Story Case

Mr. Felix Ehrman owned a piece of land in the city of New York, for which the Pabst Brewing Company offered him an attractive price, expressly intending to locate a saloon upon the lot. Mr. Ehrman contracted to convey the property free of restrictions. An old friend of the family, however, reminded him of the clause in the will of his grandfather, who had devised this lot to Ehrman's father, "in fee simple provided it shall never be sold for saloon purposes. If this should happen, then to the Wesley Hospital in fee." Mr. Ehrman was perplexed, and decided to lay the matter before his prospective purchaser. The brewing company promptly cancelled negotiations. Can Mr. Ehrman sue them for breach of contract to purchase the lot!

Ruling Court Case. Walker And Wife Vs. Vincent, Volume 19 Virginia State Reports, Page 369

Peter Harnot died, devising certain lands to Mrs.

Walker in fee simple, but with the express condition that she should will them to her heirs. Mrs. Walker contracted with B. B. Vincent and William Nimrod for the sale of the land to them, but they refused to carry out that contract, because of the provision of Harnot's will, forbidding any such sale by Mrs. Walker. Mrs. Walker claims that this provision is invalid and brings this action to enforce this contract of sale.

Mr. Justice Lourie delivered the opinion of the court: "By the words used by Harnot in his will, a fee simple estate would be conveyed, and hence must have been intended to be conveyed. One of the attributes of a fee simple estate is the right of the holder to sell or dispose of the property absolutely; hence, the provision against alienation was inconsistent with the estate granted, and attempted to create a restriction impossible to be attached to such estate. Hence the provision was void. Since the provision was void, Mrs. Walker had the right to alienate or sell the land and the contract must be enforced." Judgment was given for the plaintiff, Mrs. Walker.

Ruling Law. Story Case Answer

The courts habitually frown upon any restriction placed upon property tending to prevent the owner of the fee from conveying it during his life. It is argued that a fee simple carries with it the right of unhampered alienation. It is bad policy to prevent commerce in property. Such was the attitude of the Virginia court in the Ruling Court Case. Conditions restraining marriage are usually void, the courts maintaining that they are against good public policy. Thus, should an estate be granted to a girl, with the provision that she should forfeit it on marriage, the court gives her, nevertheless, an absolute estate, free of the forfeiture. In many states, however, a condition forfeiting the estate of a widow on remarriage is valid, on the ground that this is a reasonable stipulation by the testator, the person who has granted the land through his will. Also, conditions in partial restraint of marriage may be valid, unless the restraint renders the marriage practically impossible or very difficult.

The condition in a conveyance, resulting in a forfeiture of property on the happening of an event, and a gift to some other person, should be distinguished from a restraint on alienation, which merely endeavors to make an attempted sale inoperative, leaving the title still in the person holding, subject to the restraint. The first condition if operative, deprives the person holding the estate of his title, and also the person to whom he attempts to sell. The second operates merely to prevent the prospective purchaser from acquiring title. Thus in the Story Case, the happening of the condition would deprive the person holding the title of the property, and would also defeat the brewery company in its attempt to acquire the property. Spendthrift trusts discussed in the next case are examples of restraints on alienation which do not forfeit the property, but defeat the rights of purchasers. However, the rules determining the validity of these conditions are quite similar, and the criterion is their reasonableness or fairness.

Some restrictions on alienation have been permitted to stand. Such a limited restriction, for example, as is found in the Story Case is often upheld by the courts. Notice that the restriction is not nearly so wide as that attempted in the Ruling Court Case. Mr. Ehrman would have no right of action against the Pabst Brewing Company, because Ehrman could hardly guarantee it a secure title to the lot, in view of the provision in the devise.