Opinion ID: 2458250
Heading Depth: 3
Heading Rank: 2

Heading: Fee Determinable

Text: Having made this determination that heirs is used in this Will as a word of limitation, we have thereby also arrived at the premise for determining whether the estate attempted to be created ... was an estate upon condition or an estate upon conditional limitation. Yarbrough v. Yarbrough, 151 Tenn. 221, 229, 269 S.W. 36, 38 (1925). If the testator had intended this property to go to a third party upon the termination of the prior estate, [t]he limitation over in favor of the third person [would have destroyed] the idea that it was the intention of the grantor to create simply a determinable fee in these trustees, id., and thus a fee subject to a conditional limitation would have been created. This latter estate is the one that the Court of Appeals found that this Will and Codicil created, relying on Standard Knitting Mills, Inc. v. Allen, supra , and emphasizing that the testator failed to reserve a vested reversion. While the language of the deed in Standard Knitting Mills is in some aspects similar to the language employed in this Will, we believe that the testator clearly intended and effectively reserved a reversionary interest in the property involved in this case. Standard Knitting Mills is distinguished on two salient factors: most importantly, that in the deed the word heirs was found to be a word of purchase (rather than of limitation), creating an estate upon conditional limitation subject to an executory interest in the heirs as if they were grantees, and, that the will in the instant case makes the bequest of this fund clearly subject to a condition precedent as well as to a durational condition with a reversionary interest reserved in the testator's estate. The testator's intent is unmistakable in this case. [1] As will be shown below, the fact that the testator retained no interest classifiable as a vested reversion is immaterial to the conclusion of the Court in this case. The validity of the interest created in the heirs by this Will and Codicil depends upon whether the trustees obtained a fee subject to a conditional limitation or a determinable fee. In Atkins v. Gillespie, 156 Tenn. 137, 299 S.W. 776 (1927), in which the Court distinguished the possibility of reverter from a reversion, a related problem arose, although that case involved the problem of whether the language used created a right of entry or a possibility of reverter in the heirs: The estate created in the trustees ... is either in fee simple upon a condition subsequent or is a determinable fee. If the first, the estate of the trustees would not cease or terminate upon the breaking of the condition until a subsequent entry by the heirs at law of [the grantor]. If the estate created be a determinable fee, the title of the trustees would terminate upon the breaking of the condition, without the necessity of an entry by the heirs at law. Yarbrough v. Yarbrough, 151 Tenn. 221, 269 S.W. 36. 156 Tenn. at 140, 299 S.W. at 777. Since the testator clearly limited the duration of the trust on the continued use of the income for the stated purposes of the bequest, the estate ends automatically upon the cessation of the use of the income and does not depend upon any positive act by the heirs to terminate the estate. A limitation marks the period which determines the estate, without any act on the part of him who has the next expectant interest. Yarbrough v. Yarbrough, supra, 151 Tenn. at 230, 269 S.W.2d at 38. Furthermore, the testator did not create any interest in a third party upon the termination of the trust; rather, [in] conveying such an estate there remains in the grantor ... the possibility of reverter. 151 Tenn. at 229, 269 S.W.2d at 38. Unlike the deed in Yarbrough , however, this testator, having never attempted a limitation over to a third party grantee, therefore created a fee determinable. [2] As stated in Mountain City Missionary Baptist Church v. Wagner, 193 Tenn. 625, 628-629, 249 S.W.2d 875, 876 (1952): Such `determinable fee' while it continues, has all the incidents of a fee simple estate, except in so far as these incidents are expressly restricted by the limitation over... . In such an estate there is a `possibility of reverter' under which the land will revert to the grantor or his heirs upon the expiration of the estate of his grantee. The use of the word heirs as a word of limitation preserved the possibility of reverter for the heirs of the testator. Cf. Standard Knitting Mills, Inc. v. Allen, supra, 221 Tenn. at 95, 424 S.W.2d at 798 (The grantors in the deed there conveyed their entire estate without including any words of limitation.). Or as the Court noted in Yarbrough , a fee determinable is an estate whose continuance as a fee simple is made to depend upon the happening or not happening of some future event, but where the terms used in its creation are words of limitation, as distinguished from words of condition. 151 Tenn. at 227-228, 269 S.W. at 37-38 (quoting Brewster on Conveyancing, § 173).