North Bay Council, Inc., Boy Scouts of America v. Grinnell, 82-161

• Citation: 461 A.2d 114,123 N.H. 321
• Decision Date: 09 May 1983
• Docket Number: No. 82-161,82-161
• Parties: NORTH BAY COUNCIL, INC., BOY SCOUTS OF AMERICA v. Elizabeth C. GRINNELL et al.
• Court: New Hampshire Supreme Court

Page 114

461 A.2d 114

123 N.H. 321

NORTH BAY COUNCIL, INC., BOY SCOUTS OF AMERICA v. Elizabeth C. GRINNELL et al.

No. 82-161.

Supreme Court of New Hampshire.

May 9, 1983.

Gallagher, Callahan & Gartrell, P.A., Concord (Donald E. Gartrell, Concord, on brief and orally), for plaintiff.

Law Office of Laurence F. Gardner, Hanover, and H. Bernard Waugh, Jr. (orally), Lyme, for defendants.

KING, Chief Justice.

The plaintiff, North Bay Council, Inc., Boy Scouts of America, brought a petition seeking a declaration of its rights in certain real estate in the towns of Orford and Piermont. It also sought injunctive relief, asking the superior court to enjoin the defendants from interfering with its sale of the property.

The controversy arises from language in a 1951 deed. In that year, William Morse Cole conveyed the property to Kaiora Camp, Inc. by a deed in which he attempted to retain for himself and his heirs or assigns a preemptive right. See Emerson v. King, 118 N.H. 684, 687, 394 A.2d 51, 53 (1978). The clause at issue provided:

"[T]he Grantee and its successors herein shall not sell any part of the property herein conveyed until it shall have first offered it for purchase to the grantor, his heirs or assigns, at the highest price at which they have received a bona fide offer."

Cole died in 1961. The following year, Kaiora Camp, Inc. sold the property to the plaintiff, North Bay Council, Inc., for $125,000, without first offering it to the defendants, Elizabeth C. Grinnell and Catriona Cole White, the heirs of William Morse Cole. Although the 1951 deed containing the preemptive right had been recorded, North Bay Council, Inc. had no actual knowledge of the preemptive right.

In 1979, the plaintiff entered into negotiations with Melville Enterprises, Inc. for the sale of the property, and Melville Enterprises, Inc. made an offer to buy the property. An attorney for Melville Enterprises, Inc. searched the title to the property, discovered the preemption clause in the 1951 deed, and indicated that the defendants' rights constituted a cloud on the plaintiff's title. The defendants first learned that they had a preemptive right from another attorney representing Melville Enterprises, Inc. At this time, the plaintiff offered to sell the property to the defendant Grinnell, but Grinnell did not accept the offer.

The plaintiff instituted this action in October 1980, seeking a declaration of its rights in the property and injunctive relief. The defendants filed a counterclaim, asking the court for specific performance of their preemptive right at the same consideration paid by the plaintiff in 1962, $125,000. The Master (Thomas M. Pancoast, Esq.) determined that the defendants had a valid present preemptive right to purchase the property by virtue of the 1951 deed from William Morse Cole to Kaiora Camp, Inc. He also ruled that, because of the rule against perpetuities, their preemptive right would become void twenty-one years after the death of William Morse Cole in 1961 unless the defendants exercised their right before that time. However, the master ruled that the defendants had no right to purchase the property for the same consideration paid by the plaintiff in 1962, because they were guilty of laches, and he recommended that the defendants' request for specific performance be denied. The Superior Court (Johnson, J.) approved the master's report, and the defendants appealed.

On appeal, the defendants raise three arguments. They contend that the master improperly applied the Rule Against Perpetuities as construed by this court. They also claim that the master's finding that they were guilty of laches is inconsistent with his specific finding that the defendant Grinnell had no actual knowledge of her preemptive right. The defendants also contend that this finding of laches was erroneous because the plaintiff has not been prejudiced by their delay in exercising their right. We hold that the master correctly applied the Rule Against Perpetuities and the doctrine of laches and we therefore affirm.

The Rule Against Perpetuities provides that "no interest in property is good 'unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.' " Emerson v. King, 118 N.H. at 687, 394 A.2d at 54 (citation omitted). Preemptive rights are subject to the Rule Against Perpetuities, see id. at 687, 394 A.2d at 53, and the interest is considered vested when the right is exercised. It is clear that if the Rule Against Perpetuities were applied strictly to the preemptive right at issue in this case, the right would violate the rule because exercise of the right is not limited to any time period. We indicated in Merchants etc. Bank v. Curtis, 98 N.H. 225, 229, 97 A.2d 207, 210 (1953), however, that the Rule has never been "remorselessly applied" in this State. Instead, we have been more concerned with carrying out the intent of the testator or grantor in any given case. See Emerson v. King, 118 N.H. at 687, 394 A.2d at 53; Merchants etc. Bank v. Curtis, 98 N.H. at 230, 97 A.2d at 211. Thus, in a previous case, we have shortened the time...