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French Property Outline

Table of Contents
1. WHAT IS PROPERTY?..............................................................4
A: RIGHT TO EXCLUDE................................................................................... 4
Jacques v Steenberg Homes damages for trespass...........................5
State v Shack limiting right to exclude..............................................6
Intel v Hamidi virtual property...........................................................6
B: WILD ANIMALS, NATURAL GAS AND WATER...................................................7
a) Wild Animals..................................................................................... 7
b) Capture Doctrine.............................................................................. 9
c) Oil/Natural Gas............................................................................... 11
d) Water.............................................................................................. 11
Lateral/Subjacent Support..................................................................16
C: FINDERS, BAILEES AND TREASURE HUNTERS...............................................17
CONQUEST................................................................................................ 26
ADVERSE POSSESSION.................................................................................26
Rights of Adverse Possessors:............................................................26
Color of Title....................................................................................... 26
Elements of Adverse Possession........................................................27
Elements of easement by prescription...............................................30
Tacking............................................................................................... 30
Tolling................................................................................................. 30
Color of Title....................................................................................... 31
Adverse Possession Against the Government.....................................31
Relation Back..................................................................................... 32
Adverse Possession and Future Interests...........................................32
Easement by RX vs. AP.......................................................................33
Discovery Rule vs demand rule..........................................................34
Defenses............................................................................................ 35
Acquisition of Rights by Public Use.....................................................36
Current Controversies re Capture, Conquest and Prescription
Doctrines................................................................................................. 37
RIGHT OF PUBLICITY....................................................................................38
COPYRIGHT............................................................................................... 41
Prima Facie Copyright Infringement...................................................41
Overview............................................................................................ 41
Scope................................................................................................. 42
Idea/Expression Dichotomy and Compilations....................................42
Functional Items copyright..............................................................43
Doctrine of Fair Use (affirmative defense)..........................................44
Intellectual Property, Cyberspace and the Digital Millennium Copyright
Act........................................................................................................... 46
COPYRIGHT VS. TRADEMARK.........................................................................47
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TRADEMARK.............................................................................................. 47
Overview............................................................................................ 48
Trademark Dilution (FTDA).................................................................49
Secondary Meaning............................................................................ 49
Functionality Doctrine........................................................................50
Trade-Dress........................................................................................ 51
PATENT..................................................................................................... 51
PROPERTY RIGHTS IN HUMAN TISSUE.............................................................53
ESTATES IN LAND.....................................................................56
PRESENT POSSESSORY ESTATES............................................................56
Restraints on Alienation and Unenforceable Conditions.....................60
Defeasible Fees and Condemnation/Eminent Domain........................61
Differences Among the Defeasible Fees: Adverse Possession,
Alienability and Duration.........................................................................62
LIFE ESTATE.............................................................................................. 63
Waste................................................................................................. 65
Restraints on Alienation.....................................................................66
FUTURE INTERESTS RETAINED BY GRANTOR......................................................67
FUTURE INTERESTS CREATED BY GRANTEES......................................................69
THE TRUST............................................................................................... 71
THE RULE AGAINST PERPETUITIES..................................................................72
ESTATE TYPES............................................................................................ 76
THEMES IN LT LAW.................................................................................77
LANDLORD DUTIES AND TENANT REMEDIES..........................................77
Duty to deliver possession.................................................................78
Quiet Enjoyment/Construction Eviction..............................................78
Unlawful Detainer/Breach of Habitability............................................81
TENANT DUTIES......................................................................................... 83
Duty to Preserve Premises.................................................................83
Duty to Operate.................................................................................. 86
Duty to pay rent................................................................................. 87
LANDLORDS REMEDIES.........................................................................88
1) RECOVERY OF POSSESSION............................................................88
2) SELF-HELP...................................................................................... 89
3) SUMMARY PROCESS (avoids ejectment action)..............................90
Abandonment..................................................................................... 96
Security Deposit:................................................................................ 97
ASSIGNMENTS............................................................................................ 97
Assignments....................................................................................... 97
Subleases........................................................................................... 98
Consent.............................................................................................. 99
D. Summary: Assignment and Sublease...........................................101
CONCURRENT ESTATES/MARITAL PROPERTY.............................102
TENANCY IN COMMON............................................................................... 102
Constitutional Right to divvy up a TIC?.............................................102
JOINT TENANCY WITH RIGHT OF SURVIVORSHIP...............................................102
Special Problems w/ JTwROS.............................................................103
TENANCY BY THE ENTIRETY.........................................................................104
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COMMUNITY PROPERTY.............................................................................. 104
PROBLEMS WITH SHARING POSSESSION........................................................105
DEFAULT RULES FOR DISAGREEMENT/PARTITION.............................................105
Partition............................................................................................ 106
OUSTER.................................................................................................. 106
OTHER MARITAL PROPERTY.........................................................................107
LIFETIME GIFTS NOT IN TRUST................................................109
INTER VIVOS GIFT..................................................................................... 109
CAUSA MORTIS GIFTS................................................................................109
DELIVERY................................................................................................ 110
PROBLEMS........................................................................................... 111
GOOD PRACTICE..................................................................................111
JOINT BANK ACCOUNTS AND DONATIVE INTENT..............................................111

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1. What is Property?
A: Right to Exclude
Role of property
1) Self-development (Radin); 2) Individual liberty vs state (Sunstein); 3)
Basis for participation in political life; 4) Asserting ones
personality/personhood (institutions without private property: prisons;
military; monastery; some schools); 5) Economic/use of goods in trade
Bundle of property rights
Right to exclude
Right to use/license for others use
Right to dispose (sell/donate)
Trespass and Actual Damage (Land v Chattels)
Interest in land regarded as extremely important (historically) and
given much more protection than interest in chattel property
Hamidi: applies personal property rule to intangible intrusions on land
(smoke, electromagnetic radiation) though nuisance action can be
Limitations on the right to exclude
o Landowner who refuses entry to one in emergency may be liable
for ensuing damages
Protectus Alpha Navigation Co v North Pacific Grain
Growers dockowner prevented firefighters from reaching
burning ship; held liable for CDs and PDs
Retrieving child/pet/other wandering chattel
Where landowner has taken chattel belonging to someone else
Petty trespass (matter of inches)
o Brownstone Condo Assoc. v Geller condo assoc sued Geller for
three-inch intrusion of his bolts onto their brick wall
o Court held intrusion so petty it did not merit adjudication; said
spite case
o the mere fact that there is a trespass does not warrant any
affirmative action by the court the close quarters of an urban
society demand flexibility when we encounter an intrusion on
our personal bubble.
Civil Rights statutes which limit ability to discriminate on basis of
race/religion/sex/other grounds

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Public accommodations statutes similarly limit ability of businesses to

discriminate against would-be patrons
o Shopping centers cant exclude people who want to gather
signatures on political petitions (Robins v Pruneyard Shopping
Ctr CA)
o Private univs. must allow distribution of political literature on
campus (State v Schmid NJ; Commonwealth v Tate PA)
o Casino cant exclude card-counters (Uston v Resorts Intl Hotel
In these cases, reasonable limits can be imposed
Right to exclude depends on expectation of exclusivity if
you invite the public onto your property, the court is more
likely to conclude you must allow the public onto your

Blackstone and the Right to Exclude

On property: the sole and despotic dominion which one man claims
and exercises over the external things of the world, in total exclusion of
the right of any other individual in the universe.
o Limited by modern case-law
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.
1 Transaction Costs: usually interference because of bad
information, lack of trust, large number of people involved,

Jacques v Steenberg Homes damages for trespass

Both the private landowner and society have much more than a
nominal interest in excluding others from private land nominal
damages may support a punitive damage award in an action for
intentional trespass to land.
$100,000 punitive-damage award is not excessive where nominal
damages are $1
Normal rule = no punitives without actual
o E.g. libel case: Barnard v Cohen WI: if individual cannot show
actual harm, he has only nominal interest; thus society has little
interest in deterring unlawful but otherwise harmless conduct
deterred; hence punitive damages inappropriate
o But Merest v Harvey WI establishes property is different: In a
case where a man disregards every principle which actuates the
conduct of gentlemen, what is to restrain him except large
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Individual interests implicated in trespass to land

o right to exclude is one of the most essential sticks in the
bundle of rights that are commonly characterized as property
Dolan v City of Tigard, SCOTUS 1994 hollow if legal system
provides no means of protecting it
o Because a legal right is involved, the law recognizes actual harm
occurs in every trespass the law infers some damage from
every direct entry upon the land of another
o potential harm resulting from intentional trespass
o owners ownership threatened development discouraged
o Societal interests: integrity of the legal system (What is to
stop D from intentionally trespassing in future and paying
nominal damages?); trust in the legal system (if punitive
damages are not allowed in situations like this, what punishment
will stop intentional trespass?); homeowners less likely to resort
to self-help remedies if courts enforce; punitive damages bring
punishment to actions that might otherwise go unpunished by
public prosecutor

State v Shack limiting right to exclude

The ownership of real property does not include the right to

bar access to governmental services available to migrant
workers no trespass
These rights are too fundamental to be denied on the basis of
an interest in real property and too fragile to be left to the
unequal bargaining strength of the parties.
Property rights serve human values and are limited by that
o Title does not include dominion over destiny of persons on
o Needs of occupants may be so imperative and their strength so
weak, law will deny them power to bargain away their rights
Farmers rights
o Farmer entitled to pursue farming activities without interference
o Can still bar solicitors/peddlers and others seeking economic
advantage/whose primary purpose is not helping the migrant
o Can require visitor to identify himself
Workers rights
o Representatives of aid organizations may enter premises to seek
out worker
o Migrant worker must be allowed to receive nondisruptive visitors
o Must be allowed to receive members of the press
Options for farmer to keep unwanted visitors out
o 1) employment contract stipulating no visitors
o 2) moving workers off property

Intel v Hamidi virtual property

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Calif: the tort of trespass to chattels does not encompass, and

should not be extended to encompass, an electronic
communication that neither damages the recipient computer
system nor impairs its functioning
No evidence of injury
o No actual or threatened damage; no interference with
ordinary/intended operation; no evidence system was slowed or
impaired; no evidence Hamidi used system in manner other than
that which it was intended for; no evidence that request of
employee to be removed was not honored
o Consequential damage claimed by Intel (lost productivity) is not
an injury to the companys interest in its computers
CL: To be actionable, Ds interference must have caused some injury to
the chattel or the Ps rights in it
o Owner may recover only actual damages suffered (Zaslow v
Restatement 2d 218: One who intentionally intermeddles with
anothers chattel is subject to liability only if his intermeddling is
harmful to the possessors materially valuable interest in the physical
condition, quality or value of the chattel, or if the possessor is deprived
of the use of the chattel for a substantial time, or some other legally
protected interest of the possessor is affected.
o Restatement explains that the rationale for requiring harm for
trespass to a chattel but not for trespass to land is the
availability and effectiveness of self-help in the case of trespass
to chattel.
o Theories
Richard Epstein: If you treat everything like it is real
property ex/ land (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.
Lessig: Keep everything open. This encourages creativity.
Also, ease of use will be diminished if everything is real
Email not immune from trespass if quantity is sufficiently high
o This involves extraordinary quantity of email that impairs
computer systems functioning
o Thus the injury is directly related to the nature of the trespass,
not to the content of the emails
Other torts where email may be actionable
o interference with economic relations
o interference with contract
o intentional infliction of emotional distress
contra Intel vs. Compuserve & Hotmail cases
o Compuserve emails drained computer resources; Hotmail emails
filled Hotmails computer space and threatened ability to serve

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Dissent view possibly actionable

o Intel exhausted its self-help and must wait for its system to
crash before being able to bring a CoA under majoritys view
o Rest: There may be situations in which the value to the
owner of a particular type of chattel may be impaired by dealing
with it in a manner which does not affect its physical condition.

B: Wild Animals, Natural Gas and Water

Possession Requires: (1) intent to possess (2) actual possession

a) Wild Animals
Broad Rule re Wild Animals/ferae naturae
You can acquire property interest in wild animal by taking interest in it
o Since not normally owned by someone one gains possession by
capturing has rights superior than all the world
More than one way of protecting a particular activity or form of interest
o Even if you cant protect based on possession (property
interest), you may be able to protect on basis of interference
with economic relationships, etc.
If you have a case where it is difficult to use possession,
think about using something else where someone is
interfering with your rights in a way that is causing
damage to you
General Rule of Wild Animal Possession: Pursuit (spotted/chased)
is not enough you need capture or mortal wounding (ex. trap) to
deprive the animal of its natural liberty
o Pierson v. Post: Plaintiff was hunting a fox and defendant
knowing this, killed the fox and carried it off. No trespass;
possession awarded to D
Purpose of this rule is to prevent litigation. Mere
ownership of the land that an animal happens to be on
does not give landowner a right to the animal except
against a trespasser who goes on the land for the purpose
of taking the animal.
o In a close case the court may look at custom or usage; courts
can draw on custom to determine property rights.
Dissent: The case should have been submitted to hunters, so
they could resolve it on custom.
Escaped Animals
Q: What happens if animal is captured alive and later escapes?
Traditional Rule: Blackstone: if animal escapes, they regain their
natural liberty and cease to become property unless they have a
disposition to return

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What about domestic animals?
You still own these regardless of their escape
Modern Answer: cases all over the place on this but hinge on
persons expectations re: the animal; clearly wild = yours; collared dog
/ tattooed fox = not yours
o Wiley v Baker TX: game farm owner sued for value of escaped
elk shot outside farm; elk not native to area; court held for D
o Mullet v Bradley NY: sea lion captured by P escaped NY harbor; D
bought from fishermen who captured it 70 miles south; D won
o EA Stephens & Co v Albers CO: nonnative silver fox escaped
from breeding ranch & was shot by farmer who found it prowling
around his chicken house; farmer sold pelt to D fur company;
pelt did have tattoos; P won
Breeder had invested many $$$ in fox; court feels
person who invested lots of $$$ in fox should be
Person capturing animal should legitimately expect
the animal wont be his due to markings
o Conti v ASPCA NY: ASPCAs parrot escaped; P befriended it a few
days later; called ASPCA for advice on caring for parrot; ASPCA
took back parrot; ASPCA won

Ratione Soli (constructive possession on account of land ownership)

When a hunter kills or captures a wild animal on someone elses land,
the landowner may sue to gain either possession (replevin) or its value
o Ratione soli rationale is that the landowner already had
possession of the animal by virtue of possessing the land when
the trespasser killed or captured the animal
Interfering with the capture of wild animals: A malicious act to a
persons occupation gives rise to cause of action.
o Keeble v. Hickeringill: Plaintiff had made decoy pond on land to
attract ducks but neighbor with the intent to depriving him of
profit drove the birds away by shooting a gun.
o Held: Where a violent or malicious act is done to a mans
occupation, professor or way of getting a livelihood, there an
action lies in all cases; but if a man doth him damage by using
the same employment, no action would lie
If had set up another decoy then ok because competition
Plaintiff had constructive possession of ducks (ratione soli)
Govt Regulation of Wild Animals/Fisheries and the Public
Trust/rationae solae
Geer v CT (SCOTUS) upheld statute prohibiting shipping certain game
birds out of state on ground the state owned all wildlife in the state and
held it in trust for the people
o Hughes v OK (SCOTUS) affirmed the importance to its people
that a State have power to preserve and regulate the
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exploitation of an important resource, but struck down

interstate shipping portion of Geer decision
Broad idea that state owns all wildlife is pared down:
o 1) Clajon Production Corp v Petera (WY): state game law did not
impair Ps rights; state has ample power to restrict hunting even
on private property
o 2) Moerman v CA (CA): Elk relocated to Ps area which caused
damage are not instrumentalities of the state nor controlled by
the state, and therefore, there has been no physical taking of
the plaintiffs property.

b) Capture Doctrine

Capture doctrine has two senses

o 1) ability to acquire property rights by taking possession of
o 2) ability to acquire unlimited amount of a resource as long as it
can be obtained without trespassing onto the land of another
wild animals can be lured (Keeble)
natural gas (Beech)
alternatives to unlimited right of capture
o animals
most states limit total catch of many animals
federal statutes limit or prohibit taking certain animals
o oil and gas
simple prohibitions on wasteful uses
sophisticated systems of allocation and management
problems of unlimited right of capture (oil and gas)
o encourages inefficient use of resources
overinvestment in wells and drilling equipment;
careless but speedy extractive processes;
premature exploitation of resources
o responses to these problems
courts have modified capture doctrine re: oil and gas
reasonable use limit: you can only pump gas
youll use; no pumping and storing without a
market for it
o this is an idea seen in water law
fair share (gas in place) for each landowner
gas split pro rata based on amount of reservoir
owned (displaces capture doctrine)
o this technology is new
o legislative responses
regulations limiting number/spacing of wells that can be
rules establishing unitization/pooling arrangement in which
reservoir is managed as a single unit for all overlying owners

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problems with shared resources

o wherever you have too many people cooperating, you may run
tragedy of the commons (people dont realize how their
small actions deplete the larger resource)
Rationale for capture doctrine:
o Competition/productivity: 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
o Ease of administration: Hard to define pursuit; capture is certain;
avoid unnecessary litigation

Popov v Hayashi & the Capture Doctrine in Modern Life

Rule: Where an actor undertakes significant but incomplete steps to
achieve possession of a piece of abandoned personal property and
the effort is interrupted by the unlawful acts of others, the actor has
a legally cognizable pre-possessory interest in the property. That
pre-possessory interest constitutes a qualified right to possession
which can support a cause of action for conversion.
o Court: Popovs action established an interest which encumbers the ball
Encumbrances: also seen in houses/cars where you
may buy one and take on the debt outstanding on it
This qualified pre-possessory interest does not establish a
full right to possession that is protected from a
subsequent legitimate claim

Court finds its rule the most equitable outcome

Mr. Hayashi was not a wrongdoer; he was a victim of the
same forces that attacked Popov; Each man has a superior claim to
the ball; each man has a claim of equal dignity to the other
Confusion Doctrine/Equitable division
Provides an equitable way to resolve competing claims which are
equally strong and comports with what one instinctively feels to be
Arnold v Producers Fruit Co (1900 CA): after mixing fruit, one lot
of which turned out to be rotten but source unidentifiable, each
grower was found to have had an undivided interest in the
whole, in proportion to the amount of fruit each had originally
o Rule: where more than one party has a valid claim
to a single piece of property, the court will
recognize an undivided interest in the property in
proportion to the strength of the claim.
Keron v Cashman (1896 NJ): boys stumbled on $750 after each
had possessed it but none intended to take possession. None

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could present a superior claim of concurrent control and intent,

so court held each boy entitled to an equal share.
o Two elements here: intent and control; nobody had intent
to become the owner of the thing
Here, both men intended to possess ball when in contact with it.
Neither can present a superior argument as to the other. They
are equally entitled to the ball. Court declares each have an
equal and undivided interest in the ball.
o Partition might have been an option with land; but not
an option here; so the court orders a sale and says the
parties must split
First in time rule usually governs in cases of possession
o Person who got possession first has legally protectable
o No question Hayashi first unequivocally established
o But couldnt prove Popov didnt do so first before losing it

c) Oil/Natural Gas
Anderson v Beech Aircraft Corp
TRADITIONAL APPROACH: Anderson v Beech Aircraft Corp, KS
Held: Where the landowner is not a natural gas public utility and has
attempted to create an underground storage reservoir under the property
of an adjoining landowner without acquiring by contract the right to do so,
the law of capture should be applied to any non-native gas which is
purchased elsewhere and injected into the common pool for storage.
Beech aircraft lost its ownership of the stored gas after injecting it into the
reservoir in this case.
Precedent: Hammonds v Central KY Nat Gas Co (KY 1934) + others
o Hammonds brought trespass suit for company putting natural gas
in reservoir which seeped under her land
o Court analogized gas to wild animals or animals ferae naturae it
can be captured, but when restored to its natural wild and free
state, the dominion of any person over them is at an end and they
resume their status as common property.
o The court found if non-native injected gas wanders into the land of
an adjoining homeowner, the gas company is not liable for trespass
as the gas company no longer owns the gas.
o Beechs position would lead to endless litigation, to determine how
much of gas being produced is native/stored, what damages are
owed to various adjacent landowners, etc.
Hammonds called into question by TX American Energy Corp v Citizens
Fidelity Bank & Trust (KY 1987):
o Gas has no similarity to wild animals. Gas is an inanimate,
diminishing non-reproductive substance lacking any will of its own,

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and instead of running wild and roaming at large as animals do, is

subject to be moved solely by pressure or mechanical means
instead of being turned loose in the woods as the fanciful fox or
placed in the streams as the fictitious fish, gas, a privately owned
commodity, has been stored for use subject to control and
withdrawal at any time.
Pacific Gas & Electric Co v Zuckerman (CA 1987):
o To be sure an owner who allows gas to escape to the property of
another may be liable in trespass, nuisance, inverse condemnation
or on other applicable theories, but it still remains the owner of
such gas.

d) Water
different rules apply to 1) percolating ground water (underground), 2) lakes
and streams (surface water), and 3) runoff water (diffused surface water
/enemy waters)

Remedies: Money will make landowners whole; But if we are

persuaded having a good well on property is worth more than just
monetary sanction, well go with specific performance (injunction) to
enforce water table

Percolating water (ground Water/ underground water):

Does water flow in a defined underground stream?
Most underground water does not but is diffused/percolating
o Judicial presumption is that supply is percolating
Evidence of underground stream riparian law applies
If percolating one of three doctrines applies
1) Absolute dominion/ English rule (see Frazier v Brown, overruled
in Cline) first set forth in Acton v Blundell as with CL oil and
natural gas the owner of property has an absolute right to withdraw
percolating water and use it as willed.
o Such water is to be regarded as part of the land itself, to be
enjoyed absolutely by the proprietor within whose territory it is; and
to it the law governing the use of running streams is inapplicable.
o Rationales: science didnt exist in 1800s; correlative rights would
interfere with economic development (agriculture, mining, road
construction, building)
Alternatives to English rule:
2) American rule/ Reasonable use doctrine (Majority Rule):
rule: the right to underground water is only for reasonable uses
o what is reasonable use?
Generally held that all uses of water upon land from which
it is extracted are reasonable, even if they deplete the
supply to the harm of neighbors, unless the purpose is
malicious or the water is wasted

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Water may be extracted for use elsewhere only to the point
that it begins to injure owners within the aquifer
limits: cannot maliciously divert water, waste
water, or divert wander away from the land over
the aquifer (usually)
Cline v. American Aggregates Corporation: Neighboring landowners
allege D AACs pumping unreasonably caused dewatering and pollution
of their wells, which are located on their properties
Alleged effects of Ds action:
o Reduces amount of water available to Ps
o More contaminants in remaining water (less dilution)
o Court adopts: Rest 2d 858: Liability for Use of
o (1) A proprietor of land or his grantee who withdraws ground
water from the land and uses it for a beneficial purpose is not
subject to liability for interference with the use of water by
another, unless
(a) the withdrawal of ground water unreasonably causes
harm to a proprietor of neighboring land through lowering
the water table or reducing artesian pressure,
(b) the withdrawal of ground water exceeds the proprietor's
reasonable share of the annual supply or total store of
ground water, or
(c) the withdrawal of the ground water has a direct and
substantial effect upon a watercourse or lake and
unreasonably causes harm to a person entitled to the use
of its water.
o Cites advantages: flexibility (allows utilization where most
necessary); security (ones water wont be usurped by neighbor);
economic efficiency (encouraging responsible use for water
industries using large amounts NL unless creating unreasonable
harm/burden on neighbors); rural owners also protected from
commercial users who drastically lower water table

3) Correlative rights: (California rule):

o Owners of land within an aquifer are viewed as having equal
rights to put the water to beneficial uses upon those lands
In times of shortage, can only take their reasonable shares
This is said to apply the reasonable use doctrine of flowing
streams to underground water
o Water may only be transported outside the land from which it is
drawn if the overlying owners have been fully supplied, as in
reasonable use doctrine

Lakes, Rivers, Streams (Surface and Underwater)

riparian proprietor/possessor = owner or possessor of land that has a

boundary on a natural stream, pond or lake

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riparian possessor rights:

o to have the body of water in its natural quantity and quality
o limited use and consumption
o access
o accretion and reliction
these rights are not absolute
o unless a given person owns all riparian land around a pond or
lake, others bounding on the same body of water have
competing claims
o public may also have right to use the water to some extent,
especially if it is navigable
1) English common-law doctrine = natural flow doctrine
Doctrine: 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 no riparian land and cannot deplete the quantity even
though no one his harmedreasonable use beyond domestic
o This permits every owner to consume as much water as he
needs for domestic purposes (human consumption, drinking,
bathing & watering animals)
o Beyond this, owner may use water for reasonable artificial or
commercial purposes, provided he does not substantially or
materially diminish the quantity or quality of water
o No water may be transported to land beyond riparian land
No irrigation permitted or commercial sale/resale of water
o Ideally, lower users of stream should receive as much good
water as upper users
2) Contemporary rule: reasonable use doctrine/Riparian Rights
Doctrine (water-rich eastern states)
Rule: a riparian owner may make any and all reasonable uses of the
water, as long as they do not unreasonably interfere with the other
riparian owners opportunity for reasonable use
o policy: instead of water being preserved, it should be used (even
totally) to serve human endeavors
Most states follow reasonable use doctrine
o Even states with appropriation systems may have a dual system
(appropriation system + reasonable use doctrine)
Reasonable use in practice
o Flexibility is key, applied with local variations in states following
o Depends upon weighing factors of would-be user and balancing
them against similar factors on other side
Purposes of various uses
Economic value and importance to owners and
Social value

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How much a given use impinges upon other riparian
How appropriate a use is to the particular body of water
Cost and practicality of adjusting a given use or the other
o Domestic uses are so favored they will generally prevail over
other uses
Some states recognize domestic uses as
privileged/preferred category, and then other reasonable
uses as a second category
o in arid west, irrigation may be favored over all other uses except
domestic uses
3) Appropriation system (arid western states)
17 western states practice statutory appropriation system
o exclusively appropriation system (Colorado doctrine): AZ, CO, ID,
o appropriation and reasonable use hybrid (Calif. doctrine): CA, KS,
designed to assure scarce water resources are put to use
basic principle: one who makes prior use of water for a beneficial
purpose may gain the right to continue doing so
o this right can be diminished by a later claimant who can
establish a need for water for a preferred beneficial purpose
o but water rights are viewed as property rights, so the diminished
prior appropriator must be compensated
o water statutes may list preferred uses
o the entire system will be under the control of a state agency
You get your rights by making use of the water; by making beneficial
use of the water, you establish your right to continue to use that
amount of water
o This is different from riparian system, where people had to share
so something for everybody in time of shortage
This is inheritable /transferable
French: there has been a change with permit systems; when someone
else comes along with an need for water, they can get permit for water
(but will probably have t compensate property owner for it)
In drought, persons with lower priorities may be prohibited from using
water until claims have higher priority can be satisfied

Other concerns w/ Riparian Water:

Navigation servitude: fed. govt. (and to lesser extent state govts.)
can regulate and improve navigation
o this gives gov. power to:
regulate water traffic;
build and license building of structures in navigable water
(including dams)

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theory: private riparian rights are held subject to a servitude held by

the govt to do/license navigation power
o so no wrong is done to prop. owner, because his rights were
always subject to the navigation servitude power
Its believed servitude does not burden riparian rights in non-navigable
navigation servitude functions like an encumbrance (e.g. baseball
Popov v Hayashi) something that goes along with the land; burdens
the land; when ownership of the land is transferred, the servitude is
transferred along with it

Publics right to boat/use water

Private riparian rights may be subject to publics right to boat and use
water for recreational purposes
o Some courts have extended it to water that would otherwise not
be considered navigable

Diffused Surface Water/ Runoff

Diffuse surface water = drainage from rain/snow/springs

o Problems generally arise because neighbors want to get rid of it
E.g. Upper owner precipitates dispute by doing something
that increases quantity/force of surface water flowing onto
lower neighbors land
Courts apply one of three doctrines:
o 1) common enemy
o 2) civil law
o 3) reasonable use doctrine
o What if someone wants the surface water? (this is rare)
The rule is that whoever impounds the water first may
have all he can get, unless possibly his motive was
1) Common Enemy doctrine (17 states use falling)
Rule: a landowner is privileged to use any and all methods to get rid of
surface water and is not liable to his neighbors for flooding them
o The neighbors may in turn to the same
Surface water is considered an outlaw or a common enemy
o A high value is placed on getting rid of it to develop land
Frequent modification: an owner cannot artificially collect water and
then expel it in a larger quantity than, or in a place different from, the
natural flow
o Courts distinguish between increased runoff incidental to
grading or improving land (privileged) and increased runoff
caused by alterations undertaken merely to deflect water (may
create liability)
o Some courts look to landowners purpose for altering drainage
and even suggest he might be liable if that purpose or manner is
not reasonable
Lines being blurred between this and civil law doctrine
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2) Civil law doctrine (opposite of common enemy doctrine) (~25
Rule: a landowner who interferes with the natural flow of surface
water is strictly liable for harm it causes his neighbors
o Land is said to be burdened with servitude in favor of
neighboring land
Modifications made to promote land development
o In urban areas: Common enemy rule instead of civil law rule
applied; or common enemy rule will be balanced with civil law
o In rural areas: some courts modify civil law rule to allow farmers
to accelerate flow of drainage if needed for good husbandry,
provided runoff confined to natural channels
3) Reasonable Care doctrine (10 states but a growth area)
Rule: An owner is privileged to make reasonable use of his land and, in
doing so, to alter the drainage of surface water up to the point that the
alteration causes unreasonable interference with his neighbors use of
their land
o The modern trend is to allow reasonable changes in the flow;
you can divert water but you must take into account neighbors
Factors considered:
o How necessary it is for the actor to alter the drainage that
reaches his neighbor
o Whether the actor acted with care
o Whether better methods of drainage are feasible
o Degree of harm to the neighbor
This is currently in vogue;
o Some jurisdictions are moving wholly toward it
o Others are adopting it partially for urban land or other limited
Reasonable use counterparts already dominate in underground water
and riparian water law

Lateral/Subjacent Support
Rule: every landowner is entitled to have his land receive necessary physical
support from adjacent or underlying soil.
1) lateral support: support in a vertical plane from the adjoining lands of
other persons
o this is an absolute right
neighbor is strictly liable for removing support
o If adjacent owner makes a excavation that cause the water to
flow beneath plaintiffs land thereby weakening the surface then
lateral support is violated
o implicit is that neighbor is not strictly liable if Ps land would not
have collapsed had it been in natural condition, unburdened by
buildings or other artificial weight

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no action for damages may be maintained until subsidence causes

provable damage
o D may escape liability by providing artificial support (e.g.
retaining wall) but will become liable if he fails to maintain it or it
otherwise fails
Controversy whether the right extends to support from neighboring
non-adjacent land
o Restatement of Torts extends this CoA to include neighboring
non-adjacent land
o But decided cases typically find non-adjacent neighbors liable
for negligence, not absolute liability
English rule & large majority of American cases hold neighbor also
liable for damages to harm of a building, not just for diminution in
value of bare land
o Some jurisdictions deny this, since Ds duty is only to support
the unburdened land

2) Subjacent support: This occurs when surface owners property has

layers underlying it which are owned/occupied/used by others than the holder
of the surface estate
Potential Ds are by definition limited to underlying users; potential Ps
are limited to possessor of surface or some layer above D
Exception in some jurisdictions when neighbor removes underground
water from under Ps land in such quantities as to cause Ps land to
o Rest Torts 2d and some decisions hold neighbor should be liable;
but majority of courts refuse to extent liability on theory that
subjacent support means support from solid substances in the
earth, not from underground water
Ds liability for failing to support land burdened by weighty structures
o Majority: Ds duty to maintain subjacent support is technically
usually stated to be same as with lateral support (duty is to
preserve support for land as if it were unburdened by
o however, in practice, a rule of evidence is likely to cause D to be
liable for land burdened by buildings that fall in, whether they
were emplaced before or after severance
this is because burden is on D to show land would not
have subsided in its unburdened condition (ie buildings
caused it)
but proof of actual cause is quite difficult in these
cases, so P is likely to win on this point
thus, if D is liable at all, he will likely be liable for
damage to improvements on overlying land as well
as for damage to the land itself
o a minority of courts have adopted ALR rule that subjacent
defendant owes duty to support surface with structures that
were on it at the date of severance

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Principal difference with lateral support: is that surface owner

has a right of support not only of unimproved land but all structures
existing not eh date when the severance took place

C: Finders, Bailees and Treasure Hunters

Trover and conversion; detinue and replevin
For Ps seeking damages for conversion of personal property
o Trover = old common-law CoA used for recovery of damages for
conversion of personal property
to maintain action, P required to prove either ownership or
right to possession of property at time of conversion
o Conversion = wrongful appropriation of someone elses property
For Ps seeking return of property rather than damages
Detinue = used if D acquired possession lawfully but
refused to return it
Replevin = used if property was taken unlawfully
o to maintain either action, P had to show immediate right to
possession of the property

Policy Arguments:

Giving finder the property encourages disclosure; otherwise the finder may not disclose
to anyone that he found the property

Giving it to owner of premises can be better because true owner is more likely to return
to the premise where the object was lost; and the premise owner must store and care for
found object in case true owner returns

Finder Statutes
Finder statutes typically cut off the interests of true owners who do not
appear within a set period of time after notice
lost property statutes are intended to encourage and facilitate the
return of property to the true owner, and reward the finder for his
honesty if the property remains unclaimed (Willsmore v Township of
Oceola Michigan case/rule)
o public policy in favor of honesty by finders supports vesting
clear title in them at some point. To do otherwise would cause
practical problems of continuous bailment. (Willsmore v
Township of Oceola, MI 1981)
MI lost goods act provides protection to finder, a reasonable method
of uniting goods with their true owner, and a plan which benefits the
people of the state through their local governments
o 50/50 split between finder and local gov.

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IA Ch 644 provided 10% finders fee; provided for posting Notice

posted at courthouse and three other public places in county; also
regularly advertised in publications per law
o Statute provides one year waiting period; then moves title from
true owner to finder

4 Categories of Found Property Based on Intent of Owners

1. Lost property: owner involuntarily and unintentionally parts with its
possession and doesnt know where it is; belongs to finder
General Rule: The finder of lost property has a property right superior
to all but the owner. Finder must (1) take control of the property and
(2) intend to possess it. Thus, he is the custodian or bailee to true
o Armory v. Delamirie: plaintiff found a jewel which he took to
goldsmith who refused to give it back and sued for trover. Held,
he acquired superior title as finder.
o General rule: The general right of the finder to any article which
has been lost, as against all the world, except the true owner, was
established in the case of Armory v Delamirie.
o Rest Torts 2d 895: Rights of Third Persons:
One who is otherwise liable to another for harm or to
interference with a land or a chattel is not relieved of the
liability because a third person has a legally protected
interest in the land or chattel superior to that of the other.
Comment h: this is not intended to prevent a court from
refusing to lend its aid to a plaintiff who is clearly a
wrongdoer, and especially to one who is clearly a criminal
o Damages
Unless the defendant did produce the jewel, the jury
should presume the strongest against him and make
the value of the best jewels the measure of their
Armory awarded full value of jewel though his interest was
likely worth less since it was subject to right of true owner to
o Hannah v. Peel: Soldier found broach (on top of a wind pane) in
house temporarily requisitioned by British Army and sought to
recover it from the owner of land who had never occupied the
house. Plaintiff turned it over the police who gave it to defendant.

Held: A landowner owns everything attached to or under

the land, but not necessarily things lying on the land
Held: Possession becomes vested in the finder against all
but the rightful owner when the item is found by a person
who is not the agent of the owner of the property where the
item was found, and the owner does not actually physically
possess the property where the item was found.
Owner did not live there - if he had would have gone to him

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Circumstances indicate that it was lost property and plaintiff
is proper finder; distinguish from other cases where man
possesses everything attached to the property
If had been misplaced, treasure trove, or abandoned would
have gone to owner;
o Bridges v. Hawkesworth: Lost property. P found a parcel of bank
notes on the floor of Ds ship. The court awarded possession to P,
on the grounds that the notes had apparently not been
intentionally deposited in the shop and therefore never came into
Ds custody or protection
Trespassers will not gain rights to found property. The right goes to the
locus in quo
o A servant who finds an article in course of his employment must
surrender possession to his master
o If object is embedded in soil court have tended to give it to owner
of real estate (ex. meteorite)

2. Mislaid Property:
General Rule: Mislaid property is not the same as lost property; finder does
not have superior claim to it but rather has the duty to safe keep in bailment
until the owner comes for it
Finder is entitled to reasonable expenses incurred in taking care of the
found item under the law of bailments

This rule protects the true owner because likely to return to place of loss
o McAvoy v. Medina: plaintiff found wallet left at barbershop and
barber rightly asserted bailment to keep for true owner. Wallet was
not lost but voluntarily placed on table and accidently left (versus
lost property which has not been voluntarily placed anywhere)
Held: Property deliberately placed in the shop but then
forgotten by a customer is not lost as such, and because it is
not lost property, P does not have the superior claim to
it; rather D has the duty to safe keep it until the
owner should call for it
o Benjamin v. Lindner Aviation, Inc.: Plaintiff worker found money in
the wing of airplane; money turned over to authorities. It was
mislaid property, and so worker has no right to it. Money belonged
to the bank which owned airplane and not even to the hanger
company where plaintiff worked.
More likely given to landowner if object in private portion rather than
premises open to public based on rationale that owner of premise not
open to public has intent to posses the place and whatever may be
located within. Example: in bank
o Ritz v Selma United Methodist Church : Ritz v Selma United
Methodist Church, IA 1991)
Original owner of money buried in jars and tin cans on real
property retained ownership of money as against
subsequent owner of property who found money, even
though real property on which money was found was

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abandoned by original owner's estate, where fact that
money was buried in jars and tin cans indicated that owner
was attempting to preserve it and money did not bear
characteristics of property embedded in soil.

o Ifemployeesjobdescriptionincludesturningoveritemsfoundonthejob
o Otherfindersfarebetter

Judicial Discretion and Lost vs. Mislaid

Typically, much time has elapsed before judgment
o Court can declare lost if wants to reward finder, mislaid if
finders conduct is not worthy of a reward

3. Abandoned Property: true owner intentionally and voluntarily

relinquished with the intent no longer to won the object; must have evidence
that (1) act of abandonment (2) intent to abandon; mere passage of time
does nothing goes to finder
General Rule: The finder of abandoned property has a property right
superior to all, even the original owner. Must have act of abandonment
When a previous owner claims long lost property that was involuntary
taken, abandonment must be proved by clear and convincing evidence
4. Treasure Trove: consists of coins/currency concealed by owner and has element of antiquity.
Must be hidden or concealed for such a length of time that owner is probably dead or

General Rule: The finder of a treasure trove has a property right

superior to all but the owner.
More recent cases give award it to landowner
Split in US courts re: disposition of treasure trove
o Earlier cases award to finder
o Later cases landowner

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Corliss v Wenner (ID 2001): court awarded buried gold
coins to landowner vs. person who found them while
excavating driveway:
there is no reason for a special rule for gold and
silver coins, bullion or plate as opposed to other
the distinctions between treasure trove, lost
property and mislaid property are anachronistic and
of little value. The principal point of such
distinctions is the intent of the true owner which,
absent some written declaration indicating such, is
obscured in the mists of time and subject to a great
deal of speculation.
By holding that property classified as a treasure
trove in other jurisdiction is classed in ID as
property embedded in the soil possession
awarded to the owner of the soil
o thus we craft a simple and reasonable
solution to the problem, discourage trespass
and avoid the risk of speculating about the
true owners intent
o Additionally, the true owner, if any will have
the opportunity to recover the property.
Louisiana Roman law finder and owner of locus split
treasure equally

Two doctrines used for ship treasure

1) Maritime law of salvage: the original owners retain their ownership
interests in such property, although the finder is entitled to a liberal
salvage award, but less beneficial for real owner because bigger salvage
award. If no owner shows up salvor gets total value.
Applied when property is not abandoned; less secretive and
competitive forms of conduct are encouraged because of a salvage
award is given to the finder.
Columbus America Discovery Group v. Atlantic Mutual Insurance:
Plaintiff salvaged a shipwreck and defendant insurance company
that had paid owners claims at the time of the disaster claimed
ownership of the treasure. Court applies law of salvage and not law
of finds because: because no affirmative act of showing
o You have to prove by preponderance of the evidence that
2) Common law of finds: finder gets treasure
Applied when property is abandoned. This has usually been
applied to maritime property that was never owned by anybody.
Also applies when no owner appears to claim interest.
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.

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Determining whether property is abandoned or not becomes the

Rule: In the treasure salvage cases, often involving wrecks hundreds
of years old, the inference of abandonment may arise from lapse of
time and nonuse of the property, or there may even be an express
disclaimer of ownership. This calls for the application of the law of
finds. By contrast, parties who intend to assert a claim of ownership
may be identified. In such a case the law of salvage is applied.
Rule: In conclusion, when sunken ships or their cargo are rescued
from the bottom of the ocean by those other than the owners, courts
favor applying the law of salvage over the law of finds. Finds law
should be applied, however, in situations where the previous owners
are found to have abandoned their property. Such abandonment must
be proved by clear and convincing evidence, though, such as an
owner's express declaration abandoning title. Should the property
encompass an ancient and longlost shipwreck, a court may infer an
abandonment. Such an inference would be improper, though, should a
previous owner appear and assert his ownership interest; in such a
case the normal presumptions would apply and an abandonment would
have to be proved by strong and convincing evidence.
When the Treasure is US Govt Property
US v Steinmetz (DNJ 1991): antique dealer bought Confederate
Warships bell from an antique dealer in Hastings, England. Ship sunk
in 1864 outside France; diver recovered in 1936 and it hung over a bar
in Guernsey until the bar was destroyed by British bombs in World War
II. The bell was brought back to the US in 1979 and offered to naval
academy which refused to buy it. When Steinmetz listed it in a
catalogue in 1990, naval officials spotted the ad and demanded the
o Court awarded the bell to the navy on the ground that the US
acquired Alabama by capture and never abandoned title.
o D awarded nothing, either for value of his services or for unjust
The Abandoned Shipwreck Act of 1987: lays claim to many abandoned
shipwrecks in the submerged waters of US and transfers titles to the states in
whose waters they are found; declares law of salvage and finds invalid for
affected ships. Law remains the same in international waters. States should
take responsibility of the management of shipwrecks in for habitat protection,
providing opportunist for sport diving and tourism, and allowing appropriate
public and private sector recovery of shipwrecks consistent with protection of
historical values and environmental integrity

UNESCO Convention on Protection of the Underwater Cultural


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This treaty calls on members states to protect underwater cultural

heritage: traces of human existence having a cultural, historical or
archaeological character which have been partially or totally under
water, periodically or continuously, for at least 100 years
o Convention requires signatory states consider preservation in
situ as the first option

Other types of property

Falling objects onto property


Created when possession of chattel is transferred from one person (bailor) to another
(bailee) for limited purpose

If bailee refuses to return your property conversion bailee must buy

it from you at its value at the time conversion took place
Voluntary vs. involuntary bailments
o Most bailments are voluntary
o Some are involuntary
E.g. when people take chattels into their possession without
the consent of the owner/possessor
This includes finders, towing companies, and police seizing
personal property

Can be constructive or involuntary bailment with mislaid property: when retained under
circumstances which should keep it safely and return it to its owner

Bailees responsibilities
o Duty to return property to bailor
o Level of responsibility to care for property
Varies depending on jurisdiction and whether bailment
benefits bailor or bailee
Coggs v Bernard (Eng. 1703) made six types of
bailments to determine level of care owed by bailee
to bailor

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Modern trend eliminates such categories and requires bailee
to use care an ordinary person would use under like
Hadfield v Gilchrist SC 2000): when towing
company impounded Ps car, resulting bailment
was for mutual benefit towing company owed P
duty to use ordinary care to safeguard his car
when a chattel in bailees possession is wrongfully
damaged/destroyed/ appropriated by third party, bailee may seek
redress from the wrongdoer

The Winkfield: after the Winkfield collided with and sank the Mexican the
Postmaster-General sued for the loss of mail bags and parcels on board the Mexican.
The ship was bailee and has absolute title against all but the rightful owner.

Wrongdoer has no standing to challenge bailees title

Root principle: as against a wrongdoer, possession is title.

Chattel that has been converted/damaged is the chattel of the
possessor and no other; therefore its loss or deterioration is his
loss and must be recouped to him if he demands it
postmaster-general stood in the position of bailee for the
owners of letters and parcels sent by the mail and, as such
bailee, was entitled to recover the value of property lost
through the negligence of the defendants
this overrules the case of Claridge v. South Staffordshire
Tramway Co.,15 in which it was held that as against a
wrongdoer, the bailee could only recover the damage to his
interest in the property, leaving the bailor to sue for his own
As between bailee and stranger possession gives title that is, not a
limited interest, but absolute and complete ownership, and he is entitled
to receive back a complete equivalent for the whole loss or deterioration
of the thing itself.
o As bailee has to account for thing bailed, so he must account for
that which has become its equivalent and now represents it
o what [the bailee] has received above his own interest he
has received to the use of his bailor. The wrongdoer, having
once paid full damages to the bailee, has an answer to any
action by the bailor.

Property found in public versus private settings

Finder often, but not always loses in cases where valuables are found
in bank safe deposit box vaults (Pyle v Springfield Marine Bank, IL 1946
ordinary law of finders does not apply to safety vault area); (Dennis v
Northwestern Natl Bank, Minn 1957 - ordinary law of finders does not
apply to safety vault area)
But some cases have awarded temporary custody to the bank and
eventual possession to the finder if owner is not found (Pasat v Old
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Orchard Bank & Trust Co, Ill 1978 to customer/finder); (Burnley v First
National Bank, PA 1954 to bank employee/finder)
Finder versus the Owner of the Locus in Quo in the UK
English rule: objects found in or attached to the land awarded to the
owner of the locus in quo (cases after Hannah v Peel)
Objects that are found on or unattached to the land go to the finder
unless the owner of the locus quo exercises such manifest control
over the locus in quo as to indicate an intention to control the locus
and anything found on it
Waverly Borough Council v Fletcher, England 1996: medieval brooch
buried below surface of park found using metal detector awarded to
Parker v British Airways, England 1982: gold necklace found in
executive lounge awarded to finder

Property Statutes/Rules in Misc. Situations (notes from Benjamin)

Whether property is lost, mislaid or abandoned depends on owners state
of mind when she parted with the goods
Finder statutes typically cut off the interests of true owners who do not
appear within a set period of time after notice
public policy in favor of honesty by finders supports vesting clear title in
them at some point. To do otherwise would cause practical problems of
continuous bailment. (Willsmore v Township of Oceola, MI 1981)
Why no finders fee for Benjamin?
o Common law hasnt developed doctrine allowing finders fee or
other reward if owner shows up, or if property is awarded to owner
of locus in quo
o Finder is entitled to reasonable expenses incurred in taking care of
the found item under the law of bailments
Some argue for equitable division between finder and owner of locus in
quo when locus is neither truly public nor truly private
Buried money in soil (Ritz v Selma United Methodist Church, IA 1991)
o Original owner of money buried in jars and tin cans on real property
retained ownership of money as against subsequent owner of
property who found money, even though real property on which
money was found was abandoned by original owner's estate, where
fact that money was buried in jars and tin cans indicated that owner
was attempting to preserve it and money did not bear
characteristics of property embedded in soil.
o Although the real estate was abandoned by Opal's estate, we
believe that it would be a completely unwarranted inference to
conclude that the money found by the Church had been abandoned
by its owner. The fact that it was buried in jars and tin cans
indicates that the owner was attempting to preserve it. Likewise,
the money did not bear the characteristics of property embedded in
the soil. It is fairly to be classified as the type of property to which
the true owner retains ownership as against the finder or the owner
of the property where it is found.
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Falling objects onto property

o Propertywhichhasbecomepartofnaturalearthisnotsubjecttogeneralruleoflost
o Meteoriteunderthenaturallawofitsgovernment,itbecameapartofthisearth

o IfLindneraircrafthadprevailed,Benjaminmayormaynothavebeenentitledtothe

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Conquest, Adverse Possession and


Principle of discovery: European rule: country that discovered and laid claim to possession
of new lands was entitled to right of that land or transfer title

Discovery gave exclusive title to those who made it


Johnson and Grahams Lessee v. MIntosh: Plaintiffs had acquired title to land from
Native-American tribes, but US claimed that it held title to the territory and
consequently only it could convey good title to others so defendant with title from

rule: the ceded territory was occupied by numerous and

warlike tribes of Indians; but the exclusive right of the
United States to extinguish their title, and to grant the soil
has never, we believe, been doubted
o Rule: the absolute ultimate title has been considered as
acquired by discovery, subject only to the Indian title of
occupancy, which title the discoverers possessed the
exclusive right of acquiring
Kades article (The Dark Side of Efficiency)
o Overall impact of this was to depress the price of the land
Decision stifled bidding by americans for indian land by
leaving Indians with only one buyer assured of no competition
Willingness of Europeans to use threats/force also depressed
Settlement also allowed U.S. to gain land for free
Killing off game Indians relied on
Clearing forests for agriculture

Adverse Possession
Rights of Adverse Possessors:
Before Statutory Period: Liable for trespass and mesne profits

And can have trespass action against others (because trespass based on possessory not
ownership and a defense that no title is not good

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Can sell and new AP can tack based on privity and then can tack on

Privity based on contract of sale, gift, will, or inheritance

After Statutory Period: he gains good title


Relation back doctrine: adverse possessions title is effective back when first took

Mesne profits and trespass actions barred

Easements will not be extinguished

Not possible to gain title by adverse possession to land owned by the federal or state

Color of Title

If your claim is based on a deed or other written document that

incorrectly confers title upon you.
o The statutory period is often shorter
o Constructive possession of all land described in need
o Must have entered in a good-faith belief that deed conveyed what
it purported to convey
Without a requirement of good faith at the time of entry,
the adverse possessor could simply get someone to give
him or her a deed to the property.

Elements of Adverse Possession

1) Actual and exclusive possession
actual possession or all or part of the land claimed and held to the
exclusion of possession by others
must not share land with true owner or make it available to general
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
o Does not have to personally be in possession of property: can
lease to a tenant
Ewing v. Burnett: lived across the street from lot he
claimed; but refused some people right of entry
o If has dominion of surface his claim usually extends below to
o If seasonal/rural standard varies accordingly
See Nome 2000 case: possession need not be absolutely
exclusive; it need only be a type of possession which would
characterize an owners use.

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Where, as in the present case, the land is rural, an

exercise of lesser dominion may be appropriate
o Disputed parcel located in rural area suitable
as seasonal homesite; this is exactly how the
Fagerstroms used it during the year
2) Adverse or hostile possession
Objective test (per Nome court): Objective test simply asks whether
the possessor acted toward the land as if he owned it, without the
permission of one with legal authority to give possession.
o Nome 2000: Fagerstroms actions toward land conformed with this
o That they may have overlapped with native Alaskan mind-set is
Possessor must not hold subserviently to the owner of the property (as,
for example, a lessee.)
The possessors occupation must be wrongful as to the owner, so that
possession by one co-owner is not adverse to the other co-owner unless
the co-owner in possession refuses to allow entry by the other (ousts
the other)
co-tenants possession is not adverse to others unless the co-tenant
ousts the others
State of mind usually immaterial
Lawrence v Town of Concord: inner workings of APs mind are irrelevant
if he acts as the true owner (majority rule)
Preble v Maine Cent R Co ME 1893 (minority rule)
o Held: in boundary line disputes, possession pursuant to a
mistaken belief as to the location of the boundary was not
adverse; the claimant must intend to claim title to all land within
a certain boundary on the face of the earth, whether it shall
eventually be found to be the correct one or not.
o This is the Maine doctrine
3) Claim of right
Various meanings are given to claim of right
o Some states: possessor must act as owner of property (rather
than as transient or casual trespasser) (objective standard)
o Some states: require good-faith (but mistaken) belief that
possessor owns the property (subjective - good-faith standard)
o Some states require the possessor intentionally act to acquire
property he or she does not own (subjective - bad-faith standard
or aggressive trespasser standard)
4) Open and notorious
Use of property is so visible and apparent it gives notice to true owner
that someone may be asserting a claim of adverse possession. (e.g.
flying the flag) Does not matter if actually knows.
o Lawrence v. Town of Concord: gov. learned later that it had
received a devise of the land under a will probated and therefore
was the owner. Town took property by eminent domain (take
private property for public use but must compensate) but didnt
pay him. Held: The towns lack of knowledge as to its

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ownership did not defeat claim of title by adverse
lack of knowledge is not a defense because supports the
purpose of adverse possession which is to quiet controversy
Unless such a small piece of land that is not visible to
the naked eye
AP has no burden to reveal intentions of adverse possession
to true owner
Test is met if the adverse possessors use of property is similar to that
which a typical owner of similar property would make of itnature of
land taken into account
o Ewing v. Burnett: D claimed adverse possession of unfenced,
unimproved lot; during statutory period allows people to remove
sand/gravel, denies permission to others, brings trespass action
against those without permission. Held, D owns lot by adverse
Court: neither actual occupation, cultivation nor residence
are necessary to constitute actual possession, when the
property is so situated as to not admit of any permanent
useful improvement, and the continued claim of the party
has been evidenced by public acts of ownership, such as he
would exercise over property which he claimed in his own
right, and would not exercise over property did not claim.
Acts constituted public acts of ownership even though he
did not live on the land.
Difference between ouster and trespasser is one of
May be established by buildings, fences, crops or animals
o See Nome 2000: Use consistent with ownership which gives
visible evidence of claimants possession, such that a reasonably
diligent owner could see that a hostile flag was being flown over
his property, is sufficient
Where physical visibility is established, community repute is
also relevant evidence that true owner was put on notice
What about hidden property (ie gas storage, caves, buried utilities?)
o Courts split:
wanting to protect the rights of the owner who realistically
has little way of discovering the adverse use;
wanting to prevent the waste that is likely to result from
enjoining the adverse use
o this is a situation where a liability rule might be more
it would allow the use to continue but award the property
owner compensation for the value of the interest taken
it would also solve the bilateral monopoly problem that
would place the adverse user in a very disadvantageous
bargaining position
Underground uses

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Foot v Bauman concluded an underground sewer running through
a property was open and notorious because the D-adverse users
house was up the hill, the town sewer was below and there were
three manhole covers on Ps land between the house and the
town sewer
o Marengo Cave Co v Ross IND 1937: cave ran under Ps property
which was used for tours
Court held Ds use of the portion of the cave under Ps
property was not open and notorious since P had no
reasonable means to discover that his land was being used
(court only able to determine property line thru survey)

Small Encroachments?
5) Continuous
Possession must be maintained throughout the statutory period
Continuity does not mean the adverse possessor must be present at all
o Seasonal or intermittent use may be sufficient so long as the use
is similar to that which would be made by an ordinary owner of
property like that in dispute
See Nome 2000 v. Fagerstrom: Adverse possessor used
plaintiff land for recreational purposes, began making
substantial improvements, spending more time, built shed,
and spent weekends there. Later built cabin. Held:
conditions of continuity and exclusivity require only
that the land be used for the statutory period as an
average owner of similar property would use it
Their use was consistent with the Native Alaskans
Must look at contextual factors/ case by case basis
o If a break in possession is caused by owners re-entry, or
acquisition of title by the government, the adverse possessor may
have to start over with the statutory period
A third-party intrusion usually does not defeat the continuity
requirement, provided the adverse possessor regains possession

Interruption by non-owner: Ouster by second adverse possessor: new adverse possessor

cannot tack its time to original adverse possessorsecond adverse possessor interrupts the
first, but if the original adverse possessor recaptures the property (by throwing new guy
out) he can join old period with new period
6) For the statutory period
o Statutory period varies from 5 years (CA) to 21 years in OH
o Much longer periods required for certain kinds of property
Wild and unclosed lands
Land held for public or quasi-public uses (schools/railroads)
o In some states, public land cant be acquired by adverse
possession under any circumstances
o See tacking/tolling
7) Must pay taxes on the land (some states)

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Elements of easement by prescription

Typically the same as for adverse possession except:

o no requirement that prescriptive use be exclusive
(owner/adverse user can both use a private road)
o no requirement that the use be made in good faith, even in
states that apply good-faith requirement

1) long-continued use of property creates an entitlement to the property
2) 2) flawed title may be perfected by continued use or possession of the
3) 3) long-continued use or possession is evidence of a title previously
granted but now lost
a. before public records, loss of deed was not uncommon
b. in societies lacking literacy, ceremonies rather than written
documents were used to transfer property titles
4) the time for asserting legal claims should be limited
5) Ballantine: Title by Adverse Possession:
a. A thing which you have enjoyed and used as your own for a
long time, whether property or an opinion, takes root in your
being and cannot be torn away without your resenting the act
and trying to defend yourself the law can ask for no better
justification than the deepest instincts of man.
b. the statute has not for its object to reward the diligent
trespasser for his wrong nor yet to penalize the negligent and
dormant owner for sleeping upon his rights; the great purpose is
automatically to quiet all titles which are openly and consistently
asserted, to provide proof of meritorious titles, and correct errors
in conveyance.


adverse possessor can transfer his or her interest in the property to

another, who may continue the adverse possession
o if both meet the requirements for acquiring title by adverse
passion, they may tack the two periods together to make up
the statutory period
o to tack to a prior adverse possessor, successor must show there
was a transfer and that the periods of possession were
some case law says transfer has to be by deed privity but these
courts are generally wrong
o better view all thats required is trans. of possession from
adverse possessor to another adverse possessor (e.g.oral,
written deed or even inheritance)
o shouldnt require a deed for the adverse possession to tack


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Tolling for Disability:
Every state has some provision protecting property rights of owner
who is under disability when AP takes possession of his or her land
o Cover: infancy; insanity; imprisonment
2 types of statutes:
o OH approach: If a person entitled to bring the action is, at the
time the CoA accrues, within the age of minority or of unsound
mind, the person may bring the action within ten years after
the disability is removed.
o NJ approach: if a person entitled to bring a CoA or to a right or
title of entry is or shall be, at the time of any such cause of
action or right or title accruing, under the age of 21 years, or
insane, such person may commence such action or make such
entry, within such time as limited by said sections, after his
coming to or being of full age or sound mind.
Usually, the only disability that counts is a disability that exists when
the AP takes possession of the property
Benefit of the statute extends not only to original AP but also to their

Color of Title

Two advantages conferred on AP whose claim is based on a deed or

other written instrument purporting to give her title to the land
o 1) period required to establish title by AP is often shorter
o 2) she is regarded as having constructive possession of all
property described in the deed, so long as the deed covers a
single parcel
if deed covers more than one lot or parcel, constructive
possession typically limited to the boundaries of the LOT
the AP has actually taken part possession of
even in states with no good-faith claim of right requirement, AP must
have entered with good-faith belief that the deed conveyed what it
purported to convey to obtain the advantage of color of title

Adverse Possession Against the Government

Usual justifications that land/easements cannot be gained against

government adversely:
o 1) government does not have resources to monitor all its
landholdings for signs of adverse claims
o 2) government employees may not have sufficient incentives to
take actions against adverse claimants and may even collude to
defraud the government
o 3) the publics interest in public lands should not be subject to
loss by inadvertence.
See Kiowa Creek Land & Title Co v Nazarian:
o Held: No use of land while it is owned by the state can be
support for a claim of easement by prescription, either

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against the state or against anyone who acquires title
from the state.
3rd-party exception: Test v Reichert NE
o P grew wheat on gov. land which D harvested and sold; court
awarded P damages,
o Rule: The right to a crop growing upon unenclosed public land
lies in the one who has planted it and looked after it, rather than
in one who forcibly takes possession against the will of the
o Principle: One may acquire rights in public lands by adverse
occupancy against all third persons, and this is true even though
the claimant admits the governments ownership, and this is
true even though the claimant admits the governments
ownership; in other words, the claimants possession may be
adverse without being hostile to the government.
What happens if gov acquires title to property in hands of
adverse possessor?
Ordinarily, this stops the adverse possession
What happens when gov then sells land?
o Typically SoL begins all over
o If govs ownership was not really for governmental or public use,
but simply a transition from one private owner to another
adverse possession may be regarded as continuing without
interruption/suspended during the period of gov. ownership.
(Stump v Whibco NJ 1998) (fact that SBA held title to property
for part of 1974 did not interrupt adverse possession)
Universality of adverse possession against govt?
Most jurisdictions follow this rule (nullum tepmus occurit regis no
time runs against the king)
But it is not universally followed
o Considerable variation in whether it applies to land held by
railroads and public utilities that are not owned by the

Relation Back

until the adverse possessor gains title, they are liable for trespass and
mesne profits
o mesne profits often have their own statute of limitations of 6
Once title has ben acquired, it relates back to the date of entry, and
causes of action for trespass and mesne profits are barred along with
the action in ejectment

Adverse Possession and Future Interests

Principle: the adverse possessor acquires no more than the estate held
by the person entitled to possession at the time the adverse possessor
took possession of the property or, in the case of a prescriptive easement,
when he began using the property
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If the adverse possessor possesses or uses property held by a
lessee or life tenant, the adverse possessor will get no more than
the balance of the lease term or life estate
o See Dieterich Intl v JS&J Services: D landlord Brown, lacking a
present possessory interest in the property, was legally unable to
bring an action to prevent plaintiff from gaining the easement by
prescription. As a consequence, no prescriptive easement
could ripen against him.
o But:
If the right to possession has been abridged and possessory
rights damaged, the possessor may complain by way of an
action for trespass;
if, on the other hand, an intruder harms real property in a
manner which damages the ownership interest, the
property owner may seek recovery whether the cause of
action be technically labeled trespass or some other form of
action, such as waste.
Would Dietrichs use continue if lease renewed?
o Answer unclear
Yes according to Kiowa
No according to other authority

Easement by RX vs. AP
Advantage of Easement by RX:
1) AP requires exclusion of use by owner of property, but Ds customers
were using the same area that P used throughout the prescriptive period
exclusive use not required for easement
2) Successful claims of AP in CA require payment of property taxes for
five-year statutory period
o this requirement does not apply to acquisition of more limited use
rights, e.g. easement by prescription
courts disallow claims of easements to circumvent this when
the use is really like AP (Silacci v Abramson, CA 1996 no
prescriptive easement for 1600 square feet of neighbors
property fenced in and used as backyard)
if you have fenced in part of someone elses property
and later try to claim prescriptive easement, you are
likely going to lose
but if you are just using someones driveway, you are
likely to win
possession = extensive uses; easement = particular,
limited kind of use
Principle Works the Other Way, Too Easements Travel with the Property
Against Owners
Ex: If AP acquires title to Blackacre, which was subject to an easement
giving the owner of Whiteacre the right to use the driveway across
Blackacre, the title AP acquires is subject to that easement

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This is also true if Blackacre is subject to a covenant prohibiting the

nonresidential use of the property
o The only way AP can take free of these servitudes is to obstruct
the easement or violate the covenant for the statutory period
However, AP also acquires benefits of servitudes that are
appurtenant to Blackacre
o Appurtenant = created to benefit particular land; the benefit
runs along with the title of the property into the hands of
subsequent purchasers and other successors
o An easement giving the older of Blackacre the right to maintain
an electric line across Whiteacre goes to AP when he gets title at
end of statutory period

Adverse Possession of Personal Property/ Chattels

Like real property, after statute of limitations runs you get title for personal property

Seller cannot convey a better title then he holds, which is universally applied with stolen

AP usually doesnt work because it not held open/notorious

Bona fide purchaser = innocent party who purchases property without notice of any
other party's claim to the title of that property.

Replevin = remedy
Replevin is action at law whereby the owner or person claiming the
possession of personal goods may recover such personal goods where
they have been wrongfully taken or unlawfully detained. (IN law)
o 1) P has title or right to possession;
o 2) property is unlawfully detained
o 3) D wrongfully holds possession
Is tacking allowed in adverse possession of chattels?
Calif. rule = no
o Society of Calif. Pioneers v Baker 1996: wrongful possessor may
not add the time of possession of his predecessor to his own

Discovery Rule vs demand rule

NY = demand rule
Rule: CoA for replevin against the good-faith purchaser of a stolen
chattel accrues when the true owner makes demand for return of the
chattel and the person in possession of the chattel refuses to return it

Different rule applies if in possession of thief: in that case, SoL

runs from time of theft, even if the property owner was unaware of the
theft at the time it occurred

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Guggenheim Found v. Lubell: Plaintiff museum was true owner of painting
and sought replevin of painting that was held by defendant who purchased it
from a gallery; museum did not notify any other museums or authorities.
Defendants had to give it to the museum under New York rule
Held: The timing of the museums demand for the gouache and
Ds refusal to return it are the only relevant factors in
assessing the merits of the Statute of Limitations defense
Held: Although Ds SoL argument fails, her contention that the
museum did not exercise reasonable diligence in locating the
painting will be considered by the Trial Judge in the context of
her laches defense
Rosner v. United States: Hungarian Jews claim that their property stolen from
the Hungarian gold train and later seized by the US was identifiable and
should be returned.
Held: Plaintiffs cannot circumvent the Statute of Limitations
through the continuing violation doctrine, but the facts of the
case present the Court with a set of circumstances that
warrant equitable tolling of the limitations period.
Taken as true, this makes out a claim for Breach of Implied-inFact Contract of Bailment
Continuing Violation Doctrine not applicable
o a claim which is otherwise precluded because it is based on
conduct which falls outside the limitation period may
nonetheless be considered timely if there is a substantial
nexus between that conduct and the conduct occurring within
the limitations period
o Usually invoked in context of Title VII or employment
discrimination actions where SoL is300 days;
Continuing violation doctrine may be necessary in this
context to protect employee from employer reprisal, or
because discrimination is a series of minor acts which
only become apparent as they add up
Equitable tolling doctrine applies:
o Rule: allows Ps to sue after expiration of applicable SoL,
provided they have been prevented from doing so due to
inequitable circumstances
o Used in situations where claimant has actively pursued judicial
remedies through defective pleading during statutory period, or
where complainant has been induced or tricked by adversarys
misconduct into allowing deadline to pass
o Supreme Court test: that Plaintiffs were induced or tricked by
the Governments conduct into allowing the filing deadline to
Ps allege US Gov. continued to wrongfully claim property
on Gold Train unidentifiableunreturnable; Ps also allege
Gov. turned deaf ear on Ps requests for info about their
Here, difficulties faced by Os coupled with fact that gov.
should not benefit from its own misconduct ET applies

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Breach of implied-in-fact contract of bailment: to state

such a claim, claimant must show mutuality of intent to
contract, offer and acceptance, and that the officer whose
conduct is relied upon had actual authority to bind the
government in contract.
Where Gov. 1) accepted Ps property knowing it was
theirs; 2) never claimed to be owner; 3) took possession
w/ intent to return to owners; 4) stored and guarded for
this purpose; 5) indicated through conduct it would be
returned to rightful owners; then 6) falsely claimed
property unidentifiable claim for B of IiF K of B

NJ = discovery rule (knew or should have known)

CA = discovery rule by statute

o 3-year limit on action for taking, detaining or injuring any goods
or chattels, including actions for specific performance: The CoA
in the case of theft .. of any article of historical, interpretive,
scientific or artistic significance is not deemed to have accrued
until the discovery of the whereabouts of the article by the
aggrieved party, his or her agent, or the law enforcement
agency which originally investigated the theft.
discovery rule: the statute of limitations commences to run from
the date plaintiff knew or should have discovered that she suffered an
injury or impingement, and that it was caused by the product or act of
another. Burks v Rushmore, IN 1989
o harshness offset by IN recognizes fraudulent concealment
doctrine: A defendant who has by deceit or fraud prevented a
potential plaintiff from learning of a cause of action cannot take
advantage of his wrongdoing by raising the statute of limitations
as a bar to plaintiffs action.
Determining due diligence
o in the context of a replevin action for particular, unique and
concealed works of art, a plaintiff cannot be said to have
discovered his cause of action until he learns enough facts to
form its basis, which must include the fact that the works are
being held by another and who, or at least where, that other
is. (OKeefe case - NJ)
o laziness of P tempered by fact that due diligence must be
in Autocephalous: the record evidence makes it clear
that, although the RoC may not have contacted all the
organizations Goldberg in hindsight would require, it took
substantial and meaningful steps, from the time it
first learned of the disappearance of the mosaics, to
locate and recover them
The efforts targeted at the likely points of sale of the
mosaics, were sweeping and consistent with trade

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Laches (in demand cases)
Defense directed at conscience of court and its ability to bring
equitable considerations to bear in the ultimate disposition of the
Trial judge will consider if P did not exercise reasonable diligence in
locating the painting in the context of the laches defense
Conduct of P and D will be relevant to any consideration of this defense
at the trial level
Remedy if laches successful:
o If successful, might be able to keep the painting
o Or could get damages resulting from her keeping the painting

Acquisition of Rights by Public Use

The Public Trust Doctrine
Historically, U.S. courts allow the acquisition of publicly owned
easements for roads and navigation purposes without compensating
the landowner
o Roadway easements could be acquired by public use under
either prescription or implied dedication doctrines
o Easements for navigation were recognized as to all shorelands
and navigable waterways (and the land underneath) under the
public trust doctrine
Navigation was the purpose
Public fishing rights also secured under public trust
Later expanded to recreational uses
In late 1900s, efforts made to extend public trust doctrine
beyond portion of beach above high-tide line
Dedicating a new easement over existing private easement = taking
o When the government authorizes a permanent, public easement
across private lands, it constitutes a taking that requires just
compensation to the individual owners
Opinion of the Justices (Public Use of Coastal Beaches) NH:
o Although general public is capable of acquiring easement by
prescription, continuous and uninterrupted public use of land is
insufficient to establish easement if owner consented to use.
o Determination is judicial, not legislative
o When government unilaterally authorizes permanent, public
easement across private lands, this constitutes taking requiring just
o Legislative recognition of public easement in dry sand areas,
located between high water mark which served as boundary to
coastal public trust areas and intersection of beach and high
ground, was taking of private property of owners of land adjacent to
public trust areas, in violation of state takings clause, as dry sand

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areas had not been acquired by state through prescriptive
easement. Const. Pt. 1, Art. 12.
Effect of Public Trust Doctrine
Govts ability to divert shoreland and navigable waterway resources into
private hands is limited
o Unless gov. explicitly extinguishes public trust and does so to
further trust purposes, the transferee takes the property subject to
the trust
Other States Approaches to NH Beach Easement Problem:
NJ Doctrine: the public trust may extend to dry sand beaches as
reasonably necessary for recreational purposes, rejecting the idea that
the trust doctrine is fixed or static (Mathews v Bay Head Improvement
Assn, NJ 1984)
OR supreme court invoked doctrine of customary rights based on
use from time immemorial
o All dry sand areas of ORs ocean beaches are subject to
customary rights for public use, since European settlers
continued aboriginal customs
long-continued use or possession is evidence of a
title previously granted but now lost (lost-grant theory)
before public records, loss of deed was not
in societies lacking literacy, ceremonies rather than
written documents were used to transfer property
o Court pointed out that this doctrine avoids the need to litigate
public rights on a tract-by-tract basis and provides uniform
treatment of ORs ocean-front lands
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
Rose, The Comedy of the Commons:
o Roads and navigable waterways should be public because the more
people who engage in commerce the wealthier society becomes
o Commerce plays an important socializing function, which also
applies to recreation
Law has always provided public access to some areas
because in the absence of the socializing and sociable
activities that are performed on inherently public property,
the public is a shapeless mob whose members neither trade
nor converse nor play but only fight.

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Current Controversies re Capture, Conquest and Prescription


Capture doctrine, along with factory fishing, has led to critical

depletion of oceans resources
Rights to land taken from North American tribes under discovery and
conquest doctrines, as well as by fraud and treaty manipulation, are
increasingly contested by descendants seeking return of land and
o Native American Grave Protection and Repatriation Act of 1990
requires museums to return sacred objects and objects of
cultural patrimony to a direct lineal descendant of the owner, or
to a tribe that can show the object was owned or controlled by
the tribe, unless the museum can show it obtained the object
with the voluntary consent of an individual or group that had
authority to give such consent

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Property Rights in Creative Works and

Human Tissue
Right of Publicity
In General
Originated in 1953 in NY baseball trading card case
Right of publicity protects a persons interest in the commercial
exploitation of her name, likeness and identity
o Recognized via statute/common law in about 50% of states
o One who appropriates the commercial value of a person's
identity by using without consent the person's name, likeness, or
other indicia of identity for purposes of trade is subject to
liability for the relief appropriate under the rules stated in 48
and 49. (46: Restatement of Unfair Competition)
Calif. recognizes statute and CL CoA
o California Civil Code provides use of anothers name, voice,
signature, photograph, or likeness for advertising/ selling
without consent shall be liablelikeness need not be identical
or photographic
o CL CoA: CoA: 1) Ds use of Ps identity; 2) appropriation of Ps
name or likeness to Ds advantage, commercially or otherwise;
3) lack of consent; 4) injury
What the right of publicity can do:
o Give every person the right either to prevent or to permit for a
fee the use of his or her identity in an advertisement to help sell
someones product
What the right of publicity cannot do:
o Prevent someones name in news reporting
o Prevent the use of identity in an unauthorized biography
o Prevent use of identity in an entertainment parody or satire
The only kind of speech impacted by the right of publicity is
commercial speech advertising not news, not stories, not
entertainment and not satire or parody
Wendt case:
o White robot not a likeness under this ; but court held open
possibility manikin molded to precise features, or one that was
caricature or bore impressionable resemblance to P, might be
likeness for statutory purposes
o Here, the degree to which these robots resemble, caricature,
or bear an impressionistic resemblance to appellants is therefore
clearly material to a claim of violation of CC 3344

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Ds argue figures appropriate only identities of Cheers

characters, to which Paramount owns copyrights, and that
appellants may not claim an appropriation of identity by relying
on indicia, such as the Cheers Bar set, that are the property of,
or licensee of, a copyright owner
But Ps argue it is the physical likeness to [Ps], not
Paramounts characters, that has commercial value to Host.
Court: An actor or actress does not lose the right to control the
commercial exploitation of his or her likeness by portraying a
fictional character.
Triable issue of fact re: whether the defendants are
commercially exploiting the likeness of the figures to
Wendt and Ratzenberger intending to engender profits to
their enterprises

Copyright vs. RoP

o Wendt: claims are not preempted by federal copyright law.
Issues of material fact exist concerning the degree to which
the robot are like the appellants.
o Fleet v CBS: holds an actor may not bring action for
misappropriation under 3344 when the only claimed
exploitation is distribution of the actors performance in a
copyright movie
o Wendt Ps here not seeking to prevent Paramount from
exhibiting Cheers
Wendt: An actor or actress does not lose the right to
control the commercial exploitation of his or her likeness
by portraying a fictional character.
How far does the RoP extend?
Evoking the image of a celebrity (Carson v Heres Johnny Portable
Toilets, 6th Cir 1982)
o Court held use of phrase Heres Johnny, closely associated
with comedian Carson for much of his career, intended to evoke
his image and appropriate it for commercial purposes:
if the celebritys identity is commercially exploited, there
has been an invasion of his right whether or not his name
or likeness is used
Imitation of a persons voice (Midler v Ford Motor Co, 9th Cir 1988)
o Ford violated singers RoP by hiring singer to perform Do You
Want to Dance in voice and style intended to sound like Bette
When a distinctive voice of a professional singer is widely
known and is deliberately imitated in order to sell a
product, the sellers have appropriated what is not theirs.
But RoP runs into first amendment roadblocks
o Dustin Hoffmans rights not violated when LA Times Magazine
superimposed his face on the body of a female model (Hoffman
v Capital Cities/ABC, 9th Cir 2001)

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Absent clear and convincing evidence the magazine acted

with actual malice, the portrayal was entitled to full
protection under the First Amendment

Wendt Kozinski Dissent: Problem lies with Whites sweeping standard
State courts limit RoP to name/voice/face/signature
o a copyright holder can generally avoid using any of these
tangible elements in exploiting its copyright
White decision exploded RoP to include anything that brings the
celebrity to mind inevitable so broad and ill-defined a property right
will trench on the rights of the copyright holder
o When portraying a character who was portrayed by an actor, it
is impossible to recreate the character without evoking the
image of the actor in the minds of viewers.
To avoid this, producers will have to cast new actors who
look and sound very different from the old ones
Goodwill associated with old show is lost; artistic freedom
of writers and producers is cramped
Is there a right of publicity after death?
Yes: The right of publicity, exploited during lifetime, is inheritable at
death (Elvis Presley Intl Memorial Found v Crowell, TN App 1987)
o When people invest in their name/image during life, they create
an asset that should be transferable at death like any other
To allow others to make free use of the name or image
after death would be unjust enrichment
No: Bela Lugosis lifetime right to exploit fame and likeness for
commercial purposes did not survive his death (Lugosi v Universal
Pictures, Cal 1979)
o Court troubled by unbounded nature of claimed right
Where would line be drawn?
Is drawing such a line within the scope of judicial
o This led to CC 3444.1 (overruling Lugosi v Universal
Pictures), which extends RoP 70 years after death
IN: 100 yrs; KY: 50 yrs; NV: 50 yrs
Right of Publicity and the First Amendment
ETW Corp. v Jireh Publishing, 6th Cir 2003: artist painted Masters of
Augusta, including Tiger Woods
o Held: (1) use of athlete's trademarked name was noninfringing
fair use; (2) athlete's image was not protected; and (3) print was
entitled to First Amendment protection.
Fact that expressive materials are sold does not diminish
degree of protection to which they are entitled under First

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First Amendment protection afforded to limited edition
print of painting by sports artist, depicting professional
golfer's tournament victory, trumped athlete's interest in
his image under Ohio common law right of publicity.
Comedy III Productions Inc v Gary Saderup, Cal 2001
o Held: original drawing of Three Stooges reproduced in
lithographs and on T-shirts not sufficiently transformative to
enjoy First Amendment Protection that would outweigh heirs
right of publicity
(1) when an artist is faced with a right of publicity
challenge to his or her work, he or she may raise as
affirmative defense that the work is protected by the First
Amendment inasmuch as it contains significant
transformative elements or that the value of the work
does not derive primarily from the celebrity's fame;
o Likenesses of deceased members of comedy act, as reproduced
on T-shirts and lithographs from charcoal drawing of those
celebrities, contained no significant transformative or creative
contribution so as to be entitled to First Amendment protection
in action under publicity rights statute by registered owners of
all rights in comedy act against artist who drew the likenesses
and sold the T-shirts and lithographs for commercial gain.
But see Zacchini v Scripps Howard
Held: The First and Fourteenth Amendments do not immunize the
news media from civil liability when they broadcast a performer's
entire act without his consent, nor does the Constitution prevent a
State from requiring broadcasters to compensate performers.
o The right of exclusive control over the publicity given to his
performances said to be such a valuable part of the benefit
which may be attained by his talents and efforts that it was
entitled to legal protection
o P did not abandon his rights by performing at Geauga County
o broadcast of Ps entire performance, unlike unauthorized use
of anothers name, goes to the heart of Ps ability to
earn a living
o RoP provides economic incentive for performer to make
investment required to do his act

Copyright Clause
The congress shall have the power to promote the progress of science
and useful arts, by securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries. US Const. art I
8 cl. 8

Prima Facie Copyright Infringement


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1) That P owns a valid copyright
2) That D copied original elements of Ps copyright
o test: an average lay observer would recognize the alleged copy
as having been appropriated from the copyrighted work
author cannot copyright facts or ideas; only aspects of
the work termed expression that display the stamp
of the authors originality
o spectrum:
scenes a faire stock scenes and hackneyed character
types are ideas and not copyrightable
as plots become more detailed and characters more
developed cross line into expression protected

Purpose and Duration of Copyright
Purpose: Copyright clause intended to be the engine of free
o 1) promotion of learning:
o 2) protection of public domain
o 3) granting of exclusive right to author
The authors ownership is in the copyright and not in the work itself
Duration: Most copyrights for works created after 1978 last for
lifetime of author + 70 years
o Duration has been extended, most recently in 1998 (Sonny Bono
act), adding 20 years to the term of existing copyrights
in copyright law, the balance between the First Amendment and
Copyright is preserved by the idea/expression dichotomy and the
doctrine of fair use
What are possible costs of infringement?
Any profits you make from the infringement are fair game
The burden is on D to show what net revenue is as opposed to GR
SCOTUS: No presumption of irreparable injury when alleged infringer
has bona-fide fair use defense
Further, monetary harm that can be remedied through damages

Copyright Act of 1976 expanded scope from all writings of an author to
1) literary works; 2) musical works; 3) dramatic works; 4) pantomimes
and choreographic works; 5) pictorial, graphic and sculptural works; 6)
motion pictures and audiovisual works; 7) sound recordings; 8)
architectural works
Copyright and Computers

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9th Cir held in Mai v Peak that loading copyrighted software into
a computers RAM constitutes a fixation
o Thus, anything stored, or viewed, on a computer is sufficiently
fixed to be given copyright protection
Registration is not necessary to obtain copyright protection, which
exists from the time the work is created; however proper application is
necessary to bring an action for infringement (does not mean you have
to receive it) and provides other advantages of:
o Public record of copyright/certificate of registration
o Allows copyright holder to obtain from Customs Service notice of
importation of articles that appear to be copies of the work
o Registered works may be eligible for statutory damages and
attorney's fees in successful litigation.
o Finally, if registration occurs within 5 years of publication, it is
considered prima facie evidence in a court of law.
o 17 US C602-603: copyright owners may request Customs to
seize infringing copies
o 19 C.F.R. 133.31: Claims to copyright may be recorded with
Customs for import protection
o 19 USC 1337(a)(1)(B): US Intl Trade Commission will work to stop
importation of articles that infringe a valid and enforceable
United States patent
Its cheaper to enforce a copyright than a patent, because
you can do it through the US, rather than an international

Idea/Expression Dichotomy and Compilations

Copyright cannot protect an idea, only expression of that idea
Copyright encourages authors the right to their original expression,
but encourages others to build freely upon the ideas and information
conveyed by the work.
Holding an infringer liable in copyright for copyrighting the expression
of anothers ideas doesnt impede 1A because public purpose has been
served public already has access to the idea or concepts
A new author may use or discuss the idea, but must do so using
her own original expression
Thus, idea-expression dichotomy
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
must satisfy originality requirement
requires only that author make selection or
arrangement independently and that it display some
level of creativity

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Threshold is extremely low; even a slight amount will

suffice, no matter how crude, humble or obvious
Originality does not signal novelty, a work may be
original even though it closely resembles other works
so long as the similarity is fortuitous, not the result of
See Feist Publications, Inc. v. Rural Telephone Service Co.: The raw data
in a phone book does not satisfy the requisite creativity/originality
requirement if just lists it alphabetically creator of the phonebook
cannot recover damages for copyright infringement against others who
copy the material - copyright rewards originality, not effort
Copyright protection thin with compilations
notwithstanding a valid copyright, a subsequent compiler remains free
to use the acts contained in anothers publication to aid in preparing a
competing work, so long as the competing work does not feature the
same selection and arrangement
o this is consistent with the purpose of copyright
primary objective is not to reward authors labor but to
promote progress of science and useful arts
thus, copyright assures authors the right to their original
expression but encourages others to build freely upon the
ideas/information in the work (fact/expression dichotomy)
Inclusion of Previously Published Works in Electronic Databases
NY Times v Tasini 2001: Copyright Act 17 USC 201(c) creates a
presumption that the author of a work who has consented to its inclusion
in a collective work or compilation has also granted the owner of the
copyright in the collective work the privilege of reproducing and
distributing the contribution as part of that particular collective work,
any revision of that collective work and any later collective work in the
same series

Functional Items copyright

Restrictions on copyright : cannot copyright functional/useful items.

o Copyright Act defines useful article as one having an intrinsic
utilitarian function that is not merely to portray the appearance of
the article or to convey information. An article that is normally
part of the useful article is considered a useful article. 17 USC
o Congress excluded useful articles from realm of copyright
except when, and only to the extent that such design
incorporates [artistic] features that can be identified separately
from, and are capable of existing independently of the utilitarian
aspects of the article.
Separability Test : 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.

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These features must be able to exist independently from the articles
function and demonstrate minimal levels of creativity and originality
o unless the shape of an automobile, airplane, ladies dress, food
processor, television set, or any other industrial product contains
some element that, physically or conceptually can be identified as
separable from the utilitarian aspects of the article, the design
would not be copyrighted under the bill.

so a familiar shape can by copyrightable only if it creative beyond the basis shape
and must not be functional part (which is not copyrightable)

Oddzon Products, Inc. v. Oman: court upheld copyright offices denial of

Koosh ball because it was a familiar shape and tactile properties were
inseparable from its utilitarian function
o Shape
it is not merely that the KOOSH ball approximates a
sphere, it is also that there is not enough additional
creative work beyond the objects basic shape to warrant a
copyright there is no copyrightable authorship in
producing such a familiar shape
o Tactility
the design of a useful article shall be considered a
pictorial, graphic or sculptural work only if, and only to the
extent that, such design incorporates pictorial, graphic or
sculptural features that an be identified separately from,
and are capable of existing independently of, the utilitarian
aspects of the article.
not an abuse of discretion for CO to rank tactile qualities of
KOOSH ball as dependent on, and inseparable from, the
utilitarian features of the ball

Doctrine of Fair Use (affirmative defense)

(Affirmative Defense) contains exceptions on copying for purposes of
criticism, comment, new reporting, teaching, scholarship, or research
o Exceptions allow later authors to use a previous authors copyright to
introduce new ideas or concepts to the public
o Factors in determining fair use are:
o 1) purpose and character of the use
A) commercial or nonprofit not determinative but
Test: Whether the user stands to profit from
exploitation of the copyrighted material without
paying the customary price
B) also looks at whether highly transformative (adds
something new)
Test: Whether the new work merely supersedes
the objects of the original creation, or instead adds

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something new, with a further purpose or different

character, altering the first with new expression,
meaning or message
o 2) nature of the copyrighted work
hierarchy of protection in which original, creative works
are afforded greater protection than derivative works or
factual compilations
o 3) amount and substantiality of the portion used in relation to the
copyrighted work as a whole; and
o 4) effect of the use upon the potential market for or value of the
copyrighted work
Must consider not only the extent of market harm caused
by the particular actions of the infringer, but also whether
unrestricted and widespread conduct by D would result in
adverse impact on potential market
The only harm to derivatives that need concern
us is the harm of market substitution.
Suntrust Bank v. Houghton Mifflin Company: Defendant published parody
of Gone with the Wind, which plaintiff who holds the copyright of the
original book and used characters, relationships, plot elements, and
verbatim dialogue. Injunction is lifted because might be protected under
fair use doctrine: while it is a commercial product it is transformative;
parody does not need to take just a bare amount from original and would
not harm the market
o A lack of irreparable injury to Suntrust, together with First
Amendment concerns regarding comment and criticism and
the likelihood that a fair use defense will prevail, make
injunctive relief improper

Misappropriation and Common-Law Unfair Trade


Works not protected by copyright may be protected by doctrines of

misappropriation and unfair competition
Intl News Svc v AP 1918: affirming issuance of injunction preventing
INS from copying bulletins from AP and reselling them on basis of
unfair competition:
o Held: In a court of equity, where the question is one of unfair
competition, if that which the complainant has acquired fairly at
substantial cost may be sold fairly at substantial profit, a
competitor who is misappropriating it for the purpose of
disposing of it to his own profit and to the disadvantage of
complainant cannot be heard to say that it is too fugitive or
evanescent to be regarded as property
This view does not give complainant the right to
monopolize the news, but only postpones participation by
complainants competitor in the processes of distribution
and reproduction of news that it has not gathered, and
only to the extent necessary to prevent that competitor

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from reaping the fruits of complainants effort and
expenditure, to the partial exclusion of complainant
o But equitable relief is not confined to that class of cases
regarding news as the mere material from which these
two competing parties are endeavoring to make money,
and treating it, therefore, as quasi property for the
purposes of their business because they are both selling it
as such, defendants conduct differs from the ordinary
case of unfair competition in trade principally in this that,
instead of selling its own goods as those of complainant, it
substitutes misappropriation in the place of
misrepresentation, and sells complainants goods as its
Misappropriation in other contexts
Music wasnt protected by copyright until the 1970s, so courts used
misappropriation/unfair competition to protect it
Lesson: these common-law doctrines of misappropriation and unfair
competition are available to help protect yourself even when no
obvious law exists to protect you

Intellectual Property, Cyberspace and the Digital

Millennium Copyright Act

schools of thought re: property and cyberspace

o 1) too much property
too difficult, if not impossible to police internet use
copyright affords too much credit to the author whose
work is the product of contributions from many sources
o 2) too little property
creators, publishers and distributors will be wary of
electronic marketplace unless the law provides them the
tools to protect their property against unauthorized use
likewise, the public will not use the services available and
generate the market necessary for success unless a wide
variety of works are available under equitable/reasonable
T&C and the integrity of those works is assured
DCMA attempts to strike balance between copyright owners and
internet users and to limit the impact of new copying techniques on
copyright holders
o Requires ISPs to take down content once notified of copyright

Enforceability of Copyrights in Cyberspace

A&M Records v Napster 2001: court upheld injunction against Napster
on ground it violated Copyright Act by allowing users to download/copy
songs without consent of artists or recording companies
Peer-toPeer File Sharing

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RIAA sued 261 individuals accused of downloading music; settled 64 as

of 2003 at cost of $3,000 per defendant

Cyberpiracy just added to Lanham Act

Lanham Act: 15 USC 1125(d): Cyberpiracy Prevention
(1)(A) A person shall be liable in a civil action by the owner of a mark,
including a personal name which is protected as a mark under this
section, if, without regard to the goods or services of the parties, that
o (i) has a bad faith intent to profit from that mark, including a
personal name which is protected as a mark under this section;
o (ii) registers, traffics in, or uses a domain name that
(I) in the case of a mark that is distinctive at the time of
registration of the domain name, is identical or
confusingly similar to that mark;
(II) in the case of a famous mark that is famous at the
time of registration of the domain name, is identical or
confusingly similar to or dilutive of that mark; or
(III) is a trademark, word, or name protected by reason of
section 706 of Title 18 or section 220506 of Title 36.

Cyperspace & Domain Names Kremen v Cohen 9th Cir

P bought; D Cohen sent ISP letter saying P gave up rights to; ISP turned domain over to D
Held: Kremen had an intangible property right in his domain
name, and a jury could find that ISP wrongfully disposed of that
right to his detriment by handing the domain name over to Cohen
Intangible Property & Conversion
o Calif. rule: 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.
o Restatement/Traditional Rule (requiring merger into a
o (1) Where there is conversion of a document in which intangible rights
are merged, the damages include the value of such rights.
o (2) One who effectively prevents the exercise of intangible rights of the
kind customarily merged in a document is subject to a liability similar
to that for conversion, even though the document is not itself
o Comment a: A document is a chattel and is, therefore, itself the subject
of property The document may, however, embody a personal
obligation or the title to a chattel represented by it. Thus, when by the
appropriate rule of law, the right to the immediate possession of a
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chattel and the power to acquire such possession is represented by a
document, such document is regarded as equivalent to the chattel
o An intangible is merged in a document when, by the
appropriate rule of law, the right to the immediate possession of
a chattel and the power to acquire such possession is
represented by [the] document, or when an intangible
obligation [is] represented by [the] document, which is
regarded as equivalent to the obligation.
To establish conversion, P must show ownership or right to
possession of property, wrongful disposition of property and
o Property includes every intangible benefit and prerogative
susceptible of possession or disposition. Test:
1) Interest capable of precise definition
i) domain name = well-defined interest
2) It must be capable of exclusive possession or control
i) ownership is exclusive in that registrant alone makes that decision
3) The putative owner must have established a legitimate claim to
i) registering a domain name is like staking a claim to a plot of land at
the title office, informing others that the domain is the registrants
and no one elses

Copyright vs. Trademark

Copyright protects original works of authorship, while a patent protects

inventions or discoveries. Ideas and discoveries are not protected by
the copyright law, although the way in which they are expressed may
be. A trademark protects words, phrases, symbols, or designs
identifying the source of the goods or services of one party and
distinguishing them from those of others.

Lanham Act: gives a seller or product the exclusive right to register a
trademark and to prevent his or her competitors from using that trademark.
trademarks include any word, name, symbol, or device, or any
combination thereof.

Trademark: allows seller to register a trademark and prohibits competitors
from using it. Policy behind trademark is that they help customers easily
identify a brand they associate with quality. They allow consumers to identify
the source of the product or brand immediately. It also promotes company
that produces good products because other people cannot knock off their
products and reward investments of companies and prevent others from
swooping in,
Def: A trademark is a word, phrase, symbol or design, or a combination
of words, phrases, symbols or designs, that identifies and distinguishes
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the source of the goods of one party from those of others. A service mark
is the same as a trademark, except that it identifies and distinguishes the
source of a service rather than a product. US Patent/Trademark Office
o Must be 1) distinctive rather than merely descriptive, 2) affixed to
a product that is actually sold in the marketplace, and 3) registered
with the US Patent and Trademark Office to bring action in federal
Trademarks do not have constitutionally mandated time limits
o Certificate of registration of trademark remains in force for 10
years; may be renewed every 10 years as long as the mark
remains in use
Trademarks are protected by both federal and state law
Benefits of registration Like copyright, registration is not needed to
obtain a trademark
o First-in-time, determined by use of a distinctive mark to identify a
sellers goods or services, determines priority of rights
Registration confers benefits including:
o Constructive notice to the public of the registrants claim of
ownership of the mark
o Legal presumption of registrants ownership of the mark and
exclusive right to use the mark nationwide on or in connection with
the goods/services listed in the registration
o Ability to bring an action concerning the mark in federal court
o Use of the U.S. registration as basis to obtain registration in foreign
o Ability to file the U.S. registration with U.S. Customs Service to
prevent importation of infringing gods
o Right to use symbol, which may carry significant deterrent effect
TM and SM may be used to give notice of claim of
ownership without registration of the mark
trademarks need not be federally registered and you can bring an action
in state court, but to bring an action in federal court it must be registered
Unprotectible Marks and Generic Labels
Genericicide: labels cannot be protected as trademarks
Trademarks can morph into generic labels; the trademark becomes
o E.g. aspirin, thermos, escalator, cellophane, shredded wheat
Descriptive Marks
Whether descriptive terms receive trademark protection depends on
whether they become sufficiently identified with a particular product as
to acquire a secondary meaning
o Bank of America is protected
o LA for low-alcohol beer is not
Scandalous Marks

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Scandalous, immoral or deceptive marks are not registrable

o The offensiveness must be judged in context and from the
standpoint of the general public
Old Glory condom Corp and Big Pecker Brand both held not scandalous

Trademark Dilution (FTDA)

Most trademark law aims to prevent confusion among consumers prohibits
use of similar marks only when confusion is likely to occur
but Trademark dilution involves an unauthorized use of another's
trademark on products that do not compete with, and have little
connection with, those of the trademark owner. Dilution is a basis of
trademark infringement that only applies to famous marks.
o This famous trademarks even when no confusion is likely to
occur (15 USC 1125(c):
Subject to the principles of equity, the owner of a famous
mark that is distinctive, inherently or through acquired
distinctiveness, shall be entitled to an injunction against
another person who, at any time after the owner's mark has
become famous, commences use of a mark or trade name in
commerce that is likely to cause dilution by blurring or
dilution by tarnishment of the famous mark, regardless of the
presence or absence of actual or likely confusion, of
competition, or of actual economic injury.
A registered mark prevails over an unregistered mark, even
though the unregistered mark is famous
o First Amendment carve-outs for:
Fair use of famous mark by another in comparative
advertising or promotion to identify competing goods or
Noncommercial use of the mark
All forms of news reporting and commentary
Prior to FTDA overhaul, Mosely v V Secret Catalogue held FTDA required
proof of actual dilution, rather than mere likelihood of dilution
now plaintiff only needs to show the defendant's mark is likely to cause
However, the revision also reduced the universe of marks falling under its
protection, requiring that marks be nationally well known to qualify for
protection from dilution.

Secondary Meaning

Lanham Act gives seller/producer exclusive right to register a trademark

(15 USC 1052) and to prevent his or her competitors from using that
trademark (15 USC 1114(1))
If consumers come to identify a color with a brand much like a
descriptive word on a product then it acquires secondary meaning
(acquired when in the minds of the public, the primary significance of a
product feature is to identify the source of the product rather than the
product itself

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Principle: trademark intended to protect those who use or intend to
use the mark to identify and distinguish his or her goods, including
a unique product, from those manufactured or sold by others and to
indicate the source of the goods, even if that source is unknown.
(15 USC 1127)
See also unprotectible marks (above)

Functionality Doctrine
Functionality doctrine:
functional feature cannot be trademarked
Functionality doctrine prevents trademark law, which seeks to promote
competition by protecting firm's reputation, from instead inhibiting
legitimate competition by allowing producer to control useful product
o it is the province of patent law to encourage invention by granting
inventors a monopoly over new product designs/functions for a
limited time
Test: Generally, product feature is functional, and could not serve as
trademark, if it is 1) essential to use or purpose of article or 2) if it affects
cost or quality of article, that is, if exclusive use of feature would put
competitors at significant nonreputation-related disadvantage.
o e.g. if exclusive use of feature would put competitors at significant
non-reputational disadvantage
Test for Nonfunctional Designs
PAF S.r.l. v Lisa Lighting Corp, SDNY 1989: designer of acclaimed Dove
lamp secured judgment against importer of Swan lamp
o Dove lamp entitled to protection because highly distinctive,
aesthetically appealing lamp, not a predominantly functional
lamp, and fact that D copied established that its trade dress had
acquired secondary meaning
o the crux of the doctrine of secondary meaning is that the mark
comes to identify not only the goods but the source of those
see Qualitex v Jacobson:
Held: Sometimes, a color will meet ordinary legal trademark
requirements, e.g. through secondary meaning. When it does so, no
special legal rule prevents color alone from serving as a trademark.
no objection in functionality doctrine
o the fact that sometimes color is not essential to products use or
purpose and does not affect cost or quality indicates that
functionality doctrine doesnt create absolute bar to use of
color alone as a mark
result serves the goal of TM law:
o law encourages production of quality products and discourages
those who hope to sell inferior products by capitalizing on
consumers inability quickly to evaluate quality of an item
offered for sale

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Rule: where a color serves a significant nontrademark function
courts will examine whether its use as a market would permit one
competitor (or a group) to interfere with legitimate (nontrademarkrelated) competition through actual or potential exclusive use of an
important product ingredient
o This should prevent anticompetitive consequences of which D

Trade dress: trade dress can be protected under federal law
Trade dress traditionally referred to the packaging or labeling of a
product, but it has been extended to the total image of the product,
and may include features like size, shape, color, color combinations,
textures or graphics. anything which serves to identify the
product w/ its manufacturer or source
o a design or package which acquires this secondary meaning is a
trade dress which may not be used in any manner likely to cause
confusion as to the origin, sponsorship or approval of the goods
o but the person asserting such protection in an infringement
action must prove that the matter sought 1) is not functional
or 2) puts competitors had a non-reuptation advantage
See Traffix Devices, Inc. v. Marketing Displays, Inc:
plaintiff held expired utility patents for dual spring design for road
signs and claimed that defendant infringed on its trade dresscourt
held that it was not protected under trade dress because plaintiff could
not overcome the strong inference of functionality: the design provides
useful mechanism to resist wind force
o 15 USC 1125(a)(3): burden on party asserting protection
the person who asserts trade dress protection has the burden
of proving that the matter sought to be protected is not
A utility patent is strong evidence that the features
therein claimed are functional. If trade dress protection is
sought for those features the strong evidence of
functionality based on the previous patent adds great
weight to the statutory presumption that features are
deemed functional until proved otherwise by the party
seeking trade dress protection.
Can do so by showing that it is merely an ornamental, incidental, or
arbitrary aspect of the device.
o But here, In this case, beyond serving to inform consumers re:
MDIs manufacture, the dual-spring design provides a unique
and useful mechanism to resist the wind
o Thus, the dual-spring design is not an arbitrary flourish in the
configuration of MDIs product; it is the reason the device works

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Patent Law Protection: 35 USC 101:
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 therefor, subject to the
conditions and requirements of this title.
Patent law grants inventors the right to prevent others from making, using
or selling the inventors invention or discovery for a limited period of time
To be eligible for a patent, an invention must be:
o 1) novel
o 2) useful
o 3) nonobvious in nature
Braod Intent:
o In choosing expansive terms like manufacture and composition
of matter Congress plainly contemplated that patent laws would
be given wide scope
o 1952 act changed very little; legislative history informs us Congress
intended statutory subject matter to include anything under the
sun that is made by man
Exceptions that are not patentable
o Laws of nature
o Physical phenomena
o Abstract ideas

Three main types of patents:

1) Utility patents
Issued for any new and useful machine, manufacture, process or
composition of matter
Term: 20 years from date on which patent application was filed
o If patent not issued within three years from date of filing patent
may be extended 1 day for each day of delay beyond the 3 year

Held: The patentee has produced a new bacterium with markedly

different characteristics from any found in nature and one having
the potential for significant utility. His discovery is not natures
handiwork but his own; accordingly it is patentable subject
matter under 101.
2) Design patents
a. Issued for any new, original and ornamental design for an item of
i. it is only the appearance that is protected and not the actual
b. Term: 14 years from date the patent issues
3) Plant patents
a. Issued for any new asexually reproducing plant
b. Term: 20 years from date on which patent application was filed
i. If patent not issued within three years from date of filing
patent may be extended 1 day for each day of delay beyond
the 3 year period
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No patent term is renewable patented inventions are available for
public use sooner than copyrighted works
Patent Protection
patent grants right to prevent all others from making, using or selling
the patented product or process
other rights
o prevent others from inducing domestic infringement
o prevent others from selling components for assembly of the
patented invention abroad
o prevent others from importing into the United States articles
manufactured with a patented process
patent appeals handled exclusively in federal circuit

Possible to get a business patent, but not easy because patents are not for abstract ideas

Bilski v. Kappos, Supreme Court affirmed decision denying a patent to the claimed
invention of a business method by which sellers of commodities in the energy market can
hedge against the risk of price changes. machine or transformation test is not the sole
test of patentability, and that this particular claimed invention was not patentable because
it was merely an abstract idea. The primary concern is that patents on business methods
may prohibit a wide swath of legitimate competition and innovation.

Justices found you should be able to patent some business

methods; mentions technology and says court will not close door
on patenting business methods
Court declined to make hard-and-fast rule but said it will
be tough to show this

Property Rights in Human Tissue

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?

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Holding: Yes and no. The complaint states a cause of action for breach of the physicians
disclosure obligations, but not for conversion
In soliciting patient's consent to medical treatment, physician has
fiduciary duty to disclose all information material to patient's decision
(including his own financial stake)
Physician must disclose personal interests unrelated to patient's
health, whether research or economic, in obtaining patient's consent to
medical treatment, that may effect physician's professional judgment;
physician's failure to disclose such interest may give rise to cause of
action for performing medical procedures without informed consent or
breach of fiduciary duty.
Patient whose extracted cells were utilized in research program to
manufacture patented cell line did not have cause of action under
theory of conversion; patient did not retain ownership interest in cells
following their removal, statutory law drastically limited patient's
control over excised cells and patented cell line was both factually and
legally distinct from cells taken from patient's body and thus, cell line
was not patient's property.
court doesnt want to make civil liability for innocent parties who
are engaged in socially useful activities (since conversion is a strict
liability tort & materials are routinely distributed to researchers
without their knowing the exact source of the cells)
There is no direct authority for importing law of conversion to this
Policy counsels against such an extension of conversion to cover
human cells.
Do not want to provide disincentive for socially useful
Do not want to limit product development of medicine or
research by creating uncertainty about legal title to biological
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
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.
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.

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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.

Determining damages

Law of accession and improvers

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)
o Improvers: when someone, deliberately or by mistake, builds a
structure on someone elses land
o Resolution involves relative values of parties contributions and
their good or bad faith
What if bad-faith? Then we might add punitives or change
the measure of damages
Once tissue is removed, does it become property?
o NIH immunologist held liable for conversion for poisoning a cell line
of a colleague
Rule: if in the hands of researchers clearly property

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).
ISSUE: 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?
HELD: 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.

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Common law rights, combined with statutory right under California law to
control disposition of their children's bodies, created in parents a property
interest in the corneas of their deceased children protected by the Due
Process Clause of the Fourteenth Amendment.
While the legislature may elect not to confer a property interest, it may
not constitutionally authorize the deprivation of such an interest, once
conferred, without appropriate procedural safeguards.

Due Process and Property

Newman court notes interests protected by DP extend well beyond
actual ownership of real estate, chattels or money
SC has granted property rights grounded in economic benefits
conferred by government that are safeguarded by DP:
o Welfare benefits (Goldberg v Kelly)
o Tenure (Slochower v Board of Educ.)
o Dismissal during temr of contract (Wieman v Updegraff)
o Proscribing summary dismissal from public employment
But court held no DP necessary for teacher hired for 1-year contract
without tenure or formal K or promise of rehire, who was told he would
not be rehired (no legitimate claim of entitlement to be rehired)
Whether govt benefits create entitlements that rise to level of
property under 14th Amendment DP depends on determinacy of the
If statute provides everyone meeting criteria is entitled to benefit
generally entitled to DP protection
If statute leaves room for discretion in selecting participants
generally no DP protection
See Washington Legal Clinic for the Homeless v Barry DC Cir 1997:
o Adequate shelter under DC Right to Overnight Shelter Act not
constitutionally protected property interests because District did
not have enough space to accommodate all persons seeking
shelter and statute did not specify how spaces were to be
Compensation for Property Taken by Govt
When property is taken by the government required to compensate
When someone claims compensation threshold ?: whether govt has
taken property from the claimant
o US v Willow River Power Co: power co sued after gov. dam
caused St Croix River level to rise three feet above previous
level, reducing its generation capacity
o Held: what was taken was not property (power companys
interest in preexisting highwater level of St. Croix River was not
a protected right) no compensation owed

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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).

Estate Planning Considerations

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


An Estate is an interest in land, measured by some period of time, that is or may become

A Overview: Types of estates (from longest to shortest in duration)

1 Freehold estates (holder has seisen)
Fee simple: Estate that has potential of enduring forever;
resembles absolute ownership and holder of fee simple
commonly called owner of the land
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
Life estate: Estate that will necessarily end at death of a
1 Non-freehold estate (holder only has possession, no seisen)
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

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A The Fee Simple

1 Categories of fee simple
Fee simple absolute
Fee simple defeasible
1 Fee simple determinable
1 Fee simple subject to condition subsequent

Fee Simple Absolute

Fee simple estate of infinite duration; absolute ownership of estate


Of potentially infinite duration (hence fee)

No limitations on its inheritability (hence simple)
Cannot be divested, nor will it end on the happening of any
event (hence absolute)

O conveys Blackacre to "A and his heirs"
to A creates interest in that land to A (words of
and his heirs limit and describe this conveyance
(words of limitation)
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.
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
Fully alienable: can sell, divide, or devise it. Can be
inherited intestate.
Inheritance of a fee simple absolute
Heirs: Persons who succeed to the real property of an
intestate decedent (someone who dies without a will)
under a states statute of descent.
Surviving spouse, issue, ascendants (grandparents,
parents, etc.)
Issue: lineal descendants to all degrees


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Defeasible Fees

Fee simple estates of potentially infinite duration that can be terminated by happening of a
specified event. There are three kinds:

Fee simple determinable

Fee simple subject to a condition subsequent
Fee simple subject to an executory interest

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.


a Use durational/adverbial language: for so long as,
while, during, until.
a 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.
a Can be conveyed, but grantee takes land subject to
termination by happening of condition
a Transferred in same manner as fee simple absolute,
as long as stated event has not happened
a But, fee simple remains subject to the limitation no
matter who holds
Possibility of reverter

Since grantee's estate may terminate upon breach of a condition, grantor retains a
possibility of reverter.

Grantor must expressly retain a possibility of

reverter. It is not assumed if he grants a fee simple
determinable. .
At common law: No transfer inter vivos or by
will. Attempted transfer invalid, but not
extinguished upon attempt. Transferred
through heirs.

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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
holds that there must be plain and express language
of a reversion. This wasn't present here, so it is considered
fee simple absolute.
A mere expression of the purpose for which the property
is to be used without provision for forfeiture or reentry is
insufficient to create an estate on condition in such a
case, an unqualified fee will pass.
Compare with Etheridge case (mentioned by court), in
which Fed Ct. applied fuller intent of the parties reading
to grant the FS determinable subsequent despite express

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


a Use language like: upon condition that, provided
that, but if, if it happens that.
a Example: Same example as with fee simple
determinable, but grantor retains right to enter,
rather than automatic reversion.
Alienability: Same as determinable
Inheritance: Same as determinable
Right of entry (aka: right of reentry, power of

Future interest retained by grantor when condition subsequent is conveyed.


Grantor must expressly reserve right of entry

in grantor. This does not automatically arise
by granting condition subsequent. Grantor can

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waive the right by not reentering. However,

inaction is not a waiver.
a Alienability:
At common law: not devisable or
transferable inter vivos. It did
descend to heirs of grantor on death.
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.

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

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
a A church has a fee simple subject to an
executory interest in the AHA.
a O does not have a right of entry because it
wasn't expressly reserved
a AHA is not a right of entry because that can only
be reserved for grantor
a AHA does not have a remainder, because it
divests a fee simple.
a 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
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make condemning ok. Court held that the executory
interest was compensable.

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
At common law: For reverter and reentry, went to heirs at
death and were not alienable inter vivos.
Today: In some states, attempt to transfer is simply void; in
others, it destroys the interest
This isn't so important, because many states have created
SOL for entry
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.
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.
California has converted all defeasible fees into fees simple
subject to condition subsequent (Cal Civ Code 885.010(a)(2)
California has converted all possibilities of reverter and
executory interests into powers of termination
SoL on exercising power of termination is 5 years after
occurrence of the condition

Restraints on Alienation and Unenforceable Conditions

Absolute restraints on alienation of a fee simple estate are usually void
disfavored because:
o 1) discourage improvement of the land
o 2) prevent owner from making land available for its most
valuable use
o 3) keep property off the market
o 4) keep owners creditors from reaching the land in satisfaction
of its debts
Partial restraints may be valid if:
1) the restraint has a limited purpose
2) the restraints impact and duration are reasonably limited, e.g.
o right of first refusal if grantor has limited time to exercise this
right = valid

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provision limiting transfer of affordable housing to persons
meeting certain income/wealth requirements = valid
o condition prohibiting transfer to anyone other than member of
grantors family = void
Defeasible fees limiting alienability by requiring
specific/nonprofitable land uses are typically valid
o E.g. use for parkland, church, school, ski hill, etc.
But conditions testators impose on their devisees are more likely
to be held invalid (see family conditions)
Family conditions
Courts invalidate conditions that go to peoples behavior and attempts
to control their behavior (you forfeit property by not doing x, y and z)
o Courts allow forfeiting property on remarriage
E.g. property goes to the widow so long as she remains
unmarried; This is OK because youre trying to support
someone who finds themselves in a bad situation
o You can give property to someone who gets divorce
But the provision is void if the court finds its intended to
motivate someone to get a divorce
o Rule: courts enforce rules designed to keep families
together and dont enforce rules designed to keep
families apart
Courts also sympathetic to rules forcing kids to keep
their familys faith (e.g. marry within the faith)
o Courts dont allow conditions that would prevent you from
getting married in the first place (e.g. children)
In re Romeros Estate NM: fiance took land as long as she remained
unmarried, and sons took land as long as their mother did not reside
o If primary purpose was to separate sons from their mother
o If primary purpose was to benefit fiance only provisions
separating mother and sons is void
Conditions designed to prevent a first marriage or cause a
divorce are void
But conditions designed to shift property ownership on marriage
are normally valid
o Casey v Casey Ark 1985: will granting son land but forfeiting it if
daughter ever owned/possessed/stayed on the land for more
than week void
o Babb v Rand Me 1975: Condition that grantee shall never deny
access or occupation of land to testators other children valid
Cast v National Bank of Commerce Ne 1971: court invalidated
condition that devisee or his children must occupy estate for 25 years
on pain of forfeiture as restraint on alienation
o But see Falls City v Mo Pacific Railway 8th Cir 1971: city
conveyed land to railroad so long as property was used as

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railroads divisional headquarters; railroad moved headquarters

Falls City court found this to be an invalid restraint on

alienation railroad owned property in fee simple

Defeasible Fees and Condemnation/Eminent Domain

California/ Restatement Rule: The owner of the defeasible fee

receives all the condemnation proceeds unless violation of the
condition is imminent
o thus, had the Palm Springs preserve been seized by the state for
a highway, the city would have had to use the compensation to
create and maintain a park with the same name and for the
same purpose; if it was unwilling or unable to do so, funds would
have been forfeited to the living desert reserve
OH rule (Ink v City of Canton 1965)
o State hwy. dept. condemned all but 6.5 acres of 33.5 are park
held on condition it be used ass a park in memory of Ink

Court held city was entitled only to the value of

the land as restricted to use as a park and subject to a
condition of forfeiture
Inks heirs were entitled to the difference between
that value and the value of the land in fee simple absolute
and retained their possibility of reverter in the proceeds
and the remaining acres of the park
Rationale: city could get a windfall if awarded the
value of a fee simple absolute and it deserved no
more because it had not paid for the land

Differences Among the Defeasible Fees: Adverse Possession,

Alienability and Duration
Adverse Possession
When the condition occurs, the holder of a possibility of reverter or
executory interest immediately and automatically becomes the owner
of the property in fee simply absolute, and the possessor becomes an
adverse possessor
By contrast, title held in fee simple on a condition subsequent doesnt
change until the grantor exercises the power of termination
The difference here is often academic, though
o The holder of the right of entry who delays exercising the power
for the statute of limitations is liable to be found to have
waived power, or to be guilty of laches
o Or the state has enacted a special SoL that applies the same
period to exercising a power of termination as it does to
recovering possession pursuant to a possibility of reverter or
executory interest
o See Sigh v Plair (Ark 1978): grantor waived right of reentry by
waiting 34 years after breach of the condition that grantee live
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of the property, and 1 years after breach of condition that
grantee note sell or mortgage the property
Common-law rules on alienability of possibility of reverter and right of
entry are the same: both pass on to grantors heirs at death; neither is
alienable inter vivos
In many states, this is now governed by statute
o In IL, neither interest is alienable or devisable
o MD & NC allow these interests to become alienable inter vivos
and devisable by will
At common law, possibilities of reverter & powers of termination
retained by grantor had potentially unlimited duration because
they were not subject to the Rule Against Perpetuities
o Executory interests, by contrast, were subject to the Rule
Against Perpetuities, which destroyed them if the condition was
not certain to occur or became impossible within 21 years, or 21
years after the death of a specified person living when the
defeasible fee was created
Statutes in many states have changed this
o IL terminates conditions after 40 years, leaving holder of
defeasible fee with fee simple absolute
o NC terminates conditions after 60 years, but this time limit
does not apply to interests held by a charity or governmental
body or to interest in oil, gas or minerals
o In Maryland, the limit is 30 years
o Other states apply their flat time limit only to interests retained
by the grantor, leaving the duration of executory interests to be
controlled by the Rule Against Perpetuities
Maine reached a similar result through common law
o Mildram v Town of Wells Me 1992: condition imposed in 1905
that land be used for Town House was satisfied by towns use
until 1988:
The deed contains no reference to duration
Nothing in the language suggests the purpose was
perpetual maintenance of the Town House despite all
changes that might occur in the town
Other states continue to follow common-law durational rules, but it is
necessary to record a notice of intent to preserve the interest at
regular intervals to keep possibilities of reverter, rights of entry and
executory interests alive
o NY: requires recording 27/30 years after interest is created; rerecording every 9 to 10 years thereafter
o CA requires recording at 30-year intervals
Uniform Statutory Rule Against Perpetuities continues the
common-law distinction between interests retained by the grantor
(exempt from the rule) and executory interests, which are subject to
the rule

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Broad exemption for future interests not created in donative

But this may not affect many executory interests on
defeasible fees because most are created in donative

A Fee Tail
An estate that limits inheritance to lineal descendents of the grantee. Estate created at common
law to keep land in the family.

Creation of fee tail at common law

Example: O conveys Blackacre to A and the heirs of his body
1 Term heirs of the body refers to grantees issue
1 Fee tail goes to each succeeding generation in turn
1 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
1 Almost every state has done away with fee tail; life
estate/dynastic trusts have supplanted fee tail as device
to control inheritance
1 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?

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.

Creation of life estates (2 kinds)

For life of grantee (conventional)
1 May be indefeasible: terminate only when life tenant dies
1 May be defeasible: determinable, condition subsequent,
executory interest
a Would terminate before life tenant dies if condition
is met
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
a 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.
1 In both cases, estate ends on As death; if B dies before A,
life estate pur autre vie descends to Bs heirs

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Nelson v. Parker: O granted life estate to second wife remainder to son
from first marriage. Son from first marriage tries to kick out wife,
claiming you 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. Rule: Intent of will should control in granting life
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. A 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.

Alienability of Life Estates

Life estate is fully alienable unless subject to a valid restraint on
o A life tenant cannot convey more than he has (an estate pour
autre vie)
But if the property cannot generate sufficient income to pay the
carrying charges or make repairs necessary to maintain its value, a
court may exercise its equitable powers to order sale of property to
preserve interests of both the life tenant and future interest holders
o Baker v Weedon Miss 1972: court ordered sale of part of 152acre farm to provide funds to care for life tenant (elderly and in
economic distress)
Court remanded case to determine how much of the
property would need to be sold to generate a fund that, if
invested, would provide for the reasonable needs of the
life tenant
Another impediment to sale arises if remaindermen have not yet
been born or identified
o If court orders sale of property, the interests of unborn and
unidentified future interest holders are safeguarded by an order
that the proceeds be held in trust and invested to pay the
income to the life tenant and, on her death, to distribute the
proceeds to whoever is entitled
Sometimes life tenant prefers lump-sum distribution to
receiving the income generated by the proceeds over her lifetime
o A life estate can be valued by estimating the remaining life
expectancy of the tenant and estimating the market interest

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rate that will prevail over the rest of the life tenants life
courts usually reluctant to order lump-sum distribution,
but occasionally do so, particularly if there is some
indication grantors intent would not be frustrated by such


Life tenant owes certain duties to owner of future interest

o Preserve the land and structure in a reasonable state of
repair (need not make expenditures for this purpose in excess
of profits, rent or income received by him)
But need not make extraordinary repairs or to rebuild
structures damaged or destroyed without his fault
o must pay carrying charges on property to the extent of the
gross income, or the fair rental value if he personally occupies
the property
o must pay the interest on any mortgage or other encumbrance
to which the life estate and future interest are subject

not obligated to make payments on the principal

o must pay current taxes on the property
o must pay for municipal improvements benefiting the
property when the life of the improvement does not exceed the
probable duration of the life estate
but where the improvement is of a permanent or quasipermanent nature must be apportioned between owner
of life estate and owner of future interest
o Failure to discharge this duty amounts to permissive
waste life tenant liable to owner of future interest
life tenant under no duty to make extraordinary repairs, rebuild
structures damaged/destroyed without his fault, or to make
Kinds of Waste
Voluntary waste
o Voluntary waste results from intentional acts of life tenant that
cause substantial change to value or character of the property
Trashing the house, stripping the top soil, harvesting
healthy timber or depleting oil and gas reservoirs not
Exception: if property was already being used for
mining or oil and gas production before creation of
life estate, life tenant entitled to continue working open
mines and wells but cannot open new ones (open mine

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Life tenant can also cut wood for firewood, fences

and other domestic uses
Permissive waste
o stems from inaction: the failure of the estate owner to exercise reasonable

care to protect
o the estate
Ameliorative or meliorating waste
o when life tenant increases the value of the property by
making permanent changes in its use, substantially altering its
structures or building additional structures on the property
o life tenant may make changes necessary to permit
reasonable use of the property so long as the value of the
property is not diminished
no damages, but future interest holder may enjoin life
tenant from making threatened changes, or may require
restoration of the property to its previous state

Remedy for waste:

Actual damages, punitive damages, injunction, or some combination
Hausmann v Hausmann: Punitive damages proper since D
attempted to inequitably divest P of his property right
Held: an injuction could have been acceptable, but since G was
subject to actual and punitive damages, it was not an abuse of
discretion. Upholds punitive damages for intentional waste.
If cant pay damages Forfeiture of life estate?
o Possible provided by statute
o Alternate approach: Town of Stratford v Mudre CT 1993
Remainderman claimed entire $77,000 surplus from
foreclosure sale after taxes & costs paid, which had been
triggered by life tenants waste

Court disagreed, ordered proceeds be placed in

federally insured interest-bearing account and that
interest be paid to life tenant during her lifetime
In jurisdictions that destroy the life tenant's interests in the proceeds,
the courts are acting under the authority of forfeiture statutes.
In other jurisdictions, the life tenant's failure to pay taxes is considered
permissive waste and not such waste as would constitute an absolute
forfeiture of the estate. The courts that do not impose forfeiture on
the life estate hold that even though the life tenant has committed
waste, the proceeds should be placed in a fund with interest paid to
the life tenant and the principal paid to the remainderman. (Mudre

A Term of Years (leases: see Landlord-Tenant)

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Restraints on Alienation

Starting in Middle Ages, there was a movement to remove
restraints on alienation of property.
4 reasons why restraints were considered bad:
1 Particular land may be unavailable for its best use
1 Restraints tend to perpetuate concentrations of wealth,
because it makes it impossible for owner to sell the land
consume the proceeds of sale
1 Restraints discourage improvement of land, since the
owner cannot sell and profit from improvements
1 Restraints prevent the owners creditors from reaching the
Types of restraints:
Disabling restraint: One that withholds from the grantee the
power of transferring his interest
Forfeiture restraint: Provides that if grantee attempts to
transfer his interest, it gets forfeited to someone else
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."
1 Partial restraints may be valid
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
1 Look at legitimacy of purpose, impact on
marketability, duration
1 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
1 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)
1 Conditions which tend to disrupt families are often
1 Conditions which tend to keep families together are
often upheld
1 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,

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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


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

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


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
Expressly retained: O conveys to A for life, then to
revert to O
Arising by law: O conveys to A for life; at As
death, goes back to O
Reversions are vested interests even though not all
reversions will become possessory
Will become possessory: to A for life, reversion to
Will not necessarily become possessory: to A for
life, then to B and her heirs if B survives A.
If B dies before A, O will be entitled to
possession at As death
If A dies before B, Os reversion is divested
on As death and will never become
Reversions are transferable, devisable by will, and
descendible by inheritance.
Reversions are not subject to the RULE, because they are
Indefeasibly vested reversion
Example: O to A for life. O has an indefeasibly
vested reversion in fee simple absolute
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Vested reversion subject to complete divestment

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
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.

Possibilities of reverter
a 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
a 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
1 If liquor is sold on premises, land reverts to O
a 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)

Rights of entry (aka rights of reentry, power of termination)

a 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
a 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
1 O has right of entry for breach of that condition
a 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)

Future interests created by grantees



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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
Essential characteristics/requirements:
1 Must be created only by express grant and must
have preceding estate
1 Must follow a fee tail, life estate, or term of
years. Cannot follow a fee simple
1 Cannot cut preceding estate short before its
normal expiration (would be executory interest)
1 Today: only follows life estates, because fee tails
and terms of years are rare
Types of remainders and their subtypes
1 Vested Remainders
a Indefeasibly vested remainder
a Vested remainder subject to partial
divestment/ open
a Vested remainder subject to complete
1 Contingent Remainders

a Vested remainders
A remainder created in an ascertained person and not subject to a condition precedent

Example: O conveys to A for life, then to B in fee simple

B, an ascertained person, has a remainder not
subject to a condition precedent
Whenever the life estate of A terminates, B will be
entitled to possession; Bs remainder is vested
Condition precedent: Express condition attached to
remainder such as to B if B reaches age 30

Vested remainder subject to partial divestment/open


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

Example: O conveys to A for life, then to As children

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If A has a child B, the remainder is vested in B

subject to open up and let in other children
Note: If A has no children, the remainder is
contingent (see below)
Rule of convenience class closes whenever any
member of class can demand

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

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.

Indefeasibly vested remainder

A future interest with no conditions attached to it, and owned by an identified person

If the person who own the remainder dies before the life
tenant, the remainder passes to heirs or devisees of
Fully alienable by lifetime transfer
O to A for life, remainder to B

a Contingent remainders (SUBJECT TO THE RULE!!)

A remainder that is subject to an unidentified person or subject to a condition

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

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Example: "To A for life, and then to A's children." A has no

Remainder contingent because taker (children)
aren't ascertained
A has a life estate
O has a reversion
If child is born, then it vest in that child subject to
Condition precedent
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.
1 A has a life estate
1 O has a reversion
1 B has a contingent remainder

Destructibility of contingent remainders doctrine

At common law: destroyed remainders that were still
subject to a condition precedent when prior estate
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.
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

Example: "O to A for life, remainder to A's children who

reach 21." O subsequently transfers O's reversion to A.
Contingent remainders are destroyed, and A's life
estate and reversion give A a present possessory
fee simple absolute.

Executory Interests
a Definition: A future interest in a transferee that must, in order to
become possessory
Divest or cut short some interest in another grantee
(known as shifting executory interest); or
Divest the grantor in the future (springing executory

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Hint: If it not a remainder because the preceding estate is

not a life estate, then it must be an executory interest
Shifting executory interests:

Gives the property to third parties when a condition occurred that terminated a prior
vested estate in fee simple

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 if
B goes bankrupt.
C has a shifting executory interest in fee simple
Springing executory interest:

Divest a grantor's reversion on happening of a condition


Example: O to A for life, remainder to her issues living 21

years after her death.
O has a reversion
A has a life estate
A's issue having a springing executory interest

Alienability of remainders and executory interests

a Vested remainders are alienable, devisable, and descendible
a Contingent remainders and executory interests are alienable
inter vivos
a Contingent remainders and executory interests are usually
devisable and descendible
Unless the holder's survival is a condition to the interest's
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

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.

Legal title (trustee)

Given to the trustee, who is charged with responsibility of
holding and managing property for sole benefit of
beneficiaries (who hold equitable title)

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Equitable title (beneficiary)

The trustees hold the equitable title.
Whenever unified management is desirable for an asset
that many people have interests in
Good to manage property for minors, incompetents,
spendthrifts, etc.
Frequently used in estate planning
Dynastic trusts
Set up for their descendants to last as long as the law
Restraints on alienation
Trustee can be directed not to sell property, and
beneficiary's interest can be subject to conditions

The Rule Against Perpetuities


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
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:
Split interests make property difficult to sell/ limit
investment made in property
Sentiment that property should be controlled by the
living, not the "dead hand"
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.
a Applies to:
Contingent interests (subject to condition precedent)
Executory interests
Class gifts (even if vested remainder, subject to partial
a When it begins to run
Wills: date of T's death
Revocable trusts: date trust becomes irrevocable (settler's
Irrevocable trust: date trust is created
Deeds: date deed is delivered
a Common law form:
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

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Does not pay attention to anything that happens after

conveyance. Analyzed from date of conveyance,
taking into account all possibilities.
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
Options to purchase: may or may not apply
All or nothing (class gifts)
1 The class must close within the perpetuities period
1 All conditions precedent for every member of the
class must be satisfied within the perpetuities
1 If one person in the class doesn't vest, the entire
gift to A, B, children, etc. is void
Ruthless: it destroyed sensible family wealth transmission
arrangements that posed no threat to public welfare
a Reforms:
Wait and see (main reform)
1 You wait to see what happens before deciding
whether an interest is void
1 Wait at least until death of the life in being
1 If they don't conform with the rule, the interests are
reformed to comply with it.
How to Rewrite
1 Modern law reformed using cy pres
2 Court rewrites the instrument creating the future
interest so the interest will vest within 21 years
after the death of a life in being
3 Court sticks as close as possible to grantors
intended disposition
Irrebuttable presumption
1 That spouse of a life in being is a life in being
1 People below/above a certain age won't have
children after the date the future interest is created
Other Reforms
1 Incorporates the above reforms
1 Adds an alternate 90 year vesting period
1 25 states have adopted it
2 California offers choice of 90 years or vesting or
fail w/in lives in being + 21 years
3 Some states are abolishing the RaP
a. SD & WI replaced with rule invalidating
future interests that suspend the power of
alienation for more than lives in being plus
30 years
b. 17 states have exempted trusts from the RaP

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1. in most states, the exemption is
conditioned on the trustees having a
power of sale (but this is routine)
c. RI abolished the RaP altogether
d. WY allows 1,000-year trusts
e. FL extended the USRAP wait-and-see period
to 360 years
1. WA allows 150-year trusts
a Exemptions:
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
1 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
Rights of reversion/entry
a Technique for Interpreting
Determine what interests are created
Determine the measuring life/lives to determine if
1 The interest must vest within lives in being + 21
1 The interest might not vest within lives in being +
21 years
Apply reform statute
Practice writing savings clauses
1 "At the death of the last life in being, the class
Symphony Space v Pergola Properties: 24-year option to purchase prop.
from symphony
Held: Options to purchase commercial property are not exempt
from the prohibition against remote vesting embodied in New
Yorks Rule Against Perpetuities
CL: Options to purchase land are subject to the rule against remote
o Distinguished from preemptive rights (of first refusal), which the
courts do allow beyond the time limit
o Such rules merely require the owner to offer the property first to
o Thus they encourage the use and development of the land, and
impose only a minor impediment to alienability
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Here, the option creates the sort of control over future disposition of
property that the CL rule against remote vesting seeks to prevent
o The option grants the holder absolute power to purchase
property at his whim below market rate
o This discourages property owner from making improvements
and significantly impedes his ability to sell
Generally, options to purchase land that 1) originate in a lease
provision, 2) are not exercisable after lease expiration and 3) are
incapable of separation from the lease are valid even though lease
holders interest may vest beyond perpetuities period
o Options appurtenant further the policy objectives underlying
the rule against remote vesting, because they encourage the
possessory holder to invest in maintaining and developing the
property by guaranteeing the holder the ultimate benefit of such
o but here, the property is not entirely occupied by Ds; this would
thus dicincentivize Symphony to improve the property, since it
will eventually be claimed on option by Ds
Saving Statute
Where the parties to a transaction are corporations and no measuring
lives are stated in the instrument, the perpetuities period is simply 21
Saving statute obligates courts applying statutory rule against
perpetuities, where possible, to avoid constructions of instruments
creating estates in land that frustrate parties' intended purposes; it
does not authorize courts to rewrite instruments that
unequivocally allow interests to vest outside perpetuities
Option here would survive under the wait and see approach
But the court refuses to exercise this approach in NY because the
statute does not allow it

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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
a Lease is a contract containing promises (covenants) of the
parties i.e., promise to pay rent, taxes, insurance, to
repair, etc.
1 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
a 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

American statutes provide that leases for more than one

year must be in writing
Most jurisdictions permit oral leases for a term of less than one

C. Form Leases and Question of Bargaining Power

1 When landlord prepares a lease, usually uses a form lease
1 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
a As a result, since the 1970s courts have imposed some
laws that protect the tenant
Usually the provisions are not waivable
Considered by some to be paternalism

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Estate Types

1) Estate for Years

o tenancy measured by fixed duration
o ends automatically at the end of the period
o must be in writing if exceeding one year
o expressly created by the parties
2) Periodic tenancy
o tenant holds for initial period and automatically/continuously for
successive periods of same duration until either party gives
o can be expressly or implicitly created
o requires notice

1+ year 6 months
otherwise, requires notice equal to length of tenancy
notice must terminate tenancy at the end of a period
3) Estate/tenancy at will
o if either party can terminate at will tenancy at will
but modern statutes commonly provide notice
requirement equivalent to tenancy at will
o CL: terminated if either party dies; landlord conveys landlords
interest; T commits waste or attempts to assign tenancy; L
executes lease to 3d party
but statutes have altered this too
4) Estate/tenancy at Sufferance
o wrongful possession of land by a tenant who improperly holds
over at the end of this lease
o valuable fiction for the landlord, who can treat the holdover
tenant as a trespasser subject to eviction or as a tenant for a
new valid tenancy who must pay rent


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
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

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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.
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).

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.


Doctrine of independent covenants

o Traditional in LL/tenant law
covenants in leases were considered independent, in the
absence of clear indications to the contrary, and the
lessee was relieved of his performance only by actual or
constructive eviction via breach of covenant of quiet
o Key exception was implied covenant of quiet enjoyment, where
courts found actual or constructive eviction excused tenant from
rent obligation
Modern trend away from this toward dependent covenants

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:

Carries out intention of parties since the tenant bargained for

the use of the property
Landlord is in better position to make previous tenant move
out (efficiency argument)
Landlord is more familiar with eviction procedures than
tenant (efficiency argument)

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b. Tenants remedies if landlord fails to deliver actual possession

Tenant may terminate lease and recover damages for having

to live somewhere else
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:

Should be up to tenant to take possession if he really wants it

Tenant has right to evict the holdover
Landlord should not be held liable for tortious act of holdover
Note: Reasons dont address efficiency and fairness like
English rule

b. Tenants remedies against the holdover


Sue to evict and recover damages

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???)

Taking by eminent domain:

State would ordinarily take title to possession and reversion-title

How would we split the proceeds?
o Tenant would be entitled to the value of the leasehold estate
(whatever that is)
o LL entitled to value of the reversion

Quiet Enjoyment/Construction Eviction

Neither L nor someone with paramount title will interfere with Ts possession of property under
Implied in every lease

1. Remedy: action for damages for breach of implied covenant of

quiet enjoyment
2. Protects against disturbance of tenants possession by LL or
persons claiming under him
Breach can occur in 3 ways:
1. Actual eviction: L or 3rd party excludes T from premises.
1. Remedy: This terminates lease.

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Partial actual eviction: T is physically excluded from part of

Partial eviction can be constructively implied
1. NY case: AC unit dripped down green goo onto balcony;
tenant couldnt use balcony at all; tenant claimed
constructive eviction no duty to pay rent until LL
restored balcony to them
a. Old rule: partial eviction excuses the duty to pay rent until LL
restored the part LL had taken away
b. Modern trend: reduce the amount of rent due by the value of
what is taken away
If LL takes away storage unit may just reduce rent

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
a Resulting conditions must make premises uninhabitable
a 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
Distinguished active breach (traditional rule affirmative
act performed w/ intent of depriving T of enjoyment and
occupation) and passive breach
Here, passive breach LL still liable b/c the natural and
probably consequence of what the landlord did, what he
failed to do, or what he permitted to be done

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 and could still be
conducted. Mutually dependent covenants do apply, and L breached a
Because we adopt the rule of mutually dependent
covenants for commercial leases and conclude the
plaintiff landlord breached his covenant to maintain the

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roof, the tenant was entitled to terminate the lease and

recover relocation costs
Adopts Restatement
Except to the extent the parties to a lease validly agree
otherwise, if the landlord fails to perform a valid promise
contained in the lease to do, or to refrain from doing,
something on the leased property or elsewhere, and as a
consequence thereof, the tenant is deprived of a
significant inducement to the making of the lease, and if
the landlord does not perform his promise within a
reasonable period of time after being requested to do so,
the tenant may:
(1) terminate the lease in the manner prescribed in 10.1
and recover damages to the extent prescribed in 10.2;
(2) continue the lease and obtain appropriate equitable
and legal relief, including:
(a) the recovery of damages to the extent
prescribed in 10.2;
(b) an abatement of the rent to the extent
prescribed in 11.1;
(c) the use of the rent to perform the landlord's
promise to the extent prescribed in 11.2; and
(d) the withholding of the rent in the manner and to
the extent prescribed in 11.3 until the landlord
performs his promise.

When can 3rd parties cause a breach of implied covenant of quiet

Rest 6.1 comment d: Conduct of a third person outside of leased
property that is attributable to landlord.
o The conduct of a third person outside of the leased property that
is performed on property in which the landlord has an interest,
which conduct could be legally controlled by him, is attributable
to the landlord for the purposes of applying the rule of this
o Conduct of a third person outside the leased property, no matter
where it is carried on, will be attributable to the landlord for the
purposes of the rule of this section if the landlord is a
contributing factor to the conduct.
But courts usually refuse to find constructive eviction when other
tenants, not the landlord, cause the disturbance
A tenant may be in breach of her lease for certain disturbances even
in the absence of a relevant lease provision
Illegal use of property when landlord is not party to illegality tenant
may be liable to damages/injunction
o Many jurisdictions permit eviction for illegal use

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SCOTUS upheld lease provision allowing eviction if any member
of Ts household, Ts guest or other person under Ts control
engaged in drug-related criminal activity on or near the
o NYS upheld statute allowing eviction if a tenant in public housing
removed a smoke detector battery an didnt replace for more
than 30 days
general nuisance principles may be brought to bear against a
disturbing tenant and used as the basis for an eviction
o Mayflower Hotel case: tenant evicted after 16 years because
nephew/ward, mentally ill, terrorized other tenants and wouldnt
take medication
Courts: the safety and domestic tranquility of the other
tenants in the building, to say nothing of the staff,
demand protection of the law in the form of the eviction of
the tenant, whose conduct permitted and condoned the
nuisance, and whose tenancy itself, in all likelihood, will
encourage the nuisance to continue unabated.
Breach of covenant of implied enjoyment in subleases?
o Sublessors interest ends when the lease ends
o But sublessees can bring suit against the sublessor for breach of
covenant of implied enjoyment if theyre ousted from their

Unlawful Detainer/Breach of Habitability

Implied Warranty of Habitability
4.02: CAL Rules: Breach of the Warrant of Habitability
Every residential rental agreement has an implied warrant of
habitability that is independent of tenants obligation to pay rent
LL must put premises in a condition fit for human occupancy and
must repair all subsequent dilapidations that render the
premises untenantable
LLs duty to provide habitable premises is nonwaivable
This does not govern aesthetic pleasure, only that bare living
requirements are maintained
Breach of warrant of habitability = affirmative defense for tenant in UD
action for nonpayment of rent
But not available in a UD action based on 30-day notice to quit
4.03: CAL Is the Habitability Breach Substantial?
If tenant raises breach must determine if substantial
o Statute: per se breach if LL fails to comply with any building and
housing code standards which materially affect health and
Habitability comprises the following standards:
o Effective waterproofing and weather protection of roof and
exterior walls, including unbroken windows and doors.

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Plumbing or gas facilities that conform to applicable law in effect

at the time of installation, and maintained in good order.
A water supply approved under applicable law capable of
producing hot and cold running water, furnished through
appropriate fixtures, and connected to an approved sewage
Heating facilities conforming to applicable law at the time of
installation and maintained in good order.
Electrical lighting, with wiring and electrical equipment
conforming with applicable law at the time of installation and
maintained in good working order.
Premises clean at the time of commencement of the rental
agreement, free from debris, filth, rubbish, garbage, rodents,
and vermin, with lessor-controlled areas kept free from debris,
filth, rubbish, garbage, rodents, and vermin.
Adequate garbage and rubbish receptacles.
Floors, stairways, and railings maintained in good repair.
A locking mail receptacle for each unit in a residential hotel
(operative on July 1, 2008).
Door locks and window locks in certain circumstances. [See CC

a T may move out and terminate lease
a T may make repairs and offset cost against future rent
a T may reduce or abate rent to fair rental value of property, or
withhold all rent until the court determines fair rental value
a T may remain in possession, pay full rent, and seek damages

Difference in value
Fair rent if warranty was complied with - Actual rent agreed
Amount agreed upon - Fair rent for premises as is
a Percentage reduction in value
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
a Tenants cant waive the right. This is to protect people living in
substandard housing.
Bargaining power: most tenants arent in a position to be
able to bargain
Public health: the public is better served when people live in
acceptable conditions
a Doesnt apply to commercial leases:
CT have equal bargaining power
More varied situations
Courts not concerned about people running business in
crummy environment

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McNair v CK Realty:


Knight v Hallsthammar: Factthatatenantwasorwasnotawareofspecificdefects


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.

Statute: Civil Code 1942.4 (current California)

Residential landlord may not demand rent, collect rent, issue a notice of a
rent increase, or issue a 3 day notice to pay rent or quit if all the
conditions exist:
If substantially lacks characteristics of Section 1941.1 waterproofing,
plumbing gas facilities, water supply (hot/cold/ connected to sewer),
heating, lighting, buildings and grounds that clean and sanitary at time of
start lease, floor/stairs railings in good repair, common are ok so if the
dwelling substantially lacks some of these things and have:
o Have a public officer to inspect and issue notice
o The conditions existed for 35 days after the notice and without
good cause
Then liable for damages and can have emotional damages

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Tenant Duties
TENANT DUTIES: duty to preserve premises, duty to operate, and duty to pay rent

Duty to Preserve Premises

Duty to Repair
may be limited or enlarged by express agreement, except where
tenant may not waive obligation of LL created by statute or case law
o tenants obligation may take form of: 1) express repair clause; or
2) surrender clause specifying condition of premises at
termination of lease
Factors to consider in considering tenants obligation to repair
o Residential or commercial?
o If commercial:
How much is rent? Did parties contemplate? Time left on
lease? Did reasonable inspection take place/would
reasonable inspection have uncovered the problem?
Want to determine parties intent re: whether repair was
Law of Fixtures
Tenant has the right to remove articles affixed to the property unless it
is found to be a fixture
o Fixture attached to the realty by the tenant with the intent to
make it a permanent part of the land
Objective intent test
Because tenant does not usually intend to increase value
for LL, courts reluctant to find fixture
Trade fixtures such as machinery may be removed by tenant without
resort to objective intent test (e.g. machinery in factory space, track
lighting and sales counters used in retail business)
What if substantial damage will result from removal?
o CL: tenant may be barred from removal
o Rest 2d Prop LL/T 12.2: removal is permitted as long as the
tenant restores the property within a limited time
Fixture laws can be altered by contract
Govt-mandated change to premises
o Govt mandates often regarded as not in contemplation of parties
should be borne by landlords
o But this might be treated differently if 5 year lease vs. 50 year
See Sigsbee v Canavan: T replaced old cabinets with new ones.
Held: The tenants replacement of old, used cabinets does not constitute
waste and a violation of a substantial obligation of the tenancy in the
absence of a restriction contained in the lease where the improvement is 1)

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made in the course of tenants proper use and enjoyment of the property, 2)
doesnt injure the reversion, and 3) doesnt constitute substantial and
permanent change in the character and nature of the building
o if lessee turns premises into hotel, injuring reversion & lessening
property value waste (Agate v Lowenbein, NY)
o lessee materially changes the nature and character of the
building by completely changing interior arrangement by
removing some partitions and erecting others, placing wooden
framework for store frame where brick had previously stood
waste even if property value enhanced (McDonald v OHara)
o This rule is particularly true where the alterations prevent the LL
from restoring the same premises substantially at the expiration
of the lease
Not waste:
o Ex: if tenant leases factory and replaces old, non-working engine
with new one, if replacement is done without injury to
foundation or building or old engine
no substantial alteration was made (Andrews v Day
Button Co)
o Ex: where tenant leases restaurant space and installs AC which
stand on their own support, require no new or additional power
Doesnt alter or constitute substantial change which
varies the form of the nature of the building; permissible
exercise of tenants right to the use and enjoyment of
the premises for the express purpose of the leasing.
o Ex: where tenant removes LLs sink and stove or refrigerator and
replaces them with his own
Doesnt violate covenant of lease prohibiting alteration
without LLs consent, nor a substantial obligation of
tenancy under state law
o Ex: the use of a movable washing machine not permanently
attached to the property doesnt violate substantial obligation fo
= reasonable and proper exercise of the tenants use and
Duty to Repair = Permissive Waste
At CL, tenant had duty to perform only minor repairs necessary to
prevent degradation of property; not required to make substantial
Duty to repair = part of obligation of present estate holder not to
commit permissive waste
o Permissive waste will not be found for ordinary wear and tear
o But an express repair provision may counteract thisBringing Action for Waste
In 50% of jurisdictions, LL can recover treble damages for waste
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o In other states, damages may be limited to cost of restoration

Many states permit LL to terminate (forfeit) remaining lease if T
commits waste

Ameliorative waste
Compare Sigsbee with Melms v Pabst Brewing Co WI 1899
used defense of ameliorating waste, which provides technical waste is
not actionable where the tenants actions increase the value of the
o Held: The evidence shows that the property became valueless
for the purpose of residence property as the result of the growth
and development of a great city. Business and manufacturing
interests advanced and surrounded the once elegant mansion,
until it stood isolated and alone, standing upon just enough
ground to support it, and surrounded by factories and railway
tracks, absolutely undesirable as a residence, and incapable of
any use as business property.
Result endorsed by NY Real Property Acts Law 803:
o 1. When a person having an estate for life or for years in land
proposes to make an alteration in, or a replacement of a
structure or structures located thereon, then the owner of a
future interest in such land can neither recover damages for, nor
enjoin the alteration or replacement, if the person proposing to
make such alteration or replacement complies with the
requirements hereinafter stated as to the giving of security and
establishes the following facts:
a. That the proposed alteration or replacement is one
which a prudent owner of an estate in fee simple
absolute in the affected land would be likely to
make in view of the conditions existing on or in the
neighborhood of the affected land; and
b. That the proposed alteration or replacement, when
completed, will not reduce the market value of the
interests in such land subsequent to the estate for life or
for years; and
c. That the proposed alteration or replacement is not in
violation of the terms of any agreement or other
instrument regulating the conduct of the owner of the
estate for life or for years or restricting the land in
question; and
d. That the life expectancy of the owner of the estate for
life or the unexpired term of the estate for years is not
less than five years; and
e. That the person proposing to make such alteration or
replacement, not less than thirty days prior to
commencement thereof, served upon each owner of a
future interest, who is in being and ascertained, a written
notice of his intention to make such alteration or
replacement, specifying the nature thereof, which notice

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was served personally or by registered mail sent to the
last known address of each such owner of a future
URLTA 3.101. Tenant to Maintain Dwelling Unit
A tenant shall
(1) comply with all obligations primarily imposed upon tenants by
applicable provisions of building and housing codes materially affecting
health and safety;
(2) keep that part of the premises that he occupies and uses as clean
and safe as the condition of the premises permit;
(3) dispose from his dwelling unit all ashes, garbage, rubbish, and
other waste in a clean and safe manner;
(4) keep all plumbing fixtures in the dwelling unit or used by the tenant
as clear as their condition permits;
(5) use in a reasonable manner all electrical, plumbing, sanitary,
heating, ventilating, air-conditioning, and other facilities and
appliances including elevators in the premises;
(6) not deliberately or negligently destroy, deface, damage, impair, or
remove any part of the premises or knowingly permit any person to do
so; and
(7) conduct himself and require other persons on the premises with his
consent to conduct themselves in a manner that will not disturb his
neighbors peaceful enjoyment of the premises.
See Avalon v HD Supply: Can cost of repair damages for 1) breach of
maintenance and repair covenants, or 2) waste be recovered while
defendants lease remains in effect and defendant remains in possession of
the premises?
Held: No, in an action for breach of maintenance and repair
covenants while the lease remains in effect, a lessor is limited to
damages it actually suffered: injury to the reversion interest.
Similarly, to recover for waste while a lease remains in effect, a
lessor must prove the acts of waste caused damage that was
sufficiently substantial and permanent to injure the lessor's
reversion interest.
Commercial lease was not deemed abandoned when the leased property
fell into disrepair, even though lessor served a notice of default, where
lessee continued paying rent and other payments due under the terms of
the lease, and lessor did not provide notice of belief of abandonment.
Commercial lease did not require lessee to restore the leased premises to
prelease condition at any time before expiration or termination of the
A commercial lease provision authorizing the landlord, without terminating
the lease, to (1) sue the tenant for the collection of the rent or other
amounts for which Tenant may be in default or (2) sue the tenant for the
performance of any other covenant or agreement devolving upon Tenant,
did not authorize landlord to recover cost of repair damages during the
lease term for breach of maintenance and repair covenants, where tenant

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was not in default of payment of rent or of any amount it was required to

pay under the terms of the lease, and tenant had not repudiated the
lease, absent evidence that recovery of the cost of repair damages was
necessary to prevent default under landlord's loan secured by the
To enforce nonmonetary covenants of commercial lease, such as
maintenance and repair obligations, without terminating the lease,
landlord's remedy was to sue tenant for specific performance to compel
tenant to make the repairs or to permit landlord to go on the premises to
make them, under lease provision authorizing landlord to sue the tenant
for the performance of any other covenant or agreement devolving upon
Evidence that a lessee has created a condition that substantially or
permanently diminished or depreciated the market value of the premises
is not sufficient to establish waste, since remediable damage might be
substantial on a subjective level, while causing no proven injury to the
reversion interest.

Duty to Operate
Duty to Operate: unless expressly written in the lease, a duty to operate
will be construed against landlord
Continuous operation covenant
In finding this covenant, courts look to:
o Substantial base rent vs. percentage rent
o Express right to assign or sublet without consent
o use clause
e.g. lessee may not abandon or vacate
o granting to T of exclusive right to use in a shopping center
o cost of improvements paid by LL for this particular tenant
o lease actively negotiated between parties
o discussions between parties during negotiations re: continuous
o Damages?
Hornwood v Smiths Food King No 1 NV 1989: diminution in
value of shopping center
o Injunctive relief? What if store operates at loss?
New Park Forest Associates Ill v Rogers Enterprises ILL 1990:
K not to vacate couldnt be specifically enforced
o Termination of lease?
See Piggly Wiggly Southern Inc. v. Heard: supermarket moved out before end
of lease but continued paying. Court held lease agreement did not include
any provision indicating a covenant of continuous operation; existence of a
base rent also suggested absence of an impied covenant of continuous

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Held: The parties did not agree to nor bargain for

appellants continuous operation of the premises, and we
are not authorized to rewrite the contract to create such
a provision

Duty to pay rent

Common Law Rule: in the absence of a lease provision to the

contrary, a tenant is not relieved form the obligation to pay rent
despite the total destruction of the leased premises
o Exceptions:
Where party only rented part of a building

Impossibility of performance
Modern Rule (Greenfield v Kolea): It is no longer reasonable to
assume that in the absence of a lease provision to the contrary the
lessee should bear the risk of loss in the event of total destruction of a
o Court should look to parties intent to determine if parties
intended to lease out land or the building on top of it
See also Restatement Contracts 460:
o (1) Where the existence of a specific thing or person is, either by
the terms of a bargain or in the contemplation of both parties,
necessary for the performance of a promise in the bargain, a
duty to perform the promise
(a) never arises if at the time the bargain is made the
existence of the thing or person within the time for
seasonable performance is impossible, and
(b) is discharged if the thing or person subsequently is
not in existence in time for seasonable performance,
o where a contract relates to the use and possession of specific
property, the existence of which is necessary to the carrying out
of the purpose in view, a condition is implied by law, as though
written in the agreement that the impossibility of performance
arising from the destruction of the property, without fault of
either party, shall end all contractual obligations relating to the
thing destroyed. Greenburg v Sun Shipbuilding Co,
Statutes may:
o Automatically terminate tenancy upon sudden destruction
o Give tenant an option to do so
o Keep the lease in place but suspend rent until repairs are made
Tenant cannot force landlord to rebuild the building termination is
the only remedy (Farnham v Windle, 7th Cir 1990)
o French: possible there is a right to damages (diff of new rent,
o What if LL carried insurance?
If lease doesnt specify, LL may keep insurance and not be
forced to share insurance w/ tenant or rebuild w/
insurance money
It may be again Ts only remedy is termination

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I) Fortfeiture

CL: LL had no right to terminate a lease absent an express termination

clause (independent covenants theory LLs covenant of quiet
enjoyment was independent of Ts covenant to pay rent)

Most states now permit landlord to terminate on tenants default

o Some statutes grant right of termination only for rent defaults
o Some statutes grant right of termination for other material
Many states require tenant to receive notice of default and possible
o Some statutes grant tenant opportunity to cure default within
specified time, and require notice of default to include statement
re: right to cure
Courts reluctance to forfeit leads to strict enforcement of
notice reqs
Liberty Manor v Rinnels IA 1992: action for possession
dismissed b/c notice gave no opp. to cure
Bevil v Zuora Cal Ct App 1994: notice defective because it
doubled the amount of back rent T owed
o In the absence of statute, notice may not be required
Bouwkamp v McNeill WY 1995: LL had right to terminate
commercial lease even though tenants offered to cure b/c
lease permitted forfeiture w/out notice
But here T wrote lease
Courts reluctance to forfeit ready findings LL has waived Ts
breach of covenants
o Often by accepting back rent w/out giving T notice LL intends to
terminate lease
o More likely to find waiver in residential but it happens in
Davidson v Doyle NV 1992: LL did not waive right to
terminate commercial lease by failing to keep property in
good repair
Comm Housing Alternatives v Latta NC 1987: LL waived
right to terminate by accepting rent
Does it matter if lease provides failure to declare default does not
waive LLs right to declare tenant in default later?
o Dunbar Housing Authority v Nesmith WV 1990: LL at federally
subsidized housing project did not waive right to evict by
accepting rent after initial notice to vacate was issued
o Winslow v Dillard Department Stores TX 1993: lessor waived
breach by accepting rent for 5 years without notifying lessee
that lessor considered lease terminated by lessees failure to
obtain guarantors written consent to lease renewal

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URLTA requires landlords to give notice and 14-day opportunity to pay

overdue rent before forfeiture (4.201) and provides for waiver by
acceptance of rent as follows (4.204):
o LLs acceptance of rent w/ knowledge of default, or acceptance
of performance that varies from terms of agreement waiver
unless otherwise agreed

English Rule: a landlord entitled to possession is not civilly liable for ejecting
a tenant without resort to the legal process so long as he uses no more force
than is necessary to effect the entry, even though his actions may constitute
a crime
U.S. rule: Most states historically allowed LLs to use self-help without being
held civilly liable
o This was partly because an action in ejectment is such a lengthy
process (must prove superior title to all)
States thus enacted FED (forcibly entry and detainer) statutes:
o Making it a criminal offense for a party to forcibly oust another
o Providing a summary judicial proceeding to quickly evict a tenant
To begin, LL files unlawful detainer action
Today, All jurisdictions have enacted FED or UD statutes
Such statutes allow tenant an opportunity to challenge LLs legal grounds
for eviction while furthering LLs interest in expeditiously evicting a
holdover or nonpaying tenant through judicial proceedings
Unlawful Detainer Proceedings Today
Most jurisdictions today have case law/statutes barring any type of
self-help in residential leases and requiring landlords to use the legal
o A few jurisdictions allow only peaceful self-help measures (AL,
Court found no breach of peace where commercial LL
reentered restaurant premises after business hours and
changed locks (Rucker v Wynn, GA 1994)
Many states permit peaceful self-help in commercial leases
Remedies when LL Uses Improper Self-Help?
Action to regain possession
Damages for improper eviction
Tort claims for injury to person or property
Punitive damages (in some jurisdictions)
Abandonment unlawful detainer
T told LL he would return in 2 days and left for 8 weeks, not paying rent
or contacting LL; LL entered premises, removed and stored tenants
possessions and re-rented apartment LL not liable for improper
self help inference that tenant abandoned premises allowed LL to

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properly reenter (Martinez v Steinbaum, CO 1981)

3) SUMMARY PROCESS (avoids ejectment action)

Some form of summary process by which LL can recover possession

from a tenant in default is available in every state
Typical steps:
o LL serves tenant w/ notice LL fires summary eviction claim
LL serves tenant T has period to respond
if no response, LL may request clerk to enter default
court issues writ of possession to LL upon proof of service
of summons and complaint
if response, LL may request trial date if LL wins at trial,
court will issue writ of possession to LL
o Upon receipt of writ of possession, LL must file writ with sheriff
sheriff will evict T immediately or within a few days curative
period sheriff conducts eviction and turns over possession to
Scope limited to LLs Right of Possession; may limit recovery to
o Only defense available: 1) rent = paid; 2) LL breached
Due Process Can Be Implicated in Summ Evic. Process
o Oregons summary eviction statute:
1) required trial within 6 days of complaint (OK)
2) denied tenant ability to raise defense based on LLs
breach of duty of habitability (OK)
3) required tenant appealing SJ verdict to post bond for
double the rent expected to accrue during the appeal
This provision = unconstitutional under =PC
and DPC; discriminatory against poor and de facto
forecloses appeal no matter how meritorious their
case may be; arbitrary and irrational
o Termination decisions must afford tenant due process of law
when the government is the landlord
Hinojosa v Housing Auth TX 1995: adequate process in
termination since T received notice, had opp. to counsel
and cross-examine witnesses, called witnesses and
participated in informal grievance hearings and jury trial

Duration of Summary Eviction Proceedings

CA statute allows possession in as little as 17 days
o In LA, the SE process averages between 51 and 108 days
depending on the study (well beyond the 17-day minimum)
In NY, summary process only allowed for determinable leasehold
o If estate is on condition subsequent LL must proceed in
lengthier ejectment action

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Other Statutes that Come into Play
Foreclosure: T may be entitled to 90-day notice (recent law due to
financial crisis)
If T has periodic tenancy for 1 year+ 60 days notice
14-day notice if T is in federally subsidized housing (Section 8)
In CA, LL can get damages (past-due rent and costs of UD action)
o Many other states only allow LL to reclaim possession
CA Repair & Deduct statute re: things affecting habitability (up to 1
months rent if T has paid)
o If LL sues for UD defense to tenant
California Unlawful Detainer Seminar
Preliminary Issues
1.01: How are UD cases different from other civil actions?
Unlawful detainer actions are summary proceedings, designed to
provide a means for landlords to quickly recover possession of real
property from tenants who are in wrongful possession.
1.02: Summary Proceeding
A UD action has all of the trappings of a regular civil actionfiling of a
complaint, issuance of a summons, service on the defendant, filing of a
responsive pleading, discovery period, and so on. There are some
distinct differences, howeverprimarily due to a compressed timeline
Strict Notice Requirements
2.01: General Notice Requirements
Generally, an unlawful detainer action is preceded by service of a
notice to the tenant:
o A 3-day notice to pay or quit,
o A 3-day notice to perform or quit,
o A 3-day notice to quit,
o A 60-day notice to terminateeffective January 1, 2007, for a
residential tenancy of one year or more, or
o A 30-day notice to terminatefor any commercial tenancy, for
any residential tenancy during 2006, and for any residential
tenancy of less than one year effective January 1, 2007.
2.02 Three-Day Notices - used where tenant is unlawfully in possession
The three-day notice is used when the tenant has breached a covenant
of the rental agreement, either by defaulting on the rent or committing
some other breach. [See CCP 1161(3).]
There are three options:
o 3-day notice to pay or quitfor use when the tenant has
defaulted on the rent. [See CCP 1161(2).]
o 3-day notice to perform or quitfor use when the tenant has
breached a covenant in the agreement, other than nonpayment
of rent, that can be cured. [See CCP 1161(3).]
o 3-day notice to quitfor use when the tenant has breached a
covenant in the rental agreement that cannot be cured. [See
CCP 1161(4).]
2.03 Thirty-Day or 60-Day Notice for period tenancy

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When a landlord wishes to terminate the tenancy of an indefinite term

tenant who hasnt breached any covenants of the rental agreement,
the landlord must use a 30-day or (starting January 1, 2007) 60-day
notice to terminate. Both of these notices allow a landlord to terminate
a tenancy without cause.
A residential tenant who has resided on the premises for one year or
more is entitled to a 60-day notice. [CC 1946.1(b)(c).] A residential
tenant who has resided on the premises for less than one year or any
commercial tenant is entitled to a 30-day notice. [CC 1946,
1946.1(c).] Parties to a commercial lease may agree to different notice
requirements. [See 5.05.]
2.04 When Is a Notice NOT Required?
If a termination is based on the expiration of a fixed-term tenancy, no
notice is required. [See CCP 1161(1); Stephens v Perry (1982) 134
CA3d 748, 757 n4.] No notice is required, as well, when a tenant
occupies the property as part of his or her employment (e.g., serving
as the apartment manager or caretaker) and that employment is
terminated. [See CCP 1161(1).]
A month-to-month tenancy is terminated by notice of the tenant's
death. The tenancy is terminated as of the 30th day following the
tenant's last payment of rent before the tenant's death. No further
notice is required. [CC 1934; Miller & Desatnik Mgmt. Co., Inc. v
Bullock (1990) 221 CA3d Supp 13, 18.]
Landlords Reasons for Terminating Tenancy
3.01 Introduction
Unlawful detainer (UD) actions are filed for a variety of reasons.
Depending on those reasons, each action has certain defenses that
may be available to the defendant. This part examines the common
reasons for filing a UD case. See 4.01 et seq for a review of the
tenants defenses.
3.02 Default in Payment of Rent
To evict on this ground, the landlord must first serve the tenant with a
3-day notice to pay or quit, which states the amount of rent due and
other payment information, including where payment must be made,
the hours during which it can be received, and a telephone number. If
the address does not allow for personal delivery, it will be conclusively
presumed that the rent is deemed received on mailing. [See CCP
The notice must be stated in the alternative, allowing the tenant to
cure the default. [See CCP 1161(2), 1161.1; Hinman v Wagnon
(1959) 172 CA2d 24, 27.]
3.03 Breach of Other Terms
The breach of any material term in the rental agreement other than
rent also may be grounds for termination of a tenancy. [See CCP
For a residential tenant, examples of breached other terms include
violation of a waterbed standard or use of an illegal substance on the

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Nonrent breaches are seen most often in the commercial context,
where examples include:
o Violation of use restrictions or a covenant against subleasing or
o Violation of an obligation to maintain and repair the property
o Violation of an alterations restriction
o Nonpayment of a late fee
o Failure to give notice of a hazardous substance release
The landlord must exercise caution in proceeding with an eviction for a
nonrent violation. A trivial breach will not support a termination, and
the tenant may raise substantial performance as an equitable defense
to a UD action. [See Hignell v Gebala (1949) 90 CA2d 61, 6566.]
The proper notice for a curable breach is a 3-day notice to perform or

3.04 Nuisance or Illegal Use

A landlord may serve a 3-day notice to quit on a tenant who is
permitting a nuisance (including the sale of illegal substances or
unlawful sale or possession of illegal weapons) on the premises, or who
uses the premises for any illegal purpose. [See CCP 1161(4).] This is
considered an incurable breach, and the landlord is entitled to file a
UD action on the expiration of the 3-day period if the tenant has not
Nuisance includes drugs possession/sale and weapon
A nuisance includes the illegal use, manufacture, causing to be
manufactured, importation, possession, possession for sale, sale,
furnishing, or giving away of any of the following [CCP 1161(4); CC
o A firearm.
o Any ammunition.
o Any assault weapon.
o Any .50 BMG rifle.
o Any tear gas weapon.
If a person commits an act of domestic violence, sexual
assault, or stalking against another tenant or subtenant on the
premises, there is a rebuttable presumption affecting the
burden of proof that the person has committed a nuisance on
the premises.
A landlord has a tort duty to evict a vicious or dangerous tenant only
when the tenant's behavior makes violence toward neighbors or others
on the premises highly foreseeable. [Castaneda v Olsher (2007) 41
C4th 1205, 12191222 (tenancy governed by Mobilehome Residency
Law, which requires cause for eviction).]
3.05 Prohibited Assignment or Sublease
When a commercial or residential tenant breaches a covenant against

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assigning or subletting the property, a landlord may give notice under
either CCP 1161(3) (for a curable breach) or CCP 1161(4) (for an
incurable breach).
3.06 Commission of Waste
When a tenant breaches a covenant or condition of the rental
agreement that legally constitutes or results in a waste of the
premises, the landlord may terminate the tenancy with a 3-day notice
to quit. [See CCP 1161(4); Freeze v Brinson (1991) 3 CA4th Supp 1, 3.]
To justify not offering an opportunity to cure, the landlord must produce
evidence that the tenants acts have substantially or permanently
diminished the market value of the property as a whole. Damage to
the unit without an impact on market value does not meet the
requirement. [3 CA4th Supp at 4.]
3.07 Terminating Without Cause
Unless local controls or federal regulations (for subsidized housing)
require otherwise, a landlord has the right to terminate an indefiniteterm tenancy without cause by serving the tenant with a 30-day or 60day notice to terminate. Effective January 1, 2007, a 60-day notice is
used for residential tenancies of one year or more. [See CC 1946,
3.08 Expiration of Fixed-Term Lease
After the expiration of a fixed-term lease, the landlord may terminate
the tenancy without giving notice. [See CCP 1161(1); Stephens v Perry
(1982) 134 CA3d 748, 757 n4.]
3.09 Tenant Abandonment
A landlord may recover rental property if the tenant abandons the
premises. [See CC 1951.2, 1951.3, 1951.4.]
The landlord may establish abandonment pursuant to CC 1951.3:
o The landlord must have given written notice to the tenant,
stating the landlords belief that the tenant has abandoned the
property and including a termination date.
o The tenant must then have failed to give the landlord written
notice, before the termination date, stating that he or she does
not intend to abandon the property and providing an address for
service of a UD action.
Tenant abandonment is essentially a landlords tool for recovering
rented premises without getting a UD judgment, but it carries some
riskif the landlord is mistaken about the abandonment, he or she
may face a claim for wrongful eviction. [See Kassan v Stout (1973) 9
C3d 39, 43.] Therefore, strict compliance with CC 1951.3 is critical.
4.05 Waiver of Notice to Quit
If the landlord waived, changed, or canceled a notice to quit, the
tenant has an affirmative defense to a subsequent UD action. For
example, if the landlord accepts a partial payment of back rent after

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serving the tenant with a 3-day notice to quit, he or she may have
waived the original notice. [See EDC Assoc. Ltd. v Gutierrez (1984) 153
CA3d 167, 170.]
In a case involving a 30- or 60-day notice, notice is waived only if the
landlord accepts rent for a period that falls after the expiration of the
notice period.
Whether a waiver of notice occurred is a factual issue.

4.06 Retaliatory Eviction

Residential landlords must not take any of the following actions in
retaliation for the tenants exercising his or her legal rights [see CC
1942.5(a), (c)]:
o Increasing rent,
o Decreasing services, or
o Causing a tenant to quit the rental property involuntarily.
A tenant may not waive his or her rights under this statute. [CC
A tenant has a valid affirmative defense if he or she can show that the
landlord retaliated against him or her in violation of CC 1942.5.
In addition, both residential and commercial tenants have a commonlaw affirmative defense for retaliatory actions by the landlord. [See
Barela v Superior Court (Valdez) (1981) 30 C3d 244, 251; Rich v
Schwab (1998) 63 CA4th 803, 811; Custom Parking, Inc. v Superior
Court (MacAnnan) (1982) 138 CA3d 90, 100101.]
If the tenant proves retaliation by a preponderance of the evidence, he
or she is entitled to a judgment of possession. [See CCP 1942.5; S.P.
Growers Assn v Rodriguez (1976) 17 C3d 719, 724.]
The claimed retaliatory action must have occurred within 180 days of
the tenants lawful exercise of rights. [See CC 1942.5(a).]
Furthermore, the statutory defense may be used only once in a 12month period. [See CC 1942.5(b).] No limit applies to the common-law
defense of retaliatory eviction. [See Glaser v Meyers (1982) 137 CA3d
770, 774.]
A tenant who successfully defends a UD action on the ground of
retaliatory eviction is entitled to recover both actual and punitive
damages in addition to retaining possession of the property. [See CC
1942.5(a), (f).]
4.07 Landlords Breach of Rental Agreement
If the landlord materially breaches an express covenant in the rental
agreement, the tenant has a valid defense to an unlawful detainer
based on nonpayment of rent. The tenants obligation to pay rent and
the landlords obligations under the agreement are dependent
covenants. [See Green v Superior Court (1974) 10 C3d 616, 634.]
It is not clear whether a trivial breach that does not affect the
tenantability of the rental unit would excuse the duty to pay rent. This
defense is usually combined with the habitability defense. [See 4.02.]
4.08 Discrimination
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If the landlord has discriminated against the tenant in violation of the

laws or of the federal or state Constitutions, the tenant may assert
discrimination as an affirmative defense against a UD action. [See
Department of Fair Employment & Housing v Superior Court (2002) 99
CA4th 896, 899902; Smith v Fair Employment & Housing Commn
(1996) 12 C4th 1143, 11551161, 1176, 1179; Marina Point, Ltd. v
Wolfson (1982) 30 C3d 721, 724726.]

5.03 Landlords Right to Immediate Possession

A landlord who files a UD action has the option of filing a motion to
take immediate possession of the premises when the tenant [see CCP
o Resides out of state,
o Departed from the state,
o Cannot be found in the state after due diligence, or
o Has concealed himself or herself to avoid service of a summons.
The landlord must serve the tenant with a notice of hearing that
complies with CCP 1011. [See CCP 1166a(b).] If you find in the
landlords favor at the hearing, the landlord is entitled to a writ of
possession. [See CCP 1166a(d)(e).]
You also must order the landlord to file an undertaking in an amount
calculated to cover damages that the tenant may sustain by being
wrongfully dispossessed (in the event that the action is dismissed or
the landlord fails to recover judgment). [See CCP 1166a(c).]
5.06 Self-Help Termination Prohibited
A landlord is prohibited from terminating or attempting to terminate a
tenancy by:
o Interrupting any utility service (i.e., water, heat, light, electricity,
gas, telephone, elevator, or refrigeration) [CC 789.3(a)];
o Changing the locks to prevent the tenant from gaining access to
the unit [CC 789.3(b)(1)];
o Removing the outside doors or windows of the rental unit [CC
789.3(b)(2)]; or
o Removing the tenants personal belongings from the rental unit
without written permission [CC 789.3(b)(3)].
If you find a landlord has violated this prohibition, he or she is liable to
the tenant for actual damages, statutory damages, and attorney fees.
[See CC 789.3(c)(d).]
See Jordan v Talbot: P was 2 months behind in rent; lease provided
right of re-entry; D LL entered apt, removed furniture and refused to
return possession to P
A landlord's right of re-entry is not a defense to an action for
forcible entry or detainer.
A landlord violated statute defining forcible entry when he
unlocked tenant's apartment without her consent and entered with
storage company employees to remove tenant's furniture, even
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though there was no physical damage to the premises or actual

A person who obtains possession to property by forcible entry does
not have right to retain possession.
Removal of a tenant's furniture without her consent, rendering the
leased apartment unsuitable for residence, and forcing tenant to
seek shelter elsewhere, together with statement of landlord's
employee in response to tenant's inquiry about her belongings, that
she should Get the hell out of here, was sufficient to support
finding of forcible entry based on a turning out of a party by
force, threats or menacing conduct.
Landlord did not convert tenant's goods where it stored most
items removed from tenant's apartment in a warehouse in tenant's
name, held certain of the items for tenant in landlord's basement,
and landlord did not use any of the property or make any claim of
ownership thereof.

Monetary Damages
The Calculus of Remedies
Classic rule: LL cant collect on rent after termination of the lease
Contract-era future-rent rule: Where LL terminates lease pursuant
to forfeiture clause and evicts lease provision typically allows them
to re-rent premises upon termination and recover damages from
tenant in amount of difference between rent reserved in lease and
the new rent
Calif. rule: LL can recover this even without lease provision
o CCC 1951.2(c)(2): Lessor can collect damages if The lessor relet
the property prior to the time of award and proves that in
reletting the property he acted reasonably and in a good-faith
effort to mitigate the damages


When T abandons leased premises without excuse & no lease clause

governs LL may:
1) Take back leased premises about forget about T as quickly as
o In this case, T is relieved of liability
2) Ignore Ts abandonment and continue to hold T liable under terms of
lease as though T remained in possession
o Q: does LL have to mitigate damages?
Traditional Position: NY courts hold LL has no duty to
Traditional Position #2: LL could treat itself as tenants
agent and treat abandonment as offer to LL to re-rent
premises for Ts account
Post-Reform Position: LL must mitigate by 1) making an
attempt themselves to re-rent the premises or 2) giving

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reasonable consent to Ts attempt to sublease/assign.

3) Relet leased premises and hold T liable for difference in amount of
rent received
o LL must avoid looking like such an assumption of control over
leased premises that LL is accepting Ts surrender for this to
o This intent to accept may be express or implied

Security Deposit:

usually security is left to defray damages caused by abandonment of

the premises, misuse, etc. Security deposit can only be applied to
unpaid rent that has accrued as of the date called for in the statute for
the return of the deposit. Not for future rent.
Under statute the landlord has to return the security deposit; landlord
has 2 weeks . Can use deposit for damage to the premises, default
rent, or cleaning but only for thatthe lease has to say what the
security deposit has to say what it can be used for and can only used it
for those purposes. You can waive the right of return in commercial
250 L.L.C. v. Photopoint Corp: T abandoned and left substantial
o Held: A lessor with abandoned premises has two mutually
exclusive remedies: deem the lease terminated and seek
damages, or continue to perform under the lease and seek rent
as it becomes due.
o Through the termination of the lease upon tenant's
abandonment, a landlord's continuing right to rent under the
lease is converted into a damage claim for rent lost through the
tenant's abandonment.
o By retaining breaching tenant's security deposit to cover future
rent under lease, commercial landlord violated statute 1950.7
that limited offset against security deposit to rent accrued when
deposit was required to be returned to tenant who surrendered
property, and thus landlord was not entitled to pursue setoff for
future rent under general setoff statute.
LL could have chosen to keep lease active under 1951.2 and
collect rent as due from deposit but chose not to

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

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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

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

See Kelly v Tri-Cities Broadcasting: Held: An assignee, in the absence of an

express assumption, is liable only for the covenants which run with the land
and only during the period of his occupancy. His liability ceases with
cessation of possession. The assignee has the obligation to pay the stated
rental provided in the lease and not merely the reasonable value of the use.

If no contract no requirement to fulfill the covenants of the

lease other than such obligations as would by implication be
imposed upon him because of his entry and assuming
possession of the leased premises.
If express assumption two sets of obligations
Privity of estate arising form the landlord/tenant relation
Privity of contract due to terms of which the obligation of
assignees of lease is to be measured
Rule: An occupant of real property who holds by virtue of a bare assignment
of the lease and without entering into any contract, either with his assignor or
the lessor, affirmatively binding himself to fulfill the covenants of the lease, is
subject only to such obligations as he impliedly assumes by entry
and taking possession of the leased premises.
Calif law: Obligations of lessee without assumption of obligation of lease
(Miller & Starr):
1) pay the rent; 2) maintain insurance; 3) make repairs; 4) pay
taxes if lease provides for this
o these obligations terminate when assignee terminates his
in absence of express assumption no privity of K between
assignee and LL assignee NL for covenants which are
otherwise not binding
this conforms with Rest 2d Property 16.1(2): reqs that
something runs with the land
o transferee of an interest in leased property is obligated to
perform an express promise contained in the lase if:
a) the promise creates a burden that touches
and concerns the transferred interest; b) the
promisor and promisee intend the burden to run
with the transferred interest; c) transferee is not

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relieved of the obligation by the person entitled to
enforce it; and d) the transfer brings the transferee
into privity of estate with the person entitled to
enforce the promise
Relative liabilities
Assume T1 liable under privity of K for rent and T2 liable under privity
of estate
LL may sue either T1 or T2 (but not both)
o Between them, T2 liable to T1; T1 ay recover from T2 (principle
of subrogation)

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

Landlord-tenant relations: Remain in privity of estate and privity of

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.
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

Test for determining whether a transfer is an assignment or sublease

Assignment: when transfer is for whole balance of unexpired term,
w/r/t all of originally leased premises and on exactly same terms as
those under which main lessee held
Sublease: when transfer is for period shorter than unexpired balance
of term, relates to physical part only of originally leased premises and
is on terms materially different from the main lease
Alternate test: if by the transaction, the lessee conveys his entire
term or whether he retains his reversionary interest.
o If entire term assignment
o If retains reversion sublease
See American Community Stores v Newman
Held: a right of reentry is a reversionary interest sufficient to
qualify a transfer of rights under a lease agreement as a sublease
rather than an assignment
Retained reversionary interest need not be for substantial period of time
in order for an agreement to be considered a sublease (as little as 1 day is
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Tenant's grant to subtenants of right to exercise remaining renewal

options in prime lease did not make transfer an assignment as prohibited
by prime lease; tenant granted subtenants' options to renew subleases in
order to extend their terms for number of times tenant could extend prime
lease, and did not grant subtenants' right to actually extend prime lease
pursuant to tenant's option to renew.

L must consent to the sublease or assignment before T can transfer his interest in property:
Should a reasonableness requirement be read into a clause requiring LLs
No: Merchants Row Corp v Merchants Row MA 1992
Yes: Park Place Enterprises v Park Place Mall Associates TN 1992
o These cases state it applies equally to assignments and
subleases (Kendall v Ernest Pestana Inc CA 1985 consent may
be withheld in a commercial lease only for a commercially
reasonable objection)
Traditional rule vs. Julian approach
Julian: if lease contains silent consent clause providing that tenant
must obtain landlord's consent in order to assign or sublease, such
consent may not be unreasonably withheld.
o This is generally accepted in commercial leases, if LL has not 1)
expressly retained right to be arbitrary/unreasonable
Traditional rule: if lease contains silent consent clause providing that
tenant must obtain landlord's consent in order to assign or sublease,
landlord may withhold such consent even when doing so is arbitrary or
o this still prevails in majority of jurisdictions in residential cases
Consent Clause May Require LLs Consent May Not Be Unreasonably Withheld
This requires courts to make this determination
Statutory Treatment of Consent Clauses
Kendall rule codified by CA Leg. in CC 1995.010-340
o Statute only injects reasonableness standard into commercial
NY Leg provided rules for assignment/subletting of residential leases
o w/r/t assignments T cannot assign without LLs consent; LL
may withhold consent without cause
but if LL unreasonably withholds consent, T released from
lease on 30 days notice
if consent reasonably withheld T may not assign &
lease stands

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w/r/t subletting T has right to sublet with consent of LL, which

may not be unreasonably withheld
T must submit written proposal for sublet; consent
assumed if no reply in 30 days
If reasonably withholds consent sublease ineffective /
lease stands
If unreasonably withholds consent T may proceed with
Subleases not comporting with statute may be basis for
Lease provisions cannot waive the statute

Ways Courts can avoid Constructional Issues

Finding no consent needed under language of the clause
Rule in Dumpors Case Eng. 1603
o Once LL consent to assignment of lease pursuant to consent
clause, the consent clause is deemed to be permanently waived
o Thus, no consent needed for subsequent reassignments
o This rule still applies in many American jurisdictions

Restraints on Alienation

Disabling Restraint: takes away your power to make a transfer.

Forfeiture restraint: If you assign the lease without consent, you
forfeit the leasehold estate.
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


Assignment by
Landlords consent
may be required by

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Sublease by Tenant
Landlords consent may
be required by lease

French Property Outline

Privity of
Privity of

A and C

A and B

A and B

A and B
B and C (if contract

Liability for
Covenants in

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

B remains liable to A
for rent and all other
covenants in lease
because of privity of

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)

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Four ways to divide property ownership concurrently:

Tenancy in Common

Applies whenever present possession of property is owned by more than

one person
o When property passes by intestate succession
o When couples divorce w/out settlement dividing their jointly owned
o Whenever people buy property together without creating holding
corp/partnership/trust to hold the title
o When people in high-cost housing areas buy multiple-unit buildings
for their joint use without creating condo assoc. or cooperative
o Conflict possibilities because of decisions re: use, maintenance,
improvement and sale
Carefully drawn agreements can provide mechanisms for
sensible property management and disposition of shares in
the event of divorce, death or desire to cash out
if no agreement, or inherited property rules provided by
law govern such disputes (see below)
o Fully alienable: tenants can transfer interests independently
during life, through wills or by intestate succession

Constitutional Right to divvy up a TIC?

Tom v San Francisco:

High cost of real estate parties buying
multi-unit buildings as TIC and dividing among themselves, giving each
owner ERO in a dwelling
Held: Ordinance prohibiting agreements by tenants in common
of multi-unit buildings that gave each owner an exclusive right
of occupancy in particular dwelling units violated the tenants'
constitutional right of privacy.
Autonomy privacy interest exists in choosing the persons with whom
one will reside and in excluding others from ones private residence
General right to privacy in ones home
o the desire to have privacy in one of these TROs, pursuant to
agreement among the cotenants, is a reasonable one
no reasonable person would consent to having their
neighbors wander through ones home

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Joint Tenancy with Right of Survivorship

Fully alienable inter vivos but inalienable at death

o Instead of passing to heirs or devisees, property remains with
the survivor(s)
Claims that usually can be made against property of a
decedent by tax collectors/creditors/family members are
thus avoided through joint tenancy unless altered by
o If joint tenants transfer interests independently during life
their interest converts into a tenancy in common, destroying the
survivorship right
o Cannot be transferred by will / does not pass by intestate
Popular because it is easy, avoids probate and is cheaper than a trust
o Used particularly by spouses but also in other family situations
Usually an irrevocable gift
o Way to avoid this while also avoiding probate: use POD (payable
on death) clause in deed which gives the property to whomever
upon death without creating Joint Tenancy

Four Unities required for JTwRoS until recently

i. Parties had to take possession simultaneously
i. Had to take under same instrument
i. Had to have estates of the same type and duration
i. all had to have undivided interests in property
Easy to destroy
i. Any conveyance will do so
See Smolen v Smolen: Held: All joint tenants possess
not only an interest in the joint tenancy but also the
power to transfer such interest and sever the tenancy.
Former wife and husband held real property as tenants
in common following husband's transfer of his interest
in property to revocable trust, despite divorce decree
which stated that property in question shall remain in
joint tenancy; decree created joint tenancy between
former husband and wife, replete with all
characteristics attributable to that estate under
common law, including power of either husband or
wife to unilaterally transfer interest and terminate
ii. Sometimes people make a conveyance without meaning to
do so
1. Some leases (e.g. which go beyond the life of a joint
tenant) sever the joint tenancy
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Special Problems w/ JTwROS

Effect of Mortgage on JT
Lien theory: a mortgage is only a proxy for the property mortgaged it
creates a lien on the property mortgaged, but does not pass title to the
o See People v Nogarr CA: HELD: mortgage did not destroy the joint
tenancy; The mortgage lien attached only to the interest that C had
in the real propertywhen his interest ceased to exist, then the lien
of the mortgage expired with it.
The judgment lien upon the interest of a joint tenant
terminates on the death of mortgagor joint tenant.
Title theory: if you gave someone a mortgage, you would give them title in
some conditional sense and this conditional interest was extinguished
when you paid off the loan. But theres no interest in the title in the mean
o Under this approach, if youre the mortgagor and it involves
transferring title, you break the unity of title (maybe not your
Modern approach calls it a lien and doesnt destroy joint tenancyrisk is
that if the mortgagor dies, the interest goes up in smoke
Joint Tenancy and Creditors
Joint tenants creditors, like creditors of tenant in common, can reach
the assets of the cotenant during lifetime (unless asset is exempt) and
cotenants interest can be sold to pay the debt
o Such sale destroys the joint tenancy right of survivorship
tenancy in common
If requires only one persons liability and that person dies creditor
o When a prospective lender requires both joint tenants to assume
liability for debt creditors lien is not affected by death
Effect of Divorce on Joint Tenancy
courts usually base their decisions on the intent of the parties
o Statutes in most states provide that will provisions in favor of a
spouse are revoked by divorce
Unilateral severance of joint tenancies
Joint tenancies can be destroyed unilaterally
o Riddle v Harmon Cal Ct App 1980: Riddle terminated joint
tenancy by deed granting herself one-half interest in property as
tenant in common and reciting that purpose of the deed was to
terminate the joint tenancy with her husband
Legislative response
o CA legislature responded to Riddle by passing CCC 683.2:
A written declaration/deed is not effective to terminate
right to survivorship of a joint tenancy unless: 1) recorded
in county where property is located before death of
severing tenant; or 2) executed before notary public 3
days before death of severing tenant and is recorded in

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county where real property is located no later than 7 days
after death of severing tenant
Modern Role of the 4 Unities
the 4 unities seldom play a decisive role in cases since the 1950s if the
intent of the parties can be ascertained
o they typically are used to reach an outcome that would also be
reached by enforcing the intent of the parties

Tenancy by the Entirety

for married couples only, except states granting this right to domestic
Right of survivorship as in joint tenancy
However, cotenants cannot transfer their interests independently
i. Tenant cannot acquire right to sell their interest or the whole
property, or dispose by will, without permission of both
spouses (except in case of divorce)
When you divorce becomes joint tenancy or tenancy in common

Community Property

for married couples only, except states granting this right to domestic
Can only be transferred inter vivos if both spouses join in the
But can be disposed of by will

Problems with Sharing Possession

Cotenants in all 4 own undivided shares in the land

o Each as right to possess and enjoy all the land
o No one has the right to exclude others
No one is legally in charge
o Cotenant who assumes responsibility has no right to
Each cotenant entitled to possession of entire property and responsible
for his/her share of maintenance expenses
o But no mechanism for collective decision making

Default Rules for Disagreement/Partition

Tenants by the entirety and community property owners:
If they cant agree on management or disposition of marital property
court will divide between them on divorce
Tenants in common and joint tenants
Each cotenant can sell his share individually, but everyone has to
agree to sell the whole thing
If they cant agree agree to sell court will on petition of any

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Physically divide the property between them
Order the property sold and divide the proceeds in an action of
See Leg v Boxler: Held: Provision in tenancy in common (TIC)
agreement for property originally acquired as long-term vacation
home, stating that when a cotenant receives a bona fide offer for its
purchase from any other person or entity, the other Owner shall have
the first right of refusal to purchase the selling Owner's Interest in the
Property for the price and on the terms provided for in such bona fide
offer, modified the statutory right to partition and required the
selling cotenant to first comply with the terms of the right of first
refusal provision before seeking partition.
Remedies short of partition:
o Action for accounting for rents or profits received by another
o Action for contribution for advances made to pay another
cotenants share of taxes, mortgage payments and necessary
maintenance expenses
Action for waste may be available
o But exploitation for natural resources usually gives rise to action
for account of profits rather than an action for waste
Disputes over Carrying Charges
Majority rule: a cotenant who is not in possession may claim a
credit/offset for the value of the occupying cotenants use or
occupation against his liability for contribution to the carrying charges
of the property
o Other rule: a cotenant may not have to pay rent for the others,
but the nonpossessing cotenants may not need to pay carrying

Minority rule: this is contrary to the basic rights of cotenancy

ownership (each cotenant has the right to occupy the whole)

Every partition action includes an equitable final accounting
Credits for:
Expenditures in excess of co-tenants fractional share for necessary
repairs; improvements that enhance the value of the property; taxes;
payments of principal and interest on mortgages; other liens;
insurance for common benefit; protection and preservation of title
But see Wallace v Daley:
In an action to partition real property by sale and division of the
proceeds, plaintiff co-owner was not entitled to any credit for an
increase in the value of the property caused by improvements she
made to the property herself before or after acquiring her interest,
where at all relevant times plaintiff remained an ordinary
tenant under a month to month tenancy rental agreement

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which provided that plaintiff was to assume all costs and liabilities for
repairs, alterations, and improvements. Under that provision, made by
plaintiff in exchange for valuable consideration in the form of a low
monthly rental charge, plaintiff bargained away any right she might
otherwise have had to compensation for the improvements.
Rule: Where tenants create the relation of landlord and tenant
between themselves, improvements by a cotenant in possession
as an ordinary tenant, made solely for his individual purpose,
cannot form the basis of a claim for contribution against his
cotenant upon partition.


Courts have developed constructive ouster and presumptive ouster

o Def = is the wrongful dispossession or exclusion by one tenant
of his cotenant or cotenants from the common property of which
they are entitled to possession. Legal question
Obvious example: changing locks, posting no trespassing
signs and denying cotenant admittance (Zaslow)
Ouster, coupled with rule allowing offset of value of occupying co-Ts
possession in action for contribution to practically nullify rule that
any Co-T may occupy the premises rent-free regardless of the size of
his/her economic stake in the property
Malleable concept
o Cotenants in possession of family farm held to have ousted their
widowed sister in law by telling her they didnt want to have
her on the place and she was not to come back Mauch v
Mauch OK 1966
o Ex-wife did not oust her ex-husband by telling him not to leave
and that shed call the law Fitzgerald v Fitzgerald FL 1990
o Lock change is not ouster Spiller v Mackereth AL 1976
o Lock change is ouster Morgan v Friedlander AZ 1984
Ouster via legal cations?
See Estate of Hughes v Patton
o Held: Absent an ouster, a cotenant out of possession has no
right to recover the rental value of the property from a cotenant
in possession.
o the conduct of the decedent's spouse in filing petitions,
asserting the spouse's sole ownership of the property, may have
constituted ouster of the other cotenant heirs. the spouse's
petition alleging that he was entitled to 100 percent of the
property was the functional equivalent of telling his cotenants
that they could not enter the premises.
The fact that ouster may occur in a peaceful,
nonaggressive manner through lawful means is consistent
with the policy underlying the enactment of Civ. Code,
843 (ouster established by noncompliance with cotenant's
demand for concurrent possession).

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In addition to triggering an obligation to pay rent, an ouster

furnishes the tenant in possession a benefit, since it starts the
time in which the tenant in possession will hold the property
adversely. The ouster by one cotenant of others can result in the
tenant in possession obtaining title to the property, if the
occupying tenant otherwise satisfies the requirements for title
by adverse possession.
George filed petition in 1982; this case brought in 1997
Court may establish equitable estoppel or waiver in light of
heirs failure to seek partition given the delay and increase in
propertys value

Other Marital Property

Viability remains the critical point at which they become
people(Davis citing Roe)
o We conclude pre-embryos are not strictly speaking persons
or property but occupy an interim category that entitles them
to special respect because of their potential for human life
any interest the parties have is not a true property interest
Right of Procreational Autonomy
o Constitutional right to privacy governs
o Right includes right to procreate an right to choose not to
o the existence of the right itself dictates that decisional
authority rests in the gamete-providers alone
their interests are entirely equivalent
See Davis v Davis
o Disputes involving disposition of pre-embryos produced by in
vitro fertilization (IVF) should be resolved, first, by looking to
preferences of progenitors and if their wishes cannot be
ascertained, or if there is dispute, then their prior agreement
concerning disposition should be carried out.
o If no prior agreement exists between progenitors as to
disposition of pre-embryos produced by in vitro fertilization (IVF),
then relative interests of parties in using or not using preembryos must be weighed if a dispute arises as to custody.
o Ordinarily, party wishing to avoid procreation should prevail if
there is dispute as to custody of pre-embryos produced by in
vitro fertilization (IVF), assuming that other party has reasonable
possibility of achieving parenthood by means other than use of
pre-embryos in question but if no other reasonable alternative
exists, then argument in favor of using pre-embryos to achieve
pregnancy should be considered; however, if party seeking
control of pre-embryos intends merely to donate them to
another couple, objecting party has greater interest and should

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Kass v Kass NY 1998: couple signed agreement that if they couldnt

make decision re: disposition of embryos, IVF Program should dispose
them for approved research
o Affirmed against wifes arg that she should be awarded the

Hecht v Superior Court Cal 1993

o Held: decedent had right to leave frozen sperm to woman with
whom he lived for 5 years preceding his death
o Decedents other children/former spouse were not entitled to
order directing its destruction

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Lifetime Gifts Not in Trust

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

Statute of frauds applies w/r/t land

o If land intention must appear in writing signed by donor
o Otherwise may be expressed orally or inferred from
circumstances surrounding the transfer
Distinction between lifetime and testamentary gifts
o Lifetime gifts can be made orally
Lifetime gift presently transfers some interest in property to
the donee
o Testamentary gifts must be made in signed writing in testators
handwriting or attested by two witnesses; no delivery necessary

Inter Vivos Gift

Inter vivos = irrevocable present transfer of ownership

To make a valid inter vivos gift there must exist:
o 1) Intent on the part of the donor to make a present transfer
o 2) Delivery of the gift (actual or constructive)
o 3) Acceptance by the done
o Proponent of a gift must prove each element
See Gruen v Gruen: Held: A valid inter vivos gift of a chattel may be
made where the donor has reserved a life estate in the chattel and the
donee never has had physical possession of it before the donors death
o 1) test: whether donor intended gift to have no effect until after
his death, or whether he intended to transfer some present
unambiguously established that father intended to make
a present gift to son of title to painting while father
retained a life estate
o 2) A donor making a gift of a remainder interest in a chattel
following a life estate is not required, to satisfy delivery
requirement of a gift, to physically deliver the chattel into the
donee's hands with donee redelivering the chattel to the donor.
o 3) Son presented clear and convincing proof of his acceptance of
a remainder interest given by his father in painting by evidence
that he made several contemporaneous statements
acknowledging the gift to his friends and associates, even
showing some of them his father's gift letter, and that he had
retained both letters for over 17 years to verify gift after his
father died

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Causa Mortis Gifts

Causa mortis = at time of alleged gift, 1) decedent intended to make

a gift, 2) decedent apprehended death, 3) res of intended gift was
actually or constructively delivered, and 4) death actually occurred
o Not necessary the donor say he knows/believes he is dying; it
may be inferred
o Suffices if at time of gift, donor believed he was going to doe
soon, and that death actually did ensue within a reasonable time
o A gift causa mortis differs from other gifts only that it is made
when the donor believes he is about to die, and is revocable
should he survive
See In Re Estate of Smith endorsing causa mortis and refusing to
revoke checks suicidal donor wrote prior to suicide
o Majority:
Policy: causa mortis furthers public policy against suicide
since donor may retrieve the gift if suicide is not
A gift causa mortis differs from other gifts only that it is
made when the donor believes he is about to die, and is
revocable should he survive
o Dissent:
Because suicide may be readily abandoned other
jurisdictions hold suicide does not serve as the foundation
for a gift causa mortis (more normal circumstances are
Causa mortis gifts lack regular safeguards afforded by law
for disposition of property in an executed will thus,
strict proof is required to find such gifts exist
Common law does not reward one who does not
look out for his own safety
PAs policy of protecting human life shown in
statutes criminalizing assisted suicide by upholding
this gift, the majority rewards the donor for his
Is delivery of check effective?
o Smith = yes (minority rule)
o Woo v Smart = no
A donors own check drawn on a personal checking
account is not, prior to acceptance or payment by the
bank, the subject of a valid gift causa mortis (majority


Ritual function: Makes significance of gift clear and concrete to donor:

donor suffers the "wrench of delivery." There is no question about
whether he really meant to give the gift.

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Evidentiary function: provides unequivocal proof to the witnesses of the

transfer, and provides donee with prima facie evidence in favor of alleged

Constructive Delivery
When the subject matter of an oral gift is not readily available or
capable of manual handing-over, courts recognize gifts effected by
delivery of means of gaining access to the subject matter
o Gift of furnishings in a house effectuated by handing over the
key (Libel v Corcoran Kan 1969)
o Gift of car made by handing over keys to the car in Estate of
Lines NY 1959
Disclosure of the location of the item may serve as delivery
o Valid gift when testator discloses location of buried cash (Waite
v Grubbe Or 1903)
o Valid gift by disclosing combination to a safe (Teague v Abbott IN
Symbolic Delivery and Delivery to a Third Person
Instead of delivering subject matter of a gift, donor can deliver a
symbol (title, etc.)
o If donative intent clear court may uphold gift of chattel by
symbolic delivery
o Beck v Givens: gift of sheep upheld by delivering instrument
purporting to be bill of sale to done, though donor retained
Via Third person:
Gift may be made by delivering subject matter to third person with
instructions to deliver to done immediately or at some time in the
o Except as gift is otherwise revocable, attempt by donor to retain
power to revoke is likely to cause trouble; gift fails for lack of
delivery if donor retains express power to revoke
Can use a revocable trust to accomplish the same goal
o Third person should be independent or agent of donee


Whether there was delivery.

a Usually comes up after testator dies. Usually the heirs fight with
the person that received the gift.
Whether the gift was revoked.
Causa Mortis
a Sometimes, the person made a gift, and then claims causa
mortis just because they want it back.
Use of incorrect instrument
a Did you really mean to make a gift during lifetime, or a gift that's
effective only at death?

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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


Use a written instrument

a Required for transfer of land
a Not required, but a good idea for future interests
Be sure to include:
a Parties
a Donor's intent to make a gift
a Identify property to be transferred to donee
a Signature

Joint Bank Accounts and Donative Intent

Joint bank accounts with right of survivorship often used by couples

with intention that any party may withdraw all funds and remaining
funds belong to survivor
Other accounts that are better suited:
o Payable on death account: if O doesnt want A to have any
rights to withdraw until O is dead
o Power of attorney account: instead of so-called
Convenience account O intends to give A access to funds to
pay Os bills in the event O becomes incapacitated but does not
intend that the balance of the funds goes to A on Os death
Uniform Probate Code: lifetime withdrawal rights based on the net
contribution of each party
o Other states: each party entitled to withdraw equal share of the
After death of depositor, most states allow estate to claim the balance
of the account by clear and convincing evidence that convenience
account was intended
o In a few states, presumption that survivorship rights were
intended is conclusive

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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.

Statute of Frauds
Sets out the requisite formalities to create a binding contract of sale for real property

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.
a Purpose: to protect property holders from trumped-up claims that others
owned interests in their property
a Requirements:
Must be written: either formally or in a memo

Personal property doesn't have to be in writing. It can just

be handed over.
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.
Identification of the parties of the contract
The price and manner of payment
Signature of seller and buyer
Closing date
a 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
Possession of the land
Making substantial improvement to the land
Payment of all or part of the purchase price

Financing condition
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In the absence of an express provision, buyer is not excused from

performance because he lacks the funds to pay the purchase price
o French: buyer may want to spell out provisions (interest rate, etc.)
Problematic language:
o subject to adequate financing (financing in nearby city = buyer
breached obligation to use reasonable effort) Moore v Moore
o contingent on the buyer obtaining a mortgage at his terms
(condition finding a reasonable amount of financing implied)
Grayson v LaBanche
Waiving a condition can be dangerous
o Financing condition waived by securing extension of time for
performance after failing to qualify for bank mortgage loan;
purchase cannot revive waived condition when alternative financing
arrangement falls through Williams v Ubaldo
What if buyer loses job?
o K contingent on buyer obtaining mortgage commitment; three days
prior to closing buyer lost job and lender cancelled commitment
pursuant to right to terminate if borrowers employment changes;
buyer in breach and seller entitled to retain deposit Malus v Hager
If the parties wish to provide in their contract for an
eventuality such as this, they are free to do so. We decline,
however, to impose the risk of an otherwise firm deal
unravelling upon an unknowing and blameless seller, leaving
him with no ability to recoup his increased expenses

Marketable Title

implied by courts in every K for sale of property

o purpose: to protect legitimate expectations of buyers
when found, seller must fix problem/encumbrance or let
buyer out of K, refunding earnest money or down payment
may be altered or eliminated by parties who agree that title must be good
record title or merely insurable title; or that buyer will purchase only
whatever interest seller has
o implied warranty of marketable title shifts burden of negotiation to
buyer who wants good record title/title free of easements for visible
o it shifts the burden of negotiation to the seller who is only willing or
able to provide less than a marketable title
problems of marketability:
o when seller lacks good title (see Conklin)
o when seller is cotenant and other cotenants havent joined in
sale (seller liable see Warner v Davis)
o when property is landlocked
property w/out access is unmarketable (Myerberg Sawyer &
Rue v Agee MD)
lack of access affects value, not title Sinks v Karleskint (IL

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when property is subject to encumbrance (easement, restrictive

covenant or mortgage) not mentioned in sales K

rule: existence renders title unmarketable

some jurisdictions: exceptions sometimes made for visible
encumbrances like electric lines/roads
buyer said to make exception for these easements
despite language in K

a Adverse Possession
A title based on AP can be a marketable title

If the possession has been for a long period of time

If the risk the record owner will sue appears to be very remote
If the probability of the record owner's success in such a suit
appears to be minimal

See Conklin v. Davi NJ:


a Defects in title that may render it "non marketable"

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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
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
Zoning restrictions: Do not generally make title unmarketable
1 Truck South v Patel: discovery of water federally
protected wetlands a burden but not an encumbrance,
lien, easement, etc.
2 But existing violations of public regulations do render the
title unmarketable
a. Buyer has obligation to know of regulations like the
Coastal Commission, etc. that are public even if
they may limit property rights
Presence of hazardous waste on property doesnt render
title unmarketable
But see Sechrest v Safiol: Held: Contract which provided that
purchaser's obligations under the contract were conditioned on
purchaser's obtaining from the proper public authorities all
permits and other approvals reasonably necessary for
construction of a single-family residence impliedly contained
an obligation on the part of purchaser to use reasonable
efforts to obtain such approval.

a 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.

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 company promises to pay costs of defending

subsequent claims brought against the insured by a
party claiming to have superior title and to indemnify
the insured in cases it loses
Valid Record Title: a perfect chain of title going back to
the sovereign

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a 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.


remedies before closing:

Rescission: unilateral unmaking of a contract
Damages: get money from the courts
Specific performance: make seller turn over land with
abatement of purchase price
Merger: If buyer permits closing to occur, the contract merges with
deed, and seller has no liability for implied warranty of

Installment Land Ks

Under these Ks, buyer obtains possession immediately and is

obligated to pay installments on the purchase price from time to time
Upon completion of all payments, seller delivers a deed to the buyer
Traditionally led to harsh results
o E.g. seller who makes 119 of 120 payments but misses the last
one defaults and seller can retain purchase price already paid as
well as title
Recently, courts intervene
o Wilson v Taylor MI: limiting forfeiture to sum still owing
o Lambert v McDaniel NC: buyer has right to redeem its interest
on default by paying remaining debt
o Restatement 3d Mortgages 3.4(b): contract for deed creates
mortgage substantive rules and protections of mortgage law
On default, property will be sold and seller is entitled only
to remaining balance of price + expenses

Risk of Loss & Equitable Conversion

When contract is silent, who bears risk of loss due to

damage/destruction of property between K signing and closing?
Courts give different answers
o Majority (places risk on buyer):
Bryant approach: depreciation by damage/destruction is
treated the same as appreciate and depreciation due to a
falling market: it belongs to the buyer if the sale is
completed, either voluntarily or trough the grant of
specific performance
o Minority (places risk on seller):
Damage/destruction by fire/flood/catastrophes are borne
by seller until closing
Uniform Vendor and Purchaser Risk Act (13 states incl.

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Places risk of loss on seller until delivery of possession or
title to buyer (whichever is earlier)
Parties may avoid default rule by providing for risk of loss
Either neither or both parties may have insured the property; who is
entitled to proceeds?
o Under majority rule:
Purchase is equitable owner but doesnt receive benefit of
insurance (In re Gay KY)
Contract purchaser (King v Dunlap TN)
Buyer entitled to proceeds to extent of improvements
made; seller entitled to balance (Gosset v Farmers ins Co
of Washington WA)

Equitable conversion
Equitable conversion if you have a specifically performable right in
property, equity will treat you as the owner of the property
o This is an equitable interest rather than a legal interest
o But for some purposes the buyer will be treated as the owner of
the property and will be regarded as having an interest in real
property while the seller will have the right in personal property
Payment = personal property; conveyance of land = real
o Used in cases of loss but also if the owner dies
o Also applied by courts to solve other real-estate matters
Assume S&B sign a K for B to buy Blackacre from S; before closing,
both die; Ss will leaves realty to S1 and personalty to S2; B leaves
realty to B1 and personalty to B2
o Clapp v Tower ND: proceeds on resale of real property after
executors cancelled contract made by decedent must be
accounted for as personal property of the estate

Caveat Emptor?


This was long the dominant rule

o Active misrepresentation would be actionable but failure to
disclose a known defect would not expose the seller to liability
o This still controls in NY & elsewhere
Increasingly, however, courts are rejecting this rule
o where the seller of a home knows of facts materially affecting
the value of the property which are not readily observable and
are not known to the buyer, the seller is under a duty to disclose
them to the buyer. Johnson v Davis FL 1985
to disclose
recently enacted statutes impose duty of disclosure on sellers of
residences (e.g. Calif.)
another group of statutes relieves seller from disclosing that the
property was previously inhabited by a person with AIDS or that a
felony was committed in the house

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Exception to Caveat Emptor for New Homes
virtually all jurisdictions make builder/vendors of new homes liable to
purchasers for defects under theory of implied warranty of fitness
o second owner may have cause of action if resale occurs within a
reasonable time (Blagg v Fred Hunt Co AR 1981)
Comprehensive Environmental Response, Compensation and Liability
Act (CERCLA) 1980
property owners strictly liable for hazardous materials on their
property even if they didnt discharge the materials
buyer may be able to sustain CoA against seller for failing to disclose
the problem, but buyer is still liable if sued by federal government or
neighbors for cost of cleaning up property
o thus buyer must make independent assessment of the
environmental condition of the property before buying

Remedies for breach of sales contract


Legal remedy: Monetary remedy

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])
1 Difference btw/ contract price and market value of land on
date of breach
a 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
Specific Performance
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.

If seller can't give marketable title, specific

performance requires transfer with abatement of price.

The Deed
Classifications of deeds:
1) general warranty deed
o grantor warrants good title title against defects arising
before and during the time the grantor was unconnected with
the land
if untrue, this ousts the buyer, or buyer has action for
2) special warranty deed

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grantor warrants title against defects arising during grantors
association with the land but not against defects arising before
that time
much more limited
3) quitclaim deed
o grantor warrants nothing; merely transfers what title he has, if
Must transfer be manual?
Phenneger v Kendrick IL: delivery is essential to make a deed
operative, but no particular ceremony is necessary.
o May be word without acts; acts without words; or both
o Intention is the controlling element re: whether a deed has been
delivered and it depends in great measure upon the particular
circumstances of a case
Is delivery adequate where grantor gives photocopy of deed to grantor
but retains original for safekeeping?
o Material fact question re: delivery (Evans v Waddell AL 1997)
3rd-Party Intermediary Delivery
Even though grantee doesnt receive benefit of property at the time of
the delivery, courts typically hold such deliveries valid as long as
grantor parted with control over the deed
o If deed is subject to being recalled by grantor before delivery to
grantee no effectual delivery (sufficiency of deliver principle)
See Chandler v Chandler: HELD: JW Chandler, at the time he delivered
the deed to the bank for safekeeping, possessed the requisite intent to
relinquish control over the deed and have it take effect as a present
conveyance, given the testimony of bank personnel and the totality of
the circumstances
Dissent: As long as grantor reserves locus penitentiae, ether by
express reservation or by not placing the deed beyond his control as
a matter of law he has not foregone his right of revocation
o Citing Culver v Carroll 1911: if the deed is placed in the hands
of a third person, as the agent, friend or bailee of the grantor,
for safe-keeping only and not for delivery to the grantee then
such transfer of the mere instrument fails does not constitute a
delivery, and the instrument fails for want of execution.
Forged Deeds
Forged deed is void and grantor receives no title

Merger Doctrine
Upon delivery of deed, K of sale merges into deed and disappears unless
parties provide otherwise
Exception: collateral promises
o Express warranty to construct a house in a good/workmanlike
manner = collateral (Davis v Tazewell Place Associates VA)
o Sellers promise to place mortgage it receives from buyer in
position subordinate to other mortgages = not collateral/clause
merged into deeds (40 North Corp v Morrell WY 1998)

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Provision giving seller option to repurchase property = collateral

(Bruggeman v Jerrys Enterprises MINN 1998)
Warranty that plumbing/heating/electrical/AC systems are in
working order on date of possession = collateral (Lanterman v
Edwards IL 1998)

Covenants for Title

Ways to protect ownership rights
1) title insurance to protect against superior titles
2) title covenants warrant that grantees title is good
title covenants are present covenants or future covenants
present covenants guarantee a described situation exists at the time the
covenant is made
Covenant for seisin: grantor guarantees he owns the estate he is
Covenant of the right to convey: same as seisin but the grantor
may have the right to convey but not be the owner of the estate he or
she is purporting to convey (e.g. if conveying the land under a power)
Covenant against encumbrances: grantor guarantees there are no
mortgages/liens/judgment liens/easements/covenants restricting use of
the land, etc. against the land conveyed
future covenants
covenant of quiet enjoyment and covenant of general
warranty: these are basically the same and mean the grantor
guarantees purchaser will not be disturbed in the future by the grantor
or some paramount claim existing at the date of conveyance
o covenant not broken unless there is a disturbance (ouster from
possession by one having paramount title; foreclosure of
mortgage; enforcement of covenant restricting use of the land,
o if purchaser pays off outstanding mortgage on land may be
disturbance even though purchaser is not ousted from
covenant for further assurances: grantor promises to do further
acts within his power to make purchasers title good

The Sale: Calif. practice

California practice
Land transferred via grant deed or quitclaim deed
Deed must:
o Be in writing
o Describe parties properly
o Parties must be competent
o Property must be described to distinguish from other parcels
o Must be granting clause (I hereby grant)
o Deed must be signed by parties making the conveyance

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o Must be delivered and accepted

Consideration not necessary for valid transfer
o But lack of consideration may affect grantees rights against
third parties, because many statutes are designed to protect
bona fide purchasers
Acknowledgment is a formal declaration before an authorized officer
that the execution is the executors act and deed
o Safeguard against forgery/false impersonation
o Wont be invalidated by absence of date if sufficient in other
o No acknowledgment should be recognized if officer has personal
interest in the transaction unless there is another neutral
Parties must disclose unwarranted/unauthorized
encumbrances of their property on the official records
o Most instruments affecting real property must be executed and
acknowledged or proved by the owner of the property before the
instrument is eligible for recordation
Agreements for sale, options, deposit receipts all apply
o Any instrument transferreing or encumbering community
property must be executed by both husband and wife
o Deed isnt invalid if unrecorded, but important to protect grantee
o If grantee fails to record and another deed is recorded first
grantee is in jeopardy
o Law presumes valid delivery if deed is found in possession of
grantee or is recorded
o Ordinarily a deed cannot be given effect until accepted by the
Types of deeds
o Grant deed warrants grantor hasnt conveyed it to any other
person and estate is free from encumbrances including taxes,
assessments and other liens
Applies only to grantors acts, not others
o Quitclaim deed conveys whatever the person has
o Warranty deed contains express covenants of title
Uncommon to reliance on title insurance in CA
o Trust deed 3-party security instrument conveying title to land
as security for performance of obligation
o Reconveyance deed conveys title to property from trustee
back to trustor on termination of the trust
o Sheriffs deed sheriff holds this deed on foreclosure of a
property; title is only that acquired by the state/sheriff and
contains no representations/warranties whatsoever
o Gift deed grantor may make gift of property to grantee and use
gift deed
Need not specify reason is love and affection

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May be set aside if made to defraud creditors

Void deeds
o 1) deed from incapacitated person (judicially determined)
o 2) forged deeds
o 3) deed from minor
o 4) deed executed in blank where grantors name is inserted
without authorization or consent of grantor
o 5) deed purely testamentary in character where grantor
intends deed not be operative until death
voidable deeds
o 1) from person of unsound mind (not judicially determined)
o 2) prior to 1972, a deed from person 18-21 years old, except
from a lawfully married person over 18


Recording System
Common-law rule: first in time, first in right
o This still applies when no applicable recording statute
Purpose: to promote recording and punish those who
Grantor-Grantee Index & Tract System
Grantor-grantee index
o Two indexes (one for grantor, one for grantee) listing all people
in the county who have recorded transactions
o By going between the two you can find out who your grantor
bought from, and so on, repeating the process
Tract index
o Some states allow this type of index, which shows conveyances
of each lot in the county
Combination tract and grantor-grantee index
o County is divided into blocks; conveyances of land in that block
are indexed by party name so you can locate your references by
grantor-grantee method
Descent or devise of land
o neither system accounts for title passing on death of owner
o So if your indexed chain of ownership has a gap, it is probably
due to its passing by descent or devise
Classification of Recording Acts
1) pure notice statutes (MA) place no premium on race to
recorders office and protect bona fide purchaser whether he or she
records first or not
o if you buy w/out notice of someone elses interest, you take free
of it
2) race-notice statutes (CA) place a premium on race to recorders
office and protect bona fide purchaser only if he or she records first

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gist: if you are a purchaser and rely on the records in purchasing
the property from somebody, you are protected against interests
that do not show up in the records
must buy before the other person and record
before they do or you lose
o even if someone got perfectly good title, if someone got it and it
does not show up in the records, it is vulnerable to divestment
by someone who comes along and buys the property w/out
notice of your interest
o in sum: if you buy w/out notice of someone elses interest, you
take free of it
must be bona fide purchasers
3) period-of-grace statutes give prior grantee a period of time in
which to record and protect bona fide purchaser only if prior grantee
does not record in time allowed by statute
4) race statutes (uncommon) place a premium on race to
recorders office and protect purchaser, whether purchaser has notice
or not, if he/she records first
o first person to record wins
o no requirement of notice of anothers interest or not

Types of notice
3 types
1) actual notice B actually knows of Os prior conveyance to A
2) record notice if document is recorded in chain of title, all people in
the world are deemed to have record notice
o one does not have record notice of documents outside the chain
of title
o thus, chain of title determines extent of search that must be
conducted and those documents that give record notice
3) inquiry notice law requires a person to make reasonable inspection
of property and make reasonable inquiries about ownership that such
inspection would trigger
o Def: an easement created by operation of law and held by the
owner of a lot in a residential development that entitles the
holder to enforce restrictions that were part of the general
development scheme against the developer and subsequent
buyers who purchase free of the restrictions
what qualifies as a BFP? How do you get notice?
Actual notice
Record notice comes from public records
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.
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P loses case against title insurer, because easement wasn't in chain of

title: was a "wild" easement.
Rule: an instrument executed by an owner which is recorded before
acquisition or after relinquishment of title is outside the chain of title

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.

Deeds from common grantor of adjacent lots

Buffalo Academy of the Sacred Heart v. Boehm Bros : The debtor agreed to
discharge an indebtedness to the creditor by conveying to the creditor
good and marketable title to certain realty. The parties' contract provided
that if title should prove unmarketable, the debtor would pay the creditor
a specified sum in cash. The creditor refused to accept the deed tendered
by the debtor, on the ground that the title was unmarketable. The lower
court granted judgment in favor of the creditor, accepting the creditor's
argument that a deed conveying four lots in the subdivision in which the
realty was located prohibited the erection and operation of gasoline filling
stations and the sale of motor oil and fuel on any other lots located in the
subdivision. The court reversed, concluding that the subject covenant was
personal to the grantor, could not be impressed upon future owners of
other premises in the subdivision, and never attached to the lots later
transferred to the debtor. Moreover, even assuming the covenant to be
one that ran with the land, it was not enforceable because the remaining
lots in the subdivision were sold by deeds that made no mention of the
Majority rule (followed in NY): a purchaser of a lot which formed
part of a larger tract is not charged with notice of restrictive
covenant contained in a prior deed from the same grantor to any
other lot or parcel of the same general tract
In the absence of exceptional circumstances, NY should
follow the general well-settled principle that a purchaser
takes with notice from the record only of encumbrances in
his direct chain of tittle
1. exception: constructive notice when houses on a street all jut
out the same amount or encumbrance is otherwise visible
Minority rule: recording of such a deed by a common grantor
affords notice to all his subsequent grantees
See Sanborn v McLean MI:
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Ds owned house in high-end subdivision; sought to build gas

station in the rear. P claimed a reciprocal negative easement on his
property and the McLeans property prevents the McLeans from
using their lots for anything but residential purposes. The original
owner deeded some of the land in the subdivision with restrictions
and some without.
Held: The McLeans had inquiry notice of the easement. Because
the McLeans could not have helped but notice that all of the lots in
the subdivision were being used for residential purposes, they
should have inquired into the existence of restrictions and negative
easements. Simply examining the title and asking the grantor if
there were any restrictions did not suffice as adequate inquiry; any
deeper inquiry would have revealed the easement.

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.
a 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.
a Exclusions: The standard title insurance policy does not insure against
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
Government regulation restricting land use

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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.
1 14th Amendment:
No state shall depirve any person of life, liberty, pr property w/out
due process of law
1 Civil Rights Act of 1866 (aka 1982)
Bars racial or ethnic discrimination only
Applies to sale or rental of all property; not limited to housing
No explicit method of enforcement, but courts have fashioned
remedies including injunction against landlord or damages
1 Civil Rights Act of 1968- Fair Housing 42 USC 3604
Enacted as Title VIII of Civil Rights Act of 1866; applies to sale or
rental of dwellings only
1 Discrimination based on race, color, religion, sex, national
origin, against persons with children except in senior citizen
housing, and against handicapped persons
1 Discriminating in terms of rental on same bases
1 Advertising or making any public statement that indicates
any discriminatory preference
1 Representing that a place is unavailable based on same
bases when it is available
1 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.
1 Private clubs and dwellings for religious organizations are
exempt from FHA
1 A person leasing/selling a single-family dwelling she owns is
exempt if she
a Does not own more than three such dwellings
a Does not use a broker
a Does not advertise in a manner that indicates her
intent to discriminate
1 A person is exempt if she is offering to lease a room in a
dwelling in which she lives in, and in which no more than 4
independent families live, 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
a 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
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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
b See Fair Housing Council v Roommates: Held: The FHA
doesn't apply to the sharing of living units, and it is
not unlawful to discriminate in selecting a roommate.
As the underlying conduct is not unlawful, Roommate's
facilitation of discriminatory roommate searches does
not violate the FHA.
The right to enter into and maintain certain
intimate human relationships is secured against the
states intervention
The right to association implies a right not to
Statutes must be read to avoid constitutional
iv. Enforcement: An aggrieved person may sue landlord in federal
court; court may give an injunction, actual damages, and punitive
Preferences in Advertising
Media carrying discriminatory ads can be liable
o Ragin v NYT 2d Cir 1990: Black prospective home purchasers
and equal opportunity organization stated claim against
newspaper publisher for publishing housing advertisements
indicating racial preference, in violation of Fair Housing Act,
where they alleged long-standing pattern of publishing real
estate advertisements in which models of potential consumers
were all white while black models largely portrayed service
employees, except for exclusive use of black models for housing
in predominantly black neighborhoods, and that pattern
reflected targeting of racial groups.
o But see Housing Opportunities Made Equal v Cincinnati Enquirer
6th Cir 1991: Aggregate effect of newspaper's publishing
multiple advertisements by unrelated realtors which featured
only white models did not violate Fair Housing Act, especially
where each individual advertisement was legal.
LL expressing preferences for a certain type of tenant can violate Title
o Jancik v HUD 7th Cir 1995: rental advertisement for mature
person discriminated against families with children
o Holmgren v Little Village Community Reporter ND Ill 1971:
newspaper advertisements which evinced preference on part of
sellers and landlords to have purchasers and tenants who spoke
certain languages constituted indication of preference for
persons of certain national origins, or at least intention to make
such preference; thus such ads were unlawful despite contention

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that the purpose of language requirement was to foster
communication and understanding between the parties.
The Act at Work
Property owners association is liable if it blocks minority purchase of a
unit by exercising right of first refusal
o Phillips v Hunter Trails Community Assn 7th Cir 1982
LL cannot use quotas in waiting lists to maintain racial balance or
prevent white flight
o US v Starrett City Associates 2d Cir 1988: court of appeals held
quotas illegal, refusing to treat them as valid affirmative action
plans because the use of racial distinctions was not designed as
a temporary measure to achieve a defined goal
apt. sought to maintain racial balance/integration via
struck down by court
LL may violate FHA through policies having discriminatory effects even
though they involve no discriminatory actions
o Significant discriminatory effect of zoning decisions violates FHA
Metro Housing Devel Corp v Village of Arlington Heights 7th Cir
o If established that race played some part in refusal to deal
violation of the act Moore v Townsend 7th Cir 1975
o Steering to certain apts. In a complex based on race violates the
act b/c it denies access to equal housing opportunities US v
Mitchell 5th Cir 1986
o FHA prohibits direct discrimination as well as practices w/
racially discouraging effects, and steering evidences an intent to
influence the choice of the renter on an impermissible racial
basis US v Henshaw Bros ED Va 1974
FHA prohibits discrimination in the extension of credit in real-estate
transactions 3605 and in membership in/access to real estate brokers
organizations and MLS services 3606

Discrimination Based on Race

A 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 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 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

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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 reversed because 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.

Discrimination against the handicapped


Hill v. Community of Damien of Molokai: AIDS: Handicap. Subdivision

with covenants. Non-profit 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:


Discriminatory intent: They didn't object until they

found out that it was a home for AIDS victims
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.
Reasonable accommodation: It would have been a
reasonable accommodation simply to not enforce the
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What happens if you try to prevent a sale to a group home?

The Act applies to a buyer who purchases a property with the intention
of preventing the purchase by an entity planning to use the property as
a group home for members protected under the act
o Step-by-Step Inc v Lazarus PA 1997
Judgment obtained against neighbors who filed suit to intentionally
block sale of property for use as a home for mentally retarded children
o US v Wagner ND Tex 1996
A bank violates FHA by financing a discriminatory purchase
Bank violated the FHA when it financed the purchase of a property with
the intention of aiding the purchasers in keeping the home from being
purchased by other buyers who were associated with mentally ill
persons (US v Hughes, D.C. Neb 1994)
What is a handicap under the FHA?
3602(h): a physical or mental impairment which substantially limits
one or more of a persons major life activities
o recovering alcoholics are covered: City of Edmonds v Oxford
House, 1995)
o so are drug addicts (US v Southern Management Corp 4th Cir
battered women/at risk children do not constitute handicapped persons
o Parkwood Assn v Capital Health care Investors NC Ct App 1999:
enforcing the covenant did not limit the availability of housing
on the basis of handicap
Zoning Interfering with Location of Group Homes Violates the FHA
Zoning limiting the number of unrelated persons who can live together
are not exempt from the Act as reasonablerestrictions regarding the
maximum number of occupants permitted to occupy a dwelling and
discriminate against group homes for the handicapped (City of
Edmonds v Oxford house, 1995)
o Refusal by township to make reasonable accommodations in
zoning variances was discriminatory against group homes for
the disabled (Hovsons v Township of Brick 3d Cir 1996)
Reasonable accommodation provisions requires municipalities to
change/waive/make exceptions in zoning rules to give those with
disabilities the same opportunities as those without (Horizon House
Development Services v Township of Upper Southampton 3d Cir 1993)

Discrimination on basis of familial status/age

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

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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.
3) Actual damages, punitive damages and injunctive relief are
available to the Simovits and Hope, but not emotional distress
o Simovits have not shown a causal connection between their
alleged injuries and the associations conduct

Old-person exemption:
(2) As used in this section, housing for older persons means housing
(A) provided under any State or Federal program that the Secretary
determines is specifically designed and operated to assist elderly
persons (as defined in the State or Federal program); or
(B) intended for, and solely occupied by, persons 62 years of
age or older; or
(C) intended and operated for occupancy by persons 55 years of age or
older, and
(i) at least 80 percent of the occupied units are occupied by
at least one person who is 55 years of age or older; Simovits
couldnt show
(ii) the housing facility or community publishes and adheres
to policies and procedures that demonstrate the intent required
under this subparagraph; and Simovits couldnt show
(iii) the housing facility or community complies with rules
issued by the Secretary for verification of occupancy, which shall

(I) provide for verification by reliable surveys and

affidavits; and
(II) include examples of the types of policies and
procedures relevant to a determination of compliance
with the requirement of clause (ii). Such surveys and
affidavits shall be admissible in administrative and judicial
proceedings for the purposes of such verification.

1st Amendment dimensions

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

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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.
o raises ?: can you discriminate against unmarried couples in
Fed statute: no prohibition on disc. for marital status
But state statutes often cover marital status
State investigations of violations for free speech only can violate
the law
See Julie Waltz First Amendment Policy (Cal Dept of Fair Empl &
o Prohibits the department from investigating citizens for housing
discrimination solely on the basis of free speech activity,
including speaking at public meetings, and writing, distributing
and displaying signs or newspaper articles critical of public
housing projects, even if they appear to advocate discriminatory
Distinction between this ladys commenting and one actually doing the
Can we deny housing based on a criminal record?
CA Statute allows denial of housing to someone who poses a direct
threat to safety

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Public Nuisance
Rest Torts 2d 821B: Public Nuisance
1) A public nuisance is an unreasonable interference with a right
common to the general public.
2) Circumstances that may sustain a holding that an interference with
a public right is unreasonable include the following:
o (a) Whether the conduct involves a significant interference
with the public health, the public safety, the public
peace, the public comfort or the public convenience, or
o (b) whether the conduct is proscribed by a statute,
ordinance or administrative regulation, or
o (c) whether the conduct is of a continuing nature or has
produced a permanent or long-lasting effect, and, as the
actor knows or has reason to know, has a significant effect upon
the public right.
Rest Torts 2d 821C: Who Can Recover for Public Nuisance
1) In order to recover damages in an individual action for a public
nuisance, one must have suffered harm of a kind different from
that suffered by other members of the public exercising the right
common to the general public that was the subject of interference.
(2) In order to maintain a proceeding to enjoin to abate a public
nuisance, one must
o (a) have the right to recover damages, as indicated in
Subsection (1), or
o (b) have authority as a public official or public agency to
represent the state or a political subdivision in the matter, or
o (c) have standing to sue as a representative of the general
public, as a citizen in a citizen's action or as a member of a class
in a class action.
See Mark v State Dept of F&W:
Undesired nude exposure = public nuisance
Citing Blagen v Smith: Ps owned land adjacent to brothel; injunction
granted on grounds of public nuisance
o General rule: brothels = private nuisance if it renders the
neighbors premises unfit for comfortable or respectable
occupation and enjoyment

In this case, court held public nuisance , finding the harm different
from that suffered by the public as a whole because where by reason
of the proximity of such property to the public nuisance, disgusting
scenes and sounds shock the sense of those whose property, or

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the enjoyment thereof, is affected thereby, the injury sustained is
necessarily different in kind from the public at large.

Private Nuisance
Rest Torts 2d 821D: Private Nuisance
A private nuisance is a nontrespassory invasion of another's
interest in the private use and enjoyment of land.
a. Nature of interest invaded: It is obvious from the history of the
action for private nuisance that the interests originally protected were
interests in the use and enjoyment of land, including interests in the
use and enjoyment of easements and profits. These interests continue
to be the interests that are protected by actions for private nuisance.
When there is an invasion of these interests, the plaintiff may recover
not only for harm arising from acts that affect the land itself and the
comfortable enjoyment of it, but also for harm to members of his
family and to his chattels.
Rest Torts 2d 821E: Who Can Recover for Private Nuisance
For a private nuisance there is liability only to those who have property
rights and privileges in respect to the use and enjoyment of the land
affected, including
o (a) possessors of the land,
o (b) owners of easements and profits in the land, and
o (c) owners of nonpossessory estates in the land that are
detrimentally affected by interferences with its use and
Rest Torts 2d 821F: Significant Harm
There is liability for a nuisance only to those to whom it causes
significant harm, of a kind that would be suffered by a normal person in
the community or by property in normal condition and used for a
normal purpose.
b. LiabilityDamagesInjunction. The rule stated in this Section
applies only to tort liability in an action for damages. either a
public or a private nuisance may be enjoined because harm is
threatened that would be significant if it occurred, and that would
make the nuisance actionable under the rule here stated, although no
harm has yet resulted. The recovery of damages in a tort action
is, however, limited to those who have in fact suffered
significant harm of the kind stated in this Section.
Rest Torts 2d 822: General Rule
One is subject to liability for a private nuisance if, but only if, his
conduct is a legal cause of an invasion of another's interest in the
private use and enjoyment of land, and the invasion is either
o (a) intentional (see 825) and unreasonable (see 826) or
o (b) unintentional and otherwise actionable under the
rules controlling liability for negligent or reckless

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conduct, or for abnormally dangerous conditions or
activities (SL)
Rest Torts 2d 825: Intentional Invasion
An invasion of another's interest in the use and enjoyment of land or
an interference with the public right, is intentional if the actor
o (a) acts for the purpose of causing it, or
o (b) knows that it is resulting or is substantially certain to result
from his conduct.
Rest Torts 2d 826: Unreasonableness of Intentional Invasion
An intentional invasion of another's interest in the use and enjoyment
of land is unreasonable if
o (a) the gravity of the harm outweighs the utility of the
actor's conduct, or
o (b) 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.
Rest Torts 2d 827: Gravity of Harm: Factors Involved
In determining the gravity of the harm from an intentional invasion of
another's interest in the use and enjoyment of land, the following
factors are important:
o (a) The extent of the harm involved;
o (b) the character of the harm involved;
o (c) the social value that the law attaches to the type of use or
enjoyment invaded;
o (d) the suitability of the particular use or enjoyment invaded to
the character of the locality; and
o (e) the burden on the person harmed of avoiding the harm.
Rest Torts 2d 828: Utility of Conduct Factors Involved
In determining the utility of conduct that causes an intentional invasion
of another's interest in the use and enjoyment of land, the following
factors are important:
o (a) the social value that the law attaches to the primary
purpose of the conduct;
o (b) the suitability of the conduct to the character of the
locality; and
o (c) the impracticability of preventing or avoiding the invasion.
Rest Torts 2d 831: Gravity vs Utility Conduct Unsuited to
An intentional invasion of another's interest in the use and enjoyment
of land is unreasonable if the harm is significant, and
o (a) the particular use or enjoyment interfered with is well
suited to the character of the locality; and
o (b) the actor's conduct is unsuited to the character of that
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Permanent Damages vs Injunction

Whalen rule (old NY rule): where a nuisance has been found and where
there has been substantial damage shown by the party complaining,
an injunction will be granted despite disparity in economic
See Boomer v Atlantic Cement: (new NY rule): Where neighboring
landowners sustained injury to property from dirt, smoke and vibration
emanating from defendant's cement plant, and defendant's investment
in plant was in excess of $45,000,000 and over 300 people were
employed in the plant, and it appeared that techniques to eliminate
annoying by-products of cement making were unlikely to be developed
by any research defendant could undertake within any short period,
injunction would be conditioned on payment by defendant and
acceptance by landowners of permanent damages in compensation for
servitude on the land.

Misc. Nuisances
Riparian doctrine and environmental injunction
Riparian doctrine provides an additional standard for determining
whether upstream activities constitute a nuisance
o In Whalen, the downstream farmer was entitled to receive water
undiminished in quality/quantity under the natural flow doctrine
What is a standard payment for damages?
In eminent domain cases difference between fair market value of
property before the interference occurred and its value after the
interference occurred
Spite Fence Doctrine
When a fence is erected solely for the purpose of maliciously harming
ones neighbor courts intervene and may require removal of the
Modern doctrine:
o courts utilize spite fence doctrine where rival competitors erect
fences to block visibility of competitors (motel case Sundowner
v King)
o courts use spite fence doctrine to enjoin blocking of a billboard
by a rival billboard Hullinger v Prahl)
also applies to malicious use of water resources
o failure to cap ones artesian well solely out of malicious spite of
drawing down the pressure capacity of a neighbors well is
How much does nuisance cover?

Halfway house?

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Yes if residents fears are real and reasonable, inmates are
convicted rapists and continuing alcoholics and property values
decline (AR Release Guidance Foundation v Needler, AR)
o No mere depreciation of land values caused by subjective fears
could not sustain an injunction (Nicholson v Connecticut Halfway
House, CT)
Fear of pollution?
o No fear of dioxin contamination from upstream landfills
insufficient basis for recovery on private nuisance theory (Carter
v Monsanto WV 2002)
Harboring dangerous animals?
Stockpiling weapons?
Maintaining nuclear facility with history of leaks?

Feng shui nuisance?

Pro feng shui: HK case new building disrupted neighborhoods feng
shui bank settled by hiring expert to come cure the feng shui vs.
Anti feng shui: neighbors suing HK immigrants who remove trees that
arent feng shui from neighborhoods on grounds that they provide
privacy and green the neighborhood
Injunction as favored remedy
Normally, damages is the favored remedy, not injunctive relief
But in nuisance cases especially those consisting of acts offensive to
good morals injunction is the normal and traditionally favored remedy
Enjoining prostitution and street gangs
o City of Milwaukee v Burnette 2001: permanent injunction
against prostitution activities in a certain area was held partly
valid/partly void
o People ex rel Gallo v Acuna CA 1997: upheld determination
street gang was a nuisance
1) injunction didnt violate 1st amendment associational
2) Street Terrorism Prevention statute not exclusive
means of enjoining criminal street gangs
3) conduct of gang members qualified as public nuisance
& is proper subject of injunction
Spacing Competing Uses
airport case
o Emerald Development v McNeill AR 2003: two airports fought for
same air space; govt provided existence of both airports would
create unquestionably dangerous situations resulting in mid-air
collision; Ps airport pre-dated Ds by 30 years

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Injunction upheld
Malibu View case
o Rosenblum v Shayne 2003: P sued after D began construction,
blocking Ps views in violation of covenants
Held: obstruction of a view not a nuisance

Other nuisances
Genetically modified corn
o Starlink v Aventis IL: dissemination of genetically modified corn
to farmers could support action for public and private nuisance

o Public Service Co of COLO v VanWyk: land owners had viable
claim for intentional nuisance for increase in line voltage even
though it was approved by PUC
o Martins v Interstate Power Co IA: dairy farmers could maintain
nuisance actions for stray voltage w/out accompanying
negligence claim
Cell towers
o GTE Mobilnet v Pascouet TX: 125-foot cell tower is a nuisance
o Gamecock-breeding operation enjoined Lambert v Matthews MS
o Barking dogs = public nuisance Patterson v City of Richmond VA
o Possession of live tiger a nuisance despite state permit to keep
the tiger in the neighborhood; while not loud nor smelly nor
visible, it is exotic and undomesticable animal and mere chain
link fencing wouldnt hold it back (Fairview Township v Schaefer
PA 1988)
Mandatory injunction granted
Gun Club
o Gun clubs conduct constitutes nuisance and trespass (Citizens
for a Safe Grant v Lone Oak Sportsmens Club MN 20010

Liability of Land Owners

Rest Torts 2d 838: Possessor Who Fails To Prevent Nuisance Caused
By Activity
A possessor of land upon which a third person carries on an activity
that causes a nuisance is subject to liability for the nuisance if it is
otherwise actionable, and
o (a) the possessor knows or has reason to know that the activity
is being carried on and that it is causing or will involve an
unreasonable risk of causing the nuisance, and
o (b) he consents to the activity or fails to exercise reasonable
care to prevent the nuisance.
see Fleischner v Citizens Real-Estate & Investment Co: LL who renews
lease after creation of nuisance on the premises is chargeable for
continuance of the nuisance

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Liability of Govt. in Particular

See Mark v State Dept of F&W:
State is clearly immune via sovereign immunity in action for damages
but because an injunction does not involve potential monetary
liability, it does not come within the discretionary function exception to
a public bodys liability in tort
you have pleaded sufficient facts that this discretionary function is not
being done re: injunction, but you have not pleaded sufficient facts to
show the state has a nondiscretionary duty to control the beach which
would allow damages

Nuisance as Inverse Condemnation

Issue: whether, as a matter of fact, the governmental activity has

resulted in so substantial an interference with use and enjoyment of
ones land as to amount to a taking of private property for public use;
such taking must be so aggravated as to amount to a complete ouster
or deprivation of the beneficial use of the property.
See Mark v State Dept of F&W:
o Here, the nudity has not deprived Ps of all feasible private uses
of their property (they still live on it), nor do they assert the
property has become valueless

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