PROPERTY ESSAY QUESTION Professor Vollmar Spring 2010 In 1990, Simon Speculator purchased a 300-acre estate called Gardendale from George and Gail Flowers. The estate is located in Calm County, in the State of Order. Simon paid $900,000 for the property. Simon has consulted you about a dispute with George and Gail s cousin, Frances Flowers. Simon explains that George and Gail Flowers are the grandchildren of David Flowers, who built a home on the Gardendale property in 1942. David planted a formal wildflower garden on approximately 10 acres surrounding the house, and the garden is well-known as one of the most complete collections of wildflowers native to the State of Order. David Flowers had two sons, Edward and Everett. Everett left home at an early age to become a lawyer, and neither he nor his daughter, Frances Flowers, has ever taken any interest in Gardendale. Edward, on the other hand, became a well-known landscape gardener and horticultural expert in Calm County. For this reason, David gave Gardendale to Edward in 1958. When Edward later died in 1974, he left Gardendale to his children, George and Gail Flowers, in his will. David Flowers died without a will in 1980, and his property passed to his heirs (½ to Everett and ¼ each to George and Gail) as tenants in common. Your search of the Calm County land records revealed the following properly-executed documents, all of which were promptly recorded: 1. General warranty deed dated May 15, 1990, which included the following language: We, George Flowers and Gail Flowers, brother and sister, do hereby grant to Simon Speculator, in fee simple, the 300-acre estate known as Gardendale located on Azalea Drive, in Calm County, State of Order, which we inherited from our father, Edward Flowers, under his will dated February 18, 1968, which was admitted to probate on October 20, 1974, and recorded in the land records of Calm County at Will Book 386, page 279. 2. Edward Flowers s will admitted to probate in 1974, which contained the following language: ARTICLE 5. I give to my children, George Flowers and Gail Flowers, the 300- acre estate known as Gardendale located on Azalea Drive, in Calm County, State of Order, which I received from my father, David Flowers, by deed of gift dated April 1, 1958, and recorded in the land records of Calm County at Deed Book 259, page 822. 3. 1958 deed of gift from David Flowers to Edward Flowers, which included the following language: 1
I, David Flowers, do hereby give to my son, Edward Flowers, my 300-acre estate known as Gardendale, located on Azalea Drive, in Calm County, State of Order, in fee simple, to have and to hold for so long as the wildflower garden on the property is maintained and preserved. I received this property from Oliver Owner by general warranty deed dated May 20, 1940, and recorded in the land records of Calm County at Deed Book 149, page 63. Edward and, after his death, George and Gail maintained the garden in the same condition as David had. When Simon bought Gardendale, he began using the house as a business office but continued to maintain the garden. The garden became rather expensive to maintain, however, and two years ago Simon donated the garden to the Calm County Botanical Society. The Society built paths through the garden and has opened it to the public. The Society uses the money collected as admission fees to maintain the garden and to fund research into development of hardier strains of local wildflowers. Everett s daughter, Frances Flowers, recently contacted Simon claiming that she now owns Gardendale in fee simple. She bases her claim on a deed of gift from her father dated August 8, 1984, which includes the following language: I, Everett Flowers, do hereby give, grant, and convey all of my interest in the estate known as Gardendale, located on Azalea Drive, in Calm County, State of Order, to my daughter, Frances Flowers, and the heirs of her body forever. This is the same property that Oliver Owner conveyed to my father, David Flowers, by deed recorded in the land records of Calm County at Deed Book 149, page 63. Frances claims that Everett s deed conveyed to her all of the interest Everett had in Gardendale as an heir of David. Further, she claims that because her grandfather s wildflower garden now is owned by the Botanical Society instead of by Simon Speculator, the garden is no longer part of Gardendale and therefore is no longer maintained on the property as required by her grandfather s deed of gift to her uncle Edward. Frances asserts that Gardendale automatically reverted to her grandfather when Simon gave the wildflower garden to the Botanical Society. Since her grandfather is dead, and her father, Everett, gave her his interest in David s estate, Frances claims that she is now the sole owner of Gardendale. Frances says that she will bring a legal action to evict Simon unless she and Simon can settle their dispute privately. Describe the legal effect of each of these documents and events, and explain the current state of the title to Gardendale. In addition, assess the validity of Frances s claims. Assume that the State of Order follows the prevailing modern rules on matters of property law. If the law on a particular issue is in a state of flux, identify the different approaches that might be taken and how each would affect the rights of the parties. 2
Sample Answer All documents were properly executed and promptly recorded, so no issues exist regarding execution and recording. No facts suggest that any other property interests arose during the relevant time (e.g., by adverse possession), so this answer assumes that none did. Family relationships. David Flowers, who purchased Gardendale in 1940, had two sons, Edward and Everett. David had three grandchildren, George and Gail (Edward s two children) and Frances (Everett s child). Edward died testate in 1974, and David died intestate in 1980. Everett, as well as David s three grandchildren, are still alive. The chain of title. The chain of title is as follows: Oliver Owner (FSA) 5/20/40 general warranty deed David Flowers: d. 1980 intestate heirs ½ to Everett: 8/8/84 deed of gift Frances (fee tail??) (FSA) ¼ each to George & Gail as TCs 4/1/58 deed of gift Edward Flowers 10/20/74 will George & Gail Flowers, TCs 5/15/90 general warranty deed Simon Speculator Oliver to David: Oliver conveyed Gardendale to David in FSA in 1940. It may be desirable to verify that Oliver had FSA ownership, although some state statutes do not require a purchaser to search the records back as far as 70 years. David to Edward: David had a FSA, but conveyed only a defeasible FS to Edward. Most likely, the defeasible FS is a FS determinable because David used words of duration ( for so 3
long as the garden is maintained ) in describing the condition. With a FSD, the grantor (David) retains an implied possibility of reverter under which Gardendale will automatically revert to David if the garden is not maintained. (If the defeasible FS wasn t a FSD, it would have to be a FSSCS, in which case David would retain only a right of entry and would have to enter and retake the land to reacquire ownership.) At David s death. David s retained interest had not become possessory before his death because the garden was being maintained. In a majority of jurisdictions, possibilities of reverter and rights of entry are freely transferable. Because David died without a will, his possibility of reverter passed to his heirs as TCs (an undivided ½ interest to his living son Everett, and an undivided ¼ interest each to George and Gail, the issue of his deceased son Edward). Everett to Frances. In 1984 Everett deeded all my interest in Gardendale to his daughter Frances. However, Everett s only interest in Gardendale was an undivided ½ interest in David s possibility of reverter, so that s all Frances acquired. George and Gail still own ¼ each. Also, Everett s deed is to Frances and the heirs of her body forever. At common law, these words created a fee tail. Modernly, however, most states convert a fee tail into a FSA. The next most likely treatment would be for Frances to have a LE and her issue to have a remainder contingent on surviving Frances. (But query: what s the effect when the fee tail is in ½ of a possibility of reverter?) Edward to George & Gail. Edward s will devised Gardendale to George & Gail as tenants in common. However, Edward only owned a FSD, so that s all he could devise to George & Gail. George & Gail to Simon. George & Gail conveyed a fee simple to Simon in 1990. In fact, however, Simon received only a FSD, because that was all G&G owned. His ownership is subject to the requirement that he maintain the flower garden. Has the FSD terminated due to breach of the condition? The deed that created the FSD said for so long as the wildflower garden on the property is maintained and preserved. The deed did not say who must maintain the garden, and it appears that Simon and then the Calm County Botanical Society have been maintaining it. So Frances s claim seems premature. Merger. Even if Frances s claim were valid, Simon probably owns an undivided ½ interest in FSA in Gardendale anyway. G&G acquired all of the FSD in 1974 under their father Edward s will, and acquired ½ of the possibility of reverter in 1980 as David s heirs, so these interests merged in 1980 to give G&G a FSA in ½ of Gardendale. (As successor to G&G, Simon still owns the remaining ½ of Gardendale in FSD.) Covenants of title. G&G s deed to Simon was a general warranty deed carrying all the present covenants (seisin, right to convey, against encumbrances) and future covenants (present enjoyment, general warranty, further assurances). A seller can be liable in damages to a buyer if 4
any of these covenants is breached. However, any claim made by Frances is likely to fail. Even if she succeeds and Simon proves breach of the covenant of quiet enjoyment, his damages would be limited to the $900,000 he paid for Gardendale. 5