Company Law Multiple Choice Questions by chm36503


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									                      Santa Clara University School of Law - SPRING 2001

CAMPUS ID: _____________ COURSE: _____________ PROFESSOR: ________________



PROPERTY 104                                                                        MAY 2001
PROFESSOR CARBONE                                                                   3 2 HOURS
18 MULTIPLE CHOICE/ 2 ESSAYS                                                        CLOSED BOOK

                                   PROFESSOR=S INSTRUCTIONS

INSTRUCTIONS: This exam consists of two parts. Part I consists of 18 multiple choice questions. Part II
consists of 2 essay questions and a map. ANSWER THE MULTIPLE CHOICE QUESTIONS FIRST.
While you may allocate your time as you like, in the event of an emergency, the multiple choice questions
will be collected at the end of the time allotted for them and no revisions will be permitted. Credit for all
portions of the exam will be proportional to the time allowed. (A half hour is allocated to reading the

                                                           PART II ESSAY QUESTIONS (1
                                                           question, 2 subparts)

       1. Unless you are typing the exam, please write your answers in the bluebooks provided.
Write on every other line and on every other page. (I.e., do not write on the backs of the pages.
The ink shows through.) Begin each question in a separate bluebook. Write your student I.D. on
the exam and on the outside of each bluebook.

       2. If you believe that there is an error or ambiguity in any of the questions, note the error
or ambiguity and any assumptions you are making in answering the question.

       3. You are in the State of Misery, a mythical jurisdiction in which there is very little law
and in which the courts are influenced by precedents from other states. The jurisdiction has,
however, adopted the following statutes:
       a. a statute of limitations of five (5) years for all property actions;
       b. a race-notice recording act; and,
       c. a statute recognizing implied reciprocal servitudes.


       Dee Veloper buys a large tract of land outside of a rapidly growing city. She
plans her new development as a testament to innovation and artistry. Dividing the tract
into twelve lots, she designs each of the first four buildings to accommodate mixed
commercial and residential activities, or multiple residential groups. Each also employs
unconventional styles and colors that complement each other and create a
neighborhood feel. She sells the first four buildings with deed covenants that specify:

       In order to celebrate and preserve the artistry that inspired this
       development, grantees agree on behalf of themselves, their heirs,
       successors and assigns, for the benefit of all the landowners in this
       subdivision and humanity as a whole, to maintain the distinctive
       architectural style of the existing structures, and to refrain from any and all
       additions or alterations inconsistent with the rest of the development.

        Market conditions change, however, and she has trouble financing the rest of the
development. To raise money, she sells lots 5 and 6, which are still undeveloped, to
relatives. The deeds contain no restrictions. She discovers that additional prospective
buyers are concerned about the lack of assurance about the residential character of the
area, so she sells lots 7 and 8 with covenants that provide:

       In order to celebrate and preserve the artistry that inspired this
       development, grantees agree on behalf of themselves, their heirs,
       successors and assigns, for the benefit of all the landowners in this
       subdivision and humanity as a whole, to maintain the distinctive
       architectural style of the community. Grantees also agree on behalf of
       themselves, their heirs, successors and assigns, that the property shall be
       restricted to single family residential use, and that all land retained by the
       grantor shall be similarly restricted.

       Market conditions stabilize, and Veloper develops the four remaining lots with
structures similar to those on the first four lots. These structures, like those of the
original lots, are designed to accommodate mixed residential and commercial uses, and
multiple-family groupings. Veloper sells lots 9 through 12 with deeds identical to those
used to sell the first four lots. The deeds to all twelve lots are recorded.

QUESTION A (80 minutes)

        Twenty-five years pass. Four single fathers jointly own Lot 3, and they live there
with their families and operate a day care facility on the premises. Four single mothers
jointly own Lot 9. They also live there, and operate a web-based delivery service from
the premises. Lot 11 houses a hospice, which can provide for up to four patients. The
rest of the development, however, has been limited to single family use (and to

architectural styles consistent with Veloper=s artistic vision) with the exception of Lot 5,
which has never been developed.

        A Balkan refugee organization purchases Lots 5 and 11 to use as a home for
war refugees suffering from post-traumatic stress. To make the refugees feel more at
home, the organization plans to build a large house on Lot 5 in a traditional Balkan
style, and to remodel the ultra-modern building that was used as a hospice on Lot 11 to
give it a more traditional "Balkan feel." When the construction is complete, the
organization expects that 12 to 14 refugees will live on Lots 5 and 11, along with a staff
of 4, and that the refurbished building on Lot 11 will include a store and a community
center as well as residential quarters.

        The neighbors object to the construction, which they feel will destroy the
character of the neighborhood, and to the adequacy of the refugee organization's plans
to screen and supervise the residents, given the paucity of background information
available and the association of post-traumatic stress with substance abuse and
psychotic behavior. In addition, Balkan refugees from the last round of fighting, who
are from different religious and ethnic groups than the current refugees, are organizing
protests against the home (and against the ethnic symbolism of the proposed design)
that will interfere with the tranquility of the neighborhood.

       The neighbors persuade the local zoning board to pass an ordinance that limits
the area to single family use. It provides further that:

       (a) AFamily" will be defined as "no more than six persons living together in a
       single housekeeping unit. More than six persons may be defined as a family
       only if they apply for a permit from the Town Council, and demonstrate that they
       are related by genetics, adoption or marriage, and that living apart would impose
       a significant hardship on them.@

        (b) No permit for new construction, additions or alterations will be issued without
       the approval of an architectural review board to insure conformity to certain
       minimum architectural standards of appearance and harmony with surrounding

        Advise the refugee organization of the grounds on which the neighbors are likely
to oppose their plans, any possible defenses, and the likelihood of prevailing. The
organization informs you that the owners of Lots 1, 3, 6 and 11 have been particularly
active in opposing their plans.

QUESTION B (55 minutes)

         After the resolution of the issues in Question A, the four fathers decide to split
up. They divide Lot 3 into the four units marked ABCD on the map. The cables that
connect all of the cable TV hookups for the four units run through Lot A. At various
times in the past, all four units have had cable TV service, and the equipment
necessary to maintain the connection remains in place. In the period immediately
before the four units were subdivided and sold, however, only the residences on what
are now Lots A and C received cable TV service.
         Danny is the new owner of Lot D. Shortly after moving in, he orders cable TV
service. The Cable Company provides the services through the existing cable that runs
under Lot A. Annabel, the owner of Lot A, is not consulted or informed. Four years
later, Danny comes to the conclusion that his children are watching too much TV and
he discontinues the service, again without informing Annabel. The cables remain in
place, and Lot C, which has always had cable service, continues to use them.
         Eighteen months after Danny discontinues the service, the Cable Company
offers new high speed internet access through its existing cable connections. Danny
spends $2500 on a new computer designed with special features that can be used only
with the type of internet service the Cable Company provides. Danny decides to
subscribe, but when Annabel sees the Cable Company truck in front of her house, she
objects, informing the Company and Danny that they she will not permit use of the
cables that run through her property.
         Danny asks you to evaluate his prospects for compelling Annabel to permit the
cable connections to run through her property. He tells you that the cables are
underground and cannot be seen through a casual inspection of the property. He also
tells you that the only other means of access for cable service would be through the
back alley, but he regards the cable company price of over $1000 for the installation of
new cables to be prohibitive. Danny is particularly incensed because he does not
believe that his use of the cables will affect Annabel or Lot A in any way, but Annabel is
convinced that they will increase her family's cancer risk. Advise Danny of any possible
legal basis he may have for his claim, any defenses Annabel is likely to raise, and who
is likely to prevail. Your preliminary research indicates that there is nothing in the
record that sheds light on this matter.

                                END OF EXAMINATION
                                ENJOY THE SUMMER!


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