Court Opinion

ID: 8039923
Source: CourtListenerOpinion
Date Created: 2022-09-09 03:28:05.998748+00
Date Added: 2024-06-11T16:37:17.275511
License: Public Domain

White, C. J.,
dissenting.
The majority opinion does not consider nor discuss what I consider to be the fundamental issue involved in the disposition of this case. I am in agreement with the detailed and rather fine-spun analysis reaching the conclusion that the devise here constitutes an executory or conditional limitation. However, the conditional or executory limitation is clearly void and of no effect whatsoever because it constitutes an illegal restraint on alienation.
The strength of the intent statute is urged in the majority opinion. But for centuries the dead hand of a testator has been carefully restrained by rules of positive law prohibiting an intent that interferes unduly with the absolute necessity of the freedom of alienation and use of land in a political and economic system fundamentally based on the private ownership and use of land. *371For many years in the early history of our law in Nebraska our court wavered in this general area. Then, in one of the leading cases in this country this court firmly committed itself to the doctrine of freedom of alienation of property when opposed to the unrestrained intent of a testator in Andrews v. Hall, 156 Neb. 817, 58 N. W. 2d 201, 42 A. L. R. 2d 1239 (1953). There the rule is stated as follows: “The general rule that restrictions against alienation of real estate vested in fee simple are against public policy and void is a rule of substantive law which remains unaffected by the intent statute. It is a rule to be applied in all cases falling within it.” (Emphasis supplied.)
In the instant case Richard Cast was devised a fee simple estate subject to the requirement that he or a member of his family live on the land for 25 years and with a limitation over to the residuary legatee upon breach of condition. This devise was in form a condition subsequent but due to the limitation over there can be no question, as the majority opinion states, that what the estate created was a fee simple subject to an executory limitation. The language of the principle enunciated by Andrews v. Hall, supra, needs no paraphrasing or further explanation. It is directly applicable here. That case stated: “A restraint on alienation in the form of a condition subsequent, forfeiting or terminating the fee simple estate, or providing for a limitation over upon breach of the condition, is void.” (Emphasis supplied.)
While this would appear clear from a simple reading of the conditional limitation imposed here I will indulge in a further analysis of the nature of this devise.
The dominant purpose of the testator is succinctly stated by the majority as being to force compliance with the conditions of living on the land for 25 years if the nephew was to keep his interest and if he was unwilling the limitation over would be effective. It also appears clear that this condition was tied in with a companion purpose, if not a dominant one, to perpetuate the family *372name of Webermeier. In any event it cannot be doubted that the testator intended to prohibit in any practical sense any alienation of the land for a 25-year period.
Could Richard Cast make any effective alienation when clear title in a third party would be subject to such a condition? What kind of a market would exist for such a title? What of the whims of the devisee Richard Cast during the 25-year period? Would the death of Richard Cast in the 25-year period make operative the conditional limitation? Is there any practical or effective alienability at all for a period of 25 years? The only possible answer is “no.” How could the land be used as collateral in obtaining credit? And even on a color-matching basis, how could this case be distinguished from Andrews v. Hall, supra, where the prohibitive restriction was against a remainderman selling, mortgaging, or disposing of his interest prior to the death of the life tenant? The practical effect upon Richard Cast’s power of alienation is exactly the same. One of the primary incidents of ownership in fee simple is the right to possession, the right to convey it, sell it, or encumber it. We have a complete gap for 25 years in any practical alienability of this property. The purpose of the condition was to perpetuate the Webermeier name. The language of the devise conclusively shows that the limitation over was designed to enforce the 25-year possessory or “living” period upon Richard Cast. Cast must earn his title by a 25-year living on the property and in the meantime it is removed from the merchantable stream of alienable real estate. It cannot be plotted, developed, improved, or used by a purchaser as a part of the normal incidents of fee title.
In Peters v. Northwestern Mutual Life Ins. Co., 119 Neb. 161, 227 N. W. 917, 67 A. L. R. 1311 (1929), a restraint against sale or encumbrance which ran for a 10-year period from the date of execution of the will was upheld as valid. In overruling this case the court in Andrews v. Hall, supra, stated: “The validity or ex*373tent of one’s title to real estate ought not to rest upon consideration of reasonableness in the imposing of restrictions. Such a relaxation by judicial interpretation can only bring confusion where certainty ought to exist.” (Emphasis supplied.) The restrictions in the instant case run for a period of 25 years from the date of the testator’s death. The majority is without mention flouting the command of Andrews v. Hall, supra, and resurrecting a case long since dead. The evil in restraints on alienation as clearly demonstrated by case law is not restrictions on how the property is to be used but rather restrictions on who< can use the property.
At this point it may be well for us to understand the importance and the vitality of the principle stated in Andrews v. Hall, supra. In that case this court wisely turned away from its previous course. A reading of the authorities in this area, while abstruse in nature, leads one to the inevitable conclusion that this conditional limitation is void as a restraint against alienation. I generalize the applicable principles in this area. The conceptual argument to begin with is that the law defines the exact nature of every estate in land and that each has certain incidents which are provided by law, and that one of the principal incidents of a fee is alienability. See, Manning, The Development of Restraints on Alienation Since Gray, 48 Harv. L. Rev. 373 (1935). There are many reasons for restraining the intent of a testator. The first of two reasons most often given for holding restraints void is that a restraint is repugnant to the nature of the fee. Murray v. Green, 64 Cal. 363, 28 P. 118 (1883); Eastman Marble Co. v. Vermont Marble Co., 236 Mass. 138, 128 N. E. 177 (1920); Andrews v. Hall, supra; 5 Tiffany, Real Property, § 1343, p. 161 (3d Ed., 1939); Manning, Harv. L. Rev., at p. 401. The danger of the type of restraint involved in this case was realized as far back as Coke. He stated that restraints were void not only because they were repugnant to the fee, but because “it is absurd and repugnant to reason, *374that a tenant in fee simple should be restrained, of his power to alien.” See, Coke upon Littleton, 223a.
The second, and probably the more important and more practically oriented reason for holding restraints of this nature void, is that a restraint by taking land out of the flow of commerce is detrimental to the economy and the basic principles of a free competitive society. See, Gray, Restraints on Alienation, § 21 (2d Ed., 1895); 6 Powell on Real Property, 1 (1969); 5 Tiffany, Real Property, § 1343, p. 161 (3d Ed., 1939). One of the best statements is contained in Simes and Smith, The Law of Future Interests, § 1115, p. 8 (2d Ed., 1956), where it is stated: “In brief, the law is concerned primarily with practical alienability, not with a theoretical power of alienation. All these rules tend primarily to further practical alienability. Whether a given provision will be held valid or not depends on a number of considerations, but, reduced to their lowest terms, these considerations amount to no more than this: One must consider, first, the extent to which the sort of provision in question tends to decrease practical alienability; and, second, the purpose of the restraint in question.” (Emphasis supplied.)
The primary considerations underlying the prohibition against restraints on alienation is that they are economically undesirable and that the dead hand should not be allowed to control the living. Restraints on alienation are economically undesirable in that they tend to produce frozen assets and, without prohibitory rules, productive property would be rendered useless whenever one in whom ownership is inalienably vested could not use it himself. The dead hand rule is, simply stated, that society is better off if property is controlled by its living members who are cognizant of every changing economic condition than if controlled by the dead.
As stated generally by the authorities, an analysis or exploration as to the latitude of a permissible restraint on alienation must be governed by a balancing of the *375beneficial character of the purposes of the restraint as against the extent to which alienability would be hindered, if the provision in question is held to be valid. In the light of the nature of this devise could there be any question as to what the conclusion of the court should be in this case? There is no purpose here to accomplish a gift over to the scholarship fund. It is clear, and is in effect conceded by the majority opinion, that the “limitation over” had as its design the imposition of compulsory possession or “living” by Richard Cast for a period of 25 years and this in turn for a purpose related to the perpetuation of the family Webermeier name.
Another example of the repugnancy of this restraint to the base fee is pertinent. As a result of the devise Richard Cast became a tenant in common with his incompetent mother and thus was not entitled to exclusive possession. The majority feels it is quite relevant that the co-tenant is Richard Cast’s incompetent mother and that he is her sole and only heir. I submit that the fact is immaterial as the decisions of this court in cases of this type should never hinge on the sole issue of who the cotenant may be, the cotenant’s competency, or who the cotenant’s heirs are.
Would the majority result be different if the co-tenant was not Richard Cast’s mother? If she was not incompetent? If he was not her sole and only heir? If so, what would the majority position be if the cotenant regained her competency and made a will disinheriting Richard Cast?
This leads us to a final conclusion that this condition imposed by the testator is in derogation of one of the basic rights of joint property owners in the right of partition. § 25-2170.01, R. R. S. 1943. We must realize that partition in kind in this situation as a practical matter is almost impossible. The right to partition is absolute and fulfills a fundamental public policy in settling conflicting rights to possession, eliminating confusion *376as to title, and restoring to a unity of use and title enhancing the economic productivity of land. It would seem that Richard Cast would clearly be foreclosed of the right to partition without violating the restrictions imposed upon him. How could a sale be held that would be effective to give a purchaser clear title when Cast is required to remain in possession? What would be the effect upon Richard Cast’s title and right to the proceeds if his mother regained her competency and forced a partition sale? We are aware of the doctrine of Peterson v. Damoude, 98 Neb. 370, 152 N. W. 786, 14 A. L. R. 1238, holding that a prohibition against partition is not a restraint on alienation when the undivided share is assignable. But here there is and cannot be for a period of 25 years an assignable interest in any practical sense of Cast’s interest, under the condition imposed. The title itself is prohibited from having the basic element necessary in a partition action, that the purchaser shall acquire a fee title with the exclusive right to possession.
Although the majority opinion does not discuss these issues we anticipate, as the result of our research, that cases could be cited holding that “use” restrictions in deeds and testamentary dispositions are valid and that they do not interfere with the legal right of alienation. These cases cannot be equated with the restriction in the instant case. In the first place such cases as I have been able to discover are not close in either the nature of the conveyance or restriction attempted to be imposed. In the second place in all of these cases a restriction upon the kind of use (e.g., against the use of alcoholic liquor), does not restrain alienation because the property may be conveyed to anyone subject to the restriction. The restriction here is not upon how the land may be used or a prohibition of some individual particular use. The prohibition here is upon who shall have all of the uses of the property, thus effectively forbidding alienation.
*377Nor may it be argued in this case that a distinction between a direct and an indirect restraint will sustain this condition. There is a statement in Simes and Smith, The Law of Future Interests, 2d ed., c. 37, § 1111, et seq., that could be construed to infer that any “indirect” restraint, short of the violation of the rule of perpetuities, is valid. It is very clear that when this statement is read in context the writer’s classification is purely for the purpose of clarification in analyzing whether the restraint is a disabling, promissory, or forfeiture restraint. The reason for this is obvious because a drafter of a deed or a will could easily avoid an illegal restraint on alienation by simply clothing it in the form of an indirect restraint. Fortunately, as Simes himself recognizes, neither the Restatement of Property nor the classic writers on restraints of alienation, Gray or Kales, recognizes such a distinction. See, Simes and Smith, The Law of Future Interests, c. 37, § 1111, p. 4, n. 3.
It is what the condition does with reference to practical alienability that is the test. This is made abundantly clear by Simes and Smith, The Law of Future Interest, 2d ed., §§ 1111 and 1112, pp. 4 and 5, wherein is stated: “As used in this treatise, the expression ‘restraint on alienation’ refers not merely to the restriction of the legal power of alienation, but also to the restriction of alienability as a practical matter. * * * These provisions may assume a variety of forms. Thus, the conveyance or devise may contain a direction to the effect that the grantee or devisee shall not alienate, or a condition to the effect that if he attempts to* alienate, his estate shall be subject to forfeiture, or there may be a contract binding on the grantee to refrain from alienation. A further classification of direct restraints is set out later.” (Emphasis supplied.)
Such a superficial distinction is avoided by the Restatement of Property, and by Gray and Kales, the classic writers in this area. We are dealing here with what we all recognize as a “forfeiture restraint,” that is, a *378violation of the condition forfeits the estate. Such a restriction is valid only if the “restraint” is reasonable under the circumstances and if it does not violate the rule against perpetuities. See Restatement of Property, c. 30, §§ 406 and 407. The comment on these sections states: ' “Even though a restraint on alienation is a forfeiture or promissory restraint and is qualified so as to permit alienation to some though not all possible alienees, the restraint must still be found to be reasonable under all the circumstances. * * * Each case must be thoroughly examined in the light of all the circumstances to determine whether the objective sought to be accomplished by the restraint is worth attaining at the cost of interfering with the freedom of alienation or to determine whether the particular interference with alienability is so slight as not to be material.”
There is, no problem here of contention that the creation of a contingent remainder or some other future interest in property constitutes an illegal restraint on alienation. That is a problem that belongs to the application of the rule against perpetuities. What we are dealing with here is the creation of an absolute estate in fee simple, with no attempt to create a future interest but only the imposition of a forfeiture restraint to enforce a condition repugnant to alienation.
How far we are departing from the sound doctrine of Andrews v. Hall is demonstrated in the latest annotation to Simes and Smith, The Law of Future Interests, 2d ed., at § 1150.5, p. 13 (1969), wherein it is stated: “Until recently, only Kentucky and Nebraska had given support to any doctrine that ‘reasonable’ restraints on the alienation of a legal estate in fee would be sustained. Moreover, as indicated in the preceding section, Nebraska has recently overruled the doctrine.” (Andrews v. Hall, supra.)
Richard Cast is now 48 years of age. At the age of 73, and only then, he will receive a fee simple title in *379any realistic sense. In the meantime, he has a choice of forfeiting the estate or living on the property in serfdom. The practical alienability or partition of this property is nil during that period of time. The restrictions imposed are clearly repugnant to the fee created as Richard Cast during the 25-year period has none of the most basic right's of a fee owner. Furthermore, it appears abundantly clear that this condition will serve only the capricious and unreasonable purpose of . perpetuating the Webermeier name. I submit that the doctrine and principles of Andrews v. Hall, supra, should be followed.
The undoubted intent to give Richard Cast the fee simple should be enforced, and the restriction requiring personal possession declared void.
McCown, J., joins in this dissent.