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In the Matter of Estate of Vera E. Cawizell, et al., v. Tom Coronelli, et al. Restraints on Alienation
The will of the testatrix in this Muscatine County, Iowa, case devised 150 acres of farmland to friends, subject to a restriction. According to the will, they were not to sell or transfer the property "outside their immediate family" for 20 years after her death. If they did, the will directed them to give the first option to purchase be given to the farmer who was currently operating the land. It also requested that he be allowed to continue to operate under a share crop lease under favorable terms.
The executors prepared a deed, containing conditions to put these wishes into effect. They presented the deed to the probate court for approval. The devisees objected to these conditions being included in the deed. The district court held that the restriction was an invalid restraint on alienation and therefore void. The executors appealed, and the case ultimately went to the Iowa Supreme Court.
The court quoted the long-standing rule from an 1880 case that "a condition or restriction which would suspend all power of alienation for a single day is inconsistent with the estate granted, unreasonable, and void." McCleary v. Ellis, 54 Iowa 311, 315, 6 N.W. 571, 573 (1880).
The executors argued that the rule was inapplicable, because the grantor hadn't granted an absolute title in the first place, and that the right to transfer the property was not part of the "bundle of sticks" granted by the deed. The court called this argument circular and unconvincing, and that the will contains no indication that the grant was other than a fee simple title.
The executors next argued that Iowa Code 614.24 allows reasonable restraints of alienation of no more than 20 years, but the court held that it was inapplicable, since it relates to use restrictions rather than transfer restrictions. The court distinguished an earlier case where the grantee was a charitable institution.
For these reasons, the Supreme Court affirmed the district court's ruling.
No. 19-1214 (Iowa Apr. 30, 2021).
Please see the original opinion for the court's exact language.
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Richard P. Clem is an attorney and continuing legal education (CLE) provider in Minnesota. He has been in private practice in the Twin Cities for 25 years. He has a J.D., cum laude, from Hamline University School of Law in St. Paul and a B.A. in History from the University of Minnesota. His reported cases include: Asociacion Nacional de Pescadores a Pequena Escala o Artesanales de Colombia v. Dow Quimica de Colombia, 988 F.2d 559, rehearing denied, 5 F.3d 530 (5th Cir. 1993), cert. denied, 510 U.S. 1041 (1994); LaMott v. Apple Valley Health Care Center, 465 N.W.2d 585 (Minn. Ct. App. 1991); Abo el Ela v. State, 468 N.W.2d 580 (Minn. Ct. App. 1991).
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