PROPERTY A SLIDES 3-6-15. Friday March 6 Music: Bach, Unaccompanied Cello Suites Yo-Yo Ma, Cello (Released 2006) ALMOST SPRING BREAK

PROPERTY A SLIDES3-6-15

Friday March 6 Music: Bach, Unaccompanied Cello SuitesYo-Yo Ma, Cello (Released 2006)

ALMOST SPRING BREAK

LOGISTICS: Chapter 4 Test LOGISTICS: Chapter 4 Test PreparationPreparation

• I’ll Post by Monday I’ll Post by Monday •General Test Info & Instructions Page; E-Mail Me if Qs•Assignments for Next Week’s Classes including• Additional Instructions for Problem 4I (Redwood for Tues 3/17)• Additional Instructions for Prob 4O (Shenandoah for Tues 3/17)

•Bank of Sample Qs & Entire Fall 2007 Test Along with:• List of Qs That Require Material We’ll Cover After Break• Answers to Qs You’re Ready For

LOGISTICS: Chapter 4 Test LOGISTICS: Chapter 4 Test PreparationPreparation

• After Class on 3/17 I’ll Adjust Syllabus As Needed to Address After Class on 3/17 I’ll Adjust Syllabus As Needed to Address Time ConstraintsTime Constraints

• I’ll Post After Class on 3/19I’ll Post After Class on 3/19• Rest of Answers to Already Posted Qs (that We are Covering)• Additional Tests & Answers

OTHER LOGISTICSOTHER LOGISTICSI’ll Post on Course Page During Break:

•Chapter 5 Materials & Updated Syllabus•Updated Assignment Sheet Covering the Rest of March•Info Memo on Chapter 1•More Old Exam Qs with Comments/Best Answers

Additional Final Exam Preparation •Instructions to Submit Sample Exam Answers Posted; E-Mail Me if Qs•Reminder: If you want to submit more than one, first submission must be e-mailed to me by Noon on 2d Saturday of Spring Break

PROPERTY A: 3/6

THE “READY BETTY” JOKETHE “READY BETTY” JOKE

DEFEASIBLE FEESRecap & Further Info

DEFEASIBLE FEES:Restatement Terms

• Fee Simple Determinable

• Fee Simple on Condition Subsequent

• Fee Simple on Executory Limitation

DEFEASIBLE FEES:Two Relevant Distinctions

1.Automatic termination v. Needs action by future interest holder

2.Who holds future interest?: GrantorGrantor v. GranteeGrantee

DEFEASIBLE FEES:Fee Simple Determinable

•OPERATION: Self-Executing•KEY LANGUAGE: “So long as”, “While”, “Until” • FUTURE INTERESTFUTURE INTEREST: “Possibility of Reverter” (in : “Possibility of Reverter” (in

GRANTOR)GRANTOR)

DEFEASIBLE FEES:Fee Simple on Condition Subsequent

• OPERATION: Grantor Must Act• KEY LANGUAGE: “But if”, “provided that if”, “on condition that if” PLUS “O may

[re]enter and [re]claim the land”

• FUTURE INTERESTFUTURE INTEREST: “Right of [Re]Entry” : “Right of [Re]Entry” (in (in GRANTOR)GRANTOR)

DEFEASIBLE FEES:Fee Simple on Executory Limitation

•OPERATION: Either self-executing or grantee has to act.


• OPERATION: Either self-executing or grantee has to act.

•KEY LANGUAGE: Creates interest in 3d party if condition violated


• OPERATION: Either self-executing or grantee has to act.• KEY LANGUAGE: Creates interest in 3d party if condition violated

• FUTURE INTEREST: Executory Interest Executory Interest (in 3d party grantee)

DEFEASIBLE FEES:Fee Simple on Executory Limitation: Examples

• To Estelle and her heirs so long as asparagus is not grown on the property, otherwise to Bob.

DEFEASIBLE FEES:Fee Simple on Executory Limitation: Examples

• To Estelle and her heirs so long as asparagus is not grown on the property, otherwise to Bob

• To Estelle and her heirs, but if asparagus is grown on the property, Bob can enter and claim the land.

DEFEASIBLE FEES:Restatement Terms (What We Use)

•FEE SIMPLE DETERMINABLE (to grantor; automatic)

•F.S. ON CONDITION SUBSEQUENT (to grantor; must act)

•F.S. ON EXECUTORY LIMITATION (to grantee; either way)

Defeasible Fees & Matching Future Interests

(Accessorizing)(Accessorizing)

FEE SIMPLE DETERMINABLE & Possibility of Reverter

F.S. ON CONDITION SUBSEQ’T & Right of Re[Entry]

F.S. ON EXECUTORY LIMITATION & Executory Interest

TERMINOLOGY: ME v. WORKBOOK

Defeasible fee in the form of a Fee Simple Determinable BUT with the future interest in third party:•Me (& Restatement): “Fee Simple on Executory Limitation”•Workbook: “Fee Simple Determinable” (See Workbook p.72

fn19)

TERMINOLOGY: ME v. TEXTBOOK

• Textbook says Fee Simple on Executory Limitation terminates automatically (P533)• For our purposes, assume that sometimes, a Fee Simple on

Executory Limitation can operate like a Fee Simple on Condition Subsequent• “To Sonny & his heirs, but if Sonny ever runs for Congress,

Cher may enter and take the land.”

DEFEASIBLE FEES:Transfer of Fee: Effect on Condition

• The purchaser/grantee of a defeasible fee takes subject to any condition not made irrelevant by the sale/transfer.

• Like purchaser/grantee of a Life Estate; usually can’t get more than grantor has.



• Example: To J so long as alcohol is never used on the premises.

• Wording of condition not limited to J; appears to apply to anyone

• Condition survives sale.



• Compare: To J so long as J never uses alcohol on the premises. • Condition only places limit on J.• Fairly minor restriction if J is not the owner. • Once J is dead, condition can never be violated, so

subsequent owner would have fee simple absolute.

Defeasible Finite Estates: Defeasible Finite Estates: Examples

Term of Years on Condition Subsequent:“To Joshua for 20 years, but if he ever passes the bar exam,

my heirs can enter & retake.”

Life Estate on Executory Limitation“To Dan for life, but to Chris & his heirs if Chris ever passes

the bar exam.”

YELLOWSTONE (Problem 4H)

GIANT GEYSER

Yellowstone: (4H): Thelma conveys “To Louise for 99 Years if Louise so long live."

• Louise?


•Louise: Term of years determinable.• Most likely to operate as a life estate, but L might live 99 more

years. (Yogurt in Georgia)• Can be used where there is some legal or tax reason to avoid

life estate (See Rule in Shelley’s Case after break).


•Louise: Term of years determinable.

•What other interests are there?


• Louise: Term of years determinable.

• Thelma: • Possibility of Reverter (rights if L dies before 99 years)

PLUS

• Reversion (rights after 99 years if L alive) =


• Louise: Term of years determinable.• Thelma: Possibility of Reverter plus

Reversion =Reversion (Merger)

Doctrine of Merger• If one person becomes the owner of two contiguous interests, the

interests will

Doctrine of Merger• If one person becomes the owner of two contiguous interests, the interests will

• Example:

• Erik has a life estate.

• Katie holds the reversion that follows it.

• If Erik purchases the reversion from Katie, it merges with his life estate and he will have a fee simple absolute.

Mahrenholz v.Mahrenholz v.County BoardCounty Board

ARCHES: DQ4.05ARCHES: DQ4.05Mahrenholz Major Events

DELICATE ARCHES

ARCHES DQ4.05: Mahrenholz Major Events

•3/51: Grant to SD#1•2/69: Mrs.H dies intestate; HH sole heir•5/73: Property used for storage only•5/77: HH conveys interest to Ms•9/77: HH releases interest to SD#1

ARCHES DQ4.05: Mahrenholz Major EventsFee Simple Determinable Fee Simple Determinable & Poss. of Rev.Poss. of Rev.

•3/51: Grant to SD#1 SD=FSD + Hs=PRHs=PR•2/69: Mrs.H dies intestate; HH sole heir ?


• 2/69: Mrs.H dies intestate; HH sole heir SD=FSD + HH=PRHH=PR

•5/73: Property used for storage only • 2 Possibilities: Violation or Not ?


SD=FSD + HH=PRHH=PR5/73: Property used for storage only

GRANT VIOLATEDHH-FEE SIMPLE ABS.

5/77 HH Ms

NO VIOLATIONSD-FSD HH-PRHH-PR

5/77 HH Ms


5/77: HH Mahrenholzes

GRANT VIOLATEDHH-FEE SIMPLE ABS.

Ms-FEE SIMPLE ABSOLUTE

9/77 HH release to SD?

NO VIOLATIONSD-FSD HH-PR HH-PR

SD-FSD HH-PRHH-PRCan’t Transfer PR in Illinois

Except to Holder of Fee; Only Passes Through Intestacy



9/77: HH Release to SD

GRANT VIOLATEDMs-FEE SIMPLE ABS.

HH has Nothing, So Release Ineffective

Ms-FEE SIMPLE ABS.

NO VIOLATIONSD-FSD HH-PRHH-PR

Release to Holder of Fee Allowed; School District’s

Interests Merge

SD-FEE SIMPLE ABS.

ARCHES DQ4.05: Mahrenholz Major EventsFee Simple on Condition Subsequent Fee Simple on Condition Subsequent &

Right of EntryRight of Entry

•3/51: Grant to SD#1 SD=FSCS + Hs=REHs=RE•2/69: Mrs.H dies intestate; HH sole heir ?

ARCHES DQ4.05: Mahrenholz Major EventsFee Simple on C.S. Fee Simple on C.S. & Rt. Of EntryRt. Of Entry

• 2/69: Mrs.H dies intestate; HH sole heir SD=FSCS + HH=REHH=RE

•5/73: Property used for storage only • 2 Possibilities: Violation or Not ?


SD=FSCS + HH=REHH=RE5/73: Property used for storage only

GRANT VIOLATEDSD-FSCS HH-REHH-RE

Right of Entry Only Can Become Fee if Holder Acts: HH Didn’t5/77 HH Ms

NO VIOLATIONSD-FSCS HH-REHH-RE

5/77 HH Ms


SD=FSCS + HH=REHH=RE5/77: HH Mahrenholzes

GRANT VIOLATED

SD-FSCS HH-REHH-RECan’t Transfer RE in Illinois Except to

Holder of Fee, so No Change



Can’t Transfer RE in Illinois Except to Holder of Fee, so No Change



SD=FSCS + HH=REHH=RE9/77: HH Release to SD

GRANT VIOLATED

SD-FSCS HH-REHH-RERelease to Holder of Fee Allowed; School District’s Interests Merge

SD-FEE SIMPLE ABS.


Release to Holder of Fee Allowed; School District’s Interests Merge

SD-FEE SIMPLE ABS.

Mahrenholz: Summary of Possibilities

FSD/PR FSCS/RE

Violation Mahrenholzes School District

No Violation School District School District

ARCHES: Mahrenholz & DQs 4.06-4.08: Distinguishing FSD from FSCSFSD from FSCS

DELICATE ARCHES

ARCHES: Mahrenholz & DQ4.06Distinguishing FSD from FSCSFSD from FSCS

The court says: “The type of interest held governs the mode of reinvestment with title if reinvestment is to

occur.” (Top para. S90)

What does the court mean by “reinvestment”?


“In Northwestern Univ. …, a conveyance was ‘made upon the express condition that… Wesley Hospital… shall erect a hospital

building on said lot … and that on the failure of … Wesley Hospital to carry out these conditions the title shall revert to

Northwestern University.’ This language cannot be interpreted as creating anything but a

fee simple subject to a condition subsequent…” (S92, 3d full para.)

WHY NOT?


Northwestern Univ.: •Grant to build hospital building on lot conveyed.•If FSD: Very difficult to identify precise moment when condition is violated and grantee loses fee•Interpret as FSCS • Grantor can exercise discretion about when grantee has

sufficiently shown non-compliance • Court doesn’t have to do line-drawing about when a building

isn’t built


In its discussion of McElvain, the court says that “as an action in ejectment was brought…,

the difference between a fee simple determinable and a fee simple subject to a

condition subsequent would have no practical effect ….” (S93)

Why does it believe this?

Mahrenholz Distinguishing FSD from FSCS (3d Para. S90)FSD from FSCS (3d Para. S90)

•Use FSD to give property “for so long as it is needed for the purposes for which it is given and no longer” (a “limited grant”)

•Use a FSCS “to compel compliance with a condition by penalty of a forfeiture.” (an “absolute grant to which a condition is appended”)

•Pretty fine distinction• Court is describing idealized use of the forms• Can use to argue a particular grant is FSD or FSCS

Mahrenholz Distinguishing FSD from FSCS (S90)FSD from FSCS (S90)

Use FSD to give property “for so long as it is needed for the purposes for which it is given and no longer” •To Xavier, so long as he operates his dental practice on the premises.•To Yolanda, so long as she doesn’t remarry.•To Zebulon University, so long as it is used as a research laboratory.

Mahrenholz Distinguishing FSD from FSCS (S90)FSD from FSCS (S90)

•Use a FSCS “to compel compliance with a condition by penalty of a forfeiture.” • To Xavier, but if the property is ever used for commercial purposes …• To Yolanda, but if alcohol is ever used on the premises …• To Zebulon University for construction of a science building, but if the building is

not completed within 5 years or if it ever ceases to be used for educational purposes …

BISCAYNE: Mahrenholz & DQ4.09Distinguishing FSD from FSCSFSD from FSCS

"to be used for school purpose only; otherwise to revert to Grantors herein.”

•Arguments for FSD• “only” suggests automatic• Condition in clause creating fee, not subsequent clause • “to revert” (v. “may re-enter”) suggests automatic• Similar grants held FSD

BISCAYNE: Mahrenholz & DQ4.09Distinguishing FSD from FSCSFSD from FSCS

"to be used for school purpose only; otherwise to revert to Grantors herein.”

•Arguments for FSCS• 2 clauses usually used for FSCS• No time words• “Otherwise” looks like “but if” • Most states presume FSCS

BISCAYNE: Mahrenholz & DQ4.10Distinguishing FSD from FSCS:FSD from FSCS:

Possible Consequences of the Distinction: Possible Consequences of the Distinction:

•Transferability after breach (Mahrenholz issue)

•Adverse Possession (Clock starts running immediately when condition violated if FSD)

•Income from land after breach • Goes to future interest holder if FSD (See Lasater @ P532)

•Waiver/Estoppel by future interest holder• Only possible if FSCS

BISCAYNE: Mahrenholz & DQ4.10Distinguishing FSD from FSCS: ConsequencesFSD from FSCS: Consequences

Given significant consequences, why do so many grants fail to indicate clearly which interest is intended?

Mahrenholz Distinguishing FSD from FSCS:FSD from FSCS:

Test Note #2Test Note #2: : Test Will Include At Least One Grant (Yielding Multiple Test Will Include At Least One Grant (Yielding Multiple Questions) with a Present Estate That Could Be Either Questions) with a Present Estate That Could Be Either

DeterminableDeterminable or or on Condition Subsequenton Condition Subsequent, So You Need , So You Need to Know Arguments Distinguishing the Twoto Know Arguments Distinguishing the Two.

E.g., Problem 4I Includes This Kind of Ambiguous Grant

BISCAYNE: DQ4.11BISCAYNE: DQ4.11Violation of School Purposes Condition?Violation of School Purposes Condition?

SUNRISE AT ADAMS KEY

BISCAYNE: Mahrenholz & DQ4.11Meaning of “School Purpose”

IS STORAGE A “SCHOOL PURPOSE”?

•Parties’ Likely Arguments• For School District?• For Future Interest Holder?


IS STORAGE A “SCHOOL PURPOSE”?•What legal research could you do to help resolve this question?


IS STORAGE A “SCHOOL PURPOSE”?•Useful Legal Research includes:

• CASES ON “SCHOOL PURPOSE”

• CASES ON “CHURCH PURPOSE” ETC. • OTHER LEGAL LIMITS ON SCHOOL ACTIVITIES (to demonstrate what the term

could reasonably be understood to mean)


IS STORAGE A “SCHOOL PURPOSE”?•Useful Factual Research includes:• Use of Space: Relevant Qs/Investigation?

• Grantor’s Intent


IS STORAGE A “SCHOOL PURPOSE”?•Useful Factual Research includes:• Use of Space• What is stored & how used? • Alternatives (Crowding? Cost?)• How regularly is storage accessed?

•Grantor’s Intent: Relevant Qs/Investigation?


IS STORAGE A “SCHOOL PURPOSE”?•Useful Factual Research includes:• Use of Space• Grantor’s Intent• Check Grant or Related Documents•Witnesses to Transaction• Ask Grantor if Still Alive•Witnesses re Grantor Beliefs

Mahrenholz Meaning of “School Purpose”

Test Note #3Test Note #3: : Test Will Include At Least One Grant Containing an Test Will Include At Least One Grant Containing an

Imprecise Term Like “School Purpose” and You Will Be Imprecise Term Like “School Purpose” and You Will Be Asked to Consider Arguments About Whether a Asked to Consider Arguments About Whether a

Particular Action or Activity Falls Within that Term.Particular Action or Activity Falls Within that Term.

BISCAYNE: Mahrenholz & DQ4.12

Why should we allow grantors to have any control at all of what happens to land after

they have died?

We’ll come back to after Spring Break w Shapira case.