Prince v. Charles Ilfeld Co.

• Decision Date: 15 July 1963
• Docket Number: No. 7232,7232
• Citation: 72 N.M. 351,383 P.2d 827,1963 NMSC 135
• Parties: William B. PRINCE, Plaintiff-Appellee, v. CHARLES ILFELD COMPANY, a corporation, Defendant-Appellant.
• Court: New Mexico Supreme Court

Page 827

383 P.2d 827

72 N.M. 351

William B. PRINCE, Plaintiff-Appellee, v. CHARLES ILFELD COMPANY, a corporation, Defendant-Appellant.

No. 7232.

Supreme Court of New Mexico.

July 15, 1963.

Nordhaus & Moses, Fred Trechel, Albuquerque, for appellant.

Manuel A. Sanchez, Alfred P. Whittaker, Santa Fe, for appellee.

COMPTON, Chief Justice.

This appeal is from a judgment awarding $11,000.00 to appellee for his interest in certain land located in Santa Fe County, New Mexico. The award is based upon a contract between the parties providing for the payment of this amount by appellant to appellee in the event the District Court of Santa Fe County determined that appellee had a valid existing claim to title to the property involved herein. The court found in favor of appellee and this appeal follows.

The issues raised deal primarily with (1) the nature of appellee's interest in 1905 and its assignability; (2) the date of cessation of use of the condemned property for railroad purposes; and (3) the statute of limitations as a bar to recovery of any claim appellee may have had. The issues seem simple yet they are involved, necessitating extensive research and discussion.

On September 4, 1903, one Philip E. Moisson was the owner of Lots 166 and 167 within 'Valuable Building Lots Adjoining Railroad Depot, Santa Fe, New Mexico, 1880.' On that date, pursuant to Sections 3804 to 3858, inclusive, 1897 Compilation, New Mexico Statutes, portions of these lots were condemned 'to the uses and purposes of the Santa Fe Central Railway Company in the construction, maintenance, operation and use of its line of railroad and telegraph.' By the decree, which was duly recorded, the railway company was authorized to 'enter into, hold, possess and enjoy for the purposes aforesaid' the said land, real estate and property. The Atchison, Topeka & Santa Fe Railway Company, hereinafter referred to as Santa Fe Railway Company, is the successor of the Santa Fe Central Railway Company.

On May 1, 1905, Moisson quitclaimed to appellee these and other lots subject to their uses for railroad purposes, thus conveying his 'contingent reversionary interests,' and this deed was recorded in 1911. Prior to 1940 appellant leased portions of the property involved upon which it built a warehouse. On November 30, 1943, it received a Trustees' Deed from the trustees of the property of The Denver & Rio Grande Western Railroad Company, including portions of lots 166 and 167 which deed sold, conveyed and quitclaimed to appellant all of their right, title and interest in and to the property as trustees of that railroad company. This deed was also recorded. In 1945 appellant erected a stucco addition to its warehouse, the major portion of which is on lot 166. On April 30, 1948, appellant received a quitclaim deed from Santa Fe Railway Company to other portions of lot 166, acquired by condemnation. This deed was likewise recorded.

Thereafter, on or about February 15, 1960, appellant conveyed the entire fee in real estate, including the portions of the lots involved to the State of New Mexico. Preparatory to making the conveyance a title search revealed that appellee had a claim possible of enforcement on the property by virtue of the deed from Moisson to him, and that a quitclaim would be required from him to the State of New Mexico in order to remove the claim. Consequently, on January 13, 1960 appellant and appellee entered into the contract, previously mentioned, at which time the total value of the portions of the lots involved was fixed at $15,000.00. Appellee received at the time $4,000.00 for his quitclaim deed to the State, the balance of $11,000.00 being subject to determination by the district court.

It was stipulated that appellant was in possession of the ground covered by its warehouse an stucco building prior to 1940 and was in continuous possession of the warehouse and building from that time until 1960; that appellant's name appeared on the warehouse prior to 1940 and remained thereon until 1960; that appellant obtained the deed from Santa Fe Railway Company for the purpose of acquiring title to said property, as it no longer desired to hold under lease as property was becoming valuable; that appellant made no investigation at the time it took the deed to determine whether Santa Fe Railway Company owned the property or whether plaintiff had an interest therein; that appellant paid all taxes on the property from 1948 to 1959. It was further stipulated that Santa Fe Railway Company, for more than 30 years, had used and is now using the grounds of area lying easterly of and adjoining the warehouse and stucco building for railroad purposes.

Defendant concedes that by the then existing eminent domain statutes pertaining to railroads, it was not intended that absolute fee simple title in the condemned property become vested in the railroads but, on the contrary, that title in the property was conveyed to them so long as the property was used for railroad purposes, as a public use. The language of the condemnation decree before us followed the language of the statute. See Wabash Ry. Co. v. Chauvin, 346 Mo. 950, 144 S.W.2d 110, where the condemnation title provisions of the general laws of 1855 in Missouri, condemning property for railroad uses and purposes, contains language almost identical to the statute with which we are here concerned.

All that the railway company took in 1903 by condemnation was a base, qualified or determinable fee, with a possibility of reverter to the original owner upon the abandonment of the uses and purposes for which it was condemned. Fitch v. State, 139 Conn. 456, 95 A.2d 255; Calhoun v. Hays, 155 Pa.Super. 519, 39 A.2d 307; Reichard v. Chicago B. & Q. R. Co., 231 Iowa 563, 1 N.W.2d 721; Peters v. East Penn Township School District, 182 Pa.Super. 116, 126 A.2d 802; Consolidated School District No. 102 v. Walter, 243 Minn. 159, 66 N.W.2d 881, 53 A.L.R.2d 218. The court correctly found that Moisson continued in ownership of reversionary rights in and to said real estate until the 1905 deed to appellee.

It is appellant's contention that a possibility of reverter after a determinable fee was not an assignable interest in New Mexico in 1905. The statute in effect on that date, which is the present Sec. 70-1-3, N.M.S.A., 1953 Comp., states:

'Any person or persons, or body politic, holding, or who may hold, any right or title to real estate in this state, be it absolute or limited, in possession, remainder or reversion, may convey the same in the manner and subject to the restrictions prescribed in this chapter.'

We think there can be no doubt that the owner of a possibility of reverter comes within these provisions and that such a contingent reversionary interest was and is alienable. Sections 70-1-21 and 70-1-22, 1953 Comp., being Sections 1 and 2, Chapter 4, Laws 1937, which appellant contends made this right alienable for the first time, specifically relate to the assignability of a possibility or right of reversion 'for breach or violation of condition or conditions subsequent.' It requires no citation of authority to support the assertion that a conveyance of a determinable fee, in which the grantor or owner retains a possibility of reverter, is not a conveyance subject to a condition subsequent, the latter being a conveyance in which there remains to the grantor only a power of termination or right of re-entry for condition broken, which certainly is not the case here. However, for a clear statement of the distinction, see Consolidated School District No. 102 v. Walter, supra; People by and through Dept. of Public Works v. City of Fresno, Cal.App., 26 Cal.Rptr. 853; Note in 53 A.L.R.2d 224.

Both by judicial decisions and by statutes in the various states it has been held that a possibility of reverter is alienable. In London v. Kingsley, 368 Pa. 109, 81 A.2d 870, it is most aptly stated thus:

'While the terms 'possibility of reverter' and 'reversion' have at times been used interchangeably and confusedly, the courts of Pennsylvania have held, for over 100 years, that a possibility of reverter, like any other reversionary interest, is capable of transmission by inheritance, conveyance or release. * * * The law of Pennsylvania on this point has been adopted by the Restatement, Property, Future Interests, Sec. 159, p. 570.

'The basic reason for these decisions was probably because our courts saw neither reason, logic nor necessity for continuing the doctrine of a feudal society in modern commercial and industrial times. Cf. 3 Simes, Future Interests, Sec. 715. The power to dispose of a possibility of reverter is in accord with sound public policy in the interest of modern civilization. Cf. Graves, Notes on Real Property, pages 392, 393.'

See also Dickerman v. Town of Pittsford, 116 Vt. 563, 80 A.2d 529; Richardson v. Holman, 160 Fla. 65, 33 So.2d 641; James v. Dalhart Consolidated Independent School District, C.C.A.Texas, 254 S.W.2d 826; Caruthers v. Leonard, Tex.Com.App.1923, 254 S.W. 779; Brown v. Independent Baptist Church of Woburn, 325 Mass. 645, 91 N.E.2d 922, citing Tiffany, Real Property, 3rd Ed., Sec. 314, note 31; and Reichard v. Chicago B. & Q. R. Co., supra.

This would appear to be in accord with the views expressed by this court in Gurule v. Duran, 20 N.M. 348, 149 P. 302, L.R.A.1915F, 648, wherein it was held, in 1915, that only so much of the common law was adopted in New Mexico as was applicable to the changed conditions and circumstances under which we live. This same reasoning, as early as 1852, apparently led to the passage of the above-quoted statute declaring the transferability of interests in lands.

There is no merit in appellant's contention that the assignment of a possibility of reverter is violative of the rule against perpetuities. Here, the base or qualified estate had already vested and the possibility of reverter is not considered an outstanding estate. The nonvesting of a...