DEFEASIBLE FEES Cont

1
DEFEASIBLE FEES Contd
2
Mahrenholz v. County Board Distinguishing Fee
Simple Determinable from Fee Simple on Condition
Subsequent
3
DQ100 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?
4
Mahrenholz P583 A grantor should give a FSD
if he intends to give property for so long as it
is needed for the purposes for which it is given
and no longer, but he should employ a FSCS if he
intends 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 grant is FSD or
FSCS
5
Use a 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.

6
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

7
Mahrenholz v. County BoardFICUS DQs 101-104
8
Mahrenholz v. County Board

• To the Trustees of School District No. 1
• "to be used for school purpose only otherwise to
  revert to Grantors herein.
• DQ101 Fee Simple Determinable or
• Fee Simple on Condition Subsequent?

9
"to be used for school purpose only otherwise to
revert to Grantors herein. FSD

• only suggests automatic
• condition in 1st clause
• to revert (v. may re-enter) suggests
  automatic
• similar grants held FSD

10
"to be used for school purpose only otherwise to
revert to Grantors herein. FSCS

• 2 clauses usually used for FSCS
• No time words
• Most states presume FSCS

11
Mahrenholz v. County Board DQ102 Under what
circumstances might the distinction between a fee
simple determinable and a fee simple on condition
subsequent be significant?
12
FSD v. FSCS Consequences

• Transferability after breach (Mahrenholz)

13
FSD v. FSCS Consequences

• Transferability after breach
• Adverse Possession

14
FSD v. FSCS Consequences

• Transferability after breach
• Adverse Possession
• Income from land after breach (to grantor if
  FSD)

15
FSD v. FSCS Consequences

• Transferability after breach
• Adverse Possession
• Income from land after breach
• Waiver/Estoppel by future interest holder
  (possible if FSCS)

16
DQ102 Why do so many grants fail to indicate
clearly which interest is intended?
17
DQ103 IS STORAGE A SCHOOL PURPOSE?

• PARTIES LIKELY ARGUMENTS?

18
DQ103IS STORAGE A SCHOOL PURPOSE? What
legal research could you do to help resolve this
question?
19
DQ103IS STORAGE A SCHOOL PURPOSE? What legal
research could you do to help resolve this
question? CASES ON SCHOOL PURPOSECASES ON
CHURCH PURPOSE ETC.
20
DQ103IS STORAGE A SCHOOL PURPOSE? What
factual research could you do to help resolve
this question? (What facts matter?)
21
IS STORAGE A SCHOOL PURPOSE? What facts
matter? GRANTORS INTENT

• CHECK GRANT OR RELATED DOX
• WITNESSES TO TRANSACTION
• ASK GRANTOR IF ALIVE
• WITNESSES RE GRANTOR BELIEFS

22
DQ104. Why should we allow grantors to have any
control at all of what happens to land after they
have died? Come back to later w Shapira
23
IDENTIFYING DEFEASIBLE FEES
24
IDENTIFYING DEFEASIBLE FEES
25
IDENTIFYING DEFEASIBLE FEES
26
DEFEASIBLE FEES
v. CONTINGENT REMAINDERS
27

• DEFEASIBLE FEES
• PRESENT INTEREST IS FEE

• CONTINGENT
• REMAINDERS
• PRESENT INTEREST IS FINITE

28

• DEFEASIBLE FEES
• PRESENT ESTATE CUT OFF IF CONDITION MET

• CONTINGENT
• REMAINDERS
• PRESENT ESTATE TERMINATES NATURALLY

29

• DEFEASIBLE FEES
• FUTURE INTEREST IN EITHER GRANTOR OR GRANTEE

• CONTINGENT
• REMAINDERS
• REMAINDER IN GRANTEE PLUS REVERSION IN GRANTOR

30
Pepe grants Tealacre to Rory and his heirs, but
if Totie loses 100 pounds, she may enter and
retake the land. (Fee Simple on Executory
Limitation Executory Interest)

• Pepe grants Tealacre to Rory for life, then to
  Totie if she loses 100 pounds.
• (Life Estate Contingent Remainder)

31
DEFEASIBLE FINITE ESTATES

• Can create conditions cutting off finite estates,
  yielding, for example
• Life Estate Determinable
• Term of Years on Condition Subsequent

32
Back to Poincianas(H) Thelma conveys "to
Louise for 99 years if Louise so long live."

• Louise?

33
(H) Thelma conveys "to Louise for 99 years if
Louise so long live."

• Louise Term of years determinable.

What other interests are there?
34
(H) Thelma conveys "to Louise for 99 years if
Louise so long live."

• Louise Term of years determinable.
• Thelma Possibility of Reverter
• Reversion
• Reversion (Merger)

35
DOCTRINE OF MERGER

• If one person becomes the owner of two contiguous
  interests, the interests will merge

36
DOCTRINE OF MERGER

• If one person becomes the owner of two contiguous
  interests, the interests will merge.
• Example Eric has a life estate. Vanessa holds
  the reversion that follows it. If Eric purchases
  the reversion from Vanessa, it merges with his
  life estate and he will have a fee simple
  absolute.

37
DOCTRINE OF MERGER

• If one person becomes the owner of two contiguous
  interests, the interests will merge.

MERGE
38
ONLINE

• Review Problems R-W
• Assigned
• Write-Ups Posted After Wednesday
• Exam Q Bank Through Spring 95
• Tests for Fall 95 and Spring 97
• Answers Posted after Wednesday

39
LOGISTICS

• Same Midterm Blind Grading Numbers
• Watch Course Page for Info on
• Classrooms for Exam
• Office Hours Thurs ? Sun
• Qs on Assignment III?

40
PROBLEM I

• Featuring Live Oaks

41
O conveys "to J and her heirs so long as the
premises are not used for sale of beer, wine, or
liquor, and if beer, wine, or liquor is sold on
the premises, O retains a right to re-enter the
premises." J opens a restaurant that serves
several dishes cooked with wine or flamed with
brandy and at Sunday brunch offers a free glass
of champagne. The restaurant is successful, and
11 years after its opening D wants to buy it and
add a bar. Advise D.
42
For Review Problems

• Remember not in same form as your test.
• Try to make lists of key questions ambiguities
• Try to follow decision tree out as far as you can
• Well go over in class as time permits Ill aim
  to do one from each panel.
• Ill post suggested analysis for all review
  problems after class on Wednesday.

43
PROBLEM I MULTI-STEP ANALYSIS

• FSD or FSCS?
• CONDITION VIOLATED?
• EFFECT OF VIOLATION?
• ADVICE RE PURCHASE

44
PROBLEM I MULTI-STEP ANALYSIS

• FSD or FSCS?
• CONDITION VIOLATED?
• EFFECT OF VIOLATION?
• ADVICE RE PURCHASE

45
(I) O To Julia and her heirs so long as the
premises are not used for sale of beer, wine, or
liquor, and if beer, wine, or liquor is sold on
the premises, Orrin retains a right to re-enter
the premises."

• Does Orrins interest vest automatically (FSD) or
  does he have to act (FSCS)?

46

• FSD or FSCS?
• So long as condition built into 1st clause
  suggest FSD
• Moment of violation clear, so can be FSD
• Right to re-enter 2 clauses suggest FSCS
• Most states presumption favoring FSCS
• Mahrenholz More like punishment than purpose

47
PROBLEM I MULTI-STEP ANALYSIS

• FSD or FSCS?
• CONDITION VIOLATED?
• EFFECT OF VIOLATION?
• ADVICE RE PURCHASE

48
(I) O To J so long as premises are not used
for sale of beer, wine, or liquor, and if beer,
wine, or liquor is sold on ... premises O retains
a right to re-enter. DOES IT VIOLATE GRANT IF
Js restaurant(i) serves several dishes cooked
with wine or flamed with brandy? (ii) at Sunday
brunch offers complimentary glass of champagne?

49
PROBLEM I MULTI-STEP ANALYSIS

• FSD or FSCS?
• CONDITION VIOLATED?
• EFFECT OF VIOLATION?
• ADVICE RE PURCHASE

50
IF VIOLATION, RESULT? If O has Possibility of
Reverter?O gets legal title at moment of
violation.If sufficient time has passed, J may
have title through adverse possession

51
IF VIOLATION, RESULT? If O has Right of Entry
(RE)?Assuming O has not acted, O still has
REIf O is aware of Julias use of alcohol, may
be held to have waived the right to enforce
regarding these kinds of uses of alcohol.

52
PROBLEM I MULTI-STEP ANALYSIS

• FSD or FSCS?
• CONDITION VIOLATED?
• EFFECT OF VIOLATION?
• ADVICE RE PURCHASE

53
Note that if J sells a defeasible fee to D, D
takes subject to any condition not made
irrelevant by the sale.

• To J so long as alcohol is never used on the
  premises.
• Wording of condition not limited to J appears to
  apply to anyone
• Condition survives sale.

54
COMPARE

• To J so long as J never uses alcohol on the
  premises.
• Condition only places limit on J.
• Essentially void if J is not the owner.
• Once J is dead, condition can never be violated,
  so owner would have fee simple absolute.

55
11 years after its opening Donald wants to buy
restaurant and add a bar. Advise Donald.

56
Plausible Advice to Donald Includes

• Buy both present estate and future interest (or
  all rights of both J and O) to merge into
  f.s.absolute
• Serve free liquor raise prices (and argue
  waiver if O questions)
• Make purchase contingent on J insuring right to
  use alcohol (winning suit re adverse possession/
  waiver/etc. buying future interest waiver K
  with O)

57
EXECUTORY INTERESTS

• Future interest in grantee
• Cuts off prior vested interest (present estate or
  reversion or vested remainder) rather than
  waiting for it to expire naturally.

58
Pre-1536 Limitations on Future Interests in
Grantees

• Must follow finite estate
• Must be capable of taking effect at the
  expiration of preceding estate
• Must not take effect before the expiration of the
  preceding estate

59
EXECUTORY INTERESTS

• Future interest in grantee
• Cuts off prior vested interest rather than
  waiting for it to expire naturally.
• Shifting Executory Interest cuts off another
  grantee

60
EXECUTORY INTERESTS

• Future interest in grantee
• Cuts off prior vested interest rather than
  waiting for it to expire naturally.
• Shifting Executory Interest cuts off another
  grantee
• Springing Executory Interest cuts off grantor

61
EXECUTORY INTERESTS(EXAMPLES)

• Shifting Executory Interest
• To Justin his heirs so long as no tobacco
  is grown on the land, otherwise to Eric and his
  heirs.

62
EXECUTORY INTERESTS(EXAMPLES)

• Springing Executory Interest
• To Crystal if she passes the California bar exam.