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INTRODUCTION

A. Private property plays a role in society at large:


Right to exclude others (most important)
Member of a group (land ownership, voting, etc)
Encourages people to be productive (to gain more property)
Creates power structures (bargain/sell property to another)
Creates your own identity
Ensures security (gated communities)
B. Individual interests in property:
To avoid adverse possession (squatter's rights)
To avoid stealing of possessions
To avoid a lawsuit if someone gets hurt on your land
C. Social interests in property:
Serves as an example to future offenders
Integrity of the legal system (if you give people a right, then you better give them the confidence
that you will enforce it)
Discourages self-help
THE RIGHT TO EXCLUDE
A. Overview
The essence of private property is the right to exclude. This is the single most important property right. A person
has the right to lawfully use and enjoy his land, and to exclude others. But there are restrictions on this as well.
Certain situations supersede the right to exclude (emergency, necessity, etc.). Also, you cannot exclude others in a
way that abridges the rights of somebody on your property.
B. General Rule
Punitive damages may be imposed for intentional trespass to property, regardless of damage to the property
Jacque v. Steenberg Homes: Neighbor of the Jacques (P) purchased a mobile home from Steenberg
Homes (D). As part of the purchase, D agreed to move the home to the purchasers property.
Despite P refusals, D intentionally transported the home, plowing a path over P's property. P sued D
for trespass. The actual harm is not in the damage done to the land, which may be minimal, but in
the loss of the individuals right to exclude others from his or her property.
C. Exceptions/Limitations
Property rights are not absolute, and over time property rights have become less absolute and more emphasis has
been placed on societal interests.
1. In cases of emergency or necessity
2. Retrieving a child, pet, or chattel that has wandered onto the land
There can be liability for damage done to the property
3. Diminimus: Encroachments by one persons building onto the land of another
Generally is a trespass, but a remedy isnt always awarded
4. Public accommodation
Once you have opened it to the public generally, then you can't discriminate based on
religion, sex, race, etc.
5. Property rights cannot endanger the well being of others

State v. Shack: D. entered onto private property of P. to aid migrant farm workers. D. worked for
two government funded programs/agencies. D. asked to see the workers in the privacy of their
dwellings on the P. land, and he refused. A state trooper removed D. from the land. P. sues for
trespass.

6. Blackstone: "Property is an absolute right"


In saying this, Blackstone used it as a trope (figure of speech), meant for you to start to
think about whether property is or is not an absolute right.
Property is not absolute despotic dominion over things: Land has always carried
obligations with it. There is an obligation to share your property with others
D. Virtual Property
1. Trespass to chattels
Intel v. Hamidi: Unsolicited e-mail messages that do not harm to server or computer (not spam), do
not constitute trespass to chattel On six occasions, D sent e-mails criticizing the Intel's (P)
employment practices to numerous current employees on P's e-mail system. D breached no
computer security barriers in order to communicate with the P's employees. He offered to, and did,
remove from his mailing list any recipient who so wished. D's communications caused neither
physical damage nor functional disruption to the P's computers, nor did they deprive the company
of the use of its computers. The contents of the messages, however, caused discussion among
employees and managers.
2. Theories
a. Richard Epstein: If you treat everything like it is real property (including email, then it will
force the owners of the markets to compete with each other. They will be able to block out
all unsolicited mail, which will force the SPAMMERS to internalize their costs.
b. Lessig: Keep everything open. This encourages creativity. Also, ease of use will be
diminished if everything is real property
c. The Intel v. Hamidi court says that this is an issue for the legislature, not the courts, to
decide.
E. The Coase Theorem
In a perfect world with rational actors, the actors will come to the most economically efficient solution. This will
only happen with no transaction costs
1. In Jacque, if there had been no transaction costs, they would have been able to come to an
agreement before Steenberg cut across their land.
2. Transaction Costs: What is likely to interfere with bargains taking place
a. Bad information
b. Lack of trust/dislike
c. Large number parties involved
d. Holdouts
THE CAPTURE DOCTRINE
A. Capture of Wild Animals and Gas
1. Capture Doctrine: The acquisition of property rights simply by taking possession of something.
a. Unlimited right to acquire rights in a resource, as long as the resource can be obtained
without trespassing on the property of another
b. Problems: The capture doctrine encourages inefficiency, because people will over-invest in
equipment to extract the natural resource. Some courts have imposed a reasonable use
limit to counter-act this
2. Rationale for capture doctrine:

i.
ii.

Competition: Societys goal is to capture foxes; to foster competition resulting in more


capture, society should reward the one who actually captures or kills it; assumed that this
will bring more people in pursuit, resulting in more capture
Ease of administration: Hard to define pursuit; capture is certain; avoid unnecessary
litigation

3. Wild Animals
a. Overview: A landowner has the right to capture all wild animals on his property. You do
not retain property rights to an animal until you have seriously maimed or killed it. Also, a
person cannot maliciously interfere with your livelihood on your own land (hunting
animals). If a wild animal escapes, it is free game for anybody else, unless it is an animal
that tends to return home. There are also exceptions for animals that don't generally return
home (cattle, dogs, cats, etc.). There is very little consistency about when an animal is
property if it is exotic. The more exotic an animal is, the more likely the original owner is
to retain property rights. Sometimes, the court draws on custom to determine property
rights. In Pierson v. Post, the dissent claims that the court should have submitted it to
hunters to decide based on custom, and in Popov v. Hayashi, the court draws on custom to
determine that Hayashi had a claim to the ball. It only makes sense to use custom when
both parties belong to the same group.
b. General Rule: Pursuit does not equal ownership; need capture or mortal wounding
Pierson v. Post: Post (P.) had engaged a fox in hunt. The hunt was on uninhabited and
unpossessed grounds. After seeing P. in the hunt, Pierson (D.) killed the fox and carried it
off. Court holds for D. You must "occupy" it (either kill or seriously maim an animal to
gain possession). This is to prevent litigation. The court went against custom, which
recognizes that "hot pursuit" vests rights in an animal, which the dissent agrees with.
Dissent: The case should have been submitted to hunters, so they could resolve it on
custom.
c. Interfering with the capture of wild animals
i.
General Rule: One cannot engage in violent or malicious acts done to get in the
way of anothers occupation, profession, or way of getting livelihood, including if
that occupation attracts wild birds onto the property. However, one can interfere
with anothers occupation, etc, in the course of business, such as establishing a
competing business.
Keeble v. Hickeringill: Hickeringill (D.) scared off fowl for his own use that
Keeble (P.) was hunting D. was not on P. ground, but P. and ducks were. P. used the
fowl for his profit (to sell or eat). Court held for P. Every man should be able to
use his own land lawfully. D. restricted P. from doing so. If D. had interfered in an
appropriate way (luring the ducks to his pond with a better decoy), there would
have been no issue. Maliciousness played a large role in the decision.
d. Other animal issues
i.
Escaped wild animals
1. If captured wild animal escapes, captor losses possession and animal is
subject to capture by another, but
2. If captured animal has been domesticated and has habit of return (animus
revertendi) not available for capture by another
ii.

Ratione Soli

a.

iii.

Definition: The landowner already has possession of the animal by virtue


of possessing the land when the trespasser killed or captured the animal
i.
This treats something as if it were something else: treating the
ownership of the land as if it were ownership of the animals. The
owner of the land can sue to gain possession of the animal
(replevin) or its value (conversion).

The government and animals


1.
The state regulates the taking of animals. The state really owns all of the
wildlife, so it can require you to get a permit, or prohibit you from taking
it. This gives rise to the case: if you own the animals, then why don't you
pay me for the damage they cause to my property? The state says: we're
not an ordinary owner. It is more of an entrustment for the people. We can't
regulate the animals, but we can regulate you!

4. Gas
a. General Rule: Capture doctrine applies to gas as long as you do not trespass on someone
elses land to get it.
Anderson v. Beech Aircraft Corporation: Non-native gas that is placed is a natural
reservoir is bound by the capture doctrine. While the gas is in the reservoir, it is in its
natural environment, and thus anyone who extracts it can own it. When this gas it put in
the reservoir, and thus in its natural state (escaped), no one has title to it. Anderson (P1)
owns land that is bordered by Beech Aircraft (D.). A natural gas reservoir is under both
properties. D. puts natural gas into the reservoir. Avanti Petroleum (P2) has leased the right
to extract gas from Anderson's property, even though the gas is owned by D. The law of
capture applies to gas injected into subterranean reservoirs without a license. Holding
otherwise would invite excessive litigation between owners of adjacent properties with
mineral interests, and complex remedies would be required for such suits. Further, the
Kansas statutory scheme authorized only public utilities to inject gas, and non-public
utilities were statutorily required to seek approval before using a neighbors underground
spaces.
B. Guiding Principles
1. Reliance on Custom
a. Rule: Courts willing to account for customs when deciding who has rights to capture things
Popov v. Hayashi: At a baseball game, Popov (P.) tried to catch Bonds' homerun. The ball
entered P. glove, at which point the crowd jumped on him, and the ball came loose.
Hayashi (D.) picked up the ball and put it in his pocket. Hayashi would have won, based
on custom of a baseball game. But P. had a "prepossessory" interest in the ball that was
interfered with by malicious fans (he wasn't afforded the opportunity to catch the ball). So
when Hayashi got it, the ball had an encumbrance (cloud of ownership). This didn't amount
to title; however, so Hayashi had an equal claim.
2. Confusion Doctrine
a. When indistinguishable items of personal property belonging to different owners are mixed
together so that it is not possible to determine which belongs to whom, each will receive a
pro rata portion of the whole based on the amount he contributed.
Arnold v. Producers Fruit Company: Prune growers put their prunes in a bin, some
of which are rotten. They couldnt tell whose prunes are bad, so they divide the
whole thing evenly. Court: When practicalities of the situation require it, we can
treat undivided interests equally

Keron v. Cashman: Boys were playing with a sock with money in it, not knowing
what was inside. Only after it broke open did they each lay claim to it. Court:
Divide the ball. Intent plus action is necessary. No boy expressed intent to keep the
sock before he knew what was inside.

3. Anticommons
a. A kind of property in which everyone has a right to say no. No one can use it unless
everybody agrees to how it will be used. Or, a whole bunch of people have veto rights as to
how it will be used. The transaction costs are enormous in reaching an agreement.
i.
Often times it isn't used
ii.
Often times the use to which it is put is not the most efficient
C. Water Law
General Rule: Different rules apply to the different types of water. 1.) Ground water, 2.) Lakes and
Streams, 3.) Runoff water (enemy waters).
2. Ground Water
a. Prevailing Rule: Reasonable use doctrine
i.
A surface owner can pump water as he wishes unless done negligently or
maliciously; an overlying owner may pump only so much water as reasonably can
be used for beneficial uses on his overlying land. How much is reasonable may
depend in part on whether the water used will seep back down to recharge the
aquifer.
Cline v. American Aggregates Corporation: A landowner was not liable for use of water on
his own land that affected other landowners unless such use lowered the water table or
reduced pressure, exceeded the proprietor's reasonable share of the store of ground water,
or had a direct and substantial effect upon a watercourse or lake and unreasonably caused
harm to one entitled to the use of its water. The landowners (P) whose property
surrounded a sand and gravel quarry (D) filed an action against (D) alleging that Ds
operations adversely affected the quality of the water they obtained from their wells. Court
held that the law to be applied in the case should be the reasonable use doctrine:
b. Other doctrines
i.
Correlative Rights Doctrine: Landowners have coequal rights in a common water
basin and in times of shortage can only take reasonable shares; all overlying
owners are joint tenants of the underground basin and are limited to a reasonable
proportion of the annual supply for beneficial use on the overlying land.
ii.
Absolute Ownership Doctrine: A landowner has an unqualified right to pump all
the water, even if it deprives other landowners over the same underground basin of
water for their needs. This doctrine preceded the reasonable use doctrine
3. Lakes and Streams
a. Majority Rule: Riparian Rights Doctrine
i.
A large majority of courts give an owner of land adjacent to a stream or lake
riparian rights in the quantity, quality, and velocity of the water. The rights is
attached to the land and can never be transferred to a non-riparian owner; common
law gave owners of bordering streams the right to use water for certain purposes,
and this right was considered an incident to the ownership of land; water rights
cannot generally be sold for use off the riparian land or out of the watershed.
ii.

Natural Flow

1.

Riparian owners are entitled to the natural flow of water, without material
diminution in quantity or quality. Each owner may use the water for
natural wants (i.e. household uses) and even for artificial wants if the
natural flow is not diminished. But an owner cannot use the water on
nonriparian land and cannot deplete the quantity even though no one his
harmed. (Few states apply this doctrine to streams); owner need not show
any special injury resulting from the alteration of the flow.
2. A riparian owner can take water for domestic purposes only as water for
livestock and gardening. He is entitled to have the stream or lake at normal
levels

iii.

Reasonable Use
1.
Majority of courts follow the theory that a riparian owner is entitled to a
reasonable use of the water. If a downstream owner is not harmed, then he
has no cause of action. A lower riparian owner is entitled to receive as
much stream water as she can put to beneficial use, with due regard for the
upstream owners correlative rights.
2. Preferred use: Most states give preferred status to domestic use regardless
of the effect on the natural flow or the needs of the downstream owners.
An upstream owner can take water for commercial use if the taking does
not interfere with the domestic uses of all owners. Use for nonriparian
purposes is similarly permitted if no harm is suffered by riparians.

Harris v. Brooks: Owners of riparian land may make reasonable use of their
water if this use does not affect the water available to lower riparian owners; a
riparian owner is liable for making an unreasonable use of the water that causes
harm to another riparians reasonable use. Appellant Mashburn leases land from
riparian landowners. He conducts a commercial boating and fishing enterprise. He
and lessors filed a complaint to prevent appellees from pumping water from the
lake to irrigate a rice crop, alleging that appellees had reduced the water level to
the point of making it unsuitable for use. Appellees are lessees of Ector Johnson
who owns a large tract of land adjacent to the lake.

b. Minority Rule: Prior Appropriation Doctrine


i.
In ten western states, riparian water rights have been replaced by this doctrine,
which is rule of capture. Rights are determined by prior beneficial use. Once a
water right is established, it can be severed from the land and sold to another (i.e.,
water can be used on land distant from the water.)
ii.
Water rights are allocated on a first-in-time basis to those who make beneficial
uses of the water, without regard to their status as riparian landowners. If supply is
limited, people at bottom lose their right and people who were first retain their
rights. People here get specific amounts to fit their needs. You can sell your share
in this system. This system started in west during gold mining.
iii.
Example: April obtained a permit to appropriate a certain amount of water per day
for her mining activities. Subsequently, Jerry obtained a permit to use water from
the same stream for his mines. If the stream level falls too low to allow both parties
to take their full quotas, April will be preferred as the prior appropriator. Jerry may
take his full allotment only if it does not interfere with Aprils rights, regardless of
where their respective diversion points are located on the stream.

c. Public Rights
i.
A riparian owner may not infringe on public rights in public waters (i.e. navigable
waters, great lakes, and streams)
4. Runoff/Surface/Enemy Water
a. Rule: Capture doctrine applies. Surface water belongs to the person who captures it and
can be used in any manner as long as lower owners are not harmed
b. Expelling
i.
Frequently, a landowner will try to expel surface waters by changing the natural
drainage. Liability depends on the doctrine applied:
1. Common Enemy Doctrine
a. Under this theory, surface water is a common enemy and an owner
can expel it. Interference with neighbors must be reasonable;
unnecessary or disproportionate herm must be avoided; a
landowner may dam against surface waters, discharge them back
to upper lands, or deflect them elsewhere. Only the artificial
discharge or large quantities of water onto others lands is
prohibited.
2. Natural Servitude Doctrine/Reasonable Care Rule
a. Lower lands are servient to the natural flow of ground waters. An
owner cannot change the flow so as to injure owners above or
below his land. The modern trend is to allow reasonable changes
in the flow; you can divert water but you must take into account
neighbors well-being
ACQCUISITION BY FIND
A. Categories of lost property
1. Lost property
a. Definition: Property is lost when the owner involuntarily and unintentionally parts with its
possession
b. General Rule: The finder of lost property has a property right superior to all but the owner.
Rights of the finder are only inferior to the actual owner.
c. Exceptions to finders of lost property
i.
Trespassers will not gain rights to found property. The right goes to the locus in
quo
ii.
A servant who finds an article in course of his employment must surrender
possession to his master

Armory v. Delamirie: P, a chimney sweepers boy, found a jewel and carried to the Ds
goldsmith shop to fund out what it was. He delivered the stones to the Ds apprentice who,
under pretense of weighing it, took out the stones. The D offered three halfpence for the
stones. The P refused and asked for the item back. The D then gave him the socket without
the stones. Court: The finder has rights against all the world except for the true owner.

2. Mislaid Property
a. Definition: Property intentionally put in a certain place by the owner who then overlooks
or forgets where the property is.
b. General Rule: The owner of the locus in quo where mislaid property is found has a
possessory right superior to all but the owner. The finder has no possessory right.

i.

Rationale: Since the true owner "intentionally" left it in the locus in quo, he is
more likely to look there to retrieve it.
c. The possessor is a quasi-bailee
d. He has a duty to find owner
i.
Michigan statute:
1. Central registry
2. Requirement to try to contact true owner.
3. Part of the money goes to the state.
ii.
Iowa statute:
1. 12 months for the true owner to show up
2. The finder has a superficial duty to locate the owner: newspapers
Benjamin v. Lindner Aviation, Inc.: Benjamin, while working for Lindner, found $18,000
well hidden in an airplane. The compartment was rusted and hadn't been opened for years.
He originally kept half, but his supervisor made him turn it over to the police. The bank
owns the plane, which was leased to Lindner, whose employee was Benjamin. Court: the
bank keeps the money, because the true owner is most likely to look in plane to retrieve the
money.
McAvoy v. Medina: D is a barber and the P was a customer. P found a pocketbook on the
table at the shop. D asked where he found it. P said on the table. D took the pocketbook
and counted the money. P told the D to keep and to give it back to the P if the owner is not
found. The owner was not found. The P asked for the money three times from the D. Court:
The wallet stays with the barber.
e. Exception
i.
Hannah v. Peel: If the owner of property has never occupied his land, the finder of
unattached property on this land has a superior title against the land owner.:
Plaintiff (Hannah) finds a brooch (a pin) while stationed at the house of the
defendant (Peel). The house was not occupied by D. Thinking that the brooch was
of some value, P gave it to the police. The brooch was not claimed so, two years
later, it was given to D. D sold the brooch. There is no evidence that D knew of the
brooch before P found it. D offered Hannah a reward for the brooch but P refused,
maintaining that he had possession to it against all persons other than the owner,
who was unknown. D argued that since he possessed the house, he possessed the
brooch. Court awarded damages to P.
3. Abandoned Property
a. Definition: Property is abandoned when owner no longer wants to possess it; there must be
intent to give it up.
b. General Rule: The finder of abandoned property has a property right superior to all, even
the original owner.
Columbus America Discovery Group v. Atlantic Mutual Insurance: Common law of finds
should only be applied when property is abandoned or when there is no owner. Should an
owner appear at any time, the law of salvage applies. Abandonment is proven by an
affirmative act. In 1857, with more 1.2 million dollars worth of California gold, the S.S.
Central America sank in a hurricane. When the Central America sank, the gold had been
insured. Most of the claims were paid off by the insurance companies. Under past and
current law, once the insurers paid the claim for the treasure, the treasure became theirs.
Insurance company tried to salvage the treasure but it failed. Between 1857 and 1990, the
original insurance contracts were destroyed as is common practice. In 1988, the ColumbusAmerica Discovery Group found the ship under 8,000 ft of water and claimed possession
of the treasure.

4. Treasure Trove
a. Definition: Coins or currency concealed by the owner. To be a treasure trove, the property
must have been hidden for such a time that the owner is probably dead or undiscoverable
b. General Rule: The finder of a treasure trove has a property right superior to all but the
owner.
c. Two doctrines used for ship treasure
i.
Maritime law of salvage: the original owners retain their ownership interests in
such property, although the finder is entitled to a liberal salvage award.
1. Applied when property is not abandoned
2. Less secretive and competitive forms of conduct are encouraged because
of a salvage award is given to the finder.
ii.
Common law of finds: finder gets treasure
1. Applied when property is abandoned
2. This has usually been applied to maritime property that was never owned
by anybody.
3. Finder must demonstrate possession and intent to possess. As a result of
high degree of possession required, finders are secretive and hide
recoveries in fear that another will claim title.
Columbus America (see abandoned property)
5. Vocabulary
a. Trover: Old term for conversion: recovery of damages (78)
b. Conversion: A wrongful act that results in an appropriation of someone else's property
c. Detinue: Used if the property was taken unlawfully; recovery of lost item
d. Replevin: Used if the property was taken lawfully, but was not given back; recovery of lost
item
CONQUEST, ADVERSE POSSESSION, PRESCRIPTION
A. Definition
i.
Method of acquiring title to real property by possession for a statutory period under certain
conditions
B. Elements of adverse possession
1. Actual and exclusive possession
2. Adverse or "hostile" possession
3. Claim of right
4. Open and notorious
5. Continuous
6. For the statutory period
** Some states (CA) add that you must pay taxes on the land. This makes it more difficult to claim
C. Rationale for adverse possession
1. Purpose:
a. Protects title
b. Bars state claims
c. Rewards productive use of land
d. Gives effect to expectations (a basic policy of property law)
2. Oliver Wendell Holmes: After possessing land, it takes root in your being, and you can't be torn
away from it without resenting the person who tore you away. It is a deep instinct of man. So if a

person sees you using his land, he better do something about it before you become too attached,
otherwise it is yours!
3. Henry Ballantine: The purpose of adverse possession is to quiet titles. This can help solve boundary
line disputes, etc.
D. Interests not affected by AP
1. Interests Not Affected by Adverse Possession
a. Future Interest
i.
AP does not run against the owner of a future interest if entry is made when a life
tenant has possession. If entry has been made before the owner created the
remainder, the statute would begin to run against the owner and his successor in
interest (the owner of the remainder)
b. Reversionary Interest
i. Rule: A prescriptive easement can not ripen against a reversionary interest (i.e.
landlord)
ii. Rationale:
1. Reversionary interests are unable to bring a cause of action to prevent
people from gaining easements on their property (because, though they
own they own the property, they do not have possession). An adverse
possessor or prescriptive user cannot acquire more than the interest of the
person presently entitled possession of the property (this applies to
easements and covenants too)
Dieterich International Truck Sales, Inc. v. J.S. & J Services Inc: For 22 years (since 1967),
P Truck repair and sales company used a strip of Ds property as primary access to its
service bays, as the space between Ps bays and the property line provided insufficient
space for tractors and large trucks to turn into the service bays and park in them. For other
reasons, barriers had to be erected that would block the easement claimed by P. P truck
company filed an action to quiet title to an easement for access across the adjoining
property of defendants, landlord and tenant. Bus company has 49 year lease to landowner.
Easement is granted only against lessee, not against landowner.
c. Governmental Land
i. Rule: With a few exceptions, public policy exempts government land from adverse
possession
Kiowa Creek Land & Title Co. v. Nazarian: A statute of limitations does not begin to take
effect on prescriptive easements when the title is owned by the government; No use of land
while it is owned by the state can be support form a claim of an easement by prescription,
either against a state or against anyone who acquires title from the state.: In 1994, Kiowa
filed a declaratory judgment action to obtain a declaration that it held an easement of
access across a section of land that was formerly school land, but which had been
purchased by the co-trustees of the 12/20 Trust, the Nazarians. Nazarians purchased the
land from Nebraska Board of Educational Lands by a quitclaim deed in 1990. The
Nazarians had rented the school land since 1982 before they purchased it. Kiowa owned
land west of the Nazarians land. Kiowa apparently frequently crossed the line into the
neighboring property to use it in some way.
d. Notes

10

i.
ii.
iii.

Even if statute of limitations has passed, the original owner can sue to eject a
possessor by arguing that possessor did not fulfill a particular element of adverse
possession.
Adverse possession is usually an affirmative defense. Adverse possessor can also
sue for quiet title to gain title. They would claim title by adverse possession.
Before the statute of limitations runs, the adverse possessor has all the rights of the
possessor, but he has no interest in the property valid against the true owner.

E. Elements of AP
1. Actual and exclusive possession
a. This requirement triggers the cause of action. There must be actual entry; if entry is on part
of the land, the possessor is in constructive adverse possession.
b. Rule: All that is required for actual and exclusive possession is for the adverse possessor to
use the property as a reasonable owner would use the property
Ewing v. Burnet: Actual possession has to be more than just a trespass, but it does not
require living on the land or building structures. Requires suitable and reasonable usage.:
Ewing recovered possession of a vacant lot. Burnet (AP) claimed title by adverse
possession. Burnet used the property as a gravel lot, leased it, excluded others, and brought
actions for trespass against those who entered the land. He did not live there. Burnet
claimed property after P, but paid taxes on it from 1810 to 1834. P knew of AP's usage but
made no effort to enter property before his death on 1824. Court held for AP
i.
Color of Title
1. Definition: If your claim is based on a deed or other written document that
incorrectly confers title upon you.
2. This affects the statutory period
a. The statutory period is often shorter
b. AP is construed as having all property described in the deed, so
long as the deed covers a single parcel. If the deed covers more
than one lot, the person only gets up to the boundary of the actual
land that they are adversely possessing
3. Ewing had color of title.

Nome 2000 v. Fagerstrom: One can receive title by AP without significant physical
improvements or substantial activity. The land only must be used as an average owner
of similar property would use it. P owned land. AP began using the property. AP made
continual seasonal use of the property. On North parcel, AP made permanent structures.
On Southern part, P erected stakes, and AP only walked through on trails. Court held that
North part was AP, but south part did not because it wasn't open and notorious.

2. Adverse or hostile possession


a. Possession must not be by consent and not in subordination to the rights of the true owner.
Must be act of dominion or use that is inconsistent with absolute right of owner.
3. Claim of right
a. Objective standard
i.
In some states, this means no more than that the possessor must be acting as an
owner of the property, rather than as a transient or trespasser might act (state of
mind of the possessor is immaterial).
b. Good-faith standard
i. Person believes that they own the property

11

ii. Other states require that the possessor have a good-faith belief that he owns the
property.
c. Bad-faith standard/aggressive trespasser standard
i. Other states require that the possessor intentionally act to acquire property he does
not own
ii. Person knows that they do not own the property
iii. Maine rule: if you use land thinking it is yours (good faith), you do not fit hostile
possession requirement (in this rule, the good-faith user does not get possession
while the bad faith user does get possession)

Preble v. Maine: Held that a mistaken belief as to where a boundary was could not qualify
as adverse possession. No good-faith adverse possession. This encouraged people to
commit perjury, claiming that they were "aggressive owners" when they really had no idea
that they were "adversely possessing" it because they that that it was theirs all along.

4. Open and notorious


a. The possessor must occupy the property in an open, notorious, and visible manner so as to
give reasonable notice to the owner that the possessor is claiming dominion adverse to the
owners rights.
b. General Rule: Open and notorious use is deemed to place the true owner on constructive
notice, and it is immaterial whether the true owner learns of that use or not. For adverse
possession to take place, the actual owner does not have to have knowledge of its interest.

Lawrence v. Town of Concord: Subjective intent of the adverse possessor should not affect
outcome of the adverse possessors claim. Mary Burke gives life estate to Helen, the
remainder to Harriet, and if Harriet has no kids, the property to the town. Joe is Harriet's
husband, and he continues to use the property until 1996 after her death in 1965. Title went
to town, but possession was with Joe. The town sues him, claiming that his possession
wasn't open and notorious. Court: Joe's possession of property was open and notorious,
because his neighbor's felt like he owned the property. The onus was on the town to figure
out if it had title to the property.

5. Continuous Usage
a. Possession must be maintained throughout the statutory period, which is the period set by
the applicable statute of limitations.
b. General Rule: Seasonal usage is sufficient to prove continuous usage as long as the adverse
possessor is using the property as a reasonable owner would.
c. Nome 2000 v. Fagerstrom
6. For the statutory period
a. Title passes when the SOL has run
b. Chattels (art)
i. Discovery Rule
1. Definition: The statute of limitations begins when the original owner
discovers where the object was or, in the exercise of due diligence, when
the owner should have reasonably discovered where the object was.
Autocephalous Greek-Orthodox Church v. Goldberg: Goldberg (D) bought
mosaics belonging to Cypriot Church (P) that were stolen in war. D.

12

bought them through intermediaries, from a person in Germany. The court


has to decide 1) What jurisdiction to apply? (Indiana), 2) whether the SOL
has run on claims (no), and 3) whether D. acted in good-faith when buying
the mosaics (no). Does SOL begin to run when the chattel is stolen or
when the true owner finds it where it is (discovery rule)? The court holds
in favor of the P., placing the interests of the original owner of cultural art
over the would be purchaser. Dissent discusses not applying discovery
rule, but letting the SOL run, and only letting someone adversely possess it
if they are in good-faith.
i.

Demand and Refusal Rule


1. Definition: Statute of limitations starts when owner discovers possession
and makes demand made of possessor by true owner.
2. No due diligence requirement
Solomon Guggenheim v. Lubell: D. bought a painting from a
reputable art store in NYC, displaying it in her home for 20 years.
This painting had been stolen from the Guggenheim Museum (P.).
Does the museum's failure to use due diligence in finding the
painting bar it from extending the SOL? The court holds in favor
of the museum (P). It reasoned that imposing due diligence on the
owner of a stolen painting would make NYC a haven for art
thieves. The discovery rule still applies.

i.

Where P has been prevented from claiming property due to inequitable


circumstances
1. P can sue after SOL if they have been prevented from doing so due to
inequitable circumstances.
2. SOL will not bar a claim if the P, despite diligent efforts, did not discover
the injury until after the limitations period had expired.
Rosner v. United States A group of Hungarian Jews (P), during the
Holocaust, were forced to put their belongings on a train and send them to
Germany This was called the Hungarian Gold Train. The United States (D)
intercepted this train, and stored the valuables in a warehouse in Salzburg.
The U.S. then sold many of the items, and the rest were looted. Does SOL
allow the Jews to bring suit (it was over 50 years later), and whether an
implied in fact bailment existed between the Jews and the U.S. The court
held in favor of the Jews (P). The court accepted their equitable tolling
claim. The court says that they were "induced and tricked" by the govt.
Court also accepted their implied in fact contract of bailment claim,
because it can be inferred from the actions of both parties. The govt.
accepted their property, never claimed to be the owner, planned on
returning it when it took possession, guarded the property, and indicated
that products would be returned if identifiable.

i.

Protection of true owner v. buyer when dealing with chattels and land
1. With chattels, we make it easier for the true owner because chattels are
more easily moveable
2. We protect the buyer for land, because it will ruin the market if people
can't be confident in their purchases
3. We don't protect the buyer for ordinary chattels because it's less likely the
true owner will show up for chattels worth less money

13

a. We protect purchasers of cars, and things in commercial


transactions (lots of money, and stuff that's important to keep the
economy going)
i.

Laches
1. Equitable doctrine. It is a defense that's available to person who has
painting in possession. If she can show that the delay in the museum in
pursuing the painting, has prejudiced her, then she may be able to keep it.
Sort of like a SOL, but is more flexible and doesn't have a time period.

c. Tacking
i.
When successive adverse possessors combine, or "tack," respective periods as
long as they are in privity
1. The property is voluntarily sold, given, or bequeathed to subsequent
possessor.
d. Tolling
i.
General Definition: The time during which the following conditions are met is not
counted in the time period; or that the period, which has otherwise expired, is
extended beyond a certain event.
b. Tolling for disability
i.
Provision for protecting the property rights of an owner who is under a
disability when an adverse possessor takes possession of his or her land.
Accounts for people of "unsound mind" or "minors"
ii.
Two methods
1. Once they are of sound mind (cured), they get ten years from that
point. If at after ten years the normal statutory period would not
have ripened, then it just extends until the end of the statutory
period, or
2. The statutory period begins (usually 21 years) the day that the
disability is removed
iii.
Disabilities cannot be tacked together
iv.
The disability has to be present at the time of the AP.
F. The Public Trust Doctrine
1. Doctrine of trust with the public that gives them easement rights
Public Use of Coastal Beaches: New Hampshire legislature submitted a law to the NH Supreme
Court asking whether or not they could acquire an prescriptive easement to the dry sand area of
privately owned property without paying for it. The issue is whether the taking of private land by
the government is a violation of the 5th amendment. The court holds that it is.
For the government to obtain an easement to dry sand land owned by a private individual for public usage,
the government must pay compensation to the individual owners.
2. Other Beach Doctrines
a. Implied Dedication Doctrine: If a landowner has not done anything about public use of a
beach for the statutory period, courts will say that the landowner agreed to give this to the
public. (This is evidence of an implied grant.)Idaho p. 189
b. Customary Rights Doctrine (i.e. Oregon): all dry sand areas of states oceans are subject to
customary rights for public use

14

c. New Jersey Doctrine: public trust may extend to dry sand beaches and reasonably
necessary for recreational purposes, rejecting that trust doctrine is fixed.
PROPERTY RIGHTS IN CREATIVE WORKS AND HUMAN TISSUE
A. Intellectual Property
1. Property Rights in Personas and the Right of Publicity
a. The right of every person to control commercial use of his/her identity. Protects a persons
interest in the commercial exploitation of her name, likeness, and identity.
i.
The right of publicity grew out of right of privacy. But now, they are completely
separate legal rights.
b. Distinctions with the right of privacy
i.
Right of Publicity
1. The right of every person to control the commercial use of his or her
identity.
2. Protection given to people against other people using their identity to sell
products
3. You have an interest in your own commercially exploitable value
4. Really only applicable to famous people
ii.

Right of Privacy
1.
Covers some uses that cannot be considered commercial
2.
People digging up private facts about private things
3.
Valuable to people who are not famous too

c. Commercial speech is the only speech affected by the right of publicity


d. Right of Publicity can . . .
i.
Prevent use of identity for advertising
e. Right of Publicity cannot . . .
i.
Prevent news reporting
ii.
Prevent unauthorized biography
iii.
Prevent parody
f.

Right of publicity in statutes v. common law


i.
Statute protect against someone knowingly using name, voice, signature, or
likeness
Vanna White: mechanical figure was not a likeness under statute
ii.

Common law covers identity, rather than just name, voice, signature, or likeness

Bette Midler case: used someone to imitate her voice

Race car: use driver's car to evoke his image

Here's Johnny portable toilets: using the expression violated common


law

g. Right of publicity after death


i.
The right of publicity, if exploited during lifetime, is inherited after death

15

ii.

When people invest in their name and likeness, it creates a capital asset, which
should be transferable like any other intangible asset in which they invest time and
money
Lugosi v. Universal Pictures: The court held that his likeness wasnt inheritable, because he
chose not to exploit it during his lifetime

h. Appropriating likeness has 4 elements


i.
Ds use of Ps identity
ii.
Appropriation of Ps likeness to Ds advantage
iii.
Lack of consent
iv.
Resulting injury

Wendt v. Host International Inc.: Host (D) put robotic figures of actors Wendt (P1) and
Ratzenberger (P2) in a bar setting at airports. This was supposed to remind patrons of the
setting of Cheers. D. had gained the rights to Cheers from Paramount, the company that
produced the show. D. named these figures "hank" and "bob" to avoid lawsuit. Is the
exploitation of the Ps likenesses a matter of law or fact? It is a matter of fact. The jury
must decide whether D. is exploiting the likeness of the characters, or of the Ps
themselves. It is impossible to differentiate identities from the characters. This places the
constitution and the copyright laws on a collision course. We should put more weight on
what the copyright law protects, rather than carving out this piece for personal protection
for actors. The dissent is worried about too much litigation, and that the derivative rights
will never be able to be used, hindering creativity.
i. Policy concern: If actors continually receive rights, then it hinders innovation and
creativity of show producers. It then becomes more expensive and difficult to
negotiate with actors.

Zacchini v. Scripps-Howard Broadcasting Co.: A whole performance by an entertainer


taped and aired by a news station violates the property rights of the entertainer and thus
entitles the entertainer to damages. Such broadcasts are not protected by the 1st and 14th
amendments to the Constitution. Zachinni (P) was a human cannonball, which his father
invented, and was performed only by his family. Television station (D) decided to air his
entire 15 second stunt on television, against his will. The Supreme Court explained that
the Ohio Supreme Court interpreted the 1st and 14th amendments too broadly. Although
they protect newscasts (freedom of the press), they do not protect a news organization
televising someones entire stunt, which is his livelihood. There is a difference between
commentary coming from you, and a film clip that shows the whole performance. P. was
concerned about the future value of his performance.

2. Property Rights in Writings, Recordings, and Product Designs


a. Copyright
i.
Definition: A property right in an original work of authorship (such as a literary,
musical, artistic, photographic, or film work) fixed in a tangible medium of
expression
ii.

It doesnt cover ideas, but the expression of those ideas.

iii.

Governed by the Copyright Act of 1976


1.
Literary works
2.
Musical works
3.
Dramatic works

16

4.
5.
6.
7.
8.

Pantomimes and choreographic works


Pictorial, graphic, and sculptural works
Motion pictures and other audiovisual works
Sound recordings
Architectural works

iv.

Goals:
1.
Leads to more creativity
2.
Discourages censorship
3.
Promotes learning
a.
Limited monopoly to encourage them to engage in the drudgery
of something new
4.
Protects rights of the author

v.

Protection
1.
Original works get the most protection.
2.
Derivative works get less protection
3.
Facts get the least protection

vi.

History of Copyright
1.
Prior to the Statute of Anne: Natural law copyright: if you create
something you permanently have control over it: you're the owner of the
work. The book sellers had a monopoly
2.
After Statute of Anne: 28 years maximum
3.
Now, it's life + 70 years

Sonny Bono: Old movies that were about to pass into public
domain. Motion picture industry got copyrights extended for 20
years, and had the term changed for life + 70 years

Eldred v. Ashcroft: Was putting copyrighted works online. Was


going to give the public free access to all kinds of works. This
extension is too much. This lost by the S.C.

vii.

Copyright laws and the First Amendment


1.
The Idea/Expression Dichotomy
a.
Copyright cannot prevent a idea, only a expression of an idea.
b.
Copyright assures the right to original expression, but allows
others to build upon these ideas
c.
Ideas are not protected by copyrights; Expressions are

viii.

Benefits of registering a copyright


1.
It is necessary in order to bring an action for infringement
2.
It makes a public record of the copyright/ certificate of registration
3.
You can get notification from the Customs Service of imports that may
violate your copyright
4.
Its cheaper to enforce a copyright than a patent, because you can do it
through the US, rather than an international body

ix.

Restrictions on copyright
1.
You cannot copyright functional items. This is to prevent the
monopolization through copyright of everyday items such as spoons,
toasters, lamps, etc.

17

x.

Fair Use
1.
Fair use is use for purposes of criticism or comment. This is not a
copyright infringement.
2. Fair Use Statute: The fair use of a copyrighted work . . . for purposes
such as criticism, comment, news reporting, teaching (including multiple
copies for classroom use), scholarship, or research, is not an infringement
of copyright . . .. In determining whether the use made of a work in any
particular case is a fair use, the four factors to be considered are:
a. The purpose and character of use, including whether such use is of
a commercial nature or is for nonprofit educational purposes
a. Does the work in question supersede the object of original
creation, or is it a transformative work, with a further
purpose or different character.
b. The nature of the copyrighted work
a. Given little weight because parodies have to copy works
c. The amount and substantiality of the portion used in relation to the
copyrighted work as a whole
a. This is a difficult issue for parodies because they have
made the work they are imitating recognizable
b. Supreme Court stated that it does not require authors to
use bare minimum to conjure up work.
d. The effect of the use upon the potential market for or value of the
copyrighted work
3. Useful Article Provision of the Fair Use Statute
a. Design of a useful article shall be considered a pictorial,
graphic, or sculptural work only if to the extent that such features
can be identified separately from and are capable of existing
independently of the utilitarian aspects of the article.
b. Provision exists so common items (i.e. spoons) cannot be
copyrighted. This prevents a monopoly.
c. Separability Test
i.
Rule: For a useful item to be copyrightable it must
deemed that the object has additional creative work
beyond its basic shape. The test for creativity is whether
the article has pictorial, graphic, or sculptural features that
are separable from its utilitarian function. These features
must be able to exist independently from the articles
function. This is the separability test.

Suntrust Bank v. Houghton Mifflin Company: Parody is not copyright


infringement because it is included in the fair-use affirmative defense for
copyright infringement. Author (D) wrote a parody, called The Wind Done
Gone of Gone With the Wind (P). The book was strikingly similar,
including characters, events, and even some quotes. Was the preliminary
injunction granted to P. properly granted against an infringer who, relying
largely on the doctrine of fair use, made use of anothers copyright for
comment and criticism? No. The injunction is lifted. Because of the
transformative nature of the work, and because it is a form of criticism,

18

it is protected. Under the fair use doctrine, it is protected. Also, this will
have very little effect on market value.

xi.

Oddzon Products, Inc. v. Oman: OddzOn (P) filed an application to


copyright the Koosh Ball, a sphere formed of many hundreds of floppy,
wiggly, elastomeric spaghetti-like filaments radiating in three
dimensions, arguing it was a sculptural work. Copyright office (D)
rejected its application because Koosh Ball is a familiar design (not
copyrightable) and because an objects tactility is a functional part of the
work (not copyrightable). Did the Copyright Office abuse its discretion in
rejecting OddzOns application to copyright the Koosh Ball? No. An
objects shape is not the sin qua non of the copyright determination. The
test is whether a work contains certain minimal levels of creativity and
originality. Problem is that the Koosh balls shape approximates a sphere
and that there is not enough additional creative work beyond the objects
basic shape to warrant a copyright. Kooshs tactility does not warrant
copyright. The law prohibits protecting articles of utility.

Factual Compilations
1.
Copyright Acts of 1909 and 1976 both confer copyright protection to
compilations of facts. If selection and arrangement of facts are original,
then these elements of the work are eligible for copyright protection. But
the facts themselves do not become original through association.
2.
Copyright Act of 1976 defines a copyrightable compilation to have three
distinct elements:
a.
the collection and assembly of preexisting materials, facts, or data
b.
the selection, coordination, or arrangement of those materials
c.
the creation, by virtue of the particular selection, coordination, or
arrangement, of an original work of authorship

Feist Publications, Inc. v. Rural Telephone Service Co.: The raw data in a
phone book does not satisfy the requisite creativity/originality
requirement, thus the creator of the phonebook cannot recover damages
for copyright infringement against others who copy the material. A
phonebook is merely a list of facts. RTS publishes annually updated
telephone directory. Feist offered to pay RTS for the right to use its white
pages listings. RTS refused. Feist used RTS listings without their consent.
RTS detected the copying. RTS sued Feist for copyright infringement in
the district court for the district of Kansas. Does the copyright in RTS
directory protect the names, towns, and telephone numbers copied by
Feist? No. Feists use of RTS white page listings cannot constitute
infringement because RTSs white pages lack sufficient originality to be
copyrightable.

xii.

Misappropriation and Common-Law Unfair Trade Doctrines


1.
Even when copyright protections are not in place, a plaintiff can recover
damages if there was a misappropriation or unfair competition.
International News Service v. Associated Press: One of the agencies took
the news stories of the other and sold it to newspapers.

xiii.

Cyperspace & Domain Names

19

1.

xix.

Three elements must be met for a property right to exist:


i.
Interest capable of precise definition
ii.
It must be capable of exclusive possession or control
iii.
Putative (i.e. believed; supposed) owner must have established a
legitimate
Kremen v. Cohen: Domain names, though intangible, are property and
thus subject to conversion. California does not follow the strict
requirement that an intangible be merged into a document, and a domain
name is therefore protected by California conversion law. Sex.com was
stolen from P. The criminal wrote fake letters to Network Solutions, (D)
the government appointed host of the site. The court held against the
stealer, and froze his accounts, but he fled the country, leaving the P.
helpless. The P. then sued the D. for mishandling his domain name,
seeking damages for conversion. Does Kremen have a property right in an
intangible domain name? Yes. The court says that CA does not distinguish
between tangible and intangible property. He discusses the merger
requirement, which says that something must be merged in a document to
be property. Kozinski says that CA only has a very minimal merger
requirement, and that the fixed hard drive of Network Solutions is equally
as fixed as a document. He sites Olchewski v. Hudson (laundry route not
written down, but still property), Palm Springs v. Kieberk (Information on
note cards is property), and A&M Records v. Heilman (music recordings
are property). After this, he applies the standard property test, which a
domain name passes: 1) Definition, 2) Capable of exclusion, 3) Owner has
excluded.

Lanham Act
i.
Prevents people from using domain names that are confusing . . . (p. 248).

b. Trademarks and Tradedress


i.
Trademark
1. Definition: A word, phrase, symbol or design, or a combination of words,
phrases, symbols or designs, that identifies and distinguishes the source of
the goods of one party from those of others
2. Elements
a. The main purpose is to guarantee a products genuineness
b. It distinguishes the source, not the product
c. There is no time limit, but it must be in continuous use every 10
years
d. Registration is not needed to get one
e. It is protected by both state and federal law
f. To get a trademark, the product must be:
i.
Distinctive rather than merely descriptive
ii.
Affixed to a product that is actually sold in the
marketplace
iii.
Registered with the US Patent and Trademark Office
3. Benefits of registration of a trademark
a. Constructive notice to the public of the registrants claim of
ownership

20

b. Legal presumption of the registrants ownership of the mark, and


exclusive right to use it
c. Ability to bring an action concerning the mark in federal court
d. Use of the US registration to obtain registration in foreign
countries
e. Get protection from the customs service
4. Why we have trademarks
a. Encourage commerce and encouraging people to compete.
b. Promotes company that produces good products because other
people cannot knock off their products
c. Reward investments of companies and prevent others from
swooping in.
d. Trademark protection is designed to protect competition
5. What prohibits a feature from being trademarked
a. Functionality doctrine: Doctrine that forbids the use of a products
feature as a trademark where doing so will put a competitor at a
significant disadvantage because the feature is essential to the use
or purpose of the article or affects its cost or quality. (this doctrine
aims to prevent monopolies and encourage competition)

Qualitex Co. v. Jacobson Products Co.: A color, as long it is not


instrumental to the objects function, can be registered as a
trademark under the Trademark Act of 1946 (Lanham Act). P. was
owner of a dry cleaning pad that was distinguishable by its green
color. D. created a pad with a very similar color. The trademark
office granted registration, and sued D. for use of the color. Does
the Trademark Act of 1946 permit the registration of a trademark
that consists, purely and simply, of a color? Yes. If the trademark
act allows a descriptive word with secondary meaning, why not a
color? The purpose of the trademark is to establish the source of
the product, and to minimize the customers shopping decisions..

Traffix Devices, Inc. v. Marketing Displays, Inc.: A feature that


has functional usage cannot be trademarked, even if the feature
has an expired patent. Trade dress protection does not grow out of
a previously patented feature that was part of a utility feature.
(Burden is on patent holder to prove that previously patented
feature is not functional)
MDI (P) built a traffic dual-spring system sign to prevent signs form
blowing over. It obtained two utility patents. Traffix Devices (D) almost
copied the design (it put the springs in a different place on the sign), and
used a very similar name: Windbuster instead of Windmaster. MDI
sued for trademark infringement (Confusing the names) and tradedress
(the look of the product was too similar). Traffix countered with an
antitrust claim (MDI was cornering the market). Does an expired patent
preclude remedy for trade dress infringement? Yes. The dual spring
design, for which MDI received its patent, is a functional aspect of the
product. Trademark does not protect functional aspects because then
people would be able to trademark ordinary things. Also, trademarks can

21

be renewed forever, so this would stifle creativity and support monopolies.


In order to get tradedress protection, they would have to prove that the
springs were ornamental or incidental.
6. Unprotectable Marks
a. Genericide: When a mark becomes so identified in the public mind
with a product that it becomes a generic label, it loses trademark
protection.
b. Descriptive Marks: Bank of America
c. Scandalous Marks: If they are immoral, deceptive, or scandalous
7. Trademark dilution
a. Prevents confusion among consumers as to the source of a product
or service, and prohibits use of similar marks only when confusion
is likely to occur. This extends to famous trademarks
Moseley v. Secret Catalogue: Victorias Secret lost a claim against
Victors Little Secret, an adult novelty store, because it was not
likely that it would actually have injurious economic consequences
for Victorias Secret.
c. Patents
i.
Three Types of Patents
1. Utility Patents
a. Useful machine, manufacture, process, or composition of matter
b. 20 years
2. Design Patents
a. Ornamental design for an item, where it is only the appearance
that is protected and not the actual item
b. 14 years
3. Plant Patents
a. New asexually reproducing plant
b. 20 years
4. Eligibility: Must be novel, useful, and nonobvious
ii.

Patent Statute: Whoever invents or discovers any new and useful process,
machine, manufacture, or composition of matter, or any new and useful
improvement thereof, may obtain a patent therefore, subject to the conditions and
requirements of this title.
Diamond v. Chakrabarty: Chakrabarty (P) created a genetically engineered
bacterium that could break down four oil components. This was as opposed to
having to use four separate naturally occurring bacteria to break down the four
separate components of oil. His design would foster the efficient breaking-down of
oil spills into components that aquatic life can eat. He filed three patent claims. 1)
Process claims for method of producing the bacteria, 2) Claims for an inoculum
comprised of a carrier material floating on water to deliver the bacteria, 3) Claim
for the bacteria itself. The patent examiner granted patents on 1 and 2, but not on 3,
claiming that patent statutes were not designed to cover laboratory created

22

organisms. Is a live, human made micro-organism patentable subject matter? Yes.


This was not occurring in nature. It's a product of his ingenuity. This combination
is patentable as a composition. The court interpreted the statute covering patents
broadly, holding that you can patent things that aren't found in nature.
3. Property rights in human tissue
a. Rule: In CA, a doctor has a duty to disclose the extent of his research and economic
interests in a patients body parts. Research interests are included in informed consent.
However, human body parts are not property such that they may be converted.
Moore v. Regents of the University of California:
Facts: Moore (P) underwent treatment for hairy cell leukemia at UCLA Medical Center. Doctors
(D) removed his spleen with his consent, but then used the spleen for research purposes, and
collected biological materials from which they produced a marketable cell line all without Moores
consent. The Regents, Moores doctor, and researcher patented the cell line and planned to split the
proceeds of commercial development. Moore sued physician and UCal for failing to disclose
preexisting research and for his economic interest in the cells.
Issue: Does Moores complaint state a cause of action?
Holding: Yes and no. The complaint states a cause of action for breach of the physicians
disclosure obligations, but not for conversion
Reasoning: (Judge Panelli)
Breach of Fiduciary Duty: Moore stated a cause of action against Golde (Doctor)
in alleging that he breached his fiduciary duty by failing to disclose the extent of
his research and economic interest in Moores cells before obtaining consent to the
medical procedures by which the cells were extracted.
Conversion: Extending tort theory of conversion to cover Moores claim is not
advisable
Conversion is a tort governed by strict liability that protects against
interference with possessory and ownership interests in personal property.
There is no direct authority for importing law of conversion to this case
Policy counsels against such an extension of conversion to cover human
cells.
Do not want to provide disincentive for socially useful research.
Do not want to limit product development of medicine or research
by creating uncertainty about legal title to biological materials.
Rather than extend conversion, it is more appropriate to protect existing
disclosure obligations through liability
The tort of conversion is not necessary to protect patients rights.
Problems in this area are better suited to legislative resolution
Concurrence: (Judge Arabian)
Legislature must deliberate moral issues raised: What effect on human dignity will
be created if there is a marketplace of human body parts, bidding for such
materials, and exposures to researchers to potentially limitless tort liability?
A licensing scheme establishing a fixed rate of profit sharing between researcher
and subject has already been suggested.
Creating a tort of conversion is not the answer to addressing Ds greed.
Concurring and Dissenting (Judge Broussard)
There is common law precedent to support Moores conversion claim. A patient
has a right to determine, before a body part is removed, the use to which the part
will be put after removal.

23

Breach of fiduciary duty will not always exist in other factual settings. In these
cases, patients will have no way to seek redress without a claim under tort theory
of conversion.
E.g., if patient donated cells to a research institution, then another research
institution stole those cells to do research there is no breach of fiduciary
duty.
Under majority opinion, patient would have no claim under
conversion.
Majoritys holding just prevents patients from getting any profit from cells value
while permitting defendants to exploit their full economic value.
Dissent (Judge Mosk)
Property is often said to refer to a bundle of rights that may be exercised with
respect to an object. But the same bundle does not attach to all forms of property.
Even though the law limits or forbids the exercise of certain rights over certain
forms of property (for policy reasons), these limits do not extinguish the right
itself.
When Moores cells were excised, he had the right to do with his own tissue
whatever the defendants did with it. He could have contracted with researchers
and pharmaceutical companies to develop and exploit the vast commercial
potential of his tissue and its products.
b. Rule: The fact that next of kin have the exclusive right to possess the bodies of their
deceased family members creates a property interest in the body, the deprivation of which
would be a violation under the 14th Amendment of the Constitution.

Newman v. Sathyavaglswarin: Deceased childrens corneas were removed by the Los


Angeles County Coroners Office (D) without notice or consent to the parents (P). Does
the exclusive right of family to possess the bodies of their deceased family members create
a property interest, the deprivation of which must be accorded due process of law under the
14th Amendment? Yes. The common law grants rights to possess, control, dispose, and
prevent the violation of the corneas. California's adoption of the UAGA recognizes the
right to transfer body parts for research, and to refuse to allow the transfer. This carried
with it the right to exclude others, which is the most important strand of property rights.
The statute protecting coroners was unconstitutional, because it deprived the property
interest without providing safeguards such as notification and consent.

c. Accession Doctrine: If you take property and later add value to it, the person who added
the value in good faith could keep the profits and benefits but pay the original owner the
value of what was taken at the time of possession (i.e. person takes a canvas from another
an paints a painting. Person who painted the painting could keep it all and just pay the
original canvas owner the value of the canvas)

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ESTATES IN LAND
I.
IN GENERAL
These are possessory interests in land. They may be presently possessory (present estates), or they may become
possessory in the future (future interests). They may be freeholds, which give possession under legal title or right
to hold (fees or life estates), or they may be nonfreeholds, which give mere possession (leases). Estates in land are
distinguished from nonpossessory estates (easements, profits, covenants, and servitudes).
II.

Estate Planning Considerations


a.
Keep it in the family
i.
Per stirpes: distribute property among highest level generation who are still alive
ii.
Per capita: every descendent gets an equal share
b.
Withhold it until people are mature enough to use it properly
c.
Don't distribute to dead people

III.
PRESENT POSSESSORY ESTATES
An Estate is an interest in land, measured by some period of time, that is or may become possessory
A. Overview: Types of estates (from longest to shortest in duration)
1. Freehold estates (holder has seisen)
i.
Fee simple: Estate that has potential of enduring forever; resembles absolute ownership and holder
of fee simple commonly called owner of the land
ii.
Fee tail: Estate that has potential of enduring forever, but will necessarily cease if and when the
first fee tail tenant has no lineal descendants to succeed him in possession
iii.
Life estate: Estate that will necessarily end at death of a person
2. Non-freehold estate (holder only has possession, no seisen)
i.
Leasehold estate: Estate that endures (1) for any fixed calendar period, or (2) from period to
period until landlord and tenant gives notice to terminate at the end of a period, or (3) so long as
both landlord and tenant desire
B. The Fee Simple
1. Categories of fee simple
i.
Fee simple absolute
ii.
Fee simple defeasible
1. Fee simple determinable
2. Fee simple subject to condition subsequent
2. Fee Simple Absolute
Fee simple estate of infinite duration; absolute ownership of estate
1. Of potentially infinite duration (hence fee)
2. No limitations on its inheritability (hence simple)
3. Cannot be divested, nor will it end on the happening of any event (hence absolute)
i.

Creation:
1.
O conveys Blackacre to "A and his heirs"
a.
to A creates interest in that land to A (words of purchase)
b.
and his heirs limit and describe this conveyance (words of limitation)
c.
Notes: A receives the full fee simple absolute, and his heirs receive nothing. It
only means that A is capable of transferring to heirs. Technically, A has no heirs
while he is living.

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2.

ii.
iii.

Notes: Common law words of inheritance have been abolished in all states. Now, it is
presumed that fee simple is intended to pass by grant of real property unless it appears
lesser state was intended in the grant
Alienability:
1.
Fully alienable: can sell, divide, or devise it. Can be inherited intestate.
Inheritance of a fee simple absolute
1.
Heirs: Persons who succeed to the real property of an intestate decedent (someone who
dies without a will) under a states statute of descent.
a.
Surviving spouse, issue, ascendants (grandparents, parents, etc.)
2.
Issue: lineal descendants to all degrees

3. Defeasible Fees
Fee simple estates of potentially infinite duration that can be terminated by happening of a specified event. There
are three kinds:
1. Fee simple determinable
2. Fee simple subject to a condition subsequent
3. Fee simple subject to an executory interest
i.
Fee simple determinable (and possibility of reverter)
An estate that automatically terminates on the happening of a stated event and goes back to the grantor. It
is a tool used for controlling land use/ behavior.
1. Creation:
a. Use durational/adverbial language: for so long as, while, during, until.
b. Example: O conveys land "to A, so long as no alcoholic beverages are consumed
on premises" A has fee simple, so long as nobody drinks on premises. If A
conveys to B, he has fee simple, so long as nobody drinks. If A does not convey
and dies, it will pass by will or intestacy, who have fee simple, unless someone
drinks. However, if at any time somebody drinks, O will become the owner of the
fee simple, even if he's dead.
2. Alienability:
a. Can be conveyed, but grantee takes land subject to termination by happening of
condition
3. Inheritance:
a. Transferred in same manner as fee simple absolute, as long as stated event has not
happened
b. But, fee simple remains subject to the limitation no matter who holds
4. Possibility of reverter
Since grantee's estate may terminate upon breach of a condition, grantor retains a possibility of
reverter.
a. Grantor must expressly retain a possibility of reverter. It is not assumed if he
grants a fee simple determinable. .
b. Alienability:
i.
At common law: No transfer inter vivos or by will. Attempted transfer
invalid, but not extinguished upon attempt. Transferred through heirs.
ii.
Today: in most jurisdictions, can be transferred inter vivos or by will and
descends to heirs if grantor dies intestate.

Station Associates v. Dare: O granted land to US govt. to be used as lifeguard station. US


govt. then quitclaimed the deed to Dare County (D). P was successor of O, arguing that O
granted a fee simple determinable, not a fee simple absolute. If determinable, the US
abandoned the property, violating deed and possibility of reverter is exercised. Court

26

holds that there must be plain and express language of a reversion. This wasn't present
here, so it is considered fee simple absolute.
ii.
Fee simple subject to condition subsequent (and right of entry)
An estate that the grantor retains the right to terminate upon the happening of a stated event and
goes back to the grantor. It is a tool used for controlling land use/ behavior (more desirable than
determinable). When condition happens, estate of grantee continues until grantor exercises right of
entry
1. Creation:
a. Use language like: upon condition that, provided that, but if, if it happens
that.
b. Example: Same example as with fee simple determinable, but grantor
retains right to enter, rather than automatic reversion.
2. Alienability: Same as determinable
3. Inheritance: Same as determinable
4. Right of entry (aka: right of reentry, power of termination)
Future interest retained by grantor when condition subsequent is conveyed.
a. Grantor must expressly reserve right of entry in grantor. This does not
automatically arise by granting condition subsequent. Grantor can waive
the right by not reentering. However, inaction is not a waiver.
b. Alienability:
i.
At common law: not devisable or transferable inter vivos. It did
descend to heirs of grantor on death.
ii.
Today: In most jurisdictions, still not alienable inter vivos. (In
some states, an attempted transfer destroys it.) In most states, they
are devisable; in all states, they descend to heirs.
Red Hill Outing Club v. Hammond: O granted land to P ski club on condition
subsequent that it be used as a ski slope. The court held that when interpreting a
condition subsequent, strict interpretation is to be used, and resolve all ambiguities
against forfeiture of the land. The court is not required to import meanings not
apparent on the face of the deed: it only had to be maintained and made available
as a ski area, not actually operated.
iii.
Fee simple subject to an executory interest
Upon the happening of a stated event, is automatically divested in favor of a third person rather
than the grantor. Executory interests are subject to the RULE
1. Example: O conveys land "to A church; provided that if the premises shall ever
cease to be used for church purposes, title shall pass to the American Heart
Association."
a. A church has a fee simple subject to an executory interest in the AHA.
b. O does not have a right of entry because it wasn't expressly reserved
c. AHA is not a right of entry because that can only be reserved for grantor
d. AHA does not have a remainder, because it divests a fee simple.
e. Therefore, it is an executory interest
City of Palm Springs v. Living Desert Reserve: O granted nature reserve to City, with
executory interest in Living Desert Reserve if City doesn't use it for natural purposes. City
wants to turn into a golf course, and offers to purchase Living Desert's interest, but LD
refuses. City tried to condemn the property, to invalidate defeasible fee and executory
interest of LD. They argue that it was actually a charitable trust, not a condition
subsequent w/ executory interest. Different rules for trusts, that would make condemning
ok. Court held that the executory interest was compensable.

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iv.

Notes:
1.
Adverse possession: When a condition occurs, the holder of a possibility of
reverter or executory interest becomes the owner and possessor becomes an
adverse possessor. Title held on condition subsequent doesn't become AP until
grantor exercises right of entry.
2.
Alienability:
a.
At common law: For reverter and reentry, went to heirs at death and were
not alienable inter vivos.
b.
Today: In some states, attempt to transfer is simply void; in others, it
destroys the interest
c.
This isn't so important, because many states have created SOL for entry
3.
Duration:
a.
At common law: reverter and entry had potentially unlimited duration,
because they weren't subject to the RULE. Executory interests were
subject to the RULE.
b.
Today: In some states, conditions expire after certain period, leaving
possessor with fee simple absolute. In other states, common law rules of
duration apply, but may require recording every so often.

C. Fee Tail
An estate that limits inheritance to lineal descendents of the grantee. Estate created at common law to keep land in
the family.
1. Creation of fee tail at common law
i.
Example: O conveys Blackacre to A and the heirs of his body
1. Term heirs of the body refers to grantees issue
2. Fee tail goes to each succeeding generation in turn
3. If blood descendants of original grantee run out, the fee tail expires and property is
returned to original grantor (O, or Os heirs) in fee simple
ii.
Note:
1. Almost every state has done away with fee tail; life estate/dynastic trusts have supplanted
fee tail as device to control inheritance
2. Problem involving fee tail today: When an instrument uses language that would have
created fee tail at common law, what estate is thereby created today?
D. Life Estate
An estate that is not terminable at any fixes or computable period of time, but can't last longer than the life/lives of
one or more persons. Then reverts back to grantor, or grantors estate; or it can be granted to someone else, in
what is known as a remainder estate. Today, this device is used to set up trusts, so that trust pays the life tenant
income from the property.
1. Creation of life estates (2 kinds)
i.
For life of grantee (conventional)
1. May be indefeasible: terminate only when life tenant dies
2. May be defeasible: determinable, condition subsequent, executory interest
a. Would terminate before life tenant dies if condition is met
ii.
For life of another
1. Two ways to create
a. Direct: O conveys Blackacre to B for the life of A. B is a life tenant pur autre vie.
A is the measuring life
b. Indirect: O conveys life tenancy to A, who then, conveys her life estate to B. B
has life estate pur autre vie. A remains the measuring life.

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2. In both cases, estate ends on As death; if B dies before A, life estate pur autre vie descends
to Bs heirs
Nelson v. Parker: O granted life estate to second wife in warranty deed remainder to son from first
marriage. Deed was directly to son, but "subject to" life estate in wife. Son from first marriage
tries to kick out wife, but she had lived there 13 years. Son claims that can't reserve something to
someone who is "stranger to the deed" (archaic rule). Court holds that the intent of O was clear to
leave it to his wife for life, regardless of how the deed was stated. O should have written "To O for
life, then wife for life, then to Daniel."
Estate of Kinert v. Pennsylvania IRS: O granted life estate to foster children, on condition that they
not leave premises for more than 60 days at a time. This is ok, because it isn't a fee estate. If it
were a fee estate, it would be void.
Estate of Jackson: O granted property to A, but retained life estate. She entered a nursing home,
and while there, a hail storm damaged the house. The died, and insurance company distributed
money to A. But then the lawyer changed his mind, and distributed money to residuary
beneficiaries. Court held that owners of the house weren't directly entitled to insurance money, but
had a claim to waste, so could get money asserting a creditors claim. They got the money.

a. Waste
Conduct by life tenant that permanently impairs value of land or interest of person holding title or having
some subsequent estate in land
i.
Tenant for life is entitled to all ordinary uses and profits of land, but cannot do any act that
would injure the interests of the remainderman.
ii.
Remedies:
1.
damages and/or
2.
injunction.
Hausman v. Hausman: Failure to pay real estate taxes on a life estate by a life tenant could have
given rise to a cause of action in waste.
E. Term of Years (leases: see Landlord-Tenant)
F. Restraints on Alienation
1. Background
i.
Starting in Middle Ages, there was a movement to remove restraints on alienation of property.
ii.
4 reasons why restraints were considered bad:
1. Particular land may be unavailable for its best use
2. Restraints tend to perpetuate concentrations of wealth, because it makes it impossible for
owner to sell the land consume the proceeds of sale
3. Restraints discourage improvement of land, since the owner cannot sell and profit from
improvements
4. Restraints prevent the owners creditors from reaching the land
2. Types of restraints:
i.
Disabling restraint: One that withholds from the grantee the power of transferring his interest
ii.
Forfeiture restraint: Provides that if grantee attempts to transfer his interest, it gets forfeited to
someone else
iii.
Promissory restraint: Extracts a promise from grantee not to transfer his rights and results in
contract damages if there is such a transfer, including injunction
1. Any direct restraint on a fee simple is void.
1. "I grant you this property but you have no power to sell it. If you try to sell it, I get
it back."
2. Partial restraints may be valid

29

1. A partial restraint is valid if, under all circumstance of the case, the restraint is
found to reasonable in purpose and limited in duration
2. Look at legitimacy of purpose, impact on marketability, duration
3. Example: Those that ensure affordable housing. You may be prohibited from
reselling it to anyone but the agency from which you bought it. This is how we
keep housing affordable. If they could turn around and sell it for market value,
your affordable housing initiative wouldn't be effective
3. Behavior restrictions may be valid
1. Conditions designed to prevent a first marriage are void, but conditions designed to
prevent remarriage are ok (Once the spouse remarries, they will be dependent on
someone else, so they don't need your property anymore)
2. Conditions which tend to disrupt families are often void
3. Conditions which tend to keep families together are often upheld
4. Problems (336): Condition that requires farmer's children to remain on land for 25 years
invalid because there is no social utility to keeping children on the farm. Also, condition
requiring a city to maintain headquarters in small town is invalid. French thinks this is
wrong, because there is a social utility to the business remaining in the town. Distinction
between people controlling their families, and cities controlling their economies
IV.
FUTURE INTERESTS
An estate that doesn't entitle owner to possession immediately, but will/may give possession in the future. This is a
present, legally protected interest, not an expectancy
A. Categories of future interests
B. Future interests retained by grantor (NOT SUBJECT TO THE RULE, even if contingent!!)
a. Reversions
A future interest left in the grantor after she conveys a vested estate of a lesser quantum than she has
i.
Reversion can be expressly retained or arise by operation of law where no other
disposition is made of property after expiration of the lesser estate
1.
Expressly retained: O conveys to A for life, then to revert to O
2.
Arising by law: O conveys to A for life; at As death, goes back to O
ii.
Reversions are vested interests even though not all reversions will become possessory
1.
Will become possessory: to A for life, reversion to O
2.
Will not necessarily become possessory: to A for life, then to B and her heirs if B
survives A.
a.
If B dies before A, O will be entitled to possession at As death
b.
If A dies before B, Os reversion is divested on As death and will never
become possessory
iii.
Reversions are transferable, devisable by will, and descendible by inheritance.
iv.
Reversions are not subject to the RULE, because they are vested.
v.
Indefeasibly vested reversion
1.
Example: O to A for life. O has an indefeasibly vested reversion in fee simple
absolute
vi.
Vested reversion subject to complete divestment
1.
Example: "O to A for life, remainder to B if he survives A." Owner has a reversion
that will be divested if B survives A, causing B's interest to vest.
2.
Example: "O to A for life, remainder to her issue living 21 years after her death" O
has a reversion that will be divested if any of A's issue live 21 years past her death.
b. Possibilities of reverter

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i.

Definition: Possibility of reverter arises when an owner carves out his estate a determinable
estate of the same quantum in most cases, possibility of reverter deals with carving a fee
simple determinable out of a fee simple absolute
ii. Example: O conveys Blackacre to A and his heirs so long as liquor is not sold on the
premises
1. A has fee simple determinable; O has possibility of reverter
2. If liquor is sold on premises, land reverts to O
iii. Termination: Possibility of reverter could endure indefinitely; because inheritable,
grantors heirs could enforce possibility of reverter hundreds of years after grantors death
(some states limit life of possibility of reverter by statute)
c. Rights of entry (aka rights of reentry, power of termination)
i. Definition: When a grantor creates an estate subject to condition subsequent and retains
power to cut short or terminate the estate, the grantor has a right of entry
ii. Example: O conveys Blackacre to A and his heirs, but if intoxicating liquor is ever sold on
the premises, O has right to reenter and retake Blackacre.
1. A has a fee simple subject to condition subsequent
2. O has right of entry for breach of that condition
iii. Termination: Like above, right of entry could endure indefinitely; because inheritable,
grantors heirs could exercise right hundreds of years after grantors death (some states
limit life of right by statute)
C. Future interests created by grantees
1. Remainders
Remainder is a future interest that waits politely until the termination of the preceding possessory estate, at which
time the remainder moves into possession if it is then vested
a. Overview
i.
Essential characteristics/requirements:
1. Must be created only by express grant and must have preceding estate
2. Must follow a fee tail, life estate, or term of years. Cannot follow a fee simple
3. Cannot cut preceding estate short before its normal expiration (would be
executory interest)
4. Today: only follows life estates, because fee tails and terms of years are rare
ii.
Types of remainders and their subtypes
1. Vested Remainders
a. Indefeasibly vested remainder
b. Vested remainder subject to partial divestment/ open
c. Vested remainder subject to complete divestment
2. Contingent Remainders
b. Vested remainders
A remainder created in an ascertained person and not subject to a condition precedent
i.
Example: O conveys to A for life, then to B in fee simple
1.
B, an ascertained person, has a remainder not subject to a condition precedent
2.
Whenever the life estate of A terminates, B will be entitled to possession; Bs
remainder is vested
ii.
Condition precedent: Express condition attached to remainder such as to B if B reaches
age 30
1. Vested remainder subject to partial divestment/open (SUBJECT TO THE RULE!!!)

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A vested remainder created in a class of persons (children) that is certain to take on termination of
preceding estates, but is subject to diminution because others may enter the class
i.
Example: O conveys to A for life, then to As children
1.
If A has a child B, the remainder is vested in B subject to open up and let in other
children
2.
Note: If A has no children, the remainder is contingent (see below)
2. Vested remainder subject to complete divestment
Arises when remainderman is in existence and ascertained and his interest isn't subject to any condition
precedent, but his right to possession is subject to being defeated by the happening of a condition
subsequent
i.
Condition subsequent example: "O to A for life, remainder to B; but if B is declared a
bankrupt, to C." B has a vested remainder that will be shifted to C on the occurrence of the
condition. C has a shifting executory interest.
3. Indefeasibly vested remainder
A future interest with no conditions attached to it, and owned by an identified person
i.
If the person who own the remainder dies before the life tenant, the remainder passes to
heirs or devisees of owner.
ii.
Fully alienable by lifetime transfer
iii.
Example:
1.
O to A for life, remainder to B
c. Contingent remainders (SUBJECT TO THE RULE!!)
A remainder that is subject to an unidentified person or subject to a condition precedent
1. Unidentified person
It is contingent if it is created in favor of an unascertained person, because until the remainderman is
ascertained, there is no one ready to take possession if the preceding condition occurs
i.
Example: "To A for life, and then to A's children." A has no children.
1.
Remainder contingent because taker (children) aren't ascertained
2.
A has a life estate
3.
O has a reversion
4.
If child is born, then it vest in that child subject to open.
2. Condition precedent
i.
Example: "To A for life, and then to A's child, if he survives A" A's child is alive.
1. Remainder contingent because A's child may not survive A. Condition precedent.
2. A has a life estate
3. O has a reversion
4. B has a contingent remainder
3. Destructibility of contingent remainders doctrine (abolished)
i.
At common law: destroyed remainders that were still subject to a condition precedent when
prior estate terminated
ii.
Example: "O to A for life, remainder to A's children who reach 21." A dies when children
are 17 and 18.
1. Destroyed, because children weren't 21 when A died. Still subject to a condition
precedent. O owns property in fee simple absolute.
4. Merger doctrine (abolished)
If one person holds two estates in the same piece of property, and there are no intervening estates held by
other parties, the two estates merge into the larger estate

32

i.

Example: "O to A for life, remainder to A's children who reach 21." O subsequently
transfers O's reversion to A.
1.
Contingent remainders are destroyed, and A's life estate and reversion give A a
present possessory fee simple absolute.

2. Executory Interests
a. Definition: A future interest in a transferee that must, in order to become possessory
i.
Divest or cut short some interest in another grantee (known as shifting executory interest);
or
ii.
Divest the grantor in the future (springing executory interest)
iii.
Hint: If it not a remainder because the preceding estate is not a life estate, then it must be
an executory interest
b. Shifting executory interests:
Gives the property to third parties when a condition occurred that terminated a prior vested estate in fee
simple
i.
Example: O to A for life, remainder to B, but if B is declared a bankrupt, to C.
1.
B has a vested remainder that will be shifted to C if B goes bankrupt.
2.
C has a shifting executory interest in fee simple absolute
c. Springing executory interest:
Divest a grantor's reversion on happening of a condition
i.
Example: O to A for life, remainder to her issues living 21 years after her death.
1.
O has a reversion
2.
A has a life estate
3.
A's issue having a springing executory interest
3. Alienability of remainders and executory interests
a. Vested remainders are alienable, devisable, and descendible
b. Contingent remainders and executory interests are alienable inter vivos
c. Contingent remainders and executory interests are usually devisable and descendible
i.
Unless the holder's survival is a condition to the interest's taking
ii.
Example: "To A for life, and on A's death to B; but if B does not survive A, on A's death to
C"
1. If B dies before A, and leaves all his property in a will to D, D doesn't get B's
remainder interest, because B died before A so C has it. Survival was a condition
V.
The Trust
A device that allows you to split the title of property into two parallel and simultaneous titles called the "legal" and
"equitable" title.
a. Legal title (trustee)
i.
Given to the trustee, who is charged with responsibility of holding and managing property
for sole benefit of beneficiaries (who hold equitable title)
b. Equitable title (beneficiary)
i.
The trustees hold the equitable title.
c. Purpose
i.
Whenever unified management is desirable for an asset that many people have interests in
ii.
Good to manage property for minors, incompetents, spendthrifts, etc.
iii.
Frequently used in estate planning
d. Dynastic trusts
i.
Set up for their descendants to last as long as the law allows
e. Restraints on alienation

33

i.
VI.

Trustee can be directed not to sell property, and beneficiary's interest can be subject to
conditions (spendthrift)

The Rule Against Perpetuities


1. No interest in property is valid unless it must vest, if at all, not later than 21 years after one or more lives
inbeing at the creation of the interest
2. An interest is void if there is any possibility, however remote, that the interest may vest more than 21 years
after some life in being at the creation of the interest.
a. Rationale for:
i.
Split interests make property difficult to sell/ limit investment made in property
ii.
Sentiment that property should be controlled by the living, not the "dead hand"
iii.
Very effective in reuniting all elements of a fee simple absolute in hands of people who are
identified and have indefeasibly vested interests that they can sell or partition every 120
years or so.
b. Applies to:
i.
Contingent interests (subject to condition precedent)
ii.
Executory interests
iii.
Class gifts (even if vested remainder, subject to partial divestment)
iv.
NOT VESTED INTERESTS!!!
c. When it begins to run
i.
Wills: date of T's death
ii.
Revocable trusts: date trust becomes irrevocable (settler's death)
iii.
Irrevocable trust: date trust is created
iv.
Deeds: date deed is delivered
d. Common law form:
i.
Destroys all contingent interests and class gifts that will not vest within 21 years after the
death of an identifiable person who is alive at the time the future interest is created
ii.
Does not pay attention to anything that happens after conveyance. Analyzed from date of
conveyance, taking into account all possibilities.
iii.
Considers that a person can live until any age, die at any time, and have children at any
time until she died, regardless of physical condition
iv.
Options to purchase: may or may not apply
v.
All or nothing (class gifts)
1. The class must close within the perpetuities period
2. All conditions precedent for every member of the class must be satisfied within the
perpetuities period
3. If one person in the class doesn't vest, the entire gift to A, B, children, etc. is void
vi.
Ruthless: it destroyed sensible family wealth transmission arrangements that posed no
threat to public welfare
e. Reforms:
i.
Wait and see
1. You wait to see what happens before deciding whether an interest is void
2. Wait at least until death of the life in being
3. If they don't conform with the rule, the interests are reformed to comply with it.
ii.
Reform
1. If grandchildren violate the rule, the court can strike the grandchildren, and still
apply the gift to the rest of the people in the conveyance
iii.
Irrebuttable presumption
1. That spouse of a life in being is a life in being
iv.
Age

34

1. People below/above a certain age won't have children after the date the future
interest is created
v.
Uniform Statutory Rule Against Perpetuities (USRAP)
1. Incorporates the above reforms
2. Adds an alternate 90 year vesting period
3. 25 states have adopted it
f. Exemptions:
i.
Future interests held by government or charities, so long as the property vests in some
qualified organization within the common law period
1. O conveys to State University, but if university fails to use for agricultural
purposes, it shall pass to Nature Conservancy.
a. Executory interest in Nature Conservancy is valid because it is charitable
organization and present fee simple is vested in a different charity
2. O conveys to A, but if A doesn't use for agricultural purposes, to Nature
Conservancy
a. Executory interest in Nature Conservancy is invalid, because the present
fee simple is not a charitable organization
ii.
Rights of reversion/entry
g. Technique
i.
Determine what interests are created
ii.
Determine the measuring life/lives to determine if
1. The interest must vest within lives in being + 21 years
2. The interest might not vest within lives in being + 21 years
iii.
Apply reform statute
iv.
Practice writing savings clauses
1. "At the death of the last life in being, the class closes"
LANDLORD-TENANT
I. THE LEASE
A contract by which a rightful possessor of real property conveys the right to use and occupy that property in
exchange for consideration (usually rent)
A. Nature of Lease
1. Lease is both conveyance and a contract
a. Lease is a conveyance of property and the tenant has purchased a leasehold estate in land
b. Lease is a contract containing promises (covenants) of the parties i.e., promise to pay
rent, taxes, insurance, to repair, etc.
2. Lease distinguished from other relationships
a. In a lease, landlord transfers to the tenant the right to possession of that premises; apart
from freehold estates, a leasehold is only other interest that gives the holder right to
possession
b. Other interests such as an easement, license entitle holder to use anothers land, but do not
give possession
B. Statute of Frauds
An English statute (1677) declaring certain contract judicially unenforceable if they are not committed to
writing and signed by the party to be charged
1. American statutes provide that leases for more than one year must be in writing
2. Most jurisdictions permit oral leases for a term of less than one year
C. Form Leases and Question of Bargaining Power
1. When landlord prepares a lease, usually uses a form lease

35

2. Form leases usually favors the landlord


a. For example: If tenant breaches the lease, the lease may have some exculpatory clauses
that would release landlord from liability
b. As a result, since the 1970s courts have imposed some laws that protect the tenant
i.
Usually the provisions are not waivable
ii.
Considered by some to be paternalism
II. LEASEHOLD ESTATES
A. Term of years
A tenancy measured by a fixed duration with fixed start and end dates
1. Example: Ten years from the date of this lease
2. Creation: Express by both parties. Must be in writing if it exceeds one year (in most jurisdictions)
3. Termination: Automatic at end of period.
a. If T breaks covenant (not pay rent), L can terminate. This is called a right of entry.
b. T can surrender property (see surrender section).
B. Periodic tenancy
Tenancy of fixed duration that continues for succeeding periods with no ending date until either landlord or tenant
gives notice of termination.
1. Example: week to week; month to month; year to year
2. Creation: 1) express, 2) implication, 3) operation of law (T holds over).
3. Termination: Notice required!! Continuous and will roll over unless either L or T gives notice of
termination.
Termination happens at end of period.
Usually length of period necessary for notice.
6 months notice necessary for year to year.
C. Tenancy at will
Tenancy of no fixed duration that endures only as long as both landlord and tenant desire
a. Common law: could be terminated by either party without notice
b. Modern: notice equivalent to time between payments is necessary
1. Creation: Must be express. If not express, courts choose periodic tenancy.
2. Termination: automatic if
a. either party dies
b. L conveys his interest
c. T commits waste
d. T attempts to assign his tenancy
e. L executes a lease to a 3rd party
D. Tenancy at sufferance
Arises when a tenant wrongfully remains in possession (holds over) after termination of tenancy.
1. Remedy for L:
a. treat T as trespasser and evict
b. treat T as new valid tenant who must pay rent. This is a periodic tenancy
III. THEMES IN LT LAW
1. Conveyance or contract: Courts used to consider leases conveyances of an estate in land. Now the
lease is seen as a contract between L and T for purchase of space and services. Some say leases
have a dual nature, of contracts and conveyances.

36

Independent covenants: promises made by a landlord in a lease are independent from the
obligations of a tenant. This precludes the tenant from withholding payment if the landlord
doesnt fix the roof.

Mutually dependent covenants: 1) if the landlord fails to perform a valid promise in the
lease, and 2) the tenant is deprived of a significant inducement to the making of the lease,
and 3) the landlord does not perform his promise within a reasonable period after the
request of the tenant, that the tenant can terminate the lease.
2. Statutes: There has been an increase in legislation governing LT law. Residential and commercial
LT law have diverged. Residential is now governed mostly by statute (legislation).
3. Residential/commercial dichotomy
Residential: Courts favor T to provide habitable shelter and to regulate evictions of T from
their homes. This is because L has greater economic power and skill than the residential T.
Commercial: Courts view commercial leases as a free market transaction between parties
with equal bargaining power and skill that should be enforced as any other consensual
agreement.
IV. LANDLORD DUTIES AND TENANT REMEDIES
A. Duty to deliver possession
1. English rule (majority): Landlord has duty to deliver actual possession. If previous tenant has not moved out
when new tenants lease begins, and landlord does not remove person within a reasonable time, landlord is in
default
a. Rationale:
i.
Carries out intention of parties since the tenant bargained for the use of the property
ii.
Landlord is in better position to make previous tenant move out (efficiency argument)
iii.
Landlord is more familiar with eviction procedures than tenant (efficiency argument)
b. Tenants remedies if landlord fails to deliver actual possession
i.
Tenant may terminate lease and recover damages for having to live somewhere else
ii.
Tenant can affirm lease, refusing to pay rent for the portion he was out of possession and
recover damages
2. American rule (minority): Landlord has no duty to deliver actual possession at commencement of lease term. If
previous tenant has not moved out, landlord is not in default
a. Rationale:
i.
Should be up to tenant to take possession if he really wants it
ii.
Tenant has right to evict the holdover
iii.
Landlord should not be held liable for tortious act of holdover
iv.
Note: Reasons dont address efficiency and fairness like English rule
b. Tenants remedies against the holdover
i.
Sue to evict and recover damages
ii.
Treat holdover as tenant for another term and take rent from him and cost of finding a another
place to stay (does this mean that the new tenant is still responsible for paying rent to
landlord???)
B. Quiet enjoyment
Neither L nor someone with paramount title will interfere with Ts possession of property under lease.
Implied in every lease
Breach can occur in 3 ways:
1. Actual eviction: L or 3rd party excludes T from premises.
Remedy: This terminates lease.

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2. Partial actual eviction: T is physically excluded from part of premises


Remedy:
a. Partial eviction by L: entire rent obligation relieved
b. Partial eviction by 3rd party: apportionment of rent
3. Constructive eviction: Act by L making premises unfit for occupancy, often with result that T is
compelled to leave
a. Act must be done by L, by someone acting for him, by another T over whom he has control
b. Resulting conditions must make premises uninhabitable
c. T must move out
Remedy: T may seek termination and damages

Residential premises: Premises must be uninhabitable


Blackett v. Olanoff: Tenants couldnt sleep due to a night club owned by L. T sued
L. The noise was a natural and probably consequence of L permitting lounge to
operate. Court ruled in favor of T

Commercial premises: The conditions have to be such that business CANNOT be


conducted. If they are merely interrupted or inconvenienced, its not enough.
Wesson v. Leone Enterprises, Inc.: T complained of leaky roof, and finally left. L
sued T. Court ruled in favor of T. Constructive eviction doesnt apply, because
business was still conducted. Mutually dependent covenants do apply, and L
breached a covenant

C. Implied Warranty of Habitability


A warranty from L to T that the leased property is fit to live in and that it will remain so during the term of the lease
1. Standard: Usually the local housing code, or whether conditions are reasonably suitable
2. Remedies:
a. T may move out and terminate lease
b. T may make repairs and offset cost against future rent
c. T may reduce or abate rent to fair rental value of property, or withhold all rent until the
court determines fair rental value
d. T may remain in possession, pay full rent, and seek damages
3. Damages:
a. Difference in value
i.
Fair rent if warranty was complied with - Actual rent agreed upon
ii.
Amount agreed upon - Fair rent for premises as is
b. Percentage reduction in value
i.
Reduce the rent by percentage of rent that is to be paid by looking at how much of
the value of the property has diminished based on the lack of fulfilling the
warranty
4. Issues
a. Tenants cant waive the right. This is to protect people living in substandard housing.
i.
Bargaining power: most tenants arent in a position to be able to bargain
ii.
Public health: the public is better served when people live in acceptable conditions
b. Doesnt apply to commercial leases:
i.
CT have equal bargaining power
ii.
More varied situations
iii.
Courts not concerned about people running business in crummy environment

38

Javins v. First National Realty Corp.: D. rented from L. L broke 1500 housing code rules, so T
withheld rent. L sues T. Court held in favor of T, applying the implied warranty of habitability. In
modern times, its unrealistic to expect T to make repairs

D. Right against retaliatory eviction


An eviction - nearly always illegal commenced in response to a tenants complaints or involvement in activities
with which the landlord does not agree
Retaliatory motive is presumed if it happens within 90 to 180 days of incident. To overcome this, L must
show a reasonable reason for his actions
Murphy v. Smallridge: P. T sued D. L for retaliatory eviction. L was dumping trash on T property. T
complained, and L raised rent to what T couldnt pay. Court held L liable.
V.
TENANT DUTIES
A. Duty to operate
Unless expressly written in the lease, a duty to operate will be construed against L.
Piggly Wiggly Southern Inc. v. Heard: Supermarket (D) moved out before end of lease, continued
payment, but didnt sublease. L sues T. The court held that the language of the lease expressly
negated a continuous operation requirement and contained no such implied covenant. The court
found that the parties did not bargain for continuous operation and that it was not authorized to
create such a provision.
B. Duty to pay rent
At common law, T had to continue paying rent if part of or the whole premises was destroyed. Now, in most states
T has option to terminate the lease if part of or the whole premises is destroyed
Albert M. Greenfield v. Kolea: Parties entered into two separate leases for lots next to each other.
One lot was for an auto dealership, the other was to store the cars. The building burned down, and
D lessee was able to get out of both leases.
VI.

LANDLORD REMEDIES
A. Recovery of possession: unlawful detainer and self-help
If T remains on premises and refuses to leave, L can take T to court for unlawful detainer. But with residential
premises, the court doesnt allow self-help; you must go through the courts. With commercial premises, self-help is
more permissible.
B. Recovery of possession: abandonment
A tenants relinquishment of possession before the lease has expired, allowing L to take possession and treat the
lease as terminated
L has these options:
1. Accept a surrender of the premises and agree to termination of the tenancy. When the tenant
abandons, it's consider an offer to surrender the premises.
a. Landlord may want to accept surrender b/c he wants to use premises himself; market may
have gone up and wants to re-rent premises at higher rent; etc
b. Tenant not liable for future rent
2. In the alternative, landlord may refuse surrender and re-let premises on tenants account to a new
tenant
a. Landlord may do this if market has gone down and can only charge a lower rent to new
tenant
b. Tenant will be liable for difference between original rent (his) and the new lower rent
3. Finally, landlord may do nothing (let premises lie idle) and sue tenant for rent as it comes due

39

a. Landlords duty to mitigate damages (to try and find new tenant)
i.
Old rule: Landlord has no duty to mitigate (not landlords fault that tenant decided
not to use premises)
ii.
New rule (majority of states): Landlord has duty to mitigate Use an acceleration
clause
C. Monetary Damages: Acceleration clauses
A loan agreement provision that requires the debtor to pay off the balance sooner than the due date if some
specified event occurs, such as failure to pay rent or maintain insurance.
They are enforceable, but L must try to re-rent property and credit T.
Aurora Business Park Associates v. Michael Albert, Inc.: P. L sued D. T for unpaid rent and future
due rent for remaining of lease. D. assert that a rent acceleration clause in the lease was an
unenforceable penalty and that the trial court should have set-off future rent by the reasonable
value of rent obtained from re-letting the premises.
VII.

ASSIGNMENTS AND SUBLEASES


A. Assignments
An assignment is a complete transfer of the remaining term
Transfer must be on the same terms as the original lease, but T1 retains a right of reentry if the
terms of the original lease are breached. The assignee and L are in privity of estate, and each is
liable to the other on all covenants in the lease that run with the land. If the assignee disappears,
T1 is still liable for the rent. This arises out of privity of contract.

Privity of estate: Covenants that run with the land


a. If it touches and concerns the leased land. These are:
i.
To do or not do a physical act (repair, conduct business, supply heat)
ii.
Pay money (rent, taxes)
iii.
Regarding duration of lease (termination clauses)

B. Subleases
A lease by a lessee to a third party, conveying some or all of the leased property for a shorter term than that of the
lessee, who retains a reversion in the lease
1. Landlord-tenant relations: Remain in privity of estate and privity of contract
2. Tenant-sublessee relations
There is privity of contract between lessee and sublessee. This can be used as a basis for
suit for contribution.
Although there is no privity of estate between the lessee and the sublessee, there is a right
to terminate and evict the sublessee on the part of the lessee.
3. Landlord-sublessee relations
Sublessee is not in privity of estate with landlord; cannot sue or be sued by landlord
Sublessee is not in privity of contract with landlord either, thus cant be sued under that
C. Consent
L must consent to the sublease or assignment before T can transfer his interest in property:
1. Traditional rule: Landlord can act arbitrarily and doesnt have to act reasonably in refusing consent
2. Emerging rule: Landlord can only refuse consent if reasonable
a. Rationale:
i.
Unreasonable restraint on alienation
ii.
Fairness

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Julian v. Christopher: Lease contained a silent consent clause requiring T to obtain the Ls consent
to sublease. L arbitrarily said T couldnt sublease. Court said that Ls reason must be reasonable.

Restraints on Alienation
1. Disabling Restraint: takes away your power to make a transfer.
2. Forfeiture restraint: If you assign the lease without consent, you forfeit the leasehold estate.
3. Promissory restraint: Tenant promises not to assign or sublet without Ls consent. If the tenant
promises, the assignment would be effective. You are liable for damages, but it doesn't say you
didn't have the power. You don't lose the estate.

D. Summary: Assignment and Sublease


A = Landlord; B = Original Tenant; C = Assignee or Sublessee
Consent

Assignment by Tenant
Landlords consent may be
required by lease

Sublease by Tenant
Landlords consent may be
required by lease

Privity of Estate

A and C

A and B

Privity of Contract

A and B

A and B
B and C (if contract assumed)

Liability for
Covenants in Lease

C liable to A on all covenants


that run with land because of
privity of estate

C not liable to A on any covenants


in original lease and cannot
enforce As covenants

B remains liable to A for rent


and all other covenants in
lease because of privity of
contract

B remains liable for rent and all


other covenants in lease and can
enforce As covenants
C liable to B for rent (if contract
assumed)

CONCURRENT ESTATES AND MARITAL PROPERTY


A. Tenancy in common
A concurrent estate with no right of survivorship
a. Creation: Default status of property conveyed to two people (not husband and wife) if nothing is
specified
b. Transferability:
i.
Fully alienable inter vivos and testamentary transfer.
ii.
Inheritable.
iii.
Subject to claims of creditors
c. Estate planning device.
B. Joint tenant by right of survivorship
When one JT dies, the whole estate goes to the other JT (or JTs): right of survivorship

41

a. Creation:
i.
Common Law: Four unities
1. Time: interests must vest at the same time
2. Title: interests must be acquired by the same instrument
3. Interest: Interests of the same type and duration
4. Possession: interests give identical rights to enjoyment
ii.
Modern Law: Courts look at intent, but sometimes will call on unities if they support their
argument
iii.
Express language required: must say "To A and B as joint tenants with right of survivor"
b. Transferability: Fully alienable in lifetime, but not at death. JT no ability to transfer by will.
Property remains with survivor upon death. If JT transfers during lifetime, creates a tenancy in
common between third party and remaining JT. If there are 3 JTs, and 1 JT transfers during
lifetime, creates a tenancy in common between third party and other two JTs, but other two JTs
retain a right of survivorship in their 2/3.
c. Severance:
i.
Mortgages: do not usually sever JT
1. A mortgage involves a conveyance to the lender of the full title subject to a
condition that if you pay off the loan you get the title back.
a. This breaks unity of title. This is how the Maryland court reached the
result that it severs the joint tenancy
2. Lien theory: It doesn't involve a conveyance of title, it simply gives the lender
power to sell property in event of default. Owner keeps property until there is a
foreclosure
a. No severance until owner goes into default, and property is sold at
foreclosure
b. One JT can enter into a mortgage as long as it doesn't go into default
Downey v. Downey: Helen owns whole thing. She conveyed it to Hoff, and then
reconveyed it to Helen and John Jr. as joint tenants. Helen died, and fight arose. Bonnie
(other kid) was cut out of this arrangement. If it's a joint tenancy, it all goes to her brother.
The court held that the lower court was wrong in concluding that the mortgage on the
property by decedent and defendant destroyed the joint tenancy. JT don't have to share
interest equally. They can share it unequally with agreements within themselves, without
destroying the JT.
ii.

Leases: doesn't sever it, but all JTs are entitled to get rent
Martin v. Martin: Garis has 1/8 undivided interest in fee simple. Mom/Dad have 7/8
undivided interest for life. Remainder of 7/8 in Garis in fee. Mom/ Dad puts a mobile
home park on the property, and charges rent. Garis moves onto one of the lots. They don't
pay rent, but they sued for 1/8 of the rent collected from the mobile home lot so far. Court
holds that Garis doesn't have to pay rent, and is entitled to 1/8 of rent collected from park.
Garis didn't create an ouster: you have to oust from the entire property. There are no
consistent rules for what constitutes an "ouster" The courts have retained a lot of
discretion for themselves because the factual situations are pretty manipulable.

d. Remedy: Partition
1. In kind: split up the property by land (preferred)
2. In sale: sell the property, and split up money by interest, only if
1. Physical attributes of the land render partition in kind impracticable or inequitable,
and
2. Owners' interest would better be promoted by a partition by sale

42

Delfino v. Vealencis: and are tenants in common. owns 99/144 interest in property
and owns 45/144 interest in property. owns a garbage removal business which she
operates on her land. wants to develop a subdivision on land of 45 residential building
lots. brought action seeking a partition sale (didnt want in-kind because garbage would
still be there). moved for judgment of in-kind partition. Court holds that land will be
partitioned in kind.

Default rule: Preference for partition in kind. Burden of proof is on person who wants the
"sale." You have to show that it's impractical to do it in kind, and prove that it would be in
best interest of all parties. Protection of the little guy who has attachment to the land, and
has been there, but may not be able to raise the capital to buy it out.

C. Tenancy by the entirety


Marital estate akin to a JT between husband and wife: right of survivorship
a. Creation: Not recognized in community property states, but in 21 common law jurisdictions, arises
presumptively incident to a JT
b. Transferability: Least alienable. Neither inter vivos nor at death. The couple together can sell the
property, but unilaterally, nothing can be done. They can get a divorce if they don't agree. Any
transference unilaterally is ineffective.
i.
Death of either spouse: goes to the other
ii.
Divorce: creates a tenancy in common with no right of survivorship
iii.
Mutual agreement to transfer
iv.
Execution by a joint creditor of both husband and wife: creditor of one can't execute
D. Community Property
Marital estate akin to a JT between husband and wife (and domestic partners in CA)
a. Transferability: Inter vivos only if both spouses so it jointly. Unlike tenancy by the entirety or JT,
it can be disposed of by will.
** Half the states have tenancy by the entirety. 9 have community property. Forced share doesn't apply to
community property states (outgrowth of old dower).
E. Issues with marital property
1. Community Property v. Separate property: Property that people have before marriage is separate.
Property acquired in marriage is assumed to be community. If you can prove that it's a gift or inheritance,
then it's separate. Earnings of separate property: in some states, it's community. In some states it's
separate.
Smolen v. Smolen: Married couple got divorce to avoid medical expenses from husband's brain
tumor. This will protect the wife's separate property from the creditors. They kept their house in
JT and kept living there. She became a guardian, and then put him in a group home. A court then
cancels her guardianship and get a decree saying he's competent (if he's not competent, there would
be no effect of the deed). They then get a deed/trust to himself as trustee with his nephew as
successor trustee (revocable inter vivos trust). It destroyed the JT (four unities: title). Martin
transferred his title to himself as trustee for benefit of himself or nephew in remainder. Roslyn has
no right of survivorship, and is now cotenant with the trust and after her husband dies, with her
husband's nephew. She can continue living there (just like Garis and Peggy). Jason may be able to
move in with her. If Jason wants her out, he can sue her for a partition (probably by sale). She can
buy out Jason if she wants to stay there. By telling her he wouldn't partition it in her lifetime, it
would have been a restraint on alienation, which could be subject to the Rule.

43

2. Ability of creditors to reach property


Sawada v. Endo: D Sawada hit P in car accident. Sawada had tenancy by the entirety with his wife, and
died prior to the lawsuit. Court held that creditors can't get to any of spouse's assets (not even the husband's
half) in tenancy by the entirety.
Harris v. Crowder: Spouses who own property as JT with right of survivorship. Either spouse can sever it,
which would lead you to the conclusion that the creditors can reach the interest of either spouse as to 1/2 of
the property. This court said not necessarily. In our statute on partition, there's a proviso that you can't
have a partition if it would unduly prejudice the interest of one of the tenants. Creditors going after the
family home, might cause prejudice to non-debtor spouse, and that in that circumstance, the court might
deny the right to get at the 1/2 property. It Depends on the situation.
3. Married Women's Property Act
Before Married Women's Property Act, women had no property rights. Until her husband died, he had total
right of her property, including sale. If she survived him, she kept what was left. Wealthy people created
control over their daughter's property. Setup in a trust, so it was in the trust, not under his control. But if
they didn't do this, she could lose a lot if he was bad with property. After MWPA, her property was
protected from his separate creditors. He still had management and control of property. This changed in
the 60s and 70s with the women's rights movement.
4. Protection for spouses when divorced
a. First there will be a division of the property held (either separate or together)
b. Determination whether either spouse is entitled to support payments
c. If there are children, there will be an award of custody and an award of support for children
Simmons v. Simmons: In almost every jurisdiction, advanced degrees are not property. This is
a matter for alimony. P wife sued ex-husband for the value of his medical degree. The court
concluded that plaintiff's medical degree was not property subject to equitable distribution, because
the advanced degree was a mere expectancy of the possibility of future earnings and was not
"property" within the meaning of the statute. However, the trial court abused its discretion by not
awarding the wife some alimony in view of her age, and the emotional and financial support she
offered her family during her husband's schooling.
5. Dower, curtesy, and forced share
A. Dower: Wife's rights at the death of her husband
Wife got a third of husband's land that he had received during marriage for her life (life estate). It was
selected by the heir. Or they might have been selected at the church door before the wedding. Oldest son
would have the rest of the estate, and mom would be in the dower house. Problem: attached to all lands of
which husband seized during marriage. Even though he transferred it, she could come claim the land back.
It made it harder to sell land.
B. Curtesy: Husband's rights at the death of his wife
Recevied life estate in all of the wife's lands, but only if issue capable of inheriting the lands had been born
alive.
C. Forced Share: Gender neutral rights at death that apply to both real and personal property, but only to
property owned at death.
Right to a percentage of the estate of the deceased spouse outright (fee simple). This is non-community
property states

44

LIFETIME GIFTS (NOT TRUSTS)


A present, outright transfer of an interest in property made without consideration. All that is required is that donor
transfer property to donee with intention of making a gift, and that donee accept.
I.

GIFTS
1. Inter vivos: A gift during lifetime: intent + delivery + acceptance. Not an exchange for consideration. Can
be made orally.
2. Causa mortis: made at contemplation of immediate death. Ability to revoke gifts if you get better: intent +
delivery + acceptance + revocability on survival (either automatic or power to revoke). Revocability also
applies to gifts in contemplation of marriage.
3. Testamentary gift: will. Must be in writing with intent to make a will, and either be in testator's
handwriting or have two witnesses. Delivery not necessary.

II.

REQUIREMENTS FOR GIFTS


1. Intent
2. Delivery
a. Ritual function: Makes significance of gift civid and concrete to donor: donor suffers the "wrench
of delivery." There is no question about whether he really meant to give the gift.
b. Evidentiary function: provides unequivocal proof to the witnesses of the trasnfer, and provides
donee with prima facie evidence in favor of alleged gift
Other forms of delivery
i. Symbolic Delivery: instruments of title (automobile, stocks, bank books). Intent must be
clear
ii. Third person delivery: A power to revoke will invalidate the gift
3. Acceptance
a. If transfer is beneficial to donee, acceptance will be assumed

III.

PROBLEMS
1. Whether there was delivery.
a. Usually comes up after testator dies. Usually the heirs fight with the person that received the gift.
2. Whether the gift was revoked.
3. Causa Mortis
a. Sometimes, the person made a gift, and then claims causa mortis just because they want it back.
4. Use of incorrect instrument
a. Did you really mean to make a gift during lifetime, or a gift that's effective only at death?
b. Did you use the right form? If you used an inter vivos gift, but nothing is supposed to pass to
donee until death, then you used the wrong instrument. You should have used a will. We now
accept a wide range of will substitutes, because there has been increasing disfavor for probate
process. (Pay on death designation).

IV.
GOOD PRACTICE
1. Use a written instrument
a. Required for transfer of land
b. Not required, but a good idea for future interests
2. Be sure to include:
a. Parties
b. Donor's intent to make a gift
c. Identify property to be transferred to donee
d. Signature

45

THE MODERN REAL ESTATE TRANSACTION


I.
CONTRACTS FOR SALE
Standard procedure: Buyer and seller enter into contract. Exchange of money (earnest money or down payment).
Then, a period of time between when the contract is signed and when the closing takes place. This is an escrow.
Escrow is used to clear the state of the title. Get a title search done, and if there are problems, this gives seller time
to clear it up. Buyer will also make inspections of the property. Depending on the contract, the seller will have
time to remedy the problems. It allows the buyer to arrange financing. At end of escrow, money is paid into the
escrow agent who then uses it to pay off the existing loan and any other encumbrances on the property. At end of
the closing, the money will be delivered to the seller. The deed to the buyer and the mortgage will be recorded and
given to the buyer.
1. Statute of Frauds
Sets out the requisite formalities to create a binding contract of sale for real property
a. Origins: feudal law required feoffment (ceremony). Then came Statute of Uses (1536), which
allowed conveyance by document, creating an equitable estate that the statute turned into a legal
estate. Statute of Frauds (1677) said that no freehold estate could be created or trasnferred without
a written instrument signed by the grantor.
b. Purpose: to protect property holders from trumped-up claims that others owned interests in their
property
c. Requirements:
i.
Must be written: either formally or in a memo
Personal property doesn't have to be in writing. It can just be handed over.
ii.
Description of property
Some states are stickier about description of property than others, and require a full
legal description. Others allow you to use just the address.
iii.
Identification of the parties of the contract
iv.
The price and manner of payment
v.
Signature of seller and buyer
vi.
Closing date
d. Exception: A party to an oral agreement (not satisfying SOF) who has made part performance that
indicates existence and general content of the agreement may seek specific performance if two of
the following are met:
i.
Possession of the land
ii.
Making substantial improvement to the land
iii.
Payment of all or part of the purchase price
2. Marketable Title
An implied warranty in every land sale contract that seller will provide buyer with marketable title: title reasonably
free from doubt (what a reasonably prudent buyer would be willing to accept). It doesn't have to be "perfect title,"
but it does have to be an unencumbered fee simple with good record title. This is to protect legitimate expectations
of buyers.
a. Adverse Possession
A title based on AP can be a marketable title
i.
If the possession has been for a long period of time
ii.
If the risk the record owner will sue appears to be very remote
iii.
If the probability of the record owner's success in such a suit appears to be minimal

Conklin v. Davi: Seller agreed to sell property obtained by adverse possession. TC says
that seller had marketable title, and that buyer forfeited their down payment. Appellate
court ruled as a matter of law for the buyers. But the seller didn't have the opportunity to

46

present a defense. SC says that the seller should be given the chance to present their
defense. A title based on AP can be a marketable title.
b. Defects in title that may render it "non marketable"
i.
Defects in record chain: May be unmarketable if seller doesnt own the property because of
defect in some prior instrument constituting part of the chain of title
ii.
Encumbrances: Encumbered titles are generally unmarketable. Marketable titles are
unencumbered fee simples; property interests in other people other than seller constitute
encumbrances which make title unmarketable
1. Examples of encumbrances: Easements, marital interests, dower rights, restrictions
on use of property (covenants). Mortgages and other liens may be encumbrances,
but not if seller pays it off before closing
iii.
Zoning restrictions: Do not generally make title unmarketable
c. Ways around warranty of marketability
Implied warranty is a default rule that can be circumvented if parties agree either that it must be a valid
record title, or an insurable title.
i.
Insurable Title: A reputable title insurance company will insure at regular rates.

If it's not at regular rates, you will probably have trouble selling it.

Title insurance: company undertakes to make a title search for you. They insure
that what they have said about the title is correct. Determined at time you buy
your house. Policy reflects purchase price you paid. If inflation happens, your
title insurance gets less adequate.
ii.

Valid Record Title: a perfect chain of title going back to the sovereign

d. Remedies for non-marketable title


If not marketable, buyer must alert seller and give reasonable time to cure defects. Notice must specify
nature of defects.
i.
Buyer remedies before closing:
1.
Rescission: unilateral unmaking of a contract
2.
Damages: get money from the courts
3.
Specific performance: make seller turn over land with abatement of purchase price
ii.
Merger: If buyer permits closing to occur, the contract merges with deed, and seller has no
liability for implied warranty of marketability
3. Remedies for breach of sales contract
a. Legal remedy: Monetary remedy
i.
Damages
1. Liquidated damages: Seller usually requires buyer to deposit money (up to 10% of
sales price) in event buyer defaults in performance. Seller may retain liquidated
damages (deposit), unless certain conditions aren't met (marketable title: see
Conklin v. Davi [above])
2. Difference btw/ contract price and market value of land on date of breach
b. Equitable remedies: Injunctions; discretionary with court; usually not awarded unless party had
behaved in an equitable fashion; more drastic because it operates on the person requiring them to
do/not do something
i.
Specific Performance

47

Buyer's remedy: Equity court order seller to convey title if buyer pays. Damages (legal remedy)
inappropriate because buyer gets land, and land is unique.
1. If seller can't give marketable title, specific performance requires transfer with
abatement of price.
4. Quality of the property/ Seller's duty to disclose
a. Old Rule (NY): Caveat emptor (buyer beware); The buyer must make a thorough inspection. The
seller doesn't have to tell the buyer anything, unless
i.
There's information that would reduce the property's value in the community created by
the seller, and the buyer can't be reasonably expected to know that
ii.
Fraud (fake ventilation system)
iii.
If you start to say something, you have to tell the truth

"As is" clause (exception to caveat emptor)


1. A disclaimer of liability for property sold "as is with all defects" is not sufficient to
overcome seller's liability for conditions above

b. New Rule (most states and growing): Seller must disclose all material defects that substantially
effect the value of the property and that seller knows is not readily observable and unknown to
buyer (This is usually only residential. Not extended to commercial property)
i.
In CA, there is a checklist that seller must provide to the buyer.
ii.
Some states don't require disclosure if past renter had AIDS, if a felony happened on
property

Stambovsky v. Ackley: Application of old rule, with active misrepresentation: entered into a
contract of sale for s house. later discovers that house has reputation for being haunted. sued
to rescind contract, saying that breached duty to disclose of haunted house. Holding: Even
though NY is a caveat emptor state, court allows exception and allows to rescind Reasoning: 1)
Even if buyer investigated, she wouldnt have found out about haunted condition, and 2) Seller was
the one who created this reputation that house was haunted

II.
THE DEED
After the contract of sale, parties will "close the transaction." Seller will deliver deed (as grantor) to buyer (as
grantee), in exchange for buyer paying remaining sums due as provided in contract of sale.
1. Types of deeds:
a. General Warranty: Grantor warrants title against defects arising before and during the time the
grantor was connected with the land
b. Special Warranty: Grantor warrants the title against defects arising during the grantor's
association with the land, but no against defects arising before that time
c. Quitclaim: Grantor warrants nothing; the grantor merely transfers what tile the grantor has, if any
2. Covenants for title (assurances):
A warranty from the grantor that her title is good. A general warranty deed will contain all of these. A special
warranty will contain only a few. Covenants have limitations: in terms of what they will cover (SOL problems),
and ever finding the covenanter in order to collect. This is a good reason to get title insurance.
a. Present covenants: Guarantees that a described situation exists at the time the covenant is made
i.
Covenant for Seisin: grantor has the estate or interest she purports to convey. Both title and
possession are necessary. Being subject to a mortgage doesn't cause a breach.

48

ii.

Covenant of the right to convey: Grantor has the power and authority to make the grant.
Title alone is satisfactory, as is proof that grantor is acting as authorized agent for
titleholder
iii.
Covenant against encumbrances: Assures that there are neither visible encumbrances nor
invisible encumbrances against the title or interest (mortgages, liens, easements, etc.)
b. Future covenants:
i.
Covenant of quiet enjoyment/ general warranty: Grantee will not be disturbed in her
possession or enjoyment of property by a third party's lawful claim of title
ii.
Covenant for further assurances: Perform whatever acts are reasonably necessary to
prefect the title if it turns out to be imperfect.

Before an action arises on future covenants, you may have to have an ouster. They won't
do you any good until the holder actually does something. You may be able to provoke
them into doing something, but if they don't you're screwed.
c. Breach of covenants

Breach of present covenants occurs when covenants are made; grantee has immediate
cause of action and statute of limitations (usually 4 to 6 years) begins to rum immediately

Breach of future covenants occurs only when grantee is actually or constructively evicted
some time in the future; statute of limitations does not begin to run until the covenantee is
disturbed in possession

III.

Brown v. Lober: People bought property in 1957. In 1974, they contracted with coal company to
sell it option for mining rights. In 1976, it turned out they didn't own he coal mining rights,
because in 1947, the grantor had reserved 2/3 of the coal rights. Coal co. renegotiates contract for
1/3. They turned around and sued the executor of the people who conveyed them the property.
The basis of the lawsuit is breach of covenant of title. The question is which covenants they claim
was breached. The obvious one was "seisin." They didn't base their claim on that, because SOL
was 10 years, and this was year 19. This was a "present" breach. But they did sue for breach of
"quiet enjoyment/warranty." This breach occurs when they discover that there is a problem with
deed, or when you are ousted. They lose, because they weren't ousted (no eviction/constructive
eviction). The mere existence of a paramount title doesn't breach quiet enjoyment.

THE RECORDING SYSTEM


1. Introduction: All states have recording acts providing for recordation of documents affecting land title.
These acts are designed to protect bona fide purchasers of land from secret unrecorded claims. At common
law, the grantee who was first in time prevailed over one subsequent in time
i.
Example: O conveyed Blackacre to A for consdieration, and later O conveyed Blackacre to B for
consideration (who knew nothing of As deed). A prevailed over B on the theory that O had
conveyed title to A and had nothing left to convey to B.
ii.
Under this rule, the purchase of land was risky because B had no reliable way to assure that there
no prior deed
iii.
Since allowing the first grantee prevail encourages fraudulent acts by a grantor and imposed losses
on innocent subsequent grantees, states enacted statutes to require some sort of recordation to give
notice to the world that title to property had been conveyed and thus to put subsequent
purchasers on guard. Recordation is not essential to the validity of a deed as between the grantor
and grantee, but if a grantee does not record the instrument, he may lose out against other
purchasers from his grantor: laws punish those who fail to follow standard recording and searching
procedures to encourage recordation
2. How to approach a recording problem
a. Focus on language of statute
b. What result will serve policy of the statute

49

c. Whether the parties were following standard recording and searching procedures
d. Who best could have avoided the loss in question
3. Mechanics of the recording process
a. Grantor-grantee index (most common): Indexed by name of grantor and grantee
i.
Used to determine whether a particular owner of property has conveyed interest to
someone else
ii.
Use grantee index to see where grantor got property from, and grantor index to see if he
conveyed it to anyone else
b. Tract index (rare): keyed to description of the land conveyed rather than to names involved in
conveyance
i.
Area must be divided into blocks---> then lots, which must have single ownership at time
of index
c. Combination tract and grantor-grantee index: Divided into blocks, but within that, conveyances
of land are indexed by names.
d. Problem: Niether index makes provision for indexing passage of title on death of owner. If a gap
exists in indexed system, it is probably due to passage through death (will/intestate succession).
4. Classification
a. Notice:
i.
Subsequent BFP prevails over prior grantee who failed to record. Subsequent BFP must
have had no constructive or actual notice at time of conveyance. She is protected
regardless of whether she records at all (but only against a prior purchases, not a
subsequent BFP).
1. Constructive notice: Both record and inquiry notice
ii.
Typical notice statute: A conveyance of an estate in land (other than a lease for less than
one year) shall not be valid against any subsequent purchaser for value, without notice
thereof, unless the conveyance is recorded
iii.
Example: On January 1, O conveys Blackacre to A. A does not record. On February 1, O
conveys Blackacre to B, who gives valuable consideration and has no notice of deed from
O to A. B prevails over A, whether A records after the conveyance or not.
b. Race-notice:
i.
Subsequent BFP protected only if she records before prior grantee. Thus, to win, the BFP
must:
1. Be without notice; and
2. Win the race to record
ii.
Typical race-notice statute: A conveyance of an estate in land (other than a lease for less
than a year) shall not be valid against any subsequent purchaser for value, without notice
thereof, whose conveyance is first recorded.
iii.
Example: On January 1, O conveys Blackacre to A. A does not record. On February 1, O
conveys Blackacre to B, a bona fide purchaser. On February 3, A records. On February 15,
B records. A prevails over B because A was a BFP and Bs conveyance was not first
recorded.
c. Race (very uncommon):
i.
Whoever records first wins. Actual notice is irrelevant.
ii.
Example: On January 1, O conveys Blackacre to A. A does not record. On February 1, O
conveys Blackacre to B. B knows of the deed to A. B records. Then A records. B prevails
over A.

50

d. Period of grace: Give prior grantee period of time in which to record, and protect bona fide
purchaser only if prior grantee doesn't record in time allotted by statute
5. Types of notice (for notice/race-notice statutes)
a. Actual notice: B actually knows of O's prior conveyance to A
b. Record notice: If it is recorded in the chain of title, all people in the world have record notice.
i.
If it is outside the chain of title, one doesn't have notice (Ryckzowski v. Chelsea)
c. Inquiry notice: Purchaser must make reasonable physical inspection of property, and to make
inquiries about ownership that such an inspection would trigger. This knowledge is imputed
whether or not purchaser makes actual inspection.
6. Chain of title problems
a. Wild title
Ryckzowski v. Chelsea: Grantor got possession of property from Nevada in 1946. He gave an
easement to power co. in 1949. In 1952, Nevada transferred actual title to grantor (easement came
before title). In 1952, grantee (P) bought property, and title insurance (D) didn't show easement. P
loses case against title insurer, because easement wasn't in chain of title: was a "wild" easement.
b. Prior grantee not connected to chain of title
Morse v. Curtis: Notice statute (Mass): Grantor mortgaged property to A (who didn't record), then
to B (who had notice of A). B recorded, and then A recorded. B then assigned mortgage to C (who
had no notice of A. Court held that C gets the title: If a purchaser, upon examining the registry,
finds a conveyance from the owner of the land to his grantor, which gives him a perfect record title
he is entitled to rely upon such record title, and is not obliged to search the records afterwards, in
order to see if there has been any prior unrecorded deed of the original owner.
c. Deeds from common grantor of adjacent lots
Buffalo Academy of the Sacred Heart v. Boehm Bros: Subdivider O is developing a residential
subdivision. O sells lot 1 to A and the deed provides that lot 1 can be used for gas station. The deed
also provides that O on behalf of himself, his heirs and assigns, promises to use his remaining lots
(2, 3, etc.) not for gas sation (no competition). Then O sells lot 2 to B. The deed to B contains no
restrictions. B wishes to erect a gasoline station. Is B bound by the restrictions on lot 2 in the O to
A deed, of which B has no actual notice?
i.
Courts are split:
1. Some hold that because the burden of title search would be excessive, deeds out to
other lots from the common grantor are not in Bs chain of title, and B is not bound
by them
1. Other courts charge B with reading all deeds out from a common grantor, not just
the deeds to his particular tract. Thus, B has constructive notice and is bound by
the restriction. Courts protect the purchasers of the first few lots, that all other lots
will be developed in the same way.
7. Title Insurance
a. Definition: Title insurance guarantees that the insurance company has searched the public records
and insures against any defects in the public records, unless such defects are specifically excepted
from coverage in the policy. Accordingly, the standard policy insures only a good record title as of
the policys date.
b. Who is insured: Title insurance can be taken out either by the owner of the property or by the
mortgage lender. The insurance only protects the person who owns the policy. Policy does not run
with the land to subsequent purchasers.
c. Exclusions: The standard title insurance policy does not insure against

51

i.
ii.
iii.
iv.
v.

Liens imposed by law but not shown on public records


Adverse possession claims not shown on the public records
Encroachments and boundary disputes
Implied easements or covenants and easements by necessity or prescription
Government regulation restricting land use

DISCRIMINATION
A. Background and Statutes
1. Historically, a landlord was free to rent to whomever he pleased. But now, federal and state statutes
prohibit discrimination in rental of property on the basis of race, religion, or national origin.
2. 14th Amendment:
i.
No state shall depirve any person of life, liberty, pr property w/out due process of law
3. Civil Rights Act of 1866 (aka 1982)
i.
Bars racial or ethnic discrimination only
ii.
Applies to sale or rental of all property; not limited to housing
iii.
No explicit method of enforcement, but courts have fashioned remedies including
injunction against landlord or damages
4. Civil Rights Act of 1968- Fair Housing
i.
Enacted as Title VIII of Civil Rights Act of 1866; applies to sale or rental of dwellings
only
ii.
Prohibits:
1. Discrimination based on race, color, religion, sex, national origin, against persons
with children except in senior citizen housing, and against handicapped persons
2. Discriminating in terms of rental on same bases
3. Advertising or making any public statement that indicates any discriminatory
preference
4. Representing that a place is unavailable based on same bases when it is available
5. For profit to induce or attempt to induce anybody into selling or renting based on
prospective entry into community of people of a certain race, etc.
iii.
Exemptions:
1. Private clubs and dwellings for religious organizations are exempt from FHA
2. A person leasing a single-family dwelling she owns is exempt if she
a. Does not own more than three such dwellings
b. Does not use a broker
c. Does not advertise in a manner that indicates her intent to discriminate
3. A person is exempt if she is offering to lease a room in a dwelling in which she
lives in and does not advertise in a discriminatory manner (Mrs. Murphys
Exception)
a. Note: 1982 does not provide for Mrs. Murphys Exception so a person
can sue under 1982 if denied admittance
b. Example: O inserts ad in newspaper offering to rent a room in her house to
a white person. O is in violation of FHA prohibition against
discriminatory ads. But if O does not advertise, she is exempt from
liability under FHAs Mrs. Murphys exception; however, she would be
liable under 1982 which doesnt have that exemption
iv.
Enforcement: An aggrieved person may sue landlord in federal court; court may give an
injunction, actual damages, and punitive damages
B. Protection under above statutes/ Acts
1. Federal constitution: 14th Amendment
Shelley v. Kramer: Restrictive covenants were in place restricting property to being used by
Caucasians. The State court had upheld the covenant, but the Supreme Court reversed on 14th

52

Amendment grounds. It said that the state upholding the covenants was equivalent to "state action"
that was discriminatory, despite the fact that there was no statute statute regulating the matter. The
court concluded that because of petitioners' race or color, they were denied rights of ownership or
occupancy enjoyed as a matter of course by other citizens of different race. Rather than decide this
on grounds of touch and concern or horizontal privity (which the court could have done), they
decided this on constitutional grounds to set a precedent about racial discrimination
2. Civil Rights Act of 1866 and Fair Housing Act
Jones v. Alfred Mayer Co: Whether congress has the power to prohibit private parties from refusing
to sell their property on racial grounds. Respondents refused to sell petitioner a home because he
was black. The lower court dismissed because 1982 only applied to state action and did not bar
private individuals from refusing to sell based on race. The Court reversedbecause 1982 barred
all racial discrimination by private owners and public authorities in the sale or rental of property.
The plain language of the statute granted to all citizens the same rights to purchase property as
enjoyed by white citizens. The Court was unwilling to read into 1982 an exception for private
conduct when the legislative history did not furnish the slightest factual basis for an exception.
3. Discrimination against the handicapped
Hill v. Community of Damien of Molokai: AIDS: Handicap. Subdivision with covenants. Nonprofit organization which has bought a house on one of the lots to be used for AIDS patients. The
people who made the covenants sued for an injunction, forcing people to move out and use it for
"single family purposes only." TC found that it was not used as a single family residence, and it
violated the covenant. SC of New Mexico reversed. They ruled that this didn't defy the covenant.
But even if it had, the covenant was invalid, because it violated the FHA. They said that the home
operates as a family unit: they stress that they all help each other out financially, emotionally,
spiritually. There is an exception to the statute that it's not discrimination to deny renting to a
person who will affect the safety of the neighborhood. TC found that there was increased traffic,
but that it didn't affect the safety of the neighborhood. Usually, this is reserved for dangerous
"people." Three arguments for why it violated the statute:

Three arguments for violation of statute:


i.
Discriminatory intent: They didn't object until they found out that it was a home for AIDS
victims
ii.
Disparate Impact: People with certain kinds of disabilities need group homes, and if single
family neighborhoods are allowed to use zoning or covenants to keep them out, this will
have harmful impact on people with disabilities.
iii.
Reasonable accommodation: It would have been a reasonable accommodation simply to
not enforce the covenant.

4. Discrimination on basis of familial status


Simovits v. Chanticleer Conominium Ass'n: Condominium association had adopted a no-children
policy. Someone who bought in under the regime is suing. When they tried to sell, the covenant
prevented prospective buyers with children from buying it. So they had to lower their price, and
pay an extra mortgage. They are suing for economic damages. The board called the lawyer saying
that someone wanted to sell to kids which violated the covenant. The lawyer called the Simovits
and threatened them. Then, the same lawyer, goes back to the board and tells them that this is
illegal. He must have realized later that he messed up. The board disregards his advice, and
discriminated anyway. They take the risk anyway, and ultimately get punitive damages.

53

Smith v. Fair Employment: L had a policy of not renting to unmarried couples because she had a
belief that if she did that, God would prevent her from meeting her deceased husband in the after
life. She refused to rent to them. They were probably testers, setting her up, because they had
heard about her discriminatory practices. T called sued her for violation of FEHA: you can't
discriminate against people based on marital status. It was clear that she had discriminated. They
resolve the case by saying that the burden wasn't substantial on her religious practices: it's not like
folks who were fired because they wouldn't work on Saturday. She's a capitalist. She can deploy
her capital in some other form of investment that wouldn't violate her religious belief. We don't
reach the issue of whether CA has a compelling interest in preventing discrimination against
unmarried couples in the housing market.

NUISANCE
1. Public nuisance:
An unreasonable interference with a right common to the general public
a. Interferes with public health, safety, peace, or comfort in place of public convenience
i.
Ex.: Prostitution, air pollution, drug dealing, gang violence
b. Proscribed by ordinance, statute, or administrative regulation
c. Is continuous or permanent in nature, and has a significant effect upon the public right
o Originated from criminal law: the government brings the case.
2. Private nuisance:
Non-trespassory invasion of another's interest in the private use and enjoyment of land, if the invasion is either 1)
intentional or unreasonable, 2) unintentional and otherwise actionable under the rules controlling liability for
negligent or reckless conduct, or for abnormally dangerous conditions or activities.
a. Who can recover for Private nuisance?
i.
Possessors of the land
ii.
Owners of easements and profits of the land
iii.
Owners of non-possessory estates in the land that are detrimentally affected by
interferences with its use and enjoyment
b. There is liability only to those to whom it causes significant harm
c. An intentional invasion is knowledge that the actor has at the time he acts or fails to act. Not
malice.
d. Intentional invasion is unreasonable if:
i.
the gravity of the harm outweighs the utility of the actor's conduct, or
ii.
The harm caused by the conduct is serious and the financial burden of compensating for
this and similar harm to others would not make the continuation of the conduct not feasible
e. Gravity of harm, factors involved:
i.
The extent of the harm involved
ii.
The character of the harm involved
iii.
The social value that the law attaches to the type of use or enjoyment invaded
iv.
The suitability of the particular use or enjoyment invaded to the character of the locality
v.
The burden on the person harmed of avoiding the harm
f. Gravity v. utility of the conduct- conduct unsuited to locality
i.
The social value that the law attaches to the primary purpose of the conduct
ii.
The suitability of the conduct to the character of the locality
iii.
The impracticability of preventing or avoiding the invasion
g. Pairs with trespass law:
i.
Trespass: physical invasion of property
ii.
Nuisance: no physical trespass, but interferes with use and enjoyment

54

Boomer v. Atlantic Cement Co (LIABILITY RULE) Plaintiff landowners neighbored defendant's cement factory.
Plaintiffs sought an injunction for property damages from the factory's vibration, smoke, and dirt. The lower court
found the factory a nuisance and ordered temporary damages, but denied an injunction. The court found it should
not try to lay down a policy for the difficult problem of pollution elimination as the byproduct of private litigation.
The court determined permanent damages were allowed where the loss recoverable is small in comparison with the
cost of removal of the nuisance. The court further indicated permanent damages were appropriate when there was a
continuing and recurrent nuisance, as in this case. The court found it equitable to award plaintiffs permanent
damages based on the theory of compensation for servitude on the land which precluded future recovery by
plaintiffs or their grantees. The court granted an injunction which was vacatable upon defendant's payment of
permanent damages.
Options
Court options:
1. Permanent damages at the time of the lawsuit
2. No injunction, and allow residents to sue over and over again
3. No injunction, no damages
4. There's one more that I don't remember: get from someone

Boomer's options if there had been an injunction:


1. Buy out injunction
a. High transaction costs: each P trying to be last holdout and get most money
b. Coase theorem doesn't hold, because of the transaction costs
2. Close and move away
3. Develop new technology

If judgment had been awarded to Boomer:


1. Landowners could have bought out Boomer: free-rider problem. They also might not have enough
money (the higher valued use is the cement plant)
2. Talk to the legislature: zoning regulations, pass clean air act
3. Buy air filters, wear a mask

Spur Industries v. Del Webb Development: Defendant owned cattle feedlots prior to the construction of plaintiff's
nearby residential development. Plaintiff sued defendant, claiming that the feedlots were a public nuisance because
of the flies and odor that drifted toward the development. The trial court permanently enjoined defendant from
operating the feedlots. The court affirmed the judgment of the trial court permanently enjoining the feedlot
operations, holding that the feedlots were both a public and private nuisance. A populous neighborhood was
affected by the odor and flies, and the public's health was affected. The court held, however, that plaintiff, having
brought people to the nuisance to the foreseeable detriment of defendant, was required to indemnify defendant for
his costs of relocating (Spur still owns the land) or shutting down the feedlots. The court, therefore, remanded the
case for a hearing on the damages sustained by defendant.
Cost Avoidance
1. Who's the least cost avoider from the beginning? Dell Webb. They could have picked another location.
2. Who's the least cost avoider once the units have gone in? The feedlot. It would be easy to move: ship off
the cattle to market and find a new place. Very little infrastructure involved.
3. The case would have been different if Phoenix had just gradually expanded into the area. Then, the feedlot
would have gotten nothing. Also, the property can sell for a lot more, because expanding Phoenix would
want it. It would have been foreseeable. W/ Dell Web, it wasn't foreseeable.
Mark v.State Dept. of Fish and Wildlife: Plaintiff landowners' sought damages and injunctive relief against
defendant state agencies for failure to prevent consistent public nudity and sexual activity on public lands adjacent

55

to plaintiffs' property. The complaint stated causes of action for public and private nuisance as well as inverse
condemnation caused by the decrease in value of plaintiffs' property. Plaintiffs appealed and the court affirmed the
dismissal of inverse condemnation claims and all claims for damages, but reversed as to injunctive relief on the
nuisance claims. Because defendants had no nondiscretionary duty to prevent public nudity, they could not be held
liable for damages. The inverse condemnation claims were properly dismissed because plaintiffs were not deprived
of all use and enjoyment of their property. The court said that the complaint stated claims under both public and
private nuisance theories because plaintiffs alleged an injury as adjacent property owners that was distinct from the
injury suffered by the public at large. Public sexual activity is a public nuisance. But if you live next door, you can
get private nuisance. Reciprocal nature of nuisance claims: who is the nuisance? The people who moved in, or the
people using the nude beach. Both are nuisances. Which one gets privilege, or is there a middle ground where the
interests of both groups can be accommodated.
I.

II.

SERVITUDES
Background: Servitudes are non-possessory rights in land that "run with the land" (automatically pass on
to subsequent owners and occupiers whether they have actually been assigned it or not). The rights created
are called benefits and the obligations are called burdens. These agreements can be divided into two broad
categories: (1) easements: rights arising from a grant of a right by one landowner to another and (2)
covenants: rights arising from a promise respecting the use of land by one land owner to another. These
rights are frequently found in subdivision developments and in condos, as well as between neighboring
landowners.
Easements

A. Introduction
An easement is a grant of an interest in land that entitles a person to use land possessed by another
1. Types of easements:
a. Affirmative: Owner of an affirmative/positive easement has the right to go onto the land of
another (the servient land) and do some act on the land (lay utility lines, take water)
b. Negative: Owner of a negative easement cannot go onto the land of another ("servient
land), but has the right to compel the servient owner to refrain from engaging in activity
that, were it not for the easement, he would be allowed to do.
2. All easements are either appurtenant to other land or in gross
a. Easement appurtenant: If an easement benefits its owner in the use of another tract of
land, it is appurtenant to that land
i.
The land benefited is called the dominant tenement; the land burdened is called the
servient tenement
ii.
Example: Whiteacre is located between Blackacre and a public road. O, owner of
Whiteacre, conveys to A, owner of Blackacre, a right to cross Whiteacre to reach
the public road. The easement over Whiteacre is appurtenant to Blackacre
(dominant tenement).
iii.
An easement appurtenant is attached to the dominant tenement and passes with the
tenement to any subsequent owner of the tenement.
b. Easement in gross: If an easement does not benefit its owner in the use and enjoyment of
his land, but merely gives him the right to use the servient land, the easement is in gross
i.
Example: O, owner of Greenacre, grants to Heylook Billboard Co. the right to
erect a sign on Greenacre. Heylook owns no land. The easement is in gross and can
be assigned by Heylook if the parties so intend. If O sells Greenacre to A, the
burden of the easement passes with the ownership to A.

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ii.

Easements in gross can be either personal (right to swim in a friend's lake) or


commercial (railroad easements), but they usually are only transferable if for a
commercial or economic purpose.
c. If an instrument creating an easement is ambiguous, courts generally construe it as creating
an easement appurtenant to land
B. Creation of easements
1. Easements can be created by
a. Express grant or reservation
b. Implication
c. Prescription
d. Estoppel
2. Easement by express grant or reservation
a. Creation by express grant must be written and signed by grantor (Statute of Frauds). It
also must comply with all formal requisites of a deed. It is presumed perpetual unless
stipulated a shorter time period
b. Creation by reservation typically can only be reserved for the grantor, not anyone else.
c. An express easement can expand to recognize changing technology as long as it's serving
normal development of the dominant estate. As property changes, the uses of the easement
can develop. It's when there's a drastic change that the court finds a problem (easements for
cart ways can be adapted for cars and buses)
d. If instead grantor gives grantee permission to enter land by oral agreement, the grantee
has license to use the land, not an easement
Stratis v. Doyle: Easement or license? Doyle (D) gave an easement to his neighbor,
Abbatiello to build a driveway. Abbatiello passed his property to mortgagee (foreclosure),
who gave it to Stratis (P). Doyle then gave his property in part to Denenbaum. Doyle had
the servient estate, and Abbatiello had the dominant estate. The servient estate got
subdivided, but the easement went across both pieces. Court says Both Doyle and
Denenbaum have to respect easement, which Stratis now owns. The benefit runs with
Abbatiello's land, and is now in Stratis. The burden runs with Doyle's land, and successors
will take possession of easement unless they are bona fide purchasers without notice. If we
had subdivided the benefited property into two pieces, each piece would have been able to
use the easement, as long as we don't reach a point at which it would overburden the
easement. D says Abbatiello only got a license. He argues that it was personal to Abbatiello
out of friendship. Court says that it wasn't personal. It ran with the land. It was an
easement, because of the formality that went into the language of the deed. They used a
deed form, and words of inheritance ("grant"). If they had meant just a license, they
wouldn't have used something this formal.
3. Easement by implication
a. Created by an operation of law, not a written instrument. An exception to the Statute of
Frauds.
b. Three kinds:
i.
Implied from existing use (quasi easement)
ii.
Implied without existing use
iii.
Necessity.
c. Implied from existing use (Quasi easement)
i.
Tract must be divided into two or more parcels
1. Implied grant: If easement is implied in favor of the grantee.

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2. Implied reservation: If easement is implied in favor of the grantor.


Use of one part of the tract must exist at the time a tract is divided (quasieasement)
1. Previous use must be apparent; it is apparent if a grantee could, by a
reasonable inspection of the premises, discover the existence of use (i.e.,
beaten path). Need not be visible though (toilets imply sewage lines)
2. Previous use must be continuous, not sporadic
3. The easement must be reasonably necessary for the enjoyment of the
claimed dominant tenement
Van Sandt v. Royster: Three lots, with three houses. It's a sewer line, that was put in in
1904 by the single owner of all three lots. She sold the other two lots. Houses on the other
two lots connected to the sewer. Court says there is an easement, even though the deeds
don't say anything about the sewer line. The original owner created "quasi dominant" and
quasi servient estates. Since she owned all plots, she didn't need to get an easement. But
when she sells the other property, she didn't intend to cut off the sewer line, or give the
right to buy the sewer line. The original buyer got an advantage, cus he could hook into the
sewer line.
ii.

d. Implied without existing use


i.
Subdivision plat: when lots are sold in a subdivision with reference to a recorded
plat or map that shows streets leading to the lots, buyers of the lots have an
easement to use the street to gain access.
ii.
Profit a prendre: An owner grants right to remove products of the soil (trees,
asphalt, etc), the holder of the profit has an implied easement to pass over surface
of land to use it to extract the product
e. Implied by necessity
i.
Easement by necessity is implied if the owner of a tract of land divides the tract
into two lots and by this division deprives one lot of access to a public road
ii.
Requirements for implying easement by necessity
1. There was a unity of ownership of the alleged dominant and servient
estates. IT MUST HAVE BEEN DIVIDED!!!
2. The roadway is strictly necessary, not a mere convenience; and
3. The necessity existed at the time of severance of the two estates
4. Note: No requirement for existing use
iii.
French's better rule for interpreting easements by necessity: Easements for utilities
that are normally used by properties in this area
4. Easement by prescription
a. Akin to acquiring land by adverse possession.
b. Elements of prescription (usually same as adverse possession)
i.
Open and notorious use of easement
ii.
Claim is under a claim of right (i.e., not with permission of the owner of land)
1. Objective test: Acts of the user appear to the community to be under a
claim of right
2. Subjective test: User must have a good faith belief that he has a right to
use the servient land
iii.
Continuous use of easement
iv.
Uninterrupted use of easement
Paxson v. Glovitz:
5. Easement by estoppel

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Mund v. English: Son and daughter of D got together with D, and built a well on D's land. There
was no explicit agreement: nothing written down. They both invested in it, paid for operating
expenses. Ps now want courts to give them half interest in the will, and irrevocable license. They
brought in a lawyer, but the lawyer didn't take notes, and couldn't remember what they had agreed
upon. Courts said that if someone makes improvements based on a permission granted to use their
land, then if they make investments based on that permission, they will be estopped to revoke it.
This gets around part performance, because this doesn't deal with contracts. You can use estoppel
where there is no contract, just permission. Permission isn't a promise, which would be a contract.

B. Scope of easements
1. In general: After an easement is created, questions may arise about what use the easement owner
can make of the easement or about what interference by the servient owner is permissible. These
questions are treated as questions of the scope of the easement.
2. General rule: The scope of the easement depends on the intention of the parties. In ascertaining
this intent, court will examine the following:
a. Whether the easement was created expressly or by prescription; and
b. What changes in use might reasonably be foreseeable by the parties; and
c. What changes in use are required to achieve the purpose of the easement under modern
conditions and preserve the usefulness of the easement to the dominant tenement; and
d. Whether the burden is unreasonable
3. Specific rules
a. If the dominant owner subdivides his lot, each subdivided lot has a right to use easement
appurtenant to the dominant tenement unless it poses an undue burden on the servient
tenement
b. If an easement has been granted in a specific location, or has been located by mutual
agreement of the parties, the location cannot thereafter be changed by one party acting
unilaterally
Davis v. Bruck: The landowners had an easement over the neighbor's land as a right of way
for the landowners to access their land. The landowners filed an action against the neighbor
to prevent her from obstructing their right of way across the land and to the seashore. On
review, the landowners argued that the trial court had no authority to order the relocation of
an expressly granted easement without their consent. The court agreed, finding that the
location of the easement could not be changed unless both parties to the easement agreed to
the new location. Because there was no mutual consent of the parties, the trial court erred.
c. The dominant owner cannot increase the scope of the easement to benefit a
nondominant tenenment
Brown v. Voss : Brown () owns parcels B and C. Voss () owns parcel A. Brown has an
appurtenant easement for right of way through Voss parcel A to get to parcel B, but not to
C. Brown wants to use right of way to carry equipment for building a house on C, but Voss
objects to the use for that purpose. Voss sues Brown for injunction. Court holds Brown
cannot add another dominant estate (here, C) to an easement; the dominant owner cannot
increase the scope this would be a misuse of easement. Thus, Brown cannot use roadway
on A to carry equipment that Brown would use to build house on C. However, court denies
injunction because that would keep Brown from ever getting onto parcel C; instead, court
gives damages
4. Restatement (Third)
a. If the location is not expressly stated in the deed:
i.
The owner of the servient has the right to specify location

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ii.
iii.

The dimensions must be necessary to properly enjoy easement


Owner of servient estate is entitled to make reasonable changes, at his expense, to
permit normal use and devt. Of servient estate, but only if changes don't
1. Lessen utility of easement
2. Increase burdens on owner of easement in use and enjoyment
3. Frustrate purpose for which easement was created

Lewis v. Young: Easement to use driveway. Servient wanted to relocate driveway, contending that it
didn't interfere with dominant's easement rights. Dominant argued that the driveway could not be
relocated without his consent. Court: Express easements were defined by the intent of the parties.
In the absence of a demonstrated intent to provide otherwise, a landowner burdened by an express
easement of ingress and egress could narrow it, cover it over, gate it, or fence it off, so long as the
easement holder's right of passage was not impaired. The court concluded that a balancing test was
appropriate, and that in the absence of a demonstrated intent to provide otherwise, a landowner
could move the right of way, so long as he or she bore the expense and the change did not frustrate
the parties' intent or object in creating the right of way, increase the burden on the easement
holder, or lessen the utility of the right of way.

5. Easements by prescription are given less latitude for change than express, implied, or necessity
D. Termination of easements
1. By unity of title: An easement is a right in the land of another. If the title to the easement and title
to the servient tenement come into the hands of one person, the easement is extinguished; once
extinguished, it is not revived by the subsequent separation of the tenements
2. By prescription of servient owner: If the servient owner interferes with an easement in an adverse
manner (e.g., erecting a fence across a roadway), the servient owner can extinguish the easement
by prescription; requirements are same as for creating easement by prescription
3. By abandonment of dominant owner: If the dominant owner of the easement acts in such a way as
to indicate an unequivocal intent to abandon the easement, the easement is terminated; need intent
and action
4. If the easement is implied by necessity, easement terminates when necessity no longer exists
E. Assignability of easements
1. In general
a. Appurtenant easements: The benefits and burdens of appurtenant easements pass
automatically to assignees of the land to which they are appurtenant
i.
Easement appurtenant is thought of as attached to the dominant land
ii.
Owners of the dominant and servient tenements may mutually consent to detach
the easement
b. Easements in gross: Benefit may or may not be assignable; courts have restricted the
transfer of benefits (see below for details)
2. Easements in gross
a. Old rule: Easements in gross are not assignable because it might lead to burdens that
parties did not contemplate
b. New rule: Easements in gross can only be assigned in leases for commercial purposes
i.
Commercial easements in gross are those that have primarily economic benefit
rather than personal satisfaction
ii.
Rationale for rule: It would be unacceptable public policy for a company to lose its
easements when it merged with another company (i.e., want to able to transfer
entire business infrastructure)

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c. Restatement of Servitudes: Any kind of easement in gross is transferable unless the


original parties did not intend for it
d. Even if it is assignable, it is questionable as to whether it can be subdivided. Partial
assignments are permissible so long as it doesn't burden the servient estate beyond what
was originally contemplated.
III.

Covenants that run with the land


A.
Introduction
A.
A covenant is a written promise to do or not to do something.
a.
Unlike easements, covenants are not a right to use someone else's land
b.
Promise can be affirmative or negative
i.
Affirmative: Promise to pay association fees in a condo
ii.
Negative: Promise to not build property too high to obstruct a view
c.
Remedies for breach
i.
If promise is breached, the promisee can either
1.
Get damages; or (legal)
2.
Get an injunction requiring specific performance (equity)
ii.
If the successor to the promissees land wants money damages, he must sue in law
and must prove that the covenant qualifies as a real covenant
iii.
If the successor to the promisees land wants injunction or specific performance,
he must sue in equity and must prove that covenant qualifies as an equitable
servitude
B. Creation and Enforcement of Real Covenants
a. Issues:
i.
Whether the burden of the covenant will run to successor owners of the promisors
land; or
ii.
Whether the benefit of the covenant will run to successor owners of promisees
land
b. Requirements for burden to run at law
i.
Must be in writing
ii.
Contracting parties must intend that successors to the promisor be bound by
covenant
iii.
There must be privity of estate:
1. Between the original promisor and promisee (horizontal privity); and
2. Between the promisor and his assignee (vertical privity)
iv.
The covenant must touch and concern the burdened land
v.
Subsequent purchaser of the promisors land must have notice of the covenant
c. Requirements for benefit of covenant to run at law
i.
Must be in writing
ii.
Contracting parties must intend for it to run
iii.
Some form of privity of estate may be required (usually vertical privity)
iv.
Benefit must touch and concern the benefited land

Runyon v. Paley: If a subdivider creates a covenant after selling part of the subdivision to
someone, that original purchaser cannot enforce the covenant included in the later deeds,
unless it is part of a common scheme of development. Williams can enforce covenant, but
Runyons can't. The benefit of the covenant only went to Williams lot, not to the Runyon's.
Gaskins owned the William's lot at time that she made the covenant, but not the Runyon's
lot (because she had already sold it to the Runyon's at that time).

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1. Analysis of requirements for real covenants


a. Writing
i.
Must comport to the Statute of Frauds
ii.
Sufficient that only the grantor signs the deed.
b. Intent
i.
Creating covenants that run with the land is voluntary. We shouldn't find that
people created them where they didn't intend to do it
ii.
May be inferred from circumstances surrounding the creation of the covenant, or
directly from the language of the deed: "these covenants shall run w/ land"
iii.
Required for both benefit and burden
c. Privity of estate
i.
Horizontal privity: a specified relationship between original promisor and
original promisee
1. Required for burden to run
a. English view: Parties to a promise are in horizontal privity only if
they are in a landlord-tenant relationship (mutual interest; both
have interest in property)
b. American view:
i.
General/majority rule is that a conveyance creates a
horizontal privity
ii.
MA rule is that leasehold and easements create horizontal
privity
iii.
Restatement combines above two; horizontal privity is
satisfied by a mutual relationship or a successive
relationship
c. Covenants between neighbors are invalid unless they use a straw
man to actually "convey" something
2. Not required for benefit to run
a. Ex. A, who owns Blackacre, covenants with her neighbor, B who
owns Whiteacre, that "A, her successors and assigns, will keep the
building on Blackacre in good repair" Horizontal privity is
missing. B then conveys Whiteacre, the dominant estate, to C. C
can enforce the benefit of the affirmative covenant against A
because horizontal privity isn't necessary for the benefit to run.
But if A then conveys Blackacre to D, neither B nor C can enforce
the covenant against D, for horizontal privity is necessary for the
burden to run.

Sonoma v. Miller: Court says that as long as covenant is part of a transaction between covenantee
and covenantor, that is sufficient to establish horizontal privity.
d. Vertical Privity: A specified relationship between the original party to contract and an
assignee
i.
Required for a burden to run
1. Restatement: Succession to an estate of the same type as owned by the
original promisor satisfies vertical privity for burden to run; if, for
example, the original promisor owned a fee simple, the covenant will run
only to a person succeeding to a fee simple and not to some lesser estate
like a life estate

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2. Example: O owns Whiteacre and Blackacre. A buys Blackacre from O. A


promises O, his heirs, and assigns that A, his heirs, and assigns will not
erect a pizza parlor on Blackacre, which would be objectionable to
Whiteacre. Subsequently, A devises Blackacre to his wife, W, for life. W
erects a pizza parlor. W is not liable for damages since she did not succeed
the whole fee simple A had.
ii.

May be required for a benefit to run


1.
Restatement: Succession to an estate of any type satisfies vertical privity
for benefit to run
2.
In above example: If O devised Whiteacre to his wife for life, Os wife
could sue A on the promise or she could sue any successors to As fee
simple. However, she could not sue As wife because As wife did not
succeed the whole simple.

e. Touch and Concern


i.
This is a very difficult topic for the courts. Generally, touch and concern refers to a
covenant that makes the land itself more useful or valuable to the benefited party.
Rose's definition: if it is "pretty land related." It must affect the legal relationship
of the parties as landowners, and not just as members of the community at large.
For the burden to run, the covenant must diminish the landowner's right in
connection w/ her enjoyment of her land.
ii.
Specific applications:
1. For negative covenants to touch and concern
a. The covenant must restrict the servient owner in his use of that
parcel of land; and they enhance the value of the benefited land
2. For affirmative covenants to touch and concern
a. The covenant must require the servient estate to do something that
increases her obligations to her land.
b. If the covenant poses a substantial burden on the servient land, a
court may find that it doesn't touch and concern
3. Promises to pay money
a. If the money is to be used in a way that's connected w/ the land,
the burden will run.
b. Ex. Payments for a homeowner's association.
f. Remedies
i.
Damages only, because this is at law.
2. Creation by estoppel
Shalimar v. DOC Enterprises: Court protects buyers' interests in real estate development
against changing mind of the developer/owner. Development started in 1960 to be a golf course.
Covenants recorded for subdivision included restrictions that related to the golf course (a setback
from the course, landscaping, etc.) The course was identified as one which might be constructed on
tract A. IT was constructed, and continued until 1970s. It wasn't doing well financially, and D.
wanted to redevelop it. The homeowner association sued to keep the property as a golf course.
Problem: There wasn't anything in writing that opposed restrictions on tract A. And nowhere in
writing was there a covenant of continuing operation that it would remain a golf course (similar to
Piggly Wiggly). They win. Statute of Frauds problem: part performance and estoppel: The
developer had documents that described the golf course, so everyone who purchased saw a map
that showed a golf course. Also, they told the homeowners that they would operate it as a golf
course until 2000 and extend to 2025 unless the homeowners didn't want it. Also, the buyers buy

63

the houses, and the developer builds a golf course and maintains it, and sells it at golf course price
(part performance)
Promises and representations: We want clear evidence that promises and representations
were made: they charged more for lots adjacent to golf course, and the current owner said
that it was his understanding that it had to be a golf course.
Reliance: We want to know that the buyers detrimentally relied on the representations.
Defenses:
Changed conditions: There's still benefit here to the landowner. So we can't change
it. We find this with racial covenants before Shelley v. Kramer.
3. Creation by implication
a. Usually involved when a developer sold property in a new development
b. When maps, advertisements, sales representations for a new development led purchasers to
believe the developer is obligated to complete and maintain roads, recreational facilities,
convey common areas to property owners' association, etc., courts may find implied
covenant to bind developer's successors to complete the development in accord with the
representation (see Shalimar: this could have been done with the golf course)
c. Also, when developer creates project with common property but does not provide for
ongoing management or maintenance of property. If lot owners should have reasonably
expected this to happen, a court may find implied covenants to allow an association of
owners to manage property and pay assessments
Neponsit v. Emigrant: Covenants can be enforced against homeowners and successors of
original buyers. Important because it's the first big case that held that homeowner
association assessment covenants can be enforced.
4. Creation by prescription and eminent domain
a. Prescription
i.
Failure to develop or use your land in a particular way doesn't give rise to
prescriptive negative covenant for the neighbor (not building for 50 years so the
neighbor has a view, and then building to block it: this is OK)
ii.
Prescriptive covenants can only happen if a person believes they are bound by
covenants and performs the covenants for the prescriptive period and if there was
some defect in the covenant creation (i.e. not recorded, or out of chain of title)
b. Eminent domain
i.
Sometimes it's cheaper for got. To take over the covenants rather than fee simple.
This is possible
C. Equitable Servitudes
1. Definition: An equitable servitude is a covenant that equity will enforce against assignees of the
burdened land who have notice of the covenant. Usual equitable remedy is an injunction against
violation against a covenant
2. Requirements
a. Must be in writing (but some states may imply a negative equitable servitude from a
general plan, see below)
b. No privity requirement (but some jurisdictions require privity for burden to run)
c. Parties must intend to bind successors
d. Must touch and concern the land (same as in real covenants)
e. Successor must have notice (usually a problem in planned units)
f. Does not apply to affirmative covenants, only negative covenants. Negative burdens can be
applied in both law and equity.

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3. Servitudes implied from a common scheme


a. When a developer divides up land into several parcels and some of the deeds contain
negative covenants but others do not, negative covenants or equitable servitudes binding
all the parcels in the subdivision may be implied under doctrine of "reciprocal negative
servitudes"
b. Requirements
i.
A common scheme of exclusively residential development, and
ii.
Notice of the covenants
c. If someone bought a lot from developer before the scheme arises, benefited parties cannot
impose servitudes on those that purchased before scheme
d. Developer's common scheme may be evidenced by
i.
Recorded plat
ii.
General pattern of prior restrictions
iii.
Oral representations
e. Rationale:
i.
Someone may have purchased the lot believing that servitude applied to everyone
in the lot
4. Touch and concern
a. Same as in real covenants
5. Vertical Privity
a. Only "some" estate needs to be shown for a burden to be enforceable in equity. Therefore,
lessees and life tenants are bound in equity, but not at law.
C. Rel. between covenants and zoning
a. They complement zoning laws usually, but can conflict with them
b. People use covenants because they're more flexible and the landowners have control, as
opposed to the city
c. Also, covenants can be much more detailed and do things the government can't do
d. When there's a conflict, the more restrictive prevails
i.
This isn't true if the zoning prohibits something required by the covenants, then the
zoning would prevail
D. Validity of servitudes (Touch and concern and the Restatement 3rd)
1. Old view of what was not allowed:
a. Benefits in gross
b. Covenants w/out horizontal privity
c. Affirmative covenants
d. Covenants to pay money other than rent
e. Covenants against competition
f. Covenants that didn't touch and concern
g. But, it failed to strike down evils like racial covenants
2. Modern view (Restatement 3rd)
a. Has eliminated the touch and concern policy; servitude will be struck down if:
i.
Arbitrary, spiteful, or capricious
ii.
Unreasonably burdens a fundamental constitutional right
iii.
Imposes unreasonable restraint on alienation
iv.
Imposes unreasonable restraint on trade or competition
v.
Unconscionable
Davidson v. Katz: Public policy can be made and may result in non-enforcement of a covenant.
Covenant that space shouldn't be used as a supermarket for 40 years. First trial held against
Davidson, who was trying to enforce the covenant on the ground that covenant didn't touch or

65

concern the land (burden clearly touches or concerns, but benefit doesn't). Benefit to Davidson is
more business, because it's not tied to a particular piece of land, it is to a grocery store business.
From this they concluded that the burden touched and concerned, but the benefit didn't so it wasn't
enforceable. Supreme Court said that touch and concern isn't the only question. Look at a larger
"reasonableness" standard. Should this burden be attached and allowed to run with land? Generally,
we would say that covenants against competition are useful. Rather, public policy has a big role.
This covenant should not be enforceable at all because it violates public policy. This is the inner
city, and it is susceptible to harm from not having a grocery store. For public policy, we look to
legislation and court cases. It would have been unenforceable anyway due to touch and concern
under traditional law. We could have protected them with a liability rule (damages) instead of a
property rule (injunction). Also, the city could have condemned the covenant (forced Davidson to
sell them the covenant)

Rhue v. Cheyenne: Design controls (you can't build anything without permission) are ok!! Tthe
architectural control committee has to act "reasonably." How would you attack this from PP
standpoint? 1) There are no standards. So the decisions are arbitrary. If you can say that this is
purely arbitrary, then we can't get into judicial enforcement. Court says it's not a problem. You don't
have to put standards in covenant. Rather, the architectural control committee has to act
"reasonably." 2) Freedom of expression: it unduly burdens a fundamental constitutional right

Nahrstedt v. Lakeside Village: Court says that they have no problem enforcing blanket covenants
unless it violates public policy or is unreasonable. They look at the benefit to the community, to see
if it outweighs the costs. Cats case.

E. Succession to Covenants: (Vertical Privity and the Restatement 3rd)


1. Overview
a. Benefits: To be entitled to enforce a covenant, anyone other than the original covenantee
must show that he now owns wome land that was intended to benefit by the covenant. If it
is in gross, an assignment must be shown. People who are not assignees or owners of land
benefited lack standing to enforce a covenant.
b. Burdens: It is also necessary to show that person is connected to covenantor, either by
current ownership in land intended to be burdened by covenant, or express assumption of
the obligation.
2. Succession to burdens:
a. Burdens at law: same estate as covenantor (strict vertical privity)
b. Burdens at equity: some estate held by covenantor (relaxed vertical privity)
c. Lessees and life tenants are bound in equity but not at law.
d. Problems: This made sense when only negative covenants were enforceable in equity, but
when affirmative covenants were enforced in equity by courts, it lost utility. Lessees
shouldn't automatically be bound on fee owner's covenant to pay assessments to a
homeowner association (affirmative) but should be bound by restriction limiting use of
property to residential purposes (negative). But a life tenant should be bound by both.
3. Succession to benefits
a. Relaxe4d vertical privity required for benefits to run at law and in equity.
b. If the benefited property is leased, or carved up, they can still enforce the covenant
c. Problems: Makes sense for negative covenants, but presents problems w/ affirmative
covenants. If covenant is to pay money to landowner for use of an easement, or entitling
owner to vote on homeowner issues, this doesn't make sense for a lessee to be able to do
this.
4. Restatement 3rd

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a. Vertical privity fails to recognize distinction between lessees, life tenants, and adverse
possessors regarding burdens and benefits, so the Restatement distinguishes between
affirmative and negative covenants
b. Negative covenants: treated the same as easements. All occupiers of burdened land are
bound not to interfere w/ covenant, and occupiers of benefited land are entitled to use the
covenant.
c. Affirmative covenants:
i.
Lessees: Benefit of covenants to repair, maintain, and render services to property
run to lessee, as well as covenant benefits that can be enjoyed by lessee w/out
diminishin their value to fee owner and w/out increasing burden of performance of
covenant. Also, only affirmative covenant burdens to lessees are those that can be
more reaosnably performed by lessee than the holder of the reversion
ii.
Adverse possessors: Acquire all appurtenant benefits and take subject to all
servitudes burden property when AP began.
F. Modification, Termination, and Changed Conditions of covenants
1. Termination: May be terminated by expiration, release, abandonment, merger, estoppel,
prescription, condemnation, and agreement of all interested parties.

Westwood Homeowner's Ass's v. Lane County: Is requirement to pay assessments to Ass'n a lien
or encumbrance, or a servitude? County got title to 15 lots in a planned community at a tax
foreclosure sale. The homeowners association made assessments against each of the lots for road
and common area maintenance fees that were incurred after the county acquired title to the 15 lots.
The county refused to pay the assessments and the homeowners association brought a foreclosure
action to enforce its liens. The court held that the tax foreclosure did not extinguish or render
extinguishable the covenants, conditions, and restrictions that affected each lot in the planned
development or the homeowners association's power under the covenants, conditions, and
restrictions to make post-tax-foreclosure assessments against the lots. The county, therefore, took
title to the lots in planned development subject to the servitudes.

2. Modification:
a. May be modified with consent of all interested parties. Also, the covenantor may retain
modification powers. Also, modern common interest communities have provisions for
amendment by specified percentage of lot owners. Sometimes statutes will grant these
powers to members of common interest communities; however, courts will construe these
in favor of minority parties (amendments that change basis for allocating assessments
among units are usually invalid)

Evergreen Highlands Ass'n v. West: If you buy into a community that has shared private facilities
(parks), you are going to expect that you and your neighbors are going to pay to maintain that
facility. Landowner bought into facility with a huge park. He thought he was getting a sweet deal in
being able to use the park but not having to pay for it. He sued when he was assessed for the park,
but the court said that he should have known that he would have to pay for it. Modified the
covenants.

3. Changed Conditions
a. Restatment 3rd: When a change has taken place since creation of servitude that makes it
impossible/impractical, a court may modify the servitude. If modification isn't practicable,
the court may terminate the servitude. Compensation for benefiting parties may be
awarded.

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b. NY: as long as there's some benefit to enforcement, you can continue to enforce by
injunction
c. Mass (very extreme): Even if there's benefit, if continuation of the restriction would
impede reasonable use o f the burdened land, or if enforcement would not be in public
interest, the court can award money damages only, not enforce by injunction

Rick v. West Covenant is still benefit to West, so court will enforce it. Covenant restricting land to
residential use. One resident (D) sued to enjoin P. from selling their land for commercial use. Court
held in favor of D.

Requirement
Intent
Horizontal privity
Existence of general
plan

Real Covenant
Required
Required

Writing

Required
Probably OK, but first Restatement
said no
OK
Required
Succession to same estate required for
burdens
Required by recording act (actual,
inquiry, or constructive)

Benefits in gross
Affirmative burdens
Touch or concern
Vertical privity
Notice

Not required

Equitable Servitude
Required
Not required
Not required, except in Virginia (and maybe a few
other states)
Required, but implied servitudes and servitudes by
estoppel are allowed
Not allowed, but many exceptions
OK, but a few exceptions
Required
Succession to some estate required
Required (actual, inquiry, or constructive, except that
NC requires record notice)

TAKINGS
I. Eminent Domain
A. Introduction
The state can compel a private property owner to relinquish to the state's control, ownership, and dominion any
property it so chooses provided two conditions exist
1. A public purpose, and
2. Under the 5th Amendment, it must pay just compensation to the property owner (fair market value)
B. Conventional Uses
1. Acquire land for roads, airports, schools, parks, etc.
2. Delegated power to railroads, public utilities, etc. for their tracks on theory that it benefits public
3. Assemble land packages for private developers and redistribute land ownership
Hawaii Housing Authority v. Midkiff: The state can use eminent domain powers to condemn
property in order to transfer land into the hands of private parties who live there. Hawaii set out to
correct imbalance in Hawaii real estate market: most of the land was held by a small group of
individuals, so they wanted to redistribute the fees simple to lessees of property. If 25% of
landowners want property condemned, the govt. will do it. The landowners weren't selling because
of tax liability. So they did the condemnation so the owners would reduce tax consequences for
owners. Standard of review: Rational basis (there's judicial deference to what the legislature
decides). "Where the exercise of the eminent domain power is rationally related to a conceivable
public purpose, the court has never held a compensated taking to be proscribed by the Public Use
clause"
Berman v. Parker: If this comes within the police power, then it's a public use, so you can
use eminent domain. No difference between "public purpose" and "public use." (Slum

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renewal. This has been widely used, but is criticized because it clears out communities: in
early days, there was no relocation aid). Court: You can take non blighted property in a
blighted area, condemn it, and turn it over to private developer.

Poletown Neighborhood Council v. City of Detroit: OVERRULED. You can use eminent domain
to grant land to a single private corporation. A whole neighborhood was condemned for a new GM
plant, because GM was threatening to leave town, which would take many jobs. Court upheld it
saying it was a public purpose.
Dissent (Justice Ryan):
1. Public control: Purpose v. Use. Purpose is what we can spend money on, or what
we can tax people for (if they want to spend their money to keep GM here). Use is
more intrusive: eminent domain. Instrumentality of commerce is public use
(railroads). But there's much more govt. control over these. However, with GM,
there is no public control.
2. Accountability: GM has no accountability to the public. GM could leave if they
want to, and made no commitment to maintain employment level.

City of Oakland v. Oakland Raiders: You can use eminent domain to gain an intangible property
right. What's the public use? Employment, revenue. Court says that you can go to trial on this and
try to show it's a public use. They did this, but the court on appeal after trial said it was
interference with interstate commerce, which violates Federal Constitution.

Kelo v. City of New London: Redevelopment project which involved Pfizer establishing a facility in
the city. City was in poor condition. Landowners challenged it on public use, saying that the only
justification is economic development, which is a public purpose, but not a public use. Court sees
this as a challenge to statute that authorized the redevelopment. Court holds that this is a public
use. They distinguish this from Illinois case (which was an abuse because it was strictly for the
racetrack). There, there was no redevelopment plan (they just reacted to a big contributor to use
govt. powers to help them out. Here, there is. They use old cases about manufacturing
development to determine that economic development is a public use. Also, public use and
benefit/purpose are the same. Here, this is a broad development plan that includes a park, marina,
incubators, etc. Not just a private entity like GM. Also, bringing in the private sector is a big part
of achieving the public purpose.

C. Justification
1. Prevent the possibility of a holdout of small property owners for an appropriate site for a particular
public purpose
D. Notes
1. Police Powers
a. Residual powers of government. With state govt., the powers don't need to be mentioned.
They are inherently enjoyed by governments. There may be limits though.
b. Inherent powers
i.
Eminent Domain
2. Standard of review (doesn't apply to this. Ask someone)
a. Definition: How much justification will we require the lower court/legislature to provide
for the decisions they make
b. Rational basis
i.
Lowest level
c. Intermediate scrutiny
d. Strict scrutiny

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II. Land Use Regulation


A. Central question: What is considered a taking? When does the government have to pay for taking property?
B. Categories:
1. Regulatory takings
2. Implicit takings
3. Inverse condemnation
C. Tests
1. Penn Central
a. Identify purpose
b. Character of governmental action
i. Whether purpose is to prevent harm (nuisance)
1. There is no taking
ii. Govt. trying to acquire resources for public functions
1. There is a taking
iii. This regulation is designed to adjust the benefits and burdens of economic life
1. No taking
c. Economic impact
i. Diminution in value
1. How much is left for the property owner
a. If property owner can still make reasonable return, it might be
enough to sustain regulation
ii. Interference with investment backed expectations
1. Consider whether there's been an average reciprocity of advantage
a. If there is average reciprocity, no taking
2. Lorretto:
a. A physical invasion of property is a per se taking.
3. Lucas:
a. Regulations that deprive property of all economically viable use are takings
i.
Exception: If a prior traditional property rule bars the activity (nuisance law), then
it's not a taking.
4. Nollan
a. The conditions you can demand on a permit must be designed to mitigate/remedy harm
that proposed building project will create.
D. Issues
1. What is the relevant property?
a. The whole thing, or just part?
2. What factors do we consider?
3. Regulation has to substantially advance legitimate state interests
E. Cases
Pennsylvania Coal v. Mahon: The first case that said a regulation, when it goes too far, can be a taking.
Prior, anything that didn't involve a taking of physical property, couldn't require just compensation. Statute
prohibited mining of coal where mining would cause subsidence of property that had inhabited structures
on it, or city streets, etc. P sued to enjoin the mining, but the D coal company claims it's unconstitutional.
The state can choose to pay to sustain the regulation, or they can choose not to buy it, and repeal the
regulation

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Loretto v. Teleprompter: A physical invasion of property is a per se taking. Tenants wanted to force
landlord to have a cable service install dishes on her property.Matter of control. If you have to put up a
mailbox, you are under control of it. But if you have to put in cable, it's a physical invasion. The problem
is that you are forced to admit strangers on your property against your will. You don't have the same type
of control as when you are forced to provide essential services for your tenants.

Pruneyard v. Robbins: Public mall was required to allow petitioners to setup shop on their premises based
on their free speech rights. However, the mall could dictate where and when. What's the distinction w/
Loretto? Temporary versus permanent invasions. Also, your expectations of right to privacy are much less
in a shopping center than in your house. You have already opened this center up to the public and are just
trying to exclude other members of the public. Free speech rights are more important than right to exclude
here.

Miller v. Schoene: No compensation required when owner of cedar trees is forced to cut them down
because they cause disease to apple orchards nearby. Public benefit outweighs tree cutting.

Village of Euclid v. Ambler:: Zoning is constitutionally valid.

Penn Central v. NYC: The Court will look individually at each case and apply a factor test. Look at a
particular scheme and determine whether fairness requires that compensation should be paid. Challenge
to landmark preservation ordinance prohibiting Grand Central Station from providing air space rights above
the station to build a 50 story tower. They argue that it's a taking because they can't improve it the way they
want to. Court: This is not a taking. They can still make a return on Grand Central, and they can still
alienate their air rights. It's not that they can't build anything above, it's just that they can't build that
structure above.
1. Brennan majority: Look at the property as a whole. The property is the whole city block.
Economic impact on whole property is less than 100%. Factors to consider:
a. Economic impact
i.
Extent to which regulation has interfered with investment backed expectations
ii.
Diminution in value
1. In this case, there hasn't been much in this category. They can continue
using the property in the same way and make a profit. The fact that you
can't make the most profitable use of your property doesn't mean its a
taking.
b. Character of governmental action
i.
Physical invasion v. public program that adjusts benefits and burdens of economic
life to promote common good (cut down cedar trees to protect apple orchards)
ii.
Whether govt. is trying to acquire resources to provide an essential governmental
function.
iii.
Is this unfairly put on a group of landowners? Then its a taking. If its for the
public benefit and it isn't unfair, then its not a taking.

Lucas v. South Carolina Coastal Council: Where the government has removed the opportunity to make any
economically viable use of the property. The regulation is invalid unless the uses were already prohibited
by background principles of nuisance law and maybe cases of necessity (blowing up a house in case of a
fire). This is a carve out of Penn Central. It doesn't matter if it's for a good public policy. Traditionally we
defer to the legislature. But the conservative justices take the view that land use regulation isn't desirable,
so they shift the burden of proof to the legislatures to prove it's a taking rather than the govt. Denominator:

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looking at whole fee simple interest. But Scalia says we should look at just the part of the parcel that is
impacted (Penn Central: the air rights)

Palozzolo v Rhode Island: Investment backed expectations is important, but can't be a determinative factor.
P had two pieces of land: a wetlands piece and an upland piece. He claimed he should be entitled to Lucas,
because he couldn't develop wetlands piece. This should be considered separately from the uplands piece.
State court had dismissed his claims, because background state law principles said you couldn't develop
wetlands. This affects his investment backed expectations. He has no investment backed expectations,
because he acquired the property after the regulation. Supreme Court: the fact that the regulation came in
before he acquired title doesn't preclude it from being a taking. They remand it for a Penn Central analysis.
RI Court said that the fact that he bought after the regulation should not be a determinative factor, it should
just be balanced. Also, here they didn't consider the "whole parcel" issue, because he didn't argue it in his
petition for certiorari. So they didn't have to consider it.

Tahoe Sierra Preservation Council v. Tahoe Regional Planning Agency: No per se rule that a moratorium is
a per se taking because it deprives property of economically viable use for a particular period of time.
Planning committee uses moratoria on construction of property until they can determine proper
development plan. If you have a serious problem where development will threaten something the planners
wish to accomplish for the public good, it's a good idea to put a moratorium on development until you
finish your plan. Moratorium is attacked "on its face." (the whole statutory scheme is unconstitutional)
Distinct from "as applied" attack. ((the statutory scheme is unconstitutional as it applies to me). It is
unconstitutional because it creates periods of time in which they can't develop their property. First English:
there was a taking in the court, and the legislature rescinded the regulation. But the court said that you
couldn't go back on it. You had to pay for the period of time that it was in effect. Here, court distinguishes
this case from a permanent taking. Lucas doesn't apply because once the moratorium is lifted, the value
will return. We consider the whole property area and time wise. They wiggled out of First English.
They're looking at part of time that ownership interest will last. But in First English, it looked like a
permanent regulation when it was enacted, despite the fact that it stopped when the court held that it was a
taking.

Nollan v. CA Coastal Commission: The conditions you can demand on a permit must be designed to
mitigate/remedy harm that proposed building project will create. City wanted easement on Nollan's (P)
property. They demanded this easement as condition on building on the premises. City wanted to link two
beaches on other sides of property, and they needed the easement for people to get back and forth. If they
had wanted an eminent domain, it wouldn't have been a problem. Their attempt gets challenged, on
grounds that the activity on Nollan's property (building) didn't have anything to do with the easement they
seek. This turns it into an arbitrary demand. Court: if you want to demand an easement, you must show
that 1) proposed use of property creates need. This case addresses how closely they have to be tied, as does
Dolan.

Dolan v. City of Tigard: The nexis doesn't have to be absolutely necessary, but it must be in the
intermediate range. What you demand as mitigation has to be roughly proportionate to the amount of
harm/need that this development will create. It must be directly related to reducing the impact of the new
devt. Puts burden of proof on city. The conditions that the city placed were to force the Dolans to dedicate
all the land to the city that is in the floodplain area (use their land as part of the greenway for a public
access), and dedicate more land for a bike path to reduce traffic to downtown business district. It was clear
that this was going to happen when they went in to get their building permit, because the plan demanded
this for a while. The court says that there is a nexis, but they have to decide whether the relationship was
sufficient to exclude the taking. The court says that, while there is a nexis (they create problem and it's ok
to attach conditions), it has nothing to do with the greenway system for people to use and enjoy, so the
particular condition you attached asks for too much. It would be ok to ask them to do lots of things that

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would control the flooding, but not something solely designed to be a passageway for the public. This
reminds us of the public/private stuff in public use cases (If there's public purpose, incidental private uses
are ok). They could pay for an easement, and it wouldn't be much, because the court says that they can
restrict them from building on it. So this is valueless property, and getting an easement on the valueless
part of the property wouldn't be expensive. Court is trying to put roadblocks in front of cities: you must
pay for private property. Unless the developer creates the need, you must spend public funds.

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