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DEFEASIBLE FEES DEFEASIBLE FEES Restatement Terms FEE SIMPLE DETERMINABLE (to grantor; automatic) F.S. ON CONDITION SUBSEQUENT (to grantor; must act)

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Presentation on theme: "DEFEASIBLE FEES DEFEASIBLE FEES Restatement Terms FEE SIMPLE DETERMINABLE (to grantor; automatic) F.S. ON CONDITION SUBSEQUENT (to grantor; must act)"— Presentation transcript:

1

2 DEFEASIBLE FEES

3 DEFEASIBLE FEES Restatement Terms FEE SIMPLE DETERMINABLE (to grantor; automatic) F.S. ON CONDITION SUBSEQUENT (to grantor; must act) F.S. ON EXECUTORY LIMITATION (any to grantee)

4 IDENTIFYING DEFEASIBLE FEES

5

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7 Warning: Inconsistency 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 & her heirs may enter and take the land.”

8 DEFEASIBLE FEES v. CONTINGENT REMAINDERS

9 DEFEASIBLE FEES PRESENT INTEREST IS FEE CONTINGENT REMAINDERS PRESENT INTEREST IS FINITE

10 DEFEASIBLE FEES PRESENT INTEREST IS FEE PRESENT ESTATE CUT OFF IF CONDITION MET CONTINGENT REMAINDERS PRESENT INTEREST IS FINITE PRESENT ESTATE TERMINATES NATURALLY

11 DEFEASIBLE FEES PRESENT INTEREST IS FEE PRESENT ESTATE CUT OFF IF CONDITION MET FUTURE INTEREST IN EITHER GRANTOR OR GRANTEE CONTINGENT REMAINDERS PRESENT INTEREST IS FINITE PRESENT ESTATE TERMINATES NATURALLY REMAINDER IN GRANTEE PLUS REVERSION IN GRANTOR

12 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)

13 Back to the Beatles: (H): Thelma conveys "to Louise for 99 years if Louise so long live." Louise?

14 (H): Thelma conveys "to Louise for 99 years if Louise so long live." Louise: Term of years determinable. What other interests are there?

15 (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)

17 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.

18 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.

19 Mahrenholz v. County Board DQs E5-E8 Eagles

20 IGNORE THE JACQMAINS 1.Delete last paragraph on P Delete last complete paragraph on P Pretend you never heard of the Jacqmains.

21 Mahrenholz v. County Board 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

22 Mahrenholz v. County Board MAJOR EVENTS: FSD +PR 3/51: Grant to SD#1: SD-FSD Hs-PR 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

23 Mahrenholz v. County Board MAJOR EVENTS: FSD +PR 3/51: SD-FSD Hs-PR 2/69: Mrs.H dies intestate; HH sole heir SD-FSD HH-PR 5/73: Property used for storage only? (2 Possibilities: Violation or Not) 5/77: HH conveys interest to Ms 9/77: HH releases interest to SD#1

24 Mahrenholz v. County Board MAJOR EVENTS: FSD +PR 2/69: SD-FSD HH-PR GRANT VIOLATED HH-FEE SIMPLE ABSOLUTE 5/77 HH --> Ms? NO VIOLATION SD-FSD HH-PR 5/77 HH --> Ms?

25 Mahrenholz v. County Board MAJOR EVENTS: FSD +PR GRANT VIOLATED HH-FS ABSOLUTE 5/77 HH --> Ms? Ms-FS Absolute 9/77 HH release to SD? NO VIOLATION SD-FSD HH-PR 5/77 HH --> Ms? SD-FSD HH-PR 9/77 HH release to SD?

26 Mahrenholz v. County Board MAJOR EVENTS: FSD +PR GRANT VIOLATED Ms-FS Absolute 9/77 HH release to SD? Ms - FS Absolute NO VIOLATION SD-FSD HH-PR 9/77 HH release to SD? SD - FS Absolute

27 Mahrenholz v. County Board MAJOR EVENTS: FSCS +RE 3/51: Grant to SD#1: SD-FSCS Hs-RE 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

28 Mahrenholz v. County Board MAJOR EVENTS: FSCS +RE 3/51: SD-FSCS Hs-RE 2/69: Mrs.H dies intestate; HH sole heir SD-FSCS HH-RE 5/73: Property used for storage only? (2 Possibilities: Violation or Not) 5/77: HH conveys interest to Ms 9/77: HH releases interest to SD#1

29 Mahrenholz v. County Board MAJOR EVENTS: FSCS +RE 2/69: SD-FSCS HH-RE GRANT VIOLATED SD-FSCS HH-RE 5/77 HH --> Ms? NO VIOLATION SD-FSCS HH-RE 5/77 HH --> Ms?

30 Mahrenholz v. County Board MAJOR EVENTS: FSCS +RE GRANT VIOLATED SD-FSCS HH-RE 5/77 HH --> Ms? SD-FSCS HH-RE 9/77 HH release to SD? NO VIOLATION SD-FSCS HH-RE 5/77 HH --> Ms? SD-FSCS HH-RE 9/77 HH release to SD?

31 Mahrenholz v. County Board MAJOR EVENTS: FSCS +RE GRANT VIOLATED SD-FSCS HH-RE 9/77 HH release to SD? SD - FS Absolute NO VIOLATION SD-FSCS HH-RE 9/77 HH release to SD? SD - FS Absolute

32 Mahrenholz: Summary of Possibilities

33 Mahrenholz v. County Board The court says (P583) : “ The type of interest held governs the mode of reinvestment with title if reinvestment is to occur.” DQE6. What does the court mean by “reinvestment” ?

34 DQE7: (P584) “In Northwestern Univ. …, a conveyance was ‘made upon the express condition that said Wesley Hospital… shall erect a hospital building on said lot … and that on the failure of said 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, and the court so held.”

35 DQE8: 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?

36 Mahrenholz v. County Board DQs E9-E12 Fleetwood Mac

37 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.” DQE9: Fee Simple Determinable or Fee Simple on Condition Subsequent?

38 To Trustees of SD No.1: "to be used for school purpose only; otherwise to revert to Grantors herein.”: FSD “only” suggests automatic condition in 1 st clause “to revert” (v. “may re-enter”) suggests automatic similar grants held FSD

39 To Trustees of SD No.1: "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

40 Mahrenholz v. County Board DQE10: Under what circumstances might the distinction between a fee simple determinable and a fee simple on condition subsequent be significant?

41 FSD v. FSCS: Consequences Transferability after breach (Mahrenholz)

42 FSD v. FSCS: Consequences Transferability after breach Adverse Possession

43 FSD v. FSCS: Consequences Transferability after breach Adverse Possession Income from land after breach (to grantor if FSD)

44 FSD v. FSCS: Consequences Transferability after breach Adverse Possession Income from land after breach Waiver/Estoppel by future interest holder (possible if FSCS)

45 DQE10: Why do so many grants fail to indicate clearly which interest is intended?

46 DQE11: IS STORAGE A “SCHOOL PURPOSE”? ARGUMENTS

47 DQE11: IS STORAGE A “SCHOOL PURPOSE”? What legal research could you do to help resolve this question?

48 DQE11: IS STORAGE A “SCHOOL PURPOSE”?: RESEARCH LEGAL: CASES ON “SCHOOL PURPOSE” CASES ON “CHURCH PURPOSE” ETC. FACTUAL: WHAT FACTS MATTER ?

49 DQE11: IS STORAGE A “SCHOOL PURPOSE”?: RESEARCH FACTUAL: GRANTOR’S INTENT IN GRANT ITSELF WITNESSES TO TRANSACTION ASK GRANTOR WITNESSES RE GRANTOR BELIEFS

50 DQE12.Why should we allow grantors to have any control at all of what happens to land after they have died?

51 PROBLEMS I-L Featuring The Grateful Dead

52 (I) 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 cham- pagne. The restaurant is successful, and 11 years after its opening D wants to buy it and add a bar. Advise D.

53 PROBLEM I: MULTI-STEP ANALYSIS FSD or FSCS? CONDITION VIOLATED? EFFECT OF VIOLATION? ADVICE RE PURCHASE

54 PROBLEM I: MULTI-STEP ANALYSIS FSD or FSCS? CONDITION VIOLATED? EFFECT OF VIOLATION? ADVICE RE PURCHASE

55 (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 Orrin’s interest vest automatically (FSD) or does he have to act (FSCS)?

56 (I): “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." FSD or FSCS? “So long as” & condition built into 1 st clause suggest FSD Moment of violation clear, so can be FSD “Right to re-enter” & 2 clauses suggest FSCS Most states: presumption favoring FSCS

57 PROBLEM I: MULTI-STEP ANALYSIS FSD or FSCS? CONDITION VIOLATED? EFFECT OF VIOLATION? ADVICE RE PURCHASE

58 (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 J’s restaurant: (i) serves several dishes cooked with wine or flamed with brandy? (ii) at Sunday brunch offers complimentary glass of champagne?


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