Valuation of Life Estate & Restraints on Alienation

Case:
Baker v. Weedon, Supreme Court of Mississippi, 1992

Fact:
John Harrison Weedon married three times. At his first marriage, he had two children, Mrs. Florence Weedon Baker and Mrs. Delette Weedon Jones. Mrs. Baker had three children, Henry Baker, Srah Baker Lyman and Louise Virginia Baker Heck (the appellants). Wife and child to John Weedon’s second marriage were passed away. At the third marriage, John Weedon married to Anna Plaxico in 1915 when he was 55 years old while Anna was 17 years old. John and Anna did not have a child, but they worked hard together for farming in Oakland, and Anna’s contributed to protect the land from financial ruins in World War I. John wrote a will in 1925 which read as follows: he gives all of his property to Anna for her natural life and upon her death to her children, if she has any. When Anna dies without issue, he will give his property to his grandchildren with equal shares. Anna lived on the farm and made a living by renting the firm, but due to her age and the small revenue from the farm lease, her financial situation was not good. In 1964, the Mississippi State Highway Department investigated the land to construct the Highway. The highway department found John’s three grandchildren and negotiate with them for the purchase of the farm where John left it. Until the highway department contacted the grandchildren, they did not know about inheritance from their grandfather. The value of the farm for rent is $1000 per year for agricultural use, but the value would be appreciating to $168,500 if the highway passes and in 4 years, the value would increase at $336,000. 73-year-old Anna wanted to sell the farm due to economic distress to a commissioner. The defendant, opposes to sell the land, arguing that Oakland Farm is not deteriorating and Anna can pay tax for the land, a judicial sale is improper.

Procedural History:
The chancellor granted the relief to Anna under the theory of economic waste, and judicial sale was ordered.

Issue:
Can the life estate sell the property for her current financial difficulties for a judicial sale in the theory of doctrine of waste although the value of the property will increase in future and the sale of the land at present may decrease the remainders interest of the property?

Holdings:
No. In determining whether to conduct a judicial sale of property, the court should consider the best interest of all the parties. Doctrine of waste and property’s deterioration are not the only theory to justify a judicial sale, and the sale of the land should be done for the best interest of all the parties, the life tenant and the contingent remaindermen. Although Anna faced the financial crisis, if the property would be sold at this time, financial loss of the remainderman would be great and future interest will be damaged. A judicial sale of the land at this time would not benefit all the parties. The court proposed to sell a part of the land which keeps Anna financially stable if all the parties agree.

 
The court reverse the decision and remand the case.

Rule of the Law:
In case of a judicial sale of the property, equity courts consider whether a sale is necessary for the best interest of all the parties, such as a life tenant and remainderman.