10/28/2011 9:23:00 PM
I. Intro to Property:
 What does it mean to own something? o Bundle of Rights:
 1. Use - you have the ability to use it
 2. Exclude - you have the ability to exclude others from using it
 3. Alienate - you have the ability to alienate it from others (transfer it)
- Ability to transfer creates efficient use of assets
 Ownership can come from 3 sources: o When you create it (acquisition by creation) o When it is taken involuntarily (adverse possession) o When it is given voluntarily (acquisition by gift)
 4 main topics: o 1. Acquisition of Property
 original acquisition
 adverse possession
 gift
 voluntarily o 2. Multiple interest in the same piece of property
 possessory estates o 3. Co-ownership
 marriage interests
 how multiple ppl can own the same piece of property o 4. Relationship btw individuals and government
 zoning
 takings, power of imminent domain
II. Section 1: Acquisition and Creation
 A. ACQUISITION BY CAPTURE: o Rule = if wild animals are captured they belong to the captor. Capture is required; chasing the animal is not
enough. (Pierson v. Post – Post had been pursuing a fox when Pierson came along at the last minute and captured and carried off the fox.)
 Doesn't apply to tamed animals

2 o Rule = (First in Time Rule) The first to physically
capture/kill wild animals gets the title (Pierson v. Post)
 Dissent: CONSTRUCTIVE POSSESSION: Post's pursuit put him in constructive possession of the fox. The pursuit of the fox has the same effect as actual possession; he had the right to possession even though it was not yet actual possession esp. b/c Post expended much more effort and labor in pursuing the fox. o Rule = custom/trade usage is sufficient when:
 Its application is limited to the industry and those working in it
 The custom is recognized by the whole industry
 The custom requires in the 1st taker the only act of appropriation that is possible
 The custom is necessary to the survival of the industry o
 The custom works well in practice (Ghen v. Rich – P is a whales-man that captures whales by marking them w/a bomb lance. Someone else found one of P’s whales and sold it at auction.)
Rule = Interference by a non-competitor: if someone hinders another trade, he is liable for not allowing
another to practice his trade freely. (Keeble v. Hickeringll
- P owns land which contains a decoy pond to attracts wild game and D shot guns near the decoy pond for the purpose of interfering with P’s capture operation.)
 Rationale: Society wants the animals caught; promotes killing not conservation of wildlife which is the goal at this time
 Productivity of Land
 Trade competition is allowed but not malicious intereference o The Rule of capture and other "fugitive" resources
 1. Oil and gas - Oil and natural gas commonly collect in reservoirs that underlie many acres of land owned by

3 many different people. The resources have a fugitive character in that they wander from place to place.
 When problematic situations arose about ownership of oil and gas the courts likened the resources to wild animals b/c of their fugitive nature.
 "minerals ferae naturae" = have the power and tendency to escape w/o the volition of the owner – similar to animals
 this type of thinking was overruled b/c it denies society at large the benefits of economical underground storage
 2. Water - The rule of capture has played a formative role in the case of water
 i. Absolute Ownership Doctrine: Allowed each landowner to withdraw freely w/o regard to effects on neighbors
 ii. Reasonable Use Doctrine: wasteful uses of water, if they harm neighbors, were considered unreasonable and hence unlawful
 Western US = first in time or prior appropriation is used in the West where water is not an abundant resource
 the person who captures the water 1st and puts it to reasonable and beneficial use has the superior right to it
 Creates externalities b/c once someone starts to capture the water, everyone will rush to use to it so that it is not depleted by just one person
 Eastern US = riparian rights are used in the East where water is an abundant resource
 each owner of land along a water source
(riparian land) has a right to use the water subject to rights of other riparians o Benefits to the rule of capture:

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 low transaction costs
 easy to implement b/c the parties know what's involved
 clear rules are nice when there is a small amount of money at stake because you don't want to spend a lot of money transacting when there is only a small amount of gain to be realized
 B. PROBLEM OF THE COMMONS o Externality:
 costs, which are external to the decision maker so that they are costs, which are not taken into account which can lead to insufficient use of resources
 Decisions are beneficial to the maker but harmful to society
 a cost that gets placed elsewhere, costs are pushed out on other people other than the individual b/c the individual only looks at the benefits and not the costs.
 This causes people to use resources inefficiently.
 Hypo: a factory pollutes the air which is the best for the factory b/c in order to not pollute the air, it would cost them a lot of money and not polluting the air doesn't benefit the factory at all, and the community bears the cost of having to live with unclean air o Problem of the holdout - why should I do it if no one else is going to?
 Hypo: Suppose Midway airport wants to build a runway and there are 10 houses in the way which each cost
$100,000. Midway offers each homeowner $140,000 b/c the gain to midway is going to be more than that. 9 out of 10 people say yes and the 10th person holds out and waits for a better offer b/c the 10th person understands that the gain to Midway is much more than
$140,000. o 3 Types of Property Ownership:
 1. Communal ownership - a right which can be exercised by all members of the community; the community denies the state or the individual the right

5 to interfere with any person's exercise of communally owned rights
 i.e. everyone had the right to put their animals on common property
 Problem with the commons is that individuals have incentives to look only at their own private gains, not the gains of the community.
 Hypo: There are 100 people that have ownership of a forest w/100 trees. If one person rushes out and cuts down a tree to take it as their own, that person is better off and society is worse off. What is society going to do? Run out and cut down all the trees before someone can take them all.
 2 conditions must be met for the problem of the commons to hold:
 1. You need to know the information – you need to know what is the best for the community as a whole in order to act accordingly
 2. Finite amount of resource (property)
 Problems with Communal Property
 *Assumes Exhaustible resource of land*
 *Assumes sufficient knowledge*
 Everyone has access to commons and everyone is likely to be worse off as a result o Individuals with access to commons have incentives only to look at own gain and own costs (private gain/private costs); not benefits for gains to the community as a whole o Communal situations are likely to have many externalities.
 2. Private ownership - implies that the community recognizes the right of the owner to exclude others from exercising the owner's private rights

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 Private property makes it easy to internalize the externalities. There are costs associated with internalizing externalities, but doing so is more worthwhile than not doing so.
 By internalizing externalities, you look at the cost and benefit and therefore make the best decision, which is what private property forces people to do.
 Moving from common property  private property has advantages:
 1. Internalizes externalities
 2. Individuals have incentives to act in a societally beneficial way
 3. Cuts down on transaction costs b/c we don't have to negotiate with other people
 4. Able to transfer property to the person who is going to value it most highly
 5. Allows people to plan prospectively
 3. State ownership - implies that the state may exclude anyone from the use of a right as long as the state follows accepted political procedures for determining who may not use state-owned property
 C. ACQUISITION BY CREATION: o 1. Property in One’s Ideas and Expressions: General Principles of Intellectual Property
 General Rule = If you create something you are essentially first in time and that something is yours to exploit
 Rationale: The purpose is to reward labor
 Rule = misappropriation or unfair competition -
When a P has by substantial investment created in an intangible thing of value not protected by a patent, copyright, or other intellectual property law, and the D appropriates the intangible at little cost which injures the P and puts the P's continued use of the intangible in jeopardy as a

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result, an action for misappropriation will lie.
(International News Service v. Associated Press - INS was bribing members of AP to give them gathered news so that INS can publish the news before AP.) -
 Rule = In the absence of some recognized right at common law or under the statutes, a man's property is limited to the chattels which embody his invention. Others may imitate at their
pleasure. (Cheney Brothers v. Doris Silk Corp - The P owns a silk shop where he designs patterns and the D copied one of the popular patterns which took business away from P.)
 Policy: Imitation promotes business competition – property must be protected by law (patents, copyright) if they are to be safe from imitation
 Rule = When copying another's product, it can claim to be equivalent without claiming to be
identical. (Smith v. Chanel - D copied perfume from P and stated in the advertisements that the imitation perfume was the equivalent of the original perfume.) o 2. Property in One’s Person
 Rule = Property rights are terminated when biological material is excised so that one cannot bring an action for conversion (wrongful exercise of ownership – must show reasonable expectation
of possession, dominion and control) (Moore v.
Regents of the University of California - P consented to a spleen removal operation and P's spleen was retained for research purposes w/o his knowledge or consent as well as samples of P's tissue and blood which Ds used to establish a pantented cell line which will yield billions of dollars in the future.)
 No conversion where P would not have wanted his excised skin/cells anyway
 Rule = right to exclude others from property is an
important right which must be protected. (Jacque

v. Steenberg Homes Inc - D was delivering a mobile home to the P and the P told the D not to cut across their land for delivery but D did it anyways.)
 Policy: Private landowners should feel confident that wrongdoers who trespass upon their land will be appropriately punished so that they are less likely to resort to self-help remedies.
 Rule = One cannot use property rights to injure/harm the rights of others; the right to
exclude is not absolute. (State v. Shack- A farmer attempted to exclude an attorney from speaking to migrant workers living on the land.)
III. Adverse Possession and Gift
 A. ACQUISITION BY ADVERSE POSSESSION: o 1. The Theory and Elements of Adverse Possession
 A means by which interest in property can be transferred w/o the consent of the prior owner
 General Rule = An adverse possessor should be able to obtain property at the time that the statute of limitations has passed
 Length of time varies by jurisdiction
 Policy: This rule developed b/c of the idea that we should use property efficiently
 Punishes unproductive users
 Encourages productive users
 If someone has been using your land for so long and you haven't noticed, you obviously aren't using your land efficiently
 Five Elements of Adverse Possession (Pneumonic: An
Ox Has Carried Cargo)
 1. Actual Entry – time of trespass begins the statute of limitations
 2. Open and notorious – have to use property as a true owner would and to give notice to the owner
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 3. Hostile or adverse – in defiance of the owner/can’t be there with permission
 4. Continuous for the Requisite statutory period – to give the owner an appropriate period of time to discover someone on his or her property
 To establish continuous possession for the statutory period, an adverse possessor can tack onto her own period of adverse possession any period of adverse possession by her predecessors provided there is privity
 5. Claim of title (states differ in what this means – often disputed) – claim of right by the adverse possessor
 i. Passive Adverse Possessor - You can only adversely possess property if you are an innocent or good faith trespasser; only then do u have a claim of title
 ii. Active Adverse Possessor - You only have a claim of title if you know that the property you are trying to claim is not yours; an aggressive claimant
 iii. It doesn't matter which way you do it
 iv. A very small number of states require color of title (refers to a claim founded on a written instrument that is for some reason defective and invalid; so that in good faith the adverse possessor believes they own the entire property)
 Color of title – defective form of title giving some rights but not all rights, usu. a written instrument which facially looks like you have the right to title
 If you have color of title you may be able to show constructive possession for more property than you are actually, physically possessing

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 If you have color of title to the entire property, but you are only improving and cultivating ½ of it, you may be able to claim color of title for the entire property which is dependent upon who else has claim to the property
 Rule = To acquire title to real property by adverse possession it must be shown by clear and convincing proof that for at least a statutorily limited amount of time there was an actual occupation under a claim of title. Elements of proof being either that the premises (1) are protected by a substantial enclosure, or are (2)
usually cultivated or improved (Van Valkenburgh v.
Lutz – D was using an un-owned lot for 35 years when
P came along and purchased the lot and wanted D to get his possessions off the lot.)
 Rule = Only when there is actual knowledge that the land you are adversely possessing is not yours will the statue of limitations begin running
(Mannillo v. Gorski - D's son made additions and changes to the house including steps and a concrete walk which encroached upon the P's land to the extent of 15 inches.) o 3. The Mechanics of Adverse Possession
 Rule = Continuity of possession may be established although the land is used regularly for only a certain period each year. It is not necessary that the occupant should be actually
upon the premises continually. (Howard v. Kunto –
D wanted to tack the time his predecessor owned the land onto his own for purposes of adverse possession but his predecessor only used the land as a summer home.)
 Tacking:

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 An adverse possessor may establish continuous possession by tacking onto his time of possession, any period of adverse possession by predecessors in interest so long as there is privity of estate (a possessor voluntarily transferred to a subsequent possessor either an estate in land or physical possession).
 An adverse possessor may not tack on a prior period of possession if he has ousted the prior possessor or if the prior possessor abandoned the property.
 Tacking could occur by either:
 1. Successive adverse possessors
 2. Change in ownership o Change in ownership does not destroy adverse possession
 Rule = A purchaser may tack the adverse use of its predecessor in interest to that of his own where the land was intended to be included in the deed between them but was mistakenly omitted, if the successive
occupants are in privity. (Howard v. Kunto)
 Disabilities:
 Look at the statute on pg. 149 – same one on the exam
 When the adverse possessor enters the property, if the true owner is a minority, of unsound mind or imprisoned at the time of entry the statute of limitations extends whichever is the longer of 21 years or 10 years added to the time when the disability is removed.
 Rationale: Most legislatures think it is unfair for a statute of limitations to run upon a person who is unable to bring a lawsuit; therefore most statutes give an additional period of time to bring an

12 action if the owner is under a disability. However, disability provisions are limited in 2 ways:
 1. Only the disabilities specified in the statute can be considered
 2. Usually only disabilities of the owner at the time adverse possession begins count
 Ways disabilities can be removed:
 Reach the age of majority
 Declared of sound mind
 Released from prison
 Disabled owner dies
 A disability is immaterial unless it existed at the time when the cause of the action accrued.
 You cannot tack successive disabilities, only one disability applies
 Rule = Adverse possession does not run against
the government - local, state, or federal (for better or worse)
 Rationale: Purpose of this rule is that the state owns its land in trust for all the people, and the gov't should not lose land b/c of the negligence of a few state officers or employees o 3. Adverse Possession of Chattels
 Rule = The discovery rule - provides that a cause of action will not accrue until the injured party discovers, or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of a cause of action - controls in actions involving the adverse
possession of chattels. (O'Keeffe v. Snyder - P contends that she created 3 paintings which were stolen out of a gallery. She later discovered that the D was in possession of the paintings and the D is claiming title by adverse possession.)
 B. ACQUISITION BY GIFT

13 o A gift is a voluntary transfer of property without any consideration. o 3 elements –
 (1) Intent – determined by statements and actions of donor
 a. The donor must intend to make a gift
 (2) Delivery
 a. Actual
 Physically handing over the gift
 b. Constructive
 When actual manual delivery is impracticable
 The handing over of the means of obtaining possession and control (usually a key)
 Rule = small, tangible objects must be handed over for delivery to be
enforced. (Newman v. Bost – P was her lover’s housekeeper. On his death bed, her lover gave her keys to a drawer which contained his life insurance policy.) o You cannot have constructive delivery when actual delivery is possible.
 c. Symbolic
 Again, where actual manual delivery is impracticable
 the handing over of some object that is symbolic of the thing given (most common is an instrument in writing)
 Rule = A gift of property evidenced by a written instrument executed by the donor is valid without a manual
delivery of the property. (In re Cohn – A husband wrote a letter stating that he was giving his wife shares of stock in his company for her birthday.)
 (3) Accept

 a. The donee must accept the gift (hardly ever an issue) o Two types of gifts:
 1. GIFT INTER VIVOS - made during the donor's life when the donor is not under any threat of impending death
 Once made is irrevocable
 a. You can't take the gift back
 b. You have no control over how the property is used
 2. GIFT CAUSA MORTIS - made in contemplation of immediately approaching death
 Revoked if the donor doesn't die
 Substitute for a will o Exam Tip: On the exam, determine if the gift is inter vivos or causa mortis by analyzing the intent of the donor. Did the donor intend the donor intend the gift to be irrevocable? the gift to be irrevocable? Or was it made in contemplation of death and to be revoked if death does not ensue? o Rule = Black letter law - if it is practicable you have to actually deliver the gift. If it isn't practicable then you have to deliver the gift either constructively or symbolically.
 If you can hand it over, you must
IV. The Land Transaction
 A. INTRODUCTION TO BUYING AND SELLING REAL ESTATE o Determine purchase price w/contingencies after inspection o Title insurance – the opinion of the insurer concerning the validity of title, backed by an agreement to make that opinion good if it should prove to be mistaken and loss results as a consequence
 You want title insurance b/c it covers things that the abstract or certificate won’t
 Does not run with the land
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 Developed b/c of the inadequacies and inefficiencies of the public records in protecting private titles
 Bought by one premium paid at the time the policy is issued
 Premium is based on the amount of insurance purchased:
 1. In a homeowner's policy it's the amount of the purchase price of the property
 2. In a lender's policy it's the amount of the loan
 B. THE CONTRACT OF SALE o 1. Statute of Frauds - sought to make people more secure in their property and their contracts by making deceitful claims unenforceable
 Applies to transfers of any interest in real estate
 Requires that all land transactions (except leases less than 3 years) need to be in writing and contain:
 Identification of the Parties
 Signature of bound party (seller)
 Description of the property
 Sale price or method to determine price
 Exception: (where oral agreements can be enforced)
 1. Part performance: allows specific enforcement of oral agreements when particular acts have been performed by one of the parties to the agreement o i.e. Pay the contract price, take possession of the property, or improve the property
 2. Estoppel: applies when unconscionable injury would result from denying enforcement of the oral contract after one party has been induced by the other seriously to change his position in reliance on the contract

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 Rule = An oral contract for the transfer of interest in land may be enforced despite the Statute of
Frauds if the party seeking specific performance changed his position in reasonable reliance on the contract so that injustice can be avoided only by
specific performance (Hickey v. Green – P and D agreed that P would buy D’s lot. In reliance on this agreement, P sold their house and then D revoked the offer.) o 2. Marketable Title - means the quality of title, which a reasonable person with competent legal advice would be wiling to accept
 A title free from reasonable doubt, not free from every doubt
 If the seller cannot convey marketable title then the buyer can rescind, however, the fact that there is not marketable title does not mean that the property cannot be sold
 If you have a restriction/easement/covenant which would effect marketability of title can still be sold as long as it is contractually negotiated for
 Rule = the mere existence of public zoning ordinances do not make titles automatically
unmarketable (Lohmeyer v. Brown - P entered into a contract to buy a lot from D. The contract provided that the D would convey a deed with an abstract of title showing good merchantable title, free and clear of all encumbrances but it showed the building on the lot was in violation of zone ordinances.)
 Rule = A party cannot convey good merchantable title if violations of covenants or zoning ordinances exists on the property at the time it is
to be sold. (Lohmeyer v. Brown)
 Rule = Private restrictions constitutes an encumbrance rendering the title to land
unmarketable (Lohmeyer v. Brown)

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 Policy: private restrictions are not as easily found as a public restrictions therefore a buyer would have no reason to know of a private restriction
 Rule = Title is unmarketable when it poses doubt in the mind of the P and subjects P to possible
litigation (Lomeyer v. Brown) o 3. The Duty to Disclose Defects
 The duty can be put on the seller to disclose or the buyer to find out
 The duty to be put on the seller to disclose is much more efficient b/c the seller knows much more about the property
 Doctrine of Caveat emptor: “Let the buyer beware” - buyer alone is responsible for assessing the quality of a purchase before buying
 Under this doctrine there is no obligation for the seller to disclose unless:
 1. Fiduciary relationship
 2. Conduct which shows active concealment of seller
 3. Confidential relationship
 no longer prominent
 Exception to the Rule of Caveat Emptor = When a condition/defect has been created by the seller that materially impairs the value of the contract and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care, the seller has a duty to
disclose. (Stambovsky v. Ackley - P contracted to buy a house from D, which was widely reputed to be possessed by poltergeists.)
 Latent Defect Rule = A seller has a duty to disclose when the seller of a home knows of facts materially affecting the value of the property that are not readily observable and

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are not known to the buyer. (Johnson v. Davis
- The P entered into a contract to buy the D’s home. The D’s knew that the roof leaked but they told the P there were no problems w/the roof.)
 Policy: We want to deter this type of behavior by sellers b/c o 1. misrepresentation o 2. unethical bargaining conduct o 3. creates bad transactions b/c good transactions are made by conveying information to both parties
 C THE DEED o 1. Warranties of Title
 The Deed - a short legal document whose purpose is to transfer title
 Description of Tract - A deed must contain a description of the parcel of land conveyed that locates the parcel by describing its boundaries. Customary methods include:
 Reference to natural or artificial monuments and, from the starting point, reference to directions and distances (‘metes” and “bounds”).
 Reference to a government survey, recorded plat, or some other record.
 Reference to the street and number or name of the property.
 3 types of deeds: Property is sold in 3 different ways -
 1. General warranty deed – warrants title against all defects in title
 2. Special warranty deed – contains warranties only against the grantor’s own acts but not the acts of others
 3. Quitclaim deed – contains no warranties
 Difference btw general and special is not what's covered but when it is covered.

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 General warrants against all defects irrespective of whether the seller was the owner when the error occurred
 Blanket protection for all time
 Special warrants against defects that occurred only during the time at which I was the owner of the property
 Quitclaim deeds don't warrant anything.
 Most common at foreclosure sales.
 All quitclaim warranties do is transfer the property.
 6 Traditional Warranties – Promises or representations that title is as presented at closing and no one will step forward later claiming an undisclosed interest in the property (even if not stated, inferred, unless specifically listed in warranty to exclude)
 Present covenants - If a present covenant is breached, it will be breached at the time the property is conveyed. The statute of limitations begins running at the time of the conveyance.
 1. A covenant of seisin - The grantor warrants that he owns the estate that he purports to convey
 2. A covenant of right to convey - The grantor warrants that he has the right to convey the property.
 3. A covenant against encumbrances - the grantor warrants that there are no unexpected encumbrances on the property
 Future Covenants - Future covenants can be breached at any point in the future, if this happens the statute of limitations begins running at whatever point in time they are breached.
 1. A covenant of general warranty - the grantor warrants that he will defend against lawful claims, and he will compensate the

20 grantee for any loss that the grantee may sustain by assertion of superior title
 2. A covenant of quiet enjoyment - grantor warrants that the grantee will not be disturbed in possession and enjoyment of the property by assertion of superior title
 3. A covenant of further assurance - the grantor promises that he will execute any other documents required to perfect the title conveyed. o Rule = the mere existence of a paramount title does not constitute a breach of the covenant of quiet
enjoyment (Brown v. Lober – P bought land w/ 2/3 interests in the mineral rights by a general warranty deed. Years later,
P tried to sell their mineral rights to a coal co. but P discovered that they only owned 1/3 of the mineral rights.) o Rule = To render a title unmarketable, the defect must present a real and substantial probability of litigation
or loss at the time of the conveyance. (Frimberger v.
Anzellotti - When the P wanted to make improvements on his land he discovered there was a tidal wetlands violation on the property.) o Rule = as long as the statute of limitations has not run, owners can bring actions against owners who
transferred title by general warranty deed. (Rockafellor v. Gray) o Rule = Whether a chose in action runs with the land
varies between jurisdiction. (Rockafellor v. Gray) o Rule = The amount of recovery of the remote grantee is limited to the consideration recited in the deed from the original grantor to his immediate grantee, even if
the remote grantee paid a larger consideration.
(Rockafellor v. Gray – Gray held a mortgage on property which was obtained by general warranty deed by Rockafellor.
When payments were missed, Gray foreclosed on the mortgage.)

21 o Rockafellor v. Gray dealt w/how different types of deeds work in the context of whether a successor in interest is entitled to the benefits which were brought by a general warranty deed even if they weren’t given a general deed
 AKA Does the chose in action run to remote grantees?
 Depends on the jurisdiction
 D. FINANCING REAL ESTATE TRANSACTIONS o 1. Introduction to Mortgages and the Mortgage Market
 When a mortgage is granted, the lender receives a security interest usually called a lien
 Security Agreement:
 Grants bank security interest in property you’re purchasing
 Gives bank priority over other creditors if there is a default
 Establishes priority of payment; determined by who first obtains secured interest
 A lien insures that the lender will get paid in the event of a default
 Usually people sign:
 A promissory note promising to pay back the money,
 A mortgage, and
 A basic contract that sets out the terms of the agreement
 By signing and properly filing the mortgage, the lender is insuring that they have 1st rights to the value of the collateral if the collateral has to be sold
 Lien Theory:
 The legal title remains in the mortgagor
(borrower) and the mortgagee (lender) has a lien on the property.
 Authorizes the mortgagee to have the sheriff seize the property and sell it, in the event the mortgagor defaults on the payment of a loan.

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 Policy: The idea of a lien is good for every party involved.
 It's good for the lender b/c it makes it easier for the lender to get paid in the event of a default, and
 Its good for the buyer b/c since it is easier for the lender to get paid, the interest rate will be lowered. o Hypo: suppose the value of the property is $300K and there is a 1 st lien on the property worth $200K and a 2 nd lien on the property worth $50K and a 3 rd lien on the property worth
$20k
 if the property sells for $300K, every lien would be extinguished and the debtors would receive the balance as equity
 if the property sells for $220K, creditor 2 would have a deficiency of 30K and creditor 3 would have a deficiency of 20K unless there is an anti-deficiency statute they can go after the debtor for $ that they didn't get paid and
 then they would be general unsecured creditors and be in a race with every other unsecured creditor to go to court and get a judgment and find assets which are not encumbered by a security interest or not subject to an exemption statute to sell them and get paid
 1 st , 2 nd , and 3 rd lien means the order in priority which will be paid in the event of foreclosure - order of priority by the date by which the creditor perfected their interest
 when lender 3 looks in the recording office, they will see that the 1 st and 2 nd lenders are there
 Unsecured creditors can't get paid from the foreclosure sale. o 2. Secured Interests
 Over-secured v. under-secured creditors:

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 An over-secured creditor is when the value of the collateral is greater than the debt owed
 i.e. if the collateral is $250,000 and the debt is $200,000 when the creditor sells the house, they will get $250,000 and they will only have to pay $200,000 in debt and the extra $50,000 left over is known as the equity cushion
 In the event of foreclosure, the remaining difference after all creditors have been paid will be returned to the owners of the house
 Under-secured is when the collateral is less than the debt owed
 i.e. if value of collateral is $200,000 and the debt is $250,000 then this means not all that they are owed is going to be repaid.
There is not sufficient credit to protect the creditors position
 Creditors want to be as over secured as they can.
 But the amount of the collateral and the amount of the debt fluctuates
 Creditors insist on 20% down b/c:
 That way the creditor would only be lending
80% and by definition would be oversecured.
 Hopefully, the house would bring enough money realized at a foreclosure sale that they would get paid back everything they have lent
 If someone can put 20% down then they are financially stable enough to do so which means that they could probably make their payments in the future
 Acceleration clauses:
 Most mortgages have an acceleration clause

24
 A clause, which says that in the event that the debtor defaults on the mortgage, the creditor, at its discretion, may accelerate the loan so that the entire amount that is owed will be immediately payable
 If the owner defaults on their mortgage, and the loan is accelerated or if the house goes into foreclosure it is very unlikely that the owner will be able to pay the full amount that they owe on the house if they weren't able to pay their monthly bills o 3. Mortgage Foreclosure
 Generally occurs when there is a default on the payment of the loan
 3 traditional methods of foreclosing on real property
 1. Judicial foreclosure - far more common
 Requires the creditor to go to court and this is accomplished by entry of a court order which follows a civil action for foreclosure brought by the creditor
 How the creditor goes about foreclosing is set out by individual state statue
 Typically the court sets a date for the foreclosure sale, and the sale is proceeded by a sheriff
 2. Power of sale foreclosure - much less common
 About 1/2 the states offer it
 Situation where the parties agree in the security agreement to a power of sale. A trust is set up which allows the trustee in the event of a default to sell the property, and use the proceeds of the sale to repay the creditor
 The lawsuit to establish the right to foreclose is not necessary - circumvents the court process, do not need a sheriff

25
 3. Strict foreclosure
 Unusual and rarely seen; occurs where a buyer can’t get financing any other way
 Foreclosure sales:
 Rarely bring much value, other than the fair market value of the property
 The method of sale is almost always one of auction.
 If the sale doesn't bring enough to pay back the creditor, the homeowner may be able to sue.
 Most state statutes allow the homeowner to object to the sale b/c of:
 Insufficient advertising
 Winning bid was just not high enough o In the absence of some other defect in the title, the price must be “grossly inadequate” or must
“shock the conscience of the court” for the sale to be invalidated. Generally, the mere inadequacy of the foreclosure sale price will not invalidate a sale.
 Unfair agreement btw the purchaser and the creditor
 Equitable right of redemption – the owner has a period of time to try and buy back the property by paying the purchase price
 Problems w/ Foreclosure Sales:
 Advertising
 Inspection of the property is difficult
 There is no title insurance; buyer receives a quitclaim deed
 Creditors have little interest in receiving a high price
 The existence of a redemption period
 The existence of additional costs

26
 General Rule = The mortgagee never gets possession of the property; the mortgagor keeps the property until the foreclosure sale is confirmed and then the purchaser would get the property
 The debtor typically stays in the property
 If the debtor has no equity then they have no incentive to upkeep the property.
 If you are concerned as a creditor that the debtor will not maintain the property, the creditor can go to court and ask for a receiver to make sure the property is maintained in good
 To get a receiver appointed:
 1. One must be provided for in the mortgage document; and
 2. The ct. has to determine, in its equitable discretion, that a receiver is needed o Creditor has to show that they have no other remedy o This would mean the creditor is under-secured b/c if they were oversecured the collateral is worth more than the mortgage and depreciation of the property wouldn't affect the creditor. If they are under-secured depreciation of the property would affect the creditor.
 Exemption statutes:
 Every state has an exemption statute which tells us what properties creditors can’t reach
 You get property exempt based on the state you are in
 Purpose is so that individual debtors are not left absolutely destitute so as to provide unsecured creditors cannot get at certain assets

27
 Unsecured creditors cannot get at exempt property.
 Secured creditors and some tax liens can generally get at exempt property, which is covered by an exemption statute.
 3 different forms
 1. You can exempt specific type of property at a maximum dollar amt. (most common) o i.e. jewelry, automobile
 2. You can exempt a max amt. of money and apply it to any property you want (rare)
 3. You can exempt the following property irrespective of value o i.e. your home
 If your property is exempt, it can’t be reached by creditors
 General method by which creditors gets paid:
 If you are a secured creditor, in the event of a default you can have the property seized and sold and you have the right to be paid from the proceeds.
 In the event that you are not paid in full by the proceeds, you still have the right to get paid but you have the status as a general unsecured creditor
 Then you are in a situation where you are in a race w/every other unsecured creditor to go to court to get a judgment for a lien, which directs the sheriff to get to the property and are not covered by security interests that are of value
 Or if they have security interests that they have equity in the property, and sell it to get paid
 General unsecured creditors do not trump exemption loss
 Secured creditors do trump exemption loss as a general matter

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 Distribution of the Proceeds
 1 st to get paid on a foreclosure is the cost of sale.
 If the senior creditor brings the foreclosure, he gets paid first and then the junior liens are paid in the order credit was given (First to give credit gets paid first).
 If a junior creditor brings foreclosure, he gets paid first and then all liens junior to him are paid in the order credit was given
 Liens senior to the foreclosing creditor are not extinguished by the foreclosure sale; the purchaser at the foreclosure sale picks up the remainder of the mortgage.
 If you do not have you lien extinguished, you can’t be paid
 i.e. if the 2 nd creditor forecloses, the purchaser will buy the property subject to the 1 st creditor’s lien
 Whoever takes the appropriate measures to file their lien first has a superior lien. Monetary value has nothing to do with the order of the lien payments upon foreclosure.
 If there is excess after the junior lenders have been paid, the unsecured creditors don’t get paid
- the homeowner gets the rest in equity.
 Deficiencies:
 A deficiency is the amount a creditor, who is under-secured, is not being paid at the foreclosure sale
 i.e. if a house has a loan for $100,000, the house is foreclosed for $60,000, there is a $40,000 deficiency
 Generally, the bank has the right to sue the home owner for the money difference
 This is only applicable to under-secured creditors
 Anti-Deficiency Statutes:

29
 They may deny deficiencies in all foreclosures
 They may deny deficiencies in certain foreclosure processes (i.e. power of sale)
 They may deny deficiency when the creditor is the purchaser
 They may set forth the use of the market value of the property to determine the deficiency
 Rule = Unrecorded mortgages are not effective against subsequent good faith
purchasers.
 Rule = Anybody against whom their is a
default has the right to foreclose.
 Rule = The only liens that get extinguished at a foreclosure sale are those of the foreclosing creditor and those junior to the foreclosing creditor if there are sufficient assets
 The economic impact is the same o The amount that they get paid ought to be the same (see example)
 Rule = if your lien is extinguished in a foreclosure sale, you have the right to get paid
 Rule = If you are a foreclosing creditor, you have to notify all junior creditors of
foreclosure.
 Rule = In his role as a seller, the mortgagee has a duty to act in good faith and due diligence to get fair market value and
protect the mortgagor’s equity in the house.
(Murphy v. Fin.Dev.Corp.- Ps were in arrears on their mortgage payments and had failed to pay other utility and tax bills therefore the D foreclosed.)
 Mortgagee’s duty is essentially that of a fiduciary

30 o 4. The Subprime Mortgage Crisis
 The subprime foreclosure rates are unbelievably higher than prime foreclosure rates
 Why would lenders give loans that they knew would likely end in foreclosure?
 Bank practices changed where due diligence disappeared and it became common practice for the lenders to lend w/o the buyers having sufficient income or assets to pay because:
 1. The housing crisis, which created incentives for lenders to lend subprime b/c worst-case scenario for them was to foreclose and get their money back
 2. Rise of mortgage back security - share in a pool of mortgages which were expected to generate a regular cash flow for the life of the mortgage (30 years usually) o Pool had to be large which gave incentives to lenders to write overly risky loans o Lenders got paid based on the number of loans they hold o Lenders didn't care if they could get repaid, b/c they only had to hold them long enough to sell them to wall street o Therefore due diligence went by the wayside
 3. Creation of collateralized debt obligations
- pools of portions of mortgage backed securities o Formed an incredibly risky asset pool which people thought were safe o Easy credit meant the purchase price of the homes rose, which meant equity in the homes rose

31 o Housing prices doubled but household income did not raise as quickly. So ppl. bought homes and then reached a point where they could no longer pay on their mortgages
 Which lead to defaults
 Which lead to foreclosures
 Which lead to more houses on the markets
 Which lead to a decrease in the value of homes and therefore less equity in the homes
 Rule = It is unfair for lenders to lend money when they know or should have known that the borrower would default and eventually have to
foreclose on their property. (Commonwealth v.
Fremont Investment & Loan- The D is an industrial bank who sold subprime loans to residents of
Massachusetts.) o 5. Mortgage Substitutes: The Installment Land Contract
 Installment Land Sale Contracts:
 The seller retains legal title and does not deed the property to the purchaser until the purchaser pays the full purchase price.
 The payment period under an installment contract may be as long as the normal deed and mortgage period
 Equitable Conversion: where there is a sale of land where the contract is specifically enforceable, equity
(fair action) is done and secured:
 The buyer is viewed as the owner of the property from the date of the contract (equitable title)
 And the seller holds the title as trustee for the buyer and has a claim for money secured by a vendor’s lien on the land

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 Rule = The vendee under a land sale contract acquires an interest in the property of such a nature that it must be extinguished before the
vendor may resume possession. (Bean v. Walker -
The P agreed to sell and the D agreed to purchase a home to be paid in monthly installments and in the event of a default a forfeiture clause came into play whereby the P could retain all the money paid under the contract as "liquidated" damages and would be considered payment of rent.)
 B. THE RECORDING SYSTEM o To ensure reliability of recorded documents, statutes required deeds to be acknowledged before notary public or other public official before it is entitled to recordation. o Functions:
 Establishes a system of public recordation of land titles
 Preserves important documents
 Protects purchasers for value and lien creditors against prior unrecorded interests
 Gives constructive notice of your claim to anyone with future interests o 1. The Indexes
 Indexing is how searches are done.
 2 types of indexes:
 1. Tract index - index title according to parcel identification number
 Not common
 2. Grantor-grantee indexes
 2 separate indexes, alphabetized one for the grantors, one for the grantees - so any grant of property is indexed twice
 The key is that you want search both grantor and the grantee indexes
 You need to search back on the grantee line as far as you need to under the statute to find who has owned the property in the past

33
 You search forward on the grantor line to find any liens, mortgages (any instruments which might be there) that you don’t know of o Rule = An instrument, which describes the property to be conveyed with a Mother Hubbard clause is not sufficiently specific as to be effective against subsequent purchasers and mortgagees, unless they
have actual knowledge of the transfer. (Luthi v. Evans -
Grace Owens assigned all her interests in oil and gas leases to
International Tours, Inc. The written instrument included a
Mother Hubbard clause.) o Rule = A misspelled name does not give constructive notice to title searchers under the doctrine of idem
sonans (Orr v. Beyers - The P obtained a judgment against
William Elliott. The written judgment identified Elliott erroneously as "William Duane Elliot", "William Duane Elliot" and "William Duane Eliot")
 idem sonans - though a person's name has been inaccurately written, the identity of such a person will be presumed from the similarity of sounds btw the correct pronunciation and the pronunciation as written.
Therefore, absolute accuracy in spelling names is not required in legal proceedings and if the pronunciations are practically alike, the rule of idem sonans is applicable o General rule = subsequent bona fide purchasers for value are protected from unrecorded prior interests but
they have to search o 2. Types of Recording Acts
 Exam Tip: It is critical to know which recording act applies to the jurisdiction before you start analyzing the issues
 1. Race statute - (pretty obsolete) as btw successive purchasers of Blackacre, the person who wins the race to record prevails. Whether a subsequent purchaser has

34 actual knowledge of the prior purchaser's claim is irrelevant.
 The 1st person to record prevails which is easily determined. Advantage is that the whole inquiry is based on written record.
 O owner of Blackacre, conveys Blackacre to A, who does not record the deed. O subsequently conveys Blackacre to B for a valuable consideration. B actually knows of the deed to A.
B records the deed from O to B. Under a race statute, B prevails over A, and B owns Blackacre.
 2. Notice statute - (IL uses this) A subsequent bona fide purchaser for value prevails over prior claimants as long as the subsequent purchaser acquires the interest w/o notice of the prior claim and prevails immediately upon closing
 If a subsequent purchaser has actual notice of a prior unrecorded instrument, the purchaser could not prevail over the prior grantee, for such would work a fraud on the prior grantee, even if they record 1st
 Protects a subsequent purchaser against prior unrecorded instruments even though the subsequent purchaser fails to record
 O, owner of Blackacre, coveys Blackacre to A, who does not record the deed. O subsequently conveys Blackacre to B for a valuable consideration. B has no knowledge of A's deed.
Under a notice statute, B prevails over A even though B does not record the deed from O to B.
 3. Race-Notice statute - Under a race-notice statute a subsequent purchaser is protected against prior unrecorded instruments only if the subsequent purchaser (1) is w/o notice of the prior instrument and
(2) records before the prior instrument is recorded.

35
 O, owner of Blackacre, coveys Blackacre to A, who does not record the deed. O subsequently conveys Blackacre to B, who does not know of A's deed. Then A records. Then B records. A prevails over B, even though B had no notice of A's deed,
B did not record before A did.
 A sells to B, A sells C, and then C sells to D
 It is the contest btw. C and B which determines
D’s rights
 Rule = You can only properly record your deed only if all the prior deeds in your chain of title
have been recorded (Messersmith v. Smith - Carolyn conveyed property to Smith and the 1st time she did it, the deed was in error and was ripped up. The 2nd time,
Carolyn never appeared before the notary so the deed was invalid.)
 Rule = An unacknowledged deed does not qualify for recordation (both parties need to be present w/a notary public) and therefore the recording does not give constructive notice to subsequent
purchasers. (Messersmith v. Smith)
 Rule = Zimmer Rule - if a deed in chain of title is defective then every deed down the chain is
defective (Messersmith v. Smith) o 3. Chain of Title Problems
 Chain of title- refers generally to the recorded sequence of transactions by which title has passed from a sovereign to the present claimant
 Technical meaning: the period of time for which records must be searched and the documents that must be examined within that time period
 Meaning varies by jurisdiction
 Dependant upon the searcher being able to find the appropriate document and then be able to link it properly

36
 Problems occur referring to the recorded sequence of transactions by which title has been passed
 Rule = constructive notice of real property can only be obtained if the chain of title includes all parties to whom a deed has been transferred (if part of the chain of title is missing, no way to link
the title) – KEY TO CHAIN OF TITLE (Bd. Of Ed v.
Hughes - Bd. of Ed. purchased land from Hoerger but had no way of knowing that Hoerger had conveyed the same tract of land to D&W b/c they hadn’t recorded yet.)
 Rule = Implied Authority - A deed that does not name a grantee is nullity, and wholly inoperative as a conveyance, until the name of the grantee is legally inserted. When the grantor receives and retains the consideration and delivers the deed w/o the grantee’s name filled in, the grantee is presumed to have the authority to insert his
name. (Bd. Of Ed v. Hughes)
 Bd of Ed v. Hughes was designed to show that if the title isn’t properly linked in the chain of title, then a subsequent purchaser is not going to be able to track title
 Who gets the benefit of the bona fide subsequent purchaser statute (which is the person who is protected)? The system protects the last to purchase
 C. TITLE INSURANCE o 2 types of Title Assurance:
 1. Title searches documents of record
 2. Title insurance o All instruments affecting land can and should be recorded in the public records office
 Easily searchable to determine who has title o People who want additional title assurance can get it by buying title insurance

 Dual back up system o Title Insurance:
 Title insurance may be taken out either by the owner of the property or the mortgage lender.
 The insurance protects only the person who owns the policy.
 The policy does not run with the land to subsequent purchasers.
 Back up to traditional title assurance
 Back up of the recording system
 Developed b/c of the problems w/the recording system and that it didn't always protect people the way it should
 Good investment, not very expensive
 In all insurance policies it's common for them to have lots of exclusions:
 Easements
 Losses resulting from gov't regulation
 Things that an accurate survey would have shown
 Rule = In the absence of a recital of acreage, a title company does not insure the quantity of land.
Title companies are in the business of
guaranteeing title, not acreage (Walker Rogge, Inc. v. Chelsea Title & Guaranty Co.- The P bought land
V. System of Estates where he thought the acreage was larger than it actually was.)
 A. POSSESSORY ESTATES o There are only 5 possessory estates (AKA free hold estate - means the owner is seized of the property):
 1. Fee Simple Absolute
 2. Fee Tail
 3. Life Estate
 4. Fee Simple Determinable
 5. Fee Simple Subject to Condition Subsequent
37

38
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 6. Term of Years - not a possessory estate but a nonfreehold estate o Possessory estates are simultaneous interest in the same piece of property and they are linked to future interests
 one person has the property now, and another person has a legal recognizable right to own the property in the future
 i.e. to A for life and then to B and his heirs
 Indicates A has a current possessory interest which is legally recognizable and enforceable, and they have ownership interest but only for their lifetime.
 When A dies, the land will go to B, B's heirs,
B's devisees, or B assigns to a third party
 B. FEE SIMPLE ABSOLUTE (FSA) - "To A and his/her heirs"
(translate this in your mind as to A and FSA which tells you there is no future interest that follows) o The only possessory estate that does not have to be coupled with a future interest which means a FSA owner has the right to possess the property forever o The owner has the property w/o any qualifications at all o Consists of a number of elements:
 O owns Whiteacre in fee simple absolute:
 O has the right to property in it forever
 to freely transfer it
 to devise the property in O's will,
 and if O fails to devise the property, at his death it will pass to his heirs in an intestacy statute o Largest estate you can own o It is created by words of purchase and words of limitations
 words of purchase (aka words of transfer) are "to A"
 words of limitations are "and his/her heirs"
 words of limitations are used to designate a fee simple absolute
 C. FEE TAIL - least significant b/c it is largely obsolete at this point

39 o it has to be followed by a future interest o doesn't have to end anytime soon, but it is treated by law that it will end at some point o Lords back in the day wanted to ensure their property would stay in their direct lineal line and this would continue as long as there are lineal descendants o "to A and the heirs of his/her body" - deals w/lineal descendants exclusively, not heirs o when the fee tail ends there is a reversion back to the grantor, the grantor may leave it in his will to devise his interest to someone else o fee tails at common law weren't devisable, however each individuals interest could be alienated. o Only a handful of states allow for a fee tail - Delaware, Maine,
Massachusetts, and Rhode Island
 if someone tries to create a fee tail in a state that does not allow it, most states will say the fee tail is a FSA
 on the other hand some states recognize fee tails that were created at common law but that still exist today o the holder of a possessory fee tail can destroy a fee tail by alienating the fee tail during their lifetime
 Can disentail by conveying a fee simple absolute while alive (“straw”). This destroys the fee tail and converts it to fee simple. Must disentail when alive. o Concerns about fee tail estate:
 1. inefficient
 2. we don't want dead hand control over property
 D. LIFE ESTATE - estates for life; for the duration of the grantees life o "to A for life"
 cannot be devised by A or inherited by A's heirs
 life estates can be alienated to a very limited degree
 you can alienate your life interest referred to as life estate pur autre vie = life estate measured by the life of another

40
 A conveyance "to A for life" gives A a life estate that lasts for the duration of A's life. A can transfer his life estate to B, in which case B has a life estate pur autre vie that is, an estate that is measured by A's life-span, not B's. If B dies during A's lifetime, the life estate passes to B's heirs or devisees until A dies. o default rule at common law for an improperly drafted conveyance
 i.e. "to A." = common law would take this to mean a life estate
 today we would take this to mean FSA
 life estates are not devisable and they are not inheritable o Rule = Unless the words of a will clearly evidence an intention to convey only a life estate it will be
interpreted as conveying a fee simple absolute (White v.
Brown - Mrs. Lide died leaving a handwritten note saying: "I appoint my niece, to the executrix of my estate. I wish Evelyn
White to have my home to live in and not to be sold. I also leave my personal property to my niece. My house is not to be sold.")
 E. LEASEHOLD ESTATES o Non-freehold possessory estate o leasehold tenants do not have seisin
 law regarded the freeholder (landlord) as still seised of the land even after he had granted a term of years and given up physical possession to the leasing tenant
 therefore when a lease is involved the landlord holds seisin; the tenant merely has possession but this distinction is of little importance today o Term of Years - an estate ending on a fixed calendar date
 F. Defeasible Estates - defeasible estate means it will terminate, prior to its natural end point, upon the occurrence of some specified future event o Fee Simple Determinable

41
 Key Words: as long as, while, until, during o Fee Simple Subject to Condition Subsequent
 Key Words: but if, upon the condition that, provided that, provided however
 FSD and Fee Simple SCS operate in almost identical fashion
 Both have a grant in fee subject to a condition. What distinguishes them is what happens if the condition is breached.
 O conveys to A and her heirs so long as A farms the land. And A ceases to farm the land
 Under a FSD, when A ceases to farm the land, the fee automatically terminates upon breach of the condition and this is called a possibility of reverter
 Under a Fee Simple SCS when A ceases to farm the land, the fee doesn't automatically terminate upon breach of the condition but only terminates when the grantor exercises his right of entry
 Primary difference:
 when there is a condition that is breached under a FSD the estate terminates automatically
 when there is a Fee Simple SCS and the condition is breached, the estate doesn't terminate until the person holding the right of entry comes in and exercises their right o As a general rule restraints on alienation are null and
void. (White v. Brown.)
 Rationale: Objections to restraints on alienation:
 1. Such restraints make property unmarketable the particular land is made unavailable for its highest and best use
 2. Restraints tend to perpetuate the concentration of wealth by making it impossible for the owner to

42 sell the property and consume the proceeds of sale
 3. Restraints discourage improvements on land
 an owner is unlikely to sink his money into improvements on land that he cannot sell
 if a mortgage cannot be placed on the land
(giving the moneylender the right to sell the land if the borrower defaults on the loan), lenders will not make money available to finance improvements
 4. Restraints prevent the owner's creditors from reaching the property, working hardship on creditors who rely on the owner's enjoyment of the property in extending credit
 5. Efficiency - the ability to transfer property lets us put property in the hands of people who value it most highly o Rule = Absolute restraints against alienation are null
and void. (Mountainbrow Lodge v. Toscano – P acquired land by gift deed w/a habendum clause stating "Said property is restricted for the use and benefit of the 2nd party, only; and in the event the same fails to be used by the 2nd party or in the event of sale or transfer by the 2nd party of all or any part of said lot, the same is to revert to the 1st parties herein, their successors, heirs or assigns.)
 Restraints on Alienation:
 Disabling: withholds from grantee the power to transfer the interest
 Forfeiture: if grantee tries to transfer his interest the property is forfeited to a third party
 Promissory: grantee promises not to transfer his interest o Rule = In the interest of preserving giving restricted gifts to charities, restrictions on usage are allowed.
(Mountain Brow Lodge v. Toscano)

43 o Rule = Where land, restricted by a deed, is taken by eminent domain, a ct. shall divide the eminent domain damages between the owner of the fee and holder of
the right of reverter (Ink v. City of Canton – The lineal descendants of Harry Ink conveyed tract of land to the D. In each deed, the grantor made it very clear that the land was only to be used as a public par and if the land was not used as a public park it was to revert to the grantor) o Helpful Definitions:
 Heir - anyone who can take under the intestacy statute
 a person who (1) outlives the decedent and (2) is designated as an intestate successor.
 You don't become an heir until the person dies
 Historically spouses were not heirs, but they are now
 beyond spouses, heirs are typically lineal descendants - children, grandchildren, great grandchildren (in that order)
 if I die w/no spouse, and no children, then my property will go to my parents if they survive me
 if I die w/no spouse, no children, and no parents, then my property will go to my collaterals (siblings, cousins)
 issue - children, grandchildren, great children; a lineal descendant
 Devisee - is a person who gets property from a person who died and left that property to them in their will
 Per stirpes distribution - suppose the testator, O has 3 kids, A, B, and C, and C has two kids, X and Y. C predeceases O and O's will says I leave things equally to A, B, and C. Per stirpes distribution would mean that
X and Y stand in C's shoes for purposes of distribution.
Under this situation A would get a 1/3, B would get a
1/3, and X and Y would split C's 1/3 so they would each get 1/6

 Rule of Primogeniture - in the event of intestacy, the oldest son inherits. And if the oldest son has predeceased the descendant and leaves children it will go to his oldest son
 Ancestors - people who preceded you (parents, grandparents)
 Collaterals - people who are related by blood but are neither ancestors or blood lineals (siblings, cousins)
 Escheat - someone who dies intestate and there is no one left under the appropriate intestate statute that can take the property; in this event it is called escheating to the state - idea is that the property will go back to the state
 very rare o Rule = A court of equity has the power to order a judicial sale of land affected with a future interest and an investment of the proceeds, where this is necessary
for the preservation of all interests in the land. (Baker v.
Weedon – D’s husband created a life estate in his wife followed by a contingency – if she had children, the land would go to them, if she died childless the land would go to his grandchildren.)
VI. Future Interests
 A. INTRODUCTION o The Modern Relevance of Future Interests
 Future interests confer rights to the enjoyment of property at a future time
 Future interests recognized in our legal system are:
 (1) Interests retained by the transferor:
 a. Reversion
 b. Possibility of Reverter
 c. Right of entry
 (2) Interests created in a transferee:
 1. Remainders o A. Vested Remainder
44

45
 i. Indefeasible
 ii. Subject to open
 iii. Subject to complete divestment (you will see a separate divesting clause) – look to see if the condition is a condition precedent written into the same clause or a condition subsequent written into a separate clause
 iv. Subject to open and complete divestment o B. Contingent Remainder
 2. Executory Interest o A. Springing – will always divest the grantor o B. Shifting – always follow a conveyance to a 3 rd party grantee
 A future interest gives a legal right to its owner.
 it is a presently existing property interest, protected by the ct. as such
 O conveys Blackacre "to A for life, then to B and her heirs"
 B has present legal rights and liabilities
 B can sell or give away her remainder
 B can enjoin A from committing waste
 B can sue third parties who are injuring the land
 If B dies during the life of A, B's remainder will be transmitted to B's heirs or devisees
 A federal estate tax or state inheritance tax may be levied upon its value
 Although a future interest does not entitle its owner to present possession, it is a presently
existing interest that may become possessory in the future.
 B. FUTURE INTERESTS IN THE TRANSFEROR

46 o 1. Reversion - the interest left in an owner when he carves out of his estate a lesser estate and does not provide who is to take the property when the lesser estate expires
 Reversion follows transfers of estates of a lesser quantum
 When you transfer estates of the same quantum, it cannot be a reversion.
 At common law a reversion was transferable during life and descendible and devisable at death. It remains so today.
 If O, a FSA owner, granted the land "to A for life", the land would revert (come back) to O at A's death.
 O's right to future possession is called a reversion
 If O dies during A's life, O's reversion passes under his will or to his heirs
 If O owning a FSA, creates a fee tail, a life estate, or a term of years, and does not at the same time convey away a vested remainder in FSA, O has a reversion.
 If A, owning only a life estate, creates a term of years,
A has a reversion.
 Example: O conveys Blackacre "to A for life". O has a reversion that is certain to become possessory. At A's death, either O or O's successors in interest will be entitled to possession.
 Example: O conveys Whiteacre "to A for life, then to B and her heirs if B survives A." O has a reversion in FSA that is not certain to become possessory. If B dies before A, O will be entitled to possession at A's death.
On the other hand, if A dies before B, O's reversion is divested on A's death and will never become possessory. o 2. Possibility of Reverter - arises when an owner carves out of his estate a determinable estate of the same quantum
 a future interest remaining in the transferor or his heirs when a FSD is created

47
 Example: O conveys Blackacre "to Hartford School
Board so long as used for school purposes." O has a possibility of reverter.
 Any time you see a FSD, it will necessarily be followed by a possibility of reverter
 O conveys Whiteacre to A, as long as A uses
Whiteacre as a farm - FSD followed by a possibility of reverter o 3. Right of entry - when an owner transfers an estate subject to condition subsequent and retains the power to cut short or terminate the estate, the transferor has a right of entry
 Example: O conveys Whiteacre "to Hartford School
Board, but if it ceases to use the land for school purposes, O has the right to re-enter and retake the premises"
 Any time you see a Fee Simple SCS, it will necessarily by followed by a right on entry
 C. FUTURE INTERESTS IN THE TRANSFEREE o 1. Remainder - future interests, where it is possible for the interest to become possessory immediately at the end of the prior estate, there cannot be a mandatory gap btw the end of the prior estate and the commencement of a new estate
 Remainders break into:
 1. Vested - for a remainder to be vested, you need the remainder-men to be (1) born, (2) ascertainable, and (3) there can be no express conditions precedent to the holder of the remainder being able to take possession upon the termination of the preceding estate
 when something vests, it means that it is certain to become possessory to the individuals, assigns, heirs, devisees but it doesn't mean it is currently possessory
 vested remainders are devisable, alienable, and inheritable
 There are 4 kinds:

48
 i. Indefeasible - certain to become possessory upon the expiration of a prior estate created at the same time o to A for life, then to B and her heirs o B has an indefeasibly vested remainder
 Example: O conveys "to A for life, then to B and her heirs." B has an indefeasibly vested remainder certain to become possessory upon termination of the life estate. If B died during A's life, on B's death B's remainder passes to B's devisees, or if B dies w/o a will, passes to B's heirs, or, if B dies w/o a will and w/o heirs, escheats to the state. B or B's successor in interest is certain to take possession upon A's death
 ii. Subject to open - remainders which are limited in favor of a class of people o You need to have at least one living member of the class, and no unmet express conditions precedent. o It's open b/c there is a possibility that new people can join the class, and it's not open when the possibility of new people joining the class is no longer available o Example: O conveys "to A for life, then to A's children and their heirs." A has one child, B. The remainder is vested in B subject to open to let in
A's later-born children. B's exact share cannot be known until A dies. If
A has no child at the time of the conveyance, the remainder is contingent b/c no taker is ascertained.

49
 When A dies, the class can no longer remain open b/c A can't have anymore children. When A dies this becomes an indefeasibly vested remainder.
 iii. Subject to complete divestment - remainders that are born, ascertainable people, or in a class that can still be subject to open but is not subject to the occurrence, or non-occurrence of a condition subsequent so that the remainder may not become possessory or if it becomes possessory it may not remain possessory o If it is subject to complete divestment there will be a vesting clause and then that clause will be followed by a divested clause o Example: "O conveys to A for life, then to B and her heirs, but if B is unmarried, then to C and his heirs" o these are not subject to the rule of perpetuities
 iv. Subject to open and complete divestment o Example: To A for life and then to A’s children and their heirs, but if A is not survived by any children at A’s death, then to Q. A has a living child, B and
A is alive. B has a vested interest subject to open and subject to complete divestment.
 2. Contingent - remainders are contingent when they are given to unborn people or to unascertainable people
 Example: "To A for life, then to B and her heirs only if B is married when A dies"

50
 Contingent remainders are subject to rule against perpetuities
 A remainder that is contingent b/c its takers are
unascertained is illustrated below:
 O conveys "to A for life, then to the heirs of
B." B is alive. The remainder is contingent b/c the heirs of B cannot be ascertained until B dies.
 A remainder that is contingent b/c it is subject to
a condition precedent is illustrated below:
 O conveys "to A for life, then B and her heirs if B survives A." The language if B survives A subjects
B's remainder to a condition precedent. B can take possession only if B survives A.
 Example 1. O conveys "to A for life, then to B and her heirs if B survives A, and if B does not survive A to C and his heirs." The language if B survives A subjects B's remainder to the condition precedent of B surviving A and the language if B does not survive A subjects C's remainder to the opposite condition precedent. Here we have alternative contingent remainders in B and C. If the remainder in B vests, the remainder in C cannot and vice versa.
 The granting clause, which creates the interest, is in the same clause which divests, is contingent, which means there has to be an alternate contingent remainder
 possessory life estate in A, contingent remainder in FSA in B, and an alternate contingent remainder in FSA in C
 These may or may not become possessory in the future
 Example 2. O conveys, "to A for life, then to B and her heirs, but if B does not survive A to C and his heirs."
Note carefully: B does not have a contingent remainder.
B has a vested remainder in fee simple subject to

51 divestment. C has a shifting executory interest which can become possessory only by divesting B's remainder.
 Key to understanding why B's interest is contingent in Example 1 and vested in Example 2 is that you must classify interest in sequence as they are written. Start reading to the right, classify the 1st interest, then move on to the 2nd interest and classify it, and then move to the next interest. o Vested v. Contingent:
 1. A vested remainder accelerates into possession whenever and however the preceding estate ends
 either the life tenant's death or earlier if the life estate ends before the life tenant's death
 A contingent remainder cannot become possessory so long as it remains contingent
 2. At early common law a contingent remainder was not assignable during the remainder-man's life and hence was unreachable by creditors
 contingent remainder was thought of as a mere possibility of becoming an interest and not as an interest that could be transferred
 Now, in most states, contingent remainders are transferable during life and reachable by creditors
 Vested remainders have always been transferable during life as well as death
 3. At common law contingent remainders were destroyed if they did not vest upon termination of the preceding life estate, where as vested remainders were not destructible in this manner
 4. Contingent remainders are subject to the Rule
Against Perpetuities, whereas vested remainders are not o 2. Executory Interests - a future interest in a transferee that must, in order to become possessory:

52
 (1) divest or cut short interest in another transferee
(AKA shifting executory interest), or
 (2) divest the transferor in the future (AKA springing executory interest)
 Generally executory interests are devisable, inheritable, and alienable
 Shifting Executory Interest:
 Future interest created in a third party transferee that in order to become possessory must on the occurrence or non-occurrence of an event
(depending on how its written) divest the current possessory interest or future interest of another transferee
 Example: O conveys "to A and his heirs, but if A dies without issue surviving him, to B and her heirs." A has a possessory fee simple subject to an executory limitation (or subject to divestment by B's executory interest). B's future interest can become possessory only by divesting A.
 Example: To A for life, and upon A's death to B and her heirs, but if C marries D then to C and her heirs
 current life estate in A, followed by a vested remainder subject to complete divestment in FSA in B, and a shifting executory interest in C
 3 possibilities: o 1. C and D never marry, which would mean B's interest is no longer subject to complete divestment and is then indefeasibly vested when C or D dies o 2. A dies, B takes the property in FSA subject to a potential executory limitation based on whether C & D marry and if so then the future interest would go to C

53 o 3. C marries D before A dies, so it never becomes possessory in B, and what gets divested is B's potential future interest which was a future remainder subject to complete divestment
 Springing Executory Interests:
 future interests that in order to become possessory has to divest the transferor
 Example: O conveys Blackacre to A upon her marriage, A is soon to be married. O has the property subject to the executory limitation.
When A gets married, A divests O's interest.
 Example: O conveys Blackacre "to A for life, then to B if B gives A a proper funeral".
 there would be a gap period of time btw A's death and the time it takes B to give A a proper funeral where Blackacre would spring back to O
 O's interest would be divested to B upon B giving A a proper funeral
 Big difference is shifting divests transferees and springing divests transferors o Rules to make life easier:
 If you have a contingent remainder:
 Only two possibilities
 1. another contingent remainder in a
3rd party
 2. it goes back to the grantor
 If you have a vested remainder subject to complete divestment, it will always be followed by a shifting executory interest
 If you have a reversionary interest and it's a FSD it will always be followed by a possibility of reverter

54
 If it is a Fee Simple SCS it will always be followed
a right of entry
 D. THE TRUST o Legal document where a person puts property in trust for the benefit of someone else. Trustee are appointed to manage the trust and they have legal ownership. o Trustee:
 is fiduciary,
 has to act in good faith
 referred to as legal owner
 is subject to the rights of the equitable owner o Beneficiary is referred to as equitable owner o Example: O conveys Blackacre "to X in trust to pay the income to A for life, and then to pay the principal to A's children who survive A."
 X is given the express power to sell Blackacre. X has the legal FSA in Blackacre; A has an equitable life estate and is entitled to all the income generated by the property. A's children have an equitable contingent remainder, and O has an equitable reversion.
 If X sells Blackacre for $200,000 and reinvests the money in Whiteacre and General Motors Stock, the trust property then consists of these latter items. Upon A's death, X conveys the trust property to the persons entitled thereto - A's children if any are alive or O if A has no surviving children. o Two additional types of trusts (we will go over these at a later date)
 1. spend-thrift trusts
 2. perpetual or dynasty trusts
 E. THE RULE AGAINST PERPETUITIES o A compromise btw landowners who wanted to keep the property in their family indefinitely and judges who were concerned about freedom of alienation and dead hand alienation.

55 o "No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest."
 this provides a formula whereby you begin looking at the time the interest was created; if property is conveyed inter vivos, it begins running then, if the property is conveyed through a will, it begins running at death
 can you prove conclusively that there was someone alive at the time of conveyance who if you count 21 years after that person's death, the property will vest or fail at the designated individual
 it doesn't matter if you're sure it will vest or if you're sure it will fail
 something violates the Rule when you can't tell whether it will vest or not
 Life in being plus 21 years has to either vest or fail - you need to point to someone, when they die, what will happen 21 years after that = validating life
 if you can find any scenario where 21 years after the validating person dies the conveyance will not vest or o Example: O transfers a sum "in trust to A for life, then to A's first child to reach 21."
 A is the validating life. You can prove that any child of A who reaches 21 will necessarily reach 21 within 21 years of A's death.
 The remainder must vest or fail within this period; it cannot possibly vest more than 21 years after A dies.
The remainder is valid. o Example: O transfers a sum "in trust to A for life, then to A's first child to reach 25." A has no child age 25 or older. There is no validating life; the contingent remainder is void. You cannot prove that A's first child to reach 25 will do so within
21 years after A's death.
 When you see a time period that is more that 21 years it's a big red flag!!!

 Whenever there is a possibility of after-born children it's a big red flag!!! o Example: T devises property "to my grandchildren who reach
21." T leaves two children and three grandchildren under 21.
The validating life is the survivor of T's two children. All of T's grandchildren must reach 21, if it all, within 21 years after the death of the survivor of T's two children. Therefore, the gift is valid.
 Would it make a difference if the transfer had been by deed rather that will? - YES b/c it would begin running as soon as the conveyance is made which would mean that T could still have more children. When it was conveyed by will, T could not have any more children at his death when it began to run. o When determining whether conveyance is valid - can you think of a scenario where it will vest within the prescribed period and can you think of a scenario where it will not vest within the prescribed period
56 o Red Flags:
 Period longer than 21 years
 After born children
 Validating life not mentioned, just need to be alive
 Gifts to living members will probably be valid b/c we will know what happened at the time of their death o Basic Rules:
 Does not apply to any future interests retained by the transferor; reversions, possibility of reverter,
and right of entry are not subject to the rule
 Does not apply to indefeasibly vested remainders
 Does not apply to vested remainders subject to complete divestment56

o Rule applies to: You have to ask the question if it violates the rule, these may or may not violate the rule
 Vested remainders subject to open
 treated as a unit which means if it might vest too remotely in a member of a class, it is void as to the entire class
 Contingent remainders
 Executory Interests o Rule = Reversionary interests are not subject to the
Rule against Perpetuities. (Brown v. Independent Church of Woburn - Sarah died devising a parcel of land "to D, to be holden and enjoyed by them so long as they shall maintain and promulgate their present religious beliefs and faith and shall continue a Church, and if the said Church shall be dissolved, or if its religious sentiments shall be changed or abandoned, then my will is that this real estate shall go to my legatees hereinafter named.") o When a will devises property in fee simple determinable or fee simple subject to condition subsequent and then devises the remainder to someone else, it’s void because you don’t know for sure if it’ll vest within 21 yrs.
 Ask Lewis if this is correct
VII. Co-Ownership and Marital Interests
 A. COMMON LAW CONCURRENT INTERESTS o 1. Types, Characteristics, Creation
 3 major forms of co-ownership:
 1. tenancy in common - most prevalent
 deemed to have separate but undivided interests in the same piece of property
 interest of each is inheritable, devisable, and alienable
 cannot unilaterally sever this relationship
57

58 o i.e. A and B are tenants in common and A transfers her interest to C then
C and B are tenants in common
 each tenant owns the property in an undivided whole
 distinguish btw. joint tenancy - there is no right of survivorship in tenants in common which means that if A and B are tenants in common and A dies, B does not necessarily get A's share
 American statutes favor tenancy in common over joint tenants
 2. joint tenancy –
 major feature is that there is a right of survivorship o i.e. A and B are joint tenants, and A dies while the joint tenancy is still in place, the whole interest will pass to B o if you want to sever joint tenancy you need to do so during life
 joint tenants are viewed as owning the property as one, which gave rise to the Four
Unities: o 1. Time - the interest of each joint tenant must be acquired or vest at the same time o 2. Title - all joint tenants must acquire title by the same instrument or by a joint adverse possession. A joint tenancy can never arise by intestate succession or other act of law o 3. Interest - all must have equal undivided shares and identical interests measured by duration o 4. Possession - each must have a right to possession of the whole. After

59 a joint tenancy is created, however, one joint tenant can voluntarily give exclusive possession to the other joint tenant.
 At common law if you do not have the 4 unities, you do not have joint tenancy and therefore have a tenancy in common
 Joint tenancy can be severed during lifetime o i.e. If A and B are joint tenants and A conveys during A's life to C, that creates a joint tenancy in B and C. If
A tries to devise A's interest to C at their will, A cannot do this b/c the right of survivorship trumps the intention of A.
 conveyances can be done unilaterally, w/o the other joint tenants consent and the other joint tenant does not have to know about the conveyance
 3. tenancy by the entirety - virtually identical to joint tenancy except that it requires the joint tenancy to be married; same 4 unities, including a
5th of marriage
 right of survivorship that cannot be destroyed unilaterally
 creditor of one spouse cannot have their 1/2 involuntarily conveyed o way of protecting assets
 divorce ends tenancy by the entirety which makes it tenancy in common o only 1/2 the states have tenancy by the entirety o 2. Severance of Joint Tenancies
 Rule = One joint tenant may unilaterally sever the joint tenancy w/o the use of an intermediary
devise. (Riddle v. Harmon – Mrs. Riddle wanted to

60 sever the joint tenancy w/her husband so that he would not get her 1/2 so an attorney prepared a grant deed whereby Mrs. Riddle granted to herself an undivided 1/2 interest in the property)
 Rule = a lien on a joint tenant's interest in property will not effectuate a severance of the joint tenancy, absent the conveyance by a deed following the expiration of a redemption period.
(Harms v. Sprague – One joint tenant executed a mortgage on the jointly owned property w/o the other’s consent or knowledge and then he subsequently died.) o 3. Multiple Party Bank Accounts
 3 Forms of Multiple-party Accounts:
 1. Joint accounts - most common
 2. Savings Account Trusts (AKA Totten Trusts)
 3. Payable-on-death Accounts (POD)
 Rule = in a joint tenant bank account, the joint tenant takes what's in the account at the death of the other joint tenant unless it is clear that the intention was for the account to be a convenience account
 Convenience account is where someone is added, not to give that person full ownership, but for that person to be able to pay their bills. o 4. Relations Amount Concurrent Owners
 i. Partition
 Partition - the privilege of each co-owner to transform a concurrent estate into estates held in severalty
 Concurrent owners may want to terminate co-tenancy and they can do this voluntarily by agreeing on a division of the property or the proceeds from its sale
 When this cannot be accomplished voluntarily, resource to the equitable action of partition is necessary. The action is

61 available to any joint tenant or tenant in common; it is unavailable to tenants by the entirety.
 Partition in Kind – split property  favored
 Partition by sale – extreme remedy to sell against someone’s will
 Rule = Partition by sale should be ordered only when two conditions are satisfied: (1) the physical attributes of the land are such that a partition in kind is impracticable or inequitable and (2) the interest of the owners would better be promoted by a
partition of sale. (Delfino v. Vealencis – P and D own land as tenants in common and the P wants to develop the property but D won’t move.)
 ii. Sharing the Benefit and Burdens of Co-Ownership
 Rule = in the absence of a contractual agreement to the contrary or unless there as has been an ouster, a co-tenant does not have to pay rent to his fellow co-tenants
(Spiller v. Mackereth - P and D owned a building as tenants in common. D entered and began using the structure as a warehouse. P wrote a letter demanding that D either vacate 1/2 of the building or pay 1/2 of the rental value.)
 Rule = Generally co-tenants are not fiduciaries with respect to each other.
 Exceptions: 1. One co-tenant buys in concurrently owned property at a mortgage foreclosure or tax sale and then asserts a superior title against cotenants. Here cts. normally compel the buyer to hold the superior title for the benefit of all the cotenants, provided they reimburse the buyer
 2. A claim of adverse possession by the co-tenant in exclusive possession. Where co-tenants are kindred, cts. often treat the co-tenant in

62 possession as a fiduciary, who can claim adverse possession only where his claim of sole ownership is so unequivocal and notorious as to put his cotenants on actual notice of a hostile claim.
 Rule = The act of one joint tenant w/o express or implied authority from, or consent of, his co-tenant cannot bind or prejudicially affect the rights of that co-
tenant (Swartzbaugh v. Sampson – P and D were husband and wife who owned property as joint tenants and P’s husband leased the property w/o
P’s consent.)
 Exception: a lease to all of the joint property by one joint tenant is not a nullity but rather is valid to the extent of his interest in the joint property as long as the lessee does not oust cotenant from their share of the possession of the property.
 B. MARITAL INTERESTS – get the 4 things from pg. 371! o 1. The Common Law Marital Property System
 a. During Marriage (The Fiction that Husband and Wife are one)
 2 different systems -
 1. English system - spouses holding property separately. Ownership is given to the spouse who has acquired the property originally. US has historically looked to this system.
 Common law basically said when women got married they forfeited all their property to the husband
 in the US the married woman's property act completely eliminated this concept
 2. Community property - situation where the spouses share equally. US is now evolving into using this system.
 Rule = The interest of a husband and wife in an estate by the entireties is not subject to

63 the claims of his/her individual creditors
during the joint lives of the spouses. (Sawada v. Endo - Ps were injured when struck by a vehicle driven by D. D and his wife owned property as tenants by the entirety.)
 Exception to this rule = the IRS
 b. Termination of Marriage by Divorce
 Property held by spouses as tenants in common, remain tenants in common followed by divorce.
 Property held by spouses as joint tenants, remain joint tenants followed by divorce.
 Property held by spouses as tenancy by the entirety, is then held as tenants in common followed by divorce.
 Rule = An educational degree cannot be marital property subject to division upon
divorce. (In Re Marriage Graham - P and D were married for 6 years and throughout the duration of their marriage, the P was the sole bread-winner while the D obtained a bachelor's and master's degree.)
 Rule = Celebrity status with the accompanying economic opportunities may be a marital asset subject to equitable
dissolution. (Elkus v. Elkus – Wife was a famous opera singer and Husband claimed he helped her advance her career)
 c. Termination of Marriage by Death of One Spouse
 1. Dower - Evolved to be a rule whereby a surviving wife got interest in all freehold land which her husband was seized of - it was inheritable by the issue of the spouses and the wife got an interest in it. Dower was a 1/3 interest of a life estate and it attached at marriage.

64
 if the wife predeceased the husband, the dower disappeared.
 after the land attached, the husband couldn't destroy it and no creditor could get at it
 2. Curtesy - condition was the dower only attached if there was issue of the marriage that was born that was capable of inheriting the dower
 These have been abolished
 Now every state but Georgia has a forced elective share - the surviving spouse can typically choose either what's left to them in the testamentary estate or a percentage of the total testamentary estate determined by statute
 you can take what you're left in the will or renounce the will and take what the statute provides for the testamentary estate, usu.
1/2 or 1/3
 Any property held in joint tenancy does not enter in the decedent's estate nor do life insurance proceeds o 2. The Community Property System
 a. Introduction
 8 states have a community property system
 concept is that community property is what is owned by each spouse's earnings.
Anything earned during the marriage is community property as a general matter. By agreement during the marriage, you can make property separate such as things you inherit.
 b. Community Property Compared w/Common Law
Concurrent Interests
 Community property has certain limitations:
 1. It can only exist btw. spouses

65
 2. Neither spouse can convey their undivided 1/2 share to a 3rd party absent the other's spouse's consent - so a spouse cannot transform community property to non-community property during their life w/o the other spouse's consent
 3. no right of survivorship - each spouse can devise a 1/2 share in the community property to whoever they choose at death subject to the elective share statutes, and
 4. finally there is a stepped-up cost basis, at the death of 1 spouse, the entire property gets a stepped-up cost basis for federal income tax purposes, tax difference btw value of the property when sold and the amount it was purchased at and that is subject to capital gains tax
 c. Management of Community Property
 Community Property cannot be converted into separate property w/o the consent of both spouses and it can be conveyed to a third person only as an undivided whole. As a result, special management problems arise.
 The husband used to be deemed the manager of the community but each community property state enacted statutes giving the husband and wife equal management powers.
 The manager of the community property is a kind of fiduciary - each spouse must act in good faith in exercising authority
 In most community property states, liability to creditors follows management and control. The creditors of a managing spouse can reach whatever community property the

66 creditor spouse is legally entitled to manage. o Hence if the husband and wife are equal managers of the property, creditors of either spouse can reach the property.
 d. Mixing Community Property w/Separate Property
 What happens when you mix community property w/separate property depends on what jurisdiction you are in:
 the inception of right rule - you characterize property at the time the legal right was entered into. If you purchase property prior to marriage and make payments prior to marriage, the property would be separate property
 the time of the vesting rule - you determine title at the time the last payment is made and the right fully vests, if that happens during marriage its community property
 pro rata - look at the share paid before marriage and the share paid during marriage and calculate the cost of each
 e. Migrating Couples
 Once the property has been initially characterized
(as community property for example), the ownership does not change when the parties change their domicile unless both parties consent to the change in ownership. o 3. Rights of Domestic Partners
 Common law marriage:
 Widely recognized in the 19th century when travel to the courthouse to obtain a license was a difficult journey.
 Now it is only recognized in 10 states.
 To have a common law marriage:

 cohabiting parties must manifest their intent to be husband and wife
 cohabiting parties must hold themselves out to the public as husband and wife
 When recognized, common law marriage couples have the same rights as couples married w/license and ceremony
 Abolished in most states b/c:
 a. it was thought to generate litigations and encourage perjured testimony about an agreement to marry by a cohabitant seeking benefits of lawful marriage at the termination of the relationship
 b. no longer needed b/c of the development of modern transportation and roads
 c. a certified marriage made proof easy for gov't benefits, pensions, and property claims, which increased dramatically in the
20th century
 d. common law marriage dignified immorality among persons in the lower socio-economic class who were more likely than the well-off to enter into such an arrangement
 Rule = Iowa's marriage statute, defining marriage as btw. one man and one woman, violates the
equal protection clause of the Iowa Constitution.
(Varnum v. Brien - Ps compromise 6 same-sex couples who want to get married and they are seeking to declare the marriage statute unconstitutional.)
VIII. Nuisance
 A. AN INTRODUCTION TO THE SUBSTANTIVE LAW o Nuisance law - aka judicial zoning
 When there is no public or private zoning but conflicting uses are present, the cts. step in to resolve the issue
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 Solve problems of conflicting uses by:
 i. public enactments
 such as zoning laws which are intended to prevent conflicting use
 ii. private agreements
 covenants to restrict how the parties o Private Nuisance: behave in relation to the property
 A private nuisance is a substantial interference that is intentional and unreasonable or unintentional but negligent, reckless, or abnormally dangerous. The plaintiff must have a property interest that is affected by the nuisance.
 A person who intentionally creates or maintains a private nuisance is liable for the resulting injury to others, regardless of the degree of care or skill exercised by him to avoid such injury.
 Rule = Any substantial non-trespassory invasion of another's interest in the private use and enjoyment of land by any type of liability forming conduct is a private nuisance which can be intentional, when his conduct is unreasonable under the circumstances or unintentional, when his conduct is negligent, reckless, or ultra
hazardous. (Morgan v. High Penn Oil Co. – D owns an oil refinery which emits nauseating gases and odors in great quantities which invaded P’s property.) o Public Nuisance:
 A public nuisance affects the general public.
 A private individual may act against a public nuisance only if he can show special injury, different in kind from that suffered by the public
 Unlike suits for private nuisance, a private individual suing for a public nuisance does not need to own any affected land. o Intentional Nuisance:

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 A person is subject to liability for an intentional invasion when his conduct is unreasonable under the circumstances of the particular case.
 The invasion is intentional if:
 the person who is liable acts to cause it
 Knows it is resulting from his conduct or
 Knows that it is substantially certain to result from his conduct.
 An intentional invasion is unreasonable if:
 The gravity of the harm caused outweighs the utility of the actor’s conduct, or
 The harm caused by the conduct is serious, and the financial burden of compensating for this and similar harm to others would not make the continuation of the conduct unfeasible.
 The standard of unreasonable interference is measured by the sensitivities of average people not abnormally sensitive ones. o Two Types of Nuisances:
 1. Nuisance per se (at law): a nuisance at all times and under any circumstances, regardless of location or surroundings.
 2. Nuisance per accidens (in fact): those which become nuisances by reason of circumstances and surroundings o Influential Factors in Determining a Nuisance:
 Social Value: One of the primary objectives of nuisance law is to avoid the more serious harm.
 Fear of harm: Even though people fear a use, it may be permitted to exist b/c it has high social value.
 i.e. Generally, halfway houses are not a nuisance per se
 Depreciation of property value: Generally, use of property in a manner that depreciates the value of surrounding property is not enough by itself to constitute a nuisance

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 i.e. In the case of the halfway house, they can become a nuisance when actual calculable damages arise
 Spite: Generally, where a landowner builds a structure of no use whatsoever other than to vex a neighbor, liability for nuisance has been found.
 Light and Air: Generally, the blocking of light or overproduction of light does not constitute a nuisance.
 Plain Old Ugly: Generally, unsightliness alone does not constitute a nuisance, unless spite is the only motive.
 General Rule = You cannot legislate esthetics - most courts hold that unsightliness alone does not a nuisance make
 Exception: unless it affects property value or unless spite is the only motive
 First in Time: If the defendant’s use was first, a plaintiff who has come to the nuisance has a less appealing case b/c he could have avoided the harm. (Coming to the
Nuisance Theory) o The Coase Theorem :
 Hypo: Suppose you have a situation where you have a steel mill and next to the mill, you have a house. And it costs the steel mill $5/ton to make the steel and it can be sold for $6/ton.
 However b/c there is a house next door, the smoke and debris imposes a cost of $2/ton on the homeowner. The private cost of making the steel is $5/ton and it can be sold for $6/ton but when you internalize the externalities of actually making the steel it is $7/ton and society only values it at $6/ton.
 Therefore it would be better if steel wasn't made.
But it is still beneficial to the steel mill owner to keep making steel since they aren't liable for the
$2 unless the law steps in and either impose a tax

71 on the factory, makes the factory stop, or makes the factory pay the damages of the homeowner hence enforcing the owner to internalize the externalities which would in all likelihood force the steel mill out of the business. Prior to Coase you had to force the steel mill owner to internalize the
$2 costs.
 Coase said we are thinking about this wrong. If you avoid harming the homeowner, this means you are necessarily harming the steel mill. But avoiding harming the steel mill, necessarily means harming the homeowner = reciprocal
 Key question is who should be harmed? –
We should harm the person that results in the least societal harm.
 If there are 0 or very nominal transaction costs, the efficient rule will result regardless of the choice of legal rule of liability applied to the
parties by the legal system.
 This is b/c it is easy for the 2 parties to contract amongst themselves so that no matter what rule of liability the court imposes upon the parties, the parties will come up w/an efficient result
 In order for this to work certain assumptions must be met:
 1. There has to be nominal transaction costs
 2. the parties have to behave in their own economic self-interest and bargain reasonably
 3. the parties need to have appropriate information, about what is at stake, how much society values it, and what the actual harm is
 If you don’t have these, it matters where the liability is placed.

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 i.e. if you make the steel mill owner liable, the steel mill will shut down
 if you don't make the steel mill owner liable, we know as a societal matter that we don't want steel to be made, so the homeowner has to pay off the steel mill. o the steel mill will be making a $1/ton profit but the homeowner is going to be harmed $2/ton, so any amt. btw
$1/ton and a $1.99/ton which the homeowner pays to the steel mill will be more advantageous to both parties b/c it is costing the homeowner less to pay off the steel mill any thing less than $2 and it is more advantageous for the steel mill owner to take anything more than $1 from the homeowner instead of shutting down.
 Hypo Altered: What if it only costs the homeowner 50 cents/ton?
 Now it is efficient to make steel and we want steel to be made b/c the steel mill owner will be making a 50 cent profit/ton b/c they can sell it for
$6/ton, and the steel mill will pay the homeowner
50 cents/ton.
 if the steel mill is not held liable to the homeowner, it is not worth it for the homeowner to buy out the steel mill b/c they would have to pay more than 50 cents/ton in order to make it worthwhile for the steel mill.
 Once the law sets an initial entitlement, all property rights can be bargained out to reach a societally optimal result.
 The Coase theorem matches nicely w/the Calebresi and
Malemed article:

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 1. Whenever you are analyzing a nuisance conflict, you have to determine who the state will grant the entitlement to (who ought to prevail)
 once you know who has the entitlement, than you have the ability to know how to bargain this out
 2. Then you determine how to protect that party
 Four Rules: o Property rule: (Injunction)
 entirety and injury to the party must be fully removed o Rule 1: If P wins, D has to abate his activity
 If D wishes to resume his activities, P will have the ability to hold him up for a large amount of money. o Rule 3: If D wins, he can pollute and doesn’t have to pay anything. o Liability rule: (Damages)
 sanctions ongoing wrongs so long as injurer willing to pay fair market value
 The judiciary determines who gets the entitlement but not what it is worth
 the property is protected in its o Rule 2: If P wins, D can proceed but has to pay damages.
 It gives D license to trespass and damage anyone’s property if he is willing to pay the damages. o Rule 4: If D wins, D must abate his activity, but P must pay him damages
(injunction w/ indemnity)

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 Hypo: The house extends across the property line and costs $1000 in damages to the P, but the cost of eliminating the extension would be $50,000. The P will win this case b/c the D is trespassing but the question is how do you protect the rights?
 i. if you enforce a property rule: the D has to get off the property and the P is out $1000 but the P might be willing to sell the right for the D to use his property b/c the P could hold out for up to
$49,000 b/c anything less than $50,000 is beneficial to the D, and anything over $1,000 is beneficial to the P.
 property rule is a deterrent to trespassing
 ii. if you enforce a liability rule: the ct. will figure out what damages are owed by making the P whole. In this situation the D gets to keep his property where it is but the D has to pay the P the actual damages that he suffered, in this case
$1,000
 advantage is that you don't have greatly distorted liability situations but the ct. is basically saying you can damage anyone's property as long as you pay the fair market value for it
 4 different ways to look at this:
 1. Give entitlement to P and protect P by property rule
 i.e. Ct. issues an injunction against polluter
 2. Give entitlement to P and protect P by liability rule
 i.e. Ct. finds a nuisance but permits pollution to continue if the Polluter chooses to pay damages
 3. Give entitlement to D and give D protection by property rule

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 i.e. Cts. finds the pollution not to be a nuisance and permits the Polluter to continue w/o paying damages
 4. Give entitlement to D and protect D by liability rule
 i.e. Ct. permits Polluter to continue unless
Resident chooses to pay Polluter damages in order to enjoin further pollution
 These examples are premised on Polluter’s affirmative actions encroaching upon
Resident’s passive enjoyment of his property
 Hypo: Jones (D) owns the factory, damages Smith's house (P). P sues D for damages.
 1. entitlement goes to P, Smith wins, and the right is protected by property rule which stops D from continuing to send smoke and debris on to
P's property
 2. entitlement goes to P, protecting it by liability which means D can continue to pollute but D has to pay P actual damages which P has incurred b/c of pollution
 3. D wins and protect him by property rule which means D can continue to pollute and D doesn't have to pay P anything
 4. D wins and protect him by a liability rule which means D cannot pollute but P has to pay D damages for D to make necessary steps for D not to pollute.
 Coase transformed the way people thought of nuisance law
 Basic argument is that if we want the cts. to maximize the benefits to society, then we don't need to worry about where the rule of liability is placed

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 If you have all of these things, you will get an efficient rule of law irrespective of where the legal system places the rule of liability:
 1. You need good information about what is at stake,
 2. the parties have to bargain in their economic self- interest, and not refuse to do something out of spite or anger
 3. the transaction costs have to be nominal
 Goal is to internalize the externalities for the tortfeasor - force the factory owner to take into account the true cost on society
 B. REMEDIES (AND MORE SUSBTANTIVE LAW) o Rule = Even though a jury finds facts constituting a nuisance, equities must be balanced in order to
determine if an injunction should be granted. (Estancias
Dallas Corp v. Shultz - Ps brought suit asking that the D be permanently enjoined from operating the air conditioning equipment on the property next to the Ps' residence. Ct. applied Calebresi Rule #1) o Old rule = if its a nuisance, it will be enjoined, not taking into account the economics o New Rule = When the cost of removing a nuisance is greater than requiring D to pay P for recurring damages, permanent damages may be awarded as an
alternative. (Boomer v. Atlantic Cement Co. - D operates a large cement plant and neighboring land owners allege injury to property from dirt, smoke, and vibration emanating from the plant. Ct. applied Calebresi Rule #2)
 Rationale: the P will suffer small damages compared to the D's damages if the D has to shut down, permanent damages will make the P whole and will also allow the D to continue operation, fair to both parties o Rule = A business which is not per se a public nuisance may become such by being carried on at a place where the health, comfort, or inconvenience of a populous

neighborhood is affected. (Spur Industries, Inc. v. Del E.
Webb Development Co – D had been farming on his land for a long time when P came along and developed a senior retirement community and D’s 's feedlots caused a nuisance b/c of the flies and odor that drifted onto P’s property. Ct. applied Calebresi Rule #4.) o Rule = The doctrine of coming into the nuisance does not prohibit granting injunctive relief against the
nuisance. (Spur Industries, Inc. v. Del E. Webb Development
Co.)
IX. Zoning
 A. INTRODUCTION o 1. Historical Background
 Rule = Zoning laws have to be part of a
comprehensive plan for the community
 supposed to look prospectively at a long range of community needs – how communities should develop.
 Zoning is Usu.:
 1. restricting how high buildings can be built, or
 2. restrictions on usage
 Zoning is accomplished by police power given to municipalities by the state- (not the actual police) a constitutional grant to the states that give them the power to protect the health, safety, and welfare of their citizens
 Zoning is cumulative
 Zone 1 can be built anywhere; in Zone 1, 2 and 3
 Zone 2 can be built in Zone 2 and Zone 3
 Zone 3 can only be built in Zone 3
 Rule = A zoning ordinance, as a valid exercise of the police power, will only be declared unconstitutional where its provisions are clearly arbitrary and unreasonable, have no substantial relation to the public health, safety, morals, or
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general welfare. (Village of Euclid v. Amber Realty Co
– D instituted zoning ordinances which dropped the value of P’s property and P attempted to claim zoning in general is unconstitutional.)
 Policy: Zoning laws protect property values by ensuring segregation - protecting values of residential areas by not allowing industrial usage buildings in residential areas
 B. THE NONCONFORMING USE o A nonconforming use is a use of land that lawfully existed before enactment of a zoning ordinance and that may be maintained after the effective date of the ordinance, although it no longer complies w/use restrictions newly applicable to the area o The right to maintain a nonconforming use runs with the land; hence it survives a change of ownership o Rule = A lawful nonconforming use establishes in the property owner a vested property right which cannot be abrogated or destroyed, unless it is a nuisance, it is
abandoned, or it is extinguished by eminent domain (PA
Northwestern Distributors, Inc. v. Zoning Hearing Board – P obtained all necessary permission to conduct his adult book store business and then 4 days later the township published a notice of its intention to amend the zoning ordinance to regulate adult commercial enterprises.) o Amortization - A zoning ordinance may provide that the nonconforming use must terminate after a specified period of time
 Allows owner to realize the value of their investment before they have to relocate/change business
 Some cts. say amortization doesn’t cut it b/c it forces people out on a timetable which is not their own timetable
 Other cts. say if there is a sufficient period of time of amortization to take place then it is permissible
 C. ACHIEVING FLEXIBILITY IN ZONING

79 o 3 ways to achieve flexibility in zoning:
 1. variances - administratively authorized departures granted in cases of unique and individual hardship in relation to the property from the terms of the zoning ordinance
 only granted in situations of unique individual hardship
 2. special exceptions - aka conditional uses, a situation where a certain use is permitted where the ordinance doesn't expressly provide for it but it's not necessarily incompatible w/the usage, but if its not monitored can cause harm to the area
 i.e. hospital in residential neighborhood
 3. zoning amendments - aka spot zoning, simply rezoning, treated like any other zoning amendment o 1. Variances and Special exceptions
 a. Variances –
 Two Part Test for Granting a Variance:
 1. Exceptional undue hardship to the owner
 2. It would not create a detriment to the community or impair the ordinance
 A variance must run with the land
 Boards of adjustment have the power to grant a variance provided that (1) the variance must be necessary to avoid imposing undue hardship on the owner of the land in question and (2) the grant of the variance must not substantially impinge upon the public good and the intent and
purpose of the zoning plan and ordinance
(Commons v. Westwood Zoning Board of
Adjustment – Property owner wanted to build a one-family house on his lot but his lot did not meet the existing zoning ordinance's minimum lot size requirements. Therefore, he sought a variance.)

80 o 2. Zoning Amendments and Spot Zoning Problem
 Other Means for Achieving Flexibility in Zoning
 How cts. deal w/spot zoning:
 spot zoning is isolating a particular parcel of land to use it differently than everything else
 usu. prohibited unless you can get a variance.
 in reviewing spot zoning activity, as a general matter, cts. are very deferential to legislature, but spot zoning is different b/c spot zoning is not based on policy but is based on a case-by-case analysis
 spot zoning is not legislative but adjudicative
 the accepted approach is that spot zoning is just a type of zoning and should be treated as such so that spot zoning is treated with the same sort of deference of the courts
 Other types of isolated zoning:
 1. Floating Zones – achieves flexibility by defining a zone but reserving the decision about its location for the future. Two steps are usu. involved:
 1. the local gov't creates a use district by an ordinance that specifies standards and criteria to govern the uses permitted in the zone
 2. the zone is brought to earth, attach to a particular area through a zoning amendment
 2. Cluster Zones - a flexibility device whereby a developer is permitted to construct dwellings in a pattern not in literal compliance w/the area restrictions of a zoning ordinance
 a central idea of the concept is to provide some of amenities of a rural environment in an otherwise urban setting

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 3. PUDs - similar to cluster zones, mixes of residential, commercial, and industrial activities
 Cluster zones and PUDs are accomplished in several ways:
 through special exceptions issued by a board of adjustment
 through subdivision controls administered by a planning board
 through floating zones created by the legislative body= most common approach
 D. EXPANDING THE AIMS (AND EXERCISING THE MUSCLE OF
ZONING) o 1. Aesthetic Regulation
 Rule = Aesthetics is a reflection of property value, therefore it is permissible to allow zoning based on aesthetics if the purpose of it is to preserve
property value (State ex. rel. Stoyanoff v. Berkeley –
P wanted to build a pyramid shaped house in the middle of a well-to-do neighborhood.)
 Generally, cities may enact aesthetic regulation when the prohibited use offends the sensibilities of the average person and tends to depress property values
 Problems: building your house the way you want to is an element of free speech;
 the ct. ends up making the conclusion that property values would be negatively affected by the way the house is built based on speculation and no concrete evidence;
 what is ugly, or aesthetically pleasing is subjective o 2. Controls on Household Composition
 Nontraditional Families:
 The highest form of use is that of the single family house

82
 Family is usually defined as people related by blood, marriage, or adoption.
 The definition of family set out in a zoning ordinance must bear a rational relationship to the objective of preserving family values and quiet seclusion to be held as a valid restriction.
 Group Homes: Excluding group homes for persons w/ handicaps may come in conflict with the Fair Housing
Act, which prohibits discrimination in housing against persons with handicaps.
 Occupancy Caps:
 The FHA exempts any reasonable zoning regulation restricting the max # of persons permitted to occupy a dwelling.
 Family composition rules that cap the total # of occupants are exempt, but rules designed to preserve the family character of a neighborhood by focusing on composition of households are not.
 Ex. Limiting a household to a max of 5 unrelated occupants or an unlimited number of related occupants is not a max occupancy restriction.
 Traditional Families:
 An attempt to limit the number of traditional family members, including extended family is often found unconstitutional.
 Such regulations intrude on the traditional family and are often reasoned to only have a marginal relationship to the permissible objective of zoning for density control
 Rule = A city may pass an ordinance which prohibits unrelated individuals from living in one
location. (Village of Belle Terre v. Boras – Homeowner rented a house to 6 unrelated college students which violated a zoning restriction.)

 Statutes that divide the nuclear family are unconstitutional but statutes that state the max. # of occupants in order to deal w/overcrowding are permissible
 Rule: zoning laws cannot discriminate against people. If it limits the number of occupants then it cannot distinguish between family and non-family
(City of Edmonds v. Oxford House, Inc. – D opened a group home in a neighborhood zoned for single family homes.)
 The family composition rule does not answer the question of what the maximum number of occupants permitted to occupy a house is. So long as the occupants are related, there is no limitation. Therefore, the composition rule is not a maximum occupancy rule and does fall in the realm of the FHA exemption clause. o 3. Exclusionary Zoning
 Rule = Municipal land-use regulations must provide a realistic opportunity for low and
moderate income housing. (Southern Burlington
County NAACP v. Township of Mount Laurel - The P sued D, contending the municipality's zoning scheme violated the NJ constitution by failing to provide for low income housing outside of depressed areas.
X. Takings
 A. THE POWER OF EMINENT DOMAIN: SOURCES AND RATIOANLES o Eminent domain - takes the gov't out of the market place and allows them to take property as long as they meet certain conditions
 this eliminates the problem of the hold out o Rule = nor shall private property be taken for public use w/o just compensation
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 This language limits not the government’s right literally to take property through the power of eminent domain, but its freedom to regulate property as well o 3 issues w/takings:
 1. What is just compensation? - fair market value
 Can be viewed in two ways
 a. What has the homeowner lost?
 b. What has the gov’t gained?
 2. What is public use? -
 use by the gov't
 use that is available to everybody
 legislature can define what is in the public interest, and as long as the legislature has defined that something is in the public interest, eminent domain is completely valid
 3. What constitutes a taking? – hardest question to answer
 Physical v. Regulatory takings
 Permanent v. Temporary
 Rule = if it is a permanent, physical invasion it is a taking no matter what and the amt. of damage to the property is irrelevant o If the gov't wishes to condemn private property for public use, it must comply w/procedures designed to assure owners due process of law:
 1. The gov't is usu. required to begin by attempting negotiated purchases - gov't must attempt a consensual negotiation
 if they can't agree then they proceed to step 2
 2. Failing acquisition by that means, the condemning authority will file a petition in ct., followed by notice to all persons w/interests in the property in question
 3. Thereafter, a trial is held, at which the gov't must establish its authority to condemn.
 the ct. can give the gov't permission to enter and inspect the subject property

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 it may require the gov't to make a deposit as security for the eventual condemnation
 4. At the conclusion of a successful condemnation action, the gov't must pay the compensation awarded plus interest
 generally, condemnees may not recover attorney's fees or other litigation expenses
 dissatisfied condemnees may appeal
 B. THE PUBLIC USE PUZZLE o Rule = the legislature will decide what is good for the
community, not the courts (Berman v. Parker - The Ps owned a department store in an area that was being developed in the interest of public health. P claimed their property may not be taken constitutionally for this project b/c its commercial, not residential and because it is not blighted.)
 The ct. was extremely deferential to the legislature and did not question whether eminent domain should be used when there is a less intrusive alternative available o Hypo: The Oakland Raiders were discussing moving to LA and the gov't was discussing using the power of eminent domain to stop them from moving to LA. Argument was enjoyment on
Sundays, jobs (at the stadium), pride in the community.
Legislature said this dealt w/public interest issues.
 the raiders have a franchise agreement w/NFL and the city was discussing taking the franchise agreement away from the NFL and compensating them for it based on the fact that the Oakland raiders provided jobs, revenue, contracts, etc. which are all public uses. o Rule = A City's proposed taking of private property for general economic development qualifies as a public
use. (Kelo v. City of New London – D was designated as a distressed municipality that needed to be developed and most landowners agreed to sell their properties to D but 9 owners refused to sell their 15 properties purely b/c they were within the area designated for development.) o 5 key points:

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 1. the gov't cannot justify taking private property from an individual solely to transfer it to another private party even if compensation is paid (wholly private = unconstitutional)
 2. the gov't can transfer property from one private individual to another if use by the public is the underlying principle
 3. literal public use, use by the entire public, is not required
 4. economic development is a legitimate purpose of gov't
 5. the ct. continues this extreme deference to the legislature in terms of their standard of review unless they are doing something facially unconstitutional o Just Compensation - just compensation has been held to be satisfied by payment of market value
 However, market value is not full compensation b/c it is not the value that every owner of property attaches to his property
 i.e. property can have personal and sentimental values for people
 Reason for just compensation requirement is justness and fairness
 the owner is entitled to receive what a willing buyer would pay in cash to a willing seller at the time of the taking
 C. PHYSICAL OCCUPATIONS AND REGULATORY TAKINGS o 1. Two Categorical Rules
 Rule = If an occupation is both physical and
permanent, it is per se a taking (Loretto v.
Teleprompter Manhattan CATZ Corp. – P alleged D’s placement of its cable television installation equipment constituted trespass and that the statute allowed for a taking of her property w/o just compensation.)
 Rule = You are not entitled to the highest possible
value of your property. (Haddacheck v. Sebastian – P

87 operated a brick yard w/a kiln when the city enacted an ordinance making it unlawful for anyone to operate a brick yard/kiln in city limits and this drastically reduced the value of his property.) o 2. Rules Based on Measuring and Balancing
 Rule = Private property may be regulated pursuant to the police power of the state to protect public health, safety, or morals; but if such regulation goes so far to destroy or appropriate a property right, it becomes a taking,
requiring just compensation. (Pennsylvania Coal Co. v. Mahon - In 1878, conveyed property in which D reserved the mineral rights on the property and P waived all rights to object to or receive damages for the removal of such materials. In 1921, PA enacted the
Kohler Act, which forbade the mining of coal in such a way as to cause the subsidence of any human habitation.)
 Balancing Test = if you are not dealing w/nuisance protection/prevention, when the burden becomes too great there has to be compensation
 General Rules:
 Permanent physical occupations are always takings
 Nuisance-control measures are never takings
 When governmental regulation of a use that is not a nuisance works too great a burden on property owners, it cannot go forth w/o compensation
 diminution of value test - one should compare the public benefits of governmental activity against the private harms it works on claimants. If claimants would lose a lot

88 more than the public would gain, a taking should be found, otherwise not.
 Rule = A city may place restrictions on the development of individual historic landmarks w/o
effecting a taking requiring just compensation.
(Penn Central Transportation Co. v. City of New York –
P wanted to construct a multistory office building on top of Grand Central Terminal and D wouldn’t allow it.) o 3. A Third Categorical Rule
 Categorical rule = if you lose full economic value of your property, you are entitled to compensation, irrespective of whether the
government is trying to control a nuisance. (Lucas v. South Carolina Coastal Council)
 Exception: if a neighboring land owner or the state could have sued you under common law nuisance law before the enactment of the offending legislation and they would have won, then you are not entitled to compensation b/c you never had the right in the first place
 Rule = The state must compensate a landowner when a regulatory action denies an owner economically viable use of his land, unless the prohibited use of the land constitutes a nuisance
under state common law. (Lucas v. South Carolina
Coastal Council – P bought two lots on which he planned to build homes. After the purchase, D enacted an ordinance prohibiting habitable improvements.)
 Matters of Remedy
 inverse condemnation action - the opposite of a government eminent domain proceeding: the claimant, rather than the gov't institutes the suit, alleging that a taking has occurred and seeking recompense for it. A forced purchase rather than a forced sale, is the claimant's objective.

 this remedy was routinely granted as to takings by physical occupation (loss of access, destruction of property, or an actual transfer of title, possession, or control to the gov't)
 this remedy was typically denied as to regulatory takings o a case from 1987 changed this by ruling that if a gov't regulation results in a taking, then the gov't must pay just compensation from the time the regulation first worked the taking until the time the gov't rescinds the regulation or changes it in such a way that no taking occurs.
XI. Easements and Covenants
 A. EASEMENTS o 1. Historical Background, and Some Terminology
 Easements are interests in the land of other people
 private agreements
 benefited tract = dominant estate
 burdened tract = servient estate
 General rule = easements run with the land, they stay w/the property not w/the individual
 Exception: easement in gross
 Profits a prendre - AKA profits - rights to take off the land things that were thought of as part of the land
 i.e. timber, minerals, wild game, and fish
 Affirmative Easements - easements granted by a servient owner that allowed a neighbor the right to enter or perform an act on servient land
 Negative Easements - easements forbidding one landowner from doing something on his land that might harm a neighbor
89

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 Easement Appurtenant - gives easement owners the right to make some specific use of land that they do not own and gives that right to whomever owns a parcel of land that the easement benefits
 benefits the easement owner in the use of land belonging to that owner
 the law favors easement appurtenant
 requires both a dominant tenement (or estate) and a servient tenement
 transferable
 Easement in gross - gives easement owners the right to make some specific use of land that they do not own and gives that right to some person w/o regard to ownership of land
 benefits the easement owner personally rather than in connection w/use of land which that persons owns
 only involves a servient estate
 may be alienable or inalienable
 can be divided but must be used as one o 2. Creation of Easements
 An easement is an interest in land and therefore within the Statute of Frauds
 creation of an easement requires a written instrument signed by the party to be bound
 Exception to the Statute of Frauds is an easement by implication
 Created based on apparent and continuous use
 Once an easement is implied by law, the easement may continue forever
 Easement by Necessity: if dominant tract was severed from servient tract and the necessity must have existed at the time the tract was severed
 Will only last as long as it is necessary – it terminates when the necessity ceases to exist

91
 Creation by Prescription: an easement by created by a period of adverse use
 Easements break into 2 categories:
 1. easement - the right to access someone else's land, right of entry
 i. easements appurtenant - run w/the land o if there is ambiguity, the cts. favor easements appurtenant
 ii. easements in gross - an easement which is personal o the easement is given to a person for their benefit, does not run w/the land, personal to the individual
 2. covenant - is not allowed for entry, the ability to force someone to do something on their land or force someone not to do something on their land
 i. real covenants - covenant enforceable at law at which there is a remedy of damages o reducible to monetary damages, if relief is sought at law
 ii. equitable servitudes - covenants that are enforceable at equity o If I can force you to do something on your property and get an equitable injunction if you don't do it
 Rule =A grantor, in deeding property to one person, may effectively reserve and vest an interest in the same property in a third party.
(Willard v. First Church of Christ, Scientist – D sold two lots that she owned w/a clause in the deed that one lot was subject to an easement for the D to use it for parking.)
 Licenses
 License - an oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would be a trespass

92
 Rule = a license is revocable
 Exceptions: 1. a license coupled with an interest cannot be revoked o 2. a license that becomes irrevocable under the rules of estoppel
 Licenses v. Easements
 Rule = easements are subject to the statute of frauds and must be in writing o Exception: License
 licenses are not property rights
 licenses are irrevocable when there is reliance (estoppel) on the part of the ongoing use of the license - cts. have made the use of the license permanent
 Rule = A right to the use of a roadway over the lands of another may be established by estoppel when improvements were made on the servient estate w/the servient owner’s permission or awareness, maintains the improvements and has
done so for a considerable time. (Holbrook v. Taylor
- When P's home was being constructed, P was allowed to use the roadway for construction purposes and later
P was given express permission by D to use and repair the roadway but then a dispute arose and suit was filed)
 Rule = Whether there is an implied easement on certain property will be inferred from the intentions of the parties, and such inference will be drawn from the circumstances under which the
conveyance was made. (Van Sandt v. Royster - P discovered the existence of a sewer drain running on, across, and through his property. Ct. said P should have known this was the case b/c he was getting plumbing from somewhere.)

93
 Rule = When you have an easement by
implication - it is implied indefinitely (Van Sandt v.
Royster)
 Rule = In order to create an easement by necessity, the necessity must have existed at the
time that the estate was created. (Othen v. Rosier -
In order to reach any public highways, P must use a road which cut across D's property which D kept in repair. As a result of encroaching surface waters the road was impassable except by horseback.) o 3. Assignability of Easements
 Rule = easements in gross are assignable if the
parties to its creation so intend. (Miller v. Lutheran
Conference & Camp Association – Brother conveyed bathing rights which he didn’t have but the parties acted as if they did for so long that a right by prescription was created.) o 4. Scope of Easements
 Black letter law = When you grant an easement you are granting it to the named estate only, and any extension is improper
 Rule = If an easement is appurtenant to a particular parcel of land, any extension thereof to other parcels is a misuse of the easement, unless
the easement is not overburdened (Brown v. Voss -
D granted an easement to P and P subsequently obtained title to a third parcel and attempted to use the easement to gain access thereto.) o 5. Termination of Easements
 4 ways to terminate easements:
 1. if the dominant and servient estates become owned by the same person - b/c you can't have an easement over your own property
 2. for the servient estate owner to use the land in a manner that prevents the easement to be used by the dominant owner for a period long enough

94 to satisfy the statute of limitations w/o an appropriate response from the beneficiary user
 3. the easement can be abandoned but it can only be abandoned by an act from the owner of the dominant estate that clearly indicates there is no intention to ever use the easement again
 4. the parties can contractually agree to terminate it o 6. Negative Easements
 Dominant owners stopped servient owners from doing something on their property
 Traditional English cts. would only accept 4 negative easements:
 1. blocking your windows
 2. interfering w/air flowing to your land in a defined channel
 3. removing the support of your building
 4. interfering w/the flow of water in an artificial stream
 Negative Easements turned into a new portion of law called Covenants -
 There are two types:
 1. Enforceable at law - aka real covenants
 2. Enforceable at equity - aka equitable servitudes o 7. Conservation and Other Novel Easements
 Conservation Easements:
 a landowner gives a public body or a private charity a conservation easement, which prevents the servient owner and their assigns to build on the land unless specified in the grant
 this is a charitable gift and is treated as such in tax returns
 these are transferable
 B. COVENANTS RUNNING WITH THE LAND o 1. Historical Background

95
 a. Covenants Enforceable at Law: Real Covenants
 if monetary damages available - have to be recorded, subject to the statute of frauds, requires HP for burden to run
 A pays B to do something on B’s land
 b. Covenants Enforceable in Equity: Equitable
Servitudes
 if you can get an injunction – doesn’t require HP, may or may not be recorded
 A forced B to do something on B’s land
 Rule = Privity of estate notwithstanding, a person who acquires real property w/notice of a restriction placed upon it will not be
allowed, in equity, to violate its terms. (Tulk v. Moxahy – P sold his property w/a covenant prohibiting constructing upon the grounds.
Subsequently D obtained land w/no such covenant but admitted he knew of it.) o 2. Creation of Covenants
 Rule = If the owner of two or more lots, which are situated so as to bear a relation to each other, sells one w/restrictions which are of benefit to the land retained, during the period of restraint, the owner of the lot or lots retained can do nothing forbidden to the owner of the lot sold.
(Sanborn v. McLean – Original owner of the lots restricted the deeds so that only residences would be built on the lots and then D attempted to erect a gasoline filling station.)
 This is the doctrine of reciprocal negative easements.
 Equitable servitudes do not have to be in writing, they can be implied
 Key difference btw equitable servitudes and real covenants:
 Real covenants -

A  B
| |
 are enforceable at law
 they require HP
 they have to be recorded to be valid
 they have to be created via written instrument
 Equitable servitudes -
 enforceable at equity
 can be implied by a ct. based on conduct
 no need for HP
 are not subject to the statute of frauds o 3. Validity and Enforcement of Covenants
 Equity imposes 3 requirements:
 1. intent that the benefit and/or burden of the covenant run to successors of the original parties
 2. notice of the part of purchasers of the original promisor; and
 3. that the covenant touch and concern land
 For covenants to be assignable there had to be privity of estate
D C
Real Covenant Equitable Servitudes
Burden Benefit Burden Benefit
H.P.
V.P.
Y
Y
N
Y
N
N
N
Y
T.C. Y Y Y Y
H.P. = Horizontal Privity
 Do you need HP for the burden of a real covenant to run? - YES
 Do you need HP for the benefit of a real covenant to run - NO
 Do you need horizontal privity for the burden of equitable servitudes to run - NO
 Do you need horizontal privity for the benefit of equitable servitudes to run - NO
V.P. = Vertical Privity
 Do you need VP for the burden of a real covenant to run - YES
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 Do you need VP for the benefit of a real covenant to run - YES
 Do you need VP for the burden of equitable servitudes to run – NO
 Do you need VP for the benefit of equitable servitudes to run - YES
T.&C. = Touch and Concern
 Do you need T&C for the burden of real covenants to run - YES
 Do you need T&C for the benefit of real covenants to run - YES
 Do you need T&C for the burden of equitable servitudes to run -
YES
 Do you need T&C for the benefit of equitable servitudes to run -
YES
 There are two types of privity: o 1. HP - refers to the relationship btw. A and B
 at common law there was only HP if a covenant is created part and parcel of a landlord/tenant relationship
(only need to know this for the case of Tulk v. Moxhay)
 so sales of property destroyed HP
 Under modern law HP means the two parties have a grantor-grantee relationship
 the covenant created has to be part of a sale of property - which means you can always artificially create HP by using a straw o 2. VP - refers to the relationship btw. A and D
 if someone takes property by adverse possession there is no VP
 when a lesser possessory estate is passed, there is no
VP o T.&C. - touch and concern the property
 The covenant must be directly related to the land or land usage. o When someone is suing for damages that hints that you are dealing w/a real covenant o When someone is asking for an injunctive relief that hints that you are dealing w/equitable servitudes
 it is easier to get equitable relief than to get monetary relief
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98 o The party that wants to enforce the rights = benefited party o The party who those rights are being enforced = burdened party
 Rule = A covenant in a deed subjecting land to an annual charge for improvements to the surrounding residential tract is enforceable by the property owners' association against subsequent purchasers if: (1) grantor and grantee so intended; (2) it appears that the covenant is one touching and concerning the land; and (3) privity of estate is shown btw. the party claiming benefit of covenant and the party under the burden of
such covenant. (Neoponsit Property Owner’s
Association, Inc. v. Emigrant Industrial Savings Bank –
Ps failed to pay a covenanted fee to their homeowner’s association which became a lien.) o 4. Discriminatory Covenants
 Rule = State court enforcement of private, discriminatory restrictive covenants constitutes
state action under the 14th Amendment. (Shelley v. Kraemer – Neighbors agreed to prohibit the sale of their homes to any person not of the Caucasian race.
About 30 years later, an African-American attempted to purchase one of the house covered by the agreement.) o 5. Termination of Covenants
 Covenants can be terminated in a number of ways:
 1. Merger – on the basis of unity of ownership of the benefit and burden by the same person
 2. A formal release – usu. written & recorded
 3. Acquiescence – which arises when the P has failed to enforce the servitude against other breaches and then seeks to enforce the servitude against the D
 4. Abandonment – resembles acquiescence except that it makes the servitude unenforceable as to

99 the entire parcel rather than only as to the P immediately involved
 5. The equitable doctrine of unclean hands – the ct. will refuse to enjoin a violation of a servitude that the P previously violated
 6. The equitable doctrine of laches – involves an unreasonable delay by the P to enforce a servitude against the D
 7. Estoppel – if the D has relied upon the P’s conduct making it inequitable to allow the P to enforce the servitude
 Rule = A restrictive covenant is enforceable so long as its provisions remain of substantial value.
(Western Land Co. v. Truskolaski – D subjected lots to restrictive covenants which restricted the subdivision to single family dwellings subsequently D wanted to build a shopping center and Ps sued to enjoin D.)
 Rule = Cts . will not engage in a balancing of the equities but will enforce restrictive covenants unless there is a substantial change of conditions
in the general neighborhood. (Rick v. West – P’s predecessor restricted the land to single-family dwellings and P subsequently attempted to sell the land to a hospital which the community wanted but D refused to release the covenant.)
 Restatement Section 7.10: Modification and Termination of Servitudes B/c of Changed Conditions
 (1) When a change has taken place since the creation of a servitude that makes it impossible as a practical matter to accomplish the purpose for which the servitude was created, a court may modify the servitude to permit the purpose to be accomplished. If modification is not practicable, or would not be effective, a ct. may terminate the servitude. Compensation for resulting harm to the

100 beneficiaries may be awarded as a condition of modifying or terminating a servitude.
 (2) If the purpose of the servitude can be accomplished, but b/c of changed conditions the servient estate is no longer suitable for uses permitted by the servitude, a ct. may modify the servitude to permit other uses under conditions designed to preserve the benefits of the original servitude
 Rule = A landowner cannot abandon property to
which he holds perfect title. (Pocono Springs Civic
Association, Inc. v. MacKenzie )
 Rationale: Someone has to be responsible for property o 6. Common Interest Communities
 Condominiums: Each owner can obtain a mortgage to finance his/her individual unit
 Real estate taxes are assessed separately of each unit
 Each unit owner had the condo in fee simple
 Each individual unit is owned by the individual
 the common areas are owned by the condo community usually as tenants in common
 Cooperatives: Title to the land and the building is held by a corp. and the residences own all of the shares of stock in the corp. and they control the corp. through an elective board of directors
 each resident has a long term renewable lease to their unit
 the resident of a co-op is simultaneously an owner and a tenant of the corp.
 typically co-ops have one blanket mortgage which means if one person misses a payment, the other members of the co-op have to come up w/the money or else they will default on the entire mortgage

 for this reason co-ops screen applicants very closely
XII. Landlord – Tenant
 A. THE LEASEHOLD ESTATES o 1. The Term of Years
 Term of Years - an estate that lasts for some fixed period of time
 at common law there was no limit on the number of years permitted
 Now, in some states there are statutes that limit the duration of terms of years
 B/c a term of years states from the outset when it will terminate, no notice of termination is necessary to bring the estate to an end o 2. The Periodic Tenancy
 Periodic Tenancy - a lease for a period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice of termination
 i.e. "to A from month to month"
 i.e. "to B from year to year"
 if notice is not given, the period is automatically extended for another period
 under common law - 1/2 a year's notice is required to terminate a year-to-year tenancy
 for any periodic tenancy of less than a year, notice of termination must be given equal to the length of the period, but not to exceed 6 months
 Now, there are statutes that have shortened the length of required notice to terminate
 The death of the LL or T has no effect on the duration of a term of years or periodic tenancy, but it does on the tenancy at will o 3. The Tenancy at Will
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102
 Tenancy at will - A tenancy at will is a tenancy of no fixed period that endured so long as both landlord and tenant desire.
 if the lease provides that it can be terminated by one party, it is necessarily at the will of the other as well if a tenancy at will has been created
 a unilateral power to terminate a lease can be engrafted on a term of years or a periodic tenancy
 i.e. a lease by L to T for 10 years or until L sooner terminates creates a term of years determinable
 tenancy at will ends, when one of the parties terminates it or when one party dies
 modern statutes usu. require a period of notice - say 30 days or a time equal to the interval btw. rent payments o 4. The Tenancy at Sufferance: Holdover
 Tenancy at sufferance - arises when a tenant remains in possession (holds over) after termination of the tenancy
 Common law rules give the landlord confronted w/a holdover two options:
 1. eviction (plus damages)
 2. consent (express or implied) to the creation of a new tenancy
 Problems arise over this b/c questions as to what type of new tenancy is created come up
 most jurisdictions say a periodic tenancy but for what period? - some say its the length of the original period or term w/the maximum length limited in either case to one year and other courts base length on the way rent was computed in the original lease
 some jurisdictions convert the holdover tenancy into a tenancy at will and provide that the tenant shall be liable for the

103 reasonable use and occupation - even though this may be less than the rent agreed upon in the original lease
 B. THE LEASE o An arrangement that resembles a lease or even declares itself a lease might nevertheless be held by the cts. to amount to something else
 It matters primarily whether or not an arrangement amount to a lease b/c leases give rise to the landlordtenant relationship which carries w/it certain incidents - certain rights, and duties and liabilities and remedies - that do not attach to other relationships o You need to figure out whether it is a lease which is hard to do but it is very fact specific.
 ask yourself how much control the lessor has over the property
 if it is freely revocable then it is a license, b/c leases are not freely revocable even a tenancy at will needs to give notice. o Leases are treated alternately as conveyances and as contracts.
 Conveyance v. contract - Is a lease a conveyance or a contract? – both
 a lease transfers a possessory interest in land so it is a conveyance that creates property rights
 lease also contains a number of promises so the lease is a contract, too o The statute of frauds - leases for more than one year must be in writing
 C. SELECTION OF TENANTS o The Federal Fair Housing Act
 you cannot discriminate based on race, sex, familial status, handicap status, gender, religion o The P must make a prima facie case for discrimination by showing that (1) they are member of a discriminated class that is protected by the statute and they are qualified to rent

104 the property (financially) and (2) they were rejected even though the property remains available
 a discriminatory motive need not be proved in order to make out a prima facie case under the FHA; proof of discriminatory impact or disparate treatment is sufficient o Then the burden is shifted to the D to show there were permissible reasons - and if the D makes a tenable argument to show there were permissible reasons then the burden shifts back to the P to show defense's argument was a pretext
(giving a reason for something but in reality that is not the real reason) o Five Can’t Dos
 1. A landlord can’t refuse to negotiate
 2. A landlord can’t refuse to sell or rent once a bona fide offer has been made
 3. A landlord can’t discriminate conditions (race, sex, etc.)
 4. A landlord can’t advertise to show an illegal preference
 5. A landlord can’t tell somebody the property is not for lease/sale when it actually is.
 D. DELIVERY OF POSSESSION o English Rule = The landlord has a duty to deliver actual possession at the beginning of the lease; if a tenant does not get out in time the landlord is in default. o American Rule = There is no duty to deliver actual possession; rather, the tenant has the burden of ejecting the holdover tenant. o Rule = The landlord is not bound to put the tenant into actual possession, but is bound only to put him in legal possession, so that no obstacle in the form of superior right of possession will be interposed to prevent the tenant from obtaining actual possession of the demised
premises. (Hannan v. Dusch – P and D entered into a lease and on the day the lease began, P could not take possession b/c the last tenant remained on the property.)

105
 Rationale: the tenant has sufficient remedies to protect themselves
 E. SUBLEASES AND ASSIGNMENTS o Majority Rule = Where a lease provides for assignment only w/the prior consent of the lessor such consent may be denied arbitrarily o Minority Rule = Where a commercial lease provides for assignment only w/the prior consent of the lessor such consent may be withheld only where the lessor has a commercially reasonable objection to the assignee or
the proposed use. (Kendall v. Ernest Pestana, Inc. – D was the lessor of hangar space. P approached D requesting permission to sublet which D denied for no apparent commercially reasonable reason.)
 F. DUTIES, RIGHTS, AND REMEDIES (ESP. REGARDING THE
CONDITION OF THE LEASED PREMISES) o 1. Landlord’s Duties; Tenant’s Rights and Remedies
 LL's do have duties and obligation under the lease which may not be waiveable under the lease by tenants
 the common law rule was that the tenant took the property as is and the LL had no duty to warrant the property’s fitness
 today that is not the case and we have covenants for quiet enjoyment, warranty of habitability, etc.
 a. Quiet Enjoyment and Constructive Eviction
 General rule = to claim constructive eviction, you have to do so within a reasonable period
of time
 Rule = Every tenant is entitled to a covenant of quiet enjoyment which is implied in every
lease (Reste Realty Corp. v. Cooper – P held leased property which continually flooded which the LL did not nothing about so P left the premises.)
 b. The Implied Warranty of Habitability

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 Rule = An implied warranty of habitability
exists in residential leases. (Hilder v. St. Peter
– P leased an apartment from D which had various problems that the D never fixed so P brought suit seeking recovery of rent.)

10/28/2011 9:23:00 PM
1. T, a trespasser, captures a wild animal on the land of O, a landowner, and carries it off to her own land where she confines it in a cage. Subsequently, T1 trespasses on T’s land and takes away the animal.

T will win in a suit against T1 because he has more right to the animal than T1. If O had gone onto the land of T and taken the animal back, O would win if T tried to sue O b/c the animal was captured on
O’s property (constructive possession)
2. (a) F has established a herd of deer that she keeps for pleasure and an occasional roast of venison. The deer roam about on open gov't grazing land during the day, but are sufficiently tame and domesticated that they return to a large shelter on F's land in the evening. H, a hunter, licensed to hunt deer on the land, shoots one of F's deer one day during the hunting season. F sues H for return of the carcass. Who wins and why?
 the hunter takes possession b/c its on public land o solutions = need to fence the herd of deer in, or make a clear rule that if animals leave the property F no longer has ownership, or put a distinguishing mark on herd so that it shows ownership (brand the animals)

who has the burden of proving ownership? = F

There is a rule that says if animals have a habit of returning to the owner, then the owner can let the animal leave and not lose ownership. Therefore the hunter has the burden of knowing which deer are wild and which are domesticated so he should not have shot the deer o this is a very complicated rule and the easier solution would to be keep the deer fenced in
2. (b) Suppose that F has a neighbor who also keeps a herd of deer. A doe belonging to F roams into the neighbors land, takes up with a buck in the neighbor's herd, is fed by the neighbor, and eventually bears a fawn sired, presumably, by the neighbor's buck. Who owns the fawn and why?
 the owner of the mother b/c this is the only way to provide certainty
 the mother has to have produced the fawn, where as the male is not certainly the father

every court has decided this way for this argument
3. P imports two silver gray foxes, a male and a female, from Canada for breeding purposes on her Mississippi ranch. The natural habitat of the animals is the north central US and Canada. The foxes are wild and once having escaped captivity have no inclination to return. For this reason, P keeps her pair securely confined in a floored pen w/plank walls 5 ft. high. Despite these measures, the male gnaws his way out. P sets traps to recapture him, but to no avail. Some time later the fox is killed by D in a pine thicket 15 miles from P’s ranch. D skins the fox and preserves the hide. P learning of this, sues for return of the hide. Who should prevail and why?

You could argue for P b/c she made reasonable attempts to secure the fox and tried to get fox back

You could argue for D b/c he should not reasonably be held responsible for figuring out who owns the fox 15 miles away from its owner
1

4. F, a farmer, is bothered by wild migrating geese on her land and shoots them in violation of the fish and game laws. The gov't confiscates the carcasses, and F sues for their return. The gov't wins, the court explaining that the gov't owns the wild animals, may regulate their taking, and may confiscate the animals taken in violation of regulations. So when the geese return next year, F sues gov't for damage to her cornfield caused by the geese the gov't has been said to own. The gov't wins again, the court holding that the gov't does not own wildfowl and is not liable for damage. How can you square the cases?

Overall we want the gov't to be able to regulate certain things like the hunting of wild animals for the betterment of society even if sometimes the case conclusions seem to be contradictory

Courts grant gov't limited ownership to promote best public policy and so that species of wild animals do not become extinct.
 We don’t want the gov't spending money and time trying to prevent a small amount of damage caused by wild animals
Pig Chart:

Pig gaining weight depends on how many pigs there are on the commons. o
If there is 1 pig/commons, than the pig can gain 10lbs and the cost is $1 o
If there are 2 pigs/commons, than the pigs can only gain 9lbs and so forth.

What is the optimal number of pigs to have on the commons? o
For society the optimal number is 5 b/c that number has the best gain for the community o
If you only were concerned with private gain, people would continue putting their pigs on the commons b/c individuals are still receiving gain. By putting #6, 7, 8, & 9 on the commons hurts society as a whole.

This is an example of why we don't want to function as a commons
5. O owns and has been in possession of a 100-acre farm since 1975. In 1994 A entered the back 40 acres under color of an invalid deed from Z (who had no claim to the land) for the entire 100 acres. Since her entry, A has occupied and improved the back 40 in the usual manner for the period required by the statute of limitations. A brings suit to evict O from the farm claiming title by constructive adverse possession.

What result? o
O doesn't know that A has the intention of taking ownership of the front 60 acres, he should have known about the back 40 acres of his land but he had absolutely no notice that A was intending to take the front 60

Suppose that in 1975 O took title to the farm under an invalid deed and has been in possession for a period sufficient to satisfy the statute of limitations. Would the result in the suit by A be different? o
For both questions O is ok for the front 60 acres.
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6. Two contiguous lots, 1 and 2 are owned by X and Y respectively. (X and Y are not in possession). The lots are conveyed by an invalid deed from Z to A, who enters lot 1 and occupies it in the usual manner for the period required by the statute of limitations. Subsequently A sues X and Y to quiet title to lots 1 and 2.

What is the result if A sues X? o
A would win b/c A has done everything she need sto do to adversely possess the land

What is the result if A sues Y? o
Y would win b/c there is no entry on Y, and therefore we cannot compute knowledge against
Y

Would it matter if X had executed the deed? Would you get the same result? o
Yes we would get the same result. In both circumstances A has properly adversely possessed lot 1 and has not properly adversely possessed lot 2

What if X executed the deed and A enters lot 2? o
Then A would win against Y b/c Y should have had constructive knowledge, and A would win over X b/c X conveyed an invalid deed
Problems: Tacking
7. Suppose X buys certain property described in a deed from the seller, who as it happens had also (but unknowingly) adversely possessed a strip adjacent to the described land. If the evidence shows that the deed to X was intended by the parties to convey not only the described land but also the adversely possessed strip, is X allowed to "tack" that strip onto the land described in the deed?
 the court held that X could do exactly that
8. In 2000 A enters adversely upon Blackacre owned by O. In 2007 B tells A, "Get out of here, I'm taking over." A, feeling threatened, leaves, and B enters into possession. In 2010 who owns Blackacre?

O does b/c in 2007 the statute of limitations hasn't run and same for B in 2010 b/c B has already been there for 3 years.

Can O or A eject B? o
O can eject B b/c O owns the land. o
A can eject B b/c A has better relative title than B
Suppose that in 2007 A leaves under threat of force but 6 months later A recovers possession from B. If O does nothing will A own Blackacre 10 years from the date of his entry in 2000, or 10 years and 6 months from the date of his entry in 2000, or in 2017.

There are credible arguments for each but the court says 10 years and 6 months
Suppose that in 2007 A abandons Blackacre and B immediately goes into possession. If O does nothing, will B own
Blackacre in 2010?

No, not until 2017
3

9. In 1994 A enters adversely upon Blackacre, owned by O. In 1995 O dies, leaving a will that devises Blackacre to
B for life, remainder to C. In 2010 B dies without ever having entered upon Blackacre. Who owns Blackacre?

this creates successive legal interests which are both legally binding. B cannot leave the property in
B's will b/c B has a life estate which is only valid during B's life and the land will not become possessory for C until B dies. C owns the property and C can leave the property to his successors

A's actions acted against B at the same time that they acted against C o
C could have gotten A off of the land b/c C has a legal obligation to monitor the property b/c
Problems: Disabilities he has a currently recognizable interest in the property. C should have said to B, either you get
A off or I am going to sue you to make sure you get A off the land.
10. In each case O is the owner in 1984 and A enters adversely on May 1st, 1984. The age of majority is 18.

O is insane in 1984. O dies insane and intestate in 2007. - when does the qualifying disability end? 10 years after O dies which is 2017 o a. O's heir, H, is under no disability in 2007 - does this make a difference? no b/c you can't tack disability so the statute of limitations still runs 10 years after O dies o b. O's heir, H, is 6 years old in 2007

2. O has no disability in 1984. O dies intestate in 2002 O's heir, H, is 2 years old in 2002. When does the statute of limitations run? o
2005 b/c adverse possession statute is 21 years, change of ownership is irrelevant

3. O is 5 years old in 1984. In 1994 O becomes mentally ill and O dies intestate in 2009. O's heir, H, is under no disability. Does the adverse possessor here acquire title in 2005, 2007, or at some later date?
If the answer is 2005 or 2007 how are O's interests to be protected? o
We have a qualifying disability in 1984 so we would have to wait 13 more years until O reaches the age of majority and then tack 10 years onto that to get to 2007 o
Or we have to wait until O seizes to become mentally ill or until O dies which he does in 2009 and then we would have to tack 10 years onto that. Which one is it?

It's 2007 b/c (1) you can't tack disability and (2) even if you could O was not insane at the time of entry, he didn't become insane until after the time of entry.
11. (a) O owns a pearl ring. While visiting her daughter A, O leaves the ring on the bathroom sink. After O leaves, A discovers the ring. When A telephones O to tell her of the discovery, O tells A to keep the ring as a gift. Has O made a gift to A? If so can O change her mind the next day and require A to return the ring?

A gift has been made b/c delivery has been made even though the delivery is odd. If it was a gift O cannot change her mind.
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(b) Suppose that A does not telephone O to tell her the ring has been found. A week later, at a dinner with friends, A surprises O by producing the ring. O takes the ring, looks at it, then gives it back to A, saying "I want you to have it.
It's yours" A tries the ring on, but it is too large for A's finger. O then says, "let me wear it until you can get it cut down to fit you." O leaves the dinner party wearing the ring, is struck by a car, and is killed. A sues O's executor for the ring. What result?

A gift has been made b/c delivery occurs. What about when A gives the ring back? that is not a gift b/c there was no intent for A to give the ring back as a gift. A was just letting O borrow the ring.
(c) Suppose A gives B a $21,000 engagement ring. Later the engagement is broken. Does it matter who broke the engagement in determining who now owns the ring?
 traditional rule is that the donor cannot recover the ring if the donor is at fault
12. O writes a check to B on her checking account and hands it to B. Before B can cash the check, O dies. What result?
13. Suppose that O, while wearing a wristwatch, hands A a signed note saying: "I hereby give A the wristwatch I am wearing." Is this a valid gift?

Would a reasonable person know that a gift can only be given be delivery and not by the giving of a note? No. Why do we have a rule that isn't widely applicable?
14. O, owner of Blackacre, executes and delivers a deed of Blackacre to her daughter, A as a gift. The deed is not recorded. Subsequently O tells A that she would like Blackacre back, and A, a dutiful daughter, hands the deed back to P and says, “the land is yours again.” O tears up the deed.
Who owns the land?

A owns the land b/c she never amended the document to give the land back to O. By handing back the deed, A didn’t do anything b/c that deed transferred the land from O to A.
15. By general warranty deed, A conveys Blackacre to B for $20,000. B conveys Blackacre to C for $15,000. O, the true owner ousts C. The jurisdiction holds that present covenants are breached, if it all, when made, and the chose in action is not assigned to subsequent grantees.

(a) The deed from B to C is a quitclaim deed. If C sues B, B has no liability. How much, if anything, can B recover from A? o
It depends on what the reason is for the drop in value of the property

(b) The deed from B to C is a warranty deed. C has not sued B, nor settled from him, how much of anything can be recovered from A? o
B should not be able to sue A and get anything until C is out the 15,000. The ct. could order A to put 15,000 in escrow until the situation resolves or until the statute of limitations runs.
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
(c) The deed from B to C is general warranty deed, C sues B and recovers the $15,000, how much of anything can B recover from A? o
Can B get back the $15,000 that he had to reimburse C? One theory is that the purpose of the damages is to cover the actual loss, B is out $15,000 b/c he had to reimburse C so the only thing that B should get back from A is $15,000. Can B get back the full $20,000? The other theory is that damages should be rewarded to restore the parties to their original status quo.
16. By general warranty deed, A conveys Whiteacre to B for $15,000. By quitclaim deed B conveys Whiteacre to C for $12,000. By general warranty deed, C conveys Whiteacre to D for $20,000. O, the true owner, ousts D at a time that the land is worth $24,000. Advise D and C as to how much they can recover on the warranties.

C gets nothing b/c he bought through a quitclaim deed and D should recover what he bought the land for regardless of how much the land if worth in order for D to be made whole.

If D sues C and recovers, what can C get from A? - C can only recover is they are in a jurisdiction where the chose in action runs and he will only be able to recover the 15,000 that A, the original grantor got from B.
17. O, owner of Blackacre, has 2 children, A (daughter) and B (son). Subsequently B dies testate, devising all his property to his wife, W. B is survived by three children B1 (daughter), B2 (son), and B3 (daughter). A1 (son) is born to A. Then O dies intestate. Who owns Blackacre in England in 1800? B2 b/c of the rule of primogeniture

Under modern American law - A will get 1/2, the other 1/2 would be divided btw. B's 3 children. W gets nothing b/c the land is passed by O's will not B's will, and the laws relating to O's will would say if B predeceases O, the land would go to B's blood line (his kids)
18. O conveys Blackacre "to A and her heirs." If A dies intestate w/o issue will Blackacre escheat to the state?

Issue is not the same as heirs, A would have to die intestate and w/o heirs in order for Blackacre to escheat to the state. Issue is only one type of heirs.
19. O conveys Blackacre "to A for life, remainder to B and her heirs." B then dies intestate w/o heirs. A then dies.
Who owns Blackacre?

When B died intestate and w/o heirs he left his future interest to the state and when A died, no one had an interest in Blackacre so then Blackacre would escheat to the state
20. In 1600 O conveys Blackacre "to A for life, then to B forever." What estates do A and B have? If A dies and then B dies, who owns Blackacre? Suppose the conveyance takes place in 2002?

In 1600, to B forever is improperly drafted which means that at common law this would be taken as a life estate. If and A and B die in 1600 Blackacre would revert back to O, the grantor.
6


In 2002, life estate in A, fee simple in B. When A and B die it depends what B did with the property - did he devise it, assign it, or did he die intestate?
21. O conveys Greenacre "to A and her heirs." A's only child, B, is a spend-thrift and runs up large unpaid bills. B's creditors can attach B's property to satisfy their claims. Does B have an interest in Greenacre, reachable by B's creditors? Suppose A wishes to sell Greenacre and use the proceeds to take a trip around the world. Can B prevent A from doing this?

No, B does not have an interest in Greenacre until A dies, therefore B's creditors cannot reach the land.
B cannot prevent A from conveying the land to a third party b/c A has a FSA.

Fee simple in A, no interest created in B. B's creditors cannot get at the property and A can do whatever she wants with the property.
22. O conveys "to A and her heirs, then to B and her heirs"

A has a FSA and B has nothing b/c no future interest follows a FSA
23. O conveys "to A and fee simple" In 1600 if this conveyance was made, what would A have?

A has a life estate b/c this was the default rule at common law

Today - A has a FSA b/c this is the default rule now but either way the conveyance is improperly drafted which makes the cts. turn to the default rules
24. O conveys to A for life, and then to B and her heirs. During A's life, A conveys her life estate to C. What does C have?

C has a life estate pur autre vie as long as A is alive, not as long as C lives
25. Regarding all the problems, assume O started w/a fee simple absolute
(a) O conveys Blackacre "to A and her heirs, but if Blackacre is used for any purpose other than agricultural purposes, then O has the right to re-enter and take possession of the land." What is the state of title in Blackacre at common law?

A has a fee simple subject to condition subsequent and O has a right of entry in FSA.
(b) Taking the facts of problem 1, suppose that some years later after the conveyance, A begins construction of several residences on Blackacre. O has died and devised her entire estate to B. What is the state of title in Blackacre at common law?

If A has breached the condition subsequent her estate doesn't terminate until the right of entry is exercised. If the right of entry is devisable by will then B has the right of entry, but if it is not devisable then O's heirs have the right of entry. If no one exercises the right of entry, A's estate continues
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(c) O conveys Blackacre "to A and her heirs so long as Blackacre is used for residential purposes only." What is the state of title in Blackacre at common law?

A has a fee simple determinable and O has a possibility of reverter.
(d) Taking the facts of Problem 3, suppose that some years after the conveyance, A begins construction of a factory on Blackacre. O has died and devised her entire estate to B. What is the state of title in Blackacre at common law?

If A has breached the condition the fee automatically terminates, and B owns Blackacre
26. O owns a FSA and makes the following transfers. In which cases is there a reversion?
 a. O conveys "to A for life, then to B and her heirs" o
There is no reversion b/c when A's life estate is over, the future interest will go to B and her heirs. If B dies before A's life estate terminates, the future interest will pass to B's successors -
B has a vested remainder in FSA o you never have a reversion following a FSA
 b. O conveys, "to A for life, and to B and the heirs of her body" – o
There is a reversion b/c O conveyed a vested estate of a lesser quantum than that of the vested estate which he has but the land would only revert to O if B dies w/o issue or when B's blood line ended
 c. O conveys, "to A for life, and then to B and her heirs if B attains the age of 21 before A dies." At the time of conveyance, B is 15 years old. Is there a reversion? (If there is a reversion, what happens to it if
B reaches 21 during A's life?) – o
O has a reversion that is not certain to become possessory. If B reaches 21 during A's life, then B's interest ceases to become contingent and then B has a vested remainder which means
B will retain the land when A dies and then B would have a FSA upon A's death and this effectively destroys O's reversion.
 d. O conveys "to A for 20 years" - O has a reversion after the 20 years is up.
27. O conveys Blackacre "to A for life, then to B for life." O subsequently dies with a will devising all of O's property to C. Then A dies, then B dies. Who owns Blackacre?

C owns Blackacre b/c A and B had life estates and O had a reverter once the life estates were over but since O is dead, the reverter passed to his devisee who is C.
28. O conveys "to A for life, and in the event of A's death to B and her heirs". Is B's remainder vested or contingent?
If B subsequently conveys her interest back to O, what does O have? –

B's remainder is vested b/c it is the same as saying, "to A for life, then to B and her heirs". If B conveys her interest back to O, O has an indefeasibly vested remainder b/c that's what B had, so it would be the same when B transfers it back to O
8

o
A's death is not a contingency, b/c it is going to happen, the only question is when.
29. O conveys "to A for life, then to B for life, then to C and her heirs." What interests are created?

A has a current possessory life estate, B has an indefeasibly vested remainder life estate, and C has an indefeasibly vested remainder in FSA, O has nothing.
Suppose the remainder to C had been "then to C and heirs if C survives A and B". What interests are created?

A has a current possessory life estate, B has an indefeasibly vested remainder in life estate, C has a contingent remainder in FSA, and the alternate contingency is that O has a reversion in FSA.
30. O conveys "to A and B for their joint lives, then to the survivor in FSA." Is the remainder vested or contingent?

A and B have a joint life estate, and the life estate ends when one of them dies, the survivor has a contingent remainder b/c we don't know who will die first A or B.
31. O conveys " to A for life, then to A's children who shall reach 21." A's oldest child, B, is 17. Is the remainder vested or contingent?

At common law - Contingent b/c if the life estate naturally ends before A's child reaches the age of 21,
A's child would not certainly receive their possessory interest.

When B subsequently reaches 21, it is subject to open b/c A could have more children

When B reaches 21, this goes from being contingent to being vested and when this happens, the alternate contingency ends
32. To A for life, and then to A's children who survive. A has one child

This is vested subject to open b/c A can have more children, but also subject to being divested b/c none of A's children could survive A
33. O, owner of Blackacre, comes to you to draft an instrument of gift. O tells you he wants to convey Blackacre to his son A for life, and upon A's death O wants Blackacre to go to A's children if any are alive or, if none are then alive to O's daughter B. Consider the following conveyances, all carrying out O's intent, but each creating different future interests. Identify the future interests.
 a. O conveys "to A for life, then to A's children and their heirs, but if at A's death he is not survived by any children, then to B and her heirs." At the time of conveyance, A is alive and has no children. What is the state of the title? o
A has a current possessory life estate

A's unborn children have a contingent remainder in FSA (contingent upon them being born)

B has a FSA subject to a contingent remainder
9

o
Two years after the conveyance, twins C and D are born to A. What is the state of the title?

A has current possessory life estate

A's children have a vested remainder subject to open and complete divestment (they have to be born, and at least one of the children have to survive A)

B has a shifting executory interest in FSA o
Suppose that C dies during A's lifetime, and that A is survived by B and D. What is the state of the title?

D and C's heirs have a current possessory FSA
 the class is closed when A dies, and D survived A which matters b/c the conveyance was contingent upon the kids surviving A.

B's interest is gone b/c the kids interest is fully vested
 b. O conveys "to A for life, then to such of A's children as survive him, but if none of A's children survives him, to B and her heirs." At the time of the conveyance A is alive and has two children, C and
D. What is the state of the title? o
A has a current possessory life estate o
C and D have a contingent remainder b/c they have to survive A, and the contingency is written into the vesting clause o
B has a contingent remainder
 c. O conveys, to A for life, then to B and her heirs, but if A is survived at his death by any children, then to such surviving children and their heirs." At the time of conveyance, A is alive and has two children, C and D. What is the state of the title? o
A has a current possessory life estate o
B has a vested remainder in FSA subject to complete divestment o
C and D have a shifting executory interest in FSA
34. T devises $10,000 "to my cousin, Don Little, if and when he survives his wife." What does Don Little have?
 springing executory interest b/c the transferor is being divested
35. To A for life, and upon A's death to B and his heirs
 life estate in A
 indefeasibly vested remainder in B in FSA
36. To A for life, and upon A's death to B and her heirs, if B reaches the age of 21

A has a possessory life estate

B has a contingent remainder in FSA b/c the conditional clause is written into the vesting clause o if B doesn't satisfy the condition, the land reverts to the grantor
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37. To A for life, and if B survives A, then to B and her heirs

A has a possessory life estate

B has a contingent remainder in FSA b/c the conditional clause is written into the vesting clause
 if A dies, and B is still alive, B's remainder has fully vested and O's interest divests
38. To A for life, and upon A's death if B marries A's widow then to B and his heirs

A has a possessory life estate
 followed by a reversion in O

B has a springing executory interest in FSA
39. Applying the traditional system of estate and future interests, for each problem below, identify all present estate and future interests in existence at the times indicated and on the basis of the facts stated.
 i. O conveys "to A for life, then to B for life, and then to C's heirs." A, B, C, and O are all alive at the time of the conveyance. C is unmarried and has two living children, X and Y. o
A has a life estate o
B has a vested remainder for life o There is a contingent remainder in FSA in C’s unascertained heirs o
There is a reversion in FSA in O
 ii. O conveys "to A upon her 1st wedding anniversary." A is alive and unmarried at the time of the conveyance. O is also then alive. o
A has a springing executory interest in FSA o Immediately and automatically upon A’s 1 st wedding anniversary, A’s executory interest will divest O’s fee simple and become possessory in A in FSA
 iii. O conveys "to A for ten years, then to such of A's children as attain age 21." At the time of the conveyance A, and O were alive. A had two children X and Y, ages 20 and 17, respectively. o
A has a term of years, followed by a contingent remainder in FSA (contingent upon attaining age 21) in which X and Y have an interest. There is also a reversion in FSA in O
 iv. Applying the same facts as in Problem 3, assume that X later attains age 21 and Y is still under age
21. A and O are both still alive. o X’s attaining age 21 vests the contingent remainder in him/her so that X now has a vested remainder in fee simple subject to open by Y and also subject to open b/c A is alive and may have more children some or all of whom may reach age 21. There is no reversion. Y now has a shifting executory interest in FSA which will vest if Y reaches age 21.
 v. Applying the same facts as in Problem 3, assume that X dies when X is 22 and Y is age 19. O is still alive.
11

o X’s vested remainder is transmissible at death b/c it is not subject to any condition that X survive to the time of possession. So, it passes to X’s successors in interest, i.e. X’s devisees under any valid will or X’s heirs. Those persons take exactly the same interest that X had. Y still has a shifting interest in fee simple. There is no reversion.
 vi. O conveys "to A for life, then to A's children." A and O are alive are the time of the conveyance. A has one child, X. o
A has a life estate; X has a vested remainder in fee simple subject to open; and there is a shifting executory interest in fee simple in A’s unborn children.(b/c they partially divest X’s share) There is no reversion.
 vii. Applying the same facts as in Problem 6, assume that A has another child, Y and then A dies survived by X, Y and O. Identify all of the estate and future interests existing as of A's death. o The birth of Y vests the remainder in him/her and simultaneously partially divests X’s remainder. Both X’s and Y’s remainders are subject to open so lone as A is still alive and capable of having more children. Once A dies, however, the class of A’s children closes and
X’s and Y’s interests become indefeasibly vested in FSA. W/A’s life estate terminated, X and
Y take possession and own the property in fee simple as tenants in common.
 viii. O conveys "to A for life, then to B and her heirs; but if B marries Z, then to C and his heirs." o
A has a life estate; B has a remainder in fee simple that is vested subject to complete divestment; C has a shifting executory interest in FSA. There is no reversion.
 ix. O conveys Blackacre "to A for life, then to B and her heirs so long as Blackacre is organically farmed" - Lewis would not give us something that looks like this on the exam b/c there are multiple interpretations
 x. O conveys a sum of money "to A if she graduates from college." A is not yet enrolled in college. o
A has a springing executory interest in FSA. O has a fee simple subject to executory limitation. If and when A graduates from college, A’s interest will vest, which divests O.
40. T devises property in trust "for my son A for life, then to A's children and their heirs." At the time of T's death,
A has one child, B. Two year later C is born to A. Then B dies leaving a husband, D and a child, E. B's will devises all her property to D. Then A dies, survived by C, D, and E. Who owns the trust property?

When T dies, A has a possessory life estate, B has a vested remainder in FSA subject to open

When C is born, B and C have vested remainder subject to open

When B dies, the land goes to D b/c is passes through her will

When A dies, C owns the property and D who has B's share and they have the property in FSA in tenants in common
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41. T devises property in trust "for my son A for life, then to A's children and their heirs, and if any child dies in the lifetime of A, such child's share shall go to his or her issue who survive A." At the time of T's death, A has two children B and C. Then B dies, leaving a husband, D and a child, E. B's will devises all her property to her husband,
D. Then C dies, leaving a wife F, and no issue. C's will devises all his property to his wife, F. Then another child, G is born to A. Then A dies, survived by D, E, F and G. Who owns the trust property?

When T dies, A has a possessory life estate, B and C have a vested remainder in FSA subject both subject to open (b/c A could have more children) and complete divestment b/c B and C have to survive
A

When B dies, is her share divested? - NO land passes to D but D's share is vested subject to open still b/c A is alive and could still have more kids. B's share is not divested b/c we have a potential divested condition (E survive A) - the only way B's share is divested is if E survives A.

C and D have vested remainders in FSA subject to open and complete divestment

When C dies, his interest gets passed to F and his interest cannot be divested b/c C has no issue so C's share is no longer vested subject to complete divestment but is still subject to open b/c A is still alive

When G is born - G has a vested remainder subject to open and complete divestment

When A dies, the class closes which means F's share is vested. G has no issue and G survived A so G's share is fully vested in G.

E survived A which means E divests E's father D

E, F and G. each have a 1/3 share in FSA
42. O conveys "to A for life, then to B if B attains the age of 30." B is now 2 years old.

This gift is valid b/c the gift is made to B who is alive, so when B dies we will know for sure whether it vested or failed, we will know whether B is 30 when he dies. (we don't even need the 21 years)
43. O conveys "to A for life, then to A's children for their lives, then to B if B is then alive, and if B is not then alive, to B's heirs." Assume that A has no children at the time of the conveyance.

To A's children is a contingent remainder and subject to the Rule and is valid b/c we will know who
A's children are when A dies
 then to B if B is then alive, B is the validating life and when B dies we will know if B dies.
 to B's heirs, B is the validating life so when B dies we will know who B's heirs are
44. O a teacher of property law, declares that she holds in trust $1,000 "for all members of my present property class who are admitted to the bar." Is the gift good? Suppose that O had said "for the first child of A who is admitted to the bar."

A gift to a class which at the moment is open b/c no members of the class have been admitted to the bar.
13


Is there a validating life? - YES the last student to die and when that person dies, the class conclusively closes
 if it said for the 1st child of who is admitted to the bar = if A had two kids in law school, neither of them could pass the bar, A could have another child and then everyone who is relevant could die, then
21 years could pass and we won't know if A's last child will pass the bar.
45. O conveys "to A for life, then to A's children who reach 25." A has a child, B, age 26 living at the time of conveyance. Is the remainder valid?

Under the common law rule this is invalid b/c A could die and leave a child under the age of 4 and B could be dead at the time of A's death o
Possessory life estate in A, reversion in fee simple in O
The Unborn Widow Scenario FAMOUS PROBLEM!!!!!
46. O conveys to A for life, then to A's widow, if any, for life, then to A's issue then living." Is the gift to A's issue valid?

Do we have a validating life for A's widow? - YES, A b/c when we dies we will know whether A is married and his wife outlived him

Second part is invalid b/c we assume A's widow is the validating life but it's possible that she may not be born yet b/c A could marry someone much younger than him and at the time of the conveyance A's widow may not be born. o
Why can't A be the validating life for A's issue? B/c it says "then living" we don't know who will be a part of the class then living. Also, it say's to A's "issue" not to A's "children" and issue means lineal descendants and it could be 50 years after A dies until you know which issue will get the land.
47. O conveys Blackacre "to A, B, and C as joint tenants" Subsequently A conveys his interest to D. Then B dies intestate, leaving H as his heir. What is the state of the title?

When A conveys the property to D, D gets A's share of the property as a tenant in common with B and
C. A's conveyance severs the joint tenancy as to A's interest but it doesn't affect B and C's joint tenancy. When B dies, B's share is effectively divided b/c part of B's share is a joint tenancy with C which is governed by the right of survivorship, so that share that is held in joint tenancy w/C goes to C, and the share that is held as a tenancy in common w/D will pass to B's heir, H.
48. T devises Blackacre "to A and B as joint tenants for their joint lives, remainder to the survivor." What interests are created by the devise?
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
A and B have joint possessory life estates measured by the 1st of the two to die, contingent remainder
(contingent on who survives) in FSA so this creates a situation where A and B are tenants in common for their joint lives, no survivorship interest.

During their life, can A or B convey their interest? - YES they have life estates per autre vie
Why does a joint tenancy in fee simple matter? - if it is a joint tenancy, then the person who made the conveyance is not controlling who gets the future interest, and A and B can leave the property to whoever they choose in the will.
49. A and B own Blackacre in joint tenancy. A conveyed a 10 year terms of years in Blackacre to C. After 5 years,
A dies devising all of his property to D. What are B's rights? Did the lease from A to C sever the joint tenancy?

NO b/c nothing short of a conveyance followed by an expiration of a redemption period is sufficient to sever a joint tenancy. So when A dies, the lease disappears and C is a trespasser. A's devise to D is invalid and B owns everything.
50. A and B sign a written agreement giving B the rentals from and possession of the land for her life. Does the agreement destroy the unity of possession?

Yes but it doesn't destroy the joint tenancy.
51. H and W owners of Blackacre in joint tenancy are getting a divorce. They sign a divorce agreement providing that Blackacre will be sold and the proceeds divided equally btw. H and W. Before Blackacre is sold, W dies. What result?

Divorce in and of itself does not sever a joint tenancy. B/c the property hasn't been sold, not until the sale does the severance of joint tenancy happen.
52. H dies in a state that gives the surviving spouse an elective share of ½ of the decedent’s property passing by will or intestacy. During his life, H took out a life insurance policy in the face amount of $60,000 at H’s death, and took title as joint tenants. H dies owning Blackacre worth $90,000, stocks and bonds worth $20,000 and a $10,000 savings account. H’s will bequeaths all his estate to his daughter by his first marriage, D. How if H’s estate distributed?

The life insurance policy is payable to W and W owns the property as a joint tenant, so she is going to get the entire house. The rest is worth $120,000 and b/c of the statute, W can renounce the will that disinherited her and take 1/2 of the estate so she would get an additional $60,000 leaving D w/only
$60,000.
If you were advising H before he died, how would he advise him to carry out his wishes?

He could change the life insurance policy by changing the designee to D instead of W. He could take the property that H and W own in joint tenancy and sever the joint tenancy during his life as tenancy in common so that D will get 1/2. D could also transfer ownership of Blackacre to a straw and then
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transfer it back to himself and his daughter as joint tenants. H cannot completely disinherit W, but he can do everything he can so that D gets the most.
53. A and B, neighboring landowners, decide that they will mutually restrict their lots to single-family residential use. They sign an agreement wherein each promises on behalf of herself and her heirs and assigns, that her lot will be used for single-family residential purposes only. This agreement is recorded in the county courthouse under the name of each signer. B sells her lot to C. C builds an apartment house on his lot. A sues C for damages. What result?

Neighboring landowners hints that there is no HP

Privity has to deal with issues of whether something is enforceable against successors and assigns

There is VP, but there is no HP so when A sues C for damages C has the burdened estate, A has the benefited estate and C is going to win and not owe monetary damages to A
Suppose that A rather than C had built the apartment house. Is C entitled to damages against A?

Now C is the benefited party and A is the burdened party - does C get the same benefits that B did? -
YES C can win in an suit against A b/c you don't need HP for the benefit of a real covenant to win
54. On October 1, L leases Whiteacre "to T for one year, beginning October 1." On the following September 30, T moves out w/o giving L any notice. What are L's rights?

This estate was a term of years, therefore T was not required to give L any notice, so L has no rights.
What if the lease had been to "to T from year to year, beginning October 1st."
 if neither party gave notice than both parties are obligated to each other for another year
What if the lease had been for no fixed term "at an annual rental of $24,000 payable $2,000/month on the 1st of each month."
 periodic tenancy but what is the term? - arguably it would be one year b/c it says annual rental, however it could also be argued that it is monthly b/c the rent is payable each month
55. T, a month-to-month tenant, notified L on November 16, 2010, that would vacate as of November 30, 2010. T subsequently vacated on that date and paid no further rent to L. L, after reasonable efforts, finally relet the premises beginning April 1, 2011. The jurisdiction in question has no statute prescribing the method of terminating a monthto-month tenancy. L sues T for unpaid rent for the months of December, January, and March. What result?
 it was obvious she wanted to get out as soon as she could and she couldn't get out in November but she gave sufficient notice to get out in December
56. T is a tenant at will of L. L causes a nuisance that interferes w/T's business on the leased premises. T vacates, rents equivalent space at a higher rent, and subsequently sues for damages on a theory of constructive eviction arising from a breach of quiet enjoyment. What result?
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 in most jurisdictions, the LL can terminate at any time during a tenancy at will which mean the LL can also terminate constructively but this isn't fair o so they are going to construe this as an implied periodic tenancy and let the tenant continue w/their claim
57. In each of the following cases T, who has a term of years, vacates the leased premises prior to the end of the term and stops paying rent. In a subsequent suit by L for unpaid rent, T asserts a defense of constructive eviction, claiming that L breached the covenant of quiet enjoyment. What result on the facts described below?
(a) L fails to control excessive noise made by neighboring tenants of T who commonly party long and loud into the night.
What if the disturbance was cigarette smoke seeping from neighboring units into the unit of a nonsmoking tenant?
 traditionally the rule is the LL can't be charged w/the misconduct of others including other tenants
 there are some cases to the contrary b/c the LL has the power to control other tenants based on how they contract and therefore the LL has a duty to control the conduct then
(b) the building in which T leases an apartment from L has been the site of criminal activity - act of burglary, vandalism by unknown and third parties. L installs deadbolt locks on all entrance doors and hires private security guards, but the problems continue.

No breach of the covenant of quiet enjoyment b/c the LL cannot be an absolute complete insurer of all criminal activity so as long as the LL has taken reasonable steps then they cannot be held liable
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