Hansen v. Stroecker
1985 Alas. LEXIS 261, 699 P.2d 871 (1985)
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Rule of Law:
The common law rule against perpetuities in Alaska adopts the 'wait-and-see' approach, validating an interest if it actually vests within the perpetuities period, rather than voiding it based on remote hypothetical possibilities at the time of its creation.
Facts:
- On December 31, 1971, James B. Hansen and W.G. Stroecker signed an agreement titled 'Option to Purchase,' where Stroecker paid $1,500 to Hansen.
- The agreement granted Stroecker an option to purchase seven parcels of land, with prices for some parcels based on square footage, requiring a survey to calculate the total purchase price.
- The agreement did not specify a deadline for exercising the option or who was responsible for completing the necessary survey.
- James B. Hansen died on June 20, 1976.
- In July 1980, W.G. Stroecker had the property surveyed.
- On August 25, 1980, Stroecker sent a check for the balance of the purchase price ($1,028.00) to Mary Hansen, James B. Hansen's attorney.
- Mary Hansen refused to deliver a deed for the property to Stroecker.
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Issue:
Does an option to purchase real estate with an unspecified time for exercise violate the common law rule against perpetuities if the state's common law embraces a 'wait-and-see' approach and the option is actually exercised within the perpetuities period?
Opinions:
Majority - Matthews, Justice
No, an option to purchase real estate with an unspecified time for exercise does not violate the common law rule against perpetuities in Alaska if the 'wait-and-see' approach is applied and the option is actually exercised within the perpetuities period. The court acknowledged that under the traditional common law rule against perpetuities, which voids interests that might vest too remotely, an option with an unlimited exercise period would be void. However, the court noted that Alaska had not formally adopted this traditional approach. While Alaska had enacted AS 34.27.010, adopting a statutory 'wait-and-see' approach, this statute could not be applied retrospectively due to AS 01.10.090, which prohibits retroactive application of statutes unless expressly declared. Nevertheless, the court found itself free to adopt 'wait-and-see' as the common law rule for Alaska. Citing other jurisdictions and the Restatement (Second) of Property, the court reasoned that the 'wait-and-see' approach is superior because it prevents the invalidation of reasonable limitations that do in fact vest within the perpetuities period and avoids unfairly penalizing less skilled draftsmanship. Under this adopted common law 'wait-and-see' rule, Stroecker's option was valid because he exercised it in 1980, well within the perpetuities period (21 years after a life in being). The court affirmed the specific performance order and remanded the issue of attorney's fees due to the trial court's lack of explanation for its denial.
Analysis:
This case is significant for formally adopting the 'wait-and-see' approach to the Rule Against Perpetuities as Alaska's common law, diverging from the more rigid traditional common law rule. This shift reflects a modern trend toward practicality and fairness in property law, preventing valid transactions from being voided based on unlikely hypothetical scenarios. It provides greater certainty for parties to long-term contracts like options and future interests, reducing the risk of forfeiture due to technical perpetuities violations and encouraging a focus on actual events rather than speculative possibilities. The decision streamlines judicial analysis by eliminating the need to invalidate interests prospectively that ultimately vest within the acceptable timeframe.
