Real Property Flashcards
(6 cards)
Summary
Owner conveyed either a fee simple determinable or a fee simple on condition subsequent to School. Because the Owner-to-School deed used language that did not conform to the classic formulations for creating either of these interests, it is unclear which interest School acquired. However, in the case of an ambiguous conveyance, there is a presumption in favor of the fee simple on condition subsequent.
If School has a fee simple on condition subsequent, either (1) Owner retained nothing to pass to Daughter because the Owner-to-School deed did not expressly specify that Owner retained a power of termination, or (2) Owner retained an implied power of termination which passed to Daughter and then through Daughter’s estate to Ann and possibly, upon Bill’s death, to Mary as well.
If School has a fee simple determinable, then Owner’s retained possibility of reverter passed through Daughter’s estate at least to Ann and possibly to Mary.
Any cause of action for breach of the condition or limitation (depending on the interest created in the School) accrued only three years ago and, thus, the statute of limitations on that action has not run.
Of course, whether School’s interest has been lost depends upon whether using Blackacre for administrative purposes violates the requirement of using the property to teach children aged 5to 13, which it probably does
The terms of the conveyance to School were ambiguous. In construing an ambiguous instrument, courts typically adopt a preference for the fee simple on condition subsequent. If so construed, it is unclear what interest, if any, Owner retained. It is either no interest or a right of entry for condition broken (also called a “power of termination”). If, on the other hand, School acquired a fee simple determinable in Blackacre, then Owner retained a possibility of reverter.
If the Owner-to-School deed conveyed a fee simple determinable to School, then Owner retained a possibility of reverter, which became possessory immediately upon the happening of the event designated in the instrument. JOSEPH W.SINGER,INTRODUCTION TO PROPERTY 309 (2d ed. 2005). If, instead, the Owner-to-School deed conveyed a fee simple on condition subsequent, Owner may or may not have a power of termination or right of entry for condition broken, depending on whether the court would be willing to imply a forfeiture provision when none was expressly set forth in the deed.
Application
Here, Owner conveyed Blackacre to School “if School uses Blackacre only to teach children aged 5 to 13.” The language of the deed does not conform to the paradigms for creating either a fee simple determinable or a fee simple on condition subsequent. To create a fee simple determinable, the typical formulation would be “to School, so long as it uses Blackacre only to teach children aged 5 to 13.” To create a fee simple on condition subsequent, the typical formulation would be “to School, but if School does not use Blackacre only to teach children 5 to 13, then the grantor may reenter and reclaim Blackacre.”See SHELDON F. KURTZ,MOYNIHAN’S INTRODUCTION TO THE LAWOF REAL PROPERTY 44–48 (4th ed. 2005).
In this case, the deed language is ambiguous. The word “if” in the deed expresses the language of condition and suggests an intent to create a fee simple on condition subsequent, but the deed’s lack of an express, retained power of termination suggests the intention to instead create a fee simple determinable. On the other hand, the deed’s failure to use the typical formulation for creating a fee simple determinable, coupled with the absence of any language suggesting that Owner intended to retain a possibility of reverter(e.g., “Blackacre shall revert”), suggests that Owner did not intend to convey a fee simple determinable, but instead a fee simple on condition subsequent.
Where the terms of a conveyance are ambiguous, courts construe the instrument to effectuate the grantor’s intentions. In construing an ambiguous instrument, courts typically adopt a preference for the fee simple on condition subsequent. See id. at48; WILLIAM B. STOEBUCK &DALE A. WHITMAN,THE LAW OF PROPERTY 44 (3d ed. 2000).
Here, it doesn’t matter whether the court finds that the Owner-to-School deed created a fee simple determinable or fee simple on condition subsequent if, in the latter case, it also implies a forfeiture provision. Either construction would allow Owner to regain possession of Blackacre if School ceased using Blackacre only to teach children aged 5 to 13. The only practical difference that flows from these two constructions is that the fee simple on condition subsequent would require Owner (or his successors) to first make a demand, and the fee simple determinable would notbecauseit becomes possessory immediately upon the happening of the limitation. In either case, the holder might have to sue the School to enforce her rights if Blackacre is not vacated voluntarily by School.
If, however, the court construes the deed as creating a fee simple on condition subsequent and does not imply a power of termination, then School has what amounts to a fee simple absolute because no one has the power of termination or right of entry for condition broken. In this case, School’s decision to discontinue use of Blackacre for teaching children aged 5 to 13 has no effect on School’s interest in Blackacre.
[NOTE: Applicants who conclude that School has a fee simple on condition subsequent may fail to realize that a right of entry must be expressly reserved in the deed and, thus, fail to discuss a court’s reluctance to find a forfeiture.]
[NOTE: An applicant’s conclusion on how the deed should be construed is much less important than demonstrating an understanding of the consequences that flow from the various constructions.]
School has likely ceased using Blackacre “only to teach children aged 5 to 13.” If Owner is treated as having either a possibility of reverter or a right of entry for condition broken (power of termination), then School’s interest can come to an end and, subject to Point Four, Blackacre passes to the successors of Owner’s estate. Otherwise, School continues to own Blackacre.
There is a factual question as to whether ceasing to only teach children aged 5 to 13 in the building on Blackacre and then using that building for administrative purposes is inconsistent with language in the deed from Owner to School. See Mahrenholz v. County Bd. of School Trustees of Lawrence County, 417 N.E.2d 138 (Ill. Ct. App. 1981). Here again applicants can make an argument either way, but the stronger argument appears to be that the terminating event occurred. No teaching appears to be going on in the building; rather, it is being used for administrative purposes, and that use seems to be beyond the intended purpose set forth in the Owner-School deed.
If Owner’s successors have an interest in Blackacre, the statute of limitations has not run on that interest.
Whether Owner conveyed to School a fee simple determinable or a fee simple on condition subsequent, the state statute of limitations applicable to actions for possession permits actions within “10 years after the cause of action accrues.”
Because School ceased using Blackacre for the permitted purposes onlythree years ago, the period in which an action for possession may be brought has not yet expired.
Ann has an interest in Blackacre if Owner retained either a possibility of reverter or a power of termination. In some jurisdictions, Mary (Bill’s widow) would also have such an interest. If Owner retained only a power of termination, Ann will have to assert that right by exercising the power because possession will not automatically inure to her as it would have if Owner had retained a possibility of reverter.
If Owner retained a future interest in Blackacre, that interest passed to Daughter upon Owner’s death because state law provides that such an interest is devisable. Upon Daughter’s death, Daughter’s devisable interest passed to Husband for life, with the remainder to “my surviving children.”
Although Daughter was survived by two children, one of them, Bill, predeceased Husband. According to the Restatement of Property, which expresses what appears to be the current majority view, a survivorship contingency like that contained in Daughter’s will applies at the termination of the interests that precede distribution of the remainder. See RESTATEMENT OF PROPERTY § 251 (1940). In this case, that point is Husband’s death. Thus, under the Restatement approach, Mary has no interest in Blackacre because Bill, having predeceased Husband, had no interest in Blackacre to devise to Mary. This approach is typically justified on the ground that a testator would want an interest in property to pass only to children who could take possession.
There is another view that interprets a survivorship contingency to require surviving only the testator (here, Daughter) and not the life tenant (here, Husband). This view is typically justified by a preference forearly vesting of estates. If it applies, then Bill’s interest passed to Mary. See 3 POWELLON REAL PROPERTY ¶27.032.
If Owner bequeathed a possibility of reverter in Blackacre, instead of a power of termination, then Ann (and Mary, in a state that follows the non-Restatement view) is entitled to immediate possession of Blackacre. If Owner retained and bequeathed only a power of termination, then Ann’s (and, in a non-Restatement jurisdiction, Mary’s) interest would not become possessory until and unless the power of termination was exercised.
