Docstoc

Acquisition of Property

Document Sample
Acquisition of Property Powered By Docstoc
					 I. Acquisition of Property
A. Finding
        1. First possession- Pierson v. Post--- Post sued for rights to a fox that he was pursuing
and Pierson killed---Rule: First possession gives ownership—in order to have ―possession‖-actual
possession is sufficient or continued pursuit (not mere pursuit)
        a. formalism- emphasis on making decision based on the rule
        b. instrumentalism- emphasis on choosing the rule based on what is best for society
        2. Finder v. landowner- Goddard v. Winchell--- aerolite fell onto land owned by Goddard
in which was sold by finder to Winchell. The aerolite belonged to Goddard b/c was not movable;
fixed part of the land—goes to land owner. Rule: anything on land belongs to landowner
        a. Winchell wanted first possession (occupancy)
        b. possession rule better for scientific research
        c. replevin- lawsuit for ownership and possession of thing
        d. Hypo: if wild animal is caught ( 1st poss.) and gets away, becomes property of whoever
catches him next
        e. Hypo: if domesticated (tame) wolf was running down street in your neighborhood, would
be yours if you didn’t know it was tame. You would have to return it if you did know it was tame.
        3. Relativity of title- Amory v. Delmaire--- boy found a jewel and took it to a jeweler to
found out the worth. The jeweler didn’t return the jewel. Rule: Finder has right to object against all
except the rightful owner
        a. trover- action for damages when something was wrongfully taken
        b. rule is an attempt to make people report lost items
        4. Finder as possessor- Hannah v. Peel--- soldier was working for Peel in his house
when found a brooch. Who does brooch belong to? Soldier wins. Rule: Landowner’s claim is
superior to all others( finders) except original owner when found on landowner’s land
        a. Usually when a worker finds something on employers’ property, belongs to employer.
        b. Peel wanted the landowner rule, but didn’t work b/c
                   - item wasn’t attached to land (necessary for landowner rule)
                   - Peel wasn’t occupying the house (no real possession)
                   - IMP—no intent—Peel didn’t know about brooch
        c. Finder to be possessor
                   - intent ( reasonable knowledge of object)
                   - act of possession ( either physical or continued pursuit)
        5. Mislaid v. Lost Property—McAvoy v. Medina—McAvoy found a wallet in barber shop
and returned to store owner (mislaid b/c had money in it). After no one claimed it, McAvoy made
demands for it. Storeowner wins. Rule: Item belongs to the owner of the premises on which the
item was found
        a. Instrumentalist rule—gives the original owner an opportunity to retrace steps to regain
mislaid property
        b. 3 forms of property: depends on intent of owner and circumstance
                   -Lost- Owner (O) unintentionally left in location unknown to O
                   -Mislaid- O intentionally left in location intending to retain ownership but failed:
                   forgot
                   -Abandoned- O relinquishes rights to property: throw out with the trash
        c. Who wins? F v. O
                 - Finder (F) wins over O only if ppty is abandoned
                 - O wins against all others
                 - F wins generally over 3d parties
                 - Landowner(L) wins over F generally
                 - ―Finders Keepers‖ not law
         d. Who wins? F v. L
                 - if embedded on private ppty- L
                 - inside house on private ppty- L usually
                 - mislaid in/on private ppty- L usually
                 - on, but NOT EMBEDDED in soil on private ppty- F sometimes
         e. Status of finder matters
         6. Acquisition of Conquest-Johnson v. McIntosh—Johnson had an official purchase from
Indian tribe. McIntosh had contract with gov’t for same land. Whose land is official? McIntosh
won. Rule: U.S. acquired all the land that Great Britain had won from acquisition of conquest when
the U.S. won the revolutionary war. (Also called the Discovery Doctrine).

B. Gifts- voluntary immediate transfer of property w/o compensation. Critical elements: INTENT,
DELIVERY, ACCEPTANCE
         Details: present v. future, symbolic v. actual physical possession
         Types: inter vivos and causa mortis
                  -inter vivos— regular gift between two living people: IRREVOCABLE
                  -causa mortis—gift from one person to the next in anticipation of imminent death---
same as inter vivos with the exception of it being REVOCABLE b/c donor could not die and can
receive their property back.

         1. Delivery--In re Cohen—Wife was given a paper saying that she would receive stock
from husband for her b’day. He died before he physically owned them and could transfer it to her
name and give them to her. Was gift Wife’s? Yes. Rule: Gift was given symbolically; effective and
excuses manual delivery.
         a. symbolic delivery did occur but lacks physical delivery--- physical delivery is very imp but
not always possible
         b. why delivery?
                   - makes sure that people that think that they have received something really
have—keeps from being greedy (fraud)
                   - to distinguish nice thoughts about the future from the actual situation
         2. Future Possession (acceptance)—Gruen v. Gruen—Father gave son an expensive
painting but said that he, father, would keep the painting until his death, though son had a note
saying that he was the owner. After dad’s death, wife said she owned it. Who owned the painting?
Son. Rule: There was intent and delivery. Father gave Son a remainder. Acceptance by the
donee is essential to the validity of an inter vivos gift, but when a gift is of value, the law will
presume acceptance.
         a. remainder- Son had title. Father kept it during his lifetime: life estate
         b. sequential possession—Dad has it until death, and then son gets it
         c. Is it possible to give remainder as gift? Court said to treat it as intangible property
         3. Delivery—Scherer v. Hyland—Woman was going to commit suicide and received an
accident settlement check. She wrote 2 notes, one explaining her reason for taking her life, and
another willing the check and all of her possessions to her live-in boyfriend. She signed the back
of the check. Can boyfriend get check? Rule: Gift was inter vivos b/c had nothing to do with intent
(diff b/w causa mortis and inter vivos).
          a. Case not about intent-clear- or acceptance-presumed (donee didn’t know). Case was
about delivery b/c suicide

C. Bona Fide Purchaser (BFP)
           - law that was enacted to facilitate commerce—encourages transactions
           -―caveat emptor‖- buyer beware—O always won, but now BFP set up for P to win. If O
won, then P wouldn’t buy anymore because would get taken away if real owner shows up. ( 2
wrongs don’t make a right theory).
           -2 Doctrines for BFP( have to apply both to satisfy BFP)
                    1. equitable estoppel: common law rule
                               -pay; valuable consideration
                               -acting in good faith
                               -***owner has clothed sellor w/indicia of ownership
                               -provenance- possess all documents of ownership
                    2. statutory estoppel: U.C.C. code
                               - property was entrusted by owner to merchant in goods of that kind
                               -good faith
                               -normal course of business w/o knowledge of owner
           1. BFP- Porter v. Wertz—Porter owned painting and let Von Maker (Wertz) use it and gave
him documents on the painting, but not with the intent of letting Wertz keeping the painting. Wertz
sold the painting to a seller of paintings, Feigen. Is Feigen a BFP? Rule- Feigen isn’t BFP b/c
wasn’t acting in good faith. Porter also didn’t give Wertz indicia of title.
           2. Suzuki v. Caruso Auto Sales- Bouton buys motorcycle from Suzuki w/ bogus check and
sells it to Caruso for cheap. Rule- voidable title
           -Voidable title: title that looks good on the surface, but turns out to be bad; ex. Selling a car
to someone by check and check bounces, they may have some indicia of title, but if do some
research, it can be shown that the person really doesn’t own car. EXCEPTION: Title obtained
through voidable title is the property of third party
           ***Who wins? Owner or purchaser on a BFP claim?
           If P keeps goods, O can sue middle man.
           If O wins, would it turn out worse?
           If P keeps BFP, facilitates theft, but keeps the law happy, b/c transaction b/w S and P
encourages commerce
           ―caveat emptor‖- buyer beware—O always won, before BFP
           Bailment—possession and control of item w/ duty to return to you, not someone else (ex.
Valet parking)
2 doctrines of BFP: equitable and statutory estoppels
           equitable- case law—common law rule; have to pay w/ valuable consideration, act is good
faith, and the owner has to have clothed the seller with the indicia of title (provenance—all of
documents of ownership).
           statutory—UCC rule; ppty was entrusted by O to merchant in goods of that kind, in good
faith, in normal course of business, and w/o knowledge of O.

D. Adverse Possession
       -acquisition of ppty, but theft
         -squatter’s rights—someone living on your land long enough, and they own it.
1. Elements
         a. Actual- physical use of the ppty as would a reasonable owner
         b. Exclusive- not shared with O or public—depends on the character of the ppty
         c. Open and notorious—visible and obvious such that a reasonable O would have noticed
         d. Adverse or hostile—state of mind of the possessor—majority rule- obj. – did true O give
permission? If did, not adverse possession b/c not abandonment—minority rule- sub.- possessor
must be acting in good faith and believe he/she owns the land
         e. Continuous—uninterrupted; reasonably continuous given the character of the land
         f. For the statutory pd.—statues of limitations for claims—O will lose rights if don’t file in
time
         **Real ppty; 5-40 yrs. Personal ppty; 2-10 yrs.
         **Tacking—successive pd. of adverse possession by separate possessors may be
combined if each successive possessor is in privity of title w/ previous possessor.
         **Tolling—clock stops while O is minor, incompetent, or imprisoned
         ** no adverse possession against the government
The process is a little different for personal ppty—would be hard for open and notorious
         -some states use replacement rule:
         a. discovery doctrine—statute of limitations doesn’t start is O is doing a reasonable diligent
search for ppty and doesn’t fid it. (O’Keefe case)
         b. demand and refusal rule—adverse possession pd. starts when finder receives and
refuses O demand for ppty.
E. Intangible ppty
         1. Rule: lack of novelty in an idea is fatal to any cause of action for its unlawful use—idea
has to be unique in order to be held by copyright law: Downey v. General Foods—man wanted to
sue GF b/c of an idea that he thought was unique to him that he sent in and they used. The co.
instead got the idea from someone else.
         2. Rule: What is ppty? The VA statute didn’t cover larceny for intangible ppty:
Commonwealth v. Lund—Lund was charged in a criminal case for use of computer time that he
used w/o permission.
         3. Rule: An act did not hold for art created before the act was enacted, and cannot apply to
most cases of immovable art. Moakley v. Eastwich—π had a work of art on land that a church
bought, and the church wanted it off of the land b/c it conflicted with the church’s views.
F. Human Bodies
         1. Rule: Human bodies should be protected—fairness and equity b/w doctor and patient
Moore v. Regents of UCLA—Moore underwent surgery and it was found that he found that he had
special cells. His doctor decided to use his cells w/o his knowledge in order to market a new line.
         **ppty rights are recognized in hair, blood, bone marrow
         **can’t sell organs b/c need those to live
         **courts will protect ppty right in body if you are asserting right to exclude someone
         2. Rule: Dilemma with ppty rights of the human body. Davis v. Davis—husband and wife
get a divorce and have dispute over who gets the possession of some fertilized eggs.
         3. Rule: No notice is required for GA to take eyes from dead bodies b/c they aren’t even
ppty. GA Lions Eye Bank, Inc. v. Lavant—an infant died and GA removed corneas w/o permission
of the parents.
G. Theories
          1. First Occupancy—theory that explains ownership of natural resources—good implicit
theory—not normative—doesn’t explain why.
          2. Labor—(labor desert investment) theory that says transformation (from desert to land)
justifies property rights—problems if you think about factory (workers make things but don’t own
them)—good w/ wilderness, not modern idea.
          3. Legal theory—ppty exists only as a creature of law—legal expectations about things—
good black letter law—best rules are formative rules.
          4. Utilitarian theory—believes that in ppty, private ppty rights exist to promote community
happiness—instrumentalist—doesn’t explain happiness or ―make society better.‖
          5. Free-market economics—whatever market wants, is the best for economy—should
allocate ppty rights for better efficiency. **If this was a rule, what would poorer people do?
          6. Civic Republican—private ownership is tied to democracy—large, stable middle class—
economic inequality causes democratic chaos. If everyone had ppty stake in the future, better
equality—no or less crime.
          7. Personhood—ppty and individualism are interrelated. We define ourselves by the things
that we spend our money on. The reason for ppty rights is to allow people to express themselves.

II. Private Interest in Real Property
      A. Landlord /Tenant
1. Creation of LL-TT
          Estate in land—ownership of all land
          Fee simple absolute
          Freehold estate—hold estate freely and clear—of you want to hold and give someone else
title—tenancy
          Leasehold—TT had complete control and responsibility of land—―caveat lessee,‖ lessee
beware
          Modern—TT isn’t buying land, instead are leasing. They are really entering into a K for
products. TT only has to maintain premises if there and habitable. TT can cancel lease if LL is
barring access to rented ppty.
          a. Brown v. Southall Realty—appeal arises out of act for possession by LL against TT for
nonpayment of rent. Rule: if the apartment is against public policy (violation of a statute), the K is
invalid--illegal lease doctrine.
          **action for possession—also known as eviction
          **statute of frauds—lease has to be in writing over 1 yr. lease or for sale of lands.
          **license—revocable privilege to temp. enter for specific purpose rests on extent of use—
just use or possession—specificity of area, language of agreement, and extent of control.
          **Students in a dorm are licensees.
          **Limits on leases:
                   1. Statute of frauds
                   2. Illegal lease doctrine—significant illegal violations known before a lease
is signed voids a lease. **Works only if a violation of statutory regulations.
                   3. Restriction on LL freedom to pick TT—fair housing act—LL can’t discriminate.
Exceptions—LL can discriminate when renting our their own house
          b. Adrian v. Rabinowitz-- ∆ leased a place to π in which there was someone there and
wouldn’t leave. Rule: (English rule)—to give actual and exclusive possession of the premises to the
lessee on the day filed for the commencement of the term.
          **min. rule—LL only guaranteed to deliver legal right to possession , but no physical—TT
would have to remove the trespasser.
Covenant of quiet enjoyment— clause constituted into lease that says TT gets actual
possession and right to possess
          TT can use this as a defense to an action of rent by LL
          Courts will imply into lease
Leasehold Estates
          Tenancy of a term—term on months, years, etc. After term is up, goes back to owner.
          Periodic tenancy—term, typically month, renews automatically at end of each term—O isn’t
going to repossess at end of month—renews. It ends by one party giving a certain notice.
          Tenancy at will—tenancy goes on forever—until one party terminates. Usually oral. This
brings about a statute of frauds problem.
          Life estate—TT will get to use ppty for duration of life
          Tenancy at sufferance—person who was once rightfully in possession, stays in possession
wrongfully—Holdover TT.
                   ** in reality, the LL will evict when there is another TT
                   --LL will continue to take $
                   --court says implied sufferance—for how long? Some courts say for the entire
previous term—Some courts say month-to-month arrangement w/ termination at will on either side
          **Breach by one party or the other—lease terminates
7 limits on end of lease
          1. Discriminatory motivation
          2. Rent control—cap on max. rent LL can charge
          3. If LL wants to end lease for condos
          4. Public housing—LL limited in ability to evict
          5. Good cause requirement—have to have good cause to evict
          6. Retaliatory eviction
          7. If TT has disability or is elderly
Waiver and acquiescence
          If LL does nothing—silence (not acting)
          Waiver—affirmative act, voluntary, knowing, and intelligent—LL has to be informed of
breach b/f waiver. Best case of waiver—if LL says ―That’s o.k.‖
          Another argument for waiver is if LL learns about breach and accepts rent.
          c. Foundation Development Corp. v. Loehmanns Inc.—Foundation was renting to
Loehmanns and b/c they received their rent check 3 days after the 10 day pd. they wanted to evict
them. Rule: the breach was immaterial and trivial.
          Old law says that even though someone breached, not reason for termination b/c TT
getting livelihood land. Ct. rejects this law, but keeps consistency in that TT always wins.
           Old rule: covenants are independent of each other. Modern trend—if one party
breaches, the other is excused from their duty
          Material Breach—failure to pay rent, late payment, illegal use of ppty, damage to ppty,
sublease, failure to honor full lease term, if fail to have casualty ins.
Eviction
Rightful—LL has a cause of action to evict TT—LL has to evict in proper manner
Wrongful—LL interferes w/ TT right to possess the ppty—if LL wrongfully evicts, TT excused from
rent.
         Many jurisdictions have special processes for eviction—summary process
         If this is too slow for LL, they may use self-help. Self-help only works under these
circumstances: 1. some states allow self-help with ONLY reasonable force—avoid risk of injury or
violence. 2. other states allow self-help, but ONLY peaceable—NO FORCE at all. 3. Nat’l trend—
prohibit self- help eviction.
         d. Edwards v. Habib-- After Edwards, a month-to-month TT complained to Dept. if License
and Inspections, Habib gave Edwards a notice to move. Edwards filed a retaliatory eviction claim.
Rule: LL is not free to evict in retaliation for TT report of housing code violations.
How can prove retaliatory behavior? Timing.
Wrongful eviction
         - is possible w. ct, decision, no wrongful( some action by LL that bars TT from ppty)
eviction if it goes to ct.
         -if LL bars TT, violation of implied warranty of quiet enjoyment (actual possession).
Wrongful actual eviction
         -TT could walk away and not pay
         - TT could go to court to cancel lease
         - TT could seek damages, (if commercial—revenues, if residential—const of moving)
         -TT could file for possession
Wrongful actual, but partial eviction
         - breach my LL, but is TT allowed to breach?
         -Traditional rule: TT can breach b/c material breach
         - Trend—TT can’t walk away, but gets rent abatement—courts look at what part of
the ppty is unavailable.
         -LL is doing something difficult to gain access to all of ppty—also wrongful partial eviction
Retaliatory eviction
         - increase in rent
         -LL refuses rent renewal
         -LL terminated rent
         -LL evicts
         -if a TT has direct proof, case is easy (doesn’t happen often)
In order to prove retaliatory eviction, have to prove:
         1. happens shortly after protective conduct—TT has to prove legitimate motive
         e. Javins—First case in this area of ppty law F: Javins and other TT found 1500 violations
after signing lease. They stopped paying rent on these grounds. First Nat’l Realty Corp. is
bringing suit to evict TT. Implied warranty of habitability—if the courts find that this is breached, the
LL has made a material breach, and TT doesn’t have to pay rent.
         Modern trend—court says that IWH will be implied into leases b/c new rule relieves
the TT of repair—re-allocation of $ to LL
         --In a city, IWH will be violated if against that city’s housing codes
         --If in a rural area or where there are no codes, court will probably look to similar
communities
         --If LL breaches IWH, TT can choose to not pay rent. Court then decides if breach is
material, or rent abatement. If court says rent abatement, the TT has to make good or get evicted.
Implied Warranty of Habitability
LL must deliver and maintain premises in habitable standards
Based on housing code, if one; if not, -- ―Fit for Human Habitation‖—difficult to apply and uncertain,
but flexible.
Some states say ―Fit for Human‖—is a min. only.
         1. heat                                            10. locks
         2. ventilation                                     11. hazardous materials
         3. access to water                                 12. noise
         4. plumbing; sewage                                13. intact wall & ceilings
         5. windows                                         14. flooding
         6. infestation                                     15. common area safety(elevators, etc)
         7. wiring                                          16. waste disposal, gen.
         8. functioning kitchen
         9. water-tight roof
TT must give LL notice and reasonable chance to correct the problem
TT cause of action if breach of IWH
         TT can remain and withhold rent and use breach of IWH as defense
         Some say put rent in escrow
         Some say TT can withhold rent for partial breach of IWH, and later sort it out
         Some say TT can remain and repair and subtract form rent—more efficient
         **Min. of states say remain and sue for damages—Incentive for LL to fix ppty.
         IWH defense for back-rent and eviction
         Over 30 states have made IWH part of statute. MS requires good faith—not clearly stated
in statute.
         Almost all states don’t allow waiver of IWH—law doesn’t want people living in inhabitable
housing, even if the person wants to.
         f. Richard Barton—F: Tsern rented building to Barton for antique store for $3000/mon.
Signed lease that Barton would accept the building as is, except for elevator. Tsern never really
repaired elevator, thus hindering Barton’s total use of the building. Barton stops paying rent and
brings claim on who has duty to fix elevator.
         Constructive eviction—substitute for real eviction—Barton can’t use this floor as he
actually wants to—partial constructive eviction—court elected to adopt partial constructive eviction.
         This case introduces IWH in commercial leases—not a lot of states doing this.
Commercial leases
1. Should commercial leases be treated from residential leases when looking @ covenants being
ind. some jurisdictions say comm. leases are still independent.
         Trend—covenants are dep.
2. Should IWH be treated in comm. leases? NO.
         Only a small number of states say yes.
Constructive eviction—wrongful eviction by LL that substantially interferes w/ enjoyment of
premises by TT.
         --Conduct so substantial, TT had to vacate.
         **Modern trend—abandonment not required
         ** What if TT concerned about 3rd parties—if LL has a duty to control them.
                  Misprison—LL has duty to report violation of a statute—LL should also be worried
that one of the TT could get hurt, so should report.
         Partial C.E.—wrongful eviction by LL that substantially interferes w/ TT enjoyment and use
of part of premises.
          g. Piggly Wiggly v. Heard—Piggly Wiggly had a lease w/ Heard. After Piggly was sold to
someone else, they vacated the premises and moved to nearby shopping center, but still payed
rent. Heard wanted his % of sales, so wants Piggly to put someone else in there to operated store
so he can get $.
          --If there is % clause in lease and % is imp., then will imply covenant of continuous
operation in lease
          1. Is clause expressly states or expressly foreclosed?
          2. Base rent vs. % rent
          3. Noncompetitive provision—so that no matter where the person is, it will be accessible to
them. noncompetitive provision won’t allow this b/c LL doesn’t want other business to take $.
          --Assignability of TT to sublease
          --If TT wan sublease to anyone, helps the TT—no duty of cts operation.
          --If lease is ―silent,‖ most cts. say LL can sublease, not TT.
Damages
          h. US National Bank of OR v. Homeland—π rented to ∆ for 5 yrs. and after about 2 yrs., ∆
moved out and paid no more rent. Π found a lessee, and after 10-12% vacancies in Portland, they
moved out. Homeland abandoned
                    TT2-default
                    TT3
          According to OR cts, HL abandoned the right to possess—Leasehold—they abandoned
their interest in real ppty.
          LL has an obligation to make an reasonable effort to try and find a new TT.
                    --if LL makes no reasonable effort, then he collects no damages.
          Codification—group of statutes governing a body of law (LL-TT)
          **If fair market value decreases, original TT has to pay diff. b/w that and rent on original K.
          Efficient breach—if fair market value goes up,  everyone happy ( LL gets increase rent
from TT, original TT doesn’t have to pay that much).
                             -- if fair market value goes down, LL is not guilty of failing to mitigate by
getting TT not paying original rent—original TT responsible for diff, in new TT rent and fair market
value.
          LL has to make a substantial effort to lease, but still nominal use of premises (ex. if dental
offices, don’t have to lease to anyone else).
          When the TT breaches, LL can mitigate damages reasonable effort to mitigate damages
          Modern trend: mitigation
          Traditional rule: abandonment and surrender and did LL accept surrender
Doctrines
          1. Lease v. License—who might want a license other than lease? Huntsman.
                    LL doesn’t have any responsibility
                    Lease requires IWH
                    License has none of the obligation in leasehold
          2. Doctrine of illegal leasehold—illegal lease doctrine
                    TT would want to raise this
          3. Statute of frauds—person who wants to get out of obligation could use this
                    No enforceable K b/c was oral K
                    No on-going
          4. Implied Covenant of Quiet Enjoyment
                    TT raises thisif LL doesn’t deliver possession, or can raise
Later b/c of constructive or actual eviction
                  Tenancy of sufferance—if tenant stays until end and is holdover, new tenancy has
been created.
         5. Termination b/c of breach—real ppty interest terminated obligation—obligation under K
continues
         6. Material breach
         7. Waiver
         8. Wrongful Eviction
         9. Retaliation
         10. Caveat Lessee—lessee beware—TT responsible for ppty—TT takes as is
         LL says they are excused for IWH—available in min states

B. Interest Affecting Another’s Land
1. Easements—non-possessory right to use another’s land. Person who owns the easement
cannot exclude others—owner of land can exclude others, not owner of easement.
          a. Express easements—created by an agreement. What problems?—created an
easement or less created an easement or more what kind of easement?
Mitchell v. Castellaw—Mitchell owns corner lot beside gas station w/ driveway. Original owner
granted driveway by warranty deed.
          Servient estate—estate being burdened
          Dominant estate—benefited estate
General warranty deed—giving title free from defects and the rest to give exceptions or limitations
Reservation—clause in deed that says it is conveying ppty, but reserving something
Exception clause—if easement is old, to put in deed---(reservation and exception is used with ppty
owned by one person and part of it is sold or 3rd party getting easement).
          Affirmative easement—gives O some ability to use servient land
          Negative easement—prevents the owner of the servient estate from doing something on
their own land.
Easement in gross—easement belongs to person—might die out
Easement appurtenant—easement belongs to land—lasts indefinitely—“magic words”—
applies to heirs—history of the use of the land.
Extinguishing of an easement
1. Release—owner of benefit releases back to servient estate
2. If two lands come together as one
3. Misuse
4. Abandonment
Urbaitis v. Commonwealth Edison—Dodson has a deed for RR—commonwealth is successor. If
residential, then it goes to πs. Πs have used it for ornaments and gardens. ∆s want if for power
lines.
          ―Right of way‖ suggests an easement.
          ― Convey and warrant‖ suggests sale of land in fee simple.
Stoner v. Zucker—court decides whether there was an easement or a license when ∆ put an
expensive ditch on π land on reliance of ∆ license. The court ruled that an easement was to be
created.
          Easement by estoppel- irrevocable license— A. initially granted by a license
                  B. Party who wants to claim easement upon good faith in reliance on a promise
                  C. Owner should reasonably know of investment

        License
                 -is revocable and nontransferable. Exceptions: where the licensee makes
substantial expenditures in reliance on the license. The expenditure has to be related to license. If
LL sees licensee making changes, they should stop the licensee before the investment is finished.
                 -can be created orally
         b. Easements by implication, necessity, and prescription
Finn v. Williams—Finn bought land from Williams that was landlocked. Finn wants to use Williams
land to get out and Williams says no.
         Easement by necessity—only given against LO when they sell landlocked land.
                 Severance of title—if at one time, the two parcels of land were owned by the same
                 person.
         Required elements
                 1. Severance of title
                 2. Strict necessity (maj.)
                           a. easement or necessity existed at time of severance
                           b. any access to land defeats necessity
                 3. Reasonable necessity (min.)
                           a. allows easement or necessity to be dormant for a while
                           b. don’t have ―any access‖ claim
                 -always implies this easement, but looks like a ―grant‖—lasts as long as necessity
                 lasts
         Rationale of easement
                 1. Efficiency—if no easement, then land would be a waste
                 2. Presumed intent—what were parties thinking when land was landlocked?
Granite Ppty Ltmd v. Manns—π has ppty of apt. complex and shopping center--they seek to enjoin
easements of ∆ land.
         Easement by prior existing use (presumed intent)
                 Elements
                 1. Severance of title
                 2. Existing, apparent, continuous use
                 3. Reasonable necessity—higher level of necessity if sold land
                 Created by implied reservation
                 Want to analyze necessity with this easement
Beebe v. DeMarco—Beebe was using back of a neighbor’s ppty to drive his boat around, and
when the neighbor sold the land, the new owner wanted to cease Beebe’s use of his land.
         Prescription
                 Elements (Dominant-wants easement)
                 1. Open and notorious
                 2. Adverse
                 3. Continuous
                 4. For statutory period—**only exclusive and actual are missing b/c don’t want to
                           own it.
         Conservation easement
                 Dominant owner can prevent servient from constructing
        c. Scope and Transferability
                Scope—how much do they get? The court says that it is limited to use and
                purpose
                Easement can be used to benefit dominant estate or dominant owner.
                Easements are allowed to grow and change reasonably as long as it does
                not impose an unreasonable burden on servant estate.
                Transfer of easements
                      a. Appurtenant- if servient estate is sold, the easement follows
                                          if dominant estate is transferred, then easement follows
                                          if dominant estate is divided, then each piece has a full
                                          right of easement
                      b. Gross
                               a. Traditional rule- Commercial were transferable, but not
                               noncommercial easements in gross
                               b. Modern trend-allows people to transfer noncommercial
                                 easements in gross.
                General Rule—easements are transferable except for noncommercial, but there is
                modern trend.
            Termination
                a. Merger of dominant and servant estate
                b. Abandonment
                c. Prescription-Adverse possession of easement
                d. Misuse-such as regular vandalism, must be grossly egregious

S.S. Kresge Co. v. Winkelman Realty—alley on Kresge’s ppty, Winkelman has several stores on
neighboring land—easement was for barber shop and apartment  now used for big things. This
was originally an easement by prescription. There is also a claim b/c ∆ has a second store on the
other land, but using the easement for 2nd estate, not only estate addressed in the easement.
Rule: change and new uses are allowed, so long as reasonable use and no unreasonable burden
         -have to look @ nature and cause of the change
         - generally, the b’fit of the easement goes to dominant estate or dominant owner only, not
estates owned by same person
Sakansky v. Wein—describes what a burdened estate owner can do—court says can’t build on
land freely b/c someone else has an easement
         -this is weird b/c affirmative easement has neg. effect b/c owner of the servient estate can’t
do what they want
         Promissory servitude—limitation on land that can be used for a single purpose
                   Easements and p.s.—private land use planning—landowners conserving land for
         the future.
         Main uses
                   appearance restrictions
                   maintenance requirement
                   dues to homeowners’ association and pay ppty taxes
                   conduct requirement
                   pay for improvement projects
**The most historical use is racial restrictive covenant.
                                                       horizontal privity
2. Real Covenants and Equitable Servitudes A  B
                                                                 
                                      relax vp                    vertical privity
                                                                  burden runs w/ land
                                                    C D
         a. Elements of Covenants and Equitable Servitudes
         Real Covenant—has to be a real covenant in order for C to recover damages
         Equitable servitude—has to be equitable servitude in order for C to get an injunction
Damages—promise must be enforceable as a Real Covenant
         Requirements for Burden to Run With the Land (if original buyer sells to someone else)
                   1) writing
                   2) notice (actual or recorded)
                   3) intent—has to be intent that the burden runs with land b/w two persons that
         constructed promise
                   4) touch and concern—promise about conduct or $ that doesn’t concern land (like
         going every year to sing—doesn’t touch and concern land)
                   5) horizontal privity—privity of estate = common ownership of land at one point
                             *straw man transaction—where neighbors can sell to one man and man
         puts in covenant and sells back
                   6) vertical privity—B must have sold D entire estate
         Requirements for Benefit to Run w/ the Land
                   1) writing
                   2) intent
                   3) touch and concern
                   4) relaxed vertical privity—does C own some of land of A
                             * can be an agent
Injunction—Promise must be enforceable as an Equitable Servitude
         Requirements for the Burden to Run w/ the Land
                   1) writing or implied from a common plan
                   2) notice
                   3) intent
                   4) touch and concern
         Requirement for the Benefit to Run w/ the land
                   1) writing or implied from a common plan
                   2) intent
                   3) touch and concern
Defenses
         1) covenant has terminated or run out (unenforceable)
         2) covenant has been abandoned
         3) contractual release
         4) limited duration
         5) illegal promise
         6) circumstances have changed (changed conditions—no longer b’fit under original K)
         7) Owner knew about it, and did nothing (SOL had run)
         8) relative hardship—burden of promise out of proportion of benefit that owner will get
         9) UNCLEAN HANDS—owner broke promise already, so burdened owner should be
         allowed.
         b. Implied Servitudes and Enforcement
                  Implied from a common plan—implied reciprocal covenant or implied negative
reciprocal servitude—when someone buys into a neighborhood, court will imply, dependent on the
neighborhood, that those left out of restriction were supposed to be part of restriction.
         Snow v. Van Dam—Luce passed the land to Shackleford, who sells lots to people
Snow. There is a restriction that there cannot be a house less than $2500 or an outhouse. There
was a provision changed in Van Dam’s lease that gives the grantor the right to review and change
price of house and grantor right to review and change exception to privy. Van Dam wants to open a
business. Van Dam says he is not bound by the summer cottage theory b/c it wasn’t in his lease.
         Rule: The court will apply implied negative reciprocal servitude b/c there was a common
plan that says b’fit was supposed to run w/ the land, houses seem to match (Van Dam on notice),
and restriction appears in many deeds
         Rhue v. Cheyenne Homes—the neighborhood doesn’t want Spanish style home in their
homogenous neighborhood. Court endorses this view, can be a problem when dealing with
segregation.
3. Nuisance—when you can please yourself so much you bug your neighbor—one whose conduct
is to be controlled is acting unreasonably  committing a tort
         a. Elements of nuisance- def. intentional non-trespassory unreasonable and
substantial inference w/ the use of enjoyment of π land.
         Rose v. Chaikin—Chaikin’s windmill that they were using for electricity was causing
neighbors problems.
―unreasonable‖ multi-factor balancing test
                  1) gravity of harm caused by nuisance
                             a) extent of harm
                             b) character of harm
                  2) character of the neighborhood—HUGE
                  3) utility/ social value of the uses/ activities (also look @ π uses)
                  4) burden on parties to avoid the nuisance—are there alternatives
Public nuisance—affect the health, safety, or morality issues (―whore‖ house)
         b. Remedies


Basic Future Interest—Estates
        Present interest—can be ownership or tenancy
        Future interest—ownership right, not present, that mar or will become possessory in the
        future
        Different estates
                 Freehold estate—owner owns what ever there is to own
                 Non-freehold estate—tenancy where the tenant has right to use and possess, but
                 someone else owns
   Freehold estates
        1. Fee simple absolute—nothing causes one of these to end unless loss of life—passes
             on to heirs
        2. Defeasible life estate—can be taken away by terms or condition—if stop using as
             condition, land will be taken away
           If you own land, it is probably fee simple absolute (government will infer that land is
            this if not specified).
           These come into being with a deed

Absolute estates

1) Fee simple absolute (FSA)—what we normally think of as ownership—right to use, possess,
   transfer, and give FOREVER. If state takes land, (escheat), will make the land FSA
        i) O to A and his heirs, or O to A
        ii) NO future interest
2) Fee Tail—may pass only to A’s descendents—future interest (remainder). If goes back to the
   original owner (reversion). These two can’t happen at the same time. This is almost
   impossible to create today.
3) Life estate—right to possess and use for the length of the users life
        i) O to A for lifetime, or O to A for life, then to B, or O to A for B’s life, then to C
        ii) Have present interest, and have created a future interest
        iii) Future interest-- reversion

Defeasible Estates

1) Fee simple determinable (FSD)—if land is used for any reason other than the condition, land
   goes back to O. O has a future interest.
       i) Uses language of time ( for so long, while, during the time, etc)
       ii) Reversion is automatic
       iii) O to A for so long as Greenacre used as a farm, or O to A while Greenacre used as a
            farm, or O to A during the time Greenacre used as a farm
       iv) Future interest—possibility of reverter (automatic)
2) Fee simple subject to a condition subsequent (FSSCS)—if the condition subsequent happens,
   O has the right of re-entry once the right is exercised. This is not automatic—O has to assert
   the right.
       i) O to A but if Greenacre is not used as a farm, then O may re-enter, or O to A on the
            condition that Greenacre is used as a farm, or O to A provided however that if
            Greenacre is not used as a farm, reverts to O
       ii) Future interest—right of entry/ right of re-entry (option), or power of termination
       iii) Law likes this better, b/c promotes land transfer
       iv) If O doesn’t exercise right, A gets to keep land
3) Fee simple subject to executory limitation (FSSEL)—owner owns the present estate, but the
   future interest belongs to a 3rd party (executory limitation)
       i) Executory limitation is automatic—if the condition happens, then goes to B and B gets
            FSA.
       ii) Some conditions are not in A’s control
       iii) O to A but if Greenacre not used as a farm, then to B and his heirs

Transferability of the estates
 The old rule is that life estates are not transferable—TREND, they are
 Defeasible estates are transferable
         Restriction—defeasible land cannot be wasted b/c there is a future interest holder
 ―Restraint on alienation‖—courts use this to discontinue frivolous defeasible estates
 The courts are inconsistent on the issue of partial restraint

Future interest
 FI held by transferor are most times created expressly
 Rule: O may sell, give, or put in will FI
 Most states are trying to do away with the defeasible estates and return to FSA

Future interest held by transferee—Remainders—mainly talking about life estates
        These will occur for as long as the O is still alive

 Interest—future interest in a transferee that becomes possessory upon the natural termination
  (not condition) of a prior estate created by same instrument
 Indefeasibly vested remainder—remainder created in a living (ascertainable) person and not
  subject to any condition or limitation
        O to A for life, then to B
 Vested remainder subject to divestment—(happens after)—remainder created in a living
  person, but subject to a condition subsequent that may extinguish the remainder before it
  becomes possessory
        O to A for life, then to B, unless B goes to law school during A’s life, in which case to C
 Vested remainder subject to open—remainders created in a class with at least one living
  member and with the possibility of additional members
        O to A for life, then to the children of B and their heirs (B now has one child)
        If child dies, no longer vested, but contingent
 Contingent remainder—remainder created in an unascertainable person (don’t know of anyone
  in this class) or subject to a condition precedent (happens before) that must occur before the
  remainder may become possessory
        O to A for life, then to the children of B and their heirs (B now has no children—
            unascertainable person)
        O to A for life, then, if B goes to school, to B, otherwise to C (something B has to do
            before definite future interest)
 There is little different b/w VRSD and CR (b)—many states say that they don’t care of the diff.

Future Interests Held by Transferee—Executory Interests—follows FSSEL

 Executory interests—future interest in a transferee that ―cuts short‖ or ―divests‖ another estate
  or future interest to become a possessory estate OR any future interest in a transferee other
  than a remainder
        O to A and his heirs, but if B goes to law school, then to B
        O to A and his heirs for so long as B refuses to go to law school, but if B does to law
           school, then to B
        O to A for life, then to B and his heirs, but if C goes to law school, then to C
        Rule of thumb: a second future interest following a future interest in FS is an executory
           interest
 Shifting executory interest—B holds a shifting executory interest b/c it would cut short the
  estate/interest held by another transferee
        O to A, but if B goes to law school, then to B—shifts from one transferee to another
 Springing executory interest—A holds a springing executory interest because it would cut short
  the estate held by the transferor
       O to A if A goes to law school—cuts short estate held by transferor (original O)
       O has a FSSEL

Concurrent Ownership

 Common in marriage and family law

In re estate of Michael—F: There was a deed that willed to four people and court had to determine
if the original deed deeded to the families as tenancy in common or joint tenancy

 There are three types of concurrent ownership:
        Joint tenancy—right of survivorship—does not have to be by married people. If owned
            by three people, then goes to other two when one dies. In order to use this, have to
            use magic words, such as right of survivorship
        Tenancy in common—doesn’t have to be a married couple. If have three people
            owning the ppty, then look to will. If there is no will, then look to state testacy laws to
            see who is getting the ppty.
        Tenancy by the entirety—exists only in married couples—exists in MS—if one spouse
            dies, the other spouse takes the ppty if survives.
 As a general rule—the courts will apply tenancy in common b/c it allows people to put their
  ppty as they wish.
 Four unities create a joint tenancy:
        Unity of time—acquire at same time
        Unity of title—same title
        Unity of interest—equal interest
        Unity of possession—equal possession
        If have 3 joint tenants, and one sells, the unity is destroyed and ppty is now tenancy in
            common
        Interest is transferable during your life, but not among death b/c interest goes to others
        Families often use this to avoid a will
        If one of the joint tenants, murders another, the murderer isn’t entitled to anything
 Tenancy in common can have unequal shares—can add people and is freely transferable—no
  right of survivorship—states will presume tenancy in common if ambiguous deed or if left out
        Most common--condos
 Tenancy by entirety—has to be a married couple—four unities + marriage
        Interest is not transferable—only 2 ways terminate (other than death)
                 Divorce—tenancy in common
                 Agreement—can transform it into something else
        Creditors can’t get to tenancy be entirety, unless the debt is owned by both

Laura v. Christian—F: Laura wanted quiet title. Christian should have paid his share. This is a
case about duties of co-owners.
 Have a duty to share of tax and mortgage
 If you don’t pay your half, person who pays gets that share. You could redeem your share in a
  reasonable length of time
 Illegal for owners to oust other owners—one owner cannot to be sole possessor of the land

Real Estate Transactions
 Real estate contract—K for the purchase and sale of land, not the actual sell of the land
         Exceptions—part performance and estoppel
 Encumbrances on a title
         Mortgage—seller has to have a plan to sell of the current mortgage or transfer to the
            buyer
         Easements, promissory servitudes, liens, encroachments (neighbor’s garage 10 ft. on
            your ppty), option to purchase, judgment entered against ppty, mechanics lien
         Big dispute going on now whether seller has the responsibility to disclose defects on
            the ppty
         Also, lawsuits about psychological content of the land—murder, haunted, etc.
         Can deal with this by contingencies—contingent on marketable title that the buyer buy
            the house
 What about if something happens to the land b/w K and transfer?
         Old law—risk falls on the purchasers
         Trend—risk of loss remains w/ seller until closing
         If under old law—could avoid loss by putting in K, or getting title insurance
 Remedies—specific performance

Sale/Closing
 Buyer, seller, lender, and title insurer are present
 Title insurance is to protect if there isn’t a marketable title
 Purchase and sale agreement, avidavit of title, insurance policy insuring title—send someone
    to check the title, accounting form listing transactions from the bank, survey of ppty
 In MS, have to get termite inspection certificate
 Closing isn’t when actually buying the land, just are getting the title
 Title is what you really are buying—transfer of deed isn’t valid until recorded

Mortgage Foreclosure
 If the lender can’t get money for his loan, then he is going to used the deed of trust as
   collateral to sell the house and get money for the house
 Some jurisdictions give the lender the power of sale—private right to sale the ppty w/o court
   decrees or statutory action
 Standard model—lender needs to get foreclosure action—could be an incentive for the
   borrower to get $ (right of redemption)
         Foreclosure action—gives the lender the right to sell the house—lender gets whatever
            they are owed
         If there is extra, mortgage co. will typically get it
         Some jurisdictions hold that buyer should get the money back b/c they put some equity
            into the house
         If the house sells for cheaper, then some states allow lender to get a deficiency
            judgment against buyer for the rest of the money
 Regular installment sales K—basic argument is that don’t want lenders to take advantage of
  people living in homes
      Equitable mortgage—same procedures as foreclosure—effort to protect homeowners
           if looks like mortgage and it is not.

Deeds
 Needs to be in writing, need to have signature to be valid, describes ppty
 Quitclaim deed- giving over the interest in the land—have to figure out if there is something on
   the land
 Warranty deed—deed that promises marketable title—if it turns out that there is an
   encumbrance can sue on the deed
 Can claim BFP on quitclaim deed if you search if yourself. Quitclaim deed is typically not good
   faith b/c something fishy about the transaction
 Special warranty deed—saying can’t afford warranty, but conveying encumbrances

Interests in ppty
 Interest is valid only if they are properly filed in a recording system
          Deeds and estates
          Future interest
          Easements, servitudes
          Mortgages
          In some jurisdictions: judgments, leases over a year
 Not included in recording
          Some jurisdictions: judgments
          Some ―‖: leases
          Bankruptcy
          Tax liens
          Probate
          Divorce
          Adverse possession

Conflicting title claims
 The owner sold the ppty twice—loser is going to sue original O for damages. This isn’t
   satisfactory b/c seller isn’t one whom you get $ from

Recording System
 Administrative use for cataloguing land ownership and resolving disputes over title
 Different types of recording system
        Tract index—catalog interest by location—best but not most used
        Grantor-Grantee index—common, but inefficient and causes problems
 Searching a tract index
        Goal: find all of the interest
        Easily achieved
        All transactions listed by location
        Government land survey, or subdivision plat that has been filed
 Searching a Grantor-Grantee Index
        Search backwards for prior owners
               Grantee index—want to know if any of the owners conveyed any interest
      Search forward for interests conveyed
               Grantor index—if find easement, then negotiate w/ seller b/c of the interest—
                   or discover that don’t want the ppty anymore
 Other steps for both indexes
      Check other records
      Check other interests that are not in the title system: judgments and lawsuits, tax
          records, etc.

Multiple claims recorded
 First in time, first in right
          Recording acts vary this rule in encourage recordation of interest
 Race jurisdiction—the first one to record wins—regardless of who purchases first
          Only LA and NC
          Awards bad-faith purchasers
          BFP jurisdiction—reward only good faith purchasers
 Notice jurisdiction—subsequent innocent purchaser wins if he/she records
          Innocent: acting in good faith w/o notice of prior conveyance
          Protects BFP even if they are not the first to record
 Race-notice jurisdiction
          Subsequent purchaser prevails only if the 1st to record
          Innocent: good faith purchase w/o notice of prior conveyance
 Most jurisdictions say that getting a quitclaim deed is innocent
 Minority of jurisdictions say that quitclaim is putting purchaser on notice
 Wild deeds—deed outside the chain of title—no record notice
 Solution for wild deeds—Shelter rule—3rd party who purchases from BFP is protected by the
    recording act takes good title
 Recording too late
          Majority says that BFP should win in order to promote BFP—encourages conspiracy
          Minority—MS—first purchaser who recorded too late should win
 Recording too early
          Estoppel by deed—if grantor conveys interest not owned and later obtains that
             interest, then the grantee is immediately vested
Sabo v. Horvath
         F: Alaska has a race notice recording act. The court discourages wild deeds

				
DOCUMENT INFO