Mahrenholz v. County Board of School Trustee, 417 N.E.2d 138, 1981.

Facts

JONES: This case involves an action to quiet title to real property located in Lawrence County, Illinois. Its resolution depends on the judicial construction of language in a conveyance of that property. The case is before us on the pleadings, plaintiffs' third amended complaint having been dismissed by a final order. The pertinent facts are taken from the pleadings.

On March 18, 1941, W. E. and Jennie Hutton executed a warranty deed in which they conveyed certain land, to be known here as the Hutton School grounds, to the trustees of School District No. 1, the predecessors of the defendants in this action. The deed provided that "this land to be used for school purpose only; otherwise to revert to Grantors herein." W. E. Hutton died intestate on July 18, 1951, and Jennie Hutton died intestate on February 18, 1969. The Huttons left as their only legal heir their son Harry E. Hutton.

The property conveyed by the Huttons became the site of the Hutton School. Community Unit School District No. 20 succeeded to the grantee of the deed and held classes in the building constructed upon the land until May 30, 1973. After that date, children were transported to classes held at other facilities operated by the District. The District has used the property since then for storage purposes only.

Earl and Madeline Jacqmain executed a warranty deed on October 9, 1959, conveying to the plaintiffs over 390 acres of land in Lawrence County and which included the 40-acre tract from which the Hutton School grounds were taken. When and from whom the Jacqmains acquired the land is not shown and is of no consequence in this appeal. The deed from the Jacqmains to the plaintiffs excepted the Hutton School grounds, but purported to convey the disputed future interest, with the following language:

"Also, except the following tract of land which was on the 18th day of March, 1951, by the said grantors [sic] conveyed to the Trustees of Schools of District No. One (1) of the Town of Allison, in the County of Lawrence and State of Illinois, and described as follows:

[legal description]
and containing one and one-half (1 1/2) acres, more or less; Reversionary interest to Grantees; * * *."

On May 7, 1977, Harry E. Hutton, son and sole heir of W. E. and Jennie Hutton, conveyed to the plaintiffs all of his interest in the Hutton School land. This document was filed in the recorder's office of Lawrence County on September 7, 1977. On September 6, 1977, Harry Hutton disclaimed his interest in the property in favor of the defendants. The disclaimer was in the form of a written document entitled "Disclaimer and Release." It contained the legal description of the Hutton School grounds and recited that Harry E. Hutton disclaimed and released any possibility of reverter or right of entry for condition broken, or other similar interest, in favor of the County Board of School Trustees for Lawrence County, Illinois, successor to the Trustees of School District No. 1 of Lawrence County, Illinois. The document further recited that it was made for the purpose of releasing and extinguishing any right Harry E. Hutton may have had in the "interest retained by W. E. Hutton and Jennie Hutton * * * in that deed to the Trustees of School District No. 1, Lawrence County, Illinois dated March 18, 1941, and filed on the same date * * *." The disclaimer was filed in the recorder's office of Lawrence County on October 4, 1977.

The plaintiffs filed a complaint in the circuit court of Lawrence County on April 9, 1974, in which they sought to quiet title to the school property in themselves, by virtue of the interests acquired from the Jacqmains. This complaint was amended but later dismissed on defendants' motion.

A second amended complaint was filed on September 7, 1977. This alleged that the plaintiffs owned the property through the conveyance from Harry Hutton. The defendants moved to dismiss this complaint because (1) the plaintiffs did not meet the equitable requirements which would entitle them to have title quieted in them, and (2) Harry Hutton had no interest in the school property, as he never acted to re-enter it. The second amended complaint was dismissed on August 17, 1978, by an order which did not specify the reasons for the decision.

The plaintiffs filed a third amended complaint on September 13, 1978. This complaint recited the interests acquired from the Jacqmains and from Harry Hutton. On March 21, 1979, the trial court entered an order dismissing this complaint. In the order the court found that the

"[W]arranty deed dated March 18, 1941, from W.E. Hutton and Jennie Hutton to the Trustees of School District No. 1, conveying land here concerned, created a fee simple subject to a condition subsequent followed by the right of entry for condition broken, rather than a determinable fee followed by a possibility of reverter."

Plaintiffs have perfected an appeal to this court.

The basic issue presented by this appeal is whether the trial court correctly concluded that the plaintiffs could not have acquired any interest in the school property from the Jacqmains or from Harry Hutton. Resolution of this issue must turn upon the legal interpretation of the language contained in the March 18, 1941, deed from W. E. and Jennie Hutton to the Trustees of School District No. 1:

"this land to be used for school purpose only; otherwise to revert to Grantors herein."

In addition to the legal effect of this language we must consider the alienability of the interest created and the effect of subsequent deeds.

The parties appear to be in agreement that the 1941 deed from the Huttons conveyed a defeasible fee simple estate to the grantee, and gave rise to a future interest in the grantors, and that it did not convey a fee simple absolute, subject to a covenant. The fact that provision was made for forfeiture of the estate conveyed should the land cease to be used for school purposes suggests that this view is correct.

The future interest remaining in this grantor or his estate can only be a possibility of reverter or a right of re-entry for condition broken. As neither interest may be transferred by will nor by inter vivos conveyance, and as the land was being used for school purposes in 1959 when the Jacqmains transferred their interest in the school property to the plaintiffs, the trial court correctly ruled that the plaintiffs could not have acquired any interest in that property from the Jacqmains by the deed of October 9, 1959.

Consequently this court must determine whether the plaintiffs could have acquired an interest in the Hutton School grounds from Harry Hutton. The resolution of this issue depends on the construction of the language of the 1941 deed of the Huttons to the school district. As urged by the defendants, and as the trial court found, that deed conveyed a fee simple subject to a condition subsequent, followed by a right of re-entry for condition broken. As argued by the plaintiffs, on the other hand, the deed conveyed a fee simple determinable followed by a possibility of reverter. In either case, the grantor and his heirs retain an interest in the property which may become possessory if the condition is broken. We emphasize here that although section 1 of "An Act relating to Rights of Entry or Re-entry for breach of condition subsequent and possibilities of reverter" effective July 21, 1947 provides that rights of re-entry for condition broken and possibilities of reverter are neither alienable nor devisable, they are inheritable. The type of interest held governs the mode of reinvestment with title if reinvestment is to occur. If the grantor had a possibility of reverter, he or his heirs become the owner of the property by operation of law as soon as the condition is broken. If he has a right of re-entry for condition broken, he or his heirs become the owner of the property only after they act to retake the property.

It is alleged, and we must accept, that classes were last held in the Hutton School in 1973. Harry Hutton, sole heir of the grantors, did not act to legally retake the premises but instead conveyed his interest in that land to the plaintiffs in 1977. If Harry Hutton had only a naked right of re-entry for condition broken, then he could not be the owner of that property until he had legally re-entered the land. Since he took no steps for a legal re-entry, he had only a right of re-entry in 1977, and that right cannot be conveyed inter vivos. On the other hand, if Harry Hutton had a possibility of reverter in the property, then he owned the school property as soon as it ceased to be used for school purposes. Therefore, assuming (1) that cessation of classes constitutes "abandonment of school purposes" on the land, (2) that the conveyance from Harry Hutton to the plaintiffs was legally correct, and (3) that the conveyance was not pre-empted by Hutton's disclaimer in favor of the school district, the plaintiffs could have acquired an interest in the Hutton School grounds if Harry Hutton had inherited a possibility of reverter from his parents.

The difference between a fee simple determinable (or determinable fee) and a fee simple subject to a condition subsequent, is solely a matter of judicial interpretation of the words of a grant.

A fee simple determinable may be thought of as a limited grant, while a fee simple subject to a condition subsequent is an absolute grant to which a condition is appended. In other words, a grantor should give a fee simple determinable if he intends to give property for so long as it is needed for the purposes for which it is given and no longer, but he should employ a fee simple subject to a condition subsequent if he intends to compel compliance with a condition by penalty of a forfeiture.

[T]he Huttons would have created a fee simple determinable if they had allowed the school district to retain the property so long as or while it was used for school purposes, or until it ceased to be so used. Similarly, a fee simple subject to a condition subsequent would have arisen had the Huttons given the land upon condition that or provided that it be used for school purposes. In the 1941 deed, though the Huttons gave the land "to be used for school purpose only, otherwise to revert to Grantors herein," no words of temporal limitation, or terms of express condition, were used in the grant.

The plaintiffs argue that the word "only" should be construed as a limitation rather than a condition. The defendants respond that where ambiguous language is used in a deed, the courts of Illinois have expressed a constructional preference for a fee simple subject to a condition subsequent. Both sides refer us to cases involving deeds which contain language analogous to the 1941 grant in this case.

We believe that a close analysis of the wording of the original grant shows that the grantors intended to create a fee simple determinable followed by a possibility of reverter. Here, the use of the word "only" immediately following the grant "for school purpose" demonstrates that the Huttons wanted to give the land to the school district only as long as it was needed and no longer. The language "this land to be used for school purpose only" is an example of a grant which contains a limitation within the granting clause. It suggests a limited grant, rather than a full grant subject to a condition, and thus, both theoretically and linguistically, gives rise to a fee simple determinable.

The second relevant clause furnishes plaintiffs' position with additional support. It cannot be argued that the phrase "otherwise to revert to grantors herein" is inconsistent with a fee simple subject to a condition subsequent. Nor does the word "revert" automatically create a possibility of reverter. But, in combination with the preceding phrase, the provisions by which possession is returned to the grantors seem to trigger a mandatory return rather than a permissive return because it is not stated that the grantor "may" re-enter the land.

The terms used in the 1941 deed, although imprecise, were designed to allow the property to be used for a single purpose, namely, for "school purpose." The Huttons intended to have the land back if it were ever used otherwise. Upon a grant of exclusive use followed by an express provision for reverter when that use ceases, courts and commentators have agreed that a fee simple determinable, rather than a fee simple subject to a condition subsequent, is created. Our own research has uncovered cases from other jurisdictions and sources in which language very similar to that in the Hutton deed has been held to create a fee simple determinable:

Thus, authority from this State and others indicates that the grant in the Hutton deed did in fact create a fee simple determinable. We are not persuaded by the cases cited by the defendants for the terms of conveyance in those cases distinguish them from the facts presented here.

We hold, therefore, that the 1941 deed from W. E. and Jennie Hutton to the Trustees of School District No. 1 created a fee simple determinable in the trustees followed by a possibility of reverter in the Huttons and their heirs. Accordingly, the trial court erred in dismissing plaintiffs' third amended complaint which followed its holding that the plaintiffs could not have acquired any interest in the Hutton School property from Harry Hutton. We must therefore reverse and remand this cause to the trial court for further proceedings.

Reversed and remanded.