## Facts

- A common grantor owned two adjacent subdivision lots (Lots 579 and 580) in Lake Oswego, Oregon, during a period when the area was being connected to a municipal sewer system.
- The grantor conveyed Lot 579 to Dan R. and Norma M. Garza; that deed did not mention any easement.
- The grantor later conveyed adjoining Lot 580 to predecessors of Jeffrey L. and Jane R. Grayson and included a reservation of “an easement for public utility purposes” over a specified five-foot strip along the northeast boundary of Lot 580 running from Blue Heron Road to the tract’s easterly corner.
- The Garzas sought to construct and maintain a sewer/service line to Lot 579 using the reserved strip on Lot 580.
- The Graysons, as successors to Lot 580, denied that the reservation created an easement benefiting Lot 579 and opposed installation of the line.
- The Garzas filed a declaratory judgment action; after a bench trial, the court declared the easement existed, and the Graysons appealed.

## Issues

1. Whether a deed “reservation” can validly create an easement benefiting a nonparty third person (here, the owners of Lot 579) rather than the grantor.
2. Whether an easement “for public utility purposes over and across” land includes the right to install an underground sewer line.

## Decision

- The court affirmed the decree recognizing an easement across Lot 580 for the benefit of Lot 579.
- The court held the reservation validly created an easement for public utility purposes benefiting the Garzas’ lot, despite the Garzas not being parties to the deed.
- The court held the utility easement included installation and maintenance of a sewer line, even though the line would be placed below the surface.

## Legal Principles

- A deed may be construed to create an easement benefiting a third party when the instrument adequately expresses the grantor’s intent, notwithstanding technical objections based on the label “reservation.”
- Deed interpretation favors effectuating the grantor’s manifested intent over formalistic distinctions that defeat that intent.
- A grant of an easement for “public utility purposes” is interpreted broadly to include sewer facilities.
- Language describing a utility easement “over and across” a strip of land does not exclude subsurface utility lines when consistent with the stated utility purpose and the surrounding circumstances.

## Conclusion

The court enforced the recorded deed language as creating a utility easement along a boundary strip for the benefit of the adjoining lot and construed that easement to include an underground sewer line needed for service in the developing subdivision.


Garza v. Grayson, 467 P.2d 960 (Or. 1970)