Laughlin v. Elliott
1924 Ky. LEXIS 731, 202 Ky. 433, 259 S.W. 1031 (1924)
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Rule of Law:
A conveyance of a future interest to a class of persons, such as 'grandchildren,' is void under the Rule Against Perpetuities if the class is not limited to members in being at the termination of the preceding life estates, thereby creating a possibility that the interest might vest later than 21 years and 10 months after the death of the life tenants.
Facts:
- On December 5, 1884, Anna E. Baker and her husband executed a deed for real estate in Lexington, Kentucky.
- The deed conveyed the property to Anna E. Baker's daughter, Nannie W. Neeley.
- The deed stipulated that Anna E. Baker would retain a life estate in the property.
- Upon Anna E. Baker's death, Nannie W. Neeley would receive a life estate in the property.
- Following the deaths of both Anna E. Baker and Nannie W. Neeley, the deed specified that the property would 'pass and belong to the grandchildren of Anna E. Baker, in equal portions.'
- At the time of the conveyance, Anna E. Baker was alive and had four children, including three sons who could potentially have more children.
- Anna E. Baker died in 1919, and Nannie W. Neeley died in 1921.
Procedural Posture:
- In 1906, Anna E. Baker and Nannie W. Neeley filed an action in the Fayette circuit court (trial court) to sell the original property for reinvestment.
- The trial court ordered the sale and reinvestment, with the new deeds containing the same remainder interest for the grandchildren of Anna E. Baker.
- Following the deaths of Baker and Neeley, some of Baker's grandchildren filed the present equity action in the Fayette circuit court to partition and sell the reinvestment properties.
- The trial court ordered the sale of the properties.
- Purchasers from the court-ordered sale filed exceptions, arguing that the title was defective because the remainder interest to the grandchildren in the deeds was void under the rule against perpetuities.
- The Fayette circuit court sustained the purchasers' exceptions and set aside the sales.
- The grandchildren, plaintiffs in the partition suit, appealed the trial court's judgment to the Court of Appeals of Kentucky (the state's highest court at the time).
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Issue:
Does a conveyance of a remainder interest to 'the grandchildren of Anna E. Baker' following two successive life estates violate the Kentucky statute against perpetuities when the class of grandchildren could potentially include members born more than 21 years and 10 months after the life tenants' deaths?
Opinions:
Majority - Judge Thomas
Yes, the conveyance to the grandchildren violates the statute against perpetuities. A gift to a class like 'grandchildren,' without specific limiting language, is construed to include all members of that class, including those born after the deed's execution. Because Anna E. Baker had living sons at the time of the conveyance, it was possible for one of them to have a child (Anna's grandchild) more than 21 years and 10 months after the deaths of the life tenants, Anna E. Baker and Nannie W. Neeley. The mere possibility of the interest vesting outside the perpetuities period renders the entire remainder gift to the class of grandchildren void from its inception. The court referenced cases like Tyler v. Fidelity and Columbia Trust Co., which held that such class gifts include unborn members unless the language expressly or by necessary implication limits the class to those in existence at the time of vesting.
Analysis:
This decision reaffirms the strict and unforgiving application of the common law Rule Against Perpetuities to class gifts. It underscores that courts will not reform a conveyance to save it from the Rule by inferring an intent to exclude after-born class members; the language of the instrument must be explicit. This case serves as a critical lesson for estate planners on the necessity of precise drafting, such as including language that closes the class at the end of the life estates, to avoid invalidating a future interest. The ruling highlights the 'what-might-happen' test, where even a remote, theoretical possibility of late vesting is sufficient to void the gift.
