Court Opinion

ID: 9735424
Source: CourtListenerOpinion
Date Created: 2023-08-26 18:14:59.201635+00
Date Added: 2024-06-11T18:26:58.457566
License: Public Domain

STONE, J.
—I dissent. I believe the entire habendum clause which purports to restrict the fee simple conveyed is invalid as a restraint upon alienation within the ambit of Civil Code, section 711. It reads: "Said property is restricted for the use and benefit of the second party, only; and in the event the same fails to be used by the second party or in the event of sale or transfer by the second party of all or any part of said lot the same is to revert to the first parties herein, their successors, heirs or assigns.”
If the words “sale or transfer,” which the majority find to be a restraint upon alienation, are expunged, still the property cannot be sold or transferred by the grantee because the property may be used by only the I.O.O.F. Lodge No. 82, upon pain of reverter. This use restriction prevents the grantee from conveying the property just as effectively as the condition against “sale or transfer ... of all or any part of said lot.” (Los Angeles Inv. Co. v. Gary, 181 Cal. 680, 682 [186 P. 596, 9 A.L.R. 115] ; Property Restatement, § 404 et seq.; 2 Witkin, Summary of Cal. Law (1960) Real Property, p. 1004; Simes, Perpetuities in California since 1951, 18 Hastings L.J., p. 248.)
Certainly, if we are to have realism in the law, the effect of language must be judged according to what it does. When two different terms generate the same ultimate legal result, they should be treated alike in relation to that result.
Section 711 of the Civil Code expresses an ancient policy of English common law.1 The wisdom of this proscription as *29applied to situations of this kind is manifest when we note that a number of fraternal, political and similar organizations of a century ago have disappeared, and others have ceased to function in individual communities. Should an organization holding property under a deed similar to the one before us be disbanded one hundred years or so after the conveyance is made, the result may well be a title fragmented into the interests of heirs of the grantors numbering in the hundreds and scattered to the four corners of the earth.
The majority opinion cites a number of cases holding use restrictions in deeds to be valid, but these restrictions impose limitations upon the manner in which the property may be used. The majority equates these eases with the restriction in the instant ease to use by only Lodge No. 82. It seems to me that a restriction upon the use that may be made of land must be distinguished from a restriction upon who may use it. In the first place, a restriction upon the kind of use does not restrain alienation because the property may be conveyed to anyone, subject to the restriction. Moreover, as Professor Simes points out in his article, Restricting Land Use in California by Rights of Entry and Possibility of Reverter, 13 Hastings Law Journal No. 3, page 293, where changed circumstances are shown a court of equity will free land from a property use restriction.
There is a judicially-created exception to public policy against restraint of alienation embodied in Civil Code section 711 which is broadly defined as “restraint on alienation when reasonable as to purpose.” (Coast Bank v. Minderhout, supra, *3061 Cal.2d 311 [38 Cal.Rptr. 505, 392 P.2d 265].) In discussing this subject, a comment in 12 U.C.L.A. Law Review No. 3, says, in part, at pages 955-958: “The alienability of realty has long been a jealously guarded incident of a fee simple estate. All jurisdictions invalidate absolute restraints on alienation, and an overwhelming majority void restaints partial as to persons and temporary as to time. California has codified the common law rule of restraints on alienation in Civil Code section 711. This provision not only voids restraints created by the grantor of an estate in a deed or conveyance but has been judicially interpreted to void restraints created by covenants executed separately from a deed. In mitigation of the harshness stemming from the rule invalidating restraints, both ease law and statutory exceptions have been promulgated in most jurisdictions. In California, a restraint on the transfer of shares in a corporation has been upheld, as have the restraints created by the spendthrift trust, a lease for a term of years, and a restraint on the alienability of a life estate. The decision in Minderhout distinguished California as the first state not to invalidate a restraint on alienation when reasonable as to purpose.” (Italics added.)
As I view the restraint in the instant case, it accomplishes no reasonable purpose within the rationale of Coast Bank v. Minderhout, supra, that would justify the indefinite suspension of alienation.
It also appears that there is some correlation between a restriction upon who may use property, and the exclusion of a racial group from the use of property prohibited by Civil Code section 782. That section provides:
“Any provision in any deed of real property in California, whether executed before or after the effective date of this section, which purports to restrict the right of any persons to sell, lease, rent, use or occupy the property to persons of a particular racial, national or ethnic group, by providing for payment of a penalty, forfeiture, reverter, or otherwise, is void. ’’
The Restatement of the Law of Property finds parallel reasoning applicable to the two kinds of restrictions, as it is said, in volume 4, chapter 30, section 406, page 2412, that: “m. Analogous rule—Use by racial or social group excluded. The exclusion of a racial or social group is sometimes attempted by a provision designed to prevent use or occupancy of designated land by persons of this excluded group. Such a provision is not a ‘restraint on alienation’ within the meaning *31of that term as defined in § 404. It has the effect, however, of curtailing alienability and the validity of such a provision is determined by the same considerations as are stated in Comment l. The applicable rule is analogous to the rule stated in this Section. ’ ’
The usual restriction in violation of section 782 specifically excludes Negroes, orientals, or other ethnic groups from using property. Here, everyone is excluded except members and guests of Mountain Brow Lodge No. 82, I.O.O.F. Restricting use of land indefinitely to a particular person or class of persons, or a particular organization, if held permissible, will open the way for violation of Civil Code section 782 by use of an inverse exclusionary clause.
In any event, it seems to me that quite aside from section 782, the entire habendum clause is repugnant to the grant in fee simple that precedes it. I would hold the property free from restrictions, and reverse the judgment.
A petition for a rehearing was denied January 12, 1968, and the judgment was modified to read as printed above. Stone, J., was of the opinion that the petition should be granted. Appellant’s petition for a hearing by the Supreme Court was denied February 13, 1968.