Property Good Outline

8/2/2019 Property Good Outline

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Property Outline Fall 2009

I. What is Property?a. Property as a absolute right against the world versus property as as a collection of rights (bundle of rights) with content

that varies according to context and policy choices

b. Trespass to Landi. Any intentional intrusion that deprives another possession of land (even if only temporarily)

ii. Jacque v. Steenberg Homes, Inc.1. Facts: Easiest route to put up mobile home through Ps property, P denied multiple requests, fear of AP

(irrational), D went through property anyways, no harm

2. Rule:a. Elements of Trespass: (1)must be intentional, the act (2) physically enter the property, (3)no harm

necessary

b. Right to exclude is a fundamental property right (categorical/essentialism view)3. App/ Holding: harm in every trespass even if no damage to the land, it infringes upon the rights of the

landowner to trespass. USSC precedent one of the most essential sticks in the bundle of rights that are

commonly characterized as property Dolan v. City of Tigard. Nominal damages support punitive damages

c. Trespass/Nuisance Dividei. Hinman v. Pacific Air Transport (Trespass)

1. Facts: D operates a commercial air line whose aircraft enter Ps airspace sometimes at low altitudes2. Rules:

a. No property right to airspace except so far as one may actually use (ad coelum doctrine impractical,absolute ownership of the sky would make flight impossible)

b. Property as a bundle of rights varying in context according to the necessary policies of air travel(utilitarian/functionalist view)

c. Type 3 Calebresi and Malamud Rule: Property Rule for the Defendant (see below)d. Dominion: Property, must be capable of exclusive possession. Without possession, no right can be

maintained. Air and ocean are incapable of private ownership. Only possess it while you use it then

reverts back to public domain

3. App/ Holding: Bundle of Sticks: property is a bundle of sticks enabling you to remove certain parts. Functionof air travel outweighs exclusive right to airspace.

ii. Hendricks v. Stalnaker (Private Nuisance)1. Facts: Incompatible uses of the well and the septic system2. Rules:

a. Nuisance: anything which annoys or disturbs the free use of ones property, or which renders itsordinary use or physical occupation uncomfortable

b. Elements of private nuisancei. Intent (know or should know that something would interfere w/ use and enjoyment)

ii. Harm (interference with use and enjoyment)iii. Interference must be substantialiv. Interference must be unreasonable: gravity of harm outweighs social value of the activity alleged to

cause harm

c. When Neither use unreasonable must balance the interests of the landowners3. App/Holding: since the installation of the septic tank and the well were reciprocal nuisances so only one could

stay. Although both parties have the intent to install their well or septic tank and they know it will

substantially impair their neighbors use and enjoyment of each others land they determined that when

balancing the two partys interests, the septic tank was more unreasonable because it required drainage and

therefore granted the injunction to the Stalnakers to keep their well. Balance owners competing interests.

Here it is slightly in favor of the well.

d. The Problem of Social Cost; Property and Equityi. Coase Theorem (search for efficient outcomes)


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1. Basics: In the absence of transaction costs parties will agree to maximize net wealth. Baseline entitlementirrelevant; two parties will find the most efficient joint use of the resources (always most valuable use, come

to agreement that is mutually beneficial)

2. Extension of Coase: courts should try to resolve cases in the most efficient way. Almost amorally. In issues ofincompatible uses, courts should give entitlements to minimize transaction costs and be clear (parties will

negotiate in the shadow of the law)

3. Criticisms Entitlement matters, People dont negotiating well (Jaque), holdouts, free-riders, lack of fullknowledge, Endowment effects (people overvalue what the own), Assembly problems (Hinman): can't expect

airlines to negotiate with everyone, bilateral monopoly issues (only one person to negotiate with), Assumed

awareness of the law

ii. Repeated Trespasses: Baker v. Howard County Hunt1. Facts: Fox hounds trespassing on Ps small farm, scared chickens, bit wife, P shot at them. Trespasses not

continuance but part of the same course of conduct (foxhunting)

2. Rules: Injunctive relief granted; rights of landowner are paramount to County Hunt activitiesa. Injunctions (P must usually satisfy the traditional requirements of equity to obtain injunctive relief)

i. Granting Injunction/ Maxims of Equity:ii. No adequate remedy at law: damages are insufficient to deter or resolve issue. Action seriously

interferes with enjoyment

iii. Coming in with clean hands: Plaintiff hasnt done something lawfully bad in return to defendant3. App/Holding: Since damages wont suffice in repeated trespass, and Baker has clean hands since he shot the

dogs only to protect his property and not out of maliciousness, the permanent injunction preventing the dogs

and hunt club from entering is granted.

e. Equitable Remedies1. Types of Injunctions

a. Prohibitive: not do somethingb. Mandatory: Do somethingc. Declaratory (relief explaining exactly what the legal rights are in a circumstance)

2. Violation of an injunction: can be held in contempt (fine, misdemeanor, or jail)f. Property and Equity

i. Building Encroachments1. De minimis (trifling; so insignificant that a court may overlook it)(nominal damages only) 2. Pile v. Pedrick Bright Line Rule (categorical)

a. Facts: Poor survey; factory built intruding 1 and 3/8 inches onto Ps property beneath the surface; Prefused offer for party wall; P refused to collect damages on permanent trespass and insisted D take

down wall from Ds side

b. Rules:i. Bright Line Rule=injunction to remove: D has no right, at law or in equity, to occupy land that does

not belong to them

ii. If a structure even accidently encroaches on the property of another, it can be ordered to b e takendown from the Ds side and bearing all the costs (categorical/essentialism)

iii. Good faith irrelevantiv. Type 1 Calebresi Malamud Rule: Property Rule for the Plaintiff(see below)

c. App/Holding: Since the wall encroached on neighbors land, even by a couple inches, that still is anencroachment and is prohibited. Grant injunction, Wall must be torn down and rebuilt on the correct

parcel of land.

3. Golden Press, Inc. v. Rylands (majority rule for good faith violators)a. Facts: Foundation runs several inches under the surface onto Ds propertyb. Rules Fact-Specific Adjudication:

i. Factors for determining whether to grant damages or injunction for removal:1. Good faith: must act in good faith to have the possibility of paying damages rather than

mandatory removal of encroachment


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2. Degree of trespass: barely encroaches or not3. Burden on Defendant to remove the encroachment: i.e. if a significant burden to remove

while encroachment is minimal

ii. Restatement of Torts: "Where defendant's encroachment is unintentional and slight, plaintiff's usenot affected and his damage small and fairly compensable, while the cost of removal is so great as to

cause grave hardship or otherwise make its removal unconscionable, mandatory injunction may be

properly denied and plaintiff relegated to compensation on damages."

iii. If encroachment is deliberate and constitutes a willful and intentional taking of anothers land, equitymay require its restoration regardless of the expense

iv. An unintentional encroachment may not warrant a mandatory injunction if the encroachment isunintentional and slight (only damages) (utilitarian/functionalist)

v. Crystal clear rule turned to mud in fairness to good faith violators (liability rule)c. App/ Holding: Since the neighbor got a survey and build the structure in good faith believing it was on

their land, the degree of trespass in very minimal as it is several feet below ground, and the burden of

removing the structure would be prohibitively expensive, the good faith violator must give just

compensate to the neighbor for the cost of the land where they intruded.

ii. Property Rules versus Liability Rules1. Calabresi & Melamed (modes of protection for entitlements)

a. Property Rules (holder must consent before entitlement is transferred) supports injunctionsi. Must buy in voluntary transaction

ii. State lets parties decide how much entitlement is worthiii. Works with Coase theorem

b. Liability Rules (only court can take away entitlement)(damages) supports damagesi. Cannot be transferred or destroyed by parties themselves

ii. Changes in entitlement decided by the stateiii. Covers high transaction costs

iii. Ex Ante/ Ex Post Problem1. Ex ante: analysis of a situation before some critical event: determining fairness by policy concerns

a. Focuses on incentives and future conduct (aligns more closely with categorical view)2. Ex Post: analysis of a situation after some critical event: thinking back about fairness and rights

a. Focuses on fairness and distributional concernsb. Courts are naturally drawn to ex post because this is how controversies are presented to them (fact

specific, aligns more closely with functionalist view)

g. Restitution unjust enrichment (non-bargained-for benefits)i. Elements

1. An enrichment of the D2. At the expense of the P3. Under circumstances that are unjust

ii. Windfall must be at the expense of the Piii. The mistaken improver

1. Producers Lumber & Supply Co. v. Olney Building Co.a. Facts: P mistakenly builds house on lot that he sold to D, negotiations failed, P razed houseb. Rule:

i. It is only when a person places permanent improvements upon land belonging to another in a goodfaith belief that he is the owner of the land, that he has any remedy

ii. Normal remedies for good faith improvers (liability rule)(utilitarian/functionalism)1. let the true owner keep the land and pay the encroacher its value (an equitable award of

restitution)

2. Transfer the lot to the encroacher for its fair market value3. Sell the property at auction and divide the profits


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c. App/ Holding: Resorted to self-help and committed waste before a court of equity could determine therights of the parties (cannot come to court with unclean hands and seek the equitable remedy of

reimbursement for the amount he had enhanced the value of the lot) owed damages to the landowner

for full price of the home.

II. Original Acquisition (ways of acquiring property other than purchase or gift)a. First Possession (new root of title)

i. When is first-in-time possession established? (point of capture) (VERY CONTEXT DEPENDENT)1. Intent to control2. Notice (physical demonstration of ownership)3. Labor (Creation of Value) (Exploitation of Resource)(labor theory / Lockean)

ii. Wild Animals (rules of capture for wild animals is relevant to other natural resources; ex. oil and gas)1. Pierson v. Post (1805)

a. Facts: P hunting fox with hounds; D w/ full knowledge of P intercepted fox killing and taking itb. Rules:

i. Rule of Capture: Whoever mortally wounds/captures the fox owns the fox; Requiresa. deprivation of natural liberty;ANDb. certain control by their pursuer

ii. Mere pursuit did not establish a legal right (intent insufficient)iii. Possession at the time ofcontrol or inevitable control (mortally wounding animal) (Exploitation of

Resource)

c. App/ Holding: Since D killed the fox and took it in his hands, he gained possession. P only gave noticeand had intent which is insufficient

2. Ghen v. Rich (1881)a. Facts: Hunting fin-back whales w/ bomb-lances; sink and rise to the surface; whales identified later by

lance; customary finding fee; D took whale for himself and sold at auction

b. Rules:i. Bomb-lance holds the whale: If you kill it with clear proof then its yours.

ii. Fast-fish, loose fish rule: whale goes to the salvageriii. Factors to consider when determining which rule to use

1. General maritime law2. Universal custom that doesnt conflict with the law 3. Case is a very limited application4. Industry will fail with rule changed

c. App/Holding: (utilitarian/functionalist view) Custom applies very narrowly to protect industry.Considering the factors, the whaler has possession because w/o this rule the industry would fail.

3. Keeble v. Hickeringill (1809)a. Facts: Keeble makes money from catching ducks and has a duck decoy system to catch them. Neighbor,

Hickeringill maliciously fires his gun on his own property near Keebles to scare his ducks away.

b. Rules:i. Malicious Hindrance: Person who maliciously hinders another person in their trade or livelihood are

liable for hindering them (protect investment, net social worth considered)

1. P had no possession of ducks but was still a willful disturbance (social utility rationale)ii. Fair Trade: People have the right to engage in their trade and law protects fair competition (setting

up competing business next door is ok)

iii. Benefits of fair competition:1. more goods and services with better prices2. wrong to purposely harm people without gaining anything3. Protect activities that benefit social welfare

c. App/Holding: Keeble may recover for the disturbance but not for the damage by loss of fowl since it isimpossible to know the amount of ducks scared away.

iii. Salvage Claims


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1. Abandoned or Lost Propertya. Property is abandoned when an owner manifests an intention to relinquish all future claims of

possession or ownership (I.e. having trees growing on a sunken ship)

b. Eads v. Brazelton (1961)i. Facts: Riverboat w/ bars of lead abandoned; P marked area (buoys) and was called away; D placed

boat over and raised the metal. Knew the lead was abandoned because trees were growing on the

boat.

ii. Rules:1. Elements of Possession: (labor)(exploitation of resource)

a. Due diligence: clearly positioning yourself to take it and diligently working towardsconsumption (notice and intent insufficient)

b. Abandonment: owner relinquishes all claims2. If not abandoned: Salvor: Person who salvages something owned and gets a generous

proportion of the value of the salvages without ever owning it

iii. App/Holding: Since the person who marked the spot and intended to take it did not exert duediligence to take it, the lead belongs to the person who put in the effort.

2. Exploiting Minerals: Pedis Possesioa. When exploring diligently and in good faith for minerals, exclusive right to work a given spot even before

he makes a discovery (labor theory)

iv. Splitting Entitlements: Popov v. Hayashi (2001)1. Facts: Barry bonds hits record home run. Ball abandoned once left the field. Popov caught ball in his glove

when the mob assailed him. Ball rolled to the side where Hayashi peacefully standing took it and established

clear possession over the ball

2. Rules:a. Split Entitlement

i. exclusive pre-possessory interest in being allowed to complete the catch without interferenceii. exclusive first unambiguous possession

b. Both have superior claim against the world; ball sold at auction and $ split3. Caveat: Such decisions create wasteful and destructive racing behavior. First possession works best when a

clear winner can be declared at a stage when other competitors are unlikely to compete effectively.

4. App/ Holding: Both own equally b/c Popov would've had full possession if there was no interference from themob and Hayashi, not part of the mob first person to unambiguously establish possession. Sold the ball and

split proceeds equally (Equitable Division and Law of Finders)

b. Discovery; Johnson v. MIntosh (1823) (chains of title to determine who has stronger claim)1. Facts: Indians sold land to Johnson ancestor, later, Indians grant land to US. US sells to MIntosh. Johnson sues

for ejectment of MIntosh.

2. Rules:a. Discovery: unique right to possess an unclaimed thingb. Nomo Dat Non Quod Habet principle: cant give what you dont have. (When there are two competing

chains of title, you must keep going back until you see who has the earlier claim. Under this, Johnson

would win because he bought the land from the Indians before the US got it from the treaty)

c. Dominion, established by discovery/conquest trumps the right to occupancyof Native Americansd. Labor theory of value: Possession through use and labor. Indians didnt use the land by farming so no

dominion

a. Necessity: Must rule in this way or it would cause crazy problems and would uproot American propertysystem

b. Reasoning: 1) reliance upon history, 2) disruptiveness of resettling, 3) prudent to preserve courtlegitimacy

3. App/Holding: Native Americans held incapable of transferring the absolute title of land to others because theywere mere occupants and not in possession of it.

c. Creation


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i. Information: International News Service v. Associated Press (1918)1. Facts: INS obtaining AP news from legal sources (bulletin boards) and re-publishing it; East Coast AP news

published early on West Coast by INS. Suit for unfair competition and appropriation

2. Rules:a. Information is a nonrival goodb. Primary reason for creating property rights in information is to provide incentives for producing more of

it, not to assure that it is allocated efficiently among potential users of it

c. Lockean / Labor Theory Examplei. Effort, expense, skill, and thejust desserts

d. Relativity of title: Only INS enjoined (not a right against the world)e. Common principle of competitors: each party is under a duty to conduct its business in a way that

doesnt unfairly injure the other

f. No absolute property in the news: News acquired by honest labor or lawful business is given the guardof property

3. App/Holding: quasi property because they are both selling it as such (postpones competition). Only INSenjoined because proved that they were hurting AP. Rest of the world can still copy and print info.

4. Holmes Dissenting: No property in un-copyrighted combinations of words (categorical/essentialism)d. Accession

i. Principle of Accession: doctrine where you acquire property that is intimately connected with objects that are alreadyour property, fruit of trees, offspring of cattle

ii. Doctrine of Accession: common law doctrine: someone mistakenly takes up a physical object that belongs to someoneelse and transforms it through her labor into a fundamentally different object

iii. Doctrine of Increase: General rules absent agreement to the contrary, Offspring of Cattle (the birth follows thebelly)(partus sequitur ventrem) For domestic animals if you own the stock you own the offspring (Carruth)

iv. Accesssion: Wetherbee v. Green (1871) (action of replevin is retaking property)1. Facts: Wetherbee cut down trees; thought trees were his; made barrel hoops; Greens action for replevin to

get all the barrel hoops. Original wood worth $25, the hoops altogether cost $800

2. Rules: Elements to Determine ownership in Accession a. Intent: Good faith/ bad faith distinction:

i. Bad faith: improved item must revert back to the original owner (categorical)ii. Good faith: may keep if labor significantly improves item

b. Transformation of the object: Significance and Value to determine title (labor theory) (functionalism)i. Labor insignificant and original object prominent--> title stays with original owner

ii. Labor prominent and original object insignificant--> title goes to improverc. Factors in determining significance or prominence of improvement

i. Improver significantly multiplied the value of the original product (wood into a piano)ii. Transformation of the product is ofsignificant value or important to the improver (beam in a house

from unintentionally taken wood)

d. If title goes to improver: improver must pay damages equivalent to fair market value of the rawmaterial(pre-transformation) to the original owner (liability rule for good faith improver) (see Golden

Press)

3. App/Holding: Whetherbee took trees in good faith and the value of the improved object is 32 times the priceof the wood alone. Therefore the labor is prominent and original object insignificant, and so Wetherbee must

compensate Green for the cost of the trees but can keep the hoops

v. Accession in Patent Law1. Minor improvement to original invention: infringe2. Significant improvement to original invention: still infringe on patent but entitled to a patent of their own3. Radical improvements: exempted from liability to the original patent owner regardless

vi. Ad Coelum Rule: Edwards v. Sims (1929)


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1. Facts: Edwards discovers cave opening on his land, makes it a public attraction, neighbor sues for undergroundtrespass. TC: orders survey to determine boundaries of cave. Edwards requests Writ of prohibition of survey

order; cave possibly under Sims land; entrance on Edwards land

2. Rules:a. Ad Coelum Rule: whoever owns the land owns to center of earth and to sky(categorical)b. Rule: Unless there is prior division of estate, owner of land is entitled to free and unfettered control of

his own land above, upon, and beneath the surface.

3. App/Holding: Ad coelum applies (he who owns the surface owns cave rights directly underneath land) Surveymust follow through to determine bounds so that Edwards doesnt trespass on Sims land underground.

4. Dissent: Only have rights to what you can subject to dominion or use. Since only Edwards can access the cavesince the entrance is on his land, he should own the whole cave regardless of whose land it is under.

(functionalism)(seeHinman)

e. Adverse Possessioni. When an owner sits on their right to exclude, and the statute of limitations for challenging the original unlawful entry

expires, original owner is barred from asserting the right to exclude and there is a new title in the adverse possessor

(evolved from statutes of limitations doctrine)

ii. The adverse possessor becomes the new true owner, and can exercise the right to exclude against all the world,including the original owner

iii. Majority Rule for Adverse Possession: Lesee of Ewing v. Burnet (1837)1. Facts: Man sells land twice, one owner possesses the land adversely and takes sues other owner to clear title.

P had older title; D lived across the street, paid taxes on lot, brought actions against trespassers, gave rights to

dig gravel; P stated that someday he wanted to reclaim lot

2. Rules:a. Elements of Adverse Possession, must possess for the statute of limitations period, possession that is:

i. Actual: actually possession and asserting dominion over the land ii. Exclusive: excludes the true owner

iii. Open and Notorious: giving notice to outside world and obvious you are claiming possessioniv. Continuous: consistent occupation throughout statute of limitationsv. Adverse: under a claim of right (i.e. no permission from owner)

b. Unnecessary Elementsi. No need for fence, building or other improvement

ii. Residence is unnecessaryiii. Use it for occupational purposes or cultivation

3. App/Holding: Since D actually, exclusively (TO didnt visit land), Open and notorious (public acts of ownershipsuffice: all the people in the area thought it was his), continuous for the whole stat of lims) and adverse under

a claim of right since he wasnt technically the TO, so D now becomes TO.

iv. Rationales for Adverse Possession1. Personhood: Possessor may have developed reliance on the property through long-standing possession.

Losing something that one has is relatively more painful than not getting something you don't own. (people

project more value on their property) (Holmes: Adverse possessor has connection w/land)

2. Penalty: designed to discourage true owners from "sleeping on their rights." Private property requires agatekeeper to protect the resource from abuse. If the gatekeeper fails their job, the resource may be looted as

an open access commons (lumber). Adverse possession seen as firing bad gatekeepers and replacing them

with more eager ones.

3. Efficiency; Reduces transaction costs: for determining title to assets that last a long time (like land) which canaccrue various potential claims. If you had to investigate every claim to title no matter how old, it would

impair the functioning of markets. Costs of proving or disproving claims invariably increase over time. Reduces

the transaction costs of determining title assets that last for a long time

v. Adverse Possession against the government1. Presumption that adverse possession does not apply (high monitoring costs of public parks) 2. Historically government has treated squatters generously


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vi. The role of good faith: Carpenter v. Ruperto (minority rule of explicit good faith requirement)1. Facts: Adverse possessor knowingly extended yard into neighbors cornfield, uses it as her own for 20yrs.

Marginally improves it, (bad faith, always knew it wasnt hers and sues to take possession via Quiet title action

(declaration of court of who owns what)

2. Rules:a. Minority Rule: few states require Good faith in Adverse Possessors to gain title. Most states dont care

about good faith or bad faith. (some even require bad faith)

b. Objective facts usually much more compelling than subjective intent for adverse possessionc. When knowledge of lack of title is accompanied by knowledge of no basis for claiming an interest in the

property, a good faith claim of right cannot be established. However courts sometimes look more

favorably on good faith actors in close cases.

3. App/Holding: Woman fulfills all elements of adverse possession, but her state (IA) requires Good Faith inadverse possessors so she is denied.

vii. Tacking: Howard v. Kunto (1970)1. Facts: Deeds of 3 properties did not correspond to where they built their summer houses, instead of

switching, they sue to take others land.

2. Rules:a. Must Meet all Adverse Possession Requirements:

i. Sufficient Continuity: sufficient when the land is consistently occupied during certain times of theyear. Helps if there are permanent improvements on the land (i.e.home and dock)

b. Tacking: adding of one's own period of land possession to that of a prior possessor to establishcontinuous adverse possession for the statutory period

c. General Tacking Rule: tacking of adverse possession is permitted if the successive occupants are in"privity" (i.e. contractual relationship) (ex: sale, gift, running of deed between parties suffices)

d. By limiting tacking to situations in which successive Adverse Possessors are in privity of estate thecourt permits tacking when A enters adversely and then sells to B who then sells to C

e. Tacking of adverse possession from previous owners is permitted if it was intended to be in the deedand mistakenly omitted from the description (such as claiming more land than was in the deed)

3. App/Holding: Since owners occupancy their tract during summer months and created improvements upon theland, that constitutes uninterrupted possession. Did actually, exclusively, open and notoriously, and adverse

under a claim of right too, so since all successive adverse possessors were in privity, can add all the years up to

get adverse possession.

viii. Disabilities1. Typically, state statutes provide that the statute of limitations is tolled for owners suffering from certain

narrow classes of disabilities, including being under age, insane, legally incompetent or sometimes in prison at

the time the adverse possessor enters the property

a. Disabilities arising later usually do not affect the running of the statuteb. Disabilities in the same of successive owners cannot be tacked

2. Note: cant adversely possess government propertyf. Sequential Possession

i. Multiple persons serially claim property on some theory other than purchase or giftii. Property rights may be good against the world, but disputes over property usually take the form A v B, and courts

usually ask only as between A and B who has the superior title

iii. Good faith threshold may be crucial to injunction order (clean hands)(see Baker v. Howard County Hunt), or not to orderan injunction and use a liability rule (see Golden Press)

iv. Armory v. Delamirie (1722) (F1 v. C1) True owner versus finders versus converters (takers)1. Facts: Chimney sweeper boy found a jewel and brought it to a jeweler to determine the value, the apprentice

took the jewels from the sockets and only returned the sockets.

2. Rules:a. Finders rights subordinate to true owner but has more rights than anyone elseb. Finder may have legal duty to


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i. Not convert the object to the finder's own use; ORii. Deliver the object to anyone other than the true owner

c. Finder's title is a qualified: (does not become the owner)until the statute of limitations for recovery ofpersonal property runs out allowing the finder to claim title by adverse possession

3. App/Holding:jeweler must either return the jewel or the jury will determine what the most expensive jewelthat could fit in the socket would be and will find him liable for that amount

v. Clark v. Maloney (1840) (F1 v. F2)1. Facts: P found pine logs floating in river, moored them, D took them claiming he found them in river. Action of

trover used to recover the value of personal chattels that are converted

2. Rules:a. General Rule: first finder of chattel may keep the item against everyone but the true ownerb. For the First Finder to get the property back he must show the items were

i. His property; ANDii. Converted by defendants to their own use

c. When not abandoned, loss of chattel does not change the right of property. So, previous owner hasmore rights than subsequent finders or converters

3. App/Holding: P showed better title to the logs since he never abandoned them, so he may keep them againstall the world but the rightful owner

4. Rationale: desire to create a stable rule, splitting entitlement would create confusing precedentvi. Anderson v. Gouldberg (C1 v. C2)

1. Facts: Two converters: both trespassing and cutting down third party logs. Coverter 1 takes trees and leavesthem outside, then converter 2 claims title. Converter 1 sues to get trees back.

2. Rules:a. Even when a person wrongfully obtains property from another, the first converter still has better title to

the property than anyone else (including other takers) but still subordinate right ti the true owner

b. Complicated set of facts, court applies easy test: He who has better title/possession wins3. Holding: even if a person wrongfully takes anothers property, the bad faith taker still has more right over the

chattel than any subsequent finders/converters other than true owner

III. Owner Sovereignty and its Limitsa. Protecting the Right to Exclude

i. Civil Actions1. Developed out of writ system

a. Trespass (used to vindicate the interest that a person in actual possession has in exclusive possession ofland)

b. Ejectment (used to vindicate the interest of a person who has title to land against a person wrongfully inpossession)

c. Detunue (when P alleged unjustly detained specific goods which remained in the D s possession)d. Trover (to allege that D had wrongfully converted the Ps goods to his own use) e. Replevin (originally used when a landlord seized personal property of the P for unpaid rent)f. Trespass to chattels (when the D interfered or injured the property in some manner falling short of

conversion while it remained in the property of the P)

2. Principal actions for protection ofpersonal property today are: replevin, conversion, and trespass to chattels3. Intel Corporation v. Hamidi (2003)

a. Facts: D sent mass emails to Intel employees over the company intranet that complained of Intels badbusiness and hiring practices. Intel unsuccessfully tried to block Hamidi but failed, so suing for injunction.

b. Rules:i. Trespass to chattel requires injury to

1. the owner's right of possession2. Harm the value of the personal property (i.e. computer)


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ii. Decisions finding electronic contact to be trespass to computer systems generally involve some actuaor threatened interference with the functioning of the computers. i.e. can prove he is sending

malware, viruses, or Trojans that materially harms computers, then likely can grant injunction.

iii. Theory of impairment by content: Some servers were able to sue spam companies because thelarge amount of spam actually impaired the functioning of their servers (property) and were granted

injunctions App: no discernable difference in performance of Intels computers. So cant succeed on

impairment

c. App/Holding: Intel retains its right to exclude people from their intranet, but they cant get an injunctionwithout showing injury to the chattel or their possession of the chattel. No such thing as nuisance to

chattel

ii. Self-Help1. Permitted to greater or lesser degrees to vindicate the right to exclude2. Right to exclude Right to injunction

a. Courts are unlikely to order injunctions or other remedies that do not accomplish much(seeHamidi)b. Courts are also unlikely to be too liberal with self-help remedies as they resemble lawlessness (see Berg)

3. A person in possession of property can generally use reasonable force to prevent or terminate an unlawfulentry or other trespass upon land or a trespass against moving property

4. Berg v. Wiley (1973)a. Facts: D leased property to P for restaurant, reserved the right to retake possession should the lessee fail

to meet lease conditions; P broke lease; D locked P out when she left for the night and re-let the

property

b. Rules:i. Majority Rule: landlord may rightfully use self-help to retake leased premises form a tenant in

possession without incurring liability for wrongful eviction provided 2 conditions are met

1. Landlord legally entitled to possession when a tenant holds over after the lease term or wherea tenant breaches a lease containing a reentry clause

2. The landlord's means of reentry are peacefulii. Minority Rule: self-help is never available and must use judicial process to dispossess a tenant who is

in possession and has not abandoned or voluntarily surrendered the premises

iii. Damages awarded to tenant for wrongful eviction : where LL either has no right to possession ornon-peaceably removed the tenant or both

c. App/ Holding: P did not abandon or surrender the property (so Ds entry was not peaceful). D could onlyrepossess by suit through judicial system.

5. Williams v. Ford Motor Credit Companya. Facts: Ps ex-husband stops car payments; Repo men take Mustang in the middle of night w/ little

objection

b. Rules: In a repossession after default: a secured party may proceed to take collateral property withoutjudicial processif this can be done without breach of the peace

c. App/Holding: No breach of peace when P neither gives permission nor objects to repossession. Fordhad the right to take the care but ex-husband must reimburse ex-wife for cost of the car

b. Limiting the Right to Exclude (necessity, custom, public accommodation laws, and Antidiscrimination laws)i. Necessity: Ploof v. Putnam (1908)

1. Facts: P caught on lake in sailboat during storm, moored on Ds dock, Ds servant unmoored the boat; crashedon the shore destroying ship and injuring those onboard

2. Rules:a. Necessity: an inability to control movements in the proper exercise of a strict right that justifies entries

upon land and interferences with personal property that would otherwise be trespasses (everyone bears

own loss) (functionalism) Shift in entitlement out of necessity (the ship-owner has a right [more than

privilege] to dock)

i. Animals: cannot be withdrawn instantly, allowed to trespass to drive off sheep as long as D does bestto recall dog


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ii. Highway obstruction: traveler may pass upon adjoining land out of necessity without being atrespasser

iii. Save goods: may enter other's land to save goods from being destroyed by water or fire iv. Save Human Life(special force): assaulted in peril may run through another's land, may sacrifice

other's property to save his and other's lives

3. App/Holding: Because of necessity to save life, P had the right to moor on Ds dock. Since D unmoored P andcaused P physical and material injuries, D must compensate P for all those damages.

ii. Vincent v. Lake Erie Transportation1. D docked his boat through storm (Court held D was justified in docking but must pay for dock damage)

iii. Custom; McConico v. Singleton1. Facts: D hunted on P's unimproved rural land with explicit prohibition from P.2. Rules:

a. Custom: something well known and universally exercised for a long time, license may be implied fromhabits of the country

i. When custom applies, trespass permitted, even with landowner protestb. Posting Laws: peeps may hunt on rural land unless prominent sign prohibitc. Fencing-In Laws: owner of livestock must fence in to protect neighborsd. Fencing-Out Laws: landowners must fence out harmful livestock

3. App/Holding: No injury to land so customary regime of the right to hunt on unenclosed and uncultivated landsholds

iv. Public Accommodations1. Owners of public accommodations have a much more qualified right to exclude2. Subject to a general duty ofnondiscrimination among customers

a. Obligation to serve any person who requests service, provided it was available (cannot refuse service)b. Must charge customers only reasonable rates for the services they provide

i. Different customers can be charged different prices as long as each fell within zone of reasonablecharges

3. Definition of public accommodations expanding (closely tied with Civil Rights Act) a. Originally a very narrow list of business generally associated w/ travel (innkeepers, common carriers)b. Often have some form of monopoly

4. Uston v. Resorts International Hotel, Inc. (1982)a. Facts: D excluded P from their casinos for card countingb. Rules:

i. Balancing the interests of the property owner and the patron (right to exclude versus the right toaccess)

ii. General Principle: the more private property is devoted to public use, the more it mustaccommodate the general public and less it can exclude

iii. Public Accommodations Duty: not to act in an arbitrary of discriminatory manner toward person whocome on their premises. Also usually duty to remove disorderly or otherwise dangerous people from

the premises

1. Applies to all property owners who open their premises to the publiciv. Exceptions (when public accommodators may exclude), i.e. disorderly, intoxicated

1. "disrupts the regular and essential operation of the premises"; OR2. "threatens the security of the premises and its occupants"

c. App/Holding: Absent regulation making technique against the rules, cannot exclude P5. State v. Schmid

a. Facts: Distributing literature on a private university campusb. Rule: When a property owner opens their premises to the general public pursuant to their own

property interests, they have no right to exclude people unreasonably Weak right to exclude and strong

right to access

c. Holding: People may distribute literature if no rules specifically bans


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6. State v. Shacka. Reversed trespass conviction of attorneys and social workers entering property to assist farm-workersb. Strong right to exclude and a strong right to accessc. Holding: farm owners dont have the right to exclude gov employees who provide health and legal

services to migrant workers

7. Brooks v. Chicago Downa. Expert handicappers excluded from racing trackb. Market forces that preclude outrageous excess give weight to right to exclude over right to access

v. Anti-Discrimination Laws1. Shelley v. Kraemer (1948)

a. Facts: Neighborhood agreement restricting occupancy to Caucasian race; 35 years later an AfricanAmerican family is sold property in neighborhood w/o knowing of restrictive covenant. Neighbors sue.

b. Rules:i. Judicial enforcement of discriminatory covenants between private parties constitutes government

action and is therefore barred by the Fourteenth Amendment (14th

Amendment: No state shall

make or enforce a law which shall abridge the privileges or immunities of US citizens, nor deny any

citizen of equal protection of the laws.)

ii. State action necessary for enforcement private agreement which would result in denial of equalprotection of the laws

iii. Excluding a trespasser does not have such an imposition on core property rights as ousterc. App/Holding: Can have covenants on the deed but they are unenforceable b/c would constitute state

action and violate 13th

amendment. Shelleys may stay.

2. Fair Housing Act: Civil Rights Act of 1968a. Prohibits a range of discriminatory behaviors against members of protected classes:

i. Refusal to rent or sellii. To discriminate on terms

iii. To make or print notice or ad that shows discriminatory preferences (always applies, no exceptions)iv. To discriminatorily claim unavailability incorrectly (lying about availability)v. For profit, to attempt to induce any person to sell or rent discriminatorily

vi. To discriminate because of handicap of the renter, buyer, intended resident, or any associationb. Must be 1) Protected class, 2) qualified to rent, 3) try to rent, 4) denied, 5) with the property available

i. If the above is satisfied the burden shifts to the D to provide a legitimate, nondiscriminatory reasonc. Refusal to rent to a protected class at any moment counts as a violation.

i. Potential evidence: Rental history, interaction between LL and P i.e. reason for refusal, LL can negatefacts as a defense

d. Craigslist ad for roommate w/ gender preference hypo: falls under privacy and association rightsi. Fair Housing Act only enforceable within constitutional limitations

e. Exceptionsi. Mrs. Murphy exception: renting out a few rooms in a single family home where LL lives there too.

Home cannot be intended to have more than 4 single families.

ii. Religious organizations, private clubs, elderly communitiesf. Ps under FHA May not need to show discriminatory intent and discriminatory effects sufficeg. 3 purposes of Antidiscrimination laws:

i. Increase housing opportunities for people in protected classesii. Eliminate indignity suffered

iii. Eliminate social message of inferiorityh. Attorney General v. Desilets (1994)

i. Facts: Strict Roman Catholic D refused to rent property to unmarried cohabitating coupleii. Rules:


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1. Marital Status is not necessarily a protected class: Some states have laws against unmarriedsex, and can conflict with religious rights. Married couples also get more benefits under law

than unmarried couples. Considered less important than other types of discrimination.

2. Balancing Test: Balance State interests against the nature of the burden on the D3. Contextual framings of the benefits and burdens are crucial:

a. Discrimination against marital status (Majority Argument); Cohabitation (DissentArgument)

b. Renting apartments (Majority Argument); Free exercise of religion (Dissent Argument)iii. App/Holding: There is a general state interest is the elimination of discrimination in housing based

on marital status. Commonwealth must show protecting cohabiting couples is more important that

Ds religious freedom. (unlikely for cohabiting couple to win)

c. Other Powers of the Sovereign Owneri. Licenses

1. Closer to contract than to property (right between two parties and not beyond)(usually cannot get injunctiverelief, only damages)

2. ProCD Inc. v. Zeidenberg (1996)a. Facts: P uses price discrimination in selling database; D bought restricted consumer version and resold

information in violation of the 3 shrink-wrap licenses inside. ProCD sues for injunction

b. Rules:i. License is not copyright, so it isnt a right against the world, but it is a contract between two parties

for the two bound parties to comply with the agreement. Has right to exclude people from certain

actions as per the license agreement.

c. App/Holding: ProCD may not use the consumer version and resell it, they must purchase the commerciaversion if they wish to continue the internet business.

d. Limits on Owner Sovereigntyi. Abandonment

1. Considerations of social welfare may override owner sovereignty regarding the right to abandon property2. Pocono Springs Civic Association, Inc. v. MacKenzie (1995)

a. Facts: D purchased vacant lot, couldnt sell, tried to give property to D as gift, tried to sell again, stoppedpaying taxes, wrote letter to abandon, P sued for community fees

b. Rules:i. If a person DOESNT have perfect title: Property is abandoned when owner has voluntarily

relinquished all right, title, claim, and possession with the intention of terminating ownership without

vesting it any other

ii. Traditional Rule: Real property cannot be abandoned (D had perfect title)1. Fee simple absolute must be sold or transferred2. Doctrine of abandonment only applies to imperfect titles

iii. Failure to possess land, pay taxes, or intention to abandon dont matter c. App/Holding: D has perfect title to the land so they cannot abandon and must continue to pay taxes

ii. Destruction: Everman v. Mercantile Trust Co. (1975)1. Facts: Will directs expensive house in nice neighborhood to be razed upon death2. Rules:

a. Destruction Rule: Person may be enjoined to stop destruction of property if (functionalism)i. There is no good reason for the destruction; AND

ii. the act is against public policy b. Acts are against public policy when: they have a mischievous tendency so as to be injurious to the

interest of the state apart from illegality or immorality

c. Courts will almost never order the destruction of property causing substantial loss in value3. App/Holding: Since Will stated no good reason for the razing of the house, the state may intervene and

prevent the razing. Injunction to neighbors granted because would cause great loss in value to society.

iii. Transfer


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1. Permits owner to shed gatekeeper responsibility2. Two types

a. Quid pro quos (owner relinquishes title in exchange for a reciprocal transfer; ex. $$) b. Gifts (owner relinquishes title in favor of another w/o explicitly receiving anything in return)

3. Lauderbaugh v. Williams (1962)a. Facts: Lake Watagwa Association agreement to only sell to members (3 members can veto) b. Rule:

i. Common law rule against restraints on alienation: Owner may not transfer property to another oncondition that the transferee will not retransfer

ii. Absolute restraints on alienation are voidiii. A limited and reasonable restraint may be validiv. Standardless, discretionary restraints on alienation are suspect b/c of the possibility of discrimination

(see Shelley)

c. App/Holding: Not enforceable: Restriction is unlimited in time is subject to the whim and caprice of theLake Assoc. member which could unjustly deprive Mrs. Lauderbaugh from alienating her land.

IV. The Forms of Ownershipa. Present and Future Interests in Land (see practice worksheets)

i. Freehold Possessory Estates (leases are non-freehold estates)1. Fee Simple Absolute: complete ownership in real property. No natural end. Owner can designate a successor

owner (gift, sale, will), If owner died intestate, statute will designate

a. Language to signify to A and his/her heirsi. A person does not have heirs until death (no interest while living)

ii. If language is ambiguous courts will assume fee simple absolute (unless it is clear that a lesser estatewas intended)

2. Life Estate: Limited duration (comes to a natural end with death of named person, usually the holder of theestate)

a. Followed by a future interest in Remainder or Reverterb. Language to signify to Afor life (implied reverter); to A for life then to B (remainder to B)c. Alienable by gift or sale (estate pur autre vie: life estate measured by named persons lifespan)

i. New owner loses property right when named person dies3. Fee Tail: Creates a nontransferable life estate to be followed by blood descendants until line ends

a. If A dies without issue the fee tail ends b. Language to signify to A and the heirs of his/her bodyc. Eliminated by statute in most states

4. Defeasible Fees (interests like a fee simple absolute except they may end on the happening of some namedcontingency)(future interests become possessory when such contingency occurs)

a. Fee Simple Determinable: Fee simple ends automatically upon the occurrence of a named event, theni. Possibility of reverter: grantor or grantors successor gets property in fee simple

ii. Language to signify to A as long as or to A whileiii. (i.e. "O grants blackacre to VULS law school as long as it is used for in the instruction of law, then to

O")

iv. Stat of lims for adverse possession when event triggersb. Fee Simple Subject to Condition Subsequent

i. Interest can be ended by the occurrence of a named event (not automatic, option of grantor)1. Must be ended by action (self-help or lawsuit)2. Power of termination (Grantor has right to reenter and take the premises via self-help or suit

ii. Language to signify to A but if or to A provided howeveriii. "O grants Blackacre to VULS, but if it is not used for the instruction of law, then O has the right to

reenter and take the premise")

iv. Clock does not start for adverse possession but still cannot sleep on rights (laches, same as AP)


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c. Fee Simple Subject to Executory Limitation: upon named event, interest goes to a 3rd party who has anexecutory interest (either springing or shifting)

i. Language to signify To A, but if then to B (executory interest to B)ii. "O grants Blackacre to VULS as long as it is used for law instruction, then to Springfield Animal

Hospital.")

iii. No reversion to the grantorii. Future Interests (besides fee simple absolute, other estates do not continue indefinitely and create future interests)

1. Interests Retained by the Grantora. Reversion: rights go back to the grantor

i. Follows the natural end of a life estate or when the owner has not disposed of the entire feeii. If there is no other interest following a life estate the reversion goes to the original grantor

iii. Language to signify to A for life (implied reversion) (owner has not disposed of entire fee)1. O grants to A for life, then to O Reversion to original grantor

b. Possibility of Reverter: interest reverts to grantor upon occurrence of built in limitationi. Interest of the grantor reserved following a fee simple determinable

ii. Grantor gets back property automatically if the limitation is metiii. Language to signify O grants to A as long as then to O

1. If grantor dies, his successor will take (by will, intestacy, or sale)c. Right of Entry / Power of Termination

i. Right of the grantor following a fee simple subject to condition subsequentii. Grantor has option to take action (nothing happens automatically)

iii. Language to signify O grants to A but if then O has the right to reenter and take2. Interests Created in Grantee (third party, not grantor)

a. Remainder: follows a life estate and remainder receives property in fee simplei. Follows the natural end of a life estate (not to grantor)

ii. Indefeasibly vested1. Identity of the takers is known2. No other contingency3. Language to signify To A for l ife, then to B

iii. Contingent: Uncertainty to the takers1. Remainder is vested

a. If fails to vest in interest and no other interests then supporting reversion2. Language to signify To A for life, then to B if (interest is vested)

a. To A for life, then to his children and their heirs (uncertainty to the takers)3. Vested Subject to Complete Defeasance: upon occurrence of a condition, interest can shift to

someone else. (Marge grants Blackacre "to Homer for life, then to Bart; but if Bart fails to

graduate from high school by age 19, then to Lisa") aka. "Condition subsequent" therefore, Lisa

has a "shifting executory interest"

4. Vested Subject to Open: Marge grants Blackacre "to Homer for life, then to his children andtheir heirs" and at the time Homer is the father of Bart and Lisa, but not yet Maggie, so Bart

and Lisa are "subject to open" b/c Homer could have other children, therefore, Bart and Lisa

have "vested remainders subject to partial divestment" because with each additional child,

their interest is reduced from (1/2 to 1/3 to 1/4 etc) After Homer dies, Bart, Lisa, and Maggie

will own Blackacre in fee simple absolute

b. Executory Interesti. An interest in a transferee (not retained by the grantor) that divests or cuts short a previous interest

ii. Language to signify to A but if then to B (third party) iii. Springing executory interest: if the executory interest divests an interest in the grantor (Marge

grants Blackacre "to Bart for life, remainder to Lisa 5 years after his death.") therefore, there is a

reversion to Marge that would be possessory during the 5 year gap after Bart's death. Lisa has

"springing" executory interest b/c it divests the reversion in the grantor (Marge)


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iv. Shifting Executory Interest: like above, but auto shifts to 3rd partyupon condition3. Vesting

a. An interest vests in possession when the interest becomes a present possessory oneb. An interest can vest in interest before it vests in possession

b. Maintaining the Systemi. Conservation of Estates

1. Whenever a transfer is made all of what the grantor had must be accounted for2. Ensuring that all the pieces of the estate are accounted for as grantors often convey less than full interest

a. If a holder in fee simple dies without heirs the property escheats to the state (relatively rare)3. Estate Planning

a. Williams v. Estate of Williams (1993)i. Facts: Will provides estate to daughters during their lives, and not to be sold during their lifetime

and if any one of them marry their interest ceases and the ones that remain have full control. Each

daughter had 1/3 life estate defeasible and with an executory interest when the other daughters die

or marry and the successors have executory interest for taking care of their mom.

ii. Rules:1. Rule of Construction:language of a single sentence is not to control as against the evident

purpose and intent shown by the whole will when a predominate purpose of the testator is

expressed, courts must to effectuate that purpose and to construe all subsidiary clauses as

subordinate to the main purpose.

2. Intent: function of construing a will is to ascertain and carry out the predominant purpose andintent of the testator. very important in holographic wills (handwritten by testator)

b. App/Holding: Intent is clear b/c evidence that author was careful and thorough: GA devised life estatesto the 3 daughters. Evidence: during their lives, limits duration to their unmarriedstate, testators

purpose is accomplished after they marry or die then grantor intended his heirs to inherit thru intestate

succession

c. City of Klamath Falls v. Bell (1971)i. Facts: Corporation conveyed land in gift to city for library; deed provided city should hold the land so

long as it complied with the condition (use as library), and if not pass to Schallock and Dagget and

heirs. Executory interest violates RAP, replaced with possibility of reverter

ii. Rules:1. Minority: some states rule that grantor may not alienate a possibility of reverter even if they

attempt to give 3rd

party an executory interest.

2. For Corporations: even if corp. dissolved, possibility of reverter remains and will go toshareholders and their heirs.

iii. App: Deed created a fee simple determinable, executory interest violated rule against perpetuities1. Grantors retained possibility of reverter (passed to heirs of shareholders)(same result)2. A failed attempt by a grantor to transfer his possibility of reverter does not destroy it 3. Fit language into the limited menu (just because executory interest was impermissible does

not give city fee simple) (strike problematic language and reevaluate which form of ownership

still exists)

iv. Holding: For corps, must revert to shareholders. Only shareholders were the grantors, so it goes totheir heirs. Becomes fee simple determination w/ possibility of reverter

ii. Disclaimer1. Gifts are only valid if accepted (it takes two to transfer)2. No obligation to accept a property interest (potential recipient can refuse property)(goes to next interest)

iii. Numerus Clausus: catalog of estates is finite andclosed. Property, unlike contract is not freely customizable by partiesbut rather is standardized into a closed set of approved forms. (building blocks rationale)

1. Merrill and Smith; Conclusion: numerous clauses strikes a rough balance between the extremes of completeregimentation and complete freedom or customization and this leads to a system of property rights that is

closer to being optimal than that which would be produced by either of the extreme positions.


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2. Three classes of people are affected by creation of idiosyncratic property right : (1)Originating parties(participants who create the fancy), (2)potential successors, and (3) other market participants. People within

the zone of privity (1+2) have decided to take on the extra burden on the fancy but it creates problems for (3)

other market participants by disproportionally raising information costs. i.e. If Monday only watch exists, 3rd

parties must investigation for type of right they want, whether to repair it, and riskier (clouds on title may

exist).

3. Rationale: Limits confusion from new modes of ownership, prevents excessive fragmentation (too many veto-wielding co-owners and holdout behavior will cause a resource to be underused) Limited menu of forms;

fewer bizarre property types; complicated conveyances are uniformly sorted

4. Johnson v. Whiton (1893)a. Facts: Man wills property to 5 grandchildren, 4 have fee simple, one may have fee tail. All trying to

combine interest and sell. Sue to determine whether 1 has fee tail or not. Will conveys: to my

granddaughter and her heirs on her fathers side

b. Rules:i. Fee Tail Rule: If it is obvious certain heirs got fee simple, even if it sounds like another heir got a fee

tail, it cannot be true and all have in fee simple since fee tails are illegal now and won t give fee tail

unless 100% clear

ii. A man cannot create a new kind of inheritance (granddaughter has fee simple absolute)iii. Appears similar to a fee tail which has been abolished

c. Could have used precise vocabulary of the estate system to effectuate this conveyanced. App/Holding: Fee tails are not recognized and cant create a new form so it is a fee simple absolute and

they may sell it.

5. Garner v. Gerrish (1984)a. Facts: Landlord leases premise to tenant. for and during the term of quiet enjoyment from 1977 which

term will endGerrish has the privilege of termination *sic+ this agreement at a date of his own choice.

Also, Landlord may reenter if rent not timely paid. Lease provides that lessee has power of termination

at the date of his own choice and landlord does not

b. Life Tenant Lease Rule: Lease which expressly and unambiguously granted to tenant right to terminate,and did not reserve to landlord a similar right, does not create a tenancy terminable at will of either

party, but instead created a determinable life tenancy on behalf of tenant.

c. Holding: Since only T has the right to terminate, created a determinable life tenancy.c. Mediating Conflicts Over Time

i. Waste: Brokaw v. Fairchild (1929)1. Facts: Will conveyed 4 NYC mansions to each of 4 children in a life estate followed by contingent remainder in

other 3 mansions; son wants to raze untenable house and put up apartments (greatly increase value)

2. Rules:a. Waste: any act of the life tenant which permanently injures the inheritanceb. General Rule for what life tenants (LT) may do : LT may do whatever is required for the general use and

enjoyment of his estate as he received it btu may NOT exercise acts of ownership such as demolition. LT

may erect new edifice so long as they do not materially injure any existing improvements to the land. Or

can change the property so long as they change it back before the tenancy expires.

c. Ameliorative Waste: Increases market value but permanently changes propertyd. Only those with future interests can sue for waste (indefeasibly vested remainders or reversions)e. Waste can be affirmative or dismissive (damage from failure to repair may constitute waste)

3. App/Holding: Materially changing the nature of the building considered waste whether the value of theproperty is enhanced by the alteration

ii. Valuation of Interests1. An amount in C in the future equals the present value P times the discount factor r, applied for the requisite

number n of time periods, i.e. C = P(1+r)^n

a. or in reverse from a future nominal amount to calculate the present discounted value, i.e. P=C/(1+r)^n2. Value of future interest depends on the life expectancy of the life tenant


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iii. Restraints on Alienation1. General: Courts do not usually uphold determinable fees that restrain alienation (limit transferability)2. Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano

a. Facts: Deed reads: said property is restricted for the use and benefit of the second party, only; and inthe event the same fails to be used by the second party or in the event of sale or transfer *then to

grantor]

b. Restraint on alienation is void, but language is disjunctive and land use restriction is validi. Created a fee simple subject to condition subsequent w/ regards to land use (w/ reverter)

c. App/Holding: Valid to restrict the use of land, even if such restriction hampers or even completelyimpedes alienation. But cant restrict the sale of land. So Mountain brow lodge can sell the land ,but

they are still the only people who can use it.

3. Courts may permit restraints on land even if they impede transferabilitya. Often look to marketability

i. Damages/Injunction v. Forfeiture1. Forfeiture remedy has hugely negative impact on whether a property is marketable

ii. Number of potential buyers potentially affected1. Restrictive small universe of potential buyers under clause will likely be deemed invalid

iii. Surrounding land restrictions (In Toscano, property used as parking lot for lodge)iv. Improvements

1. Does a restriction disallow improvements on the propertyv. Charity exception (limited transferability from charity to charity often excepted)

iv. Rule Against Perpetuities (see practice worksheets)1. Purpose is to prevent Dead Hand Control2. Strict Rule: No interest is good unless it must vest, if at all, not later than 21 years after some life in being at

the creation of the interest

3. Step 1: RAP only applies to the following interests: (1)contingent remainder, (2)executory interest,(3)remainder subject to open. DOES Not apply to vested interests or interests retained by the grantor:

reversion, possibility of reverter, power of termination

4. Step 2: look through the pool of possible measuring lives: anyone alive and affects vesting at the time the willis created

a. RAP lasts up to 21 years after the death of the measuring person. If the interest does not definitely vestwithin that time, its void

b. Includes a child born after measure persons death if they were already conceived, and Measuringpeople cant be subject to open

c. Interest is void if the burden of keeping track of measuring lives is too great (to my heirs after the deathof last person in NY phone book

5. Step 3: choose one person as the validating life. Make sure that w/ crazy scenario, all interests vest w/I RAP(unborn widow, fertile 80 yr old, after born wife.

a. Measuring lives: Do not have to be specifically mentioned in deed, can be implied in the grant, may nothave any special connection to the property (ex. living heirs of Queen Victoria)

b. Solution: insert perpetuities savings clause: refers explicitly to the possibility of invalidation under theRap and specific a backup plan

6. Step 4: if a invalid clause exists, rewrite the will by striking out the bad part and adding a possibility of reverterto O at the end

7. Exception: doctrine ofcy pres: saves gifts to charity from RAP or wastefulness by substituting a similar charity,also ok w/ Rap if executory interest from one charity to another.

8. Examples of Rule Against Perpetuitiesa. O devises to A for life, then to B if B survives A. Rule does not apply; A has a life interest and B has a

contingent remainder in fee simple absolute. Os heirs have a reversion interest (if B does not survive A)


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b. O conveys to A so long as the property is used for commercial purposes, then to B. Rule againstPerpetuities renders Bs contingent interest void because it is unknown how long the property will be

used for commercial purposes.

c. O conveys to A for life, then to B. O is 93 and in poor health, A is 10 years old. Rule does not apply andages are not important; A has a life estate and B has a vested remainder in fee simple absolute.

d. O conveys to A for life, then to As first child to reach 25. At time of conveyance, A has one child, age24. Rule applies and renders the interest in As children void because As first child could die and A could

die, making it conceptually possible that the interest might not vest within As life plus 21 years. A has a

life estate, and As first child has a contingent remainder.

e. O conveys to A upon As marriage to B. Rule does not apply because the uncertainty will be resolvedwithin As life plus 21 years. O has a fee simple subject to As springing executory interest; A has a

springing executory interest in fee simple absolute

9. Merger rulei. O grants to A for life and then O separately conveys his reversion to A

ii. Courts hold that conveyances can be merged (this would be a fee simple)10. Limiting Future Interests

a. Rule in Shelleys Case: At common law, if the same instrument created a life estate in A and gave theremainder only to As heirs, the remainder was not recognized, and A took the life estate and the

remainder. Most jurisdictions have abolished this rule.

i. Effectively abolished Fee Tailsb. Doctrine of Worthier Title: A remainder in the grantors heirs is invalid and becomes a reversion in the

grantor. E.g., if O grants Blackacre to B for life, then to the heirs of O, B has a life estate, and O has a

reversion, not Os heirs. This doctrine is generally treated as a rule of construction (i.e., it does not apply

if intent to create remainder in heirs has been clearly manifested). It applies only to inter vivos transfers

(not wills), and only if the word heirs is used. It is not recognized in many jurisdictions.

c. Destructibility of Contingent Remainders: At common law, a contingent remainder was destroyed if itfailed to vest before or upon the termination of the preceding freehold estate. Not widely recognized

V. Co- Ownership and Conflicts Between Co-Ownersa. Co-Ownership

i. Tenancy in Common: separate but undivided interest. Separate: independently descendible, conveyable, and devisable;No right of survivorship; Undivided: each tenant in common must have the right to possess the whole property. No

requirement of equal share. 80, 15,5. (usually presumed unless otherwise specified)

1. ex. (C and D and E are tenants in common and D dies, Ds interest goes to Ds heirs) 2. Creating tenancies in common: Easiest to create (To A&B (they do not have to have the same interests) to

A&B in common to A for life, to B 1/8 interests)

ii. Joint Tenancy: Same as tenancy in common but also includes right of survivorship: surviving joint tenants automaticallyacquires the interest of other joint tenants that die (cant will to heirs until last survivor has fee simple). Therefore, the

last joint tenant alive owns in fee simple.

1. Requires (4) units at creation:a. (1) Time: each interest must vest at the same time,b. (2) Title: each must acquire title by the same instrument or adverse possession (never intestate

succession),

c. (3)Interest: each must have the same legal interest in the property (fee simple, life estate, lease, but notsame fractional share),

d. (4) Possession: each must have the right to possess the whole.i. Any joint tenant can sever the joint tenancy (sell it for $1 and buy it back so that it is a tenancy in

common) (one party can unilaterally change the form of the ownership this way)

1. To get the unities and joint tenancy back, cotenant has to sell and buy back as a joint tenancy2. Ex. (C and D and E, D dies, Ds share dissolves and the other joint tenants assume a half portion)


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iii. Tenancy by the Entirety: only for married couples, each owner has a separate and undivided interest, and possession ofthe whole, also includes right of survivorship. But, neither spouse can transfer or encumber their share without the

consent of the other. No unilateral exiting. (5 requirements: up+ marriage)

iv. Community Property: for married couples in South and West. All property acquired during the marriage automaticallybecomes community property. Each spouse has the right to possess community property and may transfer property in

and out with the others consent. Property acquired before the marriage is separate, but may become community

property.

a. Partition (most important legal remedy available to concurrent owners) (usually not used for future interests see waste)v. Each cotenant has an automatic right to terminate a co-tenancy at any time

1. Partition in Kind: Division of physical property according to the parties respective interestsa. Owelty (payment to correct imbalances in a partition in kind

2. Partition by Sale: Division of proceeds according to the parties respective interests vi. Delfino v. Vealencis (1980)

1. Facts: Tenants in common; Ps seek partition to sell residential property; D runs garbage business and lives onland.

2. Rules:a. Partition by Kind (physical partition) is preferred when possible. Consider: size, area, structures,

present and future use, zoning, whether someone using land for home, business, livelihood.

b. Partition by sale between tenants in common should be ordered only when 2 component are satisfied:i. The physical attributes of land allow for practicable and equitable partition (see above)

ii. The interests of all parties are better served by a partition by salec. Side Note: party requesting partition by sale has the burden to demonstrate the sale will promote the

owners interests

d. Owelty: payments to correct imbalances in partitions of land3. App/Holding: Partition in Kind (physical partition)more practicable because interests of D not accounted for

(home and business on property) so D gets to keep house and business on the 1 acres and D must pay owelty

to other tenants in common to compensate them for lose in revenue b/c selling land as residential.

b. Contribution and Accounting: Gillmor v. Gillmor (1984)vii. Facts: Tenants in common; grazing issue resulting in alleged ouster; both parties could not graze simultaneously. P

wants damages for loss of revenue from exclusion from property to graze.

viii. Rule:1. Co-Tenants Rights: right to free and unobstructed possession without liability for rents for their use and

occupation. Co-t only liable if interferes with other co-tenants right to occupy, use, and enjoy.

2. Establishing Ouster: must demonstrate that activity necessarily excludescotenanta. Exclusive use alone is not necessarily an ouster (must exclude the use of other cotenant)b. Once there is an ouster, adverse possession clock starts ticking

3. Reimbursement for improvements: Generally, when Co-T in sole possession makes repairs or improvementsto common property w/o consent from other co-Ts, improver has no right to contribution; Consider: ongoing

or terminated relationship, necessary to prevent forfeiture(allowed), repairs and maintenance (unlikely),

improvements (not awarded)

1. Exceptions: improver gets compensation from Co-Ts when (1) other co-Ts have stood by and permitted him toproceed to his detriment (2) If improver acted in good faith believing themselves to be sole owner

ix. App/Holding: Grazing necessarily excluded other cotenant because of issue with overgrazing. Woman getscompensation for lost revenue from inability to graze and gets injunction to force other co-Ts to allow her to graze.

However, excluder repaired fence and wants compensation. Court divides the repair consts by the percentage of

interest to each party, so cost of repairs is subtracted from womans damages.

VI. Entity Property (allows managerial function to be concentrated w/ specialists while use is spread over larger group)a. Possessory Interests

i. Leases (financingclosely related to loan, risk-spreadingnew ventures, and specialization functionsmanagerial LL)ii. Lease Types (numerus clausus principle applies; limited menu; ambiguous language will be put into category)


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1. Term of Years: lease for fixed time that ends on specific date (no notice by either party to terminaterelationship) (notice=length of rent cycle) statute of frauds (in writing) usually applies.

2. Periodic Tenancy: lease that auto renews (each party required to give notice to terminate lease) (must giveminimum 6 month notice to end or length of period of recurring rollover)

3. Tenancy at Will: tenancy that lasts as long as both parties wish to continue (either party can terminate at anytime for any reason) Notice equal to the period of time at which rents are made is required in most

jurisdictions

4. Tenancy at sufferance: when tenant remains in possession after their right has ended after original entry waspermitted. Differs from trespasser because original entry was not wrongful (often not regarded as a true

tenancy)

5. Rationale for appeal: (1) de facto financing devise which allows owner to lend possession for rent, (2) riskspreading devise: allows tenants to have flexibility (pull up stakes and leave rather than property tying them

down) landlord also spreads risk by leasing to multiple tenants, (3)form of entity property where complex

assets can be integrated and professionally managed

6. Warranties/ covenants: covenant to pay rent T LL; covenant to peaceful enjoyment LL T (LL may notpermit to trespass, or T doesnt pay rent);Covenant to repair (independent); warranty of Habitability LL T, (if

breached, T doesnt need to pay rent); Duty to mitigate LLT

iii. The Independent Covenants Model1. Assumption of independent covenants provides that all covenants must be performed without regard to

whether other covenants have been or can be performed

2. Paradine v. Jane (1647)a. Facts: Term of years lease; prince w/ army kicked tenant off land; claims to not owe rent for that periodb. Rules:

i. Covenant to pay rent and covenant to use and enjoyment : Most basic covenants (LL must notinterfere w/ quiet enjoyment during lease term and tenant must pay rent)

ii. Assumption of independent covenants provides that all covenants must be performed w/o regard towhether other covenants have been or can be performed

1. If the LL fails to perform a covenant to repair, the tenant must continue to pay rent but can sue2. Remedy of Distraint (LL could enter w/o permission and take things to collect the rent

c. Rationale: Lessee would have captured windfall profits and therefore accepts risks of losses i. Exception if complete destruction of property: by outside forces terminates the lease and removes

the tenant from obligations to pay rent

d. App/Holding: Tenant still required to pay rent because LL did not interfere with Ts use and enjoymentand did not break covenant. Outside disasters are risks that T must bear.

3. Smith v. McEnany (1897) (step towards covenant dependency)a. Facts: P built on edge of Ds leased property; treated encroachment as eviction; LL (P)sues for rent.b. Rules:

i. Right to Exclude: if the LL permits something to encroach on Ts leased land, then LL breachescovenant for quiet enjoyment and T doesnt need to pay rent. T has the right to use and enjoyment of

the whole property.

ii. Does not absolve tenant of other covenants besides rent (duty to repair)iii. Actual eviction or ouster by the LL is an exception to the rule of independent covenants from

Paradine. If the LL evicts the tenant, then the tenants covenant to pay rent is suspended as long as

the eviction lasts. Court here found that partial ouster completely absolves the tenant from paying

rent, rather than just reducing the amount owed.

iv. Property Rule: Partial ouster by LL completely absolves the tenant from performing the covenant topay rent

c. App/holding: LL broke covenant to provide full possession of the property so T doesnt need to pay rentfrom time wall constructed by T liable for not repairing the premise, so subtract damages

4. Sutton v. Temple (1843)


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a. Facts: Tenant refuses to pay rent, LL sues Leased eddish for livestock; paint chips in manure; spread overproperty; killed livestock Tenant refused to pay rent, LL sues.

b. Rules:i. No implied warranty of fitnessthat the leased premises will be fit for the tenants intended purposes

ii. Distinguished from Smith v. Marrable house and furniture supposed to be livable and can easily see.c. Holding: tenant cannot escape their obligation to pay rent whether premises are fit for their intended

purpose or not (caveat lessee). Tenant must pay all the rent for the whole period of the contract.

iv. Exception to Independent Covenants1. Forfeiture Clauses

a. Clauses in leases providing that upon the tenants violation of enumerated covenants in the least (mostcrucially the covenant to pay rent) the tenants interest in the lease would be immediately forfeited

i. Two Forms modeled after defeasible fees1. Fee simple determinable2. Fee simple subject to condition subsequent (retake and reenter)

2. Constructive Eviction (exception to independent covenants recognized for actual evictions by the landlord)a. Severely depresses value of tenancyb. Landlord misfeasance sufficiently serious to cause a reasonable tenant to vacate

i. Tenant is excused from further payment of rent (pro-tenant doctrine)ii. Can include situations over which LL has no control

c. Blackett v. Olanoff (1977) (nonfeasance)(inaction of LL violates lease)(extends Smith v. McEnany)i. Facts: Tenants in this case were disturbed by a nightclub that the LL leased next door and didnt

enforce a noise restriction in that lease. Therefore, b/c residential tenants right to quiet enjoyment of

the premise was substantially diminished, LLs actions constituted constructive eviction.

ii. Doctrine of Constructive Eviction applies when : T were very substantially deprived of quietenjoyment of their leased premises for a substantial time. So, Ts implied warranty of quiet

enjoyment was violated (by loud music and disturbances from nearby lounge LL leased to other T.)

not reasonably habitable, no difference between nonfeasance and malfeasance

iii. App/Holding: Though LL didnt create the condition, LL had the power to not enter lease or correct it,b/c foreseeable that clash of interests would occur. So, allowing the lounge to move in amounted to

constructive eviction of the residential tenants. (when LL in control of condition that will foreseeably

cause problem, but still allows the substantial condition to continue const. evic.)

3. Doctrine of Surrendera. If tenant vacates premises w/ the intention never to return, there is a mutual release of further lease

obligations by implied contract (contractual release of liability) (pro-tenant doctrine

b. Moment ofAcceptancei. When the landlord takes some action recognizing that the tenant has surrendered the lease

ii. Tenant is liable for the full amount of rent owed up to the moment of acceptance, but not thereafteriii. Usually original lease distinguished as a matter of law by the landlords reentry

c. In Re Kerr (1939)i. Facts: Tenant in 2 year lease went bankrupt and stopped paying rent. LL relet premises to new

tenant but for a reduced price with several months free at the beginning. LL re-let and sued for rent

i. Rules: Both are Pro-Tenant1. Doctrine of Surrender: Tenants state of mind must be to abandon the leasehold; LLs must be

to accept the abandonment and retake. Tenant is only liable for full rent until moment LL

accepts the surrender. (if LL relets that signifies surrender)

2. Reenter and relet clause: tenant remains liable to the LL for expected damages if the LL cannotwith reasonable effort relet the premises at a rent equal to or higher than the original rent

reserved.

ii. App/Holding: bankrupt is only liable to LL for the amount of rent before LL relet the premises v. The model of Dependant Covenants (modern landlord-tenant law)

1. Dependant Covenants: Medico-Dental Building Company of Los Angeles v. Horton and Converse (1942)


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a. Facts: Lease agreement stated no other pharmacy in the building; physician began selling drugs inbuilding. The lease had a specific rider which makes a difference

b. Rules:i. General Rule of bilateral commercial contracts

1. Breach sufficiently serious (goes to essence of consideration):can rescind from the lease andterminate further performance of the contract. (shifting from hard property doctrines to softer

contract doctrines)

2. Breach of less serious covenant(doesnt go to essence or not materially sufficient to justifyrescission): promisee entitled to sue for damages only.

3. Those features of the lease which are strictly contractual in their nature should be construedaccording to the rules and interpretations of contracts generally (leases from property to

contract)

ii. Options of Defendant (pharmacy)1. Could rescind the lease, not pay further rent2. Continue under lease and at end of term sue for loss of profits (sue for damages) 3. Could have treated the violation of the covenant by P as putting an end to contract for

purposes of the performance and sued for damages (rescind as a forward going measure, and

sue damages back)

iii. App/Holding: Since the agreement that no one else in the building sell drugs goes to the essence ofthe consideration under the lease, the contract is terminated and T does not need to pay rent.

2. IWH (Implied Warranty of Habitability)a. Continuous obligation to the tenant to maintain the premises in accordance w/ all applicable lawb. Only urban residential housing (usually not extended to commercial leases) c. Not waivable (even for lower rent) and automatically implied in all leases (departs from contract doctrine

in this regard)

d. Javins v. First National Realty Corp. (1970)i. Issue: Whether housing code violations which arise during the term of a lease have any effect upon

the tenants obligation to pay rent

ii. Facts: Tenants refuse to pay rent. LL sues T for rent. Ts claims they dont have to pay b/c 1500housing reg violations.

iii. Rules: Legitimate expectation that the apartment will be fit for habitation for the period for which itis rented (more like a consumer of goods and services)

1. Rent dependant on LLs performance of IWH: Under contract principles, the tenantsobligation to pay rent is dependent upon the landlords performance of his obligations

including his warranty to maintain the premises in habitable condition

2. Implied warranty of Habitability (nearly all states, but only residential leases): By signing thelease, LL undertakes duty to maintain the premises in accordance with Housing regsor T

doesnt need to pay rent. (Implied in all res. Contracts)

3. Jury/Judge must find: (1) vios existed during period rent past due; AND (2), how much of therent is suspended for LLs breach of IWH.

4. Remedies for violation of IWHa. Tenant can vacate w/ no further obligationb. Order directing specific performance of IWHc. Action for damages for breach of IWHd. Set-off against rent liability reflecting the LLs violation of IWHe. Some jurisdictions allow the withholding of all of the rent until IWH correct or permits

the tenant to arrange for repair

i. Impact of the IWH crucially relies on enforcement (very spotty)(market tends to sort)5. Doctrine of retaliatory eviction: LL may not retaliate against a tenant for reporting code

violations or attempting to organize a tenants union. (even if it is a periodic tenancy and it is at


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the end of the lease) Cannot give notice to terminate if a court concludes the termination was

motivated by a desire to punish the tenant for asserting rights under housing code

6. Illegal Lease Doctrine: (minority) If LL leases property that is subject to one or more codeviolations, so that the premise is rendered unsafe and unsanitary, then the lease is void and

has no effect. (bad b/c LL can evict tenant right away)

iv. Holding: leases of urban dwelling should be interpreted like a contract. Warranty of habitability is awarranty LL must give to T as set by Housing Regs. Breach of warranty allows T to access usual

remedies for breach of contract. Violations cant be de minimis and T not pay rent. After LL repairs, T

must pay rent

3. Duty to Mitigatea. A landlord seeking damages from a defaulting tenant is under a duty to mitigate damages by making

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