PROPERTY D SLIDES Tuesday March 4 Music: Isaac Stern, 60 th Anniversary Celebration (1981) Tuesday March 4 Music: Isaac Stern, 60 th Anniversary Celebration (1981) New York Philharmonic Orchestra; Violins: Isaac Stern, Itzhak Perlman, Pinchas Zucherman 1982 Grammy Award for Best Classical Performance (Soloists with Orchestra) No Deans Fellow Session Today Lunch Tomorrow: Meet on 12:25 Hoffman, Oa, Pan, Perez, Schindler, Tarafa Shenandoah: (4E) Derekto Bernie for life, then to Jorge for life, then to Roger and his heirs. Bernie? to Bernie for life Shenandoah: (4E) Derek to Bernie for life, then to Jorge for life, then to Roger and his heirs. Bernie: Life Estate Jorge? to Bernie for life Shenandoah: (4E) Derek to Bernie for life, then to Jorge for life, then to Roger and his heirs. Bernie: Life Estate Jorge: Vested Remainder in Life Estate. Note that even though Jorge has to survive Bernie for his interest to become possessory, we dont describe this as a Contingent Remainder because the condition is not stated explicitly. Roger? to Bernie for life Shenandoah: (4E) Derek to Bernie for life, then to Jorge for life, then to Roger and his heirs. Bernie: Life Estate Jorge: Vested Remainder in Life Estate. Roger: Vested Remainder in Fee Simple. Shenandoah: (4E) Derek to Bernie for life, then to Jorge for life, then to Roger and his heirs. Almost as Predicted YELLOWSTONE (Problems 4F-4G) GIANT GEYSER Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Betty is 15. Veronica: ? to Veronica for life Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Betty is 15. Veronica: Life Estate Betty? to Veronica for life Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Betty is 15. Veronica: Life Estate Betty: Contingent Remainder in Fee Simple (condition of turning 21 must be met before she can get property) Anything Else? to Veronica for life Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Betty is 15. Veronica: Life Estate Betty: Contingent Remainder in Fee Simple Reggie: Reversion Always Created Along with Contingent Remainder Covers Rights to Property After Veronica Dies if Bettys Condition Not Met to Veronica for life Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Betty is 15. Veronica: Life Estate Betty: Contingent Remainder in Fee Simple Reggie: Reversion to Veronica for life Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Veronica: Life Estate Betty: Contingent Remainder in Fee Simple Reggie: Reversion What if Betty turns 21 while Veronica is alive? to V for life Yellowstone: (4F) Reggie to V for life, then to B and her heirs if B attains the age of 21. ***B turns 21 while V alive*** Veronica: Life Estate Bettys Contingent Remainder vests leaving her with a Vested Remainder in Fee Simple Reggies Reversion now can never become possessory, so we say it divests, leaving him with nothing. to Veronica for life Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Veronica: Life Estate Betty: Contingent Remainder in Fee Simple Reggie: Reversion What if Betty dies at age 17 while Veronica is alive? to V for life Yellowstone: (4F) Reggie to V for life, then to B and her heirs if B attains the age of 21. ***B dies at 17 while V alive*** Veronica: Life Estate The condition can never be met, so Bettys Contingent Remainder fails leaving her (and her successors) with nothing Reggies Reversion stays in place, so he or his successors will get the property when Veronica dies. to Veronica for life Yellowstone: (4F) Reggie to Veronica for life, then to Betty and her heirs if Betty attains the age of 21. Veronica: Life Estate Betty: Contingent Remainder in Fee Simple Reggie: Reversion What if Veronica dies while Betty is still age 17? Life Estate is Over Betty Cant Take, Because Condition Not Met Well Come Back to This After We Introduce Executory Interests Yellowstone: (4G): To my only son, Larry, for life, then to Larry's children and their heirs." Larry has two living children, Moe and Curly. Larry? Yellowstone: (4G): To my only son, Larry, for life, then to Larry's children and their heirs." Larry has two living children, Moe and Curly. Larry: Life Estate Moe & Curly? Yellowstone: (4G): To my only son, Larry, for life, then to Larry's children and their heirs." Larry has two living children, Moe and Curly. Larry: Life Estate Moe & Curly: Vested Remainders (in Fee Simple) Subject to Open Remainders are still vested b/c M&C certain to get at least a share of the property. Use of subject to open makes clear that exact share of the property they will get is uncertain; reduces if more children born. We dont use phrase subject to open with contingent remainders, which are always uncertain. Yellowstone: (4G): To my only son, Larry, for life, then to Larry's children and their heirs." Larry has two living children, Moe and Curly. Larry: Life Estate Moe & Curly: Vested Remainders (in Fee Simple) Subject to Open Larry has additional child, Stella. Stella has? Yellowstone: (4G): To my only son, Larry, for life, then to Larry's children and their heirs." Larry has 3 living children, Moe, Curly, Stella. Larry: Life Estate Moe & Curly & Stella: Vested Remainders (in Fee Simple) Subject to Open Curly (C) dies, leaving his wife, Noreen, and a child, Orrin; C's will devises all property to Noreen. What happens to Cs interest? Yellowstone: (4G): To my only son, Larry, for life, then to Larry's children and their heirs." Larry had 3 children, Moe, Curly, Stella. Larry: Life Estate Moe & Noreen & Stella: Vested Remainders (in Fee Simple) Subject to Open Nothing in grant requires that Ls children survive him As in Problem 4C, Vested Remainder in Fee Simple passes at death like any other property. Larry dies. State of the title? Yellowstone: (4G): To my only son, Larry, for life, then to Larry's children and their heirs." Larry Dies, ending Life Estate Moe & Noreen & Stella: Share Fee Simple Absolute (as Tenants-in-Common) For this course, only need to know that theyd share; dont need to know term tenants in common or what it means. DEFEASIBLE FEES Dotted Line indicates Conditional Interest Open Circle indicates that it would cut off present interest (usually at an unspecified time) as opposed to waiting for it to be complete. DEFEASIBLE FEES: Two Relevant Distinctions 1.Automatic termination v. Needs action by future interest holder GrantorGrantee 2.Who holds future interest?: Grantor v. Grantee DEFEASIBLE FEES: Restatement Terms Fee Simple Determinable Fee Simple on Condition Subsequent Fee Simple on Executory Limitation DEFEASIBLE FEES: Fee Simple Determinable OPERATION: Self-Executing (Automatically Terminates Fee Simple When Condition Occurs) DEFEASIBLE FEES: Fee Simple Determinable OPERATION: Self-Executing KEY LANGUAGE: So long as, While, Until (References to Time) DEFEASIBLE FEES: Fee Simple Determinable OPERATION: Self-Executing KEY LANGUAGE: So long as, While, Until FUTURE INTEREST: Possibility of Reverter (in GRANTOR) FUTURE INTEREST: Possibility of Reverter (in GRANTOR) DEFEASIBLE FEES: Fee Simple Determinable: Example To Estelle and her heirs so long as asparagus is not grown on the property. DEFEASIBLE FEES: Fee Simple on Condition Subsequent OPERATION: Grantor (or Successor) Must Act to Terminate Fee Simple DEFEASIBLE FEES: Fee Simple on Condition Subsequent OPERATION: Grantor Must Act KEY LANGUAGE: But if, provided that if, on condition that if PLUS O may [re]enter and [re]claim the land DEFEASIBLE FEES: Fee Simple on Condition Subsequent OPERATION: Grantor Must Act KEY LANGUAGE: But if, provided that if, on condition that if PLUS O may [re]enter and [re]claim the land FUTURE INTEREST: Right of [Re]Entry (in GRANTOR) FUTURE INTEREST: Right of [Re]Entry (in GRANTOR) DEFEASIBLE FEES: Fee Simple on Condition Subsequent: Example EXAMPLE: To Estelle and her heirs, but if asparagus is grown on the property, I can reenter and claim the land DEFEASIBLE FEES: Fee Simple on Executory Limitation OPERATION: Either self-executing or grantee has to act. DEFEASIBLE FEES: Fee Simple on Executory Limitation OPERATION: Either self-executing or grantee has to act. KEY LANGUAGE: Creates interest in 3d party if condition violated DEFEASIBLE FEES: Fee Simple on Executory Limitation OPERATION: Either self-executing or grantee has to act. KEY LANGUAGE: Creates interest in 3d party if condition violated Executory Interest FUTURE INTEREST: Executory Interest (in 3d party grantee) DEFEASIBLE FEES: Fee Simple on Executory Limitation: Examples To Estelle and her heirs so long as asparagus is not grown on the property, otherwise to Bob. DEFEASIBLE FEES: Fee Simple on Executory Limitation: Examples To Estelle and her heirs so long as asparagus is not grown on the property, otherwise to Bob To Estelle and her heirs, but if asparagus is grown on the property, Bob can enter and claim the land. DEFEASIBLE FEES: Restatement Terms (What We Use) FEE SIMPLE DETERMINABLE (to grantor; automatic) F.S. ON CONDITION SUBSEQUENT (to grantor; must act) F.S. ON EXECUTORY LIMITATION (to grantee; either way) (Accessorizing) Defeasible Fees & Matching Future Interests (Accessorizing) FEE SIMPLE DETERMINABLE & Possibility of Reverter F.S. ON CONDITION SUBSEQT & Right of Re[Entry] F.S. ON EXECUTORY LIMITATION & Executory Interest TERMINOLOGY: ME v. WORKBOOK Defeasible fee in the form of a Fee Simple Determinable BUT with the future interest in third party: Me (& Restatement): Fee Simple on Executory Limitation Workbook: Fee Simple Determinable (See Workbook p.72 fn19) TERMINOLOGY: ME v. TEXTBOOK Textbook says Fee Simple on Executory Limitation terminates automatically (P580) For our purposes, assume that sometimes, a Fee Simple on Executory Limitation can operate like a Fee Simple on Condition Subsequent To Sonny & his heirs, but if Sonny ever runs for Congress, Cher may enter and take the land. Defeasible Finite Estates: Defeasible Finite Estates: Examples Term of Years on Condition Subsequent: To Joshua for 20 years, but if he ever passes the bar exam, my heirs can enter & retake. Life Estate on Executory Limitation To Richard for life, but to Chris & his heirs if Chris ever passes the bar exam. YELLOWSTONE (Problem 4H) GIANT GEYSER Yellowstone: (4H): Thelma conveys To Louise for 99 Years if Louise so long live." Louise? Yellowstone: (4H): Thelma conveys To Louise for 99 Years if Louise so long live." Louise: Term of years determinable. Most likely to operate as a life estate, but L might live 99 more years. (Yogurt in Georgia) Can be used where there is some legal or tax reason to avoid life estate (See Rule in Shelleys Case after break). Yellowstone: (4H): Thelma conveys To Louise for 99 Years if Louise so long live." Louise: Term of years determinable. What other interests are there? Yellowstone: (4H): Thelma conveys To Louise for 99 Years if Louise so long live." Louise: Term of years determinable. Thelma : Possibility of Reverter (rights if L dies before 99 years) PLUS Reversion (rights after 99 years if L alive) = Yellowstone: (4H): Thelma conveys To Louise for 99 Years if Louise so long live." Louise: Term of years determinable. Thelma: Possibility of Reverter plus Reversion = Reversion (Merger) Doctrine of Merger If one person becomes the owner of two contiguous interests, the interests will Doctrine of Merger If one person becomes the owner of two contiguous interests, the interests will Example: Eric has a life estate. Katie holds the reversion that follows it. If Eric purchases the reversion from Katie, it merges with his life estate and he will have a fee simple absolute. Doctrine of Merger If one person becomes the owner of two contiguous interests, the interests will Mahrenholz v. County Board Mahrenholz v. County Board ARCHES: DQ4.05 Mahrenholz Major Events DELICATE ARCHES ARCHES DQ4.05: Mahrenholz Major Events 3/51: Grant to SD#1 2/69: Mrs.H dies intestate; HH sole heir 5/73: Property used for storage only 5/77: HH conveys interest to Ms 9/77: HH releases interest to SD#1 Fee Simple Determinable Poss. of Rev. ARCHES DQ4.05: Mahrenholz Major Events Fee Simple Determinable & Poss. of Rev. Hs=PR 3/51: Grant to SD#1 SD=FSD + Hs=PR 2/69: Mrs.H dies intestate; HH sole heir ? Fee Simple Determinable Poss. of Rev. ARCHES DQ4.05: Mahrenholz Major Events Fee Simple Determinable & Poss. of Rev. 2/69: Mrs.H dies intestate; HH sole heir HH=PR SD=FSD + HH=PR 5/73: Property used for storage only 2 Possibilities: Violation or Not ? Fee Simple Determinable Poss. of Rev. HH=PR ARCHES DQ4.05: Mahrenholz Major Events Fee Simple Determinable & Poss. of Rev. SD=FSD + HH=PR 5/73: Property used for storage only GRANT VIOLATED HH-FEE SIMPLE ABS. 5/77 HH Ms NO VIOLATION HH-PR SD-FSD HH-PR 5/77 HH Ms Fee Simple Determinable Poss. of Rev. ARCHES DQ4.05: Mahrenholz Major Events Fee Simple Determinable & Poss. of Rev. 5/77: HH Mahrenholzes GRANT VIOLATED HH-FEE SIMPLE ABS. Ms-FEE SIMPLE ABSOLUTE 9/77 HH release to SD? NO VIOLATION HH-PR HH-PR SD-FSD HH-PR SD-FSD HH-PR Cant Transfer PR in Illinois Except to Holder of Fee; Only Passes Through Intestacy 9/77 HH release to SD? Fee Simple Determinable Poss. of Rev. ARCHES DQ4.05: Mahrenholz Major Events Fee Simple Determinable & Poss. of Rev. 9/77: HH Release to SD GRANT VIOLATED Ms-FEE SIMPLE ABS. HH has Nothing, So Release Ineffective Ms-FEE SIMPLE ABS. NO VIOLATION HH-PR SD-FSD HH-PR Release to Holder of Fee Allowed; School Districts Interests Merge SD-FEE SIMPLE ABS. Fee Simple on Condition Subsequent Right of Entry ARCHES DQ4.05: Mahrenholz Major Events Fee Simple on Condition Subsequent & Right of Entry Hs=RE 3/51: Grant to SD#1 SD=FSCS + Hs=RE 2/69: Mrs.H dies intestate; HH sole heir ? Fee Simple on C.S. Rt. Of Entry ARCHES DQ4.05: Mahrenholz Major Events Fee Simple on C.S. & Rt. Of Entry 2/69: Mrs.H dies intestate; HH sole heir HH=RE SD=FSCS + HH=RE 5/73: Property used for storage only 2 Possibilities: Violation or Not ? Fee Simple on C.S. Rt. Of Entry HH=RE ARCHES DQ4.05: Mahrenholz Major Events Fee Simple on C.S. & Rt. Of Entry SD=FSCS + HH=RE 5/73: Property used for storage only GRANT VIOLATED HH-RE SD-FSCS HH-RE Right of Entry Only Can Become Fee if Holder Acts: HH Didnt 5/77 HH Ms NO VIOLATION HH-RE SD-FSCS HH-RE 5/77 HH Ms Fee Simple on C.S. Rt. Of Entry HH=RE ARCHES DQ4.05: Mahrenholz Major Events Fee Simple on C.S. & Rt. Of Entry SD=FSCS + HH=RE 5/77: HH Mahrenholzes GRANT VIOLATED HH-RE SD-FSCS HH-RE Cant Transfer RE in Illinois Except to Holder of Fee, so No Change 9/77 HH release to SD? NO VIOLATION HH-RE SD-FSCS HH-RE Cant Transfer RE in Illinois Except to Holder of Fee, so No Change 9/77 HH release to SD? Fee Simple on C.S. Rt. Of Entry HH=RE ARCHES DQ4.05: Mahrenholz Major Events Fee Simple on C.S. & Rt. Of Entry SD=FSCS + HH=RE 9/77: HH Release to SD GRANT VIOLATED HH-RE SD-FSCS HH-RE Release to Holder of Fee Allowed; School Districts Interests Merge SD-FEE SIMPLE ABS. NO VIOLATION HH-RE SD-FSCS HH-RE Release to Holder of Fee Allowed; School Districts Interests Merge SD-FEE SIMPLE ABS. Mahrenholz: Summary of Possibilities FSD from FSCS ARCHES: Mahrenholz & DQs : Distinguishing FSD from FSCS DELICATE ARCHES FSD from FSCS ARCHES: Mahrenholz & DQ4.06 Distinguishing FSD from FSCS The court says: The type of interest held governs the mode of reinvestment with title if reinvestment is to occur. (Top para. P583) What does the court mean by reinvestment? FSD from FSCS ARCHES: Mahrenholz & DQ4.07 Distinguishing FSD from FSCS In Northwestern Univ. , a conveyance was made upon the express condition that Wesley Hospital shall erect a hospital building on said lot and that on the failure of Wesley Hospital to carry out these conditions the title shall revert to Northwestern University. This language cannot be interpreted as creating anything but a fee simple subject to a condition subsequent (P584, 3d full para.) WHY? FSD from FSCS ARCHES: Mahrenholz & DQ4.07 Distinguishing FSD from FSCS Northwestern Univ.: Grant to build hospital building on lot conveyed. If FSD: Very difficult to identify precise moment when condition is violated and grantee loses fee Interpret as FSCS Grantor can exercise discretion about when grantee has sufficiently shown non-compliance Court doesnt have to do line-drawing about when a building isnt built FSD from FSCS ARCHES: Mahrenholz & DQ4.08 Distinguishing FSD from FSCS In a deleted passage in its discussion of McElvain, the court says that as an action in ejectment was brought, the difference between a fee simple determinable and a fee simple subject to a condition subsequent would have no practical effect . Why does it believe this? FSD from FSCS (P583) Mahrenholz Distinguishing FSD from FSCS (P583) Use FSD to give property for so long as it is needed for the purposes for which it is given and no longer Use a FSCS to compel compliance with a condition by penalty of a forfeiture. Pretty fine distinction Court is describing idealized use of the forms Can use to argue a particular grant is FSD or FSCS FSD from FSCS (P583) Mahrenholz Distinguishing FSD from FSCS (P583) Use FSD to give property for so long as it is needed for the purposes for which it is given and no longer To Xavier, so long as he operates his dental practice on the premises. To Yolanda, so long as she doesnt remarry. To Zebulon University, so long as it is used as a research laboratory. FSD from FSCS (P583) Mahrenholz Distinguishing FSD from FSCS (P583) Use a FSCS to compel compliance with a condition by penalty of a forfeiture. To Xavier, but if the property is ever used for commercial purposes To Yolanda, but if alcohol is ever used on the premises To Zebulon University for construction of a science building, but if the building is not completed within 5 years or if it ever ceases to be used for educational purposes BISCAYNE: DQ SUNRISE AT ADAMS KEY FSD from FSCS BISCAYNE: Mahrenholz & DQ4.09 Distinguishing FSD from FSCS To the Trustees of School District No. 1: "to be used for school purpose only; otherwise to revert to Grantors herein. Arguments for FSD? FSD from FSCS BISCAYNE: Mahrenholz & DQ4.09 Distinguishing FSD from FSCS "to be used for school purpose only; otherwise to revert to Grantors herein. Arguments for FSD only suggests automatic Condition in clause creating fee, not subsequent clause to revert (v. may re-enter) suggests automatic Similar grants held FSD Arguments for FSCS?