Also known as:executory limitations · executory interest
Written by attorneys — see sources below.
A restriction in a conveyance of land by which an estate in fee simple is created in a conveyee or left in the conveyor and is automatically divested in favor of a third party upon the occurrence of a stated event. The executory limitation operates without any action by the holder of the succeeding interest and is created only through a shifting use or executory devise.
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How its tested
Common Examples
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Conveyance to Charity with Use Restriction
Esther Eisenberg conveyed a residential complex to her son Liam by deed stating that he took the property in fee simple but that title would shift to HomeBridge Housing if Liam and all his issue ever died. When Liam later sought a declaratory judgment that he held fee simple absolute, the court treated the gift over as an invalid executory limitation on an indefinite failure of issue. Liam therefore retained an unburdened fee simple absolute and HomeBridge acquired no interest.
Deed Creating Shifting Interest in Heirs
Elijah Edwards conveyed land to his daughter by deed that granted her a fee simple but directed that the property pass to her heirs if she died without surviving issue. The language created an executory limitation that attempted to divest the daughter upon an indefinite failure of issue. Because the limitation was void, the daughter held fee simple absolute free of any future interest in the heirs.
In January 1899, James J. Hanigan conveyed a house and lot in New York City to a trustee. The trust instrument directed the trustee to pay the grantor from the rents and profits the yearly sum of $1,500, with discretion to pay more, and to pay some debts and two existing mortgages on the property.
The trustee received powers to mortgage the premises to satisfy liens or carry out the deed's provisions and to sell the property. Upon the grantor's death, the trustee was to convey the premises, if unsold, to the grantor's heirs at law or to pay them the unexpended balance of any sale proceeds. The trustee could also reconvey the premises to the grantor at any time to end the trust.
At the time of trial in this action, the grantor remained alive, with two daughters as his sole descendants. In June 1902, one daughter, Mrs. Hughes, executed a deed conveying to her husband all her interest in the real estate.
The plaintiffs, who are judgment creditors, later recovered a judgment for more than $4,000 against Mr. and Mrs. Hughes. They brought this action to subject what they alleged to be an interest in the real property to the lien of their judgment. The Special Term ruled in favor of the plaintiffs on the existence of a reachable interest, but the Appellate Division reached a contrary conclusion, leading to this appeal.
Elliot Edmonds conveyed park land to a city subject to the condition that the property remain open to the public. The deed provided that if the city ever closed the park, title would automatically pass to a named charitable foundation. The foundation held an executory interest that would divest the city's estate upon breach of the use restriction.
Evans v. Abney396 U.S. 435 (1970)
In 1911, United States Senator Augustus O. Bacon executed a will that devised a tract of land to the Mayor and Council of the City of Macon for use as a park and pleasure ground exclusively for white people, with control vested in a Board of Managers composed entirely of white persons, and the will expressed the Senator's view that the two races should be forever separate while providing that the property under no circumstances was to be devoted to any other purpose.
The city accepted the trust and initially operated the park on a segregated basis, but after it began allowing Negroes to use the park, members of the Board of Managers sued in state court to remove the city as trustee and appoint new trustees, prompting Negro citizens to intervene in the proceedings.
Following the city's resignation as trustee, the Georgia courts appointed private trustees, but in Evans v. Newton the United States Supreme Court held that the park must be operated without racial discrimination, leading the Georgia Supreme Court to determine that the purpose of the trust had become impossible to fulfill and to remand the case for further proceedings.
The trial court declined to apply the cy pres doctrine, ruled that the trust had failed, and determined that the property had reverted to Senator Bacon's heirs, a decision affirmed by the Supreme Court of Georgia; petitioners, the Negro citizens of Macon who had sought integration of the park, challenged the termination of the trust, and the United States Supreme Court granted certiorari to review the case.
Eugene Ellsworth conveyed land to his daughter by deed that granted her a fee simple but directed that the property pass to a named charitable foundation if she died without surviving issue. The language created an executory limitation that attempted to divest the daughter upon an indefinite failure of issue. Because the limitation was void, the daughter held fee simple absolute free of any future interest in the foundation.
Riddle v. Harmon162 Cal. Rptr. 530
Mr. and Mrs. Riddle purchased a parcel of real estate, taking title as joint tenants. Several months before her death, Mrs. Riddle retained an attorney to plan her estate. After reviewing pertinent documents, he advised her that the property was held in joint tenancy and that, upon her death, the property would pass to her husband.
Distressed upon learning this, she requested that the joint tenancy be terminated so that she could dispose of her interest by will. As a result, the attorney prepared a grant deed whereby Mrs. Riddle granted to herself an undivided one-half interest in the subject property. The document also provided that “The purpose of this Grant Deed is to terminate those joint tenancies formerly existing between the Grantor, Frances P. Riddle, and Jack C. Riddle, her husband. ...” He also prepared a will disposing of Mrs. Riddle’s interest in the property. Both the grant deed and will were executed on December 8, 1975. Mrs. Riddle died 20 days later.
The trial court refused to sanction her plan to sever the joint tenancy and quieted title to the property in her husband. The executrix of the will of Frances Riddle appeals from that judgment.
What distinguishes an executory limitation from a possibility of reverter?
An executory limitation divests an estate in favor of a third party other than the conveyor or the conveyor's successors. A possibility of reverter remains in the conveyor and is not created by an executory limitation.
Supporting sources
Does an executory limitation require any action by the succeeding interest holder to take effect?
No. On the occurrence of the stated event the prior estate automatically ceases and the succeeding interest becomes possessory without any further act.
Supporting sources
Can a gift over on an indefinite failure of issue create a valid executory limitation?
No. Language granting a fee simple followed by a gift over upon an indefinite failure of issue is treated as void. The first taker receives fee simple absolute and the attempted executory limitation has no effect.
Supporting sources
How is an estate in fee simple subject to an executory limitation created?
The conveyance must first create or leave a fee simple and then provide that the estate will be divested upon a stated event in favor of a person other than the conveyor or the conveyor's successors.
Supporting sources
225 N.Y. 305, 122 N.E. 221, 222
…of the person creating them” (Watkins, supra ). We may assume that this is the principle that would control the courts to-day. Executory limitations are no longer distinguished from remainders, but are grouped with them as future estates (Real Prop. Law, secs. 36, 37; Tilden v. Green , 130 N.Y. 29, 47), and deeds, like wills, must be…
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