## Facts

- In 1925, a corporation conveyed land to the City of Klamath Falls as a gift “for use as the site for a city library,” to be held “so long as” the land was used for that purpose.
- The deed stated that if library use ceased, title “should pass to” two named individuals (the corporation’s shareholders) and “their heirs and assigns.”
- The City built and operated a public library on the land for more than 40 years.
- On July 1, 1969, the City moved the books to a county library facility; library services thereafter were provided by the county by contract.
- The library building on the parcel was left vacant and not put to another use.
- The donor corporation dissolved in 1927 after paying creditors and distributing assets to its shareholders.
- The City filed a declaratory judgment action against the shareholders’ heirs to determine ownership after library use ended; the Flitcrafts asserted interests acquired from other heirs.

## Issues

1. Whether the deed created a fee simple determinable in the City that automatically ended when library use ceased.
2. Whether the deed’s “gift over” to the named individuals (and their heirs and assigns) created an executory interest that was void under the rule against perpetuities.
3. If the executory interest was void, whether the City held fee simple absolute or whether a possibility of reverter remained in the grantor (and, after dissolution, its legal successors).

## Decision

- The Oregon Court of Appeals reversed the judgment declaring the City held fee simple title.
- The court held the deed conveyed a fee simple determinable to the City, and cessation of library use automatically terminated the City’s estate.
- The court held the “gift over” was an attempted executory interest that was void from the outset under the rule against perpetuities.
- The court held Oregon law treated the possibility of reverter as not transferable during life; therefore, the grantor could not effectively convey that future interest to the named individuals.
- Because the City’s determinable fee ended and the executory limitation was void, the property did not become the City’s fee simple absolute; the valid future interest was the grantor’s retained possibility of reverter, held by the grantor’s successors after dissolution.

## Legal Principles

- “So long as” and similar duration language creates a fee simple determinable that ends automatically upon violation of the stated limitation.
- An interest that shifts title upon breach of a limitation following a fee simple is an executory interest and is subject to the rule against perpetuities.
- An executory interest that may vest beyond lives in being plus 21 years is void ab initio under the rule against perpetuities.
- Under Oregon law, a possibility of reverter is not transferable inter vivos; an attempted “gift over” of that reversionary interest is ineffective, leaving the possibility of reverter in the grantor (and later in the grantor’s legal successors).

## Conclusion

The court held that ending library use terminated the City’s fee simple determinable, but the deed’s shifting “gift over” to the shareholders and their heirs was void under the rule against perpetuities; the operative future interest was the grantor’s retained possibility of reverter, held by the grantor’s successors rather than the City.


City of Klamath Falls v. Bell, 7 Or. App. 330, 490 P.2d 515 (Or. Ct. App. 1971)