Property
Class Notes
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?