Dividing Rights by Time Flashcards
Future interests
Interests that might become possessory in the future
What do the authors mean when they say “a future interest is a presently existing interest”, that it exists soon or now?
It exists now
O conveys Greenacre “to A for life, then to B and his heirs.” B is a spendthrift. B borrows money from C and spends it and does not repay C. C wins a judgment against B. Today, C can attach all of B’s property to satisfy C’s judgment. Does B have an interest in Greenacre that C can reach?
Yes. After O’s conveyance, B has some interest- title to a future interest in fee simple- and because he has something, C could get it
What does a conveyance “to A for life” mean?
gives A a life estate that lasts for the duration of A’s life.
If a conveyance is “to A for life” and A transfers his life estate to B, how will the estate be measured?
B would then have a life estate pur autre vie — that is, an estate that is measured by A’s life span, not B’s.
If a conveyance is “to A for life” and A transfers his life estate to B and B dies during A’s lifetime, who would the estate go to?
the life estate would pass to Bs heirs or devisees until A dies.
According to White v. Brown (1977), will a fee simple absolute be passed through a will, if said will’s terms are ambiguous?
Yes. When the terms of a will are ambiguous, said will shall be determined to have passed a fee simple absolute.
In White v. Brown (1977), Ms. Jesse Lide left land to Ms. Evelyn White but did not make it clear what estate. The two possible options were either a life estate or fee simple estate. According to the court, which freehold must White get if Lide’s intended restriction on sale (for the property to not be sold) is to be effective?
a life estate
Can there be a restriction on sale for a fee simple estate?
No
Are restraints on alienation of a fee simple estate void or valid?
Void
A disabling restraint, forfeiture restraint, and promissory restraint are all types of restraints on?
alienation (alienation refers to the process of a property owner voluntarily giving or selling the title of their property to another party)
What does a disabling restraint withhold?
It withholds from the grantee the power of transferring his interest (e.g., O conveys Blackacre “to A and his heirs but any transfer hereafter in any manner of an interest in Blackacre shall be null and void”). A
disabling restraint was involved in White v. Brown. This estate cannot be alienated
What is a forfeiture restraint?
It provides that if the grantee attempts to transfer his interest, it is forfeited to another person (e.g., O conveys Blackacre “to A and his heirs, but if A attempts to transfer the property by any means whatsoever, then to B and her heirs”). This estate is forfeited if the holder attempts to alienate
What is a promissory restraint?
It provides that the grantee promises not to transfer his interest (e.g., O conveys Blackacre “to A and his heirs, and A promises for himself, his heirs and successors in interest that Blackacre will not be transferred by any means”). The holder is in breach of promise if she alienates
What type of restraint is acceptable for a fee simple estate, and under what circumstances?
The Restatement provides that a partial restraint (e.g., limiting conveyance to certain persons or putting a time limit on the restraint) is valid if, under all the circumstances of the case, it was not imposed with spite or malice
In White v. Brown (1977), Ms. Jesse Lide left land to Ms. Evelyn White but did not make it clear what estate. What kind of estate do the 12 nieces and nephews of Lide (the grantor) want White (the grantee) to get?
A life estate. If Lide transfers to White only a life estate then Lide has only transferred some of her interest to White but would keep the rest and keep the rights to take possession after the death of White. The nieces/nephews will inherit what she didn’t give away by intestate succession.
Are restraints on alienation allowed on a life estate?
Sometimes
Are restraints on alienation allowed on a fee simple estate?
No
For a life estate, which restraint is not allowed in most states? Which restraint might be enforced?
A disabling restraint is not allowed in most states (but allowed in TN)
A forfeiture restraint might be enforced
What are 2 economic reasons to restrain restraints on alienation? Why do we like alienability?
- exchange efficiency, changing owners
- productive efficiency, changing uses (less likely to a develop land you can’t sell; can’t borrow to develop land you can’t sell)
What are nonfreeholds?
Leaseholds, estates without seisin. Nonfreehold estates are not inheritable and are said to exist “without seisin.” Seisin denotes ownership: An individual who is “seised” of an estate is the owner of the estate. A nonfreehold estate is created through a lease or rental agreement that can be either written or oral.
What are the 2 future interests in a transferee?
- Remainder (RM)- an estate which vests after the termination of the prior estate (Ex: life estate); It is the right to own and possess the land after the fixed interest of current holder expires. Thus, a remainder can follow a life estate or a term of years. It is created by the use of the phrase “then to” or similar language. For example both “to A for life, then to B” and “to A for 10 years, then to B” give B a remainder.
- Executory Interest (EI)- a future interest in property that will be triggered on the happening of a stated event, and will pass the property to a third party; they are non-vested meaning the beneficiary of the right or property interest is not certain to receive a specific amount, either now or in the future.
What are the 2 kinds of remainders and what is the rule regarding them?
Remainders are vested or contingent
They are vested if not Contingent
- Vested means a remainder with an ascertained taker and with no condition precedent.
- Contingent means it is a future estate with some uncertainty - either in the identity of the possessor (“then to my children” leaves uncertainty as to how many children there will be) or if the person will actually take the estate (“to my son, unless he moves away”). They are subject to the rule against perpetuities.
What are the 3 kinds of vested remainders?
- Indefeasibly vested (refer to a future interest in property that does not have any condition precedent or future contingency; normally use language such as “to (insert name) and their heirs” in a will or other document to clearly show that the person stated is supposed to get the property in the future no matter what)
- Vested subject to open (might have more people sharing in that remainder)
- Vested subject to complete divestment (even though it’s vested now, events may change it to being divested)
What was an Executory interest in the past?
One person held legal title for the benefit of another person: O to T for the use of B.
Do equitable interests have seisin and need to obey rules of seisin?
No
What was the Statute of Wills (1540)?
it gave landholders the right to devise their property to whomever they pleased in a written will (testament).
What is the Statute of Uses exception?
“active duty” exception- for trusts, the Stat of Uses applied to any person seised to the “use” or “trust” of
another person, however, if the person who had legal title had some active duties to perform (manage the land, turn over profits, etc.), then the statute does not apply
What is a trustee?
A legal title holder with active duties
What is a beneficiary?
Equitable title holder
In Baker v. Weedon (1972), John devised to Anna “during her natural life and upon her death to her children, if she has any, and in the event that she dies without issue then . . . to my grandchildren . . .” What do Anna and her children have?
Anna has a life estate and her kids have a contingent remainder (because she has no children right now- the taker is not ascertainable) and John’s grandchildren have a contingent remainder
In Baker v. Weedon (1972), Anna is getting $1300 income per year.
• Anna (LE) asks court to sell land and pay her interest on the proceeds, $168,500. (A 5-yr treasury bill at the time would pay 6% interest, about $10,000/yr, a lot more than $1300.) John’s grandchildren (CRMen) say don’t sell. What does the court rule?
SC of Mississippi says a sale of all the property will result in “great financial loss to the remaindermen”. A sale would provide immediate relief to Anna, the life tenant, who needs the money to pay her expenses and taxes. However, such a sale would cause great financial loss to the Bakers, the remaindermen, who seek to sell the property at a higher price after their interests vest. They both have an interest in the land. The court later said to sell some of the land.
What is the doctrine of waste?
a future interest (FI) holder can sue a present interest (PI) holder if PI holder is doing something FI holder does not like to the land.
When does the waste doctrine apply?
when there are multiple owners of same realty (usually present and future, maybe concurrent)
What are the 2 kinds of waste?
- Permissive waste- involves doing nothing. (Not fixing hole in roof.)
- Active or affirmative waste- involves taking some action. (Axing hole in roof.)
What are the 3 remedies for waste?
- Forfeiture (the court could take away the property)
- Injunction
- Damages (present estate holder pays to the future estate holder)
What are the 4 situations in which a court will find waste?
If the present interest holder’s action or inaction:
- Diminishes value of the future interest (FI),
- Impairs evidence of title (moving the boundaries of the land)
- Destroys identity, or
- Substantially changes character of the realty (even a change of character that does not diminish and may even increase the value)
What is ameliorative waste?
When the present interest holder substantially changes character but does not reduce value or
even adds to market value
What is a “determinable” interest”? When does it terminate?
If the interest includes a “special” (durational) limitation. It terminates automatically if it terminates. Established by durational language, determinable estates are followed by the future estates of a possibility of reverter.
For example: To A for as long as the property is used for a museum. A has a fee simple determinable, and will hold the land for as long as it is a museum; the grantor holds a possibility of reverter. If the museum is shut down, the land will automatically be transferred to the grantor.
When is an interest “subject to a condition subsequent”? When does it terminate?
It has a condition attached. Established by conditional language, these estates are followed by a right of entry. If the triggering event occurs, the holder must take steps to establish possession of the land. It terminates when right of entry is exercised, not automatically.
Example: To A, but if A does not use the land for a museum, then the grantor has a right of entry. A has a defeasible fee simple estate subject to a condition subsequent, and the grantor has a right of entry. If the land is not used for a museum, then the grantor must take action to recover the land. If the grantor does not take action, the land will remain with A, even after it is not being used as a museum.
When is an interest “subject to an executory limitation”? When does it terminate?
If the interest is followed by an executory interest. It terminates automatically if it terminates. An interest with a stated event, which if it happens, is automatically divested by an executory interest in a transferee (if the event happens, the land automatically goes to a THIRD PARTY).
For example: To A so long as the land is used for a museum, but if used for anything else, to B. A holds a defeasible fee simple subject to an executory condition, B holds an executory interest. If the land is not used for a museum, it is automatically transferred to B.
What is fee simple determinable?
What words are used to indicate that an estate is this kind?
It is land ownership subject to a special limitation where such ownership automatically reverts to the grantor if a specified event occurs or doesn’t occur. Established by durational language, determinable estates are followed by the future estates of a possibility of reverter.
“so long as”, “while”, “until”
For example: To A for as long as the property is used for a museum. A has a fee simple determinable, and will hold the land for as long as it is a museum; the grantor holds a possibility of reverter. If the museum is shut down, the land will automatically be transferred to the grantor.
What is a fee simple subject to a condition subsequent?
What words are used to indicate that an estate is this kind?
it’s land ownership subject to a condition where the grantor can take back the land if a specified event occurs or doesn’t occur. Once a specified condition occurs, the grantor CAN take it back- it is NOT automatic, steps must be taken but now the grantor CAN if he wants to. Before the condition occurred, the grantor couldn’t take it back, even if he wanted to.
“upon the condition”, “provided that”
Example: To A, provided that A uses the land for a museum. A has a defeasible fee simple estate subject to a condition subsequent, and the grantor has a right of entry. If the land is not used for a museum, then the grantor must take action to recover the land. If the grantor does not take action, the land will remain with A, even after it is not being used as a museum.
In Mahrenholz v. County Board of School Trustees (1981), can a “fee simple subject to a condition subsequent followed by a right of reentry” or a “fee simple determinable followed by a possibility of reverter” be alienated inter vivos?
No. Neither can be alienated
According to Mahrenholz v. County Board of School Trustees (1981), if O transfers land subject to a fee simple determinable to A, then O conveys the reversionary interest to B, then A stops the condition, and O dies and has a child C, who gets the land- C or B?
C, the child of O gets the land because you cannot alienate inter vivos a “fee simple determinable followed by a possibility of reverter”. Therefore, the reversionary interest was never conveyed to B- O had the reversionary interest the whole time. In addition, once A stopped abiding by the condition, the ownership automatically reverted to O. Since O is dead, it therefore goes to his child, C.
It would’ve gone to B if it was an interest “subject to an executory limitation” because those can go to 3rd party’s.
What did the Statute of Uses 1536 do? What was the exception?
It made it impossible to pass land by will.
The exception: the courts decided that the Statute of Uses did not apply to some uses (including those where the legal title holder had active duties to perform (active duty exception)).
What is waste?
When possessors of land behave in ways that create negative externalities for other owners of the same realty (in the future or concurrent). Waste is a cause of action that might internalize those negative externalities.
Will a court always apply waste to the holder of a defeasible fee (a DF is a simple interest in land that can be taken away from the holder by the occurrence or non-occurrence of a specified event) on the ground
that the defeasible fee holder has “all the incidents of a fee simple.”
Not always. This is because a defeasible fee simple is supposed to have all the rights of ownership of a fee simple (should have full control of the land) and therefore even though it might end early, the court will not recognize that future interest for an action of waste.
What is a defeasible estate?
Any estate (freehold/nonfreehold) ends early/before natural end based on nature of estate because it is subject to:
(1) Durational limitation
“During” “as long as” “until”
EX: “To A as long as A doesn’t drink alcohol”
(2) Conditional language
“If” “but if” “provided” “on condition that”
EX: “To A if A doesn’t drink alcohol”
What is a defeasible interest that is “determinable”?
An interest that might end automatically by a special (durational) limitation.
What is a defeasible interest that is “Subject to a condition subsequent”?
It is an interest that is followed by a right of
entry- it is not automatic; the right of entry must be exercised.
What is a defeasible interest that is “Subject to an executory limitation”?
It is an interest followed by an executory
interest. An interest with a stated event, which if it happens, is automatically divested by an executory interest in a transferee (if the event happens, the land automatically goes to a THIRD PARTY).
So, once we know the names of those future interests, we can look back to the present interests
Why do we have both, a possibility of reverter and a right of entry option, when they are both so similar?
Having both gives transferors more freedom, creates a greater need for lawyers
Are all future interests descendible (they can pass by intestate succession to the next owner when someone dies) and releasable (released to the present estate holder) everywhere?
Yes
Are reversions and vested remainders completely transferrable everywhere?
Yes
Reversion- a future interest that the grantor keeps. Follows fee tail estates, life estates, and terms of years.
Remaider- A future estate, possession of which will not be taken until the end of a current estate.
Example. O grants Blackacre from A to B for life, and then to C. B has a life estate (present estate), and C has a remainder (future estate).
In Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano (1967), Toscanos give Fee Simple Subject To Condition Subsequent to Lodge, retaining Right of Entry. Toscanos can terminate if Lodge tries to transfer or fails to use. Lodge sues to quiet title. The condition allowing Toscanos to
terminate if Lodge tries to transfer is a forfeiture restraint on sale. Is it valid?
It is void because you can’t restrict alienation on a fee simple and this is a form of fee simple
In Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano (1967), Toscanos give “Fee Simple Subject To Condition Subsequent” to Lodge. Toscanos can terminate if Lodge fails to use. Is this use limitation valid- does it make the land inalienable?
Yes, it is valid. Although this condition may make the land unmarketable because no one would want to buy land that the lodge uses, the condition did not make it “inalienable”
According to Falls City v. MO Pacific RY, If an estate is unmarketable, should the court treat it as being inalienable?
Yes (minority view). This is counter to the ruling in Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano (1967). The court here reasoned that if an estate becomes so unmarketable due to the effect of a condition, it will be considered to place a restriction on alienation, and therefore the condition will be void.
Are all restrictions that reduce marketability invalid because they serve as a restraint on alienation?
If courts are going to allow the argument that a. . .
What is the modern law and common law view on Restrictions on uses (not direct restraints on alienation) of fee simple?
– Common law: valid
– Modern law: less certain
Under modern law, are fee simple estate restrictions requiring a person to live on land often void or valid?
void
Under modern law, are fee simple estate restrictions that look like spite often void or valid?
void
Under modern law, are fee simple estate restrictions that have the purpose of discouraging marriage or remarriage often void or valid? What’s the exception?
void.
But maybe ok if the purpose is to provide support until marriage.
Does a holder of a possibility of reverter get some of
condemnation award?
Majority say no; some say yes (Ink v. City
of Canton)
