Red Hill Outing Club v. Hammond
| Citation | 143 N.H. 284,722 A.2d 501 |
| Decision Date | 31 December 1998 |
| Docket Number | No. 97–312.,97–312. |
| Court | Supreme Court of New Hampshire |
| Parties | RED HILL OUTING CLUB v. Robert HAMMOND and another. |
Martin, Lord & Osman, P.A., of Laconia (Charles V. Moser, on the brief and orally), for the plaintiff.
Law Offices of David J. Killkelley, of Laconia (David J. Killkelley, on the brief and orally), for the defendants.
The defendants, David and Elizabeth Hammond and their son, Robert Hammond, appeal the Superior Court's (Fauver , J.) decision denying them right of re-entry and possession of land they deeded to the plaintiff, Red Hill Outing Club (club), subject to a condition subsequent. We affirm.
David Hammond purchased land in Moultonboro in 1956 known as Red Hill, which was subsequently cleared for use as a ski slope. Hammond installed a rope tow and participated in forming the club for the purpose of operating the ski slope. From 1969 to 1979, the club leased Red Hill. During this period, it operated the rope tow and provided free ski lessons to members and Moultonboro residents.
In 1979, David and Elizabeth Hammond conveyed Red Hill by quitclaim deed to the club for nominal consideration. The deed contained the following condition:
The Grantee ... covenants and agrees that the within described premises shall be maintained and made available to residents of Moultonboro as a ski slope in accordance with its now existing by-laws. If the Grantee fails to provide such skiing facilities to Moultonboro residents for a period of two consecutive years then a breach of this covenant has occured [sic], provided such failure was not caused by reason of an act of God, such as inadequate snowfall. In the event the Grantee ... breach[es] [this covenant], the Grantor shall have the right to re-enter and take possession of said premises....
From 1979 to the mid-eighties use of the ski slope grew. But the popularity of other ski areas, changing interests of families who had previously frequented the slope, inadequate snowfall in some years, and the waning leadership of the club resulted in a noticeable decline in its use after 1988. Consequently, the club ceased offering free ski lessons after the winter of 1988–1989, and did not obtain a rope tow permit for the ski seasons of 1992–1993 and 1993–1994. Red Hill was closed to all skiing during the winter of 1993–1994.
In October 1994, the defendants filed a notice of re-entry and possession, claiming that the club had breached its condition by failing to provide skiing facilities at Red Hill for two consecutive years. In response, the club brought action against the Hammonds, seeking, inter alia , declaratory judgment regarding the parties' relative rights.
After a bench trial, which included a view, the trial court determined that the condition subsequent should be strictly construed. Therefore, to comply with its obligation to provide Red Hill as "skiing facilities," the club needed only to "maintain and make available the premises ... as a ski slope." Accordingly, the court found that the club had not substantially breached the condition because it had remained in existence as a club and continued to maintain and offer use of the hill as a ski slope. It found that any failure of the club to provide ski facilities from February 1993 to October 1994 was not sufficient in duration to constitute a breach.
On appeal, the defendants argue that the trial court erred by: (1) strictly construing the condition subsequent; (2) construing any ambiguity in the deed against the grantor; (3) finding that the club did not substantially breach the condition subsequent; and (4) refusing to consider evidence of a breach occurring after the club instituted its action.
The defendants first argue that the trial court should have construed the condition subsequent by determining the parties' intent in light of the surrounding circumstances at the time of the conveyance. They contend that by strictly interpreting the condition to refer only to maintaining and making available the ski slope, the trial court ignored the parties' original intent to include the operation of a licensed ski tow and provision of free ski instruction within the club's obligation to provide "skiing facilities." Although the defendants acknowledge that strict construction of conditions subsequent has long been the rule in this State, they urge us to update this rule consistent with the modern trend in contract interpretation.
The construction of deeds is an issue of law for this court. See Baker v. McCarthy, 122 N.H. 171, 174–75, 443 A.2d 138, 140 (1982). The general rule in interpreting a deed is to determine the parties' intent at the time of conveyance in light of the surrounding circumstances. See Chao v. The Richey Co., Inc., 122 N.H. 1115, 1117, 455 A.2d 1008, 1010 (1982). As the defendants correctly note, formalistic requirements in real estate conveyancing have largely given way to effectuating the manifest intent of the parties, absent contrary public policy or statute. See Therrien v. Therrien, 94 N.H. 66, 66–67, 46 A.2d 538, 538–39 (1946) ; 4 W. Jaeger, Williston on Contracts § 614, at 584–97 (3d ed.1961). Thus, for example, when the interests of a changing society persuaded us that restrictive covenants were valuable land use planning devices rather than restraints on the use of land, we discarded the rule of strict construction in favor of ascertaining the parties' intent in light of the surrounding circumstances at the time of a covenant's creation. See Joslin v. Pine River Dev. Corp. , 116 N.H. 814, 816–17, 367 A.2d 599, 601 (1976).
We are not convinced, however, that we should apply the general rule of construction to conditions subsequent. "The [grantor of a fee simple subject to condition subsequent] shall have his exact legal right, but no more." Emerson v. Simpson, 43 N.H. 475, 478–79 (1862). "[T]o defeat an estate of his own creation, [he] must bring the [grantee] clearly within its letter." Id. See generally City of Lincoln v. Townhouser, Inc., 248 Neb. 399, 534 N.W.2d 756, 759 (Neb.1995). A fee simple subject to condition subsequent is a conveyance of land in which the grantor expressly retains the right of re-entry upon breach of a stated condition, the exercise of which results in a forfeiture of estate for the grantee. See Hagaman v. Board of Education of Woodbridge Tp. , 117 N.J.Super. 446, 285 A.2d 63, 66 (N.J.Super.Ct.App.Div.1971). See generally 1 R. Powell & P. Rohan, Powell on Real Property § 188, at 13–56 to 13–75 (1998). Because of the drastic consequence of a breach, we have traditionally viewed conditions subsequent with disfavor. See, e.g ., Emerson, 43 N.H. at 477; cf. DeBlois v. Crosley Bldg. Corp., 117 N.H. 626, 629, 376 A.2d 143, 145 (1977).
The passage of time has failed to increase the social value of conditions subsequent. Unlike restrictive covenants, conditions subsequent continue to be viewed with disfavor because of their potential to cause a forfeiture of land. See, e.g. , MacDonald Properties v. Bel–Air Country Club, 72 Cal.App.3d 693, 140 Cal.Rptr. 367, 371 (Cal.App.1977). We disagree with the defendants that the consequences of a forfeiture are "no greater" than those of specific performance of a contract or an attachment on property. A forfeiture by nature is a drastic remedy because in most cases it is widely disproportionate to the breach. See Korngold, For Unifying Servitudes and Defeasible Fees: Property Law's Functional Equivalents, 66 Tex. L.Rev. 533, 551 (1988). In addition, restricted use of the land for a potentially indefinite duration substantially diminishes the land's marketability and development, ultimately to the detriment of the community. See Powell, Defeasible Fees and the Nature of Real Property , 40 Kan. L. Rev. 411, 418–19 (1992). Neither specific performance, an equitable remedy at the court's discretion, see Shakra v. Benedictine Sisters , 131 N.H. 417, 421, 553 A.2d 1327, 1330 (1989), nor attachment, applied to secure payment of judgment should a plaintiff prevail, see RSA 511:1 (1997), evokes the hardships associated with a condition subsequent.
The defendants, relying on North Hampton School District v. Congregational Society, 97 N.H. 219, 84 A.2d 833 (1951), contend that the terms of a defeasible fee should be construed in light of surrounding circumstances. While we agree that North Hampton appears to extend the general rule of contract construction to a deed involving a fee simple determinable, id. at 221, 84 A.2d at 834, we do not read its holding so broadly as to apply to the case before us. North Hampton addressed only the issue of the nature of an estate created by language in a deed, id., not the operation and effect of the particular terms of a forfeiture clause. Compare DeBlois, 117 N.H. at 629, 376 A.2d at 145, with Gage v. School–District, 64 N.H. 232, 234, 9 A. 387, 388 (1887). Here, there is no dispute that the deed contains a condition subsequent. The question before us is the scope of the condition subsequent. North Hampton thus addresses aspects of deed construction that do not concern us here.
The overwhelming majority of courts in other jurisdictions also have continued to strictly construe conditions subsequent in deeds with regard to their capacity to work a forfeiture. See, e.g. , Willhite v. Masters, 965 S.W.2d 406, 409 (Mo.Ct.App.1998) ; C Company v. City of Westbrook, 269 A.2d 307, 309 (Me.1970), abrogated on other grounds by Herzog v. Irace , 594 A.2d 1106, 1108 (Me.1991). Our position conforms to the great weight of authority from our sister States.
Our decision today does not abrogate the guiding rule that the intent of the parties to a deed is to be determined and effectuated when possible. See Chapin and Wife v. School District, 35 N.H. 445, 451 (1857) (); cf. Div. of Labor Stand. Enf. v. Dick Bullis, Inc., 140 Cal.Rptr. 267, 270 (App. Dep't Super. Ct.1977) ()....
To continue reading
Request your trial