Red Hill Outing Club v. Hammond
1998 N.H. LEXIS 103, 722 A.2d 501, 143 N.H. 284 (1998)
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Rule of Law:
A condition subsequent in a deed, the breach of which results in forfeiture of the property estate, must be strictly construed based on its literal terms. Courts will resolve ambiguities against forfeiture and will not look to extrinsic evidence of the parties' intent to expand the grantee's obligations beyond what is explicitly written.
Facts:
- In 1979, David and Elizabeth Hammond conveyed land known as Red Hill to the Red Hill Outing Club (club) by quitclaim deed.
- The deed contained a condition requiring the club to 'maintain and make available' the premises to residents 'as a ski slope.'
- The condition stated that if the club failed to provide 'such skiing facilities' for two consecutive years, the Hammonds would have the right to re-enter and take back the property.
- After 1988, use of the ski slope declined, and the club ceased offering free ski lessons after the winter of 1988-1989.
- The club did not obtain a rope tow permit for the 1992-1993 and 1993-1994 ski seasons.
- The Red Hill slope was completely closed to all skiing during the winter of 1993-1994.
Procedural Posture:
- In October 1994, David, Elizabeth, and Robert Hammond filed a notice of re-entry and possession against the Red Hill Outing Club.
- The Red Hill Outing Club (plaintiff) brought an action for declaratory judgment against the Hammonds (defendants) in the Superior Court (trial court).
- Following a bench trial, the Superior Court found that the club had not substantially breached the condition and denied the Hammonds' right of re-entry.
- The Hammonds (appellants) appealed the trial court's decision to the New Hampshire Supreme Court, with the Red Hill Outing Club as the appellee.
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Issue:
When a deed contains a condition subsequent that can result in forfeiture of the property, should the condition be strictly construed based only on the explicit language in the deed, resolving any ambiguities against forfeiture?
Opinions:
Majority - Horton, J.
Yes. A condition subsequent in a deed must be strictly construed, and a breach will only be found if the grantee's actions fall clearly within the literal terms of the condition, because forfeiture of a property estate is a drastic and disfavored remedy. The court rejected the modern trend of interpreting instruments based on the parties' intent in this specific context, reasoning that the social value of conditions subsequent is low and the penalty of forfeiture is widely disproportionate to most breaches. Unlike restrictive covenants, which are valuable land use tools, conditions subsequent diminish land's marketability and development. Therefore, the club’s obligation was limited to what the deed explicitly stated: to 'maintain and make available the premises ... as a ski slope.' The deed did not mention a rope tow or ski lessons, so the club's failure to provide them did not constitute a breach. The court found that the club substantially complied with the condition by clearing the hill and keeping it available for skiing, thus showing no intention to abandon the property or disregard the condition.
Analysis:
This case reaffirms the traditional, formalistic rule of strictly construing conditions subsequent in property law, distinguishing them from other deed provisions like restrictive covenants. The court explicitly prioritizes the strong public policy against forfeiture of property over the modern interpretive principle of effectuating the parties' intent through extrinsic evidence. This decision solidifies that grantees' obligations under a condition subsequent will be narrowly confined to the deed's literal text. It signals to future litigants that courts will be highly reluctant to declare a forfeiture unless a breach of the condition's explicit terms is clear and unambiguous.
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