Professional Documents
Culture Documents
A combination of
(realty) and
(tangible and intangible assets).
Best seen as a ͞
͟ that includes right to
.
I.V xockean Theory: Property is acquired by mixing personal labor with a common resource. Very influential on
judges and a precursor to utilitarianism. Exemplifies instrumental reasoning.V
i.V 0riticism is that it can lead to absurd results, such as claiming ownership of the Pacific Ocean if I
dump tomato juice in it. Important in Pierson.V
II.V Economic Theory of Property Rights (Harold Demsetz͛s Toward a Theory of Property Rights): Private property
rights are superior to collective property rights because á
in maximizing wealth since collective
ownership imposes undesirable externalities, costs not internalized by property users, who are
á
á á
), while private property forces actors to
their actions͛ costs.V
a.V Demsetz͛s
á
xaborador Indians, when Europeans created a market for fur,
moved to private property rights because communal ownership became costly since Indians had incentive to
cease maximizing long-term value communally (Garrett Harden͛s Tragedy of the 0ommons ʹ each
individual͛s wealth maximization depletes the communal wealth beyond replenishment rate). Transitioning
to private property brought two efficiencies: (1) cost internalization and (2) lower transaction costs (reduces
free ride problem of holdouts) by reducing the people with whom landowners must cooperate.V
i.V 0riticisms: (1) ignores power differences, (2) mechanism problem (how societies transition from
communal to private ownership), (3) wealth is imperfect proxy for social welfare, (4) custom can be
efficient (like not stealing at 0ornell library), (5) anti-commons (all rights divided) are very inefficient
(one of the things the Rule Against Perpetuities tries to prevent).V
V
G
III.V Instrumental: xegal rules are instruments for achieving social desirable endsby giving incentives and
disincentives for behaviors. Protecting labor is one common end for instrumental reasoning. One common
argument is that a rule promotes competition and thus better allocation of resources. 0ases where important:
m V
VV
VV ).V
a.V Example: xivingston͛s dissent in Pierson. Social good of killing foxes better accomplished by giving
ownership by reasonable pursuit, thereby better protecting labor.V
i.V But xivingston probably wrong since more competition through rule of capture.V
IV.V ·ormalist: Blindly following authorities just because they͛re authorities. m V
.V
V.V 0ustom-Based Reasoning: Established customs should have a role in law. Prof says should be rejected unless
customs agree with societal norms. m V
.V
VI.V ·airness: Tends to merge into instrumental reasoning.V
·
!"
#
Pierson v. Post: Pursuit of an animal does not create a property right in the animal.
i.V Property right is created once animal is mortally wounded and hunter acquires it. (0apture)
V m
aV #
$definition of pursuit nebulous, capture is not (however, mortal wounding is not clear)
aV
%
&litigation would be curtailed by capture rule (rule is predicable); physical
aV G
&good public policy at the time
aV G#
$hunters more likely to invest resources to capturing foxes
(better horses, technology, etc)
G
#
(: if you own the land, you are deemed to be in physical possession of all
wild animals on the land
V
to discourage trespass;
V xand owner has the legal right to make a first attempt to gain physical possession
Animus revertendi (If animal runs away with intention or habit of return, hunter
cannot keep carcass even if hunter thinks animal is wild)
ii.V This encourages domestication of animals.
iii.V Owner does not lose title even though animal runs away.
G
+
&!"
#
Exclusive rights granted for a limited time to encourage competition.
iv.V conopolies encourage invention.
v.V ximited monopoly encourages competition.
vi.V
Tension b/w polices: 1) Incentives to create; 2) 0ompetition to improve quality and lower prices.
Patents
vii.V Requirements: Useful, novel, non-obvious
viii.V conopoly lasts 20 years from date of application.
ix.V ·ederal law
0opyrights
x.V xife of author + 70 years.
xi.V No registration required, copyright comes directly into existence.
xii.V ·ederal law
Trademarks
xiii.V State AND federal law (xanham Act)
xiv.V Grew out of common law of unfair competition.
International News Service v. AP (51)
xv.V 0ourt creates quasi-property interest in the news b/w the 2 parties.
xvi.V With respect to public there is NO property right in the news, but there is a quasi-right b/w the
2.
xvii.V 0ourt really talks of UN·AIR 0OcPETITION law, not IP. INS͛s practices are unfair competition,
but do not violate copyright laws.
xviii.V 0ourt extends unfair competition to misappropriation
1.V cisappropriation: Selling another͛s good as your own.
2.V Palming off: Representing someone else made goods you actually made.
xix.V 0ourts rarely follow this decision anymore b/c they want to encourage competition. Usually
limited to its own facts.
xx.V AP could do other things to protect itself (which is why INS is disfavored)
1.V 0hange release time
2.V Enhanced its own reputation
3.V Undercut INS prices
4.V cake exclusive deals to only use AP news
0heney Bros. v. Doris Silk (55)
xxi.V Silks aren͛t patented can͛t be copyrighted.
xxii.V D is knocking off P͛s best-selling silks. (0opying P͛s design and selling it as D͛s own).
xxiii.V 0ourt interprets INS very narrowly to the specific facts of INS.
xxiv.V 0ourt wants to encourage competition and, absent statute, copying is protected.
xxv.V P has property right ONxY in chattel, NOT in idea/design of chattel.
xxvi.V Protect competition! No common-law patents/copyrights.
xxvii.V P should put its trademark on the silk! Then D could not use trademark b/c it would be
infringement.
xxviii.V There is a difference b/w tangibles and info. Two people can simultaneously own info. Info is
public good and there is non-rivaled consumption.
xxix.V Exclusive rights to info/public good does not promote goals of market economy while granting
exclusive rights to property/non-public good does.
a.V Smith v. 0hanel: You can compare copy to the original. We want people to know they have better options.
b.V Nichols v. Universal (59): You can͛t copyright themes and general ideas.
c.V Diamond v. 0hakrabarty (60): You can get a patent for a living thing not found naturally (here it was an
engineered bacterium). Tension b/w protecting Ê V
and protecting products of nature.
d.V The other cases all show tension b/w protecting creativity and idea and stifling creativity and competition.
B.V Property over One͛s person
a.V 0onversion: any wrongful act of dominion over another͛s property inconsistent with their rights.
b.V In coore (69) the court does NOT extend conversion claim to excised body parts. No property right over
excised body parts. D owns body parts once excised.
i.V 0ell line generic to all humans
ii.V P͛s likeness not being invoked.
c.V xaw of Accession
i.V Owner of product is owner of raw material unless the value of the final product is substantially
greater than the value of the raw product.
ii.V If there are multiple raw materials from different sources, owner is owner of principle raw
material.
d.V 0ompeting Policies
i.V Right over one͛s person
ii.V ·urthering medical research (0ourt more concerned w/ this policy)
e.V 0ourt says informed consent protects P so conversion unnecessary, and P is allowed to sue for not
getting informed consent.
f.V 0ourt also says legislature is better suited to deal with this area (Dissent says UAGA already did this and
allows sale of body parts: one stick from bundle taken does not destroy property rights)
g.V We may also NOT want a market for body parts.
G
0ore of ownership: Essential right
0an get punitive damages for trespass b/c property owners have right to exclude others from their
property.
Justifications for trespass (state v. shack)
i.V Necessity
ii.V Public Policy (as in shack to provide medical/legal advice)
iii.V Right to exclude limited to allow gov͛t services and charities seeking to assist employees͛
welfare.
Broad reading of Shack requires employees to be able to have visitors and press to be allowed on land.
In Uston (91) casinos can͛t exclude card counters b/c they are not technically cheating and casino is
open to public, inviting them in.
iv.V Singer͛s reliance interest would allow card counter to stay (91)
v.V Singer͛s 1st theory: Once non-owner allowed on property he develops a reliance interest and
should be allowed to remain in the future.
vi.V Singer͛s 2nd principal: when there is mutual dependence and relationship ends, property rights
should be shifted to protect more vulnerable party.
vii.V Singer͛s 3rd: Shift rights to protect vulnerable.
The more private your property is, the more you have right to exclude.
VII.V !#,-+ ++./·+
a.V Rule: A possessor often prevails against all but the true owner and a prior possessor prevails against a
subsequent possessor, but there are some exceptions such as when the owner of locus in quo has an
interest.
b.V 0ommon law forms of action:
i.V Trover: Seeking money damages for conversion of chattels.
1.V ·or a found object, money damages for conversion should always be less than the full
market value of the good because of possibility that true owner will come forward.
2.V Example: @VV ʹ P received the full value of the found stone, probably
because court decided every doubt against D.
ii.V Replevin: Seeking return of the object for conversion of chattels.
iii.V 0onversion: Interference with dominion and control, like stealing someone͛s pen.
iv.V Trespass to 0hattels: Damaging a resource or interfering with use and enjoyment.
c.V Relativity of Title: Ownership is relative to the context so look at the respective rights of the parties
involved in the litigation before us and ask who has superior title (i.e. who is the prior possessor, as
articulated in Armory v. Delamirie).
i.V Rule: Against the true owner, the finder has relatively inferior title, but against future finders,
the first finder has superior title to the good. ^
"
.
1.V 0ourts often rejects jus tertii defense: the right of possession outstanding in some third
party not a party to the litigation.
2.V True owner can acquire the good back from the finder, but if the finder sold the good
and received less than the owner claims it was worth, the true owner is out of luck.
a.V Policy: Otherwise, there are disincentives to finding goods.
ii.V Policy:
1.V Possession is often a good proxy for ownership (e.g., we don͛t carry laptop receipts
around).
2.V 0reate incentives for prior possessor to make productive use of the good, increasing the
change the true owner will learn of the good and get it back.
iii.V Exceptions:
1.V â 0
: If the true owner is (1) a voluntary bailor and (2) the wrongdoer
paid full damages, the true owner cannot recover against the wrongdoer since he
assumed the risk by making a voluntary bailment
a.V Doesn͛t apply to Armory since that was involuntary bailment. Thus, the true
owner of the jewel could recover damages from Delamirie, in which case the
true owner͛s rights would be subrogated to Delamirie.
b.V Double liability is possible against subsequent possessor if prior possessor
receives damages and skips town, and original owner goes after subsequent
possor in an involuntary bailment case.
2.V As Helmholz argues, courts often penalize thieves by giving them no rights as prior
possessors of goods against future innocent finders.
d.V Ô
+
. á
i.V Ô
. á
: True owner (
)voluntarily delivers a good to another person ( )
for a certain purpose under an express or implied-in-fact K.
1.V Remedies: Bailor is less likely to receive damages from bailee for return of good since
the bailorhad the opportunity to determine whether the bailee was trustworthy or likely
to lose the good. Since the bailor created the risk of loss, property law is less willing to
award possession to the true owner since he created the risk of loss.
2.V !
.
3.V A bailee acquires
ʹ it is revocable and thus
á
.
4.V Duties: A bailee has more duties to bailor than a possessory interest holder has to future
interest holder.
á
'
ii.V +
. á
: A bailment that arises when bailor accidentally confers possession to
another person.
1.V Remedies: Bailor is more likely to receive possession back since the bailor did nothing to
create the risk of loss.
2.V Example: ^ÊVVm ʹ This was involuntary bailment because true owner didn͛t
mean to confer possession of the brooch to Peel, the soldier. Terribly reasoned.
e.V ·
* ,
i.V 0entral Question: Whether the owner of the locus in quo should be considered the prior
possessor instead of the finder.
1.V Policy 0onsiderations: (1) promoting return of objects to true owners, (2) meeting
reasonable expectations of parties, and (3) rewarding honesty by creating incentives for
finders to pick up found goods.
a.V Theme:
. Sometimes, as in
Hannah, policy considerations can prevail over possession.
b.V Hannah v. Peel ʹ 0riticisms: Gives the finder the found broach on the erroneous
reasoning that (1) the brooch was lost, (2) the finder was honest, (3) owner
never had possession of the house since never moved into it.
2.V 0riticism: The American all or nothing approach to found property is inferior to other
countries͛ approaches like Japan with nationwide
that require finders to
turn goods in to owner of locus in quo and gives generous rewards if the property is not
claimed. American courts generally reject this approach because of obsession on
possession.
ii.V Rules of Thumb
1.V xost v. cislaid (Intentionally Placed) Goods:
a.V xost Object ʹ ·inder wins
i.V xost: Owner placed the property where it was and unintentionally lost
it. Thus, an involuntary bailment.
1.V ExampleO doesn͛t notice his watch slipped off his watch onto
the street.
ii.V xike the banknotes in Bridges v. Hawkesworth discussed in Hannah,
though Hannah reasoning was terrible because confused the
shopkeeper͛s relatively inferior title to the owner with relatively inferior
title to the finder.
b.V cislaid Object ʹ Owner of locus in quo wins.
i.V cislaid: Owner deliberately places object somewhere and fails to
return. Thus, an involuntary bailment where the owner acquires
because of the owner͛s duty to care for the
good.
1.V Policy: Owner of mislaid good is more likely to return for it than
if the good is lost, so owner should keep the good until then to
maximize the opportunity of true owner to receive the good
back.
a.V Example: O lays his watch on the sink and forgets to
pick it up.
2.V Example: The court in Hannah got this point wrong. The brooch
should have been considered mislaid since it was so well-hidden
in the windowpane. Hiding a good displays an intention to
return for it.
ii.V Example: ccAvoy v. cedina - A wallet on a table was considered
mislaid since it was intentionally placed there. The owner of the locus
in quo won.
c.V Problems with the xost-cislaid Distinction:
i.V Goods on floor could be placed there deliberately, like a purse.
1.V Example: Purse found on floor is technically lost because found
on floor since in theory goods aren͛t placed on floors. But the
purse might have been put there deliberately.
ii.V 0ategory determined by the subjective state of mind of the true owner
at the time the item left the possession of the true owner.
1.V Example: When wallet mislaid on table knocked onto shop floor
goes from mislaid to lost, it becomes nearly impossible to
determine owner͛s state of mind
iii.V 0reates incentives for finder to pretend the good is lost so he can
dispose of it.
d.V Abandoned Property
i.V Rule: ·inder gets possession and title if he exercises (1) control over the
property with (2) intent to assert ownership, with some exceptions
when the parties have
.
ii.V Abandoned: Property is abandoned when the owner (1) voluntarily and
(2) intentionally relinquishes ownership with intent to give up title and
possession.
1.V Example: O throws his old watch into garbage can beause a
battery would be too expensive.
2.V Public Place v. Private Place:
a.V Rule: The more private the place where object found, the more likely that
owner of locus in quo will win. The more public the place, the more likely object
will go to the finder.
3.V Objects ·ound Under Soil:
a.V Rule: If an object is found under or embedded in the soil, the owner of the
locus in quo wins (South Straffordshire v. Sharman).
i.V Policy: The owner of the locus in quo expects to have ownership of
buried goods.
b.V The older the good is and the less likely that the true owner can be found, the
more the owner of the locus in quo wins, such as an underground ancient boat
in Elwes v. Brigg Gas 0o. because the boat was treated as if attached to soil.
4.V ·inder is Employee of Owner of xocus in Quo:
a.V Rule: If finder is employee of owner of locus in quo, some cases hold that
employee cannot keep object because employee is acting for the employer and
has contractual duty to report object to employer, as in South Straffordshire.
i.V The understanding between the employer and agent is relevant.
!
á
1.V ·or the statutorily-stated period of time, the adverse possessor must have made an
entry. The
adverse possessor's possession must not only be actual but . It must not be shared w/ the true
owner.
'V á
'
You don't have to put the true owner on
notice, but if the true owner investigates the state of her
land, she should discover your occupancy.
a.V ·encing, cultivating and erecting a building are deemed open and notorious acts
i.V !
ii.V +"
A form of constructive notice in that a reasonable person would have
sufficient notice to make inquiries to discovery the AP.
iii.V G
something recorded, like will or deed. Not matter if not read it, but if
recorded somewhere have notice.
1'V ^
á
Adverse possessor must be there w/o the true owner's permission, and not conceding that her possession is
permitted. You must be there in possession as though you are the true owner.
aV Adv possessor must be in possession of land that isn͛t theirs and they know it isn͛t theirs
aV This is the c
of adverse possession
V Alexander: odd result ʹ party wins with bad faith intentions; loses with good faith
V Encourages honestly mistaken neighbor to lie
aV Requires that the adverse possessor act in good faith in thinking that the land was theirs.
aV Used in xutz majority, said knew 0harlie͛s shack wasn͛t on his property, said that meant no
claim of title. Shouldn͛t matter, but often does in practice.
b.V ͞claim of right/title͟ should be distinguished from ͞color of title͟ which is not a requirement of adverse
law. 0laim of title is a requirement.
'V # áG
4
expresses the necessary adversity of title
'V #
claim is based on a written instrument/judgment that is defective'
Required for adverse possession in some states, but not most.
iii.V !
An adverse possessor who occupies land under color of title has big
advantages:
1.V #
: Under color of title, adverse possessor
is said to be in constructive possession of the entire parcel at issue, not just the
part occupied.
a.V
: Adverse possession only gives ownership of the
.
2.V Shorter statute of limitations when taken under color of title.
iv.V Policy why favored: Exemplifies good faith adverse possession.
v.V Example: O owns and has been in possession of 100 acre farm since 1975. In 1990, A
entered the back 40 under color of an invalid deed from Z, who had no title to the land.
Since 1990, A has improved the back 40 acres in a manner consistent with that of a true
owner. A then moves to evict O. The section in between O and A isn͛t possessed by
anybody.
1.V A cannot evict O from section O is possessing since O͛s actual possession trumps
A͛s constructive possession under color of title.
2.V O wins the section in between because O constructively possessed the land first.
3.V !
! .
4.V
: When there are competing claims of constructive possession, the
prior possessor wins title to everything except what͛s actually possessed by the
adverse possessor.
D'V #
This goes back directly to the statutory foundation. If the true owner discovers the
of adverse
possession and takes action against the adverse possessor sufficient to interrupt the running of the statute,
by bringing for example an action to
the adverse possessor, or by exercising self-help (adverse
possessor goes to work one day, and the adverse possession is simply in the form of some kind of a crude
wooden shack, and the true owner comes during the day and tears down the shack and moves the contents
off his land,) that interrupts the running of the statute.
If the adverse possessor comes and starts actual possession , open and notorious, hostile and
under a claim of right, that may trigger the running of the statutory period to start anew.
!
:
a) Avoid Stale 0laims: A desire to avoid stale claims when evidence if faulty and hard to acquire.
b) Promotes Quiet Titles: A desire to quiet title so land can be alienable. A rational buyer will not buy land that
lacks a quiet title. (Ballantine͛s argument.) Also protects people who have relied on deed, not know it was
defective. Quiets title to land by correcting technical error in original conveyance.
c) 0ost of correcting errors: Over time, the cost of correcting errors in boundaries becomes very high (errors are
everywhere since many deed descriptions get the boundaries wrong), exceeding the benefit of correction.
d) Reward Theory: Reward the adverse possessor for putting land to productive use.
e) Sleeping Theory: Punish the idle owner. Penalize true owner for not asserting rights.
f)Prospect Theory: xand over time becomes part of peoples͛ identity according to Oliver Wendell Holmes. Thus,
the long-term adverse possessor suffers grave loss from losing the property. Similar to Hegel͛s Personality
Theory of Property, which says the self develops an identity by attaching itself to the outside world.
"0olor of title" adverse possession refers to a claim founded on some kind of written instrument or judgment that
was defective or invalid for some reason. If you enter on someone else's land that you do not own but you
Ê
you own, because you're relying upon some legal document that purports to you title, that is color of title
adverse possession.
0oT adverse possession -
1.V Shorter limitation period
2.V "0onstructive" adverse possession given to adverse possessor
All states provide by statute that they will
the statute of limitations if certain disabilities exist
If a person with a cause of action is within the age of minority, insane, imprisoned, whatever, then after the
original statute of limitations runs, they might get an additional 10 years
the disability is removed.
Also, successors get the extension if the original owner was disabled and then died.
When in the following examples would the adverse possessor acquire title under a statute with a 21 year statute of
limitations and a 10 year extension for disability?
1.V O is insane in 1984. O dies insane and intestate in 2007.
a.V O's heir, H, is under no disability in 2007.
ANSWER: 2017. disability removed in 2007, thus H gets 10 years.
b.V O's heir, H, is six years old in 2007.
ANSWER: 2017. Disabilities are
V
V
Ê.
2.V O has no disability in 1984. O dies intestate in 2002. O's heir H is two years old in 2002.
ANSWER: Statute runs out in 2005 (21 years.) O was under no disability when the statute began to run. Any
disability is ignored.
3.V O is five years old in 1984. In 1994 O becomes mentally ill, and O dies intestate in 2009. O's heir, H, is under
no disability. Does the adverse possessor here acquire title in 2005, 2007, or at some later date? If the
answer is 2005 or 2007, how are O's interests to be protected?
aV 0ould be 205: statute of limitations starts in 1984, and 21 years later runs out
aV But you can't use 2005 cause it ignores O's subsequent mental illness
aV It could be 2007, b/c in 1984, when the cause of action accrued, O was only 5, which is a disability which
was removed in 1997 and ten years later was 2007.
The conventional wisdom is that if it is either the date produced by the basic statutory period of 21 years or
the disability statute (plus 10 years,) you go with whichever is longer.
Reason for this is that if O was under a disability when the cause of action accrued, and the basic limitation
period was 21 years and it was removed 21 years and 6 months later, does O have six months or 10 years?
We say it's the longer of the two to avoid giving an VÊ
period of time to the owner or
the owner's successor
The sleeping theory doesn't require that we use the earlier date. Since the owner was under a
disability (and by definition
assert her rights any earlier) there's no policy justification for
using the earlier date.
4.V O disappears in 1997 and is not heard from again. You represent B, who wishes to buy from A, our adverse
possessor. What advice do you give to B?
You're in a bit of a quandary. O may have wandered off suffering from a mental disability that qualifies as a
disability under the statute. So O might have a good claim that will go on for some time. What do you do?
See if, in your jurisdiction, there's a statute that establishes a
VV
Ê following their
disappearance for a period of time.
In lieu of that, see if you can get insurance against the risk of loss imposed here.
@ m
a.V Rule: Adverse possession of chattels is possible if the true owner brings no claim within the statute of
limitations (which differs greatly from jurisdiction to jurisdiction).
b.V Problem: Devising a fair solution for true owners and bona fide purchasers since (1) there is no
registration system for valuable chattels like there is for land and (2) chattels are easily moved and
hidden
c.V Bona ·ide Purchaser (B·P): One who has in good faith paid valuable consideration (
) for property without adverse possession claims.
aV )
'
V Always applied when seller has stolen the property. (X steals car from P and sells to Y, who
ultimately sells to O for ·cV and D not know stolen. P may recover car from D because
possessor of STOxEN goods never can convey good title even if B·P.
aV Ô
: If goods are acquired from TO not by outright theft but by less blatant
forms of dishonesty, B·P may be protected.
V B·P who takes from someone with voidable title (as opposed to the void title of thief) will be
protected. (B obtains goods from A by fraud, B gets voidable title and sells to 0, a B·P, A cannot
get back.
aV Owner can still recover as long as still in hands of one with voidable title. Once voidable
titleholder transfers them to B·P, TO͛s right extinguished.
aV Voidable title is acquired when the bailee entered into a voluntary arrangement with
the bailor and, through fraud or misrepresentation in some way, acquired possession,
such as by writing a bad check. A bona fide purchaser of a good from a person with
voidable title acquires ownership. ^
-##&D 1
$ÿD.
V Example: A car owner who entrusts a good with a car dealer to make
repairs, but the dealer sells it. The dealer would have voidable title and
whoever bought the car from the dealer would have good title.
V -##6&D 11(
V if an owner entrusts an item to a ͞merchant who deals in goods of that kind͟ ʹ the merchant
has the power to transfer all rights of the entrusted to a buyer in the ordinary course of
business. )·
'
P, claims that her painting was stolen from gallery in 1946 ʹ D, present possessor, claims the painting was in
father͛s house in 1941-43, father had relationship with gallery͛s owner. O͛Keeffe brings case to recover the painting.
^No ʹ P still has claim under the Discovery Rule for S of x'But due diligence requirement is ambiguous. Six
Years from Time of Theft: Applied by the trial court in O͛Keeffe v. Snyder to say P loses since only had
from the time of theft to claim the good, so P lost at trial court level.
Six Years from Time Adverse Possession ·ulfilled: Applied by the Appellate Division in O͛Keeffe. Six years from
the time the elements of adverse possession are established.
á
. 0ourt says here that
instead of imposing burden on present possessor (xike in AP), imposes burden on TO, a burden easily met by
exercising due diligence ot find painting. ͞open and notorious͟ different for chattels because easier ot hide, so
given more time/leeway to TO.
!
#
*
1.V
GSofx begins to run when TO knows/reasonably should have known through
should have discovered facts which form the basis of a cause of action
aV emphasis on the conduct of the TO rather than on the conduct of the possessor
aV As in O͛Keeffe, it͛s unclear whether due diligence is required from the time the painting is stolen or
the time when the P could have reasonably known the possessor of the lost chattel. ·or instance,
what if P gave up for a while because the chattel was hidden, but the painting resurfaced decades
later? Has the statute of limitations for claiming the lost chattel run out? It͛s ambiguous.
aV As long as excercising DD, the statute does not run.
aV Encourages adverse possessor to keep chattel hidden because all the efforts taken to find it.
V /
04áGSofx begins to run when the TO demands the return and good faith purchaser
refuses
aV No obligation on the TO to locate the whereabouts of the chattel or identity of the possessor with
due diligence
aV Protects the TO to a greater extent ʹ no requirement on their behalf to use due diligence
aV But allows TO to wait until forever before bringing a claim, decreasing buyers͛ certainty in buying
artwork since TO could appear and demand it back at any time.
V *: Applied in equity courts as alternative to the statute of limitations.
Allows a possessor to keep the good if it͛s been kept so long that it would be inequitable
to make the possessor return it (though today inequitable period is similar to the statute
of limitations).
V Policy: ·orces true owners to act, not sit on their rights. Increases certainty in
purchasing chattels like artwork that buyers are getting a good title.
aV
á
á
$
d.V Rule: Adverse possession of chattels is possible if the true owner brings no claim within the statute of
limitations (which differs greatly from jurisdiction to jurisdiction).
e.V Problem: Devising a fair solution for true owners and bona fide purchasers since (1) there is no
registration system for valuable chattels like there is for land and (2) chattels are easily moved and
hidden
f.V Bona ·ide Purchaser (B·P): One who has in good faith paid valuable consideration (
) for property without adverse possession claims.
aV )
'
V Always applied when seller has stolen the property. (X steals car from P and sells to Y, who
ultimately sells to O for ·cV and D not know stolen. P may recover car from D because
possessor of STOxEN goods never can convey good title even if B·P.
aV Ô
: If goods are acquired from TO not by outright theft but by less blatant
forms of dishonesty, B·P may be protected.
V B·P who takes from someone with voidable title (as opposed to the void title of thief) will be
protected. (B obtains goods from A by fraud, B gets voidable title and sells to 0, a B·P, A cannot
get back.
aV Owner can still recover as long as still in hands of one with voidable title. Once voidable
titleholder transfers them to B·P, TO͛s right extinguished.
aV Voidable title is acquired when the bailee entered into a voluntary arrangement with
the bailor and, through fraud or misrepresentation in some way, acquired possession,
such as by writing a bad check. A bona fide purchaser of a good from a person with
voidable title acquires ownership. ^
-##&D 1
$ÿD.
V Example: A car owner who entrusts a good with a car dealer to make
repairs, but the dealer sells it. The dealer would have voidable title and
whoever bought the car from the dealer would have good title.
V -##6&D 11(
V if an owner entrusts an item to a ͞merchant who deals in goods of that kind͟ ʹ the merchant
has the power to transfer all rights of the entrusted to a buyer in the ordinary course of
business. )·
'
P, claims that her painting was stolen from gallery in 1946 ʹ D, present possessor, claims the painting was in
father͛s house in 1941-43, father had relationship with gallery͛s owner. O͛Keeffe brings case to recover the painting.
^No ʹ P still has claim under the Discovery Rule for S of x'But due diligence requirement is ambiguous. Six
Years from Time of Theft: Applied by the trial court in O͛Keeffe v. Snyder to say P loses since only had
from the time of theft to claim the good, so P lost at trial court level.
Six Years from Time Adverse Possession ·ulfilled: Applied by the Appellate Division in O͛Keeffe. Six years from
the time the elements of adverse possession are established.
á
. 0ourt says here that
instead of imposing burden on present possessor (xike in AP), imposes burden on TO, a burden easily met by
exercising due diligence ot find painting. ͞open and notorious͟ different for chattels because easier ot hide, so
given more time/leeway to TO.
!
#
*
1.V
GSofx begins to run when TO knows/reasonably should have known through
should have discovered facts which form the basis of a cause of action
aV emphasis on the conduct of the TO rather than on the conduct of the possessor
aV As in O͛Keeffe, it͛s unclear whether due diligence is required from the time the painting is stolen or
the time when the P could have reasonably known the possessor of the lost chattel. ·or instance,
what if P gave up for a while because the chattel was hidden, but the painting resurfaced decades
later? Has the statute of limitations for claiming the lost chattel run out? It͛s ambiguous.
aV As long as excercising DD, the statute does not run.
aV Encourages adverse possessor to keep chattel hidden because all the efforts taken to find it.
- V /
04áGSofx begins to run when the TO demands the return and good faith purchaser
refuses
aV No obligation on the TO to locate the whereabouts of the chattel or identity of the possessor with
due diligence
aV Protects the TO to a greater extent ʹ no requirement on their behalf to use due diligence
aV But allows TO to wait until forever before bringing a claim, decreasing buyers͛ certainty in buying
artwork since TO could appear and demand it back at any time.
V *: Applied in equity courts as alternative to the statute of limitations.
Allows a possessor to keep the good if it͛s been kept so long that it would be inequitable
to make the possessor return it (though today inequitable period is similar to the statute
of limitations).
V Policy: ·orces true owners to act, not sit on their rights. Increases certainty in
purchasing chattels like artwork that buyers are getting a good title.
aV
á
á
$
!"
)
Here, as in contracts, we have certain requirements that serve basic functions
Three requirements for a gift to be valid:
1.V
You intend to bind yourself â. Not at some point in the future. You intend to part with dominion
and control, giving it to the donee.
'V
Analogue to consideration in contracts
0omes in three flavors:
aV canual deliveryV
aV If the object of the gift is capable of being physically, manually delivered, it
be.
No substitute for manual delivery will be accepted where manual delivery is
possible.V
aV Handing over the object makes vivid and concrete to the donor the significance of
the act performed. This is the
in the law of gifts.V
aV The act is unequivocal evidence of a gift to the actual witnesses to the transaction.
This is the
. V
aV Delivery of the object to the donee gives the donee, after the act, prima facie
evidence in favor of the alleged gift. Also the
.V
aV 0onstructive deliveryV
aV Giving the donee the VV (keys to a car)V
aV ·or when something is to big to pick up and manually hand overV
aV Symbolic deliveryV
aV When manual and constructive can't be had, you write a piece of paper saying "I
hereby give you my painting of water lilies"V
'V Example: O writes a check to B on her checking account and hands it to B. Before B cashes the
check, O dies.Result: No gift. The check was only a promise to pay and the money was
revocable ʹ O could have ordered the bank not to honor the check. xoss of dominion and
control with cashing to check.
'V Example: Robert leaves a note in safety deposit box that says, ͞Upon my death, the contents of
this safety deposit box shall go to Joan.͟ Result: No gift. Because note said ͞upon my death͟
there was no present transfer of property interest. This is just an invalid will since not
witnessed, a mere statement of donative intent which isn͛t enforceable. Did not give up
dominion and control.
'V Example: O owns pearl ring, but accidentally leaves it on sink of daughter A͛s house. When A
calls to report the ring, O tells A to keep it, but later changes her mind. Under traditional rule, O
has not made a gift to A because no donative intent at the time of delivery. But most courts
wouldn͛t reach this result because of a
. Otherwise, cases like this are terrible because they place
á
.
'V Once transfer of gift occurs, the donor can͛t change his or her mind ʹ the donor has lost all
property interest in the good unless donee let͛s the donor have it.Example: O owns pearl ring,
but leaves it accidentally on A͛s sink. A doesn͛t call, but surprises O by showing it to O the next
time O visited. O says A can have it, borrows it back, and is killed. A sues O͛s executor for the
ring.Result: A wins because A acquired title from O. O only had possession, not title, when
killed. This assumes the court relaxes the delivery requirement.
V
There is a clear trend AWAY ·ROc the insistence on manual delivery, reflected in statutes in some
states.
0alifornia statute: symbolic delivery by writing is permitted.
3.V !
aV Presumed
aV Acceptance is almost an issue
)
á
is a gift made in contemplation of and expectation of immediate death, there must be an
intention to make a gift and actual delivery of that gift.
A gift causa mortis is conditional on the donor dying. If the donor recovers, then the gift is revoked.
)
)
á
The court worries that people might use a gift causa mortis as a way of the very stringent requirements
required for wills (most notably the witness requirement.)
aV
: if a person dies intestate without heirs, the person͛s property went to overlord in feudal times.
Now such property escheats to the state.
aV
: A unit for measuring ownership, both size and time. An estate last forever, it is an independent
entity, independent of both the owner and the thing that is owned.
aV +: Blood descendents. You can talk about someone͛s issue while they are still alive (unlike heirs).
Property goes to children, if no children then parents, if no parents then to others.
aV ·
+
: A present existing property interest to possess property in the future
aV
: man who leaves a will
aV
: woman who leaves a will
aV +
: lacking a valid will at time of death. cost states say property goes to issues first. If there is no
issue then goes to the parents (ancestors) and if dead then to collaterals (lateral level, brothers, sisters,
etc).
aV ^
: Those that inherit if a person who dies (the
( is intestate. Usually limited to
(those in the immediate bloodline like parents and children ʹ children are ) and
(non-
lineal relatives such as cousins and uncles). While a person is alive, he or she has no heirs, only
á
ʹ no one is heir to the living).
aV G
: interest in land or things attached it (real estate).
aV !
: going up
aV : person who has real property to them, ie take under a will.
aV *
` person who has personal property
Ê to them, ie take under a will.
aV ! : to transfer property to another by gift, sale or will.
aV Ô
: an interest that either confers a present right to possession, use, or enjoyment of the property or
is sure to confer such a right in the future.
A.V Non-freehold
a.V xeasehold
b.V cere leases
B.V ·reehold
a.V ·ee simple
i.V Inheritable
ii.V Alienable (freely) ʹ can transfer to whomever you want
iii.V cay last forever
iv.V In old times words of inheritance/limitation (͞and his heirs͟) required. These not required today,
but if you see them, remember ͞and his heirs͟ gives nothing to the heirs at that time.
1.V ͞to the heirs of B͟ were words of purchase and limitation in old days interpreted as to
B͛s heirs and their heirs.
2.V ͞to A͟ ʹ words of purchase ͞and his heirs͟ ʹwords of limitations.
3.V Words of purchase tell you who has the interest.
4.V Words of limitation define the estate.
5.V If I say ͞To A and his heirs͟ creditor͛s cannot attach property for debt accumulated
through A͛s heirs to be.
b.V ·ee tail
i.V ͞to A and the heirs of his body͟ or ͞to A and his issue͟
ii.V Heirs limited to lineal descendants (no parents, aunts, cousins)
iii.V Always followed by remainder (expressly stated) or reversion to O.
iv.V Stifles alienability.
v.V Only 4 states still have the fee tail b/c it perpetuated wealth.
1.V Now easy to unlock fee tail in these states to make it ·S.
vi.V What happens to fee tail in states abolishing it?
1.V 0onvert fee tail to ·S absolute.
2.V If line runs out w/ person currently having fee tail (A) then the land goes to the
remainder or reversionary interest at A͛s death, otherwise A gets ·S.
c.V xife estate
i.V Good for life of the life tenant or pur autre vie (life estate valid for the life of another, not
necessarily possessor of land).
ii.V 0ourts generally do not order sale of land subject to legal life estate unless interested parties
consent or if the sale is to serve the best interests of all parties (life tenant and
remaindermen).
iii.V xaw of Waste (pg 201)
1.V A cannot use property in manner that unreasonably interferes w/ expectations of B
(who takes land after A)
2.V Affirmative Waste: Injurious acts that substantially reduce land value.
a.V cinerals may only be extracted if they were being extracted at the time the
interest was created.
b.V Open mines doctrine
3.V Permissive Waste: Not taking reasonable care of property.
4.V The law of waste is a mess and is unpredictable b/c it is too estate and property
dependent.
iv.V Don͛t give legal life estates, put them in trusts! This prevents all law of waste problems, b/c
trustee may sell property!
=
aV Typically controlled by state statute
aV
usually ½ share (NY: 1/3)
aV + (children, grandchildren, etc ʹ all further descendant)
V #
typically divide half of estate
V
#
issue of children take by representation
V )
take nothing if parent is alive
V !
#
treated as biological children
aV
V if decedent dies with issue ʹ parents take nothing
V if decedent dies with spouse and no issue ʹ parents take ½
V if decedent dies w/o spouse or issue: parents take al
aV )
V Take when decedent leaves no issue and no parents and no siblings
V Treated as units (ie suppose only heirs are widower paternal grandfather and married maternal
grandparents ʹ paternal gf takes 50% and married set takes 50%)
aV #
(brothers, cousins, uncles, aunts, etc)
V take under complex statutory laws if decedent leaves no issue, spouse or parents
V take by representation of parents, grandparents
· á
ÿ ·ee simple determinable states language in durational terms ("to the school district so long as
it is used for classroom teaching purposes.")
"So long as," "until," "while"
A "fee simple subject to conditions subsequent" states the event in terms that tell you that,
when that event occurs, then the grantor or someone else has a right to come in and retake possession of the land.
The tip off is language like "but if." "To A, but if A ever smokes tobacco." Or, "To A,
, if A ever smokes
tobacco͙"
These are
terms
1 ·ee simple subject to executory limitation. The same instrument that transfers the defeasible
fee simultaneously transfers some future interest to a third party, such that the grantor has not retained a future
interest himself. That future interest given to a third party is called an
V
.
O conveys to "A and her heirs; but if A ever smokes tobacco, then to B and his heirs."
The defeasible fee is followed by executory interest (the interest that is given to B.)
If A smoke, the fee simple
á
' In this regard it's like a fee simple determinable. B does not
have to show up and exercise a right of entry. The termination does not wait upon action of anybody else.
·--G+G
G
·
+
a.V Definition: ·uture interests are presently existing property interests. The word future only refers to when the estate
becomes possessory.
b.V Proper classification has two parts: (1) the future interest created and (2) what type of estate will be created when
and if the future interest becomes possessory.
c.V Where there is ambiguity as to what future interest is created, courts will usually be guided by the type of defeasible
fee rather than the type of reversionary interest that is created. If it͛s feasible to construe as either ·SD or ·S0S, the
latter is preferred
d.V G
+
ʹ Kept by Grantor and
i.V G
: The interest remaining in the grantor, or in the successor in interest of a testator, who transfers a
vested estate of lesser quantum than that of the vested estate which he has.
1.V Quantum of Estates: (1) fee simple, (2) fee tail, (3) life estate, and (4) leasehold.
a.V Example: O conveys ͞to A for life, then to B and the heirs of her body.͟ In a state that
recognizes the fee tail, O keeps a reversion because an estate of lesser quantum.
ii.V G
: Whenever future interests are contingent remainders only, there must be a technical
reversion even though it will never become possessory.
1.V It can arise by operation of law, even when the vesting of one contingent remainder necessarily
precludes the vesting of the other and there is seemingly no circumstances in which possession
might come back to the original grantor.
a.V Example: O ͞to A for life, then to B and her heirs if B survives A, and if B does not survive A,
to 0 and his heirs.͟ Here, O has a reversion even though B and 0 have alternative contingent
remainders.
iii.V
G
: The interest that arises when an owner carves out of his estate a determinable
estate of the same quantum. It is a future interest remaining in transferor or his heirs when ·SD is created.
1.V Example: O conveys Blackacre to Town xibrary Board so long as used for library purposes. O has a
possibility of reverter.
iv.V G
á
( When an owner transfers an estate subject to condition subsequent
and retains the power to cut short or terminate the estate.
1.V Example: O conveys Whiteacre to Town xibrary Board, but if it ceases to use the land for library
purposes, O has the right to reenter and retake the premises.
e.V &G
+
ʹ ·uture interests created in a grantee. Never divest preceding estate. catters because
(1) vested remainder accelerates possess, (2) transferability since at common law contingent remainders weren͛t
transferable although this isn͛t true in most states today, (3) destructibility rule which has been abolished, and (4)
G!
ʹ the
.
a.V Gá
)
A future interest that is capable of becoming (immediately) possessory at the termination of
the prior estate (as opposed to executory interests which can take affect only by divesting another interest; i.e. not
immediately possessory)
1.V Remainders are either
or
.
&
1) Remainder or Executory? (capable of becoming possessory immediately?)2) Kind
of Remainder? (contingent or vested? Are the takers born and ascertained?) 3) If vested ʹ how?
(indefeasibly? Subject to open? Subject to complete defeasance?)
ii.V Ô
Gá
: In possession ʹ once possessory, an estate is vested. In interest: An interest is vested if it
is (1) given to an
person (born and identified) and (2) is
2
(a
condition precedent is set out within the description of a particular estate and must be satisfied before that
estate can become possessory) other than the natural termination of the preceding estate.
1.V
a.V + Ô
: Holder of remainder is certain to acquire a possessory estate at some
time in the future and is also certain to be entitled to retain permanently thereafter the
possessory estate so acquired.
i.V Eg ͞to A for life, then to B and her heirs͟ B has indefeasible vested remainder
interest as he is certain to take possession on A͛s death. Interest is vested: If B
predeceases A ʹ B͛s heirs/devisees are entitled to possession
b.V Ô
2
404Ô
2
á
(: 0lass gifts.
Remainder is vested in a class of persons, at least one of whom is qualified to take
possession but shares of the class members are not yet fixed because more persons can
subsequently become members of the class.
1.V Example: To A for life, then to B͛s children. B has one child (X) at time of
conveyance. A has life estate, B has vested remainder subject to open, and
unborn children have an executory interest.
2.V Example: To A for life, then to A͛s children who shall reach age 21. B is now
15.When child B reaches age 21, he has satisfied the condition precedent
and now has a vested remainder in fee simple. If child 0 is born, 0͛s interest
does not automatically vest; rather, 0 has an executory interest because if 0
does satisfy condition precedent and reach age 21, the vesting in 0
simultaneously partially divests B͛s interest.If A dies after child D is born, B
and 0 now have a fee simple subject to an executory limitation, with an
executory interest held by D.
3.V !
4.V Sometimes have rule of convenience where clas closes as soon as 2 person
entitled to take possession. cOST O· THE TIcE NOT APPxI0ABxE.
c.V Ô
2
#á
á
: Remainder is either vested subject to being
divested by the operation of a condition subsequent or vested subject to a divestment by an
inherent limitation of the estate in remainder.
1.V â
5
á
á2
á
á
á
.
2.V Remainders that have vested but may be divested on the happening of an
event
a.V ͞to A for life, then to B, but if B drops out of law school, then to 0͟B
has a vested remainder in ·S ʹ but interest is divested if she drops
out of law school
b.V ·
2
2
á
á
3.V Ô
2
* á
: Remainder is subject to durational
limitation.
1.V Example: To A for life, then to B for life. B has a vested
remainder subject to limited defeasance.
ii.V Ô
á
#
(
language that merely refers to the termination of the preceding estate (͞to A for life, and on A͛s death, to
B͟). 3)
unless expressly stated. E.g. ͞to A for life, then to A͛s issue, and if A dies w/o issue to B͟. B͛s
remainder is contingent to A dying w/o issue ʹ not on B surviving. If B predeceases A ʹ B͛s devisees/heirs take the
interest
a.V Anytime you have a life estate followed by a contingent remainder in a fee simple, then there must be a reversion in
a fee simple. .
á
.
b.V â
á
á
.
ii.V á: O conveys to A for life, then to A͛s children and their heirs, but if at A͛s death he is not
survived by any children, then to B and her heirs.͟ A is alive and has no children. G
: A has
life estate, A͛s children have contingent remainder, B has contingent remainder, and O has
reversion. .
!
, the remainder vests and O͛s reversion disappears.
1.V Suppose A has 0 and D, but 0 dies before A. At time A dies, D and B survive. ^
#
have title in fee simple absolute because the condition was only that one child
survive, so by D surviving, 0͛s successors take.
a.V Example: ͞to A for life, then to B and her heirs if B survives A, and if B does not
survive A to 0 and his heirs.͟ B has a contingent interest because the condition
is part of her estate͛s description.
b.V Example: T devises $10,000 ͞to my cousin, Don xittle, if and when he survives
his wife.͟ State of Title: 5
á2
á
.
c
xE in A and a remainder in A will merge unless (i) there is an intervening estate or (ii) the remainder
in A is subject to a condition precedent to which his xE is not subject. Under doctrine of merger, if a life estate came into
hands of the person who held next vested estate in fee simple, then the life estate would merge into next vested estate
in fee simple. xife estate would be destroyed and any contingent remainder that in between would be destroyed.
##-GG !
Rule: 0oncurrent estates are estates in which multiple people share simultaneously the right to ownership and
possession.
b.V Three ·orms: (1)
áá
(, (2) 2
(
),
and (3)
(.
i.V Difference between tenancy in common and joint tenancy: 2
áá
.
ii.V
G
: The right of the survivor to get the land completely after the other dies
, which explains the
popularity of joint tenancies.
c.V #áá:
i.V Rule: Each tenant in common owns by
(not by the whole) and has a
interest in the property that
.
1.V codern Rule: ·avored by modern courts because they increase the alienability of land.
ii.V No Surviorship: Tenants in common have no survivorship rights; when one tenant in common
dies, his interest passes to successors in interest.
iii.V Equality of Shares: Presumption is that tenants͛ shares are equal, but this presumption can be
overcome by evidence that unequal shares were intended.
1.V Example: if A puts up ¾ of purchase price and B puts up ¼ purchase price, likely that
parties will have undivided interests proportionate to the consideration each paid
d.V
:
i.V Rule: Each tenant owns by ÿ(
(
.
ii.V Equality of Shares: All tenants must have an "
to create a joint tenancy.
iii.V 0reation: j VV
ÊVV
V
V
V
V
V V
VV
V
V
VV
V
. To be safe, just say: ͞To A and B as joint tenants and not
as tenants in common.͟
a.V Example: ͞To A and B jointly͟ ʹ this does not create a joint tenancy since not
specific enough. Will be read as creating a tenancy in common.
2.V VV
: To create a joint tenancy, you can also use a straw, such as by conveying
to the straw and having it conveyed back to you as a joint tenant with another person.
iv.V Survivorship: When first of tenants dies, his/her share terminates and the surviving joint
tenant(s) take their interest entirely free of the claims of the deceased joint tenant and without
going through probate. However, 2
2
á, defeating survivorship and creating a tenancy at common.
1.V Example: A and B are joint tenants. When A dies, B gets everything, even if A tried to
devise the land to another.
2.V +
by devising to A and B as
joint tenants for their joint lives, remainder to the survivor. This is indestructible
because the survivor gets the whole estate and therefore has a presently existing future
interest.
3.V Uniform Simultaneous Death Act has been modified to say that the new default rule is
that there is a 120 hour survival requirement. You must survive the other party by 120
hours and unless you do, one-half the property is distributed as if A has survived and the
other half as if B has survived.
v.V Severance: A joint tenant can unilaterally end a joint tenancy
, converting a
joint tenancy into a tenancy in common with no right of survivorship.
5
"
á
á0
0
2
.
1.V /
2
áá'
xeads to problems, as in the wife͛s actions in Riddle v. Harmon (though wife was able to
create a tenancy in common, but was very lucky to get a favorable court ʹ most courts
wouldn͛t have done this).
vi.V Requirements (·
-
)
1.V Time: interest of each tenant must be acquired/vest at same time.
2.V Title: all tenants must acquire title by same instrument or by a joint adverse possession.
a.V Thus, people who inherit by intestate succession inherit as tenants in common,
not as joint tenants. People who take under a will have to take under the same
instrument. Heirs take by an act of law ʹ a statute. Devisees take under the
same instrument ʹ a will.
3.V Interest: all must have equal undivided shares and identical interests measured by
duration.
4.V Possession: Each must have right to possession of whole
vii.V Examples
1.V A, B, and 0 as joint tenants. Subsequently, A conveys to D. B then dies intestate, leaving
H as an heir.
a.V State of Title: When A conveyed to D, D got a 1/3 interest as tenant in common,
leaving B and 0 with a 2/3 interest in joint tenancy. Vis-à-vis to A, they would be
tenants in common. ^
02
.
2.V A and B are planning to get married. Two weeks before the ceremony, they buy the
house and take title in A and B as tenants by the entirety. Several years after the
marriage, A moves out of the house and conveys his interest in the house to his brother
0. 0 brings an action to partition the property.
a.V State of Title: 0 wins because A and B couldn͛t have taken as tenants by the
entirety since they weren͛t married at the time. Thus, they took as either
tenants in common and joint tenants, both of which lets A convey his interest
elsewhere.
i.V A and B could avoid this problem by buying as joint tenants, conveying it
to a trustee, and having the trustee convey it back to them as tenants
by the entirety after the marriage.
e.V
:
i.V Rule: A tenancy by the entirety allows tenants
,
conferring a right of survivorship.
ii.V 0reation: In most states,
á
'Disfavored
because of: (1) difficulty of physically dividing land precisely according to shares and (2)
difficulty of assessing owelty payments compared to dividing the market price.
a.V If not possible to divide according to respective shares, the party getting a larger
than deserved share must pay
to the other party as an equalization
payment.
b.V Example: VV ʹ The 0onnecticut Supreme 0ourt ordered an in-
kind partition, but D got the short end, having to pay owelty and getting less
than her fair share of acreage. D owned 45/144 interest, but only got 1 acre
while Ps got 19 acres, and D had to pay owelty anyway.
2.V By Sale: 0ourt puts up the land for auction, with proceeds divided according to owners͛
shares.
m
O opens a joint bank account with $5000 with both O and A having access:
+
.0!
V
@
V equal access/ownership in the amount on deposit ʹ right of survivorship
V
$this is the presumption when the joint tenancy card at the bank is completed
V
!m
"
@
V A possesses no right to withdraw money ʹ only survivorship rights (like a will)
V Avoids probate
V
á
$rebuttable by clear & convincing evidence to the contrary
V form will not control ʹ courts allow extrinsic evidence to establish explicit intentions of O. Has all these
weird forms because can͛ tjust have them say ͞A payable to death to B͟ because sounds like a will, need
witnesses and formality of execution etc. Banks don͛t want to be bothered with this.
-
á
#: in certain states, the ambiguity is avoided because the code authorizes financial
institutions to offer any combination of the above.
*
!"
##$
#%
a.V History: Rental agreements used to be determined solely as contracts and nothing more. In the 1960s,
this changed ʹ landlords started having responsibility for the care and condition of the rental property,
and thus the law transitioned from property to contract law. Today, rental agreements are a hybrid of
property law and contract law since technically a
2
·
, a lease
for over one year must be in writing to be valid.
b.V Types of Tenancies: (1) term of years, (2) periodic tenancy, (3) tenancy at will, (4) tenancy at sufferance
(holdover).
iii.V
á/
: A lease for a duration, with an
.
1.V Notice:
is required to end term of years ʹ it ends automatically.
a.V Example: x leases Whiteacre to T for one year, beginning October 1. On
September 30 of next year, T moves out.
50
"
á
.
iv.V
: A lease for a fixed period, but tenancy
á
unless a party
gives adequate notice of intent to terminate the tenancy.
1.V Notice: At common law, periodic tenancies of á
5
required: (1)
á
5
and (2)
"
to be effective. Would hold them on hook until effective notice given that
stated effective last day of period. Today, notice will be read as giving notice to vacate
.
i.V Example: T has month to month lease and gives notice on Nov. 16,
saying T will vacate on Nov. 30. cost courts will hold T liable for
December͛s rent, but no more, conferring notice to Dec. 31.
b.V If the period was for less than a year, than the notice has to be for the
, but not more than six months, and terminate the tenancy on the
final day of the period (though some states have relaxed this requirement).
i.V Example: A month-to-month tenancy has 30 days notice required,
though jurisdictions differ on whether it has to fall on the final day of
the rental period.
2.V Examples:
a.V x leases Whiteacre to T from year to year, beginning on October 1. As a periodic
tenancy, six months͛ notice is required, so notice must be given by carch 30 or
else lease is automatically renewed.
b.V x leases Whiteacre to T at an annual rental of $24,000 payable $2,000 per
month on the first of each month. (periodic tenancy with period of 1 year or 1
month, depending on the jurisdiction).
v.V
â : A lease of no fixed period that endures so long as both landlord and tenant
both desire.
1.V Notice: codern statutes require notice in order for a party to end tenancy at will, but
notice not required at common law.Both sides á
(if a tenancy isn͛t terminable by only one party, it is not a tenancy at will).
a.V Ends at death of either party.
vi.V
(^
): The tenant remains in possession (holds over) after
the end of the formal lease, preventing landlord from using property (leaving furniture and
circumstances beyond tenant͛s control aren͛t enough to create a holdover).
1.V xandlords have two options: (1)
á
( and (2)
4 á (
(usually a
, not
just the old lease period) for á
xandlords must pick one and
cannot change mind, as in ÊVVmV.
a.V Example: ÊVVmVVV
Ê ʹ cississippi Supreme 0ourt said that
landlord treated tenant as trespasser but fails to eject tenant creates a month to
month periodic tenancy by cashing rent check. Implied consent: the exception
and cashing of rent checks beyond the termination date
b.V â
3
5
7
i.V
1.V Periodic tenancy (modern/majority approach). Period
determined by manner in which rent was paid (usually
monthly). All other terms other than duration apply from
previous tenancy.
2.V Term of years (minority approach). Term of years determined
by old lease agreement ʹ á
á
h.V Rule: Discrimination in tenant selection is controlled by federal, state, and local statutes. State and local
statutes may be more protective against discrimination than federal law, but
less protective.
i.V
(1968):'
á
á
. å prohibits discrimination on the basis of
á
(last added by amendment in 1988 (see pp. 376-377).
á
.Applies to
á
in provision of
services.
i.V ceaning of Terms:
1.V Dwelling: Does not include a place that is not a residence for a significant period of time.
a.V Example: A hotel would not be covered by the term, but a single room
occupancy hotel or a college dorm would be covered by the term.
2.V ·amilial status: Specific exception which allows for the creation of housing intended only
for the elderly.
3.V Handicap: Includes people with AIDS and people with HIV. .
áá
á
á
5
á under 3602(h). Handicap defined as ͞a
physical or mental impairment that substantially limits one or more of major life
activities of the individual.͟
4.V Reasonable accommodation: If the landlord produces evidence that the tenant͛s
presence constitutes a direct threat to health/safety of other individuals in the building
or on the premises, or would result in substantial property damage, then the landlord
may refuse to rent or can even evict the tenant. Owner with no pets policy might have
to accommodate a blind tenant with a seeing eye dog. But if tenant playing music too
loud, not wear hearing aid, can evict.
ii.V !
á
(§ 3604(c)): Prohibits any oral or written statement of landlord indicating a
preference, limitation, or restriction on the basis of discrimination. c
'c
5
á
under 618 1(.
1.V Ads that regularly suggest the prominence of one race in an area are forbidden, such as
regularly using only non-minorities in ads for home buyers, regardless of intent.
2.V Standard used is the ordinary reader or the ordinary listener standard, which is a
question of fact to be determined by jury. Although a plaintiff need not prove intent to
discriminate, here intent may be relevant to evaluating the ordinary reader/listener
standard.
a.V Example: Ad says ͞·urnished basement apartment in private white home.͟ This
seems illegal under §3603(a)).because an ordinary reader would see this ad as
indicating a racial preference, but isn͛t because of the c
'c
§3603(b)(2)) for home-owners renting out space in house they occupy and
because it͛s a single family home rented by owner under §3603(b)(1)). .
§3604(c) since implies a preference based on race.
iii.V Exceptions:
1.V +1
á á (s. 3603 b1). Therefore, statute only applies to
those whose main business is such sales or rentals - needed in order to get statute
through 0ongress because seen as radical change in the law.
2.V crs. curphy Exception: Rooms or units in dwellings containing living quarters occupied
or intended to be occupied by no more than four families living independently of each
other, if the owner actually á
one of the living quarters as her
residence ('18 1). Policy: political compromise and principle of associative
autonomy.
á
18 D($
á
á
because of exception in § 3603(b).
iv.V
á· #
·^!
18 D((refuse to rent or sell) and
18 D( (discrimination in privileges and conditions of rental or sale):
1.V Discriminatory Treatment: Usually where P claims D discriminated against P on the basis
of race or one of the other proscribed bases of discrimination
.
a.V Elements of Prima ·acie 0ase: (1) cember of Protected 0lass, (2) Qualified to
rent/purchase (property eventually rented or purchased to person similar
except for not being in class), (3) Rejected although housing remained on
market.
b.V Once prima facie case established,
á
2
. Plaintiff then
opportunity to show that a defendant͛s stated reason for denying plaintiff
rental/purchase was pretextual.
2.V Disparate Impact: Show discrimination on the basis of
.
a.V Elements of Prima ·acie 0ase: (1) Demonstrating that a facially neutral policy
has a disproportionate discriminatory impact on a racial or ethnic group or some
other group protected by the statute.
.
b.V Once a prima facie case established,
*)++c!
á
0
á
á
(as stated in Pfaff v. Hud) so long as there isn͛t a less
restrictive means of obtaining the goal.
i.V Example: Suppose that a local zoning policy limiting the location of
multi-family apartments for low-income families has a disproportionate
impact on blacks. That would establish a prima facie under ·HA.
v.V â
7
aV ·reedom of association in one͛s own home
aV 0ongressional compromise ʹ legislature was going after professionals
aV ·HA was very controversial at the time it was enacted ʹ exceptions necessary to get legislation
through
j.V # G
!
ÿ88 (0odified as 42 U.S.0.A'6ÿ): Prohibits
á
ÿ88
á
)'
á
$
á
'Given new life by Supreme 0ourt in 1968 in rVV
@V^VV.
i.V 0omparison to ·air Housing Act: Broader because doesn͛t contain the crs. curphy exception,
but narrower because limited to racial discrimination and covers only refusals to rent or sell.
1.V It͛s a violation of 0ivil Rights Act for a landlord of single-family home to refuse to rent to
a black couple based on race.
ii.V Discrimination: Requires
á
, so ads indicating racial preferences aren͛t
covered by this. +
á
'
1.V When the purpose of racial discrimination in housing is to counter the effects of past
discrimination and is temporary, it is probably okay, but not otherwise, as in the
minority cap in
V
VV
V
V@
.
iii.V Example:
1.V Ad says ͞·urnished basement apartment in private white home.͟ German couple
applies and is rejected because German. # G
!
ÿ88
)
á
ÿ88.
á
á0
á
·
^ !
á
á
á
'ÿ88#G!
ÿ
"
'
^O inserts ad in newspaper offering to rent a room in her house to a white a person.
&
a.V Rule: Tenants have the ability to (1) or (2) their estates because estates in land are fully
transferable under the principle of free alienability. To recover directly from the transferee, the lessor
only has to have either privity of estate or privity of contract with the transferee.
2.V Privity of Estate ʹ An estate grantor-grantee relationship.
3.V Privity of 0ontract ʹ A contractual relationship. Terminating privity of K requires a
release (
) from the landlord, which is not implied merely from the landlord
consenting to the assignment or sublease (as in
VV
, this principle would allow the landlord (Ernst) to recover from the
sublessee (0onditt).
e.V Subrogation: If one party has to pay damages for a breach by another party then the party paying the
damages is entitled to recover from the breaching party based on
á"
5
.
iv.V Example: So if T had to pay x for T1͛s damages, T could step into the shoes of x and recover from
T1 on the basis of subrogation.
f.V Example: T1 in agreement with T assumed all the covenants in the head lease between T and x. Three
months later, T1 assigns entire interest to T2. A few months later, T2 assigns interest to T3 who defaults
on rent and trashes the apartment.
v.V Between x and T ʹ T is liable. Privity of contract,
á
. No
privity of estate. Once T loses, T could make T1 pay because of T1͛s promises to T. T could also
áÿ
since T acquired x͛s rights after paying x, and x could
recover from T1. If T has to pay, T can also recover from T3 because of subrogation. But not T2
because x cannot go after T2.
vi.V Between x and T1 ʹ T1 is liable. Privity of contract under
since T1 agreed to assume all the covenants T owed to x. Therefore, in the assignment between
T and T1 where T1 assumed all of the covenants T owed to x, x was a third party beneficiary and
has K rights against T1. Since no novation for the assignment between T1 and T2, privity of
contract still exists. Thus, T1 is liable for T3͛s actions.
vii.V Between x and T2 ʹ T2 isn͛t liable because no privity of estate or contract. No privity of estate
because T2 assigned the whole estate to T3. No privity of contract because T2 never assumed a
contractual duty to pay back rent or maintain the apartment.
viii.V Between x and T3 ʹ T3 is liable because privity of estate between x and T3 and you only need
privity of estate or K to recover.
@
#
: PRIVITY of contract between A and T ONxY if A explicitly takes on all of T͛s covenants. If A does that, then x has a
third party beneficiary interest.
At the time a transfer of an interest in the leased property is made ʹ the transferor may exact a promise from the
transferee that he will perform the promise.
# '& '(
)
(
*
'
'VV
a.V 0onsent/Approval 0lause Types:
i.V Absolute Discretion 0lause: Explicitly says that tenant must obtain landlord͛s consent for any
assignment or sublease. The consent may be withheld by the landlord at the landlord͛s sole
(and absolute/arbitrary) discretion
ii.V Reasonableness 0lause: The landlord must act objectively reasonably in deciding whether to
approve the sublease from a áá
.
iii.V Silent 0lause: Tenant must obtain landlord͛s consent to any assignment or sublease.
1.V cajority Rule: When there is no mention of reasonability in an approval clause, the
landlord
áá
á
.
2.V cinority Rule: Unless the lease says otherwise, there is an inherent reasonableness
requirement for commercial leases, but not residential leases. But even in minority rule
states, parties of equal bargaining power can contract around the reasonableness
requirement for residential leases even, such as in 0alifornia.
b.V
5
: At common law, tenants duties were to: (1) avoid waste, (2) make repairs, and (3) pay
rent. Example: If window broke, tenant had to pay for repair in order to avoid waste by exposing unit to
the elements.
c.V *
5
#
#
á
++'V Traditional 0ommon xaw Rule: 0aveat lessee because of policy of self-reliance.
a.V The landlord had: ÿ( á
( á
- #
1(
(not actual possession, so the tenant might have to evict
holdovers),D(
:(
"
2á
(,
with some exceptions.
i.V The landlord͛s duties were mutually independent, so if the landlord broke a duty, the tenant still
had to pay rent,
"
2á
.
Duty not to interfere with T͛s quiet enjoyment'
4
%
D
(
III.V 0ovenant of quite enjoyment, if substantially breached, allows the T to vacate in a timely manner and cease
paying rent ʹ
á
a.V Exceptions to 0aveat xessee (xandlord had duty of care for the conditions of the premises, which
breaching was breaking covenant of quiet enjoyment):
i.V ·urnished dwelling doctrine ʹ A short term lease of a furnished place.
ii.V xatent defect: Defects the tenant couldn͛t discover by a reasonable inspection of the property.
1.V Example: Water leaking from pipes in upstairs apartment and raw sewage entering
sewage from broken basement pipe in Hilder v. St. Peter.
iii.V 0ommon areas: xandlord possessed common areas, so landlord responsible for defects in
common areas.
iv.V Nuisance: xandlord responsible because the nuisance affects multiple tenants and the landlord
is better positioned to deal with the problem.
v.V ·raudulent misrepresentation: Standard principle of K law.
vi.V xandlord promised to repair: xandlord was liable for promises to repair premises that didn͛t
happen or repairs were negligent.
vii.V Express promises
b.V Third Party 0onduct:
i.V 0ommon law: landlord not responsible for acts of third parties, including other tenants.
ii.V codern trend: landlord remains obligated to control actions by tenants that interfere with
ability of other tenants to enjoy premises, such as nuisance or noise abatement. c
áá.
c.V #
,
2á
#,: A áá
tenant has a right of quiet enjoyment
of the premises, without interference by the landlord. If the condition of the premises interferes with
the tenant͛s enjoyment of the premises, you don͛t have to show there is a duty on the landlord to
breach 0QE. The landlord͛s duty in one of the above exceptions or a provision in the lease. Breach of
covenant gave grounds for the tenant to vacate and stop paying rent if (1) the breach
52á
and (2) the landlord didn͛t take
to eliminate the problem.
1.V Example: No breach of covenant of quiet enjoyment if landlord hires private security
guards but crime continues, because he took reasonable steps.
ii.V G
á+â^: (1) implied warranty of habitability doesn͛t
cover commercial leases or all residential leases like single-family homes in some jurisdictions
(but not Vermont as we saw in Hilder), (2) implied warranty of habitability isn͛t recognized in all
states, and (3) jurisdictions recognizing IWH may not apply it to all residential leases (such as the
single-family home exception in Hilder v. St. Peter).
iii.V Historical Evolution:
1.V Actual Eviction: Only requirement to breach covenant, like changing the locks.
2.V 0onstructive Eviction as a Remedy: 0onstructive eviction became added as an
affirmative defense. -
.
If there has been a breach of 0QE and the tenant has given landlord notice of the
problem and an opportunity for landlord to correct problem and landlord fails to correct
in timely fashion, tenant may vacate premises in timely fashion and stop paying rent.
52á
(
á
.
a.V Gáá
"
2á
. The tenant can stay in possession and sue for breach of covenant of
quiet enjoyment. But 0E an affirmative defenswe. Need to give notice of defect
and reasonable time to fix it.
3.V Reste Realty: 0QE itself can be the basis of constructive eviction, unlike before.
á '
#,
0
á
. It is separate from constructive eviction, which is
just a remedy.
0
#, ʹ you now
don͛t have to show there was a duty independent of the covenant. You no longer have
to go into one of the exceptions to caveat lessee ʹ you just go directly to the covenant.
Under traditional analysis, the covenant was dependent upon caveat lessee. Under
Reste Realty, the covenant is an independent duty. /2
0
5
á
. But without Reste Realty, you must ask whether the landlord has a duty with
respect to the complained of defect, which means (1) is there anything in the lease that
imposes such as duty. If no, did the landlord make an oral promise. If no, do one of the
exceptions to caveat lessee apply, such as latent defect or nuisance or common areas. If
the answer to all these question is no, then the landlord has no duty regardless of how
much the defect interferes with the tenant͛s enjoyment of the premises, there͛s no
breach of 0QE. Reste Realty made the landlord͛s duty have independent significance ʹ
it itself imposes a duty on the landlord.
V In Reste Realty, the court really wanted to broaden the scope of 0QE even though it could have established
breach of 0QE under landlord͛s promise to repair basement flooding and duty to maintain common areas
(the driveway). #
á
#,(!: court did not
need to depart:
aV many exceptions are present in the instant case to the traditional 0aveat lesse:
i.V common areas: the drive way was a common area which needed repair
ii.V express promise: there was an express promise to repair the leaking
â
7
V The new rule of law is more tenant friendly (convenant of quite enjoyment now has a broader
reach)
V If x renders the premises substantially unsuitable for the purpose for which they are leased, or which
seriously interferes with the beneficial enjoyment of the premises, this is a breach of the covenant of quite
enjoyment (less clear legal standard)
aV departure from tradition approach: treating this as a independent grounds for constructive eviction ʹ
did not need another violation by the x to show breach of the covenant of QE
a.V
iv.V Tenant͛s options when breach of 0QE: (1) stay in possession, continue paying rent, and sue for
damages (the difference between the fair rental value without defect and fair rental value with
defect)
(2) vacate in a timely fashion, stop paying rent, and assert constructive eviction as an
affirmative defense.
1.V Problems: Tenant has to guess whether the breach of 0QE is sufficient to be
constructive eviction, so could be stuck with bad place.
d.V +á â
^
(c
): There is a breach of the
unwaivable implied warranty of habitability for residential leases of multi-unit homes (not single family
homes ʹ mostly apartments rented by a landlord in the business of renting apartments rather than a
non-professional) when the defect has an á
5
(violation of a housing
code is a helpful benchmark, but not necessary). The defect has to be such that it would in the eyes of
reasonable person deprive tenants of essential functions that a residence is supposed to serve, but this
is read 2
, not subjectively ʹ it means conditions that violate statutory warranties of habitability
regardless of the lease͛s terms.
i.V The implied warranty of obligation is an "
to keep premises inhabitable,
such as for trash collection when workers strike. A
can justify rent
withholding.
1.V Example: ·ailing to repair gym equipment is no violation of IWH because nothing to do
with safe or healthy conditions.
2.V Example: ·ailure to maintain luxury amenities like a pool isn͛t a violation of IWH because
there is an objective standard about the uses of the premises reasonably intended by
the parties.
ii.V
because (1) presumed unequal bargaining power between landlords and tenants,
and (2) undesirable third party effects of letting it be waived, such as rats bothering neighbors.
1.V Example: Even if landlord takes $50 per month for a rundown house because its in
terrible condition, the tenant can still allege breach of warranty of habitability and not
pay rent.
iii.V Authority: Hilder v. St. Peter ʹ 0reated the implied warranty of habitability even though it could
have reached the same practical result based on the broken basement sewage pipe allowing for
breach of 0QE, although the problem was that the
á
#,.
iv.V Policies:
1.V 0QE not always a helpful remedy since housing markets can be tight and the difficulty of
tenants predicting whether there really is constructive eviction in deciding whether to
move out.
2.V -".
between landlords and tenants is the basis for not letting
the implied warranty of habitability be waived.
3.V Better fulfills expectations of tenants, who don͛t think of leases as estates in lands but
as places of safety and security.
v.V !
#,: (1) letsa tenant stay in the premises and withhold rent, (2) repair and
deduct (tenant can make repairs and deduct their fair market value from the rent, (3) possibility
of punitive damages, and (4) possible advantages of damages in tort for personal injury.
á
á
á
#,.
vi.V
5
â.
+â^: ·irst step is always to notify landlord to give him
opportunity to cure defect. After this, the tenant can (1) remain in possession and stop paying
rent (more common) or (2) vacate.
1.V cethods of 0alculating Damages:
a.V Difference of fair market value as warranted and as is condition (unrepaired).
i.V This is used rather than the contract formula because the K formula
would allow waiver of warranty of habitability by landlords claiming the
K value and as is condition are the same, so no damages.
ii.V The court in Hilder v. St. Peter explicitly adopted this approach to avoid
implicit waiver of the warranty of habitability by a low K rent. In fact,
this court assumed that the rental value as is was worth less than
nothing.
b.V Difference between agreed rent in contract and as is condition.
i.V This helps tenants͛ attorneys because they don͛t have to prove the fair
market value as warranted.
vii.V G
: In almost all jurisdictions, the landlord attempting to change
services, increase rent, or end the tenancy within 80 to 90 days after a warranty problem is
raised will carry a rebuttable presumption of retaliatory eviction, in which case the landlord
unless rebuts the presumption.
áá
5
á
á
á
T can assert breach of the 0QE even if she remains in possession and does not raise 0E as an
affirmative defense. She then pays the rent, but brings an action for breach of 0QE for damages.
BUT, you're correct that she could not remain in possession, stop paying rent, and then bring an action for breach of
0QE. She must continue to pay rent.
â
*
Residential 0ommercial & residential
xatent
#
xatent & patent (Reste Realty 0orp.: covers patent
defects after the signing of the lease)
á7 Yes No
â
&
á
á T must vacate
G! ·G ·*!
"
!
+,
l.V Principle: Because of the importance of notice in law of servitudes, assuring the title to a property is good is vital.
There are three methods to assure good marketable title: (1)
á, (2)
(aka Torrens
system), and (3)
.
i.V Recording System: A private system where the recording is done by private individuals.
1.V The point of recording is not that it͛s required for validity ʹ it͛s to protect yourself against
á
that may conflict with later instruments.
ii.V Title Registration: xeast important ʹ A public system that involves the government giving a certificate stating
that title to the land is good. A
system because of potential for fraud.
iii.V Title Insurance: Used by all who buy land, even if they use a recording system to buy land. Title insurance
companies have their own private index, which is good because reduces risk of flawed titles. There are gaps
in recordation system. Adverse possession, unless owner who seeks legal judgment and records that
judgment. Easements, right of way easements, acquired by proscription, all not included. Recorded deeds
might also be defective. Neither deeds nor wills are REQUIRED legally to be recorded in order to be valid.
Want to record to protect self from subsequent B·P.
m.V Indexes: There are two main categories of indexes:
i.V Tract Index ʹ The best system because of simplicity. Parcels are filed by a number. The tract is given a
number and you do a search under the number of the tract. But this index is rare, and you usually have to
use the grantor-grantee index, which is far worse.
ii.V Grantor-Grantee Index ʹ You do this in the county court of the place where the land is located. It͛s a far
worse system than tract index and requires you to trace the grantees back a long time and then going
forward in the grantor index to find out if grantor transferred title to anybody else.
n.V G"
á
Ô
i.V Recordation of documents affecting title such as wills
to be valid.
1.V To be valid, a deed must be (1) in writing (signed by party to be charged) and (2) delivered (not need
to be manual, can use 3rd party escrow, can stick in safety deposit box and say deed upon time of
death). Deed needs to identify grantor and grantee. Describe conveyed property. 3 cethods for
legal description. V
a.V cetes and boundsV
b.V Government survey (rare)V
c.V Plat (subdivision map, usually on file from residential developer). cost efficient. V
ii.V 0onditional delivery must be to a third party (escrow), cannot be to grantee because safety of
real estate titles and prevent fraud and fabrication. (Sweeney). V
o.V Purpose of Recording Statutes: (1) protect subsequent purchaser of land from prior unrecorded instruments and (2)
protect existing owners from losing their title to later purchasers. You do a title search to see if there are prior
unrecorded instruments that could affect your interest in land.
p.V G
:
i.V Rule: Different states have different rules about what recordings are valid. The main categories are: (1)
, (2)
, and (3)
&
.
1.V Race (2 states): Under pure race, all you have to do is be the first person to record. Notice is
irrelevant.
2.V Notice (1/2 states): The subsequent purchaser is protected if he or she (1) is a bona fide purchaser
that gave valuable consideration and (2) took without notice (actual or constructive). V
a.V !
b.V 0onstructive Notice:V
i.V G
: Recording a deed is considered to give notice to all subsequent
purchasers.V
ii.V +"
: A person with notice of facts that would lead the ͞reasonable
person͟ to make inquiries that would have yielded actual notice that would have led
you to learn of the actual facts, you are deemed to have been given actual notice.
You have a duty to inquire.V
3.V Race-Notice (1/2 states): Protects the subsequent purchaser against prior unrecorded instruments if
he takes: (1) without notice of prior instruments and (2) records first.V
ii.V
G: A person who takes from a bona fide purchaser protected by the recording act has the same
rights as his grantor, and thus is protected from earlier conveyances.
iii.V Example: O conveys to A, not recorded. O conveys to B, not recorded (bona fide purchaser). A records. A
conveys to 0 (bona fide purchaser). B records. 0 records.
1.V Who wins between B and 0?
a.V Under Notice Statute: B wins over A since B is a subsequent bona fide purchaser without
notice. But 0 wins over B because 0 is a subsequent bona fide purchaser without notice of
conveyance to B since it wasn͛t recorded, so 0 wins.
b.V Under Race-Notice Statute: A wins over B because B didn͛t record first. And because A wins
over B, A can transfer A͛s superior rights to 0 through the shelter rule. Therefore, 0 wins
over B.
&
*
Definition: Servitudes are private land use controls which parties agree to regulate how land used so as to maximize
aggregate value of all land in question. A servitude gives a use interest, NOT an ownership interest like an estate does ʹ
the right to do something on another͛s land or have another not do something on his or her own land ʹ both of which
involve the uses of another͛s land.
aV They are
, unlike a license, and is a use valid for a specified period. The duration depends
on whether the easement agreement is a contract enforceable against the person (in personam) or a covenant
that runs with the land as a property right enforceable against whoever buys neighbor͛s land (in rem).
for entire statutory period of time, and (4) (cannot be open to the
public, but can be used by dominant and servient estate holder, a Vrequirement than
adverse possession). Difference b/w easement by prescription & adverse possession? No
ownership rights in easements (only possessory/utilization rights)
!
2*
*
# '
4.V Distinguishing between Running of Benefit and Burden: To determine whether we͛re dealing with
the running of the benefit and burden, look at who is trying to get the benefit of promise.
a.V Example: A and B are neighboring landowners and they decide to mutually restrict their lots
to single-family residential use. They sign an agreement wherein each promisor they
promise on behalf of themselves and assigns (this
$
). The agreement is recorded properly and B sells her lot to 0. 0 then
builds an apartment house on her lot and A sues 0 for damages. What result?
i.V Answer: We͛re dealing with the running of the burden because 0 is not an original
promisor. Therefore, we ask whether there is horizontal privity, and there is not
since A and 0 didn͛t contract with each other (there was no grantor-grantee
relationship).
;
!.
!
#.
1.V Suppose that after B conveyed to 0, A breached the covenant. Since 0 was
not an original contracting party, we look at
. In this
case, A is liable because horizontal privity is not required for the running of
the benefit, and vertical privity exists between B and 0 since 0 took B͛s
estate.
b.V Example: O owns Whiteacre and Blackacre. A buys Blackacre from O. A promises O, his
heirs, and assigns that A, his heirs, and assigns will not erect a pizza parlor on Blackacre,
which would be objectionable to Whiteacre. Subsequently A devises Blackacre to his wife,
W, V . W erects a pizza parlor. O sues. What result?
i.V Answer: Since O is the original contracting party, we͛re talking about the running of
the burden. And there is no vertical privity because a life estate is not a fee simple.
Therefore, O loses.
c.V Example: O, a developer, conveys xot 1 to A, who promises not to use xot 1 for commercial
purposes. A subsequently sells xot 1 to B, who uses it for commercial purposes. What
result?
i.V Answer: Burden of the covenant runs to B because A and O are in horizontal privity
(grantor-grantee relationship) and there is vertical privity of the same estate
between A and B (both of which are required for the burden to run).
Difference betweeh covenant and defeasible fee. Same function but not substitutes. ·S determinable, forfeiture
of estate if limit breached, 0S auto right of entry. Servitude, no forfeiture, money or injunction.
a.V ,-+!.* GÔ+-
v.V Rule: A promise about land use enforceable that runs with the land when the requested remedy is an
,-+!.*Gc/, such as an injunction. !
(
á
á 'Governs the majority of covenants since landowners prefer injunctions rather than money
damages. The requirements of an equitable servitude are: (1)
, (2)
, (3)
, and
(4)
(sometimes). ^G+<!* G+Ô+/+ 5G,-+G.
a.V History: Originated in Tulk v. coxhay. Tulk conveyed land to Elms after extracting a promise
not to develop garden. Elms conveyed to coxhay, who had notice of Elms͛s promise. No
real covenant enforceable because no horizontal privity (England requires landlord-tenant
relationship for horizontal privity). But equity court let P win by creating equitable servitude
doctrine.
2.V Intent: Original parties intended for burden to run with the land, such as by assigning the burden
and benefit to themselves and assigns.
3.V Touch and 0oncern: Still a requirement although Restatement (Third) tried to abolish it. Really just a
way to measure reasonableness of enforcing covenant. Burden of promise touches and concerns
the burdened land. There is a connection between the promise͛s substance and the affected land
that makes it reasonable to say promise should be enforceable against future landowners. Purpose
is to distinguish personal promises from those somehow connected to the land. In
, New
York͛s court tried to define touch and concern as a requirement that affects land͛s value.
'!
á
á
á
.
Restrictive 0ovenants in planned communities a problem. Affirmative, do something (tree cutting)
ok, paying (maineteance fee ok, contiguous facility or water no).
a.V Restatement (Third)
"
á
and creates a policy test
that presumes a covenant is enforceable unless unconstitutional (like racially restricted
covenant), illegal (such as under ·air Housing Act), unconscionable, or contrary to public
policy.
b.V Example: If Prof. sells you land in return for promise not to develop it and you sell land to
xara who tries to build a Wal-cart, Alexander can get an injunction because the burden
touches and concerns the burdened land.
4.V Notice: The covenants are enforceable against you only if you͛re a purchaser with notice of
equitable servitude. ·or non-purchasers such as adverse possessors, the covenant is enforceable
regardless of notice. 0an be satisfied by actual notice, record notice, and inquiry notice. Equity
comes down to notice because eliminated privity.
,-+!.* Horizontal privity Vertical privity Touch and concern Notice
GÔ+-
Vertical Privity: Some courts require there to be vertical privity for the running of the benefit (such as New York,
though some recognize substantive vertical privity). Other jurisdictions do not require vertical privity for third
parties. In
, New York recognized for the first time that homeowners͛ associations have standing to
enforce covenants despite vertical privity requirement on theory that the association acted as an agent of the
developer.
Example: Suppose A agrees to transfer blackacre to B (blackacre is undeveloped wetland) and B
promises A not to develop blackacre, with the nature conservancy having the right to enforce the
agreement. The nature conservancy is a third party beneficiary of the contract and can enforce it in
most jurisdictions even though there is no vertical privity and conservancy isn͛t a party to the estate.V
Burden to Run Benefit to Run
(1)V Restatement:
(a)V General Rule: there is a presumption that a servitude is enforceable where
there is intent, and notice is required for burden to run.
(b)V Exceptions: Servitude is unenforceable and does not run to successive
owners if it is illegal, unconstitutional (e.g. racially discriminatory servitude ʹ
state action), or violates public policy. Violates public policy if it: 1) is
arbitrary or capricious, i.e. has no rational relationship with any legitimate
and stated objective for the servitude; 2) Unreasonably burdens a
fundamental constitutional right; 3) Imposes unreasonable restraint on
alienation; 4) Unconscionable; or 5) xacks rational justification.
(2)V Negative vs. Affirmative (not as important, but here):
(a)V Negative Promise: a negative promise runs to all subsequent owners and
possessors of the burdened and benefited properties. xike easement, runs
to all subsequent owners.
(b)V Affirmative promise: may not be enforced if unreasonably burdensome.
Example, if affirmative burden that keep trees on your property cut,
inappropriate for tenant on three months to do that. The burdens and
benefits of such covenants run to persons who succeed to estates of the
same duration as were held by the original parties to the covenant. The
burdens also run to adverse possessors. The burden will also run to a lessee
only if reasonable parties would expect that the act is the kind of act more
easily carried out by the tenant than by the landlord
(3)V SUccARY:
^ A, owner of BA, deeds BA to B, and B promises to not use the land for use commercial purposes.
aV A = promise; B = promisor.
aV This does not form a K (in personum rights only) ʹ but rather binds all assignees and successors and is in
favor of A and A͛s successors
aV Now 0 buys BA from B ʹ 0 builds a 7-11 on BA; !
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#
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a.V coney damages = law of real covenants
b.V Issue: running of the burden (party against whom damages are sough is someone other than the
original promisor); no running of benefit (A is the original promisee)
* - 3rd Restatement (minority US) has dropped the privity requirement; Rstmt distinguishes b/w negative and
affirmative promises:
aV negative promises treated like easements for succession purposes (runs to all subsequently owners);
aV affirmative promises: run to persons who succeed to the same estate only (but to leesees or life tenants ʹ
burden runs only under certain conditions)
^
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7
aV Yes ʹ no requirement of horiz or vertical privity; the promise was recorded in the chain of title; the
touch & concern requirement is satisfied
WA BA
͚A͛ ͚B͛
A has never build within 10 yards of BA ʹ B appreciates it. A puts in deed of WA that there is a promise to A that buyer is
not to build within 10 yards of BA when he sells to 0 who sells to D. D is about to breach promise by developing within
10 yards of border.
+cay B (w/o vert privity) enjoin D from building w/in 10 yards?
^
á
(0ondo developer extracts promise from buyers in deed that purchaser and assignees and
successor will pay certain sum to maintain tennis/sports complex beside the condo itself (not part of the condo).
͚A͛ ʹ original purchaser ʹ sells to X ʹ and D (developer) sells to Trump. X refuses to pay fee to Trump.
+Is the promise to pay money for facilities off the complex but for the enjoyment of the condo residents satisfy the
Touch and 0oncern requirement?
^Suppose in common interest community ʹ purchasers must pay 10% of capital gain on resale to the developer.
Does this promise ͚Touch & 0oncern͛ the land?
aV -
1
G
á
: no touch & concern requirement; the servitude is unenforceable only if it is:
(1) illegal
- unconscionable
^In a common interest community ʹ restrictive covenant: no owner may put up a flag of any kind outside the
house (for aesthetic reasons).