Daily Development for
Friday, October 17, 1997
by: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
ESTATES; POSSIBILITY OF REVERTER; ADVERSE POSSESSION: Seven year statute of limitations on actions to recover property by reason of the termination of determinable fee simple estates amounts to establishment of an adverse possession period for title reverting following such determinable estates, notwithstanding normal twenty year period for other forms of title.
Knights and Ladies of Samaria v. Board of Education of Charles County, 688 A.2d 933 (Md.Spec.App. 1997).
In 1921, the Joshua Lodge No. 65 Independent Order Good Samaritans and Daughters of Samaria conveyed to the local school district a seventeen acre parcel for the creation of a school, with a provision that if the school were ever closed the property would revert to the Lodge. The court apparently construed this deed as creating a fee simple determinable. The school district stopped using the property for a school in 1974, but at that time the Lodge was (at best) inactive.
In 1993, the "Knights and Ladies of Samaria" claimed that it was the successor to the Lodge and sought to acquire the property for purposes of establishing a private day care facility. The court accepted that the "Knights and Ladies" were valid successors for purposes of its opinion.
A 1969 Maryland statute provided that a possibility of reverter must be recorded no sooner than 70 years and no later than 73 years after its creation in order to remain valid. The lower court skirmishes dealt largely with application of this statute, but the court held that it had no application under these facts. The seventy years on this right would have run in 1991, and by that time the possibility of reverter was no longer in existence. At the time the school district stopped using the property, the holders of the possibility of reverter automatically became legal owners of the property, and not holders of a possibility of reverter.
On the other hand, the court found that another Maryland statute caused more difficulties for the Knights - the fee claimants. This statute imposes a seven year statute of limitations on the assertion of rights under a determinable fee:
"No person may commence an action for the recovery of land, nor make an entry on it, by reason of a breach of a condition subseuent, or by reason of the termination of an estate of fee simple determinable, unless the action is commenced or entry is made within seven years after the breach of the condition or from the time when the fee simple determinable estate terminates."
After looking to legislative history for guidance, the court ruled that in light of the statute, when a fee simple determinable estate is created, the adverse possession of the grantee in possession begins to run on the date of the determinable event, and title in fee simple absolute vests by adverse possession seven years later. The court discussed the anomalies created by the statute when, as in this case, upon the happening of the determinable event, under the common law, fee simple title automatically reverts to the grantor. The grantee at that point merely has possession. Yet the statute requires the out-of-possession owner to institute an action for possession within seven years, or that "ownership" is lost. If the state's general twenty year adverse possession statute were to be applied, for the next thirteen years, it would not be clear who was the owner of the fee simple estate. For that and other reasons the court decided that for purposes of a fee simple determinable holder, the period of adverse possession is not twenty, but seven years. Comment 1: Scholars sometimes speculate that courts seem more inclined to find that termination rights are optional, rather than automatic, because they believe that such rights are more readily disposable. But adverse possession actually works better to cut off automatic rights in most states.
Comment 2: The Maryland statute, specifically addressing determinable fee estates, of course, is even more slick. Is it too slick? Is the public policy all that strong in letting public agencies and charitable institutions keep property conveyed to them for specific public service purposes even after they abandon those purposes?
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