Property Class Notes 2/18/04

The fee tail has been pretty much abolished everywhere.

The fee tail in Ohio

Let’s talk about Ohio. The Ohio Rule Against Perpetuities says that “no interest in real or personal property shall be good unless it must vest, if at all, not later than twenty-one years after a life or lives in being at the creation of the interest.” This rule only applies to contingent remainders.

But the important part here is: “All estates given in tail, by deed or will, in lands or tenements lying within this state shall be and remain an absolute estate in fee simple to the issue of the first donee in tail.” So a gift that purports to create a fee tail will create a life estate in the tenant-in-tail, and then a fee simple absolute in the issue of the tenant-in-tail, assuming that the tenant-in-tail has any issue. Compare (i) on page 137.

Another alternative is to abolish the fee tail altogether and say that “to A and the heirs of her body” equals “to A and her heirs”.

Or you could get a life estate that converts into a fee simple absolute upon the birth of issue.

There are a couple of reasons for these statutes. One is that fee tails last too long! They prevent the property from being used in commerce during that period.

Problems on p. 135

(A) “Henry conveys to Sam and the heirs of his body. Sam and his wife have a son Eric”: Sam is granted a fee tail. Henry retains a reversion. While Sam is alive, Eric doesn’t have anything. But when Sam dies, if Eric is still alive, then Eric will inherit the fee tail. Before De Donis, Sam would have had a fee tail, but as soon as Eric was born it would have more or less been converted into a fee simple absolute.

(B) “Henry conveys to Sam and the heirs of his body, and then to Dorothy and her heirs. Sam and his wife have no children (yet)”: Sam gets a fee tail. Henry gets a reversion. Dorothy gets a vested remainder in fee simple absolute. It doesn’t matter that children don’t yet exist.

(C) “Henry conveys to Sam and the heirs of his body and then to Dorothy and her heirs. Sam and his wife have no children (yet). Henry dies; Henry’s heir is Elmer”: Sam gets a fee tail. Dorothy gets a vested remainder in fee simple absolute. Henry and Elmer get nothing.

(D) “Henry conveys to Sam and the heirs of his body. Sam and his wife have no children (yet). Henry dies; Henry’s heir is Elmer”: Sam gets a fee tail. Henry retains a reversion in fee simple absolute. Upon Henry’s death, Elmer gets the reversion in fee simple absolute and Sam still has the fee tail.

The defeasible fees

The law has created all these different interests and then tried to make it clear through language just what interest has been created. The common law succeeded at this to some extent, but it’s about to get really messy as we get into defeasible fees.

Untrained people insist on writing their own deeds. Also, once we start introducing conditions into the fee simple, we have a difficult time figuring out what the conditions mean. What does it mean that land must be used “for school purposes”? What does it mean to “keep the land in its natural state”? What about “To A for so long as the property is not used for the sale of alcoholic beverages?” What if you sell dishes that are cooked with wine? What if you give away alcohol? What about “caring for someone in their old age”? Braunstein says that a trust would be a better way to handle most of these situations.

Creation of the defeasible fees

If we’re trying to create a fee simple determinable, we’ll use language that will create a condition precedent, also known as “durational language”. The words you might see include “while”, “during” and “so long as”. When the duration has run out, the estate runs out and there’s nothing left. When the duration runs out, the possibility of reverter turns into a possessory estate.

The fee simple subject to a condition subsequent does not end automatically. The grantor or the grantor’s heirs must take some action to enter onto the property and regain possession. Therefore, two things must happen in order for the estate to end: some condition must occur, plus the grantor or the grantor’s heirs must take some action. The most common language to establish this estate includes “provided that”, “but if” and “upon condition that”.

Some courts prefer to construe conveyances as fees simple determinable under there is clear language retaining the right of entry. Note that the court in Higbee v. Kennedy does just the opposite. This is not a hard and fast rule, but it is something you can fall back on when you’re hopelessly confused.

These defeasible fees are accompanied by a retained interest in the grantor, either the possibility of reverter or the right of entry. If the future interest following the defeasible fee is created in a transferee then we call it an executory interest for reasons we’ll get to shortly. When the interest is an executory interest, it doesn’t matter if the accompanying estate is a fee simple determinable or a fee simple subject to a condition subsequent. Executory interests are not retained interests.

Mayor and City Council of Ocean City v. Taber

Taber founded Ocean City. Taber granted land to his trustees in order to create Ocean City. The trustees sell a portion of one of the lots to the United States to be used as a lifeguard station.

We get introduced to the parts of the deed, and in particular to the habendum clause. The habendum clause is reminiscent of the marriage ceremony. That’s not a coincidence! Marriage was once thought of essentially as a transfer of property rights. The habendum clause contains limitations on the estate granted. It usually follows the actual grant.

What did the habendum clause say in this case that was relevant to our discussion? It says that it should be used “for the purpose of a Life Saving Station”. Is this a fee simple determinable, or is this a fee simple subject to a condition subsequent? Is the reversion to the trustees automatic? According to the deed, it seems to be. It says that the land will go back to the trustees “without any legal proceedings, suit or otherwise”. That sounds pretty automatic. On the other hand, there is language that follows that says: “they shall be entitled to re-enter upon and take possession”. Is that latter language consistent with the fee simple determinable? It doesn’t sound like it. It sounds more like a fee simple subject to a condition subsequent because that is followed by right of entry, which is the future interest that this sounds like.

What does the court conclude? The court doesn’t seem to tell us why, but they say that it’s a fee simple determinable. Has the use ended? Has the divesting condition been triggered? The United States stopped using the land for life saving stuff. The way the court looks at it is that it’s not enough for Ocean City to take over the life saving station. The condition seems to be that as soon as the United States fails to use the land as a life saving station, and thus as soon as the United States conveys the land to anybody else, the condition has occurred and the estate terminates. What if the United States had leased back the land to continue using it as a life saving station? What if the United States subcontracted to somebody to do life saving?

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