515 S.W.3d 104
Ark.2017Background
- In 1906 Stephen and Amanda Stone conveyed land to the City of Fayetteville to establish and maintain Stone Hospital, with a reversion in favor of the Stones or their heirs if a hospital was not established within four years or the land ceased to be used for hospital purposes (1906 Deed).
- In 1909 the Stones executed a second deed modifying the arrangement: it described holding the property "in trust and maintained as a city Hospital," provided for proceeds to fund a relocated hospital, and omitted an express possibility of reverter (1909 Deed).
- The hospital opened and later reorganized as Fayetteville City Hospital (FCH); title moved between City and FCH over the decades. FCH liquidated and dissolved in 2011.
- In 2011 the City quitclaimed the property to Washington Regional Medical Center (WRMC); WRMC later conveyed an acre to the City for a roundabout and sought to quiet title to the remaining parcel in 2014, claiming fee simple title and continuous possession.
- The Stone heirs sued, arguing the 1906 reverter survived (or the City breached the charitable trust) and sought to quiet title in themselves and to dismiss WRMC’s petition for failure to join indispensable parties. The circuit court granted summary judgment to WRMC and the City; the court of appeals affirmed and the Arkansas Supreme Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1909 Deed preserved or extinguished the 1906 reversionary interest | Stone heirs: 1909 did not extinguish the 1906 possibility of reverter; reverter remained | WRMC/City: 1909 converted the interest into a charitable trust and released the possibility of reverter | Court: 1909 Deed clearly replaced reverter with a trust; possibility of reverter terminated |
| Whether Stone heirs have standing to enforce the charitable trust or assert reversion | Stone heirs: as heirs of the settlors they can enforce trust and challenge title | WRMC/City: heirs are not settlors and thus lack standing under charitable-trust enforcement provisions | Court: heirs are not settlors or authorized enforcers; no standing to enforce the trust or assert the reversionary interest |
| Whether WRMC met its prima facie burden to quiet title (title + possession) | Stone heirs: City (as trustee) could not convey fee simple; WRMC lacks color of title/adverse-possession proof | WRMC/City: WRMC acquired fee simple by quitclaim in 2011 and has continuous, exclusive possession since 2011 (with operational control earlier) | Court: WRMC showed legal title (2011 quitclaim) and possession; prima facie case to quiet title established; title quieted in WRMC |
| Whether FCH (or other parties) were indispensable parties and required joinder | Stone heirs: FCH (successor/operator) should have been joined as indispensable party | WRMC/City: FCH had liquidated/dissolved in 2011 and thus had no viable interest to join | Court: FCH was dissolved and not indispensable; joinder not required |
Key Cases Cited
- Barton Land Servs., Inc. v. SEECO, Inc., 428 S.W.3d 430 (Ark. 2013) (deed-construction rules: intent from instrument’s four corners; presumption grantor conveys full interest)
- Wilson v. Pharris, 158 S.W.2d 274 (Ark. 1941) (definition and nature of reversion vs remainder)
- Koonce v. Mitchell, 19 S.W.3d 603 (Ark. 2000) (elements of prima facie quiet-title case: legal title and possession)
- Covenant Presbytery v. First Baptist Church, 489 S.W.3d 153 (Ark. 2016) (legal title to trustee for charitable purpose; enforcement principles)
- Kohn v. Pearson, 670 S.W.2d 795 (Ark. 1984) (requirements for charitable trust: public charitable purpose)
- Arkansas Annual Conference of the AME Church, Inc. v. New Direction Praise & Worship Ctr., Inc., 291 S.W.3d 562 (Ark. 2009) (standing limits where party lacks right, title, or interest)