Property 1 Outline- Professor Parella

I. POSSESSION Introduction: Possession differs from ownership in that ownership is title. Possession requires: 1. Intent to exclude others: to control and posses 2. Actual custody: A physical control or deprivation of liberty. OR 1. Constructive Possession: Legal fiction to recognize possession where there is no actual possession A. WILD ANIMALS 1. Acquiring Title to Wild Animals B. Animals ferae naturae: Animals that still retain their wild nature 1. Possession of wild animals occurs when: 1. Custody: Actual bodily seizure, a deprivation of their natural liberty. 2. Capture virtually complete: Mortal wounding and "hot pursuit" A. Chasing: Insufficient for capture: a. Pierson v. Post: NY - 1805: Pursuit alone is not enough. i. π Post's pursuance of a wild animal within his sights gave him no legal claim to the fox, rather the interloper ∆ who intercepted it and caught the fox. ii. J. Livingston's dissent: We should give merit to the custom of sportsmen B. Trapping/Wounding: Sufficient if mortal wound and capture virtually complete. a. Young v. Hichens: QB - 1844: - If there is a distinct possibility of escape, there is no possession. The probable, but not virtually complete trapping of the fish was insufficient for the π to lay legal claim on the catch. Property of second boat that sneaked in and scooped the fish up. C. Custom/Usage: May rule where industry is at stake or when immediate possession is difficult. a. Ghen v. Rich: MASS - 1881: π made mark on whale after harpooning it. - We want to reward the efforts of whaler & protect the industry from raiders, even though uncertainty of whale ever being captured. 2. Interference by Noncompetitor: Courts will be sympathetic to the one that made the effort for capture. a. Keeble v. Hickeringill: KB - 1707: π set up traps on his pond to lure ducks for his trade. ∆ shot off gun to scare them away - ‘malicious acts against another’s livelihood.’ i. Ruled π, the one who made the effort and for his livelihood. ii. Note: Had the ∆ set up traps on his end of the pond, he would have been entitled to the ducks. iii. Court desires to protect one's livelihood. 3. Policy: i. Certainty of possession: Through actual seizure or mortally wounding. ii. Reward those for their efforts. iii. Protection of industry from raiders iv. Encourage law that is appropriate for settling disputes. B. Ratione Soli: "On account of the soil": One owns anything attached to his land. 1. American Rule: Landowner's give implied invitation to hunt. Rescinded if there is a sign. 2. Attachment to soil or stationary wild animals are property in constructive possession of the landowner. a. McKee v. Gratz: Mussels dug from bed of slow moving stream and made into buttons were the property of the landowner. Owner could recover for conversion by trespasser of the mussels, but not the subsequent profits made from their use. 3. If the animal is semidomestic and wanders off to wander back on your land (e.g. deer) you still own it. Your land. 4. One who deprives wild animal of liberty on another's land does not gain title. Property of land owner. PropertyI - Michael M. Wechsler 1 2. Escaped Wild Animals 1. Rules: i. Qualified Possession: One obtains possession by taking wild animal away from its natural liberty. One can lose that right of possession if the animal regains its natural liberty. ii. Animus Revertendi: "Intention of Returning" to their owner/place of land. a. With animus revertendi: Belong to owner when they roam at large (dogs return to home): ‘reward for taming’ b. Without animus revertendi: Once animal escapes, it may be captured and possessed by anyone i. Return to natural habitat: Prior possessor loses all qualified rights ii. Non natural habitat: notice of escape to second captor of prior possessor's interest. Property of prior possessor/owner if animal cannot survive on its own. A lion in NYC is obviously misplaced and cannot fend for itself. iii. Regulation by state: of hunting rules via statutes. iv. Exceptions: natural gas seeping from underground is the equivalent of a ‘wild animal’ but will be your liability if damages neighbor by fire 2. Mullett v. Bradley: NY - 1898: Sea lion originally captured in SF, escapes from LI, found on coast of NJ. - Ruled for new capturer as sea lion had regained its natural freedom in area it could fend for itself. - No hot pursuit by prior owner. Minority rule as it is very displaced from its natural habitat. a. Common Law Rule: Any escaped wild animal is free and owner has no legal title. Old rule when no zoos. 3. Domesticated Animals: we want to reward owner for training, discipline and domestication. 1. Semi-domesticated: May be property of the owner when there may be possible identification. a. EA Stephens v. Albers: COL - 1927: Fox with ID tattoo on ear escaped from pursuing owner, a professional trader. Killed by ranchman and sells through agent to tanner. Court ruled for trader as tanner knew trade, unusual for fox to be shot, area where there weren't foxes, and ID mark identified true owner. 2. Domesticated Animals: True owner never loses ownership, entitled to return by finder. a. Conti v. ASPCA: NY 1974: Chester parrot escaped from ASPCA and flew into tree 7 miles away. After 7 hours of coaxing, no success. Captured by Conti when in his backyard. Court ruled for ASPCA despite no sign of 'training' in court. Effort and fact that domestic (like dogs) means true owners always have possession, and traditional rules of wild animals do not apply. PropertyI - Michael M. Wechsler 2 B. TYPES OF POSSESSION 1. Unconscious Possession: Finders 2. Bailments 3. Constructive Possession 4. Adverse Possession Five forms of action: i. Trespass: Actual direct injury of trespass over property (Hitchens had possession, not legally) ii. Case: Indirect injury of trespass of property iii. Trover: Property taken and Converted: get value of chattel: Now Conversion. (Armory) iv. Replevin: Property taken and chattel returned. Specific relief in equity (Conti) v. Ejectment: of ∆ and return of land 1. Unconscious Possession: Finders: one who takes first possession A. Policy: i. Certainty of possession ii. A liability to the owner may exist when the item is lost/mislaid. We want to return rightfully. iii. We secure with state, fee owner, to ensure that items will be returned to rightful owner when possible. iv. Promote interest of the finder as he will turn the item in if he knows he will get possession. B. Requirements for Possession: 1. Requirements for possession: i. Intent to posses: and exclude others ii. Physical control: custody over the object C. Rules of finders: common law i. Finder has superior title over all except true owner. Becomes a custodian of object. ii. Finder has better rights as prior possessor over subsequent possessor iii. True owner has best rights against all, regardless of lost/mislaid, unless barred by SOL. iv. Tenant of unfurnished apartment gives exclusive possession to lessee (may be right for tennant/finder) v. Landlord better finders (exclusive possessors) than fee owner if property came upon premises after lease signed v. Public carriers act as bailees (Foulke v. NY Consolidated RR) vi. Trespassers have no rightful claim whether lost/mislaid. (like thief) fee owner get title. vii. Quasi-public places; Depends upon how much control over area (Cohen v. Manufacturer’s Safe Co) D. Lost Property: 1. Definition: Lost: Casually and involuntarily parted from true owner’s possession, and may be identified as when object is in location where obvious that in was not intentionally placed there. 2. Rules: A. Finders have best rights over all but true owner or prior possessor. i. Private place: Fee owner wins v. finder; (fee owner 1. intends to exclude others, 2. has control of area) ii. Public place: Finder wins v. fee owner; (fee owner has not satisfied 1. intent to posses, 2. custody/control) a. Exception: If public premises under de facto control, bank bailee (Cohen v. Manufacturer's Safe Deposit) 3. Applications: i. Bridges v. Hawkesworth: Finder in public place has better rights than fee owner, who does not satisfy requirements of intent to keep found item and exclude others. Finder in public store wins. ii. Hannah v. Peel: One owns things attached, underneath to one's land, but may not have rights against a finder for chattels found on the land. Physical possession of land is constructive ownership of everything on it. a. Finder in requisitioned house property of finder as owner never had intent to control or prior possession as he had never been to the house. Bad reasoning as obviously mislaid, but we know that owner of the premises was never true owner or prior possessor. Best case would be the Queen's, they ‘possessed’ it. - Queen would be bailee for true owner had she asserted rights to the jewelry. iii. Armory v. Delamarie: A finder of a jewel has best rights against all but true owner. iv. S. Staffordshire v. Sharman: An ‘employee under duty to deliver’ : One in employ of another & finding is job requirement, employer is legal finder. Employee found rings cleaning out pool, finder = employer. v. Queen v. Ashwell: Minority Rule: You cannot posses something you do not have, and there is no delivery when it is not intended. Ashwell received a sovereign instead of a shilling. Until he realized it was a sovereign, he did not 'posses' the sovereign as no requisite intent. Once he realizes it is a sovereign, and that it was 'lost,' Ashwell had intent to posses, and had duty to return to the true owner, and not doing so constituted larceny. Common Law of larceny stretched as real possession is at time of intent to take and have custody. That is when delivery took place. vi. Elwes v. Brigg: Owner of land owns all things and minerals attached to the soil - constructive possession. a. Sunken prehistoric boat embedded in soil is considered as part of the land. PropertyI - Michael M. Wechsler 3 E. Mislaid Property: 1. Definition: Voluntary parting/placing of the chattel and forgotten to be removed. Implied quasi-bailment with fee owner. 2. Rules: i. Fee owner wins v. finder regardless of public or private place ii. Fee owner has a duty to take care of the item because he is a gratuitous bailee. a. A quasi bailment is created, status of a K, but implied by law b. Secures return to owner, who is likely to come back for it. (McAvoy v. Medina - pocketbook in barbershop) 3. Applications: i. Foulke v. NY RR Co: NY - 1920: Passenger picked up a package that he saw another passenger mislaid. RR ruled to have possession over finder, & under duty of care to hold it until true owner found or statute runs out. ii. Cohen v. Manufacturers Safe Deposit: NY - 1948: Exception to public property finders. An establishment (bank) that has de facto control over its premises (did not here) will become the custodian of the property as an involuntary bailee and liable for return. iii. Invitee Doctrine: One who is on premises of another as invited guest, e.g. a salesman, the fee owner of the land will have better rights over the invited finder. F. Abandoned Property: i. Finder has full title as true owner has relinquished all rights to the property. ii. No abandonment of real property (adverse possession) G. Treasure Trove: The valuables are intentionally concealed in a private place/underground and true owner will never be found. Finder generally wins, JD split on this. a. English common law to the crown. b. Finder keeps it unless true owner appears. H. NY Personal Property Law Article 7-B - Lost and Found Property a. § 251: definitions. (1) Covers items where true owner cannot be located; money, instruments issued to bearer goods, chattels, tangible personal property, chattels, checks payable a. Does not include items where location of true owner can be made; Cars, animals, wrecks, instruments not drawn to bearer such as checks, bill of lading, warehouse receipt, stock certificate, promissory note, draft and bearer bonds (changed: liquid status in NY as court ruled bond found on PATH train was an instrument) (3) Abolishment of distinction of lost and mislaid: Lost includes mislaid; Abandoned and treasure trove assumption of lost unless proven otherwise of ownership. (Helps finder and finder wins regardless of lost/mislaid and public/private place) (5) Finder is the "one who takes first possession." First finder has better right over subsequent possessors. (6) Any vehicle which transports business is the owner of the establishment b. § 252: Found property to be delivered to police. (1)/(2)Anyone finding lost money or instrument of $20 or more must report it to the police/correct authority or return it to the proper owner within 10 days. (3) Non-compliance is fine of up to $100, misdemeanor and possible jail term up to 6 months. (Misdemeanor but you do not lose finder's rights in the object (Hurley)) (4) A person can give the found object to the owner of a premises as long as he has no reason to believe that the owner would do the right thing and give to proper authority for return to true owner. c. § 253: Duties of the police: To hold the chattel, attempt to find true owner (7) If found money is : i. less than $100 - 3 month wait ii $100 < $500 - 6 month wait iii. $500 - $1,000 - 1 year iv. $5,000 --> - 3 year wait d. § 254: If owner not found, the item goes to the finder or best owner. Item is after reasonable maintenance costs. e. § 256: Safe deposit vaults and transportation facilities (1) A finder on another's property will not be allowed to benefit: If the owner of the property files with the police a written notice asserting rights over it, before the property is delivered to the finder, the owner will take the right as 'finder.' (2) If employee finds and is an "employee under duty to deliver:" a. He is employed by the state or a public corporation and finds within the scope of his employment, the state or employer will have the rights to it as finder. b. If finder of private company finds within scope of his employment, employer will have rights as finder provided it files written PropertyI - Michael M. Wechsler 4 (3) If property found in a safe deposit vault or transportation facility, the police shall hold the money for 6 months, afterwards the bank for 15 years from date of find, as bailee. If no claimant bank sells all chattel not cash and proceeds goes to state comptroller. (4) Finder should turn item over to the one in charge of the premises in one of these two exceptions. (5) The two facilities are required to make an attempt to find the true owner of the object if discernible and open. Objects in closed briefcases e.g., the company is not liable for. (6) If there is a dispute over such found property, the police are to take custody of the item. (7) The article is superseded by any other statute requiring delivery to police, e.g. evidential matter pertaining to a crime. f. § 257: Title to Lost Property (1) Property goes to the finder or the person who has best rights, or pursuant to the other sections. (2) If the finder of less than $20 made a reasonable effort to find the true owner, title vests with him in one year. g. Hurley v. City of Niagra Falls: NY AD - 1968: Hurley found money being contracted independently to build a rec room in home of Moracas. Issue was whether Hurley was an employee under duty to deliver; court ruled no, an independent contractor. a. J. Scileppi's dissent: Hurley kept the money and was a thief. The statute provides a misdemeanor and a fine for not turning in the money. In addition, we are letting the thief benefit from his wrongdoing. Statute should also be read broader than just as though one under h. Private Residences: finder must report it to fee owner, holds it for 60 days, then must give to police. i. Merry v. Green: If there is no intention to deliver, there is no acceptance. a. Purse in desk drawer by accident. Owner got it back from buyer. PropertyI - Michael M. Wechsler 5 2. Bailments: The rightful possession of goods by one who is not the owner. K is formed when bailment requirements met A. Rules: 1. Elements to form 'contractual' bailment: i. Intent of bailee to possess: intends to assume custody and control over the goods. Must know what he gets It must be fairly obvious as to what bailee is really bailing (A canvas with dot may look like 1$ but worth $5K) ii. Custody/physical control by bailee: Bailee's acceptance and possession of goods iii. No consideration is necessary 2. Duties: A. Bailee: i. Compensated bailee mutual benefit: Liable for ordinary negligence, duty of due diligence ii. Sole benefit of bailor (gratuitous bailment): Bailee liable only for gross negligence. iii. Sole benefit of bailee (use by bailee): Duty of extraordinary care, but some degree of fault/negligence must be shown. Elastici ty of bailee duty Duty: Liabili ty: ordinary care g ross neg l ig ence sol e benefi t of bai lor ordinary care ordinary neg lig ence Mutual Benefit extraordinary care slig ht neg l ig ence sol e benefi t of bai lee iv. Redelivery: Bailee is strictly liable for misdelivery (presumed negligence). i. Burden of prima facie liability on bailee as he is most able to explain what happened to the object. ii. Liable even if he uses reasonable care but turns goods over to impostor. Where bailee does not redeliver, he will be deemed a converter as "the facts will permit an inference of negligence." Hiort v. Bott (Should do nothing and let the goods sit there. Once bailee does something with the goods, liable.) a. Exception: Public carriers (UPS) do not carry presumption of conversion and liability for full value. b. Defenses of redelivery: if act of theft (no negligence) G-d, levied by sheriff (bailor debt) c. If third party destroys object, bailee can recover for bailor, or bailor can recover directly from third party. No double recovery allowed (both bailee and bailor cannot sue third party and recover) v. Bailee rights and limitations: i. Bailee must inform bailor as to terms of bailment -Fine print on tickets will not apply, but bailment still exists ii. Bailee cannot exculpate himself completely from negligence iii. Modification must be with consent of both bailor and bailee iv. Bailee can recover for bailor - 3rd party cannot claim Jus Tertii (no right to sue - bailee ± owner) a. Bailee must inform bailor of suit and bailor can sue for himself. B. Involuntary Bailee: (one who does not intend bailment but it is thrust upon him) i. If no dominion by bailee: Burden of slight care ii. Dominion by bailee: Strict liability if delivery to wrong bailor - bailee is a converter(no excuse of good faith - Hiort v. Bott: Delivery of barley shipment to impostor) a. Cowen v. Pressprich: Strict Liability for misdelivery by involuntary bailee who assumes dominion. i. Cowen delivered wrong bond to Pressprich. PP called for the messenger but gave it to a fraud by mistake. Ruled that PP was negligent as it could have called Cowen. Strictly liable for misdelivery. ii. Dissent/Majority rule: If involuntary bailee does the reasonable thing he should not get nailed for liability. Delivery to the wrong party by a bailee is strictly liable, regardless of negligence. Where there is no true exercise of dominion, and bailee tries to remedy the situation immediately, he is involuntary bailee merely under the duty of ordinary care not to deliver to frauds. 3. Burden of Proof: i. π/bailor : Burden of proving that a bailment exists and that there was a loss/damage (prima facie case) ii. ∆/bailee: If π establishes a prima facie case, bailee must prove that bailee was not negligent as per the appropriate standard. If it does so successfully, burden shifts back to bailor to prove that bailee was negligent. PropertyI - Michael M. Wechsler 6 4. Rules governing contractual bailments: a. Parking Lots: Presumed only license to park. The more control the lot has, the more chance it is a bailee. 1. If the parking is done by an attendant and they keep the keys, requisite control is usually found 2. "Park and Lock" lots where the driver parks and takes his keys will usually not find that lot has custody/control. i. Ellish v. Airport Parking: NY AD - 1973: No Control, no bailment. a.Ellish drove into gate, received ticket and parked his car, took his keys. π did everything to retain control over the car and did not expect any more from the ∆ than license to park in a space. π knows of the volume of cars in the lot, and the ticket has no identifying mark as in a typical bailment relationship. π has burden to show negligence of lot owner as the lot is not a bailor because no control/custody of the car. b. J. Shapiro's dissent: Very persuasive. states the lot had control over the car as the lot was fenced in, exits were manned, there was no other place to park so adhesion K, and majority even said that it wasn't valid K but π agreed to the terms (that is the definition of an adhesion K!). Lot owner therefore has requisite intent of possession (for payment of money) and has control (can't leave without $) so the lot owners are bailors and have the assumption of negligence when the can't deliver. Burden on ∆. 3. NY General Obligations Law § 5-325: A lot (storage of 4 or more vehicles) cannot exempt itself from liability from negligence by waiver. It may have a clause of limitation of assumed negligence for theft, fire and damages of no less than $25,000, if it also agrees to, upon request of bailor, an increase in liability for additional payment. (Don't want to make lot owners liable for Mercedes unless car owner willing to pay for extra protection) b. Receptacle Rule: i. When there is a bailment of a receptacle, in absence of an express disclosure of its contents/items, bailee is only responsible for what could reasonably be expected to be found within. ii. If one receives an item without knowledge or consent, there is no bailment created. 1. Samples v. Geary: MO - 1927: If no statement of value, only liable for $200 minimum. a. Woman deposited coat with check at dance studio. She claimed that she stuffed her fur piece in the sleeve of the coat without the bailee's knowledge or sight. It was gone upon redelivery, and court ruled that no knowledge, no bailment. 2. Policy: i. Too easy to perpetrate fraud if liability for unforeseen items ii. Theory of Negligence: If you know bailed item cost more, you would take greater degree of care: should cost more, so laws limit liability of bailee liability (disclaimer theory) iii. Constructive Knowledge: safe deposit boxes: Contents unknown, but known to be valuable - as though contents known to bailee. c. Knowledge of Value: If bailee does not know the value of the bailment, he will be responsible; bailee only needs to know existence of the item, not necessarily the value. A bailment K will still exist. i. Peet v. Roth Hotel: As long as the bailee knows of the existence of the item being bailed, he is liable for full value regardless whether bailee appreciated it. (Distinguished from Geary - there no knowledge of fur) a. Facts: Bailee accepted engagement ring in envelope and was aware that it was a ring, but not of its value. Held full liability as bailee that does not deliver has burden of overcoming presumed negligence. Distinguished from Geary as bailed item known to exist. d. Disclaimers: Bailee may limit liability if not contrary to public policy. Limitations of liability will be strictly construed. i. Disclaimers must be conspicuous and easily understandable or they will be void. ii. Disclaimer of negligence must be explicitly stated in those words. iii. Burden on bailee to prove bailor was or should have been aware of disclaimer a. Willard van Dyke v. Eastman Kodak: NYCA - 1963: Kodak was negligent in processing film. Court ruled that disclaimer invalid as (1) In back of box in small type - illegible (2) Simple reading would imply that it does not apply to processing, only defective film manufacture and (3) negligence limitation is not explicitly stated - 'any liability' will not do. PropertyI - Michael M. Wechsler 7 B. Hotels/restaurants: 1. Common Law: Liability strict: Innkeeper held strictly liable to guest (unless guest negligent) as he provided protection from nondescript highwaymen. Modern view recognizes convenience of travel. 2. Statutory Provisions a. NY General Business Law § 200: Safes; Limited Liability A. Covers: i. Motel, hotel, inn, steamboat ii. providing safe or other convenient place for safekeeping iii. Money, jewels, ornaments, banks notes, bonds, securities, precious stones B. Requirements: i. Post notice of statute and safe in a public conspicuous manner in public rooms, offices, parlors ii. State safe available and failure to deposit valuables will relieve proprietor of liability for loss, theft or other C. Liability i. None if no deposit by guest and establishment fulfills requirement ii. If delivery to safe, hotel is only liable for a maximum of $1,500 - unless another amount was agreed upon and expressed in writing. (Not obliged to accept more than value of $1,500) iii. If establishment does not provide a safe, statutory protection of limitation of liability is not available and common law rule applies. (Most hotels will have insurance) b. NY GBL § 201: Liability for loss of clothing and other personal property limited (1) A. No liability for damage/loss to wearing apparel or other personal property i. in lobby, hallways, rooms ii. exceeding $500 unless hotel negligent and then liable for maximum of item value - For items put in baggage/storage where reasonable fee may be exacted: i. exceeding $100 if in storage/baggage/other room than guest's and no notice of higher value ii. exceeding $500 if notice given and innkeeper gives written receipt of value iii. any amount if due to negligence of innkeeper (1) B. $500 limitation of liability for merchandise unless either written receipt for more, or negligence by proprietor. (1) C. Property deposited by guests/patrons in checkroom of any a. Covers: i. Hotel, motel, restaurant and ii. Delivery evidenced by check/receipt and iii. No charge exacted b. Liability i. $200 unless value stated upon delivery and written receipt stating value (including negligence) ii. $300 maximum unless proprietor negligent (1) D. No innkeeper liable for fire unless proprietor negligent in causing the fire. (2) Notice must be placed in conspicuous place, and no misrepresentation as to this section PropertyI - Michael M. Wechsler 8 3. Application: a. Zaldin v. Concord Hotel: NY CA - 1979: A hotel may limit liability only at the times it provides access to a safe. when safe is not available, no statutory protection. b. Gonclaves v. Regents Intl. Hotel: NYCA 1983: i. Hotelkeeper is negligent and fails to satisfy requirements of § 200: C/L absolute liability ii. Hotelkeeper negligent, satisfies § 200 requirements, liability $1,500. a. Facts: Guests put their jewelry in unattended lockboxes, which were broken into. Question is whether the steel boxes constituted a safe within the meaning of § 200. Court said that since the statute is in strict derogation to the common law, strictly construe § 200. Burden of proof that it is a safe is on ∆ bailee, as he wishes to absolve himself of liability by using this statute. Court does not allow hotel to say they made a K with agreement to stay that they won't be responsible for more than $500. If allowed, we would have no use for the statute. Court says the issue is one of facts, whether the boxes qualified as a safe, and should be left for the jury. i. Dissent: The issue is one of law. It is a definition. If we allow this, then those who don't know anything about safes will be deciding whether one is or not. Meaning of words should not be left to the jury. If so, every time π yells 'no safe' it will call a jury to determine. Other cases determining safes (payphone, storage) were determined by judge. In addition, statute intended to limit liability of hotel owners, not to insure guest's property. Therefore, we should not state whether the safe is adequate for the hotel, but whether the safe in question is good enough to safe keep $500 worth of property. In fact, the guest must disclose whether more than $500 for liability, and if not, only $500 protection in safe. A hotel is not a bank, therefore these boxes are adequate under § 200. c. Honig v. Riley: NYCA 1926: Woman left $850 coat with check in restaurant, no fee. When she went to reclaim, it was gone. Rule, that if at free check, if no value stated, maximum liability is $75 (now $200). If value stated and written receipt, $300, if there was negligence and there was a written receipt of value, only then could liability be unlimited. d. Conboy v. Studio 54: Disco could not invoke NY GBL § 201 because 1. they were not a restaurant with a business of serving food, and 2. The sign for giving notice was insufficient as it would not give notice to the bailor of the limitation disclaimer. Therefore bailment created with absolute liability. 3. Constructive Possession: a. Gillespie v. Dew: Where there is no adverse possession, the title draws with it constructive possession. Actual possession need not occur to sustain an action for trespass. b. State v. Schingen: Servant, acting in course of employee, took beer and horses for transport of beer. Servant drank the beer and tried to sell the horses. Claimed no crime as no possession by master. Ruled that servant only had custody of goods, not possession, and that master still had constructive, although not actual possession. c. Constructive possession is a legal fiction to remedy the owner for wrongdoing by others. 4. Adverse Possession (AOCEA) 1. Requirements: 1. Actual Possession - Mere assertions are not sufficient - need physical manifestation of actual entry. a. Once AP sets foot on land, SOL begins to run b. Brumagim v. Bradshaw: The circumstances surrounding the tract of land will determine the extent to which the owner is required to give ‘notice to others’ that the land is possessed. Here the land was over 1000 acres, but surrounded on 3 sides by water, and one side by fixed stone fence. since Treat fixed the wall sufficiently to enclose the area and give notice to others that property is owned. 2. Adverse Possession: May not be permissive, and a claim should be able to be brought through this adversity a. Color of Title: Not required in most states. Is required in NY state. One who claims possession of land with invalid deed, but he believes that it is valid, in good faith. b. Constructive Possession: Alone it does not satisfy adverse possession requirements. If there is color of title, and possessor only possesses part of the land actually, he will be deemed to have constructively possessed the whole land. c. Hostility is not necessary for AP. i. Mistake of boundary: is sufficient to comply with AP requirement. 3. Open and Notorious: Secret or furtive possession insufficient. Owner must have constructive notice. a. True owner does not need knowledge of the AP, only good opportunity to know. b. Should give reasonable notice to the owner that he has a case for ejectment if he wants c. Does not have to be all 365/year, but depends upon situation d. Ewing v. Burnett: Rich guy digging sand and owning lot while poor guy knew who didn’t bring suit for over 21 years. SOL ran out and land is title of adverse possessor. 4. Continuous and without interruption: Must be regular occupation, not necessarily 365/year. Same degree of possession as objective possessor. Interruption by true owner may destroy continuity if true owner attempts to reestablish entitlement to the land. a. Mendonca v. City services Oil: Gas station rebuilding land tore down fence and rebuilt it using three feet of it’s property originally held by AP. This constituted a break in the SOL and no AP. 5. Exclusive: No simultaneous possession: 2. NY CPLR PropertyI - Michael M. Wechsler 9 a. § 212: Actions to be commenced within 10 years: action to recover real property must be made within 10 years from when adverse possession began in relation to predecessor or π. b. § 211: 20 year SOL v. state for adverse possession, or political subdivision of the state. In NY no title allowed if the state land is held in governmental capacity or in public trust. c. § 208: Infancy/Insanity: If the person against which the cause of action accrues is i. under a disability of infancy ii. at the time the cause of action arose, and iii. statute would have run so that when the situation is concluded (reaching age of 18/sanity/death) there would be no more than 3 years left on the SOL, then 3 years are extended onto it. iv. The later of (a) 3 years from the time the disability ends or (b) 10 years from the date of the adverse possession, whichever ends later. v. For chjattels (3 year limit) infancy/disability first will extend to 3 years from point of cure. PropertyI - Michael M. Wechsler 10 3. NY Real Property Actions and Proceedings Law - Article 5 - Adverse Possession a.§ 501: Action after entry (to stop SOL) i. Requirements in NY to stop the SOL from running, are both: 1. Entry onto land must be made, and 2. claim made within one year of entry, and within the 10 year SOL for adverse possession. b. § 511: Adverse Possession: with COT: Constructive Possession Allowance i. When AP claims colour of title by written instrument, he constructively holds the entire parcel of land even if he actually occupies only part. ii. exception: If the tract has been divided up into parcels, AP with COT only possesses that tract he occupies. c. § 521: Adverse Possession without COT Constructive Possession Denied Common Law rule applies: Occupied area (no constructive possession) is considered AP. d. § 512: Essentials of adverse possession under written instrument or judgment (COT) i. If AP possesses the land under color of title, AP must do one of the following to qualify as AP: 1. Usual cultivate/improve the land, OR 2. Protection by substantial enclosure, OR 3. Use as ordinary occupant would, or for supply fuel, fencing timber. e. § 522 Essentials of adverse possession under claim of title not written i. If person was an AP as per requirements, and COT not founded on a written instrument, judgment or decree, land will be possessed for AP only if either have occurred: 1. Usually cultivated/improved, OR 2. Protected by a substantial enclosure f. § 531 Adverse possessor, how affected by relation of landlord and tenant i. Where there was a relationship between landlord and tenant that has been terminated; if adversely possessed by the tenant for 10 years after last payment of rent, it will start the SOL running (10 + 10 for AP) g. § 541 Adverse possession, how affected by relation of tenants in common i. Where one tenant or his servant, of a TIC occupy the land for 10 successive years exclusively, or do so by immediate ouster exclusively, SOL begins to run (10 years + 10 for AP) h. federal Non-Intercourse act of 1790: Congress’ permission for Indian grants paramount to state SOL. 4. RPAPL § 311: Burden of Proof: On AP that he has met requirements for AP. 5. Applications: a. Van Valkenburg v. Lutz: AP did not meet the statutory requirements for an AP. He needed to improve the land or make boundaries. Garage was not enough over boundary for sufficient notice. Use of land only constituted an easement. i. Dissent: It was continuous improvement of land from nothing to a truck farm. statute does not say you need to cultivate all the parcels or the entire parcel. People in town all had notice of Lutz’ ownership. His suit for easement would not overcome his AP as mere oral assertion of not having title is not good enough to give away land (cannot be abandoned). b. West v. Tilley: Even though the triangular lot was not completely occupied, the wall surrounding it was sufficient to establish AP right of the whole parcel. It does not matter hat the land was AP by mistake. 6. Title acquired by Adverse Possessor a. Relation back: to beginning of 10 year period of SOL holding. AP holds from 10 years ago good title in relation to claims by the prior owner (not to others) b. True owner may recover 3 year back damages for trespass in NY if SOL doesn't run out. 7. Future Possessors v. Adverse Possessor a. An AP only has as good title as the person he is AP against. If AP against one with a life estate, AP only has good title of life estate against that owner and not against remaindermen. after if estate owner dies, the new SOL begins to run against the remainderman. PropertyI - Michael M. Wechsler 11 8. Tacking a. AP can transfer his SOL time to another by oral transfer, written deed, inheritance, one in privity b. Periods of possession are tacked together c. Tacking allowed only when privity exists: by deed/will or d. against those with future interests (remaindermen) i. If remainderman has interest at time AP begins, he will continue to have that interest and SOL will only run against him at death of life tenant. ii. remainderman interest created after AP SOL begins, SOL runs against both life tenant and remainderman as life tenant had ability to bring the suit. 9. Policy: i. we want to encourage use of land and resources ii. Many documents destroyed and no way to trace title back to the sovern. iii. Gie notice to the owner about an adverse possession before it gets taken away from him iv. Bars stale claims IV. REMEDIES OF AN ADVERSE POSSESSOR A. Types of Remedies 1. Replevin: Specific performance for the actual item. Only need to prove prior possession. 2. Trover: Conversion: Recover FMV of chattel at time of taking; only need to prove prior possession a. Accession: Right of converter to keep the profits of what he had converted in good faith, but must pay the owner for the fair market value of the chattel at the time of conversion. 3. Trespass: Deprivation of chattel; damages for time you are without the item/ or to the item. B. Types of Possessors 1. Finders i. Rights of prior possessors ii. Bailment rights of involuntary bailee iii. Double recovery against wrongdoers allowed (Armory: both finder and true owner could sue goldsmith) iv. may recover Replevin, trover and trespass. a. Anderson v. Gouldberg: Prior possession by one allows him to bring suit against subsequent possessors not the true owner b. Lieber v. Mohawk Arms: π stole Hitler's clothes and they were stolen from him. Allowed to recover even though he was a thief. Seems better policy thief gets better title as prior possessor than second - same as AP against second AP. 2. Bailee i. Rights of possessor ii. Contract right of bailment iii. Liability to owner. Bailee acts as agent in suits for recovery if true owner cares not to litigate personally. iv. Double recovery not allowed. if bailee recovers, bailor cannot and vice versa (bailor may sue bailee) a. The Winkfield: One who is bailee has right to sue for bailor as his agent. ∆ cannot assert Jus tertii, that it is not property of bailee to sue for. Bailee may recover for bailor, but only one action allowed between bailee and bailor. 3. Life Tenants (are bailees) A. Majority View 1. Zimmerman v. Shreeve: Trespasser cut wood, life tenant sued for decrease in value of land & wood i. A life tenant can only recover for the property taken and the damage to the land as per actuarial tables of the life of the owner of the life estate. Life tenant not permitted to sue for full measure of damages to the property. ii. Remaindermen must bring their own suits. B. NY and Minority View 1. Rogers v. Atlantic, Gulf & Pacific: A life tenant is not liable to remaindermen for permissive waste but may sue on their behalf. a. NY Real Property and Proceeding Law § 833: If the life tenant sues on behalf of the remainderman, he must sue at one time for all interests involved. b. damages may be payable in lump sum or reinvested to fix the land. The money would probably be held in trust for the remainders. c. Damages: In both cases: i. Life Tenant: Take (value of damages for use of land/year) * (actuarial age span left) * PV of money ii. Remainder: The (value of the land before and after) - (Life Tenant's value of land use per I) PropertyI - Michael M. Wechsler 12 A. pros: to not allowing joinder (Zimmerman) i. If we allow life tenant to sue he may abscond with money, never give remaindermen their share ii. Life tenant only cares about his interest & may not bring the best action for the remaindermen B. cons: to not allowing joinder (Rogers): better view i. We don't want to flood the courts with lawsuits that could be resolved immediately ii. Life tenants/remainders are usually family matters therefore no real danger of absconding/weak suit iii. Trust could be set up for the money won 4. Application a. Tapscomb v. Cobbs: One bringing an action of ejectment must recover in the strength of his own title, not the weakness of another. One may pass title of prior peaceable possession to heir even if heir never set foot on the land. i. Prior peaceable possession is enough to ouster anyone from adversely possession except the true owner. ii. Strange result as 7 year gap of possession should entitle Tapscomb with a new possession over Cobbs. Cobbs probably had actually bought the land even though no records, therefore court sympathetic. Facts: Cobbs took land by will from Mrs. Lewis who appeared not to have gone through with a sale to her, although possible. Tapscomb entered land after Cobbs left for 7 years, Cobbs sues to eject. Mrs. Lewis never entered the land. b. Winchester v. City of Stevens Point: One who asserts title has the burden of proving it. i. A mere possessor (not owner) of property may only sue for the damage to use of the land, not to the land ii. The fact that π tried to prove ownership and failed leaves court to assume she has title as an AP or a mere possessor. Since no other concrete proof, she is entitled only to possessor damage. iii. Don't want to allow possessor to recover for full damage - he may be gone when true owner shows up, if he isn't. iv. Common Law: A rebuttable presumption of title arises from possession of real property. 1. Dissent: Agree with decision, but not with rationale. One who intrudes upon another who is in peaceable possession has no defense that the other person isn't the owner. Burden of proof is still on trespasser, but π here could recover only for the devaluation of the land by the flooding from the time of the flood to the time of the suit. 2. Facts: π had land for more than one year as prior peaceable possessor but could not prove title. ∆ built dike which overflowed constantly damaging the land. c. LaSalle County Carbon v. Sanitary District: Only a titleholder can sue for damage to land - and if one is the titleholder at time cause of action arose.. i. Facts: Adverse possessor in 1900 when damage occurred. 1905 π became possessor of land but could not sue for past damages as he was not owner when cause of action arose. d. Illinois v. St. Louis RR: A peaceable prior possessor can recover damages against a trespasser for present damages to land. i. Facts: RR CO built on π's island which had accreted and become a strip of land going across the Mississippi River. RR tore down his fence 3 times, he sued that lease didn't cover his land, and that ∆ cannot assert that he cannot recover because the RR can prove that 3rd party owns the land. ii. Rule: Trespassers cannot assert defense that 3rd party owns land. iii. We care to encourage punishment against wrongdoers e. Mentzel v. List: 1. Case Facts: Mentzells fled Belgium during WWII invasion 1940, upon recovery German's had record of removal not whereabouts. Parisan gallery had it and sold it to Perls 1955, who sold it to List 1955. Sued List upon discovery 1962, who impleaded Perls. Awarded List painting. 2. Damages: i. List against Perls for $22,500 value of painting at time of 1962 claim as restitution improper and would not show any wrong done by Perls to List. Given expectancy compensation. ii. Court warns art dealers to be more careful: No excuse not to ask because impolite. See Porter infra. iii. Damages for interest were to be as of the date of the suit. NY has law that there is no cause of action for replevin/trespass until you demand the item back. PropertyI - Michael M. Wechsler 13 f. 509 Sixth Ave v. NYTA: Encroachment = continuous trespass, not barred by SOL, renewed daily for 3 years. 1. Case Facts: π discovers tunnel by ∆ on π land forces change in plans to blueprints for building structure. ∆ claimed the encroachment, since 1939 is barred by 3 year NY SOL in this 1960 suit. Recovery for trespass to land damages is 3 years SOL. i. Ruled π as encroachment is a continues trespass whose claim is renewed every 3 years after SOL runs out. f. NY Real Property Actions and Proceedings Law A. § 611: Where action cannot be maintained; i. If property strip of 6 or less inches of which exterior wall is built, action must be commenced within 1 year of completion of wall. ii. Damages for erection of the wall may be made in more than 1 year - but if after year and satisfactory judgment for π, title passes to ∆. iii. Otherwise, if no case brought within 1 year as per I, ∆ will have easement to strip only while wall standing. B. § 871: Action for removal of encroaching structures: 1. Action may be maintained for encroachment, and damages may be awarded instead of injunction. 2. The § does not modify existing statutes. g. Damages of continuous trespass v. permanent injury Situation 1) Damages 2) Requirements to sue 3) Statute of Limitations 5. Bona Fide Purchasers a. Porter v. Wertz: 1. Facts: Porter sold Hassam, gave Utrillo to Von Maker/Wertz who sold it to Feigen Gallery, commission immediately to SA buyer. a. ∆ Feigen asserts: i. UCC § 2-403 Statutory Estoppel: If one gives property to another who is a merchant and has apparent authority to sell, he has no claims against BPV from the merchant as they were made to think by merchant's possession that they are his and π estopped by his original action. Clothed by the guise of actions by owner that he was an agent. ii. Equitable Estoppel: not mentioned. b. Court rules that Wertz not within definition of merchant as very easy to see he was really a deli worker. In addition, no good faith as Feigen turned it over for commission quickly and he knew something not quite kosher. Therefore painting not on consignment and never Wertz' to sell. c. NYCA: Agreed with ruling for π and added that art world would be devastated by ruling for π as now all art dealers must suspect one another, must insist on certification of ownership and that won't work. b. O'Keeffe v. Snyder: NJ: NJ discovery rule, SOL runs from time you should know where item is + due diligence. 1. Facts: O'Keeffe had paintings stolen in NY gallery 1946, never reported, very few 'inquiries. Probably stolen by friend who gave to relative, father of ∆ in NJ. 1 day art show in 1968 in NJ. Sold to Snyder in 1975, discovered in 1976. NJ SOL for replevin is 6 years. Not adverse possession as not open & notorious (Redmond: Even painting in gallery for 50 years isn't good as open, but with no adversity by gallery). Discovery rule appropriate, when O'Keeffe through diligent effort would have located the paintings. a. Rules: i. Thief can never transfer good title and true owner will win regardless of the possession. ii. One with voidable title may pass good title to an HDC. iii. Theft occurred in NY and law is replevin only runs SOL when demanded, but can't delay or laches applies. iv. NJ is appropriate forum as painting and owner in NJ; as per International Shoe, use NJ law. iv. SOF discovery rule to bar stale actions, propose π diligence to recover and end situation for all quickly. v. SOF does automatically make one an AP. vi. Must use reasonable efforts to have right for return or discovery rule starts early. b. Policy problems i. Open and Notorious: Most thieves take painting underground and can't say when one could have known. Will keep them underground and never to be found. ii. If it must be wide open, it will ruin art market for people that buy fro their homes, they will always lose. iii. Change of burden of proof: i. Land = Possessor (AP must show he possessed it for 20 years) ii. Personal Property = Owner (Must prove he used due diligence for discovery) c. Dissent: Snyder was the first time the painting was out and Snyder bought it. O'Keeffe sued within 6 years. Now burden is on true owner who innocently has to prove he was diligent or thief gets title. Encourages thievery, as sale is either to fortunate person, or cunning. Continuous Trespass FMV of land use from time of deprivation of land until time of suit Prior Possession Renews every 3 years Permanent Injury FMV before injury - FMV after injury True Ownership 3 years PropertyI - Michael M. Wechsler 14 c. DeWeerth v. Baldinger: NY: NY action for replevin is when demand for return, laches applies when identity known. 1. Facts: Monet disappears in Germany during WWII and found location in 1982. Book published which is catalog for art had painting listed in 1957. Does discovery rule apply in NY? No, replevin begins at time of demand for return, but court applies NJ rule as woman did very little to find the item, less than Elificon case. Should have applied NY rule as per International Shoe. 2. Rules: i. NY has 3 years to bring action of replevin against thief at time of taking, even if no knowledge by owner ii. Laches applies when the party is known to have item, but π delays bringing suit. 3. Policy i. Discovery rule better as 3 year limit protects thieves better than even a BPV. ii. π can hold out until he 'knows' - will never settle a dispute in timely fashion. D.R. Rids stale claims. iii. On other hand, this rule encourages return to true owner (replevin only 3 years from demand) e. Guggenheim v. Lubell: No discovery rule applied in NY, replevin SOL accrues 3 years after demand for property. d. Jensen v. GE: CPLR § 214 (c) Applies 3 year discovery rule in NY for toxic waste/asbestos injuries VI. GIFTS OF PERSONAL PROPERTY A voluntary transfer of property without consideration/compensation. A. Policy for delivery requirement i. Clear indication of donative intent ii. Prima Facie evidence of transaction B. All Gifts: Requirements: 1. Donative Intent - (if clear courts try to find delivery - Newell: His best friend for years) a. Present intent to give and irrevocable; not merely transfer of possession. 2. Delivery a. Actual possession, or b. Delivery of deed (signature, description of chattel, stating intent) c. Constructive delivery i. Shows clear intent of donor to part with the property ii. Relinquishes control, can be symbolic (key to safe) iii. Family transfer only needs clear intent of constructive delivery (Irons v. Smallpiece) iv. Agent: Assume valid for donee unless fraud or reason to believe no real transfer (lawyer of donor) a. Agents for infants will almost always be enforced 3. Acceptance (prima facie if beneficial implied acceptance, but still need delivery) C. Statue of Wills: (Try to protect dead man's intent and capacity at time of will) i. Signed writing ii. 2 witnesses iii. Ceremony in some states D. Rules: for gifts: 1. Inter-Vivos i. Absolute and unconditional transfer of title when alive ii. Possession and title transferred with relinquishment of control; irrevocable 2. Causa Mortis: Requirements and Rules: (Poor man's will) i. Gift made in apprehension of imminent death. Not that he must die (may allow suicide) ii. Automatically revoked if donor recovers, or donee dies prior to donor death iii. Possession before death, title at death (if death from that peril - other death revokes title) iv. Revocation (implied right in CM) may be made in any form, even slight verbal intent v. A CM gift can be revoked before death, and giver usually intends to revoke if no death. vi. CM gift must be made with present transfer or it is subject to the SOW vii. As in both CM and SOW, title at death, possession before death for CM, not SOW. viii. Giving up right to revoke is a IV gift, not a CM. IX. May give present future interest for valid CM (Gaden) E. Application of requirements: 1. Donative Intent a. Newell v. National Bank of Norwich: Intent when delivery made, - IV gift is satisfied if permanent intent i. Facts: On his deathbed, man gave ring to childhood friend (no other heirs). Accepted it only if donor would wear it until death. Donor recovered and wore it until his death 4 years later ii. Held A valid inter-vivos gift was made as the intent was for donee to keep it from that point on. iii. Rule: An IV gift can be made on one's deathbed. iv. "Dead Man's Statute" - Donor can't testify his claims donor orally states to him on deathbed. Who can refute? v. Courts will try to find intent and delivery where it seems apparent...his childhood friend and no heirs. PropertyI - Michael M. Wechsler 15 b. Miller v. Silverman: i. Facts: Envelope in box found 'All within belongs to Jane' ii. Rule She could not testify that it was TIE property due to 'dead man's statute' that they went to vault together. Security guard testified they were there together. iii. Held: Intent was good enough to qualify for causa mortis gift and constructive delivery. c. Innes v. Potter: An IV gift may satisfy delivery if made to 3rd person 1. Facts: Old man gave shares of stock and writing to 3rd person to deliver to his daughter upon death. ii. Held: Relinquishment of all control to third person Third parties d. Grymes v. Hone: Gift may be held in case one dies as long as some present interest vests immediately. As long as fear of death, and other 2 elements, there is a gift CM. i. Facts: In signed/witnessed writing, donor gave 20 shares to wife to hold for favorite granddaughter in case of death. Held in case he needed it later. He died. ii. Held: Valid CM gift as all 3 elements fulfilled. Intent to transfer effectuated delivery. iii. Since the remainder interest passed immediately, that is fine for CM interest as donee only does not have the immediate 'enjoyment to use.' e. Meyers v. Meyers: Delivery may be made by deed for gift CM, as not like will that interest vests upon death. i. Facts: Father going to surgery, gave lawyer a signed deed to minor son and told him to record if he died. ii. Held: Valid intent and delivery of deed to satisfy gift CM. Doesn't have to be actual delivery to minor son, lawyer is fine. f. Gruen v. Gruen: One may give 'remainder interest' in property to qualify for intent for CM gift i. Facts: Father gave son painting with remainder interest, he keeps for life estate. Painting in father's home until death. Only proof were letters giving title. ii. Held: Valid CM gift as transfer of remainder interest was effectuated and delivered through the written letters. iii. Differs from will and no worry as will interest does not vest until death. iv. A CM gift can be revoked before death, and giver usually intends to revoke if no death. v. As long as there is evidence to establish intent to make a present and irrevocable transfer of title or the right of ownership, there is a present transfer of some interest and the gift is effective immediately. 2. Delivery a. Irons v. Smallpiece: Son said father gave him the horse. Law requires actual delivery, not words. i. Note with intrafamily transfers there usually is no need for formality and constructive intent ii. Lord Escher states that a gift should be where nothing more needs to be done, like Irons. 3. Gifts in Contemplation of Marriage: a. NY Civil Rights Law Article 8 "Heart Balm Law" 1. § 80 (a): Causes of action for alienation and affections, criminal conversation, seduction, breach of k to marry abolished i. Abolishes fault/injury based on promise to marry 2. § 80 (b) Allows suit for chattel, money, real property securities when in 'sole consideration of marriage' a. Gaden v. Gaden: i. Facts: Man finances land with his own and father's money. Gets ex-wife to sign mortgage with him because he wants to in expectation of marriage. Break up, she wants half by TIC (not entirety), he wants out as per § 80 (b). ii. Held: Recission: Sole consideration of marriage means that where the main reason was marriage, that is where recission takes place. He got nothing from her signing, no real legal obligation. Substance over form - He would bear entire loss if there was a default. iii. TBE is created only when there is marriage at time of transfer to them. iv. Many times people use lay people to obtain TIC and TBE as a. $ goes from bank to people to pay for land. b. Land is bank's property c. and deeded to the two as TBE v. Many times donor never actually takes title but would allow recission: "Go to Tiffany, get a ring, I'll arrange all" vi. We do not get into whose fault it was or we'd be back in Heart Balm years. Engagement is just a trial period to see if things will work out and it is not fair to make someone at fault at this time. vii. Dissent: The clothes he bought for them while they lived together is no different than this land. TIC. b. Lowe v. Quinn: If already married to another, § 80 does not apply as illegal i. Married man gave diamond ring to woman for engagement. Broke up. ii. Held: Illegal in CL of NY to be engaged to marry while you are still married. § 80 (a) allows nothing will bar recovery under this statute - that is unless something else does. PropertyI - Michael M. Wechsler 16 F. Bank Accounts 1. Totten Trust: A tentative transfer effective upon death, not subject to the Statute of Wills i. Must read "A as trustee for B" ii. A can withdraw all, B can't withdraw anything iii. All passes to B on A's death iv. Present transfer of tentative interest in trust v. Revocable - not like IV gift 2. Power of Attorney i. A gives to B power of attorney ii. A and B can withdraw iii. When A dies B gets nothing, only use during lifetime, death is subject to SOW iv. § 678 allows specific convenience account to be set up. 3. Joint Survivor "Either/Or" Account: Presumed gift that each has undivided interest at C/L, 1/2 in NY i. Made to "A or B" - "A or B or survivor" "A and B" ii. Donor can withdraw all at C/L as can B, NY to their moiety iii. Survivor takes all. iv. If opened only for convenience and not a IV gift (proof of intent assumed) no survivorship, subject to SOW v. If joint, A can sue B if B withdraws more than her 1.2 (moiety) vi. § 678 allows to set up specific convenience accounts - does not pass on death. A. Intent to make: i. Change names on account ii. Change name and deliver passbook B. Delivery i. Change of name with no delivery of passbook is not sufficient delivery except in joint account ii. Delivery of passbook with no name change sufficient as complete parting of control iii. Change of name and delivery sufficient iv. No actual passbook delivery required for family of minor child C. Rights of Joint Tenants i. Common Law: Each party has right to possess but precluded from preventing other from the whole ii. NY (Minority Rule) a. Joint Tenancy with right of survivorship b. If either party withdraws more than moiety, right of survivorship vanishes and becomes TIC D. EPTL a. § 7-5.2 Terms of a trust account: (1) Trust can only be revoked by extent of withdrawals, or by a writing specifically naming the beneficiary & bank. (- NY: "Bank account 1234, in Apple Bank, A as trustee for B") (2) i. Will can terminate trust but must be a writing that specifically names the bank, beneficiary, and account, or ii. by specific bequest to one other than the beneficiary (3)If depositor survives the beneficiary - title in donor. (4) Beneficiary survives donor - trust terminates, gets title free and clear of trust. (5) If conflict with will and trust, if will specific as per (2), will gets money free from trust b. § 7-5.3: Payment to the beneficiary i. If beneficiary over 18, gets all ii. Under 18, guardian/parents can take less than $5,000 to use for beneficiary iii. More than $5,000, only to appointed guardian of beneficiary c. § 7-5.4: Effect of Payment i. Once bank pays to anyone in § 7-5.3 it is absolved from all claims from anyone claiming right to the funds d. § 7-5.6: Joint Depositors i. If joint trust in more than one name as depositor, or survivor or in trust for another, account governed by EPTL, but title to corpus governed by NY Banking Law. e. Article XIII Joint Deposits and Shares § 675 Ownership and Payment (a) To protect bank from liability: If one withdraws more than their moiety from the bank account, or money is paid to the survivor, the only recourse the JT injured has is against the other JT, not the bank. (b) The making of a joint account is prima facie evidence of the creation of a JT with a right to survivorship. The one objecting to JT has the burden of proof against rebuttable presumption that valid gift was made to survivor. PropertyI - Michael M. Wechsler 17 E. Applications a. Tygard v. McComb: Using a joint account for one's substantial benefit will make the joint account an SOW item i. Facts: father made joint account for his 2 daughters. Used the account to loan money for notes ansigned checks in their name. Father died in an accident. Was it a joint account valid IV gift? ii. Held estate as father used account for his benefit therefore no intent to give (POD) gift. b. In re Totten: A Totten Trust is a tentative revocable trust (donor not a fiduciary), unless completes gift by some unequivocal act i. Facts: Fanny set up many accounts in trust for people and kept switching money around. She died after taking a large sum out of trust of π and putting it elsewhere. ii. Held: Estate. A donor to a Totten Trust can do whatever they want unless they make an unequivocal manifestation of a gift to complete the transfer IV. c. Malone v. Walsh: JT is not subject to SOW where intent is clear and survivorship interest vests upon death i. Facts: Estranged woman desires to keep money away from husband so she sets up JT for her brother. ii. Deposits in joint account are present revocable interests that ripen at death. iii. "The reservation of right to withdraw both income and principle and to revoke the JT was not inconsistent with the creation of a present interest in a valid IV JT ." d. A Matter of Lang: NY: One cannot withdraw more than their moiety in a joint bank account. i. Facts: Old woman puts money in joint account so niece will care for her. Relative shows no proof withdrawals made for old woman's care, niece cleans out account, puts in joint account for herself and husband. ii. Held: Must return aunt's moiety to estate. Once withdraws more than moiety (without consent) in NY, JT severed and they become TIC, no survivorship rights. iii. If allowed to clean out account, joint tenant that cleans out first wins. e. Klieinberg v. Heller: We adjudicate the return of moiety only where the withdrawals are excessive i. Reverses Lang because there must be a determination whether the aunt consented to this impliedly. ii. If there is consent, a withdrawal of excess of moiety is not a severance of the JT per § 678. iii. § 678: If money is labeled as convenience the money is still survivable and JT exists. iv. Niece could have gotten money almost immediately. Intent of aunt was that she should get it. Therefore, taking it out right before death should not sever the JT as implied consent may be found. F. Oral Trusts a. Smith's Estate: Rare infrequent holding that oral trust may be made with no actual delivery i. Facts: Donor told brother that he had 'appropriated' bonds for his nephew, envelope found 'held for Tom.' Nephew lived with uncle for many years, close relationship, collected debts entered in account for Tom. ii. Held: A valid oral trust made as intent was no manifestly clear that we would not want to frustrate intent. iii. The delivery was in the form of Creator = Trustee. Not usually allowed orally. G. Voidable v. Void Title: 1. Voidable: Owner intends to pass title. BPV wins over true owner. Owner could have prevented transfer: No defense: i. Lack of consideration ii. Unauthorized Completion of Instrument iii. Breach of contract for the property iv. Fraud in inducement to sign v. Prior Payment. 2. Void Title: No intent to pass possession: Owner could not prevent transfer: True Owner wins: i. Forgery of check/chattel ii. Fraud in execution (signs one thing not knowing it is another) iii. Material Alteration of terms of instrument iv. Bankruptcy of maker v. Incapacity of Maker/ duress may be voidable under state law 3. Policy: We want to make the party that could have prevented the loss from occurring to bear the burden. of loss. BPV could usually do nothing unless he knew of fraud or should have known. PropertyI - Michael M. Wechsler 18 VIII. ESTATES IN LAND 1. Freehold Estates A. Fee Simple Absolute a. "O to A", alone, at issue, and his heirs, forever b. Presumption of absolute conveyance with any of words in (a) c. Rights absolute include alienability (sell), devisability (transfer by will), descension (heirs) d. Total restraint of alienability on any fee simple is void B. Determinable: Fee simple continues as long a some event occurs, but ends automatically if it doesn't i. e.g. For school as long as used for school purposes ii. Reverter interest may occur iii. Transferability iv. Not infinite C. Condition Subsequent: Fee simple will end if event does not occur, fee simple ends if grantor elects to reenter. i. Reverter: "to school upon condition for school purpose, however..." ii. Courts prefer this one as reversion is optional by grantor 2. Fee Tail: Abolished in NY: Kept land only within the family 3. Life Estate: For life of grantee, life of other, or words of limitation 4. Remainder: Future interest created in grantee capable of becoming possessor upon expiration of prior estate. 5. Less than freehold estates i. Easement ii. license of use iii. restrictive covenant iv. mortgage 6. Husband and wife: Inchoate Dower A. Dower: Wife had 1/3 interest in husband's property so long as it was: i. Marriage at time ii. Inheritable Freehold 1. Attached only to real property, even if had personal debts on it by husband B. Curtesy: Husband was to be seised in rights of wife. Her death, he gets all. C. Modern Law: All real and personal property now passes. Spouse can contest will if they get nothing. Inchoate dower only applicable if from before abolishment in 1930. IX. CONCURRENT OWNERSHIP A. Three Types 1. Joint Tenancy with right of survivorship (JT): Shares go to co-tenants 2. Tenancy In Common (TIC): Shares go to heirs 3. Tenancy by the Entirety (TBE): Married spouse inherits. B. NY Estates, Powers and Trusts Law (EPTL) a. § 6-2.1 i. Estates in NY classified as 1. Severalty 2. Joint Tenants 3. TIC 4. TBE as to real property only b. § 6-2.2 (a) Rebuttable presumption of TIC unless declared as a JT (b) Husband and Wife property rebuttable presumption of TBE unless declared JT or TIC (c) Disposition of real property to those described as husband and wife, but are not, creates assumed JT, unless TIC (d) Disposition by guardian to two or more persons is assumed a JT. (e) Property passing intestate assumes a TIC. C. Four Unities Requirement: (TIPT) To be joint tenants, need all at time tenants take interest: 1. Time: Interests taken at same time 2. Title: Derive interests by same Instrument/title 3. Instrument: With identical duration of interest (same type of title, e.g. fee absolute/life estate) 4. Possession: Equal undivided right in the property as a whole 5. Marriage for TBE PropertyI - Michael M. Wechsler 19 survivorship survivorship: several sell part interest: (conveyance) possessor interest of entirety equal shares req'd forced partition sale unilaterally destructible agreement mortgage available accountable for waste # unities required judgment creditor lien against 1 party D. Rules: tenancy in common N Y Y Y N Y Y Y Y 4 Y tenancy by the entirety Y N N Y Y N N Y both sign see (1) below Y 5 depends on the state. see (2) joint tenancy Y Y Y becomes TIC Y ? Y becomes TIC Y becomes TIC Y becomes TIC Y 4 Y 1. TIC i. All own undivided shares in land ii. No survivorship between them. Property passes to heirs iii. Property may be partitioned iv. Each tenant's share may be conveyed v. each may own different undivided % of shares land. vi. Presumption of TIC unless otherwise declared vii. My be partitioned as to sale or actual division 2. JT i. Survivorship - survivor is owner of entirety ii. Tenancy is undivided in whole iii. May be partitioned iv. Severance by one creates a TIC between the one and remaining JT v. Words of creation "JT with x with right of survivorship" or "x with rights of survivorship" vi. "Jointly" no good, "as joint tenants" allowable in some states 3. TBE i. Survivorship ii. No severance by either iii. No partition except for divorce, but creditor has rights of one in debt (Bubba) v. NY recognizes TBE only for real estate vi. Common Law presumption of TBE with husband and wife unless otherwise specified vii. "as husband and wife" is sufficient NY, CL says "H + W with right of survivorship" D. Application: a. Sawado v. Endo: Property TBE is not subject to creditor's liens in Hawaii. 4 Groups. i. Facts: Man has car accident and subsequently transfers his and wife's land to his child. Court Aftre accident victim tries to put lien on it, Hawaii court disallows is as TBE property is not anle to be touched by anyone. 1. MASS, NC, MICH: H has exclusive dominion over the property. MASS levy can be only over H, NC/MICH only over both H + W. 2. NY: You can levy over either debdtor but you can't partition. Note that if she H dies before W, levier gets nothing as entire property goes to W. 3. HAWAII: No one can touch TBE community property. 4. Liens are allowed and H + W become TIC in the community property. b. Pico v. Columbet: Enjoyment of land is exclusive to both. TIC in exclusive possession of land has no duty to account for profits of his use of the land to the other, except for rents/profits received from a stranger. i. TIC has no remedy against another who exclusively occupies the premisis and receives the entire profits from them unless: 1. TIC is ousted of possession (and may bring ejectment) 2. One is acting as bailiff for the other's interest agreement where an action for accounting will lie. c. McKnight v. Basilides: i. Dissent/Majority rule: If One tenant has exclusive possession (without ouster/bailiff title) he is responsible for an accounting of rents and profits only to those rents to third parites, not his own occupancy - that was his right. ii. Majority Opinion: Uses case where widow pays half property rent for premisis she occupied exclusively to state that when a cotennant exclusively occupies whole land, he is liable to pay full rent value to his cotennants. PropertyI - Michael M. Wechsler 20 PropertyI - Michael M. Wechsler 21