Dolby v. State Highway Commissioner , 283 Mich. 609 ( 1938 )

Since the question was first presented to this court it has been the law of this State that an attempt by the possessor of a conditional right of reverter to convey the same before breach of condition does not convey any interest in the realty to the grantee named, because the right before breach cannot be conveyed; and further such an attempt to convey extinguishes the right itself. This is a law of property and should not be changed by the court in the absence of compelling reasons.Lewis v. Sheldon, 103 Mich. 102. In this jurisdiction the rule was first announced in Halpin v. Rural Agricultural SchoolDistrict, 224 Mich. 308, and it has been reiterated in each of the following cases: County of Oakland v. Mack, 243 Mich. 279;Fractional School District v. Beardslee, 248 Mich. 112; Avery v. Consumers Power Co., 265 Mich. 696.

I cannot assent to the conclusion that the rule as judicially adopted and consistently followed in this State is without support in respectable authorities or in reason. Regardless of the correctness or incorrectness of the statement that such a conditional or contingent right of reverter could not at common law be conveyed by the holder of the right, there can be little doubt that such was and is the understanding of the common law by many of the courts of this country. In the opinion of Mr. Justice POTTER in this case he has quoted or cited several of the courts which have stated such was the common law. See Cloyes v. Beebe, 14 Ark. 489; Moore v. Sharpe,91 Ark. 407 (121 S.W. 341, 23 L.R.A. [N. S.] 937); Young v.Young, 89 Va. 675 (17 S.E. 470, 23 L.R.A. 642); ShellPetroleum Corp. v. Hollow (C.C.A.), 70 Fed. (2d) 811. Even after the passage of the Statute of Henry 8 (32 Henry 8, chap. 34), the rule as above stated was adhered to in English courts. See Warren v. Lee, 2 Dyer, 126b (73 Eng. Rep. 276), wherein it is said:

"But when the condition is once annexed to a particular estate, and then by another deed the reversion is granted by the maker of the condition, there the condition is gone,causa patet."

Further the rule as first above stated is by no means without respectable support in other jurisdictions, some of such decisions being of very recent date. Dyer v. Siano, — Mass. — (11 N.E. [2d] 451); O'Connor v. City of Saratoga Springs (1933), 146 Misc. 892 (262 N.Y. Supp. 809); Underhill v.Railroad Co., 20 Barb. (N.Y.) 455; Rice v. Railroad Corp., 12 Allen (94 Mass.), 141; Craig v. Inhabitants of Franklin County,58 Me. 479; Wagner v. Wallowa County,76 Ore. 453 (148 P. 1140, L.R.A. 1916 F, 303); Board of Educationof Humphreys County v. Baker, 124 Tenn. 39 (134 S.W. 863);Stevens v. Railway Co. (Tex.Civ.App.), 169 S.W. 644. Text writers of repute have also stated the rule as prevailing law. Tiedeman, Real Property (4th Ed.), § 207; 2 Washburn, Real Property (6th Ed.), § 959; 2 Reeves, Real Property, p. 1018; 3 Thompson, Real Property, § 2083; and 1 Tiffany, Real Property (1st Ed.), § 75, which we quote:

"Nor can the right to enforce a forfeiture, or, as it is usually called, the right of re-entry, be, at common law, assigned or transferred by the grantor to a third person before entry for the breach, this being in conformity with the common law rule that 'nothing in action, entry, or re-entry can be granted over.'

"These restrictions as to the persons able to take advantage of a breach and the inability to assign the right have been generally recognized in this country, and not only will an attempted assignment of the right of re-entry be void, but it will have the effect of destroying the grantor's right to enforce the condition, which is thereafter in effect nonexistent."

It cannot be said that none of the courts have expressed a reason justifying the adoption of the rule. Regardless of whether the reasons are satisfactory or convincing, it may be noted that in some jurisdictions the rule that the contingent right of reverter is extinguished by an attempt to convey before breach, is based upon a waiver of or an estoppel against the right to claim upon the happening of the contingency after the holder has sought to dispossess himself thereof.Wagner v. Wallowa County, supra; Rice v. Railroad Corp., supra. It has also been stated that the forfeiture of the right by the holder's attempt to convey before breach of condition is in the nature of a penalty imposed in consequence of the party's attempt to make a conveyance in violation of law. Rice v.Railroad Corp., supra. In Tennessee the court has said that the unlawful attempt to convey results in a relinquishment of the right of re-entry and is an election not to exercise the right.Board of Education of Humphreys County v. Baker, supra. Former consideration of the rule by this court has been accompanied by reasons assigned in support thereof. We have approved of the above quotation from Tiffany on Real Property, and as further reasons in support of the rule have said:

"Conditions subsequent are not favored by the courts, nor by statute (3 Comp. Laws 1915, § 11564 [3 Comp. Laws 1929, § 12966]). Frequently the condition survives any substantial or actual benefit to the grantor and his heirs and becomes an onerous burden upon the grantee and his assigns, whose prayer for relief is appealing. This, in some degree, may account for the arbitrary rule that an attempt to convey destroys the right. And the author of a note in 38 A.L.R. 1112 states with ample citation of cases:

" 'It may also be noted in this connection that, wherever the point has directly arisen, it has been held that the effect of a subsequent conveyance by the grantor of the property, subject to the condition, is to destroy the condition.'

"In a note L.R.A. 1916 F, 311, 312, there is criticism of the rule, but the author says:

" 'All the American courts which have had occasion to pass upon the question have, practically without dissent, decided it in the same way.'

"The rule is settled in this jurisdiction. Halpin v. RuralAgricultural School District, supra." County of Oakland v.Mack, supra.

Because the law as previously announced by this court is a rule of property and because it has ample support in other jurisdictions, it ought not to be set aside lightly. Especially is this true (even if it be conceded that the rule is not any too well grounded in reason), since comparatively recently the legislature has definitely established the law in this State, making such an interest in land transferable by deed or will. Act No. 219, Pub. Acts 1931 (Comp. Laws Supp. 1935, § 12966-2). The importance of not changing the rule of property as judicially adopted in this State is readily revealed by the circumstances of the instant case. It is to be presumed that the defendant who purchased the parcel of land involved knew and relied upon the law as it had been plainly and repeatedly announced by this court. As hereinafter pointed out, if the previously judicially announced law is adhered to defendants will prevail in this case; but if we depart from the established law of this State, defendants will be defeated and the purchaser deprived of the acquired property rights.

Justice POTTER states that the conditional interest here in suit may lawfully be conveyed under 3 Comp. Laws 1929, § 12955. This, to say the least, is debatable. If, as some courts have held (Wagner v. Wallowa County, supra), a reversionary right contingent on a condition subsequent is nothing more than an unassignable chose in action and is not an interest in land (to the same effect, see Tiedeman, Real Property [4th Ed.], § 207), the plaintiffs in the instant case cannot benefit by 3 Comp. Laws 1929, § 12955, which provides for the conveyance of expectant estates. This is true because the statute is applicable only to expectant estates in real property. This statute is said to have been copied from a like statutory provision in the State of New York. See 1 N.Y. Rev. Stat. 1829, 725, § 35. The New York court has held that its statute is not applicable to a conditional right of reverter; and that notwithstanding the statute an attempt by the possessor to convey such right prior to the breach of condition extinguishes the right. Underhill v. Railroad Co., supra.

If we are to adhere to the rule as announced in theHalpin Case and other decisions of this jurisdiction in accord therewith, what then is the result to be reached in the instant suit? From a review of the record it convincingly appears that Mr. and Mrs. Dolby in 1916 and before there was any breach of the condition which resulted in a reverter, attempted to convey their contingent reversionary rights. Thereby such rights were extinguished, and Brooks, trustee, became vested with an absolute and unconditional fee title to the parcel. By mesne conveyances this title was vested in defendant Dillman, as State highway commissioner. As against defendants, plaintiffs have established no rights under their bill to quiet title in themselves to the parcel in suit. Such was the effect of the holding in the circuit court. I concur with Mr. Justice BUSHNELL in affirmance, with costs to appellees.