De Peyster v. Michael

New York Court of Appeals · Property

PropertyRestraints on alienationFee simpleFee-farm leasesrestraint on alienationfee simplefee-farmquarter-sale

Facts

James Van Rensselaer granted William P. Snyder a lease in fee in 1785 reserving annual rent of forty-eight bushels of wheat and also reserving one-fourth of money arising from any sale, assignment, or other disposition of the premises. The lease provided that if the premises were sold or assigned without payment of one-fourth of the purchase money to the lessor, the sale would be void, the premises would revert, and the lessor could re-enter for breach of condition. The plaintiff was the assignee of the lessor and the defendant the assignee of the lessee. The plaintiff offered evidence that part of the premises had been assigned to the defendant without payment of the quarter-sale money and sought to recover the land in ejectment.

Issue

Is a condition in a lease in fee or fee-farm estate requiring the lessee or assignee to pay the lessor one-fourth of the purchase money whenever the land is sold or assigned valid, or is it void as a restraint on alienation repugnant to the fee-simple estate granted?

Rule

When an estate in fee-simple is granted, a condition that the grantee shall not alien, or that the grantee must pay the grantor a sum or portion of the sale price upon alienation, is void as repugnant to the estate, unless the grantor retains a true reversion or possibility of reverter. A reserved rent or a right of re-entry for breach of condition is not such a reversionary interest and does not support a restraint on alienation.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

In 1810, Owen Barrett conveyed a farm outside Rochester, New York, to Lena Pierce and her heirs, reserving an annual wheat rent of 20 bushels. The deed also stated that whenever Lena or her heirs sold any part of the land, they had to pay Owen's assigns 15% of the sale price, and failure to do so allowed re-entry.

If Lena's successor sells a parcel without paying the 15%, what is the best argument about the validity of the clause?

Explanation. The majority held that when land is granted in fee simple or fee-farm, a condition requiring the grantee to pay a portion of the sale price upon alienation is void as repugnant to the estate. Free alienability is inseparable from the fee. The fact that the grantor reserved rent and a right of re-entry does not change the result, because neither is a true reversion or possibility of reverter.