Present: All the Justices
COMMONWEALTH TRANSPORTATION COMMISSIONER
OPINION BY
v. Record No. 051335 JUSTICE LAWRENCE L. KOONTZ, JR.
June 8, 2006
WINDSOR INDUSTRIES, INC.
FROM THE CIRCUIT COURT OF CHESTERFIELD COUNTY
Herbert C. Gill, Jr., Judge
In this appeal, we consider whether the chancellor
correctly determined in a declaratory judgment action that
property acquired by the Commonwealth of Virginia in 1973 should
be reconveyed by the Commonwealth Transportation Commissioner to
the successor-in-interest of the original owner for the original
purchase price by operation of Code § 33.1-90.1
1
The parties do not dispute that in 1973 the Commonwealth
of Virginia acquired the property in question on behalf of its
agency formerly designated as the Department of Highways and now
designated as the Virginia Department of Transportation. In the
intervening years, the agency and its directing authority have
undergone several changes of designation, though the
responsibilities of each remained essentially unchanged. The
agency is now subject to the direction of the Commonwealth
Transportation Board, which is chaired by the Secretary of
Transportation. Code § 33.1-1. The Commonwealth Transportation
Commissioner is the vice-chair of the Board and the
administrative head of the agency. Id.; Code § 33.1-3. For
clarity in this opinion, we will refer to the Virginia
Department of Transportation as “VDOT” and to the Commonwealth
Transportation Commissioner as “the Commissioner” in accord with
the current designations.
1
BACKGROUND
The issues raised in this appeal are questions of law
decided by the chancellor on the written record and cross-
motions for summary judgment by the parties, and the facts are
undisputed. Accordingly, we will review the record and consider
the issues de novo. See, e.g., Davenport v. Little-Bowser, 269
Va. 546, 552, 611 S.E.2d 366, 369 (2005); Wilby v. Gostel, 265
Va. 437, 440, 578 S.E.2d 796, 798 (2003); Eure v. Norfolk
Shipbuilding & Drydock Corp., 263 Va. 624, 631, 561 S.E.2d 663,
667 (2002).
By a deed dated October 1, 1973 and recorded on November
27, 1973 among the appropriate land records, 1314 West Main
Corporation conveyed to the Commonwealth of Virginia in fee
simple two lots consisting of 1.773 acres, more or less, in
Chesterfield County for $21,000. The property was acquired in
anticipation of its eventual use by VDOT in State Highway
Project 0288-020-101, RW-204, for the construction and
improvement of Route 288, a non-interstate highway. J. Kenneth
Timmons, Jr. (“Timmons”) executed the deed in his capacity as
president of 1314 West Main Corporation.
On March 31, 1977, 1314 West Main Corporation merged with
another entity of which Timmons was also president to become
Windsor Industries, Inc. At that time, Timmons became president
2
of Windsor Industries, as well as its majority stockholder.
Windsor Industries was dissolved by operation of law as of
September 1, 1988 after failing to pay its annual registration
fee to the State Corporation Commission.
In a letter dated September 10, 2002 to David A. Schneider,
the District Right of Way and Utilities Manager for VDOT’s
Richmond District, Timmons sought reconveyance of the 1314 West
Main Corporation property pursuant to Code § 33.1-90. In that
letter, Timmons stated that “[a]bout 3 years ago I contacted
[VDOT] and asked them to consider conveying the lots to me for
the consideration that I received in 1973. I was told that the
lots would be used temporarily for the construction office for
the contractor doing work on Route 711.” Noting that “[t]he
work on [Route] 711 seems to be completed,” Timmons requested
that VDOT reconvey these lots to him for the consideration of
$21,000.
After an unexplained delay of over a year, Schneider
responded to Timmons in a letter dated November 21, 2003.
Noting that “Windsor Industries, Inc., the successor to 1314
West Main Corporation, was dissolved as of September 1, 1988,”
Schneider maintained that “[t]he ability of Windsor to demand
reconveyance under the law did not arise until twenty years
after the acquisition. This would have been November 27, 1993,
3
at the latest.” Schneider further maintained that “[a]t that
time Windsor Industries had been dissolved and its right to
request restoration had expired.” Schneider advised Timmons
that “because the property is suitable for independent
development, VDOT will offer the property for sale to the public
at its current fair market value.”
On January 7, 2004, counsel for Timmons wrote to Schneider
contesting Schneider’s determination that the dissolution of
Windsor Industries “extinguished” the right to seek reconveyance
of the 1314 West Main Corporation property under Code § 33.1-90.
Rather, counsel contended that Timmons, as the sole director of
the dissolved corporation, had the authority under Code § 13.1-
745 to control the assets of the dissolved corporation and “to
pursue remedies which existed prior to [the corporation’s]
termination” including the ability “to convey property which has
been overlooked or not conveyed for some reason in a
liquidation.”
Subsequently, Timmons and his counsel met with Schneider
and another VDOT employee to discuss the matter. Following that
meeting, Timmons’ counsel by a letter dated July 6, 2004
reiterated “some of the points that were made at” the meeting.
It was Timmons’ position that Code § 33.1-90, as in effect when
the property was conveyed in 1973, permitted the successor or
4
assignee of 1314 West Main Corporation to seek reconveyance of
the property and that the statute placed no time limit on when
the seller is required to demand that reconveyance.
On July 14, 2004, VDOT advised Timmons’ counsel that one of
the two lots previously conveyed to the Commonwealth by 1314
West Main Corporation would be offered for sale by sealed bid on
August 2, 2004. VDOT provided Timmons’ counsel with a copy of
the public notice of the sale and the necessary forms to permit
Timmons to submit a bid for the lot.
On July 22, 2004, Timmons’ counsel filed in the trial court
a motion for declaratory judgment on behalf of Windsor
Industries, “a Virginia corporation in dissolution, proceeding
under Section 13.1-745 of the Code of Virginia (as amended),
successor in title and interest to 1314 West Main Corporation,”
against the Commissioner. Windsor Industries sought a
determination that it was entitled to reconveyance of the 1314
West Main Corporation property under Code § 33.1-90. Pending
resolution of that matter, Windsor Industries also sought a
temporary restraining order barring the Commissioner from going
forward with the planned sale on August 2, 2004.
Following a hearing on Windsor Industries’ request for a
temporary restraining order and over the Commissioner’s
objection, the chancellor granted Windsor Industries the
5
requested injunction. VDOT thereafter complied with the
injunction order and also halted the planned sale of the second
lot previously owned by 1314 West Main Corporation pending the
outcome of the declaratory judgment action.2
In his answer to the motion for declaratory judgment, the
Commissioner asserted a plethora of legal and equitable theories
under which he contended Windsor Industries should be barred
from seeking reconveyance of the 1314 West Main Corporation
property. Ultimately, Windsor Industries and the Commissioner
filed cross-motions for summary judgment supported by memoranda
of law.
The chancellor heard oral argument from the parties and
took the matter under advisement. On February 3, 2005, the
chancellor issued an opinion letter stating that “[a]ccording to
the parties there are four issues to be determined by the
[c]ourt.” The chancellor summarized those issues as follows:
(1) What is the nature of the inchoate statutory
benefit [of Code § 33.1-90]? (2) Was it possible for
Windsor Industries, Inc. (“Windsor”), a subsequent
corporation, to obtain the reconveyance opportunity?
2
While the precise status of the second lot is not
established in the record before us, the motion for declaratory
judgment clearly referenced the entire parcel of land acquired
by the Commonwealth under the 1973 deed, and the Commissioner
does not contend that the chancellor’s judgment was limited in
its effect to only one lot in that parcel. Accordingly, our
reference herein to the 1314 West Main Corporation property is
intended to include the entire parcel consisting of two lots.
6
(3) When did the reconveyance opportunity come into
existence, if at all? (4) Has Windsor waited too long
in making its demand upon the Commonwealth?
The chancellor initially concluded that, pursuant to Code
§ 13.1-745(B), a dissolved corporation such as Windsor
Industries “retains its directors as trustees of corporate
assets by operation of law.” The chancellor further concluded
that “Mr. Timmons fits this definition and is thus a proper
party to make written demand for reconveyance on the
Commonwealth.”
The chancellor then addressed the respective positions of
the parties, considering first what result would obtain if Code
§ 33.1-90 created a property right in the form of a possibility
of reverter, as Windsor Industries contended, and then the
result which would obtain under the Commissioner’s contention
that the statute created only “a legislative gratuity that could
be withdrawn or redistributed at any time without creating a
constitutional issue.” The chancellor opined that although a
possibility of reverter is not a vested property right, it is a
property right subject to vesting and, therefore, cannot be
subsequently modified by statutory amendment. Thus, the
chancellor, citing Code § 1-16 and Citizens Mutual Building
Association v. Edwards, 167 Va. 399, 404, 189 S.E. 453, 455
(1937), opined that if Windsor Industries, as the successor of
7
1314 West Main Corporation, received a possibility of reverter
under Code § 33.1-90, the contingencies for reversion and the
vesting of the right to reconveyance of the property were
established by the version of the statute as it was in force at
the time of the original transfer of the property in 1973.
Under this reasoning, the chancellor concluded that Windsor
Industries’ “right to make demand on the Commonwealth would have
commenced in 1984 [prior to the corporation’s dissolution in
1988]” and Windsor Industries “would have a successful claim,
subject to the issue of the timeliness” of its claim.
The chancellor then considered what effect the statute
would have if it provided only a “legislative gratuity.” The
chancellor noted that “[t]his argument is primarily based on
federal case law arising from other states, and the [c]ourt is
not convinced that such a concept is the law of this
Commonwealth.” See, e.g., Harrison v. Phillips, 185 F. Supp.
204, 207 (S.D. Tex. 1960). Nonetheless, the chancellor
concluded that even by accepting the Commissioner’s contention,
Windsor Industries would still be entitled to seek reconveyance
of the property in question because the various versions of the
statute resulting from subsequent amendments of Code § 33.1-90
never expressly limited or withdrew the contingent right of the
original property owner for reconveyance, and the current
8
version provides for specific time periods in which the demand
for reconveyance must be made. The chancellor noted that one of
those time periods is “within thirty days from publication in a
newspaper” of VDOT’s notice of intent to offer the property for
sale to the public. The chancellor opined that Timmons’
original written demand on VDOT, which the chancellor concluded
had resulted in the Commissioner’s decision to offer the
property in question for sale, and the filing of the declaratory
judgment action within 30 days of the Commissioner’s notice of
the intent to sell, “equate to substantial compliance with [Code
§ 33.1-90].”
The chancellor did not expressly decide whether Windsor
Industries’ authority to seek reconveyance was premised upon a
property right in the form of a possibility of reverter or a
mere statutory gratuity. Rather, the chancellor determined that
under either rationale the demand for reconveyance made in 2002
was not barred by the express terms of any version of Code
§ 33.1-90.
The chancellor then considered the Commissioner’s
assertions that Windsor Industries’ demand for reconveyance was
untimely. The chancellor first concluded that the former one-
year limitation of Code § 8.01-248, which the Commissioner
relied upon, did not apply to a claim involving real property.
9
Gilley v. Nidermaier, 176 Va. 32, 41, 10 S.E.2d 484, 488 (1940).
Additionally, the chancellor opined that “[t]here is no statute
of limitations that is applicable to the right to demand
reconveyance under § 33.1-90.” The chancellor further concluded
that laches could not apply to the claim for reconveyance
because despite “a substantial delay in the exercise of the
reconveyance opportunity . . . the Commissioner has simply not
been prejudiced by this delay.” Thus, the chancellor concluded
that under any version of Code § 33.1-90, the demand for
reconveyance in this case was not untimely or barred by laches.
The Commissioner filed a motion for reconsideration. After
receiving briefs from both parties, the chancellor advised the
parties in a letter dated March 17, 2005 that he remained of
opinion that Windsor Industries was entitled to reconveyance of
the property. In a final decree dated March 30, 2005,
incorporating by reference the rationale stated in the prior
opinion letters, the chancellor entered judgment for Windsor
Industries. The final decree expressly directed that “upon
payment to the Commonwealth Transportation Commissioner of the
original purchase price, with no interest, the Commissioner
shall forthwith re-convey to [Windsor Industries], or its
assigns, by appropriate deed, the [1314 West Main Corporation]
property.” We awarded the Commissioner this appeal.
10
DISCUSSION
Initially, we note that although the 1973 deed by which the
Commissioner obtained the property in question on behalf of the
Commonwealth did not reference Code § 33.1-90, the Commissioner
does not dispute that the acquisition of the property was
consummated subject to the provisions of that statute. We also
note that this deed did not create a true reversion or vested
property right in favor of the grantor, 1314 West Main
Corporation, at that time.
While the chancellor concluded that it was unnecessary to
determine “the specific nature of the inchoate statutory
benefit” created by Code § 33.1-90, the resolution of this issue
is central to our analysis in this appeal. Thus, we begin our
analysis by determining what right or interest, if any, the
General Assembly intended to give a property owner by providing
for the possible reconveyance of property acquired by the
Commissioner in 1973 pursuant to Code § 33.1-90.
On brief, the Commissioner appropriately describes the
purchase of the 1314 West Main Corporation property as an
“advanced acquisition.” This term is not defined in the Code of
Virginia. However, there can be no doubt that such an
acquisition of real property by the Commissioner is advantageous
to the Commonwealth by facilitating the timely and economical
11
acquisition of real property for transportation construction or
improvement which the Commissioner anticipates will be needed in
the future. Advance acquisitions of property for transportation
projects by the Commissioner are the subject matter of Code
§ 33.1-90, which in 1973 and in its current version provide that
the Commissioner determine in advance of acquisition that the
property will be required for construction of a transportation
project that does not involve the Interstate Highway System,
such as the present case, within 10 years of his determination.
At the time the Commissioner acquired the property in
question, Code § 33.1-90 provided, in pertinent part, with
regard to the property owner that:
In the event that the highway project . . .
contemplated has not been let to contract or
construction commenced within a period of . . . eleven
years . . . from the date of the acquisition of such
property, upon written demand of the owner or owners,
their heirs, or assigns, such property shall be re-
conveyed by the Commonwealth of Virginia to such owner
or owners, their heirs or assigns, upon repayment of
the original purchase price, without interest.
Former Code § 33.1-90 (Supp. 1973).
The Commissioner maintains that this provision of Code
§ 33.1-90 creates merely “an inchoate statutory right,” which he
says “is analogous to the inchoate dower right” once provided
for by statute. Like rights of dower, the Commissioner
maintains that the right granted to the landowner by Code
12
§ 33.1-90 is a “statutory gratuity” subject to alteration or
revocation by the General Assembly. Upon this premise, the
Commissioner contends that at the time it sold the property in
question to the Commonwealth, 1314 West Main Corporation
retained no right or estate in the property. Accordingly, the
Commissioner further contends that Windsor Industries, as
successor in interest to 1314 West Main Corporation, could not
acquire the right to exercise the “statutory gratuity” granted
by Code § 33.1-90, because that right had not yet accrued at the
time Windsor Industries was dissolved as a corporation.
In contrast, Windsor Industries contends that Code § 33.1-
90, as it was in effect at the time the property was conveyed to
the Commonwealth in 1973, created a property right in the form
of a “possibility of reverter.” As a property right, the
possibility of reverter was assignable as part of the assets of
1314 West Main Corporation when that entity merged with another
to create Windsor Industries and, thus, was an asset of Windsor
Industries at the time of its dissolution. Accordingly, Windsor
Industries contends that Timmons, as the principal officer and
majority stockholder of Windsor Industries, was empowered as a
trustee of the dissolved corporation to exercise the possibility
of reverter if and when it accrued.
13
“ ‘A possibility of reverter . . . is not an estate,
present or future, but a possibility of having an estate.’ ”
Sanford v. Sims, 192 Va. 644, 648, 66 S.E.2d 495, 497 (1951)
(quoting Copenhaver v. Pendleton, 155 Va. 463, 479, 155 S.E.
802, 806 (1930)). “ ‘In the case of a fee limited upon a
condition subsequent [a possibility of reverter] is a contingent
right of re-entry upon condition broken.’ ”3 Id.
The 1973 version of Code § 33.1-90 expressly provided the
conditions subsequent or contingencies which limited the fee
simple ownership obtained by the Commonwealth in the property in
question. As material to the present case, those contingencies
were that the anticipated highway project not be let to contract
or construction commenced within a period of 11 years from the
date of the acquisition of the property by the Commonwealth.
Upon the occurrence of either contingency, the statute
authorized the original owner, or its assigns, to demand
3
A possibility of reverter may also arise where a grant or
devise creates a “qualified fee limited to determine upon a
contingency which may never happen.” In such a case, the
occurrence of the contingency results in the immediate revesting
of the fee. The person entitled to the fee does not have to
make a re-entry. Copenhaver, 155 Va. at 479, 155 S.E. at 806.
As will become apparent, here we are not concerned with this
form of a possibility of reverter because the statute clearly
requires affirmative action in the form of a written demand on
the part of one claiming the right to enforce a breach of a
condition subsequent.
14
reconveyance of the property by the Commonwealth. Upon a
written demand, the statute provided that the property “shall be
reconveyed.” These provisions of the statute clearly evince the
intent of the General Assembly to grant a landowner more than a
mere “statutory gratuity.” Rather, we are of opinion that the
General Assembly intended to grant the property owner a
contingent right to reconveyance of the property acquired by the
Commonwealth in anticipation of its need for a public highway
project if the property so acquired is not ultimately used for
that purpose within 11 years. Accordingly, we hold that upon
conveying its property to the Commonwealth on October 1, 1973,
1314 West Main Corporation was granted an interest in that
property in the form of a possibility of reverter pursuant to
Code § 33.1-90.
However, a possibility of a reverter, while an interest in
real property, does not accrue into an enforceable right to
reconveyance until the contingencies for the forfeiture of the
fee occur. See Copenhaver, 155 Va. at 478, 155 S.E. at 806.
Thus, at the time of the 1973 conveyance, 1314 West Main
Corporation had “only a bare possibility that the land [would]
return to [it], upon the happening or failure to happen of the
various contingencies upon which the estate granted [depended].
The interest of the grantor [was] purely contingent.” Id.
15
(quoting 1 Frederick D.G. Ribble, Minor on Real Property § 780,
at 1012-14 (2d ed. 1928)) (emphasis in original). Accordingly,
we now consider whether 1314 West Main Corporation’s possibility
of reverter ripened into an enforceable right to reconveyance
and, if so, when that occurred. Sanford is particularly
instructive on this point.
Where there is a breach of a condition subsequent
upon which the possibility of reverter depends, the
estate vested in the grantee does not cease in him and
revest ipso facto in the grantor or his successors,
but remains unimpaired in the grantee or his
successors until entry, or its equivalent, by the
grantor or his successors; for the right to enforce
the forfeiture may be waived, and the law, favoring
the vested estate, will not permit its destruction
until the right to forfeit has been exercised.
Sanford, 192 Va. at 649, 66 S.E.2d at 497; see also Copenhaver,
155 Va. at 479, 155 S.E. at 806.
In this case, as we have noted, the possibility of reverter
was granted by Code § 33.1-90 rather than by the terms of the
1973 deed conveying the property to the Commonwealth. In
addition to the contingencies upon which the possibility of
reverter depended in order to accrue into an enforceable right,
the statute established the procedures for the property owner to
exercise that right. In this context, the statute is broad in
scope. Thus, we are of opinion that until the possibility of
having an estate in the property vested into an enforceable
right, the contingencies upon which it depended and the
16
procedures for exercising the right accrued remained subject to
modification by future amendment. Such modification includes
extending the period of time before the right could accrue and
also establishing periods of limitation on enforcing the right,
so long as such amendment did not fully extinguish the former
owner’s possibility of reverter. See, e.g., Haas v. Lee, 263
Va. 273, 276, 560 S.E.2d 256, 257-58 (2002) (holding that
“matters of procedure, such as statutes of limitations, may be
altered or curtailed by the legislature if a reasonable
opportunity and time are afforded to enforce and protect any
interests and rights, provided vested interests and contractual
rights are neither impaired nor destroyed”); see also Board of
Supervisors v. FCS Bldg. Ass’n, 254 Va. 464, 467, 492 S.E.2d
634, 636 (1997); Harris v. DiMattina, 250 Va. 306, 313, 462
S.E.2d 338, 341 (1995); Buenson Div., Aeronca, Inc. v. McCauley,
221 Va. 430, 432, 270 S.E.2d 734, 735-36 (1980).
Prior to 1314 West Main Corporation’s possibility of
reverter ripening into an accrued right, in 1983 the General
Assembly amended Code § 33.1-90. 1983 Acts ch. 146.4 In
4
Code § 33.1-90 has been amended a number of times since
1983, but generally those amendments are not material to the
issues presented in this appeal. Accordingly, we will only
reference those amendments that are germane to our analysis
without addressing the full provisions of those amendments. See
17
pertinent part, the 1983 amendment changed the time for letting
the transportation project to contract or commencing
construction on the property from 11 to 20 years. Id. The
Commissioner does not dispute that in the 20 years following its
acquisition, the 1314 West Main Corporation property had not
been permanently utilized in a project for the construction or
improvement of Route 288.5 Thus, the first date on which 1314
West Main Corporation or its successor potentially could have
obtained the right to demand reconveyance would have been
October 1, 1993, rather than in 1984.
As the quoted passage from Sanford, supra, makes clear,
however, when there has been an actual breach of a condition
subsequent upon which a possibility of reverter depends, as in
this case, the fee vested in the Commonwealth by the 1973 deed
did not automatically revest in the original grantor or its
successor. Rather, the original grantor, or its successor, was
required to make “entry, or its equivalent” to exercise the
right to reconveyance. The landowner does so by “written
1988 Acts. ch. 80, 1992 Acts ch. 108, 1998 Acts ch. 426, and
2000 Acts ch. 898.
5
The record suggests that the property was used for
subsidiary support for this and other road improvement projects
over the years, but that no permanent improvements were made on
the property itself.
18
demand” pursuant to the provisions of Code § 33.1-90.
Significantly, the 1973 and 1983 versions of the statute placed
no time limitation within which the demand was required to be
made. No written demand for reconveyance was made until at
least 1999, when Timmons made his first inquiry to VDOT
concerning the property. Thus, before that date, the
Commonwealth remained vested with title to the property, and the
contingencies and procedures for making the demand for
reconveyance remained subject to change by amendment of Code
§ 33.1-90.
In 1997, the General Assembly extensively revised
Code § 33.1-90 and significantly altered the procedures under
which a former owner of property acquired by the Commonwealth
could demand reconveyance of that property. 1997 Acts ch. 93.
As relevant to this case, Code § 33.1-90 was amended to provide
that:
If the transportation project contemplated . . . has
not been let to contract or construction commenced
within a period of twenty years from the date of the
acquisition of such property and a need for the use of
such property has not been determined for any
alternative transportation project, upon written
demand of the owner or owners, their heirs or assigns,
received within ninety days from the expiration of
such twenty-year period . . . or within thirty days
from publication in a newspaper of general circulation
in the political subdivision in which the property is
located of a notice of the Commissioner’s intent to
dispose of such property and [the Commissioner] shall
notify to the extent practical, the last known
19
owner(s) of said property by certified mail, such
property shall be reconveyed by the Commonwealth of
Virginia to such owner or owners, their heirs or
assigns, upon repayment of the original purchase
price, without interest. Unless the reconveyance is
concluded no later than six months from the receipt by
the Commissioner of a written demand, the reconveyance
opportunity shall lapse.
(Emphasis added.)
In addition to altering the contingency upon which the
possibility of reverter depended so as to permit the
Commissioner to assess the property for use in an alternative
transportation project, the clear import of this change in the
law was to provide for specific time periods in which the
written demand for reconveyance is required to be made upon the
occurrence of one or more of the contingencies and to require
any such reconveyance to occur in a timely manner. The
provisions of the statute accomplish this in principal part by
requiring the Commissioner, upon determining that the property
acquired pursuant to the statute is not needed for a
transportation project and will be offered for sale to the
public, to give notice of that intended sale, and to make a bona
fide effort to locate the original owner or his heirs or
assigns, who would then be required by written demand to seek
reconveyance of the property within 30 days of that notice. As
the chancellor correctly noted, this notice requirement and the
corresponding requirement that the written demand be made within
20
30 days thereafter are stated in the disjunctive and, thus, are
not dependant upon a prior timely demand having been made by the
former owner within 90 days from the expiration of the 20 year
designated timeframe.
The provisions in the 1997 amendment to Code § 33.1-90 were
clearly intended to provide certainty in the disposition of
property acquired by the Commissioner for anticipated
transportation projects, while allowing sufficient time and
opportunity for VDOT to use the property so acquired to the best
interest of the public. The salutary function of the amendment
is to make certain that, to the extent practicable, property
acquired by “advance acquisition” but not ultimately used for
any public transportation project should be reconveyed to the
original owner, provided the owner can be found and desires to
recover it for the original purchase price. As pertinent to the
present case, the provisions of the 1997 version of Code § 33.1-
90 became applicable to the determination of when the
possibility of reverter under consideration ripened into an
enforceable right to reconveyance. This is so because the prior
versions of the statute placed no time limitation within which
the landowner was required to make a written demand for
reconveyance and, thus, avoid a waiver of the right to enforce
the forfeiture.
21
In determining when the possibility of reverter granted by
Code § 33.1-90 ripens or accrues into an enforceable right to
reconveyance, the comprehensive structure of the statute is
significant. As amended in 1997, the statute provides not only
the contingencies upon which this property right depends, but
also the method and time limitations for exercising that
contingent right in the event of the occurrence, or breach, of
those contingencies. The statute necessarily permits the
Commissioner to refuse a written demand for reconveyance made
within 90 days from the expiration of the 20-year period when
the Commissioner has determined a need to use the property for
any “alternative transportation project.” Implicit in the
statute’s requirement that the original property owner make a
written demand is that the right to enforce reconveyance accrues
when and if the demand is refused by the Commissioner without
proper justification. In the absence of a written demand and
refusal by the Commissioner following expiration of the 20-year
period, the statute permits the original property owner to make
a written demand for reconveyance within 30 days from the
publication of the Commissioner’s intent to dispose of the
property to the public. Without question, that publication
invokes the statute’s requirement that the owner make a written
demand to enforce its then accrued right to reconveyance within
22
30 days of that publication in order to avoid a waiver of that
right.
In the present case, the property in question was not let
to contract or had construction commenced on it within 20 years
of its acquisition. Assuming that the inquiry made in 1999 and
alluded to in Timmons’ September 10, 2002 letter, was a demand
for reconveyance, it was not made within the 90 day requirement
of the statute as in effect on that date. Moreover, because it
would appear that the Commissioner had determined that the
property was amenable for use in an “alternative transportation
project” for construction work on Route 711, even if the demand
had been timely, the Commissioner was statutorily authorized to
retain the property and refuse the demand.
However, when the Commissioner subsequently determined that
the property was no longer needed for any alternative
transportation project and that it would be offered for sale to
the public, the possibility of reverter vested into an
enforceable right, and the alternative procedure for exercising
that right pursuant to Code § 33.1-90 as in effect at that time
became operative. We agree with the chancellor that the
publication of notice of the intent to sell triggered the 30 day
time period in which 1314 West Main Corporation or its successor
could again demand reconveyance of the property at its original
23
price.6 We further agree that the initiation of the declaratory
judgment action within 30 days of that notice constituted
substantial compliance with the requirement for a written demand
for reconveyance. Accordingly, we hold that the terms of Code
§ 33.1-90 for reconveyance of the property to its original
owner, or its assigns, have been met.
The Commissioner contends, however, that even if Code
§ 33.1-90 provides the original owner of property acquired by
the Commissioner with a continuing property interest in the form
of a possibility of reverter, Windsor Industries never acquired
that interest. Because that interest could not accrue into an
enforceable right to reconveyance before October 1, 1993, the
Commissioner contends that there was no vested property right
for 1314 West Main Corporation to assign to Windsor Industries
in 1977 when the later entity was created and received the
assets of the former. We disagree.
While a possibility of reverter is not a vested interest in
real property, it is a property interest. Although
6
While the record contains a copy of the public notice of
sale, it does not contain a certification that this notice was
published in a newspaper of general circulation as required by
the statute. However, we will assume that such is the case
because we will not presume that the Commissioner would have
intended to proceed with the sale of the property in question on
August 2, 2004 without fully complying with the notice
requirements of the statute.
24
possibilities of reverter were inalienable at common law, they
are alienable by both deed and will under the provisions of Code
§§ 55-6 and 64.1-46. See Sanford, 192 Va. at 648, 66 S.E.2d at
497; Copenhaver, 155 Va. at 496, 155 S.E. at 812. Accordingly,
though not yet an accrued right of re-entry, the possibility of
reverter of the 1314 West Main Corporation property was an
alienable property interest, which Windsor Industries acquired
when the former entity was merged into the latter.
The Commissioner further contends that a dissolved
corporation cannot seek to enforce a right that accrues after
its dissolution. Again, we disagree.
While it is true that a corporation in dissolution cannot
“carry on any business except that appropriate to wind up and
liquidate its business and affairs,” it nevertheless “continues
its corporate existence” and the trustees of the dissolved
corporation are nonetheless required to collect and account for
the corporation’s assets. Code § 13.1-745(A). Moreover, until
the winding up of affairs of the corporation are concluded, the
fact of dissolution does not “[p]revent commencement of a
proceeding by or against the corporation in its corporate name.”
Code § 13.1-745(B).
In this case, the possibility of reverter was a property
interest of Windsor Industries and, thus, was an asset of the
25
corporation at the time of its dissolution. The duty of
Timmons, as the principal stockholder and chief executive
officer of the corporation, was to act as a trustee in
dissolution and secure that asset for proper distribution to the
dissolved corporation’s creditors and/or stockholders. See,
e.g., Craddock-Terry Co. v. Powell, 181 Va. 417, 451, 25 S.E.2d
363, 377 (1943) (holding that “[o]n dissolution, the board of
directors of a corporation . . . holds the assets as a trustee
to be paid or distributed to . . . stockholders”). The fact
that the possibility of reverter had not accrued into an
enforceable right to reconveyance of the property in question at
that time is not relevant. Accordingly, we hold that Timmons,
as trustee of the assets of the dissolved Windsor Industries,
was the proper party to make demand on the Commissioner for
reconveyance of the 1314 West Main Corporation property and the
subsequent declaratory judgment action was properly filed in the
name of Windsor Industries pursuant to Code § 13.1-745.
Finally, we turn to consider the Commissioner’s remaining
assertion that Windsor Industries’ claim for reconveyance is
time-barred either by operation of Code § 8.01-248, Code § 8.01-
246(4), or upon the application of the doctrine of laches. The
Commissioner’s reliance upon these statutes is misplaced; nor do
we agree with the assertion that in the absence of their
26
applicability there is no statute of limitations that is
applicable to the right to demand reconveyance under Code
§ 33.1-90.
Although not mentioned by the Commissioner, we take this
opportunity to note that Code § 8.01-255.1, among other things,
applies to actions for re-entry on land by reason of a breach of
a condition subsequent and imposes a limitation of 10 years for
the action to be commenced or entry to be made from the time the
breach of the condition occurs. Beyond question, this statute
is applicable to a possibility of reverter such as, for example,
one created by the provisions of a particular deed. However, in
the case of a possibility of reverter granted to the landowner
under the provisions of Code § 33.1-90, the provisions of Code
§ 8.01-255.1 are superseded by the more specific time
limitations provided in Code § 33.1-90. The same rationale
disposes of the Commissioner’s reliance upon Code §§ 8.01-248
and -246(4). Our determination that Windsor Industries’ demand
for reconveyance, in the form of the motion for declaratory
judgment, was timely under the 30 day requirement of Code
§ 33.1-90 results from the comprehensive and broad scope of the
statute which in effect contains its own statute of limitations.
Similarly, the Commissioner’s argument concerning the
equitable doctrine of laches is misplaced. Although this case
27
was brought as a chancery action for declaratory judgment, as in
Sanford, the “remedy for enforcing the forfeiture is purely
legal.” Id. at 649, 66 S.E.2d at 498. As was made clear in
Sanford, where an action brought in equity is subject to a legal
remedy, although the chancellor retains jurisdiction and can
administer complete relief, “equity will respect the applicable
statute of limitation[s].” Id.; see also Kappa Sigma
Fraternity, Inc. v. Kappa Sigma Fraternity, 266 Va. 455, 467,
587 S.E.2d 701, 708 (2003); Belcher v. Kirkwood, 238 Va. 430,
433, 383 S.E.2d 729, 731 (1989).
CONCLUSION
For these reasons, we hold that the chancellor did not err
in concluding that Windsor Industries was entitled to the
reconveyance of the 1314 West Main Corporation property.
Accordingly, we will affirm the judgment below requiring the
Commissioner to convey the property to Windsor Industries, or
its assigns, upon payment of the original purchase price of
$21,000, with no interest.
Affirmed.
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