You are on page 1of 39

Downloaded From OutlineDepot.

com

“Property” refers to a set of rights in something. What rights?


 To use, to alienate (dispose of by giving away through sale/gift), and to exclude

I. Acquisition of Property Rights

A. First Possession: Acquisition by Discovery, Capture, & Creation

1.) Acquisition by Discovery (pg. 3) – Johnson v. M’Intosh


 Rule of Discovery – discovery of land gives exclusive title to those made it
o Principle – the discovery of land gave title to the government by whose
subjects (or by whose authority) it was made, against all other European
governments, which title might be consummated by possession
o Exclusive right to purchase land from the Indians resided in the US
government
 Right of discovery confined to countries “then unknown to all
Christian people” (not Indians!)
o Title by conqueror is acquired and maintained by force, and this title cannot
be denied by the Courts
 Policy Rationale – By giving the US the exclusive right to buy land from the Indians,
it made them the only entity that could buy that land, therefore, driving down the
price of the land
o Principle of First in Time – if the first person there to claim possession of
land, then formal right of ownership recognized to the “first grabber”

2.) Acquisition by Capture (pg. 17) – Pierson v. Post


 Rule – one obtains “occupancy” or possession of a wild animal if:
i. Manifest an unequivocal intention of appropriating the animal for his individual
use (no intent to abandon)
ii. Deprives the animal of its natural liberty
Downloaded From OutlineDepot.com

iii. Brings the animal within certain control (ambiguous)


 Possession is a legal conclusion, not a fact!
o Must obtain occupancy to obtain a property interest
o Mere pursuit is not enough to grant legal right, must have actual corporal
possession (of animal)

 Exceptions – Ghen v. Rich, Keeble v. Hickeringhill


o Usage & Custom – existing, long standing practices within a given field (i.e.
fishing, whaling, hunting)
 In some instances, for the first taker, the only act of appropriation
required is that which is possible in the nature of the case; certain
control unnecessary
 In fishing cases, if ruled against custom of practice, fishing
industry would cease to exist because no incentive to continue
if anyone can claim fish
 Rule applied in the “interest of the trade”; limited application however
 If 1st to have possession, legal right attaches via ”First-In-Time, Better-
In-Right”
 Rewards effort
 Ensures “peaceable possession”
 Law must award ownership to someone, “first” evolved
historically
o If a violent or malicious act is done to a man’s occupation, profession, or way
of getting a livelihood, action lies in a case
 Owner has “constructive” possession of all wild animals on land
(legally exists, factually does not)
 Law favors peaceable competition, but policy objective is to enforce
fair practice rather than possession
 Policy Rationale – judges are concerned about future litigants, not just the parties of
the suit, therefore, they’re setting rules for all of society
o Instrumental decision in order to reach a certain policy objective  fair
practice policy, less litigation, precedent

3.) Acquisition by Creation


Downloaded From OutlineDepot.com

Any expenditure of mental or physical effort, as a result of which there is created an


entity, tangible or intangible, vests in the person who created it, a proprietary right to
the commercial exploitation of that entity, but it is separate and independent from the
ownership of that entity

a. Property in One’s Ideas and Expressions (pg. 51) – Cheney Bros. v.


Doris Silk
 Rule – a man’s property is limited to the chattels (tangible) which embody his
invention, others may imitate these at their pleasure
o Under CL, copying and imitation are generally allowed, with copyrights and
patents being the legislative exception
o Imitation is a good thing for the public b/c it increases competition and lowers
costs, thus avoiding monopolies
o Argument in favor of making ideas property is based on belief that patents
promote creativity b/c efforts are then profitable
 Can still market themselves as “first and best” if copied

o Exception – INS v. AP, illegal to copy news from another source and then sell
it as own b/c creates unfair competition in business, which is closely related to
ownership in these cases
 “Substance of Information” aka facts are common property
 “Particular Collection of Words” is the particular expression of the
facts, which can be owned via Copyright
 Policy Rationale / Legislative Action – absence of property rights can dampen
production, but recognition of them can create costly monopoly power; Difficult
trade-offs therefore made by Congress
o Patents – granted for novel, useful and nonobvious processes or products

Once issued last for 20 years from date of original application and are
not renewable
o Copyrights – protect the expression of ideas (not ideas themselves) in books,
articles, music, art, etc.
 Must be independent creations
 Begin as soon as work is tangible and lasts until 70 years after the
death of the creator

b. Property in One’s Person (pg. 69) – Moore v. Univ. of Cali


Downloaded From OutlineDepot.com

 Rule – property is an abstract object, known as a “bundles of sticks (rights)”, that


entail certain rights such as:
o Rights to alienate
o Right to transfer to another
o Right to possess and use
o Right to exclude
o However, there are limitations on these property rights b/c one can still have a
property right without a property interest (some sticks in the bundle, but not
all) - Examples
 Things that can be sold, but not given away
Ex. – property/land in lieu of bankruptcy
 Things that can be given, but not sold
Ex. – certain fish and game
 Things that cannot be given or sold
Ex. – Prescription drugs or professional licenses
 Conversion – wrongful exercise of ownership rights over the personal property of
another
 Policy Rationale
o Sui Generis (“of it’s own class, unique”) – objects, such as body parts, tissue,
and cells, are considered sui generis and governed by law b/c they do not want
to turn body parts into commodities or meaningless things i.e. a tire

4.) Right to Include, Right to Exclude (pg. 86) – Jacque v.


Steenberg Homes
 Trespass (Property Tort)
i. Intentional and unprivileged entry upon land owned or possessed by another
ii. Strict liability
Downloaded From OutlineDepot.com

iii. Must simply intend to enter (as opposed to being forced onto another’s land /
doesn’t’ matter if unsure whose land it is)
iv. Actual damage or harm to the land is not required for entry to constitute trespass
 Rule – a private landowner’s right to exclude others from their property is one of the
most essential sticks in the bundle of rights commonly referred to as property
o The right to protect land and prevent trespassing is meaningless unless
appropriately punished by law  Otherwise, society would lose confidence in
legal system
o Right to exclude is essential b/c otherwise, there would be no value in
property rights

 Exception – statute which punishes trespasser’s is limited to those who violate rights
of property owners
o Property rights serve human values – they are recognized to that end, and
limited by it
 Must balance rights in property against human interest rights, such as
migrant workers – exception to rule of trespass
o Right in real property is not absolute, such as when a service is being done to
aid the public interest on behalf of a government agency
 Policy Rationale – right to exclude is essential b/c otherwise, there would be no value
in property rights if cannot exclude, and property would therefore be meaningless

a. Right to Destroy – Courts do not like to enforce “wasting resources”,


such as tearing down a house after owner dies, therefore the right
to destroy is limited depending on its application

B. Subsequent Possession: Acquisition by Find, Adverse Poss., and Gift

1.) Acquisition by Find (pg. 95) – Hannah v. Peel, Benjamin v.


Linder Aviation
 Rule – a lost item is the right of the finder against all people in the world, except the
true owner
Downloaded From OutlineDepot.com

i. A man possess everything which is attached to or under his land


ii. A man does NOT necessarily possess a thing which is lying unattached on the
surface of his land, even though the thing is not possessed by someone else
 Common Law Categories of Found Property
1. Abandoned – property is abandoned when the owner no longer wants to possess
it
 Abandonment shown by proof that owner intends to abandon the
property and has voluntarily relinquished all rights, title and interest in
property
 Belongs to finder of property against all others, including former
owner
2. Lost – property is lost when the true owner unintentionally and involuntarily
parts with its possession and does not know where it is
 Becomes the property of finder if true owner makes no claim within
12 months
3. Mislaid – mislaid property is voluntarily put in a certain place by the owner who
then overlooks or forgets where the property is
 Finder of mislaid property acquires no rights to the property
 Right of possession of mislaid property goes to owner locus in quo
(“place where it happened”) upon which the property is found, against
all others except true owner
 Policy Rationale – mislaid property goes to owner locus in quo b/c
gives the true owner the best chance of being reunited with their
mislaid property
4. Treasure Trove – consists of coins and currency concealed by the owner,
includes an element of antiquity
 The property must have been hidden or concealed for such a length of
time that the owner is probably dead or undiscoverable
 Belongs to finder of property against all others, except the true owner
 Multiple approaches to awarding lost property
o Categories – mislaid, lost, and abandoned property
o Status – employee-employer relationship
o Location
o Embedded/Attached or Loose on Surface
 Title is relative!
Downloaded From OutlineDepot.com

o Courts can only decide who has better title, not the same as best title (true
owner), b/c the Court cannot decide the rights of a party not present in the
case
o Decided Prior Possession is good title against anyone else, unless they can
prove they’re the true owner
 Policy Rationale – Finder/Prior Prior Possessor is awarded title of property against all
others, except the true owner, b/c possession is good evidence of ownership
o Favoring the prior possessor reduces violence and uncertainty over found
property  so entrenched in our society it even applies to wrongful prior
possessors (thieves)

2.) Acquisition by Adverse Possession (pg. 112) – Jarvis v.


Gillespie, Howard v. Kunto, O’Keefe v. Snyder, Porter v. Wertz
 AP functions as a method of transferring interests in land without the consent of the
prior owner
 Rule - one acquires title by AP through open, notorious, hostile, and continuous
possession of another’s property for a period of 15 years
o H-CANOE (for land)
 Hostile – established if claimant intends to claim the land and treat it as his own
(jurisdictional approach to hostility)
o Does not require ill-will toward the true owner, but merely means that the
claimant is not occupying with the permission of the owner AND has the
jurisdictions requisite mental state to take by AP
 State of Mind Tests:
 Connecticut Doctrine (Majority) – AP must believe in good-
faith that he actually owns the land
 SOM is irrelevant
 aka “Good Faith” Doctrine or Objective Test
 Main Doctrine – AP must think they’re invading the rights of
another to claim land, possession cannot be based on mistaken
belief
 aka “Bad Faith” or Aggressive Trespasser Doctrine
o Generally means not claiming land under the record owner’s title
o Permission to use land ALWAYS defeats hostility!
 Continuous – established if possession is continuous for a period of possession as that
of a hypothetical average landowner
Downloaded From OutlineDepot.com

o True owners use land continuously, and to prevent series of trespassers to add
up and take land by AP
o Can be lapses of time during “continuous” possession if lapses similar to that
of an average owner
o Seasonal occupation of land (summer or winter) is continuous possession
because true owner or potential AP are making the best economic use of the
land
 Tacking – occurs when the time of possession of 1 person is added to
the time of possession of previous owner(s) to satisfy the time period
under the statute of limitations
 Permitted if successive occupants are in “privity”
Privity – modernly requires some voluntary, intentional transaction
between the parties who time is being “tacked” together (transaction =
sale, gift, or devise)
 Required in order to stop a series of trespassers from having
their time tacked together
o Must satisfy all elements of AP continuously!
 Actual Possession – established if act as average owner would, taking into account
the geophysical nature of the land
Ex. If rural land, use as such, grazing cattle, cutting hay, etc
 Want level of use of land to show claim of ownership
 Open and Notorious (synonyms) – established if ownership/use of the land is
conducted in a manner which would put person of ordinary prudence on notice of the
claim
Ex. Put up fence or trespasser beware signs, etc
 Purpose is so true owner is made aware and can take action to reclaim
land  True owner must have opportunity to object
 Actual knowledge by true owner is required to establish AP
o Minor Boundary Encroachments – no presumption of knowledge arises from a
minor encroachment along a common boundary  only where the true owner
has actually knowledge thereof may it be said that the possession is open and
notorious
1. Innocent Improver Doctrine – Manillo v. Gorski
 Modern “Balancing of Equities”
Downloaded From OutlineDepot.com

 If an innocent improver crosses boundary line of


neighbor, must balance the equities of each party, and if
the true owner is left with a more harsh outcome, then
land must be conceded to true owner with
improvements
 However, if not too harsh, true owner must accept fair
market value for the parcel of land or be forced to pay
for the costs of improvements
 Problem – subjective value of land not taken into
account such as sentimental value of land (Ex. Been in
family for 100 years)
2. Doctrine of Agreed Boundaries – if there’s uncertainty between
neighbors, an oral agreement is enforceable if the neighbors
subsequently accept the line for a long period of time
3. Doctrine of Acquiescence – can be for a period of time shorter than
the SOL, is evidence of an agreement between parties
4. Doctrine of Estoppel – occurs when one neighbor makes
representations about the location of a common boundary, and the
other neighbor then changers her position in reliance on the
representations or conduct
 The first neighbor is then estopped to deny the validity of his
statements or acts
 Exclusive – possession of land must be exclusive as that of a hypothetical true owners
would be
o Ordinarily not met if the true owner is concurrently in possession of land
o Land cannot be exclusive if used by general public

 Statute of Limitations: depends on jurisdiction


1. Discovery Rule (NJ) – a cause of action will not a accrue until the injured part
discovers (or by exercise of reasonable diligence and intelligence should have
discovered) facts which form the basis of a cause of action  however, owner
must act with due diligence to pursue lost property
 Principle of equity to lessen unjust results that would otherwise come
about from AP
 Generally used to govern actions such as theft of paintings
Downloaded From OutlineDepot.com

 Statute of Limitations – period set by law during which a person must


bring suit or forever forfeit the right to bring suit (on lost property)
 Expiration of SOL for replevin actions cuts off the true owners
legal remedy, even if entitled to property
 Policy Rationale – clear title disputes, encourage people to
bring suits quickly when facts are fresh
2. Demand and Refusal (NY) – the SOL for replevin does not begin to run in
favor of a good-faith purchaser until the true owner makes a demand for return
and the purchaser refuses
 Until demand is made, possession of the stolen property by the good-
faith purchaser for value is not considered wrongful
3. Tolling – statutory period is extended (tolled) when record owner is under
certain legal disabilities, such as :
 Minor (under 18), mental incapacity, imprisonment or absence from
jurisdiction (last 2 - some jurisdictions)
 Most States – tolling only occurs if the disability exists when AP
claimant first makes entry onto land  period is extended while
disability exists
 Other States – extends by a set period after disability ends

3.) Acquisition by Purchase from One Lacking Title – Porter v.


Wertz
 General Rule – a person cannot convey a better title to property than he has
o Nemo dat quod non habet – one can not give what one does not have
 Exceptions (to general rule)
UCC Conveyancing Rules
a. Voidable Title
 Occurs when title held by one who induces the true owner to transfer
possession through fraud or deceit, or whose right to possession can be
legally divested for other reasons (ex. Payment with bounced check_
 KEY – true owner intends to transfer title, but does so under
false pretenses
 If possession is obtained though violence or stealth, then one
has void title (never good title)
b. Bona Fide Purchaser – UCC 2-403 (1)
Downloaded From OutlineDepot.com

 A person with voidable title has the power to transfer a good title to a
good faith purchaser for value
 “Good Faith” means behaving honestly and having no reason
to suspect that the seller lacks title
 May buy from anyone, not just merchants AND need not
purchase in ordinary course of business
 After such transfer occurs, true owner can sue wrongdoer, but
CANNOT recover the goods from the BFP for value
c. Statutory Estoppel (Entrustments) – UCC 2-403(2)
 Any (1) entrusting of possession (2) of goods (3) to a merchant (4)
who deals in goods of that kind gives him power to transfer all rights
of the entruster (5) to a buyer in the ordinary course of business
 “Entrusting” includes any delivery (voluntary transfer of
possession) and any acquiescence in retention of possession
regardless of any condition expressed between the parties (even
under larcenous conditions)
 “Buyer in the ordinary course of business” if the sale to the
person comports with the usual and customary business
practices in the kind of business in which the seller is engaged
or seller’s own usual practices
 If 5 conditions met, the merchant can transfer all of the entruster’s
rights to a buyer
 BUT only the entruster’s rights and no more
 Ex. If a thief entrusts, good title does not transfer
 Provides more protection to true owners than the BFP rule does
 Buyer must still act in good faith
d. Equitable Estoppel (Estoppel in Pais) – Common Law
 A party is absolutely precluded from denying any material fact which
by his words or conduct has induced another to believe or act upon
such [if that other person would be harmed by the denial]
 Inducement can be intentional or through culpable negligence
 Owner may be estopped from setting up his own title, as against a
bona fide purchaser for value, where the owner has “clothed the
vendor with possession AND other indicia of title” (ex. Owner gives
vendor apparent authority to dispose of the goods)
 Zendman v. Harry Winston
Downloaded From OutlineDepot.com

4.) Acquisition by Gift

a. Inter Vivos (if effective, it’s irrevocable) Gruen v. Gruen


 Rule – for a valid inter vivos gift, 3 requirements needed:
1. Intent – donor must intend to make an immediate (present), irrevocable transfer
of ownership to the donee
 One can also make an inter vivos gift of chattel and reserve a life
estate in that chattel (Ex. Painting) 
 As long as the evidence establishes intent to make a present
and irrevocable transfer of title or the right of ownership, there
is a present transfer of some interest and the gift is effective
immediately (Title vests immediately in donee, possession
postponed until donor’s death
o Inferring intent:
 Done through statements, letters, act of giving possession, nature of
value of item, relationship between parties, etc
 If donor intends the “gift” to take effect in the future, it is a nullity that
no confers no rights to the donee
 If “gift” is conditional, no “gift” will be found
EX. Courts uniformly agree that an engagement ring is given subject
to the implied condition of a future marriage, and thus, rule that no
“gift” has been given and the donor is allowed to recover the ring
2. Delivery
 General Requirement – in order to transfer property by gift, there must
be actual delivery of the item to the donee
 Exception under CL – if title to a chattel was transferred by a
deed of gift (formal written instrument) – manual delivery
unnecessary
 Methods of Delivery
a. Manual – donor physically transfers possession of the item/gift
to the donee
 Always preferred!!
 However, some items cannot be manually delivered i.e.
marble statue or intangible property (1/10 interest in
company)…
Downloaded From OutlineDepot.com

b. Constructive – permitted when manual delivery is


impracticable or impossible
 Constructive delivery acceptable when:
o Donor’s intent must be clear
o Item intended to be given is not present and is
incapable of manual delivery
o BUT when item is present or capable of manual
delivery, must happen!
 Donor physically transfers to donee the means of
obtaining access to and control of the property (donor
must relinquish dominion and control over the chattel)
Ex. Key to a lock box/safe
c. Symbolic – involves delivery of an object that represents or
symbolizes the chattel
 Usually done through some type of writing, but can also
be a photograph of chattel, hood ornament to represent
car, etc
 Permitted when manual delivery is difficult
 Why are courts so strict on delivery?
i. To prevent fraud
ii. So gifts are either manually given or channeled into writing –
more prepared, so aren’t giving away things on death bed
3. Acceptance – when gift is of value, law will presume an acceptance
 Donee of gift has burden of proving each element with clear and convincing
evidence!

b. Donatio Causa Mortis (not necessarily permanent) Newman v. Bost


 Rule – donatio causa mortis, unlike inter vivos, is revocable; donor may revoke gift at
any time before death
o A gift of personal property in anticipation of the donor’s imminently
approaching death
o Substitute for a will, if donor lives or does not die of exact death expected, gift
is revocable
o 4 Requirements:
1. Intent
2. Delivery
Downloaded From OutlineDepot.com

3. Acceptance
4. Donor’s expectation of imminent death
 Most donatio causa mortis decisions involve a donor
confronting the substantial certainty of death in the near future
from a particular illness or affliction, i.e. cardiac patient about
to undergo a risky operation
 Gift made by donor contemplating suicide may meet
this standard
 But, a donor’s natural apprehension of death in the
distant future does NOT support a donatio causa mortis!

II. The System of Estates

Present Estate Future Interest in Transferor Future Interest in Transferee


 

Fee Simple Absolute N/A N/A


Downloaded From OutlineDepot.com

Life Estate Reversion Remainder

     

Term of Years Reversion Remainder


     

  Possibility of Reverter N/A


Fee simple determinable

Fee simple subject to condition Right of Entry N/A


subsequent

Fee simple subject to executory interest N/A Executory Interest

o Cannot create or transfer an estate greater than the one you have
o Estates may be created by conveyance (deed) or by devise (will)
o A living person has no heirs!

A. Estates: Present Interests


1.) Fee Simple Absolute (Freehold)
 Greatest possible estate in CL system because greatest potential duration – forever!
(Now  Perpetuity)
 Freely alienable, no limitations
 Created through a conveyance – today, delivery of a deed from pervious owner
 2 Main Factors to Determine which Type of Estate Conveyed:
i. Words of Conveyance – grantor’s objectively manifested intent
Ex. “O to A and his heirs” or “O to A”
ii. Grantor’s Own Estate – cannot convey a greater estate than what you have
 “Estate of Inheritance” – descends to heirs whom are designated by law, and
continues down line from heir to heir
o When receive land under will, take by “devise” and heirs take by “descent”
o If owner leaves will to someone other than a heir, heirs are cut off
o Only was FSA ends is if owner dies, leaving no heirs – then escheats to the
state

2.) Defeasible Fees (Freehold)


 Each has potential perpetual duration because run until line of heirs runs out
Downloaded From OutlineDepot.com

 Defeasible because by terms of their creation, they’re all subject to early termination
(before heirs run out)
 Even though listed below, not lesser estate than FSA

i. Fee Simple Determinable (Durational Language)


o Terminates automatically upon stated event occurring and right to immediate
possession reverts back to grantor
o Words of Conveyance – “O to A, so long as used for a farm”
 Durational language – so long as, while, during, until…
o Future interest – possibility of reverter

ii. Fee Simple Subject to a Condition Subsequent (Conditional Language) (FSSCS)


o Defining feature – provides an election to grantor to take back land if stated
even occurs
 Meets early end by divestment through right of re-entry
 If elect to do so, must file a formal notice
o Words of Conveyance – “O to A, on condition land is used for farming”
Conditional language – but if, on the condition that, provided that,
however if, unless…
o Future interest – right of re-entry/power of termination

iii. Fee Simple Subject to an Executory Limitation


o Defining feature – it’s a defeasible fee simple with a follow up interest in a 3rd
person
o Same as FSD or FSSCS, but the future interest is in a party other than the
grantor
Ex. “O to A, so long as he never drinks liquor, otherwise to B”
Downloaded From OutlineDepot.com

No re-entry called for, third party (B) gets right to immediate
possession automatically if stated event occurs
o Future Interest – executory interest

3.) Lesser Estates


 Estates that have no possibility of lasting forever
 Carved out of Fees
i. Life Estate – estate limited to exist for the life of some individual
 Not an estate of inheritance b/c no mention of heirs
 Words of Conveyance – “O to A for life”
 Can be created to exist for the life of someone other than owner of the
estate
Ex. “O to A for life of Y” (pur autrie vie)
 All estates other than fee simple must, when created, have some kind
of future interest in it
ii. Non-Freehold Estates
o What we modernly think of as “tenancies” between landlord and tenant
o Distinction between freehold and non-freehold as little legal significance, only
conveyed by “lease” rather than “deed”
1. Term of Years – continues until some specifically identified date
 “O to A for 10 days”, “O to A for 5 years”
 Tenant in typical leasing situation is considered owner of an
estate in land
 Tenant owns present interest (term of years)
 Landlord owns future interest (reversion)
2. Tenancy at Will – exists for as long as both parties “will” it to continue
Downloaded From OutlineDepot.com

 At CL, NO notice of termination required


Modernly, some minimum notice required by statute,
such as 3 days
3. Periodic Tenancy – derived from tenancy at will by adding special
requirements on timing and notice of termination
 Continues from period to period, such as month to month
 Either party can terminate it at the end of the period
 To terminate, each party must give notice equal to the time of a
period before new period starts
Ex. Month to month period, give month’s notice
 Unless yearly lease, then it’s 6 months

B. Future Interests
 Time of Enjoyment is distinction between present and future interests
 For Grantor’s Only:
o Reversions – future interest retained by grantor
o Possibility of Reverter
o Rights of Re-entry/Power of Termination
 For Person’s Other than Grantor”
o Remainders
o Executory Interests
i. Reversion – any future interest retained by the grantor that follows upon the
expiration of any estate that is less than any kind of defeasible fee; includes
these estates:
a. Life Estate
b. Term of Years
Downloaded From OutlineDepot.com

c. Periodic Tenancy
d. Tenancy at Will
o All reversions are vested!

ii. Remainder – any future interest in someone other than the grantor that follows
upon the expiration of any estate that is less than any kind of defeasible fee
a. Indefeasibly Vested Remainder – remainder given to someone who is:
1. Born
2. Ascertainable
3. As to which there are neither express preconditions a party
must meet to receive it (no “conditions precedent”), nor
conditions he must meet to keep it
Ex. “O to A for life, then to B”, “O to A for 10 years, then to
C”
b. Contingent Remainder – a remainder:
1. Given to someone who is unborn
2. Given to someone who is not ascertainable, OR
3. Which can only become possessory after a condition precedent
 Look for words like “if”, “should”, “provided that he first”
Ex. “O to A for life, then to B if he passes the exam”
“O to A for life, then to B should he be married”
c. Vested Remainder Subject to Defeasance – reminder in which there
are no conditions to the recipient’s taking, but as to which there are
express conditions to keeping it
 Look for condition expressed in terms of the holder’s losing the
interest
Ex. “O to A for life, then to B, but if he consumes liquor on the
premises, then to C”
iii. Possibility of Reverter
Downloaded From OutlineDepot.com

iv. Right of Re-entry/Power of Termination


v. Executory Interest – a future interest in someone other than the grantor having
at least one of the following features:
a. It directly follows a defeasible fee
Ex. “O to A, but if A smokes a cigar, then to C
b. It divests/cuts short a prior estate, and/or
 Previous estate ends b/c of the occurrence or non-occurrence of
a condition
Ex. “O to A, but if A doesn’t marry in 10 years, then to C”
c. It directly follows possession by the grantor
Ex. “O to A, if A completes law school” (A has not completed law
school)
 “Future interest only” conveyance
 A has an executory interest b/c A’s interest is a future interest
in someone other than the grantor that directly follows
possession by the grantor
 Springing Executory Interest – follows possession by the grantor
 Shifting Executory Interest – follows an interest in someone other than
the grantor
** “O to A, so long as used as a farm” – A stops farming
o Clock on Adverse Possession starts running immediately!
o A will take in fee simple upon the running of the statutory period (assuming
H-CANOE and no ejectment)

C. Common Law Rules Furthering Marketability/Rules of Freehold


Estates
1.) The Doctrine of Merger
 Whenever successive vested estates are owned by the same person, the smaller of the
two estates is “absorbed” by the larger
Downloaded From OutlineDepot.com

 Example – “O to A for life”


o A has a life estate – vested estate
o O has a reversion in fee simple absolute – vested estate
o O then purchases A’s life estate
o Now, O owns a life estate followed by a reversion in FSA
o Under Merger Doctrine, the life estate is merged into the reversion in fee
simple absolute
2.) The Doctrine of Worthier Title
 When grantor makes an inter vivos conveyance of real property to one person and at
the same time attempts to create a future interest in the grantor’s own heirs, the future
interest in the heirs is void and the grantor takes a future interest instead
 Example – “O to A for life, then to O’s heirs”
o O has attempted to create a future interest (contingent remainder) in his own
heirs
o Instead, he has created a future interest (reversion) in himself
o Becomes – “O to A for life” (implied reversion in O)
o Now, if O’s heirs are to take, he must either grant directly to them or they
must take by devise or inheritance from him
 Largely abolished
3.) The Rule in Shelley’s Case
 If a life estate is given to one person and a remainder is given to that person’s heirs in
the same instrument, the remainder actually goes to the life tenant – That person’s
heirs get nothing!
 Example – “O to A for life, then to A’s heirs”
o Becomes – “O to A for life, then to A”
 By merger, A has a fee simple absolute
 Largely abolished
4.) The Doctrine of Destructibility of Contingent Remainders
Downloaded From OutlineDepot.com

 If the preceding estate expires and the condition precedent for the remainder has not
occurred, the remainder is destroyed
o Largely abolished (3/4 of states)
 Example – “O to A for life, then to B when he is 21” A dies while B is 15
o If in jurisdiction where destructibility of contingent remainders applies 
contingent remainder is destroyed, property reverts back to O
 Modern Approach – reverts to O until B reaches 21
o O’s interest becomes fee simple subject to an executory limitation, with a
springing interest
5.) THE RULE AGAINST PERPETUITIES
 Rule – “No interest is good unless it must vest, if at all, not later than 21 years after
some life in being at the creation of the interest”
o Translation – an interest is “bad” if:
1. It will NOT definitely vest w/in the perpetuities period
2. And, it will NOT definitely become incapable of vesting
o Remember, in most cases an interest vests when it has the right to become
possessory
o Exception – executory interests vest when they actually become possessory
 Policy Rationale – created to invalidate future interests that might vest to far in the
future
o Because during the period that the interest has not vested, but is still capable
of vesting, we are uncertain as to whether a future interest will become
possessory
o So land isn’t tied up for a long period of time, encourages development of
land, etc
 Advantages of RAP
o Balances desire of current owner to determine what will happen to his
property in the future against desire of eventual holders to be free from “dead
hand” control
o Increases control of the living, who are in a better position to determine how
property can be used productively
 Key Point (Often Forgotten) – RAP is applied to an interest at the time the interest is
created, and ends 21 years after the death of someone alive when the interest was
created
Downloaded From OutlineDepot.com

o If, at the time, we do not know for sure whether the interest will: (1) definitely
vest within the perpetuities period OR (2) definitely become incapable of
vesting (will definitely fail)…
o Then, the interest is void from the moment it was created
 True, even if it is very likely the interest will vest
 The Create, Kill, and Count Approach
i. Create someone born AFTER the interest is created
ii. Immediately kill off everyone else alive at the time of the conveyance
iii. Count 21 years
iv. If you can think of any conceivable scenario under which the interest could vest
in that person, but only after 21 years, the interest fails RAP
 If fails, interest is INVALID
 If you cannot create a scenario, interest is good
o Examples
 O to A for life, then to A’s first child to get a tattoo. A has 2 tattoo free
kids, B and C
 Create X, child of A
 Kill off everyone else
 Count 21 years
 Interest could vest after 21 years, X could wait 25 years to get a
tattoo
 RAP violated – INVALID
 O to A, then to B if B is alive when A’s interest ends
 Cannot create anyone because goes to B
 Interest is VALID
 Mary to Jane for life, then to Jane’s first child and his heirs. Jane has
no children
 Create X, Jane’s child
Downloaded From OutlineDepot.com

 Kill Mary and Jane


 Count 21 years
 Interest must vest immediately, as soon as Jane dies – cannot
create a scenario, so interest is VALID)
 RAP applies only to Contingent Remainders and Executory Interests
a. Contingent Remainders – if remainder must vest, if at all, upon the death of the
life tenant (life in being), it is impossible to create a scenario in which it vests
after the lives in being plus 21 years – thus interest must be valid
o Critical to determine when an instrument conveying property becomes
operative
 Inter vivos conveyances typically by deed, effective when properly
delivered
 Testamentary conveyances are by will, not effective until testator dies
 CR can be valid by will, but invalid by inter vivos deed in the same
scenario
o Special Rules:
If the condition for possession must be satisfied by a person who is
alive and ascertained, the interest does not violate RAP
Ex. “O to A, then to B if alive when A’s interest ends”
 When CR given to first grandchild, will almost violate RAP
b. Executory Interests – 2 rules of thumb:
1. Where the defeasing condition is tied to a particular person (“if B ever
serves liquor”), the executory interest is ALWAYS VALID under
RAP
2. Where the defeasing condition is not tied to a particular person (“if
liquor is ever served; so long as used for educational purposes”), the
executory interest always violates RAP

D. Concurrent Interests
 Deal with situations in which more than one person owns and has the right to possess
the same interest at the one time
Ex. Husband and Wife jointly own a house in FSA
o Both own equal shares and have a concurrent right to possession
Downloaded From OutlineDepot.com

o For ease of comprehension, assume, unless told otherwise, that all interests we
discuss are owned in FSA
 KEY – though tenants own a “share” of the property, it is an “undivided” share,
meaning they each own ALL of the property

1.) Joint Tenancy with Right of Survivorship


a. Four Unities Required under Common Law
i. Time – each tenant’s interest must be acquired or vested at the same time
ii. Title – tenants take their interest under the same instrument or joint AP
iii. Interest – tenants have an equal share in the estate (in terms of % and duration)
iv. Possession – tenants have an equal right to possess
b. Each joint tenant is entitled to possess the whole
o Regarded as a single owner (per my et per tout)
c. Survivorship – at death, a joint tenant’s share is extinguished, leaving other joint
tenants owning the entire property in proportion to how many remain alive
o Example – A B & C own 1/3 undivided shares as JTWROS

A dies, now B & C own ½ undivided shares at JTWROS

Key – A’s share does not pass to any heirs/devisees; it’s
“extinguished”, while the shares of B & C grow
 C dies, now B owns Blackacre “severally” (alone)
 Key – C’s share does not pass to any heirs/devisees
o Example – A B & C own 1/3 undivided share as Tenants in Common
 A dies, leaving heir, X. Now X B & C own 1/3 undivided share as
Tenants in Common
 Each tenant’s share is descendible and devisable
d. Severance – any tenant can severe their interest at any time by conveying his
interest away
Downloaded From OutlineDepot.com

o This may be done unilaterally and w/o consent of other joint tenants
Ex. A B & C own 1/3 undivided shares as JTWROS
 A conveys to Q, B dies – Q’s share does not increase, but C’s does
o Harms v. Sprague
 The voluntary or involuntary destruction of any one of the unities by
one of the joint tenants will sever the joint tenancy
 A lien on a joint tenant’s interest in property will not cause a severance
of the joint tenancy, absent the conveyance by deed following the
expiration of a redemption period (time period during which a former
owner can reclaim foreclosed real estate property)

2.) Tenancy in Common – Delfino v. Vealencis, Spiller v. Mackereth


 Each tenant has a separate but undivided interest in the whole (each can possess all of
the property)
o Share is alienable, descendible, and devisable
o No requirement of 4 unities – can own unequal shares and can take shares at
different times under separate instruments
 Still must have unity of possession – equal right

 A partition occurs if concurrent owners decide to terminate their cotenancy – Two


forms:
i. Partition by Sale – property is sold and proceeds are divided according to parties
respective interests
ii. Partition in Kind – property is divided by an appointed committee according to
each parties interests
 Favored by courts because “a sale of one’s property w/o his consent is
an extreme exercise of power warranted only in clear cases”
o Partition by Sale should be ordered only when 2 conditions apply:
1. The physical attributes of the land are such that a partition in kind is
impracticable or inequitable
2.
3. The interests of the owners would be better promoted by a partition by
sale
Downloaded From OutlineDepot.com

 Co-tenants – in the absence of an agreement to pay rent or an ouster of a cotenant, a


cotenant in possession is not liable to his cotenants for the value of his use and
occupation of the property
o General rule for rent – no obligation unless the occupying cotenant has
OUSTED the other cotenants
o Ouster – conclusory word used to describe two distinct fact situations:
1. The beginning of the SOL for AP
 The share of a cotenant who ousts his cotenants may ripen into
“several” title if AP requirements are met
 However, very difficult
2. The liability of an occupying cotenant for rent to other cotenants (most
discussed)
 Occupying cotenant liable when he refuses a demand of the
other cotenants to be allowed into use and enjoyment of the
land, regardless of claim of absolute ownership
o Requirements for Ouster:

A request by a cotenant for possession, followed by denial

An act that excludes a non-possessing content from entering and not
remedied when request made
Ex. Changing locks and refusing to share keys
o Cotenant not required to pay rent when asked b/c:
 Shouldn’t have to pay rent for a right you already have (each cotenant
has a right to possess)
 No cotenant is required to pay rent UNLESS he does something to
exclude other cotenant by refusing possession

3.) Tenancy by the Entirety – Swartzbaugh v. Sampson


 JTWROS that exists between married people
 Key Differences:
o Can not be severed during the marriage unless both partners consent
Downloaded From OutlineDepot.com

o Technically, neither spouse owns a share


 Instead, the “marital unit” owns the property
 The act of one joint tenant w/o express or implied authority from or the consent of his
cotenant CANNOT bind or prejudicially affect the rights of the latter
o Limitation – arises in cases (as here) where one JT in possession leases all of
the property w/o the consent of his cotenant and places the lessee in
possession
o In this case, other JT must be allowed to possess at the same time as lessee, or
ouster will have occurred
 If so, entitled to rent – 1/2 of the “reasonable rental value” of the
leased property
 Legal options (2) of property leased w/o other’s consent:
o Accounting – a suit to fore cotenant in possession to share income…includes:
 Profits wielded from land (natural resources)
 Rental payments received
o Contribution – a suit to force other cotenants to contribute to certain
necessary costs…includes:
 Taxes, mortgages, and anything necessary to retain interest (such as
homeowners association fees)
 Improvements and necessary repairs not included, but will be credited
for any increased value upon partition
o Cannot partition, unless land no longer owned concurrently

E. Marital Interests – Sawada v. Endo


 Married Women’s Property Act
o Coverture abolished
o Women maintained ownership and control of property she brought into
marriage
o Women could enter into contracts and initiate litigation
o Dower (a right to inherit a life estate in 1/3 of husband’s land if he
predeceased her) & Curtesy (husband’s right to land) abolished in most states
Downloaded From OutlineDepot.com

 Modern Approach: Community Property (10 States)


o Everything earned by each spouse during marriage is “community property”
 Either can manage or dispose of property
 Some states can’t dispose of w/o other’s consent
o Community property reachable by creditors?
 Varies state to state
o NOT community property (therefore, separate property)
 Anything owned by spouse before marriage
 Anything inherited/gifts by spouse during marriage
o Upon divorce:
 Separate property goes to whoever owns it
 Community property usually divided equally
o Upon death:
 Either party can devise or bequeath separate property and their share
of community property
 No “forced share” b/c each spouse already owns half the community
property anyway
 Separate Property (other 40 states)
o During marriage, each spouse owns separately:
 Anything they owned before marriage
 Anything they obtained during marriage, including earnings
 Nothing owned jointly unless couple chooses to take title jointly
o Upon divorce, courts make “equitable distribution” of “marital property”
Downloaded From OutlineDepot.com

 Court’s free to divide up property w/o regard to who owned it during


marriage – “equitable determination”
 Some allow division of property owned separately before marriage,
some don’t’
 ¼ states may consider whose “fault” the divorce was
 ¼ of states prohibit this
 Factors considered in “equitable distribution”:
 Income and property at time of marriage
 Duration of marriage
 Age and health of each spouse
 Each spouse’s contribution during marriage (including
domestic services)
 Each spouse’s future earning potential
 Special needs of either spouse
o Trend:
 Equal distribution
 Some states require it, absent special need
o Upon death:
 Each party can do what they want with their separate property
 But most states by law establish an “elective,” “statutory” or “forced”
share which requires a spouse to leave at least some property to
surviving spouse
 Spouses do not have individual shares - Sawada v. Endo
o “Neither husband nor wife has a separate, divisible interest”
o Instead, property is owned by a legal entity know as the “marital unit”
o Thus, creditor of ONE spouse may not reach ANY interest in the entireties
property
Downloaded From OutlineDepot.com

 This equalized husband and wife, MWPA’s reforms to the fullest


extreme

III. Leaseholds: The Law of Landlord and Tenant

A. The Leasehold Estates (Non-Freehold)


1.) Term of Years
2.) The Periodic Tenancy
3.) The Tenancy at Will
4.) The Tenancy at Sufferance: Holdovers – Crechale v. Smith
 Landlord has 2 options when a tenant “holdsover”:
i. Treat tenant as a trespasser and evict him
ii. Treat tenant as “holdover” and hold tenant to a new lease
o If a LL accepts payment from a tenant after lease expires:
 LL extends the lease for the period of time covered by the check
 A new “periodic tenancy” is created, with the period being the amount
covered by the check

B. The Lease
 Must be in writing if the term is for a year or more
 Historically, lease was treated as a conveyance
o Meant LL had few implied obligations
 Modern trend, lease is treated as a contract
Downloaded From OutlineDepot.com

o Implied ongoing obligations for LL  maintain property and keep premises


safe
 Covenants are “dependent”, LL and tenant are dependant upon each other to each
commit their respective obligations
 LL’s must mitigate damages, etc
o LL has obligation to find new tenants, if previous tenant breaches and moves
out before lease is up (similar to cover)

C. Delivery of Possession – Hannan v. Dusch


 American Rule (Majority Approach) – The LL is not bound to put the tenant in
actual possession, but it bound only to put him in “legal possession” so that no
obstacle in the form a superior right of possession will be interposed to prevent the
tenant from obtaining actual possession of the demised property
o Absent an express covenant, LL is only required to give the tenant the “legal
right to possess”  NO implied obligation on part of LL to deliver actual
possession
 LL NOT required to make sure no one else is in possession when the
lease begins
 There’s always an implied covenant that the LL will give the tenant
the “legal right to possess”
 English Rule (Modern Trend) – implies a covenant requiring the lessor to put the
lessee in possession

D. Subleases and Assignments – Ernst v. Conditt, Kendall v. Pestana


 Sublease (CL) – transaction where tenant grants an interest in the lease premises less
than his own, or reserves to himself a reversionary interest in the term
o If 2 years remain on the lease, and lessee transfers for a term of 1 year
Downloaded From OutlineDepot.com

o LL and subtenant have no contractual relationship  cannot enforce


covenants against each other
o LL and original tenant/sub-LL can enforce covenants against each other 
same for sub-LL and subtenant
 Assignment (CL) – conveys the whole term, leaving no interest or reversionary
interest in the grantor or assignor
o Transfers right to possession for the duration of the term

 Modern Rule – apply CL distinction of sublease and assignment regardless of what


terminology is used
o Primarily, look at the parties intent
o Use of terminology is not conclusive
o No bright line rule about retention of a reversionary interest
 If lease is lacking, courts will imply a requirement that the LL be commercially
reasonable for not giving consent for a sublease/assignment
o Nature of lease is a contract modernly, so based on obligation of good faith
and fair dealing
o Lessor protected b/c the original lessee remains liable to the lessor for a
guaranteed performance of the contract
 Sole Discretion Clauses – generally enforced by courts
Ex. “Lessee shall not assign this lease and shall not sublease said premises w/o
consent of LL, which consent LL may grant or withhold in LL’s sole and absolute
discretion.”
 Absolute Prohibition Clauses – generally enforced by courts
Ex. “Less shall not assign this lease…and shall no sublease the premises”  this
clause enforced in Cali by statute
Downloaded From OutlineDepot.com

For residential leases, follow majority rule


o If the consent clause doesn’t require LL to be reasonable, courts will generally
not imply a requirement of reasonableness

F. The Tenant who Defaults


1. The Tenant in Possession – Berg v. Wiley
 The only lawful means to dispossess of a tenant who has not abandoned nor
voluntarily surrendered but who claims possession adversely to a LL’s claim of
breach of a written lease is by resort to judicial process
o Self-help is not a valid legal remedy b/c usually leads to violence
 Unlawful Detainer Action (Forcible Entry & Detainer in OH)
o Person seeking to evict may NOT exercise self-help
o LL must serve 3-day notice before eviction
 Court lack jurisdiction until 3 days has passed)
o If LL has given 30 days notice to terminate (if stated in lease), no additional 3-
day notice necessary
o Meant to be quick and easy  typical time to respond is 5 days and complaint
form only 2-3 pages
 Removal of Tenant After Winning FED Suit
o Usually, can only get “possession” and unpaid past rent
o Most states  tenant cannot assert “counterclaims” (although in Ohio, they
may)
o Must request a Writ of Execution from the court
Court MUST issue the writ
Writ is then sent to the sheriff, bailiff or constable, who has 10 days to
enforce
o Tenants may be forcefully removed and his personal property placed on the
street
o Tenants cannot waive the protections of the FED statute!
Downloaded From OutlineDepot.com

 Included in lease for purposes of:


 Intimidation
 Hope that tenant is unsophisticated and doesn’t know the law
 Possibility law will change in future (why arguably ethical)

2. The Tenant who has Abandoned Possession – Sommer v. Kridel


 LL has a duty to mitigate damages by making a reasonable effort to find a new tenant
when previous tenant abandons
o LL required to carry of burden of proving that he used reasonable diligence in
attempting to re-let premises
o If LL doesn’t mitigate, recovery for LL is reduced by the amount he would
have earned had he made reasonable efforts  Majority Approach
o LL must treat abandoned premises as any other units that is part of LL’s stock
(must show to future tenants just would any other units)
 Policy Rationale – reasons for requiring mitigation:
o Modern trend treats lease as a contract
o Encourages productive use of property

G. Duties, Rights, and Remedies (Especially Regarding the


Condition of Leased Premises)
1. Landlord’s Duties; Tenant’s Rights and Remedies
a. Quiet Enjoyment and Constructive Eviction
Reste Reality Corp. v. Cooper
 Doctrine of Constructive Eviction – remedy for tenant when there is a covenant,
express or implied, and it is substantially breached by the LL
o Under this rule, any act or omission of LL which renders the premises
substantially unsuitable for the purpose which they were leased or which
seriously interferes with the beneficial enjoyment of the premises  a breach
of the covenant of quiet enjoyment occurs and constitutes a constructive
eviction of the tenant
Downloaded From OutlineDepot.com

 When occurs, as if LL breach the contract and evicted the tenant 


relieves tenant of rental obligations
 Doctrine of Covenant of Quiet Enjoyment – ensures tenant can live in a place w/o
being legally challenged as to whether they can be there or not
o Insures against the consequences of defective title or any other disturbance of
title
o Ensures that the tenant will not be evicted or disturbed by the LL
o Binds the LL to ensure the completeness, security, and continuance of the title
transferred
 Illegal Lease Doctrine – Note on pg. 430
o Defense for when LL sues to evict for non-payment of rent

Tenant argues no rent due b/c of unsafe and unsanitary conditions of
the leased premised violate the housing code
 Lease is illegal and thus not binding on the tenant
 Does not apply if code violations develop after the making of the lease
o Allows tenant to withhold rent and hold off LL’s inevitable action to evict for
nonpayment
 Very narrow doctrine, only applies in a handful of states

b. The Implied Warranty of Habitability – Hilder v. St. Peter


 Rule – expressly held that in the rental of any residential dwelling unit an implied
warranty of habitability exists in the lease, whether oral or written, that the LL will
deliver over and maintain, throughout the period of the tenancy, premises that are
safe, clean and fit for human habitation
o Holding – when a LL breaches the implied warranty of habitability, tenant
may w/hold future rent and also seek damages in the amount of rent
previously paid
o Implied in tenancies for a specific period or at will
o Covers all latent and patent defects in the essential facilities of the residential
unit
o In order to bring a cause of action for this breach, tenant must first show that
he notified the LL of the deficiency or defect not known to the LL and
allowed for a reasonable time for its correction
 Remedies:
o Standard contract remedies (b/c a lease is a contract) of rescission,
reformation and damages available
Downloaded From OutlineDepot.com

Measure of damages the difference between the value of the dwelling


as warranted and the value of the dwelling as it exists in its defective
condition
o Tenant can withhold the payment of future rent if shows:
1. LL had notice of the previously unknown defect and failed, within a
reasonable time, to repair it, AND
2. The defect, affecting habitability, existed during the time for which
rent was withheld
o Punitive damages available when a LL, after receiving notice of a defect, fails
to repair the facility that is essential to the health and safety of his tenant
 Arguments Against Implying Warranty of Habitability:
o Lease was seen as a conveyance  no obligation by LL
o Historically, “caveat lease” where LL’s only duty was to deliver possession
the tenant  no duty to render habitable
o Historically, covenants were INDEPENDENT
 Arguments for Implying Warranty of Habitability:
o Lease has evolved to become more contract than conveyance
o Today, tenants enter into leases to obtain safe, sanitary and comfortable
housing  not to obtain arable land
o LL in a better position to discover and cure problems
o Better than Constructive Eviction b/c doesn’t require tenant to move out

**** Still need to add graph/picture to sublease and assignment


10/17/2009
10/17/2009

You might also like