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# Session 06 Notes

> Property class session 06 - Present Possessory Estates, Future Interests, and Restraints on Alienation

## I. Overview of Estates Classification

### A. Initial Analysis Framework

* **First Question**: Is the estate in **fee** or **life**?
* **Life Estates** (3 types):
  1. Life of the grantee (O to A for life)
  2. *Pur autre vie* (life of another)
  3. Defeasible life estates (3 subtypes):
     * Life estate determinable
     * Life estate subject to condition subsequent
     * Life estate subject to executory limitation

### B. Fee Estates (3 types)

1. **Fee Simple Absolute** (common law/iPhone law)
2. **Fee Tail** (minority common law only - not often tested)
3. **Defeasible Fees** (3 subtypes):
   * Fee simple determinable
   * Fee simple subject to condition subsequent
   * Fee simple subject to executory limitation

## II. Fee Simple Determinable

### A. Definition and Characteristics

* **Automatic forfeiture** upon breach of condition
* Grantor (O) automatically retains a **possibility of reverter**
* **Operation of law** - no action required by grantor

### B. Future Interest

* O has a **possibility of reverter** (automatic)
* Created by operation of law when fee simple determinable is conveyed

### C. Multiple Future Interests Example

**Example**: O to A for life, so long as A uses Blackacre for residential purposes.

**Analysis**:

* O: Presumed fee simple absolute (initially)
* A: Determinable life estate (present possessory interest)
* O has **TWO** future interests:
  1. **Possibility of reverter** (if A breaches residential use condition)
  2. **Reversion** (when A dies)

**Rationale**: Property returns to O either (1) automatically upon breach, or (2) upon A's death - two separate triggering events

**Note**: Dean calls this a "reversionary interest" - NOT required terminology for exam purposes

## III. Fee Simple Subject to Condition Subsequent

### A. Definition and Characteristics

* **Discretionary** forfeiture upon breach
* O retains **right of entry** (also called "right of re-entry")
* Must be **expressly reserved** in the conveyance
* A retains property until O exercises right to re-enter and retake

### B. Future Interest

* O has a **right of entry** (discretionary, not automatic)
* Must be expressly reserved - O reserves right to re-enter and retake

### C. Comparison Chart

| Element         | Fee Simple Determinable                | Fee Simple Subject to Condition Subsequent             |
| --------------- | -------------------------------------- | ------------------------------------------------------ |
| Forfeiture      | Automatic                              | Discretionary                                          |
| Future Interest | Possibility of reverter                | Right of entry                                         |
| Creation        | Automatic by operation of law          | Must be expressly reserved                             |
| Language        | Durational (so long as, while, during) | Conditional (on condition that, provided that, but if) |

## IV. Restraints on Alienation

### A. General Rule

* Restraints that completely withhold ability to sell, transfer, or alienate are **INVALID**
* **Remedy**: Strike through (cross out) the invalid provision

### B. Validity Analysis - Three Factors

1. **Duration**: Is there a time limitation?
   * Unlimited duration = likely invalid
   * Limited duration (e.g., 10 years) = may be valid
2. **Purpose**: Is there an explanation or reasonable purpose?
3. **Reasonableness**: Can the restraint be assessed as reasonable?

### C. Example - Invalid Restraint

**Conveyance**: O to A, so long as Blackacre is used for residential purposes, and A or A's heirs never sell Blackacre ever.

**Analysis**:

* A has: Fee simple determinable
* O has: Possibility of reverter
* **Problem**: "Never sell Blackacre" provision
  * No duration limit
  * No explanation/purpose
  * Cannot assess reasonableness
  * **Result**: Strike through - provision is VOID

**After striking invalid restraint**:

* Reads as: "O to A, so long as Blackacre is used for residential purposes"
* A can sell to B
* B receives: Fee simple determinable (same as A had)
* Condition travels with the property

### D. Transfer of Defeasible Estates

**Key Principle**: A grantee can **never convey more** than what they have - only **equal or less**

**Example**: A (who has fee simple determinable) sells to B

* B receives: Fee simple determinable
* B must comply with same conditions A had
* The defeasible nature transfers with the property

**Example - Adding Additional Restrictions**:
O to A (so long as residential purposes) → A sells to B (so long as B uses as two-story residence)

* A has: Fee simple determinable + possibility of reverter (vis-à-vis B)
* B has: Fee simple determinable (more restricted than A's interest)
* B has **less** interest than A (confined to two-story residential, not just any residential)

## V. Ambiguous Conveyance Language

### A. Conflicting Language Problem

**Example**: O to A, on condition that Blackacre is used for residential purposes, otherwise Blackacre will automatically revert back to O.

**Issue**:

* "On condition that" = language suggesting condition subsequent
* "Automatically revert" = language suggesting determinable (automatic forfeiture)
* **Contradictory provisions**

### B. Resolution - Grantor's Intent Controls

**Analysis Steps**:

1. Identify the contrary language
2. Note the ambiguity
3. **Default to grantor's intent**
4. Examine what remedy/repercussions O wanted upon breach

**Automatic Forfeiture Language**:

* "Automatically revert back to O" indicates:
  * O wants immediate, automatic return
  * O doesn't want to exercise discretion
  * O doesn't want burden of re-entry
* **Conclusion**: Latter part of provision (automatic forfeiture) trumps the "on condition" language
* **Result**: Fee simple determinable (Professor's view)

### C. Jurisdictional Split

**Professor's View**: Fee simple determinable

* Automatic forfeiture language evidences O's intent
* Latter provision (remedy language) weighs more heavily

**Book's View**: May conclude fee simple determinable based on different analysis

* Examines durational language ("so long as")

**Exam Tip**: Either answer acceptable IF properly explained

* Must identify the ambiguity
* Must explain how contrary language creates conflict
* Must articulate which provision trumps and WHY
* **Analysis and reasoning matter more than conclusion**

### D. Minority Jurisdiction Rule (California)

**Majority Jurisdictions**:

* Recognize fee simple determinable
* Recognize fee simple subject to condition subsequent
* Recognize automatic forfeiture

**Minority Jurisdictions (e.g., California)**:

* Do **NOT** recognize fee simple determinable
* **No automatic forfeiture**
* All defeasible fees are either:
  * Fee simple subject to condition subsequent, OR
  * Fee simple subject to executory limitation

**Exam Note**: For extra credit, can write: "This would be a fee simple determinable in majority jurisdictions" (implies minority view is different)

## VI. Fee Simple Subject to Executory Limitation

### A. Key Distinction

* Property goes to **third party** (not back to O)
* O has **NO** possibility of reverter
* O has **NO** right of entry
* Third party (B) has **executory interest** (future interest)

### B. Critical Rule

**EXAM TIP**: A **remainder CANNOT follow a fee** - only follows a life estate

* This distinction is heavily tested
* Remainder = follows life estate, goes to third party
* If fee → third party = executory interest, not remainder

## VII. Case Law

### A. *Nof v. Gray* (Texas Supreme Court)

**Facts**:

* Vada Wallace Allen's will devised land to son William Robert Gray (Bobby)
* Will provision: Land to Bobby with instruction to maintain it and not sell it, pass down to his three children
* Bobby sold land to Pulaski Farms, LLC
* Bobby's children sued claiming Bobby only had life estate (couldn't sell in fee)

**Issue**: Did Bobby receive a fee simple or a life estate?

**Holding**: Life estate

**Analysis - Cardinal Rule of Will Construction**:

1. **Ascertain testator's intent** from instrument's language
2. Consider provisions as a whole
3. Harmonize provisions to give effect to overall intent

**Court's Reasoning**:

* Language "not to be sold, but passed on down to your children" demonstrates:
  1. Life estate elements present
  2. Grandchildren designated as **remaindermen**
  3. "Passed on down" = transfer upon Bobby's death to next generation
  4. Intent to keep property in family for multiple generations

**"Not to be Sold" Provision**:

* Bobby argued: Invalid restraint on alienation (should be struck)
* Court held: NOT a restraint; evidences intent to create life estate
* Rationale: Keeping property in family = good faith intention
* Future beneficiaries are grandchildren = confirms life estate, not fee

**Result**:

* Bobby: Life estate only
* Cannot sell in fee simple
* Sale to Pulaski Farms invalid

**Exam Application**:

* O to A, but not to be sold, passed on down to B
* "Not to be sold" + "passed on down to B" = life estate in A
* Cannot "pass on down" a fee (A would control disposition)
* Remainder to B evidences life estate in A

### B. *Baker v. Weedon* (Mississippi Supreme Court, 1972)

**Facts**:

* John Weedon (72) married Anna (17)
* Anna worked farm with John for \~20 years
* John's will: Life estate to Anna; remainder to John's 3 grandchildren (from prior marriage)
* Anna became elderly, couldn't work farm, rental income insufficient
* Anna sought judicial sale; grandchildren opposed
* Farm value: \~\$168,000, expected to double to \$336,000 in 4 years

**Issue**: May a court order judicial sale of property subject to future interests if necessary for best interest of all parties?

**Holding**: Yes, courts of equity may order judicial sale if necessary for best interest of all parties with current or future interests

**Analysis**:

* Present interest holder (Anna): Needs income, has creditors
* Future interest holders (grandchildren): Would lose appreciation if sold now
* Court must weigh equities of both sides

**Economic Waste Doctrine**:

* Life tenant committing waste may justify judicial sale
* Prevents further deterioration and value loss
* Must consider interests of future interest holders

**Result**:

* Remanded to trial court to determine best interest of all parties
* No clear formula provided
* Court balances:
  * Present needs of life tenant
  * Future financial interests of remaindermen
  * Overall economic efficiency

**Rule**: Court can order sale of entire property (present + future interests) and split proceeds if in everyone's best interest

## VIII. Restraints on Alienation - Policy Rationales

### A. Objections to Restraints (p. 284)

1. **Unmarketable Property**
   * Land becomes unavailable for highest and best use
   * Economic inefficiency

2. **Discourages Improvements**
   * Owner unlikely to invest in improvements on land they cannot sell
   * Reduces property development

3. **Repugnant to Fee**
   * Alienability is definitional characteristic of fee ownership
   * Restraints inconsistent with fee simple concept

## IX. Common Law vs. Modern Law

### A. Fee Simple Absolute - "Heirs" Requirement

**Common Law (Pre-1600s)**:

* **Required**: "O to A and his/her heirs"
* "Heirs" language mandatory for fee simple absolute
* Without "heirs" = life estate only

**Example**: O to A forever (1600)

* Common law: Life estate (no "heirs" language)
* "Forever" means A's lifetime, not perpetual
* Property reverts to O upon A's death

**Modern Law (iPhone Law)**:

* "Heirs" language NOT required
* Presumption of fee simple absolute
* Intent controls over magic words

### B. Fee Tail - Abolished

**Common Law**: O to A and the heirs of his/her body

* Lineal descendants only
* If A dies without children → reversion to O

**Modern**: Abolished in most jurisdictions

* Minority/far-reaching states only
* Not heavily tested

## X. Exam Tips and Study Strategies

### Key Memorization Points:

1. **Fee simple determinable** → possibility of reverter (automatic)
2. **Fee simple subject to condition subsequent** → right of entry (discretionary, must be expressly reserved)
3. **Fee simple subject to executory limitation** → executory interest in third party (O has nothing)
4. **Life estate** → reversion to O (unless remainder to third party)
5. **Remainder CANNOT follow a fee** (heavily tested)

### Analysis Framework:

1. Identify what O has initially (usually fee simple absolute)
2. Determine: Fee or Life?
3. If defeasible, identify type by:
   * Language used (durational vs. conditional)
   * Automatic vs. discretionary forfeiture
   * Who gets property upon breach (O or third party)
4. Identify future interests
5. Check for restraints on alienation
6. Apply grantor's intent when ambiguous

### Writing Tips:

* Always explain reasoning for identifying estate type
* When ambiguous language present:
  * Identify the ambiguity explicitly
  * Explain contrary provisions
  * State which provision controls and WHY
  * Grantor's intent is tiebreaker
* Can present alternative analyses if book disagrees with reasoning
* Thoroughness of analysis matters more than conclusion