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All opinions are subject to modification and technical correction prior to official publication in the North Carolina Reports and North Carolina Court of Appeals Reports. In the event of discrepancies between the electronic version of an opinion and the print version appearing in the North Carolina Reports and North Carolina Court of Appeals Reports, the latest print version is to be considered authoritative.
KING ASSOCIATES, LLP, CHARLIE B. SEACRIEST, J. GARY THOMPSON,
JAMES BOYCE, CECIL REID, FRED MILLER, RICHARD BRIDGES, WILLIAM P.
GOFORTH d/b/a THERMAL INSULATORS, a Partnership, MICHAEL DEAN
MONTIETH, and LANNY D. WALKER, Plaintiffs, v. BECHTLER
DEVELOPMENT CORPORATION, Defendant
Filed: 01 August 2006
1. Railroads_charter_reference in deed_property rights conveyed
Sections of a railroad charter which were referred to and incorporated into an 1856 deed
to the railroad were properly considered by the trial court as evidence of what property rights the
grantor intended to convey to the railroad.
2. Deeds--railroad right-of-way_fee simple
An 1856 deed that granted a railroad a right of way in, over and upon land granted a fee
simple rather than an easement where the deed also stated that the part and parcels of said land
herein granted, with the right of way thereon, would be ascertained by the engineer of the
railroad in compliance with its charter, and the habendum clause stated To have and to hold, all
and singular the aforesaid lands, rights and privileges to said railroad and its successors
3. Deeds; Railroads_deed_so long as_fee simple determinable
A section of a railroad charter providing that the lands or right of way so valued by said
commissioners, shall vest in said company so long as the same shall be used for the purposes of
said railroad, which was incorporated into the granting clause of an 1856 deed to the railroad,
created a fee simple determinable with the grantor retaining a possibility of reverter.
4. Real Property_fee simple determinable_possibility of reverter_extinguishment
under Real Property Marketable Act
The Real Property Marketable Title Act exception under N.C.G.S. § 47B-3(6) for rights-
of-way held by railroad companies did not extend to property interests of landowners adjacent to
a railroad's right-of-way who held a possibility of reverter in the right-of-way, and the possibility
of reverter was extinguished by the Act when the landowners failed to file notice of their
property interests prior to 1 October 1976.
Appeal by plaintiffs from judgment and order entered 27 June
2003 by Judge E. Penn Dameron, Jr. and supplemental judgment
entered 29 June 2005 by Judge Laura J. Bridges in Rutherford County
Superior Court. Heard in the Court of Appeals 8 March 2006.
Tomblin & Farmer, PLLC, by A. Clyde Tomblin, and The Cullen
Law Firm, by David A. Cohen, for plaintiffs-appellants.
Bailey & Dixon, L.L.P., by David S. Coats, and Michael
Domonkos for defendant-appellee.
Plaintiffs own property adjacent to a 7.87-mile railroad
corridor in Rutherford County. Bechtler Development Corporation
(defendant) operates the corridor as a recreational trail.
Defendant is a successor-in-interest to the rights of the
Wilmington, Charlotte and Rutherford Railroad Company. The
Wilmington, Charlotte and Rutherford Railroad Company obtained
rights to the land by deed in February of 1856. In July of 1902,
Southern Railway Company entered into a lease agreement to operate
the railroad corridor. Southern Railway Company was authorized by
the Interstate Commerce Commission to abandon the line in Cleveland
and Rutherford counties in October of 1988. In October of 1990,
Southern Railway_Carolina Division conveyed its interests in the
corridor to the Rutherford Railroad Development Corporation. In
July of 2000, the Rutherford Railroad Development Corporation and
Southeast Shortlines d/b/a Thermal Belt Railways jointly applied to
the Surface Transportation Board (STB) for abandonment exemption.
Also in July of 2000, defendant filed a request with the STB for a
Notice of Interim Trail Use under the National Trails System Act.
Defendant then reached an agreement with the Rutherford Railroad
Development Corporation and Thermal Belt Railways regarding
Defendant took possession of the right of way and began
collecting rent from landowners who use the right of way, includingplaintiffs. According to plaintiffs, defendant had begun to
install water and sewer lines on the subsurface portion of the
line. Plaintiffs filed a class action complaint on 25 May 2001
alleging that they are the rightful owners of the railroad corridor
that defendant converted into a recreational trail. Plaintiffs
filed a motion for summary judgment and for declaratory judgment on
27 September 2002. Plaintiffs argued that they owned the railroad
corridor in fee simple or, in the alternative, that defendant had
only the right to use the surface of the corridor and that
plaintiffs retained all other uses, including the right to
subsurface use. Defendant also filed a motion for summary
judgment. On 27 June 2003 the trial court entered an order
addressing plaintiffs' request for a declaratory judgment and both
parties' motions for summary judgment. The court granted
defendant's motion for summary judgment in part and directed the
parties to submit to the court a copy of the original charter
issued to the Wilmington, Charlotte and Rutherford Railroad
Company. Plaintiffs submitted a copy of the charter in July of
2003. On 29 June 2005 the trial court entered a supplemental
judgment. The court found that defendant held title to the
corridor in fee simple and that plaintiffs have no subsurface
rights in the corridor. Plaintiffs filed timely notice of appeal
to this Court.
Plaintiffs challenge the declaratory judgment and order
entered 27 June 2003 and the supplemental judgment entered 29 June
2005. Plaintiffs assign error to numerous findings of fact enteredby the trial court. We review a declaratory judgment to determine
whether the trial court's findings of fact are supported by
competent evidence and whether its conclusions of law are supported
by the findings. N.C. Farm Bureau Mut. Ins. Co. v. Stox, 330 N.C.
697, 702-03, 412 S.E.2d 318, 322 (1992). More generally, where the
trial court sits without a jury, this Court reviews the trial
court's order to determine whether the findings of fact are
supported by competent evidence and whether the conclusions are
proper in light of the findings. Shear v. Stevens Building Co.,
107 N.C. App. 154, 160, 418 S.E.2d 841, 845 (1992).
 First, plaintiffs except to the trial court's finding that
the interest conveyed in the 1856 deed by reference to the charter
of the Wilmington, Charlotte and Rutherford Railroad Company was a
fee simple. The deed expressly incorporated by reference sections
26 and 27 of the charter as follows:
we, whose names are hereto subscribed on this
and the sheets hereto annexed . . . for the
further consideration of the sum of One Dollar
to each of the assigned in hand paid by the
said Company . . . give, grant and surrender
to the Wilmington, Charlotte and Rutherford
Railroad Company, the right of way in, over
and upon any land or lands owned by us over
which said Company may locate and establish
their said road; the part and parcels of said
land herein granted, with the right of way
thereon, to be ascertained by the engineer of
the Company, in strict conformity with the
provisions, limitations, and restrictions of
the charter incorporating the same, in the
manner and intent if the same were condemned
under and by virtue of the twenty sixth and
twenty seventh sections thereof hereby granted
to the said Company . . .
Plaintiffs contend that sections 26 and 27 of the charter are
inapplicable to the court's determination of the property interest
that the parties intended to transfer in the deed. Essentially,
plaintiffs argue that the trial court
construed the language of the
charter to enlarge the property interest granted
by the deed.
Sections 26 and 27 of the Wilmington, Charlotte and Rutherford
Railroad Company charter read in relevant part as follows:
Sec. 26. Be it further enacted, That when any
lands or right of way may be demanded by said
company, for the purpose of constructing their
road, and for the want of agreement as to the
value thereof, or from any other cause the
same cannot be purchased from the owner or
owners, the same may be taken at a valuation
to be made by five commissioners . . . .
A]nd the lands or right of way so valued by
the said commissioners, shall vest in the said
company so long as the same shall be used for
the purposes of said railroad . . . .
Sec. 27. Be it further enacted, That the right
of said company to condemn lands in the manner
described in the 26th section of this act,
shall extend to condemning of one hundred feet
on each side of the main track of the road . .
Plaintiffs assert that section 26 is irrelevant to the instant
dispute because the value to be given for the land was agreed upon
in the deed. With respect to section 27, plaintiffs assert that it
is irrelevant because it only addresses the restrictions on the
width of the right of way.
'The entire description in a deed should be considered in
determining the identity of the land conveyed. Clauses inserted in
a deed should be regarded as inserted for a purpose, and should be
given a meaning that would aid the description. Every part of thedeed ought, if possible, to take effect, and every word to
operate.' Realty Corp. v. Fisher, 216 N.C. 197, 199, 4 S.E.2d
518, 520 (1939) (quoting Quelch v. Futch, 172 N.C. 316, 90 S.E. 259
(1916)). Thus, the language of the charter, which is expressly
incorporated into the deed, must be given effect if it describes
the property interest granted.
The deed recites the property interest as a right of way in,
over and upon a parcel of land and restricts the railroad's rights
to designate the location of the parcel to the rights the railroad
would have if the property had been condemned. Sections 26 and 27
of the charter set forth the restrictions on the railroad's rights
upon condemnation. Section 27 restricts the railroad company's
rights by stating that the land or right of way shall vest in the
railroad company so long as it is used for railroad purposes.
Therefore, these sections are applicable to the issue of what
property rights the grantor intended to convey to the railroad
company. In contrast to what plaintiffs assert, the court did not
interpret the language of the charter so as to enlarge the property
interest granted in the deed; rather, the court properly considered
the charter provisions as evidence of the grantor's intent. See
216 N.C. at 199, 4 S.E.2d at 520
; see also Ellis v.
Barnes, 231 N.C. 543, 544-45, 57 S.E.2d 772, 773 (1950)
interpretation of the provisions of a deed, the intention of the
grantor must be gathered from the whole instrument and every part
thereof given effect, unless it contains conflicting provisionswhich are irreconcilable, or a provision which is contrary to
public policy or runs counter to some rule of law.).
 Next, plaintiffs argue that the trial court erred in
granting summary judgment to defendant because the 1856 deed
created only an easement to the railroad. The deed to the
Wilmington, Charlotte and Rutherford Railroad Company granted it a
right of way in, over and upon the land. The determination of
what property right was granted, then, depends upon the
construction of right of way. Plaintiffs contend that the term
right of way usually connotes an easement, citing to Crawford v.
Wilson, 43 N.C. App. 69, 257 S.E.2d 696 (1979). However, the Court
in Crawford distinguished cases involving a right of way granted
to a railroad company. See id. at 71, 257 S.E.2d at 697. Indeed,
in McCotter v. Barnes, 247 N.C. 480, 101 S.E.2d 330 (1958), the
Supreme Court addressed the grant of a right of way to a railroad
The term right of way has a two-fold
meaning: it may be used to designate an
easement, and, apart from that, it may be used
as descriptive of the use or purpose to which
a strip of land is put. It is a matter of
common knowledge that the strip of land over
which railroad tracks run is often referred to
as the right of way, with the term being
employed as merely descriptive of the purpose
for which the property is used, without
reference to the quality of the estate or
interest the railroad company may have in the
strip of land.
McCotter, 247 N.C. at 485, 101 S.E.2d at 334-35. In McCotter, the
granting clause of the deed transferred to the railroad company atract or parcel of land 100 feet in width . . . . Id. at 484-85,
101 S.E.2d at 334. The Court determined that the term right of
way in the deed did not reduce the fee simple interest granted in
the granting clause to an easement. The Court distinguished
another case involving a right of way conveyed to a railroad
company. In Shepard v. R.R., 140 N.C. 391, 53 S.E. 137 (1906), the
plaintiff conveyed to the railroad company a right of way over the
land only. The McCotter Court indicated that a right of way over
a parcel of land is merely an easement over that land and not a fee
simple interest. 247 N.C. at 487-88, 101 S.E.2d at 336.
In arguing that the deed in the case sub judice created only
an easement, plaintiffs cite to Int. Paper Co. v. Hufham, 81 N.C.
App. 606, 345 S.E.2d 231, disc. review denied, 318 N.C. 506, 349
S.E.2d 860 (1986). There, the deed from the owner to the railroad
company in 1849 granted to the railroad company the right and
privilege . . . to enter upon each and every tract or parcel of
land belonging to or held by [the grantor]. Id. at 610, 345
S.E.2d at 233-34. This Court concluded that no land was conveyed;
only a right and privilege to enter upon the land and construct a
railroad line. The Court noted that McCotter was distinguishable
because in that case the owner granted a parcel of land. Id. at
611, 345 S.E.2d at 234.
We disagree with plaintiffs that the facts of the instant case
are sufficiently similar to the facts of International Paper.
Instead, we find the facts here more comparable to the facts of
McCotter. The 1856 deed granted to the Wilmington, Charlotte andRutherford Railroad Company a right of way in, over and upon any
land or lands owned by the grantor. The deed also stated that the
part and parcels of said land herein granted, with the right of way
thereon would be ascertained by the engineer of the railroad
company in compliance with the charter. The habendum clause states
TO HAVE TO HOLD, all and singular the
aforesaid lands, rights and privileges to said
Wilmington, Charlotte and Rutherford Railroad
Company, and its successors forever.
The habendum clause indicates that the interest granted was more
than a right or privilege of entry. The habendum clause in
McCotter contained very similar language: TO HAVE AND TO HOLD, the
aforesaid tract or parcel of land as above described together with
all the rights, ways, privileges and easements thereunto belonging
or in anywise appertaining unto it the said party of the second
party its successors and assigns. McCotter, 247 N.C. at 485, 101
S.E.2d at 334
. The Supreme Court noted that this habendum clause
harmonized with the fee simple interest granted in the granting
clause of the deed. Id.
The 1856 deed does not expressly grant a parcel of land as
expressed in the deed in McCotter. Nonetheless, the term right of
way can be harmonized with the other clauses of the deed referring
to a parcel of land. Thus, following the reasoning of McCotter,
the term appears to describe the use of the land and not the nature
of the property interest granted. Accordingly, the trial court
correctly determined that the deed to the Wilmington, Charlotte andRutherford Railroad Company granted a fee simple and not merely an
Next, plaintiffs challenge the trial court's finding that
the language so long as in section 26 of the charter does not
render the title an easement but instead qualifies a fee simple,
creating a fee simple determinable. Section 26 of the charter
provides that the lands or right of way so valued by the said
commissioners, shall vest in the said company so long as the same
shall be used for the purposes of said railroad . . . .
We agree with the trial
court that the language of the charter
created a fee simple determinable. The granting clause of the deed
expressly incorporated sections 26 and 27 of the charter. When
language creating a fee simple determinable and possibility of
reverter is contained within the granting or habendum clause of a
deed, this limitation on the fee simple interest is valid. See
Anderson v. Jackson Co. Bd. of Education, 76 N.C. App. 440, 446,
333 S.E.2d 533, 536 (1985), cert. denied, 315 N.C. 586, 341 S.E.2d
22 (1986). In contrast, where the granting and habendum clauses do
not limit the fee simple interest, then any conditional language
contained within a separate provision of the deed cannot create a
valid fee simple determinable. See id.; Oxendine v. Lewis, 252
N.C. 669, 672-73, 114 S.E.2d 706, 709 (1960); Artis v. Artis, 228
N.C. 754, 760, 47 S.E.2d 228, 231-32 (1948).
Here, the granting clause referred to sections 26 and 27 of
the charter in describing restrictions on the railroad company'sproperty interest. The conditional language so long as
restricting the use of the land for railroad purposes is sufficient
to create a fee simple determinable with the grantor retaining a
possibility of reverter. See Station Assoc., Inc. v. Dare County,
350 N.C. 367, 373-74, 513 S.E.2d 789, 794 (1999) (language creating
fee simple determinable need not conform to any set formula; some
language indicating the grantor's intent that estate shall
terminate on cessation of a specified use is sufficient); Price v.
Bunn, 13 N.C. App. 652, 659, 187 S.E.2d 423, 427 (1972) (typical
language creating fee simple determinable includes while,
during, or for so long as).
 The trial court also found that the grantors retained the
possibility of reverter according to this language but that this
future interest was extinguished under the Real Property Marketable
Title Act, N.C. Gen. Stat. § 47B-1 et seq. Plaintiffs dispute this
finding as well.
The General Assembly enacted the Real Property Marketable
Title Act in 1973 and expressly stated its purpose:
It is the purpose of the General Assembly of
the State of North Carolina to provide that if
a person claims title to real property under a
chain of record title for 30 years, and no
other person has filed a notice of any claim
of interest in the real property during the
30-year period, then all conflicting claims
based upon any title transaction prior to the
30-year period shall be extinguished.
N.C. Gen. Stat. § 47B-1 (2005). The Act also provides exceptions
that protect property owners from extinguishment of their rights if
they fail to file a notice of the property interest within 30 yearsof receiving title. See Heath v. Turner, 309 N.C. 483, 493, 308
S.E.2d 244, 249 (1983) (The exceptions listed under G.S. § 47B-3
. . . serve as a shield to protect from extinguishment the rights
therein excepted.). The exceptions include a right of way of a
railroad company or any land held by a railroad company and being
used for railroad purposes. See N.C. Gen. Stat. § 47B
If the 30-year period has passed prior to the effective date
of the Act, 1 October 1973, then the property interest may be
preserved under the Act if registered prior to 1 October 1976. See
N.C. Gen. Stat. § 47B-5 (2005). Applying the Act to the facts
here, plaintiffs were required to file notice of their property
interest prior to 1 October 1976. It is undisputed that plaintiffs
failed to file by this date. However, plaintiffs contend that the
future interest was not extinguished because it falls within an
exception of the Act. The exception at issue reads as follows:
Such marketable record title shall not affect
or extinguish the following rights:
(6) Rights-of-way of any railroad company
(irrespective of nature of its title or
interest therein whether fee, easement, or
other quality) and all real estate other than
right-of-way property of a railroad company in
actual use for railroad purposes or being held
or retained for prospective future use for
railroad operational purposes . . .
N.C. Gen. Stat. § 47B-3(6) (2005). The exception does not by its
plain language extend to property interests of landowners adjacent
to the railroad's right of way who hold a possibility of reverter
in the right of way. Thus, the trial court correctly concluded
that plaintiffs' future interest was extinguished under the Real
Property Marketable Title Act.
In sum, we hold that the trial court's findings in the 27 June
2003 order and judgment were supported by competent evidence and
that the findings supported the conclusions of law. Similarly, we
hold that the trial court's findings in the 29 June 2005
supplemental judgment were supported by competent evidence and that
the findings, in turn, supported the court's conclusions of law.
Judges STEELMAN and JACKSON concur.
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