There’s one more of the estates that we need to talk about. That’s executory interests or fee simple subject to the executory interest. But it’s too complicated to talk about it now.
The best way to make sure you understand this material is to work through the problems in the text.
Oswald grants Blackacre “to Mary and her heirs”. Mary gets an estate in fee simple absolute and Oswald gets nothing.
Oswald sells Goldacre “to Mary for life.” Mary gets a life estate, while Oswald gets a reversion. If somebody doesn’t get a fee simple absolute, then there must be a future interest somewhere. Can Oswald transfer his reversion? Sure, it’s a future interest, which becomes possessory in the future, but he owns it right now. Say Oswald transfers his reversion to Xavier. What does Xavier have now? Xavier now has a reversion (the name stays the same). With these interests, once we classify them in a certain way they always have that classification. It will make a difference with some stuff we’ll look at later. We look at these things at the time the interests are created in order to determine what the classification is.
Oswald sells Greenacre “to Mary”. By statute in many places, this is an estate in fee simple absolute to Mary unless there is a lesser estate expressed or necessarily implied. In property, the extrinsic evidence rule is much more restrictive than it is in the law of contracts. When property law developed, real property was the most important way that capital was held. That’s no longer true. In the absence of the statute, the words “to Mary” would have just created a life estate in Mary and would have left Oswald a reversion in fee simple absolute. So after Mary dies, Oswald would have a possessory estate in fee simple absolute.
Braunstein says that this rule is related to the Recording Acts. If A, the first purchaser, fails to make a record of sale, then B, the second purchaser without notice, will win. We want to be able to tell by going down to the courthouse and looking at public records who owns what property. If we want to accomplish that purpose, we can’t use extrinsic evidence. If such evidence is allowed to be used too liberally, then it defeats the idea of a recording system. Also, deeds last longer than contracts. Contracts are basically done once they’ve been fully performed, and are most often performed within the parties’ lifetimes. But the significance of deeds can last a very long time, even after the parties are dead or no longer own an interest in the property. So we want the deed to be certain on its face and within its four corners. The Recording Acts create a strong incentive to record!
Say Oswald died after selling Goldacre “to Mary for life.” Oswald’s will devises all of his property “to my grandchild Julio and his heirs.” After the first part, Mary gets a life estate and Oswald gets a reversion. Oswald leaves his property to Julio. What does Julio have? Well, you can’t sell, transfer, convey, or give something you don’t own. The only thing Oswald owned at his death was his reversion. Therefore, Julio has a reversion in fee simple absolute. Make sure to say that it’s a reversion in fee simple absolute. You need to say what kind of future interest it is, plus what it will become when it becomes possessory. So if Oswald dies, then Mary dies, Julio will get a possessory interest in fee simple absolute.
Oswald sells Blackacre “to Mary, and then to John and his heirs.” Mary gets a life estate, and John gets a remainder in fee simple absolute. When Mary dies, John will get a possessory interest in fee simple absolute. That’s true under the common law, but what about by statute? The statute says that you construe “to Mary” as giving a life estate because it’s “implied in the terms”. What if John conveys his interest back to Oswald? Then Oswald would own a remainder in fee simple absolute. Again, “the name remains the same”. The fact that a future interest is transferred doesn’t change its classification.
Is there any difference between a remainder and a reversion? Is there any difference in substance? If John has the future interest in fee simple absolute, he’ll get the possessory estate in fee simple absolute when Mary dies. John has the same amount of wealth either way. What we’re dealing with is a matter of form, and it’s a formal distinction that could have significant consequences.
Oswald transfers Goldacre “to Mary in fee simple absolute.” What’s this? Well, before the statute, the way to create a fee simple absolute was to say “to Mary and her heirs”. After the statute, Mary has a fee simple absolute. But what about before the statute? If you don’t use the magic words, then before the statute Mary only gets a life estate. That frustrates intent! No question about it! See how important form used to be?
Oswald transfers Brownacre “to Mary for life.” Mary sells Brownacre “to John and his heirs.” What happens? Get into the habit of classifying everyone’s interests at every step. At the start, Mary has a life estate and Oswald has a reversion in fee simple absolute. When Mary sells the life estate to John, he has a life estate pur autre vie, and Oswald still has a reversion. But Mary doesn’t say: “To John for the remainder of my life” or “for the remainder of his life”. She says “to John and his heirs”, which looks like a fee simple absolute, but she can’t convey a fee simple absolute. We construe it to convey everything that she has to convey, which is only the life estate.
Oswald sells Blackacre “to Mary and her heirs.” Mary then tries to sell Blackacre “to John and his heirs,” but Mary’s son and daughter try to block the sale claiming that they have an ownership interest in Blackacre. The children fail because they are confused. The kids never had any interest in the property. Why don’t the words “and her heirs” give any rights to the kids? The words are just “magic words”. “To Mary” are words of purchase; “and her heirs” are words of limitation. The heirs get nothing. Plus, Mary doesn’t have any heirs because she’s alive. In addition, the words “and her heirs” are not even an attempt to create an interest in anyone else.
There was this couple, E.E. and Minnie Black. They left their property to Jessie, Claude, and I.D. Black. We’re told that they were joint owners of the farm. Typically when parents leave property to more than one child, they’ll leave the property to the children, and they all own an equal interest in it, typically as tenants in common (they all have a right to possess the whole thing). That could create some problems because the law doesn’t match up with physical reality. Let’s assume they’re tenants in common rather than joint tenants.
The kids execute a “joint survivorship and partnership agreement”. What’s the thrust of this? When any of them dies, the property of the dying person goes to the siblings who are still alive. But what kind of estate is left? Let’s say we’re in the world where the statute has been passed. Then the survivor would have a fee simple absolute in the land. There’s also an agreement about the personal property.
Jessie wins! She’s the survivor. She thinks she’s the owner of a fee simple absolute in real and personal property.
But they had executed a joint will dealing with both real and personal property. The first paragraph says that upon the death of two of three kids, all of the property will go to the remaining survivor. That would create a fee simple absolute in Jessie if that was the end of the will.
But there’s a second paragraph that says that after all the siblings die, the property goes to certain nieces and nephews. Is the second paragraph enough to rebut the presumption of a fee simple absolute?