Summary of Willard v. First Church of Christ, Scientist, Supreme Ct. of CA (1972)
Parties: Willards own the lot adjacent to the easement as well as the land which the easement is on. DF First Church is the grantee of the easement as part of a deed of conveyance.
Cause of action/remedy sought: The following is an equitable action to quiet title.
Procedural History: Trial court judgment (only a judge) was entered quieting the Willard’s title. On this appeal, judgment is reversed.
Facts: McGuigan owned adjacent lots 19 & 20. She let her church park on lot 20. She sold lot 19 to Peterson, who used the building as an office. Willard expressed an interest in buying lots 19 & 20, and he and Peterson signed a deposit receipt for the sale of the 2 lots, one from Peterson, the other from McGuigan. Peterson and Willard entered into an escrow, into which Peterson delivered a deed for both lots in fee simple.
When he agreed to sell lot 20 to Willard, Peterson didn’t own it, so he made an offer to McGuigan. She said she’d sell if the church could continue to use it for parking. She referred to church lawyer, who drew up that specific provision for the deed:
“deed subject to an easement for automobile parking during church hours for the benefit of the church on the property at the southwest corner of….” After clause put in deed, land was sold.
Willard paid the agreed purchase price into the escrow and got Peterson’s deed 10 days later. Willard then recorded the deed, which had no mention of the easement provision, although Peterson did mention to Willard the church would want to use lot 20 for parking (but not about the clause). Willard became aware of the clause several months later and brings this action.
Issue(s): Under CA property law, may a grantor, in deeding real property to one person, effectively reserve an interest in the property to another?
Holding: Yes. In this case, such a reservation vests the interest in the third party.
Court’s Rationale/Reasoning: The trial court went by the common law rule that “one cannot ‘reserve’ an interest in property to a stranger to the title.” However, the court notes that times are changing, and now they want to give effect to the intent of the grantor. The court adds this rule frustrates the grantor’s intent, and b/c it produces an inequitable result b/c original grantee presumably paid a smaller price for title to the property. Here, McGuigan testified she discounted the land to Peterson.
There was also no evidence of any reliance by the insurance title company. No evidence of a policy issued, thus no showing of alliance to an insurance company. And Willard couldn’t say he had no knowledge of the easement, as the land was being used as such while he was in the negotiating process, and after Willard acquired title.
Rule: The determination whether the old common law rule should be applied to grants made prior to the court’s decision involves a balancing of equitable and policy considerations:
injustice which would result from refusing to give effect to the grantor’s intent
the injustice, if any, which might result by failing to give effect to reliance on the old rule and the policy against disturbing settled titles
Did court avoid issues?: N/A.