15 N.Y.2d 367 (1965)

A statute requiring the recording of an intention to preserve a reversionary interest is unconstitutional if it bars the remedy before the right to enforce it has matured, particularly when the reverter had not yet taken effect at the time the recording was required.

Summary

This case concerns the constitutionality of Section 345 of the New York Real Property Law, which required the recording of an intention to preserve certain interests in land, including possibilities of reverter. The Court of Appeals held that applying this statute to extinguish a reversionary interest that had not yet matured at the time the recording was required was unconstitutional. The court reasoned that such application impairs the obligation of contract and deprives the reversioner of property without due process, as it bars the remedy before the right to enforce it has matured. The decision underscores the limits on retroactive legislation affecting vested property rights.

Facts

In 1854, John Townsend conveyed land to the trustees of Walton Academy with a proviso that the land be used solely for academy purposes; otherwise, the deed would become void, and the premises would revert to Townsend and his heirs. The land was used for educational purposes until April 1, 1962, when such use ceased. Eugenia T. Miles and John Townsend (the defendants) are the sole heirs of the grantor, John Townsend. The Board of Education (the plaintiff) succeeded to the rights of the Walton Academy and sought a judicial determination that the defendants’ claim to the property was extinguished by Section 345 of the Real Property Law, which required recording of intent to preserve reversionary interests.

Procedural History

The plaintiff initiated an action to obtain a judicial determination that the defendants’ claim to the property had been extinguished. The lower court ruled in favor of the plaintiff, declaring the defendants barred from any interest in the property and vesting title in the plaintiff. The defendants appealed, arguing that Section 345 was unconstitutional as applied to their reversionary interest.

Issue(s)

Whether Section 345 of the Real Property Law is constitutional as applied to a reversionary interest that had not yet matured at the time the statute required a declaration of intent to preserve the interest, thereby potentially barring the remedy before the right to enforce it had matured.

Holding

No, because, under the circumstances of this case, Section 345 cannot be sustained as a Statute of Limitations since it purports to bar the remedy before the right to enforce it has matured, impairing the obligation of contract and depriving the reversioner of its property without due process of law.

Court’s Reasoning

The court reasoned that while recording acts are generally constitutional as a valid exercise of police power to prevent fraud against subsequent purchasers, Section 345 of the Real Property Law, in this case, did not serve that purpose. It altered the obligations of a deed between the original parties and their successors, without protecting bona fide subsequent grantees. The court distinguished this case from traditional recording acts that protect subsequent purchasers, noting that Section 345 aimed to extinguish reverters between the original parties, irrespective of third-party rights. The court stated, “Except for the protection of third parties… the recording acts would impair the obligation of contracts and deprive persons of property without due process of law.”

The court further explained that, unlike marketable title acts, which typically extinguish earlier adverse interests against an owner in possession showing record title for a specified period, Section 345 required recording of intent to preserve the reverter before the reverter had even matured. The court analogized the case to Biltmore Village v. Royal, where a Florida statute canceling reverter provisions was deemed unconstitutional because the event triggering the reverter occurred after the statutory year’s limitation. The court emphasized that Section 345, in this instance, resembled an attempt to bar the remedy before the right to enforce it had matured, which runs contrary to constitutional principles. “Under the circumstances of the case at bar, section 345 cannot be sustained as a Statute of Limitations since it purports to bar the remedy before the right to enforce it has matured.” The court concluded that unascertained persons would have been required to record a declaration of intention to preserve a reverter which would not take effect in enjoyment until an indefinite future time.