BLACK LETTER LAW  APPLICATION  POLICY/EVALUATION OF OUTCOME  THEORY OF PROPERTY

I. THE CONCEPT OF PROPERTY

WHY RECOGNIZE PROPERTY

Theories of Property
1. Protect first possession
a. Being there first justifies ownership rights
b. Courts often give weight to first possession for efficiency and stability
c. Describes how property rights arose, but not why it makes sense to recognize them
2. Encourage labor
a. John Locke: when a person “mixes” his own labor with unowned natural resources, he acquires property
rights of the mixture
b. Reward past labor and promote future labor
c. Made more sense in early US when land was plentiful land people were few
3. Maximize societal happiness
a. Utilitarian theory that property exists to ensure that owners use resources in an efficient manner
b. Related to encouraging labor
4. Ensure democracy
a. Private property allows for independent political judgment/minimizes dependence on government
goodwill
b. Jefferson envisioned yeoman farmer landowner independent of other people’s concerns
5. Facilitate personal development
a. Proper self-development requires some control over resources in the external environment
b. If personal development is the goal, could justify UBI or access to higher education (allowing someone to
flourish)

Bases of Property
 Possession
o Pierson v. Post (Supreme Court of NY, 1805)
 Facts: Post pursuing a fox on a hunt; Pierson intercepted, killed, and took possession of the fox;
occurred on uninhabited/unowned land (no superseding ownership issues); both sides agree first
to take possession has occupancy, question is when occupancy legally occurred
 Arguments
 Post argues labor theory  he put in the work and should get the fox
 Pierson argues possession  he has the fox in his possession
 Majority
 Retain old law
o Justinian: pursuit, even without wounding, is not enough; animal must actually
be taken
o Pufendorf: mortal wounding with continued pursuit
 Narrow rule easier to enforce
 Dissent
 Design law around current policy issues
o Hunters would all support Post based on known/established rules, so don’t need
to worry about old authority
o Foxes are noxious animals whose deaths should be encouraged, but no sane
person would undertake difficulties of a fox hunt if unrelated party could claim
fox without contributing labor
 Outcome: occupancy occurs when an animal’s escape from someone who has by his own hand
trapped him is impossible, when it is in someone’s possession, or when it is killed
 Creation
 o White v. Samsung Electronics (9th Circ., 1993)
 Facts: Samsung produced an ad showing a robot deliberately dressed up to resemble White on
the WOF set; did not use her picture her name; referred to it as the “Vanna White” ad internally;
unlike other celebrities in the campaign, White did not consent and was not paid for the ads
 Arguments: White argued violation of her right to publicity under CA statutory and common
law
 Majority
 Pure statutory interpretation: robot was not a “likeness” within the narrow meaning of
the statute (visual image)
 Right of publicity may be asserted by showing
1. Defendant’s use of plaintiff’s identity
2. Appropriation of plaintiff’s name or likeness to defendant’s advantage,
commercially or otherwise
 Name, picture, or identity
3. Lack of consent
4. Resulting injury
o Note: not recognized in every state; CA locus of entertainment industry
 White has invested labor in developing her “image,” so her intellectual property rights
extend to depictions that “evoke” her; company shouldn’t be able to exploit that image
for its own gain without permission/compensation
 Dissent
 Against public policy: overprotection of intellectual property limits public domain; new
creative works depend on remaking/reusing older works in the public domain
 Robot reminded people of White because of the WOF set; this holding gave White an
exclusive right in what she did for a living

PROPERTY RIGHTS

Property as Rights
 History
o Anglo-American feudal system
o Subinfeudiation (kings  barons  knights)
o Imported to the US
 Progresses extremely slowly, in part because of magnitude of property ownership
 Relationship between person and a thing vs. relationship between people
o Property only becomes a concern when individuals have competing claims to things
 Implications
o Determined by government and only exist to the extent that they are recognized
o Not absolute
 Rights in the “bundle” can conflict
 Much of property law is devoted to reconciling disputes between owners or between owners and
communities
o Can be divided
o Evolve as law changes
o As a right, may impose duties upon owners

“Bundle of Sticks”
1. Transfer
2. Exclude
3. Use
4. Destroy

Origination of Ownership and Right to Transfer

  Legal justification of all US land ownership
o Johnson v. M’Intosh (1823)
 Facts: Prior to American Revolution, Johnson purchased land directly from Indians; US, which
acquired title to most of these lands from Indians after Revolution sold parcels to private buyers,
including M’Intosh; historically, European governments had consented to the idea that European
discoverers had exclusive right of acquiring soil from the natives, with the caveat that Indians
were occupiers/residents
 Arguments: Johnson sued for ejectment of M’Intosh in a “Hail Mary” suit, trying to establish
legitimate ownership through purchase from Indians
 Majority
 Indians only had right to transfer lands to one entity, the sovereign US government
o Chain of title: Indians  French (discovery)  English (war)  US (treaty) 
M’Intosh
 Encourage most productive use of land: M’Intosh would develop, instead of leave wild
like Indians
 Outcome: US government had exclusive power to originally acquire land within its borders,
and to transfer right of ownership to private individuals
 Note: by only giving Indians one possible buyer, ensured lowest prices – “purchase was
cheaper than conquest”
 What can be considered property
o Moore v. Regents of the University of CA (CA Supreme Court, 1991)
 Facts: Physician extracted Moore’s cells, telling him it was purely for treatment of his leukemia;
actually used for research without Moore’s knowledge; defendants developed and patented a cell
line from Moore’s spleen, with a market potential of $3bn
 Arguments: Moore argued his bodily cells were his tangible personal property; conversion claim,
physician took without his permission
 Analogize to right of publicity, waste disposal rights
 Majority
 Need to establish property claim in order to establish conversion
 Not covered by legal definition of conversion
o Wrongful publicity cases irrelevant, as lymphokines are identical in every human
being; CA statutes limit patient control over excised cells; patents reward
inventive effort, not discovery/possession of naturally-occurring raw materials
 Labor theory: physicians created something new
 Extending conversion doctrine against public policy
o Extending conversion will restrict access to raw materials for beneficial research
o Problems in this area better suited to legislation
o Conversion not necessary to protect patients’ rights
 Concurrence: threat of commercializing human body parts  marketplace in human body parts
 Dissent: Moore should be able to commoditize his body parts if doctors can; no control over own
body is like slavery; diminishes dignity to not be able to control own body parts
 Outcome: people do not own rights to body parts once excised from the body; body parts
aren’t property

Right to Exclude
 Trespass: intentional, unprivileged entry onto land in possession of another
o “Privileged” entry (exceptions to right to exclude)
 Consent, e.g., mailman
 Necessity, e.g., rescue
 Encouraged by public policy
 As absolute
o Jacque v. Steenberg Homes, Inc. (WI Supreme Court, 1997)
  Facts: Jacques denied Steenberg permission to cross their land to deliver mobile homes instead of
a private road; denied access again on delivery date; Steenberg surreptitiously crossed land
anyway; no evidence of any damage to Jacques’ property
 Appellate court affirmed $1 nominal damages but reversed $100 punitive damages
 Majority
 Actual harm in intentional trespass is not the damage done to the land, but the loss of
the right to exclude others from one’s own property; not measurable in dollars
 Long-term economic value of protecting property rights > inefficiency of reinstating
$100k punitive damages for $0 in actual damages
o Efficient use
o Discourage “self-help,” i.e. violence or “spite fences”
 As a balancing test
o State v. Shack (NJ Supreme Court, 1971)
 Facts: significantly isolated migrant workers living and working on farmer’s land; Shack and
Tejeras attempted to enter to provide federally-funded aid; farmer refused to let them enter and
calls state trooper, who refuses to remove defendants until farmer files written complaint, which
he does
 Arguments
 Farmer argued black letter law of criminal trespass
 Defendants argued necessity of entry
 Majority
 Property rights serve and are limited by human values
 Balancing test: farmer’s right to pursue activities without interference vs. laborers’ right
to human dignity and ability to sustain life
o Political and social ideologies vs. physical and social facts of the time and place
o Not a landlord/tenant relationship, but migrant workers must be allowed to
receive visitors as long as no “hurtful” behavior to owner
 Under NJ state law, property ownership does not include right to bar access to
governmental services
 Outcome: owner may not deny non-tenant residents privacy, dignity, or associations
customary among citizens, and the necessity of protecting these rights justifies trespass;
migrants can receive any visitor as long as no hurtful behavior, and members of the press;
cannot be denied government or other charitable services

Right to Use
 Nuisance: intentional, non-trespassory, unreasonable, and substantial interference with the use and
enjoyment of another’s land
o “Unreasonable”: gravity of harm outweighs utility of actor’s conduct
 Sundowner, Inc. v. King (ID Supreme Court, 1973)
o Facts: Kings purchased Sundowner motel from Sundowner, who promptly built another hotel on an
immediately-adjoining property; two years later, Kings erected an 85’ x 18’ structure 2’ from Sundowner’s
building, obstructing 80% of it and blocking light
o Arguments: motive behind the structure
o Majority
 Spite fence doctrine: property ownership does not confer a right to build a structure for no
purpose other than malice
 Focus is not on the effect, but the motive: if purely malicious, falls under “spite fence” doctrine
 Based on facts of the case, structure had no value for advertising, property demarcation, or
anything other than spite
 Prah v. Maretti (WI Supreme Court, 1982)
o Facts: Prah’s home heated by solar panels on roof; heard Maretti wanted to build a home on his own lot,
and warned him that building at that precise location would substantially and adversely affect solar
system; Maretti built there anyway
 o Arguments
 Prah argued that obstructing sunlight was a private nuisance; prior appropriation, a doctrine
used to allocate water rights in some western states
 Maretti argued he was complying with all architectural and zoning ordinances
o Majority
 Outdated doctrine regarding nuisance should be replaced with a more flexible look in the
modern era
 Increasing use of regulation for the general welfare
 Society has an interest in developing alternative energy sources
 Unhindered development no longer a realistic social objective
 Whether light interference constitutes private nuisance must be decided on a case-by-case basis
o Dissent: old policies not obsolete
 Right of property owner to lawful enjoyment of his property should be vigorously protected
 Limited efficiency of solar energy
 Unhindered public development no longer the utmost goal, but this is a private matter
o Outcome: obstruction of sunlight can be a private nuisance if it meets the requirements

Right to Destroy
 Right to use implies destruction
 Difficulties when owner seeks to destroy property that retains substantial value
o Arguments for curtailing right to destroy hinge almost entirely on resource waste, but such curtailment
can also be wasteful:
 Transaction costs
 Historic preservation laws lock inefficient land uses
o Rational people don’t destroy valuable property intentionally; perhaps government should take a
deferential approach and appreciate that when someone wants to destroy something of value, it achieves
other objectives
 Unique in that courts will block if no reason is given
 Eyerman v. Mercantile Trust Co. (MO Court of Appeals, 1975)
o Facts: Decedent in her will directed executor to demolish her home in Kingsbury Place and sell the land;
neighbors, led by Eyerman, sued to stop the demolition
o Arguments: Eyerman argued the demolition would adversely affect property rights, violate terms of
subdivision trust, produce actionable private nuisance, be contrary to public policy
o Majority
 Property inheritance not an absolute or natural right, and can thus be restricted
 Lack of justification in the will
 Deadweight financial loss
 “Against public policy” encompasses anything that conflicts with morals and established social
interests; “senseless destruction serving no apparent good purpose” is against public policy;
would be detrimental to the health, safety, and beauty of the neighborhood
o Dissent: owners have exclusive control over their property subject only to nuisance doctrine; a vacant lot
would not be a nuisance
o Outcome: courts can block destruction of property on public policy grounds; deceased people have
fewer freedoms in deciding what will become of their property than living people
 Note: courts generally reluctant to destroy property, and may have been looking for a justification not to

II. OWNING REAL PROPERTY

ADVERSE POSSESSION

Elements
1. Actual: physically use the land in the same manner that a reasonable owner would, given character, location, and
nature
 2. Exclusive: not shared with owner or general public
3. Open and notorious: so visible and obvious that if an owner made a reasonable inspection of the land, he would
become aware of the adverse claim
4. Adverse and hostile: not authorized by owner, and characterized by a mindset that varies by state
a. Good faith belief of ownership
b. State of mind is irrelevant
c. Bad faith intention to take title from owner (rare)
5. Continuous: as continuous as a reasonable owner’s would be, given the character, location, and nature of the land
a. Does not require continuous occupation and use, but whatever is reasonable
6. For the statutory period
a. Tend to get shorter as you go west
b. Can sometimes be extended due to titleholder’s disability, i.e., imprisonment, mental capacity, etc.

Justifications
 Prevent frivolous claims
 Correct title defects
 Encourage development/use
 Protect personhood
 Societal happiness: losing something you didn’t even know you had < loss from losing what you’ve cultivated

Illustration
 Gurwit v. Kannatzer (MO Court of Appeals, 1990)
o Facts: Gurwits took possession of 17-acre plot belonging to Gruenders, thinking it was part of their
parcel; plot was uncultivated; hung various “no trespassing”/”no hunting” sings, planted food for
animals, chopped wood, etc.; Kannatzer eventually informed Gurwits that land had been included on his
title and tax bill, but from that point forward, plaintiff paid taxes on the land
o Argument: Gurwits filed “quiet title” action to acknowledge they had taken ownership by adverse
possession
o Majority: Gurwits established all elements of adverse possession
 Actual: acts of dominion over the originally uncultivated, brushy, rural land in the same manner
as a reasonable owner would have used it
 Exclusive: held possession for themselves, as their own; Kannatzer would call them about
trespassers, informed them of tax discrepancy
 Open and notorious: cut firewood, picked up trash, cleaned up brush, all in sight of passersby
 (Adverse and) Hostile: intent was to occupy, control, use, and exercise dominion
 Continuous: plant food in spring, firewood in fall
 For the statutory period: 10 years
 Van Valkenburgh v. Lutz (NY Court of Appeals, 1952)
o Facts: Lutz crossed through, created a truck farm, and built a small shack for his brother on unowned
parcel of land adjacent to his lot; Van Valkenburghs moved to a lot abutting that parcel and a feud
developed, Van Valkenburghs purchased unowned parcel in a government auction; Lutz granted an
easement; Van Valkenburghs demand removal of Lutz’s structures; NY statute required cultivation or
improvement to qualify as actual occupation
o Arguments: Lutz argued he had adversely possessed the parcel before public auction
o Majority
 Lutz failed to meet statutory burdens of proving cultivation or improvement, and of establishing
defined boundaries
 “Hostile” possession means that you don’t know it’s not your land, so previous easement fatal to
Lutz’s claim
 Note: NY has higher standards than most states
o Dissent: farm/chickens are substantial cultivation and improvement; don’t need to establish use of entire
plot, just a reasonable boundary; hostile just requires that claimant intended to acquire and use the
property as his own
  Tioga Coal Co. v. Supermarkets General Corp. (PA Supreme Court, 1988)
o Facts: Tioga controlled traffic on street from 1948-78 through lock on gate; believed the owner was city of
Philadelphia, not Supermarkets General
o Appellate court affirmed that Tioga’s possession was actual, open, notorious, exclusive, and continuous
in excess of statutory period, but could not have intended to adversely and hostilely possess against the
real owner, as required by law, since it was mistaken about owner
o Majority
 Attachment to property: should be sympathetic to trespasser, who has “put down roots which we
should not disturb”
 Subject test of mental state for hostility is guesswork at best
 “Inconceivable” that someone who meets all other requirements of adverse possession is not
“hostile to the true owner” as well as the “world at large”
o Dissent: recorded land titles should remain peacefully with their owners
o Outcome: if all elements of adverse possession have been established, hostility will be inferred
(objective rule)

Correcting Title Defects

 Howard v. Kunto (WA Court of Appeals, 1970)
o Facts: neighboring plots of land, with one lot between Howards’ and Kuntos’; all deeds were shifted by
one plot; Howards traded deeds with that middle plot, so middle plot got the deed to the property they
already occupied, and Howards got deed to Kuntos house; Howards tried to kick out Kuntos, who had
“purchased” the house one year prior
o Arguments: Howards argued that Kuntos had no valid claim – no possession longer than statutory
period, and requirement of “privity” of successive applicants only applied to situations where correct
land was included in the deed
o Majority
 Summer occupancy only is “actual” and “continuous” possession for a summer home
community
 Kuntos can “tack” on possession of previous owners because they have “privity” – not technical,
but more than just serial trespassing
 Requirement of technical privity of successive occupants should not apply because it would
result in injustice
 Error was in good faith
 Purpose of privity requirement is some sort of fairness and to establish a reasonable
connection between the parties, which exists here
o Outcome: where several successive purchasers received record title under mistaken belief, there is
sufficient privity of estate to permit tacking (aggregate years of possession to meet statutory
requirement of adverse possession)

III. OWNING PERSONAL PROPERTY

ACQUIRING PROPERTY

1. Sale
2. Capture
3. Finding
a. Abandoned: owner knowingly relinquishes all right, title, and interest
b. Lost: owner unintentionally and involuntarily parted with property
c. Mislaid: owner voluntarily and knowingly placed property somewhere, but unintentionally forgot
where
d. Treasure trove
4. Gift: immediate transfer of property rights without payment or other consideration
a. Inter vivos: cannot be revoked; promise to make future gift is unenforceable (no contract)
 b. Testamentary: effective only after donor dies; usually made by will

LAW OF FINDING

Policy Underpinnings
 System that makes it possible for true owner to regain possession
 Encourage honesty
 Establish certainty about property ownership
 Discourage conflict through straightforward rules
o Court’s role is to determine rights of the parties before it, not determine an item’s ultimate true owner

Bailment
 Rightful possession of goods by one who is not the owner
 Bailee (finder, non-owner, receiver of chattel belonging to someone else) has rightful possession, but not
unqualified ownership
 Bailee duties to:
o Keep chattel safe
 Mutual benefit of the bailor and bailee: bailee has duty to take reasonable care of the property
 Primary benefit of the bailee: duty of extraordinary care
 Primary benefit of the bailor: bailee only liable of property is damaged because of gross
negligence or bad faith
o Return it to prior possessor on demand

Lost Property Statutes

 Notify police/government officials
 Deposit found article with them
 Publish notice of find

Abandoned
 Popov v. Hayashi (CA Superior Court, 2002)
o Facts: Popov attempted to catch Barry Bonds record homerun ball, was pushed to the ground, and no one
can tell whether he had possession; Hayashi picked it up and kept it; no claim Hayashi harmed
Popov/was a wrongdoer
o Arguments
 Popov: possession occurs when an individual intends to take control of ball and manifests that
intent by stopping forward momentum whether or not complete control is achieved
 Hayashi: ball is caught if the person has achieved complete control of the ball at the moment that
the momentum of the ball and the momentum of the fan while attempting to catch the ball cease
o Majority
 Balls are abandoned property after hit
 Rule/custom and practice of the stands: reasonable expectation that person will achieve full
control of a ball before claiming possession
 Predictability/no unfair surprise, awareness, legitimacy, has worked for so long it must
be functional
 Fairness: reason for lack of full possession was violence  Popov had a “pre-possessory interest”
 Both parties have equal rights and it must be sold/proceeds split evenly
o Outcome:
 Where an actor takes significant but incomplete steps to achieve possession of a piece of
abandoned property and the effort is interrupted by unlawful acts of others, actor has a legally
cognizable pre-possessory interest in the property
 Pre-possessory right: can support a cause of action for conversion, but does not establish a full
right to possession that is protected from subsequent legitimate claim
Lost
 Armory v. Delamirie (England, 1722)
o Facts: chimney-sweep found jewel and took it to a shop to know what it was; apprentice took out stones,
offered boy money, apprentice tricked boy and did not give back stones
o Outcome: finder of lost item doesn’t acquire absolute property or ownership rights, but has enough
rights to keep it from everyone except its rightful owner (“next best” claim); becomes a chain in which
each subsequent finder has a claim except against previous finders and true owner
 Hannah v. Peel (England, 1945)
o Facts: Peel owned a home in which he had never lived; Hannah, a soldier stationed there, found a brooch
nestled atop a windowframe in a crevice and handed it over to police; police never found true owner, so
gave it to Peel; Peel had no knowledge of the brooch until Hannah discovered it
o Arguments: Peel argued that because it was found on his property, he had the stronger claim
o Majority
 Landowners possess everything attached to or under his land (locus in quo)
 If someone finds something as the servant or agent of another, he finds it for that other
 Owner of the locus in quo does not have a superior right to possession over the finder of lost
property that is unattached to the land
 No intent to appropriate
 Lack of de facto control
 Prior possession/finders
 Note: policy to reward Hannah

Mislaid
 McAvoy v. Medina (MA Supreme Judicial Court, 1866)
o Facts: McAvoy found a pocket book on the table of Medina’s barbershop and told him to keep it to try
and find the owner; eventually determined that it was placed upon table by a transient customer and
accidentally left there; owner not found
o Majority
 Should be a distinction between mislaid and lost property; former is more likely to be returned to
rightful owner
 Court plays a backstory based on facts that don’t exist
o Outcome
 Distinction between mislaid and lost property
 Misplacement imposed a duty on owner of locus in quo to use reasonable care for the
safekeeping of the property until owner should call for it
 Benjamin v. Lindner Aviation, Inc. (IA Supreme Court, 1995)
o Facts: Benjamin, working for Lindner, discovered a bunch of old cash in the wing of a repossessed
airplane; inspecting engineer offered to divide money with his supervisor, who reported discovery to the
owner of Lindner; money was turned over to the police; no one came forward to claim the money
o Arguments
 Benjamin: entitled as finder
 Lindner: entitled as owner of locus in quo
o Majority
 Considerations for determining whether property is abandoned, lost, mislaid, or treasure
trove:
 Location where found
 Manner in which hidden
 Age of property
 Mislaid property is entrusted to owner of the premises where it was found, which owner may
eventually recall
 Locus in quo is airplane, not Lindner Aviation
o Dissent
  Unfair that plane owner gets the money instead of finder
 Second prong of mislaid property test, that owner overlooked or forgot its location, is not
supported by facts
 More closely fulfills abandoned property test
 Money had been there for years
 No owner claimed it
 No claim made after legally prescribed notice

INTER VIVOS GIFTS

Elements
1. Donative intent: donor must intend to make an immediate transfer of property
2. Delivery: property must be delivered to the donee, so that the donor parts with dominion and control
a. Types
i. Manual (preferred)
ii. Constructive (practicality concerns)
iii. Symbolic (other methods not practical/possible)
b. Purposes
i. Make significant concrete to donor
ii. Witnesses
iii. Prima facie evidence
3. Acceptance: donee must accept property
a. Usually presumed with valuable items

Intangible Gifts
 Gruen v. Gruen (NY Court of Appeals, 1986)
o Facts: plaintiff’s father wrote him a letter gifting a Klimt to him upon father’s death; plaintiff never had
possession of the painting; father dies; stepmother refuses to give up painting
o Arguments
 Plaintiff/son: father broke apart present and future interests to the painting and gifted him, in the
present, the future interest; son has a legal claim in the present to the future interest
 Defendant/stepmother: whatever gift he tried to give, he failed because there was no delivery;
painting remained in father’s estate, and therefore went to her
o Majority
 Intent to make an irrevocable present transfer of ownership
 Three letters from father to son (original birthday letter, letter explaining why it needed
to be replaced, and final letter) establish intent to make present gift of title to painting
 Fact that father retained a lifetime interest does not defeat it as a present gift: present an
irrevocable transfer of title or the right of ownership is effective immediately
 Delivery
 Actual delivery would be impractical/require immediate return so father could enjoy life
interest
 Letter sufficiently symbolized gift of future interest
 Acceptance presumed with valuable gift
o Outcome: where the gift is a present transfer of a future interest of chattel, the donor may retain
present possession without invalidating the gift

IV. ESTATES AND FUTURE INTERESTS

Future Interest
Present Estate
Retained by Transferor Created in Transferee
Fee simple
 ABSOLUTE

Defeasible

DETERMINABLE
POSS. OF REVERTER

SUBJECT TO COND. SUBS.

RIGHT OF ENTRY
.
SUBJECT TO EXECUTIVE LIM.
EXECUTORY INTEREST
LIFE ESTATE
REVERSION REMAINDER

TRANSFER OF ESTATE OR FUTURE INTEREST

1. Deed
a. Living person transfers real property
b. Completed transfer is called “conveyance” or “grant”
2. Will
a. Property of a decedent may be transferred by will
b. Completed transfer is called a “devise”
c. Decedent is “testator”/”testatrix”; recipient is “devisee”
3. Intestate succession
a. If a person dies without a will, property will be distributed according to state statutes; generally,
i. Issue (lineal descents) and surviving spouse
ii. Parents and their issue
iii. Ancestors and all other blood relatives
iv. If no living relatives, property goes to state
b. Completed transfer is “intestate succession”
c. Verb is “descend”; recipient is “heir”

MODERN FREEHOLD ESTATES

Present Estate Transfer Rules Notes

Fee simple absolute Alienable (present transfer) Ambiguity resolved in favor of fee
 “To ___ and her heirs” Devisable (transfer by will at death) simple absolute
 “To ___ in fee simple” Descendible (transfer by intestate
 “To ___” succession at death)
Fee simple determinable Alienable Involve duration
 “To ___ as long as” Devisable Not subject to waste
 “To ___ while” Descendible If ambiguous, court usually favors fee
 “To ___ until” simple subject to con. subs.
 “To ___ during”
Fee simple subject to con. subs. Alienable If ambiguous, favored over fee simple
 “To ___ provided that” Devisable determinable
 “To ___ but if” Descendible Not subject to waste
 “To ___ on condition that”
Fee simple subject to executive lim. Alienable Future 3rd-party interest follows estate
 “To ___ <condition, Devisable Not subject to waste
occurrence>, then to ___” Descendible
Life estate Alienable Subject to waste
  “To ___ for life” When conveyed/sold to another,
 “To ___ until she dies” becomes life estate pur autre vie

Fee Simple Absolute

 Indefinite, as holder has all rights in the metaphorical bundle of sticks and can direct possession/ownership
even after death
 Presumed unless “words of limitation” specifically convey a different estate

Life Estate
 Duration is measured by the lifetime of a particular named person
o Alienable, but not devisable or descendible, because interest ends at holder’s death
o If transferred, becomes a life estate pur autre vie; the interest is still based on life of named person
 Holder of a life estate is called a “life tenant”
 If a person dies before his life estate becomes possessory, the right simply disappears
 When an owner in fee simple transfers a life estate, a future interest arises automatically
o Reversion
o Remainder
 Subject to waste doctrine

Fee Simple Defeasible

 May continue forever or end upon occurrence of some future event
o Defeasible: may end upon occurrence of some future event
 Often used to make gifts of land to public entities or charitable institutions
 Fee simple determinable: fee simple estate that automatically ends when a certain event or condition occurs,
giving the right of possession back to the transferor
o Durational condition continues to apply to any transferee
o Future interest: possibility of reverter
 Fee simple subject to a condition subsequent: fee simple estate created in a transferee that may be terminated
at the election of the transferor when a certain even or condition occurs
o Condition continues to apply to any transferee
o Future interest: right of entry
 Fee simple subject to an executory limitation: fee simple estate created in a transferee that is followed by a
future interest in another transferee
o Executory limitation continues to apply to any transferee
o Future interest: executory interest
 Mahrenholz v. County Board of School Trustees of Lawrence County (IL Appellate Court, 1981)
o Facts: Huttons granted small parcel of land to school district “to be used for school purpose only;
otherwise revert to Grantors herein”; conveyed rest of land to Jacqmains, who then conveyed it to the
Mahrenholzes in fee simple absolute while parcel was still being used as a school; Huttons died with son
as sole heir; after school had ceased to hold classes, Huttons’ son/sole heir conveyed interest in “school
land” to Mahrenholzes; subsequently conveyed his interest in property in favor of school district
o Arguments
 Mahrenholzes: fee simple absolute to non-school land; Huttons had granted school a fee simple
determinable; Huttons’ son inherited a reversionary interest in school land; interest reverted to
son when classes stopped being held on school grounds; Huttons’ son’s first conveyance to them
was valid
 School Trustees: Huttons had granted school fee simple subject to condition subsequent; Huttons’
son never exercised his right of entry after classes stopped being held on land, so land never
returned to him; conveyance to Mahrenholzes was thus invalid, and disclaiming in favor of
school board was valid
o Majority
 Because land was still being used as a school when Jacqmains left it to Mahrenholzes, they could
not have acquired any interest in the property from the Jacqmains via deed
  Quirk of IL law: future interests can only be inherited, except they can be transferred to holder of
present estate and merge into a fee simple absolute
 If grantor has possibility of reverter, he or his heirs become the owner of a property as soon as
the condition is broken
 If grantor has right of entry for a broken condition, he or his heirs become owner only after
they act to retake the property
 Use of the word “only” after granting land “for school purpose” demonstrated Huttons’ intent to
give land to school district as long as it was needed and no longer; in combination with
“otherwise to revert to grantors herein” appears to trigger a mandatory, rather than permissive,
return  fee simple determinable with possibility of reverter

Waste Doctrine
 Imposes a duty on a life tenant to use property in a manner that does not significantly injure financial rights of
future interest holders
 Types of Waste
o Voluntary: results from affirmative act that significantly reduces value of property
o Permissive: results from failure to take reasonable care to protect the estate
 Woodrick v. Wood (OH Court of Appeals, 1994)
o Facts: George Wood gave half of his land to each of his son and daughter upon the death of his wife
Patricia (life estate to wife, remainder to children in fee simple absolute); after his death, son conveyed his
half to his mother (half of land in life estate in wife with a remainder to daughter in fee simple absolute,
half in fee simple absolute to wife via merger doctrine); wife wanted to raze a rotting barn worth $3200;
daughter wanted to prevent the razing
o Arguments
 Daughter/Woodrick: destroying barn worth $3200 constituted waste (voluntary waste)
 Mother/Wood: razing barn would increase property value
o Majority
 Holder of a remainder interest can prohibit a life tenant from destroying structures on the land
only if the act would result in diminution of value of the property

MODERN FUTURE INTERESTS

Future Interests Retained by Transferor

 Arise when transferor conveys an estate to a third party that is smaller than the estate she holds
 Reversion: future interest retained by transferor when she grants an estate of shorter duration than she began
with (right of transferor to possess property upon death of present possessor or at end of lease)
 Possibility of reverter: future interest retained by transferor who holds a fee simple absolute, but conveys a
fee simple determinable
o Automatically becomes possessory upon happening of stated condition; no further action required
o Can only be retained by transferor or his heirs; cannot be created in transferee
 Right of entry: future interest retained by transferor who holds a fee simple absolute, but conveys a fee simple
subject to a condition subsequent
o Does not become possessory until and unless holder exercises this right
 Traditionally, physical entry
 Now, notice + lawsuit
o Can only be retained by transferor or his heirs; cannot be created in transferee

Future Interests Created in a Transferee

 If condition or duration occurs, possession automatically goes to third party
 Remainder: right of a third party at the end of a life estate
o Automatically possessory immediately upon the expiration of the prior estate
o Does not cut short any interest in a prior transferee
 Executory interest: right of a third party with a future interest in a fee simple subject to executory limitation
 o Automatically occurs upon duration or condition/not discretionary

V. CONCURRENT OWNERSHIP

CONCURRENT OWNERSHIP

Tenancy in Common
 To multiple parties “as tenants in common” – is the default
 Each tenant has an undivided, fractional interest
 Each has the right to use and possess the whole parcel
 Freely alienable, devisable, and descendible
 James v. Taylor (AR Court of Appeals, 1998)
o Facts: Mother kept a life estate and conveyed a remainder in fee simple to three children, including
Taylor; deed stated the remainder interest was conveyed “jointly and severally”; other two children died
before their mother
o Arguments
 James/descendants of other two children: deed was a tenancy in common and they inherited their
fathers’ future interests upon their death
 Taylor: deed was a joint tenancy with right of survivorship, so she inherited future interests upon
her brothers’ deaths
o Majority
 Conveyance deed did not explicitly state it was a joint tenancy
 Transferor’s intent is not sufficient to override presumption of tenancy in common

Joint Tenancy
 To multiple parties “as joint tenants with right of survivorship” – must be explicitly stated, or else default tenancy
in common
 Each tenant has an undivided, fractional interest
 Each has the right to use and possess the whole parcel
 Each has the right of survivorship
o Cannot be devised or descended because property automatically divided between joint tenants
 Created when four unities are present; otherwise, a tenancy in common has been created
o Time: all joint tenants acquire interests at the same time
o Title: tenants must acquire title by the same instrument (deed)
o Interest: tenants must have same shares in estate, equal in size and duration
o Possession: tenants have equal rights to possess, use, and enjoy the whole property
 Free alienable, but if one joint tenant transfers her interest, unities of time and title are destroyed so
concurrent owners have a joint tenancy with each other

Tenancy by the Entireties

 Only exists in half of the states
 Can only be held by married couples, where four unities are present
 Each member of the couple has an undivided, fractional interest
 Each has the right of survivorship
 Can only be severed by death, divorce, or agreement of both spouses
 Sawada v. Endo (HI Supreme Court, 1977)
o Facts: Endo owned a parcel of land with his wife; struck and injured Sawada in car accident; Sawada 1
filed complaint for damages against Endo; Endo conveyed property to their sons, but continued to live on
property while reserving no life interest; Sawada 2 filed complaint for damages; Endo’s wife died; Endo
couldn’t pay, so Sawadas tried to get court to set aside Endos’ conveyance of their land to their children
o Arguments
 Sawada: initial conveyance to sons was improper so ownership should revert to Endos; HI
doesn’t recognize tenancy by the entirety, so they could access it as damages
  Endo: initial conveyance proper; even if it weren’t, HI should recognize tenancy by the entirety
and so protected from individual spouse’s debts
o Majority
 Recognize tenancy by the entirety such that property held in tenancy by the entirety is not
subject to claims of individual creditors during joint lives of the spouses
 Policy favors marital stability over creditor recourse
 Occurred against backdrop of rapid development/concern about lands falling out of
hands of native Hawaiians
 Even if conveyance to sons was improper, injury occurred while property was held in tenancy by
the entirety, so unavailable to Sawadas

PARTITION

Ark Land Co. v. Harper (WV Supreme Court of Appeals, 2004)

 Facts: Claudill family owned 75 acres; Ark Land acquired a 67.5% undivided interest by purchasing from several
family members for express purpose of extracting coal by surface mining; attempted to purchase the remaining
property, but those heirs refused to sell
 Arguments
o Harper/Claudill heir with interest: partition in kind
o Ark Land: partition by sale (likely so they could purchase the rest of the property)
 Majority
o Courts do not want to get involved in individual disputes; where concurrent owners cannot settle
disputes, remedy is partition
 Partition in kind: division of land held in cotenancy into cotenants’ respective fractional
shares
 Partition by sale: if land cannot be fairly divided, entire estate may be sold and proceeds
appropriately divided
o To overcome presumption of partition in kind, party seeking sale must show:
 Partition in kind isn’t convenient
 Interests of one or more of the parties will be promoted by sale
 Sale will not prejudice interests of other party
 Outcome: economic interests alone are not sufficient to overcome presumption partition in kind, when there is
longstanding family ownership coupled with emotional or sentimental interest in the property

VI. LEASING REAL PROPERTY: LANDLORD/TENANT

LEASING REAL PROPERTY

 Governed by hybrid property and contract law principles  protections for tenants
o Property/common law layer: possessory right has been transferred for the length of the leasehold
 c. 1600, value of land was land itself; limited duties
 Landowner duty: not to kick tenant off property himself
 Tenant: upkeep, pay rent, no waste
st
 21 century, value of land was the residential structure
 Distance between landlord and tenant decreases
 Structures are complicated; typical renter cannot repair
 Shorter leases
 Landlord in better position for upkeep
 Covenant of quiet enjoyment
o Statutory layer: housing codes, protections from discrimination
o Contract layer: lease is a contract
 But, can’t just “efficiently breach”/pay damages
 Implied warranty of habitability
  Landlord duty to mitigate damages
 Rules
o Immutable: supersede any contrary provisions in a lease
 Implied warranty of habitability
 Duty to mitigate damages
o Default rules: fill gaps not addressed in the lease; may be ignored in lease negotiations
 Covenant of quiet enjoyment
 Implied warranty of habitability

BEGINNING THE TENANCY

Discrimination
 Landowner has broad right to exclude any person from property, subject to statutes prohibiting discrimination
 FHA
o Cannot refuse to sell/rent after making a bona fide offer; refuse to negotiate; or discriminate in terms,
conditions, or privileges of sale or rental based on race, color, religion, sex, familial status, national origin
o Cannot discriminate in sale/rental because of handicap
o Cannot make, print, or publish indication of preference, limitation, or discrimination based on race, color,
religion, sex, handicap, familial status, national origin
 Neithamer v. Brenneman Property Services, Inc. (DC District Court, 1999)
o Facts: Neithamer informed Brenneman’s representative that his credit report would show a few
nonpayments from a few years before, when he paid medical bills for his boyfriend who died of AIDS;
Brenneman refused to rent to Neithamer despite proof that he was good for the lease
o Majority
 Plaintiff must establish prima facie case for perceived discrimination
 Member of a protected class and defendants knew or suspected he was
o “Protected class” includes being regarded as having a handicap, even if don’t
have one
 Applied for and was qualified to rent property in question
 Defendants rejected application
 Property (or another unit in building) remained available thereafter
 Once established, defendant has burden to articulate legitimate, nonarticulated reason for
rejection
 Once burden satisfied, plaintiff must show that reasons are either pretext or dispute material
facts
 Qualifications were in dispute because of previous debts, but Neithamer successfully showed
these were pretext given overwhelming evidence that he was good for the rent
 Fair Housing Council of San Fernando Valley v. Roommate.com, LLC (9th Circ., 2012)
o Facts: Roomate.com helps people find roommates, and requires new users reveal sex, sexual orientation,
and whether children will be living with them (familial status); matches people based on their expressed
preferences
o Majority
 FHA was designed to address problem of landlord discrimination in sale and rental
 Roommate relationships are covered by the right to intimate association
o Outcome: FHA does not govern personal relationships inside the home, including roommates (right to
privacy)

Term
1. Term of Years Tenancy
a. Fixed duration agreed upon in advance
b. Upon end of term, automatically expires
c. Often used in commercial and residential leases
2. Periodic Tenancy
 a.Automatically renewed for successive periods unless landlord or tenant terminates through advance
notice
3. Tenancy at Will
a. No fixed endpoint; continues only so long as tenant and landlord desire
b. Automatically terminates if either party dies
c. Kajo Church Square, Inc. v. Walker (TX Court of Appeals, 2003)
i. Facts: Walkers transferred ownership of land to Grace Church and leased back part of the land;
document stated lease would continue until the last lessee died; Grace sold land to Kajo and gave
separate notice of the lease; Kajo informed Walkers of eviction
ii. Arguments: Walkers claimed to have retained a life interest in the property; or, that their lease
was a lease for life, terminable only upon their deaths
iii. Majority
1. When terms of a deed is unambiguous, cannot look to outside evidence of parties’
intentions
a. When a deed is transferred, assumed you transfer what you have
i. Walkers had a fee simple, so assumed that Grace obtained land in fee
simple
ii. Kajo obtained the land in fee simple
b. Walker Grace deed did not mention any “life interest”
2. Law only recognizes four categories; no such category as “tenancy for life”
3. Tenancy that ends upon death of a lessee is a tenancy at will, terminable by either
party
4. “Tenancy at Sufferance”
a. Created when a person who rightfully took possession of land continues after that right ends
b. Slightly different from trespass because person had a right when entered the property

TENANCY STANDARDS

Substandard Housing & Construction Eviction

 Challenging substandard housing
o In re Clark (Bankruptcy Court, 1989)
 Facts: Clark tenants sued for substandard conditions (crumbling walls, holes in walls, toilet ran
over into bathtub, mouse infestation, no heat, no hot water); suffered injuries (sleep with lights on
to avoid mice, child ate lead paint, couldn’t sleep from mouse sounds, kids had to live with
relatives because of cold, dangerous alternative methods of heat)
o Under common law, Clark would have had no responsibility, but had to pay a fine for violation of
housing code
o Rational economic decision to pay fine < cost of repairs
o Substandard housing often involves disadvantage people that court feels require extra protections
 Covenant of quiet enjoyment: duty of landlord not to wrongfully interfere with tenant’s possession
 Constructive eviction
o Fidelity Mutual v. Kaminsky (TX Court of Appeals, 1989)
 Facts: Kaminsky rents medical office from Fidelity, where he performs abortions; protestors
arrive and manage to enter building, stairway, waiting room, and block patient entry; Fidelity
failed to provide Saturday security per lease terms; Fidelity knew it could get police involved by
notifying protestors they were trespassing, but didn’t; police couldn’t kick them out without
Fidelity action; Kaminsky vacates
 Arguments
 Fidelity: wasn’t its own conduct that interfered with Kaminsky’s beneficial use;
deprivation of enjoyment not permanent
 Kaminsky: doesn’t owe rent because he was constructively evicted
 Majority
  Constructive eviction: tenant leaves lease premises due to landlord conduct which
materially interferes with tenant’s beneficial use of property
o Landlord intends tenant to no longer enjoy the premises; can be inferred by
trier of fact
o Landlord committed material act or omission which substantially interfered
with use and enjoyment of the premises for leased purposes
o Act or omission permanently deprived tenant of use and enjoyment of the
premises
o Tenant, after notifying landlord and giving reasonable time to remedy,
abandons premises after act or omission
 Constructive eviction not triggered until departure
 Fidelity’s lack of action (which counts as action) did not necessarily permanently deprive
tenant of use or enjoyment

Implied Warranty of Habitability

 Wade v. Jobe (UT Supreme Court, 1991)
o Facts: Wade rented home to Jobe and her three children; accumulated sewage, no hot water, etc.; Jobe
notified Wade, but issues persist; house deemed unsafe for human occupancy; Jobe withheld rent and
eventually moved out
o Arguments
 Wade: unpaid rent
 Jobe: offset against rent owned and damages
o Majority
 Implied warranty of habitability in all residential leases; cannot be waived
 All contracts have implied warranties to protect consumers; leases, as contracts, should
include implied warranty of habitability
 Must meet “bare living requirements”
o Compliance with housing code often, but not always, sufficient
o Fit for human occupation
 Payment of rent and duty to provide habitability are dependent covenants
 Once breached, tenant may pay (bring affirmative action to establish breach) or withhold
(landlord likely to sue for unpaid rent; raise implied warranty of habitability as a
defense)
o Teller v. McCoy (WV Supreme Court of Appeals, 1978)
 Dissent: long term impact of implied warranty of habitability is landlords providing cheap,
substandard housing will raise prices  nothing available at lowest price  people priced out of
housing altogether; cost of fixing/maintaining falls either to landlord, tenant, or government

ASSIGNMENT AND SUBLEASE

Transferring Tenant’s Interest

 Both landlord and tenant are entitled to transfer interests to third parties
o Privity of contract: tenant and landlord both have rights under contract law
 Contractual terms usually include rent
o Privity of estate: lease is the conveyance of an estate in land, so a relationship arises out of property law
independent of the contract
 Tenant cannot commit waste
 Duty to pay rent
 Covenant of quiet enjoyment
 Assignment: triangular relationship
o Assignee agrees to take entirety of what remains in tenant’s possessory right; tenant has no more rights

O
PRIVITY OF CONTRACT
PRIVITY OF ESTATE
 PRIVITY OF CONTRACT

 O can sue T based on privity of contract; O an sue A based on privity of estate

 T can sue A based on privity of contract
 Sublease: two separate relationships
o Tenant keeps some possessory right; owner and sublessee have no legal relationship

O
PRIVITY OF CONTRACT PRIVITY OF ESTATE

PRIVITY OF ESTATE
T

PRIVITY OF CONTRACT

 O can sue T based on privities of contract and estate

 T and sue S based on privities of contract and estate
 T retains future possessory interest of reversion
 Illustration

O A
lease

assign

assign

C sublease D
  O can sue A based on privity of contract
 A can sue B based on privity of contract
o B can sue C based on privity of contract
 C can sue D based on privity of contract
 C can sue D based on privity of estate
 O can sue C based on privity of estate
 C can sue D based on privity of contract
 C can sue D based on privity of estate
o Ernst v. Conditt (TN Court of Appeals, 1964)
 Facts
 Ernst leased a tract of land to Rogers via commercial lease with a clause saying Ernest
would be responsible for moving fixtures at the end; Rodgers developed race track, built
fence; wanted to transfer to Conditt
 Rogers transferred to Conditt via a “sublease” agreement with extended duration;
Conditt remained in possession until end of new lease but didn’t reliably pay rent;
Rogers disappeared
 Arguments
 Ernst: assignment of lease; Ernst and Conditt have privity of estate, so Ernst can sue
Conditt directly for unpaid rent
 Conditt: sublease, per wording in contract and fact that Rogers agreed to remain liable
for rent; Ernst and Conditt have no legal relationship
 Majority
 Objective test (less useful; often aligns with subjective test)
o Instrument that purports to transfer lessee’s estate for entire remainder of his
term is assignment regardless of form or parties’ intention
o Instrument that purports to transfer lessee’s estate for less than entire term is a
sublease
 Subjective test: parties’ intentions
o Despite wording, Rogers intended to give assignment
 Rogers transferred more than he had to Conditt, in terms of duration, and Ernst agreed to
the new lease
 Assignment breaks privity of estate between lessor and lessee, but privity of contract
remains
o Fact that Rogers agreed to remain liable for lease does not mean it was sublease;
his obligations arose from privity of contract, not privity of estate
 Restrictions
o Kendall v. Ernest Pestana, Inc. (CA Supreme Court, 1985)
 Facts
 City of San Jose leased hangar space to Perlitches
 Pertliches sublet to Bixler; contract required written consent before sublessee could
assign his interest
 Perlitches assigned to Pestana
 Bixler wanted to sell company to Kendall land assign his interest; Kendall had better
financial standing than Bixler; Pestana refused to consent
 Arguments
 Kendall: Pestana’s refusal unreasonable and unlawful restraint on free alienability of
leasehold interest
 Majority
 Consent to transferring leasehold interest can only be withheld when lessor has
commercially reasonable objection
 Standards of good faith and commercial reasonableness:
o Financial responsibility of proposed assignee
o Suitability of the use for the particular property
  Will sublessee compete with another tenant?
 Odors
 Interference with landlord’s own business
o Legality of proposed use
o Need for alteration of building structure
o Nature of the occupancy (office, factory, clinic, etc.)
 Cannot deny based on
o Personal taste
o Convenience
o Sensibility
 Morals
o To charge higher rent than originally contracted for

ENDING THE TENANCY

Surrender
 Landlord and tenant can mutually agree to terminate lease early
 No conflict  not relevant to this class

Abandonment
 Sommer v. Kridel (NJ Supreme Court)
o Outcome: landlord has an obligation to make a reasonable effort to mitigate damages when a tenant
vacates and defaults on rent; cannot disfavor surrendered apartment when showing available
properties/must treat the same as other properties in rental pool; has the burden of proving he used
reasonable diligence in attempting to re-rent the property
 As in contract law

VII. SELLING REAL PROPERTY

PROCESS

1. Higher broker or agent

a. Both have fiduciary duty to seller, who will pay them
2. Executory period
a. Negotiate and sign contract
b. Buyer pays “earnest money”
c. Marketable title
3. Closing

LEGAL COMPLICATIONS DURING EXECUTORY PERIOD

1. Statute of frauds
2. Marketable title
3. Equitable conversion
4. Duty to disclose

Statute of Frauds
 Requirements of enforceable purchase contract
o Essential terms
 Identity of the parties
 Price
 Property description
 o Writing
o Signature of party sought to be bound
 Exceptions
o Oral contract for sale of real property can be enforced under
 Part performance: 2/3
 Buyer pays at least part of the purchase price
 Takes possession
 Makes improvements to the property
 Equitable estoppel
 Hickey v. Green (MA Court of Appeals, 1982)
o Facts: Green agreed to sell lot to Hickey; Hickey transferred a deposit, which
Green never did anything with; Hickey began process to sell his own home,
including accepting a deposit check, endorsing, and depositing
o Arguments
 Hickey: specific performance of oral contract
 Green: violated statute of frauds, so invalid
o Majority
 Violated statute of frauds essential terms requirement
 Identity of parties not clear because “to line” blank on deposit
check, price not in writing, Green never signed anything
(including endorsing check)
 Had writing (check)
 Property description okay
 Contract for residential sale may be specifically enforced if party
seeking enforcement, in reasonable reliance on the contract, changed
his position so detrimentally that injustice can only be avoided by
specific performance
 If remand trial court determines specific performance not
required to avoid injustice (i.e., Hickey found somewhere else to
live), Green must pay full restitution for related costs plus
interest

Marketable Title
 Default rule standard (as opposed to perfect, insurable, or record title)
 Title is unmarketable if:
o Seller’s property interest is less than the one she purports to sell
o Seller’s title is subject to an encumbrance – that is, something that could open buyer up to lawsuit
 Lohmeyer v. Bower (KS Supreme Court, 1951)
 Facts: Lohmeyer contracted to purchase home from Bower; contract said Bower would
transfer “marketable title” subject to “restrictments and easements of record”; during
inspection, Lohmeyer discovered house violated various codes
 Arguments
o Lohmeyer: title not marketable, wanted deposit back and rescind purchase
contract
o Bower: specific performance of purchase contract
 Majority
o Existing restrictments and easements do not make title unmarketable
o Existing violations of such restrictions makes title unmarketable, because they
expose buyer to lawsuit
o There is reasonable doubt about either of those items
 Refers solely to title, not physical condition of the property
 Seller not required to produce marketable title until closing, so can cure any defects before then
Duty to Disclose
 Seller of residential real property obligated to disclose defects he knows about that
o Materially affect the value of the property, and
o Are not known or readily discoverable by the buyer
 Cannot actively conceal
 Stambovsky v. Ackley (NY Supreme Court, 1991)
o Facts: Ackley spent years perpetuating rumor that house was haunted; Stambovksy, not from area,
contracted to purchase the house; discovers rumors of haunting and wants to rescind contract
o Outcome
 Seller must disclose condition that he has created where it
 materially impairs value of the contract, and
 is unlikely to be discovered by a prudent purchaser exercising due care

TITLE RECORDING

Recording System
 Early England: multiple competing claims decided in favor of person who received interest first
o Reasoning was that grantor could convey title only once; later transfers ineffective because grantor had
nothing to actually convey
 America
o “Library” of recorded deed documents that anyone can use to determine who holds title
o Process
 Private transaction
 Some party must go to registrar and file
 Subsequent purchasers must check record for any title defects
o Corresponding industries, e.g., title insurance

Guiding Principles
 First-in-time: person whose interest was created first prevails
 Bona fide purchaser: major exception creating special protection for subsequent bona fide purchaser
o No notice of previous purchase
o Given value, e.g., deposit payment
 Shelter rule: if you purchase from a bona fide purchaser, you can take on their rights
 Notice
o Actual
o Constructive
 Presumed if recorded in library
 Luthi v. Evans (KS Supreme Court, 1978)
 Facts: Owens conveyed all oil and gas lease interests to Tours via a “mother Hubbard”
instrument; Kufahl lease wasn’t specifically enumerated, but was one of those interests;
Tours recorded the mother Hubbard assignment; Owens subsequently assigned Kufahl
lease to Burris; Burris checked register and secured abstract of title, neither of which
reflected prior assignment
 Arguments: Burris argued he had the superior claim because no constructive notice of
Owens’ conveyance to Tours
 Majority
o “Mother Hubbard” clauses may be valid as between the parties, but are
insufficiently specific to give constructive notice to subsequent buyers
o Where a “Mother Hubbard” clause is used, grantee must take steps to effect
notice
 Take possession, identify property through affidavit, etc.
o Without notice, Burris was a bona fide subsequent purchaser
o Inquiry
  State recording acts determine who wins when there has been a failure to record
o Race: purchaser who records first has priority
o Notice: subsequent bona-fide purchaser has priority
 No mention of recording, but still incentivized; otherwise, seller could sell to someone else
o Race-notice: subsequent bona fide purchaser who records first has priority
 Messersmith v. Smith (ND Supreme Court, 1953)
 Facts: Caroline Messersmith transferred deed to Frederick Messersmith; CM leased land
to Herbert Smith; CM transferred mineral deed to HS; HS transferred mineral deed to
Seale; lease from CM to HS recorded; mineral deeds CM  HS attempted recorded, but
defect meant HS had CM sign another one, not in front of notary; mineral deed HS  ES
recorded; deed transfer CM  FM recorded
 Majority
o Race-notice jurisdiction
o Had HS not torn up original deed and had CM sign another one not in front of
notary, would have the strongest claim as a subsequent bona fide purchaser who
recorded first
o Documents with even “latent defects”/invisible flaws are not entitled to be
recorded; therefore, treated as not recorded
 CM  FM only valid recording

VIII. PRIVATE LAND USE PLANNING/LIMITS ON USE

EASEMENTS

Definition
1. Nonpossessory
2. Right to use
3. The land of another person

Terms
 Property
o Dominant tenement/land: land benefitted by the easement
o Servient tenement/land: land burdened by the easement
 Parties
o Dominant owner: easement holder
o Servient owner: owner of servient tenement
 Appurtenant or in gross
o Appurtenant easement: runs with the land (most)
o Easement in gross: not connected to holder’s use of any particular land, but rather, personal to the holder;
owned by an individual/entity and benefits that single entity, rather than a piece of land
 Affirmative or negative
o Affirmative: allows holder to perform an act on the servient land (most)
o Negative: allows holder to prevent servient owner from performing an act on the servient land
 Conservation, historical sites, etc.
 Modern restrictions usually take the form of real covenants or equitable servitudes

Types
1. Express easement
2. Implied easement by prior use
3. Easement by necessity
4. Prescriptive easement
5. Easement by estoppel
Express Easement
 Voluntarily entered into by dominant and servient owner
 Must satisfy statute of frauds
o Identify the parties
o Describe servient land and dominant land
o Describe exact location of easement on servient land
o State the purpose for which the easement may be used
 Millbrook Hunt, Inc. v. Smith (NY Supreme Court, 1998)
o Facts: Hunt signed an agreement with owner of land to be allowed to use it for foxhunting for 75 years;
Smith purchased land and tried to kick off the Hunt
o Arguments
 Hunt: easement in gross, benefitting hunting club generally without regard to ownership of
specific land; wanted to permanently enjoin Smith from blocking them from exercising easement
 Smith: revocable license which he had terminated
o Majority
 License: no interest in land; personal privilege to commit some act on the land without
possessing any estate
 Easement: interest in land ordinarily created by a grant; permanent or specifically time limited
 Here, particular interest with specific time limit, so must be an easement
 Subsequent purchaser with actual or constructive notice of easement at time of purchase needs
to satisfy reasonable expectations of the easement
 Without notice, is a “bona fide purchaser”
 Smith had actual and constructive notice of the easement when he purchased; can use the
land however he wants as long as it doesn’t stop the fox hunt

Implied Easement by Prior Use

 Intent can be inferred
 Requirements
o Severance of title to land held in common ownership
o Existing, continuous, and apparent use of one parcel for the benefit of another (quasi-easement) at the
time of severance, and
 “Apparent” does not mean “visible”
o Reasonable necessity for that use
 Need not be essential – just that alternative access cannot be obtained without substantial
expenditure of money or labor
 Van Sandt v. Royster (KS Supreme Court, 1938)
o Facts: Bailey owned land, ran lateral drain from her house (located in what is now the furthest lot from
the road) to the road; land was eventually split and sold to three different owners; Van Sandt eventually
purchases lot closest to street, without knowing about sewage line; basement floods with sewage
o Majority
 Bailey created a “quasi-easement” on her land
 When she severed and sold part of the land, quasi-easement became standard easement
 When Van Sandt purchased, a reasonable inspection would have put him on notice of sewer line
 Building a new system would be expensive and difficult

Easement by Necessity
 Intent can be inferred; only overcome where facts show parties had contrary intent
 Requirements
o Severance of title to land held in common ownership
o Necessity for easement at time of severance
 Berge v. State of Vermont (VT Supreme Court, 2006)
 Facts: Davis conveyed large portion of her land to state of VT, reserving 38 acres on
western shore of a pond; Berge eventually came to own one of these parcels, which was
 landlocked; regularly accessed his home via a gravel road in state park; state of VT one
day fenced off the road
 Arguments
o Berge: easement by necessity to use of the road
o VT: no necessity; Berge could access his home via fishing boat
 Majority
o Not an easement implied by prior use, because at time of severance the road
didn’t exist/was not in use
o Meets requirements for easement by necessity
o What is necessary depends on nature and location of the property, and may
change over time
 “Reasonable necessity”: practical means of access to “reasonable
enjoyment” of the land
 Lack of reasonably practical access is sufficient
 Water access may have been reasonable at one time, but not anymore
o Public policy supports productive use of land

Prescriptive Easement
 Obtained in a manner similar to adverse possession
 Requirements
o O’Dell v. Stegall (WV Supreme Court of Appeals, 2010)
 Facts: O’Dell wants to use gravel road in addition to his driveway access; Stegalls have been
using it (assume an easement); Stegalls don’t own it, but have tried to keep O’Dell off
 Arguments: O’Dell claims a prescriptive easement
 Majority
 Like adverse possession, prescriptive easement supports productive use of land over
unproductive use, and conforms title/privileges to actual use
 Required elements of prescriptive easement
o Adverse use of another’s land: wrongful, made without express or implied
permission of the owner
 Owner could have prevented the wrongful use by resorting to the law
o Continuous
o Open and notorious
o For statutory period
o Reasonably identified starting point, ending point, line, and width of the land
that was adversely used, and manner or purpose for which it was adversely
used
 Burden of proof on person seeking prescriptive easement; otherwise just essentially
rewards trespassers and dissuades neighborly conduct
 O’Dell failed to show that his use was adverse, that is, made without permission of
rightful owner, because he didn’t even name rightful owner as a defendant (dumb)

Interpreting Easements
 Marcus Cable Associates, L.P. v. Krohn (TX Supreme Court)
o Facts: Krohn’s predecessor granted Hill County Electric an easement to allow it to construct/maintain “an
electric transmission or distribution line or system”; HCE entered into a joint use agreement with Marcus
Cable; Marcus Cable wants to attach its cable lines to HCE’s poles
o Majority
 Easements can be assigned or apportioned to a third party
 If third-party use does not serve easement’s express purpose, it is an unauthorized presence
whether or not in results in any additional noticeable burden to servient estate
 “Express purpose” can evolve over time to accommodate technology, subsequent
development, etc.
  However, cable cords not conveying electricity for the public; TV is more than a
“technologically advanced method of delivering electricity”
o Dissent: TV is merely electricity traveling over wires

Terminating Easements
 Methods
o Abandonment
o Prescription: if servient owner blocks easement in the manner required by prescription, easement ends
o Condemnation of servient land
o Estoppel: servient owner substantially changes his position in reasonable reliance on holder’s statement
that easement will not be used in the future
o Merger: if one person obtains title to both easement and servient land, easement terminates
o Misuse: holder seriously misuses the easement
o Release: easement holder executes and delivers a writing that complies with statute of frauds

Abandonment
 Presault v. United States (Federal Circuit Appeals Court, 1996)
o Facts: Railroad company acquired right-if-way over land in 1899; by 1975, railroad and equipment had
been removed; in 1985, state leased railroad’s rights of way for use as public hiking and biking trail;
ownership of land over which rights of way ran eventually came into Presaults’ hands
o Arguments: Presaults argued railroads had acquired easements, as opposed to fee simple estates; the
terms of the easement limited the use to railroad purposes; even if public recreational trails were
allowable usages, the easements had terminated before state leased them
o Majority
 Such railroad agreements are typically easements, not fee simples
 Original easement was specifically for purpose of laying track/operating railroad, so public
recreational trail outside of original scope
 Fundamental character is different
 Not an advancement of railroad technology
 Even if that use were in scope, the easement had been abandoned
 To establish abandonment, owner of dominant tenement must perform acts
conclusively and unequivocally manifesting either:
o Present intent to relinquish the easement, or
o Purpose inconsistent with its future existence
 No obligation to return former easement to its original condition
 Upon abandonment, easement automatically terminates

COVENANTS AND SERVITUDES

Real Covenant
 Remedied by money damages
 To bind the successors to initial contract:
For the Burden to Run (duty to For the Benefit to Run (right to
Real Covenant Requirement
perform) enforce)

Statute of frauds
 Essential terms
Yes Yes
 Writing
 Signature
Intent to bind successors
 Usually found in express
Yes Yes
language
 May also be inferred form
 circumstances
Touch and concern
 Must relate to enjoyment,
Yes Yes
occupation, or use of the
property

Vertical privity
 Successor receives entire
Yes Yes
estate that original party
had

Notice
 Actual
Yes No
 Constructive
 Inquiry
Horizontal privity
 Mutual, simultaneous
interest between original Yes No
parties (e.g., landlord/
tenant, grantor/grantee)

 Deep Water Brewing, LLC v. Fairway Resources Ltd. (WA Court of Appeals, 2009)
o Facts: Ahlquist siblings granted an easement to allow a subdivision as long as new homes would not
interfere with view of the lake from their restaurant; development recorded restrictive covenants
imposing maximum building height of 16 feet; Ahlquists sold restaurant to Deepwater Brewing; HOA
added addendum increasing maximum building height to 26 feet; some of these were built
o Arguments
 Deepwater: as successor to Ahlquists, were entitled to enforce original height restriction covenant
as one that runs with the land; sought monetary damage (sought to enforce as real covenant)
o Majority
 Note: only need to establish that benefit of covenant can run, since original burdened party was still HOA
 Original covenant satisfied statute of frauds
 To establish intent, only needs to have been manifested in some general way
 Touch and concern is often enough
 Height restrictions touch and concern the land since they are restrictive and have impact on value
 Deepwater had vertical privity with Ahlquist siblings
 Also had horizontal privity, though this is not required for the benefit to run; easement was a
mutual simultaneous interest

Equitable Servitude
 Remedied by injunction
 Developed because originally, real covenants were only recognized between landlord and tenant
 Tulk v. Moxhay (England, 1848)
o Facts: Tulk sold piece of his land to Elms; deed contained covenant that any subsequent party maintain
the square as a nice lil park; Elms was going to charge admission (park had value); eventually, Elms’ land
passed down to Moxhay; Moxhay had notice of Tulk and Elms’ deed, but his own deed did not have
development requirements; Moxhay tried to develop land
o Majority
 Cannot bind successors as a real covenant, because no landlord/tenant relationship between Tulk
and Elms
 Will enforce covenant as binding
  If vendee could ignore binding covenant, encourages people to buy land for cheap because of its
encumbrance, then sell at higher price and exclude original vendor from economic benefit
 Would render covenants worthless
o Outcome: covenants run with the land; establishes equitable servitude
 To bind successors to initial contract:
For the Burden to Run (duty to For the Benefit to Run (right to
Equitable Servitude Requirement
perform) enforce)
Statute of frauds
 Essential terms
 Writing
 Signature
or Common Plan
 Developer has manifested
common plan to impose Yes Yes
uniform restrictions  all
lots are
burdened/benefitted by
restrictions, even if they do
not appear on chain of title
to every lot
Intent to bind successors
 Usually found in express
language Yes Yes
 May also be inferred form
circumstances
Touch and concern
 Must relate to enjoyment,
Yes Yes
occupation, or use of the
property

Notice
 Actual
Yes No
 Constructive
 Inquiry
 Easier to enforce than real covenants, because no privity requirements

Discrimination
 Shelley v. Kraemer (1948)
o Facts: 30/39 property owners had a covenant to prevent non-Caucasians from occupying any property;
black Shelleys purchased one property but were prevented from moving in
o Majority
 Meets requirements of equitable servitude
 Private covenant itself does not violate Fourteenth Amendment
 Note: now illegal under FHA and Civil Rights Act
 But judiciary enforcement would be discriminatory state action in violation of the Fourteenth
Amendment
o Outcome: state cannot enforce discriminatory covenants and servitudes

COMMON INTEREST COMMUNITIES/CC&RS

Common Interest Communities

 Definition
 o Planned residential developments
o Where all properties are subject to comprehensive private land use restrictions, and
o Which are regulated by a homeowners association
 Created by four-part declaration
o Homeowners association
 Less deference to CIC board action than original declaration
o Covenants, conditions, and restrictions (CC&Rs)
 Modern equitable servitudes
o Assessments
 Originally did not “touch and concern,” but courts realized CICs would not function without
them
o Ownership rights, generally:
 Fee simple absolute in particular unit
 Undivided interest in common area of CIC
 Membership interest in HOA

Defenses to Enforcement
 CICs comparatively simple to create, so conflicts generally arise not from validity of CC&Rs, but whether a unit
owner has a defense to enforcement
 Basic defenses
o Unreasonableness
 Nahrstedt v. Lakeside Village Condominium Association, Inc. (CA Supreme Court, 1994)
 Facts: Nahrstedt purchased a condo and moved in with her cats; CIC declaration stated
no pets, including cats and dogs; when HOA learned of cats’ presence, demanded their
removal and assessed fines for each month; Nahrstedt claimed didn’t know about
restriction when she moved in
 Arguments
o Nahrstedt: invalidate assessments against her for keeping her cats, enjoin future
assessments, award damages for violation of privacy when HOA saw the cats,
award damages for IIED, declare pet restriction “unreasonable”
 Majority
o Presumption of validity of recorded use restrictions
 Discourages lawsuits by individual unit owners/case-by-case
adjudication
 Promotes stability and predictability
 Social fabric relies on courts upholding written instruments that embody
expectations
o Recorded restriction only invalid if it is arbitrary, imposes burdens of use of
land that substantially outweigh benefits, or violates a fundamental public
policy
 Dissent: unreasonable because benefits of pet ownership transcend mundane matters, no
burdens to other units that didn’t even know about the cats
o Abandonment
 Fink v. Miller (UT Court of Appeals, 1995)
 Facts: Covenant requiring approval to build/make changes; covenant requiring wood
shingles; accidentally allowed fiberglass/asphalt shingles due to handwritten addition
that was never technically approved; HOA denied Millers’ request for fiberglass/asphalt
shingles; built anyway; Fink, a neighbor, sued about it; wildfires in the area  asphalt
might be safer
 Majority
o Property owners in a CIC have the right to enforce recorded restrictions
through equitable relief against other property owners
 o Abandonment test: party opposing enforcement must prove that average
person, upon inspection, knowing of a certain restriction, would observe
enough violations to logically infer that property owners neither adhere to nor
enforce the restriction
 Number, nature, and severity of existing violations; if sufficient, no
need to go any further
 Prior acts of enforcement
 Whether it is still possible to realize the intended benefits to a
substantial degree
 Challenges in proving abandonment
 Violations that are not readily visible
 Tension between number and severity of violations
 Reason for noncompliance, e.g., beauty vs. safety
o Changed conditions
 Vernon Township Volunteer Fire Department, Inc. v. Connor (PA Supreme Court, 2004)
 Facts: Connor and others lived in subdivision whose 1946 restrictive covenant prohibited
sale of alcohol on the land; FD purchased parcel of land within subdivision for purpose
of building a social hall that would sell alcohol; FD had constructive notice of covenant,
but did not have actual notice until started building; 68/77 parcel owners agreed to waive
enforcement, 3 abstained, remaining 6 were appellants in this case
 Majority
o Party seeking to discharge restrictive covenant has burden of proving original
purpose has been materially altered or destroyed by changed conditions, and
enforcement no longer confers substantial benefit, through:
 Acquiescence in its breach by others
 Abandonment of restriction
 Changes in character of a neighborhood
 Only restricted tract + immediately adjoining tracts
 Like an easement, restriction may be terminated by
o Condemnation
o Estoppel
o Merger
o Prescription
o Release
 When equitable relief is sought:
o Laches
o Unclean hands