Russell v. Richards, 103 N.M. 48, 702 P.2d 993 (N.M. 1985)
Legal information, not legal advice. Verify against the cited opinion.
- Citation: 103 N.M. 48, 702 P.2d 993 (1985) (decided July 11, 1985)
- Court / Year: Supreme Court of New Mexico, 1985
- Topic tags: forfeiture · equitable_interest · remedies
- Facts: Russell was an assignee-purchaser under a standard-form real estate contract. She had made 72 payments, reduced principal by 26,504), and the property had appreciated from 82,735. She rented out three units for more than the contract payment, and had cured several prior defaults before this default. The trial court found her interest forfeited but found the forfeiture “shocked its conscience” and awarded her ~56,724 for her real-property equity and $7,500 for personal property).
- Holding: Refusing to enforce the forfeiture was an abuse of discretion. “The rule is well settled in New Mexico that the forfeiture provision in this type of real estate contract is enforceable …, absent unfairness which shocks the conscience of the court.” The 7,500 personal-property award affirmed.
- Reasoning: The shock-the-conscience inquiry weighs four equitable factors: (1) amount the buyer paid; (2) period of possession; (3) market value at default vs. original sale price; and (4) rental potential/value. “Not every case of default and forfeiture presents circumstances which shock the conscience of a court.” Crediting the buyer with the property’s enhancement in value was error: “during the life of the real estate contract any risk of loss or enhancement in value accrues to the purchaser” (quoting MGIC Mortgage Corp. v. Bowen), and “[u]pon default and forfeiture, the buyer’s interest is terminated and there is no enhancement value to be recovered by the buyer.”
- Practical impact for CFD operators/buyers: This is the controlling New Mexico statement of the forfeiture rule and the four-factor “shock the conscience” test. On a valid forfeiture the buyer recovers nothing — not payments, not appreciation.
- Good-law status: Good law; followed in Buckingham v. Ryan (1998) and recited via In re McCune (2024).
- Source (retrieved): https://static.case.law/nm/103/cases/0048-01.json · Verified: 2026-06-08
Jurisdictions that follow / cite: new-mexico
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.