Opinion
No. 37736.
Filed May 7, 1971.
1. Deeds: Estates. Circumstances in which grantors convey land may indicate an intent to create an estate in fee simple determinable and not an estate in fee simple absolute. 2. Constitutional Law: Statutes: Contracts. Constitutionality of a retroactive statute under the contract and due process clauses of the United States and the Nebraska Constitutions generally depends upon reasonableness. Relevant factors are the nature and strength of the public interest, the extent of modification of the asserted preenactment right, and the nature of the right altered by the statute. 3. Constitutional Law: Statutes: Contracts: Eminent Domain. Section 76-2,102, R.R.S. 1943, of the reverter act, either on its face or in its application to plaintiffs, did not violate the due process or the contract clause of the United States or the Nebraska Constitution or the eminent domain provision of the latter Constitution.
Appeal from the district court for Douglas County: JAMES A. BUCKLEY, Judge. Affirmed.
Hunter, Venteicher, Caniglia Kasher, for appellants.
D.C. Bradford and Howard Fredrick Hahn of Monsky, Grodinsky, Cohen, Garfinkle Zweiback, for appellees.
Heard before WHITE, C.J., CARTER, SPENCER, BOSLAUGH, SMITH, McCOWN, and NEWTON, JJ.
In this quiet title suit plaintiffs alleged that (1) their predecessors had conveyed to predecessors of defendants an estate in fee simple determinable; (2) the event stated in the conveyance had occurred, terminating defendants' interest; and (3) a statute providing for retroactive invalidity of possibilities of reverter such as that claimed by plaintiffs was unconstitutional. Defendants demurred, arguing the conveyance of an estate in fee simple absolute and the constitutionality of the reverter statute. From an order of dismissal on the demurrer plaintiffs appeal.
Plaintiffs are the heirs-at-law of Hiram R. and Minnie Avery, deceased. The Averys once owned an acre of land square in form and located in the corner of a section. On June 20, 1891, for a consideration of $100, they conveyed the parcel by warranty deed to trustees of School District No. 60. Plaintiffs and defendants attach no significance to the trust, treating the conveyance as one directly to the district.
In the description of the land the Averys' deed stated: "This Deed is to become null and void as soon as the land ceases to be used as school property." No other language in the deed indicated conveyance of an estate lesser than a fee simple absolute. The land was used as school property until November 1968. The School District of Omaha, successor in interest to School District No. 60, then sold the land as surplus to the highest bidder.
An estate in fee simple determinable is created by any limitation which, in an otherwise effective conveyance of land, (1) creates an estate in fee simple; and (2) provides that the estate shall automatically expire upon the occurrence of a stated event. It requires a special limitation which causes the created interest automatically to expire upon the occurrence of a stated event, and thus provides for a terminability in addition to that normally characteristic of such interest. Dell v. City of Lincoln, 170 Neb. 176, 187, 102 N.W.2d 62 (1960); Ohm v. Clear Creek Drainage Dist., 153 Neb. 428, 45 N.W.2d 117 (1950). Circumstances in which grantors convey land may indicate an intent to create an estate in fee simple determinable and not an estate in fee simple absolute. Restatement, Property, 44, Comment m, p. 129.
Defendants argue that the Averys simply set forth the purpose of the conveyance without limiting the estate conveyed. They cite what was then Article VIII (now Article VII), section 2, Constitution of Nebraska: "All lands, money or other property granted, or bequeathed, or in any manner conveyed to this state for educational purposes, shall be used and expended in accordance with the terms of such grant, bequest, or conveyance."
At the time of the Averys' deed a school district had power to purchase, hold, and sell such property as the law allowed. Laws 1881, c. 78, subdiv. I, 2, 13, and 14, pp. 331, 335, and 336. From 1881 to 1905 its power of eminent domain was limited: "The school board . . . may . . . occupy the land as long as the district desires to use it for district purposes; but should the same cease to be used for school purposes it will revert back to the owner of the fee simple of the land from which it was taken on the payment by him of the amount originally paid for the land without interest . . . . When land is thus taken without the consent of the owner, it shall not be more in amount than one acre . . . ." Laws 1881, c. 78, subdiv. XII, 2 and 3, pp. 371 and 372. In 1905 a provision authorized city school districts to acquire an estate in fee simple absolute by eminent domain. Laws 1905, c. 136, pp. 567 to 570.
Averys' deed was subject to two statutory rules of construction. An otherwise effective conveyance transferred the entire interest which the grantor had power to convey, unless an intent to transfer a lesser interest was effectively manifested. Courts in construing deeds were to effect the true intent collectible from the instrument and consistent with rules of law. See Comp. St. 1887, c. 73, 50 and 53, p. 579.
The constitutional provision for schools and the provision in the Averys' deed were nowise comparable. The deed conveyed an estate in fee simple determinable.
Section 76-2,102, R.R.S. 1943, whose constitutionality was challenged by plaintiffs, had been enacted by Laws 1959, c. 350, 4, p. 1237. It provided: "Neither possibilities of reverter nor rights of entry or reentry for breach of condition subsequent, whether heretofore or hereafter created, where the condition has not been broken shall be valid for a longer period than thirty years from the date of the creation of the condition or possibility of reverter. If such a possibility of reverter or right of entry or reentry is created to endure for a longer period than thirty years, it shall be valid for thirty years."
Constitutionality of a retroactive statute under the contract and due process clauses generally depends upon reasonableness. Relevant factors are the nature and strength of the public interest, the extent of modification of the asserted preenactment right, and the nature of the right altered by the statute. See, City of El Paso v. Simmons, 379 U.S. 497, 506 to 509, 85 S.Ct. 577, 13 L. Ed. 2d 446 (1965); Veix v. Sixth Ward Bldg. Loan Assn., 310 U.S. 32, 60 S.Ct. 792, 84 L.Ed. 1061 (1940); Home Bldg. Loan Assn. v. Blaisdell, 290 U.S. 398, 54 S. Ct. 231, 74 L.Ed. 413, 88 A.L.R. 1481 (1934). See, also, Hochman, "The Supreme Court and the Constitutionality of Retroactive Legislation," 73 Harv. L. Rev. 692 (1960); Note, 65 Colum. L. Rev. 1272 (1965). "The boundary at which the conflicting interests balance cannot be determined by any general formula in advance, but points in the line . . . are fixed by decisions that this or that concrete case falls on the nearer or farther side." Hudson Water Co. v. McCarter, 209 U.S. 349, 355, 28 S.Ct. 529, 52 L.Ed. 828 (1908).
Statutes somewhat similar to the one before us were invalid in Biltmore Village, Inc. v. Royal, 71 So.2d 727, 41 A.L.R. 2d 1380 (Fla., 1954); and Board of Education of Central School Dist. No. 1 v. Miles, 15 N.Y.2d 364, 207 N.E.2d 181 (1965). On the other hand, the Supreme Court of Illinois in an opinion by Mr. Justice Schaefer in Trustees of Schools of Township No. 1 v. Batdorf, 16 Ill.2d 486, 130 N.E.2d 111 (1955) upheld a statute similar to ours. The Illinois court pointed out that possibilities; of reverter were not voluntarily alienable inter vivos without indicating that the rule was crucial. See, also, Hijos v. Feliciano, 260 F.2d 500, (1st Cir., 1958).
The value of possibilities of reverters as a class has been slight. Maturity of the interest in English common law was so rare that the courts did not expressly decide whether a holder of a possibility of reverter might voluntarily alienate his interest inter vivos. Analogies of the law of rights of reentry and executory interests pointed to inalienability. I American Law of Property, 4.65, p. 521 (1952). Contingent interests in land became alienable under 8 and 9 Victoriae, c. 106, VI (1845), but our adoption of the English common law did not embody those statutes. Brooks v. Kimball County, 127 Neb. 645, 256 N.W. 501 (1934). Plaintiffs' possibility of reverter in the year 1959 had no such value that the eminent domain provision of the Constitution of Nebraska protected them. See State v. County of Cheyenne, 157 Neb. 533, 60 N.W.2d 593 (1953).
The Legislature may reasonably have intended the reverter act to increase utility of land and marketability of titles by methods that were certain, uniform, and inexpensive. See Note, 65 Colum. L. Rev. 1272 (1965). Section 76-2,102, R.R.S. 1943, either on its face or in its application to plaintiffs, did not violate the due process or the contract clause of the United States or the Nebraska Constitution. The possibility of reverter was not protected by the eminent domain provision of the Constitution of Nebraska.
The judgment was correct.
AFFIRMED.