Brief Fact Summary. The property in question was conveyed by warranty deed in 1897 as a life estate for Ross Kost with the property at his death (1949) to go to his lawful child or children. At the time of the deed Ross Kost had five children, and at the time of his death he had seven living children. One of the children was bankrupt in 1936 and the trustee of the bankruptcy court conveyed his interest to one Marshall Foster.
Synopsis of Rule of Law. The remainder is a vested remainder in those remaindermen in being at the time of the deed where there is no clause inserted in the conveyance which would make the remainder subject to being divested.
Issue. Was the interest of Oscar Kost a vested remainder at the time of the purported sale by the trustee in bankruptcy?
Held. Yes. Decree affirmed (Marshall Foster is owner of an undivided one-seventh interest of the land and a partition is ordered).
Oscar Kost contends that he had only a contingent remainder in the property and that a contingent remainder does not pass to a trustee during the bankruptcy of the remainderman. The Court began by distinguishing the vested remainder from the contingent remainder. In the case of a vested remainder there is a person in being (at the time of the 1897 deed, Oscar was living) who has a present right to future enjoyment which is not dependent on any uncertain event or contingency. In this case, the remainder in Oscar Kost was vested at the time of the 1897 deed, subject only to diminishment should Ross Kost have children after 1897.
To determine whether an interest is contingent or vested depends on the language employed in the deed. If the conditional element of the gift over is incorporated into the description of or into the gift to the remaindermen, then the remainder is conditional.
However, when the gift over is vested (as it was here for Oscar Kost), and then immediately followed by language which makes it subject to being divested, then the remainder is vested. In this case Oscar’s interest vested at the time of the deed in 1897, since he was alive. By the language of the deed Oscar, if he died during the life of the life tenant, then his children would receive his share. The Court found that this language meant that the remainder was a vested remainder.
The Court found that since Oscar Kost had a vested remainder at the time of his 1936 bankruptcy, the trustee could properly convey to Foster the interest of Kost, which at the time of the death of the life tenant became an undivided one-seventh interest. The Court found that Foster, by trustee’s deed in 1936, acquired the aforementioned undivided one-seventh interest in the fee of the real estate, subject to the life estate of Ross Kost and subject to the easements.
A remainder is vested if there is a person in being ascertained and ready to take who has a present right of future enjoyment, one which is not dependent upon any uncertain event or contingency.View Full Point of Law