• Life Estates Continued • Defeasible Estates Baker v. Weedon, 262 So. 2d 641 (Miss. 1972), Casebook, p. 230. The Life Estate Continued I give and bequeath to my beloved wife, Anna Plaxico Weedon all of property . During her natural life and upon her death to her children, if she has any, and in the event she dies without issue then at the death of my wife Anna Plaxico Weedon, I give . all my property to my grandchildren, each grandchild sharing equally with the other. 1 Baker v. Weedon cont’d The Life Estate Continued • Necessary— – To prevent waste? – In the best interests of all parties? • Remedies – Selling the entire estate is drastic. – Sell only part to provide for Anna’s reasonable needs if parties can’t “unite to hypothecate” the land. Baker v. Weedon cont’d The Life Estate Continued • Reasonable needs of life tenant? • Efficiency of proposed remedy? Chancellor will have continuing jurisdiction. • Sale of entire estate drastic? • Balancing rights of present interest holders against those of future interest holders. 2 Defeasible Estates • So far, we’ve studied two kinds of fee simple. – Absolute – Defeasible • There are two defeasible fees simple. – Determinable – Subject to Condition Subsequent Defeasible Estates Fee Simple Determinable • It will end automatically when an event occurs. The grantor is conveying a fee simple only until an event happens. • It uses words of duration, such as “so long as” “while used for”, and “until”. 3 Defeasible Estates Fee Simple Determinable cont’d • The future interest created is a possibility of reverter. • The future interest may be expressly retained or it may arise by operation of law. Defeasible Estates Fee Simple Subject to Condition Subsequent • It may be cut short or divested at the transferor’s election when a condition occurs. • It uses words such as “but if”, “provided, however”, and “on condition that” 4 Defeasible Estates Fee Simple Subject to Condition Subsequent cont’d • The future interest created is a right of entry or a power of termination. • The fee simple continues unless and until the right of entry is exercised. Mahrenholz v. County Board of School Trustees, 417 N.E. 2d 138 (Ill. 1981), Casebook, p. 242. “this land to be used for school purpose only; otherwise to revert to Grantors herein” • Inalienability brings this case to court. • If these interests were alienable in Illinois, Mahrenholz would win regardless of the classification because he was an assigned of the Jacqmains who were assignees of the Huttons. 5 Mahrenholz cont’d • Defeasible Estate – Determinable? – Subject to Condition Subsequent? • Distinguishable from Latham and McElvain? Mahrenholz cont’d • Latham – “their successor and assigns forever, for the uses and purposes hereinafter mentioned and for NONE other” – It was a grant “forever” which was subjected to certain use restrictions. • McElvain – “This tract of land is to be used for mill purposes, and if not used for mill purposes the title reverts back to the former owner.” – Action of ejectment was brought so didn’t make a difference. 6 Mahrenholz cont’d • Use of the land was still furthering educational goal. • Changed conditions equitable deviation doctrine for defeasible fees to non-profits Mountain Brow Lodge No. 82 v. Toscano, 64 Cal. Rptr. 816 (1968), p. 251. “Said property is restricted for the use and benefit of the second party [the Lodge], only, and [first condition] in the event the same fails to be used by the second party or [second condition] in the event of sale or transfer by the second party of all or any party of said lot, the same is to revert to the first parties herein, their successors, heirs or assigns.” 7 Mountain Brow Lodge No. 82 v. Toscano cont’d • “fee subject to condition subsequent with title to revert to the grantors”. – Note: The court mixed up the two estates. Condition subject goes with right of entry. Determinable goes with possibility of reverter. • Restraints on Alienation – Public Policy Mountain Brow Lodge No. 82 v. Toscano cont’d • Restraints on Alienation – Effects on marketability – Concentration of wealth – Discourage improvements – Prevent creditors from reaching the property – Encourage gifts to charity 8 Enjoy Spring Break!!! 9.