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DEFEASIBLE FEES

DEFEASIBLE FEES. DEFEASIBLE FEES Restatement Terms. FEE SIMPLE DETERMINABLE (to grantor; automatic) F.S. ON CONDITION SUBSEQUENT (to grantor; must act) F.S. ON EXECUTORY LIMITATION (any to grantee). IDENTIFYING DEFEASIBLE FEES. IDENTIFYING DEFEASIBLE FEES.

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DEFEASIBLE FEES

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  1. DEFEASIBLE FEES

  2. DEFEASIBLE FEESRestatement Terms • FEE SIMPLE DETERMINABLE (to grantor; automatic) • F.S. ON CONDITION SUBSEQUENT (to grantor; must act) • F.S. ON EXECUTORY LIMITATION (any to grantee)

  3. IDENTIFYING DEFEASIBLE FEES

  4. IDENTIFYING DEFEASIBLE FEES

  5. IDENTIFYING DEFEASIBLE FEES

  6. Warning: Inconsistency • Textbook says Fee Simple on Executory Limitation terminates automatically (P580) • 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 & her heirs may enter and take the land.”

  7. DEFEASIBLE FEES v. CONTINGENT REMAINDERS

  8. DEFEASIBLE FEES PRESENT INTEREST IS FEE CONTINGENT REMAINDERS PRESENT INTEREST IS FINITE

  9. DEFEASIBLE FEES PRESENT INTEREST IS FEE PRESENT ESTATE CUT OFF IF CONDITION MET CONTINGENT REMAINDERS PRESENT INTEREST IS FINITE PRESENT ESTATE TERMINATES NATURALLY

  10. DEFEASIBLE FEES PRESENT INTEREST IS FEE PRESENT ESTATE CUT OFF IF CONDITION MET FUTURE INTEREST IN EITHER GRANTOR OR GRANTEE CONTINGENT REMAINDERS PRESENT INTEREST IS FINITE PRESENT ESTATE TERMINATES NATURALLY REMAINDER IN GRANTEE PLUSREVERSION IN GRANTOR

  11. Pepe grants Tealacre to Rory and his heirs, but if Totie loses 100 pounds, she may enter and retake the land.(Fee Simple on Executory Limitation + Executory Interest) Pepe grants Tealacre to Rory for life, then to Totie if she loses 100 pounds. (Life Estate + Contingent Remainder)

  12. Back to the Beatles:(H): Thelma conveys "to Louise for 99 years if Louise so long live." Louise?

  13. (H): Thelma conveys "to Louise for 99 years if Louise so long live." Louise: Term of years determinable. What other interests are there?

  14. (H): Thelma conveys "to Louise for 99 years if Louise so long live." Louise: Term of years determinable. Thelma:Possibility of Reverter + Reversion = Reversion (Merger)

  15. DOCTRINE OF MERGER If one person becomes the owner of two contiguous interests, the interests will “merge”

  16. DOCTRINE OF MERGER If one person becomes the owner of two contiguous interests, the interests will merge. Example: Eric has a life estate. Vanessa holds the reversion that follows it. If Eric purchases the reversion from Vanessa, it merges with his life estate and he will have a fee simple absolute.

  17. DOCTRINE OF MERGER If one person becomes the owner of two contiguous interests, the interests will merge. Example: Eric has a life estate. Vanessa holds the reversion that follows it. If Eric purchases the reversion from Vanessa, it merges with his life estate and he will have a fee simple absolute. **MERGE**

  18. Mahrenholz v. County BoardDQs E5-E8 Eagles

  19. IGNORE THE JACQMAINS • Delete last paragraph on P581. • Delete last complete paragraph on P582. • Pretend you never heard of the Jacqmains.

  20. Mahrenholz v. County BoardMAJOR 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

  21. Mahrenholz v. County BoardMAJOR EVENTS: FSD +PR • 3/51: Grant to SD#1: SD-FSD Hs-PR • 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

  22. Mahrenholz v. County BoardMAJOR EVENTS: FSD +PR • 3/51: SD-FSD Hs-PR • 2/69: Mrs.H dies intestate; HH sole heir SD-FSD HH-PR • 5/73: Property used for storage only? (2 Possibilities: Violation or Not) • 5/77: HH conveys interest to Ms • 9/77: HH releases interest to SD#1

  23. GRANT VIOLATED HH-FEE SIMPLE ABSOLUTE 5/77 HH --> Ms? NO VIOLATION SD-FSD HH-PR 5/77 HH --> Ms? Mahrenholz v. County BoardMAJOR EVENTS: FSD +PR2/69: SD-FSD HH-PR

  24. GRANT VIOLATED HH-FS ABSOLUTE 5/77 HH --> Ms? Ms-FS Absolute 9/77 HH release to SD? NO VIOLATION SD-FSD HH-PR5/77 HH --> Ms? SD-FSD HH-PR 9/77 HH release to SD? Mahrenholz v. County BoardMAJOR EVENTS: FSD +PR

  25. GRANT VIOLATED Ms-FS Absolute 9/77 HH release to SD? Ms - FS Absolute NO VIOLATION SD-FSD HH-PR 9/77 HH release to SD? SD - FS Absolute Mahrenholz v. County BoardMAJOR EVENTS: FSD +PR

  26. Mahrenholz v. County BoardMAJOR EVENTS: FSCS +RE • 3/51: Grant to SD#1: SD-FSCS Hs-RE • 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

  27. Mahrenholz v. County BoardMAJOR EVENTS: FSCS +RE • 3/51: SD-FSCS Hs-RE • 2/69: Mrs.H dies intestate; HH sole heir SD-FSCS HH-RE • 5/73: Property used for storage only? (2 Possibilities: Violation or Not) • 5/77: HH conveys interest to Ms • 9/77: HH releases interest to SD#1

  28. GRANT VIOLATED SD-FSCS HH-RE 5/77 HH --> Ms? NO VIOLATION SD-FSCS HH-RE 5/77 HH --> Ms? Mahrenholz v. County BoardMAJOR EVENTS: FSCS +RE2/69: SD-FSCS HH-RE

  29. GRANT VIOLATED SD-FSCS HH-RE 5/77 HH --> Ms? SD-FSCS HH-RE 9/77 HH release to SD? NO VIOLATION SD-FSCS HH-RE 5/77 HH --> Ms? SD-FSCS HH-RE 9/77 HH release to SD? Mahrenholz v. County BoardMAJOR EVENTS: FSCS +RE

  30. GRANT VIOLATED SD-FSCS HH-RE 9/77 HH release to SD? SD - FS Absolute NO VIOLATION SD-FSCS HH-RE 9/77 HH release to SD? SD - FS Absolute Mahrenholz v. County BoardMAJOR EVENTS: FSCS +RE

  31. Mahrenholz: Summary of Possibilities

  32. Mahrenholz v. County BoardThe court says (P583) : “The type of interest held governs the mode of reinvestment with title if reinvestment is to occur.”DQE6. What does the court mean by “reinvestment” ?

  33. DQE7: (P584) “In Northwestern Univ. …, a conveyance was ‘made upon the express condition that said Wesley Hospital… shall erect a hospital building on said lot … and that on the failure of said 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, and the court so held.”

  34. DQE8: In a deleted passage 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 ….”Why does it believe this?

  35. Mahrenholz v. County BoardDQs E9-E12 Fleetwood Mac

  36. Mahrenholz v. County Board To the Trustees of School District No. 1: "to be used for school purpose only; otherwise to revert to Grantors herein.” DQE9: Fee Simple Determinable or Fee Simple on Condition Subsequent?

  37. To Trustees of SD No.1: "to be used for school purpose only; otherwise to revert to Grantors herein.”: FSD • “only” suggests automatic • condition in 1st clause • “to revert” (v. “may re-enter”) suggests automatic • similar grants held FSD

  38. To Trustees of SD No.1: "to be used for school purpose only; otherwise to revert to Grantors herein.” FSCS: • 2 clauses usually used for FSCS • No time words • Most states presume FSCS

  39. Mahrenholz v. County BoardDQE10: Under what circumstances might the distinction between a fee simple determinable and a fee simple on condition subsequent be significant?

  40. FSD v. FSCS: Consequences • Transferability after breach (Mahrenholz)

  41. FSD v. FSCS: Consequences • Transferability after breach • Adverse Possession

  42. FSD v. FSCS: Consequences • Transferability after breach • Adverse Possession • Income from land after breach (to grantor if FSD)

  43. FSD v. FSCS: Consequences • Transferability after breach • Adverse Possession • Income from land after breach • Waiver/Estoppel by future interest holder (possible if FSCS)

  44. DQE10: Why do so many grants fail to indicate clearly which interest is intended?

  45. DQE11: IS STORAGE A “SCHOOL PURPOSE”?ARGUMENTS

  46. DQE11:IS STORAGE A “SCHOOL PURPOSE”?What legal research could you do to help resolve this question?

  47. DQE11: IS STORAGE A “SCHOOL PURPOSE”?: RESEARCHLEGAL:CASES ON “SCHOOL PURPOSE”CASES ON “CHURCH PURPOSE” ETC.FACTUAL: WHAT FACTS MATTER ?

  48. DQE11: IS STORAGE A “SCHOOL PURPOSE”?: RESEARCHFACTUAL: GRANTOR’S INTENTIN GRANT ITSELFWITNESSES TO TRANSACTIONASK GRANTORWITNESSES RE GRANTOR BELIEFS

  49. DQE12. Why should we allow grantors to have any control at all of what happens to land after they have died?

  50. PROBLEMS I-L Featuring The Grateful Dead

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