Possession

1. General
a. First In Time – basic notion of property law
i.Legal Doctrine & Instrumental Ends
1. Precedent – promotes productivity
2. Possession – protects expectations
3. First in Time, ownership – promotes certainty, predictability
ii.Capture of Wild Animals
iii.Finding Property
b. Bailments – Created when one person gives temporary possession of their property to
another.
c. Adverse Possession
2. First In Time:
a. Ownership is title, legal right to property
b. Possession is proved by showing physical control and the intent to exclude.
i.Possession is easier to prove than ownership
c. Constructive Possession: a person is in constructive possession when the law treats him
as if he were in possession although he is not or is unaware of it.
d. Why the law protects possessors:
i.Possession is an efficient way to prove ownership
ii.Protecting possession preserves peace and order by preventing a stronger person
from ousting a possessor.
iii.Protecting possession facilitates trade
iv.Gives effect to the expectations of a person who has asserted a right in a thing
v.In the case of capture of wild animals, it rewards persons for making a useful item
available to society.
vi.Possession is an easy and efficient way of allocating resources
3. Rule of Capture
a. Rule of Capture –
i.To gain ownership of a wild animal, a person must have physical possession
ii.Majority Rule – Certain control
1. Mere pursuit does not give rights to the animal. The one who captures the
animal gets it. It encourages the pursuer to capture it as quickly as
possible. The rule of capture is a killing machine. Directly follows the
first in time rule.
iii.Minority Rule – Reasonable prospect of capture
a. Pierson v. Post: Man kills a fox while another man is in pursuit of
it.
2. Policy: Rule of capture is easier to administer that a rule that protect
pursuers. The court reasoned that they would be flooded with disputes.
Importance of certainty and preserving peace.
iv.Interference of a non-competitor:
1. A person cannot maliciously prevent another from capturing wild animals
in the pursuit of his trade. A person can lure the wild animals off of the

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 owner’s land but cannot scare them away.
a. Exception: When the other person engages in the same occupation.
i.Keeble v. Hickeringill: the defendant shot his rifle near the
plaintiff’s duck pond to scare away the ducks, the court
found trespass.
ii.Rational Soli: Land owner has “constructive” possession of
animals ferae naturae on their land.
b. The court values the beneficial use of land and competition to
increase the efficient capture of wild animals.
c. Since the rule of capture wants animals captured, Keeble also
seeks to ensure that the ducks are captured and not lost to either
party.
v.Custom:
1. Title to a wild animal is acquired when the hunter apprehends the animal
in accord with custom.
2. An exception to the rule that the captor must have physical control over
the animal is in the case where custom is more effective at getting animals
killed. If the killer of the animal makes marks of appropriation, he gets it.
a. Ghen v. Rich: Chance finder of a whale carcass has no rights to it.
The killer of the whale has the rights.
vi.Fugitive Resources
1. Oil and gases – under common law they are attributed the elements of
wild animals because of their fugitive nature. Gases that are part of
another element are considered to be part of that element.
a. They “belong to the owner of the land and are part of it so long as
i.they are on or in it and
ii.subject to his control;
iii.but when they escape or go into other land, the title of the
formal owner is gone.”
2. Underground storage: the rules of trespass don’t generally extend to
underground storage. The idea is that the underground storage does not
interfere with the owner’s use of the land. (Hammonds v. Central
Kentucky. P 38.3)
3. Groundwater:
a. English Rule – a landowner over an aquifer could freely draw from
it without regard to the effect on neighbors. Rule of Capture.
b. American Rule – rule of reasonable use, is also a rule of capture,
but it says that wasteful uses of water are unreasonable and
therefore unlawful.
c. Modern Rule – extraction is generally governed by legislative and
administrative programs.
vii.Demsetz Theory of Property Rights – Property rights specify how a person may
be benefited or harmed in their use of property and who must pay to modify
people’s actions.
1. Primary function of property rights is to guide incentives to create a
greater internalization of externalities.
 a. Externalities: those harms or benefits to that do not affect the actor
i.They are a function of transaction costs and encourage the
misuse of resources
b. Internalizing: enables the actor to experience the harms or benefits
that he creates
2. Transaction costs: the deals people make have costs, and can block
efficient transfers because of (1) free riders, (2) hold outs, (3) high
negotiation costs, and (4) high policing costs.
3. Idealized forms of Ownership
a. Communal Ownership: high degree of externality because costs
are borne by the community not solely the actor.
b. Private Ownership: internalizes many of the external costs
associated with communal ownership because the owner attempts
to maximize the property’s present value by taking into account
alternative future benefits
c. State Ownership: no discussion.
viii.Utilitarian view of Property Rights: Dominant Theory:
1. Hume: Our own self-interest promotes our adherence to property rights. If
there were an unlimited supply of goods no property rights would arise.
2. Bentham: Property consists of an established expectation
ix.Generally, property rights seek to promote the efficient use of resources.
x. Friedman: Private property is essential to political freedom. Alienability
promotes political freedom.
xi.Coase Theorem – Wealth v. Efficiency: if transaction costs are zero, markets
will shift resources to their most efficient use. But if transaction costs are high
and an owner uses a resource inefficiently, that resource will remain in its
inefficient use.

4. Remedies of a Possessor
a. At common law . . .
b. Replevin – suit for recovery of chattel
c. Trover – suit for damages
d. Conversion:
i.The plaintiff must establish an actual interference with her ownership or right of
possession.
e. Trespass
i.Punitive damages may be awarded for an intentional trespass

5. Acquisition by Creation
a. Right to the exclusive use & enjoyment of one’s creation
i.Majority view holds that it is not the court’s role to determine and extend
copyrights; it is the job of legislature. To do so would be to interfere with
monopolistic policies.
1. The court will not make copyright law but will only seek to enforce those
laws already established by the legislature.
2. A person’s property is limited only to the chattels that embody his

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 invention; others may imitate at their leisure.
3. Cheney v. Doris Silk: Cheney sought to prevent Doris from copying its
designs; the plaintiff could not get copyright protection through the
copyright office so it sought protection through the courts. The court
found for Doris.
a. Unless the common law or the patent or copyright statutes give
protection from appropriation, a person’s property interest is
limited to the chattels which embody his creations.
b. This case highlights two competing goals of property rights:
i.to encourage the efficient creation of property
ii.to encourage the efficient use of property
iii.value of creation v. value of efficient use of property
4. It is “fair” to claim that an item is like the original but “unfair” to claim
that the imitation is the original. Smith v. Chanel, Inc.
ii.Minority View - First in Time –News, as a stock in trade, exists as quasi property
between two competing parties. It gains this status to prevent unfair competition
right at the point where the profit is to be reaped by the wronged party. These
rights exist irrespective of their rights against the general public. International
News Service v. Associated Press
b. Persona as Property:
i.Property interests include name, likeness, and other aspects of one’s identity.
1. “When a distinctive voice of a professional singer is widely known and is
deliberately imitated in order to sell a product, the sellers have
appropriated what is not their and have committed a tort. Midler v. Ford
Motor Co
2. Vanna White had a cause of action against a company that created a robot
resembling her based on the claim that she has a “marketable celebrity
identity value” that the firm used for commercial profit. Vanna White v.
Samsung Electronics Co., pg 65.1
6. Physical Personal Property:
a. Moore v. UC Regents: the court decides that this case is really an issue of social benefits
v. individual rights, leaves this decision to the legislature. (Plaintiff claims that since the
defendant used his tissue to develop a cell line, he should have some right to cell line.
Charges conversion)
i.Majority Rule:
1. A doctor has a duty to disclose the extent of his research and economic
interests in a patient’s body parts. Human body parts are not property
such that they can be converted.
a. No precedent allows a court to hold that a person has property
rights to their cells.
b. One’s property rights do not extend to an exclusive right to our
cells and bodily fluids.
c. Consideration is placed on weighing social interests of medical
research with the individual’s rights.
d. Court says that the legislature should decide if the individual’s
property rights extend this far, but the court will not do it.
 e. A patent is an “authoritative determination that a cell line is the
product of invention.”
f. Some states limit a person’s control over excised cells and thus
restrict some of the rights ordinarily attached to property.
ii.Minority View:
1. The contention that a person’s cells are not her personal property is against
our belief system that the body is the expression of a unique person.
Many limits are placed on what a person may do with her personal
property, such as transfers, gifts, etc. This type of limit should apply to
the cells and tissues also.
2. It is “inequitable and immoral” that a party should be enriched at the
expense of another. While the person who has been deprived of the
benefits of their “cell line.”
7. Subsequent Possession
a. Finders – General rule: an owner of property does not lose title by losing property. O’s
rights persist even though the article has been lost or mislaid.
i.A finder has rights superior to everyone but the true owner.
ii.To get possession a finder must 1) have physical possession, and 2) intend to own
the item.
iii.Conditions that affect the rights of the finder
1. Finder’s status
a. customer, tenant, guest, employee, trespasser, snoop
2. Finder’s behavior
a. acts as a true owner
3. Place of the find
a. public or private, underground or terrestrial
4. Condition of item
a. lost, misplaced, abandoned
iv.Armory v. Delamirie: Boy finds jewel and jeweler takes the jewels claiming that
it wasn’t the boy’s anyway. Court says the finder, Armory, is the owner and the
boy is compensated the full value of the jewel. pg 100
1. Prior possessor has a right to the property against all but the rightful
owner.
2. The court determined damages by the most expensive jewel that could
have been used.
3. A suit by the true owner against the defendant would be maintained
although they would have had to pay twice.
a. Bailor – party who owns the rightful possession of a good.
b. Bailee – the party who takes possession of the good for the bailor.
He had a duty to care for the good until the bailor returns as
agreed.
v.Absentee Owner - Hannah v. Peel – finder is the lessor of a house owned by the
defendant. The plaintiff turns over brooch to police & police give brooch to
defendant. The plaintiff sues for replevin (return of the thing) and wins.
1. Rules:
a. First finders claim is good against the subsequent finder.

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 b. A person possess everything attached to or under his land.
c. A person does not necessarily possess everything that is unattached
to the land.
vi.Policy considerations
1. Will the true owner come along? We want to try to help rightful owners
and promote the way that will return the property.
2. Will the finder disclose the find? We want to make policies that
encourage the finder to disclose the find, that is why the finder takes if the
true owner doesn’t come along.
vii.Two innocents: If F1 innocently found a jewel and O comes to claim it. F1 may
have a better claim than the careless O. (Winkfield Doctrine pg 101.9)
1. Exception: if O can show that item was stolen, O will win even if F1 is
innocent
2. Court requires that the plaintiff prove prior possession, not ownership.
Prior possession is easier to prove.
b. Caveat: Finder doesn’t get possession when:
i.Item isn’t lost but misplaced
1. McAvoy v. Medina: the plaintiff found a pocketbook left in the
defendant’s store. The plaintiff claimed possession by finder’s rights but
court said it is in best interest of the true owner to let the defendant take
possession if and until the owner returns for it. It wasn’t lost as in
Armory.
a. Favors the accidental finder, not the snoop.
ii.Item is underground: “The possessor of land is generally entitled, as against the
finder, to chattels found on the land.”
1. Also see, Elwes v. Brigg Gas: A person has lawful possession of objects
found under or embedded in the soil on his land even if he doesn’t have
any knowledge or the existence of the objects.
a. Buried property belongs to O.
iii.Finder is working for employer
iv.Finder is a trespasser
v.Finder is a bailor
c. Policy reasons for finder’s law
i.Induce good behavior by finders
ii.Help owners get property back
iii.Get goods into lawful circulation, hot goods are worthless
iv.Deter violence, theft
v.Simple, predictable rules

8. Adverse Possession – based on 1623 statute that quieted title after 20 years.
a. Ask:
i.Is there intent to take ownership? (Maine doctrine v. French, Color of Title)
ii.Is there permission by the true owner?
b. Requirements: OCEAN
i.Open & Notorious
ii.Continuous for the statutory period
 iii.Exclusive & Hostile
iv.Actual Entry
c. Actual entry –
i.Cannot be shared with the owner or the public.
1. Must be exclusive and of such a nature that the community would think
that the adverse possessor is the true owner.
ii.The statute of limitations begins running upon the initial trespass where there is a
taking of possession of the land.
1. Whether entry is caused by mistake or intent, the true owner is ousted
from possession. pg.141.3
2. Manillo v. Gorski: The defendant believed that she owned the property she
built on.
iii.Minority view, see the Maine doctrine
d. Open and Notorious
i.True owner must have had knowledge or should have had knowledge of the actual
encroachment, so that she could defend her rights.
1. Manillo v. Gorski: The defendant encroached 15 inches onto the plaintiff’s
land. Whether plaintiff should have noticed the encroachment is a
question for the jury.
2. Statutes – some states have codified the requirement of adverse possession
a. VanValkenburgh v. Lutz: Under NY statute one must show that for
at least 15 years, they “actually” occupied the land under a claim
of title. The court held that a garden, shed, encroachment, and
housing of junk was not sufficient occupation to get adverse
possession.
b. Colorado – if you pay taxes and have color of title, the statute of
limitations drops to 7 years.
3. Would the use appear to be the use of an owner by an outside observer?
e. Adverse & under a claim of right (hostile)
i.Hostile – Possession must be without the owner’s consent
1. Claim of Title
a. State of mind is irrelevant (French v. Pearce: Majority view)
b. Good faith claimant, “I thought I owned it” (American view)
c. Aggressive trespass, “I thought I did not own it and I intend to take
it.” (Maine Doctrine)
2. There is a possibility of awarding the aggressive trespasser but making the
possessor pay the former owner market value.
f. Continuous for the statutory period
i.Requires only the degree of occupancy and use that the average owner would
make of the property.
1. Ewing v. Burnet: Gravel pit was used by the adverse possessor, he paid
taxes on the land. pg. 131
ii.Tacking: The current possessor can “tack” the prior possessor’s adverse use if the
prior and current possessors are in privity, and/or if they have a good faith
transfer.
1. Adverse possessors must use the property as the true owner would use it.

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 a. Howard v. Kunto: The defendant bought title to property that was
different from the property that was represented by the sellers and
actually occupied. The plaintiff sued to remove him from the land
but the defendant was allowed to tack the occupancy of prior
possessors to gain adverse possession.
i.Opposite of Kunto view: Baylor v. Soska: Tacking is not
permitted unless disputed parcel is actually described by
the deed as the land conveyed. pg. 147
g. Color of Title and Constructive Adverse Possession
i.Normally the possessor acquires title only to the portion of the property “actually”
occupied.
ii.Claim of Title: one way of expressing the requirement of hostility or claim of
right on the part of the adverse possessor.
iii.Color of Title: a claim founded on a written instrument or a judgment or a decree
that is for some reason defective and invalid.
1. In some states, color of title is required to get adverse possession.
2. Under color of title, the statute of limitations may be different.
iv.Constructive Adverse Possession under Color of Title: If a claimant goes into
actual possession of some portion of the property under color of title, he is
deemed to be in adverse possession of the entire property described in the
instrument. Adverse possessor is in “constructive adverse possession” of the part
of the tract he does not actually possess.
h. Exceptions to Adverse Possession Rules:
i.People with disabilities toll the statute of limitations until the disability is
removed.
1. The disabled include:
a. Children
b. Insane
c. Imprisoned
2. Typically courts make an exception to the statute of limitations for persons
with disabilities but the disability must exist at the time the adverse
possessor enters.
3. Most statutes provide that a person has an additional 10 years after the
disability is removed in which to bring an action.
i. Adverse possession and chattel –
i.Chattel.
1. Traditionally all of the elements for adverse possession must be present.
2. Some courts held that you had to openly display the artwork (chattel) to
fulfill the open and notorious requirement.
3. Modern courts apply the “discovery rule” to the open and notorious
requirement.
a. The statute of limitations begins to run when the injured party
discovers, or by reasonable due diligence should have discovered,
the wrong.
i.O’Keefe v. Snyder: The plaintiff sued the defendant for her
paintings when she discovered them stolen. The defendant
 claimed title through adverse possession since he had had
them longer than the 6-year statute. The court held that the
statute did not toll until the plaintiff discovered the theft.
b. Solomon Guggenheim Foundation v. Lubell: NY court determined
that it is inappropriate to burden true owners, potential purchasers
are required to investigate art.
c. Autocephalous Greek Orthodox Church of Cyprus v. Goldberg &
Feldman: The defendant bought mosaics in an open market in
Geneva, turned out the artwork was stolen and the defendant lost
the work.
j. Government: There is no adverse possession against the government.
9. System of Estates
a. Questions:
What type of estate do we have?
What is left over when it ends?
10. Estates - Generally
a. An estate is an interest in land that is or may become possessory, defined by the length of
time it may endure.
i.Seisin – an important concept in feudal times, a person is seised if (1) he holds a
freehold estate and (2) either has possession of the land or a tenant holds
possession from him.
1. A landlord has seisin, a tenant has possession
b. Types of Interests
i.Present Interest
ii.Future Interest
iii.Co-ownership or co-tenancy
iv.Leaseholds
c. Types of Estates
i.Freehold –
1. Fee Simple – has the potential of enduring forever
2. Life Estate – will necessarily end at the life of a person
a. In case of an ambiguous conveyance
i.Common law presumed a life estate
ii.Modern law presumes a fee simple (every state presumes a
fee simple)
ii.Leasehold
1. Term of years – may endure for any fixed calendar period
2. Periodic tenancy – endures from period to period until the landlord or the
tenant gives notice to terminate
3. Tenancy at will - so long as both the landlord and tenant desire
d. Estates are created using appropriate words in a deed or will.
i.Words of limitation describe what type of estate is created.
e. Every estate can be classified as a possessory estate or as a future interest.
i.Possessory estate – gives the holder the right to immediate possession
ii.Future interest – does not entitle the owner to immediate possession but it will or
may become a possessory estate in the future.

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 f. Heirs – people who take from an owner who dies intestate. No one is an heir to a living
person, but an heir is determined upon death. A living person has “heirs apparent.”
g. Issue – synonymous with descendants and includes children of children, etc.
h. Ancestors – by statute, parents take as heirs if there is no issue
i. Collateral – all persons related by blood to the decedent, who are neither descendants nor
ancestors.
j. Partial Intestacy: every state has a rule against partial intestacy
11. The Fee Simple
a. Fee Simple Subject to a Covenant – the covenant is not a condition on the owner’s title to
property, but the grantor may recover for a breach under a contract remedy
b. Fee Simple Absolute – absolute ownership
i.Future Estates: None
ii.Language Creating:
1. To A and his heirs
2. To A, his heirs and assigns
3. To A
iii.Duration: Unlimited
iv.Transferability: By Deed, Will, or Intestacy
v.A Fee Simple Absolute is presumed unless language indicates otherwise.
1. White v. Brown: The decedent created a holographic will passing title to
her home to White, “To live in and not to be sold.” The court had to
decide if the testator meant to convey a life estate or a fee simple.
a. Presumption against partial intestacy, assume full testacy whenever
possible:
i.The applicable Tennessee statute said that without clear
evidence of an intention to convey a lesser estate, an
instrument is read to convey the entire interest of the
testator.
b. Common law presumption is a life estate unless it is clear that the
testator intended to pass a fee simple.
c. In modern law, every state has a statute that presumes a fee simple
and a rule against partial intestacy.
i.In White, the court interpreted the language as an intent to
restrain alienation of the property and declared the
language void as a matter of public policy.
ii.Some restraints on alienation are void but some are okay if
they are “reasonable;” – see Restraints on Alienation
below.
d. Dissent: the language clearly and unambiguously conveys a life
estate, therefore the court does not need to look to the statute for
the rules of construction. The dissent may have been attempting to
keep the property in the family line.
c. Defeasible Estates -- upon the happening of some event the possessor of the fee simple
loses, or may lose, the property.
i.Under common law the future interest of these estates could not be passed by will
or through testate succession; it could only pass to heirs.
 1. However, it could be passed to possessory interest holders.
ii.Non-Defeasible Estates
1. Estate Absolute (fee simple, life estate, or term of years)
2. Sometimes a court will interpret conditional language to be an expression
of wishes and not a condition to holding the property.
3. Look at the language to determine if it’s a wish or an actual condition
4. Presumption is for Subject to a Condition Subsequent instead of a
Determinable Fee
iii.Estate Determinable (Fee Simple, Life Estate, Term of Years)
1. If the condition occurs the estate is automatically cut short, in favor of the
grantor.
2. Future Estates: Possibility of Reverter
3. Language (of Duration) Creating:
a. As long as
b. Until
c. While
4. Duration: potentially unlimited, so long as the stated even does not occur.
5. Transferability: By Deed, Will, or Intestacy
a. Marenholz v. County Board of School Trustees: A determinable
fee is created when the language indicates that the grantor is giving
a fee simple only until a stated even happens. Such as when an
instrument uses language that states upon the happening of some
event the land is to revert to the grantor.
i.Common law rule: the right of re-entry and the possibility
of reverter for the condition broken are neither alienable
nor devisble; they are only inheritable.
ii.Modern rule: many courts today allow the sale of these
future interests.
iii.Adverse possession
1. The statute of limitations starts running on the
possibility of reverter as soon as the determinable
fee ends.
2. The statute of limitations starts to run on a right of
re-entry when the grantor attempts to exercise their
right and is rebuffed. The statute is tolled until the
grantor exercises the right of re-entry.
a. Some states say the statute begin to run
when the condition occurs.
iv.Subject to Condition Subsequent (Fee Simple, Life Estate, or Term of Years)
1. If the condition occurs the grantor has the power to retake the estate.
2. Future Estates:
a. Right of Entry
b. Power of Termination
3. Language (of Condition) Creating
a. But if
b. Provided that

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 Reversion
Present Right of Reentry Estate
Future
Vested
Possibility of Reverter
Fee Simple
Remainder
AbsoluteContingent Life
Executory Interest
Interest
InIndefeasibly
Grantor
Nonfreehold Vested Subject to Open Subject Subject Freehold
In Grantee
to Divestment
to Executory Limitation
Subject to Condition Subsequent
Determinable

c. However
d. also look for Re-entry Language
4. Duration: Potentially unlimited, so long as the stated even does not occur
5. Transferability – By Deed, Will, or Intestacy

12. Life Estates – has the potential duration of one or more human lives
a. Every life estate is followed by a future interest.
b. A life estate that is defeasible upon marriage is general invalid as against the public
policy as a restriction on marriage.
 c. Future Estates:
i.Reversion in Grantor
ii.Remainder in grantee or devisee other than life tenant.
d. Language Creating:
i.To A for life
ii.To A for and during his natural life
iii.To A until he dies
iv.To A for the life of B (life estate pur autre vie)
e. Duration: For the life of the grantee, or life of another if it is pur autre vie.
f. Transferability: By Deed Only and Transfer Only Effective Till Death of Devisee
g. Equitable intervention: a court may intervene and order the sale of an estate in which
there are future interests,
i.in order to preserve the estate from waste or deterioration, or
ii.if it is in the best interest of all the parties.
1. Baker v. Weedon: The plaintiff had a life estate granted to her by her
husband. She was poor and the land was valuable so she sought approval
from the court to sell the land for her support. The court held that if the
parties cannot agree on a mortgage of the land – they should sell it to
cover the plaintiff’s “reasonable needs”.
2. A trust would have been a better vehicle for Mr.Weedon to use. See
Trusts below.
iii.If the parties are incapable of consenting to the sale, the court may consent for
them.
13. Waste – the central concept is that a party should not be able to use the property in a manner that
unreasonably interferes with the expectations of the future possessors.
a. Depends on the term of interest: the greater the interest, the less likely a party is to exploit
and the party is allowed more freedom in using the property in question. More likely to
use as the true owner would.
b. There may be waste if:
i.Taxes cannot be paid on the property
ii.Deterioration
c. Affirmative waste: voluntary acts causing waste
d. Permissive waste: failure to act causes waste
e. Injurious Acts: acts that substantially reduce the value
f. Economic waste: novel theory à if land is not being maximized economically, it may be
wasteful.
14. Restraints on Alienation
a. 4 main objections to restraints on alientation:
i.Makes property unmarketable
ii.Perpetuates concentration of wealth by making it impossible for the owner to sell
and consume the proceeds
iii.Discourages improvements to land
iv.Prevents owners creditors from reaching the property, effecting hardship on
creditors who rely on the property in extending credit.
b. Disabling restraint: withholds from the grantee, the power to transfer her interest
i.Per 2nd Restatements: An absolute restraint of a fee simple is void.

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 ii.The restatements also allow a partial restraint, if under the circumstances, it is
found to be reasonable in purpose, effect, and duration.
1. A restraint on a life estate that lasts for a life is “more reasonable.”
c. Forfeiture restraint: if the grantee attempts to transfer her interest, the property is
transferred to another person.
d. Promissory restraint: provides that the grantee promise not to transfer her interest.
i.Valid and enforceable under contract remedies.
e. Ask
i.What is the duration of the restraint? the longer, the less likely to enforce
ii.What is the reason for the restraint?
1. charity v. commercial business
2. look after someone v. spite
iii.How does the restraint limit marketability? how many buyers a prohibited
iv.Is it a direct or implicit restraint? direct restraints are less likely to be enforced
f. Odd Fellows v. Toscano: The action is brought by the plaintiff to quiet title. The court
finds that the conveyance of property to the Odd Fellows, “For the use of Lodge 82” was
not invalid and was a fee simple subject to a condition subsequent. (pg. 240)
i.Conditions that restrain alienation are void if they are repugnant to the interest
created.
ii.When ambiguous, the presumption is in favor of an estate subject to a condition
subsequent.
iii.When construing a deed, the intention of the grantor should be ascertained by the
words employed and the surrounding circumstances.
iv.Rule of the Dead Hand – we are less solicitous of Toscano’s wishes because they
are dead and “the world is for the living.”
v.Restraint on the sale of property, direct or implicit restraint because it clearly
restricts the possessor from selling the property.
vi.Restraint on the use of property, indirect or implicit restraint because it
effectively restricts the possessor from selling the property.
g. Falls City v. Missouri Pacific Railway (pg. 245): Plaintiff conveyed land to the defendant
as long as it was used for division headquarters, or else to revert back to the city. The
court ruled the reverter provision was invalid as a restraint on alienation, “adversely
affects marketability.”
i.Distinguished from Odd Fellows because the railway is not a charity and we are
not interested in encouraging these types of gifts.
ii.Social Policy: we encourage charities by encouraging gifts to them.
15. Future Interests
a. Reversion
i.Only follows a life estate or a contingent remainder
ii.Only lies in grantor
iii.One can have a reversion even though it isn’t certain ever to become possessory
iv.If it is at all possible that owner could repossess the land, the owner has some
sort of future interest.
v.A reversion coupled with a possibility of reverter are considered together only as
a reversion.
b. Possibility of Reverter
 i.Arises only in the grantor out of an estate determinable
ii.Generally devisable by will, in some states it also devisable by deed.
iii.Many state statutes limit the period of time during which fee simple estates can
be made determinable.
iv.Always subject to a condition precedent
c. Right of Entry, Power of Termination
i.Arises in grantor only out of fee simple on condition subsequent
ii.Devisable and descendible, but at common law it is not transferable by deed.
1. Under common law it may not be created in a transferee
2. However, many states have statutes establishing the ability to transfer by
deed.
iii.Always subject to a condition precedent
d. Remainders
i.It must be created at the same time and by the same instrument that creates the
prior estate; however it may follow even if the prior estate is subject to a
condition subsequent, but if the future estate only takes on the condition
subsequent it is an executory interest.
ii.A remainder may never follow a fee simple defeasible.
1. It generally follows a life estate or a leasehold estate.
iii.It must not have the capacity to cut short other estates
1. The subsequent possessor must take possession on the natural termination
of the prior estate.
iv.There must be no built in time gap.
16. Is your remainder Vested or Contingent?
a. Is the taker unascertainable? or
b. Is it subject to an unfulfilled condition precedent?
i.Look for: an unborn person, an unascertained person, other condition precedent
1. Also, if words of condition precede the name of the taker who’s interest is
contingent, then it is a condition precedent.
2. But, if punctuations separate the condition and the taker it is probably a
condition subsequent (vested remainder).
c. If yes, it is a Contingent Remainder.
d. If no, it is a Vested Remainder
i.If the taker is unascertainable or the remainder is subject to an unfulfilled
condition precedent it is a Contingent Remainder.
1. The remainder is subject to a condition precedent that is not subject to a
condition subsequent of a prior estate.
2. These remainders were destructible under common law and a few states
still destroy them.
a. Destruction of Contingent Remainders: Common law rule – if a
contingent remainder did not vest at the termination of the prior
estate, the remainder was destroyed and never took effect. Also
followed in a minority of states.
b. Common Law favors vested remainders
3. These remainders must fail or vest on or before the termination of the
preceding estate. If it fails to do so, the remainder is destroyed.

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 4. The only thing that can follow a contingent remainder is another
contingent remainder and/or a reversion in O.
5. There must always be a vested interest to support the contingent remainder
when it is created, in case it fails to vest.
ii.Vested Remainder: If the taker is ascertainable and not subject to a condition
precedent.
1. Indefeasibly Vested Remainders – it is absolutely certain that the devisee
will take
2. Vested Remainders Subject to Divestment – the devisee may not take upon
the happening of some event.
a. For these conveyances, read between the commas:
i.“To A for life, then to B, but if . . .” Commas indicate that
B’s estate can be divested.
3. Vested Remainders Subject to Open – generally these are class gifts
a. “To A for life, then to the children of B”
i.As long as B has at least one child the remainder is vested
and as long as B is alive it is subject to open. (The fertile
octogenarian)
iii.Gray’s Rule: If the condition is incorporated into the gift, it is a condition
precedent and the remainder is contingent, but if after the gift, a clause is added
divesting it, the remainder is vested subject to divestment.
1. Contingent: “To A if A survives B.”
2. Vested: “To A, but if A does not survive B”
iv.Two Helpful Rules
1. If the first future interest is a contingent remainder in fee simple, the
second future interest will also be a contingent remainder.
2. If the first future interest is a vested remainder in fee simple, the second
future interest will be a divesting executory interest.
17. Executory Interests
*If there are more than 2 parties to a transaction look for an executory interest, otherwise an
XI does not exist.
a. An executory interest must: (2)
i.take effect in someone other than the grantor
ii.Divest a prior possessory estate or a vested future estate.
b. It often follows a defeasible fee estate
c. Most (all) of these interests are contingent
d. “To A so long as, xx condition xx, but if condition is satisfied then to B”
i.A – has a fee simple subject to executory interest because the remainder is in
someone other than the grantor.
ii.B – has an executory interest because it cuts short A’s interest.
Trusts
18. Trusts Generally – A trust is a fiduciary relationship in which a trustee manages the property
for the benefit of the beneficiaries.
a. One person (trustee) is the legal owner of the trust, and the others (beneficiaries) are the
equitable owners of the same property.
i.The trustee holds legal title to the property subject to equitable rights in
 beneficiaries.
ii.The person who creates a trust is the settlor, or trustor.
iii.The trustee must use the degree of care, skill, and prudence as would be
exercised by a reasonably prudent person in managing his own property. Two of
the most disputed duties in trusts are:
1. The duty to make the trust productive
2. Invest property in a prudent fashion, and
3. Earn a reasonable return of income
iv.The duty to give undivided loyalty to the beneficiaries
1. Trustee cannot reap personal advantages from his position, and
2. She must not put herself in a situation where a conflict of interest is
possible.
v.If the trustee breaches these duties, she is personally liable
b. Statue of Uses – “To A for the use of B” is no longer applicable
19. Spendthrift Trusts – The settlor of these trusts imposes a valid restraint on alienation
a. Provides that the beneficiary cannot transfer his interest voluntarily in anticipation, and
b. Creditors cannot reach it for satisfaction of their claims.
i.Broadway National Bank v. Adams: The defendant’s creditors attempted to attach
anticipatory income from a spendthrift trust. The plaintiff attacked the trust as
invalid because of the restraint on alienation.
1. The court held that the nature of the beneficiary of a spendthrift trust never
has a right to alienate the income or the principal so the common law
restraint on alienation does not apply here.
2. English law – a beneficiary’s interest in a trust is liable for the
beneficiary’s debts.
3. American law – since a beneficiary has a limited interest for life in trust
income this interest cannot be validated.
a. The court follows the American law but notes that the ruling does
not mean that the income cannot be attached but that it cannot be
attached in anticipation. Thus, once the income is received, the
credit can attempt to levy that income.
20. Destroying Contingent Remainders (pg. 282)
a. Contingent remainders were obstacles to alienation, they came up with several rules to
destroy contingent remainders
b. Destructibility of Contingent Remainders (pg. 287)
i.Rule: A remainder in land is destroyed if it does not vest at or before the
termination of the preceding freehold estate. If the remainderman is not ready to
take seisen when it is offered, he is wiped out and seisen moves on to the next
vested estate.
ii.Merger – when A conveys a life estate to B, merge and B has a fee simple.
iii.Destructibility of contingent remainders is now abolished.
iv.Modern rule: Where an interest is for the benefit of a child, the child will be
treated retroactively as “in being” from the time of conception, if the child is later
born alive.
c. Destru

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Rule Against Perpetuities – this rule has been replaced by statute in almost every state.
*Applies only to contingent remainders & executory interests.
21. Rule Against Perpetuities – generally
a. Common law rule – “No interest is good unless it must vest, if at all, not later than
twenty-one years after some life in being at the creation of the interest.” – J. Gray
i.Strikes down contingent interests that vest too remotely.
ii.The Rule is a command of law that is to be remorselessly applied, it is not subject
to negation by countervailing considerations of public policy. Central Delaware v.
Greyhound.
b. An interest, if it is to vest at all, must vest within 21 after some life that existed at the
time of the creation of the interest.
c. Validating or Measuring Life: can include the preceding life tenant, the taker or takers of
the contingent interest, anyone who can affect the identity of the takers or the condition
precedent who is alive at the time of the conveyance.
d. A class does not vest until the class closes and all conditions precedent are satisfied.
i.The rule applies if there is any possibility of vesting outside of the prescribed time
period.
1. The fertile octogenarian: if the measuring life is over 80 years old it
creates the issue of the fertile octogenarian. We generally consider that
this person could bear children until death but that seems impossible.
2. The unborn widow: if an interest is transferred, “to A for life, then to A’s
widow for life . . .” the problem created is that A’s current wife could die
and A could remarry. This means that his widow may be unborn.
e. Applied to contingent remainders, future interests subject to open and executory
interests.
i.A fee simple subject to a condition subsequent is immune to the RAP.
f. Charitable Exception: exemption to the rule if both the possessory estate and the future
interest are in charitable organizations.
g. Gifts to Classes: A class gift is not vested in any member of the class until the interests of
all members have vested
h. Does not apply to future interests in the grantor nor vested remainders
i. Wait-and-See Doctrine
i.We can “wait-and-see” whether a contingent interest actually vests within the
perpetuities period, if it does it is valid; or
ii.We can “wait-and-see” for 90 years, it replaces the common law perpetuities
period with 90-years.
j. Brown v. Independence Baptist Church: In a minority opinion the court held that a
remote interest in a determinable fee reverted to the testator and then to the testator’s
heirs a listed in the residual clause. A majority opinion would strike the language gifting
the residual interest and the estate would go to the testator’s heirs. This opinion is highly
criticized because it assumes that the testator died twice, once to pass the determinable
fee and a second when the condition is broken and the property reverts to the dead
testator and to the heirs stated in the will.
i.A proper charitable trust would have avoid these problems
k. Central Delaware Authority v. Greyhound Corp.: Plaintiff moves to void a right of
repurchase clause. The defendant had a right of repurchase if the plaintiff failed to use
 the land for public use.
i.R4§394: “where language and circumstances of conveyance of a fee simple estate
are susceptible of two constructions – under one creating a power of termination
and under the other an option to repurchase, the option to repurchase is preferred.
ii.An option is not vested and is subject to the Rule, while a power of termination is
not subject to the Rule.
l. Reformation of Invalid Interests:
i.Many states have adopted policy that the courts are authorized to reform interests
violating the RAP so as to carry out most closely the intent of the transferor
within the perpetuities period.
Concurrent Interests
22. A grant or devise to two or more people creates a tenancy in common unless an intent to create a
joint tenancy is expressly declared.
23. Concurrent Interests
a. Principles of concurrent ownership
i.Presumption of a tenancy in common
ii.Right of surviorship, re: joint tenancy
iii.Severance
iv.Effects of Unities
b. Types of concurrent interests:
i.Tenants in Common
1. Elements:
a. Unless stated otherwise, a tenancy is common is presumed.
b. Presumption is that each tenant owns an equal share but you can
show otherwise, intent and % contribution..
c. Each tenant has an equal right to possession of the whole
d. Tenant’s interest passes to heirs at death
e. Partitioning: the tenants can petition the court to divide the
property among them.
f. No survivorship rights
g. Alienability, tenant can sell, give, devise, or otherwise dispose of
her undivided share, as if she were the sole owner.
ii.Joint Tenancy
1. Distinctive characteristic: JT has a right of survivorship
2. Ask: Is the language good enough?
a. Note: Some judges dislike JTs because “it deprives heirs of their
rightful inheritance” and “deprives creditors”
3. The four unities are essential to a joint tenancy. At common law, these
unities must exist to create a joint tenancy.
4. They are:
a. Time: Each interest must be acquired or vest at the same time
b. Title: Tenants must acquire title by the same instrument or by a
joint adverse possession
c. Interest: Tenants must have equal undivided shares and identical
interests in duration
d. Possession: Each tenant must have a right to possession of the

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 whole. This is the only unity that is essential to the Tenancy in
Common.

Joint Tenancy Tenancy in Common

Right of survivorship? Yes No
Must tenants have equal shares? Yes No
Same estate required? Yes No
Alienable? Yes, but turns to TIC Yes
Devisable and inheritable? No Yes
Create by implication or expressly? Express grant only Either
Right of possession of entirety? Yes Yes
Presumption in favor when ambiguous? No Yes

5. Severing a JT: The joint tenancy will become a tenancy in common if:
a. Any of the unities cease to exist.
b. A joint tenant conveys her interest to a 3rd party
c. Nothing “passes” at death, the estate simply continues to the
surviving joint tenant(s)
6. Partition:
a. Tenants can petition the court to partition the land into separate
parts or sell it an divide the proceeds.
7. Husband and Wife – going out of favor
a. Where property is conveyed to a husband and wife, the court
prefers to presume a JT instead of a tenancy in common.
i.However, under common law the court presumed a tenancy
by the entirety
8. Probate:
a. A joint tenancy is the practical equivalent of a will because of the
right of survivorship
b. A joint tenant cannot pass her interest by will because her interest
ceases at death.
c. However, the interest is subject to federal estate taxation at the
joint tenant’s death.
9. Unequal Shares:
a. Under common law if the tenants held unequal shares they could
not have a joint tenancy.
b. Under modern law courts are less strict about the unity. In most
states, if the tenants hold unequal shares the courts will find a joint
tenancy and divide the interest based on share percentage.
iii.Tenancy by the Entirety is only created in husband and wife.
1. Followed in less than half of the states.
2. It requires the four unities, plus a fifth – marriage (see Joint Tenancy).
3. Under common law, the parties hold as one person
a. Neither can defeat the right of survivorship by conveyance to a 3rd
party.
b. Neither has a right to partition
4. Divorce terminates the tenancy and the parties become tenants in
common.
iv.Community Property
c. Presumptions:
i.If an instrument conveying an interest in land is ambiguous,
1. American modern law presumes a tenancy in common, it is usually
dictated by statute.
2. American common law presumes a joined tenancy, but this presumption
has been abolished by statute or judicial decision
3. English common law presumed a joint tenancy because if lessened the
dividing of land into smaller parcels
ii.Language creating
1. Joint Tenancy: “To A and B as joint tenants and not as tenants in
common,”
a. Ask: “Is the language good enough?”
b. Some states require that the language include an express provision
for right of survivorship, in these cases it is necessary to say, “To
A and B as joint tenants with the right of survivorship”
c. Colorado requires only the intent to form a JT
d. Destroying a Joint Tenancy:
i.Each tenant has the right to destroy the JT without the consent or knowledge of
the other joint tenant.
1. Policy: promotes alienability of property
ii.Severing one of the unities destroys a joint tenancy.
iii.A lease for a term does not sever, although some jurisdictions hold that a lease
does sever.
iv.A severance as to one, is not a severance as to all
1. Conveyance by A results in the severance of the joint tenancy only as
between A and the other joint tenants, creating a tenancy in common while
the other remain as joint tenants.
e. Using a Strawman to Satisfy the Time Unity:
1. Under common law: the only way to create a joint tenancy was to transfer
ownership to a “strawman,” then this person would re-convey it to the
original owner and other tenants. To get the “Time” element of unity.
a. Under modern law, the court no longer requires that the tenant use
a “strawman,” but the owner may make the conveyance to herself
and others to create .
2. In Riddle v. Harmon the court considers whether a person must use a
“strawman” to destroy a joint tenancy. Common law requires that the
tenant use a strawman, but the court finds that this requirement is outdated
and no longer necessary and holds that the defendant destroyed her joint
tenancy by conveying her interest as a joint tenant to herself as a tenant in
common.
a. The court notes that there are still ways to create an indestructible
right of survivorship:
i.Create a joint life estate with a contingent remainder in fee
to the survivor
ii.tenancy in common in fee simple with an executory interest
in the survivor

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 ii.Mortgages: In Harms v. Sprague the court decided that if one tenant mortgaged
his interest in the property it did not sever the joint tenancy. The court held that a
mortgage is a lien and not a conveyance of title, the unity of title is maintained.
In this case, the death of the tenant who mortgaged the property extinguished his
interest in the property along with the lien.
1. Harms will cause lenders to inform all joint tenants, usually husband and
wife, about mortgages.
2. A joint tenancy is not severed when one joint tenant executes a mortgage
on his interest in the property since the unity of title is preserved.
3. Lien Theory – Today, it is just a conveyance of an interest-security and is
not a full conveyance and does not sever
a. Turns on policy reasons, we don’t want institutions to loan to only
one of the joint tenants, all joint tenants must be party to a loan for
it to be valid on the death of one of the tenants
f. Joint Tenancy Bank Accounts
i.The agreement with the bank is not controlling – the court will look at intent
1. Standard joint accounts are joint tenants with rights of survivorship
(JTWROS)
a. However, depositors usually intend something like a convenience
account.
ii.In determining which type of account, JTWROS or a convenience account, the
courts will look for the purpose of the joint account
iii.At death:
1. True Joint tenancy
a. The owner intends to make a present give.
2. Convenience account
a. No change in ownership; the joint tenant should only have the right
to draw on the account to pay O’s bills and not have survivorship
rights.
3. Will Substitute, JTWROS
a. At death the joint tenant gains ownership, but before death, the
joint tenant only has survivorship rights.
iv.If a lot of property/money is involved, the court will look for strong proof of the
owner’s intent.
1. Newton County v. Davison: O gave A right of access to safety deposit box
containing $324K;
2. In Allen v. Gordon parents deposit money into bank account listing their
son on the account. When one parent died, the other claimed entire
amount, the court agreed since the son made no deposits.
24. Relations Among Concurrent Owners
a. Partition is a right of co-owners
i.equitable action
ii.relatively flexible
iii.the court may decide to partition “in-kind” or “sale.”
1. Common law presumption was for a partition in kind – keeps property in
the family line.
 2. The modern courts are split as to whether to presume a partition in sale or
in kind
a. A court may partition in sale when there are too many conflicting
interests and an in-kind partition would severely affect the value of
the property. Johnson v. Hendrickson. (pg 346)
b. Contracts not to partition
i.Undue restraint on alienation – maybe void depending on the terms
ii.Consider the duration and purpose
iii.If a valid restraint, this is the only instance where a court cannot partition
c. Delfino v. Vealencis: The plaintiff moved to partition in sale but the defendant requested
a partition in kind. The court considered the number of competing interests, the
defendant’s home on the property, and the effect on property value of a partition in kind.
The court found for the defendant and ordered an “in-kind” partition.
i.A house usually goes to the one occupying it, improvements go to the improver.
ii.A partition by sale should be ordered only when
1. the physical attributes of the land are such that partition in kind is
impractical or inequitable; and
2. the interests of the owners would be better promoted by a partition by sale.
iii.In Johnson v. Hendrickson the court held that a partition of the land would be
materially less valuable than the proportionate proceeds from the sale of the
property.
iv.Modern practice is to sale the property, either because all the parties prefer a sale
or the court feels it is the fairest way to divide the interest.

25. Termination of Marriage by Divorce

a. Three Stages of Marital Property
i.During
1. Community, joint tenancy, tenancy by entirety
ii.Divorce
1. Under common law – nothing happens (need a separate conveyance to
sever); property remained the property of the spouse holding title.
a. Today alimony is support for a limited period of time until the
spouse can enter the job market and become self-sufficient.
2. Equitable distribution – replaced the common law in every state.
a. Under this rule the courts decide how to divide property based on
equitable principles. The court may consider the duration of the
marriage, vocational skills, health, age, employability, etc.
iii.Death
1. Right of survivorship, avoid probate
2. If under will, there are rules: level of disinheritance
b. When dividing marital property the court selects from 3 methods:
i.Restitution or recission
ii.Lost marital property
iii.New York rule
iv.Colorado Rule
c. Marital property is all property acquired by either spouse subsequent to the marriage,

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 except for:
i. By gift, bequeath, devise, or descent;
ii.In exchange for property acquired before marriage;
iii.Acquired after a legal decree of separation;
iv.Excluded by a valid agreement of the parties.
d. Is a graduate degree marital property?
i.Restitution: In re Graham: The court defined property as something that has an
exchange value or has a value on the open market. It held that a graduate degree
does not have those elements but that it is personal to the holder.(Colorado Rule)
1. Although the spouse was unable to recover through the marital property
rule, she could recover through restitution, in that her contribution of
financial support during the education of the spouse should be considered
in awarding her maintenance.
a. Dissent: the graduate degree is marital property; furthermore the
court would not have awarded maintenance to the plaintiff because
it will only award to a spouse who is unable to support herself.
ii.Reimbursement alimony: in some circumstances a supporting spouse should be
reimbursed for contributions they made to the spouse’s successful professional
training. Reimbursement should cover all financial contributions to the former
spouses education, including: household costs, educational costs, school travel
expenses, etc. Mahoney v. Mahoney, pg. 385
iii.O’brien v. O’brien: the court agreed that a husband’s medical license constituted
marital property and awarded the wife a portion of the value of the enhanced
earning capacity afforded by the license.
iv.In Elkus v. Elkus the court held that enhanced celebrity status and career is
marital property subject to equitable distribution. A marriage is an economic
partnership to which both parties contribute. The husband worked as the
plaintiff’s voice coach and sacrificed his career to further the plaintiff’s;
1. The court found that the defendant’s contributions were direct and
concrete; and that the nature and intent of the contribution should be
considered, not the nature of the spouse’s career, when determining
whether something is marital property.
v.New York Rule: Treats professional degrees and licenses as marital property.
The degree is valued in terms of lifetime learning capacity of the spouse. If a
spouse then remarries the income is also included in the second marital estate,
effectively counting the income twice.
Nuisance
Intentional v. Unintentional
A. Intentional – Must be unreasonable and cause severe invasion of property rights.
a. Gravity of Harm v. Utility of Conduct
i.The gravity of the harm involves the consideration of several factors.
(a) The extent of the harm involved;
(b) the character of the harm involved;
(c) the social value that the law attaches to the type of use or
enjoyment invaded;
(d) the suitability of the particular use or enjoyment invaded to
the character of the locality; and
 (e) the burden on the person harmed of avoiding the harm.
ii. The utility of the conduct is determined by considering:
(a) the social value that the law attaches to the primary
purpose of the conduct;
(b) the suitability of the conduct to the character of the locality;
(c) the impracticability of preventing or avoiding the invasion.
b. Unreasonable
• 1st Restatement: If harm outweighs good, it is a nuisance. Just mention
the 2nd.
• 2nd Restatement: If there is a gross good, and the actor can afford to
compensate for it, then it is a nuisance.
o The actor would most likely have to pay damages, not suffer an
injunction.
If the actor cannot afford to compensate for it, then it is not a nuisance.
o Policy: The community wishes to benefit from the utility of the actor’s
actions. If a nuisance were found, they would have to cease their
action.
b. Unintentional – Conduct is negligent, reckless, or ultrahazardous.

Type of Nuisance
a. Public
i. A public nuisance affects the rights enjoyed by citizens as a part of the public
and must affect a considerable number of people or an entire community or
neighborhood.
ii. Who can bring suit?
a. Member of the affected public can sue. It was generally held that
only those who had a special injury in the affected public could bring
suit, but there has been some push against this in the interest of
environmental protection.
b. Restatement: any member of the affected class or a citizen in a
citizen's action should be able to bring suit for abatement but still only
those with special injury for damages.
c. Liability:
Like private nuisance, there must be a substantial harm caused by
intentional and unreasonable conduct or by conduct that is negligent,
reckless, or abnormally dangerous.
Unreasonableness turns heavily on questions of utility and gravity.
(Restatement: 827, 828)
b. Private
i. A private nuisance is one affecting a single individual or a definite
small number of persons in the enjoyment of private rights not
common to the public.
Damages
After liability of the defendant has been determined, the court must choose between
granting an injunction or monetary liability.
a. Balancing Test: Factors Considered
• Are there damages outside of those that can be compensated monetarily?
a. Probably going to grant an injunction.
• Is there some vital social utility to the defendant’s actions?

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 b. Probably going to grant damages.
• Is it possible to accurately value the damages?
c. If not, probably not going to order injunction.
• Is the harm caused much less than the cost of abatement?
d. If so, probably going to grant damages.
• How many parties are involved?
e. If many, post injunction bargaining can be difficult so damages may be
more appropriate.
b. Policy
a. Coase Theorem: According to Coase, in a system with no transaction
costs, it doesn’t matter whether an injunction is granted or not. The
actor that values the right most and can put it to its most efficient use
will purchase it.
i.However, there is rarely zero transaction costs, and holdouts,
lack of transparency in valuation, etc, can cause vast
discrepancies between actual value and purported value.
ii.Because of this, Judges should be cautious in using such an
approach in deciding whether or not to grant injunctive relief.
Property rights should be initially allocated to the actors
gaining the most utility from them.
b. Environmental Policy: Judges are generally hesitant to use nuisance suits
as the means for an ambitious program of environmental controls (See:
Boomer). Their hesitance does not prevent other parts of the government
from taking action that they decided to avoid.

Takings

Eminent Domain
A. Justification
a. It’s implied in every land grant. Whenever the sovereign gave rights to an
owner, they included the provision that they could take it back
b. It’s a vestige of the feudal system from which our system arose
c. The power of eminent domain is inherent in sovereignty. It's necessary for
the existence of government.
B. Extent of the Power
a. Condemnation for a public use or purpose is permitted
i.Eminent domain is coterminous with the state's Police Power:
defines limits of what are acceptable public purposes. (Behrman)
ii.There must be a demonstrated primary benefit to the public.
iii.Such public benefit cannot be speculative or marginal. Must be
clear and significant.
b. This means that essentially any use is permitted as long as there is a
reason that does not violate some fundamental right of that person
i.Private-to-private transfers have been found constitutional where
the end goal is substantially a public benefit such as revitalization
of an area in Poletown or breaking up an oligopoly in Hawaii
Housing Authority.
1. But in Midkiff, a private transfer primarily for tax receipts
was considered unconstitutional.
c. Deference is given to the legislature. (Hawaii Housing Authority)
i.The legislature is better equipped to make determinations as to
what will benefit the public.
 d. Must be in good faith.
C. Just Compensation
a. The constitution requires just compensation for a taking.
b. Just compensation is the fair market value of the property before the
action was commenced.

Regulatory Takings
A. 3 Tests
a. Physical Occupation/Invasion
i.A permanent physical occupation, no matter the size, is always a
taking; an invasion of the fundamental right to exclude. (Loretto)
ii.All require just compensation.
b. Nuisance
i.The state, within its police powers, has the right to regulate activity
on lands and restrict it based on the common law definition
(Hadacheck)
ii.Such restriction on use does not require compensation.
c. Restriction on Use – Penn Central Ad Hoc (most often used now)
i.There are three parts to the balancing test
1. Character of the regulation – What is the governmental
interest?
a. Is it in bad faith? Is it arbitrary?
b. “Being singled out” is not an argument. Regulations
inherently burden some more than others.
2. Economic impact – It is not enough to show that there was only
a significant diminution of value.
a. When making this evaluation, the property is viewed as
a whole. Conceptual severance is not permitted.
3. Disappointment of investment backed expectations
d. Wipe-out
i.Complete wipeout of economic value is a taking and requires just
compensation. Remember that conceptual severance is not viewed
favorably.
B. Exactions
a. Definition : Condition imposed on land that requires part of the land to be
dedicated to public use (beach front cases and hardware store Dolan)
i.Essential Nexus Test: the exaction has to share an essential nexus
with the reason the permit would be rejected. (Nolan)
ii.Rough Proportionality Test: the burdens have to be roughly equal to
the public benefit. (Dolan)

Regulatory Takings

Easements

Covenants

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