Opinion ID: 2615097
Heading Depth: 2
Heading Rank: 1

Heading: Characterization of various interests based upon historical concepts

Text: In its deed to Williams, the Land Bank excepted:    an undivided one-half interest in all oil, gas, and mineral rights in and under the balance of the land for a period of 20 years   , and as long thereafter as oil, gas, or other minerals continue to be produced therefrom or said property is being so developed or operated   . As has been noted, the interest held by the Land Bank following the grant is properly identified as a fee simple determinable. Once it is established that the Land Bank withheld a determinable fee in the mineral estate, classical concepts of property law (absent statutory rule against perpetuities proscriptions), disassociated from the unique characteristics of mineral law, would indicate that the interest created in Williams be identified as an executory interest. Given historical guidelines, the only other designations for Williams' interest are a possibility of reverter and a remainder. It is conceded that Williams' interest cannot be labeled a possibility of reverter, because a possibility of reverter is such an interest as is retained by the transferor, following the conveyance of a fee simple determinable. Simes and Smith, The Law of Future Interests, 2d Ed., § 281 (1956); 28 Am.Jur.2d Estates § 22; Restatement of the Law of Property, § 154(3) (1936). Since the disputed interest was transferred to Williams, rather than retained by the Land Bank, it cannot properly be designated a possibility of reverter. Under antiquated historical concepts it could be  and in Justice Thomas' concurring opinion is  argued that a remainder is likewise an inappropriate designation of Williams' interest for the reason that a remainder cannot follow a fee. Simes and Smith, supra, § 103; 28 Am.Jur.2d Estates § 196; Restatement of the Law of Property, § 156(2). The justification for this rule is that once the owner of an estate in fee simple conveys his estate in fee simple, there is nothing left to constitute a remainder. Bergin & Haskill, Preface to Estates in Land and Future Interests (1966), p. 72. In Simes and Smith, The Law of Future Interests, 2d Ed., § 103, the authors say: The second characteristic [of a remainder] is that there can be no remainder after a fee simple. This is true even though the fee simple be subject to a special limitation. This is explainable only on historical grounds. All fees simple were regarded as of the same quantum and infinite duration. Hence it was thought that, when the fee simple had been given, no `remnant' could be left to grant or devise. Once the possibility of reverter and the remainder have been ruled out as appropriate labels for Williams' interest, it follows from these traditional principles that Williams should be held  on historical grounds  to have possessed an executory interest in the mineral estate excepted by the Land Bank. The Restatement of the Law of Property, § 158, says: (1) An executory interest is any future interest created by an executory limitation (defined in § 25). (2) Executory interests as defined in Subsection (1) include all future interests, other than remainders    which can be created in a transferee. Section 25 of the Restatement of the Law of Property provides in part:    [T]he term `executory limitation' denotes that part of the language of a conveyance, by virtue of which       (b) an estate in fee simple determinable,    concurrently with its expiration, is to be succeeded forthwith by another interest in a person other than the conveyor or his successor in interest. The exception by the grantor of a determinable fee and the resulting interest in the grantee are discussed in 28 Am.Jur.2d Estates § 37: By reservation or exception. While a fee simple determinable is created by the grant of the fee simple determinable to the grantee, thereby reserving the possibility of reverter to the grantor, where an attempt is made to reverse the positions of the grantor and grantee by excepting a determinable fee from the grant, the grantor is held to take a determinable fee, but the grantee takes a future interest in the nature of a springing use, rather than a possibility of reverter, which future estate may, unlike a possibility of reverter, be subject to the rule against perpetuities. An executory interest, by definition, does not vest so long as it remains a future interest. Simes and Smith, supra, § 221. Consequently, all executory interests are subject to invalidation by the rule against perpetuities. Gray, The Rule Against Perpetuities, 4th Ed. (1942), § 317. To say that a rule-against-perpetuities result is contrary to the intentions of the parties is of no avail, because the rule against perpetuities always operates to frustrate the parties' intentions. Despite the foregoing conclusion that the exception by the grantor of a determinable fee may subject the granted executory interest to problems with the rule against perpetuities, only a few courts have found such interests to be void. Walker v. Marcellus & O.L. Ry. Co., 226 N.Y. 347, 123 N.E. 736 (1919); Victory Oil Co. v. Hancock Oil Co., 125 Cal. App.2d 222, 270 P.2d 604 (1954); 2 Williams and Meyers, Oil and Gas Law (1981), § 335, pp. 177-180. Many cases simply assume the validity of these interests without any discussion of the rule against perpetuities. 2 Williams and Meyers, supra at 180, and cases cited therein. A recent Texas case found that in such situations the law implies that the grantor conveyed his entire estate to the grantee, who then regranted a determinable fee to his grantor. This fictitious regrant resulted in a possibility of reverter in the original grantee which was valid under the rule against perpetuities. Bagby v. Bredthauer, Tex.Civ.App., 627 S.W.2d 190 (1981). A number of other courts, while not dealing directly with an excepted determinable fee, have held that conveyances in the commercial context are exempt from the rule against perpetuities. Camerlo v. Howard Johnson Company, 545 F. Supp. 395 (W.D. Pa. 1982); Forderhause v. Cherokee Water Company, Tex.Civ.App., 623 S.W.2d 435 (1981), rev'd on other grounds 641 S.W.2d 522, 526 (1982); Producers Oil Company v. Gore, Okl., 610 P.2d 772 (1980). In view of the fact that the rule against perpetuities is embodied in a statute [7] and in the Constitution [8] in Wyoming, this court is without authority to carve out an exception to the constitutional and statutory provision or to circumvent the Constitution and statute through the inference of a fictitious regrant or by the utilization of any other fictitious device  and it is at this juncture that the majority parts company with Justice Thomas. In light of Justice Thomas' concurring opinion, it is well to pause here and further explore the perpetuities problem. It is worth noting that a holding designating Williams' interest as executory and thus violative of the rule against perpetuities would have the result of finding the Land Bank to be possessed of the disputed minerals  a result which was not contemplated either by the parties or the Land Bank. Wyoming has adopted the common-law rule against perpetuities through § 34-1-139, supra n. 2. This statute implements Art. 1, § 30 of the Wyoming Constitution. See n. 8. In any effort to circumvent the rule against perpetuities by fiction or otherwise, or to carve out an exception to the rule  for any reason  we are first off confronted with well-established rules having to do with the necessity to give effect to statutory and constitutional provisions. [9] We said in Yeik v. Department of Revenue and Taxation, Wyo., 595 P.2d 965, 968-969 (1979):    It is the duty of courts to endeavor by every rule of construction available to ascertain the meaning of and give full force and effect to the legislative product. 1A Sutherland, Statutory Construction, § 21.16 (fn. 2) (1972). The legislature will not be presumed to intend futile things. De Herrera v. Herrera, Wyo. 1977, 565 P.2d 479; See West's Digest System, Statutes, Key Number 212.4., and in McGuire v. McGuire, Wyo., 608 P.2d 1278, 1285 (1980), we said: It is this court's obligation to make sense out of a statute and give full force and effect to the legislative product. Yeik v. Department of Revenue and Taxation, Wyo. 1979, 595 P.2d 965. In construing statutes, the intention of the law-making body must be ascertained from the language of the statute as nearly as possible. Wyoming State Treasurer v. City of Casper, Wyo. 1976, 551 P.2d 687. We must not give a statute a meaning that will nullify its operation if it is susceptible of another interpretation. With respect to the construction, operation and enforcement of constitutional provisions, we have said in Zancanelli v. Central Coal & Coke Co., 25 Wyo. 511, 173 P. 981, 991 (1918): The general principles governing the construction of statutes apply to the construction of Constitutions.    And the fundamental purpose in such construction is to ascertain the intent of the framers and the people who adopted it, and give effect thereto. In Schaefer v. Thompson, 240 F. Supp. 247, 253 (1964), it was said:    In construing constitutional provisions, the fundamental purpose is to give effect to their purpose and intent. Courts will not ignore the general spirit of the instrument. Since the rule against perpetuities is applicable to executory interests, and since Wyoming's statute § 34-1-139, adopts the rule, the only question  with respect to whether the interest at hand should be designated as executory  is whether, under the exception by the Land Bank, the interest would offend the statutory rule. In this case, we must hold it would. As we have said, one of the characteristics of the executory interest is that it does not vest until possession. Under the Land Bank contingency language, there is no way to know that the interest in question will vest not later than twenty-one (21) years after some life in being at the creation of the interest    § 34-1-139, and thus, if identified as executory, the interest is void as being in violation of the rule against perpetuities and  in which case  the intentions of the parties would be thwarted because fee title to the disputed minerals would remain in the Land Bank.