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Court of Appeal of the State of California - 64 Cal. Rptr. 816, 257 Cal. App. 2d 22
Tags: Property, Gift, Bequest, Wills and testaments, Alienation
tl;dr:
A gift of real property to an organization with a restriction that, unless the organization is using it, it will revert back to the family's estate, is valid.Video Summary
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The case involves a dispute between a nonprofit corporation and the trustees of a deceased grantor's estate over the ownership of a property gifted to the corporation. The grant deed contains conditions that restrict the use of the property and provide for its reversion to the grantors if certain conditions are not met. The issue is whether these conditions are void. The lower court's decision on this matter is unclear. The habendum clause in the deed contains an invalid restraint against alienation, but the condition on land use is separate and valid. The land was conveyed upon the condition that it would be used for specific purposes, and therefore, the portion of the habendum clause relating to land use created a defeasible fee subject to a condition subsequent.
The dissenting opinion in this case argues that the habendum clause, which restricts the fee simple conveyed, is invalid as a restraint upon alienation within the Civil Code. The use restriction that only allows the I.O.O.F. Lodge No. 82 to use the property prevents the grantee from conveying the property just as effectively as the condition against "sale or transfer." The dissenting opinion emphasizes that the effect of language must be judged according to what it does, and 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 prohibits restraints on alienation, which is a policy that has been present in English common law for centuries. The dissenting opinion argues that the majority's comparison of use restrictions in deeds to the restriction in this case, which limits use to only Lodge No. 82, is flawed. The dissenting opinion believes that restrictions on the manner in which property may be used are different from restrictions on who may use it. The former does not restrain alienation because the property can still be conveyed subject to the restriction.
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