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ESTATES IN LAND AND INTERESTS CREATED. I. GENERAL.
II. PRESENT ESTATES.
The most complete estate of ownership is known as a fee, or estate in fee simple. It is a freehold in perpetuity. It was formerly necessary in a deed, after the words of conveyance to the grantee, to add the words "and to his heirs," and if the word "heirs" was not used, only a life estate passed, no matter how clearly an absolute interest was intended and expressed. The rule was not quite so strict with respect to the creation of a fee simple in a will. There, if "heirs" was not used, a life estate was devised unless other words showed a contrary intent. Modern statutes have changed all this, so that a simple gift to A, whether by deed or will, prima, facie is effective to confer a fee simple upon the grantee or devisee, and other words must be found to cut down the interest to a less estate. Conveyances to modern business corporations confer a fee without the use of any words beyond the name of the corporation. It is customary, however, to put after the words of conveyance to the corporation "and to its successors and assigns forever, so as to indicate most clearly an intent to confer an absolute interest. SEE ORS 93.020.
A fee tail, or estate tail, is an estate which descends to the heirs of the body of the first grantee, and so on indefinitely to the heirs of the body of each taker so long as any such line of lineal heirs continues to exist. As originally permitted by the statute de donis of Edward I, it was absolutely inalienable by any tenant (bolder) in tail for the time being, except for the life of that tenant in tail. During the fifteenth century, however, the English courts found a devious way of enabling the tenant in tail to turn the estate tail into a fee simple. By English legislation of the nineteenth century this method was simplified. In such jurisdictions of this country as still permit estates tail, a simple conveyance in fee by the tenant in tail will operate to transfer a fee simple. In most states statutes, which began in this country about a century ago, abolish estates tail entirely and declare that whatever would have been an estate tail according to the rules of the common law, shall be a fee simple. Other statutes provide that one who would have been a tenant in tail by the rules of the common law, shall have a life estate, and that on his death the remainder shall pass in fee simple absolute to the person or persons to whom the estate tail would on the death of the donee in tail first pass "according to the course of the common law." Under this latter form of act a very strange result has been reached. By the course of the common law an estate tail descended, if the tenant in tail had a son, or several sons and daughters, to the eldest son. Under the above statute, therefore, it would logically follow that where an estate tail was created the tenant in tail would have a life estate, and, upon his death leaving a large family of children, sons and daughters, the eldest son only would have the remainder in fee. Such is the result actually reached under the Missouri statute (3). In this way the rule of primogeniture has by accident been preserved.
By the common law of England it was an absolute requirement for the creation of a fee tail by a deed that the word "heirs" should be used, followed by any words of procreation which limit heirs to the lineal descendants of the transferee (4). In wills the rule was more relaxed, and it was not absolutely necessary to use the word "heirs," but any form of expression which indicated an intent that the lineal descendant of the first taker should enjoy in infinitum, was sufficient to create an estate tail. These rules, it is believed, will be found to be still generally in force in this country.
There were several recognized divisions of estates tail. An estate in general tail was to A and the heirs of his body. Any children of the grantee or donee by any lawful wife might inherit it. An estate in special tail was to A and the heirs of his body by B, his wife. Children of A by another wife, or of B by another husband, could not inherit it. Estates in tail male were limited to male issue of the donee, and in tail female to female issue. These divisions might be combined, as an estate to A in general tail male, or one to A and B in special tail female.
Any words expressing an intent to confer upon a grantee or devisee an estate for the life of the grantee or devisee, or for the life of another, will be given effect. It should be noted, however, that life estates include much more than estates for the life of any individual, or the lives of any individuals, for if an estate is created for any uncertain period, which is not an estate terminable at the will of the grantor or reversioner, it is technically classed with life estates. Thus, an estate for so long as the possessor shall please, is technically classed with life estates and not with estates at will. SEE ORS 91.030.
Difficult and important questions arise as to whether a life estate has been created by implication. Thus, suppose there is a devise to B to take effect from and after the death of A, with no direct gift to A. Will a life estate be implied to A? The English judges of the eighteenth century and early part of the nineteenth century were much inclined to imply the gift of a life estate to A rather easily. As, however, they have become more exact in construing language, a tendency has developed to restrict the earlier holdings. Within the last twenty-five years the higher courts in England have drawn the line very rigidly upon the implication of life estates in the circumstances mentioned. The rule now seems to be that no life estate in A will be implied where the gift "from and after the death of A" is to all the heirs of the testator and one outsider, or where the gift "after the death of A" is to all the heirs at law of the testator but one. The implication of a life estate is restricted to the one case where the gift from and after the death of A is to the heirs of the testator, and to them alone. The implication of a life estate in this one case is justified upon the ground that there is such an absurdity in the heirs who are expressly excluded until after the death of A coming in before that time, that a life estate must be implied to A in order to carry out the intention of the testator that his heirs at law shall not take until after the death of A. The rule seems to be settled that in this one case the life estate will be implied. In all others, no matter how nearly they may approximate the one case described, the English judges, at least, refuse to make any implication of a life estate. American courts would probably be more inclined to rely for a different result upon a special context in the will.
Life estates are usually divided into two classes: (A) conventional (created by act of the parties), including (1) estates for the life of the grantee, and (2) estates pur autre vie (for an. other's life). (B) Legal (created by operation of law), including (1) curtesy, (2) dower, and (3) tenancy in special tail after possibility of issue is extinct. A grant to A for his life, when conveyed by A to B becomes in B's possession an estate pur autre vie (for the life of A), Estates by curtesy and dower are treated in H 137-38, below. Upon a gift to A and the heirs of his body by B, his wife, if B died without issue it is evident that the possibility of heirs within the limitation is extinct, and that A's estate will now cease with his life. It is therefore for certain purposes reduced to a life estate by operation of law.
An estate for years was a grant for any definite period of time, long or short. An estate at will was terminable at the will of either party. An estate by sufferance is a mere holding over after the termination of a previous right to possession. The estate from year to year needs a word of explanation. It is not improbable that at all times in all countries the leases of small renters have been made with the utmost informality. Formality costs money, and the cheap tenancy will not bear the expense. With ignorant or dependent tenants, the tendency is for the landlord merely to let them into possession at a certain rental, with no terms as to the length of tenancy. being specified. On its face this must be regarded as a tenancy at the will of both parties. Such a construction of the transaction, however, may cause hardship to the tenant, for one may be put out of possession at any time. The English courts began very early to rule that when the tenant paid rent by the year or by any aliquot part of a year, as quarterly or half-yearly, the tenancy was one from year to year, and that neither the tenant nor the months' notice before the end of any yearly period. In the absence of such notice the tenancy was continuous, and the tenant protected. See the article on History of Real Property, § 32, elsewhere in this volume. More recently we have begun to have the tenancy from month to month, and even from week to week. These occur upon the taking of possession by a tenant and the paying of rent by the month or by the week, without any stipulation as to the termination of the tenancy. The notice here required is a whole month's notice, or a whole week's notice, before the end of any monthly or weekly period. NOTE: GENRALLY COVERED BY STATUTES REGARDING LEASES AND LANDLORD/TENTANT RELATIONSHIP. SEE ORS ch 90.
Instruments granting or conveying estates in describing the estate created customarily contained what were called "premises" and an "habendum." Thus, a conventional conveyance would read "to A and his heirs [these were the premises] to have and to hold to him and his heirs forever" [this last from the words "to have and to hold" being called habendum]. The premises had, it is believed, no special significance or efficacy in a will. But when the premises occurred in a deed it was a rule of somewhat ancient and technical character, that, if any inconsistency occurred between the premises and the habendum, the words of the premises must prevail. The application of this rule was to be found, of course, in informally drawn instruments which would read "to A and his heirs to have and to hold to A for life." Frequently there was much to induce the belief that the latter words expressed the real intent of the grantor. In fact, there is a natural inference that of two inconsistently expressed ideas the one contained in the clause which repeats in varied form what has gone before, is the one which really expresses the writer Is intent. Such a principle is applied in construing inconsistent clauses in wills where the two cannot be reconciled, and it is thought unnecessary to invalidate the whole on the ground of uncertainty. The rule of law, however, with respect to the habendum in deeds seems to have been inexorable in case of such an inconsistency as that just put, the premises must prevail, and A would be entitled to a fee simple and not to a life estate. There has, however, been much relaxation of this rule in this country, and our courts now seek to carry out what appears to have been the really expressed intent, with the result that the language of the habendum will not infrequently be found prevailing over the language of the premises.
The only joint interests now in common use are joint tenancies and tenancies in common. The joint tenancy has the attribute of causing the whole interest to remain in the hands of the surviving joint tenant when any joint tenant dies. Thus, if a conveyance be made to A, B and C as joint tenants, and A dies, B and C are joint tenants of the whole estate and A's heirs or devisees take nothing. When B dies C has the whole estate, and on C Is death the title passes by descent to his heirs, or by devise according to his will. On the other hand, when A, B, and C are tenants in common, each has an undivided separate interest which upon the death of each may devised, or which will pass to the heirs of each by descent. It should be observed that one joint tenant during life may alienate that tenant's share, and the alienee then becomes A tenant in common with the remaining joint tenants, who still remain joint tenants as between themselves. The alienee might then transfer back to the alienor, who then would be a tenant in common with the other tenants. This was known as "severing" the joint tenancy. It was resorted to for the purpose of obtaining the benefits of the separate ownership which the tenancy in common afforded. Nowadays joint tenancy is usually desired where title is taken by a husband and wife, and where each desires the other to have the real estate in case he or she dies first. In such cases it is most convenient to convey to both as joint tenants. Where, however, the grantees are husband and wife it may satisfy their desires to become tenants by the entirety, which is like joint tenancy only that there is no right of severance and one spouse alone can convey no interest without the joinder of the other. In making a conveyance to one or more persons it should always be specified whether the estate is to be a joint tenancy or a tenancy in common. The inference now is that a tenancy in common is meant, though the old common law rule was otherwise. To create a joint tenancy it is necessary therefore to say in terms that A and B are to hold as joint tenants, Conveyancers frequently add the words II and not as tenants in common." Other forms of joint ownership a-re co-parcenary and partnership. Any other form of transfer turns it into a tenancy in common. Partnership is a form of joint tenancy.
Closely associated with the creation of estates by deed is that of the creation of easements in deeds transferring title to a part of the estate belonging to the grantor, while the grantor retains the balance. Suppose, for instance, that A is the owner of lots one and two and uses a way for his residence on lot one over lot two to the highway thus: HIGHWAY, LOT 1. The way from lot one over lot two is not an easement, because of the unity of title in A. A cannot have an easement over his own land. The user, however, of the way in connection with lot one and over the other is very properly called for convenience a quasi easement, and lot one is the quasi dominant estate and lot two the quasi servient estate.
If A conveys lot one to B, it is important that B have the same right to use the way over lot two that A always had. Otherwise B may have no access to the highway. The proper course for B to pursue is to require A in A's deed expressly to grant B a right of way over a defined strip to the highway. It will be enough, however, if A grant to B as appurtenant to lot one "all ways as then used and enjoyed". But it will not be a sufficient express grant of an easement to B to convey to B lot one "together with all and singular the hereditaments and appurtenances thereunto belonging." Suppose, then, that A uses insufficient words to create an express easement in favor of lot one over lot two. Under certain circumstances B will nevertheless have such an easement by operation of law without words. Thus, in the case put, if B upon taking lot one would be left without any right of access to the highway, unless he has a way over lot two, so that the way is what may be called a way of necessity, B will secure the easement of the right of way by operation of law. If in of way by our original case the way is not one of necessity to lot one because of another highway at the back of lot one, still B will have an easement or right of way over lot two by operation of law, provided the way over lot two was in fact used continuously and apparently by A before and at the time of the conveyance to B.
If A conveys lot two to B, it is important for A himself to secure the grant of an easement to himself from B at the time B becomes by the conveyance the owner of the quasi servient estate. The safe and proper way to do this is to use a deed in form an indenture, containing a distinct grant to the party of the first part of an easement over lot two by the party of the second part (the grantee of lot two)@. in favor of lot one, and then to have this deed signed and sealed by the grantee as well as the grantor. In this way the grantee B, by the same instrument by which B receives title to lot two, duly and properly creates an easement over it in favor of the owner of lot one. In this country, however, it is believed that such care and exactness in conveyancing is unusual, especially in rural districts, and grantors like A are accustomed to execute deeds poll signed and sealed by themselves alone, merely reserving to themselves an easement over the lot conveyed. The theoretical difficulty with this sort of an instrument is that easements generally can be created only by instruments under seal or at least by a writing signed by the person creating the easement. Since the real character of the transaction between A and B demands tho grant back of an easement by the grantee, no easement can be created without his seal and signature, or at least without his signature. In England this theoretical difficulty is insurmountable and the seal at least of the grantee is essential, and no easement is created by mere words of reservation on the part of the grantor without also the seal of the grantee. In this country, however, the efficacy of the words of reservation to create the easement in favor of the grantor is very generally recognized, although there is no seal or signature on the part of the grantee. One jurisdiction at least in this country gives effect to the, words of reservation where there is no seal or signature of the grantee, only providing the user of the quasi easement existed at and before the time of the conveyance from A to B.
Even, however, where no words at all are used the easement may be created in favor of the grantor by operation of law. This occurs where the easement is one of necessity (19). 'Where the easement is not one of necessity the English cases require that the user of the quasi easement exist before and at the time of the conveyance by A to B, and that the user of it by A be continuous, apparent and reciprocal. This last element would exist in the case put if the right of way in question, instead of running wholly on lot two, ran to the highway one-half on lot two and one-half on lot one-that is to say, along the boundary line between the two lots. In this way the user of the way would be reciprocal, i. e., the user of the way by the owner of lot one would involve the user of the land of lot two, and the user of the way by the owner of lot two would involve the user of the land of lot one. Many jurisdictions in this country require the same elements (21). The reason for requiring the element of reciprocal use in the case of implied reservation or grant back, and not in the case of implied grant, is that the deed must be taken most strongly against the grantor, and that one cannot be permitted so easily to derogate from the conveyance by the creation of an easement in one's self in the property granted as one can to grant an easement over one's own land by implication in favor of the land granted. But many American jurisdictions hold that it is enough to cause the creation of an easement by operation of law in the grantor, if the quasi easement was continuous and apparent, thus refusing to recognize any distinction between implied reservation and implied grant of an easement. III. FUTURE INTERESTS.
Future interests in land are those not at present enjoyed in actual possession, but which may be, if at all, some time in the future. The future interests recognized by the common law were reversions, remainders, rights of entry and possibilities of reverter, and the marital rights of dower and curtesy. A reversion was the estate left in a party after conveying away less than a fee, as in a transfer by X to A for life or for years. X has a reversion after the termination of A's estate. After a reversion has been thus created it may be transferred by X to another and will remain a reversion. A remainder was an estate created by the same transfer as a preceding estate and taking effect immediately upon the termination of that estate. There could be several successive remainders. A transfer by X to A for life, then to B for life, and then to C in fee, creates remainders in B and C. A right of entry and possibility of reverter were not estates, but were rights that might produce estates. A transfer by X to A in fee, on condition liquor is never sold on the premises, gives X and his heirs a right to regain the estate by entering on it for condition broken. A similar transfer to A until liquor shall be sold on the premises revests the land in X, without entry, as soon as liquor is sold. This is a possibility of reverter.
A remainder is "vested," as the phrase goes, if, throughout its continuance, A, or A and his heirs, have the right to immediate possession, whenever and however the preceding estates may determine. reversions are always vested. No other future interests are always vested. Remainders may be vested or contingent. A transfer to A for life, or for ten years, then to B, for life or years, and then to C in fee, gives vested remainders to B and C. There are no conditions precedent to their rights to immediate possession as soon as the preceding estates end. B may die before A, and so never actually enjoy his life estate, but this is only because his life estate itself has come to an end. "Throughout the continuance" of B's life estate there was no condition precedent to his right to possession, except the existence of the preceding estate in A. A transfer to A and his heirs until B's marriage, and then to B, gives B a contingent remainder, subject to the condition precedent of his marriage. So, a transfer to A for life, remainder to the first son (now unborn) of B. Until B Is son is born the remainder is contingent. As soon as he is born it vests in him, and takes effect in possession at the end of A's life estate. Rights of entry and possibilities of reverter are, of course, always contingent interests.
The difficult question is how far future interests can be created at all, so that the transferee who is to enjoy in the future will be entitled when the time arrives. At the present day the layperson may safely start with the assumption that he or she can create any sort of future interest desired, subject only to restrictions imposed by modern public policy (§§ 59-71, below). Thus, you can transfer to A a fee simple, subject to a condition of forfeiture upon the happening of which the transferor or his heirs will be entitled to possession again as the full owner in fee. Such conditions of forfeiture are of everyday occurrence in the ordinary lease for years. You can give an interest to A, and then to B, and then to C. A's interest may be a life estate or a term for years, with an interest after A's death or at the end of the term to B; or B may take on the contingency that A die without any child surviving him or upon any other contingency, with the exceptions hereinafter mentioned. A's interest may be a fee simple, and B's may take effect in the event that A dies without issue, him surviving, or upon any other condition or contingency, subject to those exceptions. An interest may be conveyed to B to take effect contingently or at a certain time in the future, without any previous interest being expressly conferred at all; or A may be given a life estate for a term of years, and it may be provided that a year after A's death B shall be entitled. Even stranger things than these may be done. Land may be transferred to such persons and in such estates as W shall appoint, and upon A's appointment the appointee will take the title appointed. A rather striking use of this power of appointment was made in England, when land owners desired to retain the title to their properties free from the necessity of obtaining the wife's waiver of dower in case the land owner conveyed his estates during the wife Is lifetime. The result desired was obtained in this way: A, being the owner in fee of Blackacre, and about to marry, would, prior to the marriage, convey to himself in fee with full power to appoint by deed or will, and in default of appointment, to himself in fee simple. He then married. His wife became entitled to dower in the property which he owned in fee simple, but upon his appointment, A was not obliged to secure the wife's waiver of that dower, because the appointee took by virtue of the original instrument which created the power and this was made before A was married, and hence was not subject to the dower interest of any wife (24). So, a title may be conveyed to A with power in the grantor to revoke at any time and, upon revocation, A will lose his title and the transferor will have it again. Land may be transferred to A and his children born and to be born, and the children as thereafter born will come in and share the estate. A land owner may even transfer to herself an estate. Of course there is no object in this unless the transferor desires to create a power of appointment in herself, as in the example above given, where A was seeking to cut his future wife's dower interest off, or unless she desires to confer upon herself a life estate with future interests in others. The usual case which one meets in practice is where the grantor conveys to her children, reserving to herself a life estate. In short, it seems as if every possible vagary in the creation of interests in land that a grantor or testator could think of might be validly created--always subject to certain limits to be described.
The principal obstacles to an owner's complete freedom to create future interests in land as he or she pleases, today, are as follows:
There are still left as historical survivals from the middle ages some rules which are founded upon no sound public policy today, and which defeat the grantor's or testator's clearly expressed intention. For instance, formerly most famous--now most notorious--the rule in Shelley's case, which dates back to the year 1324. That rule is that where a life estate is given to A, with a future interest to A's heirs (the use of the particular word "heirs" -being necessary), the whole gift is construed as one "to A and his heirs," at once giving an estate to A in fee. In 1769 Lord Mansfield tried to turn this into a rule of construction which would give way if the grantor or testator was sufficiently emphatic about saying that he intended A to have only a life estate (28). But Lord Mansfield was overruled and the rule in Shelley's case remains what it always was, a rule defeating the testator's intent; and today no matter how clear it is that A is intended to have only a life estate, if the rule applies, A will have the fee. In many states the rule in Shelley's case has been abolished by statute. Conveyancers, however, are apt to like it because by it inconvenient future interests can be gotten rid of and an absolute title vested in a living person, usually of age, who has a marketable title to dispose of. NOTE: RULE IIN SHELLEY'S CASE MDIFIED OR ABOLISHED IN MOST STATES BY STATUTE. ORS 112.345.
By what is known as the rule of destructibility of contingent remainders, if A has a legal life estate and B has a legal future interest after A's life estate, which is not to take effect in possession until a certain contingency has happened, which may happen either before, or at the time of, or after the termination of A's life estate; then, unless the event happens at or before the termination of A's life estate, B's future interest is void. Thus, if a wife be given a life estate by Will with a future interest to such of her children as reach twenty-one, and the wife dies before any child has reached twenty-one, the gift to the children is void; or if the wife has z life estate and the gift after her death is to such children of hers as survive her, and the wife's life estate is prematurely terminated before her death by being forfeited, the gift to her children will fail. This rule also is of feudal origin and dates back to the fifteenth century. It has been abolished in England wholly since 1877, and in many states of the Union at an earlier date. Some courts have refused to apply it even in the absence of statute (29). Yet it is likely applied even today in jurisdictions where it has not been formally eliminated by the legislature (30). Of course, this rule of destructibility of contingent remainders is a rule which absolutely and unequivocally defeats the intention of the testator or settlor. The case which resulted in its total abolition in England is striking proof of this. In one case the limitations were in substance to A for life and then to such of A's children as survived A and his wife B. A died first. An eminent English equity judge held that the gift to the children entirely failed (31). So great was the popular outcry at so harsh and unjust a rule that Parliament at once passed an act to abolish the rule of destructibility.
If, however, this rule be in force, it may at times be taken advantage of to effect convenient results without doing injustice to any one. Suppose, for instance, a testator devises the legal title of lands to his daughter for life and then to such of her children as survive her in fee. The daughter has a life estate with a contingent remainder in fee to her children. The reversion will descend in the meantime to the testator's heirs at law, who are, we will assume, the daughter and her brother. If then the daughter and brother will convey all their reversionary interest and the daughter her life estate to any third party, the life estate will "merge" in the reversion in fee and terminate prematurely before the death of the daughter. The contingent remainder in fee in the children of the daughter will then be destroyed under the usual rule of destructibility. The third party will thus obtain the entire fee, and according, of course, to a previous arrangement, he or she will then proceed to resettle the property by a conveyance to trustees with full powers of sale, etc., to hold for the benefit of the daughter for life and then to such of her children as survive her in fee, and in default of such children, then to herself and her brother in fee equally as tenants in common--i.e., exactly as the beneficial interests were indicated under the will of the testator. The only difference will be that while under the will the title was in impossible shape for purposes of alienation or mortgaging to make improvements, under the resettlement the trustees will have such powers as will enable them to deal to the greatest advantage with the legal title, either selling it, if a good price is offered, and investing the proceeds, or mortgaging it to make necessary improvements, and otherwise having that control of disposition which is frequently necessary to the profitable management of an estate. Merger is the absorption of a less estate into a greater when held by the same owner.
From unfamiliarity with the history and principles of the law of future interests, courts even in recent times occasionally promulgate rules which defeat the testator's or grantor's clearly expressed intention. Thus, some respectable courts today, following a decision of Chancellor Kent of New York, hold that when the limitations are to A in fee, with a gift to B if A dies intestate (i.e., without having transferred the title by deed or will), B's interest is absolutely void (33)'. No reason, either in history or logic, can be perceived for this arbitrary and unjustifiable rule. At least one court has held that a conveyance by deed to A in fee, and, if A die without children him surviving, to B in fee, gives B no interest whatever; and the same court decided that a conveyance to "A and his heirs, born and to be born," likewise conferred no interest upon the after-born children of A. Such holdings as these are also without justification.
The drafting of a coherent scheme of future interests is a work of art, requiring very great experience and training. The inexperienced or ignorant will raise in a few words troubled some questions of construction, which may result in much expense to the estate afterwards to settle. One of the shortest wills that ever came to the writer's attention raised the greatest number of difficult questions and was subject to the most bitter litigation. It was executed by a mother who merely, devised "all my property to my son A, for life, and then, if he die without issue, to my heirs at law." Upon this will the following questions arose: (1) Did the son take as one of the testatrix's heirs at law, if he died without issue. Did "die without issue" mean die without issue in the testatrix's life or after her death? If "die without issue" meant die without issue after the testatrix's death, did it mean an indefinite failure of issue, so as to make the gift to "heirs" void for remoteness as to the personalty, and give the son an estate tail as to the realty which a statute would then turn into something else? If "die without issue" did not mean an indefinite, but only a definite failure of issue, was there a gift by implication to any issue which the son might have, or did the property descend to the testatrix's heirs at law at her death, including the son if he died leaving children or issue? If the issue of the son did have an interest by implication, was it contingent upon their surviving the son, or not? If any implied gift to the son's issue were contingent upon such issue surviving the son, could. that interest, together with the gift to heirs of the testatrix if the life tenant died without issue, be destroyed by the premature termination of the life estate by uniting it to the reversion to the testatrix's heirs, pending the happening of the events upon which the future interests were limited (§ 46, above) ? The reader may not understand or appreciate all of these difficulties but they 'will perhaps convince him that there are terrors even in a will of the fewest possible words.
The words "on condition" are often so used as to make it ambiguous whether an estate on condition is meant or merely a promissory obligation on the part of the transferee of the land. Suppose, for instance, the conveyance be made "on the express condition that the grantee shall not build upon the premises nearer than ten feet to the front lot line." Does this mean that the estate is subject to a condition of forfeiture upon the breach, or does it mean merely that the grantee accepting the deed with such a clause, agrees that she will not build nearer than ten feet to the front line? The difference in result is very great. The grantee can borrow money on his title in the latter case, but not usually in the former--to say nothing of the difference between the grantee having title taken away from and merely being sued to enforce the agreement. Yet the language is ambiguous. The court leans against its being construed as a condition, yet the use of the word "condition" stares the court in the face and makes it difficult to say that a condition of forfeiture was not meant. It should always be made clear whether a condition or a promissory obligation is intended. If the former is desired always add a clause of re-entry giving the grantor in express terms a right to re-enter and forfeit the estate of the grantee in case of breach. If a promissory obligation only is intended, omit the word "condition" entirely and put it plainly that the grantee covenants. Sometimes the point whether a condition or a covenant is meant is left ambiguous from design. The grantor knows that if a straight condition of forfeiture with a reentry clause is put in, the grantee cannot be induced to become a purchaser. The grantor then puts in all the words of condition possible without frightening the purchaser, and, having sold the lots, holds an extra club over the purchaser by insisting that the purchaser may forfeit the title upon the breach of what the grantor calls a "condition."
Grantors and testators in creating future interests often fail to make it clear whether the future interest is to take effect at a specified time and subject to no other contingency except the arrival of the time specified, or only if the person who is to take survives that future time. Thus, suppose A be given a life estate with a future interest to B in fee. If B is to take at all events and B die before A, then B's heirs or devisees will take in B's place at A's death, but if B is to take only if B survive A, then, if B dies before A, B's heirs and devisees can never take. There is no more fruitful source of litigation over questions of construction of wills than whether B is given an interest dependent upon B's surviving A or not. All sorts of ambiguous phrases creep in owing to the testator or grantor contemplating that of course B will survive A and will take in that event, without remembering that events may turn out the other way; and that, if they do, it is necessary to make it clear what the testator or grantor intends shall happen.
Grantors and testators frequently, after a gift to A, make a gift to B in fee, provided "A dies without issue." This simple little phrase is filled with difficulties. First, there is the question what period "die" is to be referred to. Is it die before the testator's death without issue, or after the testator Is death without issue? If the latter, is it die without issue surviving at the death of A, or does it mean when A is dead without issue in any generation hereafter, so that if A die today and A's issue do not become extinct until the tenth generation hereafter, he will only then be dead without issue or have died without issue? What the lay person usually means is that "if A die either before or after the death of the testator without issue of A's surviving at that time." This should always be fully expressed, for a long line of English and American cases support a meaning to the expression "die without issue" which is contrary to the sense in which most testators probably use it. Thus, if the gift be of real and personal property to A for life and, if A die without issue, to B absolutely; "die without issue" means die without issue either before or after the testator's death. But "die without issue" also has, under the line of decisions mentioned, been held to mean die without issue in any generation. This makes the gift of personal property to B void by reason of the application of the rule against perpetuities. As to the real estate, another rule of construction applies which turns A's life estate into an- estate tail and makes B's interest a valid future interest after an estate tail, but subject to be destroyed by A's turning A's estate tail into a fee simple.
Of course, under the modern statutes in this country which abolish estates tail, such rules as those just mentioned applying to real estate are utterly incongruous. Why use an artificial rule which practically always defeats the testator's express intention, for the purpose of producing an estate tail which a statute turns into something else, so that you obtain ultimately a result doubly removed from the testator's expressed intent? Legislators in many states have seen the absurdity to which the old construction of the phrase "die without issue" results, and have passed statutes which declare that the phrase "die without issue" shall primarily mean a definite failure of issue in the first generation--that is to say, it will be equivalent to the phrase "if the first taker dies without issue him surviving." By this simple means all the difficulties above pointed out are avoided. The gift of personal property to B if A dies without issue is no longer void by reason of the rule against perpetuities. A's interest is not turned into an estate tail so far as the real estate is concerned, and B's interest in the real estate is valid and takes effect -at the same time as his interest in the personal property, if at all. In at least one state where no such legislation exists, the highest court has on several occasions intimated that it would adopt as the regular rule of construction this meaning of "die without issue" (37).
It is very common in wills to find gifts to a class, as a gift to the children of A, or to the grandchildren of the testator. The one using these general phrases seldom observes the difficulties of meaning which are inevitably raised. Suppose there is a
A testator frequently makes a general gift to her heirs at law, after a life estate to his child, A. Then it often happens that A is also one of the testator's heirs at law at the time of his death. An inference at once springs into the minds of the testator's other heirs at law that A was not included in the gift to "heirs," but is confined to the express life estate which is indicated. The settlement of this difficulty is complicated by certain rules of construction. It seems fairly well settled that, in the case put, where the child is one of the testator's heirs at law at the time of her death, she is entitled not only to a life estate but to a share in the remainder as one of the heirs at law. On the other hand, it seems equally well settled that if the child in the case put is the sole heir at law of the testator, she will be excluded from any share in the remainder. The foundation for the difference is the absurdity of the child taking not only a life estate, but the whole of the remainder as heir at law, when in fact she was by the express language of the testator limited to a life estate. With these rules in mind what shall be done where the gift is a residuary one of real and personal property to the testator's widow for life, with remainder to the testator's heirs at law, and the testator dies childless, so that the widow is (under some statutes) the sole distributes as to the personalty and heir to one-half of the realty, with collateral relatives of the testator as heirs to the other half? The first point to be determined is whether the word "heirs" is to be taken distributively or in the fixed meaning which it bears when applied to real estate. That is to say, does it mean the widow solely as to the residuary personalty and the widow and collateral relatives as to the residuary realty, or does it mean the widow and collateral relatives, one-half to each as to the realty and personalty together? Clearly the latter is the sound construction. The word "heirs" being applied to a mixed fund of realty and personalty, cannot with any propriety mean one thing as to one part and another thing as to another part. It clearly means one thing as to the whole. The primary meaning of the word is that which it bears when applied to real estate. Hence, the widow, if entitled in remainder at all, is entitled only to one-half the personalty and realty together. Such is the view of well considered authorities (45). The case, therefore, comes fairly within the rule that where A, the life tenant, is only one of several heirs at law of the testator, A can share in the remainder as one of such heirs, and, in the absence of a special context requiring a contrary result, the widow in the case put must be entitled to share in remainder as to one-half the real and personal property. The questions of construction mentioned in this and the preceding paragraph are but a very few of the questions which arise in the creation of future interests. The books on the construction of wills are filled with minute analyses of hundreds of questions of construction, with many distinctions so nice that lawyers and laymen alike are constantly confounded. The test of good draftsmanship is not to permit them to arise at all.
In carrying out the principle that the landowner can do as one likes with land and so create what future interests at will we must not overlook the fact that there should be some limit to this liberty. It will not do to permit landowners to designate rigidly the persons who shall enjoy property during many generations to come.
The technical rule which carries out this public policy is known as the "rule against perpetuities." Its final form was settled in England in 1833 by the decision of the House of Lords in Cadell v. Palmer. The rule may be stated thus: Every future interest is void unless it must be enjoyed in possession, if at all-or must be or come into a position where it stands ready, throughout its continuance, to take effect in possession, whenever and however a preceding interest less than an absolute interest may determine, otherwise than by being prematurely cut short by the express provision of its creator not later than 21 years after some life in being at the time of the creation of the future interest. Thus, a devise to take effect 10 years after the probate of the will is void, because the will may not be probated for 12 years, and 10 years from that time would be more than 21 years after the testator's death; and, since no lives are mentioned, none can be counted. By the rule as above stated, it is sufficient to avoid its violation that the future interest must, if at all, not later than 21 years after some life in being at the creation of the interest, stand ready throughout its continuance to come into possession, whenever and however a preceding interest less than an absolute interest may determine in its natural course. This covers the case of a gift to A for 30 years and then to B in fee. Here the interest in B is valid, because B's estate stands ready throughout its continuance to take effect in possession, whenever and however A's term for years determines. If the term ends before 30 years, as by forfeiture or surrender, B's interest takes effect in possession at once. But a gift to B to take effect absolutely after 30 years, or after the marriage of some unborn child of A, is void, because B's interest here may not take effect in possession until after 21 years; and, since no lives in being are mentioned, none can be counted. Furthermore, B Is interest at no time can come into a position where it stands ready to take effect, whenever and however any preceding interest less than an absolute interest determines in due course. Suppose further, A is given a life estate, with a future interest to A's unborn son for life, and then to such children of B as survive A. B's children may possibly not be entitled to possession until after the death of A's unborn son 2 which is possibly more than 21 years after A's death. But B's children, who survive A, will at A's death stand ready, throughout the continuance of the estate for life of A's son, to come into possession whenever and however the life estate of A's son shall determine; and the children of B, who survive A, will get into that situation at the death of A, which is within lives in. NOTE: THIS RULE IS A UNIFORM STATUTORY RULE IN MOST STATES. SEE ORS 105.950, et seq.
For the purposes of the rule, a child conceived but not yet born is treated as a life in being; and any number of practicably identifiable living persons may be used as the measure of such lives. Thus, an estate may be limited to begin 21 years after the death of a large number of persons, whether specified individually or as a class. Of course a gift taking effect within a gross term of years (not exceeding 21), regardless of preceding lives, is valid.
It is very easy to violate the rule and thus wholly defeat a testator's intended gift. Thus, a gift to take effect ten years after the probate of the will is void, because the will may not be probated for twelve years and ten years from that time would be more than twenty-one years after the testator's death, and, since no lives are mentioned, none can be counted. So, also, suppose a testator devised to his adult unmarried son for life, then to any wife the son may have for her life if she survive him, and then to such children of said son as may survive the survivor of the said son or his wife. Here the gift to the grandchildren is void, because the grandchildren to take must survive the son's wife, and the son's wife may not be in being at the testator's death and might not be born within twenty-one years after the testator's death. For instance. the son at the age of sixty, twenty-four years after the testator's death, might marry a woman of twenty-two, born after the testator's death, who might outlive her husband twenty two years and then die leaving grandchildren of the testator her surviving. Not till that time, then, would it be determined who were to take, and that is more than twenty-one years after the death of the testator's son, who is the only specified life in being. However improbable it may be that this chain of fortuitous events would occur, yet the possibility will make the gift to the grandchildren void. The rule against perpetuities requires it to be an absolute certainty that gifts will take -effect, if at all, in the required manner within lives in being and twenty-one years.
This requires some additional explanation. Suppose the testator devises to his son for life and then to such children of said son as reach the age of twenty-five years, and suppose at the testator's, death there is one grandchild six years old who does in fact subsequently reach the age of twenty-five years. The result reached by the courts in such a case is well settled. The gift to all the grandchildren, including the one in being at the testator's death and six years old, is void. The reasoning in support of this involves two distinct steps: First, the gift to the class as a whole cannot be split up so that the gift can be regarded as separate gifts to individual grandchildren for the purpose of applying the rule against perpetuities. The reason for this is not any corollary to the rule, but rather the result of a principle of construction that you must take the estates and interests which the testator has created as he has created them. You must deal with his will, not with a will which you have made over for him. In this view the gift to a class is an entire gift to the whole class. It is not a collection of separate gifts to different members of the class. All are included. It is not for any judge or any court to say that the testator intended an older member of the class to take in preference to a younger or vice versa. This being established, one comes secondly to the application of the rule against perpetuities. That rule simply requires that the gift as limited, whatever it is, be absolutely certain to take effect in the manner required within the proper time, or fail entirely. Hence, in the case put, the whole gift to the grandchildren must fail. There is a possibility that the only child to reach twenty-five will be born after the testator and be less than four years old when its father dies. Hence, there is a chance that the whole class to take under the gift as made by the testator will not be ascertained until more than twenty-one years after lives in being at the testator Is death.
In the preceding cases the gift itself to the grandchildren was contingent upon their reaching twenty-five. Suppose now the gift is to the grandchildren of A, and as such is a gift to take effect immediately upon the death of the testator, so that it is subject to the condition precedent whatever except the actual birth of grandchildren of A. Suppose, however, there is what is called a "postponed enjoyment" clause added--that is to say, there is a trusteeship and the trustees are directed not to pay over any share of the principal to any grandchild of A until such grandchild reaches twenty-five. Here each member of the class has an absolute interest as soon as born which he or she cannot be deprived of, but no member of the class can obtain payment of the principal until reaching twenty-five, or, if dying before that age, the dead grandchild's estate is not to take it until the decedent would have reached twenty-five. Suppose now a grandchild of A is in being at the testator's death who is not over three years of age. Here again, individually considered, that child's interest does not violate the rule against perpetuities, yet, since the class may increase until the eldest reaches twenty-five or would have reached twenty-five, the maximum number of the class or the minimum amount of each share will not be ascertained in the proper time, and the whole gift to the grandchildren must be void were it not for one other consideration which saves it. By a rule quite distinct from the rule against perpetuities, the postponed enjoyment clause will not be enforced if it involves the possibility of keeping up of a trusteeship in favor of one having the absolute indefeasible interest for longer than lives in being and twenty-one years. That is exactly what the postponed enjoyment clause here does. It may possibly, for twenty-two years after lives in being at the testator's death, make it impossible for a grandchild absolutely and indefeasibly entitled to obtain a distribution of the principal from the trustee. Hence, the postponed enjoyment clause is unenforceable and the only ground for the class being allowed to increase until the eldest grandchild reaches twenty-five fails. The devise therefore stands simply as a gift to the grandchildren of A, the class is determined at the testator Is death, and the one grandchild three years old at the testator's death, takes the entire estate.
It will occur to the reader that most deed, containing conditions of forfeiture of the fee conveyed, violate the rule against perpetuities so far as the right of entry for the breach of the condition is concerned. Thus, a deed upon a condition of forfeiture if the premises conveyed shall be used for the sale of intoxicating liquors clearly contains a provision of forfeiture upon a condition which may not be violated until many years after lives in being at the time it is created. Is it then void? The English courts have said yes. Curiously enough the application of the rule has not been perceived by courts in this country, and very frequently such conditions are held valid and enforceable, though they clearly violate the rule. So common have such decisions been that a professional, and perhaps a judicial opinion can be said to have been established, that the rule against perpetuities does not apply to rights of entry for condition broken. It has been held in England, too, that the rule against perpetuities applies to options or contracts for the purchase of land. Thus, a. contract by the purchaser from a railroad that he would re-sell the land to the railroad again when it was needed for railroad purposes could not be enforced by the railroad so as to require a re-conveyance to it, because the railroad's option was upon a condition which violated the rule. It should be assumed that a similar rule would be enforced in this country. Observe, however, that the rule only prohibits the purchaser from obtaining a specific enforcement of the contract by an actual conveyance from the seller. It does not prevent a recovery of damages for the breach of the contract.
It was stated above that estates in fee simple might be made subject to a condition subsequent, upon the breach of which the estate could be forfeited and terminated by the creator of the estate, or his heirs. It was stated also that an estate might be given to A in fee, and then taken away from A upon a certain event and given to B in fee. In both cases and in other examples that might be put, the condition which deprives the first holder is a condition of forfeiture upon the event named. To the general assertion that these conditions of forfeiture and gifts over by way of forfeiture, attached to a fee simple, are valid, must be added the general qualification that the condition must not be one imposing a forfeiture in case the first holder in fee alienates or attempts to alienate. If the condition is one of forfeiture on alienation or attempted alienation, it is void and the first taker will retain the fee regardless of the breach of condition. This is the application of a rule quite distinct from the rule against perpetuities, and yet one resting upon a very strict public policy against limiting a landowner's freedom of alienation.
This public policy against conditions of forfeiture upon alienation is not applicable, however, when the first taker has only a life estate or a term for years, and the landowner has a reversion in fee. In such cases the landlord has a vital interest in who is to occupy the leased premises. Conditions of forfeiture if the tenant alienates are, therefore, entirely valid. The most common of all of these conditions of forfeiture is that contained in the ordinary lease for years that the tenant shall not assign or sublet without permission of the landlord, and, if he does, that the term may be forfeited and the landlord re-enter. Forfeiture is a harsh weapon, however, and its severity has been mitigated by the law in several ways. All doubtful language will be construed against a forfeiture; and, even when the language is clear and a breach of condition has occurred, certain conduct on the part of the landlord will easily waive the forfeiture by operation of law. A forfeiture due merely to a brief delay in the payment of money will often be enjoined.
Sometimes the grantor or testator, instead of attempting to execute a condition of forfeiture on alienation whereby the holder of an estate may alienate, but, if she does, is liable to have the estate forfeited or go over to another, simply declares that the estate created shall not be alienable. This is an attempt to prevent the operation of the usual laws permitting alienation. If this were effectual the holder of the estate could not get rid of it. Such attempted restraints on alienation are, however, wholly void and unenforceable. It makes no difference whether the interest subject to the attempted restraint be a fee simple, or a life estate or a term for years. The restraint is void. Whatever interest one has in land may be transfered, and creditors can take it for the satisfaction of debts.
Within the last century and a half in England, however, conveyancers have been called upon to devise some way, consistent with the above rule, by which the spendthrift member of a family might have the benefit of an income which could not be wasted and which creditors could not reach. This is the best they have been able to do: The grantor or testator can transfer property to trustees to pay the income wholly, or in part, or not at all, to such one or more of A, his wife, and children, during the life of A, as the said trustees in their discretion shall see fit; and, in case the whole or any part of the income is not paid to any person, to accumulate the part not paid and add it to the principal. Then the grantor provides for the distribution of the principal after A's death. The above settlement leaves A with nothing. If he becomes bankrupt the trustees can refuse to give A anything, and A's creditors will get nothing. The trustees can then begin to pay the income to A's wife and children. Of course, in that event A is deprived of all income. That cannot be helped, but at least A's family is protected against A's creditors. It is important in carrying out this plan that A be given no rights whatever that he can enforce, for if A has any such rights his creditors can reach them. Thus, where the trusts were to use the income to purchase clothing, board, and lodging for A, A could compel the trustees to use their discretion in expending the money for him in the way specified, and the creditors could reach that right for their benefit.
In the United States courts have very generally, perhaps universally, held valid the restraint on alienation when it is attached to an equitable life estate, i. e., when the property is transferred to trustees to hold for A for life, not subject to any claim by A's creditors or to any power of alienation by A. This is called a "spendthrift trust." It has the advantage for A, over the only scheme available in England, in that A can have the income for her support and maintenance while her creditors go unpaid. It has the disadvantage of contraveneing a policy of enabling creditors to have reasonalbe remedies against debtors. The policy of the spendthrift trust has been attacked with the greatest vigor by high authorities in this country.
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