Railroads: Easement or Fee Simple?

We are frequently confronted with a parcel of land bounded by a railroad, and spend significant time deciphering deeds to determine whether the railroad is in fact an easement or a separately titled tract. At the turn of the century, when rails ruled the country, it was common to find deeds granting rights over vast tracts of land without clear location or clearly worded rights of interest.

A recent Maryland case brought against the United States by an 1890 land trust and an area country club established in 1909 highlights some of the problems well known to surveyors. Because it is a long and involved case, only certain points will be discussed here. For further reference, the full story may be read as Chevy Chase Land Co. of Montgomery v. US, at 37 Fed. Cl. 545 (1997).

Fee Simple? Or Reversionary Easement?

The gist of the story is that the land trust owned property over which it deeded a strip of land to a railroad. The land on both sides of the railroad strip was sold to a country club, which built a golf course with several crossings over the railroad strip. At issue was whether the railroad strip was deeded in full fee simple absolute to the railroad, or whether it was merely a reversionary easement that would return to the land trust upon the abandonment of the railroad's use of the strip. Why is this so important? For one thing, if the conveyance had only been for a reversionary easement, the land trust would be able to re-sell the strip to either the adjoining country club or to the county for a Rails-to-Trails project, either way amassing a profit. (The Rails to Trails Act provides that former railroad rights-of-way are to be maintained for the public benefit, reserving the right to build light-rail transitways and public walk- and bike-ways in the right-of-way.) On the other hand, the country club wanted to be able to claim adverse rights over the strip, but it never made clear whether its claim was against the land trust or the railroad.

Now we meet the cast of characters. Chevy Chase Land Company (CCLC, or "the land company") had executed a deed to convey a right-of-way to the Metropolitan Southern Railroad (MSRR) in 1911. The parcel in question is a strip of land about one mile long and 100 feet wide, encompassing about 12 acres in Montgomery County, Maryland. MSRR operated trains over this parcel until May 10, 1985, at which point it determined that the tracks were in disrepair beyond reasonable expense to salvage, and the last two users of the railroad contracted to receive their deliveries by truck instead of by rail. CCLC argued that upon abandonment of the right-of-way, ownership should revert to CCLC. In light of the Rails-to-Trails legislation, the property was instead made available for purchase by Montgomery County for light-rail and hiker/biker trail uses, as blessed by the Interstate Commerce Commission.

In 1909, the Columbia Country Club had chosen two parcels of land, one on each side of the MSRR strip, for a golf course and clubhouse. These tracts were purchased on condition that permission could be obtained by the club from the Baltimore and Ohio Railroad Company (MSRR's predecessor) to cross the tracks. Such an agreement was executed November 11, 1909. As a result, the club purchased the two parcels on November 22, 1909 and proceeded to construct the course. Golf course patrons could cross the tracks at two locations to get from the first set of tees to the rest of the greens. In 1940, two more parcels were acquired along the tracks, and two additional paths were created to cross the tracks. At present, tee number two also encroaches onto the 100-foot-wide right-of-way strip, which is a further complication in the arguments in this case.

The land company filed a suit in 1992 after MSRR's abandonment of the tracks, arguing that CCLC owned full fee simple absolute in the right-of-way strip and that MSRR had no right to transfer it to anyone else once it had ceased its operations. Meanwhile the Country Club claimed adverse possession over the area subject to its four crossings and encroaching tee. If in fact the railroad did abandon its tracks, since it ceased its operations and transferred its customers to other transportation, should the land revert to the Chevy Chase Land Company, or did the railroad have the right to allow Montgomery County take over the land for its Rails-to-Trails project? Did the country club have rights to the land, either from deed verbiage or due to the long use for crossings and tee number two? The key is in the wording of the original deeds.

Reversionary Wording Was Missing

The original 1891 agreement between the land company and the railroad was "to donate and convey a right of way 100 feet wide…And the said Land Company for the consideration aforesaid further agrees to donate and convey to the said Railroad Company for the purposes of a passenger and freight depot, and uses incident thereto, including side tracking, the following described parcel of land…" MSRR didn't build the depot, but constructed the lines and freight siding on the depot lot; Rock Creek Railroad built a passenger depot on the next tract to the south. In the spring of 1911, the land company and the B & O Railroad entered into a deed with a granting clause as follows: "the said party of the first part (CCLC) for and in consideration of the sum of FOUR THOUSAND (4,000) DOLLARS, to it paid by the said party of the second part, does hereby grant and convey unto the said party of the second part (MSRR) its successors and assigns, a free and perpetual right of way, one hundred (100) feet wide, over the land and premises hereinafter designated as ‘Parcel A' and does hereby grant and convey unto the said party of the second part (MSRR) it successors and assigns, in fee-simple, the land and premises, hereinafter designated as ‘Parcel B'…" (clarification in parentheses added).

The only reference to a restriction on the railroad's use of the land is a statement at the end of the metes and bounds description stating that the use was "subject to (an) existing right of way for highway and other purposes over what is known as Connecticut Avenue Extended." Other railroad ventures entered into by CCLC in the same decade had specific conditions limiting the use of the land and providing for reversion in case the railway failed to meet those conditions. However, such reversionary wording was not present in the deed in question. Wording that we usually see in such instances are "for so long as," "until" or similar clear limits to the ownership of use of a parcel of land. None of these words were included in the deed, and the court disregarded claims of reversionary rights.

Court Determined Full Title Had Passed

CCLC's argument that it had transferred only an easement and not full ownership is also disputed by the wording. In the case discussion, considerable detailed attention is given to deducing the intent of the original parties by considering the deed as a whole as well as resurrecting the governing law at the time of the conveyance. Maryland law in 1911 construed conveyances of real estate "to pass a fee simple estate, unless a contrary intention shall appear by express terms or be necessarily implied therein." Further, the use of the word "grant" and the phrase "bargain and sell" were to be construed to pass the whole interest unless there were "limitations or reservation showing, by implication or otherwise, a different intention." Contracts of any kind are most strongly interpreted to the benefit of the grantee and against the grantor. Except for the clause subjecting the transfer to the right of way for Connecticut Avenue Extended, no other restrictions on use of the parcel appear in the deed. Railroads had the right to acquire fee simple absolute interests as well as easements, so that there was no implied limitation on the use of the conveyed parcel. Use of the term "right-of-way" is often interpreted in legal terms to mean an easement, but in railroad language and lay speech the phrase indicates the strip of land upon which the track is laid. Further, the amount of payment received by CCLC was considered more than a nominal fee for that time, as other transactions were sealed with payments of one dollar. In considering both the language of the deed and the fee transferred, the court determined that full title had passed, and not merely an easement or right to use.

For those questioning why the United States is listed as the defendant in this case, there is a lengthy section regarding the land company's argument that the Rails-to-Trails Act constituted a taking of land. Since the Act was federal legislation, the logical target was the U.S. government.

Wendy Lathrop is the manager of the Geographic Search Department for Charles Jones, Inc. in Trenton, New Jersey and a Contributing Editor for the magazine.

» Back to our Jan/Feb 1998 Issue

Website design and hosting provided by 270net Technologies in Frederick, Maryland.