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

Heading: Contingencies and the Possibility of Reverter

Text: In reaching the conclusion that the trustees took a fee determinable, we have not only considered the testator's expressions of the separate bequests to the County and to the Salvation Army, that is, after creating separate trusts for the benefit of these legatees, the testator expressly stated that each trust created for the charitable or religious institutions would endure so long as the income from them was used for the purposes of each institution. Additionally, we have considered that, in the case of each of the bequests at issue here, both were subject to conditions precedent. The existence of these conditions precedent led us to the conclusion that each legatee had an alternative contingent remainder. [Regarding] the distinction between a contingent and vested remainder, the former is only a possibility or prospect of an estate, which exists when what would otherwise be a vested remainder is subject to a condition precedent, or is created in favor of an uncertain person or persons. Tiffany on Real Property, Third Edition, Vol. 2, Section 320. The same author says: `A contingent remainder becomes a vested remainder so soon as the condition precedent is satisfied, or the person or persons to take ascertained, the particular estate still existing.' Sands v. Fly, 200 Tenn. 414, 422, 292 S.W.2d 706, 710 (1956). See also First National Bank of Springfield v. Pointer, 174 Tenn. 472, 480, 126 S.W.2d 335, 338 (1939) (The limitations created alternative contingent remainders, or contingent remainders with a double aspect.). If the condition precedent to the vesting of the County's interest had not been met, then the interest of the Salvation Army would have vested through the residuary clause, but once the condition was met and the County took the bequest under the terms and conditions it imposed, the remainder vested in the County as a fee determinable and could not flow through the residuary clause because the will had specifically and completely disposed of it and the condition precedent to vesting in the Salvation Army did not occur: `If the prior fee be contingent, a remainder may be created to vest, in the event of the first estate never taking effect, though it would not be good as a remainder, if it was to succeed instead of being collateral to the contingent fee... . It is not a fee mounted upon a fee, but it is a contingent remainder with a double aspect or on a double contingency.' First National Bank of Springfield v. Pointer, supra, 174 Tenn. at 480, 126 S.W.2d at 338 (citation omitted). The Salvation Army's interest as an alternative contingent remainder was destroyed when the interest vested in the County. As the ultimate bequest ... is expressly made subject to a condition precedent, it is a contingent interest. 174 Tenn. at 479, 126 S.W.2d at 337. See also Jackson v. Jackson, 219 Tenn. 237, 242, 409 S.W.2d 172, 175 (1966). Arguably, if the testator had not provided expressly for a reverter, then upon the termination of the trust for the County, it would have passed via the residuary clause, but the exception of certain [property] from a residuary devise for the purpose of giving it to another devisee would not prevent the excepted [property] from going to the residuary devisee, if the specific devise to the other person failed or lapsed or was void; that such a result would only be reached where there was a discernable intention to take the excepted property from the residuary devisee.  Fehringer v. Fehringer, supra, 222 Tenn. at 595, 439 S.W.2d at 262 (emphasis added). By preserving a reverter, Mr. Magness clearly intended that once vested in the County, the trust funds would never again become part of the residue of the estate. When the conditions precedent are considered together with the limitation on the duration of the estate, the express reservation of the reverter becomes manifestly integral to the testator's entire testamentary plan. Nevertheless, if the testator had not specifically reserved his reversionary interest in a separate reverter clause, he would have retained it in any case because both legatees took an estate of possibly limited duration, that is, a fee determinable. [3] The rule in this State is that no particular or technical words are necessary to constitute a condition either precedent or subsequent. It is not necessary that the right of re-entry be reserved, or that a forfeiture be provided in express terms. Nolfe v. Byrne, supra, 142 Tenn. at 317, 219 S.W. at 3 (citations omitted). Certainly, if such conditions are express and lawful, they must be enforced. Id. Cf. Fehringer v. Fehringer, supra, 222 Tenn. at 594, 439 S.W.2d at 262 (where a reversion is specifically preserved, it will pass as intended). As stated in Simes and Smith, Law of Future Interests (Second Edition 1956), § 281, at p. 327, the possibility of reverter may be defined as the undisposed ... interest remaining in the grantor, or in the heirs of the devisor, when the owner of ... [a] fee simple absolute has conveyed or devised it in determinable fee... . Some authorities think that the possibility of reverter, being only a contingency by nature, cannot vest until the fee determinable is terminated, but because this interest is reserved in the grantor or his heirs, however, it is not the kind of contingency that affects its validity generally. See Simes, Future Interests (Second Edition 1966), §§ 13 and 132.