Doctrine of Destructibility of Contingent Remainders and the Doctrine of Merger

                                     Rembrandt "Jeremiah Mourning Over Future Interests"

The Doctrine of Destructibility of Contingent Remainders:"A contingent remainder must vest on or before the termination of the preceding estate; if it does not, it is destroyed."

The Doctrine of Merger is a principle of the common law that provides that whenever two consecutive vested estates in land are owned by the same person the smaller of the two estates will be absorbed by the larger.

When a large company buys out a small company and decides to merge with it (imagine Microsoft buying out Mom & Pop's little software company) usually what happens is the large company swallows the small company and the small company ceases to exist as a separate corporation but instead becomes a division or a department or a line of the large company. So Microsoft swallows Mom & Pop and comes out a slightly larger Microsoft.

Example #1: Grutz, the owner of Blackacre in Fee Simple Absolute, conveys it “to Doctor Butcher for Life, and if Cornelius Husker graduates from law school, then to Cornelius Husker and his heirs.”

What is the state of the title? 

What happens if Cornelius Husker is admitted to law school, and in April of his 3L year, Doctor Butcher dies?

How about this one [#2]: Grutz conveys Blackacre "to Paul McCartney for life, then to the heirs of Jelly Roll."

What is the state of the title?

Suppose McCartney dies and Jelly Roll is still alive?

Now this one #3: Grutz conveys "to Doctor Butcher for his life."

What is the state of the title?

Now suppose subsequently Grutz conveys his reversion to Butcher?

What is the state of the title now? [Butcher owns both his life estate plus the reversion following his life state, thus....]

#4: Suppose Grutz conveys Blackacre "to B for life, then to C and his heirs."

Then C conveys his vested remainder to B. 

What is the state of the title?

#5 Now suppose Grutz conveys "to Dr. Butcher for life, and if Cornelius Husker graduates from law school, then to Husker and his heirs."

Then suppose Grutz conveys his Reversion to Dr. Butcher. 

What result?

Notice there is an exception to the doctrine of destructibility of contingent remainders: As Moynihan puts it: "a contingent remainder will not be destroyed by a merger of a life estate and the next vested estate when the two estates are created simultaneously with the contingent remainder." Example: "Therefore, if A conveys to B for life, then to C for life if C marries, then to B and his heirs, C's contingent remainder is initially valid." The reason for the exception, according to Prof. Moynihan, is that "if it were held that the merger of the two estates destroyed the contingent remainder created simultaneously with them, the intention of the transferor would be completely defeated."

However, suppose in the example that B transfers both his life estate and his vested remainder to Duncan. Now, Duncan's life estate will merge with his vested remainder in fee and C's contingent remainder will be destroyed.

Kost v. Foster (p.313)

 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

 

A Few Hypos Concerning Remainders in the Wake of Koss v. Foster

                                        Pablo Picasso "The Old Guitarist" (Blue Period)

A remainder is a future interest created in someone other than a transferor which, according to the terms of its creation, will become a present estate (if ever) immediately upon and no sooner than the expiration of all prior estates created simultaneously therewith.

1. Grutz conveys "To Dr. Butcher for life, and if by Dr. Butcher's death Cornelius Husker has graduated from law school, then to Corny and his heirs"

What is the state of the title?

Suppose Corny graduates from law school and Butcher is still alive?

Now what is the state of the title?

2. Grutz conveys "To Dr. Butcher for life, then to Cornelius Husker and his heirs, but if Cornelius Husker has not graduated from law school by the time of Dr. B's death, then to John Lee Pettimore of Copperhead Road and his heirs"

What is the state of the title?

3. EA Poe conveys "To Dr. Tarr for life and, one year after Dr. Tarr's death, to Prof. Fether and his heirs."

What interest does Prof. Fether have? A remainder? Something else?

Remainders: A Little More

                                                                                                                                    DUNCAN-PROPERTY

                                                                                                                                        Handout 4

Remainders

            A remainder is a future interest created in someone other than a transferor, which, according to the terms of its creation, will become a present estate (if ever) immediately upon and no sooner than the expiration of all prior estates created simultaneously therewith.

            A vested remainder is a remainder which is in favor of an ascertained person and not subject to any condition precedent. Thus, if Grutz conveys “To Dr. Butcher for life, then to Dr. Paine and his heirs”, Dr. Paine has a vested remainder, because it is to an ascertained person (i.e. Dr. Paine) and there is no condition precedent to its becoming possessory upon termination of Dr. Butcher’s life estate.

            A contingent remainder is one which is either to unascertained persons or subject to a condition precedent before becoming possessory. Thus, if Grutz conveys “To Dr. Butcher for life, remainder to those children of Dr. Butcher who are alive at his death and their heirs,” the remainder is contingent because the ultimate remaindermen (Dr. B’s surviving children) will not be ascertained until Dr. Butcher dies. And, if Grutz conveys “To Dr. Tarr for life, and, if Prof. Fether (a bachelor) marries, then to Prof. Fether and his heirs,” Prof. Fether has a contingent remainder, because his right to possession is subject to the condition precedent that he marry.

            There are three types of vested remainders: (a) Indefeasibly Vested Remainders; (b) Vested Remainders Subject To Complete Defeasance; and (c) Vested Remainders Subject To Open.

Indefeasibly Vested Remainders

            An indefeasibly vested remainder is one which is to an ascertained person or persons, not subject to any condition precedent, and not subject to being divested or cut down in size: Grutz conveys “to Dr. Butcher for life, then to Dr. Paine and his heirs.”

Vested Remainders Subject To Complete Defeasance

            In order to distinguish a vested remainder subject to complete defeasance from a contingent remainder, you must first be able to draw a distinction between a condition precedent and a condition subsequent.

            As noted above, if a remainder is subject to a condition precedent, it should be classified as a contingent remainder. [EXAMPLE A]: Thus, if Grutz conveys “to Dr. Butcher for life and, if Billy Budd survives Dr. Butcher, then to Billy Budd and his heirs,” Billy Budd has a contingent remainder that will vest only if Billy satisfies the express condition precedent by surviving Dr. Butcher.

            If a remainder is subject to a condition subsequent which operates to divest or cut off an otherwise vested remainder, it should be classified as a vested remainder subject to complete defeasance. [EXAMPLE B]: Thus, if Grutz conveys “to Dr. Butcher for life, remainder to Billy Budd and his heirs, but if Billy Budd dies in Dr. Butcher’s lifetime, then to Dr. Paine and his heirs”, Billy Budd has a vested remainder subject to complete defeasance (i.e. if he fails to satisfy the condition subsequent and dies in Dr. Butcher’s lifetime, his vested remainder will be divested in favor of Dr. Paine’s executory interest).

            In attempting to distinguish these types of remainders, you should note the following general guidelines:

            1.     If the conditional language comes after language which would otherwise create a vested remainder, it will probably be construed as a condition subsequent which results in a vested remainder subject to complete defeasance. See EXAMPLE B, supra.

            2.     If the conditional language comes before or is part of the language creating the remainder, or if it is incorporated into the description of the remainderman, it will probably be construed as a condition precedent which results in a contingent remainder. See EXAMPLE A, supra. Another example of a contingent remainder is the following: Grutz conveys “to Dr. Butcher for life, remainder to those children of Dr. Paine who are alive at Dr. Butcher’s death and their heirs” (the conditional language is part of the clause describing the remaindermen, so the remainder is contingent).

            3.     Finally, where there is substantial doubt as to whether conditional language is precedent or subsequent, the courts generally express a preference for a vested construction.

Vested Remainders Subject To Open

            These are vested remainders which are subject to being diminished in size in favor of additional members of the class of remaindermen, i.e. a vested remainder subject to open is a remainder to a class of persons which may increase in number. For example, suppose Grutz conveys “to Dr. Butcher for life, remainder to his children and their heirs.” At the time of the grant, Dr. Butcher is alive and has one child, Sid. Sid takes a vested remainder subject to open, because if Dr. Butcher has additional children, Sid will have to share with them.

Remainder's: Vested vs. Contingent

A remainder is a future interest created in someone other than a transferor which, according to the terms of its creation, will become a present estate (if ever) immediately upon and no sooner than the expiration of all prior estates created simultaneously therewith.

Thus, Grutz, the owner of Blackacre in FSA, conveys it:

To Roger Clemens for his life, then to Pedro Martinez and his heirs.

Pedro has a remainder in FSA. Notice it satisfies the definition:

1. The future interest was created in Pedro, not in Grutz, the transferor.
2. It will become possessory immediately upon and no sooner than the expiration of Clemens’ life estate (i.e. it does not cut off Clemens’ life estate, but takes effect only upon the natural termination of the life estate).

Now, how about this one:

Suppose Grutz, the owner of Blackacre in FSA, conveys it on January 2, 2023 “to Roger Clemens for his life.” Then on January 3, Grutz conveys the future interest following Clemens’ life estate “to Pedro Martinez.” Does Pedro have a remainder?

What was the State of the title following the conveyance on January 2?

Clemens – Life Estate
Grutz – Reversion

Did Grutz’s reversion become a remainder when Grutz transferred it to Pedro?

No. A reversion continues to be recognized as a reversion even if the Grantor transfers it to a third person. So Pedro is the new owner of the Reversion.

A remainder can be created after a life estate, a fee tail, or a term of years, but never after any kind of a fee simple (absolute, conditional, or defeasible).


Remainders can be created in fee simple, for life, in fee tail, or for a term of years and can be made defeasible.

Thus, Grutz conveys: "to Roger Clemens for his life, then to Pedro Martinez
for his life." What is the state of the title?

Clemens — has a Life Estate

Pedro — has a remainder in a life estate

Grutz — has a reversion


Notice that Pedro's remainder was created "after a life estate" (i.e. following Roger's life estate) and "in a life estate" (i.e. Pedro's remainder  is a remainder for life).

Remainders may also be vested or contingent.

A vested remainder is a remainder which is in favor of an existing and ascertained person and which is not subject to any condition precedent.

Thus, in our Pedro example, ("to Roger for life, then to Pedro and his heirs"), Pedro has a vested remainder, because he is a living, ascertained person (he is Pedro!) and the remainder will take effect immediately upon Roger's death and is not subject to any condition precedent.

Compare this conveyance: “to Roger for life, and if the Red Sox win the World Series in 2026, then to Pedro and his heirs.”

This is not a vested remainder, because Pedro’s right is subject to the condition precedent that the Red Sox win in 2026. Pedro has a contingent remainder in this example.

A contingent remainder is one which is:

(a) to an unborn person or persons; or

(b) to an unascertained person or persons: or

(c) subject to a condition precedent.

Examples:

(a) "to A for life, remainder to A's children." Assume A has no children at the time. The remainder here is a contingent remainder in favor of A's future — as yet unborn — children.

(b) "To A for life, remainder to those children of A who survive
their father." A is alive and has 3 children: B, C and D. 

The remainder is contingent because it is in favor of an unascertained class of persons (surviving children of A).

Notice these last two examples are very similar. In one case, the remainder men are unascertained because they are unborn, and in the second case because of some other future event such as surviving their father.

(c) "to Roger for life, and if the Red Sox win the World Series in
2026, then to Pedro Martinez and his heirs." Contingent remainder subject to condition precedent.

Notice that, in all 3 of these cases, until the remainder vests Grutz retains a reversion.

Why?

What the Grantor does not convey, he retains.

What happens if the Red Sox don't win the World Series in 2026?

Pedro's remainder fails, and Pedro cannot take on Roger's death. What happens to Blackacre when Roger dies? It reverts to Grutz in fee simple.

Future Interests: Grantor vs. Grantee

The casebook does a great job of explaining "future interests in the grantor" beginning on page 308.

One of the best ways to begin to identify future interests is by paying attention to whether the interest is retained by the Grantor when he conveys away "a present estate smaller than the one he owns." Notice that there are three types of reversionary interests--Reversion, Possibility of Reverter, and Power of Termination (aka,Right of Entry).

I. Future Interests Retained by the Grantor When He Conveys Away Less Than His Fee Simple Absolute

1. If the Grantor conveys a Life Estate, a Term for Years (leasehold), or a Fee Tail, what does he retain? (Reversion)

2. If the Grantor conveys a Fee Simple Conditional, what does he retain? (Possibility of Reverter)

3. If the Grantor conveys a Fee Simple Subject to a Condition Subsequent, what does he retain? (Power of Termination/Right of Entry)

4. If the Grantor conveys a Fee Simple Determinable, what does he retain? (Possibility of Reverter)

II. Future Interests Created in a Third Person (someone other than the Grantor) will be either remainders or executory interests (see casebook at p. 308). We will be studying these over the next few classes.

Nonsense and Sensibility

                                                         Movie Poster of Sense and Sensibility

 

Suppose Grutz conveys "to Mr. Dashwood and the heirs of his body." 

Mr. Dashwood owns Norland Park, a great estate that is the sole source of support for this man of leisure and his family, in Fee Tail. 

He has a wife, three daughters, and a son by a previous marriage. His son, John Dashwood, is married to the selfish and mean-spirited Fanny.

Mr. Dashwood becomes ill and is worried about something. What is he worried about and why?

One way to think about this is to ask yourself how Mr. Dashwood's concerns for the support of his wife and daughters would be lessened if he owned a Fee Simple rather than a Fee Tail. Do you understand this?

What could he do for them if he had a Fee Simple?

Pride and Prejudice: The Fee Tail Hypo

                              

Above: Pictures of Characters from Television Serious Pride and Prejudice 

 
Grantor conveys "to Grandfather Bennett and the male heirs of his body"

Grandfather Bennett

Son Mr. Bennett and......................daughter (Mr. Bennett's sister)

Mr. Bennett has a wife and five daughters:

Jane
Eliza
Kitty
Lydia
Mary


Mr. B's sister has one son:

the slimy Mr. Collins

When Mr. Bennett dies what happens to his great estate of Blackacre?

Of course, Mr. Darcy saves the day, but what if he hadn't?

Destructibility & Merger Hypos

1. Grutz conveys "to B for life, then to C and his heirs."

Then C conveys his interest to B.

2. Grutz conveys "to Dr. Butcher for life, and if Cornelius Husker obtains a J.D., then to Husker and his heirs."

Now suppose Grutz subsequently conveys his Reversion to Dr. Butcher.


3. Grutz conveys "to B for life, then to B's surviving children, but if B dies without surviving children, then to C and his heirs."

What is the state of the title?

Can you guess what my next move is?

Fee Simple Conditional/Fee Tail

Grutz conveys "To Duncan and the heirs of his body"

Prior to 1285 (prior to enactment of De Donis Conditionalibus) what is the state of the title?

 Duncan has a Fee Simple Conditional (not a Fee Simple Subject to a Condition Subsequent)

Grutz has a Possibility of Reverter

After De Donis:

 Duncan has a Fee Tail

Grutz has a Reversion

What about under the Nebraska Statute?

Fee Tail

In 1285, Parliament passed the Statute De Donis Conditionalibus, which, in effect, abolished the Fee Simple Conditional and replaced it with the Fee Tail. See casebook at p. 300

The Fee Tail is an estate of potentially infinite duration and of inheritance, however, it is inheritable only by the "heirs of the body" of the grantee, i.e., by the lineal descendants of the original grantee of the Fee Tail. 

Notice that the Fee Tail is so called because, as the French word "taille" (to carve, to prune, to trim, to cut down) suggests, it is an estate that is inherited only by certain heirs of the original grantee, that is, by the "heirs of his body."

As Prof. Moynihan explains: "After De Donis, a gift of land "to B and the heirs of his body" created an estate in Fee Tail in B. The estate would last so long as there were any lineal descendants of B living and upon failure of such issue the land would revert to the donor or his heirs....For example, suppose in 1720, O conveys to B and the heirs of his body. B dies in 1750 survived by child C, who dies in 1795 survived by Grandchild GC, who dies in1845 survived by Greatgrandchild GGC, who dies in 1906 without any surviving descendants. Under these facts, B's line of descendants is finally extinguished (i.e. becomes extinct) in 1906 and B's Fee Tail estate would only then come to an end even though B actually died in 1750."

A Fee Tail is like an infinite chain of life estates passing in the original grantee's line of descent from generation to generation.

Notice that although B could convey Blackacre to a third person, for example, to C, C received "only an estate for B's life because the restrictions imposed by De Donis prevented B from making any conveyance that would cut off the rights of B's issue or the reversioner. Thus, even though B conveyed to C, C acquired only an estate measured by B's life. Upon B's death, C's estate was extinguished and the property passed to B's heir of the body, if any, for life. If B had no living descendants at his death, or if B did but at some future point in time B's line of descendants became extinct, the property reverted to the grantor or his heir who had the reversion." (Moynihan)

Now for some examples (notice how you can "taille" or carve up the eligible heirs of the body in many ways):

1. Grutz conveys "to Arnold and the heirs of his body."

Arnold has a Fee Tail

Grutz has a Reversion

2. Grutz conveys "to Arnold and the male heirs of his body."

Arnold has a Fee Tail Male (only male descendants may inherit)

Grutz has a Reversion

3. Grutz conveys "to Arnold and the female heirs of his body."

Arnold has a Fee Tail Female (only female descendants may inherit)

Grutz has a Reversion

4. Grutz conveys "to Arnold and the heirs of his body by his wife Maria"

Arnold has a Fee Tail Special (only descendants of Arnold & Maria may inherit)

Grutz has a Reversion

5. Grutz conveys "to Arnold and the female heirs of his body by his wife Maria"

Arnold has a Fee Tail Female Special (hold the lettuce and mayo) (only female descendants of Arnold & Maria may inherit)

Grutz has a Reversion

Fee Simple Conditional

Suppose that prior to the year 1285, ye olde Harvey Grutz, the owner of Blackacre in Fee Simple Absolute, conveyed Blackacre "to Arnold Schwarzenegger and the heirs of his body." The courts in merry olde England construed this as creating a Fee Simple Conditional in Arnold and because Grutz thus conveyed away less than all of his Fee Simple Absolute, Grutz retained a Possibility of Reverter.

What is a Fee Simple Conditional? Notice that it is completely different from the Fee Simple Subject to a Condition Subsequent. I repeat: a Fee Simple Conditional is not a Fee Simple Subject to a Condition Subsequent. Do not confuse these two very different estates merely because their names are somewhat similar.

Moynihan describes a Fee Simple Conditional "as if it were to A and his heirs on the condition that A have an heir of his body." In other words, in our example above, prior to 1285 the English courts "held that, upon the birth of issue to [Arnold], the condition had been fulfilled and [Arnold then] had the power to alienate the land in fee simple. But, the courts did not go so far as to hold that [Arnold] acquired a fee simple for himself. Thus, if [Arnold] had issue but later died without any issue who survived him and [Arnold] had not alienated the land to another during his life, the land reverted to the grantor even though [Arnold] had surviving collateral relatives."

As Prof. Moynihan points out, this construction by the courts of a conveyance "to Arnold and the heirs of his body" was "undoubtedly influenced by the judicial bias in favor of free alienability of land, but it ran counter to the intention of many donors."

Suppose, for example, that the donor's nephew was about to marry and the donor wished to give his nephew, as a wedding present, land that would remain in the nephew's family from generation to generation. The donor did not wish the land to be sold outside the family in fee simple, but to remain in his nephew's line of descent from generation to generation, and upon failure of the nephew's line of descent it was the donor's intention that the land would revert to the donor.

Again as Prof. Moynihan observes, construction of the gift as a Fee Simple Conditional (rather than as a Fee Tail), allowed the donee "to defeat the rights of both his issue and the donor." Do you see how?

To return to our earlier hypo (Grutz "to Arnold and the heirs of his body"), Arnold has a Fee Simple Conditional and Grutz has a Possibility of Reverter.

Suppose one year after the conveyance, Arnold's wife gives birth to their son, little Conan? The next day, Arnold conveys "to Lou Ferrigno and his heirs." Now what is the state of the title?

Answer: Ferrigno has a Fee Simple Absolute (Arnold had the power to convey a FSA and he exercised that power).

Now suppose Arnold does not convey away the land, but dies survived by his son Conan. What is the state of the title?

Answer (from a popular Hornbook): "If the owner [i.e. Arnold] dies survived by issue before making an inter vivos transfer, the issue will take the fee simple conditional by descent. This means that the condition as to birth of issue must again be satisfied before the estate can be converted into a fee simple absolute by inter vivos transfer."

Now suppose Arnold dies without issue still owning the Fee Simple Conditional?

Answer: Now the land will revert to the grantor, Grutz, as a result of the failure of issue under Arnold's Fee Simple Conditional.