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Addy v. Short

Superior Court of Delaware, Sussex County

April 28, 1951

ADDY et al.
v.
SHORT et al.

Roger I. Addy and William R. Errett, Trustees in dissolution of the Bethany Beach Improvement Co., a dissolved Delaware corporation, brought an action in ejectment against William P. Short, and others. The Superior Court, Terry, J., held that a possibility of reverter possessed by corporation upon its dissolution, was not retained by corporation for period of extended life of corporation under statute extending corporate life of dissolved corporation for three years for specified purposes.

Judgment in accordance with opinion.

[46 Del. 180] This is an action in ejectment brought by Roger I. Addy and William R. Errett, trustees in dissolution of the Bethany Beach Improvement Co., a dissolved Delaware corporation, (called old corporation) against William P. Short, Jehu F. Derrickson and the Bethany Beach Improvement Co., a Delaware corporation, (called new corporation).

On August 31, 1905 the old corporation (owner in fee simple) conveyed to the United States of America for life saving purposes two and eighty-six hundreds acres of land situated in Bethany Beach, Sussex County, Delaware. Included within the language of said conveyance appears the following stipulation: ‘ * * * and it is further stipulated that the United States shall be allowed to remove all buildings and appurtenances from said land

Page 301

whenever it shall think proper and shall have the right of using other lands of the grantor for passage over the same in affecting such removal. And, it is further agreed on behalf of the United States that, in the event that the land hereby conveyed should hereafter cease to be used and occupied for lifesaving purposes, said lot of lands shall then revert to the party of the first part or its assigns.’

On November 3, 1940 the old corporation by voluntary proceedings was dissolved. On December 1, 1945 the United States, through the Navy Department, sold to Jehu F. Derrickson, a defendant, a lifeboat station building and appurtenances thereto situated upon said land for the sum of $555.00. On December 5, 1945 Jehu F. Derrickson sold to William P. Short, a defendant, the lifeboat station building and appurtenances. On December 19, 1945 the United States abandoned the aforesaid land, and caused to be recorded in the Recorder's Office at Georgetown a formal certificate to that effect. On October 2, 1946 the United States, through the Navy Department, sold to the new corporation a radio direction finder station with appurtenances thereto situated upon said land for the sum of $4000.00. On November 3, 1949 [46 Del. 181] the Chancellor appointed Roger I. Addy and William Errett trustees in dissolution of and for the old corporation, and, as such, they entered upon their duties and are now acting in that capacity.

The plaintiffs allege that as of the date of abandonment of said land by the United States (December 19, 1945) the fee simple absolute title in said land immediately reverted to and vested in the old corporation.

It is further alleged that since October 2, 1946 all of the respondents, or one of them, have been and are now in possession of the aforesaid land and have withheld possession of the same from the old corporation and are now withholding possession thereof from the trustees aforesaid.

The complaint concludes with a demand for judgment in the following particulars:

(1) That the trustees be declared the owners of said land in question, and that an order be entered delivering to them the possession thereof.

(2) That the trustees recover the sum of $50,000.00 for the unlawful withholding of the possession of said land, together with cost of suit.

The defendants in their answer have interposed the following defenses:

(1) They deny that a vested interest in said land was acquired by the old corporation as of the date of abandonment thereof (1945) by the United States.

(2) And for a further answer defendants William P. Short and Bethany Beach Improvement Company, a Delaware corporation, say that at the time of the abandonment by the United States of all right, title, and interest in the land forming the subject matter of this suit, the title thereto did not vest in Bethany Beach Improvement Company, a dissolved Delaware corporation, because the United States had held at most what in law is known [46 Del. 182] as a ‘ fee simple determinable’ title, and at the time of the dissolution of the said Bethany Beach Improvement Company, it had held no estate or title whatsoever which was cognizable in law, but a bare possibility of reverter, and thereafter, namely, upon the happening of the reversionary contingency, the Bethany Beach Improvement Company, having been dissolved for a period of more than three years, ...


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