Mahrenholz v. County Board of School Trustees
Citation: 93 Ill. App. 3d 366 (Ill. App. Ct. 1981)
Facts
In 1941, Harry and Jennie Hutton conveyed a parcel of land to a school district with the language: “this land to be used for school purposes only; otherwise to revert to Grantors herein.” The school used the land for decades but eventually stored equipment there rather than holding classes. The Mahrenholzes purchased what they claimed was the possibility of reverter or right of re-entry from the Hutton heir. The county argued the deed created a fee simple subject to condition subsequent and that no valid transfer of the future interest had occurred.
Issue
Did the 1941 deed create a fee simple determinable (with an automatic possibility of reverter) or a fee simple subject to condition subsequent (with a right of entry requiring affirmative re-entry), and does the distinction affect the validity of the subsequent conveyance?
Holding
The Illinois Appellate Court held that the language “to be used for school purposes only; otherwise to revert” created a fee simple determinable with a possibility of reverter, not a fee simple subject to condition subsequent. The distinction was significant because a possibility of reverter is freely transferable, while at the time a right of entry was not.
Rule
A fee simple determinable is created by durational language (“so long as,” “while,” “during,” “until”), causes automatic reversion upon breach, and leaves the grantor with a possibility of reverter. A fee simple subject to condition subsequent is created by conditional language (“but if,” “on condition that,” “provided however”), requires affirmative re-entry upon breach, and leaves the grantor with a right of entry (power of termination).
Significance
Mahrenholz is the leading case for distinguishing between the two types of defeasible fees. The outcome of the entire dispute turned on which estate was created, making it an ideal vehicle for teaching careful deed interpretation, the importance of drafting precision, and the consequences of the fee simple determinable / FSCS distinction for alienability of future interests.