PROPERTY OUTLINEproperty: anything of value that one may lawfully acquire

Locke’s Labor Theory of Property : must cultivate and develop the land to have ownership possession; the person exercises dominion and control and changes the property’s value by his labor

FIRST POSSESSION: ACQUISITION BY DISCOVERY, CAPTURE & CREATION

I. ACQUISITION BY DISCOVERY

first in time: he who gets there first has property rights

terra nullius: land inherited by no one

discovery: the sighting or finding of unknown or uncharted territory, it is frequently accompanied by a landing and the symbolic taking of possession

conquest: if you occupy the land by force then you own everything and everyone

Johnson v. McIntosh (title of property from Native Americans)

Issue: Whether title to land conveyed from Native Americans can be recognized in the Courts of the United States?

Rule:

o First in Time : the first possessor has the best right to the property – ownership

o Property : anything of value that could be bought and sold

Analysis: Native Americans could possess, but not own the land. They did not do enough to cultivate the land.

Conclusion: Native Americans could not give title

law of accretion: when natural forces gradually sift a river and cause the adjacent land to receded or advance by the build-up of new soil; the owner of the adjacent land gains or loses land as the water boundary gradually shifts

law of accession: when one person adds to the proper of another by labor alone

abandoned property: the person who has the best right to abandoned property is the finder besides the original owner; the person who exercises dominion and control – especially of the property changes value by the finder’s labor (Locke’s Labor Theory of Property)

law of avulsion: if there is a sudden change in the course of a river (as after a flood), the boundaries do not change

II. ACQUISITION BY CAPTURE

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capture wild animal: (1) mere pursuit alone does not give legal right of wild animal, must have intercepted it and killed it to have ownership rights; (2) one who mortally wounds an animal and so captures it is almost certain to be deemed to have possession.

Pierson v. Post (wild fox case)

Issue: since a wild animal does not belong to anyone, how does one become the owner of a wild animal?

Rule: to capture a wild animal one must capture it and either take possession or intercept it with a net.

Analysis: only pursuit and wounding, but did not capture the fox, and that is not enough to establish possession.

Conclusion: did not have title to wounded animal

Keeble v. Hickeringill (duck decoy)

Issue: Whether conduct to deprive a man of income by engaging in activity that interferes with his livelihood is actionable in court?

Rule: Anything on one’s property, then you have constructive possession

“where a violent or malicious act is done to a man’s occupation, profession, or way of getting a livelihood, there an action lies in all cases”

Analysis: D did not intend to disrupt the duck decoy except to interfere with P’s attempt to earn income. P invested heavily in his enterprise and D was wrong.

Conclusion: Judgment affirmed for P.

someone who kills an animal on property, then you own it; would have to trespass on the land to get it and the owner has constructive possession of the animal

Ghen v. Rick (whale case)

Issue: whether a local custom regarding ownership of killed wild animals is sufficient to sustain a cause of action in court?

Rule: may use custom, usage and public policy toward determining property rights in certain circumstances

Analysis: custom was sufficient here and to go against the local rule would cause damage to the local whaling industry. D knew the local custom of special harpoons marking the kill.

Conclusion: judgment for plaintiff

Oil and Gas: when oil or gas escapes and goes to someone else’s land or control, title of former owner is gone if the other person captures it

Water Rights: follows similar rule to oil and gas

externalities: whether a person in using his or her property should consider its effect on other people?

involves property use restrictions

can’t do what you want because it causes a nuisance

Three Types of Land Use Controls/Restrictions:

(1) nuisance: unreasonable interference with another’s use and enjoyment of their land

(2) private land use controls

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easements – the right to go across someone’s land

covenants – real or equitable

(3) legislative – law of zoning

(4) defeasible fees

a fee simple determinable

a fee simple subject to a condition subsequent

a fee simple subject to an executory limitation

III. ACQUISITION BY CREATION

acquisition by creation: any expenditure of mental or physical effort, as a result of which there is created an entity, whether tangible or intangible, vests in the person who brought the entity into being, a proprietary right to commercial exploitation of that entity, which right is separate and independent from the ownership of that entity.

International News Service v. A.P (stealing news copy)

Issue: Whether there is any property interest in news?

Rule: A.P. has a quasi property interest in news it gathers until its commercial value has passed away.

Analysis: locke’s labor theory of law; news is not copyrighted material, the information respecting current events is not a creation of the writer, but is a report of matters that are ordinarily public. Took actions to sneak the info away from INS.

Conclusion: Affirmed for P.

Cheney Brothers v. Doris Silk Corp. (manufacturer of silk patterns)

Issue: Whether silk patterns, proprietary value of which decline rapidly, is subject to copyright protection for a fashion season?

Rule: a man’s property is limited to the chattels which embody his invention . . . . Others may imitate these at their leisure.

Analysis: to prevent the imitation would go far beyond the sweep of Cong. or the S. Ct.’s interpretation of copyright law. In the absence of some recognized right at common law or statute . . . a man’s property is limited to the chattels which embodies his invention; others may imitate at their leisure.

Conclusion: Affirmed.

Smith v. Chanel, Inc. (perfume)

Rule: a perfume co. could claim in advertisements that its product was the equivalent of the more expensive Chanel No. 5 because it is unpatented

Analysis: spending lots of money to create demand for a product does not itself create a legally protected right if the product is unpatented. D serves an important public service by producing a cheaper product.

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Nichols v. Universal Pictures Corp. (play v. movie – different religions)

Issue: When is a creative work not subject to copyright protection because the material in the work falls into the public domain?

Rule: copyright protection does not cover material that falls into the public domain

Analysis: the background material for “Abie’s Irish Rose” was in the public domain. The material fell on the stock figures of the Jews, Irish Catholics, and is hardly novel material. The movie “the Cohens and the Kellys” did not infringe on P’s copyright for the play.

Conclusion: Judgment for D affirmed.

INTELLECTUAL PROPERTY:

patents – patent law protects property rights in novel, useful, nonobvious processes or products; can patent three things: (1) machine; (2) manufacture; (3) composition of matter

three types of patents: (1) utility patent; (2) plant patents; and (3) design patents

o utility patents : inventions

o process : a method of making something, using something, or doing something

o an inventor may invent a process, a product or both

o products : include machines, articles of manufacture, and compositions of matter

o machine : includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result

o manufacture : the production of articles for use from raw or prepared materials by giving to these materials new forms, qualities, properties or combinations, whether by hand-labor or machinery

o not patentable : laws of nature, physical phenomena; and abstract ideas

White v. Samsung (Vanna White’s robot comparison)

Issue: Whether P had an exclusive right to control the use of her name and likeness for commercial exploitation?

Rule: elements of a common law right of privacy: (1) defendant’s use of plaintiff’s identity; (2) defendant’s appropriation of plaintiff’s name and likeness to defendant’s advantage; (3) lack of plaintiff’s consent; and (4) injury.

Analysis: D didn’t use P’s likeness, rather a robot. Overprotecting intellectual property is as dangerous as underprotecting it. “Intellectual property law assures authors the right to their original expression, but encourages others to build freely on the ideas that underlie it.”

Conclusion: judgment for D affirmed.

FYI – Test: Whether your persona is a recognizable commodity which will result in commercial advantage?

Moore v. UCLA (used body parts)

Issue: whether P has a cause of action in conversion against D for using his cells in potentially lucrative medical research without his permission?

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Rule: no cause of action for conversion because does not have a property interest in internal body parts

Analysis: did not a cause of action for conversion – policy reason: don’t want folks selling internal body parts; also Locke’s Labor Theory of Property – didn’t do the work to convert the cells from the spleen into something of value. Had no expectation of dominion, the right to control, use or transfer, the excised cells/

Conclusion: no action for conversion; action for lack of informed consent

Diamond v. Chakrabarty (oil eating bacteria)

Issue: whether P’s micro-organism constitutes manufacture or composition of matter within the meaning of the statute?

Rule: a patent claim may be an invention as a product and as a process, but it must do so in separate claims

some things cannot be patented – laws of nature, physical phenomena and abstract ideas

Analysis: P could patent the bacteria because he created something new that was outside the natural state of nature – Locke’s Labor Theory of Property

Conclusion:

copyrights: protects rights in the expression of ideas in books, articles, music and other tangible medium; other may make fair use – one can create a painting and sell the painting and still retain the copyright

o copyright term lasts for the life of the author plus 70 years (or a fixed term of 95 years for works made for hire and some other categories of work

o an author owns the copyright in any original work of authorship as soon as he fixes it in some tangible form

o provide that an author has an inalienable right to terminate any exclusive grant of a transfer or license of any or all the rights under a copyright during a 5 year period after 35 years from the date of the grant by the author

MGM v. Groskter (infringing on the net)

Issue: Under what circumstances the distributor of a product capable of both lawful and unlawful use is liable for acts of copyright infringement by third parties?

Rule: must have actual knowledge of specific infringement

where an article is “good for nothing else” but infringement, there is no legitimate pubic interest in its unlicensed availability, and there is no injunction in presuming or imputing an intent to infringe.

Analysis: it was not enough that mere knowledge of infringing potential or actual infringing uses is not enough to subject a distributor to liability.

Conclusion: vacated and remanded.

trademarks: protects words and symbols indicating the source of a product or service

o last until abandoned

o acquires a trademark of making a bona fide use of the mark in commerce; can be a word, phrase or clause, a design, an image, a sound, a color, or fragrance

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o inherently distinctive marks : those whose intrinsic nature serves to identify a particular source

o arbitrary and fanciful marks : those which do not describe or suggest any characteristic of the product

o suggestive marks : those which suggest but do not describe the nature or characteristics of the product

THE RIGHT TO EXCLUDE OTHERS FROM PROPERTY

public trust: allows people to cross your property to get the public spaces with limitations

eminent domain: right to just compensation for taking of property

Jacque v. Steenberg Homes, Inc. (mobile home delivery across private property)

Issue: Whether P had the right to not allow D to deliver a mobile home across his property?

Rule: a private person has the right to exclude others from his or her land for any purposes which does not invade the property rights of another

Analysis: if P could not prevent the delivery over his land then he would have no real right to exclusive enjoyment of his land. Additionally, if P could not resort to the law for help then it would encourage the use of self-help, potentially violent and unnecessary.

Conclusion: Judgment for P.

State v. Shack (immigrants working on private farm seeking help)

Issue: Whether the defendants infringed on the farmer’s property rights by trespassing on the land?

Rule:

under State law the ownership of real property does not include the right to bar access to governmental services available to migrant workers and hence there was no trespass within the meaning of the penal statute

a man’s right to his real property is not absolute. . . . one should so use his property so as not to injure the rights of others

Analysis: policy considerations make it important to protect migrants workers who are in many ways outside of society. There was no “legitimate need for a right in the farmer to deny the worker the opportunities for aid available from federal, State or local services, or from recognized charitable groups seeking to aid them.

Conclusion: D’s acquitted.

SUBSEQUENT POSSESSION: ACQUISITION OF PROPERTY BY FIND, ADVERSE POSSESSION, AND GIFT

I. FIND

Armory v. Delamirie (jewel in the chimney)

Issue: Whether the finder of property has the best claim to property over all others except the true owner?

Rule: The finder of lost property has a claim against all in the work except the true owner.

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Trover is a common law action for money damages resulting from the defendant’s conversion to his own use of chattel owned or possessed by the plaintiff.

Analysis: brought an action in trover for the jewel (modern day conversion). Here P found the property. Best claim.

Conclusion: got value of the jewel

abandoned property: treated as lost property

possession of property: (1) physical possession; (2) intent to have dominion and control

bailment: the rightful possession of goods by a person (the bailee) who is not the owner

voluntary bailment: when the owner of the goods (bailor) gives permission to the bailee (dry cleaners, coat check) – duty of reasonable care for another’s property

involuntary bailment (found goods ) : involuntary from the view of the owner, but the finder assumes the obligation of a bailee; lost goods, involuntary bailee – unintentionally parted with your property – ordinary reasonable care

law of finds: finder of lost goods has the best property right against everyone except the true owner

lost property – inadvertently left behind

employer/employee: some/some

law of mislaid goods: finder has no rights to mislaid goods, when a person voluntarily and intentionally places property in that place but who forgets to retrieve it – just the true owner – better claim on the property by the owner of real property, where the item is found

real estate: cause of action for “specific performance”; modern is trespass – value for damages and ejectment: get off my property

personal property: at early common law, no replevin; could only sure for trover – recover for value of land

Hannah v. Peel (corporal found broach in house)

Issue: Who had the better right to claim ownership of property, the finder of the jewel or the owner of the land where the property was found?

Rule: A person possesses everything which is attached to or under his land. However, a person does not necessarily possess a thing which is lying unattached on the surface of his land even though the thing is not possessed by someone else.

Analysis: Corporal had best claim. Followed the right steps, and D was never in actual possession of the property. The broach was never his; the broach was lost and P found it.

Bridges v. Hawkensworth: found a package on the floor of a shop and shows the owner and say I’ll hold it until the true owner shows up – the finder gets it because it is lost, not mislaid.

Conclusion: Plaintiff.

McAvoy v. Medina (pocketbook found in barbershop)

Issue: Who has the best claim to mislaid property, the finder or the owner of the property where the item is found?

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Rule: The finder has no rights to mislaid goods (when a person voluntarily and intentionally misplaces property in that place but who forgets to retrieve it) – just the true owner.

Analysis: P had no rights to the pocketbook. It was placed voluntarily on the table and the true owner neglected to remove it. From a public policy standpoint it would be best for the owner of the shop to hold onto the property in case the true owner wants to retrieve it.

Conclusion: judgment for D affirmed.

II. ADVERSE POSSESSION

Adverse possession: An actual entry giving exclusive possession that is open and notorious, adverse and under a hostile claim of right and continuous for the statutory period.

Morengo Cave Co. v. Ross : open possession of an underground cave is not notorious – to whomever the soil belongs, goes up to the sky and down to the depths

Lutz v. Van Valkenburgh (Yonkers lot dispute)

Facts:

L v. V.V.: easement over the land, but is actually a prescriptive right because not written – won

Issue: Whether there is evidence that Lutz cultivated or improved the lot sufficiently to satisfy ownership by adverse possession?

Rule: To acquire title to real property by adverse possession not found upon a written instrument, it must be shown by clear and convincing proof that for at least fifteen years there was an actual possession under claim of title. The essential elements of proof being that the premises: (1) are protected by a substantial enclosure, or are (2) usually cultivated or improved.

Analysis: second suit, screwed up when made a statement against his own pecuniary interest in the first case, easement for the crossway. Also, Lutz didn’t improve the property enough.

Conclusion: judgment for VV

adverse possession: a method of transferring interest in land without the consent of the prior owner, even despite the dissent of the owner

Elements: (1) an actual entry giving exclusive possession that is (2) open and notorious (3) adverse & under (hostile)) claim of right; (4) continuous for statutory

entry must be – exclusive, continuous, uninterrupted, visible & notorious

must show by enclosure, cultivation, & improvements; neighbors and others must regard occupant as exercising dominion

protects the true owner before the SOL and the adverse possessor after the SOL

some states require payment of taxes to recover for adverse possession

when the life estate owner dies, the timing for adverse possession starts all over again, the remaindermen are protected

quiet title: a declaratory judgment to find out who owns the property

public rights doctrine: implied easement to gain access to some public area while crossing private property

color of title: not a prerequisite of AP, refers to claim on written instrument that is defective – grantor does not own the thing conveyed

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claim of title: one way of expressing the requirement of hostility or claim of right on the part of an adverse possessor

good faith standard : I thought I owned it

aggressive standard : I knew/I thought I didn’t own it, but intended to keep it.

objective standard : state of mind is irrelevant

TOLLING OF STATUTE OF LIMITATIONS

disability : tolling for the SOL; a disability is immaterial unless it existed at the time when the cause of action accrued.

Statute of Repose : SOL begins at the date you were injured even if unaware of the disease

bring an action for recovery within twenty-one years or ten years after adverse possession period is over

ADVERSE POSSESSION AGAINST THE GOVERNMENT

eminent domain : government can’t take private property for public use without just compensation

Under U.S. Law the states are split on adverse possession against the government

o can run in some states against the government

o some states can’t run against the government

o some, longer tolling period against the government than against private land owners

o some, only if own property in a proprietorship

BOUNDARY DISPUTES

Mannillo v. Gorski (fifteen inch encroachment on neighbor’s land)

Issue: Whether the defendant’s encroachment met the standard of “open and notorious”?

Rule: where there is a minor encroachment, the true owner must have actual knowledge of the encroachment to satisfy the open and notorious standard.

Analysis: the encroachment does not have to be hostile if “any entry and possession for the required time which is exclusive, continuous, uninterrupted, visible and notorious” – subsidiary rule that overturns – if encroachment done under MISTAKEN BELIEF then no hostile possession. The true owner MUST HAVE actual knowledge of the encroachment where there is only a dispute.

Conclusion: Remanded for trial.doctrine of agreed boundaries: oral agreement enforceable if used for a long period of time

doctrine of acquiescence: long acquiescence – though for a period of time shorter than the SOL – evidence of an agreement between parties fixing the boundary lines

doctrine of estoppel: when one neighbor makes representations about the location of a common boundary, and the other neighbor then changes her position in reliance on the representation or conduct

MECHANICS OF ADVERSE POSSESSION

Howard v. Kunto (beach land with wrong title)

Issue: What happens when the descriptions in deeds do not fit the land the deed holders are occupying?

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Rule: tacking, the joining of consecutive periods of possession by different person to the different periods of time as one continuous period, is allowed in adverse possession if the occupants are in privity

Analysis: the family in possession were not squatters, but folks who obtained record title, albeit incorrect title. They win on adverse possession by being in privity with previous owners who had incorrect title that they believed was correct.

Conclusion: reversed, dismiss P’s action and quiet title to D (in privity family)

ADVERSE POSSESSION OF CHATTELS

O’Keefe v. Synder (painting not reported)

Issue: When did O’Keefe’s cause of action for replevin of her painting begin to accrue?

Rule:

under the discovery rule the SOL on an action for replevin beings to run when the owner knows or should reasonably should know of his cause of action and the identity of the possessor of the chattel

discovery rule: in an appropriate case, a cause of action will not accrue until the injured party discovers, or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of the cause of action

Analysis: Have to investigate to determine whether P: (1) used due diligence to recover the painting at the time of the alleged theft and thereafter, (2) at the time of the alleged theft there was an effective method, other than talking to her colleagues to inform the art world, and (3) registering paintings with ADAA or any other organization would have put a reasonably prudent purchaser of art on constructive notice that someone other than the possessor was the true owner.

Conclusion: reversed and remanded for a plenary hearing

III. GIFT

Gift – the voluntary transfer of property by one person to another without any consideration or compensation. Is a present transfer property (if future transfer, then it’s a promise to make a gift, and is unenforcement).

ELEMENTS: (1) intention to make the gift – oral evidence; (2) delivery of the thing given – objective acts, passing of control of item; (3) acceptance of the gift by the donee (assumed)

constructive delivery : handing over a key or some object that will open up access to the subject matter of the gift

symbolic delivery : handing over something symbolic of the property given – usually a written instrument declaring a gift of the subject matter

acceptance : the law presumes acceptance whenever the gift is beneficial to the donee.

GIFT CAUSA MORTIS

gift causa mortis: a gift made in contemplation of and in expression of immediate approaching death and is a substitute for a will

if the donor lives the gift is revoked , although some courts may hold that revocation occurs only if the donor elects to revoke upon recovering

gift inter vivos: ordinary gift in which the donor is not responding to any threat of death

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intend to give an ownership property interest today, although a possessory interest may occur in the future

Newman v. Post (woman took care of dying man – piano)

Issue: Whether the deceased made a valid gift causa mortis to the plaintiff?

Rule: to constitute a donation causa mortis, two things are indispensably necessary: an intention to make a gift, and a delivery of the thing given . . . . Requires but one witness

the intention to make the gift need not be stated explicitly and may be inferred from the facts attending to delivery, but it must always clearly appear that he knew what he was doing and he intended the gift

constructive delivery – where it plainly appears that it was the intention of the donor to make the gift, and where the things intended to be given are not present, or, where present are incapable of physical delivery from weight and size

Analysis: the manservant was there to witness the gift and P became owner of anything that the keys unlocked in the bureau the rest of the stuff not in her bedroom was the property of D’s estate. On remand P must prove that D intended to give her the piano. Unlikely to prove the entire property, just the keys to what was unlocked.

Conclusion: new trial.

Gruen v. Gruen (father gifted painting to son)

Issue: whether a valid inter vivos gift of chattel may be made where the donor has reserved a life estate in the chattel and the donee never had physical possession of it before the donor’s death?

Rule: to make a valid inter vivos gift there must exist the intent on the part of the donor to make a present transfer; delivery of the gift, either actual or constructive to the donee, and acceptance by the donee.

delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties would reasonably permit

it is unreasonable to expect the donor of the remainder of the property interest in chattel to physically deliver the chattel into the donor’s hand only to have the donee redeliver it

Analysis: P’s father intended to give the painting to him and intended to transfer the ownership of the painting to his son and the remainder of the property interest would pass upon death. P kept two letters, showed the paintings to friends and remarked that he owned it over the course of 17 years. Delivery occurred at the receipt of the letter – vested – father kept a life estate. Created a remainder interest in the son at the day the letter (second) was received and gave a present ownership interest with possession in the future.

Conclusion: judgment for son affirmed

so long as there is a present conveyance of an interest in property now (TODAY) it does not matter that possession occurs in the future

Rule: if the grantor intends to make a transfer now, there has been an effective delivery even though possession may be postponed until the grantor’s death

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SYSTEM OF ESTATES (LEASEHOLD ASIDE)

POSSESSORY ESTATES

FREEHOLD ESTATES

estate: a bundle of rights – a word denoting legal relationship to a thing

fee simple absolute: may endure forever and there are no limits on inheritability; a fee simple absolute is absolute ownership, with potentially infinite duration. There are no limitations on inheritability. It cannot be divested, nor will it end on the happening of any event.

– “to A and his/her heirs”

fee – potentially infinite; simple – no limit in inheritability; absolute – cannot be cut short

fee tail: an estate in land created by a conveyance “to A and the heirs of his body”; has the ability to endure forever but will necessarily cease if and when the first fee tail tenant has no lineal descendants to succeed him in possession”

only in four states

fee simple defeasible: a fee simple that may last forever or be cut short or defeased upon the happening an event in the future

fee simple determinable/fee simple subject to a condition subsequent/fee simple subject to an executory limitation (shifting/springing)

fee simple determinable/possibility of reverter: a fee simple so limited it will automatically end when some specified event happens

“so long as”, “used for”, “while used for”, “until”, “during”

fee simple subject to a condition subsequent/right of reentry: a fee simple that does not automatically terminate but may be cut short (divested) a the grantor’s election when a stated event happens

“but if”, “provided, however”, “on the condition that if the premises”

right of rentry

life estate: an estate that will end necessarily at death of a person “to A for life”

INHERITANCE OF A FEE SIMPLE

heirs : person who survive the decedent and are designed as interstate successor under the state’s statute of descent; a person who, under the laws of intestacy, is entitled to receive an intestate decedent’s property

o under modern statutes: first issue parents collaterals

intestacy : if a person dies without a will, that person dies intestate, laws of heirship will control

issue : descendant

ancestors : parents

collaterals : all persons related by blood to the decedent who are neither descendents nor ancestors are collateral kin (brothers, sisters, cousins, etc.)

escheat : a person dies interstate without any heirs, the property reverts back to the state

in a will you devise land and bequeath personal property12

LIFE ESTATE

a life tenant cannot: (1) sell a fee simple; (2) enter into a long-term lease; (3) cannot get a bank to hold his/her interest in the land as collateral for a loan because the collateral lasts only during the life of the life tenant; (4) cannot safely take minerals/cut timber/take down still useable building without committing waste

White v. Brown (will of property to niece)

Issue: Whether the decedent’s will, when taken as a whole, clearly evidences her intention to convey only a life estate in her home to her niece?

Rule: state law creates a presumption that property is passed in fee simple unless express or clearly implied language indicates a life estate or a fee interest subject to a condition subsequent

can’t inherit a life estate because it reverts back to the grantor in fee simple

Analysis: The language of the will was ambiguous and her restraint against alienation of the property “shall not be sold” is void as a matter of public policy. The language did not create a remainder interest, only that it should not be sold. Created a life estate.

Conclusion: reversed.

life estate per autraphie: a life estate based upon the lifetime of the grantor of a life estate

Baker v. Weedon (skipped kids in will, but gave interest to grandchildren)

Issue: Whether the Chancery Court had jurisdiction to sell the land and set up a trust at Anna’s request?

Rule: a court of equity has the power to order the judicial sale of land affected with future interest and an investment in the proceeds where this is necessary for the preservation of all interests in land, but consideration should be given to the question of whether a sale is necessary for the best interest of all parties

Analysis: the sale would be best for Anna, but not the grandchildren. At the trial level, it should be determined whether a partial sale would be enough to set Anna up with a trust to take care of her for life.

Conclusion: reversed and remanded.

WASTE

law of waste: whenever two or more people have rights to possess property at the same time – A should not be able to use the property in a manner that would unreasonably interfere with the expectation of B

permissive waste : arising from a failure to act; essentially a question of negligence – failure to take reasonable care of the property

affirmative waste : liability results from injurious acts that have more than trivial effects; injurious, acts that substantially reduce the value of the property in question

life tenants can make substantial alterations or even demolish a structure when conditions change, provided the value of the remainder is not diminished by these actions

FEE SIMPLE DETERMINABLE/A POSSIBILITY OF REVERTER

Rule: if the condition listed is a fee simple determinable at the very moment at the breach of the condition the land automatically reverts back to the grantor

“so long as”; “while used for”; “until”; “used for”, “during”

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Examples:

O conveys Blackacre to town library so long as used for library purposes. Note: If use stops, the property automatically reverts to O.

Mahrenholz v. Cty Bd. of Trustees (school grounds conveyed)

Issue: Whether the trial court correctly concluded that the plaintiffs could not have acquired any interest in the school property from the Huttons?

Rule: A right of reentry cannot be transferred by will or intervivos conveyance; the rights of reentry for a condition subsequent and possibilities of reverter are neither alienable nor devisable, they are inheritable.

Analysis: The use of the word “only” in the conveyance indicates that the lands when to the school district for as long as it was needed and no longer. The deed created a fee simple determinable followed by the possibility of reverter.

Conclusion: reversed and remanded.

Ink v. City of Canton (public park conveyance)

Issue:

Rule:

a fee simple determinable does not automatically revert when the use ends because the government takes property in an eminent domain proceeding

the value of the possibility of reverter is the full market value of the land discounted by the probability that the reverter will never become possessory

Analysis: the parcel was condemned by the state, not the city, but the government must pay the market value of the property not used as a public park. The court held that: (a) any monies received by the city which was not reinvested in those parts of the property not taken should be paid to the grantor’s heirs; (b) the value by which the use of property for highway purposes exceeds the value of the property as a park should revert to the grantor’s heir; and, (c) any payments to

Conclusion:

FEE SIMPLE SUBJECT TO CONDITION SUBSEQUENT/RIGHT OF REENTRY

RULE: no automatic right of reentry, must take affirmative steps to retake the land

o “but if”; “provided that”; “on condition”

Examples

O conveys Whiteacre to the Hartfold School Board, its successors and assigns but if the premises are not used for school purposes, then to O and his heirs.

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Mountain Brow Lodge v. Toscano (land around a lodge)

Issue: Whether the use of a condition created a defeasible fee or whether it was a restraint against alienation and is void as a matter of public policy?

Rule: the condition of the clause which prohibits the selling or transferring of land under penalty of forfeiture is an absolute restraint on alienation and is void.

preferred construction is fee simple subject to a condition subsequent over a fee simple determinable

restriction on alienation is void, but restriction on land use is enforceable

Analysis: the use restriction was valid because it was a use restriction on the land use not on alienability of the property

Conclusion: modified to read as a fee simple subject to condition subsequent

executor : handles the property of a person who dies with a will

City of Palm Springs v. Living Desert Reserve (horse ranch conveyance)

Issue: Whether the City ended the conveyance of the estate of a fee simple subject to a condition subsequent when it condemned the land to create a golf course?

Rule: when the condemnor owns the present possessory interest in the land, the action of condemnation makes violation of the condition imminent.

Analysis: the City brought the condition into fruition when it decided to condemn the land for a golf course. The grantor was entitled to a 100 value of the land.

Conclusion:

FUTURE INTERESTS

I. FUTURE INTERESTS IN THE TRANSFEROR

reversion: the interest left in an owner when he carves would of his estate a lesser estate and does not provide who is to take the property when the estate ends; are retained interests which remain vested in the transferor

possibility of reverter: arises when an owner cars out of his estate a determinable estate of the same quantum

right of reentry: when an owner of an estate subject to a condition subsequent and retains the power to cut short or terminate the estate, the transferor has the right of reentry

II. FUTURE INTERESTS IN THE TRANSFEREES

three types of future interests in transferees: (1) vested remainder; (2) contingent remainders; and (3) executory interests (shifting/springing)

o remainder or executory interests cannot be retained by the transferor; these interests are only created in the transferee

VESTED AND CONTINGENT REMAINDERS

contingent remainders: if it either is limited to an unascertained person (unborn children, heirs) or subject to a condition precedent

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subject to RAP

lets future events determine who takes possession/legal right to the property; a future interest that waits politely until termination of the preceding possessory estate, at which time the remainder moves into possession if it is then vested

whether the interest vested turns on a condition precedent (i.e. White v. Brown – whether she had children)

a contingent remainder may be destroyed by the failure of the contingent precedent to occur

there must be a vested interest to support the contingent remainder when it is created; if the condition precedent is satisfied, then the interest transforms into a vested remainder and O’s reversion is divested

Examples: Contingent Remainders

O conveys “to A for life, then to B’s heirs.” B is alive. Note: This is a contingent remainder because we will not know if B has heirs until B dies. Whenever the owner/grantor creates a contingent remainder in fee simple, there is reversion in O.

alternative contingent remainders: if a remainder vests in B, it cannot vest in C and vice versa

subject to the RAP

a remainder in land is destroyed if it does not vest at or before the termination of the preceding freehold estate

Examples: Alternative Contingent Remainders

O conveys to A for life, then to B if B survives A, but if B does not survive A, to C. NATURE OF TITLE – A has a possessory life estate; B has a remainder in fee simple absolute subject to executory limitation; C has a shifting executory interest in fee simple absolute.

vested remainders: is both created in an ascertained person and is NOT subject to any condition subsequent. To be vested, a remainder must be capable of going into possession whenever and however the preceding estate ends.

valid property interest today, possessory interest in the future

not subject to RAP

only vested remainders, not currently possessory estates, are subject to divestment

RULE: if the first future interest created is a vested remainder in fee simple, the second future interest in a transferee will be an executory interest

RULE: if the first future interest created is a contingent remainder, the second future interest in a transferee will also be a contingent remainder

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doctrine of merger: if the life estate and the next vested estate in fee simple comes into hands of one person, the lesser estate is merged into the larger estate

EXECUTORY INTEREST

executory interest: a future interest in a transferee that is a third party that can only take effect by divesting another interest; it must

1. divest or cut short some interest in another transferee – SHIFTING EXECUTORY INTEREST

2. divest the transferor in the future – SPRINGING EXECUTORY INTEREST

ordinarily treated as contingent interests because they are subject to a condition precedent

snatching away some ownership interest that does not occur at the natural ending of the prior estate

shifting executory interest: follows an estate in a grantee

O to A, provided that if A ever allows the timber to be cut, then to B.: NATURE OF TITLE – A has a fee simple subject to executory limitation; B has a shifting executory interest in fee simple.

O conveys “to A and his heirs, but if A dies without issue surviving him, to B and her heirs.” NATURE OF TITLE – A has a possessory fee simple subject to an executory limitation; B has a shifting executory interest in fee simple absolute.

O conveys “to A for life, then to B and her heirs, but if B dies under the age of 21, to C and her heirs.” NATURE OF TITLE – A has a possessory life estate; B has a vested remainder in fee simple subject to an executory limitation; C has a shifting executory interest in fee simple.

O conveys “to A for life, then to B and her heirs, but if B does not survive A to C and his heirs.” NATURE OF TITLE – A has a possessory life estate; B has a vested remainder in fee simple subject to an executory limitation; C has a shifting executory interest in fee simple.

Jill conveys Blackacre “to Bill for life, then to Hillary and her heirs, but if Elizabeth is ever elected President, then to Elizabeth and her heirs.” NATURE OF TITLE – Bill has a present possessory life estate; Hillary holds a fee simple subject to an executory limitation; Elizabeth holds a shifting executory interest in fee simple.

springing executory interest: follows an estate in the grantor

O to A when she turns 21. NATURE OF TITLE – O has a possessory estate in fee simple subject to a springing executory limitation; A has a springing executory interest.

O to A and his heirs when A marries B. NATURE OF TITLE – O owns a fee simple subject to a springing executory interest.

O to A and her heirs if A marries B. NATURE OF TITLE – O owns a fee simple subject to a springing executory interest until and/or unless A marries B.

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TRUST

trusts: allows settlers to arrange their assets in ways that maximize flexibility in property management as well as transfer wealth into future generations

trustee: holds legal title to the trust property and manages that property for the benefit of the beneficiaries, who have the right of beneficial enjoyment of the property; has the power to sell trust assets and reinvest the proceeds of the trust

RULE AGAINST PERPETUITIES

the rule against perpetuities has no application to defeasible estates because reverter, possibilities of reverter and powers of termination are inherently vested in nature

common law rule: no interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest; property may be tied up with contingent interests for lives in being plus twenty-one years, but no longer

ELEMENTS: (1) no interest; (2) is good; (3) unless it must vest; (4) if at all; (5) not later than twenty-one years after some life in being; (6) at the creation of the estate

validating life: a person who will enable you to prove that the contingent interest will vest or fail to vest within the life, or at the death of that person, within twenty-one years after that person’s death

class gifts: if the gift to one member of a class might vest too remotely, the whole class gift is void; a class gift is not vested in any member of the class until the interests of all members have vested

a class give is not vested under RAP until all class members are identified and all conditions precedent have been satisfied for every member of the class

future interests retained by the transferor – reversion, possibilities of reverter, and rights of reentry – are NOT SUBJECT TO RAP

CHARITIES: if O makes a gift to Charity A followed by a gift to Charity B if a specified event happens, the executory interest (shifting) in Charity B is exempt from RAP

Symphony Space v. Pergolia Properties (upper east side)

Issue: whether options to purchase commercial property are exempt from the prohibition against remote vesting embodied in N.Y.’s RAP?

Rule: options to purchase land are subject to RAP, such options are specifically enforceable and give the option holder a contingent equitable interest in land.

where the parties to a transaction are corporations and no measuring lives are stated in the instruments, the perpetuities period is 21 years.

Analysis: the option period would vest as late as 25 years later. Also, the defendant did not lease the entire property, only a portion. RAP promotes upkeep of property and a long option contract would be a disincentive to the party with the present possessory interest to take care of the property.

Conclusion: void.

option to repurchase: creates an interest in property involved; treated like a future interest, contingent upon exercise of that right – RAP applies

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right of first refusal (preemptive right): does not give the holder the power to compel the owner to sell; it only requires the owner, if and when she does sell, to offer the property first to the holder of the right; some/some – RAP

EXAMPLES OF VALID CONVEYANCES

O to A for life, then to A’s first child to reach 21.

The interest in A’s child cannot possibly vest more than 21 years after A dies.

O to A for life, then to A’s children for life their lives, then to B.

The remainder in B is vested in possession now.

O to A for life, then to A’s first child if he survives A by 20 years. A has no children.

A has a possessory life estate; O has a reversion in fee simple; A’s first child has a springing executory interest in fee simple.

By will, O devises Blackacre to O’s widow for life, then to O’s children who are then alive.

A will only becomes effective at the death of the testator. We will know who O’s widow is at the time of O’s death, therefore she is a life in being for the purposes of the will and O cannot have any more children after he is dead. The vesting will occur within 21 years of the widow’s death.

O conveys to A for life, then to A’s widow for life, then to A’s children.

When A dies, A cannot have anymore children so the class closes. There is no unborn widow problem here since the language of the gift does not delay vesting until the death of the widow. The remainder in A’s children is vested in interest now.

O conveys land “to A Church for so long as the premises are used for church purposes, and if they shall ever cease to be so used, then and in that event to the American Red Cross.”

More accurate answer “A Church has a fee simple subject to an executory interest that is valid under the charity-to-charity exception to RAP.” EXPLAIN

O conveys property “To A for life, and one year after A’s death to B.”

A has a present possessory life estate; O has a reversion in fee simple subject to an springing executory interest; B has a contingent remainder in fee simple.

EXAMPLES OF CONVEYANCES THAT VIOLATE RAP

O to A for life, then to A’s first child to reach 25. A has no children 25 or older.

No validating life. Cannot prove that A’s first child to reach 25 will do so within 21 years of A’s death. The contingent remainder is void.

To A for life, then to A’s children for life, then to A’s grandchildren for life.

A may have children after the interest is created or all children except an after born child. The grandchildren’s interest may vest beyond the 21 year period.

To School Board so long as it is used for a school, then to A.

Shifting executory interest may vest in As heirs or divisees hundreds of years from now.

To B for life, then such of B’s children who become lawyers.

B may have children after the interest is created who become lawyers 21 years after B’s death.

To A for life, then to his widow for life, then to A’s descendants who survive the widow.

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“UNBORN WIDOW PROBLEM” – The contingent remainder’s A’s issue might vest in A more than 21 years of any life in being at the time of the creation of the interest. The widow may have been born after the creation of the interest. The contingent interest in A’s children is contingent upon them being alive when the widow dies which may be more than 21 years after the death of any life in being at the creation of the interest.

To M for life, then to M’s children for their lives, then to M’s grandchildren. M is 80 years old and has had a hysterectomy.

“FERTLE OCTOGENARIAN RULE” – any living person is considered capable of having children.

The residue of my estate to my descendents who are living when my estate is distributed.

“SLOTHFUL EXECUTOR” – creates an administrative contingency

COOWNERSHIP AND MARITAL INTERESTS

tenancy in common: have separate, but undivided interests in property

“T devises Blackacre to A and B”

interest of each is descendible and may be conveyed by deed or will; unity of possession is essential

don’t have to have equal interest in the land – i.e. A 33% interest and B – 67% interest

joint tenancy: have the right of survivorship; four unities are essential – time, title, interest, possession

time : the interest of each joint tenant must be acquired or vest at the same time

title : all joint tenants must acquire title by the same instrument or by a joint adverse possession; a joint tenancy can never arise by intestate successor or other act of law

interest : all must have equal undivided shares and identical interests measured by duration

possession : each must have a right to possess the whole

tenancy by the entirety: only between husband and wife

same four unities plus marriage – time, title, interest and possession

surviving tenant has the right of survivorship

neither husband or wife can defeat the right of survivorship of the other by a conveyance to a third party; cannot be unilaterally severed by the action of one spouse

I. SEVERANCE OF JOINT TENANCIES

Riddle v. Harmon (wife wanted to sever joint tenancy of property with husband)

Issue: Whether a wife/husband can unilaterally terminate a joint tenancy by conveying her interest from herself as a joint tenant to herself as a tenant in common?

Rule:

joint tenancy has the four unities: interest, title, time and possession; if one is destroyed, then a tenancy at common is created

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an indisputable right of each joint tenant is the power to convey his or her separate estate by way of gift or otherwise without the knowledge or consent of the other joint tenant and to thereby terminate the joint tenancy

Analysis: a fictional strawman is no longer necessary. When wife destroyed the four unities she created a tenancy at common. Husband no longer has right of survivorship.

Conclusion: judgment for husband reversed.

Harms v. Sprague (mortgage interest in joint tenancy)

Issue: Is a joint tenancy severed when less than all of the joint tenants mortgage their interest in the property and does such a mortgagee survive the death of the mortgagor as a lien on the property?

Rule: the execution of a mortgage by a joint tenant on his interest in the property would not destroy unity of title or sever the joint tenancy

Analysis: when the joint tenant dies, the mortgage ceased to exist against the property and the joint tenant took the property by survivorship free of the encumberance

Conclusion: reversed.

title theory: the mortgagee takes legal title to the land; the mortgagor has only the equity of redemption

lien theory: the mortgagor keeps legal title and the mortgagee only has a lien on the property

II. JOINT TENANCY BANK ACCOUNT

are used by depositors with different intents and for a variety of reasons

true joint tenancy accounts : when a person may intend to present a gift or pat of the sum and the rights of survivorship; majority of jurisdictions hold that the surviving joint tenant takes the sum remaining on deposit in a joint bank account unless there is clear and convincing evidence that a convenience account was created

payable on death account : only a gift of survivorship rights; not permitted in some jurisdictions because it is viewed as testamentary in nature and violates the Statute of Wills

convenience account : only the power to draw on the account to pay bills and no survivorship rights

III. RELATIONS AMONG CONCURRENT OWNERS

PARTITION

partition: equitable action available to any joint tenant or tenant in common; unavailable to tenants in the entirety – when the court sells the land and divides the proceeds

Delfino v. Vealencis (garbage business)

Issue: whether the trial court properly ordered the sale of property owned by the plaintiff and defendant in common?

Rule: a partition sale should be ordered only when two conditions are satisfied: (1) the physical attributes of the land are such that a partition in kind is impracticable or inequitable; and (2) the interests of the owners would be better promoted by a partition sale.

courts prefer a partition in kind over a partition in sale

Analysis: the partition in kind would be practicable because the land is rectangular in shape. The defendant could still operate her garbage business with a partition in kind and plaintiffs

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could sell the lots around and “any inference that D would probably not be able to continue her business is unfounded.”

Conclusion: reversed.

Spillar v. Mackereth (warehouse vacated and cotenant stored stuff there)

Issue: Whether the plaintiff could establish ouster to force her cotenant to move out of the property or pay rent?

Rule: before an occupying tenant can be liable for rent, he must have denied his cotenants the right to enter

in the absence of an agreement to pay rent or an ouster of a cotentant, a cotenant in possession is not liable to his cotenants for the value or his use and occupation of the property

Analysis: no adverse possession in this case; P did not demand equal use or enjoyment of the building in her letter. D did not deny P use or access to the building and only put locks up to protect his property.

Conclusion: judgment for rent is reversed

where a cotenant is in exclusive possession of concurrently owned property, the majority of jurisdictions hold that unless there has been an ouster, the cotenant in possession does not have to pay a proportionate share of the rental value to the cotenants out of possession

Swartzbaugh v. Sampson (boxing arena)

Issue: can one joint tenant who has not joined in leases executed by her cotenant and a third party maintain an action to cancel the leases where the leasee is in exclusive possession of the leased property?

Rule: a joint tenant not joining in the lease is not bound by its terms and he can recover from the tenant of his cotenant the reasonable value of the use and enjoyment of his share of the estate, if the tenant under the lease refuses him the right to enjoy his moiety of estate

Analysis: the plaintiff did not lose the right to possession and she did not attempt to reenter the leased portion of the land and was denied by the defendant. She cannot attempt to cancel the two leases.

Conclusion: affirmed.

ACCOUNTING FOR BENEFITS AND RECOVERING COSTS

accounting : an equitable proceeding

o rents and profits : a cotenant who collects from third parties rents and other payments arising from the co-owned land must account to cotenants for the amounts received

o absent ouster, accounting is usually based on actual receipts, not fair market value

taxes, mortgage payments, and other carrying charges

o a cotenant paying more than his share of taxes, mortgage payments, and other necessary carrying charges, generally has a right to contribution from the other cotenants, at least up to the amount of the value of their share in the property

o principle : protection of the interest of each cotenant from extinction by a tax or foreclosure sale imposes on each a duty to the extent of his proportionate share of the money required to make such payments

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repairs and improvements :

o necessary repairs : in most jurisdictions a cotenant making or paying for them has no affirmative right to contribution from the other cotenants in the absence of an agreement – no way for courts to really determine if the repairs & associated costs were reasonable

o improvements : a cotenant has no right to contributions from other cotenants for expenditures for improvements

no credit given for the costs of the improvements is given as such in an accounting or partition action; BUT IT MAY BE GIVEN TO PREVENT UNJUST ENRICHMENT

the interests of the improver are to be protected if this can be accomplished without detriment to the interest of the other cotenants

IV. MARITAL INTERESTS

marital property : the husband and wife have separate property; ownership is given to the spouse who acquires the property

community property : rests on the notion that husband and wife are a martial partnership and should have their assets equally

Sawada v. Endo (injury without insurance and transfer of land to sons)

Issue: whether the interest of one spouse in real property, held in tenancy by the entirety, is subject to levy and execution by his or her individual creditors?

Rule: under the Married Women’s Property Act the interest of a husband/wife in an estate by the entireties is not subject to the claim of his or her individual creditors during the joint lives of tenants.

an attempted conveyance by either spouse is wholly void, and the estate is not subject to the separate debts of one spouse only

Analysis: the conveyance to the son was not a fraud, in essence the parents kept a life estate. The estate held in a tenancy in the entirety cannot be reached by creditors.

Conclusion: Affirmed.

TERMINATION OF MARRIAGE BY DIVORCE

equitable distribution : property is divided by the court, in its discretion, on equitable principles

at common law, upon divorce, property of the spouses remained the property of the spouse holding title

In re Marriage of Graham (MBA and then dipped)

Issue: Whether in a marriage dissolution proceeding a MBA constitutes marital property which is subject to division by the court?

Rule: An educational degree, such as an MBA, is not encompassed under the broad views of property.

Under the Uniform Dissolution of Marriage Act marital property is all property EXCEPT: (1) property acquired by gift, bequest, devise or descent, (2) property acquired in exchange for property acquired prior to the marriage or in exchange for property acquired by G, B, D, D, (3) property acquired by a spouse after a decree of legal separation; and (4) property excluded by valid agreement of parties.

Analysis: no property acquired during marriage. An educational degree is not transferable nor does not a value on the open market. No way to divide the attainment of the degree.

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Conclusion: Affirmed, no martial property in MBA.

reimbursement alimony : (some/some) circumstances where a supporting spouse should be reimbursed for the financial contributions he or she made to the spouse’s successful professional training: should include all costs – household, tuition, travel expenses, etc.

Elkus v. Elkus (opera singer dipps)

Issue: Whether a career as a performing artist, and its accompanying celebrity status, constitute marital property subject to equitable distribution?

Rule: an interest in a professional career (potential) is marital property which may be represented by direct or indirect contribution of the non-title holding spouse, including financial contributions and nonfinancial contributions made by caring for the home and family.

Analysis: husband gave up his career to enhance wife’s career and contributed to her career trajectory – photos, voice training, etc. – as well as took care family. His work greatly increased her career potential.

Conclusion: reversed and remanded for proceedings to determine equitable share.

professional goodwill : a divisible marital asset in most jurisdictions – good will: essentially the reputation that will probably generate future benefits.

TERMINATION OF MARRIAGE BY DEATH OF ONE SPOUSE

common law

o dower : a gift made by the bridegroom to the bride at the wedding

o curtsey : at wife’s prior death, a widower was, at common law, entitled to a life estate in each piece of the wife’s real property if certain conditions were fulfilled

modern elective share

o forced share legislation : giving the surviving spouse an elective share in all property – real and personal – that the decedent spouse owned at death; ordinarily applied to property that the decedent spouse owned at death

community property (AZ, Cal., Idaho, Nev., N.M., Tex., Wash., Ala)

o the earnings of each spouse during the marriage should be owned equally in undivided shares by both spouses; property acquired during the marriage by joint efforts

o separate property : property acquired before marriage and property acquired during marriage by gift, devise, or descent

RULES: (1) community property can only exist between a husband and a wife; (2) neither spouse acting alone can convey his/her undivided ½ share of community property to a third person; (3) at death, each spouse has the power to dispose by will ½ of the community property; (4) in most states, if a spouse dies intestate, his or her share of the community property passes to the surviving spouse

Goodridge v. Dep’t of Public Health (Mass. Same Sex Marriage)

Issue: whether consistent with the Mass. Const., the Commonwealth may deny the protections, benefits, and obligations conferred by civil marriage to two individuals of the same sex who wish to marry?

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Rule: barring an individual from the protections, benefits, and obligations of civil marriages solely because the person would marry a person of the same sex violates the Mass. Const.

Analysis: marriage is a secular institution that conveys secular property rights.

Conclusion:

LEASEHOLDS: THE LAW OF LANDLORD TENANT

I. TRADITION, TENSION, AND CHANGE IN LANDLORD-TENANT LAW

THE LEASEHOLD ESTATES

outside of the freehold estate, because no seisen

KEY: distinguish – term of years, periodic tenancy, tenancy at will and tenancy at sufferance

term of years: an estate that lasts for some fixed period of time or for a period computable by a formula that results in fixing calendar dates for beginning and ending, one the term is created or becomes possessory

at common law no limitation on the period

must be for a fixed period, but can be terminable earlier upon the happening of some event or condition

death of LL or tenant has no effect on term of years tenancy

requires no notice because inherent in the lease

periodic tenancy: a lease period for some fixed duration that continues for succeeding periods until either the landlord or the tenant gives notice of termination

“to A for month to month” or “to B for year to year”

death of LL or tenant has no effect on the duration of the periodic tenancy

tenancy at will: no fixed period that endures so long as both the LL and T desire

a tenancy at will ends when one of the parties terminates it, at the death of one of the parties

ordinarily requires a period of notice – thirty days or some time equal to the interval between rent payments

tenancy at sufferance: when a tenant remains in possession after termination of the tenancy; under common law LL had two options: eviction (plus damages) or consent (express or implied) to the creation of a new tenancy

LEASE: both a contract and conveyance of land

Garner v. Gerrish (kept renting after the death of landlord)

Issue: Whether the lease should be liberally construed to grant the tenant alone the right to terminate at will, or whether the LL is accorded a similar right by operation of law?

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Rule: lease providing the tenant alone the right to terminate at will are not converted into a tenancy at will by either party.

Analysis: the lease expressly provided the T could terminate whenever he chose and LL retained the right of reentry if rent was not timely made. The terms of the lease were express and it gave the T the right to terminate at his will, and to hold otherwise would violate the terms of the agreement.

determinable life estate/tenancy : tenant cannot be evicted, terminable solely at T choice

Conclusion: reversed, judgment for tenant.

Crechal & Polles, Inc. v. Smith (forced attempt to create a new lease – holdover tenant)

Issue: whether a LL converts a month-to-month (periodic tenancy) when the T does not leave the premises at the end of the term of the lease?

Rule: absent evidence to show contrary intent on the part of the LL, a LL who accepts rent from a holding-over tenant has an election either to eviction, treat as a trespasser, or hold him as a tenant.

Analysis: LL is not entitled to force T into another five year lease. There was an alleged agreement to extend the lease on a month to month basis and LL cashed one month’s rent and rejected the other. T offered the premises for inventory, but LL refused. They extended the lease on a month to month basis.

Conclusion: judgment for P for back rent for the month and a half.

in most jurisdictions a holdover is a maximum of one year

I. DELIVERY OF POSSESSION

Hannah v. Dusch (LL didn’t actually deliver possession of property)

Issue: Whether a LL, who without any express covenant as to delivery of possession of leased property to a tenant, is required under the law to oust trespassers and wrongdoers so as to have put for entry by the T at the beginning of the term? (an implied covenant of delivery)

Rule:

o American Rule : where the new T fails to obtain possession of the premises only because a former tenant wrongfully holds over, his remedy is against such wrongdoer and not against the LL.

o English Rule : there is in every lease an implied covenant on the part of the LL that premises shall be open to entry by the tenant at the time fixed by the leasee for the beginning of his term…

Analysis: The American Rule – can’t force a LL to be held liable for the wrongdoing of a third party. The action lies against the holdover tenant.

Conclusion: judgment for LL affirmed.

the American Rule is the minority rule in and the English Rule is the majority rule

II. SUBLEASES AND ASSIGNMENTS

LIABILITIES OF ASSIGNEES AND SUBLEASES

ASSIGNEES

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o an assignment arises when the leasee transfers his entire estate under the least; tranfers the right to possession for the duration of the term

o only liable for rent at for the time of the leasehold; privity of estate still exists be LL and T1, but privity of estate ceases to exist

SUBLEASEES

o if the leasee transfers anything less than his entire estate; the leasee is said to retained a reversion, the right to possession reverts to him at the end of the period designated in the transfer

o no privity of contract or estate between LL and T2

Ernest v. Condit (racetrack; assignment v. sublease)

Issue: whether a lease that purports to be a “sublease” can be interpreted as an assignment?

Rule: assignment: all of the possessory interest is transferred; privity of contract still exists between LL and T1, but privity of estate shifts to T2

o sublease : less than all of the possessory interest is transferred, no privity of contract between T2 and LL

Analysis: the use of the word “sublet” is not conclusive because the facts and circumstances indicate that the parties contemplated an assignment.

Conclusion: assignment, not sublease

Kendall v. Ernest Pestana, Inc. (airplane hanger)

Issue: Whether, in the absence of a provision that such consent will not be unreasonably withheld, a leasor may unreasonably and arbitrarily withhold his/her consent to an assignment?

Rule:

o majority rule : where a lease contains an approval clause, the leasor may arbitrarily refuse to approve a proposed assignee no matter how unsuitable the assignee appears to be and no matter how unreasonable the lessor’s objections

o minority rule : where a lease provides for assignment only with the prior consent of the lessor, such consent may be withheld only where the lessor has a commercially reasonable objection to the assignment, even in the absence of a provision in the lease stating that the consent to assignment will be arbitrarily withheld – factors: financial responsibility of the proposed assignee, suitability of the use for the particular property, legality of the proposed use, need for alteration of the premises and the nature of the occupancy

Analysis: following the minority rule – no commercially reasonable reason to refuse the assignment. New assignees were in a better position to operate the airplane mechanics business. No good reason to reject assignment and goes against the policy of no restriction against alienation.

o the basic social policy involved her is that interests in property, including leaseholds, should be freely alienable

Conclusion: reversed and in favor of new assignees

III. TENANT WHO DEFAULTS

TENANT IN POSSESSION

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Berg v. Wiley (restaurant gone bad)

Issue: Whether a LL’s self-help repossession of premises by locking a T out was correctly held a wrongful eviction as a matter of law?

Rule: a LL may rightfully use self-help to retake leased premises from a tenant in a possession without incurring liability for wrongful eviction provided two conditions are met: (1) the LL is legally entitled to possession, such as where a T holds over after the lease term or where a tenant breaches a lease containing a reentry clause; or (2) the LL’s means of reentry were peaceable.

o the only lawful means to dispossess a T who has not abandoned nor voluntarily surrendered but who claims possession adversely to a LL’s claim of breach of written lease is by resort to judicial process

Analysis: T did not abandon the claim to possession of the property. LL resort to self-help was not peaceable because LL chose to go when T was not there. If T had been there, then there would have been a problem. Wrongful eviction under old law and new law.

Conclusion: affirmed.

TENANT WHO HAS ABANDONED POSSESSION

Sommer v. Kridel (keeping apartments vacate to increase damages – duty to mitigate)

Issue: Whether a LL seeking damages from a defaulting T is under a duty to mitigate damages by making reasonable efforts to relet the apartment wrongfully vacated by T?

Rule: a LL does have an obligation to make a reasonable effort to mitigate damages – factors: whether LL, offered to show the apartment to prospective T or advertised in the newspaper

Analysis: LL let the apartment stay vacant for fifteen months even though there a person ready to rent. Failure of a duty to mitigate.

Conclusion: affirmed.

QUIET ENJOYMENT AND CONSTRUCTIVE EVICTION

Reste Realty Corp. v. Cooper (leaky basement)

Issue: whether the LL was guilty of a breach of covenant which justified the T’s removal from the premises?

Rule: under this rule any act or omission of the LL or of anyone who acts under authority or legal right from the LL, or of someone having superior title to that of the LL, which renders the premises substantially unsuitable for the purpose for which they are leased, or which seriously interest with the beneficial enjoyment of the premises, is a breach of the covenant of quiet enjoyment and constitutes a constructive eviction.

a T right to claim a constructive eviction will be lost if he does not vacate the premises within a reasonable period of time after the right comes into existence

Analysis: T complained about the leaky basement. Emphasized she rented the basement for training classes. LL promised to fix, it got worse, started to damage both files and interrupt training. Promises went unfulfilled by shoddy work and then stopped. T legally vacated apartment and stopped paying rent.

Conclusion: constructive eviction

EXAMPLES OF GROUNDS FOR CONSTRUCTIVE EVICTION

failure to provide adequate heat so the apartment was “unlivable” on cold days

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main sewage pipe of apartment building remained clogged so apartment building had offensive odors and was a danger to health

LL allowed portion of apartment building be used for lewd purposes

outdated plumbing that caused unhealthy odor in apartment

IMPLIED WARRANTY OF HABITABILITY

Hilder v. St. Peter (slumlord – backed up toilets, falling ceiling, broken locks, etc.)

Issue: whether there is an implied warranty of habitability within a residential lease?

Rule: the rental of any residential dwelling unit has an implied warranty of habitability exists, whether oral or written, that the LL will deliver and maintain throughout the period of tenancy, premises that are safe, clean, and fit for human habitation

TEST: whether the claimed defect has an impact on the safety or health of the tenant?

prima facie: (1) the LL had notice of the previously unknown defect and failed, within a reasonable time, to repair it; (2) the defect, affecting habitability, existed during the time for which rent was withheld

Analysis: T gave reasonable notice of all the defects and LL did not act. LL conduct was “clearly expressive of a wanton disregard of T rights.” T could withhold rent in all or part for actions of LL and self-provided repairs.

Conclusion:

implied warrant of habitability : not extended in all jurisdictions; exemptions for single-family residences, long-term or agricultural leases, and majority declined to extend it to commercial leases

IV. THE PROBLEM OF AFFORDABLE HOUSING

Chicago Bd. of Realtors, Inc. v. City of Chicago (rent control)

Issue: Whether a local rent control law violated the Takings Clause of the Constitution?

Rule: the rent control law was sufficiently specific and reasonable in light of its stated purposes to promote public health, safety and welfare

Analysis: although joined in the majority opinion, the ordinance may have a negative effect of helping the middle class and rich rather than the poor: less resources for LL to improve property, less incentive to provide housing stock, LL will pass off costs to T making rents higher in the long run, “if the price is artificially depressed, or the costs to LL artificially increased, supply falls and many T, usually the poor and the newer T, are hurt.”

Conclusion:

TRANSFERS OF LAND

I. BROKERS

fiduciary : a person who undertakes to act in the interest of another person

o trustee’s/beneficiaries; agent/principle; attorney/client; executor’s/legatees; administrators of estates/designees; members of partnership; bod of directors/corp. & shareholders

Licari v. Blackwelder (fiduciary duty of loyalty & care)

Issue: whether the real estate brokers breached their fiduciary duty of loyalty and care by purchasing P’s property and then selling it to achieve a $54K profit?

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Rule: fiduciary duty of care: avoid being grossly negligent; good-faith

o fiduciary duty of loyalty : show fidelity to the principle, disclose any conflict of interest to principle

Analysis: agents failed: to disclose true FMV to Ps; intent to resell and not occupy the premises; disclose potential purchasers willing to pay more than $115K. Breached duty of loyalty. Cannot keep any benefit from breaching a fiduciary duty of loyalty – remedy is restitution.

Conclusion: $45K profit to Ps

Duty of Loyalty: whether you disclosed your conflict of interest and independently show your actions were fair to the principle?

II. CONTRACTS FOR SALE

THE STATUTE OF FRAUDS

Hickey v. Green (oral agreement to sell land then reneged)

Issue:

Rule: an oral contract to sell property can be specifically enforced if the party seeking enforcement of the contract changed his position in reasonable reliance upon the oral contract despite the SOF

Analysis:

Conclusion:

MARKETABLE TITLE/MERCHANTABLE TITLE

Lohmeyer v. Bower

Issue: Whether the plaintiff made a sufficient claim that he was not going to receive marketable title?

Rule:

o in order for a title to be merchantable it must be free from reasonable doubt and must not expose the prospective buyer to the hazard of potential litigation

Analysis:

Conclusion:

RULE: A house in violation of a zoning ordinance does not constitute an encumbrance on the land, but a violation of a restrictive covenant is an encumbrance on the land.

Conklin v. Davi

Issue:

Rule:

Analysis:

Conclusion:

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DUTY TO DISCLOSE DEFECTS

Stambovsky v. Ackley (haunted house)

Issue:

Rule:

Analysis:

Conclusion:

Johnson v. Davis

Issue:

Rule:

Analysis:

Conclusion:

IMPLIED WARRANTY OF QUALITY

Lempke v. Dagenais (contractors shoddy work in garage)

Issue:

Rule:

Analysis: five reasons why privity of contract between builder and homeowners should not be required: (1) mobile nature of modern society; (2) latent defects will often not show up for years; (3) builder in better position to control quality of work; (4) builder already has an obligation to perform in a workman like manner; (5) would encourage sham sales

Conclusion:

REMEDIES FOR VIOLATION OF THE SALES CONTRACT

Jones v. Lee

Issue:

Rule:

Analysis:

Conclusion:

Kutzin v. Pirnie (remedies)

Issue:

Rule:

Analysis:

Conclusion:

Brown v. Lober (warranties of title)

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Issue:

Rule:

Analysis:

Conclusion:

Frimberger v. Anzellotti

Issue:

Rule:

Analysis:

Conclusion:

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