Academic journal article Albany Law Review

Perpetuities Perpetuated: Symphony Space, Inc. V. Pergola Properties, Inc

Academic journal article Albany Law Review

Perpetuities Perpetuated: Symphony Space, Inc. V. Pergola Properties, Inc

Article excerpt

"No one can read the perpetuities cases ... without some

sense of nausea."(1)

I. Introduction

In 1986, the New York Court of Appeals in Metropolitan Transportation Authority v. Bruken Realty Corp.(2) unanimously concluded that a preemptive right in the form of a right of first refusal in a commercial or governmental transaction is exempt from the Rule against Perpetuities (Rule) as embodied in New York Estates Powers and Trusts Law (EPTL) section 9-1.1(b).(3) The court reasoned that such rights, even if unlimited in duration, implicate the Rule only marginally and that "application of the rule, because of its inflexibility, may operate to invalidate legitimate transactions."(4) Although the court made clear that options in gross(5) were significantly different from rights of first refusal in their legal effect(6) and hinted that they differed as well in the extent to which they implicated the policies underlying the Rule,(7) the court did not decide whether the commercial realities that led it to free rights of first refusal from the Rule would lead it to unshackle options in gross as well.

Ten years later, Symphony Space, Inc. v. Pergola Properties, Inc.(8) squarely presented that question. The court, again unanimously, held that options in gross are within the purview of the Rule and left to the Legislature consideration of the policy reasons proffered in support of releasing them from the Rule's unyielding grasp.(9)

II. Background

Like most states that have codified the Rule against Perpetuities, New York simply adopted the common law rule, both in language(10) and intent.(11) Doubtless to the great relief of lawyers throughout the state, the Legislature saw fit to save from the Rule's "remorseless[]"(12) application victims of such common law tyrants as the "unborn widow,"(13) the "fertile octogenarian,"(14) the "slothful executor,"(15) and the age contingency that well-intentioned lawyers fatally set at greater than twenty-one.(16) Even more generously, the Legislature created a "saving statute,"(17) establishing a presumption that the creator of the estate intended it to be valid.(18) This statutory section "seeks to avoid annulling dispositions due to inadvertent violations of the Rule Against Perpetuities."(19) Significantly, however, the section provides a rule of construction only. Thus, "[w]hile the statute obligates reviewing courts, where possible, to avoid constructions that frustrate the parties' intended purposes, it does not authorize courts to rewrite instruments that unequivocally allow interests to vest outside the perpetuities period ...."(20)

The New York Legislature has stopped short, however, of enacting the type of broad remedial statutes enacted in a number of other states.(21) Moreover, the Court of Appeals has made clear that, whatever the desirability of broad remedial rules, reform, if any, must come from the legislative branch and not from the judicial branch.(22)

While the Court of Appeals has shown an unwillingness to save interests violating the Rule, where the Legislature has not approved the rescue,(23) the court has shown a willingness in the last decade to hesitate before tossing certain kinds of interests upon the Rule's stormy seas.(24) Recognizing that invalidating an interest by application of the Rule will nearly always do violence to the parties' intentions,(25) the court has found it appropriate to consider whether the policies and values sought to be furthered by the Rule are in fact served by the Rule's application to a given class of interests beyond those to which it traditionally applied.(26) As the court had declared in the last case to reach it before Symphony Space: "[t]hat the principles of the 1682 Duke of Norfolk's Case should emerge to dominate this modern commercial transaction is a royal irony that does not serve the common law policy designed to block long-term retention over property by long-gone ancestors. …

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