662 BNSF Railway Co. v. Chevron Midcontinent, L.P., 528 S.W.3d 124 (Tex. App.—El Paso 2017, no. pet.)

Richard F. Brown

The following is not a legal opinion. You should consult your attorney if the case may be of significance to you.

BNSF Railway Co. v. Chevron Midcontinent, L.P., 528 S.W.3d 124 (Tex. App.—El Paso 2017, no. pet.) held that a railroad deed conveyed a right-of-way easement, not a fee simple absolute. The parties aligned as successors to grantor “Owner” and grantee “Railroad” under a 1903 deed. The consideration recited was one dollar and “the benefits which will accrue . . . by reason of the construction of a line of railroad over the land hereinafter described.” The granting clause conveyed “for a right of way, that certain strip of land hereinafter described, as the same has been finally located over, through or across the following tracts of land situated in Upton County in the State of Texas.” The deed then describes a surveyor’s line across multiple tracts between various train stations, and then describes the “strip of land” as follows:

The said railway right of way being 100 feet wide on each side of the center line thereof except [for certain sections where the right of way varies between 50 feet and 150 feet]. . . Said railway right of way containing an area of 28 and 55/100 acres. Together with the right and privilege of taking and using all of the wood, water, stone, timber and other materials on said strip of land, or appertaining thereto, which may be useful or convenient in the construction and maintenance of said railway or any part thereof.

The habendum clause read as follows: “TO HAVE AND TO HOLD the said premises, together with all appurtenances thereunto belonging, in fee simple, unto [Railroad] its successors and assigns forever.” The issue was whether the interest conveyed was a fee simple absolute or a mere easement. Neither party contended the deed was ambiguous, and the trial court on motion for summary judgment held that the interest conveyed was an easement over the surface estate.

The term “right of way” is not a legal term of art, and in Texas, the use of that term does not answer the easement-versus-fee question. “[S]ometimes [it] is used to describe a right belonging to a party, a right of passage over any tract; and it is also used to describe that strip of land which railroad companies take upon which to construct their road-bed.” While historically railroad rights-of-way were usually conveyed as easements, the “land . . . may [also] be conveyed in fee; therefore the character of the title conveyed must be determined by the words used and the attending facts and circumstances.”

The court noted that the 1952 Neale case established a clause-driven formula analysis holding that if the granting clause clearly conveyed a fee, it will prevail over a later provision referring to a right of way. This clause-driven approach appears to conflict with the subsequent 1991 Luckel v. White case which adopted the approach of a four corners analysis. The court did not attempt to resolve that uncertainty, because it held that in this case the granting clause itself was ambiguous requiring the court to consider the remainder of the deed. This particular deed conveyed “for a right of way” a “strip of land.” The court held that the granting clause, standing alone, could be construed as conveying either an easement or a tract of land.

Using the four corners analysis, the court held that there was only one reasonable interpretation of the deed and that it conveyed only a surface easement. The court gives reasons at length for its conclusion which primarily focus on the repeated references to “over” and “right of way” and particularly to the clause permitting Railroad to use materials from the strip to construct the railway. That is, if the grant were in fee, there would be no need to specifically grant the right to take those materials for purposes of constructing the railway.

The most troublesome provision was the use of the words “fee simple” in the habendum clause. Although those words found in the habendum could have been construed as simply meaning a duration of forever, the court chose to disregard them as being in conflict with the clear intent expressed by the rest of the deed.

This is a deed construction case, but it is significant as an attempt to reconcile the “rule of property” established in the Neale case as to the primacy of the granting clause and the four corners approach of Luckel v. White. Here the granting clause, when read against the rest of the deed, was subject to only one interpretation.