## Facts

- In 1785, a landowner executed a “lease in fee” to a tenant and his heirs and assigns, reserving an annual rent (48 bushels of wheat).
- The instrument included a “quarter-sale” provision requiring the tenant and successors, upon any sale, lease, or assignment, to pay the lessor one-quarter of the consideration, coupled with a right of re-entry for nonpayment.
- The lessor’s interest was later assigned to De Peyster, and the tenant’s interest was later assigned to Michael.
- A transfer of part of the premises occurred without payment of the quarter-sale amount, and De Peyster brought ejectment claiming a forfeiture and right to re-enter.
- The trial court ruled the quarter-sale condition void and nonsuited the plaintiff; the intermediate appellate court affirmed.

## Issues

1. Whether a condition attached to a fee-simple estate requiring payment of one-quarter of the consideration upon every alienation, enforceable by forfeiture and re-entry, is a valid condition or an invalid restraint on alienation repugnant to the estate granted.

## Decision

- The Court of Appeals affirmed judgment for Michael.
- The quarter-sale condition was held void as an unlawful restraint on alienation of a fee-simple estate.
- Because the alleged forfeiture depended on an invalid condition, ejectment could not be maintained.

## Legal Principles

- A fee-simple estate carries an essential incident of free alienability; a condition that materially obstructs or burdens transfer is void as repugnant to the grant.
- Indirect restraints on alienation—such as a perpetual requirement to pay a fixed portion of sale proceeds to the original grantor on each conveyance—are treated like direct restraints and are invalid when attached to a fee simple.
- The fact that rent is reserved and a right of re-entry is provided does not create a reversionary interest sufficient to justify a perpetual transfer payment extracted from fee-simple owners.
- Public policy favors free transfer of property; perpetual transfer-fee conditions tied to alienation are disfavored and unenforceable when imposed on fee-simple ownership.

## Conclusion

The court upheld the invalidity of a perpetual quarter-sale payment clause attached to a fee-simple estate, treating it as an impermissible restraint on alienation and therefore void, which defeated the lessor’s attempt to regain possession through ejectment.


De Peyster v. Michael, 6 N.Y. 467 (N.Y. 1852)