Real property “quiet title” actions often force the Court to apply contemporary facts to complicated legal distinctions raised by controverted century-old documents. A recent case arose out of the right of reverter in a 1896 deed of property for “church purposes” and a 2015 church decree relegating the property “to profane but not sordid use”—and turned on the meaning of phrases under the both the common law and canon law.
In 1896, the president of the Paul Smith's Hotel Company — Apollos “Paul” Smith — signed a deed by which the Hotel Company transferred property in Franklin County to the Bishop of Ogdensburg in trust for a Catholic congregation. The deed stated that the property was to be used “[a]s and for [c]hurch purposes only, . . . and in case the said premises shall be devoted to any other use than for [c]hurch purposes, . . . this conveyance shall be void and the parties of the first part shall have the right to re-enter and take possession of said premises and every part thereof.”
Shortly thereafter, St. Gabriel the Archangel Catholic Church was built on the property. The last surviving son of Apollos Smith, Phelps Smith, died in 1937. His will directed the creation of Paul Smith's College of Arts & Sciences as an entity and the transfer of the Hotel Company's assets to the College. A deed, recorded in 1963, transferred to the College “rights of way, easements, reversionary rights, [and] rights of reentry” held by the Hotel Company.
In 2015, the Bishop of Ogdensburg issued a decree that relegated the property “to profane but not sordid use,” and directed the removal of sacred objects. The College placed no-trespassing signs on the property in 2017, and thereafter filed an action seeking a determination that it owned the property in fee simple. The Diocese answered and counterclaimed that it owned the property in fee simple.
Upon a joint stipulation of facts, the Diocese moved for summary judgment dismissing the complaint and seeking judgment upon its counterclaim. And the College cross-moved for summary judgment in its favor. Supreme Court found that the Hotel Company had conveyed to the Diocese a fee simple subject to a condition subsequent and had reserved a right of reentry, but that right of reentry had been extinguished by the attempted transfer in the 1963 deed. Thus, the court granted the Diocese's motion in its entirety and denied the College's cross motion, dismissed the complaint and held that Diocese was the lawful owner of the property. The College appealed.
The main issue on appeal was what interest, if any, remained in the Hotel Company as a result of the provision in the 1896 deed limiting the Diocese use of the property to “[c]hurch purposes only.” The College contended that, under the 1896 deed, the Hotel Company and its successors retained a possibility of reverter. The Diocese asserted, and Supreme Court found, that the conveyance to the Diocese was subject to a condition subsequent with a right of reentry, which was extinguished in the attempted transfer to the College in 1963.
At common law, the legal effect of these two interests provided different outcomes. With a fee on limitation subject to a possibility of reverter, the grantor retained a right to regain the fee upon the happening of an event. And the grantor regained it automatically.
Conversely, with fees taken subject to a condition subsequent with a right of reentry, a grantee's failure to perform the condition subsequent did not divest the interest from the grantee, but rather required the grantor to act upon the breach by re-entering the property.
Supreme Court did not find the 1896 conveyance to be ambiguous and focused its analysis on the clause stating that “the parties of the first part shall have the right to re-enter and take possession.” However, as the College argued, the court did not address the first part of the provision, which clearly stated that the transfer would be “void” should the property be used for purposes other than church purposes. Here, the term “void” — which preceded the right to re-enter language — was distinguishable from the term “voidable.”
Fees taken subject to a condition subsequent are, by their nature, voidable, as only the grantor, upon the grantee's failure to meet the condition, can exercise the option to terminate the grantee's interest, by re-entering the property; the interest remains with the grantee until this act by the grantor occurs, if ever. In reading the entire provision to construe the intent of the parties, the appellate court found that the Hotel Company conveyed a fee on limitation and retained a possibility of reverter, which automatically forfeited the estate if the Diocese breached the limitation to use the property for church purposes. That interpretation was further supported by the language in the 1896 deed indicating that the Hotel Company “shall have the right to re-enter” and take possession — a conveyance which does not include permissive language. Accordingly, the appellate court reversed Supreme Court's denial of the College's cross motion for summary judgment and the grant of the Diocese motion dismissing the complaint.
Supreme Court's decision as to the transferability of the interest held by the Hotel Company was also reversed. A right of reentry, at common law, was unassignable, undevisable and undescendible before or after breach of condition. However, a possibility of reverter had no such restriction and was freely alienable. Here, the 1963 deed “did not invalidate the possibility of reverter” held by the Hotel Company and properly passed the interest to the College.
The College still held a possibility of reverter. So, resolution of the action hinged upon whether the Diocese violated the limitation restricting the use of the property to church purposes. The parties' joint stipulation of facts included the 2015 decree from the Bishop of Ogdensburg that relegated the church “to profane but not sordid use,” and indicated that parishioners would be served by a nearby parish. The stained-glass windows and the altar were later removed, leaving only the pews. Under the canon law of the Roman Catholic Church, if a church cannot be used in any way for divine worship and there is no possibility of repair, it can be relegated to profane but not sordid use. Profane use means use for purposes other than a Roman Catholic worship service,” and “sordid” limits that use, prohibiting any use that is disrespectful to the Catholic Church. The appellate court found that the Diocese's use of the property for church purposes ceased pursuant to the 2015 decree, thus violating the limitation in the 1896 deed. Accordingly, the property reverted to the College, which then owned the property in fee simple.
As a final matter, the Diocese claimed that, should the College hold a right of reentry as a successor of the Hotel Company, it should be directed to destroy the church, at its own expense, to avoid unjust enrichment. But unless otherwise stated in a deed, a structure is a fixture that passes with the property. Here, the Diocese took possession of the property and erected and enjoyed full use of the church for well over a century, fully aware of the limitation contained in the 1896 deed to use the property only for such purpose. Upon ceasing to so use it, the property reverted in fee simple to the College, together with the church building.
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