More practice problems
Braunstein claims that it is not true that remainders become possessory only when somebody dies.
Interests can be vested in two ways:
1. They can be vested because they are no longer contingent.
2. They can be vested because they are possessory interests, which are always vested.
Executory interests are never vested until they become possessory. In other words, for the purposes of the Rule Against Perpetuities, they are always treated as contingent, not vested. (This is not in the right place in your notes!)
The reason we will call something an executory interest is because it can’t be a remainder.
How come there’s a reversion when there are contingent remainders that seem to be complete alternatives? It’s kind of fictional, but on the other hand, there are ways that a life estate can end before the death of the life tenant. For example, the life tenant can decline the estate. In that case, the estate may go back to the grantor in fee simple absolute.
A vested remainder subject to divestment could be clarified to be more specific. It could be a vested remainder in fee simple determinable, a vested remainder in fee simple subject to a condition subsequent, or a vested remainder subject to an executory limitation. The latter three tell you that this remainder is followed by an executory limitation.
When you have “but if” language, but there’s a condition precedent that comes before, “but if” doesn’t make the condition a condition subsequent.
You can’t divest something that’s not vested.
We already did trusts.
There are four of these:
1. The destructibility of contingent remainders
2. The Rule in Shelley’s case
3. The Doctrine of Worthier Title
4. The Rule Against Perpetuities
The first three rules have been abolished in most places (relatively recently).
These rules all act to invalidate certain contingent and/or executory interests. That’s how they work to further marketability.
What kind of interest is offensive to the law? “To A for life, and then to A’s heirs”: A living person has no heirs. It’s impossible to convey a fee simple absolute. That property is effectively taken out of commerce until we can determine who A’s heirs are (basically until A dies). It could be even longer!
These rules are designed to “put back together” the fee simple absolute or get close to doing so by destroying contingent interests.
There is a process of reform going on. It’s a competition between “dead hand” control and the rights of the living! These rules are getting easier and easier to get around. We’re at a stage of our history where the trend seems to be to allow people to tie up property for a number of generations. These rules are being abolished or being given much less significance than 50-60 years ago. One reason is that land is so much less important as a store of wealth in our society. We’re no longer an agrarian society. The principal stores of wealth are corporate. Land is an important store of wealth, but if land is not on the market, the economy is not going to be destroyed. So it’s getting easier to tie up land for a long time.
“To A for life and then to B if she reaches the age of 25. A dies and B is only 20”: What happens?
1. Look at the time of the gift and classify the interests.
2. Then apply the various rules to determine whether the interests as classified are valid or not.
3. If any of the interests are invalid, then reclassify the interests.
We will do this same procedure throughout all four rules.
At the time of the gift: A has a life estate, B has a contingent remainder, and O has a reversion.
At A’s death: We can’t give the land to B because she hasn’t turned 25 yet. We suppose that the land must go back to O. It depends on whether we’re before or after the Statute of Uses.
Before the Statute of Uses, you’re not allowed to have the springing executory interest that O tries to create in B. We would lop off the whole gift to B and O would just have a regular old reversion that would become a fee simple absolute upon A’s death.
After the Statute of Uses, you can give B a springing executory interest. We would say that O has a fee simple subject to a springing executory interest and that B has a springing executory interest.
Note that if A is alive, we don’t have any problems. There are no executory interests or executory limitations arising from this grant unless A dies.
Executory interests weren’t recognized at law before the Statute of Uses! You really had a problem! The common law couldn’t tolerate an abeyance of seisin. The common law says that the contingent remainder is B is simply cut off and doesn’t exist if A dies before the condition is satisfied. In that case, O has a possessory fee simple absolute, has the whole bundle of sticks, and there’s nothing left for B.
Once you have the Statute of Uses, there’s no need for the destructibility rule anymore.
The effect of the rule is that contingent remainders are destroyed if the contingent remaindermen are not ready to take (i.e. the conditions precedent have not been removed for ascertained) when the preceding estate terminates.
At A’s death, we have to reclassify the interests.
When you think “trusts”, think “equity”.
This rule stops making sense once springing executory interests are recognized by the Statute of Uses in 1536.
Let’s say we have the situation above, except A conveys his life estate to O. Before the Statute of Uses, the owner now has a fee simple absolute by merger. When O has the present possessory estate and the vested reversion, the intervening contingent remainder is wiped out. This rule no longer serves any purpose. After the Statute of Uses, the contingent remainder becomes valid as an executory interest and therefore there is no reason to destroy it.
Here’s another example: “To A for life and then in fee simple absolute to B’s children who survive A.”
First, we must classify the interests: A has a life estate and then B’s children have a contingent remainder in fee simple absolute. (They’re unascertained persons.) O also has a reversion.
What if B dies leaving children, and then A dies? The contingent remainder becomes a vested remainder subject to open, then a vested remainder when B dies, and finally a possessory estate in fee simple absolute when A dies. No problem here!
We’ll do more tomorrow (slide 63).