Property Outline Mr Stephan Spring Overview Formalism by benbenzhou


									Property Outline
Mr. Stephan, Spring 2000

I.      Formalism – where you find the law
        A.      general law
        B.      English law
        C.      custom
        D.      intuition
II.     Instrumentalism – where do intuitions lead you
III.    Major Themes
        A.      formality promotes clarity but can frustrate intent
        B.      tension between stability and redistribution

Acquisition of Property
I.      First Possession (corollary to “first-in-time rule”)
        A.      Acquisition by Capture (Pierson v. Post – fox hunting case)
                1.      RULE = „Deprive of natural liberty thus making escape impossible‟
                        a.      rationales
                                i.         authority (formalism)
                                ii.        certainty
                                iii.       peace and order (but really judicial efficiency)
                                iv.        furthers competition
                        b.      dissent rule – reasonable prospect of taking or inevitable capture with intent to kill
                                i.         authority
                                ii.        incentive to invest
                                iii.       flexibility
                                iv.        custom
                        c.      majority v. dissent – disagree on what‟s the best way to kill the most foxes
                2.      Rules v. Custom
                        a.      Why relying on custom is good
                                i.         reflects consensus and has better support
                                ii.        more adaptable to temporal norms (if rapid changes)
                                iii.       reality check – actual use proves it works
                                iv.        those within custom are more knowledgeable and have greatest interest in
                                v.         stems from the people – encourages social solidarity
                                           communitarianism: norms build community and community is good; affinity is
                                           good; honoring custom honors the community
                        b.      Why law is better/problems with custom
                                i.         custom is slow to change and doesn‟t necessarily concern the greater good
                                ii.        custom sometimes a „throwback‟ (i.e railroad axle length)
                                iii.       custom can lack uniformity/fragmented from area to area
                                iv.        custom can be artificial
                                v.         custom can be self-serving; interest in outcome does not mean general or
                                           societal interest
                3.      Use of custom for the rule
                        a.      Ghen v. Rich (whale case) – first harpoon takes
                        b.      limits on use of custom
                                i.         usage clearly established
                                ii.        custom embraced by entire industry
                                iii.       application is limited and affects only a few persons
                        c.      problems with use of custom here
                                i.         no incentive to use better technology
                                ii.        assumes maximization of whale-killing is optimal
                        d.      see also handout 1/25/00

Property Outline                     Mr. Stephan – Spring 2000                                           Page 1 of 16
                   4.  Competiton as basis for rule (Keeble v. Hickeringill (duck trap case))
                       a.       competition okay but willful interference is not
                       b.       production (commercial) v. recreational activity
                       c.       competition tied to productivity levels wanted
                                – good v. bad competition...that which leads to killing of ducks is ok, but that which does
                                not is no good
                       d.       competition for scare resources v. within an industry
                       e.       collective action problem – everyone wants to scare ducks off neighbors land, but no one
                                wants ducks scared off their law must set rule b/c custom will not
        B.    Acquisition by Creation
              1.       Competition as basis for rule (Cheney Brothers – silk case)
                       a.       no patent or copyright protection in this case (formalist)
                       b.       right not to be copied creates monopoly with costs for consumers (instrumentalist)
                       c.       presumption for competition unless compelling reason
                                - rewards with innovation...variety of markets for originals v. copies
                                - IP News Service...newspapers depend on lead time so protected
              2.       Moore v. Regents (cell use case)
                       a.       rule – must have informed consent, but no right to sell/dispose
                                i.        moral concern – commoditization of the person
                                ii.       social interest of bio-medical research v. individual rights
                       b.       concept of property as a “bundle of sticks”
                                i.        right of use
                                ii.       right of control (inclusion and exclusion)
                                iii.      right of disposition
                                (limit on right to dispose independent of right to control)
                       c.       rule of conversion – scope would shut down research (instrumental issue)
                                (but why not constructive trust rule...only first docs would be liable)
                       d.       Formal issue – scope of Uniform Anatomical Gifts Act
        C.    Right to exclude
              1.       This right is fundamental unless someone else‟s important right is involved
              2.       Absolute right to exclude (Jacques v. Steenberg – mobile home)
                       a.       commercial links to anyone on the land
                       b.       availability of punitive damages
                                - privitization of justice
                                - greater social interest being protected
                                - right of person to vindicate his property rights
                       c.       problems with punitive damages
                                - overcompensation
                                - activity level effects
                                - incentive to litigate for minor infractions
              3.       Limited right to exclude (State v. Shack – migrant workers case)
                       a.       antecedents in common law (background norms)
                                - duty of care by landowner to 3 parties
                                - distinction between tenants and employees
                       b.       importance of delivering services to migrant workers (instrumental)
                       c.       rests on CL right to exclude is limited rather than expansion of federal law (formal)
                       d.       ”associations customary among our citizens” – how far does this go?
II.     Subsequent Possession
        A.    Acquisition by Find
              1.       Owner‟s rights are always superior
              2.       Finder has right over everyone but Owner (Armory v. Delamirie) – concept of relative title
                       a.       might does not make right
                       b.       finding considered socially useful – reward finders
                       c.       bailor/bailee relationship...bailor has right over bailee
                       d.       who is best position to protect O‟s rights? Finder‟s right might be limited to other 3d party

Property Outline                     Mr. Stephan – Spring 2000                                              Page 2 of 16
                   3.      Conflict b/t landowner and finder (Hannah v. Peel – brooch and the Army)
                           a.       Landowner loses, finder wins – never took possession of property of land and thus
                                    brooch therefore no “constructive possession”
                           b.       Distinctions over where property is found and who finds – diff. rules
                                    i.       place of business/open to the public ...finder‟s keepers
                                             - Bridges v. Hawksworth...finder‟s keepers for public shops
                                    ii.      objects in subsurface or attached to land...landowner wins
                                             - awareness of object irrelevant (Ewles v. Briggs – underground boat case)
                                             - exception for treasure troves (gold, silver...intentionally buried with intent of
                                             returning to claim it)
                                    iii.     Finder is invited guest/employee/agent, etc.
                                             - don‟t want employee to work more on finding so landowner keeps
                                             - Staffordshire Water Co (ring in pool)...landowner keeps
                   4.      Misplaced v. Lost (McAvoy v. Medina – purse in shop...never followed)
                           a.       rule = taker keeps „mislaid‟, finder keeps „lost‟
                           b.       owners intent at time of separation
                           c.       where the object is found – possible responsibility to owner
                           d.       perverse rule that encourages perjury and is easy to beat
                                    i.       those who know rule will make sure property is „lost‟
                                    ii.      O‟s interest not protected
                           e.       Other options? – share proceeds between taker and finder
                                    i.       incentives for both
                                    ii.      protects O
        B.         Acquisition by Adverse Possession
                   1.      General Requirements
                           a.       actual and exclusive occupation
                                    - constructive possession never wins over actual possession
                           b.       open and notorious occupation
                           c.       continuous occupation
                                    - degree of occupancy and use average owner would make of it
                                             (Howard v. Kunto – summer place)
                           d.       claim of right (assertion of rights against owner) – hostility
                                    i.       objective test – focuses on AP‟s action not state of mind
                                    ii.      hostility to title (Maine doctrine) – mistake is not enough, you must know land is
                                             not yours
                                             * mostly for boundary disputes...makes both sides pay attention, neither side can
                                             win by accident
                                             * O gets liability right
                                    iii.     claim of title – you must think land is yours...color of title or mistake is okay
                                    [note – out West...payment of taxes required for AP]
                   2.      Balancing earning and sleeping
                   3.      Tacking
                           a.       among adverse possessors
                                    i.       requirement of privity (U.S.) – voluntary transfer
                                             * note – trespassers not in privity
                                    ii.      relation to gain by good conduct (punishing violence)
                                    iii.     break in possession – break added to total time requirement
                           b.       among rightful owners
                                    i.       can‟t avoid AP by selling...buyer inherits sleep time of seller
                                    ii.      buyer in position to protect self and doesn‟t have to buy
                   4.      Disability
                           a.       irrelevant if not in existence at the time the cause of action arose
                           b.       no tacking of disabilities
                                    * does this make doctrine unnecessary?
                           c.       additional time allowed by statute to oust adverse possessor
                           * standard period or 10 years after removal of disability...whichever is longer

Property Outline                        Mr. Stephan – Spring 2000                                              Page 3 of 16
                   5.      Cases – real property
                           a.        Van Valkenberg v. Lutz
                                     * Lutz forged path over adjacent lot, built shack and some cultivation; 35 years later
                                     adjacent lot is purchased; court required an assertion of right against lawful owner; court
                                     holds Lutz‟s subsequent admission against him
                                     * “relation back” – if granted title by AP, date of ownership relates back to date AP began
                           b.        Manilla v. Gorski
                                     * D builds steps which encroach on P‟s property under mistake land was his; asks P if he
                                     knew about encroachment before survey (subjective rule?); open and notorious set aside
                                     for minor boundary encroachments
                                     * remedies for minor encroachment – liability not property right if undue hardship to move
                                     off property (forced conveyance)
                           c.        Howard v. Kunto (tacking on AP side)
                                     * owners on shore all on wrong property b/c inaccurate survey; tacking permitted b/t
                                     purchasers even though on wrong land
                                     * seasonal possession in enough for AP
                   6.      Adverse Possession of chattel (O’Keefe v. Snyder)
                           NJ – protects market by putting burden of victim to search/due diligence
                           NY – protects victim by putting burden on buyer to check for true owner/show owner‟s neglect
        C.         Acquisition by Gift
                   1.      Requirements
                           a.        intent...question of fact
                           b.        delivery...formality/question of law
                                               generally – if item can be handed over, it must be
                           c.        acceptance...presumed in absence of strong evidence to the contrary
                   2.      Intent
                           a.        independence of formal requirements from intent
                           b.        reasons to suspect intent
                                     i.        expression of intent unclear
                                     ii.       expression of intent is undesirable
                                     iii.      juries can‟t always be trusted
                           c.        required at time of delivery (though not at time of transfer)
                   3.      Constructive Delivery
                           a.        the thing itself is difficult to convey
                           b.        thing given actually relates in concrete way to the underlying thing
                                     * delivery of mechanism that functions as access to property
                                     * as opposed to symbolic delivery
                   4.      Cases
                           Neuman v. Bost
                           * Van Pelt dies and leaves stuff to Newman (two unsuccessful gifts)
                           * Court tightens delivery requirement so as to frustrate intent, don‟t want to reward housekeeper
                           * formalities rule for death-time transfers
                           Gruen v. Gruen
                           * gift of painting to son...preference for constructive delivery
                                     - minimizes possibility of perjury
                                     - letter okay for gift of future interest
                           * court won‟t punish father and son for cheating b/c wants to honor intent and fulfil formalities

Property Outline                        Mr. Stephan – Spring 2000                                              Page 4 of 16
System of Estates
I.      Possessory Estates
        A.     Introduction & historical themes
               1.      rooted in feudalism and changes from capitalism
               2.      Seisin – person is seised if holds freehold estate and has possession or tenant holds possession
                       ~ livery of seisen – formality of symbolic gesture of handing over a clod of dirt before witnesses
               3.      Eventual belief that land should be freely alienable (v. control of land over death)
               4.      Rules follow a “menu”
        B.     Fee Simple Absolute
               1.      Def: absolute ownership, can endure forever
               2.      Granting words: “to A and his heirs” (now “to A” is enough)
                       a.        ~ heirs: survivors of decedent designated as intestate successors (no heirs before death)
                                 ~ issue: descendants (kids, grandkids, etc.)
                                 ~ ancestors: parents take if no issue
                                 ~ collaterals: persons related by blood
                                 ~ escheat: if no heirs, property returns to the state
                       b.        inheritability not limited, freely alienable, no corresponding future interest
        C.     Fee Tail – right to control v. right to alienate
               1.      When wealthy property owners wanted to keep land in the family
                       a.        “to A and the heirs of his body”, or “heirs male”
                       b.        1400s – if granted FT could sue to get FSA
                       c.        now mostly abolished (in 19 century)
                       d.        future interest is either reversion to G or remainder in B
               2.      Methods today (“to A & the heirs of his body, but if A dies without issue, then to B and his heirs”)
                       a.        abolish fee tail – attempts to create fee tail will result in FSA
                       b.        create FS Conditional/Subject to Divestment, if A has issue then A gets FSA, if A dies
                                 without issue then A gets life estate (and B gets remainder in FSA)
                       c.        fee tail permitted but holder can convert it to FSA through “straw” conveyance (4 states)
        D.     Life Estates
               1.      Def: will end at the death of a person, usually the grantee
               2.      Granting words: “to A for life”
                       ~ if A transfers to B, then B has life estate “per autre vie”
                       ~ must be explicit, or else a FSA is created
                       ~ can be subject to a limitation or condition
               3.      Followed by some future interest
                       a.        reversion (in transferor)
                                           ~ presumption against reversion – policies of certainty and transferability
                       b.        remainder (in another transferee)
               White v. Brown...(Lide case) – holographic (handwritten) will created without lawyer, granted “to A to live
               in and not be sold"; CT - intent inconsistent with estate created and contrary to public policy so gives FSA
                                 * policies: honoring intent and unifying ownership
                                           (underlying agenda of assisting bargaining – sale of house to some big corp.)
               4.      Rule Against Waste – life estate owner may not make property valueless for future interest holder
               5.      Valuation (assigning market value to partial conveyances)
                       a.        Present Value of (Life Expectancy * (Interest Rate * Market Value of FSA))
                       b.        Manipulating the value
                                 ~ increase or decrease life expectancy
                                 ~ increase or decrease discount rate
                                 ~ standard valuation mechanism (used in insurance) – % survival for each year of life * E
                                 (early years not quite E, later years more than 0)

Property Outline                    Mr. Stephan – Spring 2000                                             Page 5 of 16
        E.      Defeasible Estates
                * Def: remainder is vested but can be lost upon the happening of some event
                1.       Fee Simple Determinable
                         a.       def: FSD that automatically ends upon breach of a condition (as a matter of law)
                         b.       grant: “to A so long as...” (also can use until, while, etc – words of limitation)
                         c.       followed by possibility of reverter...if condition broken, reverts to grantor (if claimed
                                  within statutory time allowance)
                         d.       freely alienable but subject to condition regardless who owns it
                         Mahrenholz v. County Board
                         * land to be used for school purposes only or reverts to grantor; CT says this is FSD with
                         possibility of reverter
                         * issue: can heir of grantor convey future interest to 3d party - YES
                         Ink v. City of Canton (outlier)
                         * grant unclear if right of entry or possibility of reverter; CT says reverter
                         * condition is use as park – state takes land for other use; “invention of an interval” so Inks get
                         compensated as if owned FSA b/t condemnation and taking by state (taking = end of condition)
                2.       Fee Simple Subject to a Condition Subsequent (NOT FS Conditional)
                         a.       def: FSD that ends upon re-entry (not breach)
                         b.       grant: “to A, but if...G can re-enter” (also “upon condition...,etc. – words of condition)
                         c.       followed by right of entry
                         d.       freely alienable but still subject to condition
II.     Future Interests
        A.      Introduction...
                1.       present non-possessory interest conferring rights at future time
                2.       How to approach FI problems
                         a.       classify present interest (FSD - reverter, FSSCS – entry)
                         b.       look at who has future interest
                                  ~ grantor – reversion, reverter, right of entry
                                  ~ other – remainder or executory
                         c.       how will future interest become possessory
                                  ~ natural termination – reversion, remainder
                                  ~ happening of some act – reverter, entry, executory
                         d.       is interest vested or contingent, if contingent apply RAP

        B.         In the Transferor (retained and therefore vested)
                   1.       Reversion (not a „possibility of reversion‟, but possibility that it will become possessory)
                            a.     def: grantor gives vested estate less than whole (like life estate)
                            b.     reversion automatic at natural end of previous estate
                            c.     need not be explicitly mentioned
                            d.     vested, so fully alienable and not subject to RAP
                   2.       Possibility of reverter
                            a.     def: grantor gives a determinable estate equal to the whole
                            b.     follows FSD; possessory upon happening of some event not under either party‟s control
                            c.     cannot be created in 3d parties (?)
                            d.     alienable during life and by will (but sometimes not)
                   3.       Right of entry
                            a.     def: grantor gives estate subject to condition and retains the right to terminate the estate
                            b.     follows FSSCS; possessory upon entry
                            c.     cannot be created in 3d parties
                            d.     freely alienable and not subject to RAP (someplace not)

Property Outline                       Mr. Stephan – Spring 2000                                               Page 6 of 16
        C.         In 3 Parties (Transferees)
                   1.     vested remainders
                          a.       def: given to ascertained person and not subject to a condition, and follows the natural
                                   termination of the previous estate
                          b.       grant: “ to A for life, then to B” (B has remainder b/c death is not contingent)
                          c.       types...
                                   * indefeasibly vested remainder – holder of remainder certain to take at some future
                                   time and certain to retain permanently thereafter
                                             ~ i.e. “to A for life, then to B and his heirs”
                                   * vested subject to open – vested in a class of persons which is not fixed b/c more
                                   persons could become members (unborn children)
                                             ~ also called: subject to partial divestiture
                                             ~ i.e. “to A for life, then to A‟s children and their heirs”
                                             ~ once one member vests, others have executory interest
                                             ~ possession sure but share not known until death of A
                                   * vested subject to divestiture – by operation of condition subsequent or by
                                   defeasement by inherent limit on estate
                                             ~ condition subsequent:
                                                       - “to A for life, then to B, but if..., then to C”
                                                       - where C has executory interest
                                             ~ inherent limitation:
                                                       - “to A for life, then to B for life, then to C”
                                                       - doesn‟t becomes possessory if B dies before A
                          d.       alienable and devisable by will
                   2.     contingent remainders
                          a.       def: given to an unascertained person or subject to a condition precedent
                          b.       unascertained person:
                                             ~ unborn children “to A for life, then to A‟s children”
                                                       - if A doesn‟t have kids at time of conveyance
                                                       - not alienable
                                             ~ heirs: “to A for life, then to B‟s heirs”
                                                       - no heirs until death, so class unknown
                          c.       condition precedent: “to A for life, then to B if...”
                                   (note: death can not be a condition but is natural termination)
                          d.       alternative contingent: “...then to B if X, and if Y, then to C”
                          e.       contingents vest upon closing of class or happening of condition
                          f.       contingents subject to RAP with reversion to G
                          g.       mostly alienable and devisable by will
                   3.     executory interest
                          a.       def: interest that becomes possessory upon an unnatural termination of the previous
                                   estate; divests the previous estate or springs directly from grantee
                          b.       shifting executory interest (divesting a transferee)
                                   ~ “to A & A‟s heirs, but if B does X then to B & his heirs”
                                   ~ A has FS subject to EI; B will get FS upon divesting A
                                   ~ title “shifts” upon happening of a certain event
                          c.       springing executory interest (divesting transferor)
                                   ~ spring from grantor upon the happening of some event
                                   ~ taking O‟s FS originally
                                             - “to A when she marries B”
                                             - upon event, A divests O‟s FS
                                   ~ taking O‟s reversion
                                             - “to A for life, and 1 year after A‟s death to B”
                                             - O has reversion of one year which then springs to B

Property Outline                       Mr. Stephan – Spring 2000                                             Page 7 of 16
        D.         The Trust
                   1.     Def: fiduciary relationship in which one person (trustee) holds title as legal owner subject to
                          equitable rights of the beneficiaries
                          a.         dual ownership
                          b.         requirement that property be preserved for the beneficiaries
                          c.         trust corpus freely alienable for benefit of the trust
                          d.         no formalities if created in life
                          e.         trust corpus not reachable by creditors
                   2.     Modern Types (note: tontine trust – last survivor takes all)
                          a.         support trust – paid out at discretion of trustee
                          b.         sprinkling trust – discretion to choose among beneficiaries
                   3.     Spendthrift Trust – Broadway Bank v. Adams
                          * grantor has right of full disposition of property and can limit alienation by anticipation; trustee
                          takes legal title with power of alienation; beneficiary only gets equitable title w/o power of
                          alienation; income from trust is not attachable by creditor to pay off beneficiary‟s debts (question
                          becomes – how fast can beneficiary spend it b/c attachable once paid out)
        E.         Rule Against Perpetuities
                   1.     “no interest in property is valid unless it must vest, if at all, not later than 21 years after one or
                          more lives in being at the creation of the interest”
                          a.         purpose: to prevent the “dead hand” control of land
                          b.         rule applied at time of conveyance – if there is a possible person that can vest after RAP
                                     time, then conveyance is no good
                          c.         does not apply to retained interests b/c by definition they are vested
                          d.         lives in being
                                     * any party living at time of transfer (not a corporation)
                                     * can be a group but must be clearly identifiable (closed class)
                          e.         example: “to my kids for life, then to my grandkids for life, then to my great-grandkids”
                                     * O‟s kids will be measuring lives because closed class upon O‟s death
                                     * violates rule – great-grand kids could take more than 21 years after death of the kids
                          f.         if violate RAP, then property reverts to preceding estate or grantor
                          g.         gift to a class is not vested until class is closed
                          Brown v. Baptist Church (Mass 1882)
                          can not create possibility of reverter in 3d party in same instrument as conveyance b/c not sure
                          when divesting condition will occur; but can create same situation by different method (convey
                          and retain possibility of reverter, then transfer it by will to a 3d person)
                          Greyhound Case
                          * right of entry to 3d person is option and subject to RAP
                          Jee v. Audley
                          * conveyance found against the RAP b/c “daughters THEN living”...more daughters could have
                          been born after conveyance and before vesting (should have said “daughter NOW alive and
                          THEN living”)
                          * presumption – if you are alive you can reproduce
                   2.     Determining if grant violates RAP
                          ~ identify all interests created
                          ~ identify lives in being
                          ~ add 9 months (for gestational period)
                          ~ add “nonlife in being” who is potential taker
                          ~ kill all lives in being, and add 21 years
                          ~ will all interests vest by now? If uncertain, the violates RAP
                   3.     RAP Reforms
                          a.         wait and see approach
                                     * regular RAP but wait and see if the interests vest; if yes, OK
                                     * land will revert to heirs if interests do not vest
                          b.         USRAP (Uniform Statutory RAP)
                                     * does not apply if RAP not violated; only applies if possible violation
                                     * wait and see 90 years
                          c.         kinder and gentler
                                     * if RAP would produce results not intended by grantor, then will can be reformed to
                                     satisfy both RAP and grantor‟s intent
                                     * no break if trying to create a dynastic trust
Property Outline                        Mr. Stephan – Spring 2000                                               Page 8 of 16
                        d.        no limits on non-land property
                                  * allows people to put non-land property in trust to last forever
                                  * tax issues: first 1mill tax-free (2M if married) FOREVER; each parent can give gift of
                                  10G per child per year tax free; remainder 37-55% (for 100M trust, need 210M – 100 for
                                  trust, 110 for tax); generation skipping tax
III.    Co-Ownership and Marital Interests
        * some menu law but also policy interests
        * more than 1 person has right to property at same time
        A.      Tenancies in Common
                1.       Co-ownership –right is freely alienable w/o affecting other party
                2.       All shares separate, equal and conveyable (unless otherwise noted)
                3.       Created by conveyance or devise – presumed in absence of language to create another
                4.       Unity of Possession; no survivorship rights; can sever on demand more or less
        B.      Joint Tenancies
                1.       Looks like co-ownership, but at death other JT takes all (Right of Survivorship)
                2.       Four Unities to create
                         a.       time
                         b.       title – by same conveyance
                         c.       interest – as to duration and share
                         d.       possession – right of possession to the whole
                3.       Purposeful termination – one JT transfers his interest and creates TIC
                                  (other JTs would remain JT with TIC of 3d party)
                4.       Mortgages
                         a.       2 views – sever (title theory) or doesn‟t sever (lien theory – Harms)
                         b.       If no severance – survivor takes free from mortgage, or with mortgage
                         c.       If severance – survivor owns FSA of ½; heirs get other ½ subject to mortgage
                5.       Leases
                         a.       CL – lease severs (no possession unity); modern – lease not does sever
                         b.       if no severance – split if survivor is subject to lease
                6.       Other options for uncooperative JTs (without death)
                         a.       possibility of partition (like divorce as to property)
                                  ~ in kind – divide land into equal value FSA
                                  ~ by sale – split proceeds (permitted only if in kind impracticable/inequitable)
                         b.       ouster – interference with other‟s free use
                                  ~ JT can be troublesome but must pay (damages can be retrospective or like partition)
                                  ~ classic = one co-tenant changes the locks and doesn‟t give other JT the key
                         c.       accounting – JT must shares proceeds from lease, etc. (no severance)
        C.      Tenancies in the Entirety
                1.       Limited to married people (except in HI) – own land as 1 person
                2.       Both parties must agree to severance
                3.       Right of survivorship and unanimity of owners for conveyance
                4.       Divorce, death or agreement – severs TITE
                5.       Debt of one spouse...creditor attachment rules
                         ~ absolute veto power – TITE not attachable (debtor spouse does not have conveyable interest)
                         ~ debtor spouse has conveyable contingent remainder – creditor takes if H outlives W
                         ~ debtor spouse has conveyable possessory interest and contingent remainder – creditor gets
                         possessory interest, but if H doesn‟t outlive W, creditor loses
                Riddle v. Harmon
                * married couple hold JT, W doesn‟t want H to take and conveys her interest to herself in TIC
                * rule = can sever JT without a straw (prec = can create JT without straw, but not sever) – admin costs
                * concerns:       abuses due to secrecy – loser takes ½, winner takes all
                                  recordation – puts 3d party on notice
                                  straw only adds a 3d party in the conspiracy
                Harms v. Sprague
                * one of JT gives mortgage – is mortgage a conveyance? (so as to destroy JT)
                * rule = mortgage does not end JT (creditors can‟t take after death; responsible to get both JTs to sign)
                Swartzbaugh v. Sampson
                * JT, Mr. S gives lease, Mrs. S wants to veto (as if it were TITE)
                * Mr. S had right to give lease b/c right to possession of each JT is 100%; but Mrs. S gets paid

Property Outline                    Mr. Stephan – Spring 2000                                              Page 9 of 16
                   Sawada v. Endo
                   * H in auto accident, no insurance, before sued they transfers his property to his kids (w/o consideration)
                   * Transfer valid – creditor is screwed (if they had sold property  creditor fraud, creditor takes)
                   * policies in conflict = promote family and protect involuntary creditors

        D.         Marital Interests - what happens to marital property upon end of marriage
                   1.       Rights to be settled
                            a.       Alimony (problem – enforcement between hostile parties)
                            b.       Child Support
                            c.       Division of Property (moves towards this away from alimony)
                   2.       Distribution of Property upon Divorce
                            a.       Uniform Marriage and Divorce Act – allows open-ended decision making by divorce
                                     court; presumption against retaining ties between spouses
                            b.       General Approaches
                                     ~ all property divided
                                     ~ all property acquired during marriage divided
                                     ~ community property: all property acquired during marriage from earnings
                            c.       Income Earning Potential (professional degrees)
                                     ~ you bring it to marriage, you keep it (can be a factor in division – Graham)
                                     ~ reimbursement alimony
                                     ~ property to be divided (Elkus) – minority view
                            d.       Inheritance as a factor but not property
                   Graham v. Graham – is MBA property for division (when no marital property)
                   * TC – alimony like payments for 27+ years; degree as “human capital”
                   * valuation problem (TC used present value w/o interest component)
                   * RULE = MBA is factor in division of property but is not itself an asset for division
                   Elkus – is operas career property for divorce division
                   * W supported throughout career by H, then walks; H coached, critiqued, toured, Mr. Mom, etc.
                   * in NY – celebrity status is property, creates earning potential, operates like property right
                   3.       Distribution of Property upon Death (without will)
                            * problematic only if children (w/o kids, spouse takes all)
                            a.       give spouse right to everything that passes through marriage
                                     i.       Dower (almost disappeared) – W gets life interest that stays with land (1/3 ????)
                                              ~ Primary function = so H and W both sign deeds
                                     ii.      Community Property – which applies to all property (sometimes limited to that
                                              earned during marriage; sometimes not; 8 different regimes); absolute
                                              ownership; veto right to all transactions in life
                            b.       Elective Forced Share – applies to all property
                                     ~ spouse can choose will or elective share (determined by statute)
                                     ~ applies only to property at death, not that transferred during life
                   4.       Status and Contracts
                            a.       Contracts between spouses
                                     ~ prenuptial agreements: waiver of support rights; generally allowed
                                     ~ other option: spouses can‟t contract beyond marital obligations
                            b.       Between unmarried co-habitants
                                     ~ allow them to do same as marital partners
                                     ~ allow them to contract expressly to share
                                     ~ no contracting
                                     ~ tension b/t changing social mores and desire of law not to intrude v. resisting change
                            Marvin v. Marvin – P argues she should recover under implied contract or quantum meruit
                            ~ RULE: non-marital partners can contract for ownership of ppty acquired during relationship
                            ~ response to changing social mores

Property Outline                       Mr. Stephan – Spring 2000                                               Page 10 of 16
The Leasehold Estate...Landlord-Tenant
**Major theme – contract v. property

I.      Leasehold Estates
        A.      Term of Years
                1.       Lasts for some fixed period of time
                2.       Expires at end of stated time (no notice requirement)
        B.      Periodic Tenancy
                1.       Lasts for some fixed time that continues for successive periods
                2.       Requirement of Notice
                         a.      CL – notice must equal length of period (or 6 month for year periods)
                         b.      late notice is bad notice (majority) OR late notice is good notice for next period
        C.      Tenancy at Will
                1.       no specific length – can be terminated with notice of 30 days by landlord or tenant
                Garner v. Gerrish – unilateral tenancy at will; Ge has right of termination...contract wins over property
        D.      Tenancy at Sufferance – tenant remains upon end of lease (hold-over)
                1.       Hold-over = periodic tenancy measure by the way rent was paid or a new term (up to 1 year)
                2.       Landlord‟s choices – treat as hold-over or trespasser – choice of on e forecloses the other
                Crechale v. Smith
                * commercial tenant; stays on at end of lease (old lease = 5 years)
II.     Tenant‟s Rights/Landlord Responsibilities
        A.      CL History – tenant took as is; courts would only step in specific contract breach
        B.      Conceivable Remedies: get out of lease, stay on for free, get money
        C.      Covenant of Quiet Enjoyment
                1.       Old rule: tenant could sue if landlord didn‟t own property
                2.       New Rule: constructive eviction & applies to physical conditions (not just title)
                3.       What is constructive eviction? noise; reasonableness of landlord‟s actions, etc...
                4.       Can be waived
                Reste Realty v. Cooper
                * C signed 2d lease knowing of problem; old landlord (lawyer) promised to fix
                * Court applies lawyer‟s promise to new landlord
                * construction eviction can be used to cancel lease – only option for tenant (plus damages)
        D.      Implied Warranty of Habitability
                1.       Basically made up by courts & can not be waived
                2.       Easiest case – code violations (codes are implicit in lease)
                3.       Landlord‟s Options: fix the problem and pay damages; reduced rent
                4.       Amenities? May have contract case, but habitability is low ground
                5.       Applicable to residential but not commercial, and to single and multiple dwellings
                6.       Requires substantial compliance by landlord
                Hilder v. St. Peter
                * poor woman has problems with her apartment and withholds rent...required landlord to sue her
                * use of warranty as a defense

Land-Use Controls
I.      Nuisance
** Major theme: inconsistent uses between neighbors
                not necessary according to Coase theory (people will bargain regardless of property right)
                BUT not that easy to bargain
                Variation on the theme of cooperation – how to deal with problems
        A.      Main Types
                1.      Nuisance per se...uses of property that are prohibited by law, allows for both public and private
                2.      Nuisance per accidens – intentional nuisance (not at law) but not tortious (no reasonable means
                        of abatement)
                3.      Negligent Nuisance...annoying and tortious (reasonable means of abatement)
                        (note: party did not know he would cause nuisance)

Property Outline                       Mr. Stephan – Spring 2000                                            Page 11 of 16
        B.        Problems
                  1.       Concept of reasonableness – different from torts; what does this mean?
                  2.       Substantial damages leads to injunction if nuisance won‟t stop – but rule that allows paying off
                           nuisance makes this rule worthless
                  3.       “Coming to the Nuisance” – would be simple if it was actually used
        C.        Conceptual Ends
                  1.       Social Welfare (as economists use the term)
                           * Coase – no social welfare because nuisance will remain for the right price
                           * Bargaining problem – as a result of litigation we know how much the nuisance is worth to each
                                    ~ hardball v. righteous indignation
                                    ~ do economic terms really capture all the wants of the parties
                                    ~ negotiation reputation at stake
                           * Social Science data (trust game)
                                    ~ people don‟t believe there is only one negotiation even if told so
                                    ~ hold out problem with multiple negotiators
                  2.       Justice – law ought to be perceived as fair and should resonate with community
        Morgan v. High Penn Oil – low income residential area, question is if we favor residential or industrial use
        * does who got the first matter?  Doctrine of Coming to the Nuisance
        * CT seems to say that omitting gases at this site is unreasonable regardless of cost
        * RULE: when mixed residential and light industrial, intrusion of heavy industry is nuisance
        Estancias Dallas Corp. v. Schultz – Shultz‟s property diminished by apartment building air conditioning unit
        * RULE: Shultz has right to proscribe the air conditioning unit but don‟t know what damages are
        * Parties left to negotiate the worth of their rights (Coasian analysis) – but only worth anything if future land
        holders bound as well
        Boomer case – cement factory...vibration, dirt, etc.
        * old rule – if damages are substantial the factory is enjoinable
        * RULE: contingent injunction – injunction issued but cement co. can buy it back & purchase would serve as a
        servitude upon the land as to nuisance claims only
        Spur – cattle feeder and encroaching housing development
        * negotiations would not work, so court sets price
        * cattle feeder has right to stink but this can be taken away upon payment – a matter of fairness
        * maybe too much made of this – CT made judgement call based on fairness and that DelWebb was naughty

                            ** Property (Injunctive relief or not)      Liability (damages of some sort)

                                                                        Spur – Emitter gets compensated for loss of his
               * Emit
                                                                        property right at some court determined price
                             Morgan & Estancias – property owner
                                                                           Boomer – Court tells property owner he must sell
               Receive       has right not to have obnoxious quality
                                                                           his right at amount set by court
                             pushed on them
                           (note: see Calabresi discussion for better understanding of this table)
                   * who gets the right – does not affect activity level, but can turn on justice considerations
                   ** choice of remedy affects activity level

II.    Easements
Major Theme: people trying to cooperate by setting rights out in advance
       A.    Types (person entitled to use land belonging to another)
             1.      Affirmative or negative – to do or not do something (negative easements: see servitudes)
             2.      Easement in gross or in appurtenant
                              ~ Easement in Gross – belongs to person or entity
                                      serviant, but not a dominant estate
                              ~ Easement appurtenant – belongs to the land
                                      has dominant and serviant estates
                                      presumed if grant ambiguous
             3.      Compare – license...permission to enter and revocable, though it can become irrevocable
                              estoppel – reliance on a promise can lead to its enforcement

Property Outline                        Mr. Stephan – Spring 2000                                              Page 12 of 16
        B.       Creation of Easements
                 1.       By express grant – deeding land and granting easement over another piece of land
                 2.       By reservation – deeding land and reserving an easement on that land for yourself
                          ~ exception – reservation of pre-existing right (old rule)
                          ~ 3d parties – varying rules; sometimes allowed, sometimes requires 2 conveyances
                 3.       By implication (also – by operation of law)
                          a.       by existing use
                                   ~ only over land granted or reserved when tract is divided into 2 or more parcels
                                   ~ no implication of easement in gross, or reservation at CL
                                   ~ existing use at time of division (quasi-easement – can‟t have easement over own land)
                                   ~ requires apparent and continuous; reasonable necessity
                          b.       by necessity – if property is landlocked, easement will be granted over locking tract
                 4.       By prescription – adverse possession for easements
                          a.       Requires: adverse, continuous, uninterrupted (no prescription if license to use)
                          b.       taking permitted if other requirements met
                 5.       Public Trust Doctrine
                          a.       state can not reserve public property for certain people, but must open it generally
                          b.       tidal waters and riparian rights
                                   ~ land covered by water owned by fed; land lapped by water owned by states
                                   ~ right to tidal lands – public has free use of land below water mark
                                   ~ riparian rights – public has free use of waters that exist in nature
        C.       Transfer of Easement
                 1.       Easement in Appurtenant stay with land when land is transferred
                 2.       Easement in Gross – difficulty if inheritable or transferred to multiple parties (who owns?)
                          ~ commercial easement assignable
                          ~ non-commercial easement assignable if parties so intend
        D.       Termination of Easements – maybe by prescription (stopping use)
        Willard v. Church of Christ – original buyer knew seller intended to reserve for church; didn‟t tell new buyer
        * can party reserve an easement for 3d party? (without 2 conveyances)
        * easements exist regardless of reporting (reporting just to put parties on notice)
        * RULE: reservation vests in 3d party when grantor intended to reserve the easement
        Holbrook v. Taylor – H said T could use road to build house; claims of easement by prescription and by estoppel
        * prescription claim fails – not adverse b/c permission at beginning; no tacking b/c previous users paid for right
        * estoppel claim succeeds – implied promise to continue use; reliance – investment or improvement
        * problem – H has lost property right without payment; easement transferable but new owner did not have to rely
        * formality put aside – friendly to development, encourages cooperation, opposite outcome worse (?)
        VanSandt v. Royster – sewer drain under house floods cellar – original grant did not reserve easement for drain
        * can there be implied easement without strict necessity?
        * English rule – grant will be implied but reservation will not
        * RULE: strict necessity not required for implied reservation if disproportionate effort and expense
        Othen v. Rosier – roadway through Rossier‟s land connects Othier to highway
        * RULE: Othen must prove road existed before severance; no necessity at time of service, only license
        * Gates – symbolic value...once gate is up, anyone who crosses must have permission
        * Exclusivity – used in some cases but doesn‟t make that much sense for easements
        Matthews v. Bay Head
        * does public have right to use land held by quasi-public body to access tidal lands
        * RULE: public right to cross private property to gain access to tidal lands, necessity right to use dry sand area
        * tragedy of the commons problem
        Miller v. Lutheran Conference – Ice Co. transferred rights to Frank, can Frank transfer it to Rufus?
        * bathing rights acquired by prescription (easement in gross can be had by prescription)
        * rights can be assigned for commercial purposes; easement in gross divisible if exercised or used as an entirety
        * tragedy of the anti-commons problem (under exploitation) – “one stock rule”
        Presault v. US – RR land changed to trails after term of abandonment; does P get paid? (takings case)
        * history – RR given easement, but must maintain per ICC, can only terminate use with permission of ICC;
        conversion of RR land for trails (Rails to Trails Act)
        * grant said “fee simple” but this ignored by court...survey before grant, unequal bargaining, etc.  easement
        * easement continues so long as consistent with original use
        * abandonment not enough to terminate easement, P must show intent to relinquish, or inconsistent use
        * P to get paid – damages depend on whether easement is terminated (if yes – full payment, if no – payment of
        difference between rail and trail use)
Property Outline                    Mr. Stephan – Spring 2000                                             Page 13 of 16
III.     Covenants Running with the Land
* Major theme: how the law deals with neighbors who want to work together to restrict use
* Big Contemporary Issue: general society norms and choices of groups to opt out of those norms...which type of
communities will we allow and which won‟t we?
         A.       Historic Formalities
                  1.        Horizontal privity required to bind original or successive interest
                  2.        Vertical privity – required for burden to run, but not for benefit to run
                  3.        Covenant is contract language and remedy is damages
                  4.        Equitable servitude sounds in equity and remedy is injunction
         B.       Negative easement = servitude = restrictive covenant...all lead to property right enforceable by injunction
                            (legal “thou shalt not” on the property)
         C.       Touch and Concern Rule – promise must T & C the land to bind successive parties
                  ~ must affect relationship as landowners not as members of community at large
         D.       Types of Notice
                  1.        Inquiry Notice...nature of neighborhood requires you do more research
                  2.        Actual Notice...if on inquiry notice and don‟t check, full notice presumed
         E.       Negative Reciprocal Easement
                  1.        if seller restrict use of buyer, then restricts use for lands still held
                  2.        presumed in absence of specific language
         Tulk v. Moxhay – English garden case (Elms buys land from Tulk w/ servitude, sells to Moxhay w/o servitude)
         * to win, Tulk must prove notice (Moxhay admits this)
         * fairness requires that future purchasers be bound (unfair for Moxhay to buy at low price b/c of servitude and
         then sell at full price w/o servitude)
         Sanborn v. McClean – original owner splits parcels and sells some under servitude
         * Court implies a reciprocal promise from seller to buyer (although explicit promise only went from buyer to seller)
         * Statute of Fraud requires writing – but servitude need not be...options
                  1 – judicially created exception to SOF
                  2 – writing exists somewhere (original deed, etc.)
                  3 – Sanborn wrong b/c no writing
         * uses 2 types of notice
         Shelley v. Kraemer – racially restrictive covenant (official restriction is to use and occupation)
         * Judicial enforcement = state action
         * Private property servitudes can not achieve what the legislature can not (if state action involved only?)
         Hill v. Community of Damien of Molokai – restricting use for single family residences; AIDS home moves in
         * servitude issues: single family covenant not illegal per se...asks what is residential, what is single family
                  ~ residential – non-commercial
                  ~ single family – based in part on federal statute; expanding definition
         * federal issue: Fair Housing Act
                  ~ is there a protected class – YES
                  ~ is there discrimination – 3 types
                            1 – intentional discrimination (selective enforcement is enough)
                            2 – disparate impact
                            3 – failure to make reasonable accommodations

IV.     Legislative Land-Use Controls...Zoning
        A.        Rise of zoning – after WW2 people move to cities, urban growth a problem controlled by cities by zoning
        B.        Found to be facially constitutional (but may give rise to a taking)
        C.        Today – primacy of single family use more controversial
                  1.       wealth effects – segregation by income
                  2.       appreciating the synergies from people living close together
        Village of Euclid v. Ambler Realty – test case to check constitutionality of zoning per se
        * city trying to abate development that comes with RR through zoning – primacy to single family use/open space
        * P argues property is devalued by 75% – valuation issues
        * zoning scheme constitutional but may constitute a taking
        * analogy to nuisance law – if CL can have nuisance rules, so can legislature; legislature only has to be close to
        CL nuisance baseline

Property Outline                     Mr. Stephan – Spring 2000                                               Page 14 of 16
V.      Takings – constitutional issue...5thA incorporated by 14thA
        A. there a public use?
                        If not, can‟t take
                        If so, is there a taking?
                                   If not, no compensation
                                   If yes, just compensation required
        B.     Public Use – outer (but flimsy) wall of the takings clause
               1.       How you feel about public use is tied to how you feel about just compensation
               2.       Clear, substantial and identifiable public benefit (O‟Conner) – intention only, not existing
               3.       Very broad; same for state and fed (but state courts more stringent)
               4.       means v. ends approach (ends approach means only states with bad lawyers will lose)
        C.     Taking (as opposed to mere regulation on use and exercise of police power)
               1.       Taking title – condemnation/eminent domain
               2.       Taking possession – takes away right to exclude
                        a.         invasion by 3d parties (Loretto)
                        b.         requiring landlord to rent
               3.       Regulatory takings (Hadacheck, PA Coal v. Mahon)
                        a.         Harm test – state can prohibit public harm, but must pay for public benefit (Hadacheck)
                        b.         Severe economic loss test (coal case)
                                   ~ if dimunition in economic value goes too far, it is a taking
                                   ~ what “property” is focused on – conceptual severance: the easier it is to call a
                                   restrictive right a separate property right (severed from the rest), the easier it is to treat a
                                   regulation that destroys its value as analogous to a permanent invasion (taking)
                        c.         Reciprocity test – if reciprocal advantages, no taking (coal case)
                        d.         Loss of all economic value – taking if all econ value lost, unless state can prove it is
                                   abating a CL nuisance
                        e.         comes down to make up of SC – liberals – social problems; conservative – property
               4.       Relation to nuisance law
        D.     What is just compensation?

        Hawaii v. Midkiff – few families own most land from feudalism, state wants to split
        * State argues owners won‟t sell because people can‟t afford and tax implications
        * Darkness in the heart of the Hawaii legislature
                  ~ currying favor with the voters
                  ~ getting around using state money for tax incentives
        * Assumes just compensation will be given but not true – need to tie compensation to public use
        * O‟Conner‟s public use test (see above)
        Poletown v. Detroit – state condemns property so it can sell it to GM...court does not intervene
        * if public use is not a barrier, then everyone holds land in sufferance of government & turns property rights into
        damage claims against the government
        * benign story – government solved collective bargaining problem; malign – extortion by GM
        Loretto v. Manhatten CATV – owners required to allow CATV to lay cable, etc. on their buildings for fee of $1
        * permanent physical occupation authorized by government = taking
        * no real public benefit, destroys owners right to exclude
        * dissent – calls for balancing test, but court chooses bright line rule
        Hadacheck v. Sebastian – upholds zoning which prohibits brickyard in residential neighborhood
        * relation to nuisance – brickyard harmful and noxious
        * legitimate exercises of police power – no compensation required
        Pennsylvania Coal v. Mahon
        * PA statute forbids coal mining that caused subsidence of any house; before law, coal co. sold surface rights,
        reserving rights to remove coal and surface owner waived right to underground support
        * CL focus: right to take coal was distinct right (but can‟t disturb surface rights per nuisance – thus waiver)
        * when regulation on use that is not nuisance places too great a burden on owner, compensation required
        * no taking if reciprocity of advantage; diminution in value test
        * conceptual severance of coal from remainder of property to get a taking

Property Outline                       Mr. Stephan – Spring 2000                                                  Page 15 of 16
Property Law – Calabresi...
Calabresi & Melamed Argument:
Start with Coase – doesn‟t matter which box you are in if there are no transaction costs...
         Property right with highest social utility will prevail – even if paid for
         As transaction costs increase, court will be more likely to choose liability over property rule
         Took Coasian theorem on transaction costs, added new language and created table above
Step 2 – Coase has put fairness aside and this unfair
         Can have efficiency and fairness too
                 Value of activity decides whether it continues; fairness decides who pays/gets paid
                          (this creates a diagonal jump inside the box  prop/emit to liab/receive)
                 Emitter v. Receiver – entitlement exists in either plaintiff or defendant
                          This entitlement can be protected by property or liability rule
                          Results in 4 rules (see chart)

Calabresi Lecture: Ownership of Body Parts – Rights in the Human Body

    McFall v. Ship (PA case)
     * bone marrow transplant needed; only match was cousin; cousin said no; needer sued for bone marrow
     * CT: person who has bone marrow “owns” it for purpose of equitable injunction; not saying what it would do in a case
     for damages or if PA could pass law that needer owns
    Question: How should we look at question of who owns the bone marrow (the haver, the needer, or the state)
    Approaches:
1.        Traditional – law is autonomous disciplne
          * does not question where values came from; fit cases into values; treat like cases alike
          * We don‟t merely have body parts, we own them (but not that clear)
                   ~ selling blood v. selling body parts; bodily autonomy v. the draft
          * Court was correct – better to say possessor of bone marrow owns, then needer does; also correct b/c unsure of
          constitutionality of law giving bone marrow to needer
2.        Law And...
          * rebellion against traditional approach and its stricture to inherent values
          * looks to other fields for a place to stand on and criticize the law
          * And Economics            ~ can‟t rely on market to bring about efficient result; waste issues
                                     ~ if body parts belong to haver more efficient
                                     ~ different schools of law and econ:       Chicago – efficiency is enough
                                                                                Yale – distrib. issues
                                                                                Critical Legal Theory – tastes shaped by rule
          * And Philosophy
                   ~ Rawls – your answer if you don‟t know if you‟ll be giver or receiver; that should be THE answer
                   ~ Others – everything belongs to those who need it
                            Marx – from each according to his ability to each according to his need
                            Kant – means and ends analysis
3.        Legal Process (another rebellion)
          * real scope of law is to decide who ought to decide and this can be answered w/o precedent/other disciplines
          * Ask if question to be decided is...       ~ scientific  panel of experts should decide
                                                      ~ contextual  repetitive – judge; unique – jury
                                                      ~ abstractly  legislature decides
          * Does question involve...majority view  jury; intensity of feeling  legislature
          * repeat v. one time players
          * Which answer is more likely to discriminate
4.        Law and Status (more generalized)
          * looks at law and each of the other areas from the particular prism of a group
          * how does law effect any one group (and...elite, laborers, race, poverty, etc..)
                   ~ new areas – & women, & sexual autonomy

    Which approach is law? Question is too important to analyze under one theory
        Must ask, “Why me, rather than them”
        Cant‟ say, “take it from them, but not from me”; but saying “I own” is not enough

Property Outline                      Mr. Stephan – Spring 2000                                             Page 16 of 16

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