Session 07 Notes

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Waste

Remedies for Waste: Injunction or damages (p. 289)

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Three Types of Waste (p. 292)

1. Affirmative Waste
   • Liability from injurious acts with more than trivial effects
   • Generally means acts that substantially reduce property value
2. Permissive Waste
   • Essentially negligence
   • Failure to maintain property
3. Ameliorative Waste
   • Tenant increases (rather than decreases) market value of the land

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Defeasible Estates (p. 294-295)

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Fee Simple Determinable

Definition: A fee simple that will end automatically when a stated event happens Key Characteristics:

• Durational language: “so long as,” “while,” “during,” “until”
• Automatic forfeiture upon breach
• Grantor retains possibility of reverter

Example: O conveys Blackacre to Hartford School Board “so long as the premises are used for school purposes”

• If school use ceases, fee simple automatically ends
• Property reverts to O automatically

Important Distinction:

• Words of motivation or desire are insufficient
• “For school purposes” (without durational language) = fee simple absolute
• “So long as used for school purposes” = fee simple determinable

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Fee Simple Subject to Condition Subsequent

Key Characteristics:

• Conditional language: “but if,” “on condition that,” “provided that”
• NOT automatic - requires grantor to exercise right of entry
• Grantor has right of entry (also called right of re-entry)
• Discretionary - grantor chooses whether and when to re-enter

Example: O conveys to Hartford School Board “but if the premises are not used for school purposes, grantor has the right to re-enter and retake the premises” Key Difference from Determinable:

• Condition subsequent requires affirmative action by grantor
• NOT automatic forfeiture
• Property interest is voidable (not void)

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Fee Simple Subject to Executory Limitation

Key Characteristic: Interest goes to third party (not back to grantor) Example: O to A, but if alcohol is consumed, then to B

• A has fee simple subject to executory limitation
• B has executory interest

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Case Law

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Paul Smith’s College v. Roman Catholic Diocese (p. 298)

Facts:

• 1937 deed conveyed land to Diocese “for so long as the premises shall be used for church purposes”
• Deed stated if not used for church purposes, “title shall revert to Paul Smith’s College”
• Also stated grantor has “right to re-enter and retake possession”
• Diocese ceased using property as church in 1970s

Issue: Fee simple determinable or fee simple subject to condition subsequent? Holding: Fee simple determinable Key Language Analysis:

• “For church purposes only” - strict limitation
• “Shall be void” (not “voidable”) - indicates automatic forfeiture
• “So long as” - durational language
• Mixed with “right to re-enter” language (typically indicates condition subsequent)

Court’s Reasoning:

• “Void” vs. “voidable” distinction is controlling
  • Void = automatic termination (determinable)
  • Voidable = can be terminated at grantor’s discretion (condition subsequent)
• “Only” shows strict limitation
• “Shall be void” indicates automatic forfeiture
• Despite “right to re-enter” language, the “void” terminology controls

Exam Tip: When analyzing mixed language:

1. Look for “void” vs. “voidable”
2. Durational words (“so long as,” “only”) suggest determinable
3. Right of re-entry suggests condition subsequent
4. Court must determine which language controls based on grantor’s intent

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Mountain Brow Lodge (Odd Fellows) v. Toscano (p. 305)

Facts:

• Deed stated property “restricted for the use and benefit of second party [lodge] only”
• Also stated: “in the event of sale or transfer by second party, same is to revert to first parties”

Issue: Does the restriction create a defeasible fee or a restraint on alienation? Court’s Analysis: Second Part (Sale/Transfer Clause):

• “In the event of sale or transfer” = clear restraint on alienation
• INVALID - crossed out by court

First Part (Use Restriction):

• “Restricted for use and benefit of second party only”
• Argument: implies lodge can’t sell (wouldn’t be for their use anymore)
• Court rejected this interpretation

Holding: Fee simple subject to condition subsequent Reasoning:

1. Second clause explicitly penalized sale/transfer (restraint - invalid)
2. Grantor wouldn’t be repetitive in first and second clauses
3. First clause creates condition on use, not on transfer
4. Intent was to restrict use to lodge purposes, NOT to prevent alienation
5. Dissent argued it’s an indirect restraint on alienation

Default Rule for Ambiguity (p. 302): In cases of hopeless ambiguity, presume fee simple subject to condition subsequent

• Rationale: Avoids harsh automatic forfeiture
• Protects grantee who may not be aware of consequences
• Defaults to requiring grantor’s affirmative action

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Conflicting Language Example (p. 302-303)

Hypothetical: O to A “so long as premises not used for sale of beer, wine, or liquor, and if such beverages are sold, O retains right to re-enter” Problem: Mixed signals

• “So long as” = determinable language
• “Right to re-enter” = condition subsequent language

Professor’s Analysis:

• Book authors: “so long as” controls → determinable
• Professor’s view: “right to re-enter” controls → condition subsequent
• Latter part shows O’s intent about what happens on breach

Additional Complexity: A opens restaurant that:

• Cooks with wine/brandy
• Offers complimentary champagne with brunch

Question: Is this a breach?

• Not “selling” liquor (champagne is free, cooking uses it)
• Could argue champagne price is included in brunch cost

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Transferability of Future Interests (p. 301)

Modern/Majority Rule:

• Possibility of reverter and right of entry are transferable inter vivos and devisable

Common Law/Minority Rule:

• These interests are NOT transferable inter vivos or devisable
• Exception: Can transfer to owner of possessory fee

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Condemnation of Defeasible Fees (p. 311)

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Ink v. City of Canton

Issue: When government takes land held in defeasible fee via eminent domain, how is compensation divided? Majority Rule:

• Holder of defeasible fee gets 100% of fair market value
• Rationale: Defeasible fee could last forever; future interest holders may never take

Minority Rule (Ohio Supreme Court):

• Compensation should be apportioned between:
  • Defeasible fee holder
  • Future interest holders (possibility of reverter, etc.)
• Rationale: Fairness and equity
  • Especially where defeasible fee holder received property as gift (paid nothing)
  • Prevents unjust windfall

Holding: Ohio court adopted minority view - compensation divided

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Restraints on Marriage (p. 318-319)

Public Policy: Government favors promotion of marriage Two-Part Analysis:

1. Purpose of coercing abstention from marriage (INVALID)
   • “To A for life, but if A marries, then to B”
   • Language: “but if” - penalizes marriage
   • Intent: Punishment for marrying
2. Purpose of providing support until marriage (VALID)
   • “To A for life so long as A remains unmarried, then to B”
   • Durational language: “so long as”
   • Intent: Support A until spouse can provide support
   • Presumption: Spouse will provide support after marriage

Historical Context: Pre-modern law when women couldn’t own property and needed male support

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Review Problems (p. 319)

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Problem 1

Conveyance: O to A and her heirs, but if Blackacre used for non-agricultural purposes, O has right to re-enter Analysis:

• O: Fee simple absolute (initially)
• A: Fee simple subject to condition subsequent
  • “Her heirs” = fee language
  • “But if” = conditional language
  • Limited by use restriction
• O: Right of entry

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Problem 2

Facts: Same as Problem 1, but A begins construction of residences; O dies and devises estate to B Analysis:

• A: Still has fee simple subject to condition subsequent (breached)
• B: Inherits O’s right of entry
• B can exercise right at any time
• If B exercises right, B gets fee simple absolute

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Problem 3

Conveyance: O to A and her heirs so long as Blackacre used for residential purposes only Analysis:

• O: Fee simple absolute (initially)
• A: Fee simple determinable
  • “So long as” = durational language
  • “Only” = strict limitation
• O: Possibility of reverter

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Problem 4

Facts: Same as Problem 3, but A builds factory; O dies and devises estate to B Analysis:

• A breached → automatic forfeiture (determinable)
• Property automatically reverts
• B: Fee simple absolute (inherited what became O’s possessory estate after automatic reversion)

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Problem 8

Conveyance: O to A and his heirs, but if A ever drinks alcohol, then to B and her heirs Analysis:

• O: Fee simple absolute (initially)
• A: Fee simple subject to executory limitation
  • Goes to third party (B), not back to O
• B: Executory interest in fee simple absolute

Later: B conveys interest to C

• C: Executory interest in fee simple absolute

Later: A drinks whiskey

• Breach occurs
• C: Fee simple absolute (executory interest divests A)

Important Limitation: Condition is “if A drinks alcohol”

• Only applies to A personally
• If A dies without drinking, A’s heirs get fee simple absolute
• B’s (or C’s) executory interest falls away
• Executory interest can only divest A, not A’s heirs

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Future Interests - Introduction

Definition: What someone could potentially get later (not present possessory interest) Focus: Analyzing interests of O, B, C, D (NOT A - A has present possessory interest)

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Remainders

Definition: Future interest in a grantee that is capable (but not certain) of becoming possessory upon natural expiration of prior estate Key Requirement: Natural expiration = death

• Remainder NEVER follows a fee (fees don’t naturally expire)
• Remainders follow life estates

Two Categories:

1. Vested Remainders
2. Contingent Remainders

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Vested Remainders - Three Types

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1. Indefeasible Vested Remainder

Characteristics:

• Grantee is ascertainable (known person)
• No conditions to fulfill before taking
• Guaranteed to get it when prior estate ends

Example 1: O to A for life, then to B

• A: Life estate (measuring life = A)
• B: Indefeasible vested remainder in fee simple absolute

Example 2: O to A for life, then to B for life

• A: Life estate (measuring life = A)
• B: Indefeasible vested remainder in life estate
• O: Reversion (property returns to O when B dies)

Reversion Rule: Future interest in grantor that automatically becomes possessory upon natural expiration of preceding estate

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2. Vested Remainder Subject to Partial Divestment (Subject to Open)

Key Concept: Class gift - going to group of people Example: O to A for life, then to B’s children; B has one child, C Analysis:

• O: Fee simple absolute
• A: Life estate (measuring life = A)
• C: Vested remainder subject to partial divestment (or “subject to open”)

Rationale:

• B can have more children
• Class is still “open”
• C’s share could be diluted by additional class members
• Like sharing pizza - more siblings = smaller slices

When B dies:

• Class closes (no more children possible)
• All children become indefeasibly vested
• Each child: Indefeasible vested remainder in fee simple absolute

Class Members:

• If C has child D, and C dies before B:
  • D steps into C’s interest
  • D shares proportionally with other class members

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3. Vested Remainder Subject to Complete/Total Divestment

Example: O to A for life, then to B, unless C gets an A+ in property, then to C Analysis:

• A: Life estate (measuring life = A)
• B: Vested remainder subject to total divestment
  • B is named (ascertainable)
  • No conditions B must fulfill
  • But B’s interest can be completely taken away
• C: Shifting executory interest in fee simple absolute
  • Takes from B if condition met

If C gets A+ while A alive:

• C divests B
• C: Indefeasible vested remainder in fee simple absolute

Distinction from Subject to Open:

• Subject to open: Share gets smaller (partial)
• Subject to total divestment: Interest completely taken away

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Contingent Remainders

Two Scenarios:

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1. Grantee Unascertainable

Example 1: O to A for life, then to B’s heirs (B alive)

• B’s heirs: Contingent remainder
• Rationale: Can’t identify heirs until B dies
• O: Reversion (in case contingency never occurs)

Example 2: O to A for life, then to A’s wife (A married 50 years)

• A’s wife: Contingent remainder
• Rationale: “Wife” doesn’t identify specific person
  • A could divorce and remarry
  • A could die without a wife
• O: Reversion

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2. Subject to Condition Precedent

Example: O to A for life, then to B if B gets A+ in property

• B: Contingent remainder in fee simple absolute
  • B must fulfill condition before taking
  • B is subject to condition precedent
• O: Reversion (if B never gets A+)

If B gets A+ while A alive:

• Condition fulfilled
• B’s interest transposes to indefeasible vested remainder

Cardinal Rule: Whenever conveyance ends with contingent remainder, assume O has reversion

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Executory Interests (Brief Introduction)

Two Types:

1. Shifting executory interest - divests another grantee
2. Springing executory interest - divests grantor

Note: Full treatment deferred to next session

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Future Interests in Grantor

1. Possibility of reverter (follows fee simple determinable)
2. Right of entry (follows fee simple subject to condition subsequent)
3. Reversion (follows life estate when no complete disposition)

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Key Terminology Distinctions

• Void = automatic termination, gone immediately
• Voidable = can be terminated at holder’s discretion
• Reversion = follows life estate only
• Possibility of reverter = follows fee simple determinable
• Right of entry = follows fee simple subject to condition subsequent

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Exam Tips

1. Mixed language problems: Determine grantor’s intent; when ambiguous, default to condition subsequent
2. Future interests never follow fees with natural expiration: Remainders only follow life estates
3. Automatic reversion with contingent remainders: Always give O a reversion when remainder is contingent
4. Transposition of interests: Contingent can become vested; subject to open can become indefeasible
5. Personal conditions: “If A does X” only applies to A, not A’s heirs
6. Class gifts: Subject to Rule Against Perpetuities (upcoming topic)

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Next Topics

• Executory interests (springing and shifting)
• Rule Against Perpetuities
• Future interests casebook chapter