC, a South
Dakota limited liability company; SAMUEL
R. ASSAM and LORI R. DEWITT, As
Co-trustees of the Assam Credit Trust
Established under the Fred Assam Revocable
Inter Vivos Trust Agreement dated July 29,
1987, as amended; SAMUEL R. ASSAM,
Trustee of the Kay Assam Trust, Defendants and Appellees,
and
VIOLA LAPE; MARQUITA CHAVEZ and
RITA R. CHAVEZ; JOHN T. LAPE a/k/a
JOHN LAPE and JANET C. LAPE; CITY
OF SIOUX FALLS, SOUTH DAKOTA, a
municipal corporation, THE ILLINOIS
CENTRAL RAILROAD COMPANY, f/k/a
ILLINOIS CENTRAL GULF RAILROAD
COMPANY; THE UNKNOWN HEIRS,
DEVISEES, LEGATEES, EXECUTORS,
ADMINISTRATORS or CREDITORS OF
H.C. ALDRICH, Deceased; and all persons
unknown who have or claim to have interest
of Estate in or lien or encumbrance upon the
premises described in the Complaint, Defendants.
* * * *
APPEAL FROM THE CIRCUIT COURT OF
THE SECOND JUDICIAL CIRCUIT
MINNEHAHA COUNTY, SOUTH DAKOTA
* * * *
HONORABLE KATHLEEN K. CALDWELL
Judge
* * * *
ARGUED ON APRIL 22, 2008
OPINION FILED 08/06/08
JAMES E. MOORE of
Woods, Fuller, Shultz & Smith, PC Attorneys for plaintiffs
Sioux Falls, South Dakota and appellants.
TIMOTHY GRANDE
PATRICK J. SUMMERS of
Mackall, Crounse & Moore, PLC
Minneapolis, Minnesota
THOMAS J. VON WALD
JOHN P. MULLEN of Attorneys for defendants and
Bangs, McCullen, Butler, Foye appellees F & K Assam Family,
& Simmons, LLP LLC, Samuel R. Assam &
Sioux Falls, South Dakota Lori R. DeWitt.
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KONENKAMP, Justice
[¶1.] Two landowners dispute title on two parcels of land, a 100-foot strip
and a 33-foot strip. One landowner claims title based on two deeds and the other
through adverse possession and reversionary interests. After several motions and
cross motions for summary judgment, the circuit court quieted title to both parcels
in favor of the deed holder. We affirm in part, reverse in part, and remand.
Background
[¶2.] Marvin and Donna Tripp dispute title to two parcels of land in Sioux
Falls, South Dakota, held by F&K Assam Family, LLC. One parcel is a 100-foot
strip of land originally deeded to the Cherokee and Dakota Railroad in 1888, by
Eunice and Herbert Aldrich through an instrument entitled “Right of Way Deed.”
In a separate deed, also from 1888, the Aldrichs conveyed to the railroad a 33-foot
strip adjacent to the 100-foot strip. At some point, the Cherokee and Dakota
Railroad became the Illinois Central Gulf Railroad Company. Then, in 1984,
Illinois Central conveyed to Assam by special warranty deed several parcels of land
in Minnehaha County, including the land conveyed by the two 1888 deeds from the
Aldrichs to the Cherokee and Dakota Railroad.
[¶3.] In 2002, the Tripps brought an action against various defendants to
quiet title to a portion of the 100-foot strip and 33-foot strip adjacent to their land.
They asserted title to the portion of the 100-foot strip based on their claim that the
Aldrichs conveyed to the railroad an easement in 1888, and when the railroad
abandoned its easement interest in 1984, ownership reverted to the Tripps as
adjacent landowners. The Tripps claimed title to the 33-foot strip by adverse
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possession. Although the Tripps’ suit was against various defendants, this appeal
only concerns Assam. In response to the Tripps’ quiet title action, Assam
counterclaimed to quiet title to the same property. Because Illinois Central
conveyed to Assam a fee interest in the properties in 1984, Assam asserted fee
ownership of both parcels.
[¶4.] The parties filed cross motions for summary judgment. On January
23, 2003, the circuit court issued a memorandum decision. As to the 100-foot strip,
the court declared that Illinois Central conveyed to Assam fee title in 1984, and
therefore, nothing reverted to the Tripps. It then found that the Tripps could not
adversely possess the 33-foot strip because the 1888 deed contained language
indicating that the property was for public use. In an order incorporating the
memorandum decision, the court denied the Tripps’ motion for summary judgment
and granted Assam’s motion to the extent that the railroad conveyed to Assam fee
simple title.
[¶5.] The Tripps’ petition for an intermediate appeal was denied. The
parties then requested a decision from the circuit court on whether the 1888 deed,
related to the 33-foot strip, could be judicially modified because it failed to convey a
bounded parcel. It is undisputed that the 1888 deed from the Aldrichs to the
Chicago and Dakota Railroad purporting to convey a 33-foot strip of land did not
convey a bounded parcel. Assam asserted that the parties intended the deed to
convey the disputed 33-foot strip and requested the necessary reformation. The
Tripps, on the other hand, argued that the statute of limitations expired on Assam’s
right to reformation. The Tripps further asserted that if the court were to reform
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the deed, it should only change one word in the deed’s language, which would then
suffice to describe a bounded parcel, but not the disputed 33-foot strip they claimed
title to by adverse possession.
[¶6.] In a memorandum decision, the circuit court refused to reform the
deed at that time. It concluded that there was an issue of fact on when Assam
discovered that the 1888 deed failed to describe a bounded parcel, and therefore,
whether the statute of limitations expired. The court ordered a trial on the merits.
In response, the parties stipulated that the mistake was discovered by Assam in
2000. Thereafter, the court incorporated all previous memorandum decisions and
orders and held that the statute of limitations had not expired on Assam’s request
for reformation. The court then reformed the deed to describe a bounded parcel.
According to the court, the reformed deed identified a parcel consistent with that
described by the Tripps’ complaint and Assam’s counterclaim. Because the court
previously declared that the deed conveying the 33-foot strip “makes clear the [33-
foot] strip was intended for public use, thereby negating the hostility element
necessary for adverse possession prior to 1984” the court quieted title in favor of
Assam to the newly described 33-foot strip. The court also quieted title in favor of
Assam on the 100-foot strip.
[¶7.] On appeal, the Tripps contend that (1) the 1888 right-of-way deed only
conveyed an easement, not fee title, (2) ownership of that easement property
reverted to the Tripps on abandonment by the railroad, (3) the circuit court abused
its discretion when it reformed the 1888 deed, related to the 33-foot strip, without
evidentiary support, (4) the statute of limitations expired, thus precluding
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reformation, and (5) the Tripps established that they adversely possessed the 33-
foot strip.
Analysis and Decision
1. The 100-Foot Strip
[¶8.] We first address the Tripps’ claim that the 1888 deed from the Aldrichs
to the Cherokee and Dakota Railroad conveyed only an easement interest in the
100-foot strip. According to the Tripps, since the deed is entitled “Right of Way
Deed” and contains limiting language, the Aldrichs intended only to convey an
easement interest. Assam, on the other hand, asserts that this Court’s precedent
supports the circuit court’s conclusion that a conveyance of fee title was intended.
In particular, Assam points to the absence of reversionary language and the
warrant of title the Aldrichs gave on the property.
[¶9.] A grant of real property presumes fee simple title “unless it appears
from the grant that a lesser estate was intended.” SDCL 43-25-15; see also
Meyerink v. Nw. Pub. Serv. Co., 391 NW2d 180, 182 (SD 1986). We examine the
instrument as a whole to determine what type of conveyance was intended.
Meyerink, 391 NW2d at 182 (citing Northwest Realty Co. v. Jacob, 273 NW2d 141,
144 (SD 1978)). “[O]nly when construction of the instrument as a whole leaves the
intention of the parties in doubt should consideration be given to the situation and
circumstances of the parties at the time of the execution of the deed.” Id. (citing
Northwest Realty, 273 NW2d at 145).
[¶10.] In 1888, the Aldrichs executed a deed entitled “Right of Way Deed”
conveying a strip of land 100 feet wide “to have and to hold to said [Railroad]
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Company and its successors and assigns forever, the aforementioned strip of land
for all purposes connected with the construction, maintenance and operation of a
steam railroad over the same.” (Emphasis added). The deed used right of way
language in describing the railroad’s right “to go outside of said right of way on the
land above described to borrow material therefrom for embankment or to waste dirt
thereon, and agree that the price to be paid for the land that may be so used, shall
be in proportion to the price paid for said aforementioned right of way, . . . .”
(Emphasis added). The Aldrichs warranted “the title to said strip of land against
all persons whomsoever.” They received $375 for the conveyance.
[¶11.] In Sherman v. Sherman, the parties disputed whether an instrument
conveyed to the railroad an easement or fee title. 23 SD 486, 122 NW 439, 442-43
(1909). The challenged deed conveyed real property to the Cherokee and Dakota
Railroad “for the purpose of station grounds, tracks, side tracks, switches, and the
location, construction, and convenient use of its railroad, but for no other purpose[.]”
Id. at 441. The deed indicated that the railroad “discharge[d] and forever
release[d]” the grantors “from all claims whatsoever[.]” Id. at 442. Despite the
deed’s language limiting the purpose to use as a railroad, the Court held that fee
title was intended. When the deed was considered as a whole, it was evident that a
lesser estate was not intended. In particular, there was no provision reserving a
right in the grantor to reenter if the property ceased its use for railroad purposes.
Id. Moreover, full market value was paid in consideration, and the grantors were
released from all claims. Id. at 444.
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[¶12.] Similarly, in Nystrom v. State, the Court construed the following
language to pass an “unqualified title in fee and not an easement:”
‘all the estate, right, title, interest, claim and demand
whatsoever’ of the grantor ‘either in law or in equity, of, in and
to the above bargained premises, with the hereditaments and
appurtenances. To have and to hold the said premises above
bargained and described, with the appurtenances, unto the said
party of the second part, its successors and assigns forever. . . .
And the said party of the first part hereby expressly waives and
releases . . . all damages to the lands of said party of the first
part which have been or may hereafter be caused by reason of
the construction, maintenance and operation of a railroad on
said granted premises or by reason of any lawful use whatever of
said granted premises by said party of the second part, its
successors or assigns’.
78 SD 498, 499-500, 104 NW2d 711, 712 (1960) (emphasis added). In concluding
that a fee title was conveyed, the Court noted that “[t]he conveyance is not limited
by its terms to [a] railroad right of way or tracks and there is no reverter clause or
conditions.” Id.
[¶13.] In Meyerink, this Court again examined a deed to a railroad company
that contained right of way language. 391 NW2d at 182. The deed was captioned
“right-of-way deed,” but the Court held that when considered as a whole “it is clear
that transfer of fee title, not a lesser estate, was intended.” Id. at 182-83. The
Court noted “that the landowners ‘will forever Warrant and Defend the title to the
premises hereby conveyed’” and that this language “is clearly the language of a
conveyance in fee or, more specifically, a warranty deed.” Id. at 183.
[¶14.] As in Sherman, Nystrom, and Meyerink, we conclude that the limiting
language in the Aldrich deed is insufficient to establish that a lesser estate was
intended. True, the deed is entitled “Right of Way Deed” and contains language
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purporting to limit the railroad’s use of the property. But this language must be
contrasted with the provisions in the deed indicating that a permanent conveyance
was intended. First, the deed conveyed the property to the railroad “to have and to
hold . . . [along with] its successors and assigns forever.” Second, the deed did not
reserve a right to reenter if the property ceased to be used for railroad purposes.
Third, the deed warranted the railroad’s title to the property “against all persons
whomsoever.” Reading the language of the deed in its entirety, we conclude that
the 1888 deed from the Aldrichs to the Cherokee and Dakota Railroad conveyed fee
title to the 100-foot strip.
[¶15.] Nevertheless, the Tripps insist that Northwest Realty Co., 273 NW2d
at 144 and Tibbitts v. Anthem Holdings Corp., 2005 SD 26, 694 NW2d 41 would
support a finding that an easement was intended. The Tripps’ reliance on Tibbitts
is misplaced. That case involved a conveyance of property to a county for use as a
highway, implicating a different analysis. See 2005 SD 26, ¶7, 694 NW2d at 44.
When this Court reviews a conveyance to the State or a county for highway
purposes, we do not presume fee title. See Pluimer v. City of Belle Fourche, 1996
SD 65, ¶15, 549 NW2d 202, 205 (the general presumption does not apply). On the
contrary, “in the absence of express statutory authorization otherwise, when the
state acquires private property for highway right of way it merely acquires an
easement and fee title remains in the abutting landowner.” Cuka v. State, 80 SD
232, 236, 122 NW2d 83, 85 (1963) (citing Edmison v. Lowry, 3 SD 77, 52 NW 583
(1892); Meek v. Meade County, 12 SD 162, 80 NW 182 (1899); Sweatman v.
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Bathrick, 17 SD 138, 95 NW 422 (1903); Henle v. Bodin, 54 SD 46, 222 NW 492
(1928)).
[¶16.] In Northwest Realty Co., the Court examined an instrument containing
language purporting to convey fee simple title, while identifying the grant as a right
of way. 273 NW2d at 144. After the Court considered the instrument as a whole, it
could not determine the intent of the parties. 273 NW2d at 144-45. Therefore, the
Court applied a seven-factor test to assess the circumstances and situation of the
parties at the time the deed was executed. The factors include:
(1) the amount of consideration; (2) the particularity of the
description of the property conveyed; (3) the extent of the
limitation upon the use of the property; (4) the type of interest
which best serves the manifested purpose of the parties; (5) the
peculiarities of wording used in the conveyance document; (6) to
whom the property was assessed and who paid the taxes on the
property; and (7) how the parties to the conveyance, or the heirs
or assigns, have treated the property.
Id. at 145 (citing Sohio Petroleum Co. v. Hebert, 146 So2d 530, 535 (LaCtApp 1962))
(additional citations omitted). Applying this test, the circumstances surrounding
the grant led the Court to conclude that a lesser estate was intended. Id.
[¶17.] Although Northwest Realty Co. did not involve a conveyance to a
railroad company, a review of the seven factors in this case supports a conclusion
that fee title was intended by the Aldrichs and the Cherokee and Dakota Railroad
in 1888. The railroad paid the Aldrichs $375 for 3.03 acres of land. The deed
described the land with particularity, as evinced by the fact that its exact location
can be determined. See id. (“[e]asements do not require a definite statement of their
width, dimensions, or exact location”). It is true that the parties limited the
conveyance “for all purposes connected with the Construction, Maintenance and
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operation of a steam railroad[.]” However, the extent of the limitation supports the
inference that the Aldrichs intended to pass fee title. This is because the Aldrichs
imposed no conditions on the grant and did not reserve an interest or a right to
reenter if the land ceased being used for railroad purposes. See Sherman, 23 SD
486, 122 NW at 444 (“There is nothing in the instrument in question reserving in
the grantors any use of or dominion over the land, nor any provision whereby the
grantors might re-enter or resume possession in case it was not used for railway
purposes.”).
[¶18.] While the type of interest that would best serve the manifest purpose
of the parties is not determinative either way, and the peculiarities of the wording
used in the conveyance are not helpful, because the deed warrants title “against all
persons whomsoever,” this is additional support that the Aldrichs intended to
convey fee title. See Meyerink, 391 NW2d at 183-84; see also Sherman, 23 SD 486,
122 NW at 443. Finally, no evidence was presented to demonstrate that the parties’
heirs and assigns treated the property as if a limited interest was conveyed. In fact,
both the Cherokee and Dakota Railroad and its successor, the Illinois Central Gulf
Railroad Company, treated the property as if they held it in fee. Indeed, Illinois
Central conveyed fee title to Assam in 1984. Thus, the parties’ reasonable
commercial expectations in holding and transferring property were maintained.
[¶19.] Because the 1888 deed conveyed to the railroad fee title to the 100-foot
strip, Assam became the fee owner of that strip with the deed from Illinois Central.
And because Assam is the fee owner, there is no need to address the Tripps’ claim
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that the property reverted to them as the adjacent landowners when the railroad
abandoned its interest.
2. The 33-Foot Strip
[¶20.] We next address the Tripps’ claim that the statute of limitations
precluded reformation of the second 1888 deed, which Assam argues intended to
convey the disputed 33-foot strip. Assam asked the circuit court to reform the 1888
deed from the Aldrichs to the Cherokee and Dakota Railroad to describe a bounded
parcel. The Tripps do not dispute that the deed failed to describe a bounded parcel,
but contend that the ten-year statute of limitations expired on Assam’s right to
request reformation. According to the Tripps, Assam was constructively aware of
the defect in the deed when the instrument was recorded in 1984.
[¶21.] When an error or mistake has been made, equity allows a court to
reform a written instrument to reflect the real intention of the parties. Enchanted
World Doll Museum v. Buskohl, 398 NW2d 149, 152 (SD 1986); Burke v. Bubbers,
342 NW2d 18, 20 (SD 1984); Garber v. Haskins, 84 SD 459, 464, 172 NW2d 721, 723
(1969); Essington v. Buchele, 79 SD 544, 548, 115 NW2d 129, 131 (1962); Craig v.
Nat’l Farmers Union Auto. & Cas. Co., 76 SD 349, 354, 78 NW2d 464, 466 (1956). A
party’s right to reformation, however, is subject to the limitation that “such relief
cannot be granted against a bona fide purchaser or incumbrancer for value and
without notice.” Farmers’ & Merchants’ Bank v. Citizens’ Nat’l Bank of Sisseton, 25
SD 91, 125 NW 642, 644 (1910) (citations omitted); see also SDCL 21-11-1.
[¶22.] Here, there is no bona fide purchaser or encumbrancer for value
protesting Assam’s request for reformation. Therefore, whether Assam was
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constructively aware of the defect in the 1888 deed is immaterial. Because the
Tripps are not bona fide purchasers for value, they are in no position to complain of
or prevent the reformation of the 1888 deed. See Nash Finch Co. v. Rubloff
Hastings, L.L.C., 341 F3d 846, 850 (8thCir 2003) (the party opposing reformation
has the burden of proving that it is a bona fide purchaser for value). There being no
intervention by an innocent purchaser, the circuit court did not err when it acted to
reform the deed. See Enchanted World Doll Museum, 398 NW2d at 152; see also
Owens v. Owens, 135 So 87, 89 (LaCtApp 1931); Michigan Trust Co. v. Land
Owners Ass’n, 284 NW 894, 900 (Mich 1939).
[¶23.] Lastly, the Tripps assert that even if the statute of limitations does not
preclude reformation, the reformed deed does not describe the disputed 33-foot
strip, and therefore, the court erred when it did not quiet title in favor of them
based on their claim of adverse possession. According to the Tripps, Ernest
Carlsen’s affidavit and deposition testimony prove that the deed should have been
reformed to change only one word, and that if so reformed, the deed would describe
a parcel immediately southwest of the disputed 33-foot strip. * Assam, however,
asserts that “the legal description in the January 1888 Deed and a comparison with
the 1889 Plat shows that the deed as reformed by the [court] is supported by the
record.”
* The Tripps asked us to take judicial notice of, or supplement the record with,
a plat recorded in the office of the Minnehaha County Register of Deeds on
April 26, 1889. We will take judicial notice of the plat. However, this plat,
like the rest of the evidence in the record, does not assist us in determining
where the property in the reformed deed is located.
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[¶24.] While we review a circuit court’s decision to reform a deed under the
abuse of discretion standard, the court’s finding on the intent of the parties and
resulting reformation must be supported by the record. Burke, 342 NW2d at 21.
Moreover, plaintiffs seeking reformation must prove their “cause of action by clear,
unequivocal and convincing evidence.” Northwestern Nat’l Bank of Sioux Falls v.
Brandon, 88 SD 453, 458-59, 221 NW2d 12, 15 (SD 1974) (citing Craig, 76 SD at
354, 78 NW2d at 466; Brooks, Inc. v. Brooks, 86 SD 676, 679, 201 NW2d 128, 129
(1972)).
[¶25.] The 1888 deed originally contained the following legal description:
Commencing at a point Nine Hundred and Fifty (950) feet west
and Eighty three (83) feet north of the Southeast Corner of the
Southwest Quarter (1/4) of Section Thirteen (13), Township One
Hundred and One (101) North, Range Forty-Nine (49) West of
the 5th P.M.; thence North Thirty-Three (33) Feet; thence
Southeasterly parallel to the center line as now located of the
line of Railroad of the Cherokee and Dakota Railroad Company,
Six Hundred & Thirty-two feet, thence South Thirty-Three (33)
Feet; thence Northeasterly along the North Line of the Right-of-
Way of said Six Hundred & Thirty-to feet to place of beginning.
The circuit court reformed the deed as follows:
Commencing at a point Six Hundred and Thirty-Two (632) feet
west and One Hundred Twenty-Six and One-Half (126 ½) feet
north of the Southeast Corner of the Southwest Quarter (1/4) of
Section Thirteen (13), Township One Hundred and One (101)
North, Range Forty-Nine (49) West of the 5th P.M.; thence
North Thirty-Three (33) Feet; thence Southwesterly parallel to
the center line as now located of the line Railroad of the
Cherokee and Dakota Railroad Company, Nine Hundred and
Fifty (950), thence South Thirty-three (33) Feet; thence
Northeasterly along the North Line of the Right-of-Way of said
Railroad Nine Hundred and Fifty Feet (950) to place of
Beginning.
(Emphasis to note reformations).
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[¶26.] The court noted that the reformed “deed describes the same property
referred to as the ‘Tripp Property’ in Count 1 of [the Tripps’] amended complaint
and is the same property for which the Assam Defendants seek to quiet title in their
name as set forth in paragraph 2 of the Assam Defendants counterclaim for quiet
title.” Based on our review of the record, including the complaint, counterclaim,
affidavits, plats, exhibits, and transcripts, there is nothing to support the
proposition that the reformed deed describes the parcel intended by the Aldrichs in
1888, or describes the disputed 33-foot strip the Tripps claim title to by adverse
possession.
[¶27.] Assam asserts that a railroad map created at the time of the 1888 deed
and a plat filed on April 25, 1889, provide evidentiary support for the reformation
by the court. According to Assam, the “strip begins 632 feet west of the section line
and continues in a southwesterly direction along the north side of the railroad right
of way.” What “section line” Assam is referring to, where on that section line, and
what constitutes “632 feet west” cannot be determined from the record. While there
are multiple plats and diagrams in the record, none contain a drawing or any other
marking identifying the reformed bounded parcel. Moreover, there is nothing to
assist us in determining how the reformed parcel relates to the disputed 33-foot
strip.
[¶28.] There being no evidence to support the court’s finding that the
reformed deed describes the same property the Tripps assert title to by adverse
possession, we reverse for the taking of further evidence and remand the court’s
decision quieting title in the disputed 33-foot strip in favor of Assam. Thereafter,
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depending on the court’s findings, the Tripps’ claim for adverse possession may be
addressed.
[¶29.] Affirmed in part, reversed in part, and remanded.
[¶30.] GILBERTSON, Chief Justice, and SABERS, ZINTER, and
MEIERHENRY, Justices, concur.
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