Consider an event that might occur at a future time. Three types of future events are
1) scheduled events are events that will occur at a specified time, for example, New Year’s Eve will occur on December 31st.
2) unscheduled but inevitable events will occur but at an unknown time, for example, the death of a person will occur but the timing is unknown
3) events which may or may not happen, for example, the death of one person before the death of another, the birth of a child, a child surviving to age 21, England winning the World Cup. .
Events of the third type are contingent events.
Recall the information on transfers of property in land. X may acquire an estate in land as the result of a grant from Y. Or X may acquire an estate in land as a result of the evolution of an estate in remainder or a contingent remainder that X held.
Consider the following grants (assume the grantor held an estate in fee simple and remember that the words “and his heirs’ are, by statute, no longer required in order to transfer the entire estate held by the grantor)
1) to A for life, remainder to B
As a result of this grant, B holds an estate in remainder in fee simple which will evolve into an estate in fee simple at an unscheduled time in the future.
2) to A until A remarries, remainder to B
As a result of this grant, B holds a form of property which may evolve into an estate in fee simple. Whether it does so evolve is dependant on a contingent event. Immediately following the grant and provided that A has not yet remarried, B is said to hold a contingent remainder in fee simple, a future interest.,
A contingent remainder is not an estate in land but a form or property in land that may evolve into an estate in land. There may be an intermediate stage of evolution to an estate in remainder,
To recognize a contingent remainder, parse the grant. Find the words of purchase, and the words of limitation, if any, and the condition precedent. The condition precedent is the contingent event that must occur before the contingent remainder can evolve into an estate in remainder or an estate. For a contingent event to be useful in any category, it must be unambiguous. That is, it must be clear to an observer what evidence would prove that the event has occurred.
-à Grant to A for life, remainder to the first child of A to reach 21
As a result of this grant A holds a life estate. If, immediately following the time of the grant, the eldest child of A is 10, there is a condition precedent in this grant. Before any child of A can hold an estate from this grant, that child must attain the age of 21 and must be the first child of A to attain 21. Each child of A holds a contingent remainder in fee simple. The remainder held by the first child of A to reach 21 will evolve into an estate in fee simple, and the contingent remainders held by the other children will then never evolve. Note that you are about to learn a rule that will destroy the contingent remainders unless one child reaches 21 by the time that A dies-Common Law Remainder Rule #2.
A contingent event may also terminate or be a factor in terminating a form of property in land.
These contingent events are known as
· determining events or
· conditions subsequent.
A determining event is distinguished from a condition subsequent by the language used in the grant. The effects of the two types of language are quite different and it is important to understand how Courts have interpreted differing language as either a determining event or a condition subsequent.
Courts have interpreted words describing a contingent event as a determining event if the words are part of the words of limitation (remember that the words of limitation describe the form of property). Words such as “so long as” or “until” have consistently been interpreted as indicating a determining event.
Courts have interpreted words describing a contingent event as a condition subsequent if the words are a separate phrase attached to the words of limitation. The phrasing of the grant indicates that there would be a comma or a pause between the description of the contingent event and the words of limitation. The words “but if” have consistently been interpreted as indicating a condition subsequent.
The happening of a determining event terminates a form of property in land.
-à Grant To A until A turns 21, remainder to B
The event of A turning 21 terminates A’s estate in land. The same event is a condition precedent for B’s contingent remainder to evolve into an estate in fee simple. If A does not turn 21, B’s contingent remainder in fee simple will not evolve, and the grantor or the heir of the grantor will hold an estate in fee simple by reversion.
Or to be more complete, consider first at common law immediately following the time of the grant. Then consider what happens if the contingent event occurs, then what happens if the contingent event does not occur:
At common law, immediately following the time of grant
A holds an estate in fee simple determinable, with the determining event being A’s reaching his 21st birthday.
B holds a contingent remainder in fee simple with the condition precedent being A’s reaching his 21st birthday
The grantor or the heir of the grantor holds an estate in remainder in fee simple determinable the determining event being A’s reaching his 21st birthday.
The contingent event is A’s reaching his 21st birthday. What happens if he does?
If A reaches his 21st birthday, B’s contingent remainder evolves into an estate in fee simple. The grantor or heir of the grantor’s estate in remainder determinable determines.
What happens if he does not?
If A does not reach his 21st birthday, A’s estate never determines, and when A dies, A’s heir will inherit his estate in fee simple. B’s contingent remainder will never evolve
The grantor’s estate in remainder in fee simple will never determine.
Note that this analysis is simplified.
The happening of a condition subsequent does not by itself terminate a form of property in land. This is discussed below under common law remainder rule #3.
-à Grant To A, but if A becomes 21, remainder to B
In the event of A turning 21, his estate does not terminate automatically but rather, the grantor or the heir of the grantor is at liberty to re-enter the land. If re-entry occurs, A’s estate in the land is terminated. Because of common law remainder rule #3 (see below) unless B is the heir of the grantor, B’s contingent remainder will not evolve ever. If A becomes 21 and re-entry does not occur, A continues to hold an estate in fee simple. If A does not become 21, B’s estate does not evolve and as in the example in 2) above, the grantor or heir of the grantor holds an estate in fee simple in reversion.
Or to be more complete:
At common law:, immediately following the time of the grant,
If A is not yet 21:
A holds an estate in fee simple subject to a condition subsequent . …
B holds a contingent remainder, which unless B is the heir of the grantor, will never evolve
The grantor or heir of the grantor holds a contingent remainder in fee simple subject to two conditions precedent, A becoming 21 and reentry occurring
If A is 21:
A holds nothing,
The heir of the grantor holds an estate in fee simple
B holds nothing,
Future interests are forms of property in land that may or may not evolve into estates in land at some point in the future. Future interests can exist at common law or in equity. The rules that apply to future interests are different depending on the type of future interest under consideration. Consider the following grant.
---> Grant To A for life, remainder to B at the age of 21.
At common law, immediately following the time of the grant, A holds a life estate. If B is 21 or older, B holds an estate in remainder in fee simple but if B is less than 21, B holds a contingent remainder in fee simple. NOTE THAT THIS GRANT IS SUBJECT TO THE COMMON LAW REMAINDER RULES WHICH CHANGE THE ANALYSIS OF WHAT MIGHT HAPPEN IN THE FUTURE.
A remainder is contingent if (i) it is not possible to identify the holder of the form of property, or (ii) there is a condition precedent in the words of limitation. This is a simple example of a future interest. Whether this future interest at common law will evolve into an estate in land is dependant on two factors, the facts and the legal rules that apply to the facts. The first to be discussed are the rules that apply to common law remainders.
All common law remainders are subject to three common law remainder rules.
1. No remainder after a grant in fee simple.
2. A remainder must always be supported by a precedent freehold estate.
3. The benefit of a condition subsequent cannot be enjoyed by a stranger.
Violation of any of these rules will result in the destruction of the remainder, no matter what the intention of the grantor. These are rules of law, not rules of construction.
The first rule is pretty much self explanatory. In the grant "To A and his heirs, remainder to B and his heirs" the remainder to B is destroyed. Simple arithmetic determines this outcome; after the grant to A there is no property left for the grantor to grant to anyone. But, it is not always that simple. Consider the following;
---> Grant To A and his heirs so long as he does not get a pilot’s licence, remainder to B if A gets a pilot’s licence.
As a result of this grant A holds an estate in fee simple determinable. B holds a contingent remainder in fee simple. B's contingent remainder is not destroyed by this remainder rule as A does not hold an estate in fee simple, but holds an estate in fee simple determinable. If A gets a pilot’s licence, B or his heirs (if B were to die before A got his licence) would then hold an estate in fee simple
The second common law remainder rule is conceptually simple, but can sometimes be tricky to apply properly. Consider the following;
----> Grant To A for life, remainder to B at the age of 21.
If B is not yet 21 at the time of the grant, B holds a contingent remainder in fee simple that will evolve into an estate if fee simple if B reaches the age of 21 before the death of A. If B is 19 years old when A dies B's future interest has no future; it is destroyed. The same applies had the grant read "To B at the age of 21" if B was not 21 as of the time of the grant. There is no precedent freehold estate to support the contingent remainder. Note this important fact; the rule contains the phrase "freehold estate". In the grant "to A for 99 years, remainder at the end of that 99 years to B at the age of 21" the remainder to B would be destroyed by the rule. A grant for a specified period of time is a leasehold estate not a freehold estate
In the previous grant it is unknown as of the time of the grant whether B's contingent remainder will evolve into an estate in land. The remainder is not destroyed as of the time of the grant, but only if A dies before B reaches the age of 21. Consider the application of the rule in the following;
----> Grant To A for life, remainder to B one day after the death of A.
The estate in remainder cannot possibly comply with the second common law remainder rule. There is a built in gap in the grant; the one day between A's death and the supposed beginning of B's estate. The remainder is destroyed.
A remainder is also contingent if it is not possible to identify who holds the form of property. This presents problems when trying to identify who holds what form of property as a result of the grant. Consider the following grant. As of the time of the grant B has three children, C1, C2, C3, aged 17, 19, and 23 respectively.
---> Grant To A for life, remainder to the children of B who reach the age of 21.
As of the time of the grant C3 holds an estate in remainder in fee simple. Each of C1 and C2 holds a contingent remainder in fee simple. Suppose that A died three years after the grant. C2 would have reached the age of 21 before the death of A (or C2 will have died before meeting the condition precedent) and would hold an estate in remainder in fee simple when he reached the age of 21. C1's remainder is destroyed as he did not reach the age of 21 before A died. His contingent remainder was not supported by a precedent freehold estate. The estate in fee simple held by C2 and C3 does not precede the contingent remainder that was held by C1. Therefore, the fact that C2 and C3 held an estate in fee simple upon the death of A is not relevant to the property that C1 holds as a result of this grant.
In the above grant assume that, as of the time of the grant, B's wife was pregnant with their first child. Would it make any difference with respect to the potential future child? No, for the purposes of property law, life begins at conception. This yet unnamed potential future child would still have to reach the age of 21 before the death of A or the contingent remainder held by that child would be destroyed. Assume further that B were to have another child 1 year after the grant. This child would also have to reach the age of 21 before the death of A or the contingent remainder would be destroyed. It makes no difference that the child was not alive as of the time of the grant, except in the case of a grant that read "remainder to the children of B now living".
When considering the impact of the second common law remainder rule keep in mind that the contingency must always be met before the precedent freehold estate ends. The above examples all deal with age attainment, but the condition precedent contained in the grant can, generally speaking, be any event that may or may not happen. Consider the following grant. As of the time of the grant B is unmarried.
---> Grant To A for life, remainder to B when he is married.
If B is not subject to impediment of marriage at the time of the grant, B holds a contingent remainder in fee simple. If at some point in the future, before A dies, B becomes married, B's form of property will evolve into an estate in remainder in fee simple at common law. Then, upon A's death B will hold an estate in fee simple at common law.
If A were to die while B was still single B's remainder would be destroyed. Note that B's marriage, before the death of A, only serves to change B's contingent remainder to an estate in remainder. The happening of the contingent event does not effect A's life estate. The marriage of B is a condition precedent that must occur before B’s contingent remainder evolves.
When considering the 3rd common law remainder rule it is important to distinguish between an estate subject to a condition subsequent and a determinable estate. Consider the following;
---> Grant To A for life, but if A marries X, remainder to B..
As a result of this grant A holds a life estate subject to a condition subsequent. B holds a contingent remainder in fee simple. A's life estate can end either by (i) A's death, or (ii) A's marriage and re-entry.
If A dies unmarried to X, or if A dies married to X but reentry has not occurred, B’s contingent remainder evolves into an estate in fee simple. B has benefited from the death of A.
If A marries X and reentry occurs, B’s contingent remainder is destroyed as only the grantor or the heir of the grantor can benefit from a condition subsequent.
A life estate determinable would lead to a different result. Consider the following grant.
---> Grant To A for life or so long as he does not marry X, remainder to B.
As a result of this grant A holds a life estate determinable. B holds an estate in remainder. If A marries X, then B would hold an estate in fee simple. If A were to die before A marries X, B would also hold an estate in fee simple. Either event results in B holding an estate in fee simple by evolution; it is simply a question of when. Hence, be careful to determine whether you are analyzing a form of property subject to a condition subsequent or a form of property that is determinable. As you can see, it can make quite a large difference to the person who holds the remainder.
As the two previous grants demonstrate, although the grants stipulate essentially the same contingencies, the results will be much different depending on whether the condition is part of the words of limitation [determining event] or attached to the words of limitation [condition subsequent]. The combination of the words of the grant and A's decision to marry can have serious consequences for B.
The lesson here is READ THE GRANT CAREFULLY. Even a small change in the words, or the punctuation, can greatly change the correct analysis of the grant.
(2) Future Interests in Equity
That forms of property can exist in equity is especially important in the context of future interests. Common law remainder rules, as the name would suggest, apply to common law remainders: they do not apply to equitable remainders. One need not be concerned with whether there is support of a precedent freehold estate or any of the other common law remainder rules.
This made it easier to transfer an estate in land with greater certainty. For historical reasons that need not be considered here, it was to the advantage of many to avoid the common law remainder rules when transferring property in land. Consider the following made in the year 1534:
---> Grant To A and his heirs to the use of B and his heirs at the age of 19.(1)
As a result of this grant A holds an estate in fee simple at common law and if B is less than 19 years old, B holds a contingent remainder in fee simple in equity in the same land. The grantor holds an estate in fee simple in equity until B reaches the age of 19. Equity assumed, in the absence of evidence to the contrary, that the grantor did not intend A to gain any benefit from the land. The common law courts would only recognize the form of property that A holds in the land. B would have to appeal to the courts of equity to force A to perform the equitable obligations that were imposed on him as a result of this grant.(2) The grantor need not be worried that B might not reach the age of 19 before A died; this makes no difference as the common law remainder rules do not apply to B’s equitable contingent remainder. A statute passed in 1535 covered in Chapter 9 changes the analysis of this grant.
It also became easier to grant interests in land that could result in different people holding an estate on the happening on a contingent event. Consider the following;
---> Grant To A to the use of A in fee simple to the use of B for life, but if B were to marry X, to the use of C in fee simple.,
As a result of this grant A holds an estate in fee simple at common law and in equity. B holds a life estate in equity subject to a condition subsequent. C holds a contingent remainder in fee simple in equity. If B were to marry, C would hold an estate in fee simple in equity. Had this been a common law conveyance, the interests of both B and C would have been destroyed. The grants to B and C follow a grant in fee simple, consequently they would have been destroyed. Moreover, the grant to C would also be an example of a stranger benefiting from a condition subsequent; something that we now know was not allowed at common law.
The next chapter will discuss estates in equity in more detail.
An attempt to create a Condition Precedent, or a Determining Event or a Condition Subsequent may fail. The reasons for failure include vagueness, encouragement of illegal acts or attempting to circumvent law.
Read the grant looking for a contingent event. Classify the event as an attempted CP, a DE or a CS. Determine if the attempt succeeds or fails. If the attempt fails, edit the grant. The results of editing will depend on whether the attempt was to create a CP or a DE or a CS. Then identify the forms of property held as a result of the grant.
1) Attempted Condition Precedent
-à to A for life, remainder to B and his heirs when B kills X
“When B kills X” looks like an attempted Condition Precedent. The grantor’s attempt to create the condition precedent will fail because the grantor is encouraging murder. So what happens?
“When B kills X” is part of what the grantor attempted to make words of limitation. Thus the words of purchase are “To B” and the attempted (but failed) words of limitation are “ and his heirs when B kills X” All those words are edited out as they contain an failed attempt. . Thus, as a result of this editing, the grant becomes
-à To A for life, remainder to B.
Section 5 of the Conveyancing and Law of Property Act provides that, unless the wording of the grant suggests otherwise, the words “in fee simple” could be added. In this case the wording did indicate otherwise, as evidenced by the words that we edited out. Since we cannot add the words “in fee simple” and therefore we have no words of limitation to describe a form of property, B holds nothing as a result of this grant. A holds a life estate, and the grantor or the heir of the grantor holds an estate in remainder in fee simple.
2) Attempted Determining Event
-àto D and his heirs until D contracts marriage
First we identify that there is an attempt to create a determining event.
The attempt fails because, unless D is subject to impediment of marriage, the grantor is attempting to prevent D’s marrying. It was considered undesirable to prevent marriage as failing to marry lead to the creation of bastards. (Note that there was no similar restriction on the discouragement of remarriage. So a determining event ‘until D remarries” would not fail. )
Next we edit. Attempted determining events are part of the attempted words of limitation. So when the attempted (but failed) determining event is edited out, the attempted words of limitation go with it. There are now no words of limitation in the grant and the grant fails.
3) Attempted Condition Subsequent
-à To E and his heirs, but if E attempts to transfer the estate, to F and his heirs.
First we identify that there has been an attempt to create a condition subsequent. The attempt fails as it is an attempt at restraint of alienation, that is, an attempt to prevent an estate holder from dealing with his land. This, like murder, was not to be encouraged.
Next, we edit. An attempted condition subsequent is not part of the attempted words of limitation but attached to them, Consequently we edit out only “ but if…..estate”. As a result of this grant, E holds an estate in fee simple and F holds a contingent remainder that will never evolve.
4) Ambiguity
Grants can be ambiguous. The grant should be interpreted so that the grantor does not benefit from any ambiguity.
Quiz: Who acquires what forms of property as a result of these grants
Assume that the grantor holds an estate in fee simple at common law as of the time immediately prior to the time of the grant
1) To A for life, remainder to B at the age of 19.
2) To A to the use of B, remainder to the use of D.
3) To A for 99 years, to the use of B for life, remainder to the use of C.
1. Assume that the Statute of Uses does not apply
to this grant. If the statute did apply to the grant, and B was not 19, the
remainder would be not destroyed. It cannot, as of the time of the grant,
possibly comply with the second common law remainder rule. See the section
below on the rule in Purefoy v. Rogers.
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2. As are system of law does not allow property to be imposed
on people against their will, the imposition is duplicitous.
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