Property
Class Notes
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.
Rules furthering marketability
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.
Destructibility
“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).