Property Outline- Prof. Currie/2001

Possession: must have some legal form of possession to claim a right to a thingI. Rules for Capture: (applies to wild animals)

a. first to capture winsb. key is that capture is certain, or so eminent that practically certain animal cannot escape

A. Must have physical occupation/control over an animal to constitute a possessionary interestRule: must gain control over an animal to have possession- nets, cage, tied up, traps, mortally wounding are all control b/c capture is nearly certainPierson v. Post- Post is chasing a fox and looks about ready to catch it, then Pierson enters in the last minute and catches fox. Suit over who owns dead fox. Question is whether fox is Post’s property. Pierson wins, Court says not Post’s b/c he did not have occupation/physical possession of fox. Reason behind possession (control) not just being in close pursuit as Post was:1)certainty (possession is easy to site)2)peace and order/ repose (a clear rule creates stability)3) incentive arg (just deserts)- what society wants to encourage (Blackstone)- foxes are bad for farmers so anything that leads to the most dead foxes is good. Also many feel this is just the fair outcome/just deserts arg that we want to give people the fruits of their labor** note- Dissent says do not actually have to have occupation of it (have it in hand) but rather just be in reasonable pursuit and likely to get it (is an arg that this fits the three principles above as well, i.e who would go to trouble of hunting fox if anyone could come into process and kill an animal and negate your effort)

B. Possession/Capture can be unique to the circumstance if Custom permits: generally means not practical to have total control at start- must have control in the best sense possible, here physical control is impossible- key is the incentive createdGhen v. Rich-P shoots whale and later it floats ashore where 3rd party finds it and auctions it off to D. P sues for possession of the whale b/c in the whaling industry it was customary to shoot whales and then when they die they would float to the top and drift ashore where one actually got them. P says that he brought it into his control (constructive capture) b/c of a mortal wound despite not having physical control, D says there was no real/physical control. P wins, probably b/c the whaling industry is peculiar and this is the closest one can come to capture of this type of whale, so if law didn’t call this possession their would be no incentives to keep the industry alive.

Hypothetical variations: * Key is to look to incentives, cannot overextend a generic doctrine like rules of capture to all situations* also note that in 19th century when these rules were formed the goal was generally to kill wild animals, today the goal may be to conserve them (endangered)

A. Must have control over the animal to be able to claim possessionElements of possession RS:

a. in your control b. intention to exclude others from possession

1) Post puts fox in cage and Pierson takes it out: fox belongs to Post b/c Post has denied it of liberty/occupied it

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2) If beast escapes from cage- then Pierson is ok to take it b/c there is no longer occupation/control.- if one left his book somewhere it stays his no matter what unless he abandones it, here a fox is fair

game b/c the incentive to promote capture of foxes and keep away from society so if fox does escape we want another to capture it and this overrides rights of orig capturer

- note also that if the animal was tamed and had a habit of returning (animus revertendi) then the captor still owns the animal while he is away b/c we want to reward taming animals

B. If animal’s true ownership is obvious to society (notice), cannot claim an animal3) Brands animal and it escapes- then rights remain in Post b/c there is an incentive to get fox out of

society for orig owner, and also for society if there is a reward posted ****ASK4) Animal not indigenous to area- - treated differently b/c public at large knows that it belongs to someone, i.e. potential 2nd captor would

have different incentive due to his understanding. There is warning that it is not free game- if foreign to area or marked/branded you know it isn’t an animal that is yours for the taking, must be

fair warning (so if branding hid and not seen no good)

C. Technicalities of modern law (trespass, statutory law, etc)5) Pierson captures fox on Posts land- - although you do not own fox until reduced to possession, even if on your land, Pierson can’t get the

fox b/c we do not reward wrongful trespassers, ratione soli (own land at exclusion of others) supercedes other incentives

6) no hunting license- Post wins b/c of statutory reason

D. Natural Resources (varies depending on incentive of the area)7) Water- taking large amounts of water from neighboring stream. Multiple resolutions:

a. default- cannot do this b/c of an incentive reason that public needs river for transportation, power, etc. this is common law of riparian water (water that borders your land), people have right to reasonable use of water. This rejects the capture rule

b. desert rule - could be a situation where it would be good to encourage the taking of water for good purposes Ex: Desert, maybe want to become more fertile and irrigateable, this is Coffin v. LH Ditch case of 1888 in CO which changed the common law from old English law of example a.

c. prior appropration rule - person who first puts the good (water) to good use gets this right protected into futures (akin to a capture rule, similar goals of the desert rule or could encompass/work with the desert rule)

** Ask if came up with the right rules8) Solid minerals: Coal

a. Land owner owns the earth below him. Capture rule doesn’t really apply- Could argue that anyone can dig up (capture) b/c we want people to dig up coal, but part of land belongs to the owner, and if owner is ignorant than other guy w/ knowledge can bargain w/ him w/o the law to get the coal(geologist case)- so cannot just dig up solid minerals anywhere, need to have some rights to the land

9) Liquid and Gaseous Minerals: Oil & Gasa. capture rule allows a land owner to extract (capture) all the oil and gas from a well under his land despite knowing if it is coming solely from land he owns. Public incentive for this scarce good.- more difficult than coal b/c these are liquid and hard to prove it came from your land or another’s

land, so need to think about it differently- if didn’t treat this way it would be like fish example in book that state there would be overexploitation

quickly and depletion due to incentive to get as much as possible very quickly- so capture rule would promote over exploitation if it were applied here

ASK*** the rule under a that came from gilberts seems to contradict last statement

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E. Right to possession of profits from you incomeKeeble v. HickeringillP has a decoy pond for ducks that he then catches and sells. D maliciously scares ducks w/ gun shots. P sues for trespass on the case (maybe conversion today), and P wins on the rationale that although he didn’t own ducks he did own (have possession of) the profits that should come from ducks.

Two possible rules from this case: when your right to gain an established profit (as in your profession/trade) is inhibited, you can

recover for property (future profits) w/o ever owning the tangible thing like the ducks- Post could perhaps not have used this arg b/c although he could have profited from fox it was not associated with his trade/business (if this is the scenario)

competition is lawful but malicious interference is not: here D is just malicious in his acts. Ex: school- if you build a competing school across street and take students away from orig school ok, but if you frighten students away from orig school, not ok- Pierson can get fox if just competition but could not if just malicious b/c wanted post’s fox only to his detriment- some courts say competition accompanied by malice doesn’t matter b/c still supports public policy of getting rid of foxes in society- crts split

II. Finders CasesSame necessity of possession :1) in your control2) intention to exclude others from possession/ dominion over

A. General Default: Finder has rights superior to all but the true owner- still have to reduce it to your control- ownership (holding legal title) is different from possession (physical control)Ex: Post sees jewel in gutter and points to it and says tallyhoe! Then Peirson quickly goes in and gets it. Pierson gets possesion b/c he reduces to possession/control. Same case here, not just enough to start chase have to gain control over object (Capture Rule)

B. The prior possessor, has superior rights to personal and real property foundHierarchy of Property Interests: relativity of title/possession

1. real owner2. finder #1 (technical trespasser)3. finder #2

Armory v. DelamireArmory finds a jewel (in course of his job as chimney sweep) and brings it to jeweler’s for appraisal handing it over to his apprentice/agent. D will not give it back saying that P doesn’t own it, thus Armory brings action of trover against Jewler/Delamire. Crt Holds that P/finder should get jewel back and has rights over all but the true owner.Incentives:- we want people to pick up lost things and get them back into economy- also just deserts, he went to hassle to get/find- put in the most toil - incentive here is weaker than w/ capture rule since the real owner can still claim it, this is because goods are usually obvious to have belonged to someone (like marked animal)

C. Finders versus Owners of the premises1. Objects found in private homes usually go to the owner b/c he has possession of the home, control and an intent to exclude others from dominion over it and all in it

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Ex: Owner invites finder to house for dinner and finder finds a diamond ring under sofa, the owner gets the ring b/c he has constructive possession of it since it is in his house2. Private home where the owner does not have possession of the house: Owner/Renter situation- then the Finder may take the object, as he has the possession of the objectHannah v. PeelP (soldier) is stationed legally to reside at D’s house during war and P finds a brooch. P brought to police and when police can’t find real owner they turn it over to D, the owner of the house. P sues D for brooch or its value. Holding: Court gives P (finder) value of brooch, b/c the D never had possession, both control of good or intent to exclude from others control.Counter: D would still argue (indirect possession arg) that he has possession of the land and thus possession of all that is on his land

3. Object found in a public place: Lost v. Mislaid distinctionLost property- true owner accidentally and casually lost (clip falls out of hole in pocket), do not know act of placing has happenedMislaid property- intentionally placed somewhere but then forgotten (purse on a table)- fine distinction, depends on circumstances of where and how found, floor v counter idea

a. Lost property goes to the Finder- want to encourage people to find objects and get back into economyBridges v. HawkesworthCustomer finds money on the floor of a shopkeepers store, both claim rights to it. Appears that it was lost, thus the Finder got to keep it

b. Mislaid Property goes to the Owner or premises- want to allow true owner to come back and claim the object as he may remember he left it thereMcAvoy v. MedunaTrue owner left a pocket book on a counter in a Barber shop. Finder and owner claim right to wallet. Owner gets wallet b/c it appears to be mislaid

4. Abandoned property: Finder gets absolute rights to property- objective intention to give up ownership and possessionEx: Owner throws his watch into the garbage b/c he doesn’t like it. Finder can claim true ownership of the watch as long as he takes possession with the intent to assert ownership

5. Finder is an unlawful trespasser: Owner of premises gets property- this rule discourages unauthorized entry on land

6. Finder is an employee: Owner of premises gets good- employee is an agent, so anything he does goes to the benefit of the employer/owner- employee is allowed on land for a limited purpose, not to take things found, so this would be a trespassSee Staffordshire v. Sharman below

7. Finder is on premises for Limited Purpose: Owner gets property- allowed on land for a limited purpose, not to take things found, so this would be a trespassSouth Staffordshire Water Co. v. SharmanEmployee finds two gold rings embedded in the owner’s ground while digging pool. Owner of premises gets gold rings.- or service person on land to remove/find/ do particular thing, not to take valuable things

8. Objects Embedded in land: Owner gets property

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- objects in soil or under land go to the owner b/c there is a reasonable expectation that things in their soil belong to them.Elewes v. BriggsA prehistoric boat was found by the renter/finder in the land and he wants rights to it now so he can sell to a museum. Rights go to Owner of land.Exception: Treasure Trove (gold, silver, and money intentionally buried) generally goes to the finder as an incentive to get these things back into commerce

III BailmentA. When one person gives another rightful but temporary possession (not ownership) of their property. The true owner is bailor, the person in possession is bailee A bailee has certain duties to the real owner.* Requires: 1) possession by bailor, 2) delivery to the bailee pursant to a contract or agreement, 3) acceptance by bailee- usual issues are: when is a bailment created and thus what are the duties applicable1. Creation- bailment created at point where bailee has physical control and intent to possess.

a. control- usually, bailee must have actual physical ability to control, although some modern courts now are a bit liberal

Ex: Parking lot cases:- if it is a valet service, clearly a bailment but if you park your own car in a garage it depends on the view of the court since the true owner retains the keys and thus the “bailee” doesn’t have real control over the car. Old view holds no bailment. New view says still bailment (liberal idea of control)

Allen v. Hyatt Regency Hotel- Crt takes modern view of bailment and holds that the parking garage was the bailee, when a car was hot-wired and driven out of the garage, thus imposing liability on the bailee for not living up to expected duty of care. Crt bends notion of control saying garage owner had control over building where car parked. Really a policy rationale that onus should be on parking garage since they having the car inside it can better than the owner protect the car.

b. intent- bailee must intend (generally = know what they are assuming responsibility for) to exercise physical control at the exclusion of others. Bailment must be consensual this means (w/ limited exception of involuntary bailment)

* Mistake of contents- if person is mistaken/unaware as to the contents of a parcel, not in possession of the contents even though in possession of the parcel, so no bailment and no duties. Policy, unfair to hold an unknowing person liable. - Samples v. Geary (in Peet case), where no bailment for a lost stole that was unbeknownst to the coat check was in the sleeve of a mink coat, only bailment for coat

* Undisclosed value to bailee- here bailment is created and liability is still imposed on the bailee. policy is that we want baliees to ask about value and take best care possible

Peet v. Roth Hotel- Cashier is given a ring and it is lost/stolen. She does not realize the value so tries to say couldn’t accept the bailment relationship for this expensive ring. Crt holds there is bailment and Hotel is liable for the loss due to the duty it had regarding ring.

B. Involuntary Bailment- generally a bailee must accept the responsibility but in some instances there is involuntary bailment when for policy reasons it makes sense b/c they are the best person to avert the harm and can to a degree expect the liability- ???????ASK

a. No duties to the bailor unless dominion/possession is taken over good, and then all the usual bailment duties pertain to the constructive bailee

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Cowen v. Pressprich- C (a runner for) thought he was delivering bond 1 that was agreed upon w/ P, but instead delivered bond 2. P intended to return bond 2 to the runner when saw error but gave to a random runner and it never resurfaced. P tries to say there was not bailment for bond 2 since no agreement/acceptance to it. But Dist Crt finds an involuntary bailment (like a constructive bailment) since P exercised posession over bond this converts involuntary bailment responsibilities into same as usual and establishes strict liability for misdelivery back to the bailor. On appeal, App Crt decides that 1) no possession over bond was really taken, so not the same duty owed by invol bailee, 2) for an invol bailee there is a neg standard only for misdelivery and thus no liability on Pressprich.- ASK?????? about outcome of this case

C. Duties and Respobsibilities of Bailee1. held to ordinary care generally (although in old courts the one who got primary benefit of bailment might change level of care***Ask Currie p43) and burden is on bailee to prove due care2. Misdelivery by the bailee to the wrong bailor or not at all, is strict liability. So even if reasonable for bailee to misdeliver (forged note from bailor, etc) still liable

* for involuntary bailee, only negligence standard for misdelivery

D. Common Bailment relationships:- valet, parking garage, dry cleaners, repair shop, pawn shop, storage, hotel safes, mail at the post office, lending a personal property to someone else

IV. Gifts Inter VivosA. A voluntary transfer of property w/o consideration during the donor’s life w/o threat of impending death.* Requirements- 1) donor’s intent to make a present gift 2) delivery of the gift physically or constructively, 3) donee’s acceptance of the gift 4) irrevocablity- issues: what can constitute delivery

1. Present Intent- must intend presently to transfer title not just possession; a promise to give property in the future is not a gift, but a mere gratuitous promise not legally enforceable in K or property

Ex O gives horse to E and says please wash Daubin- no gift but rather a bailment b/c no intent to give gift, but expectation to get horse backEx O gives horse to E and says I will give you Daubin tomorrow. - no gift b/c intent to make gift is not in the present, can renig until tomorrow (also no delivery)

2. Acceptance- generally assumed, as it is not a burden to accept a gift

3. DeliveryIrons v. Smallpiece- establishes necessity of delivery to constitute a valid gift- donor must surrender possession and control either by handing over object or in other constructive or symbolic manner if this is impractical- delivery purpose is a cautionary value

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a. Constructive- only if handing over the physical gift is impossible or impractical can one give such delivery, another means of relinquishing possession and control

- giving the key 1. some courts hold that you must give complete and exclusive control to donee

for actual constructive deliveryEx: lock box, only if the only key is given to the donee and he has complete access then on his own w/o constraints (doesn’t need a signature) and no one else has control over box (2 keys idea)Ex: Married woman gives her husband a piano. In some sense she has not delivered the piano b/c she still has retained control/access to the piano, but today probably considered a giftEx: O gives Daubin to A but there is O’s brand on Daubin- crts split: some say still O’s b/c A cannot sell (by statute) so no complete control, like retaining only key. But on the other hand, there is physical delivery of horse

b. Symbolic-when actual delivery is impractical (chattel too large or situation prevents it) then may be able to use a symbol to transfer possession and title, usually written instrument (deed). Intangible things almost always transferred by deed.

- the donee must have possession of the deed for symbolic delivery- deed doesn’t have to be an official paper, could be a branding or writing on a parcel but the important thing is that the written instrument has actually been delivered

Irons v. Smallpiece- delivery of some sort is requiredGruen (Klimpt case)- can give a gift of personal property by deed. despite Father actually retaining possession of the painting, actual delivery of the deed is symbolic delivery of the painting.- a remainder interest (that given to son) has no physical existence/intangible can be transferred by deed.

c. Delivery through a third person- delivery to an agent to complete the delivery1. if the agent is that of the donor (his employee, attorney) he still has the control

to get the property back- so no delivery until it gets to donee2. if the agent is that of the donee or and independent agent- then delivery to him

is loss of control over the property w/o anyway to renig- so delivery is had once the gift is given to the agent

- often difficult to determine whose agent it is

4. IrrevocableOnce made gifts are irrevocable (so if there is a revocable quality to a “gift” it cannot be one in the eyes of the law despite fulfilling other requirements). If a “gift” is given w/ a condition that makes it revocable by the donor- it is often really a bailment- gifts are void if revocable b/c this makes them like wills and thus they violate the statute of wills

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- gifts can still be subject to conditions, just cannot be conditions within the control of the donor.

1) O to A if it rains in may- rain is out of O’s control

2) A to B- engagement ring: implied that marriage is a condition- depends on who calls off wedding: if A then in his control and gift was not valid, if B then out of A’s control and gift valid??

3) O deposits money in a joint savings account in names of O and A. Both must be able to sign to have true possession of funds.

- there is an aspect of a gift and violation of gift, in that it is revocable since O can refuse to sign an thus no access to A, but also O cannot get to account without A. Crts generally do uphold such gifts though b/c partial control has been relinquished

* How to get around the irrevocability requirement*1Gifts Causa Mortis- here you can make revocable2Make it a will in technicality3Present irrevocable grant for future interest- retains a life interest but transfers part of possession now4Open a “joint bank account” type gift- both parties can get at the goods/both have some control and possession (most crts uphold this type of relationship- but check law of the state)5 Trusts- beneficiary ownership (check state)- Totten case sets out that trusts can revocable. Courts allow this b/c of the old equitable notion that trusts separate ownership from the benefitEx: O holds the property in trust for E, but reserves a right to revoke at any time- valid

5. A donor can make future gifts of property1) O to A and remainder to B- B’s interest will not take a possessory interest until the future (A’s death)- key is that the irrevocable right to this future possession must be transferred in the present. If the donor can still revoke the gift in some fashion before the future interest becomes possessory then it is not a valid gift

2) Father gives future right to a painting to Son by deed, retains life estate in the painting for himself/Father (Gruen Case)- this is a valid future gift: life estate in father and remainder in Son- key is must be irrevocable??? ask why not revocable here

V. Gifts Causa Mortis (deathbed gifts)-a gift made in contemplation of an immediately approaching deathRequirements are much the same as for intervivos gifts: 1) donor’s intent to make a present gift 2) delivery of the gift physically or constructively, 3) donee’s acceptance of the gift* But gifts causa mortis are revocable if the donor recovers from the specific illness that prompted the gift. Gift becomes irrevocable upon the death of the donor.- works like a last-minute substitute to a will.

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Typical structure: “If I die, this ring is yours”1. Conditional aspectConditions that must be met: 1) O must die 2) donee must not die 3) O must not revoke before death- always conditioned on death, and impliedly conditioned on the immediate, specific threat to life contemplated by donor at that moment- even if express words not used to condition gift on death, law will presume this unless otherwise proven to be intervivos when a gift is given on the deathbed- also conditioned on donee living until death of donor- like wills gifts causa mortis are personal to the donee specified

Hypos:1) I say, “It’s yours if I don’t survive the operation.” I survive the operation, but on the way home, I’m hit by a truck and die. What result?- The specific condition anticipated did not occur, so the gift is not valid

2) I’m going to Bosnia in a month. I say, “If I don’t return from Bosnia, the ring is yours.”- Not immediate apprehension of death, not a gift

2. Revocable- if O recovers then gift automatically revoked- if O changes mind before death, this is ok b/c just like changing a will (in most states)- gift can be revoked by will.

Hypos:1) O says “If I die the ring is yours A” and a week later leaves ring to X in the will. - Ring goes to X b/c O had right to revoke.

2) O gives a GCM of a ring to A. A new will is drawn up by O, which leaves all his property to B. O dies. What result?- At first glance, the will serves as revocation of the GCM. But does “all his property” include the ring? Was it already given? When does the GCM become effective to make it no longer the donor’s property?

Is it subject to a condition precedent that must occur before the gift becomes effective? If yes, no gift until death. So the will does include the ring.

Is the gift subject to a condition subsequent (final gift subject to revocation later)?If yes, gift before death. So the will does not include the ring.

Look at intention: would the donor have considered the ring her property? It is not likely that a person who has just given a ring away (even subject to a condition) still considers that property his.

VI Bona Fide Purchasers and Gifts

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Classic Problem: One with possession but not ownership has sold the true owner’s property to an unsuspecting bona fide purchaser. Now we have two innocent parties and the law must decide who will absorb the loss as the wrongful possessor has fled or is insolvent.

A. The common law default is that a seller cannot give away more than he has to give away. But there are several exceptions carved out for bona fide purchasers in order to promote sales and commerce.

* Overriding goal of policies are to put the onus on the innocent party (owner or BFP) who could have best prevented the other guy’s loss.

1. When goods are stolen from the owner, the owner regains possessionO owns gift, Pierson steals gift, P sells it to BFP- larceny here so O gets property back under common law and UCC b/c thief never had

title/ownershippolicy: No careless act of O brought this on himself and allowing a BFP to keep property that was stolen would create wasteful “defense expenditures” on the part of owners to protect their property

2. Giving possession (bailment) to a merchant who regularly sells that good, BFP gets the propertyO gives possession of horse to a horse trader P, P sells to BFP- this is embezzlement (have possession but no right to conversion), and BFP gets possession policy: O could have investigated the dealer and we favor transaction security/selling of goods. want people to feel comfortable buying from “reputable” dealers for promotion of commerce

Porter v. Wertz- O gave painting to A, an art dealer, on bailment. A gives painting to B a delicatessen employee who then pretends to be A the art dealer and BFP buys from B. Goes to O b/c of statutory estoppel nor common law estoppel will work. B is not the merchant entrusted by O, he is not an art merchant, and selling art is not the ordinary business of B.

Statutory estoppel- UCC: any entrusting of possession to a merchant who deals in goods f that kind gives him the power to trasfer all rights of the entruster to a buyer in the ordinary course of the seller’s business

3. If the owner of the property expressly or impliedly represents the possessor as the owner, the BFP can use common law principle of esttopel to retain propertyO owns a wagon for his piano moving business. P drives wagon and on its side is painted P’s piano business so to all the customers it appears that wagon is owned by P. P sold wagon to BFP and flees. Suit brought by O against BFP. - BFO wins on basis of equitable estoppel b/c O clothed the wrongdoer w/ possessionpolicy: O has brought this on self by misrepresentation and could have prevented it

3 requirements for common law equitable estoppel:1) representation- statement by owner to world that possessor is also owner2) reliance- BFP relied on this representation

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3) change of position- BFP paid money to P

4. Ordinary bailments keep possession in OO lends horse to P, P sells to BFP- O gets horsepolicy: mere possession is not enough to infer ownership. bailments are common and useful and BFPs must have some overt sign that there is ownership beyond possession

Overt signal of ownership:Zendum case- O gives ring to jeweler to clean and allows him to display it, jeweler sells to BFP. BFP gets to keep ring b/c being in the showcase mislead him to think there was ownership.- also under UCC jeweler is a merchant who regulary sells rings, so BFP gets it

5. Conditional Sales are governed by a recording system to protect the true ownerO transfers possession of a car to A on credit, title to be transferred when all payments are made to the dealer. A now sells to BFP. - Legislature adopted Conditional Sales Act which requires a recording system for things like cars that you buy on credit and this that the owner must register the deed and then is protected against all later BFPs, but if he fails to register he is not and property goes to BFP.

6. Weird exception for the wrongful sale of monetary goods, always goes to BFP A steals money from O and sells the money to B.- Uniform Negotiable Instruments law says on grounds of supporting trade by money and not barter and b/c no way to trace money and verify ownership we will favor the BFP

7. An owner is responsible for the acts of his agents- so if one of O’s agents sells to a BFP and flees with money, BFP gets the propertypolicy: O has greater control over agents and has cloaked them as if they can sell the good

8. If the seller has a “voidable” title he can transfer title to a BFPO to A but A’s check bounces. A has already sold it to BFP.- BFP gets it b/c the seller did have title briefly; this is voidable for fraud Summary of Exceptions to O getting property back (favors transaction security rather than wealth accumulation & stability of ownership):

1) equitable estoppel- misrepresentation 2) voidable title- bouncing checks, fruad3) Owner’s agent4) Negotiable Instruments- money5) statutory estoppel- UCC Merchant Provision6) Recording Acts- registration

B. Bona fide purchaser- one who does not know of the seller’s wrongful possession but has a good faith belief that the seller has title and pays valuable consideration.- a buyer who is not a BFP is never protected against the owner

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1. without consideration paid you are not a BFP (just a donee) and do not win against the owner- so only purchases and not gifts suffice to be a BFPpolicy: owner has lost something but donee has only gained something, so he will be put back at the status quo where as the reverse would leave the owner a net loser

2. A purchase is any consideration by the BFP- so taking out a mortgage or giving an IOU is payment by a BFP

3. buyer cannot know of any wrongful possession in the seller or have inquiry notice of wrongful possession- so if there is actual knowledge of wrongful act (like fraudulent solicitation from O) not a BFP- if there is a circumstance to make the buyer suspicious that the seller is not the rightful owner, not a BFP. Ex: car dealer is trying to sell a priceless painting

VII Adverse Possession of real propertyIf the owner of land does not take legal action to eject an adverse possessor within the statute of limitations period, the owner loses that legal right and thus the land becomes that of the adverse possessor and he gains title. (note titles by adverse possession cannot be recorded, so an adverse possessor must bring a quiet title action and the decree can be recorded)

Purpose: generally we do not want owners to sleep on their rights and not make use of landa. efficiency argument- one who puts land to best use gets itb. affixation of the lost grant- lost deed makes it hard to prove you own landc. bar stale claims- want legal actions to evict brought when witnesses are still around to

attest to each one’s claim to landd. protects possession & honors expectations- creates presumption that long-term possessor

is owner (right to repose for him) and people can rely on this in transactions

1. Statute of limitations: NYThe people of this state will not sue or implead any person for, or in respect to, any lands, tenements or hereditaments, or for the issues or profits thereof, by reason of any right or title of the said people to the same, unless, such right or title shall have accrued within twenty years before any suit, or proceeding, for the same shall be commenced…

If any person entitled to commence any action in this article… be at the time such title shall first descend or accrue, either (1) within the age of 21 or (2) insane, or (3) imprisoned on any criminal charge for less than a term of life, or (4) a married woman. The time during which such disability shall continue shall not be deemed any portion of the time in this article for the commencement of such suit… but such person may bring such action within ten years after such disability be removed, but not after that period.

- statute of limitations is 20 years to sue regarding all interests in land after the legal wrong first accrued- being a minor, insane, criminally imprisioned, or a married woman is a diability which give such persons a right to action for either 20 years or 10 years after the disability is cured, whichever comes first

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a. statute of limitations bars legal action after the said period (20 yrs)O owns Blackacre. A enters blackacre and builds a small home on 1-1-00. Statute of limitations is 20 yrs. * for 20 years from this point O has an action of ejectment against A (or less effectively for trespass which would give her just money damages like a forced rental)* on 1-1-20, O is bared from his right of ejectment and thus A takes title to the land. Due to the relation back doctrine, O cannot sue for trespass either after statute of limitations has run.

2. Four Requirements for Adverse Possession- common lawa. actual wrongful entry w/ exclusive possession- this starts the cause of action since AP is there illegally and the AP needs exclusive possession so he is not sharing possession w/ owner or public. (can share w/ a party action in concert as tenants in common, like family)

1) Entering must be wrongful for action to accrue and statute to begin runningA entered land w/ O’s permission on 1-1-00. On 1-1-11 O tells A she must leave land.- the action for ejectment accrues now since this is the first time the entry on land became wrongful, so O can get A off land

2) Wrongful possession must be the sole possessor O occupies property but so does A. O in winter and A on weekends in summer.- violates exclusive prong of common law, this is not in statutory law but interpreted by the

courts

b. open and notorious possession- must e visible to the world that you are acting in some respects like the owner of the land, this gives the true owner reasonable notice. the acts must be appropriate to the condition, size and geography of the land. (for farm land- cultivation, for residential- fence, house, for undeveloped land- selling resources, etc)- paying taxes or executing sales of rights to land (leases, mineral rights) are good always

1) Must be visible to Owner to be open and notoriousA tunnels under property to enter and O does not find out about it until 1922.- Common Law: O wins b/c A’s possession is not open and notorious- Statutory: action does not accrue at time of a hidden entry- accrual starts when you know or ought to have known that wrong has occurred- so that is when stat of lims starts running- O needs opportunity to know of intruder to kick off-policy

c. adverse/hostile with a claim of right- the AP’s claim is without the consent/permission of the owner and AP doesn’t know of O’s true ownership

1) Must have a claim of right in some courts, cannot be aware of another’s true ownershipA enters land on 1-1-00 w/o O’s permission but is aware of O’s ownership

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- No adverse possession. Anderson v. Cold Spring sets out rule that entry must be w/ a claim of right (thinking it belongs to you or at lest doesn’t belongs to someone else) or it is not hostile. *Most but not all Crts abide by the claim of right need to be an AP

2) Intentions of the parties do not matterA enters land 1-1-00. Both O & A believe A is the true owner, but find out on 1-1-22 that O actually owned land b/c there was a mistake in the survey - A wins as an adverse possessor. In terms of statute it should not matter the intentions of O & A, even if accidental she trespassed and the right against her has expired- If deliberate trespassor can win, than accidental trespassor can too- hostility is satisfied b/c there was an intention to make a claim of right by A

d. continuous and uninterrupted possession- requires the degree of ownership that the average owner of that land would make of the property with out a break. If occupation is interrupted then the action against him starts anew.

2) Must be continuous wrongful possessionA leaves in 1910 and returns in 1912. O sues A in 1922- Common Law: possession needs to be continuous, so A doesn’t get land- Statutory: when A returned in 1912 this is a new wrong- so A cannot get land here unless

this possession exists for more than 20 yrs

3) only normal usage is necessary for continuouswhat if A just left it for a weekend- Still continuous possession, ordinary absences do not count like leaving for work or

vacations- but there is a line to draw

3) Seasonal use can be continuous useAnderson case recognizes that summer weekends is regular enough for continuous possession of a summer cabin (b/c this is the ordinary use)

4) Abandonment is the intentional relinquishment of possession- if abandoned (depends on intent) for any period of time there is not continuity

3. Geography issue: what is actually adversely possessed and title gained to?- we did not really talk about this, but horn books make the distinction of a claim of title and color of title. If your adverse possession is in color of title (based falsely on some written instrument like a false deed unbeknownst to you) you probably get the whole land, otherwise it could be up for interpretation what portion of the land you have gained adverse possession to.

4. Tacking: For whom does a right of action or the period of possession carry over

a. Tacking on the owner’s side takes place once the statue of limitations has begun to run/ the action has accrued against O, it runs against all of O’s successors in interest as well.

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1) Accrual of the wrong passes on by inheritance or descent in wills (heirs)A enters on 1-1-00. O dies in 1910 and he leaves estate to H. H brings suit in 1922.- A gets land as the adverse possessor b/c the right of action against A is inherited by H and thus began at time it began against O.

2) Accrual of wrong passes on to purchasees and doneesA enters on 1-1-00. O conveys land in 1-1-10 to B. B now sues in 1922.- A wins b/c B as the purchasee of O’s land accrued that wrong done to O

3) future interests are not effected by adverse possession unless the adverse possessor has exerted the right against the original giver of the interests

X to O for life and then remainder to O2. Now A moves in on O’s land 1-1-00. O dies in 1930. Now O2 wants land as his remainder interest is valid.- O2 gets land b/c the wrong has not accrued to him. O2 got his land from X. So no wrong against O can accrue to O2 b/c that is not where he got his right to the land from. So now O2 has until 1950 to claim his right before A can get his interest in the land as an adverse possessor.

O has land. A enters in 1-1-00. O conveys his land to B in 1910 as a life estate with the remainder to C. B brings action in 1922 for ejectment saying A has only had a wrong accrue against B since 1910.- A gets land b/c B and C took their interests in the estate from O and there fore the wrong accrued was passed down

b. Tacking by successive adverse possessors can be done only when the tacker is a predecessor in interest to the original line of adverse possessors. This basically menas there must be privity of estate between the adverse possessors.

Flemming v. Griswold- sets out many core ideas of tacking with adverse possession

1) The wrongful possession passes on to future purchasees, donees, and heirs of the adverse possessionA conveys land to B in 1910. O sues in 1922.- A wins b/c his wrongful possession passed on to B and thus in 1920 B got land by adverse possession

A conveys land to B in 1910. B dies in 1912 and leaves land to C. C files for quiet title in 1922 against O.- C wins b/c the adverse possession tacked all the way through since each new possessor was a predecessor in interest

2) must derive title from prior adverse possessor to retain that time of wrong accrued.A leaves land in 1910. B moves in in 1910.- new wrong accrues in 1910 for B and so O has until 1930 before statue runs

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5. Owners with statutory disabilities can assert their right to the land for the period of 20 years or within 10 years after their recovery from the disability, whichever comes firstpolicy: such persons cannot assert their legal right until recovered, but still want to strike a balance with their rights and desire to put land to use

1) O has 10 years to sue for ejectment after he recoversO is insane since 1-1-00. A enters in 1-1-00. O recovers in 1920. O sues in 1929.- O gets the property b/c he has 10 years after recovery so 1930.

2) O has the greater of the two periods, 10 years from recovery or the statute period of 20 yearsO recovers in 1905 and sues in 1919.- this is ok b/c although 10 years has passed, O has the greater of the two periods so until 1920.

3) O must have the disability at time the action accrues.O sane in 1900 but becomes insane in 1905 and recovers in 1920. O sues in 1922- A gets land b/c 20 years has past and O has to be disabled at time of accrual of wrong to use the special 10 year from recovery extension- policy is that we do not want the land to possible be tied up forever from adverse possessor (one minor dying and land going to another minor, down the chain)

VIII Freeholds: Fee simples and Life estateHistory: Goal of freeing up land and making it alienable* statute of Quia Emptores (1290) gave freehold tenants the right to transfer land w/o the consent of the lord and no longer under system of subinfeudation but rather as a substitute in the chain* statute of wills (1540)- gave freehold tenants the ability to devise land in will rather than rely on fallback laws of inheritance* statute of descent details the inheritance schedule when a will is not left. If no heirs, then the estate escheats to the state

1. All freeholds have seizen

2. Fess simples all have common features: they are freehold estates, which means the estate holder has seizen, with 3 main quailities: i can potentially be for exclusive enjoyment for their life ii is completely alienable by conveyance or will iii heirs will get it under laws of inheritance

3. Always remember you can only convey what interest you have in an estate

Fee Simple AbsoluteThe closest one can get to absolute ownership. No outside condition can terminate it.

A. Properties and Fundamentals of Fee Simple Absolute1. Classic formulation: O to A and her heirs- it used to be that magic words “and her heirs” were essential to create a fee simple; now it is the default if it is not attached; however it should always be used as a caution

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2. Words of purchase are “to A”- this means the person in whom the estate is created.Words of limitation are “and her heirs”- this describes the type and limits of estate, here a fee simple- a fee simple itself means you have absolute ownership so by definition there can be no remainder on a fee simple. O to A and then B is not a fee simple in A b/c A does not have all the property rights- there are fee simples that are less than absolute though: fee simple determinable & fee simple subject to a condition subsequent, but if the conditions on them do not occur they operate like a fee simple absolute

3. A fee simple can be conveyed to others in parts or as a whole and can also be bequeathed by will or if left alone will be inherited through the laws of intestacy

4. Cannot make a new estate that doesn’t exist at common lawO to A and heirs on her father’s side.- this is not one of the 3 freehold or 3 leasehold existing estates so the law does not allow it and converts it to the closest estate that does exist (tries to follow general intent of O), here a normal fee simple—O to A and her heirs

5. Fee simple subject to executory limitationO to A and heirs, but if not used for a library, then to B.fee simple subject to a condition subsequent with a remainder in B

Fee Simple DeterminableO to A and heirs so long as it is used as a cat hospital- Creates an estate and A and her heirs as long as a condition is met but if it ever is not then the interest reverts to O as a fee simple absolute. This is called a possibility of reverter retained by O and it automatically reverts to the grantor when the condition occurrs.

1. words of limitation are “so long as…” but can also use until or while something occurs- these words preferably “so long as” must be used to create a fee simple determinable

a. Mere statement of the grantor’s intention/motive will not create a fee simple determinable

O conveys Blackacre “to the School Board solely for the purpose of being used for a public school” - this does not create a fee simple determinable but just a plain fee simple absolute b/c there are no limiting words here like “so long as” and thus the law converts it to the presumption of the largest interest the grantor had to give, here a fee simple absolute

2. Can only restrain alienation of fee simples to the way an estate is used not to who it is soldO to A and heirs so long as A does not convey Blackacre to another- this is illegal b/c it makes the land inalienable and so the law will convert this to a fee simple absolute.

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Mountain Brow Lodge v. Odd Fellows- there is a fine line between restraints on use and whom the estate can be sold to. In this case a restraint on use that pragmatically made sale impossible (had to be used by odd fellows as the condition) was upheld. Currie questions this.

3. Grantor always retains a possibility of reverter either expressly or if not then by opertation of law which automatically reverts to him when the condition is fulfilled in a fee simple determinable

*** O retains an interest, a “possibility of reverter” with fee simple determinables- this means O can still convey this interest????O to A so long as used for a cat hospital. O to B and her heirs.- O has given a fee simple determinable to A and the possibility of reverter to B.Common law may not allow this??????

Fee Simple Subject to a Condition SubsequentA fee simple subject to a condition that if happens does not automatically revert to grantor but does give grantor the right at that point to cut short at his election the estate

Classic Formulation: O to A but if blackacre is used for a cat hospital then grantor has a right of reentry.

1. words of limitation- the magic words are “but if…” the conditions stops/is not fulfilled- could also use words “upon condition that if X happens” or “provided, however that if X happens”

2. Grantor’s interest is called a “right of reentry” and is not automatic but only a right develops to affirmatively take back estate at time of condition broken- the fact that reversion is not automatic is important b/c it determines that the statute of limitations on ejectment (adverse possession) does not begin to run if donee is still on land as it does with a fee simple determinable. only runs at point that O asserts his right to reenter.

Life EstateAn estate that has the potential duration of one life and then the property (if not devised otherwise) is a reversion to grantor.

Classic Formulation: O to A for life.

1. Life estates are often for life of the granteeO to A for life.- when A dies, there is a reversion to O or his heirs

2. Life Estate Pur Autre Vie: life estates can be measured against a life other than the grantor

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O to B for the life of A.- B’s estate terminates when A dies.

O to A for life. A conveys to B- all A can transfer is her life estate, so now B has a life estate dependent on A’s life.

3. Grantor’s interest is called a “reversion” b/c the estate comes to a natural defined end- this reversion occurs automatically at natural end- once the land reverts to O, he again has a fee simple

4. Life estates can be defeasible life fee simples:a. determinable life estateO to A for life so long as blackacre used as a cast hospitalb. life estate subject to a condition subsequentO to A for life but if used for a cat hospital then O has a right of reentryc. life estate subject to an executory limitationO to A for life, then remainder to B

5. WasteConduct by the life tenant that permanently impairs the value of the land or the “integrity’ of the interest of the person holding ultimate title or with a remainder interest in the estate. Once with a damaged interest can bring an action for waste

Policy: A is supposed to turnover land to those with co interests in the land in reasonably the same manner it was given to him

1. Waste can occur in 3 ways:1) the life tenant actively causes permanent damage by destroying things- although can clear timber to cultivate

2) life tenant allows land to fall into disrepair from the elements.Smith v. Smith- where let house roof rot

3) change to the land that alters its original character (integrity) even if the seem to add value to the land

Brokaw v. Fairchild- life tenant wants to build a apartment building on land and tear down an old house increasing value substantially, but remainder brings suit and stops him- note that Melms v. Pabst Brewing Co, says that if the location changes so that it is no longer desireable for original purpose (all industry builds around a single house), then a change that enhances the value can be had

2. One with an interest in the land can bring a suit for waste- even the current life estate owner can bring a suit on behalf of the remainder or reversion against third parties that cause waste

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Fee TailCreates an estate by using the terms “heirs of his body” whish makes the estate only inheritable by the grantee’s decendants and will last as long as the grantee’s decendants are alive. At any point where an decendant “dies w/o issue” (producing further heirs), there is a reversion in O and his heirs or a remainder if specified.- one cannot convey or bequeath the land, it must pass down the chain of descent

Classic formulation: O to A and heirs of his body.

* this is no longer allowed in any state as it seriously limits alienability.

Armstrong v. Smith- grantor used the words “offspring” which court interpreted to be an attempt to create a fee tail. Thus the court converted it into a fee simple in A as Alabama statute delcared

1. Every state has by statute made the fee tail void and depending on legislation coverts it to one of the following:

a. fee simple in the grantee (most common)b. life estate with a remainder

IX. LeaseholdsImportant trait of leaseholds is that there is no seizen.

3 types of leaseholds:a. term of years- lease for a specific/fixed unit of time (days, months, years, from this day until Easter). - can be created for any number of years, and in this since be a way around a life estate and avoiding giving away seizen- there is an exception for some weird time periods that are not on a calendar but are out of the hands of the each the grantor and grantee that also qualify: a lease “until the war is over”

b. periodic tenancy- tenancy for some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice of termination (to A from month to month)

c. tenancy at will- a tenancy for no set time that endures only so long as both landlord and tenant desire.

1) O always has a reversion and siezenO to A for 10 years.- O has reversion after term of years is up, and always had seizen

2) Term of years can be alienatedO to A for 10 yrs. A to B and heirs- O has seisen and reversion after 10 years.- A's death is irrelevant, so B or heirs has property for remainder of 10 yrs

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- If B were out of picture, then to A's heirs for remainder of 10 years.

3) Leaseholds are defeasible like other estates- determinable, subject to condition subsequent, subject to executory limitation

O to A for 10 yrs so long as A shall so long live- A has a determinable term of years subject to a condition of living- O has a reversion after 10 yrs and a possibility of reverter dependent on A’s living- O always had seizen

***FUTURE INTERESTS***

X. RemaindersA future interest created in a grantee that is capable of becoming a present possessory estate on the expiration of a prior possessory estate created in the same conveyance as the remainder. Remainders always wait for the termination of the previous estate and take hold at the natural end of the prior estate

Classic Formulation: O to A for life, then (remainder) to B- at A’s death B will get a remainder in fee simple.

1. Formalities/Rulesa. Must follow a life estate, term of years, or fee tail & cannot follow a fee simple of any kind (determinable or condition subsequent) as that is an absolute right to an estate with nothing to give as a remainder, the only possibility is divesting is on a condition set by an executory interest.O to A and his heirs but if cat hospital, then to B and his heirs

b. A remainder cannot divest a preceding estate prior to its natural end. A divesting interest is an executory interestO to A for life, but if used for a cat hospital, then to B and his heirs- this is a shifting executory interest

c. remainders can be fee simples, life estates, term of years, or fee tails (if permitted)O to A for life, then to B for 10 yrs, then to C for life, then to D and his heirs- B, C, D all have remainder interests of different kinds

2. Remainders must be classified as Contingent or Vestedvested: created in an ascertained person and is not subject to any condition on its fruitioncontingent: created in an unascertained person or subject to a condition precedent to materialize

a. classify each part of a devise in sequence

O to A for life then to B and his heirs if B survives A, and if B does not survive A, to B’s children and their heirs.

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1) A for life: life estate in A2) to B and his heirs if B survives A: fee simple (and heirs) and contingent b/c

condition of survival past A3) if B doesn’t survive A, to B’s childern and their heirs: fee simple and contingent

on B not surviving A

b. vested remainders are favored by the law and contingent remainders are subject to many legal limitations:- rule of destructibility of contingent remainders- rule in shelley’s case- doctrine of worthier title- rule against perpetuities

3. Vested Remaindersa. the remainder interest will have an immediate right to possession whenever and however the preceding freehold estate ends.- this means there is not “condition precedent” that conditions whether the remainder may take his interest. no aspect of the actual termination of the prior estate counts as a condition (O to A for life, then to B- A’s death is a condition for the termination of the preceding estate and this is a given and so not a condition precedent)

b. 3 types of vested remainders:1) indefeasibly vested remainder- certain to acquire the estate at some point and certain to

be permanently entitled to the whole thingO to A for life and then to B and his heirs2) vested remainder subject to open/ vested subject to partial divestment- vested in a class of

persons but the shares of the class members are not yet fixed b/c more persons can subsequently become members of the class.

O to A for life, then to A’s children- if A has no children the remainder is contingent- if A has a child then the remainder is vested subject to partial divestment- if A has children but dies then the vested remainder is closed3) Vested remainder subject to divestment- subject to divestment by a condition subsequent

or an inherent limitationO to A for life then to B, but if B doesn’t not survive A, then to C- if B doesn’t survive A (condition subsequent) then remainder is subject to total divestment

O to A for life, then to B for life, then to C and his heirs- B has a remainder subject to divestment if he dies before A due to inherent nature of life estates

4. Contingent Remainders- either limited to an unascertained person or is subject to a condition precedent

a. unascertained persons are often children or heirsO to A for life, then to A’s children

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- all now depends on the possibility of children being born. if there are no children yet it is contingent b/c of the chance that no children will be born making the remainder never take effect- if on child is born the remainder becomes vested subject to open, and if A dies with children alive then the remainder is vested indefeasibly

O to A for life then to B’s heirs- B’s heirs cannot be known until B’s death so until then the remainder is contingent

* in all contingent remainders, if the contingency is proven and no other further devise is set up, then there is a reversion in O

b. remainders subject to a condition precedent- this condition must occur (or must not) before the remainder can ever become possessory

XI. Restraints on Contingent Remainders

A. Rule in Shelly’s caseIf one instrument creates a life estate in A and tries to create a remainder in A’s heirs (or heirs of A’s body) and the estates are either both legal or equitable, then the remainder becomes a remainder in A in fee simple. - The Doctrine of Merger, then combines the life estate and remainder in fee simple in one person to create a fee simple for A.

Policy: this was a way of getting out of incidence so old feudal system wanted to abolish and also today it is grounded in idea of improving alienability**Most states do not have this rule**

Classic formulation: O to A for life, then to A’s heirs.- Rule in Shelley’s Case turns this into a fee simple in A.

McRorie v. Cresswell- a remainder life estate in the Son and a remainder in the son’s heirs. This was turned into a fee simple in the son by operation of the rule.

1. One estate must be a life estate of some kindlife estate: to A for lifelife estate determinable: to A for life if she remains a widowlife estate in a remainder: then to B for life

2. The remainder of some sort must be in life estate’s heirsremainder: then to A’s heirscontingent remainders: then to A’s heirs if A survives B- does not apply to executory interests

- Must use words “heirs” (implying indefinite chain of decent, idea or primogeniture) or Shelly’s rule does not apply. So a remainder in A’s children or A’s issue is not subject to the rule

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3. Both estate must be legal or equitable for rule to applyX in trust to for the life of A to pay A the income and profits, remainder to the heirs of A.- X has a legal life estate pur autre vie, A has an equitable life estate, and A’s heirs have a legal remainder. So the rule would not apply

4. Way around the Rule in Shelley’s Case- the rule only applies to freeholds, in specific life estates. so drafters make a pragmatic life estate in the form of a leasehold in A. This gets around the rule’s operation

O to A for 100 years if A so long lives, then to A’s heirs- A has a term of years and the heirs have a remainder in fee simple

B. Doctrine of Worthier TitleWhen the intervivos conveyance purports to create a future interest in the heirs of the grantor, the future interest is void and the grantor has a reversion

Policy: incidence did not want O’s heirs to avoid descent and taxes, and today we want O to have the ability to change his mind and convey his land as he wishes (alienability) after the preceding estate is over. thus he can either give the land to his heirs or not.

Classic Formulation: O to A for life, then to O’s heirs.- the remainder in O’s heirs is void and O has a reversionary interest

1. future interest must be in O’s “heirs” not any other akin term2. any future interest works here a remainder or executory interest3. the preceding estate can be of any kind b/c it is immaterial the only important thing is that

O is the grantor and the future interest is in O’s heirs4. the Rule in Shelly’s case can operate on the same conveyance as is appropriate for the

Doctrine of Worthier Title to operateO to X in trust to pay the income to O for life, remainder in O’s heirs- here Shelly’s case gives O a fee simple- DWT gives O a reversion, which ultimately means he has a fee simple

C. Destructibility of Contingent Remainders

a. Springing Interests- BEFORE Statute of UsesMust have seizen flow successively, cannot have a gap in seizen and then seizen must spring forward from the grantor to the next property interest.

Following conveyances present gaps in seizen:

1. Future time framesO to A and heirs, if A marries B- if the condition of marriage is not yet met there is a gap in seizen

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O to A and heirs tomorrow- a gap of seizen until tomorrow

2. Contingent remainder following a term of yearsO to A for 10 yrs, then to B and heirs- A has a leasehold and so there is not seizen, thus there is a gap and it would have to spring forward to B

-Only way to create a leasehold followed by a contingent remainder is to put in a fee simple in the middleO to A for 10 yrs and then to B’s heirs and their heirs

b. Destructibility of Contingent RemaindersA legal contingent remainder is destroyed if it does not vest at or before the termination of the last preceding freehold estate (fee simples or life estate). This rule protects against any gaps in seizen/springing interests- remainder is struck down and never takes effect* abolished in many states

Policy: makes land alienable rather than sitting in limbo waiting for the remainder to vest

Classic Formulation: O to A for life then to B’s heirs- this is a valid contingent remainder unless A dies at which point the remainder is destroyed b/c contingent remainders cannot have seizen until they vest and the preceding estate holding seizen for it is now gone, so seizen reverts back to O and then would have to illegally spring forward to B which this rule forbades

Ryan v. Monaghan- M gave a life estate to his wife and a remainder to Son’s heirs. Remainder is valid until wife dies at which point son’s heirs are still contingent since son is alive and thus seizen has to go back to the grantor, thus it would have to spring to son’s heirs and is invalid.

1. Only applies when the preceding estate is a freehold (if the preceding estate were a leasehold, the what came after could not be a remainder but would be an executory interest and not subject to this rule)O to A for 100 yrs if A so long live, then to A’s children who reach 21.- now eve if A dies and the children are not 21 it is ok b/c the preceding estate was a leasehold

2. Merger can apply to destroy a contingent remainder-If a life estate and a vested remainder or a reversionary interest come into the same hands, they squeeze out the contingent remainder in the middle and destroy it, creating a fee simple in the now merged property owner.

O to A for life remainder to B if B survives A. Now A conveys her life estate to O.- O has always had a reversionary interest due to the contingent nature of B’s remainder, now O has also a life estate. Thus, merger operates and squeezes out the contingent remainder, giving O a fee simple.

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O to A for life, then to B for life if B survives A, then to C and his heirs. Now C sells remainder back to O.- merger squeezes out the contingent life estate remainder in B, and O has a fee simple

3. Way to avoid the working of the rule is to put a term of years before the “remainder”/executory interest.O to A for 100 yrs, then to A’s children at 21.

d. Statute of UsesBefore…Springing Interests- BEFORE Statute of UsesMust have seizen flow successively, cannot have a gap in seizen and then seizen must spring forward from the grantor to the next property interest divesting the grantor.

Following conveyances present gaps in seizen:

1. Future time framesO to A and heirs, if A marries B- if the condition of marriage is not yet met so it will happen in the future and seizen must spring forward at a later time.

O to A and heirs tomorrow- a gap of seizen until tomorrow

2. Contingent remainder following a term of yearsO to A for 10 yrs, then to B’s heirs- A has a leasehold and so there is not seizen, thus there is a gap and it would have to spring forward to B’s heirs

-Only way to create a leasehold followed by a contingent remainder is to put in a fee simple in the middleO to A for 10 yrs and then X for life, then to B’s heirs and their heirs

Shifting Interests- BEFORE Statute of UsesA future interest in a grantee that divests a preceding estate in another grantee prior to its natural termination (does not wait until the preceding estate’s natural end)

O to A and heirs but if a cant hospital then to B and B’s heirs- this condition subsequent is a shifting interest since upon the condition it terminates A’s fee simple

c. Statute of UsesIf one person is seized to the use of another, the person with the use is the only one seized. Thus use is transformed into seizen and thus an equitable title into a legal one.

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** makes both springing and shifting interests valid by using terms “bargain and sell”, and calls them executory interests. No longer need the terms bargain and sell in modern day

1. Prior to the Statute of Uses, one could divide equitable title and legal title to property in what was similar to a modern day trust situationO to A and heirs but to the use of B and heirs- this separates the legal title in fee simple in A, but the use, equitable title, goes to B in fee simple. this allowed B to get out of paying incidence to the landlord

2. Importance is that after the Statute of Uses both springing interests and shifting interests became valid executory interests to create at law.

O bargain and sells to A and heirs tomorrow – springing interest is valid

O bargains and sells to A for life and then to B’s heirs- shifting interest is valid- may be invalid by destructibility rule if A dies first still though

3. Note that even after Statute of Uses rules limiting contingent remainders apply if valid in that state: Destructibility of Contingent Remainders, Shelley’s Case, Doctrine of Worthier Title

4. Statute of Uses does allow one to get around all of the limits on contingent remainders by constructing conveyances in such a way to use a shifting or springing interest to replace the remainder.

Instead of: O to A for life, then to B’s heirsUse: O to A for life, then to C and heris, but if B leaves heirs thin to his heirs.- thus by setting up a shifting interest you avoid all of the above rules of limitations on remainders b/c there is an executory interest in its place

5. Use exceptions to the Statute’s application: point is that it is very easy to evade Statue of Uses“The statute executes all fleas on the dog, but not those on other fleas.” Only execute a use one generation away from the legally seized person. So if out more than one generation, then you subtract the furthest removed from the last use (A).Use upon UseO to A to the use of B to the use of C- is a use on a use and only the first is executed: B gets legal title to the use of C. A is cut out.

Use after a Use- this is ok and both get legal titleO to A and her heirs to the use of B for life and then to the use of C and her heirs- both are executed because they are on the same level under the statute both B and C get legal title. A being seised for the use of B and then A is seized for the use of C.

Active Uses- active uses were allowed and not affected by Statute of UsesO to A and heris for use of B and heirs, A to manage property an pay profits to B

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- active use, so A can keep title in full, this is the modern trust set up that separates beneficial ownership and management of the land* this is how modern trusts are set up, the trustee has some managerial aspects

XII Powers of AppointmentA non property interest that allows someone to make choices for your estate (usually after you are dead) in the future. Allows another with relevant future knowledge that you trust to dispense your estate.

Classic Formulation: O to A for life and then as A shall appoint.

Types of Powers of appointment:when conveyed

a. testamentary- appointer can do it only in his willb. inter vivos- can appoint during his lifec. or both abilities in one

to whom:a. general power- can appoint to whomever he wants including himself (assumed if not

specified)b. special power- limits the class or persons to whom he can appoint

if obligatorya. discretionary power- can be exercised or notb. mandatory powers- must be executed at some point

1. Since the power to appoint is not a property interest creditors cannot touch an appointment power. Although the common law is chipping away at this and some courts say a general appointment (which can be given to yourself) can be subject to your creditors

2. Spend thrift trust- another way of tying up property from creditors for the benefit of someone thought to be financially irresponsible. However by statute you cannon create one in your self or it is seen as a direct way to evade creditors.

XIII Concurrent OwnershipA. Tenancy in CommonEach owner has a separate and undivided interest in the whole which passes to his heirs at death and not the co-tentant.* there is a presumption of a tenancy in common if not expressly stated

1. Formalities:- no right to survivorship in co-tenants

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- equal shares are not necessary, ie one can own 1/3 interest and another 2/3 interest

- owners can have different types of estates, ie A can sell off estate as a life estate in D and remainderment in E, and B could still have a fee simple as his part. Now D, E, and B are tenants in common

-can sell off the land as a co-tenant

- each owner has a right to the land as a whole as long as the other owners to not object. So A can move into a house on their co-owned land if B does not object. If B does object, they can mutually or through court order have the land partitioned

B. Joint Tenancy:Owners have a common and undivided share in the property, each with a right of survivorship when one co-tenant dies. This continues until there is only one tenant left with sole ownership.

Classic Formulation: O to A, B, and C as tenants in common

1. Four Unities required:a. time: interest of each tenant must vest at the same time.Ex: O to A for life, then to A’s heirs and B’s heirs as joint tenants.- unless A and B died at the same moment, their heirs would be determined at different times and thus the interest would vest at different times. Therefore they cannot be joint tenants and this will be converted to a tenancy at common.

b. title: must acquire title by the same deed, will, or adverse possession

1) the issue that comes up with this is an attempt by a spouse to convey land owned by him to the other spouse and himself. O to wife and O as joint tentants.- this is views as not having the unity of time and title since O already had the interest, so it is converted to a tenancy at common* the way to get around this is by using a “strawman”. O to B. Then B conveys to O and wife as joint tenants. - some state (CA) have decided this is silly and allowed the earlier conveyance to avoid silly uses of strawmen

c. Interest: must have the same type of estate (life estate, fee simple, etc) and must have same proportion

d. Possession: each must have access to the whole (joint tenants are treated as one entity); but this is a waivable right by any tenant

2. Tenants can use severance to convert the ownership to a tenancy in common- leases (no unity of interest), conveyances, easements, mortgages depending on theory, etc* note you cannot sever an joint tenancy after your death by will, it is too late and will be void

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a. Conveying Joint Tenancies (type of severance)- if one of the tenants conveys his property (to an outsider or another tenant) he destroys his and his buyer’s unity with the rest. So that new buyer takes interest as a tenant in common. But the remaining tenants are still joint tenants.Ex: A, B, C are joint tenants. A sells to D. D has no unity with the others so D and B &C are tenants in common, but B and C are still joint tenants w/ a right of survivorship in their shares

b. Mortgages can destroy unity if you subscribe to the title theory, but not under the loan theory1) Title theory: the set up of a mortgage is really, A to C and if debt is paid back then

right of reentry for A. So here there is a conveyance that destroys unity2) lien theory: the lender is taking only a security interest not a property interest in

the property so there is still unity

3. Partition can be had by any tenant and this destroys co-ownership all together.- tenants come to a common K agreement or can go to court and have property divided up into individual interests

4. If the language of a conveyance indicates both types of co tenancy, then the one written first prevailsCamp v. Camp- O to A and B and their heirs as a tenancy in common w/ a right of suvivorhip. This was taken to be a tenancy in common b/c this came first in devise. Currie says you should really just look to O’s intent.

C. Tenancy by the EstateCo-owner ship between a husband and wife (5th unity of marriage) where they hold as one person legally and that otherwise mirrors a joint tenancy w/ a right of survivorship with the exception that severance can only be had by mutual agreement or divorce

Classic Formulation: O to husband and wife as tenants by the entirety

1. Severance only by agreement and divorce is the primary distinction- so if one attempts to convey by will or conveyance this is void- if severed by divorce, then tenants in common

2. If an attempt to create a tenancy by the estate fails (not legally married, etc) then probably converted to next closest thing, joint tenancy (but possibly just a tenancy in common)

D. General Rights of Co-owners of anytype1. Adverse possession hard to do (or impossible) as a co-owner A & B are tenants in common (or any type). A occupies blackacre and lives in house on it for period of statute of lim, after stat of lim runs then B wishes to occupy land too and A says she now owns it by adverse possession?- stat of lims only runs when a wrong has been committed, here A committed no wrong (no violation of anyone’s rights) as each have right to the whole to occupy this property, so no title of adverse possession

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2. One person using his right to use land does not usually mean they owe the other ownersA occupies blackacre and B says A should pay rent to him for use of the property. Split in courts- No rent b/c A only excersizing her right, no unjust enrichment. Pico v. Columbey- some courts have departed from this, saying that wrong for only one tenant to enjoy premise, McKight v. Basilides- obligation to pay ½ value of rent to other

3. One owner cultivating farm land- in a state where there is no duty to pay rent- also no wrong to farm and no profit sharing- in a state where is a duty to pay proportion of rent pay over proportion of profits, but really just rental value since other owners did not do the work for the profit

4. One owner Renting to a third party- in no rent state, do not have to pay- but more common due to Statute of Anne which modified the common law: do have to share the profits when a 3rd party pays rent, but oddly not when a co-owner lives there (still like a renter to other owners, so odd)

5. One owner extracting minerals- majority says you cannot sell oils from the land b/c this is substantially altering land and is the legal wrong of “waste- minority says you can sell oil but cannot exclude others from doing the same and maybe have to pay them their share, policy rationale

6. One owner makes necessary improvements to property (fixes roof)Common rule of contribution for necessary improvements, so all must pay although goes against ideas if rent and non rent states

7. One owner murders another- this is a severance of the estate by the murderer

XIII Marriage and Dower systemA. DowerA wife has dower (1/3 life estate) in all freehold land of which her husband is seized during marriage and which is inheritable by issue that could be born of the marriage at the death of her husband.

1. Dower must be in a freehold which means no leaseholds and must be inheritable by possible children which means a life estate (by definition) is not subject to dower and neither is a joint tenancy (b/c of the right to survivorship) nor any interest that expired (contingent remainder) before husband’s death

2. Conveyances and wills cannot take away a dower interest. Once Dower is had it takes priority over any subsequent right to property for the life of the wife.

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* Therefore it is important for all purchase property from a married man, to investigate dower rights. Also important to go back in property record and make sure any prior owners did not have wives that could still be alive and claim dower on the property

3. Dower rights are only extinguished by written release by the wife (signs the deed) or by a divorce

4. Limitations on Dowera. only applies to land not personal property

b. only applies to legal interests as those are the only property rights that can seize an ownerO to Trustee for the benefit of A, a married man- No dower here b/c there is only an equitable trust. - but note that if the Statute of Uses converts the equitable use into a title, then it may be subject to dower.Melenky v. Melen- an equitable title is converted by the statute of uses and thus subject to dower

B. CourtesyThe male equivalent of dower but it applied to both legal and equitable interests, to all property, and gave right to full life estate interest not just a partial life estate

C. Modern Statutory ShareThis system has replaced in full in most states dower and courtesy. It allows the spouse to take a statutorily mandated share of the other spouse’s land and personal property at the time of death (so only that which he owns at time of death NOT all that he was ever seized of in marriage), usually 1/3 to ½, or can take what the spouse set out in his/her will. - seizen issue no longer exists, and if land has been conveyed away cannot get an interest in it- fraudulent transactions just to get out of paying the spouse after death are often still counted

D. Community Property: An alternative to the dower systemCertain property obtained during marriage is communal and thus the spouse takes half at the other’s death if they don’t elect to take that set out in the will. Done in 8 states (LA< TX< NM< AZ< CA< NV<WA<ID)

1. Community property consists of earnings of either spouse during marriage and property acquired with those earnings. Property owned by either before marriage or acquired during marriage by gift, descent or devise is separate property. Basically anything that comes as a result of their mutual labor is community property.

2. Upon death or divorce the property is equally divided

3. Three principles that help determine if property belongs to the community or is separate:1. Accrual Principle : What matters is not when the money was received, but when the

service/fee was performed or earned

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2. Tracing Principle : Once property ownership is considered separate or community it retains that characteristic, even when exchanged for something else.

3. Apportionment Principle : When both labor and separate property contribute to the amassing of wealth, you must apportion that income according to the proportions.

-Income earned by one spouse during marriage? YES -Salary that the wife earns before the marriage? NO -The wife receives a salary during the marriage for services rendered before the marriage? NO – the salary was earned prior to the marriage, about earning time not paying time-The wife inherits a farm during the marriage? NO – inheritance is not -During marriage, the wife sells the farm that she inherited and buys stock? NO – this is the principle of tracing: if the property is separate and thus the proceeds are separate-During marriage, the wife gets dividends from the stock she bought with the money from the sale of her inherited farm? NO – generally b/c private funds, but split in crts b/c “earned” during marriage- What if the wife works the farm and therefore receives profits from it? YES/NO – generally, this is income from separate property; but the portion of the profits that are attributable to the earning capacity of the wife do belong to the community. Then there is an issue of apportionment.-Wife earns salary during marriage, but is actually not married? YES – this is considered to be a putative/supposed marriage: a person who reasonably believe himself to be married is treated as though he is-What if there is no marriage ceremony – they just say to the world that they’re married and act as such? NO – good faith is required. -What if husband and wife are the same sex? NO-The wife earns a salary during marriage while living with the husband in OH – they then move to CA? NO – even if there’s a CA statute that says “we’ll ignore OH law and you are under a community property system” this is unconstitutional because it is taking away property without compensation or notice. The same is true if you move from CA to OH – you would remain in the community property system. Kessler’s Estate

XIV Rule Against Perpetuities- created to prevent interests that are too remote in their vestingA. An interest must vest or fail to vest within 21 years after the last life in being dies- the contingency of the estate must be resolved- there cannot even be a remote possibility of not vesting in time- gestation can extend the period, so if in womb then your 21 years doesn’t start until born- applies to personal and real property- only applies to contingent interest not vested ones

Test: 1. determine the date of the creation of a devise:

a. for a will this means at the death of the testatorb. for an revocable trust this is the death of the trust’s creator

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c. for an intervivos gift or deed conveyance it is the time the devise is “delivered” (usually point made)

2. who are the lives in being?- lives in being are usually anyone alive at the time of the devise that can be remotely associated with it or are named in it- parents of children are usually lives in being if applicable- Leach says you can just name randoms in the devise “nine healthy babies” or the Queens decedents3. Kill off all the lives in being- at earliest point possible so as to prove any possible illegal vesting4. add 21 years- if the possibility of an interest vesting still there then the devise is Void as to that part of the whole

B. Jee v. Audley (Landmark Case)Ed Audley/testator in his will puts $1000

1) interest to wife as a life interest2) then to niece Mary Hall and issue of her body (issue means all decedents). -This is a vested remainder b/c no matter what Mary or her estate at some time will get the property b/c wife will surely die sometime3) if niece dies without issue then interest equally given in shares to daughters then living of

John and Elizabeth Jee (both 70 at the time)- this is the part that is struck down as against the rule of perpetuities.

Evaluation: Reason to Void is 2 foldOne: need legal definition of Dying w/o Issue:

a. seems as though this should work b/c if niece dies without issue then it should vest in daughters, could make this argument that the meaning was a “definite dying w/o issue”

b. problems is the legal definition of dying without issue is indefinite, which means if any of neice’s descendants die w/o issue, then it should vest in daughters. So even if she has kids, if they all fail to have children then there would be a death w/o issue by niece and the interest should vest in the daughters which could surely happen after 21 years from the last life in being if the daughters themselves are not all lives in being at time of will.

Two: afterborn child (& fertile octogenarian problem)a. if John and Elizabeth Jee have a afterborn child to the devise, then this child could be a

daughter who was not a live in being at the time and if all the other lives in being died and then down the line the legal definition of dying w/o issue applied to the niece, there is the possibility of the interest not vesting in time in this daughter

b. fertile octogenarian problem- the law assumes that all humans are still capable of having children despite any physical limitations like being too old or two young.

Effect on Devise:- the parts that can stand valid are upheld, here the devise to wife and to niece.- the part to the daughters is void in its entirety to all the daughters (class gift)

C. Class Devises- if one member of a class violates the Rule against Perpetuities b/c the interest could vest in them any later than the set period the gift is void to all in that class.

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- the rest of the devise that is valid though is upheld

D. Interpretation IssuesUnless specified the default for meaning in generic terms:

a. devises to be fulfilled (possessory) in the future, namely wills, are assumed to mean all alive now and those that could be born in future (daughters in Jee v. Audley)

b. devises to be immediately possessory, such as present intervivos gift, are assumed to mean those alive at time of devise

E. Not subject to Rule of Perp:1. Reversionary Interests- possibilities of reverter, right of reentry, and reversions are not subject to the rule2. Charity followed by an interest in a charity- policy grounds exempt such transactions from the ruleEx: O to American Cancer Society, but if a cure is found, then to Humane Society3. Vested Interests b/c always valid (only applies to contingent future interests)

Hypotheticals: Void under the Rule Against Perpetuities1. Shifting Executory Interest O to A and heirs but if property used as a cat hospital then to B and her heirs- fee simple subject to a condition subsequent where B does not have a remainder b/c can’t have this after a fee simple, it is rather a shifting executory interestVoid:

a. date? begins at instance of conveyance, 1-1-00b. lives in being? A and maybe others (heirs if listed) and Bc. all are deadd. add 21 years- A & B’s death does not destroy any interest, rather leaves intact all if even after 21 years the property is used as a cat hospital it will vest in B’s heirs and thus it can vest in B’s heirs way into the future, so clearly void

Effect: we strike the void part which is the part going to B, so then there is a fee simple to A

2. Sprining Executory InterestsO to A and heirs so long as there is no cat hospital, but if cat hospital then to B’s heirsVoid: another contingent executory interest and so could vest at any time and thus voidEffect: if we strike the lasts part of estate going to B, then we would have a valid fee simple determinable with a possibility of reverter in O and the rule of perpetuities does not apply to reversionary interests (common law declares this)

3. Gestation Period is OKO to A (father) for life then to A’s children: VALIDValid: no way for this not to vest at the point of A’s death- gestation period is considered a life in being, already born for purposes of the rule, so even if A is the father and his wife is pregnant w/ child at time of death, still no way for it not to vest w/in time limit

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- science could make it possible to have a child that would out live limits of rule (artificial insemination) but this violates the purpose of the rule so probably would not apply, but could avoid this in the drafting by saying this applies only to naturally conceived children

4. Age Requirements beyond 21 O to A for life then to A’s children at age 25Void: this is void because A could die and then some of children will not hit 25 until after the period runs and thus can vest after this Effect: even if some children are 25 at time they can’t get it either b/c of the possibility, class gift idea, but the part to A for life is valid

O to A for life, then to A’s 1st child to reach 25Void: b/c A could have a later child that reaches 25 first b/c the children alive at time of conveyance have died.counter- could use the rule of destructibility of contingent remainders, b/c either it vests in lives in being or it is destroyed when A dies b/c we have to have seizen. So if A has a child that is 25 at his death then it will vest immediately, but if no kid that is 25 at time of A’s death then doesn’t vest and gap in seizen and since thus is destroyed it cannot vest out of time- so here the rule of destructibility of contingent remainders saves this from rule of perpetuities

5. Sometimes Different Results if by Will or by Intervivos deviseO to O’s children for life then to O’s grandchildren and their heirs

a) if an intervivos gift: VOIDVoid: not valid b/c O could have an afterborn child after devise that is not a life in being who could then have a child (grandchild of O) and this grandchild could be born after all the lives in being dieEffect: O’s children can get their life estate, but none of the grandchildren get anything (class gift)

b) if done by will: VALID- O cannot have after born children now b/c he is dead and the devise takes effect when he is dead, so there can be no afterborns, so there is no problem; valid life estate to children that vests at death of grantor & valid for grandchildren b/c the remainder vests immediately upon the death of the children* this is the case which the rule was modeled after, but you need to do it by will b/c this precludes an after born child

***ASK- what happens when the life tenant dies before the remainder is ready to take the estate (the life tenant’s die before the after born has a child)- this creates a springing interest but this is ok b/c of the Statute of Uses, however this is still not valid b/c of the rule of destructibility of contingent remainders (it did not vest prior to the last vested estate, and so this corollary rule still protects what would have happened under the rule against springing interests, a remainder is subject to the destructibility rule- under this rule it has to vest before the last seizen is lost)

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- rule of destructibility of remainders may save a conveyance from being invalidated all together under the rule against perpetuities

- destructibility looks to when something actually happens or vests, and rule or perp asks what could happen to keep it from vesting until after the period

6. Middle men are irrelevantO by will to A’s children then to O’s grandchildren and their heirs

- O’s children have to be lives in being since this is a will (O is dead) and so then O’s grandchildren would get their estates when O’s children died and this definitely fits in the period allowed and thus this is valid- A’s children is a middle step that is irrelevant

7. Revocable Trust (works just like a will)O by revocable trust to O’s children for life and then to O’s grandchildren and heirs- VALID

- this is just like a will b/c revocable, so can’t start period until the trust becomes irrevocable, i.e. at death (revocable trusts work just like wills)Valid: so no possibility of after born children and thus all must vest within period*Rule against Perpetuities: intended to let one provide by will for his grandchildren when they grow up, but often doesn’t work intervivosly (b/c of afterborn children) unless it is done by revocable trust b/c this has same effects as a will

TRICKY PROBLEMS:8. Unborn WidowO to O’s widow for life then to O’s issue then alive

- intervivos: Void: b/c wife might not have been born at time the conveyance was made, so then since not a life in being then the remainder is invalid to O’s issue because it may not vest in time after all lives in being die (she may die more than 21 yrs after last life in being)Effect: void to all of O’s issue, valid to widow for life and then reverts back to O’s heirs as a reversionary interest

- if this is a will: then wife/widow is a life in being at his death so valid for her and then to O’s issue when she dies so again ok b/c she is a life in being

9. Precocious Toddler Case-O to A for life, then to A’s grandchildren born within the next five years - A could have later children after O dies, and then they could have children of their own (not pragmatically possible b/c would at best be 5 yrs old but think of opposite of Jee case) so this makes the transaction void.

10. Fertile Octogenarian – see Jee v. Audley- will be void when there is the possibility of afterborn children, even if pragmatically impossible b/c the parents in question are too old

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11. Administration Contengencies/ Slothful ExecutorO to my heirs who are living when my estate is settled.Void: b/c could take longer than 21 years to settle estate

O gives in trust gravel pits to A until the gravel is exhausted, then to O’s children.Void: it is possible that it will take longer than 21 years to exhaust gravel pits

O in trust land to M subject to a mortgage to be paid off (should be easily paid by rent from land in 10 years), then to O’s children.Void: b/c could take longer than 21 years to payoff since value of land could go down

F. Appointments & The Rule Against PerpetuitiesGeneral appointment power: O to A and then as A shall appoint by deed or will- this allows A to appoint to anyone including himself or his heirsSpecial appointment power: O to A and then to those of O’s heirs as A shall appoint- A must appoint to those within the named class

Must ask 2 questions when determining if Void as to the rule: must evaluate twicePowers Created

a. is the power itself valid? – will the right to exercise the power materialize w/in 21 years of the time it is created. here the time period starts running at time power set up.

- only if the power is valid do you proceed to the next Qb. is the exercise valid? – will the exercise of the power materialize in validly vested estate

within 21 years of time appointment made. pretend that this is just a normal conveyance and evaluate as usual for the rule of perpetuities issues starting at time power exercised.

1) General powers exercisable by deed or willO to A, then to such persons as A shall appoint by deed or will.a. the power itself is valid b/c the it is exercisable at the point the power was made, and thus

no contingencies exist. so this is a valid appointment and exercise

O to A for life, then income to A’s children for life, then principal to such persons as A’s first child shall appoint by deed or willa. A’s first child will have to be born by the time A, a life in being is dead, and power

becomes exercisable at that point of A1’s birth so this is valid appointment and exercise

O in trust to A for life, then to A’s children for their lives, and upon death of next to last surviving child, the principal to such persons as the last surviving child shall appoint by will or deed.a. the power itself doesn’t allow exercise of the power until the next to last child of A has

died. A’s children are not necessarily lives in being (she can have more) and A could die and then the death of her children could happen more then 21 years, so the power itself is invalid

Powers Exercised O to A, then to such persons as A shall appoint by deed or will. A appoints by will to his children for their lives, then upon all their deaths to his grandchildren.

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a. power validb. exercise is valid: his children are all lives in being since he appointed by will and thus it

will have to vest in the grandchildren by the time the last child dies

2) Specific powers work the same, just higher likelihood of being invalida. evaluate whether power is validb. evaluate whether the exercise of the power is valid

G. Modern Reforms to give rise to Intents of devisors:a. Wait and See approach (RS 2nd)- transforms rule to ask not might this vest too late but

rather did this vest too late, you wait until the last life and being dies and the 21 years pass to see if it is a void devise.

- this helps to give effect to the intent of parties, especially when the possibility of violating rule is a legal fiction like in Jee v. Audley.- disadvantage to this rule is that alienability of property and a valid interest is then in limbo for a long time.- rule only adopted in a few states; Currie questions the role of the court in applying this idea, probably the legislature’s placeb. Doctrine of Cy Pres- judicial reform of any devise that violates the rule to make it the

closest possible alternative that is lawful under the rule

H. Leech’s Checklist:1) always check for violations of the Rule of Perpetuities2) look to whether intervivos or done by will (revocable trust) and consequences3) beware of making an appointment that is special or testamentary?4) beware of age requirements over 215) beware of times that people must be alive at?6) ***always include savings clause: “any interest that has not vested after the death of all

lives in being (name them) lapses”

Perpetuities List:

Valid**Contingency is that something must be done during the life of a living person- if only lives in being are involved, the conveyance is always Valid b/c must vest or fail w/in 21 years of all of their deathsTo A if he is admitted to the bar Valid: by the time A dies (lives in being) he

will have either passed bar or no, so he will meet the limits of Rule or the conveyance will fail

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To A if B is admitted to the bar Valid: If all X&A die the conveyance will either be vested or fail depending on B being admitted to bar. Even if X dies first, the interest will go to his heirs

To C for life, then to A if B is admittedto the Bar Valid: same as above, just a preceding life

estate.

To A for life, then to B if B reaches 30 Valid: B is not a potentially unborn person, but a specified living one. So no violation b/c he is a life in being and must reach or not reach 30 by time A or B dies

To A for life, then to A’s 1st child Valid: A must either have a child or fail to at time of death

To A for life, then to A’s 1st child to reach 21 Valid: A can have afterborn children, but when all lives in being die, afterborns will turn 21 w/in time limit

T in trust to L income for life, then principalto T’s issue who are living 21 years after deaths of nine healthy babies Valid: T could have issue that came into

being after devise but this doesn’t matter b/c it is limited to those who are alive w/in 21 years of babies (L’s life doesn’t matter b/c this is just the point when the interest in T’s issues takes hold, it is the babies that determine which issue take hold)

O (will) to A for life, then to O’s 1st grandchild Valid: all of O’s children will be lives in being at his death their children must be born by the time they die, so the interest in the grandchildren will vest or fail in time

To A for life, then to B for life if one of B’schildren is admitted to the bar, then to C Valid: fee simple to C is vested, so ok. Life

estate to B is ok too, B is a life in being and B’s children will either get or fail to get into the bar by the time he dies. He only has a life estate so we only need worry about contingencies in his life.

** a life estate in a person who is in being will always be valid regardless of the contingenciesattached to it b/c the life beneficiary is a measuring life (or that of another/ pur autre vie) and allcontingencies must be vested or fail in his life as pertaining to his life estate

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Invalid:To A for life, then to A’s 1st child to reach 30 Invalid: b/c A could have an afterborn child

and then if she dies the child would not take the interest until after 21 years

T to T’s grandchildren living 21 years after the deaths of A,B,C Invalid: T’s children could have afterborn

grandchildren who the could not reach 21 w/in 21 years after all lives in being died

To A for life, then to A’s 1st grandchild Invalid: A can have afterborn children to the devise and thus these children could have grandchildren after 21 years past A’s death

To A for life, then to B’s 1st child if thatchild marries Invalid: B’s child could be afterborn and

then could marry more than 21 years after all lives in being die

XV Contracts for sale of landA. Ks for sale of land are subject to statute of frauds so must be in writing- exception to this is that some jurisdictions where equity courts will say that part performance is enough to imply there was a written contract

Statute of Fraud just sets minimums for a K: must include the essential elements- many other details should be in K though:

a. what type of deed (general, quick claim, etc)b. what about fixtures (appliances, other things connected to land in some way)c. specify what happens to earnest money, deposit in dif scenariosd. in the interim of K and transfer, who bears the risk of damage of property

-One implicit promise in a land K is a warranty of marketable title, promise to convey not only the land but a marketable title to the land “reasonably free of encumbrances and other title effects and free of the risk of litigation”. Does not have to be a perfect title but does have to be one where there is no reasonable probability that buyer will be subject to a lawsuit.- this applies to all kinds of deeds even quitclaim, unless otherwise contracted around

B. Installment Land Sales Contracts- way to finance a purchase of land- land usually purchased on credit, couple ways to do this:

a. a mortgage: immediate transfer for buyer and the lender gets a security based on the land itself (most common)

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b. installment land sales K- substitute for mortgage, lending done by seller (not bank) and the title is kept by the seller as security, so possession does pass but title does not pass immediately

O contracts to sell Blackacre to A on installments. A gets possession and begins payments.

1) Buyer (A) defaults on payment:- O can now forfeit the payments made, and take the land back. So forfeiture and cancellation are acceptable common law remedies.

* but note that this often can seem inequitable so then sometimes courts will not allow these forfeiture clauses to work and they will treat this as if it were a mortgage and allow other types of remedies.

2) Seller defaults on delivery: All payments have been made and O refuses to convey title.- A can sue for breach of K, dif in value paid and value on market- A can also sue for specific performance, b/c of inadequacy of the legal remedy for sales of land

*Doctrine of Equitable conversion- equity considers done what ought to have been done. Equity treats the situation as if the land had been conveyed and the buyer had title. Assumes buyer had an equitable title all along, and transforms the legal title into a mere right of action for the price

3) No dower in land “sold” on installmentO contracts to sell black acre to A on installment, then O marries and dies. Does O’s wife have dower?- O at time of marriage had only the right of action for the price, and there is dower only in real estate not in a right of action, O is not seized of land at time of marriage

4) Just need full title at time the installment plan is over, seller free to convey until that pointO contracts to sell land to A on installment, then O conveys blackacre to B.- obligation in the K is just to be able to convey the land at a set future point. This is the California Rule. O may still be able to perform so this is ok, Luette Case- so mortgages or even conveyance does not preclude getting this title back at time to turn over title- no thing such as anticipatory breach in installment Ks for this scenario, and the buyer just has to bear the risk that he may be paying for nothing in the end and hope he can get his money back through legal means

5) Buyer has right to use of landO contracts to sell to A by installment, A cuts the timber on the land. Is this legal?- the seller has legal title & the buyer has equitable title and thus right to possession, possession equals the right to exploit the land as well here

6) Buyer shall pay all taxes and assessments- normal expectation is that the costs follow those who benefit from the land, the possessor. depends on the state statue sometimes, but even if it says the legal title holder has to pay (seller) he could sue buyer for indemnity

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7) Buyer bears the risk to land-what if house burns down or damage to property?- buyer b/c he is in possession and so can take better precautions so he should bear the loss, cheapest risk avoider

* Can always avoid all these defaults to installment contracts through contracting around them

B. Mortgages (more common alternative to financing)- in form the mortgage is a fee simple on condition subsequent: after O conveys to A. A conveys to mortagee/financer but on the condition that the price is paid it reverts to the grantor (A)- law has departed from this title theory often and often looks at a mortgage as a lean/loan

Repurcusions of Title or Lein Theory:a. things like dower are effected, under title theory only the mortgagee/bank has to be leary

of a wife’s dower interest

b. Title theory and repercussions on Mortgagee for seller defaulitng- in form the mortgage is a fee simple on condition subsequent, A conveys to mortagee/financer but on the condition that the price is paid it reverts to the grantor (A)- law has departed from this though and really often looks at a mortgage as a lean or a title

- if part payment is made and A defaults it makes since that the financer gets to keep the payments and the land (a windfall) b/c the condition subsequent is not met, but modern courts allow an equity redemption which allows mortgagor to make late payments to get the property back. avoids the windfall for the mortgagee but also creates uncertainty for the mortgagee b/c he has right of possession to the property but it is contingent to the defaulter not coming back and taking it- foreclosure proceeding tries to remedy this uncertainty, when there comes a time that it is clear the debt will not be paid off, then law forecloses on this right - foreclosure takes place by a judicial sale, auction of the property and sell the property to the highest bidder and then the court distributes the money first to the creditor/mortgagee to pay the debt, and then gives any excess to the mortgagor. if there is not enough money to pay back the debt from the sale, then court may enter a deficiency judgment against the debtor and a contract remedy remains by the mortgagee against the debtor.

c. Repercussions for Double MortgageesO in purchasing land and gets a mortgage from M1 and then to finance a home improvement and gets another mortgage from M2

- M2 would only take the mortgage if the land mortgaged is worth more than a hypothetical payment to M1, b/c M1 gets first chance at money

i. if M1 forecloses on mortgagor: money first goes to M1 and M2 then gets what is left over as his interest is subject to M1, and finally O gets anything that may be left over after paying both mortgagees.

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ii. if M2 forecloses that does not effect M1 (he will still get all his money through sale or a deficiency judgment) b/c his mortgage was not subject to M2’s interest in blackacre, he will still be paid first

XVII DeedsA. 3 kinds of deed (given each time an interest in land is conveyed):

1) general deed 2) limited warranty deed 3) quitclaim deed- ordered in the amount of protection they give the purchaser

General- gives the most protection to the buyer and includes many covenants (set out below) which basically provide safety from defects in title created before or during the grantor’s ownership

a. siezin - warrants the grantor owns the title. so breach if the grantor only had a life estate but not breached by something like a mortgage

b. right to convey - extends siezen to say the grantor has the right to convey property. dif from siezen b/c can have seizen by possessing w/o actually owning and having right to sell, and a person who has powers of attorney doesn’t have seizen but does have right to sell

c. against encumbrances - title is not subject to things like easements, monetary charges against land, mortgages, liens, etc.

d. warranty & quiet enjoyment - same idea as seizen and encumbrances, any outstanding interest in the land be it a life estate or a mortgage, but there is the additional element of an adverse interest holder who asserts his rights to the land to try to evict,

e. further assurances - provides a right of specific performance for grantor’s failure to convey title properly

Limited warranty- less protection b/c can have fewer than the above common law covenants and more commonly b/c the above covenants are often limited to only the grantor’s period of ownership. So no promises about state of land really, just promises that actual grantor has not diminished land’s full title during his ownership of land. (ie be outstanding mortgages, etc from prior owners)

Quitclaim- includes no title covenants. basically buyer has no recourse for defects to the title even for the grantor never having interest in the land at all. “as is sale”

* note that only the direct purchaser can enforce any convenant against the seller. O to A. Then A to B. only A can enforce covenants against O, and B needs to get a new general deed from A.

- Short form deeds can be used instead of creating your own one of the above deeds, these must be used in the exact form provided in your state though b/c each word is value ladenh

B. Three Requirements for a valid deed1) the grantor had a present intent to convey the property 2) the grantor delivered the deed to the grantee

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3) the granted accepted the conveyance (presumed)

1. Delivery is the Main issue for an effective transfer of landIf deed physically handed over to one other than grantee can mean three things:

a. absolute deliveryb. no deliveryc. conditional delivery

Delivery is all about the intent of the grantor. “Delivery” requires words or conduct that shows the grantor’s intent to transfer title/interest in the land immediately to the grantee. The conduct must show the intent to make the deed legally effective at that moment. - this means that manual giving of the deed, while a good sign of intent, is not enough to be deliveryEx: O writes up a deed conveying land to A. He give it to A for “safe keeping”. There is not intent manifested here so no delivery- conversely, certain conduct implying the intent for the interest to transfer presently is enough for delivery without ever handing over the deedEx: O writes up a deed conveying land to B. She can’t find B so B never actually gets the deed. But O gives possession to B and tells others B is the owner. There is delivery here b/c of requisite intent shown objectively

Bretek v. Cihal: there was not “delivery” of the deed to Martha, so the conveyance was not valid b/c impossible to figure out the “intent” of Joe/grantor after his death due to the domineering mother’s pervasiveness in all actions.

2. Conditional DeliveryA deed contains a provision that it will take effect only upon a future condition happening. The deed to be effective must be meant to take effect now, the passing of the possessory interest and title will take place in the future upon condition met, but there is an immediate conveyance of a future interest. (like a gift of a future interest). The grantee does not actually get the deed (or probably absolute delivery) but the grantor or a 3rd party keeps it.

Two Types:

Will Substitute: Generally intra family arrangements that act like a will - problem is that this must have certain qualities of a deed (chiefly delivery) to not come in conflict with the statute of wills and be void, thus giving no interest to the proposed grantee- often key that the deed is not revocable, or necessary intent for delivery is not met

i. deed is written but retained by the grantor for “safe-keeping” to then act as a will once he dies

- must have intended the deed to be legally effective before death, which then would created delivery and a springing executory interest in the grantee. To decipher intention to give interest before death we look to objective signs like telling others that the land has been deeded to grantee, relinquishing grantor’s ties and abilities to sell land.

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Ex: safe deposit box idea. Grantor just keeps it for grantee as a pseudo will. outward signs of intent are necessary, particularly helps situation if grantee had access to box McMahon v. Dorsey- Turner v. Mallernee- ask???

ii. donative escrow: deed is given to a third party (escrow agent) with instructions to deliver deed to grantee at grantor’s death (a gift)- key here is that the escrow agent cannot be seen as an agent of the grantor, or the deed would be revocable and thus the intent to transfer in the present that constitutes delivery would not be met- as well the grantor can reserve no kind of power to revoke the grant

Commercial Escrow: commercial arrangement involving the selling of property/land by deed using a escrow agent (a sale)

a. General- usually a seller hands over a deed naming the buyer to an escrow agent w/ written instructions only to hand over deed if condition met, payment by a certain date. This protects the buyer and seller b/c money and title change hands at the same time, neither bears the risk of other’s nonperformance- no risk of invalidation by statute of wills b/c this generally has nothing to do with death

b. Escrow agent-- escrowee acts like a fictional trustee that never gets title just immediately transfers to grantee upon a condition- agent needs to appear independent and not an agent of the seller for irrevocablity, or the conveyance is revocable up to the point of the condition being met, so buyer may want to insure independent agent- Relation Back Doctrine: when the actual delivery from escrow is made the instrument will be treated as relating back to and taking effect at the time the original arrangement (deposit in escrow agent) was made for the grantee

c. Final Aspects of Commercial Escrow-1) condition must be met: suppose that the bank just hands over the deed. the condition was

not met so the delivery is not complete.2) Risk of Absconding Escrowee is on the seller: price is paid to bank, the bank turns over

the deed and the escrowee takes the money and never pays it to the seller and goes to Tanatuba, risk is on sell b/c condition is met (Lechner Case).

XVIII Recording SystemA. Puposea. Used to be that there was a First in Time First in Right rule. O to A then O to B. A took the land b/c first to be conveyed to. But we want to protect BFPs like B. * Recording protects the grantee from prior unrecorded claims and eliminates subsequent BFPs due to record notice.

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- US requires that deeds to land be required of they are not protected legally against those who do record. With recording a BFP can protect himself by looking in and index of recorded title.- also enhances marketability of land, b/c less possibility of future litigation over rights

b. note the limits to recording system- does not make invalid deeds valid: fraudulent deeds or those not “delivered” are not made valid by recording- a purchaser who did not record may lose her land via the recording system’s effects but she never loses her right to sue the grantor for unjust enrichment due to selling land twice at her expense- note in states that have a bfp style recording system, people who do not take the land via compensation (heirs, donees) do not have rights above those who did pay for the land- most statues only protect subsequent purchasers (usually means last bfp wins out) and not prior purchasers

B. Index Systems: Determining the Legal Interest You May Take1. Tract Index- the entire history of conveyances for a particular tract of land is in one index- this is very easy for a purchaser to use b/c there is only one thing to check

2. Grantor/Grantee Index- land issues are cross referenced under grantor and grantee indexes. This means you must do a more complicated search to find out about recorded title.Steps: A wants to buy from O

1) Look in Grantee index for your grantor (O), find who granted land to him and take note of this (N)

2) Look in the Grantor index under O to make sure he has not conveyed to anyone else an interest in your land.

3) Look in Grantee Index under N, find who granted this land to him, take note (M)4) Look in Grantor Index under N, to make sure he had not conveyed land to

someone else.- this process hypothetically can go back to the land grant from the government, but most states have a statutory cut off.

3. With either index must look to other appropriate places for encumbrances on title that are not recorded:- tax encumbrances on land: must go to taxation office- probate records: inheritances through wills and laws of intestacy not recoded, go to probate crt- adverse possession: must do own investigation of land (inquiry notice)- dowers- must do own inquiry back to a reasonable time where a wife could still be alive to take a possible interest by right if her husband was seized of land during their marriage

C. 3 types of Recording Systems1. Notice- where the subsequent purchaser is w/o notice of the earlier purchaser’s deed (a BFP). He takes the land interest- protects a person mislead by the record

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Iowa: No instrument affecting real estate is of any validity against subsequent purchasers for valuable consideration, and without notice, unless filed in the office of the recorder

2. Race-Notice- where a subsequent purchaser is w/o notice of the earlier purchaser’s deed (a BFP) and records his deed before the earlier purchaser, he takes the land interest

Washington: Every conveyance not recorded is void as against any subsequent purchaser or mortgagee in good faith and for valuable consideration from the same vendor whose conveyance is first duly recorded.- could be an issue with “same vendor” Currie thinks this may be careless drafting b/c heirs should be able to covey land the purchaser get the same protection

3. Race- the purchaser who records first is gets the land interest (irregardless of BFP status)

North Carolina: no conveyance of land shall be valid to pass any property interest as against lien creditors or purchasers for a valuable consideration from the donor but from the time of registration thereof

Classic Examples:

a. BFP Examples- to be a BFP must be purchaser or in some states mortgagee/creditor, in good-faith/no notice, and for valuable compensation

1) O to A unrecorded. O to B (bfp unrecorded)notice state(IA): B wins b/c he is a bfpnotice-race state (WA): A wins b/c there was no recording by B

2) O to A unrecorded. O to B (bfp) unrecorded, then A recordsNotice: B gets itNotice-Race: A gets it because B never recordedRace: A wins because made it first to record

3) O to A unrecorded. O to B w/ notice recorded. B to C (bfp) recordedIA or WA: A wins against B b/c B is not a bfp. But C wins against A b/c he is a bfp who records

3) a)- now suppose C sells to D who has notice of A’s unrecorded deed. IA stat seems to say any subsequent purchaser w/ notice cannot take the land. But, D does not need the statute to win the land b/c C literally owned property and can covey it, so w/o regard to the statute D takes land* once someone gains proper ownership, then the statute is unnecessary

Two Subsequent BFPs3) O to A unrecorded. O to B (bfp) unrecorded, then A records. A to C (bfp & recorded)Notice: C should win b/c he is the last BFP (subsequent purchaser)

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Notice-Race: C wins b/c BFP and recorded. A owned the deed in WA to begin with so A can transfer title w/o statuteRace: C b/c he won race to file. Even if B had recorded first here, it would still go to C b/c A got to recording house first to nullify B’s title period.

b. BFP’s can transfer good title that does not bear on the recording statutes per se once they acquire title.- Bona Fide Purchaser Filter Rule: there is an exception to this, a BFP cannot sell to the prior person who had notice. O to A unrecorded. A to B w/ notice records. B to C bfp who records. C back to B.- this is illegal b/c it incourages fraud and also B at very least could use C as a stooge/strawman to get land through statues in a way not wanted by the statutes (must be a bfp). Chergosky Case

c. Not a Good-Faith Purchaser4) O to A unrecorded. O to B who know of deed and does recordIA: A gets it, b/c is not a bfp and was not misleadWA: A gets it, same rationaleNC: B gets it, b/c all that matters is the race

5) O to A unrecorded. O to B who knows of deed and does record. B conveys to C (bfp) recordedIA: invalid against a subsequent purchaser w/o notice, so C gets it despite B never really having anything to pass onWA: C gets it b/c he recorded it and was a bfpNC: C b/c he recordedO to A unrecorded O to B w/ notice and records O to C w/o notice of A and records6) O to A unrecorded. O to B w/ notice and records. O to C w/o notice of A and recordsIA: C wins b/c bfpWA: C wins b/c bfp and recordsNC; C b/c records

D. Mortgagees, Easements, & Covenantsa. whether a mortgage is covered by the recording statutes is subject to a few assumptions:

i. if the statute says “instruments effecting land” or specifically mentions mortgages they are subject to recording system

ii. if not then “conveyances” does include mortgages as long as you believe the title theory to mortgages (the prevailing view) this makes the mortgagee a purchaser of a land interest- same issues for easements and covenants

1) O mortgages to A unrecorded for $5k O mortgages to B w/ notice and records for $5k O mortgages to C w/o notice of A and records for $5k- second and third mortgages are very acceptable, but here each B and C thinks they are getting a second mortgage

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Now judicial forclosure sale for only $10k. Who gets money, as noth B and C think they get the second $5k after A?

i. C is the most innocent b/c he did everything right and checked the record. So C should get exactly what she expected, the $5k worth of a second mortgage after the first mortgage to B was settledii. 2 ways to resolve dispute between A & B B knew he was taking a 2nd mortgage and should have put something in his deed (last clear chance to set record straight) to make it obvious he had a second mortgage for C. But between A and B, A is more culpable for not recording b/c B is just a derivative wrongdoer who did not set A’s mistake right in the record. So B probably deserves the other $5kORThere is a case for the other side that A does seem to take interest over B in statute b/c B had notice (not a bfp). So could make argument this other way too based on statute’s language.

E. Errors and Failures to Index Properly- Currie: maybe we should say that the recording means recording in a way that it can be found

1. Clerk doesn’t Index: Split in courts, one protecting first purchaser and other subsequent purchaser

a. recording is all that is demanded by the statute and the indexing is a state function, so the first purchaser should keep his land interest. first purchaser shouldn’t have burden of supervising the government (majority)

b. the first purchaser is the least cost avoider, as he is the only one with the reasonable burden to check and make sure it is indexed. also could read statues to mean that you must make sure title is recorded and indexed. so second purchaser should get land interest (minority view, currie likes)

Frank v. Storer- took majority view, even where the grantor new his land wasn’t indexed he kept his property over the first purchaser.

2. Indexing under misspelled name: Most courts say spelling must be correct and onus is on first purchaser to make sure this is true

3. Married Name different than Maiden name in RecordO to Jane Smith who records. She then marries to Taylor. Jane Taylor conveys to A who records. Jane Smith (now divorced) to B who records. who gets title: - Possibly A who should have asked for something in the deed that gave warning that her name used to be Smith. B (second purchaser) seems most innocent

4. Recording under nicknames- most courts today say the recording must be in official legal name

5. Oddity in logic of error cases

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O to A unrecorded. A to B recorded. O to C (bfp) and records. (famous Hughes case, came out opposite of here for B)- C could never find deed from O to A, thus C could never know of conveyance to B- B is in the position to find out that A got her deed from O, so he is in bet position to prevent the harm. Therefore, it is common to find courts to find in favor of C when original grantor’s deed is not recorded, but this seems odd to rectify with those courts who when a deed is not indexed are not sympathetic to the bfp when the bfp is the same situation

- what if there was a tract index too, then may be bound to check both indexes and if the fishy occurrence then C would be liable for buying this land without rectifying all the possible wrongs

F. Random Hypotheticals/Points: CHECK THESE

1. Zimmer v. Sundell- principal that the bfp has to record his deed and the deed of his predecessor if he is aware that that deed is not recorded- ask????- “recorded” might mean recorded by grantor and grantee to get benefit of title

2. Conveyances too early or too late to fall in chain of title you would inspect may not affect you (split in courts)- p 366-67 in Emanuels- a grant from original owner after the grant to your grantor falls out of chain of title you would be expected to checkO to A unrecorded. O to B w/ notice recorded. A records. B to C bfp recorded- C will never know of A recording since it falls after B her grantor

- same probem occurs in other direction if grantor got land too early (before his grantor actually had land- estoppel by deed)O owns property. A to B recorded (but A doesn’t own yet). now O to A recorded- B relied to detriment on assurances estopped

3. Statutes only protect valid deeds. So forged or undelivered deeds do nothing if recorded, even for a bfp.

4. Deeds procured by fraud work differently b/c these deeds are voidable not void.- bfp’s will win here but not b/c of statute rather b/c equity gives them an equitable title and O a right to sue the fraudulent middle man if he is around

5. Adverse possession is not effected by recording statutesO owns. A is an adverse possessor for 22 yrs. O to B (bfp) records- A has title of land b/c this is another example of an adverse possession not falling within the things that need to be recorded. B can get inquiry notice as well.

Same case but 10 years into A’s adverse possession, O to A unrecordedO to BFP recorded- A became the owner by deed and thus is not an adverse possessor b/c not hostily on land (not adverse). So here A just has title without recording it and bfp wins

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6. Must be a BFP to get protection of statutes- so one who takes by gift and thus not a bfp cannot use recording statutes

7. Mortgage on an Antecedent DebtO to A unrecorded. O to B as a mortgagee recorded. B already has existing action for debt.- here B is given consideration in land interest for his loan to O made previously. But if mortgagee is one who already has a cause of action on an antecedent debt (McDonald v Johns) he is like a donee who is in same place he was before debt just with greater possibility of actually collecting. majority view, B does not take over A as he is like one getting a gift.- counter is that mortgagee even w/ antecedent debt is possibly in a situation where pragmatically he can’t get debt b/c O has disappeared and only land left behind is the way to get his repayment minority view- allows B to take over A.

8. Inquiry Notice- held to have notice of things to do with land that would surface with an inspection of the land

B knows that A is in possession of Blackacre but does not know A is owner of Blackacre, A may take b/c B has inquiry notice and duty to inquire. Similar to Methonen case of inquiry notice, knew of pipes that are running from property to neighbors should make inquiries

A does possess but B doesn’t know this. Burden on B to find A and ask him if he owns land. This is again an inquiry notice issue if he finds A on land (like adverse possession)

A is on the land under a recorded lease as well. Now when B inquires about A’s presence he will see that she has a recorded lease, so doesn’t put you on notice that something suspicious and thus he should prevail

G. Torrens System p 652-57: al alternative system that an Austrailian came up withTitle certification:- begins w/ a judicial preceding (quites title) and then a certificate is made out to rightful owner and a copy goes to owner and to state. And cannot transfer this property without taking it to court and then the court gives a new certificate- even this systems has some problems, since the certificate can be forged and then the purchaser is not protected. - A lot of Europe uses this and a few states do (but most states don’t use the Torrins sys b/c costs of the Torrens system and fact that benefit mainly goes to future purchaser)

XIX EasementsA. A nonpossessory (just use) interest in another’s land. Easements benefit the dominant estate and burdend the servient estate.

a. affirmtative easements- entitles holder to enter the servient estate for specified purpose

b. negative easement- entitles the holder to compel the possessor of the servient estate to refrain from using his property in a specified way

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- a profit a predre is the right to take away (more than use) a natural product from another’s land (timber, fish, hunt, minerals). a profit is very similar to an easement and in modern courts often there is no distinction.

c. easements appurtenant to the land: pass with the land to new owners b/c easement is attached to the land

d. easements in gross: the benefit of the easement is attached to a person, not the landi. personal easements in gross: are just to that grantee and cannot be

transferredii. commercial or otherwise easements in gross: a benefit to the person not

the land, but can be transferred

- all of the above are easements by express written grants- easements are subject to the recording system- easements can be created for any time period, life, 10 yrs, etc

B. Differences: Leases, Licenses, & EasementsLicense: a permission/right to enter or use the property of another- difference from easement:* also non possessory (like easement)* revocable (unlike easement)* cannot convey/transfer * can only get damages for breach of K, not specific performance

Lease: (term of years)- possessory interest. w/ term of years there is the right to control and to exclude all others. this is different from an easement or license.

Easement:* must be in writing (statute of frauds)* non possessory* irrevocable* if breach, then can get specific performance* can convey w/ land (if appurtenant), or convey to others (if in gross & not personal)

Bruton Case- Sign case where K is ambiguous, Crt holds that this is an easement in gross over a license b/c of aggregate of objective signs: K in writing and easements must be, K gives a right to renew and this is inconsistent with the ability to revoke-suggests permanency, payment method for a license is usually on temporary terms ($100/mo) and payment for easements often large up front sum of money, here meant to last one year

- when objective sings are really unclear, there is a presumption for an easement appurtenant b/c this increases the value of the land (Miranda Case)

Bunn v. Offut- Swimming pool case, gave a right to use the pool to a family making the property more valuable for the sale. It seems thus that this was meant to be attached to the land,

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continuing to make the land more valuable but Crt says that there is a license b/c it thinks an easement must be in the deed and it was not.- currie also says that this was meant to be personal and not appurtenant to the land b/c K said to the “purchaser and his family”, so if it were an easement it would be in gross & personal, so not transferable anyway. this goes to intention of part of the grantor (so it is weird that court seems to neglect that an easement can be personal). But could argue that purchaser means generically the people who own the land and not someone who doesn’t, so this could be appurtenant (Miranda presumption)

Qs to ask:1) is it possessory (lease) or not2) is it a license or easement3) what type of easement- appurtenant or in gross (personal or not)

C. Conveying Easements1. Conveying the Burdened land: the easement burden always goes with servient landMcG grants whiteacre to Church w/ an easement to park on blackacre for church purposesMcG conveys blackacre to Peterson and deed is silent about easement. Peterson tries to tell Church people they cannot use easement anymore

- this is a transfer of the burdened land not the easement. an easement is a conveyance and so it needs to be recorded, Peterson could find this out. also McG only owned land minus the easement right and this is all that he could convey. So Peterson must honor the easement.- if this was a warranty deed P would still have an action against M b/c there is an encumbrance

2. Tranferability depends on the type of easementMcG to whiteacre to Church w/ an easement on for parking on blackacre. Church conveys whiteacre to baseball team.- if easement appurtenant to land, then team gets easement- if personal easement in gross, then no easement conveyable- if commercial easement in gross, could convey even without land- if a determinable easement “for church purposes”, could not convey to a not church

3. Reservation if form of an easement- when a grantor sells the land to another party but reserves a right in the land he is conveying as an easementMc G conveys all land to Peterson, but reserves the right for himself to park there for church purposes- this is ok, b/c can have a reserved easement in the grantor

4. Cannot reserve an easement for a 3rd PartyThompson Case- cannot create a reserved easement in “a stranger to the deed.” This is the rule in NY just like in many states. O to A with a reserved easement for B. void b/c of law.- some cases (Willard v. First Church of Christ) say this is outdated and should be overruled- can do this via two deeds:

* grant easement to B first

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* reserve an assignable right from A* convey land to B and B can convey to A and reserve a right for selves

D. Scope of an Easement1. An easement is distinct for the use of enjoyment of a particular piece of landBrown v. Voss- a party paid for an easement to get across lot A to get to lot B. then they buy lot C. Crt holds that you cannot get lot C with an easement granted to lot B. Easement is appurtenant to lot B. counter: that you are using easement to get to lot B and then where you go has nothing to do with the easement of A- issue of burden: no increased burden to giver of easement so only technical violation. but court rightly doesn’t accept this. because it doesn’t cost someone money doesn’t mean you can commit wrongs against them

This is a strict interpretation of the scope of an easement, so weighs burden in pragmatically in dealing with the injunction, no injunction b/c of the balance of equities. Theres is no extra burden on servient land and much extra burden on dominant land owner to move a completed house. So just have to pay damages

2. Cannot impose an additional burden on the servient estate, but can increase the intensity of the same burden to a reasonable levelHayes v. Aqua Marina- as a general rule a nonspecific easement does not limit to a specific use and can increase the intensity to a reasonable level of that use as long as the type doesn’t change.- Currie says this is a lenient interpretation of a “reasonable” intensity

Minority of courts do allow change in use…Cushman case (cited in Hayes)- farm case where the Crt said subdividing a farm and selling it off as a residential community was ok. (really lenient in allowing change of use and intensity)

* Moral is define the scope of a limit in the deed

3. Scope of Implied Easements is Narrower- defined by what is necessary for minimal use & enjoyment or has been going on in past. Question is what was w/in contemplation of the partiesg

NecessityO conveys landlocked parcel to A, so there is an implied easement to this open landwhat can A do with this easement, what is the scope?- existence of necessity is what defines the easement, and this test is defined very narrowly to allow what is nec to enjoy your land. so probably this means what you can do with your easement by necessity is narrower than the same case with an express easement

Prior Use- probable intention of the parties is that they intended to allow that use to continue

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- so how far does this easement go in scope. if prior use determines the existence of an easement it should probably also determine its extent (scope)

* Currie likes the idea of the narrow scope for implied easements

4. Termination of easements:1) sometimes limited in term expressly (could be determinable, easement for life, term of

years)2) easement by necessity expires with the necessity3) abandonment (more than just nonuse)4) by changed conditions (no longer makes any sense for the purpose given for, seems odd

but there is an implicit condition that validates this)

* Ways to create Easements: Express Grant, Reservation, Implication, Prescription, Estoppel

XX Implied EasementsA. Purpose: land that is unusable w/o an easement must have been intended to have one in the conveyance that gave it or fraud or duress is at work. In addition we want land to be as useful and valuable as possible.- minority view that this creates a windfall in the buyer who bought land at value w/o easement in a stupid deal and now get the extra benefit of an easement for free.

B. Implicationa. How they interact with exisiting law:- created by law so no need to be in writing and not subject to recording (but inquiry notice)- implied easements can be found as a reservation in the grantor, but sometimes disfavored by law b/c we think the grantor had the power to do this in the first place- implied easements can still come out of sales by general warranty deed b/c these deeds address encumbrances not in the deed saying that they do not exist. But an implied easement, is said to be implied and derived from the deed.- often thought that implied easements are only appurtenant

2 kinds:i. prior use- intended easement based on apparent use existing at the time the dominant

estate is separated from the servient estateii. necessity- easement necessary to make reasonable use of land

- these easements are intended to carry out what we think was the intent of the parties, but sometimes can operate just on public policy.Flax v. Smith- (pipes running under ground to septic tank on another’s land) where land is taken from grantor as a tax repercussion for nonpayment, despite grantor not intending an easement, public policy and the state desire easements so we see one as implied

1. Easements by Necessity* Most common example is landlocked parcel sold off.

a. Necessity depends on the subjective situation of the person.- we demand reasonable inconveniences be bore but not unreasonable inconveniences to use land

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Kingsly Case- case in Maine a century ago where people have boats. So court held there was no easement by necessity to the road when there was access to the land only by boat on one side.- today access to a road is considered necessity

b. Necessity only needs to be reasonable (cost prohibitive) and existing not by your own negligence, must come from deed

A and B have adjacent lots from C and A has a house right on the property line and so to repair one side of his house he has to go on B’s land, should their be an easement?

- yes this is reasonable necessity, the house was already there before the sale to B so it was implied in the deed (must be from the same common grantor)

- So if A had sold half the land to B and then built the house right on the property line, there would be no easement b/c the house was built after the sale and transfer of deed and so easement cannot be implied in the deed. Maybe here could only get by eminent domain and would have to pay for right

c. Eminent Domain Statutes: often viewed as a substitute for easements by necessity- An owner can condemn an easement for situation that seem like reasonable necessity but do not arise from implication in the deed. This makes the one who gets the right pay the other guy (unlike in an easement by nec where we give the dumb buyer more then he bargained for)- Currie postulates that the Eminent Domain statutes are better then common law easement by necessity b/c at lease makes the dumb grantee pay for his easementbut counter is that easement by nec assumes that it was in the intent of the parties so they must have bargained for it- maybe emmient domain is really about how to handle cases that are of less standard of necessity where we still think you should have ability to do what you want to do but not so great that we will give you that right free or maybe for the situation above where the house is built after the grant or other necessities that arise after the conveyance (like an earthquake makes land not accessible- no conveyance to have an implied easement)

Hollars Case- big ravine in land, so part of land does touch road, but the big part of land that is useable does not and it is not practical to drive over or around the ravine. Here they do not allow an easement b/c the court is interpreting a state statute to do with eminent domain, not looking just for easement in common law. If doing this probably could make a case for necessity b/c prohibitively expensive to get real access to the road

2. Easments by Prior Use4 prong test for past use = implied easement

1. prior common ownership of both the dominant and servient estates- both estates owned once by same person2. transfer of one of the estates3. continuous and apparent use of the quasi easement- must be apparent by inspection and not sporadic but continued use4. reasonable necessity for the enjoyment of the dominant estate- if cost and difficulty in establishing new road are high, then reasonable

- this tries to get at the intent of the parties, this is why it must be apparent b/c we assume if the

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grantor knows of the use and has not objected he probably has the intention to allow it

Application:- Flax Case may have failed test b/c pipes under land may not be apparent enough, but on other hand could have called plumer- Thompson Case, people walking to beach seems apparent

XXI Easements by Prescription & EstoppelA. Easments can be acquired by adverse use (similar to adverse possession idea w/o exclusivity requirement b/c easements are not about possession)

a. Requirements:adversecontinuoushostile (no permission)open & notorious

- remedy for wrongful easement taken is trespass (like ejectment for adverse possession) but for purposes of prescriptive easement trespass is treated as accruing not each time but at first instance of trespass

Ways to avoid losing land by adverse use:- a sign saying public is welcome in this church court yard- close down Rockefeller Center one day a year- public in general cannot claim an adverse easement

b. 2 theories behind prescriptive easements:1. “lost grant”- if person using another’s land for that long w/ above prerequisites met, we assume there is actually a missing/lost grant that would prove this.- if subscribe to this idea, then a protest by the person legally owning land matters as in some states with statutes where if the owner of land writes a letter to adverse user or puts up fence to keep him out, then he can’t acquire by prescription since obviously no lost deed. but if you believe in adverse possession policy, then protest makes no difference

2. analogy to adverse possession- for same reasons of wanting land to be used, we allow prescriptive easements (majority view)- must be a wrong that has accrued for statute of limitations to run

A owns land next to be and puts a house on property line that abuts B with windows to take in sun. this continues for 53 years. Then Pierson moves in and builds an big apartment building that occupies entire lot.- no wrong has been committed by A and you cannot create a prescriptive right without encroaching on another’s rights

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- can be express or implied negative easements, but cannot be prescriptive b/c based on unredressed wrong and is no wrong in using own property if a way that would keep someone else from doing something on their land- but beware in British courts there is a doctrine of ancient lights (easement of light and air). Idea is under “lost grant” notion, would not have put window there is never had a right to. But this is not the law in the US

B. Easments can be taken by estoppel- Estoppel requires: misrepresentation, reliance, change in position

A has license or right of way over O’s land. A paves it uses it to bring in building materials to build house. O sits back in silence and now O wants to revoke the right of way.- easement by estoppel, misrepresentation from the silence. Holbrook v. Taylor, RS3rd approves of the result in Holbrook- Currie: all that silence means is you can rely on the license and this is revocable, so doesn’t seem to agree with case’s interpretation of silence

XXII Covenants & Equitable ServitudesA. Covenant- affect the use of land as a promise to do a certain thing (affirmative) on land or to not do things (negative) on land.- between the initial promisee (grantor of land) and the promisor (buyer of land) there is a contract.- but by either of their assignees, there is a property claim to enforce the covenant

a. Remedies- for breach of a covenant: one can sue in law for damages, this is technically a covenant, and then subject to the rules of covenants to be something that can be enforced- one can also sue for an injunction or specific performance in equity, then one is enforcing an equitable servitude, with less stringent requirements than a covenant.* but premise of both is extremely similar, and especially in the US often there is no distinction

- remember a condition on an estate for a fee simple determinable or a fee simple subject to a condition subsequent may look similar, but they are different b/c the interest is forfeited if the condition occurs

Tulk v. Moxhay- created the equitable servitude (and idea of the covenant) as opposed to an easement. Tulk sold a polot of land with a garden on it to Elms, who promised for himself, his heirs, and assings not to build on the plot. Elms conveyed the plot to Moxhay who had notice of the covenant. Moxhay neverthe less planed to build on land. Tulk sued for an injunction. Crt granted this and deemed it inequitable to allow a subsequent purchaser to break a restriction such as this when he paid less for the land knowing there was this restriction on it, unjust enrichment. - this is very similar to an easement but is not an interest in land (very limited negative easements in England) and is just a right to enforcement of a promise.

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Distinguished From Other Interests:Equitable servitude- This is a covenant enforceable in equity. Easement- Whereas a covenant is a promise respecting the use of land, an easement is a grant of an interest in land.

B. Requirements of a Covenant4 requirements so a covenant can run with the land:* both benefited and burdened land must be from a common grantor

1) intention to run w/ land beyond first grant2) must be in writing3) must be privity of estate (b/c no privity in contract), in 2 senses

a. vertical- between promisor and her successor in titleb. horixontal privity- between promisor(grantee) and promisee(grantor)

4) covenant must touch or concern the land- both the land of promisor/burdened land and of promissee/benefited land

Requirements for burden to run with land:- Intent- If the parties intended the burden to run- Privity of estate- vertical and horizontal (3rd RS says no horizontal necessary)- Touches and Concerns- The covenant touches and concerns the burdened land and majority

view also requires it to touch the benefited land Neponsit- court found that covenant touched burdened land by benefiting it

Requirements for the benefit to run with land:- Intent- Vertical Privity- just need privity of a successor in interest/assignee of the promisee. - Touches and Concerns

1. Intent:- this usually found in the deed, “these covenants to run with the land” or “the grantee promises for herself, her heirs, and assigns”

2. Vertical Privity:- privity between the original promisor or promisee and her assign (who she sells land to down chain)- this is basically automatic, once there is an assignee to an interest in land

3. Horizontal Privity: relationship between the original promisor and promissee- must be a relationship between a grantor and grantee for the sale of land/ie in a deed- so cannot just exchange mutual promises in a K (Feider Case) b/c this doesn’t involve the sale of land

Possible Scenarios:1) running of the burden at law- privity required2) privity not required for cases in equity3) privity not required for the running of the benefit of the covenant

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- and 3rd RS has even gone so far as to say horizontal privity is not required for the running of the burden (so then no need for a deed)

- can get around need for horizontal privity by using a straw man. A and B both convey to C who coveys back to them w/ the covenants included.

4. Touches and concerns the benefited and burdened lands- generally this means the burdened land is diminished in value due to restriction/action and the benefited land is given extra value due to the restriction or affirmative actionEx: cannot put a mobile home on land (Rogers v. Watson)

- some cases say that it does not have to benefit or burden land directly as long as there is a limit on one party and that limit benefits the other partyEx: deed says burdened guy must contribute $100/yr to a charity. has nothing to do with land but does put limits out there

- Neoponsit case sets out idea that as long as it touches each land in some way this is valid. There court contorts the law to say that the payment of money to the neighborhood association, touched the burdened land by benfitting it. although sounds weird, it does affect and thus touch the burdened land by valuing it.

* Currie says we want these covenants to run with the land in all situations above probably for reasons of public policy, like encouraging development and respectful societies

C. Reciprocal Negative Covenants- often implied from a scheme (the more lots w/ covenants the easier to make this case) of covenants in subdivisions all plotted off by the original grantor- so even if not in deed, there was inquiry notice and should have realized there was a covenant Sanborne v. Mc Lean - sets out the rule that if you grant land in a subdivision with a covenant to most, there is an implied easement/covenant- but counter is that this erodes the validity of deed and recording system- Rizzo case (concerned b/c may be no notice to guy buying plot w/o mention of covenant, maybe inquiry?)

F. Final Notes on Covenants1. Reserving an covenant for a 3rd party: With covenants many states (like CA) allow there to be 3rd party beneficiaries to covenants that can enforce the covenants if so expressly set out, just as in easements. This is just a matter of contract law really for the first guy, and then assignees after that it is a matter of property law. BUT if you are in a state like NY that doesn’t allow reserved easements in one other than the grantor, then probably cannot assign the right of a covenant to a 3rd party (who is not just a usual assign of the land)

2. Covenants in Gross?No, there cannot be covenants in gross that are not appurtenant to the land (unlike easements). If you tried to create a covenant in gross it would not touch and concern both the burdened and benefited land.

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City to A w/ a covenant that he cannot build on part of land. City doesn’t own rest of land around A. So the benefit doesn’t touch the city’s land, benefit touches the city itself.- but some courts do allow this on policy grounds

3. Property Associations as Alter EgosNeoponsit- Who is the right party to sue here, can the property Asso sue here. The court says yes b/c the property asso is really the alter ego of the owners of the benefited property. So if the owners of land can sue (and they can b/c they are the benefited land and it touches and concerns their adjacent land) then the Asso can sue. - Crt doesn’t answer the Q of whether Asso can sue if it isn’t the alter ego, can a party sue who is benefited by this arrangement but does not have an interest in the adjacent/benefited land. This agains seems like an attempt to create a covenant in gross, which a minority of courts allow.

4. Covenants can only be created in deeds usually, but may be exceptionsAnderson Case- Covenant created w/o any reference in the deed, when can you do this?A subdivision plat was recorded saying all limited to residences, but only in recorded plat not in the deed, and deed didn’t refer to the plat.- this will serve as record notice so why do we care if this info is in a deed?Crts can come down each way depending on how formalist they are, but Anderson Case says it is ok if in recorded plat b/c serves as proper notice

5. Covenants Expire when Changed Circumstances make them illogicalGrange Case- covenant expires when changed circumstances make it no longer useful- for example if the neighborhood has deteriorated to a point that a covenant on no building apt buildings doesn’t make any more sense- but some say this is really just enforceable in equity- justification for this is efficiency, why restrict property if no one is getting a benefit anymore

E. Equitable Servitudes- An equitable servitude is a covenant that equity will enforce against assignees of the

burdened land who have notice of the covenant. An injunction is the usual remedy. An equitable servitude is an interest in land.

o Compare- real covenant: Remedy- If a P wants damages she goes to a court of law on a real covenant;

is she wants an injunction she goes to equity and asks for enforcement of an equitable servitude

Creation- Although a real covenant must be in writing, some states will imply an equitable servitude (Tulk v. Moxhay)

Privity- No privity is required- Creation- Since an equitable servitude is an interest in the land- most courts require a

writing signed by the promisoro Exception- implied from a scheme: In many states a negative servitude may be

implied on all lots in a subdivision if there is a scheme of restrictions shown by a written instrument on a majority of the lots (Houghton v. Rizzo)

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- Touches and Concerns- Like covenants, equitable servitudes must touch and concern the land in order to run with them (Rogers v. Watson- mobile home restriction)

- Needs to be intent, although not necessarily demonstrated in writing

XXIII NuisanceA. A nuisance is an unprivileged interference with a person’s use and enjoyment of his land- this is similar but different than trespass which is interference with possession of land- 2 types of nuisance: private and public

A. Requirements for nuisance: (not all interference is nuisance)a. harm must be substantialb. must be unreasonable (except modern courts often drop this)

Therefore, the gravity of the harm must outweigh the benefit of allowing action, to be a nuisance

Gravity of the harm- Factors to be considered in determining the gravity include the extent and character of the harm, the social value of the use invaded, the suitability of the use invaded to the locality, and the burden to the Π in avoiding the harm (Bove v. Donner-Hanna Coke Corp.- Coke plant was not a nuisance per se and did not become one by operating in an industrial district)

The usefulness of the thing will excuse the act- gets at the idea of unreasonableness. if the utility doesn’t warrant the harm then it is unreasonable, and nuisance

Policy: stringent requirements for nuisance - b/c we are limiting others rights more. trespass means you are doing something on someone else’s land (not your right) but w/ nuisance you are doing something on your own land that may indirectly effect another.

- 2 prongs of nuisance are governed by the Relativity of Nuisance which says that one must put up with different degrees of interference (what constitutes substantial and reasonable) in different environments. Different things are unreasonable in the city that are not in the country

* Ultrasensitive Plaintiffs are not taken into account in determing what is reasonable, rather it is the standard of the reasonable neighbor (Church Bell Case)

1) glue factory that renders property next door uninhabitable- suppose first that the glue factory could put an end to the harm for relatively little cost? then there is a nuisance b/c substantial harm and unreasonable when they could easily install equipment. So court could order an injunction until fixed- suppose now there is no way to control it; either have pollution or close factory?

a. house is there first: what could court do? 3 options: 1. enjoin factory 2. have factory pay permanent damages to house owner and go on polluting 3. find no nuisance

b. house built second- “coming to the nuisance” problem and depends on jurisdiction. Some say you assume the risk; others say a nuisance is a nuisance

B. Boomer Case: Modern view on nuisance- takes the unreasonableness out of the requirement, so that any substantial infringement on use of another is a nuisance

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- But takes reasonableness into account in the remedy for nuisance; if the cost benefit analysis does seems to say that the acticity is NOT unreasonable; then the action will not be enjoined but rather the one creating the nuisance will have to pay monetarily- Boomer v. Atlantic Cement- cannot just take someone’s rights b/c they can put your land to more economic utilization than you. So courts will still find a nuisance (not take into account the utility) but will take into consideration the utility in the awarding of damages. (In Boomer, grants injunction conditioned on the payment of permanent damages because they felt that the utility of the cement company was too great to shut down)

C. Who can sue for nuisance?- only those with an interest in the use of the land, therefore:leaseholds (renters have right to quiet enjoyment)freehold owners that have ability to use landeasement owners- since this is a right to use land* remainderments can only sue if the nuisance is doing permenant damage, since unless this is happening it is not effecting there future use.- same idea holds for owners of land who have temporarily conveyed land to another

D. Final Note:- Coase says it doesn’t matter whether we allocate damages or injunctions, people will bargain around this (Currie dislikes, there are transaction costs, and moral issue)- If a plant is not built yet this will effect the calculus of utility, since cost invested are much less, court would be more apt to issue an injunction- zoning laws do not really effect nuisance, just a legislative take on what land is good for, not dispositive- there is a statute of limitations on nuisance, so at a point can’t sue for the harm. then the nuisance becomes almost a “prescriptive easement”- damages for nuisance are the dimunision in value due to the nuisance (so if you build something after the nuisance is apparent, then no value lost due to nuisance, you chose to build)- easement of “light and air”, seems like a nuisance issue but treated as separate right historically- Fontainebleu Hotel case. In England had right to such easement in US no.- nuisance cannot deal with mass pollution of society, works for smaller disputes (Diamond v. General Motors Corp)

E. Public Nuisance- A public nuisance affects the general public, (numerous persons harmed). The test for determining a public nuisance is the same as for private nuisances. Usually only public officials have the right to stop public nuisancesEnforcement by private persons- A private individual may act against a public nuisance only if he can show special injury, different in kind from that suffered by the public.Ex: Blocking a public way. Could get private nuisance action if blocked your driveway.

Examples of Nuisance:1) play baseball on Post’s land- this is a trespass, an interference with the possession of the land2) put a clothes line over Post’s property- still trespass b/c own air above land, ad coelum

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3) tunnels underland- same premise for under land and still a trespass

4) a barking dog is right next to Post’s land- this is probably a nuisance (depending on severity) b/c it interference w/ right of use and enjoyment of land (no physical evasion of the space)

5) Smoke drifting onto land- still nuisance, but could argue that particles might constitute trespass6) odors and light (waves) - also considered nuisance

- normally small particles and waives are treated as nuisance even though in a scientific sense they are a physical interference w/ land which technically is a trespass

7) movie house shows obscene movies next door, or a funeral home, prostitution house - this could give rise to an action for nuisance depending on circumstances- so in absence of zoning laws you can still get them out of neighborhood- so things that inject uneasiness in persons can sometimes constitute nuisance, even irrational fears like that of a morgue, these are said to cause emotional harm

8) a half-way house next door (is danger a nuisance or does it have to be actual physical harm)

- this is still probably able to give rise to nuisance- things that are likely to give rise to danger like explosives, dangerous dogs, loony bin, etc- the risk of harm can constitute a nuisance

9) ugly house built next to you- aesthetic harms are usually not considered nuisance- this is so subjective that we do not allow it to be a nuisance

10) on near by property is a stagnant pond and it attracts mosquittos which often have malaria- there is a type risk of harm here, but here there is an omission (not draining pond) and not an action to bring about the affirmatively the nuisance

- so most courts hold that you must take an affirmative action to create a nuisance

XXIV Takings/ Power of Eminent DomainTakings: Governments have the power to take title to private property against the owner’s will for a public purpose. The 5th amendment requires just compensation for a taking.

Policy behind making government pay:- b/c property rights mean you have the right to exclude all, and thus must be fair and not negate premise of property rights- distributive justice- incentive argument that people need security in property rights to feel comfortable putting it to its best use (invest in it)

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- want incentive for government to think about the value of taking the land they are taking out of the private economy, paying makes them do this. So this way the gov will only take land when the benefit it gets is more than the cost it has to pay- equality argument: land is being taken for public benefit so the public should pay for it through the government (taxes) not the individual land owner

What is a “Taking”?i. takings have nothing to do in the abstract w/ amount or type: small takings of property or temporary ones still must be compensated. But must be taking a property interest (estate, easements, etc)- Lorretto case, where tiny space for a cable box was a taking since mandatory on landii. takings only occur when the harm caused to the individual is different (more severe) than that the whole general public must put up with

iii. government has the power to police and this enables it to take from private individuals when it is preventing a large public harm w/o compensaiting b/c the person never had a right to create a harm to the public

iv. takings occur anytime an aspect of the bundle of rights you have in owning property is disturbed. So even no allowing exclusive possession is a taking. (Kaiser Aetna v. US- gov mandated an easement for people to walk across land, a taking)

Physical Takings:o Taking title or possession- If the government takes title to the land/property or

allows another to take tile, it must pay for it.o Physical invasion- A physical invasion by the government is a de facto taking and

must be paid for. P can bring suit for inverse condemnation.

Regulatory Takings:o Regulatory takings- If a land use regulation is declared a taking, the regulation is

void and enforcement is enjoined. or the owner sues for damages on a theory that an inverse condemnation. (Pennsylvania Coal v. Mahon- just because it is in form a regulation does not prevent it from also being a taking) (Penn Central- Landmark takings case) (Loretto- even a taking as small as using a portion of the roof for cable was made to be compensated for)

Tests to determine when there is a taking: Harm/Nuisance test- Police power is validly exercised to prevent harm/noxious

use and thus no compensation need be given. So when there is a nuisance (the harm created by act is greater than benefit) there is not right to do this and since no right is taken, there is no need to compensate

- But where the purpose of taking is for a public benefit, a taking has occurred and payment necessary- can prevent people from creating public harm, but can’t force people to provide a public benefit

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* issue is that it is sometimes hared to distinguish between preventing a harm and promoting a benefit

CURRIE really likes this test for takings

Test of severe economic loss- The imposition of severe economic loss may show a taking. This test may be left to say that an owner must be left with some reasonable economic value in the property. (Pennsylvannia Coal Co. v. Mahon- regulation destroyed all rights to mine coal on land)

Categorical Takings- A law so significantly interferes with a right of ownership (destroys all value) that it constitutes a taking regardless of the public purpose (unless a nuisance, then ok). These cases have been limited to the most important ownership rights. (Lucas v. South Carolina Coastal Council- court focuses on the totality of the loss; difficult line to draw whether regulation was preventing harm or whether promoting something for the good of the public- when that line is hard to draw we will look to factors like the completeness of the damage. So there is a balancing test to do)

Reciprocity test- Regulations that involve reciprocal advantages are not a taking. (like taxes)

Balancing test- This test used by some state courts, balances private losses against public gains

- What is Just Compensation- Market value

SEE CHART BELOW

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- 4 Key Questions in This Domaino What is private propertyo Has there been a takingo Was it for public useo Has there been just compensation

No NoInvalid No Invalid

YES YESNo NO

Invalid Invalid

YESYES

YES

No NO Invalid

NO YES, GOES TOO FAR

RegulationsPermissible

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Is the Action a Taking?

Regulation

Must Demonstrate a Public Purpose/ Use

Is the public use a legitimate

Does the Regulation go too far

Three Tests

Physical

Prevention of Harm

Reasonable Return/ Dimunition in Value

Government must exercise eminent domain and pay just compensations

Government Act

Must Demonstrate a Public Purpose/ Use

Is the public use a legitimate

Is a private interest

Does the public benefit pass a stricter test to offset the public interest?