Property 2022 - Mahrenholz v. County Board of School Trustees

● Rule ○ Deed language granting land for an ambiguous purpose and otherwise reverting the land to the grantor creates a fee simple determinable followed by a possibility of reverter. ● Facts ○ In March 1941, the Huttons executed a deed transferring 1.5 acres of their 40-acre plot to the Trustees of School District No. 1 (defendants). The deed provided that the land “was to be used for school purposes only; otherwise to revert to [g]rantors.” The school district built the Hutton School on the land, and classes were taught there through 1973. In 1973, classes were moved to another location, and the Hutton land was used as a storage facility by the school district. In July 1941, the Huttons purported to convey the reversionary interest in the school land to the Jacqmains. In 1959, the Jacqmains purported to convey their interest in the Hutton School land to the Mahrenholzes (plaintiffs). Mr. Hutton died intestate in 1951; Mrs. Hutton died intestate in 1969. Their only heir was Harry Hutton. The Mahrenholzes filed a complaint seeking to quiet title to the Hutton School land in them. The trial court held that the 1941 deed from the Huttons to the school district reserved for the Huttons a fee simple subject to a condition subsequent followed by a right of reentry. Because the Huttons could not legally convey this right to another during their lifetimes, the right passed to their only heir, Harry, upon their deaths. In 1977, Harry purported to convey to the Mahrenholzes his interest in the Hutton School land, but the trial court held that Harry had not successfully regained title of the land because he had not moved to retake the land in 1973 when the land was no longer used as a school, and thus could not have passed title on to the Mahrenholzes. Thus, the trial court dismissed the Mahrenholzes’ complaint seeking to quiet title. The Mahrenholzes appealed. ● Issue ○ Does deed language granting land for an ambiguous purpose and otherwise reverting the land to the grantor create a fee simple determinable followed by a possibility of reverter? ● Holding & Reasoning ○ Yes. Deed language granting land for an ambiguous purpose and otherwise reverting the land to the grantor creates a fee simple determinable followed by a possibility of reverter. If a person holds a fee simple determinable followed by a possibility of reverter interest, title in the land is automatically restored if the conditions are no longer met. On the other hand, a person holding fee simple subject to a condition subsequent followed by a right of reentry must make some effort to reclaim the property if the condition under which it was conveyed is broken. This case hinges on which of the two interests Harry held to determine what, if any, rights he could convey. By statute, neither a fee simple subject to a condition subsequent followed by a right of reentry nor a fee simple determinable followed by a possibility of reverter can be alienated inter vivos. Thus, the Huttons could not have conveyed their interest in the Hutton School land to the Jacqmains, and the Jacqmains therefore had no interest to grant to the Mahrenholzes. Harry, as the heir to the Huttons, received the reversionary rights to the Hutton School land. The court held that the 1941 deed showed that the Huttons intended that the 1.5 acres be deeded to the school district only so long as it was needed for school purposes. The phrase “for school purposes only” was not a full grant subject to a condition, but rather a limited grant. This limited grant created a fee simple determinable, meaning that the grant automatically terminated when the land was no longer used for school purposes. The trial court erred in holding that Harry was required to take action to retake the land; therefore, dismissal of the complaint was erroneous. The case is remanded to the trial court for a determination of whether the school district’s use of the land as storage space constituted using it for school purposes and whether Harry effectively conveyed his interest in the property to the Mahrenholzes in 1977.