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Property Outline 10/5/10 10:49 AMThis is the html version of the file http://www.asuch.org/outlines/PropertyLeshyF03.doc.Googleautomatically generates html versions of documents as we crawl the web.Property Outline Fall 2003Professor LeshyIntroductionI. GeneralA. Property:i. Relationships between people with respect to things.B. Possession vs. titlei. Possession: usually dominion and controlii. Title: ownershipa. Common law favors either or results, not shared interest.C. Bundle of rights: Property is a bundle of rights, not necessarily all present: right to possess it, use it,exclude others from using it (most fundamental), transfer by gift or by sale.II. First Possession: Acquisition by Discovery, Capture, CreationA. Acquisition by Discoveryi. General rule: The first in time to discover land in a new world has exclusiveproperty rights, even as tothe native people. This was agreed upon by European powers.ii. Johnson v. MIntosh (p 3)Facts: Johnson purchased it from the Indian tribes on the land (1773 &1775), MIntoshgot it later from the US govt. Johnson sued for ejectment.Issue: Can Native Americans convey good title to lands they occupy and that areclaimedby the US Govt?Analysis: Have to trace the chain of title. Mere occupation may not give you legaltitle.Only a state can discover, and the first discoverer has exclusive property right

s(Britain) before discovered, there was no title. Native Am only had right ofoccupation. Britain gave it to US, who gave it to MIntosh. Native Am had no titletotransfer (they in some sense conveyed it already to Britain).Concl: Only first in time to discover real property has power to transfer title.Possession title. Native Americans couldnt convey to Johnson.a. Note: The law has to reflect some notion of reality and of history, title isEuropean created, this isnot about logic but experience the logical construct ofthe law is imposed on the history. If courthad gone other way, would have undermined all claims of title given by US govt.iii. Labor Theory of Value (Locke): Accessiona. General rule: Want to recognize the value of the labor people invest in property. We want toencourage people to invest productive labor.b. Law of accession comes into play when one person adds to the property of another. What happenswhen someone uses someone elses property to make something? Who owns the product?1. Traditional rule: person who owned original property is the owner, but if theimprover changedit so much that it is a completely different thing, it belongsto the improver (grapes into wine).2. Modern rule: disproportionate value if value of improvement is disproportionate to the valueof the materials, improver gets it. Usu has to be done in good fa

ith.c. This theory applied to Johnson v. MIntosh: Native Americans didnt put an adequate amount oflabor into the land to perfect a property interest in the soil.1. Monopsonist sole buyer. Govt was sole buyer, which reduced the cost they hadto pay.d. Property confers and rests on power. Owners have a form of sovereignty over others because thesovereign state stands behind the owners assertion of right.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 1 of 52


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Property Outline 10/5/10 10:49 AM1. Critical Legal Studies reject the notion that the law is neutral and apolitical.2. Critical Race Theory develop a jurisprudence that takes racism into account.B.Acquisition by Capturei. General rule: Property is acquired by actual capture. Mere pursuit is not enough.ii. Pierson v. Post (p 19)Facts: Post pursues the fox on un-owned land, Pierson killed the fox (in sight of Post) and took it away.Issue: Does Post own the fox because he was in pursuit, or does Pierson own it because he actually killed andcaptured it? At what point between wild animal running free and physical possession is ownershipestablished?Analysis: Ferae naturae: wild animal (on un-owned property) isnt owned until capturedDictum: When wild animal is wounded to the point at which its liberty is take

n away mortally wounded,cornered with no hope of escape it could be considered to be owned.Policy: Ruling the other way would create a fertile source of quarrels and litigation actual capture is easier toprove.Dissent: Thinks foxes should be killed, so that the rule should encourage pursuing and killing. Pursuit withreasonable prospect of success = titleRule: Capture is good enough for title. Saucy intruder wins.a. Ferae naturae: wild animal (on un-owned property) isnt owned until capturedb. Return to natural state: if animal escapes, ownership right is extinguished.c. Majority opinion is a rule (clear) capture = title, dissent is a principal (muddy) -Pursuit withreasonable prospect of success = title.1. Principals are more flexible but more costly to administer2. There are few examples of hard and fast rules. Rules are cheaper to administer and the outcomeis clear.iii. Ratione soli -owner of the land has constructive possession of wild animalson the land. Landownersregarded as the prior possessors of any animals ferae naturae on their land, until the animals take off.a. This is a construct, a legal mechanism for determining ownership without actualpossession. Thisenforces my real property rights, discourages trespass.b. CA: Animals wild in nature are possessed by: landowners while they are on theproperty (if theyclaim ownership); when tamed; or taken and held in possession;or disabled and immediatelypursued.1. In this case, would it change the result in Pierson? Post could argue that hedisabled the fox andpursued it. Pierson could still argue that he had taken itand held it in possession. This stillhelps Pierson more (but it does put Post in

a better position than he would have been, right?)c. Many states dont follow ratione soli. People have right to keep hunters off their property under atort right (trespass) and not as a property right over the animals.1. Could you be guilty of trespass and own the animal? Probably yes, although then you areencouraging trespass.iv. Custom and usage rule court makes a decision about ownership based on the custom of the industryand whether a ruling would impair industry.v. Ghen v. Rich (p 26)Facts: Ghen is a whaler. He struck a finback whale that floated to the shore. Itwas found by Ellis, who, againstProvincetown finback whaling custom, auctionedit to Rich, who sold the oil. P-town custom whalershoots whale, which sinks to the bottom and surfaces days later somewhere along the shore. Finder tellswhaler(lance has identifier on it) and gets a finder fee. Ghen sued for price of oil and argued that it washis property.Issue: Who owns the whale, the whaler who killed it or the finder?Analysis: Custom for these whales was different from that of other whales. The rule is that a whale killed (andattached to the boat by rope) is the property ofthe boat owner. This whale sinks to the bottom and laterhttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 2 of 52


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Property Outline 10/5/10 10:49 AMsurfaces days later.Policy: If court doesnt protect the customs of the whaling community in this case, whaling will cease.Rule: Custom or usage rule: Court makes a decision based on the custom of the industry.vi. Barry Bonds baseballa. Spectator caught the ball, fell down in the fray, someone else picked it up.Who owns the ball?b. The court ordered the proceeds to be split. This is very rare. Usually it iseither or. Why is that?There really is no good answer. Courts look at property matters as either or.1. For a long time, people thought of the law as eternal truth that had to be discovered, and thisimplied absolute winners and losers. Now, we think that the law is crafted. This is breakingdown the law that we have to have either or determ

inations.vii. Fugitive resources: Oil, gas, water found underground under property ownedby more than person.a. Traditional: this is like wild animals (ratione soli and the rule of capture). People own things ontheir property if they capture it.b. Then, realized this is really not smart. It tells everyone to pump as fast asyou can if you dont getit, someone else does. This also reduces how much can beextracted (if do it slowly, can get more)and led to depletion of ground water. Inefficient production and no conservationover the longterm.c. Western states governed ground and surface water by first in time1. First person who appropriates and puts it to reasonable and beneficial use has superior right tolater people.2. Eastern states, more water, riparian rights each owner has right to use subject to the rights ofother owners.viii. Externalities Exist whenever someone makes a decision about how to use resources without takingfull account of the effects of the decision. Externalitiesare a function of transaction costs, and theyencourage a misallocation and inefficient use of property.a. External costs X doesnt consider costly effects if they fall on others, even if the extra amount itwould cost him to fix it is way less than the overall cost

to the community if he doesnt. This useis inefficient because another use would increase the value of the resources involved and makeall parties better off.b. If other parties offer to pay, X has to think about how his actions affect others, and thusinternalizes the externality.c. Transaction costs: If it is too hard to make an agreement, then the transaction costs are too high because there are lots of parties, the cause/effect is unknown/uncertain, thosewho dont contributecan get a free ride if they dont.1. Freeriding problem occurs when have to extract payments from a group where the benefitswill confer on the group as a whole.ix. Demsetz and externalities (p41)1. General rule: Primary function of property rights is to guide incentives to achieve greaterinternalization of externalities. This happens when the gains of internalization become higherthan the costs.2. Communal property: Costs of agreement and costs of policing use of communal ownership maybe high.A) Communal ownership results in great externalities, and the more owners, the higher the costof internalization. Transaction costs are high.B) People have incentives to over use and greater tendency to act contrary to collective bestinterest.3. Private owners have an incentive to maximize resources, and have less externalities.A) Promotes economic efficiency and free transferability.B) Private ownership nourishes diversity.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 3 of 52


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Property Outline 10/5/10 10:49 AMC) Private ownership reduces externalities by transforming external costs into internal costs4. Criticism: assumes that efficiency maximizing behavior for the individual means efficiencymaximizing behavior for society.b. The anti-commons: multiple rights to exclude, encourages underconsumptionC.Acquisition by Creationi. General rule: creator has exclusive rights to tangible property (chattels).a. For a long time, property law was unfriendly to intangible things. Concept ofproperty came fromland.b. Creators ownership rights in intellectual property may be uncertain unless protected by statutec. Quasi-property property rights over intangibles with respect only to certainothers, such asbusiness competitors, but not to the general public (INS v. AP).d. Competition creates a better deal for the consumers (Cheney Bros & Chanel)ii. INS v. AP: copycats (p 60)Facts: AP releases news for members. AP has 3 complaints about INSs behavior: 1)bribing employees, 2)inducing AP members to violate by-laws, 3) copying news info from bulletins & ea

rly editions and sellingto newspapers. First two already decided by lower court.AP says INSs actions violate APs propertyrights in the news and constitutes unfair business practice. INS argues that the moment AP makes the newspublic, it is available to all.Issue: May INS be restrained from taking news from bulletins and newspapers (intended for public) with purposeof selling it to INS clients?Analysis: News facts themselves are not property, and reports are not of literary value so that copyrights wouldapply. What INS is doing is unfair business practices. AP has right to quasi property with respect to INSb/c it is their stock intrade. AP is protected from INS but not from the general public. AP has anownership right that transcends the physical aspect of the property.Policy: Keep businesses from unfairly profiting from the labor of another. You cant take something to unfairlyprofit, even if it is in the public domain. Want to encourage gathering news and keep it profitable.Rule: Businesses can have quasi property where their right to intangible property is protected against anotherbusiness using it to profit unfairly from their la

bor, but are not protected against the general public.iii. Cheney Brothers v. Doris Silk Corp. (p 64)Facts: P makes silk designs each season, some succeed. D copied successful designs and sold for cheaper. Pcannot patent all the designs (prohibitive, takes toolong) and cannot copyright (no words). P requestsprotection only during the season.Issue: Are the silk designs quasi property as the AP news in INS v. AP?Analysis: Cant ask for limited protection. INS v AP was specific to that situation, not a general rule. To preventimitation of a design would give too great power to designer. There is no common law copyrightprotection.Policy: We want to encourage competition b/c it is a better deal for the consumer. Imitation of the news doesntimprove it, but imitation helps here to lower theprice.Rule: Promote competition to prevent monopoly and lower prices, but must be balanced against incentive toproduce, invent.a. Copyrights1. Protects the expression of ideas, not the ideas themselves.2. Copyright is federal law. Want copyright protected across the country b/c otherwise it wouldinterfere with commerce. This is a good policy argument, but it is not one we have accepted inmost areas of property law (which is primarily state law).3. The Constitution specifically called for a national copyright /patent law.4. It is a reward system, and you want to provide incentive for people to keep creating new things.Well give you property rights so you can make money off of it in order to promote

progress.5. Patents only last for 20 years. Copyrights keep being extended (Mickey Mouse).http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 4 of 52


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Property Outline 10/5/10 10:49 AMb. Smith v. Chanel (p 65)1. Smith advertised product was same as Chanel No. 5. Allowed to do so b/c thereis a publicbenefit: imitation & competition = lower prices. Expenditure of $ isnot a legally protectedright.iv.Virtual Works v. Volkswagon (p69)Facts: Virtual Works, ISP, bought vw.net, knowing that it was remarkably similarto Volkswagons trademark,VW. They thought about possibly selling to VW later. Virtual Works used it for 2years, then contacted byVW to buy from them. Virtual Works said would sell to the highest bidder.Issue: Did Virtual Works, in bad faith, purchase vw.net in order to profit fromits similarity to Volkswagonstrademark?Analysis: There is a law passed by Congress prohibiting cybersquatting. To be il

legal, you have to have a bad faithintent to profit, and there is a whole list of factors for determining bad faith. Virtual Works met thesecriteria: knew it was similar, intended to profit, could have bought another name, never went by VW.Policy: Fair competition is good, unfair competition is bad.Rule: Bad faith use of another companys registered trademark in a domain name isillegal. Unfair profit fromsomeone elses good name.a. Cybersquatters = Virtual Worksb. Parasites are people who register domain names similar to TM and then use them in ways thattarnish image.c. Poachers: register domain names similar to other orgs in order to disseminateunfavorable infoabout them.d. Dilution use of a TM may dilute or blur distinctiveness of TM.v. Property in Ones Persona (p 77)a. Used to be all about privacy: Woman whose face was on a flour sack had to consent.b. Then became more about right to exploit ones image for ones own profit.1. Vanna White case: Computer image based on her. It wasnt her image but her character andconcept. She has a property interest in her character.vi. Property in Ones Person (p 79)a. Moore v. UC Regents (p 79)Facts: Moore sought treatment for leukemia. Had his spleen removed and many tests done. Had 7 years oftests and follow-up procedures he was led to believe wereimportant to treatment. Doctors used hisspleen and samples to make cell line worth billions. Moore sued for conversion (possession of someoneelses property as yo

ur own), lack of informed consent, breach of drs disclosure obligations.Issue: Does a person own his or her own organs and bodily tissues once removed?Analysis: Found no cause for conversion, just breach of doctors disclosure obligations. Conversion must be anactual interference with Ps ownership or right of possession; only property can be converted. It ispossible that someone elses cells could have been used. His cells were the starting point, but at the endpoint theywere no longer unique to him, and Drs put in lots of work and skill.Moore has an interest in his cells while in his body but extraction from his body severs his interest. CalStatute limits patients control human tissues should besafely disposed of. Moore had the right to sayno to the procedure and can keephis cells in his body. Conversion is a strict liability tort, all who usethe cellswould be liable, including other researchers with no connection to patient.Dissent: Property is a bundle of rights: right to use, right to exclude, right to dispose of. These rights dont haveto all be present all of the time for you tohave property interests. Property rights of ones own tissue isfair and prevents unjust enrichment. Majoritys interpretation of statute is wrong. It authorizes transferof tissue for research purposes and only prohibits sale for treatment and t

ransplant. The statute treatstissue as property that can be sold and should be protected by law of conversion. Majority gives patientonly the right to refuse and not the right to grant consent on the condition of sharing proceeds.To win on a nondisclosure action, Patient must show that they would have said noif he had knownAND no reasonable person would have said yes.Policy: Want to encourage researchers to come up with medical breakthroughs thathelp people, and legislatureshould decide. Leshy disagrees if wanted to have legislature decide, should have ruled the other way.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 5 of 52


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Property Outline 10/5/10 10:49 AMPatients dont have lobbying power like the medical industryRule:Once body parts removed, they no longer belong to the patient but Drs have a duty to get informedconsent to use them. Moore had no property rights over his tissues once they were removed from hisbody.1. Notes:A) A patent is granted for invented skill. The patent of the process doesnt meanI own whatcreated that process or the materials that go into the process.B) Law of accession: What happens when someone comes along and applies his skilland laborusing your materials? Who owns the product? 1) The person who owns thematerialscontinues to have an interest. 2) How much depends on all the facts and circumstances.Courts may give owner of materials more than worth of materials, but nowhere nea

r asmuch as the worth of the product.b. The right to include and exclude (p 99)1. General rule: Property is a relationship among people that entitles owners toinclude (permit)and exclude use or possession of the property by others.A) The right to exclude is fundamental (even when inefficient) except to serve the publicgood.2. Jacque v. Steenberg Homes (p 100)Facts: The best path for a mobile home to be transferred was across the Jacques land. Jacques refused,Steenberg Homes went across their land anyway.Issue: Can owner exclude someone from crossing land even if would cause no damage and is moreefficient than going around?Analysis: US Supreme Court recognizes private landowners right to exclude othersfrom his land, one ofthe most essential sticks in the bundle of rights. Intentional trespass can threaten the individualsownership of the land. Society has interest in punishing trespassers beyond protecting the interestsof the individual landowners.Policy: This serves the public good. In the long run this is economically rational even though inefficientin this case.Rule: The right to exclude is fundamental (except for serving public good).A) Privacy interests. In addition to property rights, there is a privacy and liberty interest atstake here. Even though this is an extreme situation, this is the law and you have the rightto exclude people.3. State v. Shack (p 101)Facts: Shack attorney for farm workers legal rights and Tejeras nonprofit worker

, entered Tedescosproperty in order to provide medical assistance and legal advice. Tedesco said they had to do it inhis office. Ds refused and said workers hadright to be seen privately.Issue: Did D trespass by entering and refusing to leave private land in order tooffer legal and medicalservices to farm-workers housed on that land?Analysis: Title to real property does not include dominion over people owner permits onto the premises.Migrant workers are highly disadvantaged, and need services. Necessity may justify entry uponlands of another. There is no legitimate need for a right in the farmer to deny workers theopportunity for aid.Policy: Is this consistent with Jacque? The larger human value served by allowing medical and legal aidin the Shack case overcomes the right to protect againsttrespass. This policy distinction isntrelevant in Jacque. Generally speaking, convenience doesnt override property rights.Rule: Right to exclude is not absolute: does not include dominion over people owner permits onto thepremises (farm-workers).A) The court doesnt say this is unconstitutional under 1st amendment -they couldhave, butthey didnt. If court has a choice between common law and the constitution, courts avoidthe constitutional question when they reasonably can. Ruling on c

onstitutional matters ishttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 6 of 52


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Property Outline 10/5/10 10:49 AMrigid, difficult to reverse and potentially at odds with other branches of govt.II. Subsequent Possession: Acquisition of Property by Find, Adverse Possession,and GiftA. Acquisition by Find (p107)i. General Rule: Finder has good title against all but the true owner.ii. Armory v. Delamirie (p 108)Facts: Chimney sweep finds a jewel and takes it to a goldsmith for appraisal. Goldsmith takes the jewels out. CSsuing for amount jewels were worth (trover).Issue: Who has rights to the jewel?Analysis: Unless the jeweler produced the jewel, the jury should find the strongest case against him (most valuablejewel as would fit in the setting).Rule: Finder has good title against all but the true owner.a. Trover: Sweep sued not for the jewel but the value of the jewel (trover). Replevin is suing forreturn of the actual goods.b. Bailment is temporary possession for some particular purpose. The owner is the bailor, and theother person is the bailee. It is a pretty elaborate law.1. Traditional rule: Different kinds of bailments had different kinds of standards of care. Finder:low standard, Cleaners, etc.: high standard of care2. Modern: Mostly just a reasonable duty of care regardless of kind of bailment.3. The law of bailment is traditionally the law of contract because it is usuall

y governed by somecontract, but contract law doesnt work all the time.c. Lawful possession: Anderson v. Gouldberg. Possessor of personal property has superior rightsagainst all but the true owner, even if he obtained his possessionwrongfully. Otherwise, wouldlead to endless series of unlawful seizures once outof true owners possession.d. Notes:1. The sweep is the bailor, and the jeweler is the bailee. In regards to the true owner: the sweep isthe bailee, and the owner is the bailor. This is an impliedbailment.2. Sweep gets all the money based on the assumption that he has absolute clear title to all but theowner. Should the value be discounted the amount of the oddsthat the true owner will showup?A) For a long time, law didnt want to split property: Its yours or it isnt.3. The jeweler is paying the sweep in effect for title, title that is good against all except the trueowner, so then if the true owner does appear, then the jeweler has to give it back.A) The true owner cant sue the wrongful possessor if the bailee has already recovered fromhim. What if the sweep is gone? Law probably would find that the jeweler had topayagain. But S/L would apply.iii. Locus ownera. General Rule:1. Locus owner doesnt have title over lost chattels not attached to land but does

generally havetitle over items imbedded in the soil.2. Finder has title over lost property, owner of locus has title over mislaid property.b. What is the right of the lessee?1. T does have a permissive, possessory right stronger than Peel.2. Terms of the lease may affect ownership3. Elwes v. Brigg gas company leasing the land found a boat in the land.A) Could say that the gas company leased all the things that could be mined fromthe soil, andthe boat is like a mineral ORB) Could say that the gas company leased only the particular minerals in the soil and the boatbelongs to the landownerhttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 7 of 52


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Property Outline 10/5/10 10:49 AMiv.Hannah v. Peel (p 111)Facts: Peel has a house that was requisitioned for soldiers. Hannah, a soldier,finds a brooch in the house. Hannahturned it over to the police to search for owner. No owner was found, Peel claimed from police and sold.Hannah demands broach or damages.Issue: Does the owner of the land on which the finder found the brooch, have better title to the brooch than thefinder?Analysis: The plaintiff, as the finder of the lost article whose true owner wasnever found, has better title than thedefendant who was the owner of the premises. P found the brooch, which was lost, and tried to find thereal owner, who wasnever found. P brought Ds attention to the existence of the brooch. D never occup

iedthe land and was never in possession. Thus, he never possessed the jewel eventhough he owned the land.There is a law that says you own things attached to your land, but this is chattel that isnt attached.Policy: We want to reward finders, especially honest finders, except against thetrue owner.Rule: Locus owner doesnt have title over lost chattels not attached to land. Finder has title (against all but trueowner).v. McAvoy v. Medina (p 118)Facts: Plaintiff found a pocket book on the counter in defendants shop.Issue: Is the finder of a pocketbook left on the counter of a shop entitled to possession as the finder of lostproperty?Analysis: A pocket book left on the counter is not lost property. Thus the finder of such property does not have titlebecause the property was not lost.Policy: A mislaid item has a higher chance of being recovered. We want to encourage items to get back to theirtrue owners. True owner more likely to come back to the shop to look for it.Rule: Finder has title over lost property, owner of locus has title over mislaidproperty.a. Notes: You can still serve the policy by giving the shop owner custody but the finder should get it iftrue owner is not found, or make arrangement to dividethe property between finder & owner.b. Lost v. mislaid1. Lost: true owner didnt intentionally or clearly place object somewhere. Title

to finder except asto true owner.2. Mislaid: true owner intentionally places object somewhere and subsequently forgets to pick itup. Title to locus owner except as to true owner (usually).3. Abandoned: true owner intentionally left it because no longer wanted it. Title to finderabsolutely.c. Objects of the law regarding lost, mislaid, and abandoned property:1. Get back to true owner. This is first and foremost.2. Encourage people to be honest. The law, where it can be avoided, should not encourage peopleto lie and should encourage and reward honesty.3. Minimize litigation: Promote certainty, have clear rules.4. Maximum utilization of property5. Protect (reasonable) expectations of locus owner. Where there is a real property owner in themix, you have interests and expectations around that property.A) Protect privacy dont want to authorize people to go onto private property looking forthings. Protect right to exclude.6. Where you have these conflicting policies, the law gets muddied. You get a bunch of casestalking about things that are not coherent.A) Getting back to owner best served by giving to Peel, rewarding honesty, to Hannah.B) Why not penalize the true owner for losing it? You might be licensing peopleto steal inambiguous situations. Finders keepers would still cause litigation over who found first.d. Statutes:1. CA finder must notify true owner if known and restore without compensation; if > $100, takehttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 8 of 52


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Property Outline 10/5/10 10:49 AMto police. If less than $250 and owner doesnt claim in 90 days, finder keeps it.More valuableproperty may be advertised, and if not claimed, sold at public auctionvi. Shipwrecksa. Shipwrecks are not considered abandoned property, generally generally claimedby government orinsurance company. Usually litigation is between private partyand insurance company, sometimesbetween the locus owner and/or govt.1. State owns certain distance out, then US govt, then international law and usually no locus owner.b. Historians and archeologists are very distrustful of applying the law of finds. The modern salvagersare, at least public relations-wise, sensitive to this. S

ay they will excavate archeologically.c. Another problem is that finding shipwrecks is expensive. Wont do it unless there is some incentive.Encouraging these excavations is also part of the picture.1. Government should regulate to protect the archeological interests, interestsof finder, true owner,locus owner. If you do it right, you can serve all of these purposes.vii. Treasure Troves: treasure buried underground for safe keeping with intent to return.a. Traditionally belonged to the kingb. In US, all hidden $, and treated as other found property.1. If found in moveable property like an airplane, it is mislaid and belongs toowner of plane.2. If found in ground owner of land3. If found in property but deemed abandoned first finder or his agent/bailee.viii. Estray beasts whose owner is unknown.B. Acquisition by Adverse Possession (p 127)i. General rule: If you 1) actually enter to exclusively hold and possess 2) hostile to the true ownersrights (in minority), 3) openly and notoriously, and 4) continuously for length of statute of limitations,title becomes yours and is assumed to have become yours at point of entry.a. Actual entry and exclusive possession means using the property as the true owner would use itunder the circumstances (Howard v. Kunto).b. Hostile (state of mind): must have intent to claim the property of another. Use cannot be authorizedby owner.1. Minority requires hostility.2. Majority uses Objective Standard: If other requirements of AP are met, hostility is implied,regardless of subjective state of mind.A) If you say that state of mind is irrelevant, then you are treating people with base, thief-likeintentions the same as honest mistakes. This is the moral objection to objectiveview.B) If you say state of mind counts, litigating these cases is a mess. In the big

picture, its bettereven if you end up rewarding a few thieves.3. Claim of right: Good faith claim -thought it was yoursA) You can still be hostile to owner even if in good faithB) Courts more likely to award to person whothought they had a claim of right than personwho knows hes trespassing.c. Open and Notorious1. Statute of limitations begins when possession/use is open and notorious2. Owner of property should be put on notice by the use. You have to be able toknow that there isa trespass. It isnt fair to trigger the clock if you dont know about it, if there wasnt reason foryou to know it.3. For small encroachments, actual notice to owner is required (Manillo v. Gorski).d. Continuous1. If owner reasserts right to property, then statute of limitations starts over. This use better informsthe true owner.2. Continuous use is how the true owner would use the land under the circumstances.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUJeshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 9 of 52


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Property Outline 10/5/10 10:49 AMe.Statute of limitations1. Western states have shorter statutes of limitation, and usually have an additional requirementthat you must pay real estate taxes to have AP.A) Conventional wisdom is that this came about b/c of RR land. RRs were huge landownerswith no way to effectively police the land.ii. Why AP?a. OW Holmes: Possessor has come to expect continued use and access, and the true owner has fedthat right by not ejecting.b. Economic: if you (owner) are not using it, someone else should be allowed to.Property is there tobe used productively. This is for the good of society.2. AP takes time. You have to do it for years. If someone makes productive use of property thatwould otherwise lie fallow, law says ok.3. The economic explanation doesnt depend on the state of mind. There are other reasons for notlooking at state of mind. It is hard to figure out and hard to pro

ve, and it is almost alwayssomething that happened a long time ago.ii. Earning and Sleepinga. Earning productive economic efficiency idea. AP earns title by his actions, good works andsocially productive activity. This focuses on actions and intent ofthe AP.b. Sleeping looks at true owner. Penalize the true owner for sleeping on their rights.c. Both are valid, but there are some cases that would turn out differently based on which one youthink of as the main reason for AP.d. Squatters rights: book says squatters never get rights, but if they are usingthe land openly andadversely, there is no reason why they cant be APs. There is alay sense of squatters that there isan understanding btwn owner and squatter.iii. Van Valkenburg v. Lutz (p 129)Facts: Lutz bought some land near an empty lot. They traveled across the lot, built a small shack onit, grew vegetables and raised chickens on it. 30 yrs later,Van Valkenburgs bought the emptylot and tried to kick the Lutzs off. In court,Lutz conceded that the lot was owned by VanValkenburgs but argued for right to use the travel way and won (easement). Then Lutzbrought suit for ownership of thelot through adverse possession.Issue: Was the whole of the land usually cultivated or improved by the Lutzs?Rule: Under NY statute: Adverse possession 1) where it has been protected by a s

ubstantialenclosure, or 2) where it has been usually cultivated or improved forat least 15 years.Analysis: The proof fails to show that the whole of the land was cultivated andimproved by the Lutzs.The garden was only on a small part of the land, the chicken coops were portableand movedaround, and there was junk laying all around. Lutz said he knew at thetime it wasnt hisland. A fundamental concept of adverse possession is that the occupation be under claim oftitle that is hostile to the true ownership. In a previous suit, Lutz conceded that the land wasowned by the Van Valkenburgs rather than declaring his hostility and asserting his rights asthe true owner.Dissent: Court shouldnt be making decisions on the facts but looking at the law and whether the trialcourt erredRule: Intent to claim property or mistakenly possessing property is not enough.a. Notes:1. Notice to owner: Protected by substantial enclosure court says no, but there were markers.Purpose of this is to give notice to others so that the world and the true ownerthat I amclaiming it. When you take steps as an AP that gives the true owner the opportunity to kickyou off, the clock starts ticking on the statute of limitations.2. You can AP part of someones property, so why does Lutz get nothing?b. Color of title vs. claim of right/claim of title. Color of title is where you

are making an adversehttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 10 of 52


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Property Outline 10/5/10 10:49 AMpossession claim but you have something in writing that gives you title.1. Rules for these claims are somewhat more relaxed: shorter statute of limitations, possession ofpart of the land is constructive possession of the whole.e. Bilateral Monopolies (Marengo cave problem, p 141)1. Bilateral monopoly: Two parties locked into dealing with each other. This canlead to highnegotiation costs w/ each trying to get the best deal. This isnt economically efficient.2. Cave is under two peoples properties. Who owns the cave?A) Ad coleum doctrine is that person who owns land owns what is in the air aboveand underthe ground.B) This is a commons problem. They both have an ownership and it is inefficient.C) Could say that person who owns the entrance owns it. That person is the onlyone who canuse it from their property. There is a single owner, and others dont have expectations ofbeing able to use it. But what if there is more than one entrance? How a

bout whoeverdiscovers it? But then licensing trespass.iii. Manillo v. Gorski (p147)Facts: Gorskis bought a lot adjacent to lot owned by Mannillos. Gorskis made additions to the house, includingraising the house and extending the stairs. Thesesteps and the concrete walk extend 15 inches ontoMannillos land. Gorski claims title by adverse possession.Issue: Is a hostile state of mind required? Was possession open and notorious?Analysis: When Gorskis built steps and path over property line, they thought they were on their own land, but stateof mind is irrelevant. Maine doctrine (hostile intention) is rejected. Use must be open and notorious. Theencroachment was soslight that Mannillo may not be expected to know of it even though he could seetheactual path.If it is open and notorious, Gorskis should pay reasonable price for the land (modern trend).Policy: Maine doctrine (hostile intention) rewards the intentional wrongdoer while disfavoring the honest,mistaken entrant. Making owner survey all the time is an undue burden.Rule: Hostile state of mind requirement rejected. For small encroachments, actual notice to owner is required.a. Notes:1. Earning rationale Gorskis built the steps2. Sleeping rationale Mannillo didnt even know he was sleeping on his rights andreasonablycouldnt know. This is what the court adopts. Court says there must be a

ctual notice, butprobably would suffice to have inquiry notice you have enough knowledge to put on youthe duty to inquire further.b. Property rules and liability rules1. Property interest protected by property rule: cant take from owner without consent. All transfersare voluntary.2. Property interest protected by liability rule: Interest can be taken withoutowners consent butonly payment of judicially determined damaged: forced transfer.c. Doctrines of agreed boundaries, acquiescence, estoppel1. If the two parties agree on a boundary but they are mistaken, and there is along period ofacquiescence (but perhaps shorter than S/L), then neighbors are estopped to deny the validityof their statements and actionsd. Mistaken improvers1. Early common law: anything built on the wrong land, even innocently, belongedto the landowner.2. Later, forced conveyance of land at market value or give landowner option tobuy improvement.A) If takes up lots of land, may be ordered removed.B) Intentional encroachers often made to remove.C) If innocent encroachment is so small as to be trivial, relief may be denied.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 11 of 52


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Property Outline 10/5/10 10:49 AMiv.Howard v. Kunto (p153)Facts: Since at least 1932, the deed to the land occupied by the Kuntos described the lot adjacent to them rather thanthe lot they actually occupied. A survey by the previous owners showed that the deed was correct. TheHowards (occupying land two lots to the east) had a survey of their land in 1959 and discovered thattheyactually owned the land of the Moyer house, and the Moyers owned the land ofthe Kunto house. Howardstraded with Moyers the title of their land for the title to the Kuntos land. Howard brought an action to getlegal recognition of their o

wnership of the title of the land occupied by the Kuntos.Issue: Can summer use only of this summer home be considered continuous use as required for adverse possession?Can an AP under color of title use the period of time immediate predecessors occupied to establish his AP?Analysis: Summer use only of a summer home is continuous use. This how an ordinary owner of this land would usethis home.A person may tack the adverse use of his predecessor even when none of the occupied land is included in thedeed. Tacking is permitted if successive occupants are in privity (mutuality of legal interest), and has beenused for cases where the owner believed that he owned more land than his deed stated. The claim of right of aperson who occupies a lot directly adjacent to the lot in his deed is no lesspersuasive than the person whobelieves she is purchasing more than her deed describes.Rule: Continuous use for AP purposes is measured by how an ordinary owner of theland would use it under thecircumstances. Tacking of AP time is permitted if successive occupants are in privity of contract or blood.v. Tacking (p 159)a. You can tack on land if there is a piece of it that isnt in the deed but you t

hink it is.b. You can tack on previous adverse possessors time if you are in privity (a legal relationship) likeprivity of contract-one bought it from the other; inheritedit; got it as a gift.1. Series of trespassers cant tack.c. You can also tack on previous true owners if the property was transferred while you were AP.1. Earning rationale: earned it from both owners2. Sleeping: Shouldnt you go out and look at it before you buy it? First owner slept and so did thenext owner.vi. Disability (p 161)a. If owner has certain disabilities minor, unsound mind, imprisoned, S/L is extended to certainlength of time after disability is removed. Applies if disabilityexisted when cause of actionaccruedb. Also has included anyone claiming from, by, or under such a personvii. AP against the government (p162)a. Common law: AP doesnt run against govt. Also some Constitutional provisions protecting statelands.1. Sovereign immunity. Govt is immune to claims or suit w/o consent.2. State owns in trust for the people.3. Govt owns 1/3 of land, and it is an unfair burden to have them police it allthe time. The govtgenerally keeps this land for public to use. If govt was opento AP, they would fence it off andkeep people out.iv. Adverse Possession of Chattels (p 163)a. Usually shorter statute of limitationsb. OKeefe v. Snyder (p 163)Facts: Georgia OKeefe found her paintings that had been stolen in the 40s in an art gallery. Gallery owner(Snyder) bought from Frank, who said he got it from hisfather, who knew Steiglitz. OKeefe did notreport paintings stolen at the time, only much later. Snyder argues that statuteof limitations has run, andhas title through adverse possession (tacking posses

sion with Franks).Issue: Is there enough conflict of evidence for suit to be brought by OKeefe forpossession and title of thepaintings?Analysis: S/L wont start until the items are discovered or reasonably discoverable as long as the owner has takenreasonable measures to locate the stolen items and notify potential buyers that they have been stolen.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 12 of 52


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Property Outline 10/5/10 10:49 AMTransfer of possession by subsequent possessors makes it harder for the owner tofind it, and discoveryrule still applies. However, once it has begun, S/L doesntbegin running anew if items change hands aslong as there is privity between possessors.Rule:Discovery rule for AP of chattels: in appropriate cases, cause of action will not accrue until injuredparty discovers, or by reasonable diligence and intelligence should have discovered, facts that form thebasis of the action.c. Discovery Rule in appropriate cases, cause of action will not accrue until injured party discovers,or by reasonable diligence and intelligence should have discovered, facts that f

orm the basis of theaction.1. Puts the burden on the true owner. We look to the conduct of the true owner,not the AP, nothow open AP is but how hard true owner tries to find it. In realproperty, we always look toactions of AP rather than true owner.2. Clock doesnt start again if possessor changes and they are in privity. This isto protect the bonafide purchaser.3. Bona fide purchaser cannot get good title from a thief but can from other scoundrels (boughtwith bad check, etc.) who have a voidable title.d. Demand Rule: AP clock starts running only after true owner demands return. Only NY has thisrule.e. Native American Graves Protection and Repatriation Act of 1990 (p 176)1. Federal law trying to get Native American artifacts and burial items to Native Americans.2. Can the museums claim AP? No. Museums have to give it back (complicated issues with tribesthat dont exist) unless, museum can show right of possession.A) Right of possession is possession obtained with the voluntary consent of theindividualowner or tribe (and museum must show this) unless results in 5th amendment taking ofproperty without compensation.B) Federal law trumps state law about AP.C. Acquisition by Gift (p 178)i. General rule: A valid inter vivos gift must include 1) intent, 2) constructive, symbolic or actual delivery,3) acceptance. Until delivery has taken place, gift is not complete.a. Delivery1. Constructive delivery handing over a key or something that gives access to the subject matterof the gift.2. Symbolic delivery handing over something symbolic of the property given (a wr

itteninstrument).3. Purpose of delivery requirement partly to make donor feel and understand whatthey are doing.Also proof that the donor intended to and actually gave the gift.b. Acceptance is assumed if it would be beneficial to the donee.ii. Inter vivos gift gift completed while donor is alive. Cannot be revoked after it is completed.iii. Gift causa mortis gift given in consideration of death. These gifts are automatically revoked and goback to the donor if the donor survives but cannot otherwise be revoked.a. Gift causa mortis requires stronger proof than inter vivos gift. If the giftis valid, it circumvents thewill. Wills require a lot of formality but gifts dont. The easier you make it for people to claimgifts causa mortis, the more you undermine the wills statute.iv. Newman v. Bost (p 180)Facts:On deathbed, Van Pelt gave Newman keys to bureau, doors in house and told her she could haveeverything in the house. Newman kept the keys. Bost, administrator,sold everything and kept it, includinglife insurance policy in the bureau and fire insurance on the piano Van Pelt had bought for Newman.Newman sues for furniture and life insurance policies as gifts causa mortis andfor her bedroom propertyand insurance money on the piano as gifts inter vivos.Issue:Was there valid delivery of the gifts to Newman from Van Pelt, both of the giftscausa mortis and the giftshttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+proper

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Property Outline 10/5/10 10:49 AMinter vivos?Analysis: Gifts causa mortis: There was valid delivery of any article of furniture that could be unlocked by the keysgive to Newman, as these articles could notbe manually delivered (constructive delivery is enough). Therewas not valid delivery of the life insurance policy because it could have been manually deliveredandbureaus are not intended or expected to store such things of value.Gifts inter vivos: There was valid delivery of Newmans bedroom belongings becausethey were boughtfor her during Van Pelts lifetime for he exclusive use and control. There was not valid delivery of thepiano because Van Pelt insured it as his

piano.Dicta: no such thing as symbolic delivery for gifts causa mortis.Rule: Constructive delivery is sufficient where the donor plainly intends to make the gift and the items are notpresent or are incapable of manual delivery because of their size or weight. When items are present andcapable of manual delivery, manual delivery must be had.a. Notes:1. If the bureau had been a safe and he gave her the keys, it would have been delivery. A safe isintended for holding things of value, while bureaus are not designed to hold things of value.2. Court seemed to rule differently on facts found by the jury although appellate court is supposedto accept the facts found by the jury.v. Gruen v. Gruen (p 187)Facts: Father (Victor) wrote letter to son (Michael) giving him Klimt painting for his birthday. Father wanted tokeep possession of painting during his life (keep a life interest). Son never had possession. Father died,stepmother wants to keep it.Issue: Can a valid inter vivos gift of chattel be made where the owner reservesa life estate and the donee never hasphysical possession before donors death?Analysis: There is a distinction between ownership and possession. The correct test is whether the donor intended thegift to have no effect until after the donors death (making it a gift causa mortis), or whether he intended it totransfer so

me present interest. Once a gift is made it is irrevocable, and donor is limitedto rights of lifetenant, and the donee gets the remainder. Under a will, neither title nor possession vests immediately.When a gift is of value to the donee, acceptance is assumed, but Michael also gave clear and convincingevidence that he accepted it.Policy: Requirement of delivery is not rigid or inflexible but must be tailoredto suit the circumstances of the case.Requiring actual delivery in this case would be artificial.Rule: A valid inter vivos gift of chattel can be made where the owner reserves alife estate and the donee never hasphysical possession before donors death. Songets the painting.System of EstatesIII. Possessory Estates (p 197)A. Feudalism (p 197-205)i. All land was owned by the king. He gave possession to lords and barons, who had an obligation toprovide certain number of soldiers to the king. Lord could give possession of a parcel to an underlingin exchange for soldiers or other obligation (seisin).B. Estates (p 195)i. Estates: an interest in land that has two characteristics: it is or may become possessory, and it ismeasured in terms of duration.a. Courts interpret ambiguous grants as the largest estate possible (White v. Brown)ii. Freehold: no ascertainable termination date, includes fee simple, life esate.a. Freeholder has seisin possession with duty of feudal services. Passing seisin

had to include formaldelivery of a piece of the land (clod of dirt, branch) while on the land. (p 238)iii. Nonfreehold: have an ascertainable termination date, includes tenancy for years, periodic tenancy,tenancy at will, (tenancy at sufferance).a. Leaseholders dont have seisin. (p 239)iv. People cant make up any other kinds of estates.a. To carry out your intent, you have to fit it into the existing pigeonholes. There is too muchhttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 14 of 52


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Property Outline 10/5/10 10:49 AMinstability if property owners have freeform ability to recreate rights.C.Fee Simple (p 209)i. Fee simple: Absolute ownership (used to be called fee simple absolute), as far as any propertyownership can be absolute (ownership is almost never absolute).a. Most unrestricted and longest estate. It is permanent and of unlimited durationii. How Fee Simple Developed (p 209)a. Heritability land wasnt owned by possessor but held by possessor as a tenant so couldnt go toheirs. Then heirs paid for it, then it went automatically to heirfor continued payment.b. Alienability later became alienable and always passed to heirs. Tenants couldsell with lordspermission.iii. Creation of fee simple (p 211) Words used to convey fee simple:a. Common law: To A and his heirs To A foreverb. Modern trend: To A. When language is unclear, courts prefer fee simple estates.iv. Inheritance of Fee Simple (p 212)a. If a person dies intestate (no will) property goes to heirs. You dont have hei

rs until after you die.b. Heirs are children and issue (their children), parents, collaterals (siblings, aunts, nephews, cousins).1. Now spouse gets a portion.c. If you dont have any heirs, it escheats to the state.d. Wills: person who gets your property under your will is your devisee.D. Life Estate (p 221)i. Lasts for the life of the person. Always followed by a future interest. Person w/ life estate has a life estatepur autre vie.a. You can sell your life interest.b. Typically measured by the life of the person who holds the estate, but can bemeasured by someoneelses life.c. To A for life, To A until he dies, To A and at his death to his childrenii. Waste doctrinea. Duties of LT1. LT may not waste or unreasonably decrease the value of the property for the person with theremainder interest. Also must pay taxes, make repairs, pay interest on mortgage. No obligationto insure.2. Life tenant cant sell, can only lease during lifetime, cant get a mortgage forrepairs, may not beable to use the property in many ways because of waste.b. If a mine was open when donor is alive, it is within his expectation that life estate will mine thecoal, and remainder people cant stop her. BUT, if a mine islater discovered, life tenant wouldhave to get remainders permission.c. Waste doctrine influenced by the age of the life tenant. Gets more discretionabout managing theproperty the longer her life expectancy is. Why? She has moreincentive for long termmanagement. The older she gets, the more her interest will differ from the remainderd. Affirmative and permissive waste (p 235)1. Affirmative waste injurious, voluntary acts that have more than trivial effec

ts and thatsubstantially reduce the value of the property.A) Generally speaking, LT can make changes if it doesnt depreciate the value of the property.2. Permissive waste failure to take reasonable care of the property. This is a question ofnegligence.e. Adverse Possession of property held in life estate1. If AP property while owned in fee simple that is split into life estate and remainder during S/L,AP was possessing against FS owner.A) Remainderman has an ownership interest that has been snatched away by AP. R loseshttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 15 of 52


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Property Outline 10/5/10 10:49 AMproperty by LTs inaction.B) R can sue LT for waste.2. If you enter against a life estate owner, and statute runs, AP gets life estate for original lifeestate owners life. If LT dies before statute of limitationsruns, clock begins again at LTsdeath.iii. White v. Brown (p 221)Facts: Lide left her house to sister-in-law (White) in a handwritten will for White to live in and not sell. Lide leftpersonal property to niece Sandra (Whites daughter). White alleges she was vested with a fee simple title.Issue: Did Lide leave a life estate to White or fee simple title?Analysis: If the expression of the will is doubtful, the doubt is resolved in favor of an absolute estate. Lide did notprovide a person who would inherit the remainder of the property after Whites life estate. There is notenough evidence of

intent to pass life estate to overcome the laws strong presumption against it. Court willdiscard provision that property will not be sold because the law resistsabsolute restraints on alienation.Dissent: The limitation that the house was not to be sold indicates that Lide intend to give a life estate. You cantjust strike this part of the will.Rule: Court interprets ambiguous grants to mean the largest estate possible.a. Notes:1. If White had a life estate, heirs would have remainder (in fact, vested remainder). Whitewouldnt be able to leave house to her heirs when she dies because sheonly has a life estate.2. But, since Jessie didnt provide a person to get the remainder, she probably didnt intend a lifeestate. If she had said and then go back to my heirs, or to this other person afterwards, thiswould imply an intent for a life estate.3. Court interprets ambiguous grants to mean the largest estate possible. Why? Makes the economymore efficient because people will use larger estates to a greater extent.b. Law is hostile to absolute disabling restraints on alienability1. Why? We want property to be flexible and used in the highest and best way possible.2. Anything that does not restrict sale absolutely is ok (not be sold to corporation; for 5 years; toEvelyn as long as she doesnt sell it, then back to my heirs)

. This is a forfeiture restraint,which is allowed (p 228).3. Promissory restraint you get it if you promise not to transfer it, and your promise isenforceable under contract remedies.c. Valuation of Life Estate and Remainder (p 229)1. Use life expectancy tables, figure out how much per year of the interest goesto the life tenant,multiply by years of life expectancy.2. Remainder is value at end of life tenancy minus life estate value.iv. Baker v. Weedon (p 230)Facts: Weedon had 3 grandchildren from a previous marriage. He left his farm aslife estate to his current wife(Anna), then to her children upon her death, or to his grandchildren if Anna had no children. Anna has nokids, so Weedons grandchildren are the remaindermen. Previously they worked out selling to govt aneasement for a highway. Anna doesnt have enough money to live on and wants to sell mostof the farm,invest the proceeds, and live off of the interest.Issue: Would sale of the land and investment of the proceeds be in the best interests of both the life tenant (Anna)and the remaindermen (three grandchildren)?Analysis: Grandchildren dont want to sell it because in 4 years, it will be wortha lot more. Sale of the land isnt inthe best interest of all parties it would result in great financial loss to the remaindermen. Perhaps part ofthe land can besold now, but only if all parties can agree.Rule: Deterioration and waste of the property is not the exclusive and ultimatetest to be used in decidingwhether to sell land affected by a future interest, b

ut also whether a sale is necessary for the best interestsof all parties.a. Notes:1. Bad decision. Grandchildren have no sentimental attachment, just greedy.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 16 of 52


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Property Outline 10/5/10 10:49 AME.Defeasible Estates (p 240)i. General rule: A holder of a fee simple defeasible is subject to a divestment,but may still hold, use, andconvey forever as long as the condition is met.a. Always followed by a future interest.b. In FSD and FSSCS, grantor has a reversion (future interest)1. Traditional: you cant transfer reversion by will or inter vivos transfer. A reversion isnt actualproperty. A reversion can only pass by inheritance.2. Modern: most states allow inter vivos transferii. 3 types: Fee simple determinable, fee simple subject to a condition subsequent, fee simple subject toexecutory limitation.a. Fee simple determinable (FSD)1. Fee simple that is divested automatically when a particular event happens.2. Grantor gets a possibility of reverter: the grantor keeps an interest that vests automaticallywhen the event happens.A) Transferee (who gets the future interest) has an executory interest. Transferee can benamed or can be by operation of law (grantor or his heirs).3. Words used to create:A) So long as, until, during, while, revert to grantor4. Purpose is to prevent property from being put to a certain use, or ensure that it is only used for aparticular purpose.5. S/L for AP starts to run from the time of creation, usually very long or ther

e is no limit.A) Laches bars relief when the grantors delay causes injury or disadvantage.b. Fee simple subject to a condition subsequent (FSSCS)1. Doesnt automatically end when the event happens but may be divested at the grantors electionwhen the event happens.2. Courts prefer FSSCS and will construe ambiguous language to mean FSSCS. Courtpresumeslargest possible estate for the grantee. Law doesnt like automatic forfeiture.A) CA: there is no FSD. If you use words to pass this fee, you are passing FSSCS.3. Grantor gets right of entry (power of termination) the future interest retained by thetransferor to divest a FSSCS when the event happens.4. Words used to create:A) Must indicate that 1) the grant is subject to a condition: provided that, however, on thecondition that AND 2) the grantor may reenter the property and terminate the estate.5. S/L for AP starts to run when the condition happens and is usually short.c. Fee simple subject to executory limitations (p 285)1. Estate passes to a third party instead of the grantor.2. Example: To A, but if property used for x, then to B.3. Can use same language as FSD and FSSCS, but shifts interest to a third party.iii. Marenholz v. County Board of School Trustees (p 242)Facts: Huttons gave piece of land to School Board to be used for school purposesonly. They transferred thewhole land and the interest in the school land to Jacqmains, who later transferred both to Mahrenholzes.After Huttons death, their only heir, Henry, released any possibility of reverteror right of entry to schoolboard, and also gave all interest in school land to

Mahrenholzes. School started storing stuff on the landinstead of holding classes.Issue: 1) Could Mahrenholzes have acquired any interest in the school land fromJacqmain?2) Did the language of the deed give FSSCS or FSD?Analysis: 1) You cant transfer reversion by will or inter vivos gift but only byinheritance. Reversion isnt actuallyproperty.2) If the language of the deed gave FSD, Henry would have become owner of the property automaticallywhen condition was broken. He would then be able to transferall interest in the land to the Mahrenholzes. Ifhttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 17 of 52


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Property Outline 10/5/10 10:49 AMit gave FSSCS, Henry could become owner of the property only if he rentered theproperty. He would beunable to transfer ownership to the Mahrenholzes.Here it was a fee simple determinable.Rule:The phrase to be used for only indicates the granting of fee simple determinable followed by a possibilityof reverter, which automatically gives ownership to grantor or his heirs when condition is broken. Grantor orheirs can only transfer ownership to a third party after property has reverted to them if FSD, or if FSSCS,only after reentry.a. Note: To quitclaim is to give whatever you have. You are not saying what youhave. It is aconveyance of whatever, if any, you have. This is kind of what Henry did in transfer toMahrenholzes.iv. Palm Springs v Living Desert Reserve (p 265)Facts: Deed land to city as long as used as a reserve. If not, then to Living De

sert Reserve. City wanted to make agolf course, so brought an action for condemnation (government taking land for fair market value). In acondemnation, party with right of reentry doesnt get anything, only the party holding the FSSCS gets paid,in this case, the govt itself.Analysis: City is trying to get around the condition in the FSSCS. The action tobuild the golf course(and not use it as a reserve) is imminent, so city has violated the condition and LivingDesert has a right to reenter.v. Defeasible Life Estates & the Marriage issuea. Leave to my wife until she marries again.b. This is using property to control behavior (law even more hostile to this invasion of privacy).Mahrenholz is about controlling how property is used.c. The marriage restrictions tend not to be enforced. Courts will enforce it ifHs intent was to supporther while unmarried, but if H intended the restriction tokeep her from getting married again,courts dont enforce.IV. Future Interests (p 269)A. Future interestsi. Not mere expectancies but presently existing property interests.ii. Future interests do not entitle the holder to possession but may become possessory in the futureB. Future Interests in the Transferor (p 270)i. Reversion the right to future possession by the transferora. Interest left over for the owner when he carves out a lesser estate without specifying a third partyremainderman. Reversion to transferor if no on is specified to get the estate after the prior estateends.b. Ex: O conveys blackacre to A for life. O has a reversion.c. If it does not become possessory, it is divested.1. To A for life then to B and his heirs if B survives AA) If B out lives A, reversion becomes divested from the grantor.B) If A outlives B, reversion will become possessory in the grantor.d. At common law, reversions are transferable by will, inheritance, and inter vi

vos transfer.ii. Possibility of Reverter The transferors interest following a fee simple determinable.a. Automatically vests when specified event happensb. Inheritable, but under common law not transferable by will or inter vivos (although modern trend isto allow).iii. Right of Entry The transferors interest following a fee simple subject to acondition subsequent.a. Transferor must reenter after event happens to vest. When transferor reenters, he terminates the feesimple.C. Future Interests in Transferees (p 272)i. Remainders future interest in a transferee which can become possessory only upon the expiration of ahttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 18 of 52


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Property Outline 10/5/10 10:49 AMprior possessory interest created by the same instrument. Remainders never follow fee simple.a. Vested remainder remainder not subject to a condition precedent that is givento a third personwho is expressly determined.1. Indefeasibly vested remainder certain to become possessory by transferee or his heirs.A) Ex: To A for life, then to B.2. Vested remainder subject to partial divestment (subject to open) there are parties whoseinterest is certain to become possessory, but there may be other parties not yet ascertained whowill share the interest.A) Ex: To A for life, remainder to Bs children and their heirs. If B already hasone or morechildren and may have more, the existing children have a vested remainder subjec

t topartial divestment.3. Vested remainder subject to divestment (subject to complete disfeasance) vested remaindersubject to a condition subsequent. Although transferees interest willbecome possessory ifprior estate ended today, there is a possibility his interest will never become possessory.A) May expire: To A for life, then to B for life. While A and B are alive, B hasvestedremainder subject to divestment b/c he may die before his interest become possessory.B) May be divested byI) Executory interest: To A for life, then to B and his heirs, but if B dies without issue,then to C. If B died without issue, his interest, although vested now, will be completelydivested and go to C.II) Right of entry: To A for life, then to B and his heirs, so long as always used for achurch. (transferor can reenter if condition subsequent occurs)III) Power of appointment: To A for life, remainder to A as A appoints, but if Adoes notappoint any, then to B and his heirs.C) To distinguish from contingent remainders: If condition is contained within the grantingclause, it is a condition precedent and therefore a conditional remainder (but ifthen to).If the granting clause stands alone and a subsequent clause takes it away, the r

emainder isvested (,then if).I) If unclear, vested remainder is preferred.4. Transferable by inheritance, will, inter vivos.5. If first future interest is a vested remainder in fee simple, the second future interest in atransferee will be a divesting executory interest.b. Contingent remainder remainder not yet vested because 1) given to a third party not yetascertainable OR 2) made contingent on some event other than the natural termination of the priorestate (subject to a condition precedent).1. Transferee not yet ascertainable either because not born or will be determined by future events(for instance, heirs of a living person).A) Ex: To A for life, then to As eldest son.2. Subject to a condition precedent a condition that must be met before remainder becomesvested. (Condition subsequent condition that ends the interest)A) Ex: To A for life, then to B and Bs heirs if B survives A.3. Alternative contingent remainders -One party subject to condition precedent,and the other tothe opposite condition precedent.A) To A for life, then to B and her heirs if B survives A, and if B doesnt survive A, then to Cand her heirs.4. Destroyed if doesnt vest by the end of the previous estate.A) Can become vested5. Subject to RAP.6. Not transferable under common law, but transferable by inheritance, will in all JX now and byinter vivos transfer in most JX.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 19 of 52


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Property Outline 10/5/10 10:49 AM7. If first future interest is a contingent remainder in fee simple, the secondfuture interest in atransferee will also be a contingent remainder.c. Courts prefer vested remainder and condition subsequent over contingent remainder and conditionprecedent. Court will construe ambiguous language as the former.ii. Executory Interests Future interest in a transferee that cuts short (divests) a prior interest: either 1)another transferees interest (shifting executory interest) or 2) the transferors interest (springingexecutory interest)a. Fee simple subject to an executory limitation. (p 284)1. If fee simple determinable is followed by an interest in a third party ratherthan a grantor, it is afee simple subject to an executory limitation. The execu

tory interest doesnt, in this case, cutshort the prior estate.b. Executory interests are treated as contingent interests because they are subject to a conditionprecedent and do not vest until they become possessory.c. Ex: To A for life, then to B and her heirs, but if A is survived at his deathby any children, then tosuch surviving children and their heirs. A is alive and has two children, C and D.1. B has vested remainder in fee simple subject to divestment by the executory interest in C and Dif C and D outlive A.D. Rule Against Perpetuities (pp 302-306, 326-35)i. Common Law Rule (p 302)a. No interest is good unless it must vest, if at all, not later than 21 years after some life in being(validating life).1. Ex: to D for life, then to her first child that reaches 21. D is the life inbeing.b. Applies to contingent remainders (subject to a condition precedent) and executory interests. Doesnot apply to vested remainders, reversionary interestsc. Wanted to limit the control of the dead hand.1. Often just passed through strawmen to get around it.2. Doesnt apply when possessory estate and future interest is in charitable organizations.3. It is a classic rule rather than a standard. It doesnt discourage wealth being controlled for along time, just gives money to lawyers who could figure out a wayaround it.4. Tax laws provide the incentive and means to limit long term control of dead hand. The morecontrol you exercised, the more it was taxed. This has overshadowed

RAP.ii. Wait-and-See Doctrine (p 326) many JX stopped using RAP or modified.a. Wait-and-See for Common Law Perpetuities Period1. Contingent interest is valid if it actually vests within the common law period.b. Wait-and-See for 90 years: Uniform Statutory Rule Against Perpetuities (USRAP)1. Wait and see if it vests for 90 years after interest is created.E. Trusts (pp 287-293, 335-338)i. Trusts trusts combined legal interests (law ct rigid rules) and beneficial interests (equity ct questions of justice)a. Trustee -Person who is bound by law to carry out the trust in the interest ofthe beneficiaries.Trustee is the legal owner and has duties spelled out in the trust instrument.1. Held to high standard of care.2. Trustee can respond to changing circumstances without having to go to court for permission.b. Beneficiary the equitable owner and has superior rights. Holds equitable interests or interestsenforceable in equityc. Ex: O conveys to X in trust to pay income to A for life, then principal to As children who surviveA.1. Ahasan equitable life estate.2. As children have an equitable contingent remainder.3. Ohasan equitable reversion and gets property back if none of As children survive Ahttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 20 of 52


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Property Outline 10/5/10 10:49 AMii. Swanson v. Swanson (p 288)Facts: Swanson died testate. He created two trusts in which his wife, Gertrude,had a life estate with the remainderfor their nine children. One of the children, died childless and left all his property to his wife, Peggy (P) inhis will.Trust 1: allows Gertrude to designate other beneficiaries of the trust, and if not, it passes to nine children,divided equally. If any child dies, their share goes to his/her surviving children.Trust 2:Remaining assets divided equally into 9 shares, one to each child or forthe then surviving issue ofeach deceased child.Issue: Was Bennies interest in his fathers trust a vested remainder, thereby passing to his wife after his deathunder his will?Analysis: Trust 1: There are immediately identifiable persons who would take if

the life estate ended = vestedremainder interest. There are two conditions subsequent that could bring about total defeasance but neitherhappened, so Bennies interest is fully vested.Trust 2: Immediately identifiable beneficiaries if the life estate ended. Courttakes surviving children to bea condition subsequent rather than a condition precedent because of laws strong preference. A child dyingbefore Gertrude but leavingchildren who survived could bring total defeasance of the vested remainder, butthis didnt happen.Bennies one ninth interest passes to his wife under his will because 1) his remainder was vested, 2) nocondition subsequent occurred before life estate ended, 3)no language in will plainly shows different intent.Rule: If a beneficiary of a trust dies before the end of a life estate, his remainder can pass to a person designatedunder his will if his remainder was vested,and no condition subsequent that could bring about defeasanceoccurred before the end of the life estate.a. Notes:1. Gertrude had a life estate and was a trustee.2. Law has a preference to construe language of surviving to mean surviving the te

stator3. Law has preference for condition subsequent rather than condition precedent because wants thecontingency to be destroyed and the interest to vest as soon aspossible.iii. Dynasty Trusts (pp 335-338)a. Dynasty trusts 1. At first, successive life estates could endure for as long as RAP allowed tax-free because noestate tax levied at end of life estate.2. Now, generation-skipping transfer tax due at end of life estate if passes to next generation andlevied at highest rate.A) But, amt up to $1 million ($2 mil for married couples) is exempt. So, can create $ 1 milliontrusts and successive life estates tax free: tax-exempt dynasty trust.V. Concurrent Estates Common Law Co-ownership (p 339)A. Concurrent estates two or more people have present possessory and undivided interests in the whole ofthe same property: Tenancy in common, joint tenancy, tenancy by the entirety.i. Tenancy in commona. Separate but undivided interests in whole of the property.1. Interests may be unequal2. May be conveyed separately by deed or will and at different times.3. Each must have a right to possession of the whole.b. No right of survivorshipii. Joint tenancya. Together are regarded as a single owner. Each, in theory, owns the undividedwhole of the property.b. Four unities must be present1. Time: each must acquire interest at the same time2. Title: must acquire title by the same instrument or by joint APA) Never can arise from inheritance w/o will or other act of law3. Interest: must have equal undivided shares and identical interests measured by duration.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 21 of 52


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Property Outline 10/5/10 10:49 AM4. Possession: each must have a right to possess the whole.A) One can voluntarily give exclusive possession to others.B) Also required for TIC.c. Right of survivorship cannot be passed by will or inheritance.1. Survivorship is automatic and not something you can change with your will.2. Survivorship extinguishes the decedents interest rather than passing his interest to the survivor.Therefore, no probate.3. Federally taxed according to portion of property due to decedents consideration. State taxes usubased on JTs share.d. Any transfer of interest destroys the joint tenancy and can be so destroyed without the consent of allJTs.1. If one JT transfers interest to a third party, that party becomes a tenant incommon with respectto the other tenants, but if there are two or more other Ts,they are still joint tenants withrespect to each other.2. If one JT conveys to another JT, joint tenancy is severed only for the shareconveyed, not forany of the other shares.e. In some JX, there must be an express provision of survivorship in order for J

T to be created1. Law presumes tenancy in common absent clear contrary indication2. Some JX have no JT.iii. Tenancy by the entirety (p 341)a. Can be created only by husband and wife (HI allows others).1. Divorce terminates TE.2. Allowed only in ~ half the states.b. Like JT (requires 4 unities) but also requires marriage.1. Unlike JT, can only be conveyed to a third party jointly and with consent ofboth.c. Right to survivorship1. No probate, marital deduction on estate taxes.d. Considered to hold as one person under the lawe. Common law presumes tenancy by the entirety in conveyances to H & W.iv. Avoidance of probate (p 343)a. Probate judicial supervision of decedents property1. Probate is costly and time consuming.2. Creditor can seize JTs property during lifetime, severing JT and creating TIC,but if waits untilafter death, there is no interest to seize.b. Survivorship avoids probate b/c decedents interest is terminated.v. Riddle v. Harmon (p 345)Facts: Mr. & Mrs. Riddle owned property in joint tenancy. Before her death, Mrs.Riddle conveyed her interest injoint tenancy to herself in order to terminate the joint tenancy and create a tenancy in common, so she couldtransfer her interest by her will.Issue: Can a joint tenant unilaterally terminate JT by conveying her interest toherself?Analysis: Mrs. Riddle clearly intended to terminate the tenancy. It is artificial to require a joint tenant to convey interestto a third party (strawman) who will convey it back to the joint tenant in order to terminate joint tenancy. CAstatute already allows JT to be created w/o strawman. Owner can convey to self andanother in JT w/ostrawman, so why not be able to destroy?Rule: One tenant may unilaterally sever the joint tenancy without the use of anintermediary device (strawman).a. Notes:1. CA statute can be interpreted either way:A) For Mrs. Riddle if you can create a JT w/o strawman, why cant you destroy it.

Seemslike policy is no different. If legislature thought it was different, could haveexplained.B) Against Mrs. Riddle if legislature intended statute to apply to destroying JT, would havehttp://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 22 of 52


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Property Outline 10/5/10 10:49 AMsaid it did.vi. Joint Bank Accounts (p 356)a. Bank accounts are different. They are joint for the purposes of the bank, not for survivorshipunder the law.b. Depends on intent1. True joint tenancy one half to each during life, survivorship at death of one.2. Payable on death no rights during life but survivorship upon death of the donor3. Convenience just for bills as needed during life.B.Relations among Concurrent Ownersi. Each tenant is entitled to possession of the whole, so often come into conflicta. Communal ownership encourages inefficient use Posnerb. Rules governing co-ownership should equally distribute benefits and burdens.ii. Partition (p 359)a. Partition action can be brought if cant agree in TIC and JT, not tenancy by the entirety.1. Partition in kind physical division of property.2. Partition by sale property sold and proceeds divided.b. Delfino v. Vealencis (p 359)Facts: Delfinos (P) and Vealencis (D) are tenants in common. D lives on and operates business onone acre and has ~30%, undivided interest. Delfinos want a parti

tion by sale because the landcan be made into a subdivision and is very valuable. Helen wants a partition in kind(physically divided).Issue: Would a partition in kind create material injury to parties?Analysis: Partition by sale only when:1) physical attributes of land are such that physical partition is impracticable: Here, the landonly needs to be divided into two parts.2) the interests of the parties would be better promoted by partition by sale: Here, Helensbusiness is her livelihood. The city would probably approve the subdivision plan even if Helenkept her plot and continued her business. The possible decline in market value due to Helensbusiness and the fact that a road would needto be rerouted is not enough to overcome Helensinterests. The interests of all parties must be considered.Rule: For property owned by tenants in common, courts favor a partition in kind(physical partition)over a partition by sale, and the decision is made in best interest of all the parties.1. Notes:A) Now, the tendency is to sell and divide proceedsB) Courts dont generally takeinto consideration the advantage of one co-tenant acquiring thepart of the property that may be next to other property owned by that party.iii. Sharing the Benefits and Burdens of Co-ownership (p 369)a. Concurrent owners can enter into K governing use and maintenance, but absentagreement, propertyrules apply: (p 379)1. Cotenant paying taxes, maintenance, improvements may seek to recover some or

all of coststhrough partition action, action for accounting, action for contribution.A) Accounting: equitable proceeding for division of costs and proceeds.2. Rents and profits Cotenant collecting rent must account to all other cotenants. This is based onreceipts, and not fair market value (absent ouster).3. Taxes, mortgage payments Cotenant paying more than share generally has a right tocontribution from other cotenants.A) CoT paying more can also get credit in accounting and partition actions.4. Repairs No affirmative right to contribution. How much should be spent on repairs is toouncertain.A) May deduct cost of repairs from rent in accounting proceeding.http://webcache.googleusercontent.com/search?q=cache:QBJnRbY3DuUshyF03.doc+property+outline+and+cases&cd=26&hl=en&ct=clnk&gl=us Page 23 of 52


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Property Outline 10/5/10 10:49 AMB) When possession is shared, a number of JX allow direct action for contribution.5. Improvements No right to contributions and no credit in accounting and partition actions.A) Improvers interest should be protected if wont diminish other interests: can get the portionof the property improved in partition in kind if fair division, ORcan get amountimprovement increased value in partition by sale (owelty).B) These remedies only look at value of improvements, not cost.b.Spiller v. Mackereth (p 369)Facts: Spiller (D) and Mackereth (P) owned building as TIC. After lessee left, Spiller started using it as awarehouse. Mackereth wrote letter demanding either half rent or to vacate half the building. Spillerdidnt do either. Spiller also put

new locks on the doors.Issue: Is Spiller liable to the other co-tenant for rent on building they own incommon that he has fullpossessory use of?Analysis: Adverse possession requires finding that possessing cotenant assertedcomplete ownership. Spilleracknowledged cotenancy relationship by filing bill for partition, precluding AP.Normally, occupying cotenant is liable to other cotenants for rent when occupierrefuses demand ofother cotenants to use and enjoy the land. There can be no denial of right to enter unless there is ademand or attempt to enter. Mackereths letter did not demand equal use and enjoyment of the premisesand rather demanded Spiller to vacate or pay rent. Further, there is no evidence Spillers locks wereintended to prevent other cotenants from entering or that other cotenants asked fora key.Rule: An occupying cotenant is not liable to other cotenants for rent unless hehas 1) agreed to pay rent, 2)begun the statute of limitations for AP, OR 3) the other cotenants have attempted to enter and use theproperty and he has refused them (ouster).1. Notes: If Mackereth had tried to use the property or had asked for the keys a

nd Spiller hadrefused, this would have been ouster.c. An occupying cotenant is not liable to other cotenants for rent unless he has:1. Agreed to pay rent,2. Begun the statute of limitations for AP, OR3. Other co-T have attempted to enter and use the property and he has refused them (ouster).A) Some JX require rent even in absence of ouster but majority doesnt.I) Majority rule encourages better use of property. Not having to pay rent provides anincentive to use it. Under minority rule you cant agree, it may go unused.II) Cost of majority rule is litigation over what constitutes ouster.B) May be stronger case for compensation in residential property, esp. if inherited.b. Fiduciary duties generally, cotenants are not fiduciaries w/ respect to eachother, but cts treatthem as such in certain situations.1. May be familial relationship of trust that requires them to act as fiduciaries2. If one cotenant asserts superior rights, that T is compelled to act in benefit of all cotenantsd. Swartzbaugh v. Sampson (p 373)Facts: Mr. Swartzbaugh (D) leased 4 acres of land to Sampson (D). The land was part of land owned jointlyby Mr. & Mrs. Swartzbaugh. Mrs. Swartzbaugh (P) did notconsent to the lease, and she sued to cancellease. Sampson is in exclusive possession of the leased land.Issue: Can one joint tenant who has

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