December 11 1897 John and Katherine Kost conveyed a life estate to their son Ross Kost and some kind of remainder to the children of Ross Kost.
And the court tells us that the issue in this case is whether the remainder to the children of Ross Kost was a contingent remainder or some kind of vested remainder.
Why does it matter whether the remainder is vested or contingent?
Because on December 29, 1936, Oscar Kost (Plaintiff and one of Ross’s children) had his remainder sold by his Trustee in Bankruptcy to Defendant Foster.
If Oscar’s remainder was a contingent remainder, it would not have been reachable by his Trustee in Bankruptcy, because in this jurisdiction at this time contingent remainders could not be transferred inter vivos nor were they subject to being reached by creditors or the Trustee in Bankruptcy.
Thus, if the remainder were contingent, it would survive Oscar’s bankruptcy and he would still own it.
However, if Oscar’s remainder was vested, then it passed into his bankruptcy estate and was properly sold to Defendant Foster by Oscar’s Trustee in Bankruptcy.
Contingent Remainder—Oscar wins
Vested Remainder—Foster wins.
So, which is it and how do we know?
Vested Remainder Subject to Complete Defeasance
To Ross for life, then to Oscar and his heirs, but if Oscar dies in Ross's lifetime, then to Oscar's children and their heirs
Contingent Remainder
To Ross for life, and if Oscar survives Ross, then to Oscar and his heirs, but if Oscar does not survive Ross, then to Oscar's children and their heirs
The actual language used:"To Ross Kost for life and at his death to his lawful children [STOP--what is this] ....the lawful child or children of any deceased lawful child of Ross Kost to have and receive its or their deceased parent's share."
Does the conditional language constitute a condition precedent or a condition subsequent?
Notice the test employed by the court: "Whether a remainder is vested or contingent depends upon the language employed. If the conditional element is incorporated into the description of or into the gift to the remainderman then the remainder is contingent, but if, after words giving a vested interest, a clause is added making it subject to being divested, the remainder is vested."
The court gives two examples:
1. "To A for life, remainder to his children, but if any child dies in the lifetime of A his share to go to those who survive." Suppose at the time of this conveyance A is alive and has 3 children, B,C & D. What is the state of the title? Suppose A was alive and did not yet have any children?
2. "To A for life, remainder to such of his children as survive him." A is alive and has 3 children, B, C & D. What is the state of the title?
How about these:
1.Grutz conveys: "To Ollie for life and, if Billy survives Ollie, then to Billy and his heirs."
2. Grutz conveys: "To Ollie for life, then to Billy and his heirs, but if Billy dies in Ollie's lifetime, then to Ed Asner and his heirs."
The court holds that the original deed crated a vested remainder subject to complete defeasance (“subject to being divested on the contingency of one of the children of Ross Kost dying before the life tenant” p. 316). Since Ross Koss died in 1949, the remainder indefeasibly vested in Oscar who survived him.
Thus, Foster is the owner of Oscar’s “undivided one-seventh interest” in what is now a Fee Simple Absolute. P. 317
