Property Class Notes 3/5/04

 

The doctrine of severability

 

If you could have divided these gifts up into several gifts to each of the children of the grandchildren, then Thomas would have worked as a life in being for his issue because his issue would have been identified on the date of his death.  Thomas’s remainder had been vested subject to open, but when his mother died, his remainder would be vested.

 

But the counterargument in this case is that it wasn’t separate gifts; it was all one gift, and the court must treat it that way.  Thus, the whole thing fails.

 

The precocious toddler

 

“‘To pay the income to A for life and thereafter to pay the principal to such of A’s grandchildren living at my death or born within five years thereafter as shall attain the age of twenty-one.’  At testator’s death A was a widow, sixty-five years old; she had two children living and one grandchild”: The gift to the grandchildren violates the Rule Against Perpetuities.  How come?  What could happen?  Let’s kill everybody!  The 65 year old widow could have a baby!  Then she dies!  Then the baby could have a baby at the age of 4 years, 3 months!  Now that’s a precocious toddler!  Obviously, this is ridiculous.  But the law considers this possible!  This is what happens when you value logic over making the system work in practice, according to Braunstein.  Also notice that this is colossally poor drafting!

 

The court actually saved this gift by saying that the gift couldn’t vest remotely in any lawful grandchildren because the precocious toddler couldn’t legally marry.

 

If there is any example where the remainder will vest too remotely, then it fails.

 

There are a limited number of fact patterns.  If you don’t get it, you can probably memorize it.  There’s the “precocious toddler”, there’s the “fertile octogenarian”, there are “unborn widows”, and there are problems with gifts spanning three generations.

 

Practice problems on the Rule Against Perpetuities

 

1.     “Orville to Andy and his heirs so long as the land is farmed; but if it is not farmed to Bonnie and her heirs”: Andy has a fee simple subject to an executory limitation [or a fee simple determinable, or maybe even a fee simple subject to a condition subsequent], and Bonnie has an executory interest in fee simple absolute [it can’t be a remainder because it follows a vested fee simple].  The problem is that Andy could die and his heirs could be on the land for hundreds of years, farming, and then stop.  So it could be hundreds of years before the executory interest would turn possessory.  That violates the Rule Against Perpetuities!  So we have to reclassify, and Andy has a fee simple determinable (it’s no longer subject to an executory limitation…and it’s definitely not a fee simple subject to a condition subsequent either) and Orville has a possibility of reverter.  Bonnie has nothing.  It would fix it to say “To Andy and his heirs so long as Andy farms the land”.

2.     “Orville to Annie and her heirs so long as the land is farmed”: Annie has a fee simple determinable and Orville has the possibility of reverter.  The Rule Against Perpetuities isn’t violated in this case.  But what if the Orville sold the possibility of reverter to Bonnie?  That’s why possibilities of reverter were difficult to sell.  What if the gift was: “To A and her heirs, but if the land is not farmed to B and her heirs”?  A has a fee simple subject to a condition subsequent, B has an executory interest in fee simple absolute.  But is the Rule Against Perpetuities violated?  Yes, because you could farm forever!  It could fail to vest in B in 21 years.  Therefore, the gift to B and her heirs is no good!  It looks like A just has a fee simple absolute and O has nothing!  That’s why we need to distinguish between fees simple determinable and fees simple subject to a condition subsequent.  With the fee simple determinable, the farming condition is part of A’s estate.  When you cut off the executory interest, the condition is still part of it and A has the possibility of reverter.  On the other hand, with the fee simple subject to a condition subsequent, you have the condition about farming being part of the executory interest, so when that interest gets cut off, the condition does too.  These are radically different results depending merely on where you put the comma!

3.     “Orville to Arthur and his heirs so long as the land is farmed, but if it is not farmed, to Brooke for life”: Arthur has a fee simple subject to an executory limitation, Brooke has an executory interest for life, and Orville has possibility of reverter.  Brooke’s gift doesn’t violate the Rule Against Perpetuities because it can only vest during her lifetime.  Thus, we can use Brooke as the life in being for that gift.  If Brooke dies, her interest goes away and we’re just left with Orville’s possibility of reverter and Arthur’s fee simple determinable.  Note that we can apply the rule before we figure out what Orville has.

4.     “Orville to Adam for life, then to Adam’s children for life, then to Adam’s grandchildren who survive their parents”: Purportedly, Adam has a life estate, Adam’s children have a contingent remainder for life (unless Adam already has children alive, in which case the children alive have a vested remainder subject to open [but that’s a contingent remainder for the purposes of the Rule Against Perpetuities]), and Adam’s grandchildren either have a contingent remainder in fee simple absolute or a vested remainder subject to open in fee simple absolute (this remainder is contingent for two reasons: we don’t know who they are, and they must survive their parents).  The gift to the children is okay, because the children will be ascertained when Adam dies.  If Adam has more children after the date of this gift, then Adam dies and any other children and grandchildren die, then we might not know whether there will be any grandchildren that survive the “new” child until 21 years after the death of everyone living at the time of the gift.  Thus, though the gift to Adam’s children will be okay, the gift to the grandchildren will violate the Rule Against Perpetuities and Orville will have a reversion instead.  All in all, after the Rule, you’ll have a life estate in Adam, a life estate in Adam’s children, and a reversion in Orville.

 

When you see gifts “to heirs”, think about the Rule in Shelley’s Case and the Doctrine of Worthier Title.

 

Be suspicious of conditions that don’t relate to human life or death.  They might be things that could stay contingent way longer than any one person will live.

 

Notice that once you drop off an executory interest, saying that it violates the Rule Against Perpetuities, the preceding estate can’t be a fee simple subject to an executory limitation anymore.

 

Recall that possibilities of reverter are the least alienable kind of future interest.  One reason is that they can potentially be a way around the Rule Against Perpetuities.

 

All reversionary interests are vested!!!  The Rule Against Perpetuities can’t kill these interests!!!

 

When you see a future interest, the thing that will make it into an executory interest in general is if it follows a vested fee, or if there is necessarily a gap in seisin.

 

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