Property – Wolf _wolfm_law

a) How would outcome change if … i. chase occurred on Post’s property? (a) Could have give Post a better chance at proving possession (1) ratione soli – „on account of the soil‟ ii. chase occurred on Pierson’s property? (a) wouldn‟t change outcome of case b/c just strengthens ‟s case (1)  was trespassing iii. the animal was a rare squirrel instead of a fox? (a) ferae naturae – (1) “noxious” fox – good to get rid of (2) rare squirrel – why get rid of it? (if this had an effect on the case) iv. Post had shot the fox, but before he could grab it, Pierson grabbed it and carried it away? (a) Majority would likely allow Post‟s possession b/c the mortal wounding deprived the fox of his natural liberty and put it under Post‟s control (Puffendorf) v. Smith (random person) had trained the fox and it was on the way back to his farm when Post started chasing it? (a) No, Smith‟s ownership IN THIS CASE doesn‟t matter (1) Smith vs. Pierson might change b/c of domesticated animal exception b) Rule of Capture: i. Must have intention of appropriating ii. Must deprive of his natural liberties iii. Must bring him into his certain control c) other contexts of rule of capture: i. Hammonds v. Central Kentucky Natural Gas Co. (255 Ky. 685) (a) Natural gas is like a „wild animal‟ b/c once put back into the ground it has the wild, migratory nature of a wild animal – it must be recaptured to be owned B. Doctrines of possession and realities of commerce 1. Animals: a) Ghen v. Rich i. Facts:  purchased a whale at auction from a man who found it washed up on the beach; the whale had been killed at sea by the crew of ‟s whaling ship, which left an identifying bomblance in the animal (a) custom was to notify the whaling town when a whale washed up on shore or floated back up to the surface ii. When all that is practicable in order to secure a wild animal is done, it becomes the property of the securer who has thus exercised sufficient personal control (a) custom can be used when it is industry-wide, necessary to the survival of the industry, and fair to all parties, also of limited application (even finder received a salvage fee) iii. Are the substance and reasoning of the majority opinion in Ghen v. Rich closer to the majority or to the dissenting opinion in Pierson v. Post Why? (a) Dissenting. both rely on custom… iv. Ghen v. Rich is like Post b/c he mortally wounded the whale and there was certainty b/c the harpoon was unique. There was also some element of control. 2. Money/Gifts a) U.S. v. Alcaraz-Garcia v. Covarrubias i. facts: Appellants claim ownership of a portion of $25,020 forfeited to U.S. govt b/c Alcaraz didn‟t claim it when crossing the border; he was going to deliver the money to the appellants‟ families in Mexico ii. Appellants retained legal rights in the property and therefore could protest the forfeiture (a) Petitioners retained title to the funds after giving them to gratuitous bailee to deliver. Delivery of the funds to bailee didn‟t constitute delivery of the gift to the families so as to relinquish ownership of funds iii. Why is it important to the 3rd-party petitioners that the court of appeals conclude that the gift was incomplete? (a) If it had been a complete gift, then the owners would have been the donees (family in Mexico) (1) Elements of a gift in California? a. Competency of donor to contract b. Voluntary intent on the part of the donor to make a gift c. Delivery, either actual or symbolic d. Acceptance, actual or imputed e. Complete divestment of control by the donor f. Lack of consideration b) Three kinds of bailment :: delivery of personal property by one person (bailor) to another (bailee) who holds the property for a certain purpose under an express or implied-in-fact contract i. gratuitous bailment (solely for benefit of bailor) :: a bailment for which the bailee receives no compensation; a gratuitous bailee is liable for loss of the property only if the loss is caused by the bailee‟s gross negligence If you find something and return it you are not liable unless you are at least grossly negligence. Level of care is low (a) solely for benefit of bailor Property outline 2 Professor Wolf – Fall 2003 ii. mutually beneficial bailment – ex. giving money in exchange for something – level of care is in the middle – liable if you are negligent or grossly negligent. iii. solely for benefit of bailee Level of care is high – liable if minimally negligent. (a) ex: borrower c) Does a gratuitous bailee have a greater or lesser duty to care for the property than the bailee involved in a bailment created solely for the bailee’s benefit? i. Lesser b/c no compensation d) How about as compared with the bailee involved in a bailment created for the benefit of both bailee and bailor? i. Lesser, if the bailee benefits in any way he has a higher responsibility. e) If you find something and return it you are not liable unless you are atleast grossly negligence. 3. Stolen Items a) Autocephalous Greel-Orthodox Church of Cypress v. Goldberg i. facts:  art dealer purchased mosaics that had been plundered from the church during an occupation of the country; refused to return mosaics to  church; lower court awarded possession to Cypress ii. Affirmed – (a) Replevin Action – action at law whereby the owner or person claiming the possession of personal goods may recover such personal goods where they have been wrongfully taker or wrongfully detained (1)  must establish three elements: a. his title or right to possession b. the property is unlawfully detained c.  wrongfully holds possession iii. Why did Peg Goldberg lose? What did she do wrong? (a) b/c the mosaics were stolen iv. When did the statute of limitations begin to run against the true owner of the mosaics? (a) Know jurisdiction – know action being made (1) replevin – not common law replevin; passage of time in USA… replevin and detinue have combined … jurisdictions had to modify the two laws in attempt to modernize the and make it ok with the constitution a. detinue – definition? (b) cause of action accrues when the  ascertains, or by due diligence could ascertain, actionable damages (c) „discovery rule‟ – statute of limitations commences to run „from the date  knew or should have discovered that she suffered an injury or impingement, and that it was caused by the act of another (1) “central to both discovery rule and doctrine of fraudulent concealment is the determination of the ‟s diligence in investing the potential cause of action” a. if  wasn‟t looking diligently enough, they have no right (2) in the context of a replevin action for particular, unique and concealed works of art, a  can‟t be said to have discovered his cause of action until he learns enough facts to form its basis, which must include the fact that the works are being held by another and who, or at least where, that „other‟ is a. under this rule, Cyprus‟ cause of action did not accrue until it learned from Dr. True that the mosaics were in ‟s possession in Indiana (but only b/c  was acting under due diligence) v. Why did the court choose to use the discovery rule over the traditional doctrine of adverse possession? What’s the difference? (a) adverse possession: Property outline 3 Professor Wolf – Fall 2003 (1) Open and Notorious possession – acts appropriate to the condition, size, and locality of the land to constitute reasonable notice to the owner of a claim of dominion (2) Continuous, uninterrupted possession – degree of occupancy and use that an average owner would make property for statutory period; tacking allowed (3) Adverse and under claim of right – w/out owners consent (4) Exclusive – not sharing possession with the owner or the public (b) Court must have felt discovery rule was more fair … difficult to make open and notorious use of personal property (c) majority rule is that personal property may be acquired by adverse possession (1) despite all the difficulties in applying it, most jurisdictions continue to use it vi. Why didn’t statute of limitations begin when the article appeared in the Turkish newspaper? (a) the article did not specifically say that Dikman had the mosaics in question, just that he was wanted for smuggling and separately mentioned the mosaics (b) besides, upon learning of the reports, Cypress redoubled its efforts at notification and recovery (showed due diligence) b) Way to get possessory rights/TITLE/ownership: i. purchasing ii. custom iii. gift iv. bailment v. capture vi. claim vii. adverse possession II. Property in Land A. Acquiring Ownership 1. Moore v. Regents a) facts:  being treated by for leukemia; had tissues and blood removed under guise of treatments; dr‟s used it for research purposes i. structurally, this case is much like Hamidi … both involved discussion of property law into a new area (a) first surveyed existing law to see if fact pattern fit (b) if it doesn‟t, they have another power and choose to change the law b) Does the law of conversion apply in this context? i. Conversion :: tort that protects against interference w/ possessory and ownership interests in personal property (a) must establish an actual interference with his ownership or right of possession ii. since Moore did not expect to retain ownership in the cells taken from him, he must prove right of possession (a) had no ownership interest in cells after they left his body; excised cells are not personal property (in this context) (b) rights to one‟s likeness or persona is not analogous to this case, or to property law (c) lymphokines had the same molecular structure in every person; its not unique (d) confusion – personal property owned by two or more … c) should court extend conversion liability? No i. policy considerations (a) don‟t want to threaten disabling liability on innocent parties who are engaged in socially useful activities, such as researchers who have no idea the cells have been taken against donors wishes Property outline 4 Professor Wolf – Fall 2003 ii. if it were to be extended, legislature should do it (a) they are better suited to gather empirical evidence, solicit experts‟ advice, and hold hearings to which interested parties may testify iii. conversion is not appropriate remedy to protect patients‟ rights d) As Moore’s attorney, how do opinions in previous cases help our client? i. Hamidi – did allow extension of trespass to chattels ii. Pierson – DNA could be like wild animal; its yours if found iii. Ghen – custom is to have patient consent iv. Alcaraz-Garcia – not a complete gift: no intent to give; could also be certain terms of bailment that were not followed (you can take my fluids for treatment, not for anything else) v. Autocephalous – weren‟t open and notorious vi. Brumagim (below) – doctors didn‟t do anything to let world know the public property (cells) was now theirs e) and as Regents’ lawyer? i. Hamidi – refuse to extend b/c no good reason to do so; plenty of other actions to bring case under ii. Pierson – cells like a noxious beast? Doctors captured the „wild animals‟ iii. Ghen – followed custom of industry as a teaching hospital iv. Alcaraz-Garcia – intended to give the cells; what they would be used for doesn‟t negate gift v. Autocephalous – owner not exercising due diligence (if statute of limitations had run); cells were abandoned (like mosaics, although this argument didn‟t work for Peg Goldberg – cannot abandon real property) (a) abandonment – knowing relinquishment of one‟s right to property w/out future intent to regain it … intent and overt act vi. Brumagim – looks bad, looks like a conversion, but we must consider quality, locality and character of the circumstances .. this the is the way you advance medical research 2. withdrawing land from common ownership a) Brumagim v. Bradshaw i. facts: (a) people were living on the land; not just pastureland … one person claims ownership by the existence of a fence and cattle on a portion of the land (1,000 acres) … not a dispute b/n true record title owner (that person would be in Mexico) … b/n two people that neither have perfect title … will take for  to win is not demonstration of perfect title,  must prove possession pedis ii. Actual Possession (possessio pedis; literally = foot hold) obtained by open, unequivocal and notorious acts of dominion, as plainly indicate to the public that the person who performs them has appropriated the land and claims the exclusive dominion over it (a) must correspond, to a reasonable degree, with the size of the tract, its condition and appropriate use, and must be such as usually accompany the ownership of land similarly situated iii. defect in case was in jury instruction (a) on remand, trial court was supposed to amend jury instruction by …letting jury use its discretion to consider quality, quantity, character (b) a fence established dominion; gives notice to the world (1) if no overt act, activities would give notice (nudist colony?) (c) acts or other indications that you are enforcing dominion; THEN will consider (1) 1,000 acres of prime residential real estate (2)  is screwed b/c cattle is only on portion of land and its been laid out in streets Property outline 5 Professor Wolf – Fall 2003 B. Title vs. Possession 1. Tapscott v. Lessee of Cobbs a) facts: Lewis possessed land, although she had never paid for it or received a deed; she built a house and lived there for 15 years until her death; bequeathed the land to Cobbs; Tapscott entered the land and began living there w/out pretense of title; Cobbs bring action for ejectment i. remedy of ejectment – action to reclaim possession by the person entitled to it, be that person an owner or merely a prior possessor ii. Cobbs ends up winning … but how? b) general rule is that  (Cobbs) case rests on the strength of his own title (can‟t win by pointing out defects in s title) and that the  (Tapscott) may maintain his defense by simply showing that the title is not in the , but in a third person i. under this general rule, however, Tapscott would win ii. Exception: when A has entered under the title of B he cannot set up title in a third person in contradiction to that under which he entered (a) in that way you were acknowledging that B has title (b) Tapscott doesn‟t fit the exception; so he still wins iii. 2nd Exception: relations b/n  and  it stands in the place of title (a) ex: familial relationship, business partnerships (b) no relation here … Tapscott wins again iv. could just get rid of general rule, but instead creates… v. 3rd Exception: if it‟s a stranger w/out title intruding upon a peaceable possession, that person can‟t defend by bringing title of 3rd party (a) relate to possession pedis; apparently Cobbs did nothing to the land; no indication she every stepped foot on the land … so if we take at its word, Tapscott still wins (b) constructive possession? nope, actual possession required … (c) court presumes that the heirs are in actual possession to the same extent as their ancestors (Mrs. Lewis) were – up to  to rebut to prove she wasn‟t there when he entered (1) hereditaments … something that an heir takes (2) party in possession of real property has superior rights to the land except as to the rightful titleholder c) Who has legal title to the parcel in dispute? i. no legal title, she might have equitable title…. Mrs. Lewis never received deed … Anderson‟s estate maybe have legal title…or maybe Rives‟ estate … regardless its not either the  or  here ii. lessee = tenant; lessee of Cobbs does not exist … legal fiction becomes  b/c only a lessee/tenant can bring an action of ejectment (jurisdictional) d) What is jus tertii, and what does it have to do with Tapscott? i. Jus tertii (legal right of a third party) –  may not allege that someone other than the  has a better right to possession than does the  (a) 3rd party is not in front of the court, so is not subject to its jurisdiction, to crossexamination, or to being bound to its judgment; protects integrity of judicial process (b) also protects the rights of that 3rd party b/c due process would be violated if decided in litigation to which he was not a party e) Why isn’t Tapscott an adverse possession case? i. person who has legal title is not a party to the case ii. also, hasn‟t reached statutory period f) Why read this case? i. force us to understand difference b/n title and possession ii. understand that sometimes dispute before the court is not a case in which real title holder is present; it‟s a dispute where one‟s title is relatively better than another 6 Professor Wolf – Fall 2003 Property outline C. Adverse Possession 1. two theories: a) punishes true owners of property for sleeping on their rights i. “law protects the occupant, not for his merit, for he has none, but for the demerit of his antagonist for delaying the contest” b) rewards users for making properties productive 2. Elements: a) actual possession for statutory period (20+ years) i. use as a reasonable owner under the circumstances ii. proved by actual improvements and fences, establishing residence, etc. (not a necessity but helps) b) Open and Notorious – giving notice to the owner and to the community c) Continuous – regular and uninterrupted i. adverse possessor can combine period of possession w/ that of a predecessor as long as there is privity of estate b/n them („Tacking‟) (a) privity of estate = voluntary conveyance, transfer, release, or surrender of rights (b) successive trespassers can‟t combine ii. so long as adverse user occupies the land as would others in similar circumstances, interruptions in actual possession do not destroy continuity (i.e. a beach house) d) Hostile – w/out permission from owner i. forget about state of mind of the adverse possessor ii. intent to possess… not the intent to take … derived from his actions that give outside world conclusion that he intends to possess ones own property (a) NOT looking for: (1) intent to steal someone else‟s land (2) lack of intent to steal (3) mistaken belief as to who‟s land it was e) Exclusive – unlike the true owner, he must not allow further trespass f) color of title? adverse user enters the property of another with a deed or other instrument of transfer that appears on its face to be valid but in fact is not 3. Lessee of Ewing v. Burnet a) facts:  received deed to land upon death of Samuel Williams; Williams had owned this piece of land until his death in 1824;  had been using the gravel pit on this land (which was across the street from his home) for more than 20 years i.  claimed right to extract the sand and gravel, built a fence, denied some people right to dig, allowed others (for a price), and paid taxes on the land b) prepare an argument on behalf of  Ewing that seeks to demonstrate that EACH element of adverse possession is missing: i. actual possession – never actually lived on this gravel pit ii. open and notorious – iii. exclusive – other people were using the land iv. continuous – v. hostile – c) prepare an argument for  Burnet that seeks to demonstrate that EACH element of adverse possession has been fulfilled: i. actual possession – used the land for only thing it was suited for, a gravel pit (quantity, quality and character) ii. open and notorious – was there all the time acting like an owner of this type of land would act, I was giving notice to the world that is was mine iii. exclusive – did actually bar further trespass; people that were there had his permission (a) “serious of trespassers, one upon another” (b) prescription – … related to adverse … what you get in the end is a „right‟ in someone else‟s property (as opposed to title) Property outline 7 Professor Wolf – Fall 2003 (1) positive – focus on adverse possessor and what he did to make it his own (2) negative – focus on owner and what he failed to do iv. continuous – v. hostile – court focuses on state 4. Tax Payments a) provide evidence of the claimant adverse possessor‟s good faith b) enhances public treasury c) method to provide the true owner with notice of the adverse claim 5. Disability (to whom statutes of limitations don‟t run – tolling) a) infants b) insanity … unsound mind c) imprisonment d) people absent from the state i. abroad (soldiers and sailors) e) married women 6. Tolling is for benefit of owners (suspend statute of limitation from beginning) 7. Tacking is for benefit of adverse possessor 1 O owns a piece of property in Ohio in fee simple absolute. AP begins adverse possession in 1975. It is 2003. Who owns the property?  Ohio statutory period = 21 years  2003-1975 = 28 years > 21  AP owns 2 O owns a piece of property in Ohio in fee simple absolute. AP begins adverse possession in 1975. AP dies in 1995, leaving all of his real and personal property to her son, Sonny, by means of a will. Sonny stays on the property. It is 2003. Who owns the property?  Sonny owns property b/c of „tacking‟  Privity of estate by will  adverse possessions b/n him and AP combined to = 28 years > 21 3. O owns a piece of property in Ohio in fee simple absolute. AP begins adverse possession in 1975. O dies in 1995, leaving all of his real and personal property to his son, O Jr., by means of a will. It is 2003. Who owns the property?     2003-1975 = 28 > 21 tacking? irrelevant tolling? disabilities? don‟t care about O Jr. b/c statute says “if person entitled to bring such action … at time of action accrues” has a disability – only applies to O in 1975 4. O owns a piece of property in Ohio in fee simple absolute. AP begins adverse possession in 1975. It is 2003. O is the Ohio Department of Revenue. Who owns the property?  O still owns it  state cannot lose title rights by adverse possession (either can federal govt; municipality may be different, depends on statute) Property outline 8 Professor Wolf – Fall 2003 5. O owns a life estate in a piece of property in Ohio. O's son, O Jr., has the future interest in the same property. AP begins adverse possession in 1975. In 2000, O dies. It is 2003. Who owns the property? Who owned the property in 1999? What about in 1995?  2003: O Jr.‟s statute of limitations doesn‟t begin until he receives ownership interest (when O dies) unless statute says otherwise… so O Jr. still owns 3 < 21  1999: O Jr.‟s future interest & AP 24 > 21; has O‟s life interest  1995: O 20 years < 21 & O Jr.‟s future interest  C has one year (in Ohio) to kick AP out  you can only get what your owner has … statute was running against A, then B, then C …  if Year 24? AP owns it  both B and C own … until statute runs out (not progressive sell)  AP gets it in Year 24, but when B dies, AP interests also die… its C‟s property  statute only runs against people that have cause of action (not against future interest holder)  depends on whether AP give O clear/fair notice that he intends to possess the land adversely  is there an OUSTER? (Powell §91.05(5)(a))  Most effective way to affect an ouster? Letter letting other owner know AP now owns property … actual notice  constructive ouster – facts so strong that they impute an ouster  how else is O supposed to know AP is asserting ownership interest? A owns property free and clear Year 1 = AP enters Year 3 = A sells to B for life, then C after B dies Year 20 = B dies A sells to B for life, then C after B dies Year 1 = AP enters Year 24 = B dies 6. O and AP co-own a piece of property in Ohio in fee simple absolute. AP begins sole possession in 1975. It is 2003. Who owns the property?  co-own = concurrent present interests; both have right to be on the property 7. O owns a piece of property in Ohio in FSA. AP begins a.p.in 1978. In 1980, O grants the property "to Archie for his life, then, when Archie dies, to Blondie for her life, then, when Blondie dies, to Cathy forever." O died in 1993. It is 2003. AP brings a quiet title action. Will the court protect Archie‟s interests? Why or why not? 9  No (same as above) AP entered when O still had all his interests, so AP acquires his when statute runs  25 > 21  O disability? No Property outline Professor Wolf – Fall 2003 8. In 1976, O acquired ownership of a piece of property in Ohio in fee simple absolute. In 1977, O sold the mineral rights under the land to Jughead Industries. AP begins adverse possession of the surface in 1978. AP sank an oil well on the property in 1991. It is now 2003. Who wins in a lawsuit between O and AP concerning O's interest in the surface? Who wins in a lawsuit between AP and Jughead Industries concerning ownership of the oil? Why?  In 1978: O owns surface, Jughead owns mineral  In 1999: AP now owns surface but Jughead still owns mineral (8 < 21)  §91.04(3)  Interest in the minerals was severed before adverse possession began – so must have open and notorious of subservice as well as surface to own entire thing (…in 2012)  In 2003: Jughead still owns mineral 9. O owns a piece of property in Ohio in fee simple absolute. AP begins adverse possession in 1975. It is 2003. O is the city of Cleveland Department of Parks and Recreation. What additional law do you need to know in order to decide who owns the property?  Does Ohio allow for adverse possession of public lands?  If so is there a distinction b/n those being used for public use and those that aren‟t? 8. In re .88 acres a) facts: donor conveyed land to the town subject to the condition that the land be used for a meeting house; fire burned down 2 meeting houses and a school was built; i. when donated, now they both owned the land ii. if restrictive language not followed; reverts back to donor (Harrington) b) 1926 when school is built land reverted to heirs … and adverse possession by town begins i. Vermont statute of limitations = 15 years c) municipality can acquire land by adverse possession i. “use of the land for a school was adverse and hostile, and put the heirs on notice that the property was being used in breach of the restriction” d) Wolf: where is element of exclusivity? 9. Devins v. Borough of Bogota a) facts: i. city acquired land b/c previous owner didn‟t pay taxes … no public use on it ii. remanded to see if  met adverse possession requirements b) municipally owned land can be adversely possessed if it is not dedicated to or used for a public purpose (treat like privately owned property) i. will encourage municipalities to make efficient use of their property and return it to the tax rolls c) reasons for nullum tempus (time does not run against the king): public should not suffer for the negligence of its agents i. countervailing considerations: statutes of limitations allow repose and avoid adjudications based on stale evidence Property outline 10 Professor Wolf – Fall 2003 1. In 1976, O acquired ownership of a piece of property in Ohio in fee simple absolute. O went to prison in 1977. AP begins adverse possession in 1978. O was released from prison in 1999. It is now 2003. Who wins in a lawsuit brought by O to recover the property from AP? Why?  Statute of limitations don‟t run on people in prison … O recovers  “if person entitled to bring such action at the time the cause thereof accrues” [Day 1of adverse possession] is disabled … add 10 years  21 years = 1999; O might have been in prison, gets 10 years extra to bring action for ejectment  tolling – stop the clock b/c owner in prison 2. In 1976, O acquired ownership of a piece of property in Ohio in fee simple absolute. O went to prison in 1977. AP begins adverse possession in 1988. O was released from prison in 1989. It is now 2003. Who wins in a lawsuit brought by O to recover the property from AP? Why?  2003 – 1988 = 15 < 21 … no adverse possession no matter what the rest of the question says  O wins 3. O owns a piece of property in Ohio in fee simple absolute. AP begins adverse possession in 1976. In 1990, O died and left his property to his sole heir, O Jr. (age 4). It is now 2003. Who wins in a lawsuit brought by O Jr. to recover the property from AP? Why?  2003-1976 = 27 > 21  O Jr. did not have any rights on Day 1 (when cause of action accrued) … so his disability doesn‟t matter 4. In 1979, O, who owned a piece of property in Ohio in fee simple absolute, died, leaving all of his real and personal property to his sole heir, O Jr. (age 2). AP begins adverse possession in 1980. It is now 2003. Who wins in a lawsuit brought by O Jr. to recover the property from AP? Why?  2003-1980 = 23 > 21  cause of action accrues in 1980, O jr. is 3 … disability  O Jr. turns 18 in 1995 ... after which he has 10 years to bring cause of action … so it is his property until 2005 5. Now (not before you do this question) check out the current versions of Ohio Revised Code Sections 2305.04 and 2305.16 on Westlaw or Lexis? When did these changes go into effect. How, if at all, would they have affected the outcomes of any of the hypotheticals above?  2305.04 – prison is no longer a disability  2305.16 – unsound mind „stops the clock‟; intervening disability Property outline 11 Professor Wolf – Fall 2003 D. Easement by Prescription 1. :: right one gains by using someone else‟s land in an adverse manner … a) right to continue to use that land – not ownership b) right to prevent your neighbor from using building on his own property in such a way to obscure your use 2. Elements: basically same as adverse possession, except substituting „use‟ for „possession‟ a) Actual use b) Open and notorious use c) Hostile use d) Continuous and uninterrupted e) Exlcusive f) For the statutory period 3. Parker & Edgarten v. Foote a) facts:  built a store near the property line on his lot adjoining  lot; store blocked the windows in the home b) in the case of light, there is no adverse user, nor any use of another‟s property, to support presumption against the rightful owner i. an easement for light cannot be acquired by prescription c) True or False i. this is an adverse possession case. (a) False. Adverse Possession is seeking title… here, they want an easement. This is a prescription case…seeking negative appurtenant easement by prescription ii. court refused to recognize easements to air and light. (a) False. Still could get easement through a contractual relationship… just can‟t get it by prescription…. iii. court rejected the English approach to prescriptive easements to air and light (a) True. English recognize prescriptive easement… doctrine of ancient lights … iv. Foote won because Stebbins lost his grant from Foote (a) False. There never was a grant … (1) Why is court talking about grant on the first place? a. if there was a grant, it would have been an express easement b. law presumes existence of lost grant? legal fiction … lower court went searching for a grant, but one never existed. v. s would probably have won if Stebbins had received a grant from Foote. (a) True. an actual grant to the sunlight would give him the rights; unless there was a stipulation in the grant vi. The English law on prescriptive easements to air and light was the law in colonial New York. (a) False. It was the law in England and was developed too late. vii. Spite Fence Rule – can‟t put up a fence for malicious purpose/just to spite your neighbor (a) In FLA: no prescription to air and light; but there is easement by prescription in general; statutory period = 20 years 4. Prah v. Maretti a) facts:  owns solar heated home;  neighbor wants to build a home (conforming to existing deed restrictions and local ordinances) that would block the sunlight from ‟s home i. private nuisance :: nontrespassory invasion of another‟s interest in the private use and enjoyment of land ii. doctrine of ancient lights :: if landowner had received sunlight across adjoining property for a specified period of time, the landowner was entitled to continue to receive unobstructed access to sunlight across the adjoining property b) court says that  has an action under nuisance and therefore must prove the elements required by such a tort, and the conduct of  must be judged by the reasonable use doctrine Property outline 12 Professor Wolf – Fall 2003 c) True or False: i. Prah won because he had acquired a prescriptive right to use sunlight. (a) False. Element of time was missing from a prescriptive easement claim… ii. It is a public nuisance case. (a) False. This is a private nuisance … no harm to general community iii. Maretti might have lost even if Prah had bought and built on his land after Maretti had already built his house. (a) True. “coming to the nuisance” … not a total defense, b/c what you do to your own land shouldn‟t affect other people‟s land …being their first isn‟t totally fair iv. Prah won because Maretti failed to follow the local zoning ordinance. (a) False. He followed ordinance v. The state supreme court concluded that Maretti was conducting a private nuisance. (a) False. Said it was possible to attain relief if he proves the elements of private nuisance vi. Maretti lost because he was a hypersensitive defendant. (a) False. Refers to s not s in nuisance actions… has to do with reasonableness 5. Reasons why nuisance law is confusing? a) we all use the word nuisance in common parlance with a relationship to legal meaning, but not 100% b) nuisance divided b/n private and public; describes both civil and criminal wrong even though they are not related i. private: only brought by owner; unreasonable and substantial interference with the use and enjoyment of s real property ii. public: engaged in activities that posed harm to the general community c) so easily confused with trespass – same acts that amount to a trespass may amount to a nuisance E. Judge Posner‟s COASE theorem 1. Transaction costs are minimized when the law (1) assigns the right to the party who would buy it from the other party if it were assigned to the other party instead and if transaction costs were zero, or (2) alternatively, places liability on the party who, if he had the right and transaction costs were zero, would sell it to the other party . . ." a) What are "transaction costs" and why should the law be interested in reducing these costs (hint: the answer can be found in law review articles and economics texts)? i. Various fees, taxes, ad other startup costs (atty fees, negotiations, expert computation of value, court fees) b) The quotation states "if it were assigned" and "would sell it." What is "it"? i. legal right 2. If transaction costs are 0 and its worth $5 for me to do something and it only costs you $1 if I do it… then I will do it b/c I will pay you that $1 (and still profit $4) a) we need to figure out which of the two parties would pay for the right if it were assigned to the other side... b) and whoever that is, will be assigned the right, based on being the more efficient actor in the economy, the wealth optimizer (to whom is it worth more?) 3. HYPO: a) Imagine that the law "assigns the right" to Prah (by making clear that Maretti is indeed conducting a private nuisance). Assume also that (1) it would cost Maretti $50,000 in construction costs to avoid the harm to Prah's "solar system," and (2) over the useful life of his already built "solar system," Prah would save $30,000 in utility bills. i. If transaction costs are zero, will Prah use his "solar system"? Why? (a) No, b/c he knows he can sell that right to Maretti for b/n 30-50,000 … for Maretti it is $5,000 cheaper to pay than tearing down the house, and Prah would make more than he would save Property outline 13 Professor Wolf – Fall 2003 ii. If, instead, the law "assigns the right" to Maretti (by making clear that Maretti is not conducting a private nuisance). If transaction costs are zero, will Prah use his "solar system"? Why? (a) No, b/c Prah would have to pay $50,000 for Miretti to move his house, but it’s only worth $30,000 to him. iii. How does your answer support Posner's conclusion on page 102 that "it seems that the initial assignment of legal rights does not affect which use ultimately prevails"? (a) b/c what determines whether it happens is the cost estimates iv. Posner‟s Rule of Law in this case: Maretti would get assigned right b/c he is the one who would pay if it was assigned to other side. v. Would your two answers change if the monetary figures ($50,000 and $30,000) were reversed? (a) Yes. Prah would be the one benefiting b/c it would be worth more to him ... answers reversed. III. The Estate Concept A. How did William the Conquerer immediate concerns in the late 11th century determine the nature of the property interests that he distributed to others? 1. he needed an army to control lands… from Normandy … went to England b/c he thought he had a claim to the throne … conquered England 2. until this happened there was not a notion in English society that you owned land beyond your lifetime … he instituted system where he owned everything and he gave it out (not forever, he‟s no fool!) “so long as they would be fit to lead troops to battle” 3. he distributed land to people that were loyal to him and were able to fight for him … the biggest, the strongest, the potential leaders in battle … only until they are no longer fit to fight … then he later decided on a set number of years, eventually it became a grant for life … eventually king allowed tenants ownership interest to pass to eldest son after paying a tax … so by 12th century we have notion that one can own land longer than own life time B. Why would Blackstone say that the feudal system “was a plan of simplicity and liberty, equally beneficial to both lord and tenant, and prudently calculated for their mutual benefit and defence” (pg 210)? What were the benefits to the lord and to the tenant and what were the burdens on each? 1. liberty = you have your own plot of land; can do what you want 2. benefited lord = homage, aides, relief, incidents of tenure (wardship, marriage, etc life events) 3. benefit to tenant = protection, use of land C. What was so important about the statute of quia emptores? 1. prevented subinfeudation (no new estates created except by King); a) freezes types of estates available – increase likelihood of land returning „up the ladder‟ (no heir, land goes back to king/baron) b) conveyee would become direct tenant of conveyor‟s lord (substitute) c) sets stage for simplification of land tenure d) freedom of land alienation D. Johnson v. Whiton 1. facts: wishes to recover a down payment he made to purchase  land b/c he thinks she doesn‟t have good title b/c the land was left to “Whiton and the heirs on her fathers side” (apparently he didn‟t like his daughter-in-law) 2. default is fee simple absolute – unless previously recognized, limitations on fee simples are void, leaving the party with a fee simple absolute a) the bequest here in has never been recognized (pg 253); 3. modern trend is to do away with any restrictions on alienation of land 4. who is arguing that Sarah A Whiton could not pass a fee simple title, and why is that person making that argument? a) Johnson is arguing b/c he wants to get out of purchasing the land and wants his deposit back … he is worried that he would only be purchasing a life estate Property outline 14 Professor Wolf – Fall 2003 IV. Freehold Estates (Table pg 253-254) A. Fee Simple Absolute 1. “To A and his heirs” a) interests: i. present possession ii. future possession until A dies iii. indefinitely inheritable (a) who are A‟s heirs? (1) none until A is dead (otherwise they are heir apparent) (2) lineal heirs (children, grandchildren, … ) (3) collateral heirs (cousins, uncles, … ) (b) primogeniture :: exclusive right of inheritance which belongs to the eldest son iv. alienable v. devisable (can give in a will) b) If A has fee simple absolute, there are no future interests 2. A has a fee simple absolute. A makes a grant “to B and his heirs.” B has one child who is alive at the time of the grant, B Jr. a) What interest, if any, does B have? i. fee simple absolute (language creates it as a grant from A) b) What interest, if any, do B’s heirs have? i. none (B has everything, he isn‟t dead yet so he has no heirs) c) What interest, if any, does B Jr. have? i. nothing d) What interest, if any, does A have? i. nothing (gave it all to B) e) Now assume that, one year after the grant described above, B has a second child, C. What interest, if any, does C have? i. None (B has fee simple absolute, C is heir apparent) f) Now assume that one year after C is born, B makes a grant “to D and her heirs.” i. What interest, if any, does D have? (a) fee simple absolute (by „magic‟ language and B also had fee simple absolute) ii. What interest, if any, do D’s heirs have? (a) none, he isn‟t dead yet g) One year after that, B Jr. dies, leaving as his sole surviving relative a child, B III. What interest, if any, does B III have? none, D has the fee simple absolute h) One year after that, B dies. i. What interest, if any, does C have? is now B‟s heir, but gets nothing since B had nothing at the time of his death ii. What interest, if any, does B III have? none iii. What interest, if any, does A have? none i) If B had died w/out any heirs and still had fee simple absolute, at common law A does not get the land back, it goes up the feudal ladder 3. Van Rensselaer v. Hays a) facts: , grantee's assignee, challenged a judgment in favor of , grantor's heir, which was affirmed in the heir's action to recover rent arising from an indentured conveyance in fee; grantor's father had sold a farm to the grantee with a reservation of rent; grantee then conveyed the land to the assignee, who had not paid the rent for 16 years. Property outline 15 Professor Wolf – Fall 2003 Van Rensselaer II sold farm w/reservation of rent   Van Rensselaer III (grantor)  V.R. IV () i. Dietz (grantee)  Hays () stopped paying rent for 16 years  sought to recover outstanding rents that the grantee had bound himself, his successors, and assigns to pay; b) Grants in fee reserving rents were legal; court found that a valid rent was reserved upon the conveyance in fee under consideration; i. the right to the rent was a hereditament that descended to the grantor's heir, which entitled him to sue upon the agreement between the grantor and grantee. ii. Assignee () could be sued because the burden to pay the rent also ran with the estate (you‟ll understand this later) of the grantee; transfer of the estate in fee from the grantee to the assignee did not affect the duty to pay the rent c) Which of the following ever had a fee simple absolute? i. Royal Whiton – Yes ii. Sarah Whiton – Yes (not at first, but court ruled in the end that she did) [by will] iii. Stephen Van Rensselaer, the elder – Yes iv. Stephen Van Rensselaer , the younger – No (a) elder can give away fee simple absolute by will to someone else, alienate intervivos, etc v. Jacob Dietz – Yes [from the elder] (a) could have more than one person sharing a fee simple absolute vi. Hays – Yes [assigned by Dietz] vii. how did quia emptores affect outcome? Prevented the grant from being anything but FSA (only king can create new …) viii. What does the Van Rensselaer court mean by “covenant,” “distrain,” and “reversion”? (a) covenant = contract (1) elder and dietz had a property relationship (grantor/grantee of fee simple absolute) (2) contractual relationship = rent (b) Distrain = to force tenant to perform obligation by seizure of his land (c) Reversion = (d) case summary (1) in property law, Deitz got FSA (2) in contract law, Deitz promised to make rent to Stephen III a. that contract is enforceable against Deitz (3) yet Deitz was not his tenant (b/c tenant is a property term and tenant/FSA are mutually exclusive, can‟t be both) ix. Why was wrong with the grant in De Peyster v. Michael, the case cited by the Van Rensselaer court in the casebook at 225? (a) court thought it was a restraint against alienation (free people don‟t allow restraints, statute of quia emptores) Property outline 16 Professor Wolf – Fall 2003 B. The Fee Tail 1. “to A and the heirs of his body” a) fee tail special – to A and the heirs of his body by W; to A and the male heirs of his body; etc. b) allows owner of land to ensure that the property remains within his family indefinitely 2. interests: a) present possession b) future possession until A‟s death c) indefinitely inheritable through lineal heirs d) Alienable – only A‟s right to possession, so upon A‟s death the estate still passes to A‟s lineal heir, no matter who owns it at the time e) not divisable 3. reversion is alienable, descendible, devisable 4. Apply post-De Donis (233) common-law rules to the following set of facts a) At common law presumption that O wasn‟t granting anything but a life estate (must use „and his heirs‟ to create FSA) i. Today presumption is that he intended to give fee simple absolute b) A has a fee simple absolute. A makes a grant “to B and the heirs of his body.” i. B has? Fee tail b/c of language ii. A has? fee simple absolute minus fee tail = reversion iii. B’s heirs have? nothing iv. B has a child, C. (a) C has? nothing (b) B has? still has fee tail (c) A has? still has reversion v. B dies. (a) B had a common-law fee tail, a present possessory interest only; A had the future interest; whether or not B had children, the property reverts back to A (reversion), then it passes to the heirs of his body (b) C has? fee tail (c) A has? reversion 5. How, if at all, would your answers to 1 change if you applied the rules found in a majority of modern American jurisdictions? a) Law presumes that you were trying to give away a fee simple absolute, so … i. B would have FSA, A would have nothing, children have nothing until B dies, C then gets FSA, A still has nothing. 6. How, if at all, would your answers to 1 change if you applied Ohio law? a) Ohio Fee Tail, and A has reversion, B has no heirs yet… when B dies, C has fee simple absolute (eh?) … B dies, reverts to A, looks for heir of B‟ body, finds C, property goes to C and becomes fee simple absolute … ohio fee tail only recognizes fee tail for one generation 7. words of purchase: identify people who are getting the interest 8. words of limitation: describe the nature of the estate a) most important criteria in determining nature is the duration Property outline 17 Professor Wolf – Fall 2003 Purchase Limitation “To A and his heirs” “To A and the heirs of her body” 9. Long. v. Long Duration descendents = Fee Simple Absolute lineal = Fee Tail descendents Emma (1/3)    Paul (1/3) Jesse (1/3)  Rosella (1/3)   John & Ethel (1/3)     Eugene & Esther Howard (1/6) + (1/6) Bessie (1/6) (1/6) Henry Long‟s Reversion  Edward (1/3)  a) What interest did the parties and the probate court in Long v. Long say Henry Long (father) had left over when he gave Jesse his piece of land in 1919? i. gives jesse fee tail ii. parties; probate said Henry got possibility of reverter b) What interest did the state supreme court say Henry Long had left over when he gave Jesse his piece of land in 1919? i. Reversion (pg 253); fee simple determinable is only way to have possibility of reverter c) What happened to Henry‟s “left over” interest in Jesse‟s land from 1919 to 1976? i. 1932 when Henry died, reversion of Jesse‟s land was split into three equal pieces to give to Ed, Emma, Jesse (each now have a 1/3) b/c it wasn‟t specified in the will (a) Jesse (1/3)  rosella long  Browns  Howard (1/6) & Esther (1/6) (b) Emma (1/3)  by inheritance, Paul (1/3) (c) Edward (1/3)  by inheritance, Howard (1/6) & Eugene  Bessie (1/6) ii. So what happened to the reversion? (a) Paul = 1/3 (b) Bessie = 1/6 (c) Howard = 1/3 (d) Esther = 1/6 iii. who owned jesse‟s triangle in 1933? (a) Jesse – 100% fee tail (present possessory), 1/3 reversion (future interest), at same time in same parcel (b) Emma 1/3 reversion (c) Edward 1/3 reversion d) What interest did Jesse get in 1919? What happened to that interest of Jesse from 1919 to 1976? Jesse‟s fee tail  rosella long  Browns  Howard (1/6) & Esthel (1/6) … measured by Jesse‟s life … when Jesse dies? Reverts to people who have the reversion… i. If Jesse had a son who became his heir? (a) would have reverted to all those people, then bounced back to son and become fee simple absolute (ohio law, fee tail only applies for one generation) Property outline 18 Professor Wolf – Fall 2003 e) How, if at all, would your answers to 1 change if you applied the pre-De Donis (also used by South Carolina)? i. fee simple absolute – fee simple conditional = possibility of reverter (a) (in ohio) fee simple absolute – common law fee tail = reversion 10. Apply pre-De Donis (before 1285) rules to the following set of facts: a) Pre-De Donis – once condition of a fee simple conditional is met (issue), FSC still exists but fee simple absolute may be conveyed i. Post-De Donis… fee tail is kept through generations … aka reversion is permanent, A dies, reverts, then goes to A‟s heir, and reversion still exists; never will be more than a fee tail ii. South Carolina still follows pre DeDonis b) A has a fee simple absolute. A makes a grant “to B and the heirs of his body.” i. B has? fee simple conditional ii. A has? possibility of reverter (really nothing b/c law of future interests hadn‟t evolved to the point it is today) iii. B’s heirs have? nothing, words of limitation iv. B has a child, C (a) B has? fee simple conditional (doesn‟t change) (1) now he has met the condition and may convey fee simple absolute a. fee tail there is a condition that B jr. outlive B for him to get property b. in fee simple conditional, B can convey a fee simple absolute (after having child) whenever he wants – has no title, but has right to pass title?!?! (b) B dies without doing anything with the property, what does C have? fee simple conditional (by inheritance) v. B makes a grant “to D and her heirs.” (a) D has? fee simple absolute (B met condition, therefore could convey FSA) (b) B has? nothing (c) C has? nothing (d) A has? nothing  Review:  Common law … A has fee simple conditional …  A dies never having had a child, O has fee simple absolute  If A has child, and A dies, FSC goes to A Jr.  A has child, child dies, A in his lifetime makes grant to B and his heirs  What does B have? fee simple absolute  Difference b/n fee simple conditional met and a fee simple absolute?  When condition of child is met, get power to convey FSA but will never have one yourself 11. How, if at all, would your answer to 1 change if you applied current Florida law? (Hint: check out Powell § 14.06 closely, including the footnotes this time.) a) Florida Statute § 689.14. Entailed estates – No property, real or personal, shall be entailed in this state. Any instrument purporting to create an estate tail, express or implied, shall be deemed to create an estate for life in the first taker with remainder per stirpes to the lineal descendants of the first taker in being at the time of her or his death. If the remainder fails for want of such remainderman, then it shall vest in any other remaindermen designated in such instrument, or, if there is no such designation, then it shall revert to the original donor or to her or his heirs. i. i.e. no fee tail, life estate instead Property outline 19 Professor Wolf – Fall 2003 ii. “O to A and the heirs of his body” = life estate to A (as first taker), reversion to O, (a) per stirpes = by the roots; (1) A dies. A had 4 children: B, C, D, E. a. B dies while A alive, B had three children F, G, H b. under per stirpes, who are the heirs of A? C(1/4), D(1/4), E(1/4), F(1/12), G(1/12), H(1/12) c. trickle down like a family tree (b) O‟s reversion is subject to complete defeasance (1) depends on whether A has issue which survive him iii. Using this FL statute: A has a fee simple absolute. A makes a grant “to B and the heirs of his body.” (a) B has? life estate (b) A has? reversion (c) B’s heirs have? nothing (d) B has a child, C. (1) C has? future interest subject to him outliving B (2) B has? life estate (3) A has? still a reversion (subject to complete defeasance) (e) B dies. (1) C has? fee simple absolute (2) A has? nothing iv. Would the outcome of Long v. Long have been different if the court had applied current Florida law? (a) Upon Jesse‟s death … instrument (henry‟s deed) doesn‟t say who should get it, so reverts to original donor or to his heirs … donor not alive (henry) so goes to his heirs … who are his heirs (living at Jesse‟s death)? Howard (grandson), Paul (grandson) [as probate court did] C. The Life Estate 1. “To A” or “To A for life” or “To A for B‟s life” 2. interests: a) present possession b) future possession until death c) no inheritance (common law) d) may alienate only the right to possession for your life or pur autre vie (for the life of another) 3. tenant for life is liable for waste a) :: spoiling or destruction of the estate with respect to houses, wood or soil, or lasting injury to the inheritance (not acts of nature, public enemies (invading army), or acts of reversioner himself) b) idea is to ensure that the future interest holder will receive land in substantially the same condition as when present possession began c) types: i. voluntary – results from actual commission; felling timber, defacing buildings, opening mines, changing course of husbandry ii. permissive – results from an omission; suffering buildings or other decay iii. failures to prevent conduct of trespassing strangers iv. equitable waste Professor Wolf – Fall 2003 Property outline 20 4. O (who has a fee simple absolute) grants “to A for life.” A has one child, A Jr. a) A has? life estate b) O has? reversion in fee simple c) A Jr has? nothing d) A grants his interest in the property to B. i. B has? life estate for A‟s life (pur autre vie) ii. O has? reversion in fee simple iii. A has? nothing iv. A Jr has? nothing e) A dies. i. B has? nothing ii. A Jr has? nothing iii. O has? fee simple absolute 5. O (who has fee simple absolute) grants “to A for life.” One year later, O grants his interest in the property to B. a) B has? reversion in fee simple b) A has? life estate c) O has? nothing d) One year later, B grants his interest in the property to A. i. B has? nothing ii. A has? fee simple absolute (merger) 6. O (who has fee simple absolute) grants “to A for life.” One year later, A grants his interest in the property to B. One year later, B dies, leaving one child, C. One day later, D occupies the land. a) Who owns the land? i. common law give is to D, special occupant ii. A alienated, B dead, O doesn‟t want it back until A dies, who is C to get the land? iii. at common law, pur autre vie is not inheritable b) How, if at all would your answer change if you applied modern rules? i. C has life estate, as devisee, in A‟s life … and O retains remainder in fee simple 7. can you have a reversion that is not in fee simple? a) reversion in fee tail = O has fee tail, grants life estate to A (fee tail – life estate) b) reversion in life estate = O has life estate and grants for a term of years (life estate – years) 8. Melms v. Pabst Brewing Co. a) facts:  reversioners filed an action for waste against  life estate tenant for the destruction of a home upon the land and the grading of the same down to street level i. became valueless for the purpose of residence property as the result of the growth and development of the city; surrounded by factories and railway tracks, absolutely undesirable as a residence and, as was, incapable of any use as business property b) What interest did Pabst acquire in the homestead property? life estate pur autre vie (Ms. Melms‟ life) [thought they were buying FSA from Mr. Melms] What interest did Pabst acquire in the brewery property? full title in fee = FSA What interest would Pabst have in the homestead if Mrs. Melms died the day after the Wisconsin Supreme Court’s decision in Melms v. Pabst? None (gone to remaindermen) Property outline 21 Professor Wolf – Fall 2003 c) Pabst won on the waste issue because: i. the court applied traditional common-law principles? (a) No, traditional common law: waste if change nature of the property ii. the court abolished the law of waste (a) nope iii. the court created an exception to the traditional laws of waste (a) yep, question was whether a life tenant must stand by and preserve a useless dwelling so that at some future date return it to the reversioner equally useless (b) created exception: (1) when there had occurred a complete change of surrounding conditions which has deprived property of its value and usefulness as previously used, the question whether a life tenant not bound by contract to restore the property in the same condition in which he received it, has been guilty of waste in making changes necessary to make the property useful is a question for the jury (2) if complete change of conditions was not produced by the tenant, resulting from causes which none could control a. Didn‟t Pabst cause the neighborhood to become more commercial? b. no guarantee this is more lucrative use of the property D. Conditional Estates 1. interests: a) exactly as fee simple absolute, subject to a self executing condition that if broken removes the possession from the grantee. b) possession is conditional c) indefinitely inheritable d) freely alienable e) devisable 2. in general: a) must exist at time of creating the estate; can‟t be added afterwards b) must operate on entire estate, not a portion c) reversion can only be reserved to the grantor and his heirs, not a third party d) conditions which are impossible at the time of making them or become impossible are void; estate becomes absolute e) conditions which would be unlawful to perform are void f) if repugnant to the nature of the estate, condition is void g) absolute bar to marriage are void on grounds of public policy h) may be performed by any person having an interest in the subject matter i) if condition is broken, grantor may elect not to take advantage of it 3. fee simple determinable – estate in fee simple which automatically determines upon the occurrence of a given event; grantor retains a possibility of reverter until the occurrence of the stated event a) “O to A and his heirs so long as the property is used for residential purposes” b) “while”, “so long as”, “until” i. describe a limitation on the grant (watch comma) 4. fee simple subject to condition subsequent – estate in fee simple which upon the occurrence of a given event gives the grantor or his successor the right to reenter and terminate the estate a) “O to A and his heirs, but if property is used for nonresidential purposes, O and his heirs shall have a right of entry and repossession” b) “but if”, “on the condition that” i. here you have estate and something happens that someone could come get it back (read examples without the comma, and a period instead) Property outline 22 Professor Wolf – Fall 2003 5. Four types of defeasible interests? a) Fee simple determinable b) Fee simple subject to condition subsequent c) Fee simple with an executory limitation d) Fee simple subject to an executory limitation 6. O (who has a fee simple absolute) grants “to A and his heirs so long as the property is used for commercial purposes, but if the property is not used for commercial purposes, then the property shall revert to O and his heirs." A has one child, A Jr. a) A has? fee simple determinable (b/c could revert automatically) b) O has? possibility of reverter c) A Jr has? nothing d) O quitclaims whatever interest he has to C. i. C has? nothing – at common law, possibility of reverter is not alienable (desendable & divisable ???) e) A converts the property into loft apartments. i. A has? nothing (he broke the limitation, automatically reverts) ii. O has? fee simple absolute iii. C has? nothing (b/c not alienable) f) 25 years later, A (who never left the property) brings a quiet title action. Who owns the property? i. A could meet adverse possession requirements 7. O (who has a fee simple absolute) grants “to A and his heirs, but if the property is ever used for anything other than commercial purposes, then O and his heirs shall have a right to enter and retake the property." A has one child, A Jr. a) A has? fee simple subject to a condition subsequent b) O has? power of termination c) A Jr has? nothing d) A converts the property into loft apartments. i. A has? fee simple subject to a condition subsequent (hasn‟t been ejected yet) ii. O has? power of termination (nothing changes until he uses power of termination) e) 25 years later, A (who never left the property) brings a quiet title action. Who owns the property? i. O [and A] still owns property b/c O is in essence allowing A to live there, unless A at some point made it clear he was possessing adversely (OUSTER) 8. Hagaman v. Board of Education a) facts:  granted land to  “solely for purpose” of a school; it was used as such until school was closed, then used as a park b) The court determined that the restriction in Hagaman was … ? (a) a condition? no (b) a limitation? no (c) a covenant? better than a ambiguous condition, but no (d) a trust? maybe, but action would have to be brought by attorney general (e) none of the above i. Why? There are no words creating either a right of re-entry or a possibility of reverter; therefore, no showing of intent to create fee simple determinable or a fee simple condition subsequent (a) hierarchy: (law abhors a forfeiture) (1) covenant (2) fee simple subject to condition subsequent (favored over (3) b/c forfeiture isn‟t automatic) (3) fee simple determinable Property outline 23 Professor Wolf – Fall 2003 V. Future Interests A. Possibility of Reverter and Powers of Termination 1. possibility of reverter – interest retained after a determinable estate; operates automatically 2. power of termination – future interest reserved after an estate subject to a condition subsequent; deemed effective only when exercised voluntarily by its holder 3. Charlotte Park & Recreation v. Barringer a) facts: grantors gave the city certain lands for park and playground purposes upon condition that white persons only used the property … commission filed an action against s to obtain a judicial determination of the effect of allowing Negroes to use the golf course because of reverter provisions and the restrictions in the deeds … b) holding: i. Barringer‟s reverter provision included that whites could only use the park, so his reversion would occur ii. Abbot Realty gave fee simple conditional as well, but their reverter didn‟t have a whites-only provision, so this reversion would not occur. c) The court determined that the restriction in Charlotte Park was (a) a condition (b) a limitation (c) a covenant (d) a trust (e) none of the above. i. Why? deed had condition of use and would revert to Barringer if wasn‟t used that way (upon payment of compensation, apparently); (a) make it a condition – reversion is not automatic; “in the event that” (b) court leans toward finding a condition when there is a hybrid case of condition and limitation (1) if it was deemed a limitation, courts wouldn‟t have gotten involved and thus it could have been enforced (against 14th Amendment) 4. If the Charlotte Park court had determined that the present estate were a fee simple subject to a condition subsequent (giving power of termination), what impact would the holding in Shelley v. Kraemer have had on the outcome of the dispute? According to blackletter law principles, on what bases should the Charlotte Park have determined that the present estate was not a fee simple determinable? a) would have made the enforcement of the power to terminate the grant a “state action” and therefore illegal by the 14th Amendment 5. O (who has a fee simple absolute) grants “to A for and his heirs, but if A during his lifetime uses the property for anything other than commercial purposes, then to B and his heirs." a) A has? fee simple subject to executory limitation (automatic future interest is not in grantor looks like fee simple subject to condition subsequent) b) O has? nothing (all of future interest is in 3rd person) c) B has? executory interest in fee simple d) A converts the property into loft apartments. i. A has? nothing ii. B has? fee simple absolute iii. O has? nothing Property outline 24 Professor Wolf – Fall 2003 6. O (who has a fee simple absolute) grants “to A for and his heirs so long as A during his lifetime uses the property only for commercial purposes, but if A uses the property to anything other than commercial purposes, then to B and his heirs." a) A has? fee simple with executory limitation (looks like fee simple determinable) b) O has? nothing c) B has? executory interest in fee simple absolute (is inheritable and devisable, but not alienable) d) A converts the property into loft apartments. i. A has? nothing ii. B has? fee simple absolute iii. O has? nothing e) on A‟s death, if he has never converted property, what will B have? Nothing…. A Jr can do anything he wants with the land with his fee simple absolute B. Remainders 1. created: a) always created by the same instrument or act which creates a particular estate b) always follow a valid particular estate i. valid = life estate, estate for years, fee tail c) “polite” – always wait for end of valid particular estate, never cut it short … i. abeyance – successive, never follow a “gap in season” 2. vested remainder –present interest passes to a determinate person to be enjoyed in future; it is certain to exist when precedent estate fails a) X is said to have a vested remainder if X has a remainder and: i. X is a person ascertainable, and ii. there is no condition precedent other than the natural termination of the valid particular estate that must be met before X‟s interest may come into possession = “ready to take” 3. contingent remainder – no present interest passes, on account of the uncertainty whether there will be any one to take it, when the precedent estate expires a) X is said to have a contingent remainder if X has a remainder and: i. X is unascertainable ii. There is a condition that must be satisfied before X may come into possession (condition precedent must be able to be tested at the expiration of the preceding estate) 4. Rule in Shelley‟s Case a) if a freehold be limited to the ancestor for life, and the inheritance to his heirs, the first taker takes the whole estate; if it be limited to the heirs of his body, he takes a fee tail; if to his heirs, a fee simple i. i.e. “O to A for life and then to the heirs of A” becomes “O to A and his heirs” ii. if a person has a present interest life estate or fee tail, and later on you have a remainder in that same person‟s heirs… then the heirs don‟t have anything, the person gets the vested remainder. iii. Doesn‟t destroy contingent remainder b/c grant makes it, but should holder of present and future interest alienate his interests … then the contingent remainder is destroyed (merger) b) Evans v. Giles i. facts: Sard Giles‟ will gave a life estate in Leta Timmons, contingent remainder in fee in her children, a contingent gift over to Elmo S Giles, Sr., for life upon a definite failure of issue of Leta Timmons, and a contingent remainder in fee in Elmo Giles, Jr. Property outline 25 Professor Wolf – Fall 2003 ii. timeline: (a) Sard Giles died (b) Elmo Sr. has a kid (c) Elmo Sr. dies (d) Elmo Jr. dies (e) Leta dies w/out issue iii. in order to take advantage of the second contingent remainder, Elmo Sr. did not have to outlive Leta … his remainder, “ To Elmo Sr for life with a contingent remainder in fee to Elmo Jr.” became “To Elmo and his heirs,” a fee simple absolute 5. types: a) indefeasibly vested – (is absolutely coming back) i. :: remainder created in an identifiable grantee or identifiable group that is not subject to any condition and that is not subject to decrease or increase ii. alienable, devisable, inheritable b) vested subject to open i. :: vested remainder belonging to a class of persons that may increase in number (a) i.e. “to the children of B” … share depends on how many children ii. alienable, devisable, inheritable c) vested subject to complete defeasance i. :: identifiable person with vested interest may be subject to the happening of two uncertainties: (a) if this person does obtain his remainder, he may lose it upon the happening of a divesting event (b) this person has no assurance that he will acquire possessory interest or a possessory interest that will pass to his successors d) contingent remainder (subject to condition precedent) i. “destructible” – destroyed unless it vests at or before the termination of the preceding estate (a) Wolf says: “alienation is good” … “dead hand control is bad” (b) may fail if condition becomes impossible to perform, by merger, or by termination (1) merger – if successive vested estates come into the same hands, the two estates are transformed into the largest possible interest (2) surrender – (3) forfeiture – C. Executory Interests 1. :: vest an estate in the holder of the interest upon the happening of a condition or event a) until the happening of the event these executory interests are non-vested future interests, and are subject to the rule against perpetuities b) i.e. i. “to A and his heirs to the use of B when he marries” or “to the use of B at 21” ii. “O to A for life, then one day after A‟s death, to B and his heirs” iii. “O to A and his heirs, the estate to commence when A climbs Mt. Everest” 2. may appear suddenly to divest an estate in possession (don‟t have to be successive) a) cuts short previous estate 3. law favors contingent remainders a) “O to A for life, then to B and his heirs if B marries C” i. B has a contingent remainder… not an executory interest b/c he could marry C before A dies and then take the remainder … with that though, if A dies and B isn‟t married yet, he gets nothing (while if it was executory he could get it whenever he married) 4. not destructible Property outline 26 Professor Wolf – Fall 2003 D. Doctrine of Worthier Title 1. :: when there is a conveyance to a person with a limitation over to the grantor‟s heirs, whose interest is either a remainder or an executory interest, no future interest is created in those heirs; rather a grantor or his or her heirs retains a reversion a) “O to A for life, then to O‟s heirs” … O would have reversion and O‟s heirs would have remainder … with doctrine of worthier title, O‟s heirs becomes O, so he has both remainder and reversion … reversion is better, so remainder is void 2. rebuttable presumption that the grantor intented to retain his reversion … 3. at common law, it is automatic E. Rule in Wild‟s Case 1. “O to A and his children” a) if A had no children at time of O‟s death, A had a fee tail b) if A has children alive at time of grant, A and his children all take a concurrent interest (tenancy in common) held in fee simple c) if A has no children at time of grant, unborn get contingent remainder F. Rule against Perpetuities“ 1. Applies to: a) executory interests b) contingent remainders c) vested remainders subject to open 2. “no interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest” a) reason: “dead hand control;” uncertainties regarding land will be resolved within a short time … can‟t control property too far into future… b) All (ascertainable) Lives in Being PLUS 21 years i. doesn‟t apply to vested future interests, including reversion, possibility of reverter, power of termination FUTURE INTERESTS HYPOTHETICALS Apply common law rules in effect in 1700 O has a Fee Simple Absolute QCD = grantor passed his interests to grantee by Quiet Claim Deed Identify interests held by all parties named; Discuss, if at all, how that interest changes Wolf‟s anal retentive method: 1) Is it a present estate or a future interest? a) If future interest… i) Is it in the grantor or in somebody else? (1) in grantor: 3 kinds (reversion, possibility of reverter, power of termination) (2) is it indefeasibly vested (know its absolutely coming back) or vested subject to complete defeasance? (could be lost somewhere along the way) ii) Is it in grantee? (1) 2 kinds (remainder, executory interest) (a) does it follow a valid particular estate? [life estate, estate for years, fee tail] (i) No – cannot be a remainder (must be executory interest) (ii) Yes – remainder or executory interest 1. Does it wait for particular estate to end? yes … remainder 2. Is there a gap in season? a. No = remainder; b. yes = executory interest; Is it springing? c. maybe = could be either (w/ contingent remainder favored in law) Property outline 27 Professor Wolf – Fall 2003 (2) If a remainder, is it Vested or Contingent? (a) Is person ascertainable? (i) Yes … vested (ii) No … contingent (b) Is it subject to a condition precedent (other than natural termination)? (i) No… vested; (ii) Yes … contingent 2) Is there a Trick? a) When you see present interest in a person, and then later a future interest in their HEIRS (NOT just children), then you apply Rule In Shelley's Case b) See a remainder in someone‟s heirs, look to see if that someone is the testator or grantor … IF YES, then apply Doctrine of Worthier Title 1. IN YEAR 1, O GRANTS "TO A FOR LIFE." A has life estate, O has reversion, indefeasibly vested, in fee simple IN YEAR 2, A QCD TO C. C has life estate per autre vie, with O his reversion IN YEAR 3, O QCD TO B. B gets O‟s indefeasibly vested reversion in fee simple, C still has A‟s life interest IN YEAR 4, B DIES, LEAVING B JR. AS SOLE HEIR. B Jr. gets the reversion IN YEAR 5, A DIES, LEAVING A JR. AS SOLE HEIR. land reverts to B Jr. (fee simple absolute), A Jr. gets nothing,, C now has nothing IN YEAR 6, C DIES, LEAVING C JR. AS SOLE HEIR who cares, C didn‟t have anything left IN YEAR 7, B JR. GRANTS "TO D AND THE HEIRS OF HIS BODY." D has a fee tail, B Jr. gets the reversion, indefeasibly vested, in fee simple 2. O GRANTS "TO A FOR LIFE, THEN TO B FOR LIFE." O has indefeasibly vested reversion in fee simple, A has present possessory life estate, B has indefeasibly vested remainder in life estate. THEN, O QCD TO C. C gets O‟s reversion 3. O GRANTS "TO A FOR LIFE, THEN TO B AND HER HEIRS." O retains nothing, A has present possessory life estate, B has indefeasibly vested remainder in fee simple [heirs don‟t matter b/c words of limitation] THEN, O QCD TO C. O had nothing to give, so C has nothing 4. IN YEAR 1, O GRANTS "TO A FOR LIFE, THEN TO B AND HER HEIRS." O has nothing, A has life estate, B has indefeasibly vested remainder in fee simple IN YEAR 2, O QCD TO C. O had nothing, C has nothing IN YEAR 3, A QCD TO B. B has fee simple absolute [merger] IN YEAR 4, B QCD TO D. D has fee simple absolute IN YEAR 5, B DIES, LEAVING B JR. AS SOLE HEIR. B had nothing left, so B Jr. has nothing either IN YEAR 6, A DIES. nothing changes 5. O "TO A FOR LIFE, THEN TO B AND HIS HEIRS." O has nothing, A has life estate, B has indefeasibly vested remainder in fee simple THEN, O DIES, LEAVING O, JR. AS HIS SOLE HEIR. O had nothing, O Jr. has nothing THEN, B QCD TO C. C gets vested remainder in fee simple absolute, A still has life estate THEN, B DIES, LEAVING B JR. AS HIS SOLE HEIR. Sorry, your pops sold his interests THEN A DIES. C gets fee simple absolute THEN, C "TO D AND THE HEIRS OF HIS BODY, THEN TO E AND HIS HEIRS." D has a fee tail, E has indefeasibly vested remainder in fee simple, C has nothing **TAKE NOTE, B/C PUT THIS IN FLORIDA AND ITS AN EXAM QUESTION** Property outline 28 Professor Wolf – Fall 2003 6. O GRANTS "TO A FOR LIFE, THEN TO B'S HEIRS." O has vested reversion in fee simple subject to complete divestment, A has life estate, B‟s heirs have contingent remainder in fee simple (as soon as B dies with heirs, it becomes a indefeasibly vested remainder in fee simple, leaving O with nothing) [in this sort of example, and ONLY this time, read B‟s heirs as “B‟s heirs and their heirs”] contingent remainder is destructible if A dies before B THEN, O QCD TO C. C gets O‟s reversion 7. O GRANTS "TO A FOR LIFE, THEN TO B'S CHILDREN AND THEIR HEIRS." O has vested reversion in fee simple subject to complete defeasance, A has present possessory life estate, B‟s unborn children have contingent remainder in fee simple (then when children are born they have a vested remainder in fee simple) THEN, O QCD TO C. C has reversion THEN, B HAS THREE CHILDREN: D, E, F. vested remainder in fee simple subject to open (partial divestment); now C gets nothing (destroyed) … A still has his life estate THEN, D DIES, LEAVING ALL OF HER PROPERTY TO G. G has D‟s portion of the vested remainder in fee simple THEN, A DIES. G (D‟s portion), E, & F each get 1/3 of f.s.a. … THEN, B HAS A 4TH CHILD: H. H doesn‟t get anything b/c remainder has already vested … nothing has changed 8. O "TO A FOR LIFE, THEN TO A'S CHILDREN AND THEIR HEIRS." AT THE TIME OF THE GRANT FROM O, A HAS ONE CHILD, B. A has life estate, B has vested remainder subject to open in fee simple, O has nothing (NOT a Rule in Shelley‟s Case) B QCD TO C. C gets only B‟s share of the vested remainder in fee simple subject to open, which is TBD A HAS A SECOND CHILD, D. C now splits his equally with D A QCD TO E. E has life estate pur autre vie E HAS A CHILD, F. E stands to inherit the life estate A DIES. C and D get ½ fee simple absolute TWO YEARS LATER, D QCD TO C. C has full fee simple absolute THEN, C "TO G FOR LIFE, THEN TO G'S HEIRS." Looks like G has present estate, G‟s heirs have contingent remainder in fee simple, C has vested remainder subject to complete defeasance … apply SHELLY‟s CASE = G has life estate, G has indefeasibly vested remainder in fee simple, C has nothing … then MERGER, G has fee simple 9. O GRANTS "TO A FOR LIFE, THEN TO B AND HIS HEIRS IF B MARRIES C." O has vested reversion subject to complete defeasance, A has life estate, B has contingent remainder in fee simple [condition precedent] THEN, B MARRIES C. becomes vested remainder, O‟s reversion is destroyed THEN, O QCD TO D. nothing to give, D has nothing 10. O GRANTS "TO A FOR LIFE, THEN TO B AND HIS HEIRS IF B MARRIES C." O has vested reversion subject to complete defeasance, A has life estate, B has contingent remainder in fee simple THEN, A DIES. reverts to O, O has fee simple absolute, B‟s remainder is destroyed THEN, O QCD TO D. D has fee simple absolute WOLF LOVES TO ASK QUESTIONS ABOUT DESTRUCTIBLE CONTINGENT REMAINDERS 11. O "TO A FOR LIFE, THEN TO B FOR LIFE, THEN TO A'S HEIRS." O has vested reversion in f.s. subject to complete defeasance, A has life estate, B has vested remainder in life estate, A‟s heirs have contingent remainder in fee simple TRICK …SHELLEY‟s RULE … A has present and his heirs have future ... A has life estate, A has indefeasibly vested remainder in fee simple WHY?!?!?! … B has vested remainder in life … don‟t merge b/c there is VESTED estate in between and can‟t be destroyed THEN, A QCD TO D. D has A‟s life state and indefeasibly vested remainder in fee simple…. no merger. Property outline 29 Professor Wolf – Fall 2003 WOLF ALSO LOVES RULE IN SHELLEY‟s CASE 12. O "TO A FOR LIFE, THEN TO B FOR LIFE IF B MARRIES C, THEN TO A'S HEIRS." A has life estate B has contingent remainder in life estate A‟s heirs have contingent remainder in fee simple O has vested reversion in f.s. subject to complete defeasance, TRICK …SHELLEY‟s RULE … A has present and his heirs have future ... A has life estate & A has indefeasibly vested remainder in fee simple … don‟t merge b/c there is a contingent estate in between even though it is destructible B has contingent remainder in life … THEN, A QCD TO D. D gets present life estate pur autre vie and vested remainder … merger, contingent remainder destroyed … D has fee simple absolute. 13. O "TO A FOR LIFE, THEN TO B AND HIS HEIRS IF A DIES BEFORE B." A has present possessory life estate B has contingent remainder in fee simple (B can die before A, in which case would revert to O so phrase can,t be read out of grant ... “IF A DIES BEFORE B” is an additional condition) O has vested reversion subject to complete divestment Two Scenarious: A dies before B … B gets fee simple absolute B dies before A … A‟s life estate, O will have indefeasibly vested reversion 14. O "TO A FOR LIFE, THEN, IF A DIES BEFORE B, TO B FOR LIFE." A has life estate B has vested remainder in life estate (b/c A has to die before B can get it, so it‟s redundant – surplusage) O has indefeasibly vested reversion, 15. O "TO A FOR LIFE, THEN TO O'S CHILDREN AND THEIR HEIRS." A has present possessory life estate O‟s children have contingent remainders in fee simple (might be a gap … not necessary … no worthier title b/c it‟s in children, not heirs) O has vested reversion subject to complete divestment THEN, O QCD TO D D has vested reversion subject to complete divestment 16. O "TO A FOR LIFE, THEN TO O'S HEIRS." [and their heirs] A has present possessory life estate O has indefeasibly vested reversion in fee simple b/c Doctrine of Worthier Title applies (O‟s heirs have contingent remainder in fee simple, but that disappears by Doctrine of Worthier Title) THEN, O QCD TO D. D has O‟s reversion 17. TESTATOR "TO A AND HER CHILDREN." HINT: THIS IS A "TRICK" CASE THAT CAN BE ANSWERED BY CONSULTING POWELL. Rule in Wild‟s Case WHAT'S THE COMMON-LAW SOLUTION IF A HAS NO CHILDREN AT THE TIME OF THE GRANT? A has fee tail, children have nothing, T has indefeasibly vested reversion in fee simple Property outline 30 Professor Wolf – Fall 2003 IF A HAS CHILDREN (B AND C) AT THE TIME OF THE DEVISE? A, B, C have joint tenancy in life estate (common law presumption, no “and his heirs”) WHAT ABOUT THE MODERN OUTCOME IN EACH SITUATION? With no children. A has a life estate, unborn children have contingent remainder in fee simple O has vested reversion in fee simple subject to complete defeasance … rewrites grant to read “to A for life, then to A‟s children and their heirs” 18. ILLINOIS BEFORE 1950. O "TO A FOR LIFE, THEN TO THE HEIRS OF A'S BODY, BUT IF A DIES WITHOUT ISSUE, THEN TO B FOR LIFE, THEN TO THE HEIRS OF B'S BODY." THEN, B HAS CHILD, C. THEN, C DIES WITHOUT EVER HAVING HAD CHILDREN. THEN, A DIES, WITHOUT EVER HAVING HAD CHILDREN. YOU ARE TO ASSUME THAT THE FACTS IN THIS PROBLEM, AND ONLY THIS PROBLEM, OCCURRED IN Evans v. Giles – Shelley’s Case was abolished .. changed fee tail in Illinois… in Ohio, if jesse had a child, it had to survive him … in Illinois, there is not condition of survivorship … MOVE ON 19. O "TO A FOR LIFE, THEN, 25 YEARS AFTER A'S DEATH, TO B AND HIS HEIRS." A has present possessory life estate B has springing executory interest in fee simple (no remainder b/c there is a necessary gap in season) … too long, wiped out by Rule Against Perpetuities O has indefeasibly vested reversion in fee simple 20. O "TO A AND HER HEIRS, BUT IF B SHOULD COMPLETE MEDICAL SCHOOL, THEN TO B AND HIS HEIRS." B IS IN HIGH SCHOOL WITH A "D" AVERAGE. A has a fee simple subject to an executory limitation B has a shifting executory interest in fee simple O has nothing 21. O "TO A AND HER HEIRS SO LONG AS THE PROPERTY IS USED AS A GAS STATION, THEN TO B AND HER HEIRS." THEN, O QCD TO C. trying to … A has a fee simple with an executory limitation (looks like determinable) B has a shifting executory interest in fee simple … too long, wiped out by R.A.P … A has fee simple determinable O has possibility of reverter, C has nothing, p.o.r. is not alienable 22. O "TO A FOR LIFE, THEN TO THE FIRST OF B'S CHILDREN TO BE GRADUATED FROM MEDICAL SCHOOL AND HIS OR HER HEIRS." B HAS TWO CHILDREN: C IS IN COLLEGE AND D IS IN THE 4TH YEAR OF MEDICAL SCHOOL. THEN, O QCD TO E. A has present possessory life estate B‟s child who graduates first has a contingent remainder in fee simple (could be a gap in season … law favors contingent remainder over executory interests) O vested reversion subject to complete divestment … gives that to E 23. GRANTOR "TO MY NIECES AND NEPHEWS WHO REACH AGE 19 AND THEIR HEIRS." GRANTOR'S PARENTS ARE ALIVE; HIS MOTHER IS 80 YEARS OLD. (no brothers or sisters, or nieces or nephews) cant be a remainder b/c it doesn’t follow valid particular estate … to have nieces and nephews … parents would have to have more children and then they would have children.. in theory old people can have babies and so can really young people. Property outline 31 Professor Wolf – Fall 2003 Nieces and Nephews who reach 19 have springing shifting executory interest IS wiped out (since parents can have sibling not existing at time of grant, that‟s the problem) Grantor has a present possessory fee simple absolute Rule of Perpetuities … applies to kind people that would give you the people in the grant … how do you get nieces and nephews? Parents and siblings … so until those people die, 21 years starts … and that cant happen here 24. TESTATOR "TO MY NIECES AND NEPHEWS WHO REACH AGE 19 AND THEIR HEIRS." AT THE TIME OF TESTATOR'S DEATH, TESTATOR'S PARENTS ARE DEAD AND TESTATOR HAS TWO SISTERS, ONE BROTHER, AND ONE NEPHEW (AGE 2). No remote vesting. Parents are dead … Rule of Perpetuities … applies to kind people that would give you the people in the grant (implied in the problem) … how do you get nieces and nephews? Parents and siblings … so until those people die, 21 years starts … and that cant happen here Nephew (age 2) has springing executory interest not wiped out by RAP T‟s heirs fee simple 25. T SETS UP TRUST, THE INCOME FROM WHICH GOES TO "A CHARITY" SO LONG AS A SPECIFIED CHARITABLE PURPOSE IS FOLLOWED, THEN INCOME TO "B CHARITY" SO LONG AS A SPECIFIED CHARITABLE PURPOSE IS FOLLOWED, THEN INCOME TO "C CHARITY" SO LONG AS A SPECIFIED CHARITABLE PURPOSE IS FOLLOWED, THEN INCOME TO "D CHARITY" SO LONG AS A SPECIFIED CHARITABLE PURPOSE IS FOLLOWED, THEN INCOME TO E (A PERSON) AND HIS HEIRS. 26. O "TO A FOR LIFE, THEN TO A'S WIDOW FOR LIFE, THEN TO HER CHILDREN AND THEIR HEIRS." A has present possessory life estate A‟s widow has a contingent remainder in life (unindentifiable person) her children have a contingent remainder in fee (same) O has vested reversion subject to complete divestment O dies, Widow is born … A marries her, A dies, 25 years pass after A‟s death W has a child … vested? Nope … violates RAP b/c “unborn widow” isn‟t alive at time of grant … so its only measured by A‟s life… O has a indefeasibly vested reversion 27. O "TO A AND HIS HEIRS WHEN THE 2003 FLORIDA GATORS FOOTBALL TEAM WINS THE 2003 SOUTHEASTERN CONFERENCE (SEC) FOOTBALL CHAMPIONSHIP." THE GATORS NEED TO WIN A FEW MORE GAMES IN ORDER TO QUALIFY FOR THE SEC FOOTBALL CHAMPIONSHIP GAME. A has a springing executory interest in fee not wiped out … gap in seasons b/n time of grant and future interest … will happen OR FAIL to happen in 2003… O has a fee simple … he who hath no name 28. O "TO A AND HIS HEIRS, BUT IF THE PROPERTY IS EVER USED FOR A RESTAURANT, THEN TO B AND HIS HEIRS." tried to A has a fee simple subject to an executory limitation (looks like condition subsequent) B has shifting executory interest wiped out by R.A.P. … A has fee simple absolute O has nothing ONE YEAR LATER, A USES THE PROPERTY AS A RESTAURANT. It doesn‟t matter. ONE YEAR AFTER THAT, A "TO C AND HIS HEIRS SO LONG AS C DOES NOT USE THE PROPERTY FOR A GAS STATION, THEN (IF C DOES SO USE THE PROPERTY) TO D AND HIS HEIRS." Property outline 32 Professor Wolf – Fall 2003 C has a fee simple with an executory limitation D has a shifting executory interest not wiped out by R.A.P (b/c it has to be w/in C‟s lifetime and he is in grant … “vest or fail to vest) A has nothing ONE YEAR LATER, C USES THE PROPERTY AS A GAS STATION. D has a fee simple absolute VI. Landlord Tenant Relationship A. NonFreehold Estates 1. estate for years :: contract for the possession and profits of land, for a certain period; distinguishing characteristic is that it must expire at a fixed period, which is always ascertained at the creation of the estate 2. estates at will :: tenant occupies at the mere pleasure of him who had the next estate, who could terminate the tenancy at any moment (no notice is required) a) ejectment b) forcible detainer 3. estates at sufferance :: where one comes rightly into possession of land, but holds over after his interest is determined (not a trespasser, but has no interest capable of being transferred 4. Explain the difference between terminating an estate for years and a periodic tenancy. How much notice is required to terminate each kind of tenancy? a) ??? b) ??? Limitation B for 10 years B at the will of A B from month to month Holdover Present Interests Estate for years Tenancy at will Periodic tenancy Tenant at sufferance Future Interests In Grantor In 3rd Person Reversion Remainder Reversion Reversion Reversion B. Intro 1. Modern Relationship almost always governed by a contractual agreement – lease. a) instead of being able to point to a document (will), there is a fuller document that explains the rights and obligations of both parties, and this is called a lease. b) we have not seen this contract aspect with any other state up to this point. c) If there is one trend - landlord tenant law has become much more contract than property. 2. Landlord tenant law is characterized by two parents, contract and property law, competing for governance of ownership. Over time, contract has replaced property. Now modern contract law is the way to go. a) propositions of “bad old landlord-tenant law” i. no implied landlord promise as to the condition of the premises at the outset of the tenancy ii. no implied landlord obligations to maintain the condition of the premises during tenancy iii. independence of covenants – even where the landlord has obligations, they cannot be pleaded as a defense to a major tenant violation such as non-payment of rent iv. summary process – eviction for non-payment of rent or for holding over gets court priority, sometimes in a specialized court 3. historically, if the owner of the land decided that he wanted it back and wanted to give it to someone else – if the possessor said no, the owner could use force a) when Property law ruled landlord tenant relationships, landlords won almost all disputes Property outline 33 Professor Wolf – Fall 2003 b) landlord is bearing the risk while the tenant is on the property … most leased property back then was for agricultural purposes … this meant that the tenant had most of the benefits, while the landlord had most of the risks 4. moving from status to contract, we move from a regime that favored the landlord, to one that favors the tenant a) Restraints on alienation are bad, when it is applied to landlord-tenant context, 5. Classifications a) total transfer – doesn‟t say that landlord can come back on at end b) if tenant transfers remainder (for term), it‟s an assignment, and the person is an assignee c) if tenant transfers anything less, it‟s a sublease, and the person is a sub tenant d) landlord has much more of a relationship with an assignee, than with a subtenant i. Landlord can go after assignee ii. Whoever becomes an assignee is governed by the language under the contract e) landlord reserves right to reject transfer legitimate? Yes i. can even hold that right unreasonably ii. Rule in Dumpor‟s case – if a landlord who has the right to withhold consent to a transfer (in the lease) allows one transfer without reserving the right to reject future transfers, the landlord has lost power to withhold consent to all future transfers. (a) Most American courts don’t follow this f) periodic tenancy C. Rights and Duties 1. Paradine v. Jane a) facts: enemy forces invaded ‟s home, so he didn‟t want to pay rent b) where the law creates a duty or charge, and the party is disabled to perform it w/out any default in him and he has no remedy, there the law will excuse him c) lessee is to have the advantage of casual profits, so he must run the risk of casual losses and not lay that burden on his lessor 2. Dyett v. Pendleton a) facts:  renting part of house from ;  used rest of house for prostitution;  left … i.  contends that ejectment must be literally proved, and an actual entry and expulsion established ii.  insists the a constructive entry and expulsion is sufficient b) “no man shall derive a benefit from his own wrong” c) conceded that to excuse the non-performance of a covenant to pay rent, an entry of the lessor and an eviction of the lessee must be pleaded 3. Jacobs v. Morand a) facts: b) fact that rooms occupied by tenant were overrun with … making it inconvenient to inhabit the premises and rendering them untenantable, doesn‟t constitute a constructive evictions c) the inconvenience is one which all are more or less subject to at times, but which with ordinary skill and attention may be abated by the tenant 4. Remedco Corp. v. Bryn Mawr Hotel Corp a) facts: landlord seeks to end lease with 13 years left b/c of long course of conduct involving illegal activities b) issue is whether the landlord can terminate a tenancy where the permitted use, though on its fact a legal one, actually turns out to be a haven for degradation to the entire community? i. Yes 5. squatting – taking up residence w/out any color of right a) can repel by force as long as use only what is reasonably necessary b) sue for ejectment Property outline 34 Professor Wolf – Fall 2003 D. Viva la Revolicion!! 1. Bowles v. Mahoney a) facts: b) common law rule: absent any contractual or statutory duty, the lessor is not responsible for an injury resulting from a defect which developed during the term c) did Mrs. Bowles owe a duty to her tenant (and therefore the child injured)? i. did not agree to repair or maintain the demised premises, so NO d) Dissent: i. throw out the rule; cast presumptive burden of liability on the landlord ii. law should recognize that when one pays for temporary use of a dwelling, the parties contemplate that the dwelling will be safe and habitable at the time of possession and throughout the period for which payment is made (a) follows that a landlord, absent an express provision to the contrary, should be responsible for providing a safe dwelling iii. two reasons why common law rule has been perpetuated: (a) tenant should bear burden b/c he has control and possession (1) but if landlord is presumed to have duty to repair, then the right to enter for inspection and repair would be implied (2) in this case, landlord did have notice of the defect which caused the injury (b) hypothesis that it is still socially desirable not to discourage investment in and ownership of real estate (1) “but it seems clear that the rule operates to defeat the interests of utility and justice” a. upon whom is the loss to be placed more justly … the landlord? … or the impoverished tenant forced to live in filth? 2. Whetzel v. Jess Fisher Management a) facts: bedroom ceiling fell on lessee b) principal theory of  action is that appellee with knowledge of the defect negligently permitted the ceiling to remain in an unsafe condition c) NY Tenement House Law – every tenement house and all parts thereof shall be kept in good repair i. doesn‟t specify who had the duty of repair, but legislature must have known that unless repairs in the rooms of the poor were made by the landlord, they would not be made at all … duty imposed became commensurate with the need 3. Kanelos v. Kettler a) facts:  injured on defective bathroom door, she had three times previously notified landlord of the defect …  argued assumption of risk b)  cannot avoid liability by the suggestion that the  was at liberty to avert the danger by moving out i. she could not, in the face of an affirmative duty to exert care, be held to have voluntarily assume the risk of injury posed by his negligence ii. “no reasonable alternative than to take change on being injured” 4. Brown v. Southall Realty Co – where landlord leases a premises knowing that housing code violations exist which render it unsafe and unsanitary, such lease is illegal and void. 5. Diamond Housing Corp v. Robinson – when it is established that a lease is void and unenforceable, the tenant becomes a tenant at sufferance and the tenancy may be terminated on 30 days notice 6. Javins v. First National Realty Corp a) facts: tenants admitted they had not paid landlord any rent b/c of alleged violations of the Housing Regulations as “an equitable defense or claim by way of recoupment or set-off in amount equal to the rent claim” b) in the case of the modern apartment dweller, the value of the lease is that it gives him a place to live c) our holding in this case reflects a belief that leases of urban dwellings should be interpreted and construed like any other contract i. old no-repair rule cannot co-exist with the obligations imposed on the landlord by a typical modern housing code, and must be abandoned in favor of an implied warranty of habitability Property outline 35 Professor Wolf – Fall 2003 d) here, under contract principles the tenant‟s obligation to pay rent is dependent upon the landlord‟s performance of his obligations, including his warranty to maintain the premises in habitable condition 7. … trying to move away from common law concept b/c they believe it causes an injustice… when litigants in federal court attempted to get S.C. to recognize tenant rights on const. basis, the Court balked (pg 328) … VII. Concurrent Estates *** DO NOT use term CO-TENANT on the test b/c its not specific enough *** A. Joint Tenants and Tenants in Common 1. Joint Tenants a) :: hold undivided shares in an entire parcel of land b/c each has right to use the whole b) created by unities of possession, interest, time, title (PITT) i. meaning that tenants must take the same type and duration of an interest at the same moment from the same instrument and the each must have a right to use the whole ii. survivorship – if one tenant dies the other become sole owner, or if three joint tenants and one dies the other two then own as joint tenants 2. Tenants in Common a) :: hold undivided shares in the land, but only one unity is required – possession. b) thus tenants in common can take different interests in the same property at different times from different sources c) no right of survivorship – when one tenant in common dies, his share passes to his heirs or devisees, who take over his place in the shared possession 3. McKnight v. Basildes a) facts:  husband became co-owners of two parcels of real estate, after his wife died, along with wife's heirs … eventual heirs, as co-owners, filed a complaint with the trial court seeking partition of real estate and for an accounting of the income obtained by husband during his possession … husband claimed that he obtained title to the properties by adverse possession b) general rule that entry of a co-owner on the common property, even if he takes the rents, cultivates the land or cuts the woods and timber w/out accounting or paying for any share of it, will not ordinarily be considered as adverse to his coowners and an ouster of them c) mere exclusive possession, accompanied by no act that can amount to an ouster of the other coowner, or give notice to him that such possession is adverse, will not be held to amount to a disseisin of such co-owner. i. court rejects adverse possession, no OUSTER – everyone had right to occupy the whole d) Did the Washington Supreme Court in McKnight v. Basilides follow the Statute of Anne? (Hint: Check out Powell §50.04) i. Statute of Anne :: gave cotenants a right of action against another cotenant who obtained “more than comes to his just share and proportion ii. Prevailing American rule: occupying cotenant must account for outside rental income received for use of the land, offset by credits for maintenance expenses 4. hypos a) people can have an undivided interest and a fractional interest … the land is not physically divided, no matter how small your fractional interest is, you still have right to own entire land b) J gives B life estate and M indefeasibly vested estate in FS … are they co-owners? NO only one has right to use property c) J gives to B (1/3) and M (2/3) in FSA … “to B and M as joint tenants with rights of survivorship, B 1/3, M 2/3” … tenancy in common (not joint tenancy even though it says so) b/c missing interest (unequal shares) Property outline 36 Professor Wolf – Fall 2003 d) J gives “to B (1/2) in FSA, to M (1/2) in life, remainder to bill Jr and his heirs” … tenants in common, different interests (same fraction, but different type of estates), but have unity of possession i. if it is not in the same instrument, it cannot be joint tenancy ii. unity of time – ask when each party when they received their interests 5. Study Questions a) O GRANTS "TO A, B, AND C AND THEIR HEIRS AS TENANTS IN COMMON." (a) A, B, & C all have 1/3 FSA as tenants in common … ii. THEN, A DIES, LEAVING ALL OF HER REAL AND PERSONAL PROPERTY TO C AND D. (a) B = 1/3; C = 1/3 + 1/6 = ½; D = 1/6 as tenants in common b/c no unity of time iii. THEN, C QCD TO B. [brackets] = tenants in common; (parenthesis) = % share (a) [ B(5/6), D(1/6) ] iv. THEN, F OFFERS TO BUY THE PROPERTY FOR $300 THOUSAND. ASSUME THAT THE OFFER IS REASONABLE AND THAT ALL OF THE OWNERS WANT TO SELL. WHO GETS THE MONEY (AND HOW MUCH OF IT?)? (a) B = $250,000, D = $50,000 b) O "TO A, B, AND C AND THEIR HEIRS AS JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP." { } = joint tenants (a) A, B, & C all have 1/3 FSA as joint tenants … {A (1/3), B (1/3), C (1/3) } ii. THEN, A DIES, LEAVING ALL OF HER REAL AND PERSONAL PROPERTY TO C AND D. (a) C & D don‟t get anything extra b/c of survivorship … estate splits b/n survivors … {B(1/2), C(1/2)} … iii. THEN, C QCD TO B (a) joint tenancy severed, B = FSA … B gets all $300,000 c) O GRANTS "TO A AND B AND C AND THEIR HEIRS AS JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP." (a) {A (1/3), B (1/3), C (1/3)} ii. A QCD "TO D AND E AND THEIR HEIRS." (a) A‟s portion severed … [ {D(1/6), E(1/6)} & {B(1/3), C(1/3)} ] (1) modern law: no joint tenancy b/n D & E … presumption is tenancy in common [[D(1/6), E(1/6)] & {B(1/3), C(1/3)}] … and so on iii. A DIES (a) nothing, A severed his interest iv. THEN, C DIES (a) [{D(1/6), E(1/6)} & B(2/3)] … B gets C‟s interest by survivorship v. THEN, E DIES, LEAVING ALL OF HER REAL AND PERSONAL PROPERTY TO F. (a) F doesn‟t get anything b/c E‟s interests are given to D by survivorship … [D(1/3), B(2/3)] vi. THEN, G OFFERS TO BUY THE PROPERTY FOR $300 THOUSAND. ASSUME THAT THE OFFER IS REASONABLE AND THAT ALL OF THE OWNERS WANT TO SELL. WHO GETS THE MONEY (AND HOW MUCH OF IT?)? (a) D = $100,000, B = $200,000 d) O GRANTS "TO A AND B AND THEIR HEIRS AS JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP." (a) {A(1/2), B(1/2)} ii. THEN, A GRANTS "TO A AND C AS JOINT TENANTS WITH RIGHTS OF SURVIVORSHIP." (a) A‟s severance converts entire joint tenancy into tenancy in common w/ no survivorship … then creates separate joint tenants … [{A(1/4), C(1/4)} & B(1/2)] Property outline 37 Professor Wolf – Fall 2003 iii. THEN, A DIES, LEAVING ALL OF HER REAL AND PERSONAL PROPERTY TO D. (a) D can‟t get anything b/c A‟s interest is still part of a joint tenancy with survivorship … [C(1/2), B(1/2)] iv. THEN, E OFFERS TO BUY THE PROPERTY FOR $300 THOUSAND. ASSUME THAT THE OFFER IS REASONABLE AND THAT ALL OF THE OWNERS WANT TO SELL. WHO GETS THE MONEY (AND HOW MUCH OF IT?)? (a) C = $150,000, B = $150,000 e) T DEVISES HER LAND "TO A AND HER CHILDREN." AT THE TIME OF T‟S DEATH, A HAD TWO CHILDREN, B AND C. i. A, B & C are tenants in common … law presumes since no clear indication of survivorship … [A(1/3), B(1/3), C(1/3)] f) O GRANTS "TO A AND B AND THEIR HEIRS." (a) A & B are tenants in common … [A(1/2), B(1/2)] ii. THEN, A AND B MOVE ONTO THE PROPERTY. (a) Nothing changes iii. THEN A MOVES OFF THE PROPERTY AND NEVER STEPS FOOT ON THE PROPERTY AGAIN. 25 YEARS LATER, D WANTS TO BUY THE PROPERTY. WITH WHOM SHOULD D NEGOTIATE? (a) Both … each still has interest in the property… B has given no indication of an OUSTER B. Estates b/n Spouses 1. Tenants by the Entireties – PITT & valid marriage a) individual interests in the estate are not recognized … b) can be severed and converted into a tenancy in common by divorce c) can be terminated by: i. transfer of each spouse‟s interest to a third party ii. transfer of either‟s interest to the other iii. death of one spouse, in which case the survivor owns the entire undivided interest 2. at common law, entireties property was under exclusive control of the husband a) retained on right to survivorship 3. Carlisle v. Parker a) Like a hypo: i. O to A and B, husband and wife, as tenants by the entirety ii. A and B give a mortgage to X iii. B gives mortgage to FNB&T iv. X forecloses (money goes to A&B jointly) v. FNB&T is seeking payment of loan to B b) interest of the wife in the estate is her “separate property” c) neither the entirety of the estate nor the interest of either spouse can be sold during their joint lives, except with consent d) here, FNB&T cant get money from B out of foreclosure profit b/c the money is joint and can‟t used by just one w/out the other‟s consent 4. Robinson v. Trousdale County a) Like a hypo: i. O to A and B, husband and wife, as tenants by the entirety ii. B to Trousdale County (w/out wife’s consent) iii. A and B sue county for damages for taking Property outline 38 Professor Wolf – Fall 2003 b) each tenant had a joint right to the use, control, and rents of the property and was unable to sell the property without the consent of the other tenant … b/c everyone in this action received what they had bargained for except the wife, the court held that she was presently entitled to her award VIII. Servitudes :: putting your land to work for some other person‟s benefit A. Easements – right enforceable against the land of another 1. definition (Powell‟s) a) interest in land in the possession of another b) an interest of “limited use and enjoyment of the land in which the interest exists” c) can be protected against interference by 3rd persons d) can‟t be terminated at the will of the possessor of the servient land e) “is not a normal incident of” a possessory land interest f) “is capable of creation by conveyance” 2. types: a) positive – right to do something on the land of another b) negative – imposes a restriction on the use of which the owner of the servient tenement may make of his land c) in gross – if established to benefit the owner personally and not his land; expires when the person dies d) appurtenant – created to benefit the owner‟s use of his land (which adjoins the land burdened by the easement) i. first look for language … if none there, then look at facts and circumstance … does it enhance value of neighboring property? 3. termination: a) release b) its own terms c) unity of title (merger) – title to easement and servient tenement come to same person d) prescription – e) abandonment – nonuse or words indicating intent to never use again f) estoppel – if used for purposes inconsistent with purposes of easement, in reasonable reliance on conduct of owner of easement, and would unfair to restore easement privileges 4. Cushman Virginia Corp v. Barnes a) facts: appellants and appellee both owned property that was originally part of one large farm; a road existed across appellee's property that was a right of way in the original deed to appellants' property but that was not specifically named as such in the deed to appellants; Appellants wanted to subdivide their property and use the road, so they filed a complaint seeking an adjudication that there was a right of way appurtenant to the appellants' land over appellee's land b) when a right of way is granted over land, the servient estate, for the benefit of the other land, the dominant estate, and the instrument creating the easement doesn‟t limit the use, it may be used for any purpose to which the dominant estate may then or in the future, reasonably be devoted i. fact that dominant estate is divided and a portion conveyed away doesn‟t mean that an additional burden is imposed ii. here, the deed creating the right of way contained no terms of limitation upon its use c) characteristics of the easement: i. easement created by – deed ii. positive easement – allowed for use of road … iii. appurtenant (“and her heirs and assigns” … not essential but its recommended) iv. dominant estate – Cushman v. servient estate – Barnes Property outline 39 Professor Wolf – Fall 2003 vi. overburdened? – no d) After the holding in Cushman, could the Cushman Virginia Corp. use the formerly disputed right of way for getting large backhoes and other construction equipment to and from their construction site? Why or why not? i. Yes, court held that the right of way contained no terms limiting its use; appellants were entitled to make such use of the right of way as its narrow width permitted (a) if at time easement is created, it could reasonably be anticipated this kind of use could show up in the future, we will allow it e) What would have happened to the right of way if, in 1930, Mary Durrette Watson had acquired all of lots 1, 2, and 3, and then sold the 126.67 acres of lot 3 to Cushman with no mention of any right of way? i. easement would be terminated by unity of title (merger of the dominant and servient tenements); cant have an easement on your own land 5. Kelly v Ivler a) facts:  sought injunction to force  to remove certain improvements from an easement which runs across  property …  cross-claimed alleging that  has no easement on  property, and that  interfered with easement  had on  property b)  concede 1929 deed created permanent appurtenant easement but contend that 1959 reservation reduced it to an easement in gross (which would have expired upon Stuart‟s death in 1955) i. reservation will be interpreted as creating a permanent easement if, from all the surrounding circumstances, it appear that was the intention of the parties (even if words of limitation are not included) ii.  had no direct access to the beach without the easement and wouldn‟t have bought the property w/out it … easement was of value to the property to which it was appurtenant iii.  knew of the easement before they purchased the servient estate and that the merely two interruptions over 19 years were insignificant c) also, fence built by  was not nuisance to the easement b/c it only encroached 7 ½ inches … not enough to block people from walking to the beach, as was easement‟s purpose d) characteristics of the easement: i. easement created by – reservation in a quick-claim deed from brother to sister ii. positive easement – allowed for use of path iii. appurtenant – iv. dominant estate – s (stewart‟s) v. servient estate – s vi. not terminated e) The Kelly case involved a reservation. Technically, the case did not involve an “exception.” What's the difference? i. reservation = creation of a new right ii. exception = retention of an existing right iii. like distinction b/n prescription (gain right) and adverse possession (gain title) … reservation applies to a right, while exception applies to ownership or title B. Licenses 1. “passes no interest, nor alters or transfers property in any thing, but only makes an action lawful, which w/out it had been unlawful” a) licensee has a privilege and nothing more i. as opposed to a holder of an easement who has not only a privilege but also rights against members of the community in general b) require no formal writing to make them effective … license may also result from an imperfect attempt to create an easement Property outline 40 Professor Wolf – Fall 2003 2. Moore v. Missouri Friends of the Wabash (991 S.W.2d 681) a) facts: s brought suit to quiet title to land that adjoined their property that had formerly been used as a railroad; s say its their land b/c they received grant from the railroad b) held that original deed to the railroad provided that the grantee railroad would have rights in the property, so long as the land was used for railroad purposes … since railroad abandoned the land, property reverted to the adjoining landowners, the s i. “voluntary” grant construed to mean a conveyance w/out valuable consideration … the effect of which was that the railroad acquired only an easement, no matter what interest the deed purported to convey c) characteristics of the easement: i. easement created by – “voluntary” grant ii. positive easement iii. in gross b/c land did not benefit any other land of railroad iv. dominant estate – no dominant tenant in gross (nothing adjacent or close by) v. terminated? Yes, by abandonment d) Why was the court correct in allowing Council Bluffs and St. Louis Railway Company to transfer its easement to the Wabash Railroad, even though the easement was not appurtenant? i. Commercial easements in gross are transferable. 3. Baseball Publishing Co. v. Bruton a) facts:  agreed in writing to give plaintiff the exclusive right to maintain a sign on a building owned by ; all signs placed on the premises remained the personal property of ; accepted by sending  a check in the amount of the agreed consideration but  returned the check;  erected the sign anyway;  removed it b) revocation of a license may constitute breach of contract, and give rise to an action for damages … but is nonetheless effective to deprive licensee of all justification for entering or remaining upon the land c) here, though, the writing seems to go beyond a mere license … right is in the nature of an easement in gross d) “treat the writing as a grant for one year and a contract to grant for four more years an easement in gross thus limited to five years” e) characteristics of the easement: i. easement created by – grant for one year ii. positive iii. in gross iv. dominant estate – none v. servient estate – vi. terminated? 4. ON TEST: if you come across an easement a) positive or negative b) Appurtenant or In Gross c) Which is dominant/servient d) Terminated? 5. O owns fee simple absolute in Purpleacre. She sells the northern half to A and retains the southern half for herself. [Make a map, it helps!] A public road runs east to west across the southern boundary of Purpleacre. Before she sold the property, O regularly used a dirt road that ran from the northern boundary of the parcel southward to the public road, splitting Purpleacre into eastern and western halves. Using the dirt road made it much easier and much less expensive to reach the public road. When O sold the northern half to A, she made no mention of the dirt road or its use in the deed. One week after the sale to A, O puts a fence along the northern boundary of her new, retained lot and tells A Property outline 41 Professor Wolf – Fall 2003 that A will have to pay $50 a month to use the dirt road. Answer the following questions in order (each question is independent): a) Will A have to pay the $50 in order to use the dirt road? Why or why not? i. A‟s argument is that the easement is a necessity, he claims an implied easement by necessity … not successful b/c info given doesn‟t say that there are no other ways to leave property ii. Easement by Necessity only occurs in narrow set of circumstances: (a) Parcels must have originally been owned by same person (b) Absolute necessity (not merely an inconvenience) (1) necessary to ingress or egress to a public road; no other way to get to the public road iii. could be an implied easement by prior use, if when A purchases the land he saw the path and assumed that he would be able to use it … not a definitive answer b) Is A's position made stronger or weaker if Purpleacres were surrounded by large, immovable boulders on the northern, eastern, and western boundaries? Why? i. Stronger, b/c that makes for better necessity argument … also, dirt road strengthens argument for implied easement by prior use c) Now, forget about part b. If O had sold A the southern half of the property, and if A had been the one to erect the fence, would O have a weaker or stronger case for not paying the $50 than A did in part a? Why? i. Weaker, b/c if he sold the land we know that he knows about the ease of using the path, so he should have reserved the easement (some modern courts may look at implied easement by prior use here, skeptically) 6. Mr. and Mrs. Fielden Townsend sold real property to Mr.Crit Cable by a deed dated January 24, 1916. One paragraph in the deed read: "There is reserved out of the foregoing tract of land for the use and benefit soly (sic) of Jesse Townsend one half interest of all the oil and gas to dispose of at his will." Is there any problem with this clause under the majority rule? What is the minority position (or, as Powell deems it, the “growing trend”)? (By the way, these facts come from a real, reported appellate case.) a) “A to B, and reserving right to C” … majority rule is that you can‟t reserve a right in a third person by deed even if it is an attempt to create an appurtenant right in the land of the 3rd party i. Townsend v. Cable, 378 S.W.2d 806 (1964) – court follows the majority rule and doesn‟t allow the easement; would be OK if Townsend‟s reserved the easement for themselves (a) in order to give the easement to Jesse, they could have given him the easement when the property was still theirs, then sold it subject to the easement b) “growing trend” is to construe as two parts, a conveyance to B and a grant of easement to C as an abridgement to B‟s ownership C. Real Covenants 1. :: are those whose obligations or burden attaches to the estate or interest of it promisor (the person undertaking the obligation to keep the promise contained in the covenant, and may be either a landlord or a tenant); a) there should be an obligation on someone seeking to enforce a promise against someone who didn‟t make it, must find: i. Intent of original promisor and promisee that they bind successors to the interests of each (a) language that subsequent parties will benefit or be burdened by the covenant (b) exception – don‟t have to have special language if the subject matter was in existence at the time of the agreement (in esse); Modern – even more relaxed … intent is almost always a throw-away requirement ii. Touch and Concern the land (a) Generally assumed; watered down requirement (b) Affirmative covenants to pay rent are problematic iii. Privity of Estate (always present with a chain of assignments b/n original landlord and any later assignee) (a) Horizontal (b) Vertical Property outline 42 Professor Wolf – Fall 2003 b) common sense say that you cant enforce a contract against someone who didn‟t sign it? c) public policy favoring running of covenants that has gotten stronger and stronger so that what you see is 2. must distinguish b/n covenants that run to subsequent or remote grantees from covenants benefiting or obligating only the original purchases a) COVENANTOR = burdened (makes the promise) b) COVENANTEE = benefits (receives the promise) i. Can‟t find out who the covenantees and „ors are until someone breaches c) when a covenant runs with the land, the person who acquires the land that is benefited/burdened by the covenant also acquires the benefit/burden 3. Wheeler v. Schad a) facts: plume was damaged,  notified  and he agreed that the work needed to be done,  proceeded w/ the repairs at a cost of $3,500; i. s argue that  is liable b/c of original grant AND  is liable b/c he authorized work to be done b) court found that the deed was transferred to the assignee, but the agreement was not; court noted that the agreement for repairs was made six days after the deed was executed b/n the grantor and their grantees and w/out the two documents merging the agreement couldn‟t be considered a covenant running with the land „Tees H(), Dun(), B,  W() Benefit „Tors DO, I, M Duv  S () Burden Vertical line on the „Tee side indicates benefits running … if on the „Tor side it‟s a burdens running …. Both sides, then it is benefits and burdens running. c) six questions: i. Who were the original parties to the agreement that is the subject of the dispute before the court? (a) Hurd Dunker, Bossell &. Doscher, Itgen, McWilliams, Duval ii. What was the subject matter of the agreement (that is, what, if anything, did each side agree to do or to refrain from doing?)? (a) agreement to jointly build & maintain a plume iii. Who is/are the plaintiff(s) and who is/are the defendant(s)? (a)  = Hurd, Dunker, Wheeler (b) = Schad iv. What is the relationship between the original parties to the agreement and the plaintiff(s) and defendant(s), or are they the same people? (a) Hurd & Dunker, same; (b) Bossell granted his share to Wheeler; (c) Schad took control upon foreclosure v. What relationship, if any, did the original parties on one side of the agreement have with the original parties on the other side of the agreement? (a) Mere neighbors – no property relationship vi. Did the court enforce the agreement and why or why not? (a) No, no horizontal privity … vii. benefits and burdens running Property outline 43 Professor Wolf – Fall 2003 4. Which one of the above six questions is an inquiry about mutual or horizontal privity and which one is about vertical privity? Why? What's the difference between these forms of privity? a) Vertical privity = the party suing or being sued has succeeded to the same estate as the original covenantee or „tor i. Question #4 (iv) – What is the relationship between the original parties to the agreement and the plaintiff(s) and defendant(s), or are they the same people? ii. adverse possessor defeats running benefits and burdens b/c it begins a new chain of title iii. burdens running OR benefits and burdens running case then vertical privity is defined… to be covenantor‟s assignee you have to acquire same quantum of estate (a) sub-tenant would not have vertical privity iv. benefits running … to be covenantee‟s assignee (suing original „tor) you just have to have part of the estate (a) relax requirement b) Horizontal privity = found if covenant is created when one original party transfers interest in land (other than the covenant itself) to another original party (a) Question #5 (v) – What relationship, if any, did the original parties on one side of the agreement have with the original parties on the other side of the agreement? ii. Tenurial Privity – b/n original parties of the agreement … landlord/tenant … or life tenant/reversioners … or fee tail … or other tenurial relationships (a) every jurisdiction finds horizontal privity if there is a tenurial relationship iii. Massachusetts Privity (“simultaneous interest”) – required that „tor and „tee have a continuous and simultaneous interest in the same property (other than the subject of the agreement) (a) Ex: Easement; i.e. „tee is dominant tenament, and „tor is servient tenament (b) only Nevada still recognizes this type iv. Instantaneous Privity (American Privity, not Nevada) – transfer of property and the creation of covenant arise at same time (a) i.e. covenant attached to deed; grantor/ee at same time c) Which types of privity are required in: i. benefits running cases – cases in which the party seeking to enforce the benefit is not an original party to the agreement? (a) Vertical privity b/n covenantee and assignee (b) why not horizontal privity? Enforcing against person who signed contract! ii. burdens running cases – cases in which the party who is allegedly burdened by the covenant is not an original party to the agreement? (a) Horizontal privity b/n covenantor and „tee AND (b) Vertical privity b/n covenantor and assignee (c) why both? Person being sued didn‟t actually agree to contract! iii. benefits and burdens running cases – cases in which neither the party who is seeking to enforce the benefit NOR the party who is allegedly burdened is an original party)? (a) Horizontal AND Vertical … same reason 5. Morse v. Aldrich a) facts: Stephen Cook conveyed to William Hull with the privilege of using and improving the land and mill pond, including a portion of grantor‟s pond and all ingress, egress, and regress; Hull conveyed to Morse; Cook conveyed to Morse; b) According to the facts in Morse v. Aldrich, in 1794 (PLEASE NOTE THIS DATE), Stephen Cook conveyed to William Hull a tract of land in Watertown "in fee." What other interest(s) in land did Cook grant to Hull? Why? Be as specific as possible in labeling the other interest(s). i. gave him a fee and a privilege to use and improve the land … privilege is an easement – full liberty of ingress, egress and regress; positive appurtenant easement ii. next, he gives a profit – right to take something off of someone else‟s property Property outline 44 Professor Wolf – Fall 2003 „Tees Morse () benefit „Tors Stephen Cook  Aldrich () Burden c) six questions: i. Who were the original parties to the agreement that is the subject of the dispute before the court? Stephen Cook and Morse ii. What was the subject matter of the agreement (that is, what, if anything, did each side agree to do or to refrain from doing?)? Cook promised to drain pond to let Morse get mud for fertilizer … Aldrich didn‟t drain pond b/c he wanted to keep water level to cut and sell the ice iii. Who is/are the plaintiff(s) and who is/are the defendant(s)?  = Morse;  = Aldrich iv. What is the relationship between the original parties to the agreement and the plaintiff(s) and defendant(s), or are they the same people? Morse is original party; Aldrich is a descendant of Cook v. What relationship, if any, did the original parties on one side of the agreement have with the original parties on the other side of the agreement? Dominant/servient tenement vi. Did the court enforce the agreement and why or why not? (a) Burdens running (1) Intent? Language was there. (2) Touch and Concern? Enhance value of Morse‟ property? Yes, agricultural resource; Negative impact on Aldrich? Yes, can‟t make money on ice. (3) Privity? a. Vertical? Standard definition. Yes, both have FSA b. Horizontal? Yes i. What‟s the jurisdiction? Massachusetts ii. Tenurial relationship (good in all jurisdictions)? No. iii. Simultaneous Privity? Yes, dominant/servient tenement relationship; In 1794, “Cook coveyed to Hull together with …to enjoy pond” … 6. Comparing Wheeler and Morse: a) burdens running case, a benefits running case, or a benefits and burdens running case? i. Wheeler = Benefits and Burden running ii. Morse = Burdens running b) Tenurial Pivity? i. Wheeler = no ii. Morse = no c) “Massachusetts Privity”? i. Wheeler = no ii. Morse = yes d) “Instantaneous Privity”? i. Wheeler = no … sold land, but created covenant six days later … even if it was at same time it would have been no, b/c at this time in history Nevada didn‟t recognize this type of horizontal privity 7. Neponsit Property Owners‟ Assoc v. Emigrant Industrial Savings Bank a) facts: b) real covenant (runs with land) if: i. intent – provision in deed that covenant runs with the land is insufficient w/out more to accomplish such purpose; this is an affirmative covenant to pay money for use in connection with, but not upon, the land which it is said is subject to the burden of the covenant Property outline 45 Professor Wolf – Fall 2003 ii. “touching or concerning” the land – “if not in form, in substance” … owners of the land have undivided interests in the common areas which make the burdened property more enjoyable iii. privity of estate – “if not in form, in substance” … although  corporate entity has not succeeded to the ownership of any property of the grantor, cannot blindly adhere to ancient formula „Tees Neponsit Realty  Owners‟ Association () Benefit „Tors Robert Deyer   Bank () Burden c) six questions: i. Who were the original parties to the agreement that is the subject of the dispute before the court? (a) Neponsit Realty Co. conveyed to Robert Deyer and his wife ii. What was the subject matter of the agreement (that is, what, if anything, did each side agree to do or to refrain from doing?)? (a) covenant called for Neponsit Realty to maintain common areas while Deyer paid a monthly fee iii. Who is/are the plaintiff(s) and who is/are the defendant(s)? (a)  = Owners Association (b)  = Bank iv. What is the relationship between the original parties to the agreement and the plaintiff(s) and defendant(s), or are they the same people? (a)  is assignee of Neponsit Realty (b)  acquired through chain of title (bought at foreclosure sale) v. What relationship, if any, did the original parties on one side of the agreement have with the original parties on the other side of the agreement? (a) Buyer and Seller vi. Did the court enforce the agreement and why or why not? (a) Yes, Benefits and Burdens (1) intent in original deed (2) touching or concerning the land b/c land enjoys benefit of improvement a. N.Y. has problem with affirmative covenant to pay money … problem! b. court gets around this by “if not in form, then in substance” i. technically its an agreement to pay money, but (3) privity a. Horizontal i. jurisdiction? NY ii. Modern American – instantaneous privity? Yes. b. Vertical i. NRC had sold of all the parcels, so couldn‟t assign  anything, so how vertical privity? ii. “pierce the corporate veil” … although  corporate entity has not succeeded to the ownership of any property of the grantor, can‟t blindly adhere to ancient formula 8. Nicholson v. 300 Broadway Realty Corp a) facts: Embossing Co. wanted to build a switch branch track from its factory to the main track of the railroad; Nicholson owned adjacent premises Property outline 46 Professor Wolf – Fall 2003 „Tees Nicholson  Nicholson successors Benefits „Tors Embossing Co  Spitzer ()  Betty Thompson  Realty () burden b) Six questions: i. Who were the original parties to the agreement that is the subject of the dispute before the court? (a) Nicholson and Embossing Company ii. What was the subject matter of the agreement (that is, what, if anything, did each side agree to do or to refrain from doing?)? (a) Embossing promised to furnish steam heat, while Nicholson promised to pay $50 per year and allow use of his land for switch iii. Who is/are the plaintiff(s) and who is/are the defendant(s)? (a)  = successors in the right of Nicholson;  = 300 Broadway Realty iv. What is the relationship between the original parties to the agreement and the plaintiff(s) and defendant(s), or are they the same people? (a) s are successors (b) Embossing  Spitzer as agent of  (including obligation)  Betty Thompson (including obligation)   (no reference to obligation) (1) a sham created to avoid obligations v. What relationship, if any, did the original parties on one side of the agreement have with the original parties on the other side of the agreement? (a) Neighbors vi. Did the court enforce the agreement and why or why not? (a) Yes, enforced as a personal convenant (not a real covenant) vii. Benefits and Burdens (a) Intent … yes (b) Concerning and Touching … negatively or positively affect the land? yep (c) Privity (1) Vertical – heirs, yes … s take same estate (2) Horizontal a. Tenurial – nope b. Massachusetts – c. Instantaneous – not b/n two neighbors 9. Van Rensselaer v. Hays (revisited) „Tees Van Rensselaer III  V.R. IV () Benefits „Tors Dietz  Hays () burdens a) Six questions i. Who were the original parties to the agreement that is the subject of the dispute before the court? (a) Van Rensselaer Sr. and Dietz Property outline 47 Professor Wolf – Fall 2003 ii. What was the subject matter of the agreement (that is, what, if anything, did each side agree to do or to refrain from doing?)? (a) VR Sr. reserves rent from Dietz in exchange for land iii. Who is/are the plaintiff(s) and who is/are the defendant(s)? (a) = VR Jr.;  = Hays iv. What is the relationship between the original parties to the agreement and the plaintiff(s) and defendant(s), or are they the same people? (a)  are descendants; Dietz assigns to  v. What relationship, if any, did the original parties on one side of the agreement have with the original parties on the other side of the agreement? (a) Property and Contractual vi. Did the court enforce the agreement and why or why not? (a) Yes, state statute enforced the interests even though common law would have said no vii. Burdens and Benefits (a) Intent? yep (b) Touch and concerning? Nope … (c) Privity (1) Vertical – strict definition (same estate as assignor) … Hays FSA, Dietz FSA … YES … s also (2) Horizontal – a. 1859 in NY … English common law? b. Tenurial privity? No … holding of case was that there was none c. Massachussets? No d. Instantaneous? Yes (but this isn‟t followed at this time in NY) D. Equitable Servitude: 1. must find: a) Intent to bind successors b) Touch and Concern c) Notice 2. Tulk v. Moxhay a) where an owner enters into a contract that he will use or abstain from using his land in a particular manner, equity will enforce the agreement against any purchaser or possessor with notice who attempts to use the land in violation of its terms, irrespective of whether the agreement creates a valid covenant running with the land „Tees Tulk () „Tors Elms   Moxhay () burden Benefit b) Six questions i. Who were the original parties to the agreement that is the subject of the dispute before the court? (a) Tulk and Elms ii. What was the subject matter of the agreement (that is, what, if anything, did each side agree to do or to refrain from doing?)? (a) Tulk sold Leicester Square to Elms with a covenant that it would always be a garden iii. Who is/are the plaintiff(s) and who is/are the defendant(s)? (a)  = Tulk,  = Moxhay Property outline 48 Professor Wolf – Fall 2003 iv. What is the relationship between the original parties to the agreement and the plaintiff(s) and defendant(s), or are they the same people? (a)  = same;  = purchased deed v. What relationship, if any, did the original parties on one side of the agreement have with the original parties on the other side of the agreement? (a) no vi. Did the court enforce the agreement and why or why not? (a) Yes, inequitable for original covenantor to shed the burden of maintenance by selling the park …  knew of the covenant and not fair if he could sell for more money w/out restriction vii. Burdens running (a) Intent (b) Touch and Concern (c) Notice (1) c) Was there tenurial privity according to the English rule? i. No … elms has nothing left after transferring estate to  (England prefers this) d) Massachusetts privity (simultaneous)? i. no e) Instantaneous privity? i. Yes, conveyance and restrictive covenant made at same time 3. If OR is a covenantor (burden) and EE is a covenantee (benefit), and EE (who has a fee simple absolute) passes an estate for years in the parcel to EE Jr., who then moves onto the land, can EE JR. enforce the covenant against a breaching OR? a) Benefits running; must have vertical privity; relaxed definition of vertical privity, allowing EE JR. to bring action against original „tor as long as he received part of the estate … ok to enforce covenant against original party Benefit EE  EE Jr. „tees Burden OR „tors For EE Jr. to enforce against OR, must have received just part of the estate YES b) What about enforcing the covenant against a breaching OR Jr., who took an estate for years from OR and then moved onto OR's land? i. Running of the benefit AND burden; vertical and horizontal required; EE successor vs. OR successor requirement that EE successor have same quantum estate as held by EE … not here, EE JR. only has estate for years Benefit EE  EE Jr. „tees Burden OR  OR Jr. „tors For EE Jr. to enforce against OR Jr., must be same quantum estate NO Property outline 49 Professor Wolf – Fall 2003 4. According to technical rules of law and equity … a) Can one get injunctive relief in the event of a breach of a real covenant? i. Yes, if damages are not adequate to remedy the situation (i.e. you violate a restrictive by painting house pink, damages for neighbor may not be enough, might be ordered to repaint the house) b) Can one get injunctive relief for the event of a breach of an equitable servitude? i. yep c) Can one get monetary damages in the event of a breach of a real covenant? i. Yes, breach of contract d) Can one get monetary damages in the event of a breach of an equitable servitude? i. No, only injunctive relief 5. Wolf v. Hallenback a) facts: Hallenback conveyed land to Lewis in which he promised to build a house by Dec. 1, 1937; Nov. 10, 1937 Lewis conveyed to Wolf who didn‟t ever erect a building; Hallenback brought action 21 months after the deadline to build i. Section 154: action must commence w/in one year of date of violation b) “special covenant” is a condition subsequent … in which Hallenback holds possibility of reverter i. if grantor seeks to enforce right of termination by judicial proceedings, he is bound by the limitations of the statute … so this action is barred by one year limitation c) Does the court in Wolf v. Hallenbeck reasonably interpret the state statute? Why or why not? i. No. Not really, but result was probably good, because bizarre restriction. d) License- allows activity that would otherwise be illegal, is revocable at any time. (can still bring action for breach of K). 6. Buffalo Academy of the Sacred Heart v. Boehm Brothers, inc a) facts:  agreed to discharge debt in exchange for ‟s land as long as land was marketable or  must pay $60,000; deed was conveyed but  refused it on ground that it was unmarketable b/c land was subject to uniform building plan and it was subject to restrictive covenant not to build filling station b) Which of the following were present and not present in the Buffalo Academy case: i. Uniform Building Plan – no (a) no deeds contained covenants, grantor did not follow a uniform policy when selling the land, no map filed, only restrictions made were when it was necessary to maintain quality of land, no fixed plan of restricting use and no intent of grantor to bind himself to land which he gave (b) no showing that general plan was ever contemplated ii. Real Covenant – yes (a) number of pump housings and buildings limited on premises iii. Personal Covenant – yes, the second half (a) promises on grantor‟s part was only a personal undertaking b/c no language or legal implication says otherwise (b) second part of grant was nothing more than an agreement prohibiting the grantor personally from becoming a competitor of the grantee in the filling station business (1) why court try so hard to find this personal covenant? a. who are the parties seeking to sell the land free of the non-competition covenant? Academy of Sacred Heart … iv. Equitable Servitude (a) no, because there was no notice (b) purchaser takes with notice from the record only of incumbrances in his direct chain of title (c) to have to search each chain of title from a common grantor lest notice be imputed would seems to negative the beneficial purposes of recording act Property outline 50 Professor Wolf – Fall 2003 7. Loeb v. Watkins a) Facts: owners of 31 lots of land entered into agreement not to build apartments or flats for 25 years and also to never build more than two separate buildings on the land; Balka built a house on her portion of lot 27; s wanted to build two more houses on their portion of lot 27 b) [Majority] Where a man‟s land is concerned, he may impose, as long as not a violation of any law or public policy, any restriction he pleases i. here, ‟s rights to enforce the restrictive covenant is absolute, regardless of proof that they do or do not suffer damage as a result of the breach of the covenant c) [concurrence] says the covenant is enforceable, but  must show some benefit (which it found) d) [Dissent] the enforcement of this restrictive covenant would result in no benefit, economic or otherwise, to the parties seeking the enforcement i. when the 25-year period expired eliminating the other use restrictions, the usefulness and benefit of the proviso prohibiting more than 2 detached private dwellings likewise expired ii. since commercial and apartment uses are now possible, the covenant limiting a lot to 2 commercial dwelling houses is useless e) According to Powell, does change in neighborhood or circumstances affect the enforcement of equitable servitudes or real covenants? i. Doctrine of Changed Circumstance (change of neighborhood) – “obligations arising out a covenant cant be secured if conditions have so changed since the making of the promise as to make it impossible to secure in a substantial degree the benefits intended to be secured by the performance of the promise” (a) some degree of physical change in the tract neighborhood is essential ii. Equitable servitudes: change in circumstance will affect enforcement if it wouldn‟t make sense to enforce them anymore iii. Real covenants: not affected, but the change may affect the amount of damages that are awarded. 8. According to Powell‟s analysis of neighborhood restrictions, and ignoring for the moment the federal constitutional issues, should the Missouri Supreme Court have enforced the covenants in Shelley v. Kraemer (pages 1071-75) in law, equity, or at all? Why? a) At law – covenantors were mere neighbors at the time of the covenant, so not enforced at law; don‟t even have instantaneous privity b) At equity – no, wouldn‟t have notice that the neighborhood had restrictive covenants c) Why is it enforced? Judges twist common law to allow enforcement (racists!) IX. Buying a House A. Equitable Conversion 1. :: shifting of many of the incidents of ownership to purchaser once the sales contract is executed a) purchaser‟s interests become real property while seller‟s interest is in the contracts, which is deemed personal property 2. In 1996, Vendee agrees to buy a house in Albany, New York (this is meaningful information) from Vendor. One week before closing, Vendor dies and Vendor's heirs (who took the house upon Vendor's death) think that they can get a better price from someone else. Do the heirs have to go through with the closing? Why or why not? i. Yes, purchaser has equitable title to the real property … get when sign purchase/sale agreement (equitable conversion occurs) … can force the vendors heirs to give up the property ii. Vendor has equitable title to the personal property (MONEY/proceeds) b) What if Vendor in Question 1 does not die, but one week before the closing the house burns down? i. Does Vendee have to go through with the closing? (a) At common law, yes, same reason as above – equitable conversion; (b) At NY law, no (p. 693), if fully destroyed don‟t have to go through with it Property outline 51 Professor Wolf – Fall 2003 ii. What if Vendee was living on the property with Vendor's permission and Vendee caused the fire? (a) Then go back to common law rule, have to go through with the purchase (part B) subject matter transferred to vendee, also through part a(1) says without fault of vendee. c) Now ignore the changes in Question b) What if Vendor in Question 2 does not die, but one week before the closing there is a mysterious fire in the house that singes some curtains? Does Vendee have to go through with the closing? i. Yes, part a(2) immaterial part thereof is destroyed 3. *** find out if jurisdiction you are in has a uniform risk act (like NY‟s) if not then CL rule, and want to put something in contract. *** B. Establishing Title 1. Morse v. Curtis 2. Tramontozzi v. D‟Amici C. Marketable Title 1. Tristate Hotel Co. v. Sphinx Investment a) definition: “Marketable title is one which is free from reasonable doubt and will not expose the party who holds it to the hazards of litigation” 2. generally, a title is unmarketable if … a) reasonable probability the seller doesn‟t own the full title alleged b) property is subject to an undisclosed encumbrance c) purchaser bears unreasonable risk that he would be subject to litigation related to the property in its current condition 3. unless seller cures defect by closing date, purchaser can refuse to close and rescind contract 4. if closing occurs, courts historically held the sales contract merged with the deed, and the purchaser generally was limited to rights flowing from the warranties of title included in the deed D. Transferring Title 1. Reed V. Hassell a) Who usually asserts that merger has occurred as a result of the closing – the seller or the buyer? i. Seller b/c he‟s made promises in the contract and then gives a deed that gives less 2. Knudson v. Weeks a) b) Why wasn't the “covenant against incumbrances” breached in the Weeks case? Did the court find that merger had occurred? Why or why not? Property outline 52 Professor Wolf – Fall 2003