Knights & Ladies of Samaria v. Board of Education

DAVIS, Judge. The Knights and Ladies of Samaria (Knights) brought an action in the Circuit Court for Charles County on March 5, 1993, seeking a declaratory judgment that title to a sixteen and three-quarter acre parcel of land in Charles County had reverted to Knights (grantors) in June 1974, upon the closing of a school by the grantee-appellee, the Board of Education of Charles County (Board). After an unsuccessful attempt at mediation and four continuances, the circuit court (G.R. Hovey Johnson, J.) granted summary judgment in favor of the Board as to all claims on March 1, 1995. Knights appeals from the ⁶⁶⁰ grant of summary judgment, presenting questions for our review that we restate as follows: I. Did the circuit court err when it held that Knights’ possibility of reverter extinguished by the operation of § 6-102 of the Md.Code Ann., Real Prop.

(R.P.) (1957,1994 RepLVol.)?

II

Did the circuit court err when it held that Knights’ action was barred by the time limitation of R.P. § 6-103?

III

Is R.P. § 6-102 unconstitutional as applied?

IV

Is R.P. § 6-103 unconstitutional as applied? Although we answer the first question in the affirmative, and therefore do not reach the third question, our negative responses to the second and fourth questions result in affirmance of the circuit court judgment. FACTS In 1921, Joshua Lodge No. 65 Independent Order Good Samaritans and Daughters of Samaria conveyed to the Board, by deed, sixteen and three-quarter acres of land located in Charles County. The 1921 deed states that the purpose of the conveyance was for the Board to establish a “Colored Manual Training School.” The deed further specified that if the Board ever closed the school, the land would revert to Joshua Lodge No. 65.

The Board permanently closed the school in June 1974. By this time, Lodge No. 65 was no longer active. 1 On June 10, 1994, Knights incorporated as successor-in-interest to Lodge No. 65, intending to possess the land and construct a day care and senior citizens’ center on the acreage. Whether Knights ever made a request for the Board to reconvey the property via confirmatory deed was contested in the pleadings, and the ⁶⁶¹ trial court made no finding as to that issue; regardless, Knights sought, in the action brought below, to have the property declared its own by operation of the reverter clause in the deed. The circuit court found Knights’ action barred by R.P. §§ 6-102 and 6-103.

As Knights challenges both findings, we shall address seriatim the effect of §§ 6-102 and 6-103 on Knights’ claim. LEGAL ANALYSIS I Section 6-102 invalidates a possibility of reverter created before July 1, 1969, unless the grantor files a notice of intention to preserve it within a certain time period. R.P. § 6-102(a),(b). To preserve a possibility of reverter created between July 1, 1899 and June 30, 1969, the grantor must record the notice “not less than 70 years nor more than 73 years after the date of its creation.” Id. § 6-102(e)(2).

Thus, for a possibility of reverter created on November 5, 1921 (the date of the deed in this case), Knights would have had to record notice between November 5, 1991 and November 5, 1994. 2 Knights admits that it did not record notice in the manner required by § 6-102. It asserts, however, that the action filed on March 5, 1993, served the purpose of the notice requirement of § 6-102, i.e., that the public be provided notice that the property was encumbered. Therefore, so the argument goes, the Board had “constructive and actual notice” of Knights’ intention to preserve the possibility of reverter in the disputed acreage, and, accordingly, we should excuse the failure to follow the statutory prescription precisely. We need not address this contention, for we find that § 6-102 does not apply in this case to extinguish the possibili ⁶⁶² ty of reverter that Knights had owned.

Knights could have filed a notice of intention up until 1994, and § 6 — 102(b) provides that “[t]he extinguishment [of the possibility of reverter] occurs at the end of the period in which the notice or renewal notice may be recorded and an estate in fee simple determinable ... then becomes a fee simple absolute.” The language of the statute, therefore, provides that the possibility of reverter will not be extinguished until seventy-three years have passed from the creation of the fee simple determinable. The statutory time period for extinguishing a possibility of reverter presupposes the continued existence of the possibility of reverter at least until the time period has expired. Of course, if the possibility of reverter no longer existed when seventy-three years had passed, then it could not be “extinguished” — it already would have been. We think, however, that is precisely what has happened in this case.

The Court of Appeals illustrated the nature of the fee simple determinable estate in Ringgold v. Carvel, 196 Md. 262 , 76 A.2d 327 (1950): “Thus, where land is devised for a certain purpose, and it is the testator’s intention that it shall be used for that purpose only, and that on the cessation of such use, the estate shall end without re-entry by the grantor, a possibility of reverter arises ...” Id. at 272 , 76 A.2d 327 (emphasis added). The Court of Appeals again examined possibilities of revert-er in Mayor of Ocean City v. Taber, 279 Md. 115 , 367 A.2d 1233 (1977), a case similar to this one. In that case, an 1878 deed conveyed a parcel of real estate to the United States for the sole purpose of establishing a Life Saving Station. Id. at 120 , 367 A.2d 1233 .

In June 1967, the United States conveyed its interest in the land through a quitclaim deed; the trial court found that the conveyance conclusively established that the United States failed to use the Life Saving Station, as the deed required. Id. at 129 , 367 A.2d 1233 . The' successors-in-interest to the original grantors had waited seven years to bring a claim for recovery based on this failure, but in holding ⁶⁶³ that the claim was not barred by estoppel, waiver, or laches, the Court of Appeals said: The 1878 deed divided the fee simple absolute estate in the property into the fee simple determinable estate conveyed by the Trustees and a possibility of reverter which remained in the hands of the Trustees. As we have observed, when the United States stopped using the property for a Life Saving Station, there was a diversion of the land from the purpose for which it was conveyed, the estate held by the United States was determined, and automatically a fee simple absolute estate was reestablished in those entitled under the original grantors.

(Cited case omitted). It was not necessary for appellees to assert a claim to the fee simple absolute estate or to take any other positive action. They acquired afee simple absolute estate by the realization of the possibility of reverter. Id. at 131 , 367 A.2d 1233 (emphasis added).

Although the Court in Taber noted that §§ 6-102 and 6-103 were not violated, we think the paragraph quoted above to be dispositive of the issue in this case. Quite simply, the cessation of using the land for a Colored Manual Training School determined the estate held by the Board, and a fee simple absolute estate automatically vested in Knights. No further action by Knights was required. See id.

The possibility of reverter was realized — ergo, the possibility ceased to exist, giving way to ownership in fee simple absolute. Id. at 128, 367 A.2d 1233 ; Ringgold, 196 Md. at 272 , 76 A.2d 327 . If the possibility of reverter did not exist in 1994, then the expiration of the time period for filing a notice of intent to preserve the possibility could not destroy it. The three-year window for filing the notice of intent serves at least two purposes.

The seventy year “waiting period” for filing prevents grantors from filing the notice immediately after the grant, as a routine matter; thus, it ensures a careful evaluation of the worth of the possibility of reverter — the interest is worth preservation if its owner is willing to file a ⁶⁶⁴ notice of intent fully seventy years after its creation. 3 Second, the seventy-three year expiration period of a possibility of reverter protects the security of title by preventing long-irrelevant and antiquated conditions from operating to strip title from a subsequent grantee. The Special Committee on Possibilities of Reverter and Rights of Entry, formed in 1968 at the request of the Judiciary Committee of the Legislative Council for the purpose of researching the area and submitting the draft legislation for what would become §§ 6-102 and 6-103, phrased the policy considerations behind the recording requirement thusly: With the passage of time, the change of conditions in the restricted tract or in the neighborhood surrounding it, and the promulgation of government regulation, the usefulness of many [conditions subsequent or special limitations] has completely vanished.... When such losses of utility occur, seriously undesirable consequences follow. The owner of the restricted land cannot use it or develop it to the greatest advantage.

He cannot find buyers for it, because no one wishes to take his place in the strait jacket. In most instances it is not practicable to obtain releases of the restrictions because the owners of the restrictions are numerous and scattered. In other instances, the restriction owners may be few and available, but hungry for their pound of flesh. In view of these undesirable consequences of the continued existence of restrictions which have lost their utility, the public interest in the marketability and full utilization of land requires that there be available to owners of parcels burdened with such restrictions economical and efficient means of getting rid of them. ⁶⁶⁵ We would not further these policies by applying § 6-102 to the facts of the case sub judiee.

The concern in this case is not with possibilities of reverter which, although alive on paper, are long-forgotten and dormant. Rather, this case deals with the attempt by Knights to obtain land in 1993 that it owned in fee simple absolute beginning, at the latest, in 1974. No possibility of reverter existed in 1993, so there was nothing to be extinguished by the operation of § 6-102. 4 Furthermore, applying the Board’s interpretation of § 6-102 would lead to an absurd result, which courts should strive to avoid. See, e.g., Coerper v. Comptroller of Treasury, 265 Md. 3, 6 , 288 A.2d 187 (1972).

If we were to adopt the Board’s interpretation, then the following scenario could occur: a deed conveying a fee simple determinable estate is executed in 1968, with the grantor retaining a possibility of reverter. The determining event occurs in 1970, and the estate in fee simple absolute revests in the original grantor. According to the Board’s application of the statute, even if the property were to change hands literally dozens of times over the years, whoever owned the property in the year 2038 would have to record, by the year 2041, a notice to preserve the possibility of reverter, ⁶⁶⁶ or else this party would lose the reverter, and thus the property. This result clearly is not what the legislature intended.

The notice requirement of § 6-102 only applies to possibilities of reverter that exist at the time the grantor must record the notice. The proper focus here is on § 6-103, which imposes a seven-year statute of limitations on actions to recover property by reason of the termination of determinable fee-simple estates. The circuit court erred in deciding that § 6-102 barred Knights’ action. II We turn to the applicability of § 6-103 to the case sub judice.

Section 6-103 reads, in relevant part: 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 subsequent, 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 breach of the condition or from the time when the fee-simple determinable estate terminates. R.P. § 6-103. Knights argues that § 6-103 does not apply in this case because of the automatic reversionary nature of a possibility of reverter. Because title to the land in fee simple absolute reverted to Knights immediately upon the closing of the school, so the argument goes, the prescriptive period of § 6-103 is irrelevant.

We disagree. Inherent in Knights’ argument is the impression that § 6-103 deals with the existence of an estate, whether in fee simple absolute or fee simple determinable. Section 6-103, however, addresses two distinct and separate matters; it speaks to the time period within which a grantor must enter land or bring a recovery action upon the breach of a condition subsequent, and it speaks to the time period to do the same upon the termination of a fee simple determinable. One matter it does not address, at least expressly, is the question of ownership.

We agree with the Board when it argues that Knights has confused having a fee simple absolute estate ⁶⁶⁷ reestablished in the original grantor upon termination of the fee simple determinable estate, and the need for the original grantor, after reestablishment of the fee simple absolute estate, to commence an action to recover the land within seven years after the termination of the determinable estate. The former is untouched by § 6-103. The latter, however, is controlled by it. See Taber, 279 Md. at 130 , 367 A.2d 1233 (§ 6-103 prescribes a statutory limitation on the period within which actions may be brought and land recovered by reason of termination of determinable fee simple estates).

The parties agree that the Board ceased operating the school in 1974. Knights presents no argument that the “discovery rule” should apply here to prevent the limitations period from beginning to run on that date. See Poffenberger v. Risser, 290 Md. 631, 636 , 431 A.2d 677 (1981) (a cause of action accrues when a plaintiff in fact knows or reasonably should know of the wrong). Thus, Knights would have had to file an action to recover the property by 1981.

Plainly, Knights failed to satisfy the requirements of § 6-103, and the statute operated to time-bar Knights’ action. An anomaly in the statute, however, requires us to go even further in our resolution of this case. As we have said, under the common law of title, Knights became the owners of a 100% fee simple absolute title upon the happening of the determinable event. This occurred no later than 1974.

All of an absolute fee simple title in the whole of a property cannot be simultaneously in two completely separate unrelated title entities. Thus, at this point, the Board only had possession of the land, not title to it. The statute, R.P. § 6-103, requires the