Life Estate with Right to Convey Fee Simple
September 12, 2017 § Leave a comment
May a person convey property by warranty deed to another, reserving both a life estate and the right to convey the property as if he were fee simple owner?
In 1973, Gilbert Lum executed a warranty deed conveying a 40-acre tract to his daughter, Lucille Crotwell. The deed included the following language:
“Grantor, however, does hereby expressly RESERVE unto himself a life estate in the foregoing lands coupled with a full and absolute disposition to be exercised by him as though he were the fee simple owner thereof … also RESERVING unto himself all mineral interest owned by him in said lands for his lifetime.”
In 1998, Lum conveyed one acre of the tract to Prestage by warranty deed, subject to his life estate for mineral interests. Prestage in turn conveyed the property to himself and his wife as tenants by the entirety. The couple executed a deed of trust which, after mesne assignments, was foreclosed on in August, 2011, and purchased by T&W Homes.
In December, 2011, the Crotwells filed a complaint to confirm title, remove cloud, and for ejectment. The special chancellor granted summary judgment that Lum had reserved a life estate only, and that his reservation of the right to reconvey fee simple title was “an illegal and void restraint upon alienation and repugnant to the granting clause of the deed. T&W filed an interlocutory appeal.
In T&W Homes v. Crotwell, decided August 24, 2017, the MSSC affirmed. Justice Randolph wrote for the 7-2 majority:
¶7. T&W argues that deeds containing reservations of life estates with power to reconvey fee simple title are recognized in other states. Each case cited by T&W is not only foreign to Mississippi law, but is factually distinguishable. … the deed at issue in the case sub judice effected a then-present conveyance by general warranty deed of real property owned by Lum. After acknowledging receipt of valuable consideration—thus taking this case outside the realm of inter vivos and testamentary gifts—Lum“[c]onvey[ed] and warrant[ed]” the forty acres described in the deed to Crotwell. The deed was signed, delivered, notarized, and filed—putting the world on notice of the transaction. Crotwell was the grantee identified in the deed. She was described in the deed as a contingent remainderman, as posited by the dissent. See Diss. Op. at ¶ 20.6 The words “remainder” or “remainderman” are not in the deed sub judice. Contra Jamieson, 912 S.W.2d at 604-05.
¶8. … [Footnotes omitted] The Lum-Crotwell deed reads that consideration was exchanged. On his oath, Lum acknowledged receipt of consideration in the notarized deed, rendering [a Maryland case] inapposite and unpersuasive.
¶9. Finally, T&W asks this Court to consider Kyle v. Wood, 86 So. 2d 881 (Miss. 1956). While Kyle remains good law for the principles of wills and testaments, it offers no guidance to today’s case. [Fn omitted]
¶10. In Kyle, J.A. Wood’s 1948 will contained the following provision:
I will and give all my property of every kind wherever located to my beloved wife, Mrs. Molly Wood, to have [and] to hold during her lifetime to use, sell and dispose of as she sees fit; and at her death, then such property left to my said wife by me is to be given to my nephew, by marriage, Arthur Kyle.
Id. at 882. J.A. Wood died in 1952. Id. Later that year, Molly conveyed the property to another. [Fn omitted] After her death, [Fn omitted] nephew Kyle filed suit against her grantees, complaining that the grant of power in J.A. Wood’s will to dispose was invalid. Id. at 882-83. This Court found Molly’s conveyance valid:
It thus appears that the rule is well settled by our own decisions, that where a testator gives an estate for life only, with the added power to the life tenant to convey the estate absolutely, the life tenant may defeat the estate of the remainderman under the will by the exercise of the power of disposal during his lifetime.
Id. at 885.
¶11. Today’s case is governed by the law of deeds, not the law of wills and testaments. [Fn omitted] To write a learned treatise on each subject is not the endeavor of this opinion, which would be the result were we to discuss exhaustively the voluminous distinctions between these intricate and nuanced bodies of law. Suffice to say, we offer only a smattering of distinguishing features. A grantor of a deed must deliver it before it becomes effective. [Fn omitted] On the other hand, to convey real property by will, the testator devises [Fn omitted] the real property upon death. And while wills are revocable by the testator at any time before death, a warranty deed for consideration (no matter how slight) is irrevocable between the parties once executed—and once filed, is valid against the world. The rule of Kyle affects testators of wills, not grantors in deeds.
¶12. The provisions in Wood’s will and Lum’s deed also differ. Wood left his wife a life estate in his property with the power to dispose. Lum, however, did not deed his daughter a life estate with the power to dispose, but rather conveyed the property by a general warranty deed to his daughter in fee and reserved unto himself a life estate. The provisions of Wood’s will were testamentary gifts. His nephew Kyle was a mere remainderman. The Lum-Crotwell deed was not a gift; it was a completed transfer or conveyance of real property with no reference to a contingent remainder. Crotwell was Lum’s grantee. T&W’s attempt to use testamentary law to settle a deed dispute is no less repugnant than the contested language in the deed before us.
¶13. Unlike the cases cited by T&W, the deed from Lum to Crotwell was not a future gift. It was not an enhanced life estate with potential remaindermen. The deed effected a present conveyance, consideration of which was acknowledged in the deed. Lum “convey[ed] and
warrant[ed]” the property to Crotwell. And as the chancellor noted, “warrant” conveys a statutorily defined meaning. See Miss. Code Ann. § 89-1-33 (Rev. 2011) (“The word “warrant” without restrictive words in a conveyance shall have the effect of embracing all of the five (5) covenants known to common law, to wit: seizin, power to sell, freedom from incumbrance, quiet enjoyment and warranty of title.”). The warranty deed contained no restriction on the warranty. Thus any attempt to reserve the power to reconvey, or convey again, fee simple title is repugnant to the grant of the warranty, which included all of the aforementioned covenants, as found by the learned chancellor.
¶14. A deed case directly on point which validates the chancellor’s decision is Dukes v. Crumpton, 103 So. 2d 385, 386 (Miss. 1958). The deed from Dukes to Crumpton contained the following provision: “Grantor or his successor reserve all rights of sale and management.” This Court held that such a provision “is an illegal and void restraint upon alienation and repugnant to the granting clause of the deed.” Id. at 388. T&W attempts to distinguish Dukes, arguing that while the reservation in Dukes was perpetual, the one from Lum to Crotwell terminated with the life estate. However, the shortened life of the reservation does not render an otherwise repugnant clause valid. The fact remains that a present conveyance, for which sufficient consideration was duly acknowledged, was executed, subject only to a life estate. That conveyance carried with it the five covenants that attached to the warranty of the deed. Because the warranty was without restriction, any reservation of the right of the grantor to sell fee simple title to property already conveyed was repugnant to the covenant of the power to sell included in the grant and warranty to Crotwell. Pursuant to the deed, Crotwell acquired ownership of the property upon delivery of the deed—March 13, 1973. Lum could not subsequently convey to Prestage property he no longer owned.
¶15. The dissent is correct that, when interpreting deeds, we look to the language employed in the deed to determine and effectuate the intent of the parties. [Fn omitted] Before making an omniscient declaration of the parties’ intent, the dissent contorts and amends the “plain language of the deed” by asserting (1) that “Lum’s deed conveyed to Lucille no present interest in the property,” (2) that it instead “provided her a contingent remainder,” and (3) that it “clearly stated that title to the property in fee simple would vest in Lucille only upon Lum’s death provided he had not otherwise conveyed the property during his lifetime.” Diss. Op. at ¶ 20. Yet none of these conclusions is supported by the words of the deed. The
language ofthe deed effectuates a present conveyance: “I, Gilbert Lum, [address] convey and warrant to Lucille Lum Crotwell [address]” the described forty acres (emphasis added). The deed recites and acknowledges receipt of consideration, and Lum swore it was delivered. Nowhere in the deed does it describe Crotwell’s interest as a contingent remainder. Nor did Lum transfer, grant, or convey a life estate. He conveyed the described property to Crotwell while reserving unto himself a life estate. There were no words of inheritance in the deed, either in the warranty portion or following the reservation to himself. Upon his death, his life interest dissolved. Had Lum conveyed to himself a life estate with the right to dispose of the property, remainder to Crotwell (as the dissent would characterize the deed before us), the dissent’s interpretation of his intent would hold water. [Fn omitted] But such is not the case. [Emphasis in original]
¶16. We agree with the chancellor that Lum retained an ownership interest in the property—his life estate—which he retained the right to sell during his lifetime. But rather than “fail[ing] to recognize a contingent remainder,” [Fn omitted] we restrict our analysis to the words
of the deed and decline to create a contingent remainder when one is not contained therein.
Pardon the truncated version of the opinion. I was trying to capture the gist of it for you. You can read the original for your own edification if you need it to argue. The footnotes omitted above by themselves would make a fine opinion in their own right.
One trivial quibble: deeds are usually acknowledged, not sworn to. There is a difference between the two actions, as I have explained previously. At a couple of points in the opinion, mention is made that Lum swore to delivery and other averments of the deed. The actual language of the deed is not included with the opinion, so we readers do not know whether the deed was sworn or acknowledged. My guess, though, is that it was merely acknowledged because that is how deeds are executed, per MCA 89-3-1, et seq.