Hello Reader, this time Tabir Hukum will discuss about determinable estates and estates subject to condition subsequent.
In the struggle to interpret grants of conditional estates, and to allocate rights between the grantor and the grantee, courts came to divide conditional grants into two categories : the "determinable estate" and the "estate subject to condition subsequent", also called the "defeasible estate". Some lawyers argued that passage of Quia Emptores eliminated conditional fee simples where the grantor retained an interest in the land, because that statute forbade subinfeudation and declared that henceforth, in all conveyances of the fee, the grantee would substitute for the grantor, and the grantor would drop out of the feudal triangle. Although it would seem to follow that grantors cannot retain anything when they convey the fee simple, this argument has not found judicial or practical acceptance.
In a grant of a fee simple that is less absolute, what does the grantor retain ?. In the grant of a fee simple determinable, the right that O retains is called a "possibility of reverter", with a fee simple subject to condition subsequent, O retains a "right of re-entry" (sometimes called right of entry) for condition broken. These are technical terms and cannot be used interchangeably. Although the two kinds of conditional fee simples appear similar in the form in which they are expressed and in te intentions with which they are created, thet are quite different in terms of the legal consequences for both grantor and grantee. To avoid confusion between the possibility of reverter and the right of re-entry, and between these interests and the reversion, attach the phrase "possibility of reverter" to the determinable estate, and remember that the two never exist apart from each other. Likewise, attach the phrase "right of re-entry" to defeasible estates.
Alas, although the common law is rigid in its compartmentalizing of different estates, there is a dismaying lack of precision in the rules whereby estates and interests in land are assigned to one or another of these two compartments. You may encounter two conveyances where only one or a few words are different, but that difference creates a completely different set of estates and interests. For example, where O makes a conveyance "to A and heirs" and adds a condition whereby if A fails to proceed as directed in the deed then O may take (back) the land, the meaning seems to be the same as in a grant "to A and heirs" for the length of time that certain conditions continue. In the first, O grants Blackacre "to A and heirs but if the land is no longer used for church purposes, then O may reenter and take possession". In the second, O grants "to A and heirs so long as the land is used for church purposes".
Using the words "so long as", A, in the second example, receives a fee simple determinable and O retains a possibility of reverter. When (if ever the land is not used as specified, O or O's estate will get the land back and resume the rights of the owner in fee simple absolute. Using the words "but if", A, in the first example, has a fee simple subject to conditions subsequent; and if A or A's successors in title breach the conditions in the grant, O will have the option of exercising the right of re-entry and taking back the estate. Although O may, in both examples, regain the land, in each both O and A have different estates subject to different rules. With a fee simple determinable and a possibility of reverter, if the conditions on which the grant was given cease to exist, then the grant comes to an end automatically - the fee simple reverts automatically to the grantor, or, if the grantor is dead, to the grantor's estate. But if the estate is subject to a condition subsequent and O has a right of re-entry for condition broken, then O has an option : to re-enter and reclaim the fee simple or to ignore the breach of the condition. If O or O's estates does not exercise the right of re-entry, A will keep note other important differences between determinable and defeasible estates as er learn about other real property rules.
Why does a small difference in the words of limitation produce different legal consequences ?. Because judges in interpreting grants have made a distinction between words that are really indistinguishable in meaning. Does the distinction serve any useful purpose ?. Legislatures in some jurisdictions have concluded that it does not, and have, by legislation, assimilated these two conditional estates to one, therefore ensuring that contending claimants to the property cannot waste resources in litigation over the grantors' intentions. But grantors lose one possibility for choice.
Attempt to define the difference between determinable estates and estates subject to condition subsequent focus on different ways of thinking about the duration or termination point of the two estates. The determinable estate come to an end automatically when the determining event is reached - the end of the situation on which the estate was premised. The condition is part and parcel of the grant, defining how long the estate will last. In the absence of other indications of the grantor-s intentions, courts have generally interpreted the following words as creating a determinable estate : "while", "Whilst", "during", "so long as", "until". These words are supposed to connote a duration or flow of time. The estate flows on, subject to the possibility of reverter. And if the possibility of reverter becomes a reality, the estate has reached its natural, if not inevitable, end. In contrast, the termination of a defeasible estate - one subject to condition subsequent - is considered premature or unnatural. Rather than flowing onto its natural end, the estate subject to condition subsequent is cus short artificially by the grantor's exercise of the right of re-entry. The fee simple subject to condition subsequent is a fee simple with an added condition that may defeat the grant. Words generally interpreted as creating an estate subject to condition subsequent are : "provide that", "on condition that", "but if", "but when", "if it should occur that", "if it happens that".
Although these lists of phrases provide some guidance in interpreting a grant, they are not terms of art that will have the same technical legal meaning in all contexts. Whether a grant creates a determinable estate or an estate subject to condition subsequent is a matter of construction, depending in each case on the intentions of the grantor. The results of this search for the grantor's intentions can seem quite arbitrary; surely if grantors had in their minds the different legal consequences of creating a determinable or a defeasible estate, they would state their intentions clearly using the appropriate technical terms.
The form of mortgage in use in many jurisdictions in Canada today began in the fifteenth century as a fee simple subject to condition subsequent. A mortgage is an interest in land created to secure payment of a debt. In the typical modern mortgage, the borrower transfers a fee simple estate to the lender, subject to the borrower's right to re-enter on payment of the debt. At common law, the terms of this condition were construed strictly, and borrowers often lost the right to regain their property for trivial defaults on their payment obligations. The court of equity, however, began to provide borrowers with some relief against loss of their estates. The rules governing modern mortgages are a compound of common law rules regarding estates subject to condition subsequent, rules of equity concerning the borrower's interest (which came to be known as the "equity of redemption"), and legislation.
As noted above, grantors may attach conditions to life estates as well as fee simples, if the grantor wants to control not only the disposition of the property on the life tenant's death, but also the life tenant's behaviour or use of the property. Grantors of life estates to widows sometimes require the widow to remain faithful to the dead spouse. In a devise "to my widow for life so long as she remains unmarried", the widow receives a determinable life estate, with two natural termination points : her death, or her remarriage, whichever comes first. The grantor's estate has both a possibility of reverter and a reversion in fee simple. If the widow remarries, the possibility of reverter becomes a reality and the estate immediately reverts to the grantor's estate. Otherwise, the estate reverts to the grantor's estate at the widow's death. Similarly, a devise "to my widow for life providing she does not remarry", creates a life estate subject to condition subsequent. Here, the natural termination point of the life estate is the death of the widow, but because of the condition added to the grant, the widow, if she remarries, faces the prospect of having her life estate cut short by the executor of the grantor's estate choosing to exercise the right of re-entry.
As we have seen, small differences in wording may produce quite different legal consequences. The requirement for the magic words "and heirs" to grant a fee simple was relaxed for devises. Suppose, then, that O, as a testator, devised Blackacre to his widow, as long as she remained such. Had O intended to give his widow the fee simple or merely a life estate, determinable in either case ?. As often happens when courts must divine the grantor's choice when the grantor probably had not realized that a choice was necessary, the decided cases are difficult to reconcile. Such ambiguity should be avoided by using technical language and using it correctly.
Umpteen posts of tabir hukum about determinable estates and estates subject to condition subsequent, hopefully the writing of tabir hukum about determinable estates and estates subject to condition subsequent can be beneficial.
Books : In Writing Tabir Hukum :
Alan M. Sinclair and Margaret E. McCallum, 2005. An Introduction to Real Property Law (Fifth Edition). LexisNexis : Canada.
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| Figure Property Law : Conditional Freehold Estates - Determinable Estates and Estates Subject to Condition Subsequent |
