Brief Fact Summary. A club had a deed which contained a restraint against alienation.
Synopsis of Rule of Law. Restraints on alienation are void only if they are unreasonable.
Issue. Are all restraints against alienation invalid?
Held. No. Judgment reversed and remanded.
The validity of a restraint against alienation depends upon its reasonableness in regards to the interests of the parties. Thus, a restraint against alienation will only be void if it is unreasonable.
The rule of reasonable restraints does not apply in the case of a gift to a charitable corporation. An express provision or condition against alienation contained in a gift made to a charitable corporation may be a valid restraint.
A sale of land owned by a charitable entity may be permitted if an equity court determines that due to unforeseen circumstances, the sale is necessary and would be in the best interests of the charity.
The lower court must determine whether Plaintiff is a charity before deciding if the restraint is invalid.
Discussion. Restraints on alienation are allowed when the holder of the property interest is a charity. Otherwise, the restraint must be reasonable in order to be valid.