Prieskorn v. Maloof

• Citation: 991 P.2d 511,128 N.M. 226
• Decision Date: 16 September 1999
• Docket Number: No. 19,653.,19,653.
• Parties: Mia S. PRIESKORN, a married woman dealing in her sole and separate property, Plaintiff-Appellant, v. Edward N. MALOOF, Patty Fields, Jimmy Albert, Nancy Kersey, Frieda K. Albert, The Unknown Heirs of Richard M. Maloof, The Unknown Heirs of Mentaha Maloof, The Unknown Heirs of Najeeb Maloof, The Unknown Heirs of Alfred Weil, The Unknown Heirs of Margarette Meyer, The Unknown Heirs of Bonifacio Baca, and The Unknown Claimants of Interest in the Premises Adverse to Mia S. Prieskorn, Defendants-Appellees.
• Court: Court of Appeals of New Mexico

991 P.2d 511

128 N.M. 226

Mia S. PRIESKORN, a married woman dealing in her sole and separate property, Plaintiff-Appellant, v. Edward N. MALOOF, Patty Fields, Jimmy Albert, Nancy Kersey, Frieda K. Albert, The Unknown Heirs of Richard M. Maloof, The Unknown Heirs of Mentaha Maloof, The Unknown Heirs of Najeeb Maloof, The Unknown Heirs of Alfred Weil, The Unknown Heirs of Margarette Meyer, The Unknown Heirs of Bonifacio Baca, and The Unknown Claimants of Interest in the Premises Adverse to Mia S. Prieskorn, Defendants-Appellees.

No. 19,653.

Court of Appeals of New Mexico.

September 16, 1999.

Michael L. Gregory, Las Vegas, for Appellant.

Edward N. Maloof, Las Vegas, Pro Se Appellee.

Kathleen Watson, Kenneth Bateman, Potter & Mills, P.A., Santa Fe, for Appellees Albert, Kersey & Fields.

OPINION

BUSTAMANTE, J.

{1} Plaintiff Mia Prieskorn (Prieskorn) appeals from a judgment refusing to quiet title to certain property in San Miguel County, New Mexico. She contends on appeal that (1) a reversionary clause in a deed affecting a portion of her property unreasonably restrains alienation of her property, and (2) changes in the circumstances of the subject property and its environs are so profound and substantial that enforcement of the reversionary clause would be inequitable. We affirm.

BACKGROUND

{2} Prieskorn was the owner of two parcels of land situated in San Miguel County, consisting of a total of approximately 26.46 acres. A portion of Prieskorn's land is located within a larger surveyed tract of land consisting of seventy-one acres as described and included in a warranty deed from Najeeb and Mentaha Maloof to the City of Las Vegas (Najeeb Deed), dated December 24, 1935, and recorded January 17, 1936, in the office of the San Miguel County clerk. The Najeeb Deed contains the following restriction:

provided, however, that this conveyance is hereby made and the land conveyed under the following conditions: That no building now on said premises or to be erected on said land shall at any time be used for immoral purposes, or for the manufacture and/or sale of any intoxicating liquors by the grantee, its succe[s]sors, heirs, and assigns, and that in the event of said condition being broken, then this deed shall become null, void, and of no effect, and all right, title, and interest of, in and to the premises of said above described land hereby conveyed, shall revert to the grantor, his successors and assigns.

The reversionary clause establishes Defendants' interest in the land because, should the reversionary condition be broken, title to the property might revert to Najeeb and Mentaha Maloof, their successors and assigns.

{3} The reversionary clause was the subject of a prior quiet title action in the early 1950s, filed by Prieskorn's predecessor-in-interest. In the prior litigation, the reversionary clause was affirmed as to the entire seventy-one acre parcel conveyed by the Najeeb Deed. See Leonard Hoskins Post No. 24, American Legion, Inc. v. City of Las Vegas, No. 14,656 (4th Jud. Dist., San Miguel County, N.M., Feb. 13, 1952). Prieskorn took title to her portion of the land described in the Najeeb Deed with notice of the reversionary clause.

{4} Since 1961, the land conveyed in the Najeeb Deed has been subdivided into multiple ownership with a housing development of thirty homes on the west end and a 204-unit mobile home park constructed by Prieskorn's parents and predecessors-in-interest on the east end. The center portion is undeveloped. To date, there have apparently been no violations of the provisions of the reversionary clause and thus no efforts to enforce it. Nevertheless, Prieskorn argues that she has been unable to obtain title insurance on the property because of the existence of the reversionary clause. She argues in turn that this has adversely affected the value of her property. She provided no evidence that the values of other properties encompassed by the Najeeb Deed have been adversely affected by the reversionary clause.

DISCUSSION

{5} Before turning to the issues we think it important to define the property interests created by the Najeeb Deed. Clearly, by the insertion of the restriction in the deed the grantors meant to convey something less than a fee simple estate—either a fee simple determinable with an associated possibility of reverter or a fee simple on condition subsequent and right of entry, which is also sometimes referred to as a right of reentry or power of termination.

No exact language is required to create a determinable fee or a condition subsequent, but there must be a clear indication in the dedication of an intent that an interest is given or granted as a determinable fee or on condition subsequent. . . . "[A] possibility of reverter is that future interest which a transferor keeps when he transfers an estate and attaches a special limitation which operates in his own favor." When this type of interest is created, the grantee's estate automatically terminates upon the happening of an event. Typical language which is used to justify a possibility of reverter is: "so long as," "during," or "until." On the other hand, "a power of termination (also commonly called a right of re-entry) is that future interest which a transferor retains when he transfers an estate in his own favor." When a right of re-entry is created, the grantor or his heirs are given an election to terminate the estate upon the happening of an event. Language creating a right of re-entry may follow from: "provided that," "but if," or "upon the express condition."

Wheeler v. Monroe, 86 N.M. 296, 298, 523 P.2d 540, 542 (1974) (quoting Thomas F. Bergin & Paul G. Haskell, Preface to Estates

in Land & Future Interest 64, 66 (1966)); see also 3 Thompson on Real Property §§ 24.01 (discussing possibilities of reverter), 25.01-.03 (discussing rights of entry) (David A. Thomas ed., 1994) (Thompson on Real Property).

{6} The provisions of the Najeeb Deed are ambiguous. On the one hand, the condition is introduced by the phrase "provided however that." Normally this language is interpreted as creating a condition subsequent with the grantor and his heirs retaining the associated power of termination. See Restatement of Property § 45 cmt. j (1936) (Restatement). However, the condition itself contains language which indicates that the Najeeb Deed is to be "null, void, and of no effect," and that the land is to "revert to the grantor" upon occurrence of the condition. This language suggests that the condition is to operate automatically.

{7} Comment m to Section 45 of the Restatement notes, however, that "[s]uch a conveyance more commonly manifests an intent to create an estate in fee simple subject to a condition subsequent." The commentators addressing the subject agree with the Restatement's position. See Lewis M. Simes & Allan F. Smith, The Law of Future Interests §§ 247-48 (2d ed. 1956) (Simes & Smith). Representative cases so holding include Hardman v. Dahlonega-Lumpkin County Chamber of Commerce, 238 Ga. 551, 233 S.E.2d 753, 755-56 (1977); Independent Congregational Society v. Davenport, 381 A.2d 1137, 1139 (Me.1978); Ohm v. Clear Creek Drainage District, 153 Neb. 428, 45 N.W.2d 117, 119-20 (1950) (mere expression that the land shall revert is not enough by itself to create a possibility of reverter as distinguished from a right of entry); Fausett v. Guisewhite, 16 A.D.2d 82, 225 N.Y.S.2d 616, 617, 621 (1962) (holding where land was conveyed "subject to the following conditions and reservations viz: ... and whenever the property hereby conveyed shall cease to be used for school and meeting purposes ... the same shall revert to and become the property of the first part [sic]," a right of reentry was created); but see Purvis v. McElveen, 234 S.C. 94, 106 S.E.2d 913, 914-15 (1959)

(concluding with little explanation that similar language created possibility of reverter).

{8} We need not decide for our purposes here whether the Najeeb Deed conveyed a fee simple determinable or a fee simple on condition subsequent (though the latter is more likely). It is enough to recognize that it conveyed one or the other, thus reserving to the grantors and their heirs a property estate, either a possibility of reverter or a power of termination rather than an interest such as an easement or restrictive covenant. See Concord & Bay Point Land Co. v. City of Concord, 229 Cal.App.3d 289, 280 Cal.Rptr. 623, 625-26 (1991)

. We note that the trial court found that the "reversionary clause does not constitute an equitable servitude upon the land." Prieskorn has not challenged this finding.

{9} Turning to the trial court's decision in this case, after considering the evidence the court denied Prieskorn's request for a decree quieting title to the property. It concluded that the circumstances surrounding Prieskorn's property had not changed to such a degree that it would be inequitable to enforce the reversionary clause, or that the purpose of the reversionary clause had been defeated. The court also concluded that, even if circumstances had changed, the changes were not so material as to render the purposes of the reversionary clause valueless to the area, or to make the benefits sought by the reversionary clause unobtainable. Finally, the trial court concluded "[t]hat the reversionary clause is a restraint on the use that may be made of the land subject to it and does not constitute a restraint on alienation." (The trial court actually included this latter conclusion among its findings of fact, but we treat it as a conclusion of law nonetheless because it would not be unfair to do so. See In re Estate of Hilton, 98 N.M. 420, 423, 649 P.2d 488, 491 (Ct.App.1982)

("Ultimate facts and conclusions of law are often indistinguishable, and their intermixture in the [trial] court's decision as written does not create reversible error where a fair construction of them justifies the court's judgment.").) We review conclusions of...