Storke v. Penn Mut. Life Ins. Co. - 390 Ill. 619, 61 N.E.2d 552 (1945)

Rule:

If the deed contains language which purports to pass immediate title, but limits its duration by some event which may or may not happen, a conditional limitation is created, because there is always a possibility of reverter to the grantor. The estate fails upon the happening of the event by its own terms, because it comes within the condition which limits it, and it is self-operative. On the other hand, a breach of a condition subsequent does not revest title in the original grantor or his heirs. Re-entry is necessary to revest title, and a court of equity will not aid a forfeiture where no right of re-entry is provided in the covenant. 

Facts:

Penn Mutual Life Insurance Company, on November 19, 1934, acquired title to the premises involved in this case by quitclaim deed, which did not contain the covenant prohibiting the use of saloons upon the premises. The premises have been occupied by Edward Walsh as tenant of Penn Mutual Life Insurance Company since 1934, and have been operated during all of that period as a saloon or tavern. The plaintiffs are the heirs-at-law of Jay E. Storke. The heirs of Bernard Timmerman are unknown. There are 491 lots in the sixteen blocks embraced in the subdivision, which are covered by the same restrictions as to the use of the premises. Located in various parts of the subdivision are saloons or taverns, with at least sixteen saloons in the neighborhood of the property involved or in the adjoining blocks, and liquor has been almost continuously sold in this subdivision since 1933, the date of the repeal of the prohibition amendment. There have been numerous instances where the heirs-at-law of Timmerman or Storke have released and waived the restriction contained in the deed, from as far back as 1904 to as late as 1924. In 1926, Penn Mutual Life Insurance Company purchased a first mortgage on the premises herein involved for the sum of $42,500, and in November, 1934, it purchased the title to said property and released said mortgage lien and the personal liability of the mortgagor in reliance upon the abandonment of the possible right of reverter by the heirs of Jay E. Storke, and by their waiver of the restriction by acquiescing in the use of the said premises in said subdivision for saloon purposes and by releasing and relinquishing any possible right of reverter therein. On December 29, 1942, plaintiffs filed their complaint asking that the court establish title in the plaintiffs and the unknown heirs of Timmerman, and that defendant and appellee insurance company be decreed to have no right or title in the premises; that the interest of the plaintiffs and the heirs of Timmerman be ascertained; that partition be had of the premises; that the defendant Walsh be perpetually enjoined from maintaining a tavern, and that plaintiffs have further relief, etc.

Issue:

Did the restrictions in the deed constitute a conditional limitation?

Answer:

No.

Conclusion:

The court determined the character of the condition, covenant, or reservation contained in the deed from the original grantors and found that they did not contain a right of re-entry. Therefore, the restrictions in the deed did not constitute a conditional limitation. The court found that the heirs' action was partition and, in order to maintain partition, it was requisite that the heirs have title. The court held that it was not within the power of equity to make the legal estate necessary to maintain a suit in partition. There being no title in the heirs, and there having been no re-entry, or provision for re-entry, the case was properly dismissed, as lacking in the elements necessary to maintain a partition suit. If the provisions in the deed were construed as a restrictive covenant, they could not be enforced by the heirs because the stipulation of facts and findings of the trial court showed that the change in the circumstances and use of the property in the subdivision had been brought about by the acts of the grantors or their assigns. Under such circumstances, they cannot be enforced.