Daily Development for Monday, November 3, 2008
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Husch Blackwell Sanders
Kansas City, Missouri

DEEDS; RESERVATIONS; TIMBER RIGHTS:  In the absence of clear language manifesting an intent to create perpetual timber rights in New Mexico, there is a presumption against perpetual timber interests.  The court also held that the omission of the word “forever” after the words “heirs and assigns” was fatal to the claim of perpetual timber rights. 

Marrujo v. Sanderson, 2008-NMCA-112, 191 P.3d 588 (N.Mex. App. 2008)

The reservation in question stated that grantor, for itself, its heirs and assigns,  reserved the rights to timber “eighteen inches in diameter measured eighteen inches above the ground” together with rights of ingress and egress to harvest the timber.  Disputes about the continued validity of the reservation had gone on for some time.  Grantor argued that the language “heirs and assigns” clearly indicated a perpetual right.  Grantee argued that the absence of the language expressing “perpetuity” indicated clearly that only a reasonable period was intended, and that a reasonable period had long since passed. 

The appeals court, in concluding that there was no perpetual right, commented that New Mexico’s approach is similar to that of other states, which “have concluded that an estate in timber is presumed to be of limited duration, unless the parties provide a clear expression of intent to establish a perpetual fee simple interest.”  This rule applies whether the timber rights are granted or reserved. 

The rationale for this rule is that “[p]erpetual interests in timber constitute extreme burdens, which so severely impair surface owners’ use and enjoyment of their property that perpetual interests of this nature should be disfavored.” 

Similarly, New Mexico courts have held that if an estate in timber is limited to a reasonable period of time – rather than in perpetuity – failure to remove the timber in a timely fashion results in termination of the estate.  In the instant case, approximately thirty-seven years had elapsed since the reservation, and the Court determined that this exceeded any “reasonable period of time” to remove the timber.  Consequently, the reservation had been terminated.

The court also ruled that several general rules of general construction applicable to deeds were balanced by contrary rules and were insufficient to support the claim of perpetual rights. 

The court rejected the argument that a reservation to the grantor’s “heirs and assigns” was sufficient to constitute “conclusive proof” of an intent to create perpetual rights.  In doing so, the court distinguished another case, followed extensively in other parts of the opinion, “which indicates that the term ‘heirs and assigns, forever’ would have ‘clearly manifest[ed] an intention that the grantor should have a perpetual right to have the timber remain on the land.’”  State ex rel. Okla. Planning & Res. Bd. v. Smith, 317 P.2d 219, 223-24 (Okla.1957).  Id. at 4.  The New Mexico court regarded the word “forever” as determinative.

Accordingly, the court affirmed the grant of summary judgment in favor of the landowners.

Reporter’s Comment:  The New Mexico court held that the word “forever” is determinative in the phrase “heirs and assigns, forever” as distinguished from the phrase “heirs and assigns.”  Does this distinction counsel the practice of “belt and suspenders” drafting?  Or does it merely signify that the court was not going to find perpetual timber rights except on the basis of the most compelling evidence?  Would it not have been sufficient if the word “forever” or “perpetual” or a similar word had been used elsewhere in the reservation to refer to the timber rights?

Reporter’s Comment 2:   New Mexico’s rule on perpetual timber interests is the modern rule, and the court reviews cases from other jurisdictions that have also adopted it.  It is to be expected that most states will adopt this rule eventually.  The rationale for this rule is compelling in light of modern circumstances.

Editor’s Comment 1: The narrowness of this issue may justify departure from the general rule that the creation of an estate in a grantee “and heirs and assigns” is the creation of a perpetual estate.  Certainly there is a policy issue lurking in the degree to which a timber extraction right affects the surface users.  Further, one hopes that significant reserved timber rights would be negotiated by the parties with the assistance of able counsel.  In fact, the use of the term “heirs and assigns” suggests that at some point technical advice was sought, if only through selection of a form.  Counsel engaged in such transfers have a duty to make themselves aware of the special rules concerning timber reservations.  Thus, the rule is not such a “gotcha” as it might appear. 

There is, nevertheless the concern that the law has created a situation in which the same words are held to mean one thing in one context and another in a different context.  In the view of the editor, law should facilitate, wherever possible, the expectations of the parties freely bargaining, and should not impose surprise policy restrictions. 

Editor’s Comment 2: Does the same limited construction apply to reserved mineral rights, which in some cases can be equally disruptive of surface usage.  If not, why not? 

The Reporter for this item was Amanda Sanchez of the New Mexico Bar. 

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