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Abo Petroleum Corporation v. Amstutz

Supreme Court of New Mexico
600 P.2d 278 (1979)


Rule of Law

If a prior estate terminates before the occurrence of a contingency, the contingent remainder is not destroyed.


Facts

James and Amanda Turknett owned a property in fee simple. In 1908, the Turknetts executed deeds conveying life estates to their two daughters, Beulah and Ruby (the daughters), in two parcels of land. The deeds provided that, upon each daughter’s death, the interest in that parcel would revert to the daughter’s heirs. In 1911, the Turknetts executed another deed for Beulah’s life-estate property, purporting to convey absolute title to Beulah this time. In 1916, the Turknetts executed yet another deed to Beulah, this one granting a portion of the property included in her two previous deeds. A second deed was also executed to Ruby, claiming to be a “correction deed” for the 1908 deed. The daughters later attempted to convey fee-simple interests in their properties to Abo Petroleum (plaintiff). Beulah and Ruby’s children (the children) (defendants) contended that the 1908 deeds gave the daughters life estates in the property, and these were the only valid deeds. Thus, the daughters only conveyed life estates to Abo, and the children still owned the contingent remainders in the properties after the death of the daughters. Abo claimed the 1911 and 1916 deeds destroyed the heirs’ contingent-remainder interests and gave the daughters fee-simple title to the properties. Abo sued, and the district court sided with Abo. The children appealed.

Issue

If a prior estate terminates before the occurrence of a contingency, is the contingent remainder destroyed?

Holding and Reasoning (Payne, J.)

No. If a prior estate terminates before the occurrence of a contingency, the contingent remainder is not destroyed. At one time, the doctrine of destructibility of contingent remainders held that a contingent remainder would be destroyed if the prior estate terminated before the contingent event. However, the doctrine of destructibility of contingent remainders has been renounced by virtually all jurisdictions in the United States and is now obsolete. Subsequent conveyances that attempt to destroy a contingent remainder are not valid. In this case, the 1908 deeds clearly gave the daughters life estates in property that, at the daughters’ deaths, would pass to the daughters’ heirs. Even after deeding the life estates to the daughters, the Turknetts still would have had a reversionary interest in the properties if the daughters had died without any heirs. Abo argued that the 1911 and 1916 deeds merged the Turknetts’ reversionary interest with the daughters’ life estates, re-creating a fee-simple interest. Abo claimed this merging destroyed the heirs’ contingent remainder and gave the daughters fee-simple title to the properties. However, this argument hinges on applying doctrine of destructibility of contingent remainders. Because the doctrine is no longer valid, the subsequent 1911 and 1916 deeds could not destroy the daughters’ heirs’ 1908 contingent remainders. After all the deeds, at most, the daughters only had life-estate interests in their respective parcels. Thus, this is the most that the daughters could have transferred to Abo. The district court’s ruling in favor of Abo is reversed.