Daily Development for Tuesday

Daily Development for Monday, November 29, 2004
>by: Patrick A. Randolph, Jr.
>Elmer F. Pierson Professor of Law
>UMKC School of Law
>Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri
>dirt@umkc.edu
>
>RULE AGAINST PERPETUITIES; WAIT AND SEE: Maryland court applies Rule to
>invalidate option that might vest beyond a life in being plus 21 years
>notwithstanding Maryland s wait and see reform statute, since at time
>of challenge all lives in being had ended, and the benefits of Maryland
>s wait and see approach had ended, and the interest was still capable
>of vesting at a later time.
>
>The Arundel Corp. v. Marie, 2004 WL 2656846 (Md. 9/9/04) (note that
>while the author has a version of the case indicating that it is a
>Court of Appeals decision - the highest court in Maryland, the Westlaw
>version indicates that the same text is the opinion of a court of
>special appeals decision - Md. App.)
>
>A married couple, Camillie and Mary Marie - conveyed a parcel of land
>to Arundel Corporation and simultaneously gave the corporation a
>conditional option in adjacent land that they continued to own. If the
>grantors ever determined to transfer the property, the first were
>required to offer it to the corporation for a set price - $2,250 per
>acre. The right had no termination point and was binding upon the Maries, their heirs, executors
>or assigns. As the were still alive at the time, their heirs, executors
>or assigns were not identified, and the only lives in being for
>measuring the validity of the interest created were the Maries. Thus,
>under the common law Rule Against Perpetuities, it was possible for
>this interest to vest more than 21 years after the last survivor of the
>two grantors, and therefore would be void from the outset.
>
>But Maryland has adopted a common law modification of the Rule that
>requires that a court wait and see until the end of any lives in being
>relevant to the grant in question, in order to ascertain whether the
>interest has vested or will vest within 21 years from that point. Such
>an approach resolves many of the potential absurd results that are
>often attributed to the Rule - such as the fertile octogenarian possibility.
>
>The corporation argued, but not very hard, that the Maryland statute
>ought to be read to extend the right to see if it were exercised or exercisable
>within 21 years from the end of the last life in being. Indeed, the
>court noted, a number of wait and see statutes might provide such
>relief. But the court further noted that these statutes were in
>existence at the time the Maryland legislature adopted its statute, and
>it specifically rejected these formulations in favor of a more narrow
>wait and see period. Thus, as the court stated, the legislature meant what it
>said and said what it meant. No relief there.
>
>The corporation went on to argue that in any event the court should
>look to the many further developments as to savings approaches after
>the adoption of the Maryland statute - such as the Restatement or the
>Uniform Laws approach, and amend the common law Rule Against
>Perpetuities to salvage the interest here. But the court noted that
>once the legislature has become involved in an issue, further common
>law developments should be undertaken, if at all, very cautiously, as
>the legislature has set the public policy in the subject area.
>
>More to the point, the court sets forth positive policy considerations
>served by application of the Rule Against Perpetuities. It clearly is
>not an antiquated formality in Maryland, but serves important values in
>maintaining the alienability of land to serve new market needs.
>
>Comment 1: Although the original rights did bind the grantors, their
>heirs and assigns, and of course we can t second guess the objective
>language of the grant, one wonders in this case whether the husband and
>wife really only intended to limit their own ability to sell out the
>property from under the corporation. Almost certainly they didn t
>intend to give the corporation the right to buy the property for $2250
>an acre three hundred years from now, as the language of the grant suggests.
>
>Comment 2: This case is full of valuable analysis of the many statutory
>approaches to the Rule arising before and after the Maryland
>legislature acted. It might, in fact, be an appropriate teaching tool
>in courses discussing the Rule, as it identifies strengths and
>weaknesses of the Rule and of the various fixes.
>
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