TABLE OF CONTENTSPOSSESSION..........................................................................................................3

1. General.....................................................................................................................32. Wild Animals...........................................................................................................33. Acquiring Possession by Finding Articles...............................................................54. Bailments.................................................................................................................75. Adverse Possession..................................................................................................9

GIFTS AND SALES OF PERSONAL PROPERTY........................................................111. Gifts of Personal Property.....................................................................................112. Bona Fide Purchasers of Personal Property...........................................................13

FREEHOLD POSSESSORY ESTATES..........................................................................141. Introduction............................................................................................................142. Fee Simple.............................................................................................................153. Fee Tail..................................................................................................................184. Life Estate..............................................................................................................19

FUTURE INTERESTS......................................................................................................201. Introduction............................................................................................................202. Reversion...............................................................................................................203. Possibility of Reverter...........................................................................................204. Right of entry.........................................................................................................215. Remainder..............................................................................................................216. Destructibility of Contingent Remainders.............................................................247. Rule in Shelley’s Case...........................................................................................268. Doctrine of Worthier Title.....................................................................................289. Executory Interests................................................................................................2910. The Rule Against Perpetuities...........................................................................31

POWERS OF APPOINTMENT........................................................................................361. Doctrine.................................................................................................................362. Terminology..........................................................................................................363. General Background..............................................................................................364. Types of powers.....................................................................................................36

CONCURRENT ESTATES..............................................................................................371. Tenancy in Common..............................................................................................372. Joint Tenancy.........................................................................................................383. Tenancy by the entirety.........................................................................................404. Rights and duties of Co-Tenants............................................................................41

MARITAL PROPERTY....................................................................................................421. Common Law Marital Estates...............................................................................422. Community Property.............................................................................................443. Alt. Marriages........................................................................................................45

THE SALE OF LAND......................................................................................................461. Contracts of sale....................................................................................................462. Mortgages..............................................................................................................49

RECORDING ACTS.........................................................................................................521. Recording System..................................................................................................522. Indexing.................................................................................................................52

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3. Types of Recording Acts.......................................................................................524. What recordation does not do................................................................................535. Who is protected by recording acts.......................................................................546. The vicious circle...................................................................................................587. Requirements for Recordation...............................................................................588. Chain of Title Problems.........................................................................................59

EASEMENTS & COVENANTS......................................................................................61Easements......................................................................................................................61

1. Introduction........................................................................................................612. Creation of Easements.......................................................................................633. Scope of Easements...........................................................................................674. Termination of easements..................................................................................69

Equitable Servitudes......................................................................................................691. Introduction........................................................................................................692. Creation..............................................................................................................703. Enforcement by or against assignees.................................................................71

Real Covenants..............................................................................................................711. Introduction........................................................................................................712. Creation..............................................................................................................723. Enforcement by or against assignees.................................................................724. Termination of covenant....................................................................................76

NUISANCE.......................................................................................................................771. General...................................................................................................................772. Private Nuisance....................................................................................................77

TAKINGS AND LAND USE CONTROLS.....................................................................791) General...................................................................................................................792) What is a taking?...................................................................................................803) Why Should the Govt. Have to Pay?.....................................................................82

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PROPERTY OUTLINE

POSSESSION 1. General

a. Definition- possession may refer either to facts indicating physical control & intent to exclude others from control OR to a conclusion by a ct. that a person is in “possession” & ought to be protected as a possessor

b. Distinguished from ownershipi. Ownership - “title”, usually proved by showing document signed by the

previous owner or 1st possessor transferring title to present titleholderii. Possession - proved by showing physical control & intent to exclude

othersc. Constructive Possession- law treats person as if he’s in possession although,

in fact, he’s not or is unaware of itd. Policy Reasons for protecting Possessors

i. Efficient way to protect ownership since ownership may be difficult to prove

ii. Prevents disturbing public peace and orderiii. Facilitates tradeiv. Gives effect to the expectations of a person who has asserted a right in

a thing until another person comes along w/ a better rightv. In cases of person capturing wild animals or finding lost property-

rewards them for making a useful item available to societyvi. Protecting possession is an easy and efficient way of allocating

resources2. Wild Animals

a. Gaining Constructive Possession- mortally wound or trap an animal or fishi. Wounding- wounding the animal not enough; must deprive the animal

of its natural liberty, either by corporal possession or by mortal wounding; i.e., so that capture is “practically inevitable”, but pursuit must be maintained- Buster v. Newkirk

ii. Trapping- capture must be virtually complete; not necessary that there be no possibility of escape- captor acquires possession if he uses reasonable precautions against escape

1. Fish in A’s net, which has a small entrance, from which escape is possible but unlikely, are possessed by A. B who removes fish is guilty of larceny. State v. Shaw

iii. Mere pursuit property right- A pursues fox but is captured by B, B has rights and possession- Pierson v. Post

iv. Policy- various reasons for the rule:1. competition - society’s object is to capture these animals- foster

comp. by rewarding capturer, not pursuer, bring more people into pursuit- Blackstone & Posner

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a. Problem- May argue that if create property rights- have less hunters- create less incentives- how do you know which way will create incentive AND how do you know foxes need to be eliminated?

2. ease of administration - “certainty” – capture is objective act, easier rule to administer that protecting pursuit- Hobbes

a. Problem- rule that if animal is greviously wounded, have possession- this creates just as much uncertainty

3. keep peace & order - recognition of property rights leads to peace & order

a. Problem- promote peace by allowing people to take fox away from pursuer?

v. Form of action dictates what must be proven:1. Trespass on the case interference with the chase of animal

(Pierson)2. Trover allegation that another has found your property

(Buster)3. Trespass – Post would have had to prove that he already

possessed the fox4. Replevin action for repossession of property wrongfully

takenb. Trespasser’s title- trespasser’s title to killed or captured animal is inferior to

that of land’s ownerc. Interference by noncompetitor- Person who doesn’t want to capture animal

cannot interferei. Society wants animal caught

ii. A puts out decoys on pond to attract ducks, neighbor B can’t shoot off guns to scare ducks away BUT B can shoot to kill ducks when fly over his land- Keeble v. Hickeringill

iii. Differences b/t Keeble & Pierson1. Injury to interest in enjoyment of land2. Injury to person’s trade3. Maliciousness of actions4. Competition- essence of distinctions

a. If you compete for same thing- its not a tortb. If you simply interfere w/ business w/out justification

of comp.- that’s a tortd. Custom- custom in some hunting trades may allow hunters to acquire

possession w/out exercising physical control over the animali. Whaling- possession to whaler which harpooned, even though animal

sunk and discovered days later- Ghen v. Richii. Policy- advanced killing of whales, allowed whalers to profit from

laboriii. Reasons to look to custom

1. look to positive value of autonomy- don’t want to interfere w/ people- advantages of self-governance

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2. also important is to protect people’s expectations- these come from custom- people conform their behavior around by custom

3. expertise of people w/in industryiv. Problems

1. people on outside- might not know rules, their expectations maybe different, their interests may not be protected

a. finder of whale - might not know rules- unfair surprise2. chance industry acting self-interestedly- partisan way- fence

off whales from the rest of the communitye. Regulation by State- State only controls the fish for regulating enjoyment and

use; not enough property rights in fish to sustain an action- State of North Dakota v. Dickinson Cheese Co., Inc

f. Escaped Animalsi. Wild Animals w/ Animus Revertendi (habit of return)- captured wild

animals that develop a habit of return continue to belong to the captor when they roam at large- domesticated animals are valuable to society & this effort to tame wild animals is rewarded

ii. Escaped Wild Animals- if captured wild animal that has no habit of return escapes- captor loses possession

1. Policy- want to encourage recapture 2. Exception

a. Animal has marking- brand?b. Animal is not native to the area- NOTICE of possession

given3. Acquiring Possession by Finding Articles

a. General Rule- Owner of property doesn’t lose title be losing property- rights persist even though article has been lost or mislaid- finder has rights superior to everyone but the true owner

i. Prior Possessor Wins- applies to personal and real property- justifications for rule:

1. protects owner - who has no indicia of ownership (title papers, etc.)

2. need to encourage bailments - efficient practice, don’t want to discourage by allowing bailees to seize unless finder able to show ownership rights

a. ex.- A finds jewel who takes it to get appraised, jeweler refuses to return, A is entitled to jewel (replevin) or money value (trover) - Armory v. Delamirie

3. incentive - want people to pick up lost objects & get back in circulation

4. maintain public order - allow peaceable possessionii. Relativity of title- if finder subsequently loses property- his title

remains superior to that of the next finder1. ex.- A finds logs and secures, later break free and found by F,

A didn’t abandon & has title over everyone except rightful owner- Clark v. Maloney

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iii. What constitutes possession- for finder to become a prior possessor, the finder must acquire physical control over the object AND have an intent to assume dominion over it

1. ex.- A discovers shipwreck at bottom of river & marks w/ buoy but never returns, F comes months later and salvages, F prevails b/c A only shown intent NOT sufficient acts of physical control- Eads v. Brazelton

2. Apply Ghen? – ct. rejects application, feels best way to encourage immediate salvage is by ruling that only way to get possession is by placing salvage boat over wreck

iv. Unconscious possession- person may constructively possess something of which she is unaware if she is in possession of premises where article rests- entitled to “prior possessor wins” rule

1. ex.- A (landowner) is in constructive possession of objects located under surface of her land even though she is unaware of objects, B (hired to clean out pool) finds ring, A entitled to possession even though didn’t know ring was there- South Staffordshire Water Co. v. Sharman

2. NOTE - rule not widely followed in U.S.a. general rule - finder’s possessory to a lost chattel

found when finder was on another’s property w/ consent- generally superior to that of the property’s owner HANNA v. PEEL

b. no consent- trespasser not entitled to possession- Barker v. Bates

b. Finder vs. Owner of Premises- arises where finder finds object on owner’s premises which owner doesn’t own the object- cases in conflict

i. Finder is trespasser- owner of land where object is found always prevails- Barker

ii. Finder is employee- some cts. argue employee is “acting for” an employer or has contractual duty to report object to the employer

1. ex.- Sharman2. NOTE- rule followed in G.B.- not in US3. NOTE- NY statute- misdemeanor to not seek rightful owner-

applies even if finder isn’t employeeiii. Finder is on premises for limited purpose- Sharmaniv. Object found under the soil- if object found under or embedded in

the soil, it is awarded to the owner of premises not to finder- (prehistoric boat- Elwes v. Brigg Gas Co)

1. Exception- 1) gold, silver, or money; 2) concealed w/ intent of returning to claim it- cts. divided, some give to owner others to finder- (owner of land- Favorite v. Miller)

v. Object found in private home- usually awarded to the owner of the home

1. Rationale - owner has intent to exclude everyone & admit persons for only limited purposes (not fishing for lost property)

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US rule on unconscious possession

Finder vs. Owner

2. Owner not in possession - if owner of house not moved into house, owner of house isn’t in constructive possession of articles therein of which he’s unaware

a. Ex.- O owns home that never occupied & is requisitioned by govt., soldier finds lost brooch, soldier entitled to brooch since O never had physical possession of house- Hannah v. Peel

vi. Object found in public place- cts. resolve dispute by determining whether item was “lost” or “mislaid”

1. Lost - property owner accidentally & causally lost- goes to finder rather than owner of premises

a. Ex.- wallet found on floor of barbershop- lost & belongs to finder- Bridges v. Hawkesworth

2. Mislaid - property intentionally placed somewhere & then forgotten- goes to owner of the premises

a. Ex.- pocket mislaid on counter- goes to owner of shop and not finder- McAvoy v. Medina

3. Rationale - facilitate return of object to true owner- assumed owner who mislays object will remember where mislaid & return to reclaim

4. NY Statute - abolishes distinction b/t mislaid & lost- encourage finders to turn in

a. Have to turn over found prop. to police (stick) & if no one claims- finder gets to keep (carrot)

b. Promote chances prop. end up in hands of true owner4. Bailments

a. Definition- bailment is rightful possession of goods by one who is not the owner- bailee has duty to care for goods & deliver them to owner

i. Bailor = true ownerii. Bailee = person in possession

b. Creation- alleged bailed 1) must assume actual physical control, 2) w/ intent to possess; cts. look to expectations of parties to determine whether liability would be unexpected or unfair

i. Actual physical control- bailee must take actual physical control of object

1. Parking lot cases - Is bailee liable for car owner’s loss or damage?

a. Park & lock- O parks & retains keysi. Older cases- no bailment

ii. Modern- bailment created- Allen v. Hyatt Regency-Nashville Hotel

b. Attended lots- O leaves keys w/ attendant- bailment created- expectations for B to exercise reasonable care

c. Policy argument- Garage owner in better position than owner since he’s not around to prevent the harm-

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Parking lot: bailment for care, not for unknowns stuff.

Allen

BAILMENT:Actual physical control+Intent to possess.

STICK and CARROT

sidestep technicalities of bailment law to put onus in party in best position

d. EXCEPTION- bailee likely not liable for theft of items in bailor’s car that was bailee was unaware of (wallet on seat of car- Swarth v. Barney’s Clothes, Inc.

ii. Intent- bailee must have intent to exercise physical control & bailor must intend to give up right to possess the object

1. Value undisclosed to bailee - if bailor gives article to bailee but doesn’t disclose exceptional value of article, bailment still created- risk of caring for article in its true value is put upon bailee when he accepts possession of article

a. Ex.- O gives ring A to hold until B claims, A does so but doesn’t realize ring is valuable, A neg. loses ring and liable for loss since bailment created- Peet v. The Roth Hotel Co.

b. Liability- bailee is liable to ex. due care since in better position to protect

c. BUT- degree of care ex. depends on value of itemi. need to know how much knowledge is

necessary in order to meet the intent standard of possession

ii. if imposing on person a burden- high degree of knowledge required before imposing obligation on the basis bailee best person to protect against harm

c. Rights and Duties of Baileei. Rights against 3rd parties- as against 3rd party, bailee entitled to full

damages resulting from wrongdoing by 3rd party1. Rights of bailor- bailee may recover from 3rd party wrongdoer,

but bailee is liable to the bailor for amount recovered; 3rd party’s payment to bailee is against claim from bailor- The Winkfield

ii. Duty of bailee to exercise care- all bailees are under duty to exercise care over bailed goods, but standard of care varies w/ type of bailment

1. degree of care maybe commensurate w/ who gets the benefita. Bailment for sole benefit of bailee - if bailment is for

sole benefit of bailee – bailee required to use extraordinary care, liable for even slight neglect that results in goods being lost, damaged, or destroyed

b. Bailment for mutual benefit of bailor & bailee - bailee must exercise ordinary care and liable for ordinary neg.

2. liability depending upon nature of loss of propertya. negligence standard- loss, theft, damageb. strict liability- misdelivery (Cowen v. Pressprich)

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Unknown value: bailment, so owes reasonable care, but that depends on how much they know about value. Peet v. Roth Hotel

iii. Duty to redeliver- if bailee misdelivers goods to wrong person, held strictly liable for loss

1. Exception- involuntary bailee liable only if bailee was negligent in delivering goods to the wrong person- gratuitous agent liable for not exercising ordinary care when intervening

a. Ex.- A’s agent brings bond to B’s office & drops through letter slot, B notices wrong bond dropped & calls for A’s agent, C steps forward & B gives to C, B liable for not exercising ordinary care- Cowen v. Pressprich

d. Contractual Modification of Liability- cts. permit contractual limitations provided they don’t relieve bailee from gross or willful negligence- BUT bailor must consent, terms must be made known to him & he must understand them- Carr v. Hoosier Photo Supplies, Inc.

5. Adverse Possession a. Doctrine- obligates title holder of land to eject, w/in a statutorily prescribed

period, a wrongful possessor land- if owner fails to do so, his claim will be barred & the adverse possessor may acquire title

i. Effect of adverse possession- terminates owner’s title and creates new title adverse possessor

ii. Purpose of doctrine1. Protect title- protection of possession may protect ownership

since title may be difficult to prove2. Bar stale claims- require lawsuit to be brought to oust a

possessor while witnesses’ memories are still fresh3. Reward those who use land productively4. Honor expectations- giving effect to expectations is policy

running all through law of propertyb. Requirements of Adverse Possession – to establish title by adverse possessor

must show 1) an actual entry giving exclusive possession that is 2) open and notorious 3) adverse & under a claim of right, and 4) continuous for the statutory period

i. Actual entry giving exclusive possession1. entry requirement - primary purpose of entry requirement is

trigger the cause of action2. exclusive possession - adverse possessor can’t be sharing

possession w/ the owner nor w/ the public generally- ensures owner alerted that adverse possessor is claiming ownership

ii. Open & notorious possession1. use reasonable % of claimed land 2. use land in manner similar to that of typical owners of similar

land3. use is sufficient to put true owner or community on notice of

possessiona. Minerals- adverse possession includes possession of

minerals unless minerals have been severed from land

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Bailee can K around liability, but bailor has to know and consent to terms.

POLICY REASONS of ADVERSE POSSESSION

Actual entryContinuousExclusive

Hostile/AdverseOpen & Notorious

by sale prior to entry- to start adverse possession, possessor must start removing them

iii. Adverse and under a claim of right1. w/out owner’s consent - possession not simply subordinate to

owner; not allow owner to be lulled into believing occupant will make no claim against

2. objective v. subjective test a. objective test- look to actions of possessor to see if they

look like claims of ownership, person can be adverse possessor even though he’s not actually claiming title against the true owner

b. subjective test- (more widely used) adverse possessor must have a bona fide or good faith belief that he has title- (adverse possessor’s possession not hostile since recognizes owner’s claim on 2 occasions- Dillaha v. Temple)

3. color of title - claim founded on a written instrument (deed, will) or judgment which unknown to claimant is defective & invalid

a. where person enters w/ color of title, no further claim of title or proof of adversity is required

iv. Continuous uninterrupted possession1. definition - degree of occupancy and use that the avg. owner

would make of particular type of propertya. purpose- give owner noticeb. seasonal use- use of summer home only during summer

for statutory period is continuous use- Anderson v. Cold Spring Tungsten, Inc.

2. tacking - time in possession of successive adverse possessors may be added together to fulfill the statutory period when 1) possession is continuous; 2) parties are in privity

a. privity of estate- possessor voluntarily transferred to subsequent possessor either an estate in land or physical possession

i. where transfer isn’t voluntary- no privity of estate

b. tacking on ownership side- when owner transfers land adversely occupied, transfers same cause of action against adverse possessor, new cause of action against adverse possessor doesn’t accrue w/ new owner

i. BUT look to see if subsequent owner is remainderman- if so, has new cause of action (no tacking) since old life estate terminates

1. look to see when entry occurred- if occurred during period in which land owned by indiv. who conveyed to life

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Minerals: to start adverse possession, have to start removing

TESTS:Objective

Subjective

Adv Adv =tacking if continuous and in privity

O (adv. COA) LE + remainderman = tacking, b/c LE and R derive interest from orig.conveyance, and COA tacked from then

LE (Adv.COA) Remainderman = NO TACKING. B/c COA terminates w/ LE, and new COA starts

H: Entry made against life tenant, SOL runs out on them, what about the Remainderman’s interest?Adverse possessor only gets what the life tenant had…that COA didn’t’ belong to the Remainderman, so once life tenant dies, that’s when their SOL clock would start. It’s just as if the life tenant had conveyed the estate to adverse possessor- they only get the estate for the life of the life tenant.

H: Old T is the owner, A enters in 1/1/00. Old T recovers; 1905 conveys to T for life, and Fleming for remainder…COA in 1/1/00, T is the owner of that COAT dies 1922F sues in 1922…suit is barred b/c T’s suit expired in 1920…at that point A owns the interest in Blackacre’s life estate. Remainderment doesn’t derive it’s title from the life estate… Since F’s interest comes from time when T dies, same cause of action that started 1/1/00; he owns a piece of the original COA. SOL starts to run against the remainderment b/c it comes from the same COA– this is like a supervening disability

tenant and remainderman- SL likely to expire since remainderman derives interest from orig. conveyance and & cause of action tacked back from then

3. payment of property taxes - several western states require adverse possessors to pay taxes on land in order to prevail

c. Disabilities of Owner- typical statutes give additional period to bring action if owner is under a disability

i. Typical statutes1. disabilities usually limited to minors, insanity, & imprisonment2. only disabilities at time of initial entry - only disabilities of

owner at time of adverse possession begins count- Fleming v. Griswold

a. no tacking of disabilitiesb. heirs insanity doesn’t affect operation of statute- O

gains land in 1990 and A goes into adverse possession; O wills to H (who is insane) in 1995; H’s insanity doesn’t affect running of statute

3. extension - usually provide for extra 10 years in which to bring suit after disability is removed

d. Nature of Title Acquired by Adverse Possessori. New title- arises in adverse possessor

ii. Relation back- adverse possessor’s title relates back to date of initial entry- bars former owner for separate trespass or mesne profits suits on which statutes of lim. have not yet run

GIFTS AND SALES OF PERSONAL PROPERTY 1. Gifts of Personal Property

a. Definition- gift is a voluntary transfer of property w/out any consideration- i. 3 requirements for a gift of chattels

1. Donor must intend to make a gift2. Donor must deliver the chattel to the donee3. Donee must accept the chattel

ii. Gifts inter vivos- made during the donor’s life when donor is not under any threat of impending death- gift is irrevocable

1. must be irrevocable- if not – doesn’t satisfy statute of wills- some ways of getting around:

a. testamentary dispostion- draw a willb. gifts causa mortisc. make a present irrevocable grant of a future interest-

transfers a part of the title but retains for you a life interest that becomes a possessory interest in donee when you die

d. deposit money in a joint bank acct.

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INTENTDELIVERYACCEPTANCE

Getting around the statute of wills…also, joint tenancy

i. retain pwr. to control but have really divided control

ii. arguable that they are testamentary (pwr. to revoke) but cts. tend to enforce

e. Totten trust- a revocable inter vivos trust doesn’t vio. statute of wills

iii. Gifts causa mortis- made in contemplation of immediately approaching death- revoked if donor recovers from illness that prompted the gift

1. immediately approaching deatha. have to have real apprehension of death (can’t just be

that your going to Bosnia)b. donor must die of contemplated peril- at least in most

states2. 2 conditions revoke gift

a. recovery of donorb. death of donee

3. Doctrine of lapse- intention of testator was to benefit this individual, not their hiers or legatees so gifts lapse

4. May be revoked by donor’s willb. Intent- donor must intend to pass title presently & not merely transfer

possessioni. Promise to give property in the future is NOT a gift

c. Deliveryi. Purpose

1. ritual - delivery of chattel impresses grantor w/ legal significance and finality of act

2. evidentiary - delivery is reliable, objective evidence of grantor’s intent to give

3. protective - protects unwary or barely competent from making improvident oral statements

ii. Manual transfer not necessary- donor must do an act that evinces an intent to be immediately bound

1. symbolic delivery - where manual delivery is impracticable- symbolic deliver is handing over of some object that is symbolic of thing given (i.e. instrument in writing)

2. constructive delivery - where actual manual delivery is impracticable, constructive delivery is permitted

a. handing over a key- may be constructive delivery if 1) delivered sole key AND 2) delivery of the object of the gift is impracticable

3. delivery through 3 rd parties - delivery may be accomplished through 3rd parties – law treats 3rd party as agent of donee as soon as donor hands over to 3rd party, donor disallowed from then revoking

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See also

DEAD MAN’s STATUTES

4. may transfer future interest - may make irrevocable transfer of remainder interest- Gruen v. Gruen

d. Acceptance- law presumes acceptance when gift is beneficial to donee2. Bona Fide Purchasers of Personal Property

a. General rule- seller can transfer no better title than he has- exception- certain situations dealing w/ bona fide purchasers

b. Exceptions- situations in which exception made for BFPi. Negotiable instruments- title to money or negotiable instruments can

be transferred even by thieves- facilitates trade ii. Seller has voidable title- can transfer good title to BFP

1. diff. b/t voidable & void title a. voidable title – owner intends to pass title but can void

the transaction b/c of fraud, misrepresentation, or duress

b. void- owner doesn’t intend to pass title or has no capacity to do so- BFP takes no title

2. reasons for exception - where 1 of 2 innocent persons must suffer by fraudulent act of 3rd party- one who could’ve prevented harm to other should suffer loss- Owner, not BFP, could’ve prevented loss to BFP, but BFP couldn’t do anything to prevent loss to owner

iii. estoppel- if owner of goods by words or conduct expressly or impliedly represents that the possessor is the owner or is authorized to pass title, inducing reliance by purchaser, owner is estopped to deny the truth of the representation

1. ex.- O delivers possession of wagon to GT, a new employee. O wants to keep possession GT built up for himself so O paints on wagon “GT, Piano Mover”- GT sells wagon to BFP. O is estopped to deny GT is owner- (O’Connor v. Clark)

2. 3 requirements- (not confined to sales):a. Person whose to be a estopped must make a

representation- statement by owner to world at large that this is P’s wagon

b. Reliance- b/c of representation of Pierson, believed that it was his

c. Change of position- laying out money for wagoniv. entrusting goods to a merchant

1. common law rule - owner entrusted goods to a merchant in business of selling goods- owner must stand by while merchant displays goods w/ goods for sale or clothe merchant w/ apparent authority to dispose of article

2. ex.- O entrusts painting to A, art dealer, for exam. A gives painting to B, delicatessen employee. B sells to C. Since C bought painting from B, O prevails over C: 1) B is not a merchant entrusted by O; 2) B isn’t an art merchant; 3) sale wasn’t in ordinary course of B’s business- (Porter v. Wertz)

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VOIDABLE TITLEPost Pierson, who promised to pay, but really had no intention.

Pierson’s title is voidable, BUT can pass on good title to a BFP. this is b/c Post has cloaked Pierson w/ title, inducing the BFP’s reliance.

THINGS TO CONSIDER in deciding BFP

v. factor acts1. factor is agent in possession of property ( A in our case)2. if limitations on authority to sell that aren’t communicated to

BFP- BFP wins3. secures transactions & encourages exchange of goods

c. Bona Fide Purchaser- one who doesn’t know of seller’s wrongful possession but has a good faith belief that seller has title, and, in addition, pays valuable consideration

i. Preexisting debt1. old rule- person isn’t a purchaser for valuable consideration if

he takes title only in exchange for a preexisting debt2. modern rule- if the mortgee in a worse position than before

transaction began, he is a BFP for the purposes of this protection

3. IOU’s: B gives A an IOU for the horse ($500). B is a BFP, IF the IOU gets sold to s/o else.

ii. IOUs- UCC- mere giving an IOU or any other consideration to support a K is enough to make B a purchaser for value (BFP)?

a. Until then: b/c an IOU is a negotiable instrument. If A sues B for the promise to pay, B will have to pay, and then if he doesn’t, A will be able to take the horse back….B won’t have to pay b/c w/o the horse, he can defend against A’s suit by saying there was no consideration for the IOU; and B can be restored to the status quo ante w/o giving him the horse by voiding the IOU.

b. Once the IOU is sold: owner of the IOU can enforce it, and the defenses against A won’t work against the new purchaser of the IOU! If the wrongdoer cashed the IOU, then B has no recourse! NO DETRIMENT is suffered UNTIL the IOU is sold to someone else.

Look at these by asking- If take property away, does BFP suffer a detriment?

FREEHOLD POSSESSORY ESTATES 1. Introduction

a. Feudal Backgroundi. Two ways to transfer land

1. Subinfeudation- process by which a tenant transferred lands in his possession to others who became his tenant

2. Substitution - involved transfer of all of a tenant’s interests in land to another party who took place of the original tenant

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ii. Escheat- if tenant died w/out heirs, tenant’s position in feudal ladder was eliminated, & possession of land or whatever rights tenant had reverted to the lord

iii. Statute Quia Emptores- permits free alienation of land by substitution, forbids subinfeudation; only effects estates in which seisin passes (fee simple estates)

b. System of Estatesi. Types of estates

1. fee simple - potential of enduring forever, resembles absolute ownership

2. fee tail - potential of enduring forever, but will necessarily cease if and when first fee tail tenant has no lineal descendants to succeed him in possession

3. life estate - estate that will end necessarily at the death of a person

4. leasehold estate - 3 main typesa. term of years- estate that endures for any fixed calendar

pd. i. ex.- O to A for 10 yrs if A shall so long live-

State of the title:1. A has a determinable term of years2. O has possibility of reverter & reversion

b. periodic tenancy- endures from period to period until landlord or tenant gives notice to terminate at end of a period

c. tenancy at will- endures so long as both the landlord & tenant desire

ii. freehold and nonfreehold estates1. freehold - include all of the above estates except leasehold;

freeholder in possession has seisin2. nonfreehold - include leasehold & other estates; leaseholder has

only possessionc. Creation of Estates- words of limitation & words of purchase

i. Words of limitation- describe what type of estate is createdii. Words of purchase- identify person in whom estate is created

iii. Ex.- “to A and his heirs”1. words of purchase- “to A”2. words of limitation- “and his heirs”

2. Fee Simple a. Basics

i. Creation1. “to A and his heirs”, “to A in fee simple”, “to A”

a. only South Carolina & Maine still require “and his heirs”

2. presumption in favor of fee simple conveyances

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ii. Duration- potentially last forever, largest possible estate in terms of duration

iii. Alienability- 3 main characteristics1. freely alienable2. can be disposed of at death of owner through will3. if owner dies intestate- passes to owner’s heirs

b. Inheritabilityi. Land may be devised

ii. Owner dies intestate- intestacy laws (governs if will doesn’t exist or will doesn’t dispose of all the property) of state

1. If wife – 1/3 to her; 2/3 to children2. If no wife- kids get all of land3. If no kids- wife gets ½; other ½ goes to other relatives4. If no heirs- by escheat goes to state

a. Escheat used to mean that prop. reverts to grantorb. State doesn’t take land as grantor but as ulimate heir

under intestacy lawsc. Rule of repugnancy

i. Nature of primary estate- donor grants fee simple in land or an absolute interest in personal property to one person, together w/ a general pwr. of disposal by deed or will

ii. Secondary estate- donor grants over to another person what remains undisposed of on the death of the first taker

iii. Rule- secondary estate void on the ground that the gift over is repugnant to and inconsistent w/ interest first taken

d. Defeasible Fees- fee simple can be created so it’s defeasible on happening of some event- owner of fee simple then loses, or may lose property- these aren’t fee simple absolutes

i. Fee simple determinable1. definition - fee simple estate so limited that it will

automatically end when some specified event happens2. creation - “to A and his heirs, so long as they use land for

specified purposes only”; “until”; “while”a. motive or purpose- words in an instrument that state

motive or purpose of grantor don’t create a determinable fee

b. owner retains- right of reverter3. duration - potentially infinite duration, as long as condition isn’t

violated- if condition broken, estate automatically terminates & possession reverts to grantor (possibility of reverter- grantor’s future interest)

4. alienability - freely alienable BUT remains subj. to limitationa. reversionary interest- not alienable

5. interaction w/ adverse possession a. ex.- O to A so long as used for cat hospital- stops being

used for cat hospital, A’s estate immediately terminates

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You can limit how the land is to be used, but not by whom.

1) if language in deed - “tract conveyed for the purpose…” – cts. hold that fee simple absolute is created..probably b/c they want strong language when there’s going to be a limit on the land.

2) if language in deed – “granted upon the express condition…”- cts. hold that a covenant is created, not a condition

covenant- grantor could maintain an action for damages when land ceased to be used as indicated but couldn’t assert rights of forfeiture

& adverse possession begins- if O does nothing, A gains estate by adverse poss. when SL run

ii. Fee simple subject to condition subsequent1. definition - fee simple that doesn’t automatically term. but may

be cut short at grantor’s election when a stated condition happens

a. ex.- O to A for life- then to B and B’s heirs but if B doesn’t marry C then O has right to reenter & reclaim

i. B has a vested remainder (fee simple subject to a condition subsequent) - subsequent condition rather than prior condition so it makes it a vest interest rather than a contingent remainder

ii. O has right of entry for condition broken (not reversion)

2. creation - “to A and his heirs, but if land is used for other than specified purposes, O or his heirs shall have right to enter and declare estate forfeited”

a. “but if”, “upon condition”, “provided, however,”- words of condition

b. owner retains- right of entry for condition broken/pwr. of termination

3. duration - keeps possession until grantor enters & terminates estate upon breaking of condition; violation of condition does not lead to automatic forfeiture of property

4. alienability - freely alienable BUT subj. to limitationa. right of entry- can only be exercised by grantor or his

heirs- Village of Peoria Hights v. Keithleyb. heirs may sign quit claim to surrender right to enter

upon condition broken- Trustess of Calvary Pres. Church v. Putnam

5. NOTE - if ct. has a choice, fee on condition subsequent is preferred over fee simple determinable

6. interaction w/ adverse possession a. ex.- O conveys to A but if land not used for cat hospital,

O retains right to reenter- stops being used for cat hospital, O’s right of action is subj. to condition precedent she elect to declare forfeiture, SL doesn’t accrue until she does so

iii. Fee simple subject to an executory limitation1. definition - upon happening of a stated event, automatically

divested in favor of 3rd party2. ex.- “O to A but if land used to sell booze, to B and his heirs”

a. B’s future interest- executory interest3. Fee Tail

a. Historical background- invented to keep land safe for succeeding generationsb. Nature of Estate- two principal characteristics

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i. Lasts as long as grantee or any of his descendants surviveii. Inheritable only by grantee’s descendants

c. Creation- “to A and the heirs of his body”d. Duration- grantee received estate for his life which passed to his first heir at

his deathe. Alienability- grantee couldn’t transfer an interest in estate which exceeded his

lifetimef. Possible Future interests- if grantee dies w/out descendants-

i. Reversion- “O to A and heirs of his body”- O has reversionii. Remainder- “O to A and heirs of his body, & if A dies w/out issue, to

B and her heirs”- B has contigent remainderg. Types of Fees Tail- unless specified, fee tail inheritable by any issue of fee

tail tenant- but can be tailored:i. Fee tail male- limited succession to male descendants of grantee

ii. Fee tail special- inheritable only by issue of a grantee and a specific spouse

h. Modern Viewi. Delaware, Maine, Mass., RI- still permit fee tail

1. BUT creditors can reach entire property just as if had fee simple

ii. most courts have abolished or greatly modified its effect- treat as:1. Fee simple absolute2. Life estate- grantee has life estate followed by fee simple in

issuei. Construction problems—gift to B and his children

i. Problem- A to “B and his children,” and at testator’s (A’s) death B has no children. What interest does B take? - “and his children” is ambiguous:

1. Could be words of limitation, indicating size of estate given; or

2. words of purchase, indicating gift also to after born children themselves.

ii. English courts say words of limitation and B takes fee tail (Rule in Wild’s Case)

iii. American courts say B takes a life estate and children a remainder.iv. Alternate resolution: B and children take concurrent interests as joint

tenants for life.j. Construction problems—meaning of death without issue

i. Ambiguity- A to “B and his heirs but if B die without issue then to C and his heirs.”- “die without issue” is ambiguous

1. Could mean C takes only when whole line of B’s descendants runs out (indefinite failure of issue), or

2. C takes if, and only if, at B’s death B leaves no surviving issue (definite failure of issue).

ii. Indefinite failure B has fee tail (by implication) and C has remainder in fee simple C takes only when B’s lineage ends.

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Dies w/o issue

Construction Problems

iii. Definite failure B has fee simple subject to an executory interest in C C takes only if B dies without surviving issue if B dies leaving child, then child dies next day leaving no issue (lineage ends), C does not take.

iv. US courts adopted indefinite failure approach- Statute can establish preference for definite failure approach (about 30 states)

4. Life Estate a. Basics

i. Creation- “to A for life”- may create by granting land to someone as long as certain condition fulfilled

1. ex.- “O to A while he shall wish to live in Albert Lea”- life estate in A created- Thompson v. Baxter

2. ex.- “O to daughter as long as wishes, and in case she should not use it as such & wish to sell it…proceeds to be divided b/t son and daughter equally”- life estate in daughter created- Smith v. Smith

ii. Duration1. grantee’s lifetime - estate lasts until death of grantee2. per autre vie - duration measured by life of 3rd party

iii. Alienability- grantee is free to make inter vivos transfersb. Defeasible Life Estate- life estate can be conditioned upon a certain event

i. Ex. – “O to A for life so long as land is used for a cat hospital”1. A dies- O retains reversion in life estate2. If land stops being used as cat hospital- O retains possibility of

reverterc. Duties & Powers of Life Tenant- life tenant has certain obligations to

remainderman (those who will take possession after tenant’s death)i. No waste- unreasonable permanent impairment of future value of

property- 3 different types of waste1. affirmative (voluntary) waste- life tenant actively causes

permanent injury (destroys building, removes trees)2. permissive (involuntary) waste- land is allowed to fall into

disrepair or tenant fails to take reasonable measures to prect land from elements

3. ameliorating waste- principal use of land changed, BUT change increases value of land- still actionable if 1) grantor intended to pass land w/ specific buildings on it to remaindermen: 2) building can be reasonably used for purposes built

a. ex.- house on 5th ave. can’t be torn down & replaced by apt. building- Brokaw v. Fairchild

b. ex.- if grantor’s intent of passing house can no longer be carried out b/c changed conditions have made it

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TYPES OF WASTE

impractical to do so- house can be torn down if raises value- Melms v. Pabst Brewing Co.

ii. Reasonable repairs- doesn’t include rebuilding structure destroyed by natural causes

iii. Interest charges on mortgage- obligation limited to value of income received from land

iv. Property taxes on estate- life tenant entitled to all rents and profits from estate

FUTURE INTERESTS 1. Introduction

a. Future Interest defined- it is a present nonpossessory interest capable of becoming possessory in the future

b. Categories limited- only 5 categoriesi. Future interests in the grantor

1. reversion 2. possibility of reverter 3. right of entry

ii. Future interests in the grantee1. remainder 2. executory interest

2. Reversion a. Definition- created when grantor transfers estate of shorter duration than the

one he holds- at expiration of shorter estate, future interest becomes possessory

b. Divestment- reversion can be divested (exstinguished) if condition necessary for reversion can’t be met

i. Ex.- “O to B for life, then to C, if she outlives B”c. Alienability- reversion is freely alienable, devisable, or inheritabled. Compared to Possibility of Reverter

i. Possibility of reverter- arises where grantor carves out of his estate a determinable estate of the same quantum (eg. fee simple determinable)

ii. Reversion- future interest left in grantor after she conveys a vested estate of a lesser quantum than she has (eg. life estates, fee tails)

3. Possibility of Reverter a. Definition- future interest remaining in grantor when a fee simple

determinable is createdb. Duration- runs w/ the fee simple determinable that was conveyed- if

condition is broken, entitles grantor to automatic repossessioni. NOTE- grantee who stays in possession after condition broken is

considered to be in adverse possessionc. Creation—constructional problems

i. Governed by intention, usually manifested in language of deed or willii. Ambiguity possible

1. Test: mode of termination of granted estate controls

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2. Unless intended to expire automatically, no fee simple determinable

3. Magic words: “while”, “during”, “until”, or “so long as”a. Expression of reverter not enough (“land shall revert”)b. Statement of purpose not enough (“for a hospital”)

4. Judicial preference for fee simple subject to condition subsequent when ambiguity between the two (more favorable to grantee)

d. Alienability- freely alienable and inheritablee. Public Policy- cts. are generally hostile, will construe restrictions as only a

suggestion or a covenant4. Right of entry

a. Definition- residual future interest in the grantor of a fee simple upon a condition subsequent- grantor reserves right to reenter land & reclaim possession if condition is broken

b. Magic words- “upon condition that”, “provided that”, “but if” coupled with provision for entry by grantor

c. Duration- right of entry runs w/ the land; to take possession of the land, transferor must actually enter it & declare the prior possessor’s claim void

d. Adverse Possessors – interest not automatically possessor- when SL begins to run varies by state- may begin to run either when:

i. Condition breached; ORii. Owner elects to ex. right of re-entry & is rebuffed

iii. Not automatically possessory, so application of SOL may vary on state. If don’t bring ejectment w/in period allowed by SOL, grantee gets title by adverse possession. BUT depending on the state, SOL can start running either 1) when condition breached 2) when O elects to exercise right to re-enter and is rebuffed…here, equitable doctrines like waiver, laches (A $$ hurt if O slow) and estoppel may bar O from exercising right of entry after reasonable period of time has passed.

e. Alienability- in most states- future interest is devisable and inheritable but can’t be transferred inter vivos

f. Public Policy- if at all possible, cts. will try to construe the grant otherwise5. Remainder

a. Definition- future interest created in a grantee that is capable of becoming a present possessory estate upon the expiration of a prior possessory estate

b. Essential Characteristicsi. Must have preceding estate-remainder can be created only by

express grant in the same instrument in which the preceding possessory estate is created

ii. Must follow a fee tail, life estate, or term of yearsiii. Must be capable of becoming possessory on natural termination of

preceding estate- divesting interest in grantee is an executory interest (not a remainder

iv. Prior interest must be immed. prior to the remainder & there may be no gap in seisin (ownership) b/t them

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SOL on adverse possession

1. If there is gap – it can only take effect as an executory interest (future interest, held by a 3rd person, that either cuts off another’s interest or begins after the natural term. of a preceding estate)

v. They must be held by a person other than the grantor of the document in which they are created

c. Classification of Remaindersi. Reasons for classification- contingent remainders affected by 1) rule

of destructability; 2) Rule in Shelley’s Case; 3) Doctrine of Worthier Title; 3) Rule Against Perpetuities

ii. Vested Remainder1. Definition - remainder created in an ascertained person and

not subject to a condition precedenta. Ex.- “O to A for life, then to B in fee simple”b. Condition precedent- “to B if B survives A”

i. If vested- there would be no condition precedent & possession would go to B’s grantees, devisees, or heirs if he had died

2. 3 types vested remainders a. indefeasibly vested remainder- holder of remainder is

certain to acquire a possessory estate at some time in future & is certain to be entitled to retain permanently the possessory estate so acquired

i. ex.- “O to A for life, then to B and her heirs”b. vested remainder subject to open- vested in a class of

persons at least one of whom is qualified to take possession but the shares of class members aren’t yet fixed b/c more persons can subsequently become members of the class

i. Example : A devises to B for life, then to B’s children in fee simple—B has no children at A’s death

1. Contingent remainder in B’s unborn children

2. When child born child’s contingent remainder becomes vested remainder subject to open contingent remainder in further unborn children become executory interests which will partially divest vested remainder of earlier born child

ii. class closing rule - existing members can move to close their class when their interest becomes present possessory

1. en ventre sa mere- children conceived before but born after estate becomes

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possessory are deemed to be alive at time of possession

c. vested remainder subject to complete defeasance- either vested subject to: 1) divestment by operation of a condition subsequent or 2) defeasance by an inherent limitation of the estate in remainder

i. condition subsequent 1. executory interest- “O to A for life, then

to B, but if B doesn’t survive A, to C”- vested remainder in B is subj. to total divestment upon occurrence of condition subsequent (B dying & A surviving)

2. Power of appointment: “A to B for life, remainder as B shall appoint, and if no appointment to C and his heirs”- C has remainder vested subject to complete divestment on exercise of power of appointment

ii. inherent limitation - “O to A for life then to B for life, then to C and his heirs”- B’s vested remainder is subj. to total defeasance if B fails to survive A

3. Problems of construction : condition precedent or condition subsequent?

a. Condition precedent contingent remainderi. Example: A to B for life, then, if C (a bachelor)

marries before B dies, to C and his heirs on B’s death

b. Condition subsequent vested remainder subject to divestment

i. Example: A to B for life, then to C (a bachelor) and his heirs but if C does not marry before B dies then to D and his heirs

c. Gray’s test: if conditional element in description of or in gift to remainderman then remainder contingent; but if, after words giving vested interest, clause added divesting it, remainder is vested.

iii. Contingent remainders1. Definition - remainder is contingent if it either is limited to an

unascertained person OR ascertained person subj. to a condition precedent

2. Remainders in unascertained persons - remainder in person not yet born or cannot be determined until happening of an event

a. Ex. – “O to A for life, then to A’s children”; “O to A for life, then to B’s heirs”

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Telling difference btw condition precedent and condition subsequent

B’s contingent b/c living person’s heirs are unascertained = no one is heir to the living!

b. NOTE- whenever grantor creates contingent remainder in fee simple- there’s a reversion in O

3. Remainders subject to condition precedent - condition precedent is an express condition set forth in the instrument which must occur before the remainder becomes possessory

a. Ex.- “O to A for life, then to B if B marries C”b. Not a condition precedent

i. Termination of preceding estateii. Surplusage- “O to A for life & on A’s death to

B”iii. Survivorship- remainder subj. to a condition

precedent other than survivorship isn’t also subj. to an implied condition precedent of survivorship

1. ex.- “to A for life, then to A’s issue & if A dies w/out issue to B”- B’s remainder contingent on A not having issue NOT on B surviving A

4. Condition subsequent VS. vested remainder subj. to divestment a. Contingent- conditional element incorporated into

description of, or into gift to person taking remainderi. Ex.- “to A for life, then to B if B survives A, but

if B doesn’t, to C”b. Vested- after words giving a vested interest, clause is

added divesting iti. Ex.- “to A for life, then to B, but if B doesn’t

survive A, to C”5. Alienability - most cts.- alienable inter vivos or, when

survivorship isn’t a condition precedent- devisable by will6. Destructibility of Contingent Remainders

a. Rule- legal contingent remainder destroyed if it doesn’t vest at or before termination of preceding freehold estate

i. Ex. “to A for life, remainder to A’s children who reach age 21”- at A’s death, all children are under age of 21

ii. Ex. “to W for life, then to A’s heirs, but if A dies w/out heirs to B”- W dies before A does, contingent remainders in A’s heirs and B is destroyed, property reverts to A as heir of O- Ryan v. Monaghan

b. Rationale- preserve continuity of seisin since import. to collection of feudal dues

c. Preceding freehold- rule doesn’t apply if preceding estate is a leaseholdd. Termination of prior freehold estate may result from: natural expiration or

mergeri. Natural expiration

1. Example: A to B for life, then to heirs of C (living) B dies before C remaindermen not ascertained so seisin reverts to A and contingent remainder destroyed

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a. Exception: posthumous child may be considered as existing prior to birth (i.e. A to B for life, remainder to B’s first son in fee tail, with remainders over B dies before son born, but left wife pregnant son entitled to take)

ii. Merger: when successive vested estates owned by same person smaller estate absorbed by larger one

1. Example: A to B for life, then to B and his heirs B has fee simple (life estate merges with fee simple)

a. Must be both successive and vested2. Destroyed contingent remainder example: “C to B for life,

then to A if he marries”- if C conveys his reversion to B before A gets married (still contingent & not vested), B’s interests merge into fee simple & destroy A’s contingent remainder

a. Any contingent remainders dependent on the merging life estate destroyed

3. Ex.- “O to A for life then to A’s widow for life and remainder to B and B’s heirs”- B conveys remainder to A and his heirs- merger takes place, life estate and remainder merge- destructibility of a contingent remainder- A’s widow’s contingent remainder destroyed

4. Ex.- “O to A for life, remainder to B if B survives A”- if A conveys life estate to O, B’s contingent remainder is destroyed

iii. Exceptions to Merger Doctrine1. Fee tail will not merge into fee simple- Statute De Donis

preventsa. Ex- “O to A & the heirs of his body, & if A dies w/out

issue, to B and her heirs if B is then living”- if A conveys to O, B’s remainder isn’t destroyed

2. Contingent remainder will not be destroyed by merger of life estate and next vested estate when two estates created simultaneously with contingent remainder

a. Intention of transferee completely defeatedb. Example (part 1): A to B for life, then to C for life if C

marries, then to B and his heirs C’s contingent remainder initially valid

c. Example (part 2): so also, if A to B for life, then to C for life if C marries, and reversion simultaneously descends to B as heir of A contingent remainder in C not destroyed by merger of life estate and reversion

e. Interests not affected by destructibility rulei. Vested remainders & executory interests- rule applies only to

contingent remainders1. vested remainder - “O to A for life, then to B for life”- if A

conveys to O, no merger b/c B’s remainder is vested

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2. executory interest - “O to A for 100 years if A so long live, then to A’s children who survive A”

ii. interests in trust- (equitable estates)- “O to X and his heirs in trust to pay income to A for life, then in trust to convey to children of A who reach 21”- if A dies before kids reach 21, remainder isn’t destroyed since X has seisin

f. Avoidance of rulei. Term of years- create a term of years rather than a life estate

ii. Trustees- destructibility rule can also be avoided by creating trustees to preserve contingent remainders

1. ex.- “to A for life, then to X, Y, and Z as trustees for life of A and to preserve contingent remainders, remainder to A’s children who survive A”

g. Modern View- most cts.- abolished destructibility rule, original grantor ends up retaking possession subject to the remainder

7. Rule in Shelley’s Case a. Rule- if 1) one instrument 2) creates a freehold in land in A, and 3) purports to

create a remainder in A’s heirs (or in heirs of A’s body) and 4) estates are both legal or both equitable, then remainder becomes a remainder in fee simple (or fee tail) in A

i. Ex.- “to A for life, then to A’s heirs”- converts remainder limited to A’s heirs into a remainder in fee simple- merger doctrine steps in & converts A’s estate to fee simple absolute

ii. Ex.- “to A for life then to heirs of A’s body”- converts remainder to A remainder in fee simple for A

b. Rationale- arose to prevent feudal tax evasion- incidents were due only if new tenant acquired his interest by descent from the former tenant, rather than by purchase under the terms of the conveyance- modern reason- promotes alienability of land, if you don’t have this rule have these unidentified people w/ contingent interests- A less likely to be able to sell since only had life estate

c. Operation of rulei. “one instrument”- for the Rule to apply, the estates of grantee and

grantee’s heirs must be created in the SAME DOCUMENT1. exception- pwrs. of appt.- the rule still operates where pwrs.

of appt. involved since these pwrs. are said to “relate back”a. ex.- “D for life, remainder to whomever W shall appt.”-

if W appts. D’s heirs as remainderman, D gets fee simple absolute

ii. “instrument creates freehold estate in A”- almost always involve a life estate; life estate must be given to ancestor of the heirs given the remainder

1. life estate determinable - life estate can be determinable or subj. to condition subsequent- “to my wife W during widowhood, and upon W’s death or remarriage, remainder to W’s heirs”

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2. life estate is in remainder - “to A for life, then to B for life, remainder to B’s heirs”

3. subject to condition precedent - life estate & remainder must be both subject to same condition precedent for rule to apply

a. ex.- “to A for life, then, if B marries C, to B for life, remainder to heirs of B”- rule applies

b. BUT if “to A for life, then, if B marries C, to B for life, remainder to heirs of B whether or not B marries C”- rule DOES NOT apply UNLESS condition is met before estate becomes possessor (B marries C during A’s life)- if B’s heirs can take an interest w/out B taking life estate- then Rule doesn’t operate!!!

4. lapse of life estate - in a will, O devises “to A for life remainder to A’s heirs”- even if A dies before O does, some authority rule applies & remainder to A’s heirs fails

5. joint life estate - “O to H & W as tenants in common, for their lives, remainder to heirs of W”- authorities divided

iii. “purports to create a remainder”- must be a remainder in grantee’s heirs (can’t be an excutory interest or other interest)

1. contingent remainder - remainder may be a remainder contingent upon happening of some condition precedent- “to A for life, then to A’s heirs if A survives B”

a. NOTE- life estate doesn’t have to be subj. to same condition precedent here- rule applies where there’s a condition precedent on the remainder and not on the life estate

2. Intervening life estate - intervening estate blocks mergera. Ex. – “O to A for life, then to B for life, then to A’s

heirs”- A has life estate and remainder in fee simple, but intervening life estate prevents merger

3. executory interest - applies only w/ a remainder, not an executory interest

iv. “in A’s heirs (or heirs of A’s body)”- remainder must be given to A’s heirs or heirs of the body in “an indefinite line of succession rather than a specific class of takers- “heirs” are magical words needed, but must be used in the technical sense

1. ex.- “to S for life, & remainder to heirs of his body”- eventhough S dies childless, rule applies & S’s wife gets estate- hiers of the body are simply magic words, (Sybert v. Sybert)

2. ex.- “to S for life and if she doesn’t have heirs to G”- S sells to M but does have heirs; rule doesn’t apply, S only had life estate and estate in remainder goes to heirs as alternative contingent remainder (word “heirs” has to be used in the technical sense (+ heirs), ad not descriptio personarum denoting children,

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issue, a particular class, or individual persons)- McRorie v. Creswell

3. US cts.- ignore requirement that heirs refer to indefinite line of succession

v. “estates are both legal or both equitable”1. ex.- “to X in trust for life of A to pay A income & profits,

remainder to heirs of A”- X has a legal life estate pur autre vie, A has an equitable life estate & A’s heirs have a legal remainder- rule doesn’t apply

d. Problem of construction: “to the heirs of B” or “to the heirs of B’s body”?i. Clear language not always used

1. A to B for life, then to his heir during its life- Rule doesn’t apply

2. A to B for life, then to his children and their heirs- Rule doesn’t apply unless context suggests so

3. A to B for life, remainder to his heir- Rule applies (singaular includes plural)

4. A to B for life, then to his heirs in fee simple- Rule applies5. A to B for life, then to his heirs of blood- Rule doesn’t apply,

heirs a restricted class6. A to B for life, then to heirs of his body, their heirs and

assigns- Decisions both ways7. A to B for life then to his issue- Rule usually applies (“issue”

= “heirs of body”)ii. U.S.: majority of courts reject technical meaning given to “heirs” or

“heirs of the body” saying rule operates where remainder limited to persons who would be heirs of life tenant at his death rule applies in A to B for life, and after B’s death to person(s) as may be entitled to inherit by statute B takes fee simple

e. Circumventing the rule- create non-freehold estate in ancestor or executory interest in heirs (rather than remainder

f. Modern Status- abolished in most states BUT still in effect in Arkansas, Delaware, Indiana, & some other states- where its abolished, grantee gets a life estate and his heirs have a contingent remainder in fee simple absolute

8. Doctrine of Worthier Title a. Two Branches of Doctrine

i. Inter vivos branch- when an inter vivos conveyance purports to create any future interest in the heirs of the grantor, the future interest is void & grantor has a reversion

1. ex.- “O to A for life then to O’s heirs” remainder to O’s heirs is void & O has a reversion

ii. Testamentary branch of doctrine- if a person devises land to his heirs, the devise is void and the heirs take by descent

1. ex.- “T to A for life, then to T’s heirs”- T’s heirs take reversion after A’s death by descent

2. RP- claims testamentary branch doesn’t exist in US

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Construction problems:

Rule in Shelley’s Case

b. Operation of the Doctrinei. Limitation to heirs- does NOT apply to a future interest limited to

“O’s children” or “O’s issue” or to “O’s heirs ascertained at death of life tenant A”

ii. Kind of future interest immaterial- doctrine applies to a remainder or an executory interest limited to O’s heirs- future interest may be legal or equitable

iii. Typical applications1. revocation of trusts - “O to X in trust to pay income to O for life

& on O’s death to convey the trust assets to O’s heirs”- trust can only be terminated if all owners of equitable interests consent, doctrine applies here & O has reversion & can operate solely to terminate the trust (creditors can also reach this to get O’s debt)

2. devise by O - “O to A for life then to A’s issue, & if A should die w/out issue, then to O’s heirs”- O’s heir is C, but O devises his reversion to B; B owns property if A dies w/out issue- Braswell v. Braswell

c. Modern View- valid in many jurisdictions- rule creates a rebuttable presumption that when conveyor limits remainder to own heirs, he intends to retain indefeasible reversion and not to create a remainder in heirs -Presumption diluted in later cases

i. abolished in Calf, Mass., N.Y.- here heirs of grantor take future interest limited to them under the instrument

ii. NOTE- most states treat rule as presumption only which is rebuttable by evidence of grantor’s actual intent

9. Executory Interests a. Development of the “use”- feudal times, expedient at times to vest ownership

of property in 1 person who would hold for use & benefit of anotheri. Ex.- “O to A for use of O’s wife & children”

b. Common law conveyancing before Statute of Uses & how rules were bypassed in equity

i. Livery of seisin required - at CL, grantor had to enfeoff grantee through livery of seisin

1. Bypass in equity- bargain and sale deed- “O bargain and sells to A and hers for a consideration”

ii. No springing interests - grantor couldn’t create a freehold estate w/out conveying seisin- ex.- “to A & her heirs when she marries B”

1. Bypass in equity- strawman & use- “O enfeoff’s X & his heirs to use of O and upon marriage of A to B, to use of A”

iii. No shifting interests - grantor couldn’t create future interest in grantee that cut short a freehold estate- ex.- “to A and his heirs, but if B returns from Rome, to B and his heirs”

1. Bypass in equity- strawman & use- “O enfeoff’s X & his heirs to use of A & his heirs but if B returns from Rome to B and his heirs”

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iv. Methods of creating a use - had to raise a use to get into equity ct.1. feoffment to uses- “O enfeoffed X & his heirs to use of A and

his heirs”2. bargain and sale

c. Statute of Usesi. Background - incidents only fell when seisin of land descended to heirs

upon death of a tenant, uses prevented descent of seisin, statute sought to turn uses into legal estates

ii. Springing & Shifting interests made possible - these became known as executory interests

1. springing interest- future interest in grantee that springs out of the grantor at a date subsequent to the granting of the interest, divesting the grantor

a. ex.- “O to A and her heirs when A marries”b. ex.- “O to A for 100 years if A so long live, then to A’s

heirs”c. ex.- “O to A for life, & 1 day after A’s death, to B &

her heirs”2. shifting interest- future interest in a grantee that divests a

preceding estate in another grantee prior to its natural termination- shifting interest divests a grantee

a. ex.- “O to A and his heirs, but if B returns from Rome, to B and his heirs”

b. ex.- “O to A for life and on A’s death to B and his heirs, but if B doesn’t survive A, to C and his heirs”

3. NOTE- executory interest is always either a springing or shifting interest EXCEPT in case of a future interest in a grantee following a fee simple determinable- executory interest doesn’t divest it but succeeds it

iii. Effect on Destructibility of Contingent Remainders - recognition of executory interests had no effect on rule, any limitation capable of taking effect as a remainder must be construed to be a remainder & couldn’t take effect as an executory interest- Purefoy v. Rogers

1. ex.- “O to A for life, remainder to A’s children who reach age 21”- rule only creates legal contingent remainder in A’s heirs- subject to destructibility, not treated as springing executory interest, rule on destructibility of contingent remainders applies

2. SOLN.- avoid contingent remainders b/c they alone are subj. to destructibility- want to create springing interest instead of a contingent remainder (ex.- want land to go to son (A) for life but I then want it to go to my daughter’s (B) heirs)

a. Shifting interest- “O by bargain and sale to A for life then C and her heirs but if B leaves heirs then to B’s heirs”- This isn’t a remainder- it’s a legal shifting executory which is valid at law

b. Springing interest

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i. “O to A for life then 1 day after A’s death to B’s heirs”

ii. “O by bargain and sale to A for 1000 years if A so long lives then B’s heirs”- Springing interest following a determinable term of years

iv. Avoiding the Statute 1. use-on-a-use not enacted- statute didn’t operate on a use-on-a-

use- statute only executed one usea. ex.- “O to A and his heirs for use of B and his heirs for

use of C and his heirs”- C still had equitable estateb. BUT- “O to A and her heirs to use of B for life then to

the use of C and her heirs”i. A gets a legal fee simple

ii. B gets a legal life estateiii. C gets a legal vested remainder

c. this is a use after a use not a use upon a use- statute of uses executes all fleas on back of a single dog, but not fleas on back of fleas on a dog

2. active duties imposed- feoffee to uses had only passive duties, but if given active duties, Statute didn’t apply

a. ex.- “O to X and his heirs to manage the property and pay income to A for life, and on A’s death to convey property to A’s children”- A has equitable life estate and A’s children have an equitable remainder

b. modern trust - trustee owns legal title & beneficiaries have equitable title- “O to X and his heirs in trust for benefit of A for life, then for B, and if B doesn’t survive A, for C”

v. Modern View - accepted as a common law statute in most states today10. The Rule Against Perpetuities

a. Statement of the Rule- No interest is good unless it must vest, if it all, not later than 21 years after some life in being at the creation of the interest

i. Ex.- O to A for life, remainder to A’s first child who reaches 25- remainder is void- A might have afterborn who is born shortly before A’s death

b. Rationale- need to promote alienability of land & prevent undue concentration of land in hands of few; don’t want land to be tied up

c. Interests subject to the rule:i. Springing & shifting executory interests

1. BUT – “A conveys to C and heirs 30 yrs. from date of this deed”

a. Springing interest- usually will be subj. to rule and this conveyance would be in violation

b. Vested- exceptional situation where ex. interest will definitely become possessory w/in fixed time so considered vested and rule doesn’t kick in

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ii. Contingent remaindersiii. Vested remainders subject to open- as long as the class of grantees is

still open, rule appliesd. Interests not subject to the rule:

i. Reversionsii. Rights of entry

iii. Possibilities of reverteriv. Vested remainder

1. NOTE ex.- “O conveys to T for life, then to J’s children, but if any of J’s children fail to reach 30, those shares shall pass to the survivors” J has a 20 yr. old kid- effect of rule?

a. Estate- J’s kid has vested remainder subject to total divestment

b. Application- Only the divesting condition (failure to reach 30) and the executory interest (in the surviving children) is invalidated

c. Final Result- J’s kid has vested remainderv. Contingent remainders involving transfers from one charity to another

e. Procedure- how rule worksi. Identify all interests created

ii. Identify all “lives in being”- any party living at the time interest created (for will- alive at testator’s death; for inter vivos transfer- alive at date of transfer) who has causal effect on when & whether future interests will vest or become possessory

iii. Add 9 mo. to guard against gestation period (children had been conceived of but not yet born at time transfer made may be considered life in being)

iv. Kill off all “lives in being”v. Determine if future interests will definitely vest or fail to vest w/in 21

yearsf. Lives in Being

i. Relevant lives- persons who can affect vesting of the interest- can affect either vesting in possession or vesting in interest

1. Vesting in possession - common ex.- life tenant2. Vesting in interest - interest is vested when 1) beneficiary

ascertained; 2) any condition precedent is satisified; persons who can affect vesting in interest are:

a. Beneficiary(s) of contingent interestb. Parent or grandparent of the beneficiariesc. Any person who can affect any condition precedentd. Ex.- O by rev. trust to A’s kids for life then to O’s

grandchildreni. lives in being- A & O’s kids

ii. both conveyances are fineiii. note remainder is subject to rule of

destructibility of contingent remainders

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3. Lives in being when interest created - relevant lives must be persons alive at the creation of the interest

a. Will- lives in being must be alive at the time of the testator’s death

b. Revocable trust- lives in being must be alive at the time of the trustee’s death

c. Inter vivos transfer- must be alive at date of transfer4. Periods of gestation - period of 9 mo. added after death of life

being which creates interest- child in the womb when interest is created is treated as a life in being if child is later born alive

g. Meaning of “Vest”- Vested interests aren’t subject to rulei. Exception- class gift- gift to a class isn’t vest in any member of the

class until the interest of all members have vested- if gift to one member of class might vest too remotely, whole class gift is void

1. ex.- O to A for life, then to A’s children for life, then to A’s grandchildren in fee simple- gift to A’s grandchildren void- A might have after born child who gives birth to child who is able to inherit gift 21 years after death of last life in being

h. Application to Defeasible Fees- rule doesn’t apply to possibilities of reverter & rights of entry which are regarded as vested interests- BUT it does apply to executory interests

i. Determinable fee- O conveys to School Board so long as used for school purposes and if land shall cease to be used so, to A and his heirs

1. conveyance to A void2. Left w/- determinable fee in the School Board and possibility

of reverter in O3. Soln.- two conveyances- 1) O to A; 2) A to School Board so

long as used for school purposes4. NOTE- gifts from one charity to another charity excepted- “O

to school board so long as used for school purposes then to the Red Cross”

ii. Fee simple subject to executory limitation- O to school board, but if board shall cease to use for school purposes, to A and his heirs

1. conveyance to A is void2. Left w/- fee simple absolute in Board (language which creates

the executory interest is cut out)3. SOLN.- two possibilites-

a. “but if not used for school purposes during lives of being or w/in 21 years after their death- to A”

b. “but if not used for school purposes during life of A and 21 years”

i. Destructability of remainders- rule of destructibility can obviate a vesting that would be too late under the rule of perpetuities- rule saves conveyances-always consider if rule of destructibility applies

i. Ex.- O by inter vivos conveyance to O’s children for life then to O’s grandchildren and their heirs when they reach the age of 21

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1. immediate possessory estate- so applies to O’s kids that are alive- lives in being

2. PROB- O might have an afterborn child (can’t take in estate) who has no kids & all of O’s other children die childess

3. remainder in grandchildren void under destructibility of contingent remainders- contingent remainders are destroyed if it doesn’t in fact at termination of prior estate - (remainders remain destructable despite legality of springing interest)

j. Will vs. Inter vivos conveyance- can lead to different results due to possibility of afterborn children

i. Ex.- O by inter vivos conveyance to O’s children for life then to O’s grandchildren and their heirs when they reach the age of 21- void since O might have afterborn child whose kid inherits 21 years after death after last life in being

ii. Ex.- O devises to O’s children for life then to O’s grandchildren and their heirs when they reach the age of 21- all good since don’t have to worry about afterborn children for O

k. Remote Possibilities- interest is void under rule if any possibility interest might vest beyond the period

i. Fertile octogenarian- evid. that person is 80 or has had hysterectomy or vasectomy is irrelevant

1. ex.- (Jee v. Audley) T to M and if M’s line ever runs out to daughters of E now living- contingent remainder in daughter’s is void- on two grounds:

a. even though E is 80, might still have an after born child in whom interest might vest

b. M dies w/out issue over 21 years after her deathi. two possible ways dwi

1. general failure of issue- occurs in the future when descendant line runs out

2. definite failure of issue- die w/out children

c. Soln.- Could’ve saved this clause by inserting- “this gift shall not vest if does not do so w/in 21 years after death of last life in being”

ii. the unborn widow- law assumes that person’s surviving spouse might turn out to be a person not now alive

1. ex.- T devises to A for life then to A’s widow for life then to A’s issue who survive A and his widow- remainder in widow is fine but remainder in issue is void since won’t vest until death of widow who may not be a life in being

l. Application to options- option is void if it can be exercised more than 21 years after some life in being at its creation

i. Ex.- A grants option to O to purchase piece of land during 120 day period which beings when city acquires right of way to widen two

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roads- void- United Virginia Bank/Citizens & Marine v. Union Oil Co.

m. Application to powers of appointmenti. General pwr.- presently exercisable gen. pwr. of appt. must be certain

to become exercisable w/in a life in being plus 21 years from date created

ii. Special pwr./general testamentary pwr.- invalid if capable of exercise beyond the perpetuities period

iii. Perpetuities period: when begins to run depends on type of pwr.1. special (testamentary or presently exercisable)- period

counted from the time of the creation of the pwr.2. general (testamentary only)- period counted from the time

of the creation of the pwr.3. general (presently exercisable)- period counted from the

time of the exercise of the pwr.iv. ex.- “to C for life, then to whomever E shall appt.”- E exercises the

pwr. in favor of C’s grandkids who reach age 35; C is childless at the time- who takes? E or his heirs

1. attempted appt. violates rule against perp.2. E had general pwr. of appt.- when donee attempts to ex. but

attempt is invalid- donee’s estate takesa. NOTE- normally where no default takers are named &

the donee doesn’t ex. the pwr- prop. reverts to donor or his estate

v. Ex.- “to P for life, reaminder to whomever P appts. by will; however in defaut of such appt., to A and his heirs”- P appts. in will C’s (not a life in being) children- C is sole of heir of P when he dies- C gets the land

1. Violation of rule- P had general testamentary pwr.- period began to run when pwr. created- before C even born

2. any interest in C’s children could vest after pd.3. Since P did attempt to ex.- property reverts to donee’s (P’s)

estaten. Doctrines operating as exceptions to rule

i. Wait and see doctrine- validity of interests is judged by actual events as they happen & not be possible events that might happen

1. Period - ½ states which have adopted wait out common law perp. Period before declaring void

ii. Cy Pres Doctrine- invalid interest is reformed w/in limits of rule to approx. most closely the intention of the creator of the interest

1. ex.- O to A for life, remainder in A’s children who reach age of 25- ct. may reduce age to 21 years

2. doctrine may be coupled w/ wait-and-see

POWERS OF APPOINTMENT

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1. Doctrine a. Rule- authority created by a donor & conferred upon a donee enabling donee

either to appoint persons to take the property OR to appoint proportionate shares which designated persons shall take in property

2. Terminology O A for life, then to such persons as A appoints by will, and in default of appointment to Red Cross.

a. Donor of the power: Ob. Donee of power: Ac. Appointee: Whoever A appointsd. Taker in default: Red Cross (Take if power is not exercised or ineffectively

exercised.)3. General Background

a. when giveni. testamentary pwr- A has to appoint through her will

ii. inter vivos pwr.- A appoints during her lifetime b. whom given

i. general pwr.- A has pwr. to appt. to anyone (including herself)ii. special pwr.- A has to appt. a member from a given class

c. when exercisei. discretionary- A can exercise whenever or doesn’t even have to-

reversion then ableii. mandatory- have to exercise w/in certain time

4. Types of powers a. General power- enable donee to appoint to any person, including herself

i. Creditors of donee- creditors can’ subj. the property to the their claims when the pwr. remains unexercised, but they can, if the pwr. is exercised in favor of a volunteer or a creditor of the donee, subj. the property to their claims

ii. TWO exceptions to rule unexercised pwr. can’t be reached by creditors

1. if donor is also donor of the pwr. & conveyance creating the pwr. is deemed fraudulent

2. if donee is also donor creates pwr. by transferring property in trust & reserves for himself life income & a general pwr. to appt. the corpus

a. set-up a spendthrift trust from why you are beneficiary, your creditors can reach it- Bank of Dallas v. Republic Nat’l Bank of Dallas

iii. Failure to exercise where no takers in default named- property reverts to donor

iv. Attempt to exercise is invalid- property reverts to doneeb. Special power- limits exercise of pwr. in favor of a person or persons other

than the donee or his estatei. Creditors of donee- creditors can’t subject special pwr. to their claims

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ii. Failure to exercise- appointive property goes to living members of class in equal shares

c. Power purely collateral- donee has no interest in property other than the pwr. itself

d. Power in gross- donee has an interest in the property in addition to the pwr., but the exercise of the pwr. doesn’t affect the interest of the donee

e. Power appendant- donee has an interest in the property and the exercise of the pwr. disposes of all or part of such interest

f. Power in trust- donee, under some circumstances & w/in some pd. of time, is under a duty to exercise it (also called imperative or mandatory pwr.)

i. If stipulated that person should be provided for, pwr. is mandatory- In re Rowlands’ Estate

ii. Power not in trust- no duty for donee to exerciseg. Nonexclusive power- donee of a special pwr. must appt. something to each of

the permissible objects of the powerh. Exclusive power- donee of a special pwr. may exclude one or more of the

permissible objects & appt. all of the property to the othersi. A to B for life, then to B’s children in such shares as B shall appoint

allows B to choose the shares the children will take bt does not allow B to appoint to a spouse or creditor a favorable charity. Also B cannot leave out one of his children, nor can he appoint to his grandchildren.

ii. limiting the way appointment may be made - Typically restricting its exercise to the donee’s last will and testament. “B shall appoint by will”

5. Instrument creating - may be deed or will6. Transfer of pwr. - pwr. of appointment is considered personable to the donee

a. Note devisable, inheritable, delegable or assignablei. BUT if the pwr. is general- holder can exercise his pwr. by creating

another pwr. in his appointee

CONCURRENT ESTATES 1. Tenancy in Common

a. Nature of tenancy- each co-tenant is owner of a separate & distinct share of the property which has not been divided among the co-tenants- each has separate undivided interest

i. Right to possession- each has right to possess & enjoy entire propertyii. No right of survivorship- when tenant dies, interest passes to

devisees or heirsiii. Equal shares not necessary- A may hold a ¾ interest while B holds

¼ interestiv. Same estates not necessary- A can have fee simple while B has life

estateb. Unity- only unity required is unity of possession

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c. Alienability- tenant in common can sell, give, devise, or dispose of her undivided share

d. Presumption of tenancy in common- when conveyance is made to 2 or more people, presumption is that a tenancy in common is created

2. Joint Tenancy Joint Tenantsa. Nature of Tenancy- each co-tenant owns an undivided share of property (as in

tenancy in common) & surviving co-tenant has right to whole estate (right of survivorship)

i. Conveyance or devise required- must be created by deed or will -CAN NOT arise where persons inherit property by intestate succession

ii. Right of survivorship- joint tenant can’t devise her share of joint tenancy of property

1. death of tenant- when tenant dies, nothing passes to surviving tenants, estate continues in survivors and decedent’s interest is exstinguished

2. ex.- State imposes inheritance tax on property passing by devise, bequest, or intestate succession. A & B are joint tenants and A dies, no inheritance tax is imposed on B

b. Four unities required- all are required to create joint tenancyi. Unity of time- interest of each joint tenant must vest at the same time

ii. Unity of title- all joint tenants must acquire title by the same deed or will, or by a joint adverse possession

iii. Unity of interest- interest of each joint tenant must be equal in an estate of one duration

1. Equal shares - shares of each joint tenant must be equal- (NOTE- upon partition, equity ct. may divide proceeds in accordance w/ proportionate consideration paid)

2. Another interest in same property - property can be divided into fractional shares, one of which is owned by persons as joint tenants & the other owned by persons as tenants in common

iv. Unity of Possession- requires that each joint tenant have the right to possession of the whole

c. Creation of Joint Tenancyi. Overcoming presumption of tenancy in common- joint tenancy can

be created only be express words in instrument indicating intent to create it

1. ex. – “to A and B as joint tenants with the right of survivorship, and not as tenants in common”

2. ex.- “to A and B as tenants in common w/ the right of survivorship as at common law”- first clause prevails and tenancy in common is created- Camp v. Camp- (might argue other way- Lay person probably wouldn’t know what a tenancy in common exactly is (don’t know that it means NO survivorship) BUT if said right of survivorship obviously intended to have survivorship rights

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Conveyance required, no INTESTACY; req. EXPRESS words

Getting around the statute of wills….

ii. Converting a fee simple into a joint tenancy- occurs when one tenancy wants to convert his fee simple into a joint tenancy w/ another party

1. common law - couldn’t be done through conveyance to another party and self (“from A to A and B”) b/c requirements of time and title not satisfied

a. SOLN.- use of strawman- “A to X” and then “X to A and B”

2. modern statutes - allow a property owner to create joint tenancy in himself & another party w/out use of a strawman

d. Severance of a joint tenancy- can be destroyed by severing any of the 4 unities

i. Conveyance by joint tenant – conveyance of tenant’s entire interest or share sever the joint tenancy w/ respect to that share

1. ex.- A, B, and C are joint tenants- A conveys share to D- B and C remain joint tenants toward each other but are tenants in common w/ D- if C dies, B owns a 2/3 interest while D has a 1/3 interest

ii. Conveyance to self1. common law - joint tenant who wished to convert the tenancy to

tenancy in common had to convey to a straw person who conveyed back to him

2. recent cases - joint tenant can unilaterally sever tenancy by conveying her interest to herself w/out using an intermediary- Riddle v. Harmon

a. Problem created- enables joint tenants to possible cheat other tenants- Sever but keep it secret in case other joint tenants die first

iii. Mortgage by joint tenant1. Title theory states - mortgage has the effect of conveying the

legal title to the mortgagee, mortgagor only kept an equity of redemption to legal title back upon payment of the mortgage- destroys unity of interest & can’t be revived by paying off the mortgage

a. Title- conveyed fee simple determinable to get loan w/ possibility of reverter (“so long as debt is unpaid”) or fee simple subject to condition subsequent (“but if repaid”)

2. Lien theory states - (majority theory)- mortgagor doesn’t transfer legal title, only transfers a lien (security interest)- states differ on whether surviving joint tenant takes ½ subject to the mortgage if the debt isn’t paid before mortgagor dies

iv. Lease by joint tenant1. common law- lease severs - destroys unity of interest b/c lessor

had only a reversion in property whereas other joint tenant had fee simple

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Seems like survivor wouldn’t be subj. to the debt b/c the lien was a burden on dead guy’s interest, which was extinguished on his death— When he died, he had an equity of redemption—did that die w/ him????

2. modern view- lease doesn’t sever - no severance, but cases split over whether surviving joint tenant takes a ½ subject to the lease

a. lessee- lessee may protect himself by having all joint tenants sign the lease

b. WHY SHOULD HE, WHEN THE LEASE WAS arose from interest that has now been extinguished?

v. Agreement among joint tenants- can make mutual agreement to hold as tenants in common

1. divorce - doesn’t automatically sever, but cts. may infer agreement to sever

2. murder of 1 joint tenant by another - severs3. simultaneous death - Uniform Simultaneous Death Act- half

goes to A’s estate and half goes to B’svi. Partition- joint tenancy may be severed by partition of land

1. mutual agreement - tenants may mutually agree to partition2. unilateral action - if 1 tenant wishes to partition, must file suit to

obtain judicial decree3. if petitioning tenant dies during proceedings, joint tenancy

survives- Riddle v. Harmon3. Tenancy by the entirety

a. Nature of Tenancy- created only b/t a husband and wife, holding as one person- only recognized in less than ½ of the states

i. Five unities required- four unities from joint tenancy and marriage required

ii. Presumption- if property granted to a husband & wife, presumption is intended to est. a tenancy by the entirety

iii. Right of survivorship- surviving spouse has right of survivorshipb. Rights of Tenants during Marriage- Married Women’s Property Act-

married woman able to receive, hold, manage, & dispose of real & personal property as if a single woman- equal rights to manage property

i. Sale or Burden- most states hold neither husband nor wife may sell or burden property w/out consent of other spouse

ii. Creditors- in most states, can’t encumber a debtor spouse’s property while the other spouse is still living; If debtor spouse dies first, surviving spouse’s interest supersedes the creditor’s interest

c. Severance of tenancyi. No termination by unilateral action- neither spouse can act

unilaterally to terminateii. Mutual agreement- can be terminated through mutual agreement

iii. Death of spouse- tenancy terminatesiv. Judgment executed by creditor of both husband and wife v. Divorce- severs tenancy

d. No marriage- created tenancy by the entirety but it turned out that both weren’t married (some tech.)

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Have to be married WHEN conveyed

i. Probably would be converted into joint tenancy since most similar- preserve right of survivorship

ii. Some cts. may convert to a tenancy in common- Currie say this doesn’t make any sense—probably b/c the 4 unities are there.

4. Rights and duties of Co-Tenants a. Right of Possession- each tenant has right to possess the entire property, BUT

no tenant has right to exclusive possessionb. Possession by One Cotenant

i. Majority rule- cotenant entitled use & occupy every part of property w/out pay any rent amt. to other cotenant(s)

1. Carrying charges - cotenant in possession must bear ordinary expenses of upkeep (taxes, mortgage interest) BUT if these exceed fair rental value, cotenant has right of contribution

2. Ouster - if one cotenant deprives another cotenant of right to possession- she must pay ousted co-tenant share of reasonable rental value of property

ii. Minority rule- cotenant must account for share of reasonable rental value of premises

c. Accounting for Rents Received from a 3rd party- any rents or other income collected by a co-tenant must be shared equally w/ the other cotenants if the income exceeds the co-tenant’s proportionate share- rule est. by Statute of Anne (NOTE- Calif. hasn’t adopted Statute- don’t have to account for rent payments)

i. Doesn’t really make sense, since they’re renting out THEIR share, and the other’s aren’t prevented from using their own. If they get money, then they’re getting to have their cake and eat it too, while co-T does all the work!

d. Exploiting Natural Resources- cotenant is accountable for profits derived from use of land that permanently reduces its value

i. Minerals- cotenant must pay a proportionate part of the net amount received for the extracted minerals to her cotenants

1. oil treated as part of land (unlike crops)2. some cts. will allow drilling w/out consent b/c feel that old rule

is inefficientii. Farming- cotenant who excludes her cotenants and farms the land is

accountable for fair rental value of the land as farm land (only in state which requires rent payment for occupation), NOT the net profits received from her farming operation

iii. Timber- some cts. hold that 1 cotenant can cut her proportionate share of the timber w/out being liable to her cotenants for its value

e. Actions by cotenant to protect property- general principle is that cotenant who pays money to keep up property, which benefits all cotenants, is entitled to reimbursement for more than her proportionate share of costs

i. Taxes- each cotenant has duty to pay her share of taxes1. Exception- cotenant in possession- duty to pay up to amount of

reasonable rental value of property

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This could arguably happen if co-tenant rents w/o other’s permission, then they can’t use

ii. Interest on mortgage- cotenant who pays interest on mortgage can compel contribution from nonpaying cotenant who are personally liable on the mortgage

iii. Repairs- repairs are considered voluntary- cotenant who makes necessary repairs can’t compel contribution

iv. Improvements- considered voluntary, can’t compel contribution, BUT in a partition action ct. will give improver portion of property containing improvement if feasible

f. Adverse Possesion- cotenant can adversely possess against another if adverse possession continues for statutory pd. BUT to est. self as adverse possessor, cotenant must give other cotenants unequivocal notice of repudiation of common title

MARITAL PROPERTY 1. Common Law Marital Estates

a. Husband’s Interest in Wife’s Propertyi. Jure Uxoris- (estate by marital rights)- life estate whereby husband

was entitled to use of all lands his wife possessed before, or acquired during the marriage (right to occupy, alienate, & collect rents & profits) BUT lost these rights when wife died

ii. Curtesy Initiate- birth of a live child transformed jure uxoris into curtsey initiate- husband no long lost his rights to his wife’s property if she predeceased him- differ from dower:

1. title to all wife’s lands 2. title to equitable interests held in possession - (eg. trusts)

iii. Curtesy Consummate- curtesy initiate transformed to curtesy consummate upon wife’s death- same rights as described above

iv. Modern view1. jure uxoris - destroyed by Married Women’s Property Act2. curtsey - abolished in most states, statutes give husband

percentage interest (1/2 or 1/3) in wife’s property; states which still have curtsey- husbands can choose b/t curtesy & statutory share

b. Wife’s interest in husband’s property- Doweri. Dower limitations- at husband’s death, wife had dower in all freehold

land 1) which here husband was seised during marriage; 2) is inheritable by issue born of the marriage- dower is a life estate in 1/3 of each parcel of qualifying land

1. ex.- H acquires land before marries W, conveys to S who makes oral promise to reconvey land upon request, H asks to reconvey but S refuses, when H dies W has no dower rights to land since H’s only right was a chose of action- Melenky v. Melenky

a. above seems like an equitable estate W wouldn’t rights to but it was a passive trust which the NY equivalent of

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ADVERSEPOSSESSION OF CO-TENANTS

No dower in equitable estates (but if Statute of Uses turns it into a legal estate—watch out! OA for use of B, B’s use converted to legal title. There’s dower!) or to land that H held as LE or w/ s/o as joint tenants

the Statute of Trusts would execute it as a transfer of title and a legal estate

b. Statute of Uses- doesn’t execute a trust where there are active duties on the trustee; here it is paper trust and not an active duty (turns out that management of land wasn’t one of four active duties in NY law)

c. he who has the use of a legal estate has seisinii. Land seised during marriage- dower doesn’t attach to:

1. leasehold interest of husband 2. remainder interest husband has following life estate 3. personal property - (no seisin)- includes stocks4. equitable interest - (trustee has seisin)

iii. Land inheritable by issue- dower doesn’t attach to land in which husband had only a life estate nor to land the husband owned w/ another person as joint tenants

iv. Rights during husband’s life- dower attaches to land the moment husband is seised during marriage- once inchoate dower attaches, wife prevails over any subsequent purchasers of property and attaching creditors of husband

1. ex.- H, married to W, purchases fee simple in Blackacre, then conveys to BFP- BFP purchases land subject to W’s 1/3 life estate

2. release of dower - wife may release dower in order for purchaser to be free of it

3. Divorce - absolute divorce puts and end to marriage & to inchoate dower

v. Rights on husband’s death- dower gives wife right to possession for her life of 1/3 of each parcel of land subj. to dower- wife’s dower isn’t terminated upon remarriage

vi. Statutory abolition- dower only exists in Arkansas, D.C, Iowa, Kentucky, Michigan, Ohio, Virginia, West Virginia

1. states in which abolished - wife may choose b/t share prescribed by will or statutory share (usually ½ or 1/3, applies to both real and personal property (but only that which was owned by decedent at death; surviving spouse takes an interest in fee simple, not just life estate)

a. NOTE- NJ statute- abolishes interest of dower and right of dower BUT claims doesn’t affect interests or estates already vested

2. dower states - wife may elect b/t dower & statutory share (benefit in choosing dower- passes free from claims of decedent’s creditors)

a. ex.- H dies survived by W & owning blackacre, stocks, & cash- H also owned whiteacre during marriage but gave to D- under dower, W gets 1/3 life estate in

43

Benefits of Dower

blackacre & whiteacre; under statutory share, W gets 1/3 share of blackacre, stocks, and cash

c. Uniform Probate Code- abolishes dower & curtsey and expands statutory share by not allowing you to get around stat. w/ sham transfers

i. Augment estate- provides to surviving spouse right to elect take a sliding scale percentage (depending on length of marriage) of property held by first spouse to die at death and assets subj. to inter vivos transactions (e.g. property held in revocable trust, property held in joint tenancy)- this allows spouse to benefit from lands which other spouse had effective control over

ii. NOTE- for most part, surviving spouse can’t take both elective share and what is allotted under decedent’s will

2. Community Property a. Where- eight states have community property- (Arizona, California, Idaho,

Louisiana, Nevada, New Mexico, Texas, & Washington)b. Basic Theory- husband and wife are a marital partnership, both contribute to

material success, both should share equally in marital acquisitions and community property is owned in equal undivided shares by the spouses

c. What is community property- consists of earnings of either spouse during marriage & property acquired through earnings

i. Separate property- property owned before marriage or acquired after marriage by gift, descent, or devise

ii. Income from community property- all income & proceeds of sale of property are community property- one spouse CAN NOT, w/out other’s consent, change community property into separate property

1. ex.- H earns $1,000 at work but then goes and buys Disney stock in his name- stock is still community property

iii. Income from separate property- Idaho, Louisiana, & Tx. Income from separate property is community property- where characterization of property is doubtful- strong presumption in favor of community property

1. ex.- W inherits farm- considered seperate property in most states; principle of tracing - can sell farm and profits remain seperate profit; if use profits to buy stocks & later gain dividends from stock- still considered separate property in most states

2. BUT - What if wife operated the farm and received profits from wheat?

a. in states where profit from sep. property remains sep. property-SP

b. BUT in other states where CP is found where have efforts of the community to earn CP- then profits are CP

iv. Salary received during marriage for services rendered before the marriage

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1. Earning capacity at this time belonged solely to that person- Question is the CP on a cost or accrual system?

2. Question- did the efforts or community earn the income? - NO so CP follow the accrual system and this income is not CP

d. Commingling of Community & Separate Property- if commingled so as to be impossible to identify separately- treated as community property

e. Conveyance of Share- neither spouse acting alone can convey his or her share of community property, except to other spouse- BUT, by agreement of parties, community property may be converted into separate property of either spouse & separate property may be converted into community property

f. Management of Community Property- either husband or wife acting alone can manage community property- can sell it, lease it, invest it, etc.

i. Real property- usually land held as community property can’t be sold except w/ consent of both husband and wife

1. Homestead exemption - property interest (usually in the couple’s home) that can’t be: defeated by the conveyance by 1 spouse w/out other’s consent AND acts as shield against creditors

2. Limited shield a. Doesn’t provide protection from creditors who loaned

money for purchase or improvement of homesteadb. Homestead is also limited to a stated value (by statute)-

if exceeds, other creditors can reachg. Rights at Dissolution of Marriage- when marriage dissolved- community

property usually divided equallyh. Death- when spouse dies- decedent has right to transfer his or her ½ share by

will to anyonei. Ex.- H purchases stock- when dies, W gets ½ share- transition was a

taxable succession b/c wife’s interest in ½ of property doesn’t fully become complete until death of husband- In Re Kessler’s Estate

i. Conflicts of Laws Rule- property acquires its character at time of procurementi. Personal property- classified in accordance w/ law of couple’s

domicile at time of acquisitionii. Real Estate- always classified in accordance w/ laws of state where it

is situated iii. NOTE- State legis. tried to pass statute in Calif. making it CP- SC of

Calif. said unconst. to take away property1. Now made quasi-CP for when spouse dies- see note on p. 2712. BUT- Nothing unconsti. About law that takes sep. property

from 1 spouse and gives it to another- think dower and statutory share

j. Uniform Marital Property Act- provides that all property acquired during marriage other than by gift or inheritance is marital property- Wisconsin was first state to adopt

3. Alt. Marriages a. W earns salary earns money during marriage BUT she was already married

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i. If there’s no marriage- there’s no CP (just like tenancy in the entirety)ii. BUT states recognize a putative marriage- person who reasonable

believes himself to be married, is treated as if married for CP purposesb. What if act like there’s a marriage but never in fact a ceremony?

i. No putative marriage b/c good faith req.- No CPc. What if same-sex marriages

i. No CPii. Vermont?- have to look and see if CP among those rights that these

unions are entitled tod. alt. set of theories of how obligations of support or prop. share outside of

marriagei. Express K- if 2 people made K for division of people b/t them- should

enforce it- maybe some limitations on it for public policy reasons (mereiticious Ks voided- based on sex services)

ii. Implied K- can have theseiii. Quasi-K- unjust enrichment- unjust to allow one party to benefit from

the exertions from the other (Miller at home putting me through law school)

iv. Constructive trust- unjust enrichment except in equity

THE SALE OF LAND 1. Contracts of sale

a. Broker’s Role- seller signs K w/ the broker, giving broker right to list & show the property to prospective buyers and, if the property sells, to collect a commission out of the purchase price

i. When commission earned1. traditional rule - broker entitled to commission if she produces a

customer ready, able, & willing to buy upon the terms and for the price set by the seller in the brokerage K

2. modern rule - broker earns commission only when buyer completes the transaction by paying the purchase price

a. BUT if the sale falls through b/c of the seller’s fault- seller may be liable to the broker

b. Written K Required- Statute of Frauds requires that the K for the sale of land be in writing, signed by the party to be charged thereby- both buyer AND seller must sign the K of sale

i. Kind of writing- can be a formal K, informal memo, or even several documents taken together to be a K

1. Negotiations - binding K doesn’t come into existence until formal K is executed

ii. reasons for- prevents fraud, cautionary value (solemnity) 1. cost of all this - might be frustration of intention2. doctrine of part perf .-sometimes if party partly performs K-

might be held as substitute for requirements of Statute of Frauds- buyer must take certain actions for application- 1) pay

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all or part of the purchase price; and 2) enter into possession; and 3) make improvements.

iii. Essential terms1. identification of the parties;2. description of the property; and3. terms and conditions (such as price & manner of payment if

agreed upon)c. Installment K- small down payment by purchaser, who borrows the balance

of the purchase price from a lender or the seller. In default- lender or seller receives the property

i. Advantages1. Buyer - avoid high interest rates, closing & mortgage lending

fees2. Seller - sells his property quickly for higher price than might

otherwise be able to charge; isn’t taxed for purchase price in 1 tax year

ii. Typical K1. Possession - transferred to buyer as soon agreement signed2. Taxes and Assessments - Buyer pays all taxes & assessments

from date of K3. Deed, Title - transferred by Seller when payments completed

a. NOTE- Luette v. Bank of Italy Nat’l Tr. & Savings Ass’n- vendor doesn’t need to have title until purchaser has fully performed K

4. Default by Buyer - if Buyer 30 days late, any monies paid to Seller is forfeited as liquidated damages & K terminated; Buyer then has no rights to possession and expressly waives any right to title b/c of possession (can’t later claim adverse possession?)

5. Legal Expenses - Buyer pays atty. fees if Seller has to sue to collect payment

6. Seller’s Option - Seller can decide to deliver deed to Buyer who will then provide promissory note for remaining payments; note financed by mortgage on the property

7. Risk of loss - Buyer bears risk of loss property during executory period

iii. Ameliorating the harshness- some states have enacted statutes to soften the legal effects of a default by the buyer

1. Foreclosure safeguard - when a buyer has paid a substantial portion of the loan, he has the rights of a mortgagor

2. Equitable right of redemption - buyer can prevent forfeiture by obtaining financing from another lender

3. Reinstatement - buyer pays the amt. of his default & continues the K as if the breach never occurred

4. Restitution - buyer recovers payments in excess of damages incurred by the lender as a result of the default

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BUYER BEARS THE RISK OF LOSS

d. Marketable Titlei. Implied in K- unless there is a provision in the K of sale to the

contrary, it is implied that the seller must furnish the buyer w/ good & marketable title at closing

ii. Marketable title defined- title reasonably free from doubt, one which a prudent purchaser would accept- although perfect title is NOT required, title must be such that there is no reasonable probability that the buyer will be subjected to a lawsuit

1. NOTE - this doesn’t include adverse possession2. Record - buyer might also have to put in provision promise to

convey a marketable record title- title that is recordede. Remedies for Breach of K- if one party breaches the K, the remedies of the

other party are recission, specific perf., and damagesi. Remedies of Buyer

1. specific perf. - land considered unique, money damages may be inadq.; equitable s available to seller

2. damages- benefit of the bargain- buyer seeking damages is entitled to the difference b/t the K price & the market value of the land on the date perf. is due

ii. Remedies of Seller- under installment K- foreclosuref. Doctrine of Equitable Conversions - may be invoked to solve problems

resulting from conveyancing- doctrine invented to treat buyer as having title for certain purposes prior to the date set for closing

i. Statement of Doctrine- based on idea that since either party can demand specific perf., equity regards as done that which ought to be done- buyer has equitable title to the land after K signed, seller has legal title in land in form of action for payment of the purchase price

ii. Consequences of doctrine1. hyp.- O Ks to sell to A and O then marries & dies

a. O’s wife doesn’t have dower in land-at time of marriage, O had right of action for price, not a legal estate- seller’s later acquired wife denied of dower!!

b. A’s wife doesn’t have doweri. Equitable conversion makes it the purchasor’s

land eventhough legal title has not passedii. Not traditionally dower in equitable estates-

wife doesn’t have dower unless husband is legally seized

2. hyp.- O Ks to sell to A then O mortgages (or even conveys) to B

a. A has equitable title w/ promise to get legal title in future- O won’t be able to fulfill (anticipatory breach?)

b. Obligation is to convey title some time in futurei. Not clear that mortgage/conveyance presents

this transfer

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If K, but no deed, then it’s not a conveyance, and buyer only has action for price, not the title...Buyer has an equitable interest, for which there’s no dower/curtesy, b/c there’s no seisen.

c. A can’t stop payments on the installment- Calif. rule- still have to keep paying on expectation that O might still be able to perform on date specified (Luette)

3. hyp.- O Ks to sell to A then A cuts timber the landa. A as buyer has equitable title and right to possession-

right to exploit the landb. If installment K- A’s case is stronger b/c has

possession- in reg. sale, right to possession doesn’t transfer until title is transferred

4. hyp.- O Ks to sell to A then O cuts timber the landa. Installment K- O would be violating A’s exclusive right

to immediate possessionb. Reg. K- O had Ked to transfer those trees & you would

be breaching K by cutting the trees2. Mortgages

a. Terminologyi. Mortgage- document giving lender the right to claim real property if a

borrower defaults on a loanii. Mortgagor- borrower who gives the mortgage

iii. Mortgagee- lender who receives the mortgageb. Theory of Mortgage

i. 2 strands1. Title theory states - states which treated legal title as being in

the mortgagee title state 2. lien theory states - states which declared that legal title

remained in the mortgagor & mortgagee merely had a lien on the property to secure the debt lien state .

ii. Dower- if property is mortgaged: title & lien states treat same- mortgagor’s wife has dower & land can’t be attached

c. Foreclosure- takes place through a judicial sale (auction of property- sell prop. to highest bidder & collect the price)

i. Recovery by single mortgagee1. Creditor - first claim on price b/c of mortgage- pay of the

remaining purchase of debt- get amt. entitled to2. Surplus - surplus goes to mortgagor3. not enough money to pay off existing debt - Ct. will likely enter

a deficiency judgment against the debtor- K remedy for repayment of the borrowed money

ii. Recovery by multiple mortgagees- O to M & O to M(2)1. money from sale : first distributed to M1 & if surplus, then to

M23. The Deed

a. Formalitiesi. Signature of grantor only- writing must be signed by the party to be

bound- the grantor; neither necessary nor customary that the grantee sign the deed

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Title StateLien State

If seller has a mortgage and it’s foreclosed, buyer loses b/c all O had was an equity of redemption, and buyer’s interest disappeared when the equity was foreclosed…buyer could have damages though…MAYBE

ii. Consideration- consideration is NOT necessary to transfer land; a person can give land away; neither necessary not customary to recite the true consideration, if any in, deed; likely will recite that the deed is given “for one dollar and other good and valuable consideration”

b. Warranties of Titlei. Covenants of Title- extent of seller’s liabilities for some defect in title

is governed by covenants contained in deed- no covenants of title are implied in the deeed

ii. Types of Deeds1. general warranty deed - normally contains all 6 “usual”

covenants found below- it warrants title against defects arising before as well as during time grantor had title

a. ìconveys and warrantsî2. special warranty deed - also normally contains 6 usual

covenants BUT warranties cover only defects arising during the grantor’s tenure and not defects arising prior to that time- grantor guarantees only that he has done nothing to make title defective

a. ìbargains, sells, and conveysî3. quitclaim deed - warrants nothing; grantor merely transfers

whatever right, title, or interest he has, if any; useful in clearing an apparent defect in tile

a. conveys and quitclaimsîiii. Covenants for title in warranty deeds

1. covenants of seisin - grantor covenants that he owns the estate or interest he purports to convey

2. covenant of right to convey - grantor covenants that he has the pwr. to make the conveyance, conveyance is satisfied if the grantor has title and is under no disability, or if he is acting as trustee or agent for the owner

3. covenant against encumberances - grantor covenants that there are no easements, covenants, mortgages, liens, or other encumberances on the property

4. covenant of quiet enjoyment - grantor covenants that the grantee will not be disturbed in possession or enjoyment of the property by a 3rd party’s lawful assertion of superior title

5. covenant of warranty - grantor covenants that he will defend on behalf of grantee any lawful claims existing at date of conveyance, and will compensate the grantee for any loss sustained by the assertion of superior title- this covenant & covenant to enjoyment amt. to same thing

6. covenant of further assurances - grantor covenants to perform whatever acts are reasonably necessary to perfect the purchaser’s title, if it turns out to be imperfect- not used much in U.S. & is often omitted

iv. Breaches of covenants

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1. covenants of seisin, of right to convey, & against encumberances

a. present covenants- guaranteed at the time of the conveyance itself , as of that time which means that it’s broken if at all at the time of the transfer if in fact seller doesn’t have title, etc. or any of these are broken.

b. Doesn’t run w/ the land- present covenants cannot be enforced against the covenantor by a transferee of the covenatee- only immediate grantee may enforce present covenants

2. covenants of quiet enjoyment, warranty, and further assurances a. future covenants- covenants is not breached until the

grantee is actually or constructively evicted in the futureb. run w/ the land- covenant attaches to the fee simple

estate & runs w/ it to subsequent granteesc. Delivery- requires words or conduct of the grantor that shows an intent to

make the deed operative and pass the interest to the grantee; usual method of delivery is handing over the deed from the grantor to the grantee, but handing over a deed w/out concurrent intent isn’t an effective delivery- manual transfer not necessary; crucial issue is intent

i. Conditional delivery- provision indicates deed becomes final upon the happening of some future event

1. can be interpreted in two ways a. provision may mean that there is no delivery and the

deed isn’t effective at all until the condition happens; OR

b. provision may mean that grantor intends the deed to be legally effective now, but passing only an interest that is subj. to a condition precedent

2. 2 types of conditional delivery deeds a. Commercial escrow- title will pass when money

received by escroweei. No risk of invalidation under statute of wills

(gift upon some condition other than death aren’t testamentary)

ii. arrangements are irrevocable (presumed intention of the parties)

iii. absconding escrowee- if grantee pays money & escrowee runs off w/ cash before grantor conveys deed, grantor bears loss- Lechner v Halling

b. Family Will substitute- give to deed to person & say give when I die

i. Handing deed over is ambiguous- need extrisinic evid. of intent

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INTENT is KEY to DELIVERY

Choosing btw interpretations of conditional delivery deeds?

ii. PROBLEM- conveyance looks too much like a will- if this is a testamentary gift that is revocable until death, must conform to statute of wills or be void

iii. How do you save them?- make clear making a springing interest (present irrevocable grant of a future interest) (O to A on O’s death- Gruen) (otherwise risk revocation under the statute of wills); make gift in a will

3. To the grantee- Can’t make a conditional delivery of a deed to the grantee- have to use a middleman

a. Cts.- if deliver a deed to a grantee- has to be unconditional- cts. worried about fraud

RECORDING ACTS 1. Recording System

a. History- 1st introduced in the Mass. Bay Colony- means by which titled to parcel of land determined, record as public document in the county where it’s located, anyone can search through record to determine state of title; also establishes priorities among conflicting claims to land and promotes certainty of titles

2. Indexing a. 3 types of indexing systems

i. Grantor & grantee indexes- separate index volumes maintained for grantors & grantees, enable a title searcher to locate an instrument by searching under either the grantor’s name or the grantee’s name

ii. Tract index- entries are made under block & lot number, greatly simplifies title search

3. Types of Recording Acts a. Race statutes- earliest statutes- under the statute, as b/t successive grantees to

the same land, priority is determined solely by who records first- notice is irrelevant

i. Rationale- determining who has actual notice depends upon extrinsic evid., which may be unreliable- only Delaware, N.C., and Louis. have today since deemed inequitable for a person w/ notice of a prior claim to prevail

b. Notice statutes- under statute, a subsequent BFP prevails over a grantee who fails to record IF the BFP has no actual or constructive notice of prior claim at the time of the conveyance (1/2 the states- Colo. & Iowa)

i. Ex.- “a conveyance of an estate in land shall not be valid against any subsequent purchaser for value, w/out notice thereof, unless the conveyance is recorded”

ii. Irrevelant WHO RECORDS FIRST.

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c. Race-notice statutes- under statute, subsequent BFP prevails over prior grantee ONLY if he is 1) w/out notice; AND 2) wins the race to record – (1/2 the states- Washington)

i. Ex.- “a conveyance of an estate in land shall not be valid against any BFP w/out notice thereof, whose conveyance is first recorded”

d. Example - O to A (unrecorded); O to B (unrecorded)- then A recordsi. Notice statute

1. A’s deed was void when B purchased title2. Since A failed to give B warning- B retains title

ii. Race-notice statute1. A was already the owner before recording, B didn’t record 2. A merely records to protect against subsequent purchasers

iii. Race statute- A’s deed not invalid against B’s deed since recorded4. What recordation does not do

a. Validate invalid deed- recordation only raises a rebuttable presumption that the instrument has been delivered & that it is authentic

i. Forgery- O to A (recorded BUT deed is forged); A to B (BFP who records)

1. Nothing O could’ve done to prevent or did to further the fraud, it was A who did the forging….

2. notice statute- doesn’t protect against forged deeda. Invalidates unrecorded deeds against BFPb. Doesn’t validate invalid recorded deeds

3. property remains in Oii. Undelivered- O to A (but not delivered); A to BFP (recorded)

1. Undelivered deed is same as fraudulent deed2. Purpose of recording statute is not to validate deeds which are

voidiii. Fraud- O to A (recorded but obtained by fraud); A to B (BFP &

recorded)1. Actions O can take unable to do w/ forged deed

a. O likely discovers fraud (more likely to be able to do than forgery)

b. O could sue to quiet title and void deedc. Plus this goes back to estoppel wagon—O clothed A

with title. 2. Deed that is obtained by fraud is voidable BUT NOT VOID-

privilege on victim to get void deed- but not automatically voided

a. Assuming O can discover the fraud- would expect the recording acts to protect the BFP since O could have done something

b. Race statute- doesn’t make valid an invalid deedi. BUT O probably still should be required to go

take judgment and record into record just in case

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Recording and FRAUD

b. Protect against interests arising by operation of law- Recordation doesn’t protect a subsequent purchaser against prior interests that arisen by operation of law (e.g., dower rights, prescriptive & implied easements, title by adverse possession, wills, inheritances)- statutes only apply to unrecorded conveyances

i. Adverse Possessor- O to BFP; A is adverse possessor; Even though A’s interest has never been recorded and a look at the premises would reveal nothing of A’s claim, A prevails against BFP

1. recording statutes- don’t invalidate the unrecorded title obtained by adverse possession

a. Only thing that is invalidated is “instrument affecting real estate”

b. No instrument by which title was obtained by adverse possession- obtained by possession

2. BUT- O owns, A is adverse possessor, 10 years into adverse possessor O to A (unrecorded), then O conveys to B (BFP records)

a. NOW A has obtained title through an instrument affecting real estate

b. Recording statute kicks in- can’t say A obtains over B; deed from O to A is voided by statute

ii. Dower interest- O to A (records) – turns out O is married and wife is entitled to dowry- nothing in record to indicate that O’s wife retains a dower interest

1. Not recorded- so no reasonable way A could have obtained info.

2. Wife’s interest, though not recorded, is not invalidated unless wife relinquished it

3. Dowry arises out of operation of law NOT by conveyance so isn’t transferred by paper- not an interest that has to be recorded

5. Who is protected by recording acts a. General- only BFP is entitled to protection under notice & race-notice. To

attain BFP status, person must satisfy 3 requirements: 1) person must be a purchaser (or mortgagee, or creditor if statute allows); 2) who takes w/out notice (including actual, record, or inquiry notice) of the prior instrument, and 3) gives a valuable consideration

i. Ex.- O to A (unrecorded); O to B (unrecorded); (A records); A sells to C (record)

1. Notice statutea. B had title at least up until A conveyed to C b. C is sub. purchaser, though, who records & B’s

instrument is of no use since not recordedc. C gets title from A even though A doesn’t have title,

A’s title is only void against subsequent purchasers;

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whole point of statute is to be able to get title from someone who doesn’t have it

2. race-notice statute- C wins- subsequent purchaser, won notice race, and C got conveyance from A who had the legit. title (not B)

3. race statute- C wins- A had recorded first so even if B recorded before C recorded, C gets title from A whose title is the only one legit. & since he records, his title is protected from subs. BFPs

ii. Ex.- O to A (unrecorded); O to B (notice & records); O to C (w/out notice of A & records)

1. Notice statutea. A is invalid against C since A didn’t record & invalid

against sub. BFP in good faithb. B is invalid against A since B had notice of A’s deedc. C’s is invalid against B since B’s is recorded (statute

invalidates only unrecorded deeds!!)d. Don’t know who gets its

2. Problema. B & C both think they are getting 2nd mortgagesb. B should put into deed- “2nd mortgage subord. to A”-

when C goes to search title, won’t find mortgage to A but will find reference to it in B’s mortgage

b. Purchasersi. Donees- generally, donees do not come w/in the protection of

recording system b/c they don’t give value1. Ex.- O to A (unrecorded); O to B (recorded but it is a gift)

a. statutes- usually require to be a sub. purchaser for valuable consideration

i. Donees aren’t usually considered purchaserb. B not prejudiced by undoing of the deed- just loses a

freebie, a windfallc. If gave property to B, A is deprived of land AND

consideration A had given to O for the propertyii. Creditor- recording acts vary considerably in protection afforded

creditors1. Mortgagee- O to A (unrecorded); O to B (recorded,

mortgage)- statute only protects sub. purchasers- Is a mortgagee a purchaser?

a. If B gets mortgage for antecedent debt- Not a purchaser since if take away mortgage still have some cause of action for antecedent debt, what you had before (similar to donee)

b. BUT could argue that B is worse off b/c could have sued debtor at time took mortgage, forewent that opportunity to collect on that debt in reliance on that

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mortgage on the property, in meantime O has gone bankrupt & has disappeared

c. NOT clear that mortagee should be not be considered worse off- some courts hold that mortgagee who accepts mortgage for antecedent debt is a purchaser for purposes of the recording statute

iii. BFP Filter Rule- (some states)- BFP that was subj. to a prior outstanding unrecorded interest may pass title free of the unrecorded interest to a subsequent purchaser who otherwise wouldn’t qualify as a BFP under the recording act (say X w/ notice) (Chergosky v. Crosstown Bell, Inc.)

1. Ex.- O to A (unrecorded); O to B (has notice & records); B conveys to C (BFP & records); C conveys to D (notice of A’s unrecorded deed)

a. C is the rightful owner before conveyanceb. A’s deed was no good against C (since C was BFP)

BUT if C goes on & conveys to D (not a BFP), A’s deed is not invalid to D (at least according to plain lang. of statute)

c. BUT C owned the property!!! One of the rights that goes along w/ property ownership is the right to sell, C is owner and can do whatever she pleases

2. Exception to rule- can’t sell to prior owner who purchased w/ notice!

a. ex. - O to A (unrecorded); O to B (has notice & records); B conveys to C (BFP & records); C conveys to B (has notice)

c. Without notice- to be protected by a notice or race-notice statute, a subsequent purchaser must be w/out notice- this means that the purchaser has not actual, record, or inquiry notice of the prior claim at the time he paid consideration and received his interest in the land

i. Actual notice- if a subsequent grantee actually knows of the prior instrument, he has actual notice & isn’t a BFP

ii. Record notice- if an instrument is properly recorded, any subsequent purchaser has record notice & is therefore not a BFP- record notice is one form of “constructive notice”- notice that law imputes to the purchaser whether he actually knows or not

iii. Inquiry notice- another form of constructive notice- under certain circumstances, purchaser is required by law to make reasonable inquiries and is charged w/ notice of whatever the inquiry would reveal, even if he didn’t make one

1. Inspection- majority of courts charge the subsequent purchaser w/ knowledge of whatever an inspection of property would’ve disclosed

2. Inquiry from neighborhood- deeds out from a common grantor (subdivider) to buyers of other lots in a residential

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subdivision may contain express written restriction on land retained by common grantor & later sold to a subsequent purchaser w/out an restrictions- under doctrine of implied reciprocal negative easements, negative restriction on use may be imposed by implication on lot in a subdivision, where there’s uniform scheme for development of subdivision, even though deed to that lot may contain no restrictions- cts. hold that from looks of neighborhood, purchaser should reasonably conclude that a restriction on use of subj. lot might exist & is put on inquiry notice of contents of other deeds out of common grantor

a. Methonen v. Stone- Water well in one subdivision lot is being used as source of water for other lot owners- purchaser bound to continue to supply water from well to other owners even though easement not on deed

i. At the time the purchaser acquired the property, he was aware of the well and the water pipes running from the well to the adjoining lots. B/c he knew of these pipes, he should have made inquiries.

ii. you have a duty to inquire even before you see the pipes. You are held to have notice of everything an inspection might reveal, whether you know of the possession (or existence of the pipes) or not. Regardless of whether or not you have information that would put you on notice, you are held to know of info an inquiry would have revealed

iv. ex.- O A in fee simple unrecorded, O B recorded. A is on the land, under a recorded lease. Does B have constructive notice of the unrecorded deed in FS?

1. B misled - B shouldn’t be on notice of A’s FS deed, bc there is nothing fishy about seeing A on the land, since A has a recorded lease.

2. NY decision- 48 unit apt complex - 48 recorded valid leases- ct held purchaser should have inquired if any of the leaseholders had a FS. Inquire notice means that you should inquire of the possessor of ALL the reasons the possessor is there.

3. Purchaser is held to know what a reasonable inquiry would reveal? . . if the owner is not in possession, and attempts were made to find out the identity of the owner from the neighbors, and purchaser still couldn’t figure out . . then purchaser is held to what was reasonable that he should know.

d. Valuable consideration- to be protected under the recording acts, purchaser must give valuable consideration

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i. Antecedent debts- person who receives a deed or mortgage as security for a preexisting debt is usually found not to have given valuable consideration at the time instrument executed- person is usually considered not to have been a BFP (but note argument that individual is protected- made above)

6. The vicious circle a. Mortgages- (ea. For $5000)- O to A (unrecorded); O to B (has notice &

records); O to C (BFP & records) – Assume we’re in notice stateb. The vicious circle

i. A prevails over B b/c B had noticeii. B prevails over C b/c B recorded

iii. C prevails over A since A’s deed was unrecordedc. Imagine judicial foreclosure sale- property sold for $10,000- who gets what

proportion of the cash?i. Options

1. Case for C - C didn’t do anything wrong (didn’t have notice & recorded)

a. If give C $5000 – get what she expected she was getting- C knew that she was taking on a 2nd mortgage

2. Sins of the others a. A didn’t recordb. B should’ve noted on record that he was taking out a 2nd

mortgagec. seems like A caused the whole problem BUT by statute

A prevails over B3. can depart from lang. - ask who deserves more than the others-

get C a. now left w/ A & B & $5,000- who gets it?b. Could give it to A since by statute A prevails over B;

and say that B only expected to get 2nd $5000 (knew he was a 2nd mortgagee), since there’s no 2nd $5000 (went to C) so not disappointing his expectations when give to A

7. Requirements for Recordation a. What can be recorded- practically every kind of deed, mortgage, K to convey,

other instrument affecting an interest in land can be recordedi. Mortgages- O to A (unrecorded mortgage); O to B (fee simple

recorded)1. Recording statute requiring recording of “instrument affecting

real estate”a. Mortgage is “instrument affecting real estate”b. Mortgage is voided by subsequent BFP

2. Recording statutes requiring recording of “conveyances”a. Title theory - some states treated mortgage as a

conveyance in fee simple upon condition subsequentb. Lien theory- in other states, mortgage is treated as a lien

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i. Cts- often construe conveyance broadly enough to req. recording of mortgages

b. What constitutes recordationi. Failure to index- Occasionally clerk in recorder’s office fails to index

instrument properly- cases are split on whether the grantee of such instrument is protected against a subsequent BFP

1. Minority view- protect the grantee- by delivering the deed for recordation, grantee has done all she could reasonably be expected to- Frank v. Storer (FL) (grantee protected here even if knew clerk had failed to record!)

2. Majority view- protect the BFP- only a properly indexed in instrument imparts sufficient constructive notice to sub. BFP- grantee seems to be better risk bearer- can make sure that instrument gets recorded (Federal National Mortgage Assn. v. Levine Rodriquez)

8. Chain of Title Problems a. Problem- even though instrument has actually been recorded & indexed in the

recording office, the instrument might not be recorded in such a way as to give notice to subsequent purchasers- deed may not be in the “chain of title”- to give notice to subsequent purchasers deed must be in the “chain”

b. Chain of title defined- includes, and is co-extensive w/, those documents of which the purchaser has constructive notice- purchaser is charged w/ notice of those conveyances by the property of her grantor recorded after the grantor acquired the property from his predecessor in title and recorded before a deed is recorded conveying title from that grantor to another

i. Wild deeds- recorded deed to the property which isn’t recorded w/in the chain of title

c. Grantor not connected to chain of title- if a deed entered on the records has a grantor unconnected to the chain of title, such a deed isn’t recorded w/in the chain & doesn’t give constructive notice

i. Ex.- O to A (unrecorded); A to B (recorded); O to C (BFP & records) (Zimmer v. Sundell- Wisc.)

1. C unable to find B’s recorded deed since doesn’t attach to Oa. Looks at grantee index- make sure O got title in the 1st

placeb. Look up O in the grantor index- won’t find any deed

from O to anyone since A’s deed not recordedc. Purpose of recording statute completely frustrated

2. B should’ve originally verified whether there was deed from O to A- when doesn’t find one, force A to record his deed- B’s fault when later doesn’t force A to record his deed- B in a better position to prevent the harm to BFP than C is to find this deed

3. Statute protects C- if B doesn’t check to see that grantor has recorded- she doesn’t benefit from the rules

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a. Additional inducement for BFP to record not only his own deed BUT also to record the deed of his grantor- protect future BFPs

b. B’s deed considered recorded outside the chain of title- if that chain is not recorded as to a subsequent BFP, that owner does not take advantage of the recording statute

c. Statute- have to record it to take advantage of statute AND record means record in chain of title (make sure that grantor’s deed is recorded)

d. Deeds recorded before grantor obtained title – estoppel by deed- must a purchaser under the name of a grantor prior to the date title came into the grantor to see if the grant gave an earlier deed to the property to which the doctrine of estoppel by deed applies?

i. Estoppel by deed- if grantor who doesn’t have title later acquires it, title passes by operation of law immediately to the grantee

1. ex.- A to B (B records but A doesn’t own); O to A (A records)a. A sold deed to B while representing she was ownerb. B detrimentally relied on A’s representationsc. As soon as deed passes from O to A- automatically

transfers to Bii. Subsequent BFP- A to B (B records but A doesn’t own); O to A (A

records); A conveys to C (records and is BFP)- who prevails, C or B?1. Maj. – limited search required - most courts hold that C prevails

over B on theory that a deed from A to B recorded prior to the time title came to A, is not in the chain of title

a. Rationale- would put an excessive burden on the title searcher to req. search of the index under each grantor’s name prior to the date grantor acquired title

2. Min.- extended search required - minority protects B over Ca. Rationale- under doct. Title passed immediately to B, A

had nothing left to transfer to C, B’s deed was also recorded as required by race statutes

e. Deed Recorded Late- Must a purchaser search the index under the name of a grantor after the recordation of a deed by that grantor transferring title- does a deed recorded after the grantor is shown by the record to have parted w/ title give constructive notice?

i. Ex.- O to A (unrecorded); O to B (notice & records); A records; B to C (no notice & records)- DOES C HAVE CONSTRUCTIVE NOTICE?

ii. Limited Search required- in most states, C prevails over A1. Rationale - if A prevails, title searcher would have to look in the

indexes under the name of each grantor in the chain of title to the present date (not just to the date of the 1st recorded deed from each grantor) to see if there was a deed executed before the 1st recorded deed BUT recorded later- too great a burden

iii. Extended Search required- min. of states (NY & Calif.), A’s deed gives notice to sub. purchasers, although recorded after B’s deed- title

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searcher must search to the present date under the name of each person who ever owned the property in to pick up deeds recorded late

f. Defective Documents- will not serve as noticei. Ex.- O to JS (records); JS them marries DT & becomes JT; JT to A

(records); JT divorces DT resumes name JS and conveys to B (records)

1. B goes to the grantee section- look for deed to JS- find a deed from O to JS and goes to the grantor section- can’t find a JS (because she was JT)

2. PROBLEM is w/ A – probably made inquiries when doing title search b/c couldn’t find a JT- once JT told her she was JS at the time of the orig. conveyance, A should’ve insisted that JT either convey to her as JS or put a note on deed to cross reference to orig. conveyance to JS

3. Makes more sense to give to B who did nothing wrong- construe recording statute to not only requiring indexing BUT also indexing in way that can be found….

9. Torrens Title Registration System - basic idea is to register title to land, instead of merely recording evidence of title- the system:

a. judicial proceeding to figure out who owns the land. b. Once ct determines who the owner is, it makes a certificate representing it,

and the certificate is recorded, and the owner gets copy (in US, gvmt only records, but does not deal with the validity of what is recorded).

c. Land can’t be sold except by going to ct with the certificate, and getting new certificate from ct.

EASEMENTS & COVENANTS

Easements

1. Introductiona. Definition- easement is a grant of an interest in land that entitles a person to

use land possessed by anotherb. Types of easements

i. Affirmative- owner of an affirmative easement has the right to go onto the land of another (the servient land) & do some act on the land

ii. Negative- owner of negative easement can prevent the owner of the servient land from doing some act on the servient land

1. English law - only recognized 4 types- easements for light, air, subjacent or lateral support (not dig to undermine holder’s house), or the flow of an artificial stream (not interfere w/ aqueduct bringing water to holder’s home)

2. Compare- affirmative act by servient owner - if owner of servient land agrees to perform an affirmative act on the servient land- this is a covenant & not an easement

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Profit: right to enters another’s land and remove something from it (minerals, water, food); when granted, easement is implied.

1. type of easement

2. scope of EAS

3. whether it’s been terminated

Married name and recording problems

c. Easements appurtenant or in grossi. Easement appurtenant- if an easement benefits its owner in the use

of another tract of land, it is appurtenant to that land- the land benefited is called the dominant tenement; the land burdened is the servient tenement- the servient tenement usually is, but doesn’t have to be, adjacent to the dominant tenement

1. passes w/ the dominant tenement - attaches to the dominant tenement & passes w/ it to any sub. owner- can’t be separated from the dominant tenement & turned into an easement in gross, unless the owners of the dominant & servient tenements make a new agreement

2. negative easement - always appurtenant to the land- easement protects the holder in his enjoyment of his land

3. easement appurtenat favored - if an instrument creating an easement is ambiguous, cts. generally construe it as creating an easement appurtenant rather than in gross

ii. Easement in gross- if an easement doesn’t benefit its owner in the use & enjoyment of his land, but merely gives him the right to use the servient land, the easement is in gross- easement may be assigned or may be personal to the holder

1. determining if personal - look to scope of easement- was it intended to benefit grantee to cross property OR was it intended to run to successor for expanded use

d. Interest in land- easement is an interest land, burden passes to subsequent owners of the servient estate- owner of an easement doesn’t merely have K rights against the orig. grantor, BUT also rights against successors

e. Profit (profit a pendre)- right to enter another’s land to remove its products, such as minerals or crops- when profit is granted, easement to go on land is implied

f. License compared- license is permission to go upon land belonging to licensor- license is revocable at the will of the licensor

i. Ex.- grantor thought creating license BUT when writing gives one “exclusive right” to maintain a sign on another’s prop. for term of yrs.- easement in gross arises & specific perf. granted after attempt to revoke- Baseball Publishing Co. v. Bruton

ii. Ex.- grantor told O that right to pool would run w/ the land and make land more valuable, later bars subsequent owner from using pool; license was created (Bunn v. Offut):

1. Right to use was conveyed by K- Provisions of a K are merged in a deed- superseded by deed which wipes out all provisions to K

2. HAVE TO INCLUDE RIGHT TO POOL IN DEED- only rights to property are acquired through the deed- Deed was silent as to the right to use of pool- wipes out anything in K

iii. Irrevocable licenses- estoppel- license may become irrevocable (become an easement) if licensee has constructed substantial

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LICENSE: only thing that can be oral.

DIVIDING appurtenant EAS: Subdividing Dominant Estate: EAS appurtenant said to benefit every part of the dominant estate, so goes w/ each parcel, BUT burden can’t be greater than what was foreseeable when EAS was created. Have to decide that on case by case; smaller # of division, more likely to continue.

improvements on either the licensor’s land or the licensee’s land, relying on the license & the licensor’s silence- may states hold that the licensor is estopped from revoking the license since it would be unfair to the licensee to permit revocation after he spends money in reliance- Holbrook v. Taylor (Ky.)

2. Creation of Easementsa. Creation by express grant

i. Statute of Frauds - unless one of the exceptions to the statute applies, creation of an easement requires a written instrument signed by the grantor- if the grantor doesn’t sign the instrument but orally gives the grantee permission to enter the land, grantee has a license to use the land

b. Creation by reservation- easement may be reserved by the grantor over the land granted- if the grantor conveys land, reserving an easement, land conveyed is the servient tenement

i. Reservation in favor of a 3rd party1. CL - easement couldn’t be reserved in favor of a 3rd party-

reason for this prohibition lay in feudal notions of conveyancing & in theory that the grantee regranted to the grantor the easement (Estate of Thompson v. Wade- NY)

a. Soln.- draft around- rule can be circumvented by putting 3rd party in position of grantor & using 2 pieces of party

b. Ex.- M to P reserving a parking easement for a church on the corner (4 ways to get around NY law)

i. give easement to church for parking (can be in gross or appurtenant); give a fee simple subj. to the easement to P

ii. M to P on condition that P deposit in escrow a deed for an easement to the church

iii. M to P on condition precedent (give easement to church)

iv. M to church in fee simple- church conveys to P in fee simple while reserving easement

2. NOTE- covenants can be created to benefit a 3rd partyc. Creation by implication- easement by implication is created by operation of

law, not by a written instrument- operates as an exception to the Statute of Frauds- implied easements are limited to 2 kinds: 1) an intended easement based on an apparent use existing at the time the servient tenement is separated from the dominant tenenment, and 2) an easement by necessity

i. Easement implied from existing use - if, prior to the time a tract of land is divided into 2 lots, a use exists on the “servient part” that is reasonably necessary for the enjoyment of the “dominant part” and which the ct. finds the parties intended to continue after the tract is divided- easement may be implied

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Implied Easements: some state say you cant have reciprocal implied easements? Sanborn

BFP of servient must have notice

Dividing EAS in GROSSif EXCLUSIVE it’s subdividable; if non-exclusive, its divisibility depends on grantor’s intent (look to language of the instrument in which ease was created—some Cts say that the very fact that it’s non-exclusive suggests that the grantor didn’t intend for it to be divisible, and some say simply that non-exclusive eas in gross are non-divisible)

1. Factors to considera. Was land formerly in common ownership?b. Was use of one part of land made for the benefit of

another part up until time of the severance of ownership?

c. Is use of 1 part is both reasonably ascertainable and reasonably necessary for the enjoyment of the other part?

2. Implied only over land granted or reserved when tract divided- easement can be implied only over land granted or reserved when tract is divided into 2 or more parcels

a. Implied only in favor of dominant tenement- easement in gross will not be implied- easement by implication must benefit a dominant tenement created by a dividing tract into 2 more lots

3. Existing use at time of tract division- use of one part of the tract must exist from which it can be inferred that easement permitting its continuation was intended (sometimes called a quasi-easement)- it’s not a legal easement (O can’t have an easement in his own land) but it can arise when O divides the land for sale

a. Apparent- to have an implied easement, previous use must be apparent- it’s apparent if grantee could, by a reasonable inspection of the premises, discover the existence of the use (eg. a “beaten path”)- “apparent” doesn’t mean the same thing as “visible”; nonvisible use may be apparent, underground sewage pipes maybe apparent- surface connections would put reasonable person on notice- (Flax)

i. Rationale - alert buyer to existence of right over property when purchasing

b. Continuous- previous use must be continuous- req. based upon idea that activities should be such that there is a great probability that the use was known to the parties at the time of the grant, from which an intent can be inferred that the parties wanted the use to continue

4. Reasonable necessity- must be necessary for the enjoyment of the dominant tenement- necessity is an important circumstance in implying an easement b/c it probably affects intention of parties as to whether the existing use is to continue

5. ex.- (Flax v. Smith- Mass.)- 3 lots under common ownership, owner defaults on taxes & city seizes property (lot A), sewer lines go under lot B & C to lot A

a. Owner argues that wasn’t his intention to grant implied easement- therefore no easement

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Express EAS must be in writing, strictly construed, signed by burdened land- if not in writing, defense to S of Fr may apply (estoppel)

Implied EAS:1) common

ownership b/f severance

2) use apparent- vis. or reason. discoverable

3) continuous4) reasonably

necessary for enjoyment of dom. Est.

5) no implied EAS in gross

BEFORE land is conveyed, it’s quasi easement where owner of dom. and serv. estates holds both. Can’t be an easement b/c can’t have EAS on own land!

Implied reservation: in favor of conveyor and appurt to tract retained.

Implied grant- appurtenant to tract conveyed

b. Ct.- city didn’t intend to take property w/out easement- otherwise worthless

c. Sometimes it’s public policy (not an intention of grantor) that creates an implied easement

ii. Easement by necessity - easement by necessity is implied if owner of a tract divides the tract into 2 lots & by this division deprives one lot of access to a public road- easement by way over lot to road is implied- rests on ground that public policy requires a way of access to each separate parcel of land or on the ground that, since access is essential to use, the parties intended to create an easement but overlooked putting it in the deed

1. 3 separate elements for creationa. prior common ownership of the dominant & servient

estatesb. transfer of one of the estates by the common grantor,

creating the lack of accessc. necessity of the easement for making use of the

transferred estate2. Implied only over landlocking parcel- easement by necessity

is implied only when land is divided- necessity must exist when the tract is severed

3. Difficulty of access- existence of easement may depend on what forms of transportation are common and in use where property is- maybe if its out in the wilderness, everybody out already gets around by helicopter

a. Kingsley v. Gouldsbourough Land Improvement Co. (ME)- no easement where can access land by boat!

b. Today- unless its common to travel by boat in this area- likely have an implied easement for necessity

4. No existing use required- don’t req. an existing use at the time tract is divided into 2 lots

5. Location of easement- owner of servient parcel has right to locate the easement by necessity, provided the location is reasonably convenient

6. No implied easements by necessity in gross- whole idea of easement in necessity comes from necessity of access to appurtenant land

iii. Easement by estoppel 1. Creation- when owner of servient tenement changes his

position in reliance on words or conduct of the easement holder2. Importance- writing not required3. ex.- P to M (right to clear a path on P’s land so M can cross);

M later paves path for use; P denies giving right of use & seeks to revoke- easement by estoppel arises in M

d. Creation by prescription

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i. Historical development - statutes of limitations applicable to recover possession DID NOT apply to easements (nonpossessory interest) BUT same policies that underlie law of adverse possession apply to long use of an easement- cts. developed doctrine that easement could be acquired by adverse user for a req. period

1. English law- focused on fiction the lost grant- if person had been using another’s land for the req. pd., ct. presumed that she was doing so under a grant from some frmer. Owner

2. U.S. law- doctrine of prescription has been developed as a matter of public policy by analogy to law of adv. poss.

ii. Easements by prescription – 3 Elements 1. Open & notorious use- use must be made w/out any attempt

to conceal2. Hostile and adverse- can’t be there w/ owner’s permission

a. Ex.- Church yard w/ sign granting permission for use- can’t get PE when permission has been given for use- no trespass

b. Ex.- hostile use can begin as soon as exceeds permissive use- puts on reasonable notice claiming right to use

3. Continuous use- use must be continuous BUT this doesn’t mean constant- continuous requires a continuous claim of right & periodic acts which give notice to the owner that an easement is being claimed- continuity also takes into account the normal use and characteristics of the land

a. Tacking- tacking is allowed in prescription- one prescriptive user can tack on to his pd. of used the prescriptive use of a predecessor in interest

b. uninterrupted use- if adverse use is interrupted, prescriptive pd. ends

i. Ex.- Rockefeller closed for 1 day a year- use has to be continuous- when users come back there’s a new cause of action that begins to run against

ii. lost grant juris.- (Conn.)- owner of serv. Estate can interrupt use by merely protesting the use (mailing letter)

iii. other juris.- owner must eff. interrupt use (sign or oral protest insuff.)

4. NOTES- a. exclusivity not required- adverse possession requires

exclusive possession by the possessor, prescription does NOT req. ex. use

b. easements which can’t arise by prescription- necessity and neg. easements

c. usage by general public- can’t usually arise in (use must be by an individual)

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Extinguishing a Rx EAS. INTERRUPTION: Servient owner can extinguish a Rx EAS same way it was created—adversely interfere w/ it (block

iii. When prescriptive rights can’t be acquired1. negative easements- in U.S., negative easements CAN’T arise

by prescription- reason is that prescription bars a cause of action and where the owner has no cause of action (trespass), prescription doesn’t apply

a. Ex.- A owns a lot; B owns a lot next door; A builds house on border w/ sun windows facing across B’s property, A enjoys sunlight & view for 53 years; B builds 140 story apt. building which occupies the entire lot

i. NO PE- A hasn’t done a wrong- can’t get a PE w/out violating a right of someone else

ii. Brit. Cts.- doctrine of ancient lights- recognize a prescriptive right in this situation

2. easement by necessity- use of an easement by necessity CAN’T give rise to prescriptive easement- b/c use of an such easement is by right & not wrongful- BUT when necessity ends, use becomes wrongful and adverse, then can get prescriptive easement

iv. Public easements - most juris., public at large can acquire a public easement in priv. land by prescription if members of public use the land in manner meeting of req.

1. Minority view- public can’t acquire prescriptive rights in private property; Rationale- owner’s cause of action runs against the specific trespassing individuals & not against the public at large (State ex. rel. Haman v. Fox – (Idaho))

3. Scope of Easementsa. Question- what use easement holder can make of easement or about what

interference by servient owner is permissibleb. General Rule- scope depends upon intention of parties- in ascertaining this

intent, ct. may examine:i. Whether easement was created expressly or by prescription

ii. What changes in use might reasonably be foreseeable by the partiesiii. What changes in use are required to achieve the purpose of the

easement under modern conditions & preserve the usefulness of the easement to the dominant tenement

iv. NOTE- when easement is created & instrument creating doesn’t limit the use to be made of it, easement may be used for “any purpose to which dominant estate may then or in the future, reasonably be devoted” (Hayes v. Aquia Marina, Inc.- Va.)

c. How easement was createdi. Express easement - extent of easement limited by what was specified

in terms or reasonably implied1. Easement of way- given a scope that permits it to meet the

needs of the dominant tenement as it normally develops- may

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be used in ways reasonably foreseeable by the parties, or, if not foreseeable, by ordinary means of transportation as those means normally evolve

a. Public policy- strong policy that land have access necessary to make it useful under contemporary conditions

b. Ex.- has easement over ’s land for boat marina- makes plans to expand marina & pave road easement- expansion changes degree of use (not type) & is allowable- (Hayes)

i. Ct. - invalidate expansion if it had added additional burden

ii. Implied easements 1. Prior use- changes that reasonably might have been expected

or that are necessary to preserve the utility of the easement are permitted- Prior use seemingly should determine extent of easement

2. Easement by necessity- extent of necessity determines scope- can you make effective use of prop. w/out easement?

iii. Easements by prescription - more diff. to increase scope of this easement than any other

1. ex.- if acquire presecriptive easement to reach house and use of dominant tenenment is changed from residential to commercial- added burden of traffic probably won’t be permitted

d. Subdivision of dominant tenementi. Dominant estate subdivided – each subdivided lot has right to use

easements appurtenant to dominant estateii. Limitation - servient estate is not to be burdened to a greater extent

than was contemplated at the time the easement was creatediii. Ex- Unqualified easement to get to farm w/ two single family

dwellings- owner wants to subdivide farm, turn into residential subdivision; Degree of burden is increased but ct. rules that this is fine & easement stands- (Cushman v. Barnes- Va.)

1. Lesson- limit these easements expresslye. Use for benefit of nondominant land- easement granted for the benefit of lot

1 can’t be used for the benefit of lot 2, eventhough same person owns lots 1 & 2; Ex.- O grants A easement over WA for benefit of BA, which A owns. A later buys GA and builds home b/t BA & GA which she accesses over WA

i. Brown v. Voss (Wash.)- O might be given damages against A BUT no injunction- burden is not increased & awarding of injunction allows weighing of equitable factors

f. Improvements- owner of dominant estate has right to make reasonable improvements to an easement, so long as the improvements does not unreasonably increase the burden upon servient estate (Hayes v. Aquia Marina, Inc.- Va.)

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4. Termination of easementsMay be terminated in the following ways:

a. Written releaseb. Abandonment- holder must manifest an intent by conduct (not words alone)

to permanently discontinue using easementc. Merger- (i.e., common ownership of the servient and dominant tenement)d. When purpose for the orig. creation of the easement no longer existse. Changed conditions- When creating document prescribes conditions

governing the easement’s durationf. Forefeit (i.e., the servient tenement’s burden dramatically increases & can’t

be alleviated)g. When the easement is by necessity & the necessity no longer existsh. Estoppel (i.e., the owner of the servient tenement changes his position in

reliance on the words or conduct of the easement holder)

Equitable Servitudes

1. Introductiona. Definition- promise by the holder of a piece of land to conduct a stated

activity on or make a stated use of his property (or a promise not to do so), which is binding on his successors- privity not required to create an equitable estate- equity will enforce against assignees of the burdened land who have notice of the covenant

b. Historical development- arise in England- by time of Indus. Rev. cts. realize value of enforcing covenants to run w/ land (cov. couldn’t run w/ land at law)- covenants enforced in equity against sub. purchaser w/ notice of the covenant

i. Tulk v. Moxhay - houses which surround a garden & sells garden to E. w/ covenant attached to deed- only use land as a garden-E. sells garden to - his deed contains no convenant BUT he admits to having had notice

1. Ct.-inequitable that a covenant should be unenforceable against a sub. purchaser where purchaser acquired land w/ knowledge of restriction- purchaser probably paid less for land b/c of restriction, to hold covenant unenforceable would give purchaser adv. he didn’t bargain for, unjust enrichment

2. Currie- real focus of ct.- value of covenanta. covenant is important b/c led to sale of landb. covenants can enable to sell land that would otherwise

be left off the market b/c the owner is afraid of how it would be used- contrary to his interests

c. Elements- for an equitable servitude to bind a subsequent purchaser, the 3 main following requirements must be met:

i. Parties creating the servitude must intend to benefit a particular parcel or parcels of land

ii. Promisor’s successor must have notice, actual or constructiveiii. Burden and benefit must “touch and concern” the land

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Equitable servitude: Enforced in equity. Don’t need privity, DO NEED NOTICE

Covenant enforced at law: get money. Don’t necessarily have to have notice- could have constructive notice in your grantor’s deed, then you’re bound.

Requirements for equitable servitude

1. burden must touch and concern the burdened estate2. benefit must touch and concern the benefited estate

iv. NOTE- Compliance w/ statute of frauds- negative equitable servitudes may be implied in cases of restricted residential subdivisions, carried out pursuant to a general scheme

d. Equitable servitude compared w/ easementi. 3rd party- equitable servitude can be reserved in a 3rd party

ii. Aff. duty- equitable servitude may impose an aff. duty on the owner of the servient land

iii. Easement is an interest in land. iv. Parties have to agree in equitable servitude, in EAS they don’t

e. Equitable servitude compared w/ real covenanti. Creation- real covenant must be in writing- in many states an

equitable servitude may be impliedii. Privity of estate- neither horizontal nor vertical privity of estate is

required in equity- in enforcing an equitable servitude, ct. is enforcing an interest in land analogous to an easement (enforceable against any person who interferes w/ it)

1. NOTE- when a 3rd party beneficiary is suing to enforce an equitable servitude, in some states the 3rd party must own the land that was granted to the beneficiary or his predecessor by the promissee

iii. Identical requirements- both real covenants & equitable servitudes require that the covenant touch & concern land. Neither is enforceable against BFP w/out notice thereof

2. Creation of Equitable Servitudesa. General Rule- most cts. require writing signed by the promisorb. EXCEPTION- Negative servitude implied from a scheme- when a

developer subdivides a tract of land, putting restrictive covenants on some, but not all, of parcels, reciprocal negative servitudes (implied equitable servitudes) arise even if no writing creating the servitude on the particular lot

i. Theory- equitable estoppel- where purchaser, buying lot restricted to residential use, relies upon promise of subdivider to restrict other lots & makes substantial investment, subdivider & any assignee of other lots are estopped to plead Statute of Frauds (not in writing)

1. Ex.- Rogers v. Watson – (Vt.)- s (grantees in subdevelopment) sue to prevent him from putting up trailer on property- even though no restriction on his deed, ct. rules that had notice & covenants runs w/ the land binding

ii. Requirements:1. negative- it must be a restriction- cts. won’t create affirmative

obligations by implication2. common plan- it must have been part of a common plan or

scheme from the beginning

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Equitable servitude vs. Easement

Equitable servitude vs. Covenant

3. assurances- developer must have assured earlier grantees (orally or in writing) that sub. grantees would face same restrictions

4. notice- either actual, constructive or inquiryiii. Who enforces- usually other grantees; Enforcement- 3 main

conditions1. Subdivision carried out pursuant to a general scheme- uniform

scheme for development of all lots of the same character, existing at the time the developer sells the burdened lot w/in the scheme

a. NOTE- if the scheme arises later, it cannot impose burdens on lots previously sold w/out the burdens

2. grantees seeking enforcement purchased their lots in reliance on right to enforce the restrictive covenant

3. grantee against whom enforcement is sought had actual or constructive notice that the land may be subj. to a restrictive covenant-

iv. Method of enforcement- injunctive reliefv. Not enforceable against the original grantor! (Houghton v. Rizzo-

Mass.)1. ex- O owns everything- divides up into plots to create

residential community- sells A (w/ rest.), sells B (w/ rest.), reserves rest for himself - O builds a factory

a. A & B can’t sue to enforce restriction- vendor has to bind the land in writing or it doesn’t count- no implied restriction arises on vendor’s own property until he conveys

3. Enforcement by or against assignees Requirements:a. Notice- actual, constructive, or inquiryb. Intent- contracting parties must intend that the servitude be enforceable by &

against assignees- no tech. words required- ct. ascertains intent from purpose of covenant & surrounding circumstances

c. Touch and concern requirementi. General rule- early cases focused on whether the covenant burdens or

benefits a party in physical use or enjoyment of particular land (now seen as too narrow)- some covenants merely enhance the value of the benefited land, but they have been held to touch & concern the land

Real Covenants

1. Introductiona. Definition- covenant running w/ the land at law (i.e., a real covenant) is a K

b/t two landowners, binding the successor in interest of each, that restricts one

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owner’s use of his land (the burdened estate) in a manner benefiting the other’s land (the benefited estate)- covenants may be either affirmative or negative

b. Covenants Distinguished from other interests i. Equitable servitude- equitable servitude enforceable in equity (get

equitable relief- injunction or SP) where real covenants enforceable at law (get money damages)

ii. Easement- covenant is a promise respecting the use of land; an easement is a grant of an interest in land

2. Creation of Real Covenanta. Writing requiredb. Grantee bound w/out signing

3. Enforcement of Covenant by or against assignees a. Major issue - whether the covenant can be enforced by a successor to the

promisee or against a successor to the promisor- this all depends on whether the benefit or the burden run to the assignees

b. Requirements for burden to run at lawi. Intent- contracting parties must intend that successors to the promisor

be bound by the covenant- usually indicated by lang. binding the promisor’s “hiers and assignees”

ii. Privity of estate1. vertical privity- (b/t the orig. party & successor in title)- entire

estate be conveyed (eg.- adverse possessor isn’t in vertical privity w/ orig. promisor since he takes a new title to land)

2. horizontal privity- (b/t the orig. promisor & the promisee)iii. Touch & concern the land- covenant must reduce the land’s use or

value to the burdened property owner1. BUT- ct.’s have req. satisfied where- burdened land touched

b/c covenant benefits it- (b/c burdened land worth more b/c common areas maintained)

iv. Notice- subsequent purchaser of the promisor’s land is not bound by the burden unless he has notice of the covenant before buying

c. Requirements for benefit to run at lawi. Intent- look to lang. of K- “these covenants shall run w/ the land”;

“the grantee promises for herself, her heirs and assignees”ii. Privity of estate- only require vertical privity (here privity b/t the

promisee & the assignee)iii. Touch & concern- benefit must touch & concern land owned by the

promiseed. Privity of estate

i. Horizontal Privity1. running of the burden - U.S. rule- covenant must be created

in a deed of the property itself 2. running of the benefit – horizontal privity not required

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ii. Vertical Privity- For an assignee to sue on a covenant, assignee must be in privity of estate w/ the orig. promisee; for an assignee to be sued on a covenant, the assignee must be in privity of estate w/ the original promisor

1. running of the burden- required succession to the estate of one of the orig. parties; assignee must succeed to identical estate owned by the promisor- if promisor has fee simple, covenant runs only to a person who succeeds to that fee simple (Currie thinks this is silly)

2. running of the benefit- benefit will run to assigns of the orig. estate or of any lesser estate, such as a life estate

iii. ex.- Feider v. Feider- 2 bros. Promise divide family estate & write an agreement to right of first refusal to each other’s heirs & assignees in sale of land- heirs of 1 bro. later attempt to bind other bro. to promise by suing for injunction to prevent his sale of land

1. Ct.- covenant doesn’t run w/ land since no horizontal privity- agreement wasn’t contained in conveyance

2. Currie- ct. was correct that there was no horizontal privity BUT horizontal privity was not required! Two reasons:

a. Since there are assignees suing an orig. party- running of the burden isn’t at issue- question is whether the BENEFIT runs w/ the land!

i. Benefit clearly runs & heirs can sue as 3rd party beneficiaries of the agreement

b. Assignees are suing in equity (for injunction)- in equity, horizontal privity not required (see equitable servitudes)

iv. Strawman- enable you to create a covenant b/t two people (A & B) with no privity burdening the land that runs at law

1. A conveys to C (strawman) w/ covenant (no trailers)a. horizontal privity- in a deed w/ conveyance of the land

2. C conveys back to A w/ covenant (no trailers)a. vertical privity

e. Touch and Concerni. Real Test- does it makes sense to tie the land up?- If going to tie the

land up & reduce its alienability- must have a good reason & not a good reason unless its about the land itself

ii. Ex.- N conveys ½ of his land to J w/ covenant for J to maintain flood insurance on the property & use proceeds to rebuild buildings in case of flood

1. touches burdened land b/c proceeds have to be used to rebuild on it

2. NOTE- if J weren’t required to rebuild on prop w/ proceeds- covenant wouldn’t touch and concern- would be considered personal

iii. Ex.- covenant (no gas station ) b/t seller of a parcel adjacent to his property and buyer- does it T&C?

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When benefit runs w/ the land

When burden runs w/ the land

1. touches burdened land b/c limits use 2. touches benefited land b/c it enhances its value

iv. Ex. - covenant (contribute a $100 year to a local cat hospital)1. doesn’t touch benefited land2. doesn’t touch burdened land- not enough to simply require

owner to do some affirmative act not connected w/ the burdened land

a. ownership of adjacent parcel has nothing to do w/ action (someone from St. Louis could pay the $100)

v. Ex.- covenant to pay fee to maintain common areas- (Neponsit Prop Owners Ass’n v. Emigrant Industrial Savings Bank)

1. benefited land touched (neighbors’ land touched b/c of improvements in the neighborhood)

2. burdened land touched b/c covenant benefits it- b/c burdened land worth more b/c common areas maintained

3. social need for this type of covenant- have to have some way for maintaining these common areas

4. NOTE- homeowner’s association allowed to sue even though it directly owns no benefited land

a. Property ownership assoc.- alter ego of the owner’s of benefited property

b. since they can sue (cov. Touches & concerns their land), assoc. can sue

f. Real Covenant Decision Tree- Running of the Burden i. When it was created, did the covenant comply w/ the statute of frauds

(in writing)?1. if N- not a real covenant2. if Y- go to (ii)

ii. Did the successor have notice of the burden before buying the land? (notice may be actual [knowledge of covenant in current or prior deeds w/ same restriction], constructive [covenant appears in grantee’s “chain of title”], or inquiry [physical appearance suggests covenant])

1. If N- burden doesn’t bind the successor2. If Y- go to step (iii)

iii. Did the orig. parties intend to bind their successors?1. If there is express lang. in the covenant, like “and their heirs,

successors, and assigns” in describing the parties to the agreement, OR statement mandating that the covenant run- intent is clear- go to step (iv)

2. If no express lang., modern court will imply if agreement “touches and concerns” land- go to step (iv)

iv. “touch and concern” - Is the covenant affirmative or negative – that is, has the burdened property owner agreed to do something (positive) or has he agreed not to do something (negative)?

1. If affirmative- go to step (v)2. If negative- go to step (vi)

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Sanborn: (MICHIGAN) reciprocal negative easement...owner of 2 or more in gen. Scheme of development—sells one w/ an EAS of benefit to the land retained, servitude becomes mutual, neither can do anything forbidden.

Is there an implied reciprocal limitation? MA and other states forbid b/c of Statute of frauds...

If there’s a pattern to justify the implication, then Ct will think it’s easier.

WHEN it touches or concerns the land—benefited or burdened

v. Affirmative- Did the burdened property owner’s promise consist of performing a stated act or undertaking a named use of the burdened land that reduces the land’s value or use to him?

1. If Y to any- it touches and concerns the land- go to step (vii)2. If N – doesn’t touch and concern the land- can’t run w/ the land

vi. Negative- did the burdened property owner’s promise consist of not conducting a stated activity on, or making a stated use of, the burdened land?

1. If Y to either- it touches and concerns the land- go to step (vii)2. If N- it doesn’t touch and concern the land (it’s in gross)- can’t

run w/ the landvii. Privity - Is there horizontal privity? Look at orig. parties- did the

covenant accompany the transfer of an interest in land b/t them (e.g. landlord/tenant, grantor/grantee, mortgagor/mortgagee)?

1. If Y- there’s horizontal privity- go to step (viii)2. if N- burden doesn’t run w/ the land

viii. Is there vertical privity? Look at the relationship b/t the covenanting party and successor(s) in interest- did the successor in interest take the entire state?

1. If Y- there’s vertical privity and burden runs2. If N- burden doesn’t run (NOTE- Currie thinks this is silly)

g. Real Covenant Decision Tree- Running of the Benefit Land i. When it was created, did the covenant comply w/ the statute of frauds

(in writing)?1. if N- not a real covenant2. if Y- go to (ii)

ii. Did the orig. parties intend to bind their successors?1. If there is express lang. in the covenant, like “and their heirs,

successors, and assigns” in describing the parties to the agreement, OR statement mandating that the covenant run- intent is clear- go to step (iii)

2. If no express lang., modern court will imply if agreement “touches and concerns” land- go to step (iii)

iii. Touch & Concern- Is the covenant affirmative or negative?1. If affirmative- go to step (iv)2. If negative- go to step (v)

iv. Affirmative- does performance of the covenant increase the use or value of the benefited land?

1. If Y- touches and concerns the land- go to step (vi)2. If N- doesn’t touch and concern the land- doesn’t run

v. Negative- does the promise increase the use or value of the benefited land (e.g., non-compete clause covering burdened land)?

1. If Y- touches and concerns the land- go to step (vi)2. If N- doesn’t touch and concern the land- doesn’t run

vi. Benefited- is there vertical privity? Look at the relationship b/t the covenanting party and successor(s) in interest. Did successor take

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possession plus some of the estate (eg., life estate from fee owner, sublease from tenant)?

1. If Y- there’s vertical privity, and the benefit runs w/ the land. 2. If N- no privity and benefit doesn’t run

h. Covenants in gross- could the benefit be given to a person who doesn’t stand in shoes of benefited property owners & could he sue to enforce the covenant? (just like homeowner’s association)

i. General Rule1. benefit will run if the burden is in gross2. burden won’t run if the benefit is in gross

ii. Ex. - city conveys land to A (covenant for no buildings on strip that may later be required for construction of strip)

1. does this convenant bind A’s successor?2. City hasn’t retained any adjoining land3. This is a covenant in gross that would run w/ the land & be

attached the land4. Any reason we should have easements in gross BUT not

covenants in gross?a. Brits.- covenants had to be appurtenant to benefited

land; had to touch & concern benefited landb. no appurtenant land here, no city land here that can be

benefited- touch & concern req. not fulfilledc. some cases in this country- covenant in gross can’t run

w/ land b/c doesn’t touch & concern the benefited land, can’t impose a burden on the land except for the benefit of some other land

d. some cases do come out the other way- recognize these as socially beneficial restrictions on land

4. Termination of covenanta. General- covenant ceases to have legal force when change circumstance have

made it no longer useful (Grange v. Korff)i. Ex.- covenant- residential use only- BUT over time other landowners

move out & factories prop out all around this land1. restriction merely destroys the value of land- covenant no

longer makes sense2. changed circumstances doctrine- firmly est. at least in equity

a. Justification for doctrine- efficiency- against public policy to destroy value of property w/out any corresponding benefit to anyone

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NUISANCE 1. General

a. Doctrine- nuisance is an unprivileged interference w/ a person’s use and enjoyment of her land- relief awarded at CL under basic maxim one must use her property so as not to injure that of another

b. two types:i. Private nuisance- involves interference w/ the private use &

enjoyment of one or a number of nearby propertiesii. Public nuisance- when the interference is w/ a right common to the

general publicc. nuisance v. trespass:

i. Trespass- right to exclusive possession, requires some intrusion, damages don’t have to be proven, b/c P’s right of exclusive possession is absolute

ii. Nuisance- right to use and enjoyment, can be infringed w/ou physical intrusion. P has to prove actual damages

2. Private Nuisance a. Definition- conduct that causes a substantial interference w/ the private use of

land and is eitheri. Intentional and unreasonable; OR

ii. Unintentional but negligent, reckless, or resulting from abnormally dang. Activity

b. Who can sue- anyone who is entitle to use & enjoyment of the land (owner of property, life tenant, lessee, holder of easement)

c. Qualify as nuisancei. 2 requirements

1. Harm must be substantial2. harm must be unreasonable (this got messed around w/

Boomer) ii. Rationale- property owners have right to use their land in most

manners- if label what they are doing as nuisance, then you are limiting the right of the owner to use his own land- have to take into account the interest of the owner in using his land

d. Intentional nuisance- primary factor in determining is the unreasonableness of the interference w/ the neighbor’s use & enjoyment- an activity is labeled a nuisance when the gravity of the harm outweighs the utility of the actor’s conduct

i. Gravity of harm- factors to consider1. extent of the harm2. character of the harm3. social value of the use or enjoyment invaded4. suitability of the use invaded to the locality; AND5. burden on the person harmed of avoiding the harm

ii. Utility of the conduct- factors to consider1. social value of the primary purpose of the conduct2. suitability of the conduct to the character of the locality

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3. impracticability of preventing or avoiding the invasioniii. Nuisance per se VS. Nusiance per accidens

1. per se- activity that is a nuisance no matter where done2. per accidens- activity that is a nuisance only b/c of

surroundings in which conductede. Types of unreasonable interference

i. must take action- in order to be found liable for nuisance, must have taken an action that could be labeled as a nuisance

1. ex.- natural stagnant pond- attracts mosquitoes – NOT a nuisance

a. owner didn’t do anything- there naturallyb. if make liable- then creating an affirmative dutyc. nuisance- usually requires an aff. act of interference-

don’t have that hereii. Character of the harm

1. Depreciation of property value- use of property in a manner that depreciates the value of surrounding property is not enough by itself to constitute a nuisances- BUT it is an important factor in proving a sub. injury to

a. Ex.- cemeteries & funeral homes often labeled nuisances

b. BUT aesthetic harms aren’t considered nuisance (ugly house)- tastes are too subjective

2. Discomfort- serious discomfort & inconvience in use of land (noise, odors, or smoke) are another impt. factor in determining a nuisance- standard of unreasonable interf. Measured by the sensibilities of the avg. person

a. Sunlight- older cases held that cutting off a neighbor’s sunlight by building next to the property line was not a nuisance (Fontainebleau Hotel Corp. v. Forty-five Twenty-five, Inc.) BUT view may change as result of development of solar collectors providing cheap energy- held that blocking a neighbor’s roof solar collecter can be enjoined as nuisance (Prah v. Maretti)

b. Spite fences- erected solely to harm the neighbor and of no eco. benefit to the erecting party- can be enjoined as nuisance since has no social utility

3. Character of neighborhood- use authorized by zoning- zoning ord. Is admissible in ct. to show community policy w/ respect to desireable land use w/in neighborhood BUT local zoning is NOT controlling, even though zoning may permit the use generally, the specific activity may be carried out in such a manner as to constitute an unreasonable interference w/ particular adjoining properties (Boomer v. Atlantic Cement Co.)

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4. Social value of conflicting uses- one of primary objective of law is to avoid more serious harm- if one party’s conduct has great social value, ct will be reluctant to enjoin BUT if harm is serious & payment of damages won’t shut the plant down, ct. may order the payment of damages for nuisance & refuse to enjoin the activity (Boomer)

a. Boomer- pro- case; said only do this cost-benefit analysis when determining whether or not to issue injunction or award damages, NOT whether or not something was a nuisance

b. no reason owner of plant should be able to externalize costs & appropriate neighbor’s property w/out paying for it

c. NOTE- ct. refuses to issue injunction b/c plant produces an enormous amt. of cement that we need- loss to neighbors is minor; ct. fails to look at total harm-Could be other neighbors, could be people miles & miles away

d. hyp.- Boomer situation, but plant not built yeti. assume that costs and benefits will be the same

after it is constructedii. BUT now the fixed costs have not been

incurred- once these are set, will be more costly to shut down than the harm suffered

iii. This is time to enjoin & cause them to move elsewhere to diff. location

5. Priority in time- another impt. factor is which of the conflicting uses was first located in the vicinity- if ’s use was first, the has “come to the nuisance” & has less appealing case b/c she could’ve avoided the harm- assumed the risk

a. BUT- might argue buyer buys a preexisting cause of action when factory has been there polluting- Buyer buys right to use land- this is being interfered w/ by plant- should be able to recover the DIV of the plant

TAKINGS AND LAND USE CONTROLS 1) General

a) Eminent domain- (police pwr.)- pwr. of the state & federal governments to take private property- this pwr. is limited by the 5th Amend.

b) Fifth Amend.- “nor shall private property be taken for public use, w/out just compensation”- 5th amend. held applicable to states through Due Process Clause of the 14th Amend.i) Interests in land- Takings clause protects against takings of all interests in

land (ex.- easements included but not licenses)

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c) Four Elements- to determine if action is in violation of the 5th Amend.- must show:i) Property taken was private propertyii) A taking actually occurrediii) Property was taken for public useiv) There was no just compensation (market value) to the landowner

2) What is a taking? a) Physical Invasion- if the govt. physically invades property, w/out taking title, it

has taken property per se and must pay for it, no matter, apparently, how trivial the invasioni) Ex- taking occurs when govt. opens private property to the public- Kasier-

Aetna v. U.S.(1) Facts- Owner builds a marina & limits it to his customer & then digs a

channel to connect to navigable waters, govt tried to argue that by digging the channel to connect to public waters owner can’t exclude people from property- this is unconst. says the ct., right to exclude is part of the fundamental rights

ii) Ex.- statute authorizing private cable TV companies to install cable in apt. buildings over landlord’s objections is a physical invasion and taking – Loretto v. Teleprompter Manhattan CATV Corp.

iii) Ex.- military airplanes fly over A’s chicken ranch causing so much noise that A’s chickens quit laying and A is forced out of business- taking- U.S. v. Causby

iv) COUNTER Ex.- state ct. decision that dirty hippies may ex. free speech rights in large private shopping center not a taking since physical invasion didn’t “unreasonably impair the value or use of their property as a shopping center,” indicating invasion for free speech may not be a taking- PruneYard Shopping Center v. Robins (Currie doesn’t think this came out right)

b) Regulatory Takings (Inverse Condemnation)- occurs when govt. restricts a landowner’s use of property through reg. w/out paying compensation- no set formula for whether a govt. regulatory activity should be considered a taking- SC has applied each of following tests to determine when, based on particular facts, justice and fairness require that economic injuries caused by public action be compensated by the govt.i) Harm Test

(1) Doctrine(a) Police pwr.- when reg. has purpose or effect of protecting the public

from harm (or prohibiting a nuisance)- noncompensable(i) Ex.- Kansas law prohibits manufacture and sale of liquor- Brewery

owner claimed law forced him to shut down brewery- not a taking b.c state was regulating a public harm - Property in country is held under the implied obligation that the owner’s use shall not injure the community- Mugler v Kansas

(ii) Scalia (Lucas v. South Carolina Coastal Council)- Taking is a deprivation of an existing property right, so if you don’t have a right to create a nuisance, the gov’t isn’t taking a property right

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when it limits the property in such a way to prevent uses which might be a nuisance or something else the owner never had the right to do

(b) Taking- when reg. has purpose of extracting a public benefit- taking and owner must be compensated

(c) Main idea- Public can’t extract a public good w/out paying for it, but it can prohibit an owner from making a nuisance of himself

(2) Problem(a) Benefits- all restrictions preventing A from harming B confer a benefit

on B (eg. a zoning ordinance prohibiting the continuation of a brickyard in a residential confers a benefit on the neighbors)

(b) Harms- when 2 landowners have incompatible uses, not proper to say only one is inflicting harm upon the other- each harms the other in the sense that each interferes w/ the other’s use of his land

ii) Severe Economic Loss (1) Doctrine- when an owner can no longer realize a reasonable return on his

investment, a taking occurs regardless of the public benefit(2) Ex.- PA statute forbids coal mining that caused subsidence of any house-

before statute enacted, coal company had sold surface right to land it owned to M, reserving right to remove coal thereunder- b/c statute made it commercially impracticable to mine the coal, SC holds statute invalid as a taking w/out compensation (Penn. Coal Co. v. Mahon)(a) Holmes- “general rule at least is, that while property may be regulated

to a certain extent, if regulation goes too far it will be recognized as a taking”

(b) Conclusion- ct. believes that if diminution in economic value goes too far it will be a “taking”

(3) Ex.- Landmarks commission designated grand central station as a landmark and under law the landmark owner must be maintain the exterior in good repair and face other restrictions- owners prevented from building office building on top of station- SC says no taking since the landowner was left w/ some reasonable economic value in the property- (Penn Central Transportation Co v NY)

(4) Scalia (Lucas v. South Carolina Coastal Council)- if you regulate in such a way as to take away a right of property owner so as to deprive property of value- this is a taking(a) CURRIE- he needs to go further- Loretto showed us that it doesn’t

matter how small the taking is – its still a taking – so doesn’t have to completely deprive property of value to be a taking

(b) BUT - can’t go to far down this road though(i) Holmes- govt. could hardly go on if to some extent values incident

to prop. couldn’t be diminished w/out paying for every such change in the general law1. States have been going beyond CL in reg. property rights

through police pwrs- not every reg. that limits use beyond CL has been considered a taking (tradition)

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2. Long recognized some values are enjoyed under an implied limitation & must yield to the police pwr.

c) Reciprocity Test i) Doctrine- regulations that involve reciprocal advantages are not a taking- if

regulated owners obtain some advantage (even if less than adv. obtained by others) reg. is w/in police pwr.

ii) Ex.- taxes- effectively compensation in kind b/c you benefit from what govt. does w/ the tax money

3) Why Should the Govt. Have to Pay? a) Unjust Enrichmentb) Fundamental Property Rights- have right to exclude people from your propertyc) incentive to use of property- if people are to be encouraged to put the property

to productive use, need to know that government will compensated) incentive for govt. to consider the costs- if doesn’t have to pay, govt. doesn’t

have to consider the costs – internalize the costs- force them to go through a cost-benefit-analysis- govt. won’t take the prop. if costs exceed the benefits

e) equality- public benefits from seizure of land, if no pay than only landowner pays the costs; unequal & unjust for one person to bear the whole cost of a benefit for everyone

H10: O A for 10 years Type of Leasehold: doesn’t involve seisen.

Term of Years technical term for lease hold interest whose time is fixed.

State of title: O has a reversionary interest b/c didn’t give away all he had. A has possessory interest. ANSWER : A has a term of years, O has reversion in FS.

O has seisen. A can’t have seisen, b/c A has no freehold estate. What if: A B + heirs? B has term of years, and O has reversion,

O has seisen, A has nothing. What if : A dies? A’s heirs gets it… Term of years can be alienated, can descend, can be devised.

3 Kinds of Leasehold:o Term of years:o Month to month, week to week: terminates unless renewed OR it

continues unless someone exercises the right to termination when it’s up for renewal…interpretation of lease depends on total circumstances.

o Tenancy at will:either landlord or tenant can terminate by giving notice. Can be statutory requirements of length of notice, but that depends on jurisdiction

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Tenancy of substance: tenany holds over after the end of the lease really a type of tenancy at will. once the lease is up, tenant can be ejected/evicted at any time.

o SEISEN: just impacts the legality of transfer. Only freeholder has seisen; tends to be the estate in possession.

o H11: O A for 10 years if A shall so long live. State of title: A has a determinable term of years ; O has a

possibility of reverter and a reversion. 2 things can terminate this estate: end of 10 years (reversion-

natural), or A’s death (possibility of reverter- artificial) This isn’t a life estate: b/c if A lives for 10 years and a day, A

doesn’t have a life estate. NOT A FREEHOLD: O has seisen. . Peeps used to use this to avoid creating a freehold estate in A—

there were some things you couldn’t do if you conveyed a life estate in A.

Suppose: O A for 1000 years? Still a determinable term of years.

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