PROPERTY E SLIDES

1. PROPERTY E SLIDES 3-05-13

2. YOSEMITE: Problem 4I HALF DOME

3. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." • J opens a restaurant that serves several dishes cooked with wine or flamed with brandy and at Sunday brunch offers a free glass of champagne. • The restaurant is successful, and 11 years after its opening D wants to buy it and add a bar. Advise D.

4. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." MULTI-STEP ANALYSIS • FSD or FSCS? Some Arguments Each Way • CONDITION VIOLATED? • EFFECT OF VIOLATION? • ADVICE RE PURCHASE

5. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." MULTI-STEP ANALYSIS • FSD or FSCS? • CONDITION VIOLATED? • No Direct Sale of Liquor for $$$ • BUT: Cost of Alcohol Incorporated in Purchase Price; Diners Buying Alcohol in Meals • EFFECT OF VIOLATION? • ADVICE RE PURCHASE

6. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." MULTI-STEP ANALYSIS • FSD or FSCS? • CONDITION VIOLATED? • EFFECT OF VIOLATION? • ADVICE RE PURCHASE

7. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." Effect of Violation if J has FSD & O has Possibility of Reverter • O gets legal title at moment of violation. • If sufficient time has passed, J may have title through adverse possession

8. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." Effect of Violation if J has FSCS & O has Right of Entry • Assuming O has not acted, O still has RE • If O is aware of Julia’s use of alcohol, may be held to have waived the right to enforce regarding these kinds of uses of alcohol.

9. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." MULTI-STEP ANALYSIS • FSD or FSCS? • CONDITION VIOLATED? • EFFECT OF VIOLATION? • ADVICE RE PURCHASE?

10. DEFEASIBLE FEES:Effect of Transfer on Condition • The purchaser/grantee of a defeasible fee takes subject to any condition not made irrelevant by the sale/transfer. • Like purchaser/grantee of a Life Estate; usually can’t get more than grantor has.

11. DEFEASIBLE FEES:Effect of Transfer on Condition • The purchaser/grantee of a defeasible fee takes subject to any condition not made irrelevant by the sale/transfer. • Example: To J so long as alcohol is never used on the premises. • Wording of condition not limited to J; appears to apply to anyone • Condition survives sale.

12. DEFEASIBLE FEES:Effect of Transfer on Condition • The purchaser/grantee of a defeasible fee takes subject to any condition not made irrelevant by the sale/transfer. • Compare: To J so long as J never uses alcohol on the premises. • Condition only places limit on J. • Essentially void if J is not the owner. • Once J is dead, condition can never be violated, so owner would have fee simple absolute.

13. YOSEMITE: (4I): O conveys "to J and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises, O retains a right to re-enter the premises." • J opens a restaurant that serves several dishes cooked with wine or flamed with brandy and at Sunday brunch offers a free glass of champagne. • The restaurant is successful, and 11 years after its opening D wants to buy it and add a bar. • Possible Advice to D?

14. YOSEMITE: (4I)Plausible Advice to Donald Includes: • Buy both present estate and future interest (or “all rights” of both J and O) to merge into f.s.absolute • Serve free liquor & raise prices (and argue waiver if O questions) • Make purchase contingent on J insuring right to use alcohol (winning suit re adverse possession/ waiver/etc.; buying future interest/waiver from O) • Find out if D is willing and able to sell beer/wine on nearby site for people to take into restaurant. (Clever Samuel Idea!)

15. Executory Interests • Future interest in grantee • Cuts off prior vested interest (present estate or reversion or vested remainder) rather than waiting for it to expire naturally.

16. Executory Interests • Future interest in grantee • Cuts off prior vested interest (present estate or reversion or vested remainder) rather than waiting for it to expire naturally. • Shifting Executory Interest cuts off another grantee

17. Executory Interests EXAMPLES Shifting Executory Interest: To Justin & his heirs so long as no tobacco is grown on the land, otherwise to Eric and his heirs.

18. Executory Interests EXAMPLES Springing Executory Interest: To Crystal if she passes the California bar exam. (Grantor is left with Fee Simple on Executory Limitation)

19. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.” Let’s Return to Problem 4F & Riverdale High

20. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.” • Veronica: Life Estate • Betty: Contingent Remainder in Fee Simple • Reggie: Reversion • What if Veronica dies while Betty is still age 17? • Life Estate is Over • Betty Can’t Take; Condition Not Met

21. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.”Veronica dies while Betty is still age 17 Common Law • If contingency not met when prior estate ends, contingent remainder is destroyed. • Betty has nothing. • Reggie has fee simple absolute

22. Doctrine of Destructability of Contingent Remainders (Common Law)First Common Application If contingency not met when prior estate ends, contingent remainder is destroyed.

23. Doctrine of Destructability of Contingent Remainders (Common Law) Overruled by statute or caselaw in every American jurisdiction except …

24. Doctrine of Destructability of Contingent Remainders (Common Law) Overruled by statute or caselaw in every American jurisdiction except … FLORIDA

25. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.”Veronica dies while Betty is still age 17 Modern View (except FL) • If contingency not met when prior estate ends, we wait to see if it is met later. • Betty’s remainder becomes an executory interest. • Reggie takes possession and has fee simple on executory limitation (cut off if B turns 21)

26. (4F) Reggie“to Veronica for life, then to Betty and her heirs if Betty attains the age of 21.”Veronica dies while Betty is still age 17 Modern View (except FL)

27. THE“READY BETTY”JOKE(right before break)

28. Doctrine of Destructability of Contingent Remainders (Common Law)Second Common Application Where there is a life estate, one or more contingent remainders, and a reversion, and the life estate and reversion merge into a fee simple, the contingent remainders are destroyed. .

29. Doctrine of Destructability of Contingent Remainders Second Common Application • Sara “to Ivane for life, then to Shae if Shae passes bar exam.

30. Doctrine of Destructability of Contingent Remainders Second Common Application • Sara “to Ivane for life, then to Shae if Shae passes bar exam. • Ivane purchases Reversion from Sara  Fee Simple Absolute ↓ ↓ ↓ Merge & Destroy ↓ ↓ ↓

31. Modern View (everywhere except Florida)Merger without Destruction • Sara “to Ivane for life, then to Shae if Shae passes bar exam. • Ivane purchases Reversion from Sara  F.S. on Exec. Lim. • Shae’s Remainder Becomes Executory Interest ↓ ↓ ↓ Merge ↓ ↓ ↓

32. EVERGLADES: Thursday Set-Up for Problem 4O (Thursday) EGRET IN MANGROVE SWAMP

33. EVERGLADES: Thursday Set-Up for Problem 4O: Three Questions • Life estate determinable or fee simple determinable? • Is condition restraining 2d marriage void? • Is cohabitation a violation of a restraint on marriage? Then Work Through Decision-Tree

34. DENALI: Problems 4J-4M Denali Caribou

35. DENALI: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda?

36. DENALI: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda: Life Estate • Ted?

37. DENALI: (4J): Mary "to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda: Life Estate • Ted: Contingent Remainder (if today: in f.s.) • Anything Else?

38. DENALI: (4J):Mary"to Rhoda for life, then to Ted if Ted gives Mary a proper funeral." • Rhoda: Life Estate • Ted: Contingent Remainder (if today: in f.s.) • Mary: Reversion

39. DENALI: (4J): Mary "to Rhoda for life, then to Ted if Ted gives MaryRhoda a proper funeral." • Rhoda: Life Estate • Ted? (Is change from Mary’s Funeral to Rhoda’s Significant?)

40. DENALI: (4J): Mary "to Rhoda for life, then to Ted if Ted gives MaryRhoda a proper funeral." • Rhoda: Life Estate • Ted can’t possibly give Rhoda a “proper” funeral by the time Rhoda dies. • There will be a gap in time between the end of R’s life estate and Ted’s interest. • Thus, Ted’s interest cannot be a remainder; • So Ted has …?

41. DENALI: (4J):Mary"to Rhoda for life, then to Ted if Ted gives Rhoda a proper funeral." • Rhoda: Life Estate • Mary: Reversion • Ted: Springing Executory Interest (will cut off grantor’s interest: reversion)

42. EXAM TIP: USE COMMON SENSE!! • Can’t give a “proper” funeral to a person until after the person has died. • Similarly, if an interest is conveyed in a will, the grantor is dead.

43. Remainders:Additional Information

44. Alternative Contingent Remainders Two contingent remainders for which the event that causes one to vest will destroy the other.

45. Alternative Contingent Remainders Two contingent remainders for which the event that causes one to vest will destroy the other. Example: To Jenna for life, then to Erin and her heirs if she graduates from law school, but if she never graduates from law school, then to Becky and her heirs.

46. Alternative Contingent Remainders Two contingent remainders for which the event that causes one to vest will destroy the other. Example: To Jenna for life, then to Erin and her heirs if she graduates from law school, but if she never graduates from law school, then to Becky and her heirs. Here, only two possibilities: either (1) Erin will graduate from law school (and would then take) or (2) she will die before graduating from law school (Becky would then take)

47. Vested Remainder Subject to Divestment • Vested Remainder followed by an Executory Interest that could cut it off before it becomes possessory. • Same as Vested Remainder Subject to Complete Defeasance(P596)

48. Contingent Remainder (1) v. Vested Remainder Subject to Divestment (2) (1) To A for life, then to B & her heirs if she turns 21, but if B dies before 21, then to C and his heirs. Reversion in O. (2) To A for life, then to B & her heirs, but if B dies before 21, then to C & his heirs. (No Reversion in O)

49. Contingent Remainder (1) v. Vested Remainder Subject to Divestment (2) • (1) To A for life, then to B & heirs if she turns 21, but if B dies before 21, then to C & heirs. Reversion in O. • (2) To A for life, then to B & her heirs, but if B dies before 21, then to C & his heirs. • If A alive & B dies at 14:(both 1+2) • B gets 0; • C gets fee simple at A’s death

50. Contingent Remainder (1) v. Vested Remainder Subject to Divestment (2) • (1) To A for life, then to B & heirs if she turns 21, but if B dies before 21, then to C & heirs. Reversion in O. • (2) To A for life, then to B & her heirs, but if B dies before 21, then to C & his heirs. • If A alive & B turns 21:(both 1+2) • B has vested remainder • C’s interest fails