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UNIT 1: ACQUISITION AND CREATION (PGS: 17-59, 69-81, 86-90)
a. Socially contingent: definition of property will vary from culture to culture and within cultures over time. b. Property is whatever thing, whether tangible or intangible, that is protected against invasion by others by the legal system of our society. c. John Locke’s Labor Theory: i. God gave the world to man in common to be used for the best advantage of life and connivance; this requires that land be appropriated from the common for beneficial use. ii. Started from the premise that every person owns himself iii. Locke claimed that you owned your labor when your labor is mixed with something not owned by anyone you own the resulting mixture. 1. EXAMPLE: A arrives on an island that has no political jurisdiction and excavates a colorful rock deeply buried in the sand. The rock turns out to be a valuable meteorite, according to Locke; A has a property right in that meteorite. ACQUISITION BY CAPTURE: You must have actual possession, or else constructive possession by inflicting a mortal wound; pursuit does not vest in title (Pierson v. Post) i. Actual Possession: usual method in acquiring a property right in a wild animal is to actually possess it dead or alive. 1. (Pierson v. Post): Involved rival claims to ownership of a dead fox. Before Post had wounded or captured the fox, Pierson intervened and killed the fox. Post did not own the fox until he had actual physical possession (occupancy). Pursuit needs to produce capture. (Page 17) a. MORTAL WOUND Approach: making possession a mere certainty (manifest intent to seize animal) b. Socially Useful Enterprise: the majority accepts that killing foxes is a socially useful enterprise (they used to be considered vermin). Dissent wants to protect pursuit as possession to encourage more hunting; so that an intruder does not gain from labor of first person. c. Other reasoning: keeps the peace, decreases litigation bc the end of the hunt is an objective measure while beginning is subjective. 1
ii. Custom: title to a wild animal is acquired with constructive
possession in accordance with custom. These rules often arise to maximize the well being of a group creating the custom, to make sure individuals do not get net benefits for themselves that impose net losses to the group as a whole. 1. Ghen v. Rich: Massachusetts whaling community used bomb lancers to kill finback whales. Each lance was distinctively marked. The whaler who lanced the whale vested best title over the person who found the whale on a beach where custom dictated that whalers marked their spears to indicate ownership. In this industry you cannot acquire immediate possession, and a first physical possession rule of ownership would eliminate the incentive to hunt finback whales and deprive the society of the benefits of fin oil and blubber. (Page 23) Custom is recognized as a basis for property right when: (1) its application is limited to those working in the industry (2) custom is recognized by the whole industry (3) requires of the first taker the only possible act of appropriation (4) is a necessary part to survival of the industry (5) works well in practice 2. Custom is bad when: (1) formulated for the benefit of the industry, but not society as a whole (2) may be dangerous to those employed in the industry (3) wasteful of a resource (the whales that floated out to see and weren’t recovered).
iii. The Importance of Policy Ends to Nature of Property 1. Law should serve human value generally property
doctrines try to serve four important values a. Reward productivity and foster efficiency b. Create simple easily enforceable rules c. Create property rules that are consistent with societal habits and customs and d. Produce fairness in terms of prevailing cultural expectations of fairness. 2. Keeble v. Hickeringill: Keeble maintains a decoy pond, which is used for trapping large quantities of ducks. Hickeringill is his neighbor and he frightened the ducks away from Keeble’s pond by shooting a shotgun nearby. The court ruled that such conduct was actionable b/c D was maliciously interfering with P’s lawful activity. The court distinguished this case from fair competition by saying that while it would be lawful for one school to lure 2
students away from another school based on superior instructions, it is another to unlawfully frighten them away. The court deduces that fair competition improves society but the D’s conduct in this case is a drag on societal improvement (fewer ducks for the table). However, in a society where killing ducks for food is regarded as inappropriate (people for example want to preserver biodiversity) D’s conduct may have been lawful. Depends on public policy that the law is meant to protect. (page 27) 3. Constructive Possession: this was passed in an effort to deter trespassers. The burden is placed on a trespasser who should know that he is on private property. a. One person’s claimed property right is almost always good, or not good, in relation to others. i. Ex: if the hunt in Pierson v. Post occurred on Post’s land, Pierson’s actual possession of the fox would give him a property right until Post trumped it Post would have the winning claim to the fox not because of prior possession but b/c Pierson was a trespasser on Post’s land. b. There is a conflict between the property rules of first possession and the owner’s right to exclude i. Society feels that it is more important to discourage trespass than to reward first possession of un-owned objects when those values collide with each other. ii. The law rarely encourages trespassing security of exclusive possession is conducive to peace and order as well as the investment the owner makes in property. iii. Even among wrongdoers prior possession prevails (A steals a fox of B’s land and then C steals the fox from A’s land. Between A and C, A would prevail) 4. Escapees and Domesticated Animals a. Wild animal escapes its un-owned, it belongs to the first possessor i. Wild animal becomes domesticated when it demonstrates a propensity to come “home” (animus revertindi)
when resources become scare we need to take externalities into account . We want to create property laws. NOW. Transaction Costs: costs of doing business (lawyer fees. When you own something you look at the long term future (this is generally beneficial) 4 . Easier to alienate property (allow the person who will value the property most to get it) c. Example: A silver fox native to Canada. Oil and Gas: Policy Considerations a. Privately Owned 1. doctrine says the hunter wins. HAROLD DEMETZ. Owner will take into account future benefits 4. b. Fugitive minerals such as oil and gas appear to be like wild animals. one person who bares all the cost as well as ownership will have to take that into account. When individuals make choices these costs are lowered b. State controls the use and distribution of property with proper political channels iii. Private owners can control 2. which will utilize property uses. Old Rule: water may be pumped under whosever land c. Individuals have incentives to act economically (internalizes externalities) 3. TOWARD A THEORY OF PROPERTY RIGHTS a. Domesticated Animals continue to belong to their prior possessor when they wander off c. Communal 1. Three Possible Ownerships i. fees to get necessary information) a. you need reasonable justification to harm you neighbors water III. not Mississippi (where it was confines by its owner/possessor) escaped and was killed by a hunter. The state and the individuals do not interfere 2. The primary functions of property rights are to create incentives to create greater internalization of externalities. ii. Will have many built in externalities. b. 5.b. courts initially apply legal doctrines similar to those of wild animals. State Owned 1.
v. Associated Press: The US Supreme court held that it was misappropriation for INS to copy AP’s news and release it before AP could (because of a time difference). and INS would just reap benefits it has not sown. Chanel: Skilled imitation of Chanel number 5 perfume is acceptable Nicholas v. International News Service v. Although both the copyrighted play and the allegedly infringed movie involved a clash of Irish and Jewish cultures. Diamond v. B/c the patent law was broadly worded. the new bacterium was none of these. White v. creation of the mind Creators have copyrights the right to own the reproduction of those creations The law of misappropriation is a branch of unfair competition that protects new ideas and tries to answer the question of when imitation is permissible and when its not b/c it will destroy incentive to create. Intangible Property Rights: i. dress and jewelry posing in front of Wheel of Fortune infringed Vanna White’s common law iv. Doris Silk Corp: The court found that a person’s property is limited to chattels that embody its inventions and other may imitate at their pleasure. (Page 51) Cheney v. vii. (Page 55) Smith v. viii. 5 . Samsung Electronics: The court decided that Samsung’s deception of a robot clad in a white wig. Many intangible property rights are created a novel is a ii. The bacterium was a product of human ingenuity. the court gave it a broad application noting that any negative consequences in protecting genetically engineered phenomena must be addressed to Congress. The bacteria in that form did not occur naturally in nature and had significant utility at breaking down oil spills at sea. vi. Universal Pictures Corp: The court here held that copyright protection did not extend to the overall theme of copyrighted work. iii.IV. there were significant differences in the nature and attitudes of the characters. ACQUISITION BY CREATION a. ix. Chakrabraty: The Supreme Court ruled that human made genetically engineered bacterium was a new “manufacture” or “composition of matter” capable of receiving patent protection under federal patent law. physical phenomena and abstract ideas are not patentable. These were stock figures that existed for many centuries. Although the law of nature. AP expended money and effort to gather news.
there must be a legal remedy for when someone interferes with that land. Jacque v. Property In ones Owner Person: i. Shack: Here. name or signature was used. State v. ii. The conflict is between the inefficiencies produced by a monopoly over creation (higher prices. To what extent do you have property in your own body ii. b. likeness. The majority said Moore had no ownership b/c he never expected to retain possession of the spleen. Moore does not have a right to profit from it after he discarded the spleen. There is a conflict present between his right to his body parts (right of first of first possession) and the scientist’s right to own unique cells developed when he voluntarily discarded the spleen. Regents of the University of California: Moore’s cancerous spleen was removed and w/o his knowledge or consent a valuable cell line was developed using his unique cells. (page 87) iii. Steenberg Homes Inc: The court here upheld a landowner’s right to bar an unwanted trespasser from moving a mobile home across their land. and Moore still had claims available based on asserted breach of fiduciary duty by his medical providers. This was criticized as a classical case of overprotection b/c it did not allow an image that reminded viewers of the celebrity even though no use of her voice. The court said that people have the right to exclusive enjoyment from any purpose. less accessibility to a desired goods) and both the sense of unfairness of allowing copycats to reap what they have not sown and the fear that w/o protection creators will not create. Moore was not allowed to share in the financial gain attributed to the cells in his spleen. 1. The right of possession allows you to exclude others from your possession. the court held that a landowner had not right to bar a poverty agency worker and a legal services lawyer from his farm where they sought to visit an immigrant worker who was an employee and tenant of that farm. which does not invade the rights of another person. The California Supreme Court ruled that there was no action for conversion (a tort that is the wrongful ownership of property rights over the personal property of another). (page 69) c.right of publicity. The landowner’s 6 . The Right to Exclude/Include: i. Moore v. moral issues involved here are left to the legislature. The court refused conversion b/c a claim like this would chill medical research. Since its important to protect people from trespassers on their land.
captures a wild animal on the land of 0. 2. After some time he fox is killed by D in a pine thicket 15 miles away from Ps ranch. O O will win. 3. reward honest finders. T1 T has more rights than T1 (T1 is a trespasser on T’s land) and we will protect the person who has the better relative title to the land. a hunter is licensed to shoot deer on the land. (a) F vs. P keeps them confined in a floored pen with planks five feet long. a landowner. F has an established heard of deer. Finders laws attempt to restore property to the true owner. but the social value disutility of doing so may limit this right. Then T1 trespasses on T’s land and takes the animal away. O had constructive possession. deer roam in open government grazing land during the day. (Page 88) d. P imports two silver gray foxes (M and F) from Canada for breeding purposes on her Mississippi Ranch. The natural habitat of the animals is north central US and Canada. Courts would side with F. b/c the deer are native to the area and have a habit of returning home therefore it is the responsibility of the hunter to know whose deer they are. Problems: The Rule of Capture and Wild Animals 1. a trespasser. (a) T vs. The Right to Destroy: generally you have the right to destroy your own property. deliver the reasonable expectations of the landowner and discourage trespassers and other wrongdoers. T has no rights to the animal. and they are sufficiently tame and domesticated and return to a shelter on F’s land at night. (b) T vs. and carries it off to her land where she confines it in a cage. The male gets out and P sets a trap to recapture him but cant. The foxes are wild and once they escape they will not return home on their own. Finders Keepers? When property is lost. e.right to exclude ended when the tenants need for accessible access by visitors began. P learns of this and sues for the hide. Hunter can say he does not know to whom the deer belong to because they are not contained or branded. and shoots one of F’s deer during the hunting season. Rights are relative. 7 . H. H F established a heard of deer by creation and her deer are domesticated enough to return to her property on their own. abandoned and then is found by another a problem of relative title ensues. T.
the true owner is FOREVER BARRED from removing the adverse possessor. 158-166. Expiration of the Statutes of Limitations: 1. Statutory requirement virtually all legal actions must be brought within a specified period of time. b/c they own wild animals and may regulate their takings. For P. F is a farmer who is bothered by wild geese migrating on his land and shoots them in violation of the fish and game laws. 3. 4. 2. F sues the government (b) the government wins again. the animal was back in the wild. The adverse possession must take place for a specified period of time. UNIT 2: Adverse Possession & Gifts (PGS: 112-124. 1. There are common law elements that have to be proven concerning the nature in which the land was possessed. P prevails the animals were confined. Definition: If a person wrongfully owns land for a long enough time and in a certain manner. he found him in the wild and put time and energy into killing him. 2. they can not be responsible for every wild animal. Sleeping Theory: Slothful owners who ignore people using their land in brazen violation of legal right deserve to be penalized. In Re Cohen) 1. The government confiscates the carcouses and F sues for their return. ii. there was no more dominion and control. (a) The government wins. then the true owner of the land may be barred from recovery possession by a statute of limitations. 4b. For D. 157-158. Rationales for Adverse Possession i. b. 129-151. B/C there is no other owner the adverse possessor can take adverse title to the land and can obtain a judgment to that effect. Adverse Possession a. Adverse possession: If a true owner of land fails to start legal proceedings to remove a person who has adversely possessed land within the period of statute of limitations. 8 . i.(a) P vs. When the geese return the next day. D P’s animals are imported and rare and someone with knowledge would know that they are not naturally present on that land. The adverse possessor acquires whatever title to the land that the original owner had.
Boundary Disputes: Some jurisdictions hold that encroachments by one neighbor onto the land of another are not open and notorious if the encroachment is in a small area and is not clearly and self evidently an encroachment. Example: An adverse possessor of fenced pasture would possess openly and notoriously if kept horses or cattle in that pasture. Stability Theory: Adverse possession enables disputes about land to be cleared by delivering title to the person who has occupied the land as if they were the owner for a long time w/o objection. Open and notorious constitutes notice to the owner that his rights are being violated. (The idea is that the true owner would know the occupation if he visited the property) 2. The possessor must take actual. c. 3. Adverse possession must be readily visible to any inspector of the property. Concurrent Ownership: a group of people adversely occupying may acquire a shared title by adverse possession ii. memories fade. By failing to bring a timely action to recover possession they create a problem b/c its difficult to adjudicate these claims (witnesses die. physical possession of the owners land the owners cause of action accrues at that moment and the clock on the limitations period starts to run at the moment of actual possession a. and documents disappear) ii. An adverse possessor of an undeveloped land must do something to mark his control 5. Actual and Exclusive Possession: 1. 1. iii. 4. Adverse possessor takes whatever title the owner had. even if someone else owns the land. After a long enough time the adverse possessor has earned some right in that land. 6. a. Earning Theory: People who use land productively and beneficially for a long period of time should be rewarded. Or in an urban setting if a person notoriously moves in and comes and goes as he pleases.1. so if the true owner had title to subsurface minerals the adverse possessor would as well. Open and Notorious Possession: 1. Doctrines to Resolve Boundary Disputes 9 . Elements of Adverse Possession i.
continuous. However the court said there must be actual knowledge not just constructive knowledge of the adverse possession.i. Agreed boundaries: If there are uncertainties between neighbors as to the actual boundary line. uninterrupted. iii. an oral agreement is enforceable to settle the matter if the neighbor accepts the boundary for a long period of time. it does not matter if the matter in the entry and possession. This is called hostility but does not mean with malice or ill will just means that there can not be permission 3. if they entered under a good faith mistaken belief) or Connecticut (which says that the act of entry and possession is an assertion of title and denial of that title to others). Acquiescence: Long periods even though they are shorter than the statute of limitations is evidence of an agreement between the parties to fix the boundary lines. The case was remanded to determine if there was actual knowledge of the intrusion. Estoppel: This comes into play when one neighbor makes representations to the other about the location of a boundary line and the other neighbor changes their position in reliance on the other representations or conduct. visible and notorious and maintained for the required time. The court found that the result is the same whether it was caused by mistake or intent. P filed a complaint seeking an injunction and alleged trespass. Hostility or Adverse claim of Right: 1. ii. The court looked at two doctrines: Maine (says that possessor has to enter the land with intent and hostility as an intentional wrongdoer otherwise they are not an adverse possessor. The court found that if entry and possession is exclusive. An adverse possessor must occupy the land w/o consent of the owner and with the intention of staying there 2. 10 . This court decided that intentional hostility was not required. iii. Gorski: D made some adjustments to their property that were an encroachment on the land of P. The adverse possessor could still claim title to it. Manillo v.
b. intentionally gives up possession. Objective: state of mind is irrelevant instead courts focus on i. v. Must occupy the property continually as would a reasonable and average true owner of the property. The court found that since this home was a summer occupancy house and all the other homes around there had also used their properties predominately in the summer months this constituted continuous use. Kunto countered that the statute of limitations period had expired. sought to eject him. This case is unique b/c D is asking for an entirely different area than they own. Lutz: P sues to remove D from lots 19-22 which he owns. Kunto: Kunto occupied a summer residence under color of title (a defective deed). the record owner. Continuous Possession: An adverse possessor must occupy continuously w/o interruption during the limitations period. Howard claimed the Kunto did not occupy the property continuously b/c he was only there in the summers. “A reasonable property owner could reasonably only use the property in the summer months and at no other times.4. Howard v. 1. Howard. Does the Possessor claim a right to stay? a. Whether the occupier’s acts and statements objectively appear to be claims of ownership. The key is to decide what normal use of the property is and if the adverse possessor makes that use then they have occupied the property continuously. with no intent of returning continuity is destroyed. Lutz sued VV claiming that while he did not own lots 19-22 he did have a right to access them 11 . Claim of Title: Open to dispute 1. 2. Lack of permission ii. a later return triggers a new cause of action and a new statutes of limitations. If the possessor ever abandons the property. 3. Subjective: Aggressive Trespass: Few odd cases require the occupier to know the property is not his own but to intend to claim it nevertheless c. Van Valkenburgh v. Subjective Test: adverse possessor must have a genuine good faith belief that he/she owns the unoccupied property. (Did you act like a true owner would act) iv.
Signature of the seller ii. In a prior lawsuit D admitted that P owned the land. Official legal description of the property iii. In order to satisfy you need i. the course of ejectment goes along with ownership. these were not found to show substantial improvements. The basic elements of adverse possession are consistent except for the statute of limitations. Privity of Estates: This requires that property be voluntarily sold 4. There were a garden and a shed done by D. The sales price 1. 5. thus P’s occupation of the land was not under a claim of title. The new title cannot be any better or greater in scope than the old one. Statute of Frauds: real property can only be transferred in writing adverse possession is the only exception to that a. Equitable Estoppel: If one neighbor does or says things that cause the other neighbor substantially to rely on his detriment on the first neighbors actions. Tacking: Tacking follows automatically on the owner’s side. 6. the former owner has not transferred his interests.and won then P sued Lutz to have him removed. Adverse possessors acquire a new title. 2. there is no consensus about what claim of title means. The law instead has stripped the former owner of title and created a new one in the adverse possessor. Exceptions a. vi. in this case there was no enclosure so D must show the land was cultivated and improved to satisfy the statute. Disabilities: statutes of limitation typically provide for tolling (suspension) of the limitations time clock if the owner is disabled 12 . which varies between jurisdictions. Promissory Estoppel (acting in reliance on an oral promise to convey property which was never conveyed and you acted to your detriment on reliance) 3. vii. Under the statute in this jurisdiction actual possession must be shown. Adverse Possession b. the first neighbor is estopped from denying his actions or statements. Once the statute of limitations has started to run. However.
E possesses only 50 acres actually. This does not matter b/c Hazel was not disabled at the time that the action accrued. c. Example: E enters Blackacre. The cause of action will be time barred in 1991. 5.from bringing an action to recover possession at the time the cause of action accrues. Insanity or other unsound mind: 2. so long as the action is commenced with ten years after the disability” a. then you have a color of title issue. i. An adverse possessor who enters under a color of title is deemed to possess all of the property that is described in the deed as long as it physically shares a common border and owned by the person against whom actual entry was made. The condition of being a minor 4. B’s guardian could bring suit if she wants to protect the interests of B. she is however considered to constructively possess the entire 100 acres b/c she 13 . a. But Beth will only be 11 years old in 1991. 1. a 100-acre farm. b. Imprisonment 3. he has until 2005 to file suit to recover possession. If you die than that’s the termination period of the disability and the person who takes the property has ten years from that time. B enters Blackacre owned by J in 1970 and in 1971 J is imprisoned for 25 year. Color of Title: If you have a written instrument that is defective in some way. If owner is imprisoned when possessor enters in 1970 and released in 1995. 2. In 1982 H dies and leaved Blackacre to B who is 2 years old. Beth succeeds H’s cause of action. of unsound mind. and you think you own the whole property but you do not. such a person may bring such action after the expiration of 21 years from accrual of the cause of action. but if the person is entitled to bring such action is imprisoned. A enters Blackacre owned by H in 1970. under a color of title. Jill’s right to bring suit expires in 1991. She was not disabled when the cause of action accrued. Example: A statute of limitations on actions to recover possession of land provides that such an action must begin “within 21 years after the cause of action accrues. or a minor at the time the action accrues. H is a free adult of sound mind.
The actions of the complaining party are looked at instead of the actions of the adverse possessor. Quiet Title: A judge says that you have met the requirements for adverse possession and you get a judicial decree. B eventually enters and occupied 50 acres of Blackacre for the limitations period. ii. b. Title to personal property can also be acquired with adverse possession even though adverse possession was designed for REAL property. O’Keefe v. c. The answer depended on whether the possessor’s exhibition of the painting in his own home was sufficient for open and notorious possession. The test should shift to determine if the owner of the chattel acted with due diligence in pursuing his/her personal property. Example: H gives B a deed for Blackacre. Courts Reasoning: Popular doctrine of adverse possession is less applicable to such items as art. the famous artist. b. the adjacent 70-acre property next to it. visible and exclusive possession of paintings. Snyder: P. had a painting that was stolen. and White. Adverse possessors w/o color of title acquire only the land. 14 . D argued that his successor in interest had acquired title to the paining by ADVERSE possession. 3. Discovery Rule: The limitations period for recovery of personal property starts to run at the earlier of (1) when the loss occurs (unless there is fraud or concealment (2) when the owner first discovers. T is an absent owner. B does not know that T owns White. It is very difficult to show a hostile. The burden of proof was placed on the party who was the one bringing forth the action. c. Years later that same painting appeared in an art gallery.has been there for the whole limitations period. iii. This case overruled established precedent. or through reasonable effort should discover. which says you are the legal owner of the property. Old Rule: Adverse possession and the requirement was open and notorious possession. She will acquire title to all of Blackacre. i. B will acquire title to all of Blackacre but not to any portion of White b/c constructive possession is never as good as actual possession. ii. Adverse Possession of Chattels a. The principle of adverse possession is not well suited to personal property b/c its difficult to make possession of personal property open and notorious possession. the cause of action (including the identity of the possessor. which they have actually possessed physically for the limitations period. a 100-acre farm.
4. then it is not a gift causa mortis. Causa Mortis: in contemplation of impending death 1. ii. iv. regardless of any impending death. “Actions speak louder than words” actual intent is better evidenced by actual physical delivery. Evidence on this element is usually circumstantial. In causa mortis gifts. b. Intent is subjective but delivery is actually objective 15 . iii. ii. v. 2. For a gift to occur the donor must transfer title. 3. b/c the gift is a likely substitute for the will. Intent i. Revocable if the donor recovers from the illness or threat causing the donor to make the gift in contemplation of death OR if the owner dies of some other cause that des not promote the gift. If the donor intends to make the gift irrevocable. Made with no knowledge or threat of impending death 2. Gifts a. instead it is considered a gift inter vivos. Made with knowledge or under threat of immediate death and motivated by those facts. Delivery is thought to perform three valid functions: 1. General Rule: the gift must be delivered to the recipient in order for the gift to be complete. the donor’s intention is presumed to be to make the gift only b/c of impending death. c. unless there is a deed generated or some other writing that evidences the donor’s intent. i. Gift: a voluntary transfer of property for no consideration. iii. The best form is actual delivery: actual physical possession however when that cannot be accomplished b/c delivery is impractical and impossible then delivery can be symbolic or constructive. These gifts are irrevocable ii. Delivery i. To make a gift of personal property the donor must transfer possession (hand over the property) to the done with the intention that the done receives the gift. 2. These types of gifts are viewed with skepticism by the courts. If the donor’s intent is to merely transfer possession than no gift has been accomplished. Inter vivos: gifts given during life 1.
Delivery of property is also presumptive evidence of acceptance by the done. The issue is that after giving the gift the donor retained control of the gift. The court reasoned that a valid gift when death is impending must be made by a donor who intends 16 . Rationale: The court said that P’s intention is clearly evidenced that the written instrument should be a gift. thus the gift is valid and should be upheld. Constructive Delivery: 1. vi. 2. a. Rule: A gift that is evidenced by a written instrument executed by the donor is valid without manual delivery of property. b. a. 1. The note was given in the presence of the entire family but the donor died before the gift was collected on. b. Jack gives Julia all the keys to the household furniture and says that he intends for her to have everything in the house. Delivery of the keys constitute constructive delivery of the furniture b/c it is impractical to make physical delivery of it under such circumstances. In Re Cohn: P received a written instrument of shares of stock on her birthday from her husband who was the owner of the stock. However. iv. When there is no physical delivery then the question becomes “What did the donor INTEND by his/her actions” v. vii. When actual delivery is possible but impractical. Symbolic Delivery: when actual delivery is impossible or impractical then delivery can be accomplished by delivering some object that is symbolic of possession. delivery of some object that is the means of obtaining possession of the property constitutes CONSTRUCTIVE DELIVERY. Rule: Symbolic delivery and constructive delivery are only allowed when it’s impossible or impractical to deliver something actually. delivery of the keys do not evidence constructive delivery of a life insurance policy that is locked in a bureau drawer. Delivery can be accomplished by a deed of gift or some writing under seal. b/c it is not impractical to deliver tangible evidence of the insurance policy itself. Newman v. The court found that in this case there was no possibility of fraud or imposition and not doubt concerning the intention of the donor.3. Bost: On his deathbed.
A entered into the back 40 acres under color of an invalid deed from Z (who had no claim to the land) for the entire 100 acres. In 1990. O owns and has been in possession of a 100-acre farm since 1975. A brings suit to evict O from the farm. In this case it is not clear whether the decedent intended to give only the bureau that he pointed to or the contents inside as well. If the delivery is to the donor’s agent then there is no delivery b/c it is as if the donor delivered the gift to himself. A donee’s delay in rejecting unwanted gifts also endangers the donee’s ability to claim that there was no acceptance. ii. and thus INVALID. Preferred (Modern View): the gift is complete upon delivery to the donee’s agent. i. ii. regardless of the condition attached.to make the gift and then actually makes it. Acceptance: A gift is not complete until it has been accepted by the donee. 3. Special Problems: a. 17 . Intent is an issue for the triar of fact b/c it is a factual issues not a legal one. Delivery on Death: If the donor delivers the property to a 3rd party (even a conceded agent of the donee) there may be no gift. The donee’s rejection of delivery can be rejection of the gift. Problems: Color of Title/Constructive Adverse Possession (pg. The condition that is attached (death) to ultimate delivery is sometimes seen as an attempt is sometimes seen as an attempt to avoid the formal requirements of a will. Since the entry A has occupied and improved the back 40 acres in the usual manner for the period required by the statute of limitations. There is a problem when the donor delivers the property to his attorney in order to give to a donee and the courts are split on this issue. d. claiming constructive adverse possession. 130) 1. Agents: When the donor delivers the property to an agent of the donee then delivery is complete. b. i.
three feet beyond A’s boundary line. (a) A vs. Three years later A. leaves and B enters into possession. Based on the statute of limitations there can be no oral agreements. Y. (B) A has a claim against X for this property b/c X has an invalid deed. O can also not sue Z. but A does have a claim against Z. 2. In 2003 B tells A “Get out of here. (b) Suppose that in 1975 O took to the farm under an invalid deed and has been in possession for a period sufficient to satisfy the statute of limitations. are owned by X and Y respectively. 1 and 2. A thereafter acts as the owner of all the land on her side of the fence for the statutory period. the fence is actually located on B’s lot. X. you are the owner regardless if its adverse possession or proper title.” A feels threatened. In 2006 who owns Blackacre? 18 . O be different? O has adversely possessed the property and once you are the owner. I am taking over. B tells A and A to avoid hassles tears down her fence and erects one on the true boundary line. However. The lots are conveyed by an invalid deed to from Z to A. B has a survey run that reveals the mistake. (a) A sues X and Y to quiet title to Lots 1 and 2 A vs. which means she has been the owner and still is the owner. Two contiguous lots. Problems: Boundary Disputes (page 134) 3. A and B own adjacent lots. who enters Lot 1 and occupies it in the manner for the period that is required by the statute of limitations. A will win b/c there is valid adverse possession and A vs. B Once the statute of limitations has run. Y wins b/c Y does not have any constructive notice that A wants to adversely possess the land. A erects a fence on what she assumes mistakenly to be a true boundary line. Would A vs. but not the front 60 acres. A never gave up ownership of the property.(a) A vs. In 1996 A enters adversely on Blackacre owned by O. Thus. As consequences of these actions A acquires title by adverse possession and after the statute has run. talks to an attorney. A can get back the back 40 acres by adverse possession. A is the true owner of the three feet of property. changes her mind and sues B to eject him from the three feet. Problems: Tacking (page 141) 1. O O has better relative title he is the true owner of 60 acres. O had not notice that A had intended to possess the front 60 acres.
O dies leaving a will that devises Blackacre to B for life.(a) Can O or A eject B? O owns Blackacre b/c there is no privity of estate and can eject B. Problems: Gifts (page 165) 2. just a minor. who owns it. In 2006 B dies w/o ever having owned Blackacre. there is no actual valid delivery b/c the person who has died is responsible for their agents actions. 2013 is when it would have run that is the time H could sue O for the property. would the policy constitute a valid gift? No. The age of majority is 18. O is insane in 1980. In 1990 A enters adversely upon Blackacre. owned by O. 2. If a person says that they would like to give you an insurance policy that is in their drawer and they ask one of their agents to give the insurance policy to the donee. O has no disability in 1980. 1. Bost. O dies insane and intestate in 2003 (a) O’s heir H is under no disability in 2003 In 2003 the statute of limitations will run for A who is the adverse possessor. Problems: Disabilities (page 143) O is the owner in 1980 and A enters adversely on May 1. (b) O’s heir H is six years old in 2003. The statute of limitations is 21 years. 3. there is no intent for the life insurance policy only the bureau is a valid gift in this case. 2001 is when the statute of limitations runs b/c O is under no disability. O is 5 years old in 1980. O dies intestate in 1998. In 1990 O becomes mentally ill and O dies intestate in 2005. the agent never does so is there a valid gift? Under the rule in Newman v. remainder to C. In 1991. O was under no disability at the time the action accrued. so there is no applicable disability statute. A can eject B b/c A has more rights in the property than B does. C b/c B only had a life estate not any kind of ownership. O’s heir H is two years old in 1998. (a) If the gift was a bureau that was moved into the donee’s room and in that bureau there was an insurance policy. O’s heir H is under no disability. O reached majority in 1993 so the statute of limitations runs ten years after 2001 so it would be 2003. 19 . Still 2013 not the time that H would reach majority b/c you cannot tack on disabilities. 1980. 2.
No gift until the check is actually paid b/c donor retains control and dominion of the funds.000 engagement ring. A sues O’s estate for the ring. B Before B cashes the check O dies.3. A would get the ring from O’s estate. Valid gift? No gift. promises to make a gift in the future are revocable. revoking command to the bank to pay the money. is there a valid gift? Yes. does it matter who broke it in determining who owns the ring? The ring must be returned to the donor regardless of who broke the engagement. If B says to his wife. there is a valid gift b/c the wife has dominion and control over the house. O writes a check to B on her checking account and hands it to B. O tells A to keep the ring as a gift. but B does not take the box physically. 2. If in the previous example A does not call O to tell her that she has found the ring. Problems: Gifts (page 165) 1. 5. instead a week later at dinner she shows O that she has the ring. B takes the key but the bureau stays where it is. b/c the item is not physically taken under Newman v. is there a valid gift? Yes. there has to be manual delivery. There has to be dominion and control of the house in order for there to be a valid gift. has there been a valid gift? The item is tangible and could be physically taken. 4. While visiting A. O says let me wear it until its resized. There cannot be constructive delivery. Is there a valid gift? There was intent and delivery (those two things do not have to happen simultaneously) at the time of the call the gift was made. A then proceeds to give B the key to the bureau. A tries it on and realizes that its to large for her finger. 5. If A calls in B on his deathbed and tells B that he would like her to have his bureau and his insurance policy that is in it. O owns a pearl ring. 3. 4. I give you my piano before he dies. 20 . Donor could stop payment or die. O says take the ring and keep it. A gives B a 21. Bost no valid gift has been made. The engagement is broken. A tells O she left the ring. A wants to give B jewelry box with an insurance policy in that box. once the gift is made it is irrevocable and O cannot later ask A for the ring back. Valid gift? This is a gift with a retained interest and is considered a bailee relationship where someone is keeping something for someone. O leaves dinner wearing the ring and is killed. What if O had just said at the same dinner that she promises to leave A the ring when she dies. there is clear intent and constructive delivery b/c the bureau is impracticable to move. O leaves the ring on the sink. A gives B the key. The traditional rule is that the donor cannot recover the ring if the donor is at fault.
6. O, while wearing a wristwatch, hands A signed writing which says that he gives him the wristwatch that he is wearing. Is there a valid gift? No small tangible items have to be handed over, that’s the current rule. 7. A and B are brother and sister and they own a safety deposit box. A plans for B to have everything in that safety deposit box. A gives B, 5000 dollars worth of bonds and says he wants her to have them so she puts them in the box. A clipped the coupons and collected interest on the bonds. Over the next couple of years A added 22 more bonds to the box and a diamond ring. A placed a note in the box indicating his intent for A to have everything in there. Is there a valid gift? B is only entitled to the first bonds b/c the box is a small tangible item and in order to have all contents B must have actual physical delivery.
UNIT 3: THE LAND TRANSACTION (PGS: 453-462, 472-489, 513-532, 541-592
1. Intro to Buying and Selling Real Estate (page 453-462) a. Real estate transactions are almost always EXECUTORY, meaning that
title is not transferred immediately upon signing the agreement b/c both buyers and sellers must do certain things during the time between the contracts and closing.
2. Contract of Sale (pages 472-489) a. Statute of Frauds: Unless there is some exception available, a contract for the sale of land must be in writing and must be signed by the party against whom it is sought to be enforced. i. Requirements for the Statute of Frauds 1. A binding contract can be informal as long as the key
terms are present: price, description of the property, and the parties signatures. Parol Evidence evidence extrinsic to the documents is permissible to remove ambiguities. a. Ex: A contract written on a cocktail napkin is sufficient and any other oral evidence after the written contract can be introduced to clear up any contractual ambiguities. 2. The contract does not need to consist of a single document. There can be multiple writings as long as they are consistent and embody the essential terms and are signed by the parties. a. Ex: There can be two separate notes pieced together one with the offer to sell and one with the acceptance to buy (they can be on two separate cocktail napkins). 3. If there are conditions within the sales contract regarding the buyers need to secure proper financing, they have to be spelled out carefully and precisely. 4. E-Sign Act: an electronically signed contract is as enforceable as its paper equivalent. Any electronic symbol, sound or process with intent to sign is enforceable. ii. Exceptions to the Statute of Frauds: Each of the two exceptions are equitable in nature and are only available if either party seeks specific performance of an otherwise unenforceable contract for the sale of land. 1. Part Performance: a. There must be proof of an oral contract
b. Some courts require that there is (a) payment of all
or part of the purchase price, (b) taking possession, and (c) making improvements. ***Some states require all three elements, some states only require possession. c. Reasonable Reliance: The modern trend is to require (1) proof of an oral contract AND (2) reasonable reliance on the contract (enough that it would be inequitable to deny specific performance). i. Hickey v. Green: Mrs. Green orally promised to sell Hickey a building lot for $15,000 and accepted but did not deposit a check for part of the payment. Hickey then sold his house expecting to build a new one on the lot that he purchased. The check had the signature of the buyer and not the seller, so there is a statute of frauds issue. Mrs. Green refused to complete the sale b/c she wanted to sell the lot to someone else for 16,000 and P offered that but D again refused. The court ruled that an oral promise for the transfer of land can overcome the statute of frauds if there is an oral promise, partial payment, and an act (taking possession) made in reliance of the oral agreement. Courts want to deter these types of opportunistic performances. ii. Part performance is available to both buyers and sellers. 2. Equitable Estoppel: An oral sale contract may be enforced if the seller has caused the buyer reasonably to rely significantly to his detriment upon the seller’s oral agreement to sell. This is not very different from the reasonable reliance in part performance.
b. Marketable Title
i. A title that a prudent buyer would accept, one reasonably free from doubt that there is any other rival to title or any other portion of it. ii. This is an implied condition of sale iii. A seller can deliver marketable title in two ways:
but some courts treat them as not making title unmarketable if the sale contract specifies a 24 . 1. An easement that benefits the party (utility easement) is regarded by some courts as not an encumbrance so long as the buyer before entry into the contract knows the easement. Lohmeyer did not agree to take existing violations of a covenant. b. EXCEPTIONS TO THAT RULE: a. The mere existence of a zoning law does not nor constitute an encumbrance making title unmarketable. easements or covenants) make title UNMARKETABLE. Root of Title: A deed at some distance in the past typically more than 20-40 years is a root of title and cuts off any claims of title founded on earlier instruments. but that the present and continuing violation of the ordinance sufficiently exposes Lohmeyer to the hazard of litigation to make the title unmarketable. Buyers can sometimes waive certain defects such as easements or a mortgage. 3. Defective Title: To be unmarketable a defect in the title must be substantial and likely to injure the buyer. Covenants restricting use are encumbrances. v. The lot was burdened by a covenant. Lohmeyer v. iv. The existing violation in this case made the title unmarketable. The chain of title may also have a faulty or non-existent link. Proving title by adverse possession.1. 4. Producing good record title (a recorded chain of title which shows an unbroken transfer of title from some original root of title in the past to the seller. either by a successful quiet title action or evidence to sufficient to establish that the rival claim will never be asserted. Bower: Bower and Lohmeyer entered into a written contract by which Bower agreed to sell and Lohmeyer agreed to purchase a one-story wood-frame house. The court said that the mere existence of a covenant restricting use is an encumbrance making the title unmarketable. with no recorded encumbrances such a mortgage. 2. A chain is only as good as its weakest link. a. judgment liens. General Rule: Generally any encumbrances (mortgage liens. easement or servitude) 2. which required all buildings on the lot to be two stories tall.
recover partial payments made and walk away. Default and Remedies 1. The traditional common law rule is that absent a fiduciary relationship. iii. Caveat Emptor: Buyers Beware. The seller may also rescind if the buyer breaches and sell the property to someone else. Fiduciary Relationships: If the parties were in a relationship that in which one party is dependent on and reposes a special trust in the other. Seller is OBLIGATED to disclose conditions that a. the seller has NO duty to disclose known defects in his property.particular use that is permitted by the restrictive covenants. Recession: If the seller breaches the buyer may seek to rescind. Specific Performance: Land is unique so damages are not always sufficient for a breach. Duty to Disclose Defects i. Damages are limited to recovery of money out of pocket and damages may be defined by the contracts liquidated damages provisions. 3. Are created by the seller. c. all defects had to be revealed. 2. Damages: The measure of damages is usually the benefit of the bargain but can also be the retention of the buyer’s deposit. 2. so specific performance may be sought. Stambovsky v. 1. ii. Are not likely to be discovered by a reasonably prudent person using due care. Materially impair property value. has been largely abandoned now by courts but before was upheld on the notion that a buyer should use diligence and care to examine the property for himself. Ackley: Ackley owned a home in NY and repeatedly publicized various phenomena (spectral apparitions) that had occurred in his house. c. The seller does have a duty to refrain from INTENTIONAL MISREPRESENTATION (the outright lie about a properties condition) or active concealment of a known defect. Usually the measure of damages gives the aggrieved party the difference between the contract price and the FMV of the property. Disclosure of Seller Created Conditions: 1. encouraging the reputation that ghosts haunted the house. b. P agreed to buy the house and then learned to his horror that the house was possessed by ghosts and sought to rescind the 25 . vi.
and is neither known to or within the reach of the diligent attention and observations of the parties.532) a. the words affecting the grant. 2. Ordinarily the grantee is described clearly and specifically. Ex: A deed to Diana Princess of Whales first son is sufficient. The court also found that Johnson was obligated to disclose any facts known to him or accessible only by him that materially affects the value of the property.contract. The first clause in a deed is a granting clause. No warranties are implied. 1. A latent material defect is: one that materially affects the value or desirability of the property. Also. The Deed (page 513. Warranties of Title: A seller’s warranties concerning the state of the title conveyed are expressly contained. i. 1. the consideration and the description of the property. iv. a. but a grantee can be described without reference to a specific person so long as it is sufficient to actually identify an actual person. Johnson v. which recites the parties. is known to the seller (or only accessible to the seller). Davis: The Davises purchased the house of the Johnson’s and learned within a few days that the roof leaked in and around the windows from the ceiling in and around two rooms. in the deed. The court held that caveat emptor did not apply in this case b/c defect is exclusively in the knowledge of the seller and as a matter of efficiency and good commercial practices we want the seller to disclose to the buyer something which the buyer has no other possible way to know. the haunting associated with the house also materially impaired the value of the house. 26 . Need an expression of intent 2. Because the Johnson’s said that the roof was sound even though they knew that was not they are liable for fraud. which are either unknown to the buyer or cannot be learned by a diligent search. Disclosure of Latent Material Defects: The emerging majority view today is that a seller must reveal all latent and material defects. The Davises sued to rescind the contract. 3. if at all.
Special Warranty Deed: A special warranty deed contains the same six covenants of the general warranty deed. deeds often recite the fact of consideration rather than the actual amount of consideration. v. Defects arising before the grantor’s ownership are not covered. Covenant of Quiet Enjoyment: The grantor warrants that the grantee will not be disturbed in the possession or enjoyment of the property by someone’s successful assertion of a superior title to the property. b. Covenant of Further Assurances: The grantor promises to do whatever else is reasonably necessary to perfect the conveyed title. i. 27 . iii. ii. This covenant is functionally identical to the covenant of general warranty and for that reason it is frequently omitted from general warranty deeds. 3. if it turns out to be imperfect.b. mortgages. Consideration is NOT necessary to convey land. Covenant Against Encumbrances: The grantor warrants that he will defend against lawful claims of a superior title and will compensate the grantee for any loss suffered by the successful assertion of superior title. Covenant of the Right to Convey: The grantor warrants that there are no liens. General Warranty Deed: The general warranty deed usually contains six covenants concerning title. c. DIFFERENCE: a grantor warrants against the defects of title that arose during the grantor’s time of holding title. as the agent of the grantor. or other encumbrances upon title to the property other than those specifically excepted in the deed. easements. c. The grantor only warrants that he has not created or suffered a defect to occur during his ownership period. iv. Modern Rule: most courts hold that the intended grantee has implicit authority. Each covenant is a promise that the title is absolutely free of the warranted defect regardless of whether the defect arose before or during the time the grantor had title. covenants restricting use. Traditional Rule: a deed that does not mention a name is void. Covenant of Seisen: grantor promises that he owns what he is conveying by deed. to fill in the intended grantees name at any later time. This covenant is also often dropped because it imposes a very open ended obligation on the seller of the property.
If title is totally defective. Present Covenants (Siesen. This doctrine does not extinguish parts of the sales contract that are independent of or collateral to the transfer of title.d. e. Merger Doctrine: i. Quitclaim Deed: Contains no warranties of title whatsoever. ii. The covenant is broken EVEN if the grantee knows that the grantor does not own the interest conveyed. f. Usually used in foreclosure sales. Traditional Rule: Any promises in the contract of sale with respect to title are merged into the deed once the buyer accepts the deed. If title partially fails. regardless if he is aware of the defect or not. Breach of Seisin: This covenant is broken if the grantor doesn’t own what he purports to convey. c. b. 1. Justification for Rule: buyer’s acceptance of the deed is conclusive evidence that the buyer was satisfied that the deed fully conformed to the seller’s obligations under the sale contract with respect to title. The Uniform Land Transactions Act eliminates the merger doctrine and permits all provisions of the sales contract to remain alive and enforceable for the buyer after acceptance of the deed. ONLY conveys whatever interest in the property the grantor may own. leaving the grantee with good title to an unusable parcel. Buyer can only sue for breach of the deed covenants of title and may not rely on the contract of sale’s provisions with respect to title. This doctrine is generally attack by the courts and they find a great number of provisions of the sales contract that are independent of or collateral to the transfer of title. a. Breached the moment the deed is delivered if at all 2. Right to Convey and encumbrances): 1. the grantee is entitled to a return of his purchase price but must reconvey the right of possession to the grantor. the grantee is entitled to recover that portion of the purchase price that is 28 . such as for example a seller’s promise to remove rubbish off the premises. If the owner owns no interest and the transfer also transfers nothing. Breach of Covenants of Title i. 3. 2. Grantor is not liable for breach of any covenants b/c there are NONE.
Rather than seeking a variance from the use of regulation P sued D on the COVENANT AGAINST ENCUMBERANCES. a. 2 years later D conveyed the property to Frimberger by a general warranty deed. Grantee’s knowledge of the grantor’s lack of authority to convey is not usually a defense to suit on this covenant. He constructed a bulkhead. whether or not his is aware of the limits on his authority to convey. 29 . BUT minority jurisdiction holds that grantee’s knowledge (actual or constructive) of an open and visible encumbrance prevents breach. that are unknown to the seller. In most states. Frimberger v. whether or not the grantor is aware of the encumbrance. Breach of a Right to Convey: This covenant is broken if the grantor lacks the power or authority to convey the interest (ex: grantor is a trustee who is barred from the trust from transferring title). Breach against Encumbrances: This covenant is breached if the title is encumbered at the time of the delivery of the deed. built a house. as to which no action to compel compliance has been taken at the time the deed was executed. 3. b. The measure of damages for this breach is the same as for the breach of Siesen. c. filled a portion of the marsh. and sold it to Anzellotti by quitclaim deed.equal to the value of the failed title and must reconvey his possessory right. Violations of governmental land use regulations that are not known to the seller and which have not become the subject of government enforcement is not encumbrances. The court held that latent violations of governmental land use regulations that do not appear on the land records. 4. and that have not ripened into an interest that can be recorded do NOT constitute an encumbrance. Anzellotti: DiLoreta owned a property. the grantee’s knowledge of the encumbrance does not excuse the breach. which was abutting a tidal marsh. When P sought to repair the bulkhead he learned that a significant portion of the lot was encroached unlawfully on protected wetlands.
then conveyed the property by general warranty deed to Dixon. Lober: Bost conveyed 80 acres to Brown under a general warranty deed containing no exceptions.d. The foreclosure sale was invalid so Connolly never owned the 80 acres and thus breached the covenant of Siesen given to Dixon. quiet enjoyment. the grantee has a chose in action.000 but was forced to accept only 2. the claim against the grantor. Rockafellor v. and further assurances): 1. e. which is not impliedly assigned if the grantee conveys to a remote grantee. ii. The court found that Brown had not been constructively evicted b/c the mere existence of a paramount title does not constitute a breach of the covenant of quiet enjoyment. H&G sued Connolly on the covenant of Siesen he had given Dixon. Brown v. However. who in turn conveyed a special warranty deed to Hansen and Gregorson. These covenants are breached when the grantee is either actually or constructively evicted which occurs after the transfer. Constructive whenever the grantee’s possession is interfered with in any way by someone holding a superior title. A present covenant is for the benefit of the immediate grantee and that if breached when made. Gray: Connolly acquired title to 80 acres at a foreclosure sale. If the owner of the other two-thirds of the mineral rights were to start mining coal under Brown’s land then he would actually be evicted. Future Covenants (general warranty.000 b/c it was learned that Brown only owned one-third of the mineral rights. There was also no 30 . a. Actual actual dispossession from title or possession. because Dixon had conveyed by a special warranty deed he did not breach the covenant of Siesen that he gave to H&G. even though Bost only owed one-third of the mineral rights. After the statute of limitations on the present covenant of Siesen expired. Brown agreed to sell the mineral rights to Consolidated Coal for 6. Statute of limitations begins to run the moment the covenant is given and varies between 3-6 years. (LOOK AT ACTUAL CASE). f.
The grantee may not recover more than what the grantor-in-breach received for the property. 3. Loans secured by mortgages are the principle device enabling people to acquire real property. The loan is evidenced by a promissory note. 31 . b. a personal promise to repay the loan on the terms contained in the note. iv. Mortgages are usually recorded in the public land records. 4. The mortgage is a security agreement between the parties. which gives the lender the right to sell the property if the borrower defaults on the loan and to apply the sale proceeds toward reduction of the loan. constructive eviction because Brown did not have to purchase the other two-thirds of the land in order to keep the property. Breach of future covenants: Future covenants are only breached when the grantee’s possession has been disturbed by someone holding superior title. This can occur when the statute of limitations has and no longer allows a claim for present covenants. there is no estate created with which the covenant may run. ii. which gives notice of the lender’s security interest in the property. but imposes no obligation to defend against spurious claims of paramount title. iii. The Mortgage Transaction i. Privity of estates means that the original conveyed either title or possession and the same interest was conveyed to the remote grantee.558) a. and to apply the sale proceeds to repayment of the loan. a. The covenant of general warranty obliges the grantor to defend against lawful superior claims of title. Benefit Runs with the Estate: If there is a privity of an estate between the original grantor and the remote grantee the benefit of a future covenant given to the original grantee runs with the land. 5.2. The Mortgage (page 541. If the original grantor had neither title nor possession (was a liar or fraud). The mortgage empowers a lender to sell the property in the event of the borrowers default on the loan. 4. This rule insulates wrongdoers from remote grantees.
b. Development of the Mortgage i. The mortgage began as a conveyance. Lenders would require the
borrower to convey the property to the lender in a fee simple to a condition subsequent (the property will be reconveyed when the payment is made) ii. The equity courts began to rule that the borrower had an equitable right the property any time after the due date. This equity of redemption, unlimited in time, hung as a constant cloud over the title and made the property effectively inalienable. 1. Lenders could bring suit in a court of law to foreclose the equity of redemption so that the property could be free for a new purchaser. 2. Modern Mortgage Foreclosure: the equity of redemption is extinguished, the property is ordered sold, and the sale proceeds are applied to the loan, and any access is given to the borrower. The foreclosure sale cuts off only this judicially created equity of redemption. a. Foreclosure goes to ownership; it is not the same thing as possession. b. Judicial Foreclosure: accomplished by entry of a court order, it’s a civil action and the debtor can raise the funds before the property is foreclosed typically done by a sheriff. i. There must be advertising in a foreclosure sale so that there can be as much value raised as possible. ii. Winning bidder must pay the entire amount at the end of the auction. iii. Strict Foreclosure: property can be taken upon default right away. 3. About 20 states have created a statutory right of redemption, which gives the borrower a defined period of time after the foreclosure sale in which the borrower can redeem the property from the purchaser at the foreclosure sale. a. Secured Creditors: always take priority i. Consentual relationship for a lien ii. Oversecured: a creditor that has a collateral value that is larger than a debt. iii. Undersecured: Do not have enough collateral to cover the entire debt.
iv. Interests need to be recorded so that
creditors know how much equity is tied up in liens and loans v. Banks also record interest b/c another creditor can prevail against unrecorded interest. Banks want to record so they can give constructive notice to other creditors. b. Unsecured Creditors: have a hard time getting repaid because they have to go through court. i. Could be consentual could not be
c. Types of Mortgages i. The same property may be used to secure more than one
mortgage, the first mortgage is given the first time and the second is given next in time. The second mortgagor only gets paid in the event of a foreclosure only after the first mortgage is fully satisfied. d. Title Theory: Treat the lender’s title as for security purposes only, thus making it virtually indistinguishable from a lien. In some states the mortgagee is entitled to possession, in others only entitled to possession until there is a default. Lender has an enhanced ability to recover possession after default fairly quickly. e. Lien Theory: The mortgagor is entitled to possession until foreclosure f. Sale/ Transfer by Mortgager: A mortgagor is always free to transfer his equity (interest in the property). A buyer of the mortgagor’s interest can acquire the interest subject to the mortgage or assume the mortgage. i. By taking title subject to a mortgage the buyer incurs no personal liability on the mortgage. In the event of a default the mortgagee can foreclose and sell the property but if the sale does not extinguish the debt, the lender can only go after the ORIGINAL mortgagor, except to the extent the state may prohibit deficiency judgments. ii. If a buyer assumes an existing mortgage he becomes personally liable for the mortgage loan. The mortgagee can go after both previous and new owners unless the previous owner was released.
g. Default by Mortgager i. In most states the lender has the option of a suit to collect the
debt or to foreclose and effect a sale on the property to satisfy a debt. A few states require the lender to foreclose first and sell before seeking to enforce the debt personally by obtaining a deficiency judgment. 33
1. Anti-Deficiency Judgments: There is a legislative bias in
favor of homeowners, b/c some states prohibit deficiency judgments on purchase money mortgage loans for residences. OR only to permit a deficiency judgment for the part of the debt that which exceeds a judicially determined FMV for the property. 2. Statutory Right of Redemption: permits redemption after foreclosure by paying the foreclosure sale price rather than the mortgage debt. This is a strong inducement for the mortgagee, who is often the only bidder, to bid the amount of the mortgage debt and seek to collect the remainder through a deficiency judgment. 3. Inadequate Sale Price at Foreclosure: If the sales price is less than the foreclosure price that in itself will not void the foreclosure sale. a. The usual rule is that the sales price will stand unless it is so far below FMV that it shocks the conscience. Some states even require that a lender acts in a commercially reasonable manner. b. Murphy v. Financial Development Corp: P refinanced their home in 1980 and executed a promissory note secured by a first mortgage by FDC. FDC then sold the mortgage to Colonial Deposit. In 1981 P were 7 months in arrears on their mortgage and the lender gave notice of its intent to foreclose. P came up with the mortgage payments but failed to come up with enough money to cover necessary legal costs. The lenders scheduled a foreclosure sale. At the sale the only people who were present were P, their attorney and D’s representatives. The lender made the only bid of 27,000 (which is approximately what was owed to Ps). Two days later D sold the house for 38,000. The court ruled that the lender was a fiduciary in conducting the sale and that they owed a duty of good faith and due diligence to exert commercially reasonable efforts to obtain a fair and reasonable price. The lender did not advertise or use any reasonable methods to generate interest in the property. The key is that a lender must generate a fair price.
h. Deeds of Trusts i. Used in many states as the form of a mortgage
A contract of sale for real property obligating the purchaser to pay the purchase price in installments and obligating the seller to deliver title to the buyer after the purchase price has been paid in full. Installment Sales Contracts i. The contract provided that if the buyer defaulted and failed to cure the default within ii.000 dollars. The trustee is often nominee of the lender (lawyer. iii. Bean v. permit the seller to retain payments only to the extent of the reasonable rental value of the property and perhaps give the buyer an equitable right to cure his default and resume payments. The borrower conveys the real property to a third party as trustee for the lender. iv. the court is likely to require judicial foreclosure of an installment sale contract. which is virtually identical to the procedure under a mortgage with a power of sale vested in the mortgagee. vi. The deed of trust gives the trustee the power to sell the property upon default (power of sale) and use the proceeds to pay off the debt and return any excess to the borrower. employee or affiliated corporation).ii. i. Nowadays. iii. If a buyer defaulted upon an installment contract a seller could evict the buyer and keep part if not the entire partially paid purchase price as damages. v. A power of sale in a vested trustee is relatively quick and cheap The third party trustee at the lenders request conducts the sale. iv. Walker: Buyer agreed to purchase seller’s home under an installment contract for 15. The seller retained legal title until the buyer had fully performed buyer’s default served to excuse any further performance on the seller’s part. There are two reasons for this (1) the installment sale contract is distinguishable from a mortgage (2) it is inequitable to permit a buyer to lose his equity of redemption under circumstances where an identically situated mortgagor would not. Still subject to statutory and judicial restrictions regarding notice and procedure. vi. for the limited purpose of securing repayment of the debt. v. 35 . The modern trend is to treat installment sale contracts as security devices. The contract required the buyer to pay over 15 years at a 5% interest rate on the unpaid balance in monthly installments. The original reason for an installment contract was the seller’s desire to avoid the procedural difficulties of extinguishing a mortgager’s equity of redemption. vii.
Here will appear name. What the Title Searcher Does 1. maintains a record of the transactions which affect real estate located in the country. ii. date of the grantor or grantee. in which every transaction pertaining to a particular parcel is entered in one location. i. an alphabetical record of all grantors and grantees by surname is maintained in different volumes. b. What the Recorder Does: 1. Grantor-Grantee: Most common. Recording System: a public official in each county often called the county recorder. The court did not uphold this contract. Race Acts: provides that between two grantees to the same property the earliest to record prevails. Making the record dispositive makes it unnecessary to rely on any extrinsic evidence 36 . and retain all payments that were paid. instead of chronologically by grantor and grantee. b. 5.30 days the Seller could terminate the contract. There are two indexes a. Title Assurance a. The purchaser is treated as the equitable owner and the title vested in the buyer at the moment that the contract was executed. a brief description of the property and the instrument and a citation to the precise location in the public records of a complete copy of the instrument. A title researcher is obligated to exercise reasonable diligence in performing a search. take possession. Indexes the instrument 2. Tract Index: A few jurisdictions maintain a tract index. 8 years into the contract the buyer defaulted and failed to cure the default within 30 days. it does not matter that the first person to record had notice of a prior unrecorded conveyance. Tract indexes are more common where property has been platted by map into various blocks and lots within blocks. i. There is a race to record first. placing the buyer in the same position as a mortgagor. but that record is only as complete as what is presented to the recorder for filing. ii.
1. had B recorded he would have prevailed in all jurisdictions. Then O conveys the same property to A for 100. Example: June 1st B conveys property to Jane. Jane recorded before Sally.000 and Sally does not know of the prior conveyance of the same property to Jane. Race-Notice Acts: protects a more limited class of subsequent bonafide purchasers who lack notice of the prior conveyance. C prevails in this case even if B records the deed first. On July 1st B conveys property to Sally for 100. Eliminate disputes over which of the two conveyances was delivered first. EXCEPT in a notice jurisdiction when the subsequent bonafide purchaser lacks notice. ii. ii. i. it protects on those subsequent bonafide purchasers who lack notice and who record before the prior purchaser. C lacked notice of the prior conveyance to B. This is true even if the subsequent purchaser has not recorded. C does not know about the conveyance from A to B. 37 . e. B did not record his deed.000. July 15th Jane records her deed and on July 20th Sally records her deed. Consequences of Recording: Recording provides constructive notice to the world of a conveyance. Notice Acts: A subsequent bona fide purchaser without notice of a prior unrecorded transfer prevails over the prior purchaser who has failed to record. d. who fails to record the deed. i. A does not know of the prior conveyance so she records. When is an Instrument Recorded: 1. Consequences of Not Recording: 1. On February 15th A conveys the property to C. who fails to record. Virtually anything that affects title to or an interest in real property may be recorded. 2. if he had this would have given C constructive notice. Example: On January 15th A conveys property to B. Jane prevails over Sally because even though Sally lacked notice of the conveyance to Jane. Even if a later purchaser fails to consult the record he is charged with knowledge of its contents. Example: O conveys a property to B.c. 2. iii. A will prevail in all jurisdictions. i. COMMON Law RULE: If no one has recorded then the common law principle of first in time continues to apply. who does not record. Encourage recording ii.
This was a notice statute jurisdiction. OLDER RULE: A purchaser is charged with constructive notice of a record even though there is no official index. In cases like this the recorder can only record this instrument by reference to one parcel b/c it is an unreasonable burden on the recorder to search the records to identify ALL other property owned by the grantor. was not specifically described. b. VOID against later purchasers of the grantor’s property. Omnibus or MOTHER HUBBARD CLAUSE: This is an instrument that accurately describes one parcel. she assigned her interest in the K lease to Burris who checked the public records and had obtained an abstract of title from a professional title searcher. NEWER RULE: An unindexed or improperly indexed instrument ought not to provide constructive notice. b/c a diligent searcher of the index will never locate any reference to the omnibus clause. The court held that the Mother Hubbard clause in the Owens-Tours assignment did not give constructive notice to later purchasers of Owens 38 . 3. and also includes all other land owned by the grantor in the county. Luthi v. Evans: Grace Owens owned interests in 8 oil and gas leases in Coffey County. in which Owens had an interest. She assigned her interest to International Tours her interest in those leases under an assignment that specifically described each of the seven different parcels and included a “mother hubbard” clause that assigned her interest in “all oil and gas leases in Coffey County” whether or not such leases are specifically enumerated in the assignment. other than the indexed parcel. a. c. 4 years after Tours recorded the assignment from Owens. Kansas. which will direct him to a particular instrument.2. Instrument Not Indexed: A recorder fails to index an instrument or indexes it so improperly that it cannot be found by a diligent searcher using the standard search. Neither search revealed the existence of the Mother Hubbard clause from the Owens to Tours conveyance. The Kufahl lease. b. a.
but Orr’s lawyer prepared the judgment by spelling the name Elliot. The court reasoned that idem sonans would place an unreasonable burden on title searchers given the uncertainties of this doctrine 39 . c.interest in the K lease. d. f. Jurisdictions divide over whether a misspelled name in a recorded instrument gives constructive notice. which Kansas’s recording acts did not contemplate. but if he had actual notice of Orr’s lien he would have lost. Byers prevailed. Byers: Orr obtained a judgment against Elliott. Elliott later conveyed the property subject to the judgment lien to Byers and Orr sought to foreclose his lien against the parcel acquired by Byers from Elliott. IDEM SONANS: this doctrine holds that a misspelling that sounds substantially identical to the correct name gives constructive notice. greatly increasing the time and expense of title searchers. Idem sonans is not the prevailing rule with respect to the issue of constructive notice for real estate records. The court held that idem sonans did not apply in California and thus that the recorded abstract did not give constructive notice to Orr’s lien. An abstract of the judgment listing the judgment debtor as Elliot or Eliot was recorded and indexed under those two names only. All jurisdictions agree that if the misspelling is so significant that it does not even sound like the correct name. Burris prevailed taking the K lease free from Tours interest b/c it was not reasonable to expect a title searcher to locate and read every other conveyance ever made to Owens at any time conferring an interest in an oil and gas lease in Coffey County. Issue for jurisdictions is if the misspelling that sounds like a correct name supplies constructive notice. there is no constructive notice. 4. This is accepted a lot. Misspelled Names: a. Orr v. so long as the misspelled name begins with the same letter as the correct spelling. e. This would be a monumental task. b.
Ineligible Instrument: a. d. c. those who prepare instruments for recording could more easily avoid the problem. 5. e. Smith: Caroline Massersmith and her nephew Fredrick owned land in North Dakota as equal tenants in common.in a highly multicultural society. Smith then conveyed his interests to Seale who claimed to have no notice of Fredrick’s interest in the land. Massersmith v. Majority Rule: An instrument with a defect on its face does not give constructive notice but an instrument with a hidden defect does impart constructive notice. still in possession. A subsequent purchaser will prevail unless they had actual notice of the prior conveyance or are under a duty to inquire and that inquiry would reveal the prior conveyance. Jurisdictions are split on whether constructive notice is imparted by an apparently recorded instrument that is ineligible for recording b/c of some defect not apparent from the instrument itself. Caroline conveyed her interest under a deed to Fredrick. Only then did Smith record the Caroline-Smith deed. Also. i. who did not record probably b/c the parties intended the deed to be a will substitute. The usual ineligible instrument is an unacknowledged instrument that nevertheless appears on the record through the recorders oversight. conveyed half interest in the mineral rights to Smith under a deed that Smith then took to a notary. on the same day the 40 . Caroline. Upon being assured that the signature was Carolines he affixed his notorial seal and acknowledgment. but this was void b/c was not physically present to be certain that the document that was in front of the notary was indeed the deed she signed and not some other instrument. Treated as unrecorded and thus does not give constructive notice of its contents. b. who spoke with Caroline by phone to ask whether the signature on the deed in front of the notary was hers.
Part of that value is the ability to transfer to someone else. and grants) and liens created by operation of law (judgments). even if such a taker knows of a prior unrecorded conveyance. SHELTER RULE: The protection that is given a bona fide purchaser under a recording act extends to all takers from the bona fide purchaser. Do NOT apply to interests created by operation of law. 2.Smith-Seale deed was recorded. If an instrument is invalid (forged or never delivered) recordation does not make it valid. i. Seale did not prevail. c. mortgagees. iii. Given that the defect could not have been known by anyone carefully scrutinizing the record. Recording acts only apply to conveyances (deeds. Necessary to give bona fide purchasers the full value of their purchase in reliance on the records. contracts. Notice and Race recording acts are intended to protect the bona fide purchaser of property. Race acts protect bona fide purchasers only to the extent that they are the first to record. prescriptive easements or implied easements (even though they are not recorded they are still valid and enforceable against subsequent purchasers) 3. Scope of Protection From Recording Acts: the protection that is afforded by recording statutes is DEFINED by the statute and INTERPRETED by the courts. The court held that no subsequent instrument in the chain of title passing through the secretly defective instrument is validly recorded. O then conveys to B. Bona Fide Purchaser: one who gives valuable consideration to purchase the property AND is w/o notice of a prior unrecorded conveyance. Needs to be read CAREFULLY! 1. b. Bona Fide Purchasers a. 1. Invalid Conveyance a. b. 6 weeks later Fredrick recorded his Caroline-Fredrick deed and then brought suit to quiet title in his name. such as adverse possession. Interests in Land Created by Law a. Example: O conveys to A who does not record. 41 . d.
4. 6. which will be limited to judgment creditors or lien creditors. If the act protects creditors or all persons. Notice: to be protected under a notice or a race statute. but a judgment or lien creditor has an interest in the state of the record in order to know what his priority is in respect to debtor’s property. i. B will prevail over A in all three types of jurisdictions. b. a purchaser must be w/o actual or constructive notice of any prior unrecorded interests at the time the purchaser pays the consideration. c.who is a bona fide purchaser. C is sheltered. This ONLY applies to the mortgagee who actually gives value (loan proceeds) in return for the mortgage. a creditor will receive protection. Creditors a. Depends on the language of the statute b. In a notice or a race-notice jurisdiction C’s knowledge of the A deed is irrelevant b/c he is a taker from B. The reason is b/c creditors do not generally rely on the state of the public land records in extending unsecured credit. Generally treated as bona fide purchasers either b/c the statute specifically includes them or b/c the courts have interpreted the phrase bona fide purchaser to include them. 42 . In most states a mortgagee who receives a mortgage to secure a pre-existing debt w/o some detrimental change in its position (a reduction in interest rate) has not acquired the mortgage for value and is NOT a bona fide purchaser. a bona fide purchaser. Mortgagees a. 5. c. If the recording act only protects purchasers. a creditor is only protected if he should purchase the owners interest at a judicial sale resulting from a successful lawsuit to collect the debt. who does record. B then conveys to C who knows about the O-A conveyance.
and evidence beyond the record is necessary to prove actual notice. Actual Notice: real actual knowledge of the prior unrecorded transactions. The court decided that Hughes prevailed over the board of education b/c the conveyance from D&W to the board of education was outside the chain of title and did not impart constructive notice. Constructive Notice i. Board of EDU v. b. 3. Hughes: In Minnesota. Record Notice: the entire world. Even though the deed from D&W to the board of education was recorded first. Hoerger conveyed a lot to D&W who did not record. If an instrument is VALIDLY recorded then every subsequent grantee has constructive notice of it and so cannot be a bona fide purchaser. D&W then conveyed the lot to the board of education who did record. At the time that Hughes purchased from Hoerger. WILD DEEDS: (outside chain of title) If a complete stranger records a conveyance (wild deed). it would appear to be a deed made by a complete stranger to the chain of title. 1. which is a race notice state. including a subsequent grantee is charged with constructive notice of the contents of the record. who lacked notice of the conveyance from Hoerger to D&W. Then Hoerger conveyed the same lot to Hughes. 2. B/c the Hoerger to D&W link 43 .a. a diligent title search would reveal Hoerger to be the record owner. Hughes recorded. the conveyance does not give constructive notice b/c it is not within a chain of title.
33 acres. after Kosa had shown Rogge a survey done by Price Walker that stated the tract consisted of 18.000 per acre if the tract was in fact smaller in area. Does not usually insure against claims or interests not part of the record. At the time the policy was issued the company had records of the prior deed. identical to those who found in the recorder’s office. ii. The deed referred to the Price Walker survey but did not state the acreage. Coverage: scope of coverage is determined by the contract of insurance. Rogge agreed to purchase the tract from Kosa. by which the insurer warrants that title is as stated in the policy. b. breach of which is actionable in tort. Chelsea Title and Guaranty CO: Kosa acquired a parcel of land from Aiello under a deed that stated the local acreage of the tract was 12. The policy is a personal contract between the insurer and the person who buys the policy. 6. Chelsea did so by issuing an insurance policy. Title Insurance a. 1. i. 1. Title insurers perform their own examination of the public land records in order to issue an insurance policy. Maintain their own duplicate set of records. Inquiry Notice: In most states a subsequent purchaser has an obligation to make reasonable inquiries and is charged with knowledge of what those reasonable inquires would reveal. They employ lawyers to search the public records OR 2.in the chain was not recorded a diligent searcher would never find the D&W-Board conveyance. iii. The issuance of an insurance policy to a person. which 44 . Usually just that the policy is a good record title.486 acres based on a survey done. Walker Rogge v. The Kosa-Rogge contract stated that the acreage was 19 acres more or less stipulated that the purchase price was reduced by $16. Basics i. iv. Most common form of title assurance in US ii. Duty to Disclose Defects in Title: courts are beginning to impose on title insurers a duty to disclose anything they know about the parcel in question that is material oar important. usually either a mortgage lender or a purchaser of property. Rogge hired D to examine and insure title.
B can ask the court to put the money in an escrow contingency in case there is a suit against him and he loses. B is out of luck if the property went down in FMV but if the sale was less b/c of an inherent risk B can sue A for the difference.000. By quitclaim deed B conveys Whiteacre to C for 12. The court found that the contract exception was clear enough o exempt D from contractual liability for an acreage shortfall that an accurate survey would reveal. B conveys Blackacre to C for 15. (c) The deed from B to C is a general warranty deed.000.000. (b) The deed from B to C is a general warranty deed. O the true owner ousts D at a time when the land is worth $24. (a) The deed from B to C is a quitclaim deed. How much can B recover from A? One approach is that B can recover the actual loss of 15. Problems: THE DEED (pg.000. 2. By general warranty deed A conveys Whiteacre to B for 15.000. 45 . HOWEVER. 531) 1.000 and sold the property for 15. A is potentially liable to B and D but the maximum amount of liability is 15. when made and the chose in action is not assigned to subsequent grantees.000. O the true owner ousts C. Rogge sued for damages on the title insurance policy.000.000. C has not sued B or settled with him. The jurisdiction holds that present covenants are breached. the court remanded for a determination if D had assumed a duty to assure P of the correct acreage of the tract. By general warranty deed C conveys Whiteacre to D for 20.000 or B could rescind to get back to his original position.stated that the acreage was only 12. how much can be recover from A? If C sues B. (a) B conveyed a quitclaim deed so he is off the hook. B can recover if he can show that damages resulted. if at all. By general warranty deed A conveys Blackacre to B for $20. the B can sue A. What can B recover from recover from A? B purchased the property for 20.43. C sues B and recovers 15. Second.000. the court found that there was evidence that D had undertaken a duty only to insure title and that any search of title was for its own benefit and ancillary to its duty to disclose.
2. (a) Who prevails under a race statute? C. B records. When William seized the English crown he claimed right to all the land in England. O conveys Blackacre to A. real property. shelter rule (b) Who prevails under a notice statute? C. who does not record. System of Estates is derived from feudal society i. Estates Generally a. O conveys Whiteacre to A. He then handed out possession of separate parcels with a catch called Siesen. each possessor was a tenant 46 . B purchases for a valuable consideration and w/o notice of the deed from O to A (bona fide purchaser). O subsequently dies leaving H as an heir. A future interest is a right (sometimes only a possibility) to possess the land sometime in the future. A then records and conveys to C. b. 206-220. who does not record. C purchases for valuable consideration and in good faith. d. (a) B prevails b/c he is a subsequent bona fide purchaser and that trumps alls the other statutory regulation and he recorded first w/o knowledge of prior deeds. C records. shelter rule UNIT 4: SYSTEM OF ESTATES (PGS: 181-201. H then conveys Blackacre to B.Problems: The Recording System (page 582) 1. who records. owns an estate in land rather then the land itself. Subsequently O conveys to B who purchases in good faith and for valuable consideration but does not record. 221-223) 1. A possessory estate has a right to occupy the land immediately c. A legitimate possessor of land.
Wardship and Marriage: If a tenant died leaving in possession an heir who was a minor. To avoid imposition of death tax. 2. Escheat: If a tenant in possession died w/o heirs. 5. 4. the next lord up the chain was entitled to profits from the land until the heir reached adulthood. Alienation: An owner of see simple absolute can convey the entire fee simple absolute to another person. devisable by will. ii. Taxonomy of Freehold Estates: When feudal holdings became alienable by free tenants (free holders) the modern freehold estate began to evolve. The tenant was siesed of the land (he held possession from the King his lord. There are two types of fee simple: fee simple absolute & Defeasible fee c. Creation 1. Common Law: by a grant to A and his heirs 2. his tenure ended and possession returned to the next lord up the feudal ladder. 3. e. 1. tenants in possession would transfer possession to their children for nominal services. 1. or inheritable by intestacy (the state of dying w/o w will. Modern View: now it is not necessary to use the words of limitation “and his heirs” to create a fee simple absolute. Fee Simple (pages 181-201) a. i. 47 . Fee Simple Absolute: absolute ownership b/c its duration is perpetual. It is not absolute in the sense that no one can restrict the owner’s use. Most common type of freehold estate b. and owed services to his lord. Alienability & Inheritance of Fee Simple Absolute: a fee simple absolute is freely alienable. Forfeiture: If a tenant in possession committed treason against the King. it may last forever or at least as long as the legal system does. The value of possession rose as population increased 2. Usual rule is that the grantor conveys his entire estate unless the grant is to the contrary.of the King. possession or alienability of the estate. The words A are words of purchase and the words and his heirs are words of limitation words limiting the duration of the estate. or violated his obligations his tenure was forfeited and the next lord up the chain took possession. 3.
uncles and cousins). The sums of the two parts add up to a fee simple absolute. 3. O conveys Blackacre to A for her life. “A and the heirs of his body” 48 . TODAY. This condition is called intestacy and is dealt with statutes that specify heirs. Fee Tail: virtually extinct and issues occur in connection with various modern methods of destroying this type of estate. b. Transfers of property owned by a person dying W/O a will.a. a. and then next closely related persons). At early common law. 3. An owner can split his fee simple absolute into lesser estates but the sum have to add up to a fee simple absolute. Devisees can be anyone that the testator specifies in his will. Inheritance: a. i. 2. A dying person with a will does not have heirs. Devise: Transferred by will a. nieces. daughters inherited only in the absence of sons. a life estate and a reversion back to O. Heirs. and distributes the remainder to the decedents children. d. If an intestate decedent dies with absolutely no heirs then the property will escheat to the state. O owns Blackacre in fee simple absolute. then the heirs are the collateral kin (brothers. sisters. the heirs were the decedent’s issues and the rule of primogeniture applied estates in land went to the decedent’s first-born son. c. Law prescribes children. c. the usual statutory scheme sets aside property for the surviving spouse. he has devisees (for real property) and legatees (for personal property). Today an owner in fee simple absolute can send it under his will to whomever he wants or split it into pieces so the sum adds to the fee simple absolute. b. In the absence of a spouse or children the decedents parents are heirs. By this transaction the fee simple absolute is split into two parts. e. Origin i.
Disentitling Conveyance: 1. iv. G has a fee simple absolute. either through devise or inheritance. 4 states permit the creation of a fee tail but all provide that the fee tail is destroyed by a DISENTAILING conveyance an ordinary conveyance of a fee simple absolute a. These future estates become possessory when the lineal bloodline of the fee tail holder dies out. Example: O conveys Blackacre to “A and the heirs of his body”. 49 . The original grantor was likely to be long dead so it would go to the grantor’s presently living heirs or devisees 2. This is an exception to the general rule that a grantor cannot convey more than he owns. Fee Tail was created so that the nobility could keep their power over land centralized in their families. b. he must use a straw conveyance W could convey the property he owns in fee tail to his lawyer in fee simple absolute and the lawyer would immediately reconvey it to William. Example: H conveys a property to W and the heirs of his body. the lineal bloodline might die out. W coveys property to G and his heirs. Elimination i. In the US creation of a fee tail has been abolished by statute ii. 1. If W wants to keep possession of Blackacre but wishes to own in fee simple absolute. ** B/c the fee tail might expire. a. every fee tail was followed by a reversion in the grantor or a remainder in a third party. instead B only has possession of Blackacre until A’s death at which point A’s son gets possession and the fee tail. Upon the expiration of the estate it would revert back to the original grantor.ii. W has a fee tail. Created a fee simple conditional. Fee tail passed from one generation to the next automatically until the lineal bloodline ran out. if A conveys Blackacre to “B and his heirs” B does not have a fee simple absolute. A has a fee tail in Blackacre. the condition being that if the estate holder had a child he could convey a fee simple absolute iii. b. thus giving W both possession and a fee simple absolute in Blackacre.
owner of Blackacre in fee simple absolute. 1. Statutory Conversion to a fee simple absolute: many states by statute or state constitutional provision converted the fee tail into a fee simple absolute. if Emma dies w/o issue Jane’s executory interest will become possessory and she will own Blackacre in fee simple absolute. or b/c the purported fee tail is a nullity and the presumption that B intended to convey his entire estate to J. 1. This creates a fee simple subject to an executory limitation. 2. 2. Some states claim that a fee tail is not to be recognized and that a purported fee tail is a nullity. other states declare that a fee tail estate at common law is fee simple absolute. Jane’s interest is executory b/c she is a transferee from F and her interest becomes possessory (if at all) by cutting off the fee simple owned by Emma. iv. Statutory Scheme: Emma gets a fee simple subject to an executory limitation. HOWEVER. the executory interest in Jane. Example: F. At common law Emma would have a fee tail and Jane would have a remainder (which would become possessory if Emma’s bloodline ran out).” a. b.iii. Statutory Conversion to a fee simple absolute subject to an executory limitation: Some states provide that an attempt to create a fee tail will create a fee simple in the first taker under the grant. J has a fee simple absolute either b/c a state statute converts the purported fee into a fee simple absolute. conveys Blackacre to “Emma and the heirs of her body and then to Jane and her heirs. Emma’s successors in interest will own Blackacre in fee simple absolute. Example: B owns Blackacre in fee simple absolute and conveys it to J and the heirs of her body. which is a future interest in a transferee from the grantor that becomes possessory either by cutting of another transferee’s estate OR cutting of the grantor’s estate at some future time. BUT if the purported fee tail contains a remainder the purported remainder will be given an effect IF AND ONLY IF the first taker dies w/o issuing use. Jane will get nothing her executory interest will lapse or expire. Emma’s fee simple does not die with her. If a son survives Emma. it either 50 .
S has a fee simple conditional and E retains a reversion. Life estate and remainder in life tenants issue: a few states allow a fee tail to last for one generation. Life estates in a group/class of people: i. b. The remainder is contingent upon A having an issue. and TN treat an attempted fee tail as creating a fee simple conditional. vi. Pur Autre Vie: i. A has a life estate. owner of T Lodge in fee simple absolute. Example: A.becomes absolute (if she is survived by a son) or becomes absolute in Jane. Life Estates: a possessory estate that expires on the death of a specified person. But if S gives birth to a child she has the power to convey a fee simple absolute (destroying E’s reversion). the contingent remainder in A’s issue will fail and D or his successors will own Blackacre in fee simple absolute. Fee Simple Conditional created: 3 states. If A dies childless. SC. creating a fee simple absolute in E (or his successor to the reversion). Life estates may be defeasible and the same rules apply as to defeasible fees. A reversion may only be created in the grantor and a remainder can only be created in a transferee. 4. E will own a life estate that is measured by G’s life. A life estate may be created in a group of people 51 . a life estate is ALWAYS followed by a future interest (either a reversion in the grantor OR a remainder in some third party). conveys it to G for life. upon A’s death M will own Blackacre in fee simple absolute. The holder of a fee simple conditional has a life estate. 1. Example: E conveys Blackacre to S and the heirs of her body. her issue owns a remainder in fee simple absolute. c. 1. If A has a child M. Example: D conveys Blackacre to “A and the heirs of her body”. a. If S never has a child her estate will expire on her death and E’s reversion will become possessory. then she may convey a fee simple absolute. Defeasible Life Estates: i. v. Iowa. If G then conveys his life estate to E. The duration of the life estate is measured by the life of a person other than the estate holder. but she must make a conveyance in order to create a fee simple absolute. then convert in into a fee simple absolute. but if a child is born to the holder. it is a life estate for the life of another ii.
Weeden: John Weeden devised Oakland Farm to his widow. b/c there was no remainder that would then exist.ii. The Supreme Ct in TN relied on 3 TN statutes to presume that Jessie meant to give Evelyn fee simple absolute b/c there is no clear evidence to the contrary. Anna Plaxico. Baker v. Value of Fee Simple Absolute = 100. Brown v. Fraction determined multiply the life expectancy in years of the person whose life measures the duration of the estate by the annual value of possession and discount the product to reflect the fact that payment must be made now to receive value over time. annual value of possession is 5.00) a. The third statute created a presumption against partial intestacy. which is about 21. Transferability: i. An issue is that some of the life tenants can die before others and there is an uncertainty if the surviving life tenants will take the deceased life tenant’s share or if the remainder or reversion man gets the interest. The court treated the no sale restriction as an invalid attempt to restrain alienation of a fee simple absolute rather than clear evidence of a life estate. 1. The other statute said that a presumption that will convey the entire interest of the testator in the testator’s real property unless there is a contrary intention in the will. which is what would happen if Jessie Lide’s will was read creating a life estate in Evelyn. A life estate is freely alienable during life ii. The transferee receives the transferor’s life estate iii.000 and the life expectancy of the person is 5 years. In cases of ambiguity the courts look for the grantor’s INTENT ii.000 (5% of 100. for life and then to John’s grandchildren by a prior marriage. Need to take the present value of $25. Example: Most courts rule that the remainder or reversion would not become possessory until all the life estates have expired.000 this is value of life estate b. EX: Mkt.000 X 5 = $25. iii. v. One statute stated that a common presumption is that every grant or devise in real estate shall pass the entire interest of the grantor or testator unless there is clear evidence to the contrary. Ambiguous Grants: i. Market value of a life estate is the fraction of a value of the fee simple absolute. The elderly Anna lived on a farm. 5. d. White: Jessie Lide’s handwritten will stated: “I wish to leave my home to live in and NOT be sold. iv.000. which was 52 .000. e.
f. Construction: a. is free to convey the assets in exchange for other assets in order to benefit the equitable owners. Jack. Equitable life estate is a property interest owned for life ii. but it only earned about 1300 in annual farm rents. 3. Ex: A devises Deer Park to her bother J. courts may interpret it to create a more flexible estate. Anna wanted to sell the farm and increase her income. In this case necessity was not found. 2. The remaindermen were unwilling to do so b/c they thought that the value of the farm was increasing rapidly and that Anna’s life expectancy was shorter than it turned out to be. Courts sometimes order the sale of the life estate and the remainder and either divide the sale 53 . a beneficiary has an equitable life estate and L&P also beneficiaries of the trust have a concurrent remainder. the trustee. 2. Could the remaindermen be forced to allow Anna to sell the farm? The court said that they have the power to order a judicial sale to preserve the estate from waste or deterioration in which the future interests would be preserved. which may not be very marketable 4. Courts try to implement the granter’s intent but if the grant is sufficiently ambiguous. However.rising in value b/c it was it was in the path of urban development. there must be necessity before this type of sale is ordered. has legal title to Deer Park in fee simple absolute. Judicial Responses to Life Estates 1. A trustee has fiduciary duties to the equitable owners of the trust but within the limits of those duties. E. such as a fee simple absolute. Modern Life Estates: i. Judicial Sale: a. A legal life estate is an estate for life in the assets themselves 1. iii. The owner of a legal life estate can only convey her life estate. There is a lot more flexibility with an equitable life estate instead a legal one. as a trustee to hold for the benefit of his wife E for life and then to L&P outright and free of trust.
ii. b. b. g. 2. A fee simple determinable is less than a fee simple absolute. the deterioration and destruction of the underlying property.proceeds or order the sale proceeds held in a trust with the income payable to the life tenant and the trust corpus preserved for the remaindermen. Waste: a term to describe the actions of the life tenant that permanently impair the properties value or the interest of future interest holders. (also look at what is in the best interests of the parties). iii. and uses language in the grant manifests that intent. The intent and the words of the grant are clear. Defeasible Fees (pages 206-220) a. 5. This is rarely done. Waste Avoidance: Courts also order a sale when it is necessary to avoid waste. Any estate may be made defeasible subject to termination upon the happening of some future event ii. owner of Blackacre in fee simple absolute. Fee Simple Determinable: i. 1. 54 . a court may invoke its equity powers. Example: R. Equitable Necessity: Where it can be proved that sale is in the best interests of all parties and is the only practical method of giving truth to the grantor’s intention. but there is always the chance that termination could occur. Basics: i. This is a fee simple determinable b. the estate will only last until the moment Blackacre ceases to be used as a free lending library. the grantor who owned the estate in fee simple absolute retains a possibility of reverter. there has to be agreement between the remaindermen and the life tenant i. If the future event never happens then the defeasible fee endures as long as a fee simple absolute. A defeasible fee is subject to termination or divestment upon the occurrence of a future event. conveys Blackacre to the town library association “for only so long a time as Blackacre is used as a free lending library” a. Created when a grantor intends to grant a fee simple only until a specified future event happens.
Mahrenholz v. iii. Fee Simple Subject to Condition Subsequent: i. Abolished in some states: California and Kentucky have abolished the fee simple determinable. d. conveys Blackacre to a battered woman’s shelter. however. A holder of a right of entry MUST actually exercise the power to terminate the fee simple subject to a condition subsequent in order for that defeasible fee to end. a. ii. iv. 1. c. Words evidencing intent to create a fee simple determinable: so long as. c.ii. but if. The transferee takes the estate subject to the limitation that makes it defeasible. owner of Blackacre in fee simple absolute. which automatically becomes possessory upon the occurrence of a future event. Action necessary to assert right of entry: 55 . grantor may enter and retake possession. and on condition that. The holder of a right of entry has the OPTION TO TERMINATE the fee simple subject to a condition subsequent. iii. so the interest that is retained by the grantor is a right of entry (or power of termination). This is a fee simple subject to a condition subsequent b. Example: O. that if Blackacre should be used for any purpose other than sheltering abused women. 1. The grantor has parted with less than a fee simple absolute. until. Words evidencing intent: provided. during. or while are indicative of grant for a limited duration and thus are likely to be construed as creating a fee simple determinable. Instead view these estates as fee simple subject to a condition subsequent. Provided however. and save only for a right to take it back. Created when words of the grant support the conclusion that the grantor intends to convey a “fee simple absolute” BUT has attacked a string to the grant so that if a specified future event happens the grantor may pull the string and get his fee simple absolute back. Transferability: a fee simple determinable is a freely transferable estate but the nature of the estate stays the same. County Board of School Trustees: look at full case its long. the key is whether the grant evidences intent to pass title COMPLETELY.
In 1980. when he files suit to eject Caroline. a. the limitation occurs. Example: Ron holds the possibility of reverter in Blackacre and Caroline holds a fee simple determinable in Blackacre. The right of entry holder does not need to actually physically enter and retake possession. In that case the cause of action would not 56 . Ex: B conveys a fee simple in Blackacre to I. Some states only permit the possibility of reverter to be freely transferable. inheritable and may be devised by will. The reason this is preferred is because a fee simple determinable produces automatic forfeiture of title and possession. iv. A cause of action accrues at the moment against the person in possession of the property. Preference for a fee simple subject to condition subsequent: in ambiguous cases courts prefer to find a fee simple subject to a condition subsequent. while a fee simple subject to a condition subsequent makes forfeiture an option of the holder of the right of entry. she has a fee simple absolute in Blackacre. v. Classification of Defeasible Fees: i. once the limiting condition has occurred and the right of entry is exercised there is no estate left to be transferred. Transferability of the interest retained by the grantor: 1. 2. B can send a letter and follow up with this. and Caroline can prove the elements of adverse possession. 2. devised or inherited. 2. Transferability: freely transferable during life. Most states allow a possibility of reverter or a right of entry to be alienated. subject to the condition subsequent that “no hunting shall ever occur”. If the state has a tenyear statute of limitations. but must do more than merely proclaim intention to retake possession. Accrual of a cause of action for recovery of possession: 1. ii. 1. i. Courts try to avoid forfeiture of title b/c its harsh d. However.1. Ron does nothing about it until 1991. automatically once the limitation has occurred. However. the cause of action for recovery of possession does not accrue the moment the limitation occurs if the title is a fee simple subject to a condition subsequent.
In 1977. This is b/c a possibility of reverter becomes possessory automatically upon the breach of the condition. A possibility of reverter and a right of re-entry are exempt from the rule against perpetuities. such interests could only be inheritable. County Board of School Trustees: W. a. who conveyed it to the Mangrenholz family. Under IL law however. Harry would only be able to own a right of reentry to convey to P (b/c Harry never claimed his right of re-entry). the school stopped teaching classes there and used the land for storage. Later the Hutton’s conveyed their farm and whatever interest they had in the Hutton land Jacqmains. 2. Under IL law a right of re-entry cannot be 57 . However if the original grant created a fee simple subject to a condition subsequent in the school board and a right of re-entry in the Huttons. P then sought to quiet title to D’s land.E and Jennifer Hutton conveyed an acre of their farm to the school district under an ambiguous grant (“this land to be used for school purposes only. Equitable Doctrine of Laches: If a person delay’s in exercising his right of entry it could provide the person in the estate with undue inequitable consequences and their right of re-entry could be denied. Mahrenholz v. and if the cessation of classes in the Hutton School in 1973 terminated the fee simple determinable. Harry conveyed his interests to P. otherwise to revert to grantors”) and the school district built the Hutton School on that land. then Harry owned a fee simple absolute in the Hutton School and that was what he conveyed to P who should prevail. If the original land created a fee simple determinable in the school district and a possibility of reverter in the Huttons (which is what the court concluded based on conflicting IL precedent). ii. 1. even if the condition was breached. iv. iii.accrue until the cause of action would be exercised. neither the right of reverter not the right of re-entry could be conveyed during life or pass by will. In 1973. In 1969 when Jennifer Hutton died that her son Harry inherited interest. Effect Against the rule against perpetuities: 1.
82 v. not loss of possession or ownership. do the social and economic benefits of the use restriction embodied in a defeasible fee outweigh the costs imposed by the restriction? ii. A fee simple determinable comes to an automatic end upon breach of the condition. 58 . and stipulated that in the event of a sale or transfer of the property or a failure of them to use the property title would revert to Toscano. Mountain Brow Lodge No. By the deed he restricted the use to the Old Fellows Lodge only. This case raises questions such as: does the use restriction embodied in a defeasible fee materially inhibit marketability? Also. while a fee simple subject to a condition subsequent comes to an end only when the holder of the right of entry asserts his right to recover possession. Invalid Restraint on Alienation: 1. If the use restriction is servitude then the remedy is either damages or an injunction. The court voided the no sale or transfer restriction of the deed as an invalid restraint on alienation but upheld the use restriction on the theory that b/c Toscano meant to convey a determinable fee to the lodge rather then merely restrict alienability the use restriction was valid. so the school board should prevail. which takes title away from the owner of a defeasible fee and sends it to the owner of the future interest. Defeasible fees restrict the use that may be made of the property. 2. e. restraints on alienation are disfavored b/c they inhibit (a) economic efficiency (b) productivity (c) such restraints also prevent resources from being allocated by the market into the hands of a person who highly values them and who will presumably make productive use of them. Toscano: Toscano gave the lodge a lot adjacent to its existing building. If a restriction is a defeasible fee then the remedy is a forfeiture. a. Defeasible fee or covenant: 1.conveyed only inherited. Problems with Defeasible Fees: i. 3.
Example: If in the Toscano case. would award of the entire proceeds go to the city deter charitable giving and deliver a windfall to the city? Court didn’t 59 . B/c the cities determinable fee was a gift to it. iii. There is a replacement value. i. regarding how the condemnation proceeds would be divided. Hard to place a value on a defeasible fee and its associated future interest b/c the condition that might terminate a defeasible fee is often not limited. but b/c land is unique it is difficult to be sure what that value would be.a. The State of Ohio took most of the park by eminent domain to construct a highway and a suit arisen between the city and the Ink family. B/c the city did not voluntarily cease its park. How is a park to be valued? There is no exchange value. as owners of the possibility of reverter. he conveyed his property to the lodge on the stipulation that the property should always be used for lodge purposes. condemnation proceeds should go to the defeasible fee owner. so long as it was used for a public park. The court ruled that the Ink family. public parks are not bought and sold as public parks. the stipulation could be seen as giving the lodge a fee simple absolute or as a covenant (a promise made by the lodge by its acceptance of the deed) which might be enforceable by damages or an injunction. Ink v. Valuation of defeasible fee & associated future interest: 1. ii. should the value of the possibility of reverter be discounted by the probability that the city would have violated the limitation voluntarily? Restatement says that unless the valuation is imminent or probable independent of imminent domain. a. City of Canton: Harry Ink conveyed land to the city of Canton. should receive that portion of the total proceeds that exceeded the value of the land as a public park. iii. who owned Ink’s possibility of reverter.
Forfeiture: this type of clause means that the estate will be forfeited the estate is alienated in any way. same type case f.take into account Ink’s intent to give the city a public park to use. d. the grantor transfers that interest to a third party. Promissory: this clause extracts a promise from the transferee that they will not alienate the property. iii. GENERALLY a restraint on alienation that is for a REASONABLE purpose and LIMITED in DURATION is valid. 6. This is a fee simple that is divested or shifted from one transferee to another transferee upon the occurrence of some future event. iv. 60 . ii. Partial Restraints on a Fee Interest: some partial restraints are valid. no matter whether the divesting condition is phrased in the form of a determinable fee or a fee subject to a condition subsequent. Theoretically this is alienable 2. Also look at City of Palm Springs. Total Restraints on a Fee Interest: a total restraint on alienation is VOID. The grantor of this type of estate transfers the future interest to a third party instead of having it. Legal Life Estates: 1. mostly due to economic efficiency (b/c restraints prevent the property from moving into the hands of the person who would use it most productively. b. ii. The practical effect of a restraint on alienation of a life estate is to prevent gift of the estate or creditor seizure of it. Restraints On Alienation (pages 221-223) a. b. Prevailing doctrine says that a fee simple subject to an executory limitation is automatically divested in favor of the executory interest. Types of Restraints: i. but instead of retaining the possibility of reverter. but most are void. Fee Simple Subject to Executory Limitation: i. If a grantor uses the words necessary to create a fee simple determinable. Restraints on Life Estates: i. c. iii. Disabling: this type of clause disables the owner by depriving him of any power to transfer the estate to anyone else.
if A dies w/o issue will Blackacre escheat to the state? We do not know if A has any heirs. B dies w/o having any children. B is survived by three children. B gets a fee tail. the son of O.” A then makes a conveyance to C “and his 61 . Disabling restraints are almost always void 4. (a) Who owns Blackacre under 1800 England? B. Spendthrift Trust: create a trust which are designed to provide a spendthrift relative with an income but prevent him from his folly by denying him power to pledge the trust assets as security for a loan or otherwise use it to tempt creditors to extend credit to the beneficiary. w/o a will it would be split evenly. B2 (B’s son) would receive the property. A (daughter). if no heirs. B (son). B1 (daughter) B2 (son) B3 (daughter). 2. 3. if there are heirs. as her sole heir. When B dies. Then. devising all the property to C. O conveys Whiteacre to “A and the heirs of her body. (b) Who owns Blackacre under modern American Law? Each child would get the 1/6 of the estate. B dies testate and devises all his property to W. In England in 1800. Other restraints can be upheld sometimes b/c courts view them as restraints that can be released. O gets the reversion back. Then O dies intestate. What is the state of the title? A dies. Problems: The Fee Tail (page 189) 1. ii. his wife. A1 (son) is born to A. what estate does A have? A fee simple absolute 2. and if A dies w/o issue then to B and his heirs.” A dies leaving her only child B. If B wanted to give his property to C when he died. then it will go to the state.3. Equitable Life Estates: 1. O. O conveys Blackacre. located in Massachusetts. to “A and the heirs of her body. Disabling restraints are permitted on equitable life estates 2. O conveys Blackacre to “A and her heirs”. the owner of Blackacre has two children. he would have to disentail the fee tail and then he could do whatever he wanted with the estate. Problems: The Fee Simple (page 185) 1. then it will pass according to state statute. would receive all the property. O conveys Blackacre to “A and his heirs male”.
Example: L conveys Blackacre to Mary for life and then to Alice and her heirs if she survives Mary. Reversion is freely alienable during life. a. and may be devised or inherited.heirs”. 1. by operation of law. A dies intestate. Introduction a. D and E. A reversion is created automatically. 244-249. A person does not have to have an estate in fee simple absolute. which is less than a fee simple absolute. A reversion is not necessarily certain to become possessory in the future. 4. Reversion i. Example: B. whenever the grantor conveys less then his entire property interest. owner of Blackacre in fee simple absolute. Interests that are not possessory but which are capable of becoming possessory at some time in the future b. to create a lesser estate and create a reversion. ii. They are presently existing property interests but which confer only a future right of possession 2. B has conveyed a life estate. A then marries D and has a son E. When S dies the life estate will end and B will get the reversion that he retained (w/o mentioning the reversion in the grant B will get it b/c he conveyed less than his own estate). 237-240. 262-266) 1. Future Interests Retained by the Grantor (transferor) a. C owns the entire property in fee simple UNIT 5: FUTURE INTERESTS (PGS: 225-234. a. A is survived by O. A reversion is nor created when the grantor conveys to one-person part of his estate and simultaneously conveys the rest of his estate to another person. 62 . 3. B. The conveyance of ANY estate that is less will create a reversion. conveys Blackacre to S for life. 2. C. Future interest that is created when the grantor conveys a lesser estate then what he originally owned.
5. Reversion is vested at creation. Pete has a fee simple determinable and Bill has a possibility of reverter. The grantor DOES NOT part with all that he owned. so it is not subject to destruction by the rule against perpetuities. 1. vi. his interest is thus vested even though his future right to possession is uncertain vii. The entire estate is conveyed. The future interest is the grantor’s possibility of reverter. Example: O. If during O’s life the estate is used for anything other than agriculture. A person does not convey their entire interest when they convey a lesser possessory estate followed by a contingent remainder in fee simple absolute. a. iv. Possibility of Reverter i. v. O has conveyed her life estate to Sal. Whenever a determinable estate is created. then J would have retained his remainder interest. If J conveyed the estate to R only if she outlives E. Reversions are ALWAYS vested Reversion is created in the transferee Reversions are vested b/c they are created in the person who owned the ENTIRE estate at the moment of creation. 2. but it will never become possessory of Alice outlives Mary. an estate that is the same quantity she had. This is created when the grantor conveys the same quantity of estate that he originally had. unless the grantor simultaneously creates in a third party what would be a possibility of reverter by the grantor. Lewis has retained a reversion. Example: Bill conveys Blackacre to Pete so long as it is used as a warehouse. b. O gets back her reversion in Blackacre and it becomes immediately possessory. Example: J conveys Blackacre to E for life and then to R and her heirs. owner of a life estate in Blackacre conveys it to S so long as Blackacre is devoted to agricultural use.iii. the grantor retains possibility of reverter. with a determinable limitation. a. 63 . J has not retained a reversion. part in the form of a presently possessory estate and the rest in the form of a future interest. but conveys it with a determinable limitation which retains the right of future possession if and when the determinable limitation occurs.
A right of entry may only be created in the in the grantor. Common law does not permit transfer of a possibility of reverter inter vivos or by will.3. because it is created in a transferee it is an executory interest. v. Example: H conveys a farm to O and her heirs but if the farm should cease to be used for pasteurizing horses. only by inheritance. ii. Vested Remainders: 64 . conveys it to May so long as it is used solely as a single family residence and if not then to June and her heirs. Today. Remainders i. if created in a grantee it is an executory interest iii. O has a fee simple subject to a condition subsequent and H has retained the right of entry. Right of entry can endure forever b/c the triggering limitation may never occur AND it is vested at creation making it immune from destruction under the rule against perpetuities. Future Interests Retained by the Grantee (transferee) a. Possibility of reverter can endure forever b/c the triggering limitation may never occur AND it is vested at creation making it immune from destruction under the rule against perpetuities. Hilda may terminate the conveyed estate and retake possession. iii. However. A possibility of reverter can NEVER be created in a GRANTEE a. only inherited. 1. devised or inherited. owner of property in fee simple absolute. ii. most states permit a possibility of reverter to be alienated inter vivos. a right of entry was neither alienable inter vivos. At common law. not devisable by will. c. Right of Entry (power of termination) i. Right of entry is created whenever the grantor retains the power to CUT SHORT the conveyed estate before its natural termination. Example: April. 3. April has conveyed a fee simple determinable to May and created in June a future interest in June that would be a possibility of reverter if April had retained it. Today jurisdictions are split whether to follow the common law or to permit free alienability. iv.
her vested remainder passes to her assignee. b. Example: Oscar conveys property to M for life. then to Joel and his heirs. Miles has an indefeasibly vested life estate. a. Indefeasibly vested remainders i. whenever M dies. A has an indefeasibly vested remainder in fee simple absolute. Connie (or her legal successor) is ready to take possession of the property. A vested remainder MUST become possessory whenever the prior estate ends. If Connie dies before M. then to Miles for life. A remainder is vested if it is created in a known person and possession is not subject to any condition subsequent. even though he never enjoyed possession. The natural expiration of a preceding estate is NOT a condition precedent. Connie’s remainder is vested b/c she is a known person and there is no condition precedent to her possession. Example: B conveys property to Sam for life. Sam’s interest is not divested it just expired naturally. devisee or heir. then to Connie and her heirs. Certain to become and remain possessory & once possession occurs it will last forever. a. BUT if he dies before Sam his estate will naturally terminate. Vested Remainders subject to divestment 65 . he cannot be divested of his possession (he has fee simple absolute).1. IF Oscar said Connie gets it only if she outlives M. b. Example: D conveys property to P for life and then to A and his heirs. 1. Once A has possession. 2. 2. A (or his legal successor) is certain to obtain possession following expiration of P’s life estate. then she would have a contingent remainder and if she died before M neither she nor her heirs would get anything.
If E dies today. c. devised or inherited. then to Robert and his heirs. then to Eve and her heirs. Adam has an executory interest. to Adam and his heirs. he will have it in fee simple absolute. b. Example: K conveys property to E for life. Eve has a remainder subject to complete divestment b/c Eve is a known person and there is no condition precedent to her possession. Eve’s remainder and her possession may be taken away if Adam returns. But. Example: F conveys land to D for life and then to James and his heirs. Adam’s executory interest will last until his death. at least one of whom is presently existing and entitled to 66 . Vested remainders subject to partial divestments i. 1. but if Adam should return from war. BUT is subject to a condition SUBSEQUENT. James might never be able to pass his remainder at death b/c he might not outlive D. but if James does not survive D. 1. ii. These remainders are still vested and may become transferred inter vivos. James vested remainder is subject to complete divestment by Robert’s executory interest. This is a remainder that is created in a KNOWN person. c. and is not subject to any condition precedent. However. that if occurs will completely divest the remaindermen of his interest. d.i. if James gets the land. This is a remainder that is created in a class (group) of grantees. Eve will be entitled to possession. a.
c. the vested remainder would pass by will or by intestate succession. b.possession as soon as the preceding estate expires. but is capable of expansion to include as yet unknown people. a. Example: R devises property to her husband for life. d. 67 . The remainder shared by R’s three children is indefeasibly vested b/c R is dead and can have no more children and all of her children have satisfied the condition precedent. iii. When one of the children graduates they will have a vested remainder but it is subject to open b/c it is possible that either one or both of the other two children will graduate from law school. her children. Vested remainders subject to open are vested even though they are subject to dilution the interest will survive its holder. then to such of her children who have graduated from law school. If at the moment of creation she has 3 children but none have graduated the remainder is contingent. ii. If one of the children graduated from law school and acquired the remainder subject to open and then died from the stress. 1. Robin has created a remainder in a class. A vested remainder can be subject to both partial and complete divestment.
Class-Closing Rules: a class closes when either of two events occur: a. ii. Example: A devises property to M for life. b. Ivan may also return and completely divest C’s children. C is living and has two children. C and D. Physiologically Closed: no longer possible to have new entrants i. a class is open if it is possible for new people to enter it and closed if new entrants are not possible. a. If C has another child. i. which states that a class closes if any member of the class is entitled to immediate possession and that result is consistent with the intent of the grantor. G is survived by his wife and one child B. to Ivan and his heirs. 68 . A has created an indefeasibly vested remainder in the class of his children.1. b. Example: G devises property to his wife for life and then immediately to his grandchildren and their heirs. c. Example: P devises Blackacre to W for life and then to C’s children and their heirs. Class Gifts: An interest in a group of people is a class gift. The class of C’s children has a vested remainder subject to partial and complete divestment. 1. but IF Ivan returns from Turkey. A and R. then to his children and their heirs. Rule of Convenience: interpretative rule. No one else can enter. At P’s death. the child will enter the class and partially divest the class. 1. not a rule of law. B has two kids. It is indefeasibly vested b/c A is dead and can have no more children. A is survived by two children B and C.
If B later gives birth to a third child that child wont be able to share. a. which create a vested interest and then add a divesting clause vs. When the wife dies they will be entitled to immediate possession.1. E has a contingent remainder. but is inherent in the estates conveyed by J. M has retained a reversion. Ellen is 12 and has no children. 2. M has again retained a reversion. c. The rule of convenience probably applies b/c it was G’s intent that the grandkids get the property immediately. K’s heirs are not going to be known until K dies. Ellen’s nonexistent children have a contingent remainder. Martha has retained a reversion. Example: J conveys land to R for life. A contingent remainder will always leave a reversion in the grantor. then to E if she graduates from Princeton. W has a vested remainder. Neither the natural expiration of the prior estate nor the precatory language in the grant constitutes a condition precedent. Example: M conveys Blackacre to K for life and then to K’s heirs. she must graduate from Princeton in order to be entitled to possession. look for grants. A remainder created in an UNKNOWN person OR that has a condition precedent to ultimate possession. a condition that is made as an integral part of the grant in remainder. b. then to W. Need to pay CAREFUL attention to the grant. Once the wife dies under the rule of convenience the class is closed. d. C and D have a vested remainder subject to open. Example: M conveys Blackacre to K for life. (NOT CONDITION PRECEDENT) 3. so the class has a contingent remainder. iii. a. Example: M conveys Blackacre to K for life. Contingent Remainders 1. then to Ellen’s children. 69 . W (or his legal successor) has no right to possession until the natural expiration of Rose’s life estate. A condition precedent MUST be expressed in the grant. E is 12 years old.
When S delivers the proper funeral for B. but is S should ever be released from prison to S. S has a shifting executory interest that will divest A. by cutting short his fee simple subject to an executory limitation if and when Sarah is released from prison. i. S has a springing executory interest. BUT nearly EVERY jurisdiction permits alienability of contingent interests. Executory Interests i. During that interval between B’s death and his funeral and possibly S’s possession. Example: R conveys property to A. Future interests are most commonly employed in trusts b. Trust divides legal ownership from equitable ownership 70 . It is not possible for S to give B a proper funeral or any kind of funeral until some time has elapsed following the expiration of B’s life estate. This is a future interest created in a grantee that divests the grantor at some future time after the conveyance. possession will spring out of A. Springing Executory Interests 1. possession has reverted to A (or her legal successor to her reversion). Common law did not permit alienability of contingent interests. and then to S if he will give B a proper funeral. This is a future interest in a grantee that divests another grantee upon the occurrence of some condition. Shifting Executory Interests 1. By such a divestiture. Example: A conveys property to B for life. (It springs out of the grantor) a. ii. another grantee.a. iii. This unknown student has a springing executory interest. Could have alternative contingent remainders 4. a. 4. not a contingent remainder ii. Example: P conveys Blackacre to the first student in his class who becomes a judge. b. The Trust a. b. iv. the shifting executory interest cuts short the preceding estate prior to its natural expiration.
The Marketability Rules a. Applies to both real and personal property and to any kind of future interest 71 . ii. who have equitable ownership of the assets. and then pay the principle to Sophie’s children who survive her. 1. Example: E conveys property. Destructibility of Contingent Remainders i. ii. which followed a life estate b/c it was applied at the natural termination and at the artificial termination of a life estate. I is the legal trustee and she owns Blackacre in fee simple absolute. iii. I can only alter the composition of the trust not the nature of equitable interests held by Sophie and her children. The Doctrine of Worthier Title i. 1. i. I can sell the property and the money paid can make up the trust assets. b. but who is charged with the responsibility to manage those assets for the economic benefit of the trust beneficiaries. Person can give assets to someone who can manage them well for the advantage of unknown trustees. d. to I in trust to pay the income for life to Sophie. This rule had a significant effect on contingent remainders. which is owned in fee simple. Sophie has an equitable life estate in the trust assets and Sophie’s children have an equitable contingent remainder in the trust assets. Trustor may transfer legal title of his assets to a trustee. A life estate could terminate early by death of the life tenant or by forfeiture or merger.c. a contingent remainder had to vest at or prior to the termination of the prior freehold estate. it was still contingent. Introduction i. Common law judges have devised a number of rules to increase the marketability of land by eliminating uncertainties of title that inhibited alienability. who becomes the legal owner of the assets. At common law a contingent remainder in land was destroyed if. If an inter vivos conveyance creates any future interest in the heirs of the grantor the future interest is VOID. at the expiration of the preceding estate. To become possessory. Instead the grantor retains a reversion. 5. 2. Rule was replaced by the rule on perpetuities c.
Applies regardless of the nature of the preceding estate and regardless of intervening future interests in people who are NOT the grantor’s heirs. An interest has to either be certain TO vest or certain NOT TO vest c. Vesting: a. b. Operation of Worthier Title: 1. but has a change of heart and seeks to revoke it. iv. Period of Uncertainty: a. Criticisms of Worthier Title: this doctrine is said to breed litigation d.iii. Heirs of the grantor: when this term means indefinite succession rather than specific people 2. c. An interest is good if it will certainly vest or certainly fail within: i. 3. that vesting could occur after the permitted time period the interest is void. living on the effective date of the grant. Designed to eliminate uncertainties about ownership that persists too long b. If an effective measuring or validating life cannot be found then the interest is void. v. if at all. The rule requires you to identify some person. Trust Revocation: worthier title can become an issue when a person establishes an irrevocable trust for the benefit of himself and his heirs. not matter how unlikely. 2. Upon the death of some person alive at its creation iv. Future Interests where the rule applies: 72 . If there is any possibility. During the life of some person alive at its creation iii. The Rule Against Perpetuities i. not later than 21 years after some life in being at the time of its creation. RULE: No interest is good unless it must vest. who can serve as a validating life. Within 21 years after the death of some person alive at its creation. 21 years from its creation ii. (JC Gray) 1.
Example: A dies and devises Blackacre “to Barry’s first child to graduate from college. An interest is vested for perpetuity interests when it has either become possessory or has vested in interest (the owners are known existing people and there is no condition precedent). Ted could die tomorrow before graduating ii.” Barry’s only child is a senior in Columbia. contingent remainders and vested remainders subject to open) b. iii. All contingent remainders (executory interests. then to my grandchildren then living. then to my children for their lives. a. Thomas and Louise. i. 73 . Validity tested at creation: in order to prove validity or invalidity you have to CONJURE UP what might happen in the FUTURE. At that moment the remainder will certainly vest or certainly fail to vest.” At Martha’s death she has two children. The life estate in Mary’s husband is presently possessory. This interest is VOID i. Example: Mary devises Blackacre “to my husband for life. Vesting: 1. DOES NOT apply to interests created in the GRANTOR (reversions. The remainder in Mary’s grandchildren is contingent but the contingency will be eliminated when Mary’s kids are dead. The remainder in Mary’s children is vested at its creation (b/c there is no condition precedent and the class of Mary’s children closes at her death). b.a. ii. The only conceivable validating lives are Ted and Barry and Mary’s HYPOTHETICAL graduation COULD OCCUR more than 21 years after the expiration of all conceivable measuring or validating lives. possibility of reverter and rights of entry) 4. ii. Barry will die immediately and Mary will only graduate from college 23 years later. Barry will have another child Mary who is born in 1998.
Every possible member of a class has to be alive at the time the interests become effective or the class cannot be a life in being. The class must be closed b. O devises property to his daughter K for life. The contingent 74 . There is no certainty that the class will close at K’s death or within 21 years of it. then to Tina’s children who reach the age of 21. i. then to Karen’s grandchildren. Example: In 1997. The class will only close when K and all her children are dead. K’s life estate is possessory and not subject to the rule.2. K’s children cannot serve as validating lives b/c their class is not closed. The uncertainty about the identity of K’s grandchildren will not be removed until their class is closed. Example: O devises a property to Tina for life. Vested Remainders subject to open: a gift to a class of people is not vested in any member of the class until it is vested in EVERY member of the class. a. 2. K is a life in being upon O’s death (the effective date of the grant) the remainder is certain to vest in K’s children no later then the end of K’s life. The class of K’s children will not close until K dies. then to Karen’s children for life. V and A have a vested remainder subject to partial divestment. VALID. Measuring Validating Lives: 1. her two children V and A and her sole grandchild N. Any conditions precedent must be satisfied by every member in the class. 1. as K can have more children. 3. For classification this example has vested but it has not vested for the rule against perpetuities. iii. K’s grandchildren have not vested for the purposes of the rule. O is survived by K.
v. The final clause is expunged and Edward gets the property in fee simple absolute. and then conveying separately his possibility of reverter to Paul. Paul’s interest is void. Example: T conveys property to Edward and his heirs. 2. then conveying separately his right of entry to Paul. then to Paul and his heirs. Executory Interest followed by determinable fee: a. even if it’s a group of people as long as every possible member of the class is alive at the effective date of the grant. Paul’s executory interest is erased. Erwin is survived by 2 sisters and 5 nieces. a. but if the property is ever fenced to Paul and his heirs.remainder in Tina’s adult children is valid b/c the uncertainty as to which if any of Tina’s children will reach 21 will be resolved at Tina’s death. T could avoid this by first conveying a fee simple determinable to Edward. you cannot certainly prove that it will vest or fail within 21 years after a life in being at the time of the grant. iv. Executory Interest following a fee simple subject to a condition subsequent: a. the uncertainty as to which if any of Tina’s children will reach age 21 will be resolved no later then 21 years after Tina’s death (Tina might die in childbirth) and Tina is a life in being when O dies and her life will prove the validity of the remainder. T could have avoided this by first conveying a fee simple subject to condition subsequent to Edward. an orphan. Example: T conveys property to Edward and his heirs so long as the property is never fenced. i. Watch out for classical Traps: 75 . Different lives can validate interests. 2. b. Example: Erwin. devises property to his nieces who reach age 21. Problems w/ Defeasible Fees: 1. The executory interest in Paul is void b/c it cannot be proven that it will vest or fail to vest within 21 years of after any life in being at the time of the conveyance. The springing executory interest in the nieces is good b/c the class of Erwin’s siblings can serve as validating lives b/c Erwin has not parents so his sibling class is closed.
The executory interest in John and Elizabeth’s children is VOID. ii. Charles 40 is married to Diana who is 35. 2. i. more than 21 years after all these deaths. VALID. 2. Mary could have a child Zoe and then die and Elizabeth could have a son Isaac and then each die. a mere reference to A’s widow is construed to mean an unknown person only to be ascertained at A’s death. Mary has a fee simple subject to an executory limitation in favor of the open class of John and Elizabeth’s children. Jee v. Charles has a possessory life estate. Audley: Edward devises an estate to Mary. i. iii. The Unborn Widow: a. then to his widow for life. The Fertile Octogenarian: a.1. then to his children still living. At the time of Edward’s death Mary is 65 years old. who are both in their 50’s. John and Elizabeth have 2 children A and O. Zoe could die w/o any lineal decedents. W/o more. The rule assumes that Mary and Elizabeth can still conceive more children. The contingent remainder in Charles children is VOID. iv. but if and when Mary ceases to have any lineal decedents. Finally. Example: W devises property to “my son for life. For example. and John and Elizabeth are each 80 years of age. It is possible that the widow is someone not alive 76 . the remainder in his widow is contingent b/c we wont know of her identity until Charles dies. b/c the uncertainties as to which if any of Charles’s children will survive his widow will not be removed until the death of that person. 1. When W dies. At that point the interest would vest in Isaac and other successors of O and A but it would be more than 21 years after the death of E. then living of John and Elizabeth.
If Taylor has another son. If Cedric predeceases S or dies within 21 years of S’s death then the class of grandchildren close and the remainder is vested. The contingent remainder in Taylor’s grandchildren is void b/c their identity will not be known until all of Taylor’s children are dead and the class of the children is open when C dies. as the rule unfolds. A. States wait for the period permitted by the common law rule against perpetuities. Still have to determine the appropriate validating life for the interest in question. Wait-and-see: evaluates the validity of future interests. The class of the widow is open at W’s death. If Cedric is still alive at that point. All of these people were lives in being at the time C died. not at the time of the creation of the instrument. If Taylor never has any more children then the remainder in the grandkids will be vested. then to Taylor’s children for their lives. e. Wait-and-see for the common law period a. i. the contingent remainder in Taylor’s children is good b/c their identities will be known upon Taylor’s death (the class will close) and Taylor is a life at being. b. Example: C devises property to Taylor for life. We will wait for S to die. Reform Doctrines i. if he dies before Cedric we will wait 21 years more. 77 . the class in Taylor’s grandchildren is still open and the contingent remainder in the grandchildren is void. the remainder in the grandchildren will not vest when A and E are dead b/c the class of grandchildren is not yet closed. Taylor.when William had died. Under wait and see we wait for the following lives to end. E and S if necessary. Under the common law rule. At C’s death Taylor has two children A &E and one grandchild S. 1. then Taylor’s grandchildren.
B has a fee tail which could come to an end and create a reversion in O. ii. when the actual intentions are impossible to accomplish. Reformation of the instrument: some modern courts apply the cy pres doctrine. O conveys to “A for life and then to B and the heirs of her body A has a life estate. O conveys to A for life and then to B and his heirs O has a life estate and B has a fee simple absolute. i. Problems: Future Interests in Transferees (page 227) 1. A person could create a trust that would pay income from the trust to his child. This avoids the necessity of locating the lives that measure the common law of perpetuities period. (b). In which case is there a reversion? (a).2. 23 states have made the rule against perpetuities inapplicable to interests in trusts. f. USRAP (90 years) a. USRAP would require the court to reform C’s will so that the interest in Taylor’s grandchildren would be vested within a 90 year period. 1. Cy Pres: doctrine of wills and trusts that permits courts to revise the grantor’s instrument to get as close to the grantor’s intentions as possible. In the above example: We would wait 90 years after the death of C to see if all of Taylor’s children have died. Waiting for a maximum of 90 years after the creation of the interest to see if it has vested. O owns a fee simple and makes the following transfers. b. thus keeping the class of the grandchildren open. his child’s children and even then to grandchildren. O gave up all rights. 78 . thus closing the class and causing the remainder to either vest or fail. Perpetual Trusts i. If at the end of the 90 year period Taylor’s after born son C was still alive. ii.
B has an indefeasible life estate with a remainder in O and C has O’s ownership rights which include the right of reversion. A’s oldest child B is 17 When A is 17 the remainder is contingent but when B reaches 21 the contingent becomes vested. and then to B for life.(c). Page 230: Remainders 1. Is B’s remainder vested or contingent? If B conveys interests back to O what does O have B has an indefeasibly vested remainder in fee simple absolute and if B conveys to O. then to B if B gives A proper funeral. O conveys to A for life. (d) O conveys to A for 20 years Yes. O dies and leaves a will devising all of O’s property to C. B gets an indefeasibly vested remainder life estate and C has an indefeasibly vested remainder in fee simple absolute. which could not be met. At the time of the conveyance B is 15 years old. automatic reversion in O. What interests are created? A gets a possessory life estate. O conveys to A for life. O gets the estate in fee simple absolute. if B attains the age of 21 before A dies. owner of Blackacre. 79 . what happens if B reaches 21 during A’s life this creates a contingent remainder. 3. O. 2. then to B and her heirs. If B reaches 21 during A’s lifetime nothing happens because A has a life estate. O gets the property by reversion when A dies. and after A dies if B gives A proper funeral then O’s interest in the property is divested by B. whose interest will be divested if B gives A proper funeral this is an executory interest (springing). Who owns Blackacre A has a possessory life estate. then to C and her heirs. and then to the survivor in fee simple. and then to A’s children if any are alive or if none are alive then to O’s daughter B. in that case (if its not met) O gets a reversion in the property. and in the event of A’s death to B and her heirs. Does B have a remainder or an executory interest? If it is an executory interest. 2. then B dies. O tells you he wants to convey Blackacre to his son A for life. O conveys to A and B for their joint lives. (Page 228 bottom) O conveys Blackacre to A for life. O conveys Blackacre to A for life and then to B for life. come to you with a draft instrument of a gift. 4. Page 238 1. O conveys to A for life. What if the remainder had been to C and her heirs if C survives A and B then C would have a contingent remainder in fee simple absolute. Then A dies. A’s life estate will only end when he life ends. If there is a reversion. the condition is contingent upon one surviving the other. O conveys to A for life and then to A’s children who should reach 21.
(e) O conveys to A for life and then to B and her heirs. B is now 2 years old. THERE HAS TO BE A SHIFTING EXECUTORY INTEREST THAT FOLLOWS) (c). O conveys to A for life. then to A’s children and their heirs. To A for life. O has no reversion. C and D have a contingent remainder in fee simple absolute (the condition is written so that they not only have to born. What does Don Little have Don Little gets the real property where there is a period of time of time that the grantor has the property and divests the grantor which gives Don a springing executory interest. then to B and her heirs. if C and D do not survive A then this can be subject to complete divestment. then there is a contingent remainder in A in fee simple absolute (A has to have children for the property to go to A’s children and their heirs). (b) Two years after the conveyance A has twins C and D A has a possessory life estate and C and D have a vested remainder subject to open. C and D have a shifting executory interest in fee simple absolute. 3. then B if B attains the age of 30. T devises 10. then to such of A’s children that survive him. C and D A has a possessory life estate. then to such surviving children and their heirs. Then B has a shifting executory interest (IF THERE IS A VESTING REMAINDER SUBJECT TO COMPLETE DIVESTMENT. what is the state of title A has a possessory life estate.000 to his cousin Don Little. but if at A’s death he is not survived by any children. if and when he survives his wife. so in that gap the grantor gets a reversion in that property in fee simple with a springing executory obligation. B has a vested remainder subject to complete divestment. they also have to survive A for their interest to vest at all) and B has a contingent remainder in fee simple absolute. Problems Rule against Perpetuities (page 248) 1. 2. but If none of A’s children survive him to B and her heirs. O conveys to A for life. (d) O conveys to A for life. but if A is survived at his death by any children.(a). At the time of the conveyance A is alive and has no children. upon A’s death if B marries A’s widow then to B and his heirs There is a gap between A’s death and B marrying A’s widow. 80 . At the time of the conveyance. A is alive and has two children. At the time A is alive and has two children C and D A has a possessory life estate. C dies during A’s lifetime and A is survived by B and D D gets the property in fee simple absolute.
21 years after O has died. 3. B is alive at the time of the conveyance and is the validating life. (a) Suppose O said for the first child of A who is admitted to the bar A is still alive and could have an after born child and die in childbirth (so she can not be the validating life) after O dies who does not get admitted into the bar 21 years after O’s death. However. to B’s heirs. if any for life. A has a child B who is 26 at the time of the conveyance. so we will know at the time of the conveyance if the contingency in B’s heirs will vest absolutely or fail when B dies. the contingent remainder in A’s children is valid b/c A is the validating life and we will know when A dies who her children are. The last contingent remainder is in B’s heirs. 4. B is alive at the time of the conveyance and can act as his own validating life. is the remainder valid? The remainder is vested subject to open. O. If it was A’s children. A’s widow is an open class b/c A’s widow may not have been born when O dies. O conveys to A for life. thus subject to the rule and b/c it is subject to open. then to B if B is still alive and if B is not then alive. the conveyance is void b/c there is the possibility of an after born child who will not be 25. then to A’s issue then living. If it said issue now living then they could be their own validating lives.000 for all members of her present property class who are admitted to the bar Valid. A has a possessory life estate. 81 . A would be the validating life but b/c its to A’s issue there is no validating life (A is dead). O conveys to A for life. 2. Assume A has no children at the time of the conveyance. at the death of the last person of this group. The contingent remainder in B is valid b/c we will know while he is still alive if he has outlived A. O conveys to A for life. then to A’s children for their lives. declares that she holds in trust 1. We will know for sure when A dies if B has reached the age of 30. B has a contingent remainder. The gift to A’s issue is not valid. a teacher of property law. then to A’s children who reach 25. then to A’s widow. 5. we will know who passed the bar and the last person to dies is the validating life and we will know.
UNIT 6: Co-Ownership & Marital Interests: (PGS: 275-296, 303-308, 310-359)
1. Forms of Concurrent Ownership a. Tenancy in Common i. Own separate but undivided interests in the same interest in ii. iii. iv. v.
property Interest may be alienated, devised, inherited separately from the other tenancy in common interests No survivorship rights By state or judicial decision, a conveyance of real property to two or more people who are not married to each other is presumed to convey a tenancy in common Each tenant is entitled to possess the entire property 1. Example: Tim conveys property to E and G as tenants in common. If E conveys his interest in the property to N, then G and N are tenants in common. If G dies and devises his interest to M, then M and N are tenants in common. Tenants in common may own unequal shares and different estates 1. Example: Able, Baker and Cassie own Blackacre, in equal shares as tenants in common. Able conveys his interest to Baker. Baker and Cassie are still tenants in common, but Baker has a 2/3 share and Cassie has a 1/3 share.
b. Joint Tenancy i. Own an undivided share in the same interest in either real or ii. iii. iv.
personal property, BUT the surviving tenant owns the ENTIRE estate. Right of Survivorship is present here (upon the death of one tenant, the share held by the remaining joint tenants increases proportionately) The joint tenancy expires upon the death of one of the joint tenants (when a joint tenant dies the ENTIRE interest dies with him). A joint tenancy may only be created by an inter vivos conveyance or will Each joint tenant OWNS the ENTIRE INTEREST
v. vi. Four Unities of Joint Tenancy: A joint tenancy at common law cannot be created if the four unities are not satisfied
1. Time a. The joint tenants must receive their interests at
the same moment in time.
2. Title a. All joint tenants must receive their interests
under the same instrument: a deed, a will, or a decree quieting title by joint adverse possession. i. Common law does not recognize transfers in interests from oneself to oneself. 3. Interest a. Each joint tenant must have an identical interest in the property i. Each must have the same share of the undivided whole AND ii. Each tenant must have the same durational estate. 4. Possession a. At the creation of the joint tenancy, each tenant must have the right to possession of the whole property i. After creation they may agree amongst each other to divide possession
vii. Creation of Joint Tenancy 1. Common law presumed that any conveyance or devise
to two or more persons (other than husband and wife) was a joint tenancy. 2. TODAY, American jurisdictions have reversed that presumption, and a tenancy in common is presumed unless there is CLEAR evidence of a joint tenancy. 3. To form a joint tenancy there needs to be a CLEARLY EXPRESSED INTENTION by the grantor 4. Common phrases: to A and B jointly, to A and B joined together, to A and B as joint tenants and then to the survivor and her heirs.
viii. Severance of Joint Tenancy: A joint tenant may destroy the joint tenancy at anytime by conveyance and a tenancy in common results. 1. Conveyance
a. If a joint tenant conveys his interest to a third
party or to another joint tenancy, it becomes severed as to that interest i. Example: If Tom, Dick and Harry are joint tenants and Tom conveys his interest to Bill the joint tenancy is severed. Bill then owns a 1/3 undivided interest as a tenant in common with Dick and Harry. Dick and Harry continue to be joint tenants with respect to their interests. 1. If Dick dies then Bill and Harry will become tenants in common and Harry will hold 2/3 and Bill will hold 1/3. b. Riddle v. Harmon: Common law held a conveyance of an interest held by a person to himself as an empty act devoid of any legal effect. In order to convert a joint tenancy to a tenancy in common the joint tenant would have to use a strawman to whom a conveyance would be made and who then could reconvey the property back. Here the court held that Frances Riddle could validly sever the joint tenancy with her husband Jack, by a conveyance from herself as a joint tenant to herself as a tenant in common. The deed Frances wrote made her intent to sever the joint tenancy very clear. The court held that the strawman concept was legally archaic and that they have already permitted A to make a conveyance to A and B as joint tenants. 2. Mortgage a. Title Theory: Holds that a mortgage effects a transfer of legal title, where a mortgager could reclaim title by paying off the loan secured by the mortgage. i. A mortgage by one joint tenant could sever the joint tenancy b/c the unity of interest would be destroyed. ii. Many jurisdictions today have modified this to treat the title held by the mortgage as only for the purposes of 84
John mortgaged his interest to Carl and Mary Simmons in order to secure a loan made by them to Charles’s friend Sprague. If the mortgage is unpaid majority of the courts allow the remaining joint tenant to keep their interest free and clear. Usually the lease does not survive the death of the leasing joint tenant. If one joint tenant kills another joint tenant then it becomes a tenancy in common 85 . c. Later John died while the loan was still unpaid. 5. Most jurisdictions today do NOT regard a joint tenancy as severed by one joint tenant’s lease of the interest. b. Agreement a. Lien Theory: Holds that a mortgagee (lender) only has a lien against the property. Operation of Law a. Sprague: John and William Harms owned a farm as joint tenants. i. 4. A joint tenancy can be severed by agreement as long as the intention is clearly manifested. Lease a. This left William with an unencumbered title to the entire farm. The court held that there was no severance and that William owned the farm free and clear of the mortgage to Carl and Mary Simmons. ii. The mortgage burdened only John’s interest and it died with him. Under this theory a mortgage by one joint tenant makes NO alteration to title and does NOT sever the tenancy. Harms v. At common law if one joint tenant leased his interest in the joint tenancy it was severed b/c the unity of interest was destroyed BUT the lease was VALID.securing a loan to resolve the issue of severance. b. 3. iii.
Made the husband master of the tenancy by the entirety 86 . Neither tenant can destroy this tenancy on their own iii. From the law’s perspective marriage produced one person husband b. c. Operation 1. Common Law a. The right of survivorship is indestructible so long as the marriage stays in tact ii. No spouse acting alone can convey the entire estate iv. The woman lost her legal identity and went from a feme sole to a feme covert iii. Need same for unities to create this PLUS marriage between the tenants a. Has a right of survivorship 3. No severance i. May not be severed ii. A depositor may make a present gift of an undivided interest in the account 2. Tenancy by the Entirety i. TODAY a husband and wife may own property however they want iii. Or it could be made to be used so that the other person could manage the money of the first person (like a power of attorney). Creation 1. General 1.ix. Joint Tenancy Bank Accounts 1. Common law presumed that by marriage the couple merged into one legal person. At common law a conveyance to a husband and wife created a tenancy by the entirety 2. One Person i. It could be created to be a payable on death account 3. A form of joint ownership available only to husband and wife 2. ii.
e. Modern Law a. 2. i. Either a woman acquired the legal right (equal right) to alienate possession and survivorship rights OR neither spouse was permitted to alienate possession and survivorship rights d. Treats spouses equally b. Neither Spouse may Alienate: majority of states provide that NEITHER spouse may alienate their possession or survivorship rights. This common law structure is NOT used anymore in the US. which could not be alienated by her w/o her husbands consent and could not be seized by her husband’s creditors. The wife only had a right of survivorship. The husband had the right to exclusive possession as well as survivorship rights c. Both of those rights could be alienated by the husband inter vivos and could be reached by the husbands creditors d. After the accident but before P brought suit. Equal Right to Alienate: half a dozen states provide that either spouse may alienate possession or survivorship rights in a tenancy by the entirety. D owned a home with his wife as tenants in the entirety. i. The husband’s creditors could seize the estate during the husband’s life and if the wife outlived him she could then own it solely. Prevents the creditors of either spouse from seizure of their interest ii. Sawada v. This change was made as a result of the Married Woman’s Act (this restored a married woman her own legal identity) c. D conveyed their 87 . e. i. Endo: D inflicted personal injuries on P b/c he was negligently driving a car that collided with them.b. The wife’s creditors could in this case seize her possessory interest in the property.
home to their sons. iv. Physical division of the property 88 . Death of the spouse 2. The conveyance would be considered to be fraud on the creditors of D if they are entitled to seize the property to satisfy claims. Rights and Obligations of Concurrent Owners a. TODAY. Personal Property 1. Creditors should require that both spouses pledge the property as security for extensions of credit. i. Divorce OR 3. Partition in Kind 1. Partition: can be demanded at any time and for any reason and for no reason at all. i. W/o agreement this can be accomplished by a suit in equity. Joint action of both spouses to convey the property held in tenants by the entirety v. The court ruled that property held in tenancy by the entirety might not be subjected to creditors against only one spouse. Termination: could be terminated by 1. f. Tort creditors of a single spouse should not be allowed to seize a portion of a family residence w/ dangerous consequences to the innocent spouse. Some states hold that creditors could seize the survivorship rights. not possession. Common law did not recognize tenancy by the entirety in personal property b/c the husband became the sole owner 2. most states permit tenancy by the entirety for personal property 2. Example: A creditor obtains a judgment lien on the husband but the only way they could get it is if the husband dies before the wife.
Helen lived on a portion of the property and she operated a business from there. The court denied her claim reasoning that a lease by a single joint tenant to a third party is a valid contract as the interest of the lessor in the joint tenancy is concerned. ii. Each co-tenant has the right to possess the entire property and no co-owner can exclude another ii. 1. Swartzbaugh v. This will be ordered if (1) physical partition is impossible or extremely difficult OR (2) physical partition is not in the best interest of all parties 2. She could appear at the pavilion and demand that D let her into possession. This is the preferred method 3. John leased 4 acres to D. Lola has some possibilities after this ruling in trying to eliminate D from the space a. Although there was evidence that the value of the property would be maximized by sale and development. He would probably invite her to come in and watch the fights and if he did not then she would have simply triggered ouster. thus causing him to be 89 . who constructed a boxing pavilion on the site. This kind of partition happens a lot in the courts b/c it is very hard to physically divide most real property. who is a boxing promoter. the court held that it was not in the best interests of all the parties to sell the entire property. The value of D’s continued possession (secured by a physical partition) was sufficient to convince the court that a condition in kind should be ordered. b. Partition by Sale 1. In general co-tenants have no fiduciary duties to each other iii. Delfino v. Profits & Possession i. Lola sought to cancel the lease that was made by John. P wished to develop the property into single-family residences and so demanded a partition by sale even though the property was physically capable of being divided and made as a partition in kind. Lola did not join the lease and she objected to the boxing pavilion. Rents.2. Vealencis: D owned a tract as a tenant in common with P. Sampson: John and Lola owned in joint tenancy a 60-acre walnut orchard.
a married woman did not iii. leaving the buyer with leasehold and the obligation to pay rent to John. b. Pure common law system of marital property no longer exists in any relevant jurisdiction ii. Marital Interests a. 90 . Wife’s Rights 1. which would terminate Sam’s leasehold b/c Sam. which was capable of inheritance by children born of the marriage. d. Support: a wife had the right of support from her husband and in the event of divorce a husband had to pay alimony to the wife 2.liable to her for half the fair rental value of the premise. dispose and possess her own property. 3. With the marriage vow the common law allowed the husband to possess. Lola could hope for John’s death. iv. which would probably result in a partition by sale (b/c it would be impossible to physically divide the pavilion). Common Law System i. She could acquiesce in the lease and demand to keep half the rent received by John from Sam c. Attached to every freehold estate of the husband but NOT life estates. Dower: a. Lola could partition the leasehold. This was the right to a life estate in 1/3 of each and every possessory freehold estate the husband enjoyed at any point during the marriage. c. had only leased John’s interest. use or convey all his wife’s property except her cloths and jewelry for the duration of the marriage (her earnings were his as well). which would expire on John’s death. The sale from the proceeds would first go to reimburse D for the pavilion that he built and the proceeds would be divided by Sam and Lola. On the death of her husband a woman had the right of dower b. A single woman had the power to use. leaseholds.
Curtsey only attached if issue were born to the marriage (even if they dies early) b. or inherited and it was simply an intellectual achievement.000 representing 40% of his future earnings. Rights on Divorce 1. 1. future interests or any possessory freehold estate held by tenancy by the entirety. The court reversed stating that his MBA was not property b/c it could not be transferred.personal property. including equitable possessory interests b. Professional Skills/Credentials i. equitable interests. The right was either physically divisible or the wife would get 1/3 of the rents or profits f. d. Curtsey: a. Once dower attached it could only be removed by divorce or wife’s consent e. In RE Marriage Graham: When the couple married she continued to work so he could pursue his education and he earned a BS and an MBA shortly after he embarked on his business career the marriage ended. Common law gave a husband who survived his wife all possessory interests in land of the wife. Almost every jurisdiction has adopted some form of an equitable distribution statute which is designed to produce usually equal division of marital property subject to statute a. Modern Common Law System i. 91 . joint tenancy. A trial court awarded her 33. Some states hold that professional skills and degrees are not property but simply personal accomplishments that may or may no produce property and thus are not subject to equitable distribution. Dower has mostly been abolished by statute 3.
1. Elkus: After a 17 year marriage the wife who was a celebrated opera diva divorced her husband.ii. Spousal Agreements 1. The court ruled that the husband’s contributions in the form of domestic duties and voice instructions entitled him to share in the earning power. O’Brian: held that increased earning power as a result of a medical degree acquired during the marriage were subject to equitable distribution. Rights on Death 1. This had to be made in the lump sum now or a portion of the future earnings later. Antennuptial: 92 . At the end of the marriage she was super start earning 600. Elective share applies to all property of the deceased spouse that is owned at death iii. Elkus v. 2.00 annually. 3. Most states give a surviving spouse the right to receive in fee simple a fraction of all the property owned by the spouse at death. Called an elective share b/c a surviving spouse may elect this or take under the deceased’s will but NOT both. 2. ii. Some states (NEW YORK) treat professional degrees and enhanced professional skills as property subject to equitable distribution. O’Brian v. At the beginning of the marriage the husband was her vocal coach and she was an unknown.
it is treated as community property a. If it is impossible to trace then it becomes presumed to be community property. b. Tracing Rule applies commingled property (if it can be traced as individual property it remains as such) a. devise or inheritance this is considered separate property. Community Property: earnings during the marriage of either spouse as well as all property acquired from such earnings. Then she uses the money to buy a painting. Community Property i. Not enforceable at common law c. or inheritance. 3.a. Origins 1. Definitions 1. married Al and they live in a community property state. devise. Agreements made prior to marriage which purport to govern property division upon divorce b. Uniform Marital Property Act: proposed in 1983 and is based on community law principles. Example (TRACING RULE): Irene. 2. which she trades for a vacation home (taking title to it in her own name alone). or property acquired by gift. Jurisdictions are split if this is valid 2. In a community property state spouses may make separate property into community property and vice versa c. Excludes: property acquired b/4 marriage. Wisconsin is the only state that has adopted this and it defines marital property to include ALL property acquired during the marriage. If the original source can be traced to community property. When a portion of an asset is brought into marriage and the rest is purchased during the marriage there are 3 approaches 93 . Spousal: a. except through gift. Al has an equal interest in all of this b/c title of this can be traced to Irene’s paycheck which is community property. She deposits a paycheck in her own personal bank account. ii.
iv.000 Al would get the rest. 94 .000 each for the lot. 3. The lot is now worth 120.i. The community is entitled to 30. Al and Jane get 60.000. Example: Al enters into an installment sale contract to purchase a building lot for $45. W/O interest Jane would only get 15. 2. Time of Vesting: the character of the property is determined when title passes iii. Who owns the lot? 1. Inception of right state would hold that Al owns the whole property b/c he acquired a contract right before marriage. Inception of Right: (TX) holds that the character of the property is determined at the inception of the legal right to the property.000 separate and 40. (Ex: when a wife signs a contract of purchase) ii. In a pro rata state. the rest is community.000 plus interest (of which half Al gets). In a time of vesting state the lot is community property b/c title did not pass until all the payments were paid off. He pays 15. Al gets 80K (40. The remaining amount is paid with combined earnings at which point they divorce.000 and then marries Jane.000 marital) and Jane gets 40k. 1/3 of the lots is Al’s separate property and 2/3 of the lot is community property. Pro-Rata Share: holds that the % of the purchase price paid prior to marriage establishes the portion that is separate.000.
000 per each year of marriage making it 60K). Example 2: Suppose instead Hugo had a stock portfolio with the 100K and hired a manager to run it for which he paid for out of his separate money. Now Hugo gets only 10K so the property for the community is 390K. Personal injury damages. are separate property but compensation for lost earnings is community property. Husband and wife have equal management powers 2. Management of Community Property 1. Either spouse acting alone can sell. iii. The remaining 340K are community property (each get half). 3. At divorce each spouse is entitled to ½ of the community property and all of their own separate property v.4. During the marriage b/c of Hugo the gallery prospered and when they divorced it was worth 500K. Upon death of one spouse. Hugo’s investment at the time of the marriage was 100K. 7. Example 1: Hugo owned an art gallery and then married Alice. b. 6. First Hugo would get a reasonable return on his investment (assume 6% which is 6. The general rule is that income earned from separate property retains its character as separate property 5. Vested pension rights are community property b/c they are the fruits of earnings. which are for pain and suffering. Rights Upon Death 1. the ½ interest of the decedent spouse in the community 95 . 10 years later it’s worth 500K. Rights Upon Divorce 1. Neither spouse acting alone can convey their interest in the community to a stranger 4. The 400K are due largely to Hugo. lease or otherwise deal in the community property. Each spouse has a fiduciary duty to the other spouse to manage the community affairs iv. Both spouses have to join in a conveyance of real property 5. Increased Value of Property a.
2. with Marla in all the former community property. This extends to contracts implied from the parties intentions 3. his daughter would take the ½ interest in the community property and be a tenant in common with her mother. Unmarried co-inhabitants may create express contracts to govern their property upon death or termination of the relationship in a fashion similar to that of married couples 2. a. This will enable them to have their property divided under marital property principles. as a tenant in common. Same Sex Couples 96 . Example: Donald is married to Marla and resides in a community property state. Contracts 1. agreed between them to be husband and wife and represented this to the public. Not all courts accept this iii. In general debts. Recognized a de facto marriage between a man and a woman if they were co inhabitants. are considered to be community obligations and the community assets are liable for their satisfaction. vi. Common Law Marriage 1. This is still recognized in 11 states 3.property is disposed of according to the decedent spouses’ will. In the absence of a will it is done by intestate succession. If he died intestate and was survived by his wife and his daughter. Creditor’s Rights 1. Babette takes a ½ interest. When he dies he devises all his property to Babette. ii. “Quasi-Marital”: Unmarried Cohabitants i. which are incurred during the marriage. d.
When B dies intestate his share goes to C b/c there is not right of survivorship in a joint tenancy. In this case they allowed gay marriage legally. 2. or the right to inherit from ones spouse. They relied on the state constitution and equality provisions to conclude that same-sex couples can marry. B and C are still joint tenants to each other but they are tenants in common with D. Goodridge v. T devises Blackacre to “A and B as joint tenants for their joint lives. to take a marital deduction for state and federal purposes. A conveys his interest to D. a contract cannot create the status benefits of marriage.1. B and C as joint tenants. They offered three rationales: marriage is about commitment not begetting children. this severs the joint tenancy. promoting the welfare of children and there should not be a bad to conserve scare resources that extended to same sex marriages. O conveys Blackacre to A. responsibilities and protections as marriage (VT) Problems: Page 278 1. such as the right to spousal support under social security. the right to file a joint tax return. (a) What interests are created by the devise? This creates a life estate in A and B who are tenants in common for their joint lives. Problems: Page 278 97 . Only Massachusetts permits same sex couples to marry. Several states provide substitutes for marriage such as civil unions which confer the same benefits. (a) When A conveys his interest to D. remainder to the survivor. Then B dies intestate leaving H as his heir. there is no right of survivorship in this case b/c they can not determine what will happen to the property unless they outlive each other. (B) What if B dies leaving a will devising his interest? 2. of Public Health: Even where enforceable. Dept. Subsequently.
Along with many other people who owned the land. 3. A conveys a 10 year term of years in Blackacre to C. reckless. UNIT 7: Nuisance: (PGS: 639-666) 1. They sign a divorce agreement saying that Blackacre will be sold and the proceeds will be divided equally. General Principle i. A person may not use their land in an unreasonable manner that substantially lessons another people’s use and enjoyment of his land. b. W dies before the property is sold and thus the document did not severe the joint tenancy. After 5 years A dies devising all his property to D. The tenancy governs who owns the property. Nuisance Substantive Law a. One must use one’s property so as not to injure another’s property 1.2. This is the root of nuisance law 2. (a). (a) Does H have survivorship rights? A divorce does not destroy a joint tenancy. Private Nuisances i. Morgan v. Before this happens W dies. The lease with C ends with A’s death. conveying a lease does not change ownership in the property. 1.: High Penn operated a refinery that emitted noxious odors several times a week. A private nuisance occurs when there is substantial interference with private rights to use and enjoy land produced either by intentional and unreasonable conduct OR unintentional conduct that is either negligent. Morgan sued to enjoin the refinery’s operations 98 . polluting the air for about a 2-mile radius from the refinery. A and B own Blackacre in joint tenancy. H and W are owners of Blackacre. or so inherently dangerous that strict liability is imposed. This maxim does not always help b/c one person’s benefit could be another person’s injury. D has nothing and B has the estate in entirety. are getting a divorce. in joint tenancy. High Penn Oil Co. What are B’s rights? No impact. But the written agreement makes this a tenancy in common. 3.
iii. in the wrong place” d. the action is a nuisance if the conduct is either below the standard of care commonly required or the risk of harm is so great the conduct cannot be tolerated. recklessness. High Penn intended to operate the refinery and knew or should have known that the operation would produce noxious odors. 2. The court held that a use is a nuisance if it is either intentional or unreasonable or unintentionally produced by negligence. Some courts look to see if substantial harm was inflicted b. but which is continued anyways. its character. 99 . The court said the use was unreasonable. Balancing Harm and Social Utility a. When an actor uses his land in a way that unintentionally injures another’s use or enjoyment of land. Was the action unreasonable? 1. ii. Unintentional Conduct 1. If the gravity of the harm inflicted by the conduct outweighs its social utility (unconstrained by nuisance law) the conduct is unreasonable.alleging that the noxious odors made him sick and deprived him from enjoyment of his property. or extremely dangerous activity. the suitability of the use to the location. A nuisance exists if the injury it inflicts is severe enough to be above some maximum level of interference that a person can be expected to endure w/o redress. 3. b. the social value of the use. Courts should consider the extent of the harm. and the burden of avoiding the harm c. This is a test to access the worth of competing uses and to decide which user should shoulder the costs inherent in two incompatible uses. Substantial Harm (Liability Threshold) a. intentional conduct is an action that is known by the actor to interfere with another’s use of land. Intentional Conduct: this is the most common form of nuisance. An intentional activity is unreasonable if it causes serious harm and the actor could compensate for that and similar harm w/o going out of business. “A nuisance may be the right thing. Balancing uncompensated harm and ruinous liability a.
(Each use intervenes with the other one). ii. Each use produces externalities. iii. usually a public nuisance is also private. thereby contaminating municipal water supply. 100 . and while Connecticut said that declining property values do not determine what is a nuisance. Enforcement: 1. A large problem with property law is that the property uses are often incompatible. The court accepted bright lights at night in an urban area. 2. but a private citizen can bring a suit to abate a nuisance if he has been specially injured by the nuisance d. Example: A factory. This affects a right that is held in common by everyone not just landowners. 1. a. ii. Remedies a. The alleged nuisance whether intentional or not must be a substantial impediment to the use and enjoyment of land. Substantial Interference 1. which is discharging pollutants into a publically owned watershed. Intro i. Trespass involves a physical invasion whereas nuisance interferes with a right to use and enjoy land. Example: A halfway house for criminals was established in a residential area producing fear of criminal activity and declining property values. Usually suits for these are brought by public officials. c. Relationship to trespass i.iv. Arkansas ruled this a nuisance. 2. b. A public nuisance is rate. Example: An operator of a drive in Movie Theater sued an adjacent amusement park saying that their bright lights constituted a nuisance. Public Nuisances i. Courts are divided. costs that are imposed on the person producing them. Nuisance and trespass are closely related ii. Oregon Supreme Ct said that the movie operator’s use was abnormally sensitive. Economic theorists argue that decisions are more efficient if all the costs are internalized (borne by the decision maker).
he will sell that right to Eve for some price grater than 40. 2.999 to stop and that sum is not enough to compensate her for the costs of ceasing. Free Rides 1.iv. When there are numerous parties to the negotiation. 1. Holdouts 1. If the law gives Eve the use right she will continue her Dairy Farm b/c Adam will pay her no more than 39. iii. as a tanning salon is 40. When there are only two person involved in the transfer there is an inherent bilateral monopoly problem. if the use right is given to Adam.000 b/c both Adam and Eve will be better off by such a bargain. Some would give the initial entitlement to the d. as a dairy farm is 100. A property interest that is protected by a property rule cannot be taken away from the owner involuntarily 101 . ii. There is a dueling monopoly only one buyer and one seller.000 and less than 100. Transaction Costs i. b/c the use right will end up in the hands of the person whose use is the more valuable one. Economic/Legal Theory & Remedies i. b. But. This assumes the absence of transactions costs and the right of use would be given to Adam if he suffered a greater damage.000 and the damage to Adam from ceasing to use Whiteacre. one person will try to get a free ride at the expense of the other parties who are involved. The initial entitlement of land should belong to the party whose use is more valuable ii. Ronald Coase (Coase Theorem): in a perfect world free from transaction costs it does not matter if two parties are entitled to continue their use. Bilateral Monopoly 1. The two people battling will negotiate and make it harder to make a deal thus diminishing value even if it is reached.000. Legal theory holds that any property right can be protected by a legal rule or a property rule ii. Some people might not want to comply c. Example: Suppose the damage to Eve from ceasing to use Blackacre. Who gets initial Entitlement i.
Nuisance: Enjoin and Abate Activity 1. Shultz: Estancias constructed an apt building complex in Dallas adjacent to Shultz’s residence. the challenged user cannot be forced to stop use w/o consent (implicitly protected by the property rule). It is not possible to ignore the real world presence of transaction costs. Example: If Eve’s dairy farm is found not to be a nuisance then she cannot be made to stop unless she agrees to.iii. 55 feet from his house and 70 feet from his bedroom. The challenger can continue the use. vi. To save 40K he located its central air unit 5 feet from Shultz’s lot line. thus in situations where there are a large number of landowners affected by a more valuable use (on the balance of a nuisance) the presence of holdout transaction costs may prompt a court to protect the right 102 . 2. The cost of Shultz’s property was 25K. Adam’s tanning salon use is protected by a property rule. v. B/c it is not a nuisance. The unit was very noisy and prevented Shultz from entertaining outdoors and even interfered with indoor conversation and sleep. A property interest that is protected by a liability rule can be taken away involuntarily BUT only upon payment of an award of damages. To change the location of the unit would cost 150K to 200K and the apartments could not be rented w/o it due to the heat in Dallas. The TX court was applying the threshold of harm. Nuisance: Pay Damages and Continue Activity 1. The court held that the unit was a nuisance and awarded an injunction from its further operation. If it is found to be a nuisance and it is protected by a property rule the challenged activity will be enjoined. Example: Eve’s dairy farm is found to be a nuisance and she is enjoined from continuing. b. Estancias Dallas Corp. v. No Nuisance: Continue Activity 1. a. iv. If the cost to Adam of ceasing his use is 200K and the cessation for Eve to stop is 100K the use right will shift to Adam if he pays Eve between 100K and 200K to stop (assuming minimal transaction costs).
The case remanded for an amount of permanent damages to be accessed. 3. 3. 3. 2.: Spur operated a cattle feed in a rural part of AZ and the lot generated a lot of manure and noxious odors but it was okay b/c there was no neighbors. Webb had to bear the costs of coming to a nuisance. The court ruled that the factory was a nuisance and awarded damages instead of an injunction. Equity required the compensation because Webb came into the nuisance. Spur Industries v. and other economic benefits for the region). The court enjoined Spur from operating the feedlot but required Del to pay a reasonable cost of shutting down or moving. Nuisance or not: Enjoin the Activity but Award Damages to the enjoined actor 1. A court may enjoin an activity but require that the benefitted landowners compensate the enjoined actor for the lost use. This may occur when (1) P asserts that his activity is more valuable (2) it is not clear that the activity is a nuisance or that equity favors an injunction or (3) it is unlikely that P is able or willing to acquire the use right in the market. 2. Support Rights: Every landowner has the rights to continued physical support of his land by abutting land.an amount sufficient to compensate now for all the past and future injury that may be inflicted by continuation of the nuisance. vii. The natural topography of land may only be altered so far as a neighbor’s land is left with sufficient support.of the numerous landowners by a liability rule instead of a property rule. Boomer v. Later Del Webb bought land next to it to create a retirement community and made the two uses incompatible. noise and a vibration that substantially interfered with the use and enjoyment of land owned by a large number of neighborhoods. The court reasoned that there was a technological impossibility to abate and the factory produced a more valuable use (positive externalities in the form of jobs. The damages that are awarded are awarded are permanent damages. Del Webb Development Co. Atlantic Cement Co: D’s factory produced smoke. The court said that the harm could be compensated for instead of stopped altogether. 103 .
When this happens the owner of the underground mineral rights is strictly liable fro any damage caused to land or structures on the surface resulting from withdrawal of support. Subjacent Support: this is never an issue unless ownership has been split into 2 parts i. strict liability follows.a. Land Itself: 1. Same with artificial support ii. Lateral Support: i. A landowner who alters his land by removing the lateral support from his neighbor’s property is strictly liable for resulting damage. 2. Use Right in Receptor: Adam Use Right in Receptor: Adam Right protected by the property rule Right protected by the liability rule Enjoin Eve: Stop the nuisance Damages to Adam: Eve’s use continues No nuisance: Eve’s use continues Enjoin Eve and damages to Eve: Adams use continues 104 . 2. Most states hold that a landowner is liable for damage to structures from withdrawal of lateral support if either of two conditions is met: a. 3. The collapse would have occurred whether or not the structures were there. A court must allocate the right and decide whether to protect that right by a property rule (injunction) or a liability rule (damages). Ownership of the right to mine under the surface iii. b. Example: Adam has a tanning salon and Eve has a dairy farm. Eve is the polluter (the creator of bad odors) and Adam is the receptor of those odors. No matter how careful the alteration. Structures: 1. Ownership of the surface ii. Minority Rule: Some jurisdictions hold that a landowner is strictly liable for removal of lateral support to adjacent buildings. The land owner was negligent and the collapse would not have occurred but for the added weight of the structures b. if lateral support is removed. The right to use may be allocated to either of the parties and once allocated may be protected by a property rule or a liability rule.
Increase property values by minimizing use conflicts (thus increasing the property tax base) 3. Prevents incompatible use conflicts (thus reducing the need for nuisance law) 2. This type of zoning permits some uses and excludes all others within the zoned area. 2. 867-878. General Constitutional Validity i. Identifies land use from higher to lower 2. Village of Euclid v. The laws objective – minimizing land use conflicts to prevent nuisances from ever occurring – was a legitimate exercise of the states inherent police powers b/c its contents were neither arbitrary nor were they unreasonable. limited the height of structures. Amber Realty CO: Euclid. The least dense single-family residential use is the highest use. Mutually Exclusive Zoning: 1. light commercial. c. heavy commercial and then industrial. Statutory Schemes i. proceeding downward to a more dense residential use (apartments and other multiple family dwellings). ii.UNIT 8: Zoning (PGS: 828-857. OH adopted a comprehensive zoning ordinance that restricted the permissible use of property. even when they restrict the land uses to which a landowner may devote his property (possible to their economic detriment). The Supreme Court upheld the validity of the law against a due process and equal protection challenge. Zoning is the use of governmental power to regulate land use ii. Cumulative Zoning: 1. Intro i. and imposed minimum lot size requirements for certain types of structures. In general zoning laws are constitutionally valid. Authorization for Zoning 105 . Channels developments into patterns that may serve larger social goals (reduce urban sprawl and air pollution) b. ii. Zoning Basics a. 901-939) 1. Zoning laws divide a particular jurisdiction into specific separate geographic areas and impose limits on the permissible uses of land within each area 1.
Tolerating the continued existence of land uses prior to adoption of the zoning law 2. The location 106 . Forced Phase-Out: phase out the nonconforming use. Character of the structure iii. Definition: when zoning is introduced some existing land uses will not be in conformity with the uses permitted under new zoning laws. i. 2. Enabling Legislation: most zoning laws are adopted at local levels. cities and other non-legislative bodies the power to make rules that look exactly like laws. Statutory Discretion and Restraint a. Defective Enabling Act: States are permitted to delegate to administrative agencies. Providing for amendment of the zoning law 3.a. Zoning responds to this by 1. Communities are dynamic and appropriate land usage should change as underlying economic and social conditions dictate. Non Conforming Uses i. Nature of the use ii. ii. Ultra Vires local action: b. Comprehensive Plan 3. ii. Majority Rule: Valid if reasonable period a. Factors to determine reasonableness i. 1. Enabling Act: A local zoning law is void unless it is in conformity with the state enabling act (the law that authorizes localities to engage in zoning) 1. b. Conferring discretion on administrators in the application of the zoning statute b. as long as the law making power is exercised with conformity with clear standards in the authorizing legislation. Introduction i. These are permitted to remain b/c their immediate abatement would constitute either a taking of property w/o just compensation OR an unreasonable exercise of zoning power. although some states have enacted laws regulating land use state wide (controlled by the state constitution and state statutes). Forced phase outs are valid as long as the amortization period is reasonable to the affected nonconforming user. this is called an amortization period.
What portion of the user’s total business is affected v. Salvage Value vi. PA Northwestern Distributors v. Use Variances: these permit an otherwise prohibited use such as a multiple family residence in a single family residence area 4. Any monopoly or other advantage conferred on the user by reason of the foreclosure of similar and competing uses 2. the effect of which was to make the store operated by P illegal. No Expansion 1. The court here ruled that the amortization and discontinuance of a lawful pre-existing nonconforming use is per se is violative of the PN constitution. Area Variances: these are awarded to alleviate siting such as setback requirements or minimum yard area 3. zoning ordinances stipulate that the nonconforming use may not be expanded beyond the precise boundaries of the existing use 2. A minority of states hold that forced phase-outs are invalid b. it did not provide adequate time for elimination of the non-conforming use. Administrative Discretion i. Almost all zoning laws establish a zoning appeals board or board of adjustment who are authorized to grant variances from the zoning law in the interest of alleviating personal difficulties or unnecessary hardships 2. iii. Variances should be granted when compliance with the law would impose such extreme burdens on the owner 107 . and a new occupant will be required to conform to the zoning laws c. Zoning Hearing Board: Moon Township adopted a zoning ordinance extensively regulating the location of stores vending pornography. A successful nonconforming business will have to move in order to expand. Typically. Variances 1. A concurring judge thought that the ordinance was void b/c the amortization period was unreasonable. Minority Rule: Invalid per se a. Extent of the depreciation of the use vii.iv.
but both attempts had been unsuccessful. the standard that must 108 . Example (HARDSHIP): Commons v. absent a variance. this porch would violate setback requirements but was well screened by shrubs and thus posed no visual intrusion on his neighbors privacy nor would it impair property values. 5. c. a condition that Common had established by his efforts to either sell the land to his neighbors or acquire additional adjacent land to conform to the ordinance’s area requirements. Example (NO HARDSHIP): Aronson v. the property may not be effectively used. The court held that there should not have been a denial of the variance. Use variances generally have a broader impact than area variances thus. They reasoned that undue hardship means that.190 square feet. A zoning variance may be granted upon a showing that compliance with the zoning law would impose undue hardship on the applicant and this hardship must not be created by or be peculiar to the owner b. that had been created before the current zoning law. There was no other spot for the porch but the variance was denied b/c the invalid condition of P’s child. Westwood Zoning Board of Adjustments: Commons owned a residential lot.500 square feet. Common’s builder proposed to construct a residence conforming to setback requirements that would be of the same values as existing homes. while perhaps a personal tragedy. 6. Alternate standards for granting variances: a.that application of the law might be either unconstitutional or invalid. The new zoning law required lots to be 75 feet wide with an area of 7. General standard for granting variances: a. Board of Appeals: P wished to add a porch on the back of his house to accommodate his invalid child. 50 feet wide with a total area of 5. In the past Commons had attempted to sell the lot to a neighbor and to acquire additional land adjacent to his lot. was not a hardship within the meaning of the variance law.
v. Correct a mistake in the existing law ii. These are uses that are permitted by the zoning law but which may impose material external costs on neighbors iii. Conditional Zoning 1.” The developer offers to cluster the townhouses in a 109 . Courts looked to see if the zoning amendment was more legislative or judicial in nature. Example: A developer wishes to build townhouses on land zoned for “fully detached single family residences. If it was more judicial there was a stronger burden placed upon the municipality to prove a demonstratable public need for the change. Adapt a change substantial in conditions affecting land use iv. 2. Floating Zones 1. Spot Zoning 1. Courts could impose a greater burden of proving the general standard when an applicant is seeking a use variance. Exceptional Uses 1. Some jurisdictions require governments to prove that the zoning amendment is necessary either to: i. b.be met in order to grant a use variance is sometimes higher. which is not in conformity with the comprehensive plan. a. 2. Spot zoning is a zoning amendment that delivers special private benefits (and no public benefits) to a small discrete parcel of land. Conditional zoning is when a developer wishes to use the land in a way that is not permitted by zoning law and requests rezoning in exchange for the creation of a servitude burdening the land that is intended to eliminate or dampen the negative externalities of the proposed use. Some states exhibit a generally skeptical attitude toward zoning amendments that apply to relatively small tracts. ii. b. Floating zones are a use designation not attached to any particular land until a landowner seeks to have his land designed as the recipient of floating classification.
4. Cluster Zoning 1. Intro i. (2) the likelihood that the proposed structure will not cause substantial depreciation of neighboring property values 110 . but confer upon zoning administrator’s discretion to decide exactly how the use and density will be achieved. States possess an inherent police power the power to achieve the people’s vision of public welfare. vi. ii. Architectural Review: 1. Architectural Review Controls: these condition a land use permit based on factors such as (1) the conformity of the proposed structure to the existing character of the neighborhood.portion of the site shielded from view from the neighbors. Cluster zoning is to zone an area for a particular use at a specified level of density of occupation. This rule has broken down and a substantial amount of jurisdictions have upheld aesthetic land use regulations. Valid federal laws preemptive of the local zoning law 3. and covenant that the undeveloped portion of the site will remain undeveloped forever. Zoning for Aesthetic Objectives i. Limits on the Zoning Power a. (Beauty is subjective and completely in the eye of the beholder) 1. as communicated through their government agents ii. State law particularly the states zoning enabling acts and judicial doctrines developed to curb unreasonable and arbitrary exercises of police power b. Traditionally Judicially Created Rule: Use of zoning to achieve aesthetic objectives was beyond the permissible scope of the police power. US Constitution 2. Relevant state constitution 4. The power is limited and must conform to: 1.
The proposal was rejected and he attacked the validity of the entire scheme as unauthorized by the enabling act. Stoyanoff proposed to build a flat. The court held that it must examine carefully the 111 . which are protected by federal and various state constitutions i. pyramidal residence with a triangular window and door opening arranged asymmetrically on the structure. laws that substantially interfere with fundamental liberty of people to marry and associate together in traditional family relationships are VOID. Berkley: The affluent suburb enacted an architectural review ordinance designed to preserve property values and maintain the neighborhoods conventional neo-classical aesthetic sensibilities. Under US Constitution Due Process Clauses. 2. Moore v. The court here applied a higher level of scrutiny b/c the zoning laws substantially interfered with the rights of members of the same extended family to arrange their living relationship. Not all courts hold these types of review boards valid. her son’s son and her grandson. The rejection of his monstrous and grotesque design was reasonably related to preserving land values and the prevailing (if conventional) aesthetic sense of the community. and defined family so narrowly that it excluded a family unit consisting of a mom. and a violation of due process if within otherwise permissible scope of the police power. Stoyanoff v. Zoning Controls of Household Compositions: zoning laws can interfere with important civil liberties concerning living arrangements. her son. The court emphasized that the probable adverse effect of the design on property values in the neighborhood is merely the markets expression of prevailing aesthetic sensibilities. State ex rel. Cleveland: East Cleveland’s zoning ordinance limited occupancy of dwellings to family members of the same family. c. When the application of such review is so vague as to cause ordinary people to guess its meaning. a. outside of the scope of the police power if so authorized.2. The fundamental Liberty of Family Association 1. City of City of E. The court held that the review board is for the general welfare and thus authorized by the enabling acts. it becomes an unconstitutional deprivation w/o due process.
If people associate together and exhibit characteristics of a traditional family unit then that interest is protected under the relevant state constitution. Boraas: The village zoning laws here prohibited occupancy of swellings by more than two unrelated persons.importance of the governmental interests advanced and to the extent to which they are served by the challenged regulation. East Cleveland’s objective was insufficiently important to merit this regulation. City of Edmonds v. He thought that zoning law could withstand scrutiny only upon a clear showing by the government that the burden imposed is necessary to protect a compelling and substantial government interest. Inc: While the FHA prohibits discrimination in housing against handicapped 112 . Federal and State law prohibit housing discrimination against persons with handicaps. The court’s view was that the liberty of unrelated persons to live together in a group was simply not constitutionally fundamental. JUSTICE MARSHALL DISSENTED: he argued that the choice of household companions involves deeply personal considerations to the kind and quality of intimate relationships within the home. They found that this ordinance cut deeply into the institution of family. Zoning laws that substantially interfere with the ability of unrelated persons to live together are presumed valid and subject to only minimal scrutiny b. Oxford House. B/c this law was rationally related to the legitimate governmental objectives of residential tranquility and low residential density it was upheld. Some states regard the concept of family as more functional than biological or legal. ii. Statutory Limits on Zoning Controls of Household Composition 1. including the extended family that is deeply rooted in this nation’s history and tradition. the most important one is the Fair Housing Act 2. The legitimate concerns of overcrowding. In Village of Belle Terre v. 3. The US Supreme Court applied minimal scrutiny b/c the law did not substantially burden the deeply rooted liberty of related family members to arrange their living patterns. traffic and parking were only marginally lawful. a.
Exclusionary Zoning: i. Township of Mount Laurel: This NY Township developed rapidly between the 19501970. All zoning is exclusionary in that it seeks to exclude unwanted users but sometimes zoning is used to exclude unwanted PEOPLE ii. a substance abuse group. 113 . This leads to only affluent owners and the poor are often excluded. The court ruled that the NJ Constitution and the state’s zoning enabling act both required that local zoning further the general welfare and that the failure to accommodate the housing needs of poor people was contrary to the general welfare. The zoning code of Edmonds limited occupancy of a single-family residence dwelling to any number of persons related by genetics. Southern Burlington County NAACP v. it exempts from that prohibition reasonable local restrictions regarding the number of occupants permitted to occupy a dwelling. iii. the court ruled that the law illegally discriminated against handicapped people when it applied to bar occupancy by a group of 10-12 recovering alcoholics and drug addicts living together under the auspices of the Oxford House. The court interpreted FHA to exempt only total occupancy limits not occupancy limits based on the familial composition of the household. Example: a zoning law requires a minimum lot size acreage of 2 acres in order to preserve open space.people. B/c the Edmonds Law permitted an unlimited number of related people to live together in a single-family dwelling. d. adoption or marriage or a group of 5 or fewer unrelated persons. aesthetics and a high tax base. should not adopt land use regulations that make it impossible physically and economically impossible to provide low and moderate income housing in the municipality but must make it possible for an appropriate variety and choice of housing for all categories of people who want to live there. The zoning law in effect excluded all multi-family residential dwellings and mobile homes and required minimum lot and dwelling sizes for single-family residences that were sufficiently large that low-income persons were effectively excluded. and capped occupancy of such structures only when unrelated persons live together. one that is expanding in size and population and thus taking shape. A developing community.
Also. Regulatory Takings a. Constitutional Text 3. Takings permitted only for public benefit c. This remains the minority view and most states hold that as long as a zoning law does not exclude people on a suspect basis (race) it need only be related to legitimate state interest to be valid.1. Eminent Domain a. Per Se Rules c. This clause prevents forcible redistribution of property by stipulating through the just compensation requirement that when governmental power ii. b. a. it applies to the state and the federal government. Eminent Domain Power i. To prevent forcible redistribution of property 1. and judicial decisions ii. Remedies 114 . 945-1022) 1. 5th Amendment: “private property shall not be taken for public use w/o just compensation” 1. Conditional Burdens e. The Principle Issues 2. All governments in the US have the power to take private property for public purposes. UNIT 9: Takings (PGS: 941. The Purposes i. Public Use Requirement a. Thus when minimum lot sizes were rationally related to a legitimate local interest they remained valid. Intro b. tangible and intangible 2. statutory law. state constitutions. Balancing Public Benefits & Private Costs d. but that power is limited by the US Constitution. This clause applies to all property.
W grants an easement across Whiteacre from Blackacre from foot passage to and from the beach. Dominant Estate = Benefitted parcel 3. Types of Easements i. Example: R owns Blackacre and W owns Whiteacre. In an ambiguous grant. Servient Estate = Burdened parcel 4. A landowner may grant to another person the right to use the land for some specific purpose or in some specific manner. usually its considered an easement. Ambiguous Grant: If the grant is not clear but the interest conveyed is a limited area for a limited purpose. Designed to deliver a personal benefit rather than to benefit a land owner 2. 709-725. courts prefer to create an easement appurtenant b/c it is easier to eliminate.UNIT 10: Easements & Covenants (PGS: 661-701. An easement almost always gives its owner to use another person’s land. 1. Example: If W. and it is more likely to create value 4. This easement benefits whoever owns Blackacre ii. This right passes with the dominant estate whenever the estate is transferred to a new owner a. Creates a personal right to use the servient estate and that personal right may be assigned if the parties intend a. An interest in land that entitles the holder of the land to use land owned or possessed by another person. ii. owner of Whiteacre grants R and his assignees the personal right to enter upon and cross Whiteacre to reach the beach and R sells Blackacre w/o any assignment of this personal right the person who he sells it to has not right to enter 115 . 736-772. b. One that benefits the owner of another parcel of land 2. Not attached to any parcel of land 3. 783800) 1. Easements General i. Easement Appurtenant 1. iii. with no defined boundaries. Easements a. Easement in Gross 1.
the right to prevent diversion of the flow from the irrigation ditch that crosses Hillside on its way to Hollow. If L grants B the right to cross the farm to move his farm produce to dock an affirmative easement appurtenant has been created. an urban fly fisherman. Permission to enter the licensor’s land ii. has no right to use Hillside. If W sells Whiteacre it continues to be burdened. 116 . an affirmative easement in gross would have been created. (3) for adjacent or lateral support. Affirmative Easement 1. iv.or cross Whiteacre. B or his successors in the dominant estate have the affirmative right to use L’s farm (no matter who owns it) in that specified fashion. a. (2) for air. the owner of Hollow. the servient estate. If L had granted C. c. (1) for light. but does have a right to prevent Hillside from being used in a way that would prevent water from the irrigation ditch. Example: If someone gives a company the right to swing cables over their property. May be oral or written. Common law only recognizes 4 negative easements. this is an easement in gross b/c the company does not own any property benefitted by this grant. This is a negative easement appurtenant. owner of Hillside. grants to D. Licenses i. Hollow the dominant estate. Permit a person to use the servient estate in a specified manner a. b. all appurtenant. Negative Easement 1. the right to cross the farm to fish in the river. Example: J. and (4) for the continuing flow of artificial streams. 2. Confers only the right to prevent specified uses of the servient estates and confers no right to use the servient estate. Example: L owns a farm that is between a farm owned by B and a riverside dock used to ship produce. iii.
v. A license is irrevocable if the licensor expressly makes the license irrevocable. Taylor used the access road to construct a substantial single-family residence. Taylor: Holbrook permitted Taylor to use a roadway across his property in order for Taylor to reach his own property. Grantors convey land and in the same deed “purport” to reserve an easement in favor of the grantor or third party 117 . Courts prefer to construe ambiguous cases as creating a license iv. 1. If a licensor grants a license on which the licensee reasonably relies to make substantial improvements to property. Most are created expressly be deed or grant 2. d. When a licensee is tied together with some legally recognized interest the license is irrevocable until the other interest is vindicated. Licenses are generally NOT assignable. A minority of jurisdictions rejects application of equitable estoppel to oral licenses. Equitable Estoppel a. i. Easement is an interest in land and is governed by the Statute of Frauds. c. equity requires that the licensor be estopped from revoking the licensee. which requires a writing signed by the grantor. Holbrook v. Are revocable at any time unless the licensee makes the license irrevocable either expressly or by conduct. 3. This license may not be revoked until P has a reasonably opportunity to perform. 3.iii. Example: D agrees to purchase form P a truckload of fertilizer. License couple with an interest a. payment to be made only after Parker has delivered the fertilizer and spread it in D’s oat soil. Easement by Grant 1. unless intended by the parties. Creation of Easements i. b. Holbrook later blocked the road with a steel cable and the court held that Holbrook was equitably estopped from revoking the license. Intention a. With Holbrook’s knowledge and w/o any objection. 2.
This could have been avoided if McGuigan conveyed the property to the church. iii. d. Peterson conveyed Lot 20 to Willard but made no mention of the parking easement. An irrevocable license. who then would reconvey the property to Peterson reserving the easement. First Church of Christ. ii. The Supreme Court overruled and said that the common law rule frustrates clear expressions of the grantors intent and delivers windfall profits to people like Peterson (who presumably paid less for the property b/c it was burdened by an easement). a. Willard v. reserved in favor of the grantor Modern = reservation of an easement by the grantor is valid Majority of modern courts treat reserved easements in favor of a third party as VOID (before common law didn’t think that it could be extended to someone who is a stranger to the deed) Usually necessary to use two conveyances instead of one to create an easement in favor of a third party.a. c. one portion of the property has been used in an easement-like fashion for the benefit of another part of the property (implied from prior use). Need Common Owner 118 . Early common law did not recognize easements b. Scientist: McGuigan conveyed Lot 20 to Peterson by deed that purported to reserve an easement for parking during church hours for the benefit of the adjacent church. e. After learning of the easement Willard sought to quiet title. Easement by Estoppel 1. Easements Implied by Prior Use: This is when the property has been divided by a common owner. The trial court applied the majority view that easements reserved in favor of a third party were ineffective. Easement by Implication 1. the functional equivalent of an easement can be created by estoppel. and prior to the division.
an easement is implied by grant but if B sells lot 1 then the easement is implied by reservation. 119 . Van Sandt v.i. Reasonable Necessity i. on the theory that no easement had ever been created on his property. If the owner and grantor retain the quasidominant estate (the benefitted part) the implied easement is implied by reservation. ii. later owners build a house on each of the two vacant lots and connected plumbing in those houses to the original sewer. This easement must be reasonably necessary for the owner of the dominant estate to use and enjoy the property. the upstream owner. The court said that an easement by reservation implied from prior use had been validly created by Bailey when she conveyed title to each of the two downstream lots. iii. Royster: Bailey owned three adjacent lots in Kansas. The court rejected the older rule of strict necessity (absolutely indispensible necessity is required). If an owner or grantor retains the quasiservient estate (the burdened part) the implied easement is implied by grant. Example: B owns lot 1 and 2 and they are both adjacent. P. b. the downstream owner sued to enjoin D. An easement implied from prior use can only be appurtenant. She built a house on one of the lots and ran an underground sewer line across the other two lots to a municipal sewer line. from continuing to use the bailey sewer after he awoke to 6 inches of sewage in his basement. If B sells lot 2 to R. B constructs a driveway over lot 1 to her house on lot 2. However. 1. There is no easement b/c she is the common owner of both lots. ii.
One of those 120 . ii. just that the easement has to embody some permanent physical alteration d. But the court said that the sewer line should have inferred the existence of some sewer by noting the existence and operation of plumbing fixtures. it is apparent if it’s visible. could be detected or could even be inferred from a reasonable inspection of the premises. An easement is implied by necessity only when a common owner divides his property in such a way that one of the resulting parcels is left w/o access to a public roadway. Apparent i. Use must be continuous not sporadic ii. Easements Implied from Necessity: This is where a property has been divided by a common owner in such a manner that an easement for access is necessary (implied from necessity). b. which he sold in bits and pieces over time in the 1890’s. Intended Continuation i. a. The prior use MUST actually exist at the time of the DIVISION f. Only permitted fro a right of way (ingress or egress) between a landlocked parcel and a public road. Rosier: Hill owned a large parcel of land in Texas.c. Doesn’t mean that it must be used constantly. Existing Use i. The use must be apparent. Continuous Use i. Othen v. Although in Van Sandt the private sewer line was sold w/o reference to an easement. could have employed a skilled plumber to detect the actual location of the sewer. Common Owner i. The parties must intend at the time of the division to continue the prior use e. 2.
which Othen contended was simply be necessity. had conveyed the property to Rosier’s predecessor in interest and it was that conveyance that landlocked that Othen parcel. Rather it appeared that at the time Hill conveyed Rosier. To prevent erosion of that road. if the necessity is removed. which made the road impassable. d.parcels was landlocked and title to that parcel was eventually acquired by Othen. Othen built a levee. Necessity at Severance i. c. Must exist at the time that the property is divided. Court held that there was no easement by necessity b/c there was no proof that Hill. Elements of Prescriptive Use a. Prescriptive period i. Must be adverse and NOT with permission of the owner 121 . Hill owned other land that was continuous to both the Othen parcel and a public roadway. Same as the required prescriptive period applicable for adverse possession b. the common owner. Adverse use under claim of right i. Duration i. Easements are not possessory interests so an easement cannot be acquired by adverse possession but adverse use for a specific period of time can ripen into an easement by prescription b. who used a roadway crossing Rosier’s land to reach a public road. the easement terminates iv. Easement by Prescription 1. Easements by prescription may be appurtenant or in gross 2. No prior use is necessary to establish an easement by necessity. Lasts as long as the necessity exits. Othen sued Rosier to enjoin further interference with his right of way. General a.
Adverse user needs to continuously assert her claim of right iii. IF the use is permissive. A permissive use can become adverse if the user does things that are inconsistent with mere permission and that give the owner notice of the users claim of right. Exclusive Use i. ii. no matter how long the use goes on. Some jurisdictions permit the public at large to acquire prescriptive easements in private lands so long as the elements of prescription are satisfied b. Othen Case: Othen’s alternative argument was that he had acquired an easement for right of way across Rosier’s land by prescription. Many courts hold that exclusive use must be established to show a prescriptive easement. Adverse use must be conducted so that the use may be discovered by any reasonable inspection. Public Prescriptive Easements a. Exclusive use is shown simply by claiming an easement from ones own use and not in common with the public or anyone else iii. iii. If adverse use is interrupted the prescriptive period starts over. Adverse user does not have to use the property constantly ii. Can not be carried on in secret or concealed d. it can never ripen into a prescriptive right. ii.ii. e. Beachfront property owners own the dry sand portion of the beach b/c their title extends to the 122 . Continuous Use i. 3. but the court rejected this claim because Othen used the roadway in common with Rosier. c. Example: a foot path beach access during a summer period every year satisfies the continuous use element iv. Open and Notorious Use i.
Easements Appurtenant 1. Transfer of Easements i. Transferable. Pocono Spring granted to Frank Miller and his heirs and assignees the exclusive right to fish and boat in the lake. Change in the Easement Location 123 . While these easements were transferable they were not divisible. Courts tend to restrict transferability here 2. The estate then begun to grant licenses to others to use the Lake. a. An injunction was granted and the court ruled that the partners had acquired a bathing right by prescriptive use and that the easement in gross and the easement in gross to fish and boat was a commercial easement that was meant to be transferable. Easements in Gross 1. f. Scope of Easements i.mean high tide mark. part of the title to a freely transferable dominant estate (both the burdened and the benefited land is transferred) ii. Lutheran Conference and Camp: Frank and Rufus Miller owned a large track of land on a creek in the Pocono Mountains. Frank and Rufus then operated a boating and bathing business as partners until Rufus died. fishing and bathing rights and upon and about Lake Naomi. They dammed the creek to create Lake Naomi and conveyed to Pocono Spring a corporation that they owned and controlled the land underlying the lake surface. How the Easement was Created iii. Parties Intent ii. D was one of those licensees to which a license was granted by Rufus Miller. So in order for the public to access the beach they need an easement over that property e. Miller v. Commercial easements in gross are assignable and noncommercial easements are not assignable unless the parties intend to permit assignment. Frank sued D to enjoin their further use of the lake. A year later Frank granted to Rufus Miller and his heirs and assigns a 1/4th interest in and to the boating.
Real Covenants a.2. Merger iii. 373-388. 402-410. 3. Equitable Servitudes Interpretations of Covenants Termination of Real Covenants & Equitable Servitudes UNIT 11: Landlord-Tenant (PGS: 363-365. Division of Estates Benefits g. General b. 5. Running Elements e. Nature Of Leases 2. Termination of Easements i. 124 . Expiration ii. Enforceability d. 4. iv. Types of Leaseholds 3. 421-437) 1. Creation of Real Covenants c.
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