1902 Encyclopedia > Remainder, Reversion

Remainder, Reversion

REMAINDER, REVERSION. In the view of English law a remainder or reversion is classed either as an incorporeal hereditament or, with greater correctness, as an estate in expectancy (see REAL ESTATE). That is to say, it is a present interest subject to an existing estate in possession called the particular estate, which must determine before the estate in expectancy can become an estate in possession. A remainder or reversion is in strictness confined to real estate, whether legal or equitable, though a similar interest may exist in personalty. The particular estate and the remainder or reversion together make up the whole estate over which the granter has power of disposition. Accordingly a remainder or 'reversion limited on an estate in fee simple is void. The difference between a remainder and a reversion, stated as simply as possible, is that the latter is that undisposed-of part of the estate which after the determination of the particular estate will fall into the possession of the original grantor or his representative, while a remainder is that part of the estate which under the same circumstances will fall into the possession of a person other than the original grantor or his representative. A reversion in fact is a special instance of a remainder, distinguishable from it in two important respects :—(1) a reversion arises by opera-tion of law on every grant of an estate where the whole interest is not parted with, whereas a remainder is created by express words ; (2) tenure exists between the reversioner and the tenant of the particular estate, but not between the latter and the remainderman. Accordingly rent service is said to be an incident of a reversion but not of a remainder, and a reversioner could distrain for it at common law (see RENT). A reversion may be limited upon any number of remainders, each of them as it falls into possession becoming itself a particular estate. Thus A may grant an estate for life or for years to B, with remainder to C, with remainder to D, with a reversion or ultimate remainder to himself. A remainder or reversion may be alienated either by deed or by will. A conveyance by the tenant of a particular estate to the remainderman or reversioner is called a surrender; a conveyance by the remainderman or reversioner to the tenant is a release.
Remainder.-—Remainders are either vested or contingent. _" An estate is vested in interest when there is a present fixed right of future enjoyment. An estate is contingent when a right of enjoy-ment is to accrue on an event which is dubious and uncertain. A contingent remainder is a remainder limited so as to depend on an event or condition which may never happen or be performed, or which may not happen or be performed till after the determination of the preceding estate" (Fearne, Contingent Remainders, 2, 3). Contingent remainders are of two kinds, those limited to uncertain persons and those limited on uncertain events. A grant by A to B for life, followed by a remainder in fee to the heir of C is an example of a contingent remainder. Until the death of C he can have no heir. If C die during the lifetime of B, the contingent remainder of his heir becomes vested; if C survive B, the remainder is at common law destroyed owing to the determination of the particular estate, for every remainder must have a particular estate to support it. In the case of a contingent remainder, it must become vested during the continuance of the particular estate or at the instant of its determination. This rule of law no doubt arose from the disfavour shown by the law to contingent remainders on their first introduction. They were not firmly established even when Littleton wrote in the reign of Edward IV. (see Williams, Real Property, pt. ii. ch. ii.). The inconveniences resulting from this liability of contingent remainders to destruction were for-merly overcome by the device of appointing trustees to preserve contingent remainders at law. Equitable contingent remainders, it should be noticed, were indestructible, for they were supported by the legal estate. In recent times the matter has been dealt with by Act of Parliament. By 8 & 9 Vict. c. 106, § 8, a con-tingent remainder is rendered capable of taking effect notwith-standing the determination by forfeiture, surrender, or merger of any preceding estate of freehold in the same manner as if such determination had not happened. The case of determination by any other means is met by 40 & 41 Vict. c. 33. The Act provides that a contingent remainder which would have been valid as a springing or shifting use or executory devise or other limitation had it not had a sufficient estate to support it as a contingent remainder is, in the event of the particular estate determining before the contingent remainder vests, to be capable of taking effect as though the contingent remainder had originally been created as a springing or shifting use or executory devise or other executory limitation. It will accordingly only be good if the springing use, &c. (for which see TRUST), would be good. If the springing use be void as a breach of the rule against perpetuities (see REAL ESTATE), the remainder will likewise be void. It may be noticed that, apart from this Act, there is some uncertainty as to the application of the rule against perpetuities to remainders. The better opinion is that it applies to equitable remainders and to legal remainders expectant upon an estate for life limited to an unborn person. In the latter case the rule as applied to contingent remainders is somewhat different from that affecting executory interests. The period is different, the remainder allowing the tying up of property for a longer time than the executory interest. There is also the further difference that the rule does not affect a contingent remainder iL it become vested before the determination of the particular estate. An executory interest is void if it may transgress the rule, even though it do not actually do so. The subject of remainders would not be complete without a reference to the famous rule in "Shelley's Case " (1 Coke's Reports, 93 b). The rule is that when the ancestor by any gift or conveyance takes an estate of freehold, and in the same gift or conveyance an estate is limited, either mediately or immediately, to his heirs or the heirs of his body, in such a case the word " heirs " is a word of limitation and not of purchase ; that is to say, the estate of the ancestor is not a life or other freehold estate with remainder to the heirs or heirs of the body, but an estate in fee or an estate tail according to circumstances. The rule is a highly technical one, and has led to much litigation and in many cases without a doubt to the defeat of a testator's intentions. It is said to have had its origin in the wish of the law to preserve to the lords their right of wardship, which would have been ousted by the heir taking as purchaser and not as successor.

The State laws of the United States affecting remainders will be found in Washburn, Real Property, vol. ii. bk. ii. ch. iv. § 7. As a general rule contingent remainders have been rendered of little practical importance by enactments that they shall take effect as executory devises or shall not determine on determination of the particular estate. The rule in "Shelley's Case" is the common law where it is not repealed by statute. The prevailing spirit of legislation in the States is unfavourable to its continuance.

Reversion.—Unlike remainders, all reversions are present or vested estates. The law of reversion, like that of remainder, has been considerably modified by statute. It was formerly considered that on the grant of the reversion the tenant should have the opportunity of objecting to the substitution of a new landlord. It was therefore necessary that he should attorn tenant to the purchaser. Without such attornment the grant was void, unless indeed attornment were compelled by levying a fine. The neces-sity of attornment was abolished by 4 & 5 Anne c. 16. Its only use at present seems to be in the case of mortgage. A mortgagor in possession sometimes attorns tenant to the mortgagee in order that the latter may treat him as his tenant and distrain for his interest as rent. The legal view that rent was incident to the reversion led at common law to a destruction of the rent by de-struction of the reversion. This would of course chiefly happen in the case of an under-tenant and his immediate reversioner, if the intermediate became merged in the superior reversion. To obviate this difficulty it was provided by 8 & 9 Viet. c. 106, § 9, that, on surrender or merger of a reversion expectant on a lease, the rights under it should subsist to the reversion conferring the next vested right. The question as to what covenants run with the reversion is one of the most difficult in law. The rule of common law seems to have been that covenants ran with the land but not with the reversion, that is to say, the benefit of them survived to a new tenant but not to a new landlord. The effect of the Act of 32 Hen. VIII. c. 34, and of the Conveyancing Act, 1881 (44 & 45 Vict. c. 41, §§ 10, 11, 58), has been to annex to the reversion as a general rule the benefit of the rent and the lessee's covenants and the burden of the lessor's covenants. Merely collateral covenants, however, do not run with the reversion, but are regarded as per-sonal contracts between lessor and lessee. At common law on the severance of a reversion a grantee of part of the reversion could not take advantage of any condition for re-entry, on the ground that the condition was entire and not severable. This doctrine was abolished by one of Lord St Leonard's Acts in 1859. The Con-veyancing Act, 1881, § 12, now provides in wider terms than those of the Act of 1859 that on severance of the reversion every con-dition capable of apportionment is to be apportioned. In order to guard against fraudulent concealment of the death of a cestui que vie, or person for whose life any lands are held by another, it was provided by 6 Anne c. 18 that on application to the Court of Chancery by the person entitled in remainder, reversion, or expect-ancy, the cestui que vie should be produced to the court or its com-missioners, or in default should be taken to be dead. The purchase of a reversionary interest might formerly have been set aside in a court of equity on the ground of inadequacy of price. This rule of equity no longer exists. It was enacted by 31 Vict. e. 4 (which extends to the United Kingdom) that no purchase made bona fide of a reversionary interest in real or personal estate shall be set aside merely on the ground of under-value. The Act does not affect those cases in which the courts relieve against such purchases on the ground of fraud or duress—the cases, for instance, of exorbit-ant bargains made by money-lenders with expectant heirs. In Scotland reversion is generally used in a sense approaching that of the equity of redemption of English law. A reversion is either-legal, as in an adjudication, or conventional, as in a wadset. Reversions are registered under the system established by the Act 1617 c. 16 (see REGISTRATION).

In the United States the Act of 32 Hen. VIII. c. 34 " is held to be in force in Massachusetts, Pennsylvania, Illinois, and Connecticut, but was never in force in Sew York till re-enacted " (Washburn, Real Property, vol. i. 432). (J. W†.)

The above article was written by: James Williams, B.C.L., Barrister-at-law.

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