## Facts

- Anna E. Baker and Laughlin divorced; they had one daughter, Nannie W. Neeley.
- Anna later married J. H. Baker.
- On December 5, 1884, Anna and J. H. Baker conveyed Lexington real estate to Neeley by deed.
- At the time of the deed, Anna had four living children: Neeley and three sons.
- The deed reserved a life estate to Anna, then provided a life estate to Neeley beginning at Anna’s death.
- The deed further stated that at Neeley’s death the property would “pass and belong to the grandchildren of Anna E. Baker, in equal portions.”
- In 1906, Anna, Neeley, and Neeley’s husband filed an equity action in Fayette Circuit Court to sell the land and reinvest the proceeds; all then-living grandchildren (and descendants of deceased grandchildren) were made parties.
- The 1906 court directed reinvestment in other parcels, and deeds to the new parcels were taken with the same plan: life estate in Anna, then life estate in Neeley, then fee simple to Anna’s grandchildren in equal parts.
- The 1906 proceeding did not decide whether the “grandchildren” limitation was valid under Kentucky’s perpetuities statute.
- Anna died testate in 1919. Neeley died testate in 1921 and left most of her property to her only grandson, John B. Murillo, Jr., with a further limitation if he died without descendants.
- After these deaths, some of Anna’s grandchildren sued for partition/sale of the reinvestment parcels. The master commissioner sold parcels and reported sales.
- Purchasers filed exceptions, arguing the remainder to “grandchildren” in the 1884 deed and reinvestment deeds was void under Kentucky Statutes § 2360 (the statute against perpetuities), so the grandchildren had no title and the sales should be set aside.
- The circuit court sustained the exceptions and set aside the sales on the theory that the grandchildren limitation was void.
- The grandchildren and aligned parties appealed.

## Issues

1. Whether the deed provision (and parallel reinvestment deed provisions) giving a remainder “to the grandchildren of Anna E. Baker” after successive life estates violates Kentucky Statutes § 2360 by suspending the absolute power of alienation beyond the permitted period.
2. If the remainder is valid, whether the circuit court erred in sustaining the purchasers’ exceptions and annulling the commissioner’s sales in the partition proceeding.

## Decision

- The Court of Appeals of Kentucky held the remainder to Anna E. Baker’s “grandchildren” was valid and did not violate Kentucky Statutes § 2360.
- The court rejected the purchasers’ argument that the class gift to “grandchildren” was void for remoteness merely because the interest arose under an inter vivos deed rather than a will.
- The court reversed the circuit court’s judgment sustaining the exceptions and setting aside the sales, and remanded for further proceedings consistent with its opinion.

## Legal Principles

- Kentucky Statutes § 2360 addresses impermissible suspension of the absolute power of alienation beyond lives in being plus the statutory additional period (including the recognized gestation allowance).
- The perpetuities analysis turns on what might happen under the instrument, not on later events; however, the measuring lives and the time when the remainder must vest control the outcome.
- A remainder to a class described as the grantor’s “grandchildren,” following life estates, is tested by the time the class must be ascertained and take possession under the deed.
- When the instrument requires distribution at the death of a named life tenant who was alive when the interest was created, the remainder will vest, if at all, at that life tenant’s death, within a permissible measuring life.
- A court-ordered sale and reinvestment that carries forward the same limitations does not, by itself, decide the validity of those limitations unless the judgment expressly construes them.
- Later wills of the life tenants cannot defeat valid future interests previously created by deed.

## Conclusion

In *Laughlin v. Elliott*, the Kentucky Court of Appeals held that a deed reserving a life estate to the grantor, then a life estate to the grantor’s daughter, with a remainder at the daughter’s death to the grantor’s “grandchildren” in equal portions, did not suspend alienation beyond the period permitted by Kentucky Statutes § 2360; the remainder was therefore valid, and the circuit court erred by accepting purchasers’ objections and setting aside the partition sales on the theory that the grandchildren took nothing.


Laughlin v. Elliott, 259 S.W. 1031 (1924)