Martin v. City of Seattle

Pearson, C.J. —

Plaintiffs brought this action to enforce conditions subsequent in a 1908 deed quitclaiming land to the City of Seattle (hereafter the City). The primary issue presented in this case is whether the acceptance by the City of a conditional transfer from the State constituted a breach of the condition found in the deed from the grantor to the City. The trial court and the Court of Appeals held that the City breached the condition subsequent and awarded damages to the plaintiffs. The City appeals contending the plaintiffs can no longer enforce the conditions, and that the City's use of the deed property does not constitute a taking. We reverse.

In 1883, the United States government issued a land patent to Charles Waters for property located in Seattle on the shores of Lake Washington. This property was subsequently purchased by C.B. Dodge Company (hereafter Dodge).

In 1908, Dodge quitclaimed a strip of the property to the City for the purpose of constructing Lake Washington Boulevard. Dodge also conveyed to the City "any and all rights which the grantor may have to acquire or purchase the shorelands of Lake Washington in front of the described property".

The deed included the following conditions:

1. That the grantor reserves the right, for itself, its successors and assigns, upon theshores [sic] of Lake Washington in front of the above described property to construct and maintain a private boat-house . . . said boat-house to occupy not to exceed twenty-five (25) feet frontage along the shore of said Lake, and said boathouse to be for the personal use of C.B. Dodge and his family, or such other person or persons as shall hereafter own, or as a tenant or licensee occupy any part of block two (2) Maynard's Lake Washington Addition to the City of Seattle . . . and that the said grantee shall at all times permit the said construction, maintenance and use of the said boat-house and acquire and keep as its property such shore land as shall be necessary for said purpose.

The deed provided that the conditions could be enforced through a power of termination, as follows:

And the party of the first part hereby reserves to itself and to its successors and assigns forever the right, in case of the breach of the foregoing conditions, or any of them, whether one or more, to re-enter the said premises and in case of said re-entry the said party of the first part, its successors or assigns, shall be revested with its former estate therein as though this conveyance had never been made, and no failure to enter for the breach of the said conditions, or any of them shall be held or construed to be a waiver of the right to so enter for such or any other or subsequent breach.

In 1913, the City acquired the shorelands in front of the Dodge property from the State pursuant to the Laws of 1913, ch. 183, which provided that the shorelands are

hereby reserved for public uses and are hereby granted and donated to the city of Seattle for public park, parkway and boulevard purposes, and as a part of its public park, parkway and boulevard system and any diversion or attempted diversion of such lands so donated from such purposes shall cause the title to said lands to revert to the state.

In 1916, construction of the Hiram Chittenden Locks resulted in the lowering of Lake Washington by approximately 9 feet. Consequently, the shoreline of Lake Washington moved from 90 feet to 140 feet east of its former location. Title to the uncovered land remained in the City.

Between 1908 and 1983 neither Dodge nor its successors in interest made any demand upon the City for permission to build a boathouse. In July 1983, plaintiffs notified the City of their desire to build a boathouse pursuant to the conditions set forth in the 1908 deed. The City refused permission, and in September 1983, the plaintiffs informed the City of their election to reenter the premises and to declare that the property had been reverted in its entirety. In December 1983, the plaintiffs commenced this action for declaratory relief and damages.

The trial court interpreted the conditions in the 1908 deed to be valid conditions subsequent. The court held that the City had not breached the condition in 1913 when it acquired its title to the shoreland from the State; rather, the City had breached the conditions subsequent in 1983 when it refused to allow the plaintiffs to build a boathouse. The trial court awarded the plaintiffs $50,000 in damages. The Court of Appeals agreed with the trial court and also held that the City's refusal to grant the plaintiffs permission to build a boathouse constituted an unconstitutional taking.

The questions necessary for resolution are: (1) what were the conditions contained in the 1908 deed; (2) were such conditions valid; (3) were any breached; (4) when did such a breach occur; and (5) was the grantor's right of entry/power of termination (hereinafter power of termination) exercised within a reasonable time after a breach occurred?

The conditions in the deed were that the City would permit the construction of a boathouse on land in front of the deeded strip, and that the City would acquire and keep such land as necessary for that purpose. On their face such conditions appear valid. The deed purported to transfer to the City "any and all rights which the grantor may have to acquire or purchase the shore lands of Lake Washington in front of said described property." (Italics ours.) It appears from such language that the parties to the deed may have been unclear as to what rights an upland owner would have to purchase newly uncovered shorelands. Although the trial court made no findings of fact and conclusions of law on this issue, the undisputed evidence at trial indicates there were statutory preference rights for upland property owners to acquire new shorelands, but those preference rights were only exercisable if the State platted and offered for sale the shorelands of navigable bodies of water. The unrefuted evidence indicates the State never offered the newly uncovered shorelands of Lake Washington for private sale, but instead the State donated them to the City in 1913. This would mean the shoreland upon which the contemplated boathouse was to be constructed never was owned by Dodge, nor would it have had rights to purchase such shorelands. The condition subsequent in the deed therefore required the City to acquire other land than was the subject of the deed and allow construction on that newly acquired property.

As a matter of public policy, a condition subsequent in a deed involving one parcel of land may not place restrictions on another parcel of land. We therefore hold that the parties to the deed had no right to encumber a piece of property which neither party owned at the time of the deed. However, even assuming the validity of the conditions subsequent in the deed which would require acquisition of shorelands by the City and permission to construct a boathouse on such land, the first of these conditions was breached in 1913, and the power of termination was not exercised within a reasonable time after that breach.

A grantor of a power of termination has only a reasonable time after breach within which to declare a forfeiture or to elect not to declare a forfeiture. If a forfeiture is not declared within a reasonable time, the power of termination expires. Metropolitan Park Dist. v. Rigney, 65 Wn.2d 788, 399 P.2d 516 (1965). The most critical issue of this case is therefore whether the condition subsequent requiring the City to acquire and keep such property as was necessary to allow construction of a boathouse was breached in 1913 when the City accepted the new shoreland from the State, with the condition that it would revert to the State if used for other than park purposes.

The construction of deeds is a matter of law for the courts. Thompson v. Schlittenhart, 47 Wn. App. 209, 211, 734 P.2d 48, review denied, 108 Wn.2d 1019 (1987); Donald v. Vancouver, 43 Wn. App. 880, 883, 719 P.2d 966 (1986); Thomas v. Nelson, 35 Wn. App. 868, 871, 670 P.2d 682 (1983). A conclusion of law described as a finding of fact is reviewable as a conclusion of law. Willener v. Sweeting, 107 Wn.2d 388, 394, 730 P.2d 45 (1986); Woodruff v. McClellan, 95 Wn.2d 394, 395, 622 P.2d 1268 (1980); Barnett v. Buchan Baking Co., 45 Wn. App. 152, 156, 724 P.2d 1077 (1986), aff'd, 108 Wn.2d 405, 738 P.2d 1056 (1987). Whether the City's acquisition of the newly uncovered shorelands from the State (with the condition the lands only be used for park purposes) constitutes a breach of the condition subsequent in the deed from Dodge to the City is a question of law. The existence of and the language used in both transfers is undisputed and the issue then becomes whether the one transfer constitutes a breach to a condition subsequent in the prior transfer.

The challenge made to the trial court's finding concerns the legal effect of actions taken by the parties. Such a question is properly reviewable by this court. See Barnett v. Buchan Baking Co., supra at 156. The issue of whether the condition to acquire land for boathouse purposes was breached by the character of the City's acquisition in 1913 is not an issue of fact but an issue of the legal ramification of undisputed facts.

The 1908 deed provided that the "grantee . . . permit the . . . construction ... of the said boat-house and acquire and keep as its property such shore land as shall be necessary for said purpose.” (Italics ours.) In 1913 the State, by public statute, gave title to the bed of Lake Washington and shorelands (including the shorelands in front of the land conveyed from Dodge to the City) to the City of Seattle for use as a public park and provided that the land would revert to the State if used otherwise. Laws of 1913, ch. 183. The deed reserved the right to build "in front of" property conveyed. The trial court's finding of fact 10 found that both the City and Dodge intended the City to acquire land to accommodate construction of a boathouse. The City breached that condition in 1913 when it accepted the land from the State in such a manner that it was absolutely prohibited from granting permission to a private party to build for personal use. The Court of Appeals stated that the State (if asked) might have granted permission to build a boathouse on the lakeshore in spite of its right to retake the land, if used for other than park purposes. Martin v. Seattle, 46 Wn. App. 1, 5, 728 P.2d 1091 (1986). It is, however, not dispositive of the issue to recognize that the City might have sought permission from the State to violate the park-purpose condition. A grantor who is a holder of a power of termination can always ask the grantee after a breach of a condition to rectify such breach; however, such possibility does not mean no breach has occurred.

Given that the City's acceptance of the newly uncovered shorelands for park purposes breached its duty to acquire land to permit private construction of a boathouse, the issue arises whether the grantor (or his successors) was on notice of such a breach.

Powers of termination are reversionary and therefore not subject to the rule against perpetuities, which means they can be "extremely troublesome and clutter up titles with outmoded restraints, or with factors that have nothing to do with land use." Washington State Bar Ass'n, Real Property Deskbook § 6.3 (1979). In addition to clouding title for decades, if not indefinitely, powers of termination are disfavored because they involve a potential forfeiture of the transferred interest. Restatement of Property § 155, comment b (1936). In a different context the Washington Court of Appeals has recognized that ”[i]t is elementary law in this jurisdiction that forfeitures are not favored and never enforced in equity unless the right thereto is so clear as to permit no denial." Shoemaker v. Shaug, 5 Wn. App. 700, 704, 490 P.2d 439 (1971) (quoting John R. Hansen, Inc. v. Pacific Int'l Corp., 76 Wn.2d 220, 228, 455 P.2d 946 (1969)). Given that powers of termination can result in harsh forfeitures and can operate to cloud title indefinitely, some diligence on the part of holders of such future interests to determine if a grantee has breached a condition subsequent should be required. However, actual notice of breach should not be required; rather, we hold that if a holder of a power of termination knew or should with due diligence have known a breach had occurred, he has a reasonable time after a breach to reenter and declare a forfeiture of the estate granted. Here, the 1913 breach was or should have been apparent to the grantor because the newly uncovered shorelands were given by the State to the City by public law. See Laws of 1913, ch. 183.

All persons are charged with knowledge of the provisions of statutes and must take notice thereof. . . . All persons having property located within a state and subject to its dominion must take note of its statutes affecting the control or disposition of such property and of the procedure which they set up for those purposes.

58 Am. Jur. 2d Notice § 21 (1971). In addition, the grantor and his successors were owners of adjacent waterview property and presumably were aware that the new shorelands were being utilized as a public park.

Therefore, upon the State's transfer of the shorelands, the City failed to meet the condition that it keep and acquire such land as was necessary for it to permit the construction of a boathouse. Since this breach occurred in 1913, the grantor had a reasonable amount of time after 1913 to declare a forfeiture and reenter the deeded property. Metropolitan Park Dist. v. Rigney, 65 Wn.2d 788, 399 P.2d 516 (1965). Since no action was taken by the grantor or his successor until 1983, the power of termination had long since expired.

Therefore, we reverse and the suit is dismissed.

Utter, Brachtenbach, Dolliver, and Andersen, JJ., and Cunningham and Hamilton, JJ. Pro Tern., concur.