Property
Class Notes
More Rule Against
Perpetuities problems
“‘To
A for life and then to the first child of A to reach her 25th birthday.’ A has one child who is 2”: A gets a life
estate, O gets a reversion, and the first child of A to reach her 25th
birthday gets a contingent remainder (or is it a springing executory interest?).
Let’s
apply the Rule Against Perpetuities first: The contingent remainder could
easily vest more than 21 years after A’s death.
A’s first child could croak, and then A could have another child and
then A could croak.
But
what if we apply destructibility first? The
thing is, if the child isn’t ready to take upon the death of A (the end of the
preceding estate), then the contingent remainder fails. Thus, the Rule Against Perpetuities would be
satisfied because the contingent remainder will easier vest or fail right when
A dies.
The rule of destructibility of
contingent remainder is applied when the estate immediately preceding the contingent
remainder terminates. Then you ask the question: “Are
the remaindermen ready to take possession?”
If they are not, then the contingent remainder fails. If they are, then the remainder vests and
becomes a possessory estate. Notice how
this rule is different from the other rules enhancing marketability.
North Carolina National Bank v. Norris
This
is kind of a hard case! The gift is
this: “To W for life, then to named daughters for life, on death of last
daughter, to the children of my daughters (i.e. my grandchildren) for life,
then to lawful issue of my grandchildren.”
Did
this gift, as things turned out,
violate the Rule Against Perpetuities?
Did the interest in the greatgrandchildren actually vest within a life in being? Sure! Thomas
Norris was a life in being at the time of Montague’s death. When he died, the interest would vest in his
children (the great-grandchildren). But
that’s not how we apply the common law Rule Against Perpetuities!
The
gift to the daughters is vested, because this is in a will and when Montague
dies, he can’t have any more daughters.
As a bonus, the daughters are specifically named. Therefore, the hypothetical possibility that
Montague could have more children doesn’t matter.
What
about the gift to the children of his daughters? This gift would be vested remainder subject
to open. We treat that as contingent for
the purposes of the Rule Against Perpetuities.
What
about the gift to the “lawful issue” of the grandchildren? This could include great-grandchildren,
great-great-grandchildren, and so on.
This one is a contingent remainder in fee simple absolute, because it
involves unascertained people.
What
about the Peace Institute? They have an alternative
contingent remainder in fee simple absolute.
The only way they get it is if there’s no lawful issue of the
grandchildren.
How
do we apply the Rule Against Perpetuities?
Why does the gift violate the Rule with respect to the
great-grandchildren?
Let’s
say the wife dies, then the mother of Thomas dies, then Thomas dies, and Thomas’s
children dies. Let’s say one of the one
daughters dies too. Then let’s say the
final daughter has a kid, then dies. At this point, there is nobody still living
who was alive when the will was executed. So the interest in great-grandchildren is not necessarily going to vest within 21
years of the last daughter’s death! The kid
could live for 25 years before having or not having a kid. The gift to the great-grandchildren fails!
What
about this “doctrine of severability”?
How does it work?
What
if the will had provided “with remainder over to the lawful issue of such
grandchild or grandchildren who are living on the date of Thomas’s death”? That should be fine, because it explicitly
makes Thomas the life in being. The contingent remainder must vest upon
Thomas’s death. Note that you don’t even
have to worry about the 21 years! The
recipients of the gift will be ascertained, explicitly,
right when Thomas dies. Note also that
this is probably what Montague actually intended. It was likely that Thomas was going to be his
only grandchild given that it was 1927 and his youngest daughter was 38.
The
Rule Against Perpetuities says, in effect, “you
can’t control a world that consists of people who weren’t born when you were
alive, except for the first 21 years”.
(This is just my conception of it, it’s not the law.)
The
Rule Against Perpetuities works better than the other rules because it’s harder
to avoid.