Document Type

Article

Publication Date

8-1983

Abstract

After years of debate, perpetuity reform is still controversial. To be sure, there is agreement among virtually all of the commentators and experts in the field that the Rule Against Perpetuities is in need of reform. The disagreement, on the surface, centers on the methods of reform to be employed. At least three basic methods have been advanced: (1) specific statutory repair of discrete problem areas; (2) reformation; and (3) wait-and-see. Each method has its sponsors, and each has in one form or another been adopted as part of the law of a few states. These methods are not mutually exclusive, and some of the states have combined more than one of them in their statutes. The most controversial of the reform methods is wait-and-see, which posits that a perpetuity violation should only occur if an interest actually remains contingent beyond the perpetuity period. The controversy surrounding the wait-and-see concept was rekindled when the American Law Institute adopted it as part of the Restatement (Second) of Property,I only a few years after the 1971 decision of the Supreme Court of Pennsylvania in Pearson Estate2 misapplied an already inadequate statutory formulation of the concept. The wait-and-see controversy has, over the years, centered on the problem of the concept's workability - specifically, the uncertainty over how the measuring lives are to be determined. Although the workability of wait-and-see and of the other methods of reform is an important matter, and is one that will be addressed in this Article, the main attention here has a rather different focus. For underlying the debate over the methods of reform lurks a largely unarticulated and perhaps largely unrecognized issue: Should reform reach all perpetuity violations or be restricted to those that fall into discrete problem areas? With respect to the discrete problem areas, which in this Article are termed technical violation categories, the Rule defeats dispositions that are reasonable: The Rule violations rest on such unlikely possibilities as an elderly woman having additional children or the probate of an estate taking more than twenty-one years to complete. The original case for perpetuity reform, indeed the only case for reform that has been systematically presented, argues from the technical violation categories and rests on the Rule's "harshness" or "illogicality" in defeating such reasonable dispositions. This case is an argument for reversing the invalidity in the technical violation categories, but not for interfering with the normal operation of the Rule in all cases of perpetuity violation. Since the invalidity in the technical violation cases is so easily reversed by the specific statutory repair method of reform, it is a great curiosity that wait-and-see - the method of reform most ardently advocated - interferes with the normal operation of the Rule in all cases of violation. Part of the controversy surrounding the wait-and-see method may at bottom be traceable to this discrepancy. The theme of this Article is that there is a respectable case for intercession in all cases of perpetuity violation. The case is grounded upon and is in fact an application of the theme of another article that John Langbein and I recently co-authored, entitled Reformation of Wills on the Ground of Mistake: Change of Direction in American Law?3 Pointing to the long-recognized reformation doctrine for nonprobate transfers, that article advocates the forthright adoption of a similar doctrine for wills. Cases of well-proven mistake of law or fact in the formulation of the terms of gratuitous transfers invoke the fundamental principle of equity jurisprudence: preventing unjust enrichment. If mistakes are not corrected, unintended takers are enriched at the expense of the intended beneficiaries. In one respect, the application of this idea to the perpetuity area is easier than in the generalized cases of mistake that are the main focus of attention in the earlier article. Extrinsic evidence is hardly necessary to show that a perpetuity violation is the product of a mistake, but such evidence is frequently necessary to prove a mistake in other cases. The application of the prevention-of-unjust-enrichment idea to the perpetuity area is easier, though more subtle, in another respect. Preventing unjust enrichment in generalized cases of mistake requires an open-ended remedy of reformation, to be applied by courts on an ad hoc basis. Because perpetuity violations are relatively homogeneous, the method to be applied in the correction of the mistake can take a common and hence more automatic form. It need not, in fact, be framed overtly as a method of correcting a mistake but can be cast as a legislative reformulation of the Rule Against Perpetuities itself. This approach will be effective as long as it is understood that correction of mistake is the underlying objective of the reformulation, so that the reformulation is shaped by the legislature and administered by the courts in accordance with that objective. Part I of this Article examines the common law Rule and identifies a paradox in the Rule's operation: The requirement of initial certainty, which is the Rule's central test of validity, is both the culprit that defeats reasonable dispositions in the technical-violation categories and the hero that makes the common law Rule workable. Part II details the discrete categories of technical violations and the specific statutory repair method of perpetuity reform that is designed to eliminate them. Part III examines the two basic methods of perpetuity reform that interfere with the normal operation of the Rule in all cases of Rule violation - reformation and wait-and-see. As we will see, some versions of both methods comport with the objective of preventing unjust enrichment of unintended takers at the expense of the intended beneficiaries. Unfortunately, until quite recently no American jurisdiction had adopted any of these versions. At long last, one state - Iowa - within the past few months enacted a statute that accords with the prevention-of-unjust-enrichment objective. 4 The details of the new Iowa statute will be noted in Part III.

Download


Share

COinS