Outline for Property 1) tends to contribute economic efficiency.
(more overall utility) 2) simple, certain and easy to administer. 3) simple, certain and predictable for the general public 4) tends to fit in with pre-existing habits, customs, cultures and natural forces 5) appeals to the sense of fairness and justice. What constitutes possession: physical control and the intent to assume dominion over the object. Constructive possession also benefits from prior possessor wins rule First possession: Acquisition of property by Discovery, Capture, and Creation: A) Acquisition by Discovery a. Johnson v. M’intosh P claims that he bought land in Illinois from Native Americans D is conveyed a grant later in time by U.S. government. Issue: whether P’s title can be sustained in the Courts of the U.S. Holding: No Rationale: Indians have a right to occupancy, but not to give away. U.S. takes from England. Everything England has, illegitimate or not, belongs to U.S. Thoughts: Possession is an elastic word and is culturally determined Determination and enforcement of property rights depends on the power of the state to impose its will Property thus both confers and rests upon power B) Acquisition by Capture a. Pierson v. Post P claims that D captured and killed a fox P was in pursuit of, whilst knowing p was chasing it Issue: does pursuit of a wild animal entail possession? Holding: no. You must be in possession of animal or mortally wound/ trap it (fish example with net young v. hichens) Rationale: Foxes are a nuisance, peace for the public. Efficiency. Easier to administer (First in time). Minimize litigation. Note: this was when there was an abundance of natural animals and Conservation may be a new argument Unfair Competition: Young v. Hitchens =/= B sinking A’s boat, but can capture fish, even though A nearly has them captured
Animal must be confined in an enclosure; cage does not need to be escape proof: State v. Shaw: Tugboat crew remove fish from a net owned by another. The net has a series of small entrances where escape is possible, but unlikely. b. Ghen v. rich- Customs more effective in getting animals killed = different result P kills whale with harpoon plus grenade D finds whale washed up dead. Issue: whether P has ownership of whale after killing it Holding: yes. Rationale: Iron holds the whale. Encourage a socially useful investment. They can be out looking for another whale to kill. Minimize litigation. Protect property interest of society c. Keeble v. Hickeringill- INTERFERENCE BY NON COMPETITOR P owned land with duck decoy equipment in a pond. D knowing of this, sabotage P by firing shots to scare ducks Issue: Whether P had a right to acquire property of ducks on his property without interference of D. Holding: yes. Rationale: he that hinders another in his trade or livelihood is liable Best for society as a whole. Minimize controversy. Feel secure in property claims Thoughts: Hickeringill would be able to shoot to kill the dukcs flying over his land to the pond. Animus revertendi- continues to belong to the captor when they roam at large. Domesticated animals are valuable to society and this effort to tame wild animals is rewarded. How does a hunter know? Tie a ribbon or a bell to it No animus revertendi- If escapes then it no longer belongs to captor. Elephant in Pennsylvania exception. Hunter will be put on notice (Stephens and Co. v. Albers) Oil and gas Why law of capture? Fugitive resources and it gives an incentive to produce oil and gas. a. Ellif et al. v. Texon Drilling co.- Non-negligent capture required. P owned land that neighbored D. D was drilling oil that was underneath both of the their lands D caused a blowout in the well and all oil was lost Issue: Does law of capture absolve D of responsibility if D deprived P of opportunity? Is P entitled to relief by losing that option? Holding: No and Yes, respectively
Rationale: In issues concerning joint ownership, landowners should be afforded the opportunity to produce his fair share of the recoverable oil and gas beneath his land. b. Limitations on capture of oil and gas- Statutes regulating the number of acres required for a well and requiring apportionment. Pooling prevents landowners from racing to put down wells to capture oil and gas from their neighbors c. Acquisition by Creation- Wants to reward labor. Acquisition by accession- mixing one’s labor or labor and new material with the property of another. A person is always entitled to the value of their property taken, but they may lose title if the other has sufficiently increased the material. Also must have acted in good faith and not willfully. Wetherbee v Green: timber 25.00, hoops 700.00. The hoops belong to 700.00, but the raw material owner can sue the other for 25 dollars in damages for tress Tip: A’s act is a trespass, regardless of his good faith. Nonetheless, where it would be grossly unjust for B to appropriate A’s labor to himself, A will get compensation for his labor and B will get damages for A’s trespass Intellectual Property: how to nurture individual creativity and reward labor without going too far by creating monopolies and stifling creativity in others. After all, creativity thrives on imitation. Common law: to avoid monopoly and encourage competition, the common law commonly allows copying and imitation of ideas, as opposed to their expression *Cheney v. Doris silk corp. Exception: Vanna White v. Samsung Electronics- can’t imitate (not a likeness) of a celebrity for commercial profit because it infringes on her right of publicity. Unfair Competition- protected labor and investment under the law of unfair competition. INS v AP- news agency has a quasi property interest in news it has gathered and prohibit competitors from copying the news until its commercial value as news has passed away
Rights in Body products: Moore v Regents***** afraid of saleable body parts. Slavery reference.
Subsequent Possession: Acquisition of Property by find. Adverse Possession, and Gift.
Acquisition by Find: an owner maintains rights over his property even if it is lost or mislaid. A finder has rights superior to everyone but the true owner. Title is relative to who the claimants are. Armory v. Delamirie: 1) Prior possessor protects an owner: possession (physical control) does not mean ownership (title) 2) Entrusting goods to another is an efficient practice: imagine a person not getting her clothes back from a dry cleaner unless the person could prove ownership. 3) Prior possessors expect to prevail over subsequent possessors: by giving them their expectations, the law reinforces the popular belief that the law is just. 4) The protection of peaceable possession is an ancient policy aimed at deterring disruptions in public order. 5) Protecting a finder who reports the find rewards honesty. 6) Protecting a finder rewards labor in returning a useful item to society. Acquisition by adverse possession Theory of adverse possession: if, within a number of years specified in the state statute of limitation, the owner of land does not take legal action to eject a possessor who claims adversely to the owner, the owner is thereafter barred from bringing an action in ejectment. Once this occurs, the original owner loses title to the land Effect of adverse possession: Means of acquiring title to property by long, uninterrupted possession. Statute of limitations not only bars the owner’s claim to possessions, but also creates a new title by operation of law in the adverse possessor. However, title acquired by adverse possession cannot be recorded in the courthouse (like a deed or will) because it does not arise from a recordable
document, but rather from operation of law (e.g. problem selling it). If he wishes to have it recorded, he will have to file a quiet title action against the former owner barred by the statue of limitations. Purpose of the doctrine: 1) to protect owner (protects ownership because title may be difficult to prove if, for example, it was passed along many hands) 2) Land records: land title records are kept in each county courthouse but are deficient in many respects. Adverse possession aids in reliability. It also tends to limit record searches of title to land to a reasonable period of time, and not back to a sovereign. 3) To bar stale claims. 4) To reward those who use land productively 5) To honor expectations: persons in possession of property axquire attachments to the land and expectations that they can continue to use the property as they have long done. Giving effect to expectations Possessor’s rights before acquiring title: Prior possessor wins: Brumagim v. bradshaw Interest—possession—which can transfer to another: Howard v. Kunto Adverse possessor has no interest in the property valid against the true owner (relativity of title). Right to Include and Right to Exclude: Most important is the right to exclude when transferring something. Jacque v. Steenberg Homes, inc. Elements of adverse possession: Summary: Entry and Actual Entry giving exclusive possession (not sharing possession with the owner or the public) Open and Notorious possession (acts appropriate to the condition, size and locality of the land to constitute reasonable notice to the owner of a claim of dominion) Adverse and under a claim of right (without the owner’s consent) Continuous, uninterrupted possession (degree of occupancy and use that an average owner would make of the property) for statutory period (tacking allowed) 1) An actual entry giving exclusive possession: to trigger the cause of action. Constructive possession of part: Exclusive possession: not sharing possession with owner or with the public generally. People working in concert can acquire title of adverse possession as tenants in common
2) Open and notorious possession: must occupy the property in an open, notorious and visible manner. Must constitute reasonable notice to the owner that she is claiming dominion. The act must be appropriate to the condition, size and locality of the land a. Possession of farmland: fencing, cultivating and erecting a building on farmland (Jarvis v. Gillespie) b. Possession of wild, undeveloped land: acts indicating a claim of dominion (e.g. erect hunting cabin on the land and uses it about six times a year. Pays taxes on the land. Sells the timber on land to others and executes a number of oil leases: Alaska National Bank v. Linck; Monroe v. Rawlings) c. Possession of city land: totality of acts must give a picture of a person claiming dominion (e.g. granted permission to other to take sand, sued in trespass those who took sand without permission, and paid taxes: Ewing’s lessee v. Burnet) d. Statutory requirements: New york = person without color of title would have to show that a hunting cabin is a usual improvement: Van Valkenburgh v. lutz e. Possession of Minerals: Adverse possession of the land entails the minerals underneath it, unless it has been severed by sale to another prior to entry of the adverse possessor. (Failoni v. Chicago and north western railway) 3. Adverse and under a claim of right: (hostile) without the owner’s consent—it is not subordinate to the owner. Two types of test: objective and subjective. a. Objective: actions of possessor are important (not state of mind). Actions must look like they are claims of ownership. If they look that way to the community, then the claim is adverse and under a claim of right. You can be adverse possessor without claiming title against the true owner. Occupying the land without the owner’s consent. Permission negates a claim of right (Peters v. Juneau Douglas Girl scout council). The very nature of the act of entry and possession is the assertion of a claim of right and triggers the owner’s cause of action (Patterson v. Reigle) b. Subjective: must have a bona fide or good faith belief that he has title. If he knows someone else has title, his possession is not adverse. (Carpenter v. Ruperto)
Commentary: Objective test is recommended by commentators, but since 1966 claims that courts usually do require the possessor to act in good faith. Possessor who knows the land does not belong to him is not holding under a claim of right (unless they have strong equities in their favor) Color of Title (although it satisfies the adverse possession requirement, it is not required for adverse possession): A claim founded on a written instrument (a deed, a will) or a judgment or decree, which is unknown to the claimant, is defective and invalid. Claim of title vs. Color of title Minority view: color of title is required for adverse possession. Constructive adverse possession: color of title is an advantage in all states under the doctrine of constructive possession. Boundary Dispute Test: Objective test—majority view (e.g. fences) Main doctrine- minority view: (e.g. if mistaken to the boundary and would not have occupied or claimed the land if he had known the mistake, the possessor has no intention to claim title and adversity is missing Preble v. Maine Central Railroad). 1 Bona fide claim v. Main doctrine: Greedy neighbor has intent to claim title to 10 feet whether or not he is mistaken. Main gives title, but he would not get title if the court required a bona fide claim of title for adverse possession. 2. Criticisms of Main: 1) action of ejectment against possessor regardless of actual intent 2. wrongdoer wins if the act was intentional 3. encourages honest neighbors to lie (I wanted it as mine) 4. Objective test is more reliable and cheaper to administer New Jersey qualification: when the encroachment of an adjoining owner is of a small area and the fact of an intrusion is not clearly apparent to the naked eye but
requires an on-site survey for certain disclosure, the encroachment is not open and notorious. If this is the case, the statue of limitations will run against the owner only if the owner has actual knowledge of the encroachment (Mannillo v. Gorski) Agreement on Boundaries: statute of frauds requires a written instrument for the conveyance of land. Ways around it: Agreed Boundaries: oral agreement to settle uncertainty is enforceable— not as a conveyance, but as a way of locating the boundary described in the deed (Joaquin v. Shiloh Orchards) Acquiescence: long period, but shorter than statute of limitations is evidence of an agreement between the parties fixing the boundary line. Estoppel: pg 141 Mistaken Improver: Common law Modern Law Intentional encroachment 4 Continuous for the statutory period- Degree of occupancy and use that the average owner would make of the particular type of property. It is continuous if there is no break in the essential attitude of mind required for adverse use. a. purpose: Notice to the owner that the possessor is claiming ownership, and that the entries are not just trespasses. b. Seasonal use: Summer homes are okay (Howard v. Kunto) Hunting cabin during hunting season (Nome 2000 v. fagerstrom) or the grazing of cattle on range lands in summer (Monroe v. Rawlings) are okay (if land is used this way) --- intervals when they are not using it for exam--- is it consistent with that type of property? c. Abandonment: intentional relinquishment of possession. If the possessor does this at any period, without intent to return, continuity of adverse possession is lost. Consider his intent: if he left for a job that didn’t work out = starting anew
**** Tacking: an adverse possessor can tack onto her own period of adverse possession any period of adverse possession by predecessors in interest (Brown v. Gobble 1996; Howard v. Kunto). Privity of estate is needed. Privity of estate: a possessor voluntarily transferred to a subsequent possessor either an estate in land or physical possession. (ousting the prior possessor = no privity of estate: porter v. posey 1979) Reasoning: needs to be gained by meritorious conduct- an involuntary transfer by ouster or seizure is not regarded as meritorious. If ousted (e.g. 6 months) by another possessor and reentry occurs, the 6 month gap must be added to the time remaining (O never had a quarrel with A during that period) Tacking cannot work with abandonment. Tacking: Privity of estate between the possessors (e.g. voluntary transfer of possession) Payment of property taxes: Ewing v. Burnet with vast tracts of land (land rich railroad companies in 19th century) potential adverse possessors by visual inspection, but the payment of taxes is recorded in the courthouse, giving notice to the owner. Good evidence of a claim of right. Adverse Possession of Chattels: a person can acquire title to chattels by adverse possession just as he can acquire title to land. Once the remedy is barred, the adverse possessor has title (Chapin v. Freeland 1886). Difference between land and chattels: land is open and notorious whereas adverse possession of chattels seldom is. Discovery Rule (Due diligence): statute of limitations does not begin to run on the owner as long as the owner continues to use due diligence in looking for them. (O’keefe v. Snyder) Burden of proof is on the chattel owner (has been exercising due diligence), while with land; it was on the adverse possessor proving all of his elements. Bona fide purchaser of stolen goods: bona fide purchaser of stolen goods is not protected unless owner’s statute of limitations has run on the owner. Risk is on the purchaser Reasons why owner is protected over purchaser: 1) Whether the purchaser is bona fide is questionable; what purchaser knew lies within his testimony, which is hard to disprove for the owner 2) Lessen the risk of buying stolen goods by inquires of the seller (proof of title)
3) If owners were not protected, then owners would spend more on protective devices, which is not a socially productive expenditure
Disabilities of Owners:
Minority, capacity (insanity) imprisonment: It must be at the time that the adverse possessor first enters Owner or successor in interest has 21 years Or 10 years after the removal of the disability (whichever period is longer) Ewing’s lessee v Burnet
First, Contract of sale- signed by buyer and seller then, closing (deed delivered and check for for the purchase price) third party may be available- mortgagee
Role of Broker: When commission is earned: When the buyer completes the transaction. If the sale falls through because of the buyer, then the seller is not liable to the broker If the sale falls through because of the seller, then the seller is liable to the broker. (Drake v. Hosley. Al. 1986)
Practicing Law: Brokers can prepare simple real estate contracts but must refrain from inserting provisions in a contract that require the exercise of legal expertise. Written Contract Required: Statute of frauds requires that the contract for the sale of land be in writing, signed by the party to be charged thereby (both buyer and seller must sign). Otherwise, the contract is not enforceable (Schwinn V. Griffith). a. Kind of writing: a. It can be formal or an informal memorandum. It can even be a series of documents that together would equal a contract. Does the contract show a meeting of the minds sufficient to constitute a contract? (Ward v. Mattushcek) Estate of Young v. Huysmans (1985) Negotiations: If the parties are negotiating with an understanding that the terms of the contract are not fully agreed upon and a written formal agreement
is contemplated, then a formal contract is needed for it to be binding (Not a meeting of the minds). b. Essential Terms: The writing must contain all essential terms: Name of buyer Name of Seller Description of the property Terms and conditions (E.g. price and manner of payment) Parol evidence (evidence other than the written document itself) is admissible to clear up ambiguities. Price: If price has been agreed upon, then it must be added. If no price was agreed upon, then the courts may imply an agreement to pay a reasonable price if the agreement can be inferred from the evidence (Wiley v. Tom Howell and associates) Conditions: a. Financing: “subject to financing” may be held as vague or void unless the surrounding circumstances indicate what amount and terms the parties had in mind (Gerruth Realty Co. v. Pire). If the terms are set on the buyer, then the buyer must act in good faith and use reasonable diligence in procuring a loan b. Building permit: A contract may be conditioned on the buyer obtaining from the public authorities all necessary permits for erecting or altering a building or obtaining a zoning change. The buyer needs to use reasonable efforts to obtain said things. If they do not submit any plans to the public authority or apply for zone change, then the buyer is at fault Oral Contracts: Part performance: equitable doctrine that can allow a court of equity. E.g. they can enforce an oral contract for the sale of land. a. acts of unequivocal reference to contract: i pays all or part of the purchase price, and ii enters into possession and iii makes improvements, the contract is enforceable, because the court assumes the buyer would not do these acts without a contract. (Gardner v. Gardner 1990) 1. Variations on part performance: Some states: all you need is possession (English Rule) Others require make payments or improvements Others require irreparable injury if the contract is not enforced (e.g. valuable improvements that cannot be compensated in money)
2. Injurious reliance theory: It is intended to prevent injurious reliance on the oral contract: Restatement of contracts section 129: contract may be enforced if the party seeking enforcement proves the contract, and in reasonable reliance on the contract has so change his position that injustice can be avoided on by specific enforcement. (relaxing statue of frauds) ****** Walker v. Ireton: P sold his land and gave a 50 dollar down payment to D because of an oral agreement on land. Holding: could not apply part performance or reliance theory because it was not within the contemplations and understanding of the parties and not foreseeable by the seller Exam Tip: if parties are in an oral contract, then mention that the statute of frauds requires it to be written. However, there is an exception for part performance that unequivocally references a contract. The buyer’s making payments, moving onto the property and making valuable improvements is powerful evidence that a contract exists. If the buyer has done less, then decision can go either way, depending on state. Suit by seller: older cases say that the seller cannot use part performance for their benefit to enforce contract (only buyer can). Principle of mutuality: If the buyer can sue for specific performance, the seller can also Contracts to devise: oral contract can be enforced if given from one person to another and original owner dies. Estoppel: In the state where part performance is not recognized, they use estoppel theory. It applies where unconscious-able injury would result from denying specific performance after one party has been induced by the other seriously to change his position in reliance on the contract (Baliles v. Cities service co.) Revocation: a written contract can be revoked by an oral agreement of both parties in a majority of states. Rationale: The statute of frauds applies to the making of a contract, not to the revocation therof (Niernberg v. fed 1955) Some states require it to be in writing, though. Rationale: contract is in reality a transfer of this equitable title back to the seller Time of Performance:
Contract sets a specific time for performance (e.g. closing date), the contract is enforceable in equity after that date if performance is offered within a reasonable period thereafter. Time of performance is treated as a formal, rather than essential term of the contract (Kasten Construction co. v. maple ridge construction co. 1967) “Time is of the essence”: if requirements are not met by this time, then the other party is excused from the contract e.g. 2:30 deadline for payment. Payment received at 3:00 pm. Seller was excused from contract (Doctorman v. Schroeder) Marketable title Implied in contract that the seller has a marketable title at closing Quitclaim dead: does not need a marketable title: if buyer finds a defect in title before closing, she can rescind contract. If she finds out after closing, then she will not be able to rescind or get damages from the seller because marketable title ends at closing; after that, the seller is only liable for warranties made in the deed (e.g. not a quitclaim) 1) Contract provisions: Insurable title: title insured by insurance company (does not have to be marketable) Good Record title: has to have a marketable title based on recorded documents alone, not upon adverse possession (no encumbrances, such as mortgages and easements, on the property)