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PARRY v. BERKELEY HALL SCHOOL FOUNDATION et al.†
Rodeo Land & Water Company, owner of 77 acres of land known as lot 7 of tract No. 3613, conveyed the same to Bank of America as trustee under a subdivision trust. Lot 7 was then subdivided into lots for residential and business uses and became tract No. 7005. Under a trust indenture issued by the bank, Rodeo Company was trustor and Berkeley Hall School Foundation was beneficiary, Rodeo Company being entitled to receive a certain price for the land from sales of lots which the trustee was authorized to make at stipulated prices, and the Foundation being entitled to receive the remainder of the proceeds from sales and any unsold lots. Plaintiff purchased from the bank and received separate deeds of the bank to lots 347, 348, and 349 of tract 7005.
The deed of Rodeo Company to the bank, as trustee, contained a restrictive condition against the sale of intoxicating liquors upon the land conveyed and a provision for reversion of title to the grantor upon breach of the condition. The several deeds of the bank to plaintiff Parry contained an identical restrictive condition and provision for reversion of title to the grantor bank upon breach of this condition. Plaintiff constructed a building on lot 347 and leased the same to defendant Eaton, who operated thereon a cafe, wherein he engaged in the sale of intoxicating liquors. Lots 348 and 349 were not so used. Plaintiff was notified in writing by the bank that such sales of liquor were in violation of the condition of the conveyances from the bank to plaintiff, and that the situation must be remedied immediately. The Foundation notified plaintiff and Eaton that it would exercise its right to immediate entry upon the land and would claim a reversion of the title unless there was a permanent cessation of the vending of intoxicating liquors thereon. No question is involved as to the sufficiency of the notice and demands, which conformed in all respects to the requirements of the deed. The selling of liquor was continued in disregard of the demand, and plaintiff brought this action to quiet her title to the three lots against the claims of the Rodeo Company and the Foundation, based upon either the reservation in the deed of Rodeo Company to the bank or that in the deeds of the bank to plaintiff, and for a decree annulling the restrictions against the sale of liquor upon the premises. Rodeo Company answered, admitting the terms and conditions of its deed to the bank, but alleging no violation thereof, nor objection to the manner in which the property was being used, and seeking no affirmative relief. The Foundation answered and, by cross–complaint, alleged the terms and conditions of the deeds to plaintiff of lots 347 and 348, that intoxicating liquors were being sold thereon in violation thereof and sought to enforce the condition of the deeds as to lots 347 and 348, by compelling a conveyance thereof to the Foundation, with damages against plaintiff and cross–defendant Eaton, because of their failure to convey title and deliver possession upon breach of the condition of the deed.
The judgment, based upon findings presently to be discussed, provided that plaintiff's title to lots 348 and 349 was subject to the condition against the sale of intoxicating liquor, as contained in the deeds of the bank to plaintiff, declared the Foundation to be the owner in fee of lot 347 because of breach of the condition, and the owner of a reversionary estate in lots 348 and 349, based upon the conditions of the deeds, ordered plaintiff to deed lot 347 to the Foundation, and declared that the title to all three lots was subject to the said restriction and condition contained in the deed of lot 7, tract 3613, from Rodeo Company to the bank. The Foundation was also awarded damages against plaintiff and cross–defendant Eaton in the amount of the rental value of the property, lot 347. Plaintiff and Eaton appeal from the judgment.
The findings present this anomalous situation: Rodeo Company has never transferred, and is vested with the absolute estate in reversion in, lot 7 of tract 3613, which embraces lots 347, 348 and 349 of tract 7005. At the same time the findings declare that the Foundation is vested with the estate in reversion as to lots 348 and 349, and with the fee title to lot 347, all subject to the reserved title of Rodeo Company. The court decided that because of the breach of the condition against the sale of intoxicating liquor upon lot 347, contained in the bank's deed to plaintiff, the Foundation became entitled to reduce its supposed right of reversion to possession, and that Rodeo Company possessed the same right because of the violation of the condition contained in its deed to the bank. Title to the lot was decreed to be in the Foundation, and not Rodeo Company, because the former sought to enforce its supposed right, while Rodeo Company did not seek a decree of forfeiture.
No question is involved upon this appeal as to the right of the bank to restrict the use of the land which it sold. While there were other restrictions in the deeds, they are not involved in the case and no violation thereof was alleged. We are concerned only with the consequences of the breach of the restriction against the sale of liquor as declared by the judgment. The only possible basis for the remedy which has been applied would be the ownership of a reversionary estate by the Foundation in all three lots, based upon the particular condition which is involved. Unless such an estate has been created in the Foundation by act of the parties, it has no existence, and the judgment is unwarranted. In deciding whether the reversionary interest exists we have only to ascertain what estates were created and how and in whom they were vested by the several deeds of the parties.
The question is whether the bank, in conveying title to the lots to plaintiff, could reserve to itself an estate in the land which had theretofore been reserved by, and remained vested in, its own grantor. No case has been cited which answers this question, and we are assured by counsel that none is to be found. As we view the case, the answer lies in the simple truth that each of two persons cannot, at the same time, own, absolutely, a single estate in property. Applying pertinent provisions of the Civil Code relating to ownership (sections 669 to 703), we find that the estate of the Rodeo Company was a vested, perpetual, contingent, future interest held in absolute ownership. While the interest was contingent, it nevertheless was an estate in land, commencing in possession upon termination of the estate with which the company had parted (Civ. Code, § 768), and subject to transfer the same as a present interest (Civ. Code, § 699; Pavkovich v. Southern Pacific R. Co., 150 Cal. 39, 87 P. 1097, 11 Ann.Cas. 760). The estate granted by Rodeo Company to the bank, plus the estate reserved by the company, constituted the entire ownership. From the estate conveyed to it the bank could carve others, but it could not create in another, and no more could it appropriate or reserve to itself, an interest which was at all times in the absolute ownership of Rodeo Company. Therefore, as far as the one condition here involved is concerned, the entire ownership in the land was lodged in Rodeo Company and the bank, until the bank conveyed the lots to plaintiff, and in plaintiff and Rodeo Company from the time the former received her deeds from the bank. The bank reserved to itself or its beneficiary no interest in the land, by the same condition stated in its deeds, because it had not that interest to reserve, and the Foundation, as beneficiary of the trust, could acquire from the bank, as trustee, no interest which the bank did not own.
The findings that the Foundation is the owner of lot 347 and of a reversionary estate in lots 348 and 349, based upon the condition against the sale of intoxicating liquor, are without support in the evidence, and the judgment based upon those findings cannot stand.
Rodeo Land & Water Company is and at all times has been the owner of the right of reversion and right of re–entry upon breach of condition subsequently reserved in the deed of that company to Bank of America conveying lot 7 of tract 3613, of which lots 347, 348, and 349 are parts. We find nothing in the phraseology of the restriction or the condition relating to the sale of intoxicating liquor, as contained in the deed of Rodeo Company to the bank, which inclines us to doubt that, until waived or relinquished, they were valid and binding upon the grantee, its successors and assigns.
The court found that Rodeo Company has never objected to or protested sales of intoxicating liquor upon the premises here involved. No claim of right or title based upon the condition of its deed has been asserted by this defendant, nor has it sought herein affirmative relief. On its behalf no brief has been filed. We are asked by appellants to hold that there has been a waiver by Rodeo Company of its right to enforce the condition of its deed and to claim a reversion of title. This we are not disposed to do upon the record which is before us, nor do we express any opinion one way or the other on this branch of the case. It is our purpose to reverse the judgment in its entirety. We are deciding only that Berkeley Hall School Foundation has no reversionary estate or title in or to lots 347, 348, and 349 of tract 7005 or either of them, based upon the condition and attempted reservation in the deeds of the bank to plaintiff, which we hold to be ineffectual.
Numerous other points are discussed in the briefs, but their decision is not necessary to a disposition of the appeal.
The appeals from an order denying motion for a new trial, from the order denying motion to vacate and set aside the judgment and conclusions of law and from the order amending judgment, are dismissed.
The judgment is reversed.
SHINN, Justice pro tem.
We concur: YORK, Acting P. J.; DORAN, J.
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Docket No: Civ. S. C. 32.
Decided: April 23, 1937
Court: District Court of Appeal, Second District, Division 1, California.
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