Shaver v. Clanton
10/12/2011 2:48:00 PM
Brief Fact Summary. Robert and Helen Clanton entered into a ten year
lease, with an option to renew for another ten years, with Emerson Stanley
for shopping center space in 1971 for a minimum annual rent of $11,400.
The lease was amended by the Clantons in 1988 and 1989, the latter
amended providing the Clantons the right to extend the lease for additional
five year periods at the end of each prior lease period and gave them the
right of first refusal if the property was offered for sale. Stanley’s sole heir
Donna Shaver challenged the validity of the lease amendments.
Synopsis of Rule of Law. Commercial, nondonative transactions such as
options to renew, rights of first refusal, and commercial leases are exempt
from the provisions of the rule against perpetuities, but if the involve the
lease of a city lot they are limited to 99 years.
Facts. Robert and Helen Clanton entered into a ten year lease, with an
option to renew for another ten years, with Emerson Stanley for shopping
center space in 1971 for a minimum annual rent of $11,400. The lease was
amended by the Clantons in 1988 and 1989, the latter amended providing
the Clantons the right to extend the lease for additional five year periods at
the end of each prior lease period and gave them the right of first refusal if
the property was offered for sale. Stanley’s sole heir Donna Shaver
challenged the validity of the lease amendments on the basis that the 1989
amendments violated the rule against perpetuities.
Issue. Does the rule against perpetuities apply in situations involving
commercial, nondonative transactions such as this?
Held. No. The 1989 amendment is valid and gives the Clantons a series of
five year options to renew their lease under the terms stated in the lease,
but the total term of the lease is not to exceed 99 years from its effective
date of 1971. The rule against perpetuities was established in the common
law in order to favor the free alienation of property. The purpose of the rule
was inapplicable to commercial transactions. Under the statutory rule
against perpetuities, California law does not enforce the rule against
perpetuities in cases of commercial, nondonative transactions. The
statutory rule called the Uniform Act specifically excludes commercial
transactions such as renewal options and rights of first refusal from the
provisions of the rule against perpetuities. The 1989 amendment is exempt
from the Uniform Act because it involves an option to renew, a right of first
refusal, and a lease to commence in the future at a time certain. The trial
court found that the provisions in the 1989 amendment which created
indefinite options to renew the lease were invalid under the rule against
perpetuities. This was error. However, under another statute, the lease or
grant of any town or city lot must not exceed a term of 99 years. Therefore,
this 1989 amendment to the lease is not a violation of the rule against
perpetuities, but is subject to a maximum term of 99 years from its
inception in 1971. Concurrence. The majority opinion was correct in the
result, but wrote an opinion unworthy of publication, and this issue is
unlikely to come up for another 99 years.
Discussion. This case illustrates the difficulty of trying to extend family type
laws of transfer of interests in land into the realm of commercial transacti
In re estate of mike
10/12/2011 2:48:00 PM
Facts: A deed’s language failed to explicitly create a joint tenancy, though it
did state that the grantees had a “right of survivorship.”
Issue: Does a devise to two or more persons (not husband and wife or
trustees) with a right of survivorship create, without more, a joint tenancy?
Rule: Within the four corners of the instrument, a grantor’s intent to create
a joint tenancy must be clearly expressed, otherwise no right of survivorship
exists, and a tenancy in common, not a joint tenancy, is created.
Stoller v. Doyle
10/12/2011 2:48:00 PM
Brief Fact Summary. Plaintiff Stoller sued children of the life tenant
claiming that he had been conveyed fee simple title and that the children’s
contingent remainders had been destroyed.
Synopsis of Rule of Law. The original deed in this case was a conveyance
of fee with limitations over and did not create contingent remainders subject
to destruction by the act of the grantor in subsequently conveying the
reversion to the grantee.
Facts. In an 1882 warranty deed, Lawrence Doyle (original grantor) and
wife conveyed land to Frank Doyle subject to the following limitations: “Said
Frank Doyle shall not have the power to reconvey this land, unless it be to
the grantor. He shall not have the power to mortgage this land, and in case
the said Frank Doyle should die before his wife dies, and any children
survive him, the surviving children and his wife shall have the use of the
land. . . during the lifetime of his wife, when it shall go to his children, if any
are living, but, if at the death of the grantee no children survive him, the
title shall be in the grantors. Should any children survive the grantee and his
wife also survive him, she shall have no [an?] interest in the land only so
long as she remains unmarried and is his widow.” In 1897, Lawrence Doyle,
then a widower, executed another deed to Frank Doyle which purported to
give title in fee simple and remove the restrictions. In 1902, Frank Doyle
and his wife executed a warranty deed of the land to Plaintiff John Stoller
(defendant in error). Then, Plaintiff John Stoller agreed to convey the land to
Bauman in fee simple, clear of all incumbrances. Bauman refused to accept
the proffered deed and Stoller sued Bauman for specific performance of the
contract for sale of land. Bauman prevailed in that lawsuit with the court
holding that in the 1882 deed a contingent interest in the real estate was
conveyed to the children of Frank Doyle and that the latter deed to him (the
1897 deed) could not affect that interest. Thus, the court held that the
proffered title from Stoller to Bauman was not merchantable title. This action
was filed in 1909 by Stoller against Doyle’s children alleging that in the first
deed Frank Doyle did not take an estate in fee simple, but only a life estate.
Also, it was alleged that Doyle’s wife took only a life estate, contingent upon
her outliving her husband, and that the children took a contingent remainder
in fee; tha t in the event no children survived Frank Doyle there was a
reversion in fee interest held by the grantor, which was ultimately conveyed
by the grantor in the second deed such that the life estate was merged in
fee and the intervening contingent remainders were destroyed. Plaintiff
Stoller prayed that he be found to be the owner in fee simple of the title free
from any claims of the children of Frank Doyle and that his title be quieted.
The adult Defendants defaulted, but the minor children of Frank Doyle did
answer the complaint by a guardian ad litem. The trial court found for Stoller
and found that Stoller was the owner in fee simple of the land free from
claims of the children. Stoller’s title was quieted. The adult children refused
to proceed with an appeal, but the minor’s did appeal.
Issue. Did the original deed create in the children of the life tenant a
contingent interest in the property which was, by the grantor’s subsequent
deed to the life tenant which conveyed the reversion interest, merged into
the estate of the life tenant in fee and destroyed?
Held. No. Reversed and remanded. A remainder cannot be created without
a precedent estate, said to support the remainder. Where a supporting
estate comes to an end before the happening of the event triggering the
remainder, then the remainder is defeated. Where the reversion and the life
estate comes together in one person the life estate merges into the
reversion and comes to an end and the intervening contingent remainders
are destroyed. This is the destructibility of contingent remainders. The
Court held that a statutory deed is deemed to be a conveyance in fee
simple, despite not having the traditional language of transfer to the
grantee’s heirs without limit. However, the deed may contain language
which, by law or construction, places limits on the fee simple. In this case,
the grantor conveyed the whole estate except for a contingent reversion
depending on the grantee dying without leaving children surviving him. The
future interest of the wife and children would become effective, if at all, at
the expiration of the grantee’s estate under the deed. The Court held that
such a limitation would not have been valid under the common law, but
under the statute of uses, the limitations over are effective. The deed
operated to convey the fee to the grantee, subject to the limitations over,
and as such did not create contingent remainders which would be subject to
the destructibility doctrine of contingent remainders. Thus, Frank Doyle took
the fee (as opposed to a file estate), subject to the limitations, and his
children and wife took no interest in contingent remainder insofar as the
limitations would have to occur before their interest would vest, if at all.
Thus, the children do have an interest such that Stoller may not quiet title in
himself in fee.
Discussion. Consider that in this case the Court was construing a deed in a
jurisdiction which still enforced the destructibility of contingent remainders.
The Court’s reliance on the statute of uses and characterization of the future
interests of the children as limitations in a deed rather than a contingent
interest is a way to create an outcome the Court finds just, even if the
decision is somewhat confusing.