## Facts

- In 1904, G.W.H. Gilbert conveyed lots 28 and 29 (block 6) in Seiberling’s Addition to the Village of Peoria Heights by warranty deed stating consideration included specified conditions; no cash was paid.
- The deed conditioned the conveyance on (1) use of the lots for a town hall, waterworks, and other public buildings, and (2) adoption of an ordinance permanently barring liquor and dram-shop licenses within Seiberling’s Addition.
- The deed stated that breach of the conditions would cause forfeiture and that title would revert to the grantors, their heirs, and assigns, with improvements.
- The village adopted the liquor-prohibition ordinance in 1904 but did not build public structures on the lots; it built a village hall elsewhere and made only minimal, intermittent use of the lots.
- The lots were treated as public property; the village paid special assessments levied against them.
- In 1910, Gilbert and his wife executed an unconditional warranty deed purporting to convey the same lots to Arthur Keithley; the record showed no payment by Keithley and no possession by him.
- In 1920, Gilbert executed a quitclaim deed to the village conveying all his present and future interests in the lots, including interests arising through forfeiture.
- The village sued to quiet title and cancel Keithley’s deed as a cloud; the circuit court decreed for the village, and Keithley appealed.

## Issues

1. Whether the 1904 deed created an automatic reversion upon breach or an estate on condition subsequent requiring action by the grantor (or heirs) to effect forfeiture.
2. Whether a grantor’s right of re-entry (power of termination) for breach of a condition subsequent is assignable to a third party so that the third party may enforce forfeiture.
3. Whether Keithley’s 1910 deed constituted a cloud on title properly removable in a quiet-title decree.

## Decision

- The Illinois Supreme Court affirmed the decree quieting title in the village and cancelling Keithley’s deed.
- The court construed the 1904 conveyance as an estate on condition subsequent, leaving Gilbert with a right of re-entry rather than causing automatic divestiture upon breach.
- The court held the right of re-entry for condition broken was personal to the grantor and his heirs and was not transferable to a third party before entry; Keithley therefore acquired no enforceable interest.
- Because Keithley had no valid interest, his recorded deed was a cloud on the village’s title that equity could cancel.

## Legal Principles

- Language providing for “forfeiture” and “revert” upon breach may create an estate on condition subsequent where divestiture does not occur automatically; enforcement requires affirmative action by the holder of the right of re-entry.
- A right of re-entry (power of termination) for breach of a condition subsequent is not assignable inter vivos to a stranger before entry; only the grantor or the grantor’s heirs may take advantage of the condition.
- A deed from the grantor to a third party that purports to transfer the property subject to a condition subsequent does not vest the third party with the power to enforce forfeiture and may be cancelled as a cloud if it purports to convey an interest the grantee cannot hold.

## Conclusion

The court held the village took title subject to a condition subsequent and that any forfeiture could be asserted only by the original grantor or his heirs; because the right of re-entry was not assignable, Keithley’s later deed conveyed no enforceable interest and was properly cancelled to quiet the village’s title.


Village of Peoria Heights v. Keithley, 299 Ill. 427, 132 N.E. 532 (Ill. 1921)