## Facts

- Leeco Gas & Oil Company conveyed about 50 acres on Padre Island to Nueces County by gift deed for park purposes.
- The deed granted the County a defeasible fee “so long as a public park is constructed and actively maintained,” with a possibility of reverter retained by Leeco if the condition failed.
- The County constructed and maintained a public park on the property.
- While the land was still used as a park, the County initiated condemnation proceedings to acquire Leeco’s possibility of reverter.
- Condemnation commissioners awarded Leeco $10,000; Leeco appealed.
- The trial court granted partial summary judgment against Leeco on issues other than damages and later awarded only $10 in nominal damages, despite expert testimony valuing the land in the millions.
- The court of appeals affirmed; the Texas Supreme Court granted review.

## Issues

1. Whether Nueces County was estopped from condemning Leeco’s possibility of reverter after accepting a deed subject to that future interest.
2. Whether awarding only nominal damages for condemnation of a possibility of reverter satisfies the constitutional requirement of adequate compensation, and, if not, what measure of damages applies.

## Decision

- The Texas Supreme Court held the County was not estopped from condemning the reversionary interest because acquiring and maintaining public parks is a governmental function, and estoppel generally does not apply against governmental units acting in that capacity.
- The Court held nominal damages were inadequate as a matter of law under the circumstances.
- The Court reversed the court of appeals’ judgment and remanded for a new determination of compensation.
- The Court directed that damages be measured by the difference between the value of the unrestricted fee and the value of the fee subject to the deed restriction.

## Legal Principles

- A governmental unit acting in a governmental capacity is generally not subject to estoppel when exercising eminent domain powers.
- Adequate compensation is constitutionally required when property is taken for public use, including when the interest taken is a future interest.
- Although a possibility of reverter is often treated as having no ascertainable market value when the triggering event appears remote, that nominal-value approach does not control when the condemnor seeks to extinguish the restriction and obtain an unrestricted fee of substantial value.
- When a governmental grantee condemns a grantor’s possibility of reverter retained in a conditional gift deed, compensation is measured by the difference between (1) the value of the unrestricted fee and (2) the value of the restricted fee.

## Conclusion

The Texas Supreme Court allowed the County to condemn the grantor’s possibility of reverter but required more than nominal compensation, holding that damages must reflect the value gained by converting the restricted park-use estate into an unrestricted fee.


Leeco Gas & Oil Co. v. Cnty. of Nueces, 736 S.W.2d 629 (Tex. 1987)