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Acquisition of Property M.B.

A. INTRODUCTION

1. Property rights defined:

The ordinary person thinks of property as things while lawyers think of property as rights:o Ex cludeo Possesso Transfer/Disposeo Useo E njoy

How do property rights originate?

o Conquest;o Social custom;o

Claims based on possession;o Claims based on labor or investment;o Family relations; oro Government assignments by law and k, etc.

Ways we acquire property:

Possession is a protected property right. The first person to get possession of an unowned thing

usually becomes its owner. To satisfy the possession requirement, the possessor must e x ercise

physical control over the object and must intend to control it and e x clude others from it.o First possession

y Discoveryy Capturey Creation

o Subsequent possessiony Findy Adverse Possessiony Gift or Bequest

If two people claim to have discovered something, who has the stronger claim?

A person simply does not become the owner of an object that already has an owner simply bytaking possession of it. The possessor is legally obligated to return the object to its owner.

B. TH E RULE OF CAPTUR E

1. What is the difference between ownership and possession?

The person who acquires ownership by taking possession of an object is entitled to all the same

legal rights as any other owner. A person simply does not become the owner of an object that

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already has an owner simply by taking possession of it. The possessor is legally obligated to return

the object to its owner.

2. Acquisition by discovery

The title of land, which has been discovered and conquered, belongs entirely to the conquering

nation, subject only to the right of those natives present to occupy the land.

o J ohnson v. M Intoshy P claims title to land that he got from Indian chiefs in 1773 and in 1775.y The Indian chiefs were working under the proper authority of tribes when they sold

their lands to the plaintiff.y P sought to have the land grants recognized by the U. S government.y The court ruled that the E uropeans conquered the land from the native Indians and

they were only given occupancy right and they were never given the right to sell

their land. After the revolutionary war, E ngland transferred their absolute rights to

the United S tates. Therefore, the Indian chiefs did not enjoy the right to sell the

land to private individuals.

a) What is the difference between acquisition by discovery and acquisition by conquest?o Acquisition by discovery entails the sighting or finding of unknown or unchartered territory.

A landing and the symbolic taking of possession frequently accompany it. Acts that would give

rise to a title must subsequently be perfected, within a reasonable time, by settling in

and making an effective occupation.o Conquest is the taking of possession of enemy territory through force, followed by formal

anne x ation of the defeated territory by the conqueror.

b) J ohn Locke¡

s Labor Theoryy ´« every man has a property in his own person. « The labor of his body and the

work of his hands, we may say, are properly his. Whatsoever then he removes outof the state that nature has provided, and left in, he has mixed his labor with, andjoined to it something that is his own, and thereby makes it his property.µ

In plain E nglish, if a person works on something, it becomes his.o Haslem v. Lockwood:

y P racked manure into heaps and accumulated it onto a public street intending to

take it away the ne x t day.y Before he could do that, the D found the heaps or manure and hauled them off in

his cart.y The manure belonged to the owners of the animals that dropped it but it had

been abandoned.y Because of this, it belonged to the P who had changed its original condition and

greatly enhanced its value by his labor.

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3. Acquisition by Capture

Actual bodily seizure is not necessary. Capture is not enough. Pursuit is required. If a wild animal

has been mortally wounded or trapped so that capture is virtually certain, the animal is treated as

captured. If a person does not actually possess the animal:o Mortal wounding of animal by one who is not abandoning his pursuit my equal possession.

o E ncompassing or securing the animal with nets or toilso Must show intent to appropriate the beast or deprive the animal of its natural liberty

y Pierson v. Post: }= Post Pursuit = Occupancy = Pierson Pursuit Possession. Pursuit + _________ =

possession Mere pursuit of an animal does not give one a legal right to it. Based on Puffendorfs definition of occupancy of beasts. You have to

have mortal damage to animal and deprive animal of its natural ability. You

have to show intent that you want the animal in order for it to become

yours. The law requires capture rather than pursuit.

a. Rationale- Policy bases

1. Competition This ensures the beneficial use of resources because more wild animals are

captured. Society does not reward the pursuer, only the captor promoting a

more effective means of capture.

2. E ase of administration

Rewarding capture is easier to administer than rewarding pursuit or prospectof capture, which is difficult to determine. It promotes certainty and efficient

administration.

b. Wounded or trapped animals If an animal has been mortally wounded or trapped so that capture is virtually

certain, the animal is treated as captured. But if the animal is only in the

process of being entrapped and is definitely not captured.

c. Interference by non-competitor Rule of capture allows a competitor who also seeks to capture an animal to

interfere with the others mere pursuit. However, a person who does not seek

to capture an animal, but rather to interfere with the otherd s capture seeks

to disrupt the efficient use of resources and must be stopped.o Keeble v. Hickeringill:

y Landowners are considered prior possessors (first possessors)

of wild animals on their land

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y Although the Plaintiff never had actual physical possession of

the ducks, the Plaintiff still had property rights in the ducks

because they were on his property.y The Defendant maliciously interfered with the Plaintiffd s

livelihood.

d. Custom Although the general rule is that the captor must acquire physical control over the

animal, in some hunting trades, a custom, which is thought to be more effective, may

dictate a different result.o Ghen v. Rich:

y Reasonable local usage gives title to the first taker of a

whale who by acts of appropriation.y The common law mandates that control is a necessary

prerequisite to someone being able to possess a wild animal.

However, the instant case is unique.y First, the Plaintiff did everything in his power to possess

the animal.y Second, the widespread custom in the industry recognized

this as the only realistic form of possession.

e. Wild animals with animus revertendi (return of habit) a.k.a Domestic Animals.o Captured wild animals that develop a habit of return continue to belong to the

captor when they roam at large. The reason behind this rule is that domesticated

animals are valuable to society and this effort to tame wild animals is rewarded.

C. ACQUI S ITION BY CR E ATION

A person can acquire property by creating. The primary purpose in recognizing property by

creation is to reward labor.

I. Intellectual Propertyo IP is the e catchall

¢

label¢

or property in ideas.

o The term includes copyrights, patents, and trademarks but may also cover property in a

persona.

- To avoid monopoly and encourage competition, the law allows copying and imitation

of ideas, as opposed to their e x pression. Cheney Brothers v. Doris S ilk Corp:

y The } could not secure a copyright or a patent on its patterns and

could not recover as a result of the d s copying.

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y S ince there is no common law copyright law, the } d s property right

is limited to chattels that embody the invention, not the design pattern

that has a short life.y Therefore, although the copied the } d s patterns the imitation is

not actionable.

y The Plaintiff has no property right to prevent any imitation of it. TheUnited S tates Constitution (Constitution) confers only Congress the

power to create this right, not the court.

- There are e x ceptions like the right to publicity. A person may not use a celebrities

name, likeness, voice or signature for profit without the celebrities consent. The

celebrity d s labor in creating a persona of value is protecte d against another d s

using it for profit. V anna White v. Samsung E lectronics America, Inc:

y It was held that, even though there is no intent to deceive, the use of

an imitation (not a likeness) of a celebrity for commercial profit

infringes her right of publicity.o Unfair competition

- Courts have sometimes protected labor and investment under the law of unfair

competition. International News Service v. Associated Press:

y A property right can be found in an individual d s labor an investment,

but that right can only be hel d against a competitor, not the generalpublic.

y There is a quasi property interest in news collected by an agency

against other news collection agencies.y It is unfair competition when one party interferes with the normal

operation of another d s legitimate business precisely at the point

where profit is to be reaped.y Information contained in news is in the public domain and therefore

cannot be subject to private ownership.y But when a news organization makes a substantial e x penditure in

obtaining the news, they will be protected from having the information

appropriated by a competitor.

II. Rights in Body Productso Moore v. Regents of the University of California

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- Supreme Court held that a man did not have a property right in his spleen following

its removal from his body by doctors who made it into a patented cell line of great

commercial value.

- The Dr d s who create d the cell line therefore create d original ownership.

- The court hel d that the patient ha d only the right to sue the Dr d s for failure to

d isclose their research an d economic interest in the patient d s cells.- Although most property is freely transferable, some property is not alienable an d

some property can be given away but not sol d .

Right to Ex cludeo The right of property is described by William Blackstone as:

- That sole and despotic dominion which one man claims and e x ercises over the

e x ternal things of the world, in total e x clusion to the right of any other individual in

the universe.o The right to exclude= the right to deny others from enjoying (use or possess) oned s

assets. Without this right other may simply take as they wish and the owner would be unable

to stop them.

- J acques v. S teenberg Homes, Inc A private landowner has the right to e x clude other from his land. This right

however has no practical meaning if the S tate will not enforce it.

- S tate v. Shack D sought to enter P d s property in order to administer medical and legal

assistance to a laborer

Owner insister that visits must be conducted in the office Dd s reduced to leave and were charged with trespass Court ruled that ownership rights in property do not include the right to bar

migrant laborers working on the property from access to governmental

services A man d s right in real property is not absolute. Necessity, private of public

may justify entry upon the lands of another

o The rights of property are not endless.o The rights and reliance interests of others must be protected.o Limitations to the right to e x clude:

- Non-owners who have relied on a relationship with the owner that made such access

possible in the past may be granted partial or total immunity from having such

access revoked when this is necessary to achieve justice.

- Relations of mutual dependence involving joint efforts, and the relationship ends,

property rights must be redistributed among the parties to protect the legitimate

interests of the more vulnerable persons.

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y Peel bought the house two years earlier and never moved iny A soldier found a brooch in the house hidden on a window ledge.y The soldier prevailed over Peel because Peel never moved into the

house and took physical possession of it.o Mislaid property

- Property intentionally placed somewhere and then forgotten. Mislaid property goesto the owner of the premises.

- The purpose of the classifying the property this way is to facilitate the return of

the object to the true owner: because it is assumed that the object was

intentionally placed where it is found, it is likely that the true owner will remember

where she placed it and will return to the shop to claim it. McAvoy v. Medina:

y Someone forgot his pocket book on the table at a barbershop.y P told D, the owner of the of the barbershop to hold on to it incase

the owner came back otherwise to advertise it. D agreedy Owner didn d t come back an d P sue d for the pocket booky J udge ruled that the P could not maintain his action.y The P did not acquire the right to take the property from the shop,

but it was the duty of the D to use reasonable care for the safe

keeping of the same until the owner should call for ity The P acquired no original right to the property, the D d s subsequent

acts in receiving an d hold ing the property in the manner he d idd oes

not create any.o Abandoned property

- Owner voluntarily and intentionally relinquished ownership with intent to give up both

title and possession.o Treasure Trove

- Any money or coin, gold, silver plate or bullions hidden in the earth

E . ACQUIS ITION BY AD V E RSE PO SS E SS ION

o If, within the number of years specified in the state statute of limitations, the owner of

land does not take legal action to eject a possessor who claims adversely to the owner, the

owner is thereafter barred from bringing an action in ejectment.

o Acquiring title to property by long, uninterrupted possession.o Running of the statute of limitation on the owner d s action in ejectment not only bars the

owner d s claim to possession, it also e x tinguishes the old title of the owner and creates a new

title by operation of law in the adverse possessor.o Title acquired by adverse possession cannot be recorded because it does not arise from a

recordable document but rather from the operation of law.

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o He must file a quiet title action against the former owner barred by the statute of

limitations.o S tatutory period for adverse possession varies from state to state from five to twenty

one years.

Requirements of Adverse Possession

Adverse possession formulao Ad Noche + Possession + Passage of Certain Amount of Time = Adverse Titleo A= Actual

- The primary purpose of the entry requirement is to trigger the cause of action,

which starts the statute of limitations running.o N= Notorious

- His or her acts must be such that will constitute reasonable notice to the owner

that she is claiming dominion, so that the owner can defend his rights.

- The acts must be appropriate to the condition, size, and locality of the land.o O= Open

- Open acts are acts that look like typical acts of an owner of property that the

community observing them would infer the actor to be claiming ownership.

- S tealthy, secret or hidden activities do not satisfy the notorious and open

requirement Manilllo v. Gorski:

o Dd s son made improvements to their house that encroached on

Pd s lot by 15inches. D stated that it was a mistaken belief

that the property belonged to them.o Court ruled that a party may acquire land through adverse

possession if that party is a mistaken belief that she had title

to the property.o In order to constitute e open and notorious

¥

possession, the

true owner must have actual knowledge o¥

a minor

encroachment along a common border.

o C= Continuous

- Continuous possession requires only the degree of occupancy and use the average

owner would make of the particular type of property.

- The purpose of the continuity requirement is to give the owner notice that the

possessor is claiming ownership, and that the entries are not just a series of

trespasses. Howard v. Kunto:

y Use of a summer home only during the summer for the statutory

period is continuous use

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y S imilarly, seasonal use of a property is permitted when it is consistent

with the type of property involved.y The court stretched the definition of privity (shared rights and

responsibilities that is connected through possession of the property)y Kunto required privity for tacking.

- Privity means that the possessor voluntarily transferred his interest or physicalpossession to a subsequent possessor

- Time runs against the true owner from the time when adverse possession began.

- The clock does not stop if the true owner transfers his interest.

- Tacking permits the later possessor to add years of possession to satisfy an

adverse possession statute of limitation. The possession must be uninterrupted and

voluntary.

- Tacking has two views: American rule- Requires privity between the possessor E nglish rule- Keeps the statute running against the true owner regardless of

privity between possessorso H= Hostile/ Adverse

- There are three approaches regarding claimant d s state of min d : Objective test:

y The adverse possessor d s subjective belief about who owns the

property is irrelevant.y IF he uses the land as a reasonable owner would use it, without

permission from the true owner, this element is satisfied.y His conduct is deemed objectively hostile and adverse, regardless of

his subjective intent. Good Faith Test

y The adverse possessor must believe that he owns the title to the landy Must innocently (but mistakenly) believe that the is the true owner.

Intentional Trespass Testy The adverse possessor must know that he does not actually own the

land and subjectively intend to take title from the true owner.y E ffectively, this test rewards intentional wrongdoers while offering no

protection to good faith occupants. V alkenburg v. Lutz:

o N.Y. statutes provide that if the claimant does not enter with

color of title, adverse possession can be claimed only where

the land e has been protected by a substantial in closuref or

has been e usually cultivated or improved.f

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o Hence, in N.Y, a person without color of title would have to

show in that a hunting cabin is a e usual improvementf and

that taking sand and gravel was a e usual cultivationf in order

to win. Color of title refers to a claim founded on a written instrument or a

judgment or decree that is for some reason defective and invalid

o E = Ex cusive

- Adverse possessor d s possession must not be share d with either the true owner or

the general public.

- This d oesn d t mean absolute e x clusivity

- It means that the a d verse possessor d s possession is as e x clusive as one woul d

characterize an owner d s normal use of such lan d .

- To interrupt the a dverse possessor d s e x clusive possession, the owner must retake

possession by using the property in manner that suite d to its con d ition.

ADV E RS E PO SS E SS ION OF CHATT E LS o A person can acquire title to chattels by adverse possession just as he can acquire title to

land.o Once the remedy is barred, the adverse possessor has title.o Difference between adversely possessing land and adversely possessing chattels: Adverse

possession of land is open and notorious, whereas adverse possession of chattels seldom is.

There are two approaches:y New York rule

o NY holds that the statute of limitations does not begin to run on the owner of

stolen goods until the owner knows who has the goods and makes a demand for

return of the goods that is rejected.o NY also puts the risk of buying stolen goods on purchases, who can often

protect themselves by making inquiries.y Due diligence rule

o The statute of limitations does not begin to run on the owner of stolen goods as

long as the owner continues to use due diligence in looking for them. The conduct

of the owner, not the possessor, is controlling.o OdK eeffe v. Snyder

The COA accrues when the owner first knows, or reasonably should know

through the e x ercise of due diligence, where the stolen goods are

including the identity of the possessor of the paintings.o The discovery rule has been adopted in most jurisdictions.

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o In those jurisdictions, where it has been adopted, you must prove the elements

of adverse possession i.e. A d NOCHE o Tacking is also applied to statutes of limitations in actions of replevin of

chattels. Privity is required.y Bona fide purchaser of stolen goods

o A bona fide purchaser of stolen goods is not protected against the claim of theowner unless the statute of limitations has run on the owner.

o The law protects the owner over the purchaser for three reasons: Whether the purchaser was really bona fide, and did not know the goods

were stolen, is questionable in many cases The purchaser can lessen the risk of buying stolen goods by inquiries of

the seller The owners were not protected, owners would spend more money on

protective devices to prevent theft, which is not a socially productive

e x penditure.

F. R E ME DIE S OF A PO SS E SS OR (at common law)

Actions to recover damages

1) Trespasso Trespass required a showing that D intentionally or negligently acted to inflict a direct,

forcible injury to the P d s property or property.o The basis for a trespass action is injury to possession.

o This action included trespass to chattels and trespass to land.

2) Trespass on the casey This would occur where one of the elements of a trespass action was missing e.g.,

indirect or consequential injury rather than an immediate injury.

3) Trovery A suit in trover was used to recover the value of the P d s chattel that the D ha d

converte d . Trover d id not apply to trespass to lan d .

G. Rights of owners

i. Right to use

ii. Right to transfer

iii. Right to Ex clud e subject to some restrictions e.g., zoning laws, mistaken

improvement, civil rights laws, etc.

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P E RSONAL PROP E RTY M.B.

ACQUIS ITION BY GIFT

A gift is a voluntary transfer of property without consideration. There must be (i) intent

by the donor to make a gift (ii) delivery to the donee; and (iii) acceptance of the chattel

by the donee.

Two kinds of gifts:y Gift inter vivos

o This is a gift made during the donor d s life when there is no threat of

impend ing d eath.o It must be absolute and irrevocable to be valid.o In order for an inter vivos to be valid, there must be intent on the part

of the donor to make a gift, delivery by the donor to the donee and

acceptance of the gift by the donee.o Acceptance by the donee will be presumed when the gift is of value to

the donee.y Gift causa mortis

o This is a gift made in contemplation of immediately approaching death.o Requirements for a gift are strictly enforced in gifts causa mortis.o The gift is revoked if the donor recovers from the illness that prompts

the gift.

I) Intent

The donor must intend to make a present, irrevocable gift, whether of a presently

possessory interest of or a future interest. If the alleged donor only in the future, the giftis an unenforceable promise because it is not supported by consideration. In determining

whether the alleged donor had the requisite intent to make a present gift, a court will

e x amine the donor d s verbal an d written statements an d the other circumstances

surroun d ing the gift.y Promise compared

o A promise to give property in the future is not a gift. A gift transfers to

the donee right now. A gratuitous promise (i.e., a promise without

consideration) is not enforceable as a gift or under the law of contracts

(because there was no consideration).

ii) Delivery

Delivery requires an act giving up dominion and passing control to the donee. Manual

transfer usually satisfies the requirement but it is not necessary.

Reasons for the delivery requirement

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o Ritualy Delivery of the chattel impresses the grantor with the legal significance

and finality of the act. Once she hands over the object, she realizes it

belongs to another.

o E videntiaryy Delivery of the chattel is reliable, objective evidence of the grantor d s

intent to give. There is no nee d to rely on oral testimony; reliance is

place d on the objective act of delivery. Moreover, the presence of the

object in the grantee d s han ds substantiates his claim of a gift.o Protective

y Requiring delivery protects the unwary or barely competent donor from

making improvident oral statements.

Alternative methods of delivery

There are several types of acts are acceptable as substitutes for e handing overf .

o Constructive deliveryy Constructive delivery is the hardening over of the means of obtaining

possession and control (e.g. key), or in some other way relinquishing

dominion and control. This is permitted when actual manual delivery is

impracticable. Donors intent

y Constructive delivery can include any acts that the donor

deems sufficient to pass a present interest. Newman v. Bost

y P filed suit against the D (the administrator of the

deceased d s estate) claiming the D converte d gifts the

decease d ha d made to her by gift causia mortis.y The P was entitled to the furniture in the room that could

be opened by the key not the insurance policy.y The life insurance policy was present in the room when the

deceased gave his keys to the P and the policy was

capable of actual manual delivery, the policy wasn d t part

of the gift to the P.o Symbolic delivery

y Symbolic delivery is the handing over of some object that represents the

thing given (e.g., instrument in writing). This is permitted when actual

manual delivery is impracticable.

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o Delivery through third persony If a donor makes a delivery to his agent, no gift takes place until the

agent makes delivery to the donee. However, if the donor makes delivery

to a third party who is the donee d s agent or an in depen dent agent, thegift is effective on delivery to the thir d party. Most courts to d ay uphol d

a gift to be d elivere d by a thir d party (not donor d s agent) on the

d onor d s death.o Revocable gifts

y Generally, no gift is made when a donor retains the right to revoke the

gift.

iii) Acceptance

The donee must accept the gift, but where the gift is beneficial to the donee, acceptance

is presumed.

o Gruen v. Gruen:y P commenced an action seeking a declaration that he is the rightful owner

of a painting that his deceased father had given to him, despite the fact

that he never retained possession of the paintingy The court held that a valid intervivos gift was made as the donor never

intended to make a gift to his son, only constructive delivery was needed

as actual delivery of the painting to the P and acceptance is deemed

presumed as it is a benefit to the donee.

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o There are no limitations on its inheritabilityo It cannot be divested, nor will it end on the happening of any event.o It includes:

y W ords of purchaseo Identify the person in whom the estate is created e.g., e to A

§

y W ords of limitationo Identify the type of escape created e.g., e and h e r h e irs

¨

.o Creation of a fee simple

y At common law it was necessary to use words of inheritance to create a fee

simple by deedy The ancient requirements of words of inheritance in a deed have been abolished in

all states. Under modern law, a deed is presumed to pass the largest estate the

grantor or testator owned.o Ex ample: e To A

©

conv eys a f ee simple if th e grantor had a f ee simple

o If the fee simple owner does not devise his land but dies without a will, the owner d s heir

inherits the fee simple. If a person d ies without a will his/her heirs are:y Spouse at common lawy Nex t of kiny Issuey Childreny Adopted childreny Nonmarital children

y S tepchildren- only blood relatives take as heirsy Parentsy Collateral relativesy E scheat: When a fee simple owner dies without a will and without heirs the fee

simple escheats to the state.

Defeasible fees

A fee simple can be created so that it is defeasible on the happening of some event and the owner

of the fee simple them loses, or may lose, the property. If the fee simple is defeasible, it is of

course not absolute.

Defeasible fees are most commonly encountered in deeds restricting the use of land, but they may

be used for other purposes as well.o Fee S imple Determinable ( FS D)

y A fee simple estate so limited that will automatically end when some specified

event happens.o Ex ample: O conveys Blackacre e to School Board so long as th e pr e mise s

ar e us ed for school purpos e s

(has words o

limitation)

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y If the contingency occurs, the estate automatically ends. It terminates

automatically and reverts back to the grantor.y A fee simple determinable may be transferred or inherited in the same manner as

any other fee simple, as long as the stated event has not happened. But the fee

simple remains subject to the limitation no matter who owns it.

y Because there is a possibility that the grantee d s determinable fee may come toan end on the happening of the stated event, the grantor has a future interest

called a possibility of Reverter.

o Fee S imple Subject to Condition Subsequent ( FSS CS )y A fee simple that does not automatically terminate but may be cut short

(divested) at the grantors election when a stated condition happens.y FSS CS is a fee simple because it may endure forever. If the contingency occurs,

O merely has the power to reenter and to terminate the estate.y FSS CS does not automatically end on the happening of the condition.y The estate continues in the grantee until the grantor e x ercises her power of

reentry and terminates the estate.y First giving the grantee an unconditional fee simple and then providing that the

grantor or her heirs may divest the fee simple if a specified condition happens

create a FSS CS .o Ex ample: e to A, upon condition that if X e ve nt happ ens

or e to A,

provid ed, how e ve r, th t i

X eve nt h pp e ns

y The estate may be transferred or inherited in the same manner as any other feesimple until the transferor is entitled to and does e x ercise the right of entry.

y If the grantor creates a FSS CS , the grantor retains a right of entry.y The interest is sometimes called a e right to r ee nt e r

or a e pow e r of

t e rminationf or a e right of r e acquisitionf .

Diff e r e nc e s b e tw ee n a FS D and a FSS CS

o FS D automatically ends regardless of whether the grantor does anything, while with

FSS CS , the grantor must act to retake the property or the grantee d s estate continues.o Restraints on marriage are sometimes struck down as violations of public policy. If the

purpose of the restraint is to penalize the marriage, the restraint may be struck down.

On the other hand, if the purpose is to support until marriage, when the new spouses

obligation of support arises, the restraint is valid.

Fee S imple subject to an e x ecutory limitation ( FSS E L)

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A FSS E L is a fee simple that on the happening of a stated event is automatically divested in favor

of a third person (not the grantor).

C. TH E FEE TAIL

1. Historical backgroundIn feudal E ngland, land was the basis of family power, status and wealth. One of the chief interests

of landowners was to keep land in the family. The fee tail was invented for just that purpose- to

keep the land safe for succeeding generations.

a. Fee S imple Conditional

i. First attempt to tie up land in the family.

ii. Ex ample:

1. e To A and th e ir h e irs of his bodyf . Th e judg e s h e ld that A could conv ey

a

ee simple i

a child was born to A.

2. The r ef or e , A d s e stat e was thought o f as a fee simple con d itional upon

having issu e .

3. If A ha d issu e , A coul d conv e y a fee simple and trans fe r th e land outsi d e

th ef amily, cutting o ff th e rights o f Ad s issu e an d th e r eve rsion e r.

b. S tatute de Donis Conditionalibus

i. Abolished fee simple conditional and permitted the creation of a new estate in

land, the fee tail.

2. Nature of E state

A fee tail has two characteristics:i. It lasts as long as the grantee or any of his descendants survives

ii. It is inheritable only by the grantees descendants

3. Creation of Fee Tail

At common law, an instrument using words of inheritance and words confining succession to the

issue of the grantee created a fee tail.

o Ex ample: e to A and th e he irs of his body f o The term e he irs of th e body f r efe rs to th e grant ee d s issu e or lin eal de sc e ndants. It inclu d e s

not only chil d r en but also gran dchild r en an d mor e r emot e d e sc e nd ants as w e ll. Th efee tail go e s

to e ach succ ee d ing g e ne ration in turn.

4. Charact e ristics

Thefee tail originally ha d two main charact e ristics:

1. During tenant d s lifeo The tenant in fee tail could not defeat the rights of the tenant d s lineal d escen dantso The tenant only had a life estate

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o On death, the land automatically goes to his descendants

2. On tenant d s deatho Only the issue of the original grantee could inherit the fee tail.o If the blood descendants of the original grantee run out, the property is returned to the

original grantor, or to any holder of the remainder named in the grant creating the fee

tail.o The fee tail cannot be devised by a will.

5. Types of Fee Tail

A grantor could specifically tailor a fee tailo A fee tail male limited succession to male descendants of the grantee. S imilarly, a fee

tail female could be created but it was rare. Ex ample: To A and the male heirs of his body

o Only the grantee d s issue by a specific spouse could inherit a fee tail special. Ex ample: To A and the heir of his bodies by wife B

6. Future interests of a fee tail

To keep the land in the family on e x piration of a fee tail (i.e., a descendant e died without issu ef )

th e land would r eve rt to th e grantor or h e could dir e ct th e land to go to anoth e r, th e r ef or e making

possibl e th ef utur e int e r e sts o f r eve rsion and r emainde r.o Reversion

O conveys Blackacre e to A and th e he irs of his body f . A has a fee tail; O

had a r e ve rsion in fee simple to b ecom e poss e ssory upon e x piration o f th efee

tail.

o Remainder Ex ample: O conveys Whiteacre e to A and th e he irs of his body, and if A di e s

without issu e , to B and h e r h e irs f .y A has a fee taily B has a vested remainder in fee simple to become possessory on the

e x piration of the fee taily Bd s interest is called a remainder rather than a reversion because a

reversion can be created only in the grantor or testatord s heirs.y The analogous future interest in a grantee is called a remainder.

7. Disentailing

Today, a fee tail can be converted into a fee simple absolute, cutting off all rights of the original

tenant d s issue, by a d ee d .

8. Mo d ern Lawo The fee tail has been abolished in E ngland and in all but four American states (Delaware, Maine,

Massachusetts and Rhode Island.

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21

o Where abolished, most courts construe e to A and th e he irs of his body f to giv e A a fee

simple . Some stat e s giv e a fee simple absolut e . Oth e rs giv e a fee simple subj ect to conditions i f

A has no childr e n.

D. TH E LIFE E STAT E

A li fee stat ee ndur e s f or a p e riod o f one or mor e human liv e s.

1. Typ e s o f Life E stat e s

a. For life of grantee

i. The usual life estate is measured by the grantee d s life.

ii. Ex ample:o O conveys Blackacre e to A for lif e ,f th e grant ee , A, g e ts an e stat e in

th e land f or so long as A liv e s. On A d s d eath, th e land r eve rts to O, th e

grantor.

b. Pur autr e vie

i. This is a life estate measured by the life of someone other than the owner of

the life estate.

c. In a class

i. A life estate can be created in several persons.

ii. The general rule is that the remainder does not become possessory until all life

tenants die.

iii. Ex ample:

o e to the children of A for their lives, remainder to B. f d. Def easible li f e estates

i. A life estate, like a fee simple, can be made defeasible.

ii. It can be created so as to be determinable, subject to condition subsequent,

or subject to an executory limitation.

iii. E xamples:o O conveys e to A for lif e so long as A r emains unmarri edf . A has li fe

e stat e t e rminabl e upon marriag e . This is a fee simple de t e rminabl e as

oppos ed to a li fee stat e de t e rminabl e . Th e r e straint on marriag e how eve r,

might violat e th e rule against r e straints on ali enation.

o O conveys e to A for lif e , but if A do e s not us e th e land for agricultural

purpos e s, O r e tains th e right to r ee nt e r. f A has a li fee stat e subj ect to

a condition subs equent.o O conveys e to A for lif e , but if B marri e s during A d s lif e time , to B. f A

has a li fee stat e subj ect to an e x e cutory limitation.

e . Construction probl e ms

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22

i. Interpretation of ambiguous language as to what estate is created depends on

the facts of each case and the grantors probable intent.

2. Alienability of Life E state

A life tenant can transfer whatever estate she has.

3. Limited Utility of Legal Life E state

Such an estate is limited because of its infle x ibility, which creates obstacles to varioustransactions e.g. bank loans, lease of land, etc. This problem is alleviated by creation of an

equitable life estate.

E . TH E RULE AGAINST R E STRAINTS ON ALI E NATION

There are three types of direct restraints:o Forfeiture restraint: Provides that if the grantee attempts to transfer his interest, if is

forfeited to another person.o Disabling restraint: A disabling restraint withholds from the grantee the power of

transferring her interest

o Promissory restraint: A promissory restraint provides that the grantee promises not to

transfer his interest.

PR E S E NT PO SS E SS ORY E STAT E S

PR E S E NT

E STAT E E XAMPLE S DURATION

CORRE LATI V E FUTURE

INTE RE ST IN

GRANTOR

CORRE LATI V E FUTURE

INTE RE ST IN

THIRD PARTY

FEE S IMPLE

ABSOLUTE "To A & his heirs" Forever None None

FEE S IMPLE

DE TE RMINABLE

"To A & his heirs

so long as

____"

As long as

condition is met,

then automaticallyto grantor.

Possibility of

Reverter

(See Fee S imple

Subject to an

Ex ecutoryInterest, below)

"until _____"

"while ______"

FEE S IMPLE

SUBJ E CT TO

CONDITION

SUBS E QUE NT

"To A & his heirs,

but if____"

Until happening of

named event and

reentry by

grantor

Right of E ntry

(See Fee S imple

Subject to an

Ex ecutory

Interest, below)

"Upon condition

that _____"

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23

"Provided that

____"

"However

_____"

FEE S IMPLE

SUBJ E CT TO

AN E XE CUTORY

INTE RE ST

"To A & his heirs

for so long a_____and if

not___ to B f

As long as

condition is met,then to third

party.

(See Fee S imple

Determinable,

above)

Ex ecutory

intereste To A & his h e irs

but i f ____ to

Bf

Until happ e ning o f

eve nt.

(SeeFeeS imple

Subj ect to

Condition

Subs e que nt,

abov e )

FEE TAIL"To A & th e he irsof his body f

Until A and his lin edie out

Reve rsion

None (but

r emainde r is

possibl e )

LIFE E STAT E

(MAY B E

DE FE

AS

IBLE

)

"To A f or li fe " or

"To A f or th e life

of B"Until th ee nd o f

th e measuring li fe

Reve rsionNone (but s ee

be low)

"To A f or li fe ,

th e n to B"None Re mainde r

"To A f or li fe ,

but i f ______,

to B"

Until th ee nd o f

th e measuring li fe

or th e happ e ning

of th e name d

eve nt.

Reve rsionEx e cutory

int e r e st

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FUTURE INTE RE STS

A. INTRODUCTION

1. A future interest is a present, non-possessory interest capable of becoming possessory in

the future.o Ex ample:

O conveys Blackacre e to A for lif e , and on A d s d eath to B f A has a possessory life estate B has a future interest called a remainder It will become possessory on A d s death. Before Ad s death. The remainder

e x ists as a property interest in Blackacre. As with other property interest, B can transfer the remainder to C, and

Bd s cre d itors can reach the remain der It is an e x isting property interest which will become possessory in the

future

2. There are five kinds of future interests:

1. Reversion

2. Possibility of Reverter

3. Right of entry

4. Remainder; and

5. Ex ecutory interest

3. Future Interest in the Grantor

Future interests are divided into to basic groups:

i. Future interests retained by the grantorii. Future interests created in a grantee

If the grantor retains the future interest, the future interest must be either a reversion,

possibility of Reverter or right of entry.

a. Reversiono A reversion is a future interest left in the grantor after the grantor

conveys a vested estate of a lesser quantum than he has.

o Ex ample:y O, owning Blackacre in fee simple, conveys Blackacre e to A for

lifef .y Because O did not convey a fee simple to anyone but only a life

estate, which is a lesser estate than a fee simple- O has a

reversion.y When A dies, Blackacre will revert to O. If O had conveyed a fee

simple to A, O would not have a reversion.

b. Possibility of Reverter

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25

o A Possibility of Reverter arises when a grantor carves out of her estate

a determinable estate of the same quantum. In almost all cases it follows a

determinable fee.

o Ex ample:

y O conveys Blackacre e to th e Board of E ducation so long asBlackacr e is us e d to school purpos e s. f

y The Board of E ducation has a determinable feey O has a Possibility of Revertery Od s interest is not a reversion because O, owning a fee simple has

conveyed a fee simple determinable to the Board.y All fees simple (Absolute, determinable, subject to condition

subsequent or e x ecutory limitation) are of the same quantum.

c. Right of entryo A right of entry is retained when the grantor creates an estate subject to

condition subsequent and retains the power to cut short the estate.o Ex ample:

y O conveys Blackacre e to th e Board of E ducation, but if th e Board

c eas e s to us e Blackacr e for school purpos e s, O r e tains a e right to

r ee nt e r. f y The Board has a fee simple subject to condition subsequent; O has a

right of entry.

d. Correlative estateo Possessory estates have correlative future interests in the grantor

y Life estate- Reversiony Fee simple determinable- possibility of Revertery Fee simple on condition subsequent- right of entry

4. Future Interests in Grantees

If a future interest is created in a grantee, it must be either a remainder or an e x ecutory

interest.

a. Remaindero A remainder is a future interest in a grantee that:

i. Has the capacity of becoming possessory at the e x piration of the

prior estates

ii. Cannot divest the prior estateso Ex ample:

o O conveys Blackacre e to A for lif e , and on A d s de ath, to

B an d he r h e irs. f

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26

o A has a possessory life estate; B has a remainder in fee

simple.o Bd s interest is a remainder because it can become

possessory on Ad s death, and it will not divest Ad s life

estate prior to Ad s death.

b. Ex ecutory interesto An e x ecutory interest is a future interest in a grantee that, in order to

become possessory, must divest or cut short the prior estate, or spring

out of the grantor at a future date.

o The basic difference between a remainder and an e x ecutory interest is

that a remainder never divests the prior estate, whereas an e x ecutory

interest almost always does.

o Ex ample- Shi ft ing e x ecutory interest:o O conveys Blackacre e to A and his h e irs, but if B graduat e s

from law school, to B and h e r h e irs. f o A has a fee simple subject to e x ecutory limitationo B has a shifting e x ecutory interest. B d s interest can

become possessory only by divesting A of the fee simple.o A shifting interest is a useful device to shift title upon the

happening of come uncertain event.o Ex ample- Spr inging e x ecutory interest:

o O conveys Blackacre e to my daught e r A wh e n sh e marri e s

B.f O r e tains th e f ee simple and cr eat e s an e x ecutory

int e r e st in A to spring out of O in th e futur e when A marri e s

B.o A springing interest was, in early days, a useful device to

give the groom assurances that the bride would come to the

altar endowed with property.

B. R E V E RS ION

A reversion is a future interest left in the grantor after she conveys a lesser estate than she

has.

The interest may be e x pressly retained or may arise by operation of law.o Ex ample 1:

O conveys Blackacre e to A for lif e , th e n to r eve rt to O. f

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Where it is not e x pressly retained, a reversion will arise by operation of

law where no other disposition is made of the property after e x piration of

the lesser estates.o Ex ample 2:

O conveys Whiteacre e to A for lif e .f

O has a reversion in fee simple by operation of lawReversions are vested interests

All reversion are vested interests even though not all reversions will necessarily become

Possessory.

Some reversions will certainly become possessory:o Ex ample:

O conveys e to A for lif e , r e ve rsion to O. f

Oth e r r eve rsions may or may not b e com e poss essory:o Ex ample:

O conveys Blackacre e to A for lif e , r emainde r to B if B surviv e s A. f O has a reversion because, if B dies before A, Blackacre will return to

O at A d s death. If A dies before B, Blackacre will go to B at A d s d eath. Note that O does not have a contingent reversion. By common law dogma, all reversions are vested. So O has a vested reversion, which can be divested by B d s interest

becoming possessory to A d s death.

1. S ignificanceo The significance of a reversion being vested is that it is alienable, accelerates

into possession upon the termination of the preceding estate, and is not

subject to the Rule against perpetuities.

2. Alienabilityo A reversion has always been regarded as fully transferable both inter vivos

and by way of testate or interstate succession.

o The transferee, of course, gets only what the transferor had- an interest

that cannot become possessory until the preceding estate terminates.

3. Distinguish- Possibility of Reverter

o A possibility of Reverter arises where the grantor carves out of his estate a

determinable estate of the same quantum.o Most often it arises where the grantor conveys a fee simple determinable.o A reversion arises where the grantor conveys a lesser estate than he has and

does not in the same conveyance create a vested remainder in fee simple.o There is no such interest as a e possibility of r e ve rsion f .

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C. PO SS IBILITY OF RE V E RT E R

A possibility of Reverter is a future interest remaining in the grantor when a fee simple

Determinable is created.

o Ex ample: O conveys Blackacre e to A and his h e irs so long as liquor is not

sold on th e pr e mise s. f A has a d e t e rminabl e f ee ; O has a possibility

of r e ve rt e r.

A possibility of r eve rt e r cannot b e cr e at e d in a grant ee . Th e analogous futur e int e r e st

cr e at e d in a grant ee is call e d an e x e cutory int e r e st.

1. Ali enability

At common law:o A possibility of reverter was not viewed as an e x isting interest, but rather as

a mere possibility of becoming an interest.

o On the death of the owner of a possibility of reverter the possibility of

reverter was treated as a thing; it descended to the owners heirs.

At modern law:o A possibility of reverter is freely alienable, both during life and by will.

Rationale: The possibility of reverter is now viewed as a property interest, and

alienability is an inherent characteristic of any property interest.

D. RIGHT O F E NTRYWhen a grantor creates an estate subject to condition subsequent and retains the power to cut

short terminate the estate, the grantor has a right of entry. Like a possibility of reverter, a right

of entry cannot be created in a grantee. The right of entry is sometimes called e a pow e r of

t e rmination f .o Ex ample:

y O conveys Blackacre e to A and his h e irs, but if into x icating liquor is eve r

sold on th e pr e mise s, O has a right to r ee nt e r and r e tak e Blackacr e .f y A has a fee simple subject to condition subsequent; O has a right of entry

for breach of the condition subsequent.

1. Alienability

At common law:o The right of entry was inalienable inter vivos because it was treated as a chose

in action, and choses were inalienable.o It was not thought of as a property interest, but rather as a special right in the

grantor to forfeit the grantee d s estate if he wished.

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29

o A right of entry could be released, however, to the owner of the fee simple, and

it was inheritable by the heirs of the grantor.

At modern law:o In some states, the right of entry is now alienable; in others, the common law

is followed.

o In a few states, the mere attempt to transfer a right of entry destroys it.o Ex ample:

O conveys Blackacre e to Railroad company, but if it fails to maintain

an ov e rpass, O has th e right to r ee nt e r and r e tak e Blackacr e .f Subsequently, O conveys the right of entry to his son. In the harsher states, this attempt to convey the right destroys it, and

the railroad has a fee simple absolute.

2. Termination

At common law:o A right of entry or a possibility of reverter could endure indefinitely, and because it

was inheritable, the grantor d s heirs coul d e x ercise the right of entry or enforce the

possibility of reverter hun d re d s of years after the grantor d s d eath.o These interests are not subject to the Rule against perpetuities, which generally

prevented the creation of future interests to become possessory far in the future.

At modern law:o This remains the law in the large majority of states.o In some states, however, statutes have been enacted e x pressly limiting the period

during which a possibility of reverter or right of entry can e x ist.o The typical statute limits them to 30 years, after which the preceding fee simple

becomes absoluteo Some states have made the termination statute retroactive, applying it to e x isting

possibilities of reverter and rights of entry.o But courts are divided on whether retroactive application is unconstitutional as a

taking of property without compensation.

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FUTURE INTE RE ST IN GRANTOR

FUTURE

INTE RE ST

CORRE LATI V E

PR E S E NT

INTE RE ST E XAMPLE

RIGHTS OF

GRANTOR ALI E NABILITY

RE V E RS ION Life E state"To A forlife"

E state

automatically

reverts to

grantor on

life tenantsdeath

Transferable,

descendible anddevisable.

PO SS IBILITY

OF RE V E RT E R

Fee S imple

Determinable

"To A so long

as alcohol is

not used on

the premises"

E state

automatically

reverts to

grantor upon

the

occurrence

of the stated

event

Transferable,

descendible and

devisable.

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31

RIGHT O F

E NTRY

Fee S imple

Subject to

Condition

Subsequent

"To A on

condition that

if alcohol is

used on the

premises, O

shall have theright to

reenter an

retake the

premises."

E state does

not revert

automatically;grantor must

e x ercise his

right of

entry.

Descendible and

devisable, butsome courts

hold hot

transferable

inter vivos

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E . R E MAINDE R

1. Definitiono A remainder is a future interest created in a grantee that is capable of becoming a

present possessory estate on the e x piration of a prior possessory estate created in the

same conveyance in which the remainder is created.

o It is called a remainder because on the e x piration of the preceding estate, the lande r emains away f inst e ad o f r e ve rting to th e grantor.

o A remainder never divests pr cuts short the preceding estate; instead it always waits

patiently for the preceding estate to e x pire.o Ex ample:

y O conveys Blackacre e to A for lif e , th en to B if B is th e n living. f y B has a remainder because B d s interest is capable of becoming possessory upon

the termination of the life estate.

2. E ssential Characteristics

The essential characteristics of every remain d er are:

1. Must have preceding estateo A remainder can be created only by e x press grant in the same instrument in which the

preceding possessory estate is created.o Unlike a reversion, it cannot arise by operation of law.o Ex ample:

y O conveys e to A is A marri e s B. f O has cr e at ed no pr ec e ding e stat e in anyon e ;

th e r e for e , A do e s not hav e a r e mainde r.

y A has a Springing Executo ry Inte r est2. Must follow a fee ta i l, l i fe estate o r te r m of y ea r s

o The estate preceding a remainder can be a fee tail, a life estate, or a term of years.o A remainder cannot follow a fee simple.o Ex ample- Fee ta i l:

y O conveys e to A and th e he irs of his body, and if A di e s without issu e , to B and

his h e irs. f y If the fee tail has not been abolished, A has a fee tail, and B has a remainder in

fee simple.o Ex ample- te r m of y ea r s:

y O conveys e to A for 10 y e ars, th e n to B and his h e irs. f y A has a term of years.y B has a vested remainder in fee simple.y At common law, B d s interest was not called a remainder. It was said that B had

the fee simple subject to Ad s term of years.y Today, lawyers call B d s interest a remain d er.

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3. Must be capable of becoming possessory on natural termination of preceding estate.o A remainder cannot divest a preceding estate prior to its normal e x piration.o A divesting interest in a transferee in an e x ecutory interest, not a remainder.o Ex ample:

y O conveys e to A for lif e , th e n to B. f y B has a remainder, because B takes when the preceding estate (A d s life estate)

e x pires.o Compare:

y O conveys e to A for lif e , but if B r e turns from Rom e during th e life of A, to B

in f ee simple .f y B does not have a remainder; rather, B d s taking d ivests A d s estate an d thus B

has a shifting executor y interest.

There can be no remain d er after a fee simple. An y interest d ivesting or following a fee simple must

be

an executor y interest, not a remain d er. This applies to all t y pes of fee simple inclu d ing fee simple

determinable.

3. E states in Remain der

An estate in remain d er ma y be a fee simple, a life estate, a term of y ears, or, in those

juris d ictions

where such an estate is permitte d , a fee tail.

o Ex ample: O conveys e to A for lif e , th e n to B for 10y ears, th en to C for lif e , th e n to

D.f B has a remainder for a term of years, C has a remainder for life, and D has

a remainder in fee simple

4. Classification of Remainderso Remainders are classified either as e ve st e df or e conting ent f .

o A vested remainder is a remainder that is both created in an ascertained person and is not

subject to any condition precedent.o A contingent remainder is a remainder that is either created in an unascertained person or

subject to a condition precedent.

Always classify the interests in order:o Ex ample:

O conveys e to A for lif e , th e n to B and his h e irs if B surviv e s each int e r e st in

s e quenc e .f y A gets a life estate

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y B has a remainder (because it is capable of becoming possessory on

termination of the life estate and will not cut the life estate short) It is a

remainder in fee simple.y It is a contingent remainder because it is subject to the e x press condition

precedent, if B survives A.

y e If B does not survive A, to B d s chil d ren an d their heirs f - the interestis a remain d er because it is capable o f becoming possessory on termination

o f the li f e estate an d cannot cut the li f e estate short. It is a remain der to

a class, B d s chil d ren, in f ee simple. It is a contingent remain d er because it

is subject to the e x press con d ition prece d ent, e an d if B does not survive

A.f

a. Sub classi f ication o f veste d remain d ers

A remain der create d in an ascertaine d person an d not subject to a con d ition prece d ent.

Ex ample: e To A f or li f e, then to B in f ee simple f creates a veste d remain d er in B.

1. In de f easibly veste d remain der

The hol d er o f this interest is certain to acquire possession in the f uture an d will be entitle d to

permanently retain the estate.o Ex ample:

O conveys e to A for lif e , th e n to B and h e r h e irs f B takes possession on A d s death If B dies before A, B d s heirs or devisees are entitle d to possession Therefore, B d s remainder is indefeasibly vested.

If B dies intestate and without heirs during A d s life, B d s remain d er escheatsto the state. At A d s d eath, the state takes the property.

2. V este d remain der subject to open

The remain d er is veste d in a class of persons, at least one of whom is qualifie d to take possession,

but

the class members d shares are not yet fi x ed because more persons can subsequently become

members

of the class. (A class is close d if others can no longer enter the class).o Ex ample:

O conveys e to A for lif e th en to A d s childr en.f If A has no children, the remainder is contingent because no person qualifies as

a child. If A has a child, B, the remainder is vested in B subject to e op e n up f and l e t

in oth e r childr en. Bd s remainder is sometimes called e ve st ed subj ect to partial div e stm e nt f .

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Once the remainder has vested in B, the interests of the unborn children are

called e x ecutory interest because they may partially divest B.o Class Gifts: A gift to a group of persons described as a class, e.g., e childr en of

Af , e broth e rs and sist e rs o f Af or e he irs o f Af .o A class is either open or closed.

It is open if it is possible for other persons to enter the class. It is closed if it is not possible for others to enter the class.

3. V ested subject to divestment

This is a remainder that can be completely divested by a condition subsequent or by an inherent

limitation of the remainder estate. A remainder can be both vested subject to open and vested

subject

to complete divestment (e.g., e to A for lif e , th en to th e childr e n of A, but if no child surviv e s A,

to B. f )

4. Ali e nability

A v e st ed r e mainde r is ali enabl e int e r vivos and d evisabl e by will. It d e sc e nds to h e irs i f not

oth e rwis e

dispos ed o f . How e ve r, it can b e limite d so as to b e dive st ed at d eath.

b. Conting ent r e mainde rs

A r e mainde r is conting ent i f given to an unasc e rtain ed p e rson or subj ect to a condition pr ec e dent.

1) R emainde rs in unasc e rtain e d p e rsons

A r e mainde r in an e unasc e rtain edf pe rson m e ans th e pe rson is not y e t born or cannot b e

de t e rmined until th e happ ening o f an eve nt. Such a r e mainde r is conting ent.o Ex ample- u nb o rn c hi ldr en:

O conveys e to A for lif e , th e n to A d s childr e n.f A has no children. The remainder is contingent because the takers are not ascertained at the

time of the conveyance. If a child is born, the remainder vests in that child subject to open and let in

other children born later.o Ex ample- He ir s:

O conveys e to A for lif e , th e n to B d s h e irs. f B is alive. e Heirs f are persons who succeed to B d s property if B d ies intestate. Because no one is an heir of the living (but only an heir apparent), the takers

are not ascertained; therefore, the remainder is contingent. Bd s heirs will be ascertained only at his death. If B dies during A d s life, the remain d er will vest in B d s heirs at B d s d eath.

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o Reversion In each of the two e x amples, there is a reversion to O. Whenever O creates a contingent remainder in fee simple, there is a reversion

in O. Whenever O creates a vested remainder in fee simple, there is never a

reversion in fee simple in O.2) Remainders subject to condition precedent

A remainder subject to a condition precedent is a contingent remainder. A condition precedent is an

e x press condition set forth in the instrument, which must occur before the remainder becomes

possessory. What is a condition precedent?

o A condition precedent is a condition e x pressly stated in the instrument.

o Ex ample:y O conveys e to A for lif e , th en to B if B marri e s C. f y B has a subject remainder subject to an e x press condition precedent.y The condition precedent is marrying C.y It B marries C during A d s life, the remain der vests in d efeasibly in B.

What isn d t a condition precedent?o The termination of a condition preceding is not a condition precedent.o The language that merely refers to the termination of the preceding estate is

surplusage and does not create a condition precedent.o Ex ample:

y O conveys e to A for lif e , and on A d s de ath, to B f y The words e on A d s death f me r e ly r e f e rs to th e natural t e rmination of

th e lifee stat e an dd o not stat e a con d ition pr ec e de nto A remainder subject to condition precedent other than survivorship is not also

subject to an implied condition precedent of survivorship.o Ex ample:

y O conveys e to A for lif e , th en to A d s issu e , and if A di e s without issu e ,

to B f y Bd s remainder is contingent on Ad s dying without issue.y It is not co nti nge nt o n Bd s survivi ng A.y Thus, if B dies before A, B d s remain d er passes to B d s heirs or d evisees,

an d if A subsequently d ies without issue, B d s heirs or d evisees take the

property.

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RE MAINDE RS : CONTINGE NT V S . V E STE D

CONTINGE NT R E MAINDE R V E STE D R E MAINDE RS

Created in an unascertainable

person (not yet born or cannot

be determined)

Created in an ascertained

person

OR ANDSubject to a condition precedent

e x pressed in the instrument

Not subject to a condition

precedent.

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3. Distinguish- conditions subsequent

Whether a condition is precedent or subsequent depends on the words of the instrument. The words

must be read in sequence and the interests classified in sequence.o Ex ample:

O conveys e to A for lif e , th e n to B, but if B do e s not surviv e A, to C. f

B has a vested remainder subject to divestment by C d s e x ecutory interest. The words e th e n to B f give B a v e st e d r emainde r; th e claus e following is a

dive sting claus e , giving th e prop e rty to C if B di e s b e for e A.o Ex ample:

O conveys e to A for lif e , th e n to B if B surviv e s A, but if B do e s not

surviv e A, to C. f B and C have alternative contingent remainders A condition precedent has been e x pressly attached to B d s remain d er O intended e x actly the same thing as in the preceding e x ample but her intention

was phrased differently. Here, O stated the condition of survivorship twice, once in connection with

each remainder.

a) Reversion in O with alternative contingent remainders

A common law, life estate could terminate prior to the life tenants death by forfeiture

or merger. If this happened, both B and C would be ready to take on the termination of

the life estate, and the property would revert to O.

F. E XE CUTORY INT E RE STS o Springing e x ecutory interest

A springing e x ecutory interest is a future interest in a grantee that springs

out of the grantor at a date subsequent to the granting of the interest,

divesting the grantor. Ex ample:

y O conveys e to A and h e r h e irs if A quits smoking. f y A has a springing e x ecutory interesty It will divest the fee simple of O, the transferor if it becomes

possessory Ex ample:

y O conveys e to A for 100 y e ars if A so long liv e , th en to A d s h e irs. f y The attempted contingent future freehold in A d s heirs was voi d at law

prior to the statute of uses because it was impossible to transfer

seisin either to A or to A d s heirs (unascertaine d ).

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y After the statute, the limitation to A d s heirs was given effect as a

springing interest.

o Shifting e x ecutory interest A shifting e x ecutory interest is a future interest in a grantee that divests a

preceding estate in another grantee prior to its natural termination. The shifting interest, like the springing interest, divests a prior interest. The difference between them is that a shifting interest divests a grantee,

whereas a springing interest divests the grantor. Ex ample:

y O conveys e to A and his h e irs, but if B r e turns from Rom e , to B and

his h e irs. f y A has a fee simple subject to an e x ecutory interest.y B has shifting e x ecutory interest.y Bd s interest cannot be a remainder, because it is a divesting interest,

and remainders never divest.

A springing e x ecutory interest springing out of the grantor (e.g., there is no preceding estate), and

a

shifting e x ecutory interest shifts the estate from one grantee to another.

An e x ecutory interest is always either springing or shifting interest- e x cept in the case of a

future interestin a grantee following a fee simple determinable. This e x ecutory interest is neither springing nor

shifting

because the fee simple determinable ends by its own special limitation. The e x ecutory interest does

not

divest it but rather succeeds it.

FUTURE INTE RE S TS IN GRANTEE S

FUTURE INTE RE S T E XAMPLE

RE V E RS ION IN

GRANTOR FOLLOWING

FUTURE INTE RE S T?

TRANSF E RABLE ?

INDE FE AS IBLY

V E S TE D

RE MAINDE R "To A for life, then to B"

No; remainder certai to

become possessory

Yes; B's remainder

transferable during life

and at death

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V E S TE D

RE MAINDE R

S UBJ E CT TO

OP E N

"To A for life, then to A's

children." A has a child, B. B

has a vested remainder

subject to open.

No; A's children are

certain of possession

Yes; B's remainder

transferable during life at

death

V E S TE D

RE MAINDE R

S UBJ E CT TO

DIV E S TME NT

"To A for life, then to B,

but if B dies before A, toC." B has a vested

remainder subject to

divestment by C.

No; no possibility of

property reverting to

grantor

B's remainder

transferable during lifebut not transferable at

B's death if B pre-

deceases A.

CONTINGE NT

RE MAINDE R

" To A for life, then to A's

children." A has no children.Yes

No; no 33 child is alive

"To A for life, then to A's

children who survive A." A

has a child, B.

Yes

B's contingent remainder

is transferable during life,

but is not transferable to

B's death if B

predeceases A.

"To A for life, then to B if

B reaches 21." B is 17.Yes

B's remainder is

transferable during life,

but remainder fails if B

dies under 21

"To A for life, then to B's

heirs." B is alive.Yes

No; no one is heir of B

until B dies

"To A for life, then to B if

B survives A, and if B does

not survive A, to C"

Yes

B's remainder is

transferable during life,

but fails if b predeceases

A; C's remainder is


and at C's death if A is

then alive.

E XE CUTORY

INTE RE S T

"To A, but if B returns from

Rome, to B"

No Yes


but if b does not survive A,

to C."

No

C's e x ecutory interest is


and C's death of A is

then alive.

"To A upon her marriage."

No reversion, but

grantor has possessory

Yes; B's remainder

transferable during life at

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fee until A's marriage death

NOTE : In a few states, contingent remainders and e x ecutory interest are not transferable during life

e x cept in certain circumstances.

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G. RUL E S RE STRICTING CONTINGE NT R E MAINDE RS (MOSTLY ABOLI SHE D)

There are three rules restricting remainders:

i. The destructibility rule

ii. The Rule in Shelley d s case

iii. The doctrine of Worthier Title1) Destructibility of Contingent Remain d ers

This common law rule, still in effect in a few states, states that a contingent remain der in lan d is

destroye d if it does not vest before or at the time the prece d ing freehol d estate en ds. Thus, in a

conveyance e to A for lif e , r e mainde r to A d s chil d r en which r each 21, f th e r emainde r is d e stroy e d

if no chil d

of A has r e ach e d 21 at A d s de ath. Th e pr e c e d ing e stat e can b e a fee tail or a li fee stat e .

2) T e rmination o f lifee stat e

The lifee stat e can t e rminat ee ith e r on th e de ath o f th e life t enant or b ef or e th e life t e nants

death. It is this lat e r proposition that mak e s th e rule mor e d iff icult than it app e ars.

a) Natural t e rmination o f lifee stat e

A conting e nt r emainde r that doe s not v e st on th e natural t e rmination o f th e lifee stat e (i.e .,

at th e life t e nants de ath) is de stroy e d .o Ex ample:

O conveys e to A for lif e , r emainde r to th e he irs of B. f B is alive

This conveyance creates a life estate in A, contingent remainder in theheirs of B, and a reversion in O.

Subsequently, A dies, survived by B. At A d s death, B has no heirs, because no one can be an heir of the

living. The contingent remainder in the heirs of B is destroyed, the O owns the

land.

b) Artificial termination of life estate

A contingent remainder that does not vest on the artificial termination of the life estate of

the life

estate is destroyed. e Artificial t e rmination f r efe rs to th ef ollowing m e thods o f t e rmination:

iv. For fe itur e

o At common law, a person forfeited his property by a tortuous conveyance

(i.e., a conveyance by which a life tenant or a tenant in tail purported to

convey a fee simple).o This is wholly obsolete in the U. S .

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v. Mergero If the life estate and a vested remainder or reversion in fee simple come

into the hands of the same person, any intermediate contingent remainders

are destroyed.o The lesser estate is merged into the larger (fee simple) and ceases to

e x ist as a separate estate.o A life tenant and reversioner can therefore conspire to destroy contingent

remainders.o Ex ample:

y O conveys e to A for lif e , r e mainde r to B if B surviv e s A. f y While B is alive, A conveys her life estate to O.y The life estate merges into the reversion, and Bo d s contingent

remain der is d estroye d .y O has a fee simple absolute.

Ex ception- fee taily Life estates merge into a fee simple, but fees tail do not.y Ex ample:

o A conveyance e to A and th e he irs of his body, and if A di e s

without issu e , to B and h e r h e irs if B is th e n living. f o A conveys his fee tail to O, the reversioner.o Bd s remainder is not destroyed.o However, A can destroy B d s remain der by d isentailing.

Ex ception- simultaneous creationy If a life estate and the ne x t vested estate are created

simultaneously, they do not merge at that time to destroy

intervening contingent remainders.y Ex ample:

o T devises Blackacre e to A for lif e , r e mainde r to A d s

child r en who surviv e A.f

o A is also T d a heir and inherit the reversion.o The life estate and reversion do not merge at that time;

otherwise the intent of T in creating the remainder would be

frustrated.o But if A subsequently conveys the life estate and reversion

to B, the estates then merge, destroying the contingent

remainder.

C) Interests not affected by destructibility rule

The destructibility rule does not apply to the following interests in property.

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1) V ested remainders and e x ecutory interests

V ested remainders and e x ecutory interests cannot be destroyed by a gap in

seisin. The destructibility rule applies only to contingent

remainders.y Ex ample- Vested r ema ind e r :

o O conveys e to A for lif e , th en to B for lif e , th e n to A d schildr e n who surviv e A.f

o A conveys his life estate to Oo The life estate cannot merge into the reversion because the

vested remainder in B blocks it.o O takes a life estate for A d s life.

y Ex ample- Ex ecuto ry inte r est:o O conveys e to A for 100 y ears if A so long liv e s, th en to A d s

childr e n who surviv e A.f o A has a term of years determinable.

o The children have an e x ecutory interest.o It is not a remainder because there is no preceding freehold.o There can be no contingent remainder after a term of years.o A conveys his term to O.o Therefore, the children d s e x ecutory interest is not affecte d /o O now has a fee simple subject to A d s childrend s e x ecutory

interest but no longer subject to Ad s term of years.

y Ex ample- Ex ecuto ry inte r est:o O conveys e to A, but if A di e s l eaving childr en, to A d s chil d r e n

who surviv e A, an d if A d ie s without chil d r en, titl e shall r e turn

to O. f o A has a fee simple, subject to divestment by an e x ecutory

interest in A d s chil d ren who survive A, the subject also to a

possibility of reverter in O.

o Later O conveys his interest to A, the fee simple owner.o This cannot affect the e x ecutory interest in A d s children.o They take the land on A d s death.

D) Avoi dance of rule

The d estructibility rule can easily avoi de d by a competent lawyer. The two most common ways of

avoi d ing

the rule are as follows.

1. Term of years

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45

o If a drafter creates a term of years rather than a life estate, the

destructibility rule can be avoided.

2. Trusteeso The destructibility rule can be avoided by creating trustees to

preserve contingent remainders.

3. Rule in Shelley d s caseThis rule has been abolishe d in most states e x cept Arkansas, Delaware, In d iana an d possibly a few

other

states.

If one instrument creates a freehol d in lan d in A an d purports to create a remain der in A d s heirs

(of in the

heirs of A d s bo dy) an d the estates are both equitable, then the remain d er becomes a remain der in

fee

simple (of a fee tail in A).

It makes lan d alienable one generation earlier.

o Ex ample- Rema ind e r to A

s he ir s: O conveys e to A for lif e , th e n to A d s h e irs f . Th e Rule in

She lleyd s cas e conv e rts th e r e mainde r limit e d to Ad s h e irs into a

r e mainde r in fee simple in A. Then the doctrine of merger steps in, and A d s life estate an d

veste d remain der merge, giving A a fee simple in possession.o Ex ample- Rema ind e r to he ir s of A

s b o

y :

O conveys e to A for lif e , th en to th e he irs of A d s body. f The rule in Shelley d s case converts the remainder limited to e th e

he irs of Ad s body f into a r emainde r in fee tail in A. The fee tail is then changed into whatever estate is substituted for

a fee tail under state law, probably a fee simple. Then the remainder in A merges with A d s life estate.

o Doctrine of merger

o The doctrine of merger is an entirely separate doctrine from the Rule in

Shelley d s case. The doctrine of merger is that a life estate in A and a remainder in

A will merge unless:y There is an intervening estate ory The remainder in A is subject to a condition precedent to

which his life estate is not subject.y The doctrine of merger may or may not apply after the rule

in Shelley d s case has operate d on the instrument.

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a) Life estate determinable

The life estate can be determinable or subject to condition subsequent Ex ample:

o T devises farm e to my wif e W during h e r widowhood, and upon W d s d eath

or r emarriag e , r e maind e r to W d s h e irs. f o The rule in Shelley d s case applies, giving W the remainder.o The remainder merges with W d s life estate, giving W a fee simple.

b) Life estate in remain d er

The freehol d can be a life estate in possession or a life estate in remain der.

The rule in Shelley d s case applies to a conveyance e to A for lif e , th en to B for lif e , r e mainde r

to B d s h e irs. f

B has a r e mainde r in fee simple .

1) Subj ect to con d ition pr ec e d ent

If th e lifee stat e in A is subj ect to a con d ition pr e c ed ent that is not also applicabl e to

th e r emaind e r to A d s h e irs, th e Rule in She lleyd s cas e doe s not

apply. Ex ample:

o O conveys, e To A for lif e , th e n, if B marri e s C, to B for lif e , r emainde r

to th e he irs of B (wh e th e r or not B marri e s C). f o The life estate is subject to a condition precedent that does not apply to

the remainder.

o The rule in Shelley d s case does not apply.o But note: If B marries C during A d s life, the Rule in Shelley d s case then

applies. Remainder subject to same condition precedent

y If the remainder is subject to the same condition precedent

as the life estate, then the Rule in Shelley d s Case applies.y Therefore, if the language in e x ample A has been omitted and

the condition precedent of B marrying C were construed to

be a condition precedent on the remainder as well as on B d s

life estate, the rule in Shelley d s Case woul d have applie d . B

woul d have taken a remain der in fee simple subject to the

con d ition prece dent of marrying C.

2) e And purports to cr eat e a r emaind e r f

The rule appli e s to a r emaind e r to th e he irs o f A, th e life t enant, eve n though th e r e is an

int e rv ening e stat e be tw ee n th e lifee stat e an d re mainde r. Contingent remainder

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o The remainder may be a remainder contingent on the happening of some

condition precedent.o Therefore, the rule in Shelley d s case applies to a conveyance e to A

for lif e , th en A d s h e irs if A surviv e s B. f o A has a life estate and a contingent remainder, contingent on A d s

surviving B. The life estate an d contingent remain d er d o not merge Ex ecutory interest

o The rule in Shelley d s Case applies only where a remainder, not an

e x ecutory interest, has been created.

3) e In Ad s h e irs (or th e he irs of Ad s body) f

The r e mainde r must b e given to Ad s h e irs or h e irs o f th e body ind ef init e line of

succ e ssion rath e r than a sp eci f ic class o f tak e rs.

4. Doctrin e of Worthi e r Titl e

The Doctrin e of Worthi e r Titl e has an int e r vivos branch and a r e stam entary branch.

At common law, th e doctrin e was a rul e of law applicabl e to land only.

In mod e rn law, th e doctrin e appli e s to both p e rsonal prop e rty as w e ll as land. Inter vivos branch of doctrine

o When an inter vivos conveyance purports to create a future interest in the

heirs of the grantor, the future interest is void and the grantor has a

reversion.o The rule is sometimes known as a rule against a remainder in grantor d s

heirs

o Ex ample: O conveys e to A for lif e , th e n to O d s h e irs. f The remainder to O d s heirs is voi d , an d O has a reversion.

Testamentary branch of Doctrineo If a person devises land to his heirs, the devise is void and the heirs take

by descent.

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TE CHNICAL RULE S OF THE COMMON LAWDE STRUCTION O F

CONTINGE NT

RE MAINDE RS

RULE IN S HE LLE Y'S

CAS E

DOCTRINE OF

WORTHIE R TITL E

RULE

Contingent

remainders are

destroyed if not

vested at time of

termination of

preceding estate.

If an instrument

creates a freehold

estate in A and a

remainder in A's heirs,

the remainder in fee

simple in A.

Inter vivos conveyance

attempting to create a

future interst in the

grantors heirs is

ineffective, so grantor

has a reversion.

E XAMPLE

"To A for life,

remainder to A's

children who reach

21."

"To A for life, then

to A's heirs." To A for life, then to

my heirs at law."

RE SULT

If A has no children

who are at least

21 at the time of

her death,

property reverts

to grantor.

A has a fee simple

A has a life estate;

the grantor has a

reversion

MODE RN

S TATU S

Abolished in most

jurisdictions

Abolished in most

jurisdictions.

Generally treated as

rule of construction

(i.e., raises a

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49

rebuttable

presumption); does not

apply in this country to

testamentary grants.

MODE RN

RE SULT

Property reverts

to grantor; A'schildren have

indestructible

contingent

remainder or an

e x ecutory interest

A has a life estate

and A's heirs have a

contingent remainder

Grantor's heirs have a

future interest given

to them under the

instrument.

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H. TH E RULE AGAINST P E RP E TUITIE S The rule against perpetuities was developed to destroy all contingent future interests,

including e x ecutory interests (which are indestructible). No interest is good unless it must vest, if at all, not later than 21 years after some life in

being at the creation of the interest.

R easo n fo r p e ri od :o A parent could realistically and perharps wisely assess the capabilities of living

members of the members of the family. Interests subject to the rule

o The rule applies to contingent remainders and e x ecutory interests.o It does not apply to vested interests (vested remainder, reversion, possibility of

reverter, and right of entry)

o Ex ample: O conveys e to A for lif e , th e n to A d s childr e n for th e ir liv e s, th e n to B and

his h e irs. f A has no children. The conveyance is entirely valid. The remainder for life given to A d s chil d ren will best if at all, at A d s death. The remainder in fee simple in B is a vested remainder when created.

What might happen test:o If there is any possibility that a contingent interest will vest too remotely, the

interest is void. Courts do not wait to see what actually happens, but look at the

interest at the time of creation.o Ex ample:

O conveys e to th e first child of A who b ecom es a lawy e r f A has a daughter D in law school. The gift is void. It is possible for the first child of A who becomes a lawyer to be a child not

alive at the time of the conveyance. Reason it doesn d t work:

y D may die before becoming a lawyer.y Then A, bereft at D d s death and desiring a lawyer in the family,

procreates another child- Hope- born two years later.y The following year, A dies.y Some 25years later, Hope becomes a lawyer and claims the gift- but

this is more than 21 years after the deaths of A and D (the only

relevant lives). Therefore, the gift is void.

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Lives in beingo Any person who can affect the vesting of the interest and who is alive at the

creation of the interest can be a validating life, provided the claimant can prove the

interest will vest or fail within 21years of the persons death.

o When lives in being is determined Generally, the validating life must be a person alive at the creation of the

contingent interest. A child in womb

y When the interest is created is treated as a life in being if the child is

later born alive. Any gestation periods are included within the

permissible perpetuities period. V alidating life

y Ex ample 1:o e To A when A marries f or e to A d s children, f

o The validating life is A because the contingency (marries or birth

of child) must happen, if at all, within A d s life.y Ex ample 2:

o e To A d s children who reach 21 f o A is the validating life. E very child of A must necessarily reach

21 within 21 years of A d s d eath plus a perio d of gestation.

Therefore, the gift will vest, if at all, within 21 years after

Ad s death. No validating life (void gift)

y Ex ample:o T conveys e To A for lif e , th e n to A d s childr en who r each

25. f A has no childr en at Td s d eath.o The remainder is void because you cannot prove it will

necessarily vest or fail within 21 years of A d s d eath. V alidating lives

y Ex ample:o Professor J ones gives $1,000 to be divided among all members

of her property class who has admitted to the bar.o The gift is good.o The members of the property class are the validating life..o The gift must vest or fail within the lives of the members of the

property class.

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o It will be known by the last survivor or maybe sooner- which

members of the class are admitted to the bar.o Meaning of e ve st f :

The rule does not apply to vested interests. Class gifts

y Do not vest in any member of the class until the interests of allmembers have vested. Therefore, if the gift to one member of the

class might vest too remotely, the whole class gift is void (all-or-

nothing rule). Ex ecutory interest

y An e x ecutory interest following a fee simple determinable or divesting a

fee simple cannot vest in interest before it vests in possession.y An e x ecutory interest following a determinable fee or divesting a fee

simple only when the condition happens and it becomes a possessory

estate.

o Remote possibilities An interest is void under the Rule Against Perpetuities if by any possibility-

however remote- the interest might vest beyond the perpetuities period. If a situation can be imagined in which the interest might not vest or fail within

the relevant lives in being plus 21 years, the interest is void.y The fertile octogenarian

o The law conclusively presumes that a person can have children as

long as the person is alive.o E vidence that a person is 80 years of age or have had a

hysterectomy or vasectomy is irrelevant.y The unborn widow

o The law assumes that a persons surviving spouse might turn out

to be a person not now alive.o Ex ample:

A mans present wide may die or be divorced, and the man

may in the future marry a woman not now alive. This

leads to the assumption leads to the unborn widow case. Application to Defeasible Fees

o The rule against perpetuities does not apply to possibilities of reverter and rights of

entry, which are regarded as vested interests, but it does not apply to e x ecutory

interests, Fee S imple Determinable

y A possibility of reverter is e x empt from the rule.

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53

y An e x ecutory interest is subject to it.y Any e x ecutory interest following a fee simple determinable that violates

the rule against perpetuities is struck out, as with a blue pencil, leaving

the fee simple determinable standing.y Ex ample:

o O conveys Blackacre e to th eS chool Board so long as us ed forschool purpos e s, and if th e land shall c eas e to b e us e d for

school purpos e s, to A and his h e irs. f o Ad s e x ecutory interest, if valid, would be transmissible to Ad s

heirs, and their heirs, and so on through time.o It might not become possessory for centuries. Therefore, A d s

e x ecutory interest is void.

o Board has a fee simple determinable, which will automatically end

when the land ceases to be used for school purposes; O has a

possibility of reverter. Fee S imple Subject to an Ex ecutory Limitation

y Ex ample:o O conveys Blackacre e to th eS chool Board, but if Blackacr e

shall c e as e to b e us ed for school purpos e s, to A and his h e irs. f o The e x ecutory interest in A is void under the RAP for the same

reason A d s e x ecutory interest in the prece d ing e x ample is voi d . Fee S imple Determinable Created by Will

y A possibility of reverter is an interest retained by the grantor if thefee simple determinable is created by a deed; the testator d s heirs

retain it if the fee simple determinable is create d by a will.y A possibility of reverter cannot be created in a grantee- nor in a

devisee.y If the testator creates a fee simple determinable by will, followed by a

void e x ecutory interest in a devisee, the testator d s heirs have a

possibility of reverter.y Ex ample:

o T devises Blackacre e to a Baptist Church so long as us e d for

church purpos e s, th en to A. All th e r e st and r e mainde r of my

prop e rty I d e vis e to B. f o Ad s e x ecutory interest violates the RAP and is struck out,

leaving a determinable fee in the church.o Td s heirs- and not B- have a possibility of reverter.

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54

o If B, the residuary devisee, were given the future interest after

the determinable fee, B d s interest as a resi d uary d evisee woul d

be an e x ecutory interest, an d Bd s interest woul d be voi d .

INTE RE STS UNDE R TH E RULE AGAINST P E RP E TUITIE S

E XAMPLE V ALIDITY E XPLANATION

"To A for life, then to A's chil d ren

for life then to B" V alid B's remain d er is veste d on creation

"To A for life, then to A's chil d ren

for life, then to A's gran d child ren." Invali d

A may have a chil d after the interest

is create d an d so may have

gran dchild ren beyon d the perpetuities

perio d .

" To School Boar d so long as it is

use d for a school, then to the Re d

Cross." V alid

This falls within the charity-to-

charity e x ception

"To school Boar d so long as it is use d

for a school, then to A" Invali d

The interest may vest in A's heirs or

d evisees hun d re ds of years from now.

(A's interest is stricken.)

"To B for life, remain d er to those of

B's siblings who reach age 21." V alid

B's parents can be use d as measuring

lives

"To B for life, then to such of B's

child ren who become lawyers" Invali d

B may have a chil d born after the

d isposition who becomes a lawyer

more than 21 years after B's death.

"To A for life, then to his wife W, for

life, then to A's surviving chil d ren." V alid

No unborn wi d ow problems because the

gift is to W, life in being,"

"To A for life, then to his wi dow for

life, then to A's surviving

descen d ants." Invali d Unborn wi dow problem."To X for life, then to Y, but if at

her d eath Y is not survive d by

child ren, then to Z." V alid Y is the measuring life.

"To M for life, then to M's chil d ren

for their lives, then to M's

gran d child ren." M is 80 years ol d and Invalid Fertile octogenarian problem.

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55

has had a hysterectomy.

"Trust income to Polo Club. At the

death of A, B, C, D and E (all born

today at Obie Hospital), the corpus toZ and his heirs." V alid A, B, C, D, and E are measuring lives.

The residue of my estate to my

descendants who are living when my

estate is distributed." Invalid

Administrative contingency- the

slothful e x ecutor problem.

S UMMARY OF FUTURE INTE RE S TS

FUTURE INTE RE ST E XAMPLE CORRE LATI V E

PR E SE NT INTE RE ST

SUBJ E CT TO

RULE AGAINST

P E RP E TUITIE S

I N G

R A N T O R

RE V E RS ION

"To A for life."

Fee tail, Life

estate, term of

years No

PO SS IBILITY OF

RE V E RT E R"To A so long as liquor is

not sold on the premises."

Fee S imple

Determinable No

RIGHT O F E NTRY"To A, but if liquor is sold

on the premises, O has a

right to reenter."

Fee S imple

Subject to

Condition

Subsequent No

I N

G R A N T

E E

INDE FE AS IBLY

V E STE D

RE MAINDE R "To A for life, then to B"

Fee tail, Life

estate, term of

years No

V E STE D

RE MAINDE R

SUBJ E CT TO

OP E N"To A for life, then to A's

children." A has a child X.

Fee tail, Life

estate, term of

years

Yes- As

long as theclass

remains

open.

V E STE D

RE MAINDE R

SUBJ E CT TO


but if B pre-deceases A,

to C." (B has a vested

Fee tail, Life

E state, Term of

Years. No

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DIV E STME NT remainder subject to

divestment.)

CONTINGE NT

RE MAINDE R"To A for life, then to A's

surviving children."

Fee tail, Life

E state, Term of

Years. YesSPRINGING

E XE CUTORY

INTE RE ST

"To A when she passes

the bar e x am."

Fee S imple, Fee

tail, Life E state,

Term of Years. Yes

SHIFTING

E XE CUTORY

INTE RE ST


but if N predeceases A,

to C." (C has a shifting

e x ecutory interest)

Fee S imple, Fee

tail, Life E state,

Term of Years. Yes.

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