Important Notes:
There are 3 sections to this “outline”:
1. A one page attack sheet / issue checklist that should be semi‐memorized to
reflect the questions you should be asking yourself (i.e. “is the asshole
government trying to take my property?”), thus the issues you need to spot in
order to maximize points.
2. The corresponding “rule” sheet. Notice it is matched exactly to the issue
checklist, so if you spot an issue but forgot the rule, you have an easy reference.
3. The full outline. This also matches up to the issue checklist and rule sheet. This
is the 3rd layer of reference – only when you need detailed info on an issue/rule, if
you absolutely need to cite/reference a case, or wish to throw in some policy at
the end of your IRAC.
Purple Font = Policy
Yellow Highlighting = Rules
Green Highlighting = Examples (including important cases)
Good luck!
FINAL ATTACK SHEET
How did I get this property?
○ Do I have 1ST POSSESSION of the property?
○ By FIND?
○ By CAPTURE of a wild animal?
○ By CREATION?
○ Part of my BODY?
○ By ACCESSION?
○ By TRANSFER ‐ NEMO DAT?
○ By BONA FIDE PURCHASE?
○ By GIFT?
○ By a TRUST?
○ A FIXTURE part of land I got?
○ AD COELUM?
○ ACCRETION?
○ AVULSION?
○ ADVERSE POSSESSION
How do I prove the property is mine?
○ Is the STATUTE OF FRAUDS satisfied?
○ Did I REGISTER my TITLE?
○ Did I RECORD my TITLE?
○ What TYPE of RECORDING ACT did I use?
○ Is my interest even RECORDABLE?
○ Does the SHELTER RULE apply?
○ Do I have a WILD TITLE?
Is the government the asshole trying to take away my property?
○ Does my land fall under the PUBLIC TRUST DOCTRINE?
○ Taking my NAVIGABLE AIRSPACE?
○ Taking my NAVIGABLE WATERWAYS?
○ Did the government TAKE my land?
○ Is this PHYSICAL OCCUPATION or DEPRIVATION of my use?
○ Are they claiming NUISANCE ABATEMENT?
○ Is the city doing some REGULATION?
○ Did I get JUST COMPENSATION?
○ Is the government taking for PUBLIC USE?
How do I rent my property out?
○ What type of LEASE is it?
○ Does the STATUTE OF FRAUDS apply?
○ Did I delivery ACTUAL POSSESSION?
○ What are the TENANT'S DUTIES to me?
○ How do I KICK TENANT OUT and REPOSSESS my property?
○ Did I CONSTRUCTIVELY EVICT my tenant?
○ Was there really a BREACH of the COVENANT OF QUITE
ENJOYMENT?
○ Or did I BREACH an IMPLIED WARRANTY OF HABITABILITY?
○ WTF do I do after tenant ABANDONS the premises?
○ Was this a COMMERCIAL LEASE?
○ Did my tenant SUBLEASE his right to occupy?
○ Did my tenant ASSIGN his right to occupy?
○ Did I ASSIGN my property?
Do I have to share this property with some other asshole?
○ Is there a CONCURRENT OWNER?
○ Am I MARRIED?
How do I get rid of this property?
○ Can I ABANDON or DESTROY it?
○ Can I TRANSFER it?
 SEE FREEHOLD INTERESTS CHART
○ Can I COMPLETELY RESTRICT FUTURE transfers?
○ If I have a LIFE ESTATE ‐ did I WASTE something?
Is some asshole trying to walk through or fuck up my property (or did he already)?
○ Do I really need the ABSOLUTE RIGHT to EXCLUDE?
○ Was it a CRIMINAL act?
○ Did some asshole TRESPASS on my LAND?
Wait a minute, is there a legitimate reason or excuse
○ Did he fuck up my PERSONAL PROPERTY?
for
this asshole's trespass?
○ Did he fuck up my INTERNETS?
Was his trespass a NECESSITY?
○
○ How do I REMOVE the asshole FROM MY LAND?
Was there a CUSTOM to hunt on my land?
○
○ How do I get a BUILDING ENCROACHMENT off my land?
○
Did I make my land a PUBLIC
○ Dude is a fucking NUISANCE, how do I make him STFU?
ACCOMMODATION?
○ How am I going to GET MY SHIT BACK?
○
Did I LICENSE it out?
○ Why don't I just use SELF‐HELP?
Did I (or a previous owner) GRANT an
○
○ Did my TRUSTEE screw up?
EASEMENT, how, and what kind?
○ Was my BAILMENT fuck up?
Was the EASEMENT properly TRANSFERRED to
○
○ Am I getting DIVORCED?
the new asshole?
○ Can I kick my CO‐TENANT out?
○ Is he blocking my LIGHT and AIR?
○ Is my CO‐OP or CONDO trying to kick me out?
○ Did the asshole ABANDON the EASEMENT?
○ Did I (or a previous owner) GRANT a REAL
COVENANT?
 SEE PRIVITY CHART
○ Did I (or a previous owner) GRANT an EQUITABLE
SERVITUDE?
Outline Page 1
FINAL RULE SHEET
How did I get this property?
○ Do I have 1ST POSSESSION of the property?
 Common law holds "first‐in‐time, first‐in‐right" ‐ that is, a person who (1) controls or holds the property,
with or without a claim of ownership, (2) with an intent to possess, is the original possessor with greater
rights than the world.
○ By FIND?
 A finder of lost property is a person who (1) takes control of the property and (2) has the intent of
maintaining possession of the property; he has greater rights to the found property than the whole world,
except for the rightful owner, a prior or rightful possessor, or a person holding through the rightful owner
or possessor.
○ By CAPTURE of a wild animal?
 A person who gets actual or constructive possession (through landownership or custom) of a wild animal
with its freedom restricted is granted rights to the animal superior to the world.
○ By CREATION?
 The first to create something new or novel is rewarded with the right to exclude all the world from said
property [subject to some limitations that are unfair in my opinion (to be discussed later)] .
○ Part of my BODY?
 No one can own another person because of unalienable self‐ownership so usually body parts are not
defined as property (for either due process or conversion purposes, at least) for policy reasons.
○ By ACCESSION?
 Ownership is given to somebody when he mistakenly takes a physical object that belongs to someone else
and transforms it through his labor into a fundamentally different object.
○ By TRANSFER ‐ NEMO DAT?
 Nemo dat is the principle that no one can give that which he does not have, so the transferee's rights are
derived from those of the transferor
○ By BONA FIDE PURCHASE?
The UCC makes an exception to Nemo Dat and allows a good faith purchaser to keep the good when he (1)
pays good value (2) in good faith, and (3) the title was simply voidable instead of void.
○ By GIFT?
A gift is a present transfer of property by one person to another without any consideration or
compensation, where there must be (1) intent to make a gift by donor, (2) delivery by donor to donee, and
(3) acceptance by donee.
○ By a TRUST?
 A trust is three legal personas plus at least one "thing"; the settlor creates the trust and is the absolute
owner; the trustee is the person who receives the trust and is responsible for management; the
beneficiary is the person the trust benefits.
○ A FIXTURE part of land I got?
 A thing that was originally a movable chattel, (1) by reason of its annexation to, (2) application and
association in the use with land, and (3) the intent of the party making annexation ‐ is regarded as part of
the land.
○ AD COELUM?
 A owner of land also owns underneath the land and above the land "to whom the soil belongs, he owns
also to the sky and the depths."
○ ACCRETION?
 Gradual change in banks bordering running water may add or subtract to an owner's land because the
boundary line of the property remains at the center of the new stream even when it has moved.
○ AVULSION?
 Sudden change of the banks of a stream such as when a river forms a new course and destroys or creates
new banks, the boundary remains as it as in the center of where the old channel was located.
○ ADVERSE POSSESSION
 A party may obtain title to real property by AP when she, by acting like having claim of right, (1)
continuously occupies another's land in (2) actual possession that is (3) open and notorious, (4) exclusive,
(5) hostile and adverse for longer than the (6) SoL
How do I prove the property is mine?
○ Is the STATUTE OF FRAUDS satisfied?
 Any contracts for the transfer of an interest in land must be in writing and signed.
○ Did I REGISTER my TITLE?
 Not widely used for real property, this registration system allows owners to obtain a certificate of title as
sufficient proof of ownership ‐ any subsequent buyer only needs to inspect certificate to prove ownership.
○ Did I RECORD my TITLE?
 The function of recording acts is to (1) give the "purchaser for value" of land a way to check if the title he is
receiving is free from inconsistencies of earlier transactions, and (2) ensure his title is gains priority.
○ What TYPE of RECORDING ACT did I use?
 There are three types of recording acts: pure race (the winner of the race prevails), notice (a subsequent
bona fide purchaser wins regardless if he records ‐ unless he has actual, constructive, or inquiry notice),
and race‐notice (a subsequent good faith purchaser wins only if he has no notice AND records before the
prior instrument is recorded).
○ Is my interest even RECORDABLE?
 Interests gained through adverse possession, easements by implication or necessity, short term leases, and
contracts are not recordable.
○ Does the SHELTER RULE apply?
 Under the shelter rule, any grantee (by purchase or gift) from a bona fide purchaser is protected as a bona
fide purchaser, even though the grantee would not otherwise qualify for this status, with the exception if
the grantee is the original grantor.
○ Do I have a WILD TITLE?
 A deed that is recorded, but is not connected to the chain of title of the property is called a wild deed; it
cannot provide constructive notice to subsequent purchasers of the property because they cannot be
reasonably expected to locate the deed using generally accepted methods (grantee and grantor indexes).
Do I have to share this property with some other asshole?
○ Is there a CONCURRENT OWNER?
 The 3 ways two or more people each own present possessory interest in the same property are: (1) joint
tenancy (a single, unified interest in real or personal property which includes the right to survivorship); (2)
tenancy in common (a separated, divided interest which does not have right of survivorship); and (3)
tenancy by the entirety (which only exists between husband and wife, which includes survivorship and
"indestructibility").
○ Am I MARRIED?
 Under modern "community property" approach, any income or property from income (not gifts or
inheritance) acquired during the marriage is considered for the benefit of the community and equally
distributed.
Is some asshole trying to take away, walk through, or fuck up my property (or did he already)?
○ Do I really need the ABSOLUTE RIGHT to EXCLUDE?
 Society needs the right to exclude for economic development, privacy, personal autonomy, liberty, and
security
○ Was it a CRIMINAL act?
 Criminal law provides the "backstop" to property so property owners do not have to resort to dangerous
self‐help in order to enforce their rights.
○ Did some asshole TRESPASS on my LAND?
 Trespass to land is committed when an individual or the object of an individual intentionally enters the land
of another without a lawful excuse ‐ a party whose land is entered upon may sue even if no actual harm is
done.
○ Did he fuck up my PERSONAL PROPERTY?
 Trespass to chattels is an intentional interference with a possessory interest absent consent of the owner.
○ Did he fuck up my INTERNETS?
An electronic message can be deemed a trespass where the message interferes with the target computer’s
operation, as long as a plaintiff can demonstrate either actual hardware damage or impaired functioning.
○ How do I REMOVE the asshole FROM MY LAND?
 Injunctions, eviction, ejectments, and actions to quite title are concerned about (1) vindicating the
interest a person has in exclusive possession and (2) recovering said possession of land (for example
against a defaulting tenant or a trespasser), who does not have (or no longer have) any right to remain
there.
○ How do I get a BUILDING ENCROACHMENT off my land?
 There is no universal rule for building encroachments, sometimes mandatory injunctions are issued,
sometimes compensatory damages (restitution) ‐ it depends if the situation calls for using a property rule
versus a liability rule.
○ Dude is a fucking NUISANCE, how do I make him STFU?
 Nuisance requires a (1) substantial (injury required), and (2) unreasonable (gravity of harm outweighs
utility of activity causing harm), (3) non‐trespassory invasion (intangible things) or interference in
another's use and enjoyment of their land.
○ How am I going to GET MY SHIT BACK?
 Replevin is used to recover wrongfully taken personal property.
○ Why don't I just use SELF‐HELP?
 A person in possession of property can generally use reasonable force to prevent or terminate an unlawful
entry or other trespass upon land or a trespass against or the unlawful carrying away of tangible property
○ Did my TRUSTEE screw up?
 Trustees have a duty to carry out the express terms of the trust, the duty to prudently invest (do what is
good for) trust assets, the duty of loyalty, the duty not to be in a conflict of interest position (i.e. to profit),
the general duty to administer the trust in the best interest of the beneficiaries.
○ Was my BAILMENT fucked up?
 A bailment is the rightful possession of goods by one who is not their owner; the bailee (person holding
goods) is not an insurer for the goods but is liable for lack of care to various degrees based on who is
benefitted and if the bailment is voluntary or involuntary.
○ Am I getting DIVORCED?
The modern approach to divorce is "equitable distribution", where property is divided by the court
according to fairness, not based on who has title ‐ usually only property acquired during the marriage from
the earnings of the parties, but sometimes includes "future assets" such as a J.D.
○ Can I kick my CO‐TENANT out?
 Regardless of the form of co‐tenancy, each co‐tenant has the right to occupy the entire premises, subject
only to the same right in the other co‐tenants, unless the parties make an agreement to the contrary.
There is no right to collect and no duty to account unless he ousts the other co‐tenant or depletes the
land.
○ Is my CO‐OP or CONDO trying to kick me out?
 Courts will enforce the covenants, conditions, and restrictions contained in the recorded declaration of a
common interest development unless unreasonable.
Wait a minute, is there a legitimate reason or excuse for this asshole's trespass?
○ Was his trespass a NECESSITY?
 A trespasser to property may have a privilege to enter another's land without consent in order to avoid
serious harm, but must my restitution for any damage incurred he caused while trespassing.
○ Was there a CUSTOM to hunt on my land?
 A trespasser may be excused if he enters the land of another that is unenclosed and uncultivated, for the
purposes of hunting.
○ Did I make my land a PUBLIC ACCOMMODATION?
 When property owners open their premises to the general public in pursuit of the own property interests
(profit), they cannot exclude people unreasonably, especially in an arbitrary or discriminatory manner
towards members of the general public that come upon their property.
○ Did I LICENSE it out?
 A license is a permission slip to use another's land for one particular purpose only, is not assignable
because it is not really a property right, does not need to meet SoF, and can be revoked at any time.
○ Did I (or a previous owner) GRANT an EASEMENT, how, and what kind?
 An easement is a privilege to the limited use of the land of another, either affirmative (to allow holder do
something), or negative (to prevent landowner from doing something) . An easement can be appurtenant
or in gross and created in 5 ways (express, implication, necessity, prescription, and by estoppel).
○ Was the EASEMENT properly TRANSFERRED to the new asshole?
 When the title of the serviant estate is transferred, the burden of the easement remains with the property.
An easement appurtenant (one where the benefit applies to the particular land only) normally passes with
the transfer of the dominant estate. An easement in gross is not transferable.
○ Is he blocking my LIGHT and AIR?
 There is no negative easement for the right to light and air, or a claim for nuisance against someone who is
building on their property.
○ Did the asshole ABANDON the EASEMENT?
 An easement may be terminated by abandonment if the easement holder (1) intends to abandon and (2)
takes actions manifesting that intent, the easement will be extinguished.
○ Did I (or a previous owner) GRANT a REAL COVENANT?
 Damages may be rewarded for breach of a real covenant ‐ which is a contract between 2 parties that,
because it meets 3 requirements ([1] touch & concern land, [2] intent for burden/benefit to run, [3]
privity), has the additional quality that it is (1) binding against one who later buys the promisor's land,
and/or (2) enforceable by one who later buys the promisee's land.
 SEE PRIVITY CHART
○ Did I (or a previous owner) GRANT an EQUITABLE SERVITUDE?
Similar to a real covenant, an equitable servitude is a type of court enforced injunction or specific
performance against an assignee of the original promisor, where privity is not required, but the assignee
must have prior notice (actual or constructive).
Is the government the asshole trying to take away my property?
○ Does my land fall under the PUBLIC TRUST DOCTRINE?
 In general, if the primary purpose of the land is to benefit the public or the public has acquired customary
rights, the resources are too public to be parceled out to private ownership and states cannot surrender or
grant a public resource to a private entity.
○ Taking my NAVIGABLE AIRSPACE?
 In balancing the public interest of using airspace for navigation against a landowner's rights, a landowner
(1) owns only so much of the airspace above their property as they may reasonably use in connection with
their enjoyment of the underlying land, and (2) only for legitimate purposes.
○ Taking my NAVIGABLE WATERWAYS?
 A state is responsible for protecting the public's right to use navigable waters, even when the land below
the water is privately owned, and the state cannot relinquish power to private parties.
○ Did the government TAKE my land?
 The 5th Amendment states: "nor shall private property be taken for public use without just compensation",
so the government may use it's eminent domain power to take private property for public use as long as
there is just compensation.
○ Is there a PHYSICAL OCCUPATION or DEPRIVATION of my use?
 A permanent physical occupation is a taking per se because the owner is deprived of all his property rights
(the entire bundle of sticks is sliced instead of simply taking away one stick), and a restriction that
eliminates all economic use for a landowner is also a per se taking.
○ Are they claiming NUISANCE ABATEMENT?
 It is not a taking when the government uses their police power to abate nuisances ‐ including preventing
harm or stopping things that are noxious to the public (but some courts analogy to define a nuisance,
while some require actual nuisances under pre‐existing principles).
○ Is the city doing some REGULATION?
Regulations for zoning, environmental protection, landmark preservation do not qualify as takings if (1)
they substantially advances legitimate state interests, and (2) do not go too far in destroying private
ownerships rights.
○ Did I get JUST COMPENSATION?
Just compensation for a taking is determined at fair market value, assuming the highest and best use for
the property, not considering the government's planned use or any assembly costs.
○ Is the government taking for PUBLIC USE?
 The government is limited to takings for public use, including developing economic plans where the (1)
primary purpose is to benefit the public and (2) the plan originated in the government, (3) especially in
cases where the land is blighted.
How do I rent my property out?
○ What type of LEASE is it?
 There are four types of estates that involve the T‐L relationship: (1) a tenancy for years, (2) a periodic
tenancy, (3) a tenancy at will, and (4) the tenancy at sufferance.
○ Does the STATUTE OF FRAUDS apply?
 Any lease for more than 3 years must be in writing and signed.
○ Did I delivery ACTUAL POSSESSION?
 English (majority) rule is that L has obligation to deliver actual possession of property to T, and T has a right
to terminate the lease and recover damages if the prior T holds over and the L does not oust him.
○ What are the TENANT'S DUTIES to me?
 The T has a duty to pay rent (which most courts today hold this as a dependant covenant), duty to restore,
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and behave reasonably per the lease. If the T materially breaches, L is usually entitled to do so, either
expressly by terms of lease, or through court action (summary proceedings and damages for holdovers),
and perhaps nonviolent self‐help.
How do I KICK TENANT OUT and REPOSSESS my property?
 A landlord may legally repossess property with no liability if (1) the landlord had a legal right of possession,
and (2) the landlord used peaceable means of reclaiming possession.
Did I CONSTRUCTIVELY EVICT my tenant?
 Constructive eviction occurs where there is a (1) breach of duty by L, (2) that causes substantial
interference with a T's right to quiet enjoyment, and (3) the T demonstrates the uninhabitability by
abandoning the premises within a reasonable time thereafter.
Was there really a BREACH of the COVENANT OF QUITE ENJOYMENT?
 If L himself, or someone claiming under L, and sometimes other tenants in violation of their leases,
interferes with T's possession of use of the premises, this is a breach of the covenant of quite enjoyment.
Or did I BREACH an IMPLIED WARRANTY OF HABITABILITY?
 Today many states hold that if L leases a residential premise to T, he also makes an implied warranty that
it is in good enough condition to be lived in and if L breaches this warranty, T may withhold rent or use
rent to make repairs himself, as long as T can provide evidence of the breach.
WTF do I do AFTER T ABANDONS the premises?
 If a T abandons and doesn't pay rent, L can (1) treat as and accept surrender, and sue for difference in rent
and FMV; (2) re‐let premises for T and sure for difference in rents; or (3) do nothing and sue for all of rent ‐
unless there is a duty to mitigate.
Was this a COMMERCIAL LEASE?
 Most commercial leases today are treated as contracts instead of independent covenants; many contracts
defenses and remedies (consideration, duty to mitigate, etc) are applied to commercial leases.
Did my tenant SUBLEASE his right to occupy?
 A sublease is a transfer by Told of less than his entire interest, and Tnew is not liable for rent to L .
Did my tenant ASSIGN his right to occupy?
 An assignment is a transfer by Told of his entire interest in the leased premises. Tnew becomes primarily
liable to L and Told becomes secondarily liable. Tnew is liable only for promises made by Told whose burden
runs with the land (touch and concern), such as burden to pay rent.
Did I ASSIGN my property?
 If L assigns his rights, the new L has the burden and benefits of covenants that run with (touch and
concern) the land.
How do I get rid of this property?
○ Can I ABANDON it?
 To abandon property, a owner must (1) voluntarily relinquish all rights, title, claim, and possession, (2)
with the intent of termination his ownership, but (3) without vesting it to any other person and with the
intention of not reclaiming further possession or enjoyment, or resuming ownership in the future.
○ Can I DESTROY it?
 Owner sovereignty normally includes the right to destroy personal property, but in some cases the state
may limit what one can do with their property ‐ such as after death a testator may not destroy her property
because it is a condition that is opposed to public policy.
○ Can I TRANSFER it?
 SEE FREEHOLD INTERESTS CHART
○ Can I COMPLETELY RESTRICT FUTURE transfers?
 A complete restraint on alienation of a fee simple is void, even for a limited time, because this is against
the premise that a owner of a fee simple has the sovereign right to transfer to whomever he wants .
○ If I have a LIFE ESTATE ‐ did I WASTE something?
 A life tenant is not allowed to take some action that unreasonably reduces the value of the reversionary or
reminder interest ‐ either in permissive waste (failure to repair and upkeep property) or ameliorative
waste (an act that increases the value of an interest).
FINAL FULL OUTLINE
WHAT IS PROPERTY?
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Has been defined in various ways ‐ as the product of one's labor (Locke), to the foundation of
capitalism and class struggle (Marx), but ULTIMATELY:
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Property law is about relations among persons with respect to things ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
Resources of the world on which society depends for sustenance, satisfaction its needs and desires
○ How to reward and encourage efforts for productive use of those resources?
Property rights consist of what you can get the state to back you up on:
○ How law defines property interests
○ How one acquires property
○ How property rights can be shared
○ How outside parties' interests affect the rights of Os
Modern economic growth is about intangible property rights in:
○ Contracts
○ Capital
○ Intellectual assets
By "property rights" we mean:
○ Predictable and enforceable version of what law calls "property" and "contract"
○ Enforcement rules more focused on a broad right to exclude than on specific list of rights to use
By "private ordering" we mean the ability for private people and firms to make deals with each other as
they chose, rather than as instructed by the government
Our goal is not to decrease use, but to coordinate increased use
○ Property rules forces people to talk and rationalize
Our goal is not to protect the wealthy, but to fight poverty and improve economy for all people
Examples Why Government Regulation is Bad
1. Banking
○ U.S. depositors and banks
 Banks vs. debtors
○ Compare Mexico
 No property rights, almost no banking system
 Around 18,000 mortgages in entire Mexico
2. SARBOX: Unintended Consequences?
○ Disclosure can be good
○ But mandatory disclosure may be so onerous, that it:
 Keeps some small companies from "going public"
 Encourages others already public to be taken "private" or offshore
 Distracts management and the board from corporate strategy
3. Hedge Fund Regulation
○ SEC rule that hedge fund managers must register under the Investment Advisors Act (immediately
overturned by DC Cir.)
○ Supposed to protect investors
○ Only opt out was if fund had at least a 2‐year lock‐up window during which investors could not
withdraw
○ But threat of withdrawal is what gave investors in small funds needed comfort and control
○ So only large funds with established reputations could attract investors
Property Rights in IP as Keys to Innovation and Competition
1. Increase innovation:
○ Not just incentives to invent
○ Get inventions put to use
○ By facilitating coordination among complementary users of the invention (investors, managers,
marketers, laborers, owners of other inventions, etc)
○ The D part of R&D
2. Help new companies compete:
○ Anti‐monopoly weapons
○ Vital slingshot for David against Goliath
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Property Rights to Encourage Individual Incentives
People make choices (tradeoffs) in view of what they perceive to be their agendas, resources, and the
incentives they face (see Becker 1992 Nobel extending “rational choice theory” to broad range of human
behaviors)
○ Lesson: identifying a particular incentive does not always predict actual resulting behavior – need
to know what other incentives are operating and how
Rent seeking and rent dissipation
○ Rent is gain from doing an activity and sometimes private and public rents can diverge
○ Lesson: potential for net overinvestment or improper investment in race towards a common prize
Information costs
○ Making decisions requires a great deal of information
○ Search costs, and the fixes of reputation, and advertising
○ Lesson: look for lowest cost provider, evaluator
Behavioralism
Lesson: we are only boundedly rational, burdened by cognitive biases, heuristics, group‐think, fashion
Conclusion
• These seemingly diverse fields (contracts, property, IP, corporate, finance, etc) ‐ share basic themes in
common
• Economic success is about private ordering
○ Private ordering benefits from:
 Lots of private flexibility backed up by firm government enforcement
 Little of flexible government enforcement or firm mandate
• Some legal approaches may:
○ Frustrate good coordination
○ Facilitate bad coordination
Property Rights at Their Best
Property Rights at Their Worst
Attributes:
Attributes:
Predictable enforcement
Unpredictable enforcement ‐ created or changed at
discretion of government
Good flexibility ‐ can be traded and licensed;
bundled and divided
Bad flexibility ‐ fixed owner and fixed contours
Users deal with private individuals
Users deal with government
Effects:
Effects:
Easy for market actors to use
Easy for political actors to use (regulators and
powerful political constituents)
Stimulate competition, innovation, economic
growth, and jobs
Concentrate wealth and power
THE RIGHT TO EXCLUDE
TRESPASS VS. NUISANCE
RULE Right to Exclude: Society needs the right to exclude for economic development, privacy, personal
autonomy, liberty, safety, and security
RULE Trespass to Land: Any intentional intrusion that deprives another of possession of land, even if
only temporarily
○ "Strict liability" in torts ‐ an intentional trespass is the act of moving on the land of another,
doesn't matter if there are damages
 Sometimes necessity is recognized as a defense to an action for trespass
○ EXAMPLE: Jacque v. Steenberg Homes, Inc. (punitive damage awarded even when only nominal
damages ‐ no actual damages ‐ because important to deter physical invasions of land, doesn't
matter the trailer didn't do any damage to Jacque's land)
 Economic development ‐ people probably wouldn’t invest in their land if someone else
could come in and damage it
 Property right also protect privacy, autonomy, liberty interests
□ Invasion of property regarded as an invasion of personal space or personal wrong
□ Infringement of a legal right is always an actual harm, whether measurable or not
 Controlling your physical space gives you extra physical safety and security
 Heavy punishment to deter self‐help or retaliation ‐ if someone wants it bad enough, they
can pay the high price
○ NOT an absolute right to exclude:
 Eminent domain ‐ the state can trump everything
 Easements ‐ right to cross someone else's property
 Necessity ‐ if life or limb is at stake, may have a privilege of necessity
 Discrimination in public accommodations ‐ can’t exclude on prohibited grounds if you are
admitting any members of the public onto land
 Free speech rights on private property
□ i.e. handing out pamphlets sometimes allowed under 1st Amendment
 Invitation will subject you to many more exceptions
 EXAMPLE: Hinman v. Pacific Transport (no trespass by planes under ad coelum rule
(whoever owns the soil, owns the sky and depths) because owner of land owns as much of
the space above him as he uses, but only so long as he uses it ‐ and no use in this case)
□ Need to exercise dominion in order to own the airspace
 Can exercise dominion by building or engaging in activities on the surface that
would use the air space
 Also would result in an absurdity to regulate who owns air space
RULE Nuisance: A substantial (must be injury and unreasonable) non‐trespassory invasion or
interference in another's use and enjoyment of land
○ Substantial = must be injury and unreasonable
○ Non‐trespassory = same thing can't be a nuisance and a trespass (nuisance for intangible
invasions)
 EXAMPLE: Adams v. Cleveland‐Cliffs Iron Co. (nuisance, not trespass, when dealing with
intangible objects such as airborne damage caused by particulates, noise, or vibrations)
□ Majority of courts says dust is like fumes, something that is part of the environment ‐
so actionable only in nuisance, if at all
□ Some courts put dust in trespass category, but also require harm
□ Court here doesn't want to soften the hard edge of trespass law by requiring harm /
injury in certain cases, so instead treats dust as a nuisance
○ Unreasonable = gravity of the harm outweighs utility of the activity causing harm
 EXAMPLE: Hendricks v. Stalnaker (water well is not an unreasonable use of land because he
had no other options, not invasive like septic tank or "spite wall" ‐ therefore is not a private
nuisance)
□ Racing problem ‐ rent dissipation: people would all pay $10 to get $10 is overinvesting
□ Absolute right to be free from physical invasions OK but non‐physical invasions are
more fact‐specific in proving harm, damages
 Granting absolute right to be free from nuisance would stop a lot of socially
productive activity
EXCLUSION & GOVERNANCE
2 different strategies for resolving disputes about how resources are used:
○ RULE Exclusion: owner is gatekeeper of the resource and decides how to use
 Land that has multiple potential uses, O's can decide what is most valuable, i.e. Jacque v.
Steenberg Homes, Inc.
 Owner has absolute right to decide how property will be used best
○ RULE Governance: focuses on particular uses of resources, and permits or prohibits uses without
regard to the other attributes of the resource
 Land that has heightened significance, i.e. Hendricks v. Stalnaker
 Judges determine how property will be used best
PROPERTY RULES VS. LIABILITY RULES
Property RULE: right can't be taken away unless you give consent (except thru eminent domain)
○ Decision is who had initial entitlement – but does not address value
○ Property rule encourages people to talk it/courts wont enforce
Liability RULE: right can be taken away at a price set by the court
○ Transfer / destruction of property allowed based on value set by the court instead of by the
parties themselves
○ Not as good as if the people thought it out themselves?
VINDICATING PROPERTY RIGHTS ‐ INJUNCTIONS AND RESTITUTION
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ The core attribute of property is that it cannot be taken without consent; the action of
restitution can be viewed as a way for vindicating rights in property ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
RULE for Injunctions: Equity not used to enjoin a mere trespass with exceptions ‐
○ Where the injury is irreparable, or
○ Where full and adequate relief can't be granted at law, or
○ To prevent repetition of similar action / multiplicity of suits
○ EXAMPLE: Baker v. Howard County Hunt (injunction justified against continuing or repeated
trespasses in pursuance of a single purpose ‐ the hunters weren't going to stop trespassing)
RULE Building Encroachments: No universal rule as to injunctions for encroachment, sometimes
compensatory damages (restitution), sometimes mandatory injunction (remove ur shit)
○ EXAMPLES:
 Pile v. Pedrick (doesn't matter the foundation was built only 1" on accident ‐ absolute
property right means the defendants must tear down the building or pay damages)
□ Plaintiff chooses injunction ‐ is this a problem? (may want to prevent defendants from
operating the factory)
□ Opportunism is the cost, if you know somebody has invested a lot in you, you can take
advantage (maybe even wait until the factory is built before suing out of spite
 Golden Press, Inc. v. Rylands (mandatory injunction denied because defendant's
encroachment was unintentional and slight, plaintiff's use not affected (damage small and
compensable), high cost of removal would cause hardship or even unconscionable)
□ Supports equity rule against injunction if person seeking it has unclean hands
□ Doctrine of laches ‐ you can't get an injunction if you wait too long and the trespassing
party relies on you not enforcing the property right
Coasean analysis
□ Pile  if cost of removal greatly exceeds harm from encroachment, parties will
bargain so entitlement goes to def, and the wall stays up
 Efficient result would be for def to offer compensation up to the amount of
tearing down the wall
 Probably won’t happen in this case b/c plaintiffs don’t want structure at all
□ Golden Press  plaintiff has to sell entitlement for a trivial amount to money set by
the court
 If having wall taken down worth more to plaintiffs than having it for defs, ideally
would pay enough to get it taken down
 Might not happen if defs don’t have enough money
RULE Restitution: (1) an unjust enrichment of the defendant, (2) at the expense of the plaintiff, (3)
under circumstance that are unjust
○ EXAMPLE: Producers Lumber & Supply Co. v. Olney Building Co. (building on another's property
could not be destroyed by the builder ‐ there were many options the plaintiff landowner could
have taking, but issue is his right to choose was taking away by the defendant, doesn't matter the
defendant was an innocent and accidental trespasser)
 Also destroying the house was waste ‐ done with unclean hands
ORIGINAL ACQUISITION OF PROPERTY
BY CAPTURE / OCCUPANCY (FIRST POSSESSION)
RULE Possession: the controlling or holding of personal property, with or without a claim of ownership:
(1) an intent to possess on part of the possessor, and (2) her actual controlling or holding the property
○ First‐in‐time, first‐in ‐right
○ Constructive possession has the same effect in law as actual possession but is not actual
possession
RULE Capture of Wild Animals: actual possession of a wild animal with its freedom restricted gives
property rights
○ EXAMPLES:
 Pierson v. Post (dispute wasn't about the fox, it was value of the hunt, but hunter must have
possession before getting property rights)
□ Rule of capture designed to minimize disputes because unlikely that more than one
person can claim such possession or capture
□ Landowners ratione soli are deemed to have constructive possession of wild animals
on their property, even if a trespasser captured the animal by first possession
 Keeble v. Hickeringill (D maliciously interfered with P's lawful use of his land, the damages
not rewarded for lost ducks ‐ for D interfering with P's use of his land for pleasure or profit)
□ Must show malicious intent is bad for society, not that it only creates competition
 Ghen v. Rich (whaler granted possession of whale because whaling custom says the whale
killer owns it, not the person who finds it)
□ Court says whaling would stop if people didn't have assurances that the fruits of his
labor could be appropriated by any chance finder
□ Economic policy concerns with rewarding and encouraging productivity, and
minimizing free riders
□ Minimizing disputes, maintaining social order
○ Rule of capture is based on open access to the Commons
 Open access = access is open to all members of a particular community, but not to all
outsiders
 Rule of capture establishes ownership of a resource once it is withdrawn (i.e. fisher owns
fish he catches in an open access fishery)
○ Problems with free riders depleting from investment rather than trying to improve it
 Individuals only think of their slight gain, not the net loss to society
 So internal arrangements or control by a private owner / the state necessary to regulate
open access resources
"COMMONS" DEFINITIONS:
○ Tragedy of the Commons ‐ no one has the right to exclude anyone else, and thus everyone will
exercise his right of access
○ Tragedy of the Anticommons ‐ too many have the right to exclude, so no one is able to use the
resource
○ Problem of the Semicommons ‐ when a given resource is subject to private exclusion rights in
some uses, but open access for other purposes ‐ people incentivized to favor their part of the
semicommons and trash the other parts
BY CREATION
RULE Creation: the first to create some new or novel thing is rewarded with a right exclude others from
using it
○ Main reason for creating property rights in info is to provide incentives for producing more of it
○ Need to protect so there is incentive to create, but not overprotect which would limit competition
and raise prices
○ EXAMPLES:
 Hot News ‐ International News Service v. Associated Press (court finds quasi‐property right /
unfair competition because this is an unauthorized interference w/ AP's legitimate business
precisely at the point where profit is to be reaped)
□ Property right not against the whole world, just the competitor because the gains /
profits are at issue, not the property itself
 Patents ‐ Trenton Industries v. A.E. Peterson Manufacturing Co. (no patent protection
because idea not inventive enough so no infringement)
□ Was product of mechanical skill , not exercise of inventive faculty
□ Court does allow protection to a limited degree by law of unjust enrichment
 Something of a quasi‐property / contract right ‐ a party is liable for use and
must pay compensation if he appropriates an idea and uses it for himself
□ Depends on if there has been unjust enrichment ‐ patentability of idea irrelevant
BY ACCESSION & AD COELUM
RULE Accession: Ownership given when someone mistakenly takes up a physical object that belongs to
someone else and transforms it through his labor into a fundamentally different object
○ Accession appears to involve the perception that one thing bears such a prominent relationship to
another thing that possession of the one is also possession of the other
○ EXAMPLES:
 Wetherbee v. Green (Wetherbee's trespass wasn't willful ‐ he thought he had permission,
and he converted the wood into something much more valuable so the hoops belonged to
him now)
□ Ultimately comes down to whether trespass was willful or not
 If deliberately take something and convert it, must give new thing back to
original O ‐ even if value has changed significantly by addition of labor or money
 If wrong is involuntary, original O can't reclaim if the property has been
transformed into something substantially different
◊ Enforcing original ownership with liability right (compensation for value
of what you gave up or lost) rather than property right
◊ The good/bad faith consideration deters theft
► But couldn’t argument be made that the value of what you lost was
the value of it transformed, rather than the its actual value when
taken?
◊ Want to encouraging manufacturing
► Court says degree of transformation not about physical changes,
but about how much value is added
RULE Fixtures: a thing which was originally a movable chattel, is by reason of its annexation to,
application and association in use with land, and intent of the party making annexation ‐ regarded as
part of the land
○ EXAMPLE: Strain v. Green (the seller's secret intent to keep those items does not mean they are
fixtures; intent is inferred by the circumstances)
RULE Ad Coelum: "to whomever the soil belongs, he owns also to the sky and the depths"
○ Applies to resources discovered beneath the surface, i.e. minerals, oil, gas deposits, or caves
○ EXAMPLE: Edwards v. Sims (a court can order a trespass onto someone's property when necessary
to determine if that person is himself trespassing ‐ if the cave was partly under Lee's property,
Edwards would be committing a series of continuing trespasses under ad coelum)
RULE Accretion: Gradual change in banks bordering running water; boundary remains at the center of
the new stream, so owner's area may vary, Nebraska v. Iowa
RULE Avulsion: sudden change of the banks of a stream such as when a river forms a new course and
destroys or creates new banks; boundary remains as it was in the center of the old channel
RULE Adverse Possession: if you enter land which, act like you have a claim of right, and remain there
for a long enough period of time, you can take title of the land, have right to exclude even the original
owner; 5 requirements:
1. Actual possession ‐ give true owner notice and starts SoL
2. Open and notorious ‐ give community notice by buildings, fences, crops, etc
3. Exclusive
4. Hostile or adverse
5. Continuous
○ Even if a owner has superior title, she may lose possession if the SoL for challenging the original
unlawful entry expires
○ Adverse possessor (AP) gets a new title after SoL expires (usually 10‐40 yrs)
 If there is a chain of valid consensual transfers, current AP can count the time of others in
the chain of title to meet statute of limitations
○ The lowest transaction cost solution is to let the person use the land (consent) ‐ if you let them
use the land, it is not "adverse" possession
○ EXAMPLES:
 Lessee of Ewing v. Burnet (Burnet probably entitled to AP even though he didn't actually live
on the property; lived across street and sold rights to gravel to some while refusing to
others, thus possession is actual & continuous, and outside world recognizes you as O)
 Carpenter v. Ruperto (Ds hold record title to land, P used the land for 25 yrs ‐ but no AP
because possession of the property was done in bad faith by P)
□ But most jurisdictions don't care about good faith
 Howard v. Kunto (every deed in the neighborhood was one off, AP established even though
they only used the property as a summer house ‐ continuous occupancy depends on the
circumstances)
□ Privity is established where successive purchasers received same mistaken deed and
tacking allowed if privity exists
Policy and purpose behind adverse possession
 Designed to protect reliance interest
□ Loss aversion / the endowment effect ‐ would be worse for AP to lose what he
essentially has than for title owner to gain something he essentially doesn't have
□ "Efficient breach", makes it so a plaintiff doesn't try to "buy" a lawsuit
 We want land put to its best use, discourage absent TOs ("you snooze, you lose")
□ Gets rid of gatekeepers who won't do their job in favor of gatekeepers who will
BY FIND & DISCOVERY
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ A finder of lost property is a person who (1) takes control of the lost property and (2)
has the intent to maintain possession of the property ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
RULE General Finder's Rights: a finder of lost property has greater rights to the found property than the
whole world, except the rightful owner, a prior or rightful possessor, or a person holding through the
rightful owner or rightful possessor
○ EXAMPLE: Eads v. Brazelton (no possession when dude just marked the ship, need actual taking
with his intent to possess; certain degree of due diligence required in first possession claims)
BY FIND ‐ SEQUENTIAL POSSESSION
RULE Sequential Possession: finder (sequential possessor) has title good against all the world except the
original (rightful) O or a prior possessor
○ First possession = usually resolved based on actual possession
 But sometimes actual possession isn't necessary – i.e. constructive possession
 And sometimes it doesn't count – i.e. abandonment
○ Present possession gives title against all the world except prior possessors or successors in title
 Sequential possession rejects jus tertii (3rd party rights) defense (unless you received title
from that party)
○ All of these hypos are replevin cases ‐ suits for possession, not money damages
 Therefore if plaintiff wins, no one else can sue original def
 If plaintiff suing for money and wins, someone else could sue both plaintiff and original def
○ All of these hypos ignore the passage of time
 Dealt w/ under adverse possession
○ All of these hypos ignore where the thing is found / owner of place where thing is found
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Resolving all of these situations by looking at who had it first‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
EXAMPLES:
○ Armory v. Delamirie (F¹ v. Th²)
 A finds ring; B steals it from A; A sues B. A wins because he has greater rights than B
□ Want to discourage theft, protect society from thieves, and protect Os who can’t
prove they are Os, good vs. bad people
□ True owner likely to find the 1st finder
○ Clark v. Maloney (F¹ v. F²)
 A finds ring but loses it. B finds it. A sues B. A wins because A had it first, and without
abandoning or selling it, A has superior title
○ Anderson v. Gouldberg (Th¹ v. Th²)
 B took ring from A; C took ring from B; B sues C. Doesn't matter that C can prove A has a jus
tertii (3rd party) claim, it's irrelevant to the dispute between B and C
□ If we don't give ring to B, we encourage more thievery
○ (Th¹ v. F²)
 A finds ring. B steals it and loses it. C finds it. B sues C. Most likely B wins even though he
is a thief because jus tertii claim again not relevant between B and C
○ (F¹ v. F²)
 A finds rock, looks at it but then drops it; B finds same rock, sees it is valuable and takes it; A
sues B. B has burden of proving A abandoned it, which means proving intent to abandon ‐
difficult to do
○ (F/S¹ v. B²)
 A finds bike, sells it to B; A sues B saying he had it first. Obviously A gave up possession
○ (S¹ v. Th²)
 A had bike, sold it to B; C steals it; A sues C. C will claim A gave up possession of bike
□ But what about the rule that 3rd party rights don't matter (jus terti) ‐ why can C use
grant to B to wipe out prior possession?
○ (B¹ v. F²)
 A leaves B a note saying he can have A’s bike, before B gets there, C sees bike and takes it; B
sues C. C might seem to have 1st possession, but because of consensual transfer, B was in
prior constructive possession
□ Land transfer often happen away from land, but we don't allow a 3rd party to claim the
land just because they got to it first
○ Sweep finds jewel, gives it to apprentice who gives it to jeweler
 Sweep wins b/c no transfer of possession, only a bailment ‐ custody transferred but title not
transferred
 Agency ‐ apprentice took the jewel on behalf of his employer (jeweler) ‐ so apprentice's
prior possession claim counts for jeweler
PUTTING IT ALL TOGETHER ‐ COMPETING PRINCIPLES OF ACQUISITION
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Competing principles of acquisition cases turn on which of two rival claims of
possession the court finds more compelling in given circumstances and context ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
GENERAL RULE is finder wins, but LO prevails in certain exceptions:
○ When the thing is mislaid
○ When finder is a trespasser / dishonest
 Maybe when finder is agent of somebody else
○ When LO is in or on his land (active possession of land)
○ When LO knew the thing was there (constructive possession)
○ If you deliberately put something down in LO's home (similar to bailment)
RULE Landowners vs. Finder/Trespasser: LO has constructive prior possession of things found on his
land as against trespassers
○ EXAMPLE: Fisher v. Steward (plaintiffs were trespassers who had no property rights to the land or
the tree, the bees, or honey – doesn't matter they marked it, giving them rights would infringe on
the LO's right to exclude)
 Extension of ad coelum because the bees and honey in Ds trees kind of like underground
minerals belonging to the owner of the soil
 US courts very sympathetic to the notion that ownership of bees goes w/ ownership of the
land, perhaps because it cannot be moved off land, a little less sympathetic to wild animals
RULE Landowner vs. Finder/Occupant: finder of lost articles, even when they are found on property, in
building, or with personal effects of third persons, becomes O against all the world except the true O
EXAMPLES:
 Goddard v. Winchell (plaintiff owned land, leased it to E; aerolite fell onto land and was dug
up and sold by E to defendant ‐ plaintiff wins because the general occupancy rule does not
apply because aerolite was not lost or abandoned, it was part of the earth, thus similar to
ad coelum
□ Same with gains or losses by accretion, new deposits become the property of the O
 Hannah v. Peel (RARE CASE ‐ finder/occupant is owner of brooch because brooch was lost
for considerable time, as opposed to accidentally misplaced)
□ Finder reported to police, then came back to reclaim when no one else had
(reinforced that true O wasn't coming back)
 Court implies that LO might have a superior claim against a dishonest finder
□ LO had never actively possessed the house
 Implies that if LO was living at home at the time, would have won
□ LO had no knowledge of the brooch ‐ so not even constructive possession
 Bridges v. Hawkesworth (finder of money in a shop wins against the shop‐owner, because
unlike a homeowner, the shop‐owner was not expected to have exclusive control over
everything in the shop)
RULE Treasure Trove: finder is awarded title to get treasure back into circulation ‐ policy overrides the
general rule (also assuming illegality on part of LO)
PROPERTY & PERSONHOOD
General RULE Human Body: No one can own another person because inalienable self‐ownership
○ EXAMPLES:
 Newman v. Sathyavaglswaran (next of kin have a property right in the body parts of their
deceased relatives – for the purposes of "cannot be deprived of property without due
process")
□ Right to protect the dignity of the human body, right to transfer body parts or refuse
to allow their transfer (right to withhold consent) are property rights
□ This bundle of sticks qualifies as "property" for due process purposes and the state
cannot redefine what is property
 Moore v. Regents of the University of California (spleen cells are not property so conversion
claim is not valid ‐ liability based on fiduciary duty / informed consent theories sufficiently
protects patient's rights)
□ Because so tied up with personhood, body parts are personal, not fungible, property
□ Chilling effect on med research resembles anticommons problem – too many people
have veto power, so social resources are under‐exploited
□ Judge Arabian's concurrence says people should not be able to sell their body parts
due to indignity of such a market
 But dissent says this market already exists already (sperm, plasma, ovaries) and
now the creator of the body part gets no say in where it goes / cut in its value
 Moore compared to Newman 
□ Could lack of informed consent be re‐characterized as a DP claim?
 Newman might not apply to living persons
 Moore turns partly on the notion of voluntary abandonment – neither the
deceased nor her parents consent to the taking in Newman
 "Property" right under DPC is not the same as "property" under conversion law
 CONCLUSION is that "property" must be defined by reference to its surroundings and its
consequences
 Hecht v. Superior Court (sperm counts as property; "at the time of his death, decedent had
an interest, in the nature of ownership, to the extent that he had decision‐making authority
as to the use of his sperm for reproduction")
LIMITS ON OWNABILITY AND ALIENABILITY
Radin – personhood theory
○ Two types of property:
 Fungible  used for achieving other goals (i.e. money)
 Personal  have a connection w/ the property, painful to lose (i.e. wedding ring)
○ Characterization of property becomes difficult when dealing w/ things that are intimately
connected to personhood – leads to a splintering of property rights
 Might provide support for Arabian – we should protect an interest that shouldn't be
commoditized
Demsetz – explanation of private property rights in economic terms
○ Courts should recognize new property rights when benefits of internalizing the costs / benefits of
exploitation outweigh the costs of recognizing the new property rights
○ Tragedy of the commons, the law gives people reassurance that they will not lose out if they wait
till tomorrow
 Get a fatter beaver, a taller tree, a riper fruit
 Once medical advances made cells valuable, question becomes do the gains of recognizing
patient's property right outweigh the costs of doing so?
□ Majority says no – costs would be great
PUBLIC RIGHTS
RULE Public Rights: of the primary purpose of the land is to benefit the public, the resources are too
public to be parceled out to private ownership
Navigational Servitude = public has a right of navigation to navigable airspace and navigable waters
○ Must remain accessible equally to all members of the community
NAVIGABLE AIRSPACE
RULE Navigable Airspace: "flights over private land are not a taking, unless they are so low and so
frequent as to be a direct and immediate interference with the enjoyment and use of the land"
EXAMPLE: United States v. Causby (low‐flying military airplanes causing chickens to not lay eggs qualifies
as a taking because there was direct injury to Causby)
NAVIGABLE WATERS
Public Trust Doctrine: state responsible for protecting the public's right to use navigable waters, even
when the land below the water is privately owned; state cannot relinquish power to private parties
EXAMPLE: Illinois Central RR v. Illinois (extended public trust doctrine to waters that are non‐tidal but
navigable (i.e. privately‐owned fishing streams became very difficult to establish)
PUBLIC TRUSTS AND CUSTOMARY RIGHTS
RULE Public Trusts:
○ Be critical of attempts to surrender a public resource to private entity
○ Public trust is violated when primary purpose of leg. grant is to benefit a private interest
○ Any attempt by state to relinquish its power over a public resource should be invalidated
○ EXAMPLES:
 Lake Michigan Federation v. US Army Corps of Engineers (primary purpose of public land is
to benefit public; cannot grant public land to private university even if there are incidental
benefits to the public ‐ main purpose was new athletic building, not the public paths Would
include public paths and areas as well as private athletic facilities (to which public would
have access subject to Loyola's right of ownership)
 State of Oregon ex rel. Thornton (Private O's title included dry sand beach ‐ but public had
historically used it thus acquired an easement, so state has an equitable right to protect
public's enjoyment)
Customary Rights Doctrine  Blackstone's 7 Factor Test:
a. Long use / Exercised without interruption / Peaceable use, free from dispute / Reasonable use /
Certainty / Obligatory recognition of custom / Can't be inconsistent with or repugnant to other
laws
 I.e. court says public acquired an easement ‐ so exception to general trespass law, not
repugnant to it
The 3 Approaches to Treating the Commons (Public Areas & Rights)
a. Public Trust ‐ applied in Illinois Central RR v. Illinois
 Critics of public trust:
□ Inherently unjust and disruptive destruction of private property rights
□ If the public wants the lands so bad, they should have to purchase them from the
private owner
□ Uncertainty about property rights invites conflicts and squanders resources ‐ high
transaction costs
 Who should manage the ocean or the air
◊ Look at the big island of waste in the Pacific Ocean ‐ nobody owns it but
everybody suffers from it
 Sometimes government steps in when there is a market failure ‐ i.e. monopoly
 Sometimes government must be a manger when individual stakes are too small
to express their preferences ‐ economies of scale
 Traditionally, only 2 points of view ‐ completely government or private owned
□ But what about toll roads that are privately owned, open to all members of the public,
and the owner could only charge tolls not what the market could bear, but only
enough to reimburse his expenses?
 Well, what fucking incentive does he have to manage it properly??
b. Prescriptive ‐ discussed in State of Oregon ex rel. Thornton
 Argument against prescriptions ‐ what's wrong with holdouts?
□ Private owners should be able to benefit from their property
□ If it's worth enough, the market will take care of the problem
 Have the holdout person killed if it's that big of a deal ‐ rational?
c. Customary Rights ‐State of Oregon ex rel. Thornton
PROTECTING RIGHT TO EXCLUDE
CRIMINAL LAWS PROTECTING REAL PROPERTY
○ Criminal law provides extensive protection to property, i.e. larceny
○ Provides the "backstop" of ownership rights that is critical to maintaining a system of private
property
 Property Os would be overwhelmed if had to enforce their own rights
 Os would often resort to self‐help
RULE Larceny: A trespassory / taking and asportation / of the personal property / of another / with the
intent to deprive him of it / permanently (or for a long period of time)
EXAMPLE: People v. Olivo (doesn't matter a shoplifter was apprehended before leaving the store ‐
today's definition of "taking from possession" simply means a customer who crosses the line between
the limited right she has to deal with merchandise and the store owner's property right)
○ Just concealing with suspicious activity is enough to show intent sufficient for a prima facie case
CIVIL ACTIONS PROTECTING PROPERTY
○ Real Property
 RULE Trespass: used to vindicate the interest that a person in actual possession has in
exclusive possession of land (i.e. tenant v. squatter)
□ EXAMPLE: State v. Shack (no trespass when medical / legal workers went onto farm to
speak to migrant workers because the more you open your property to others
(particularly for economic purposes) the more you become subject to the legally‐
recognized rights and interests of those others)
◊ Employer may regulate access but cannot deprive workers of access to
things they need ‐ i.e. privacy, or interfere w/ his rights of life and
association
◊ Creates distinction: there is (1) private property and (2) private property
that isn't so private because you allow others on for your own economic
gain
 RULE Ejectment: used to vindicate the interest of a person who has title to land against a
person wrongfully in possession(i.e. landlord v. tenant)
 RULE Nuisance: protects the interest in use and enjoyment of land
○ Personal Property
 Trespass d.b.a.: applies to the forcible carrying off (asportation) of plaintiff’s goods
□ Not really used anymore
 Detinue: based on the unlawful detention of goods
□ Not really used anymore
 Trover: used to allege that def had wrongfully converted plaintiff’s goods to his own use
□ Eventually supplanted by tort of conversion
 RULE Replevin: used for recovery of wrongfully taking personal property
 RULE Trespass to Chattels: applied when there had been no asportation of personal
property, but def had injured or interfered w/ property while it remain in plaintiff’s
possession in some manner falling short of conversion
□ EXAMPLE: Intel Corp. v. Hamidi (No trespass to chattels because Intel cannot show
any harm done to the computer system)
 Invasion insufficient, harm required in trespass to chattel but not trespass to
land
◊ Because we bump into people or things all the time , whereas trespass to
land is less common and more avoidable
◊ No harm because sending letters does not harm a mailbox, or calling
people does not harm a telephone
□ Even if servers were on Intel's property, no trespass to land b/c intangible
interferences on land are not trespasses unless they cause physical damage
□ Electronic invasions maybe conceivable as trespass, i.e. spamming clogs servers
□ No nuisance either because servers are not real property in the sense that a person
cannot "affecting use and enjoyment" of a server
SELF‐HELP
RULE Self‐Help: A person in possession of property can generally use reasonable force "to prevent or
terminate an unlawful entry or other trespass upon land or a trespass against or the unlawful carrying
away of tangible property"
○ Jurisdictions disagree on whether reasonable force = deadly force absent physical danger
○ More controversial is the use of self‐help to recover property once possession has been lost
RULE Repossession: A landlord may prove a repossession is legal (and no liability) if:
i. The landlord had a legal right of possession
ii. The landlord used peaceable means of reclaiming possession
○ EXAMPLES:
 Berg v. Wiley (L claimed T breached lease so L changed locks and released property ‐ but Ls
means of repossession were forcible (violence would have erupted had T been present or
not restrained enough to resort to judicial process) and therefore unlawful
□ Two‐step analysis:
a) Did T abandon or surrender leasehold?
b) Was L's self‐help repossession of premises wrong as a matter of law?
□ The only lawful means to dispossess a T who has not abandoned or surrendered
property is to resort to judicial process ‐ which L did not do
 As a matter of policy to discourage people from taking law into their own
hands ‐ judicial determination avoids erroneous repossession and also
disruption to social order / violence
 Williams v. Ford Motor Credit Co. (repossession of car was legal because it was
accomplished without any incident that might provoke violence)
1) Legal right of possession based on default in payment on the car
2) Peaceable means of reclaiming possession because car was taken at 4:30AM and
plaintiff didn't provoke violence
More tolerance of / latitude for self‐help repossession of personal property as opposed to real property
○ Importance of right to exclude from real property
○ Move ability of personal property
 Court didn't want to disrupt the consumer market by chilling the sale of goods on credit
LAND
PERSONAL PROPERTY
Trespass
No harm required
Harm required
Self‐Help
(Landlord‐Tenant) ‐ (1) right of
possession & (2) peaceable means
(Seller‐Buyer) ‐ (1) right of possession & (2)
peaceable means
EXCEPTIONS TO THE RIGHT TO EXCLUDE
COMMON LAW EXCEPTIONS
RULE Necessity: privilege to enter land of another without consent in order to avoid serious harm
○ EXAMPLES: Ploof v. Putnam (necessity of saving life justifies docking so any interferences w/
personal property that would otherwise have been trespasses is excused)
 Defense of necessity shifts from a property rule  liability rule
 O retains entitlement, but does not have rule of absolute exclusion ‐ the intruder can use
the entitlement out of necessity, without O’s consent, but he must pay the O just
compensation for any damage
RULE Custom Right: right to hunt on unenclosed and uncultivated lands has never been disputed, and
has been universally exercised
○ EXAMPLES: McConico v. Singleton (no right to exclude others who are hunting on your land partly
because this was back in the day when there was necessity to hunt for food and partly because
custom of hunting)
 Law now  if you haven't posted on your land, people can hunt / fish there
□ Posting allows you to withdraw your land from the commons
 Economics of hunting have changed, now hunting is more of a recreation
activity, so hunters now may be willing to pay for use of land
RULE Public Accommodations: When property Os open their premises to the general public in pursuit
of their own property interests, they cannot exclude people unreasonably – cannot act in an arbitrary
or discriminatory manner towards persons who come on their property
○ EXAMPLES: Uston v. Resorts International Hotel (casinos can't prohibit people based on card
counting because Gaming Commission didn't recognize as a reason (did not explicitly state that in
its rules ‐ which are expansive)
 Right to exclude can't interfere w/ another's constitutional rights
□ But only applies to state action ‐ so private property Os could still discriminate on any
basis ‐ unless it is a public accommodation
RULE Anti‐Discrimination: The power of the state to create and enforce property interests must be
exercised within the boundaries defined by the 14th Amendment ‐ state cannot enforce discrimination
○ EXAMPLE: Shelley v. Kraemer (14th Amend would be violated if the state judicial enforced a
private racist covenant, because the action would deny equal protection to plaintiffs)
 But also important personhood argument ‐ the restriction on the sellers right to sell their
house to whoever they wanted was against the natural property right to transfer the title
OTHER POWERS OF SOVEREIGN OWNERS
LICENSES
RULE Licenses: A license is a waiver of owner's right to exclude, like a permission slip
○ Mere licenses are not property rights ‐ does not need to satisfy SoF and can be made orally
○ But you can still create a property right by having an interest in the thing on the land to which you
got the license, or a grant
○ EXAMPLES:
 Marrone v. Washington Jockey Club of DC (the ticket purchase made a contract, but is not a
conveyance of an interest in the race track, so not a property right)
 Wood v. Leadbetter (a license is always revocable, but if coupled with a grant it is not ‐ i.e. a
license to hunt can be revoked but a grant to take the killed deer makes it irrevocable)
 Hurst v. Picture Theatres, Ltd. (it is assault and false imprisonment when you kick a man out
of the theatre after he paid for the seat and was behaving reasonably ‐ because the ticket
purchase was a contract or license, but with it came an implied grant or interest to be able
to sit through the performance)
□ Public policy ‐ the movie theatre could just sell and revoke the tickets at will if they
had an absolute right to exclude
 ProCD, Inc. v. Zeindenberg (by purchasing the software, Zeidenberg agreed to the license or
contract, which is not a property right ‐ this is not a copyright because it is not a creative
expression and not a patent because it is not new)
□ Contracts only affect the parties ‐ but copyright laws are property rights against
"everyone in the world"
□ Price discrimination is ok, that's what businesses do
□ Contracts can be printed in tiny script outside or the software companies can just
write, by buying this software, you agree to the shit inside
□ Transactions where money precedes the communication of detailed terms are
common ‐ airline tickets, cruise line tickets
BAILMENTS
RULE Bailments: A bailment is the transfer and delivery by an owner or possessor (the bailer) of
possession of personal property to another (the bailee):
a. whose purpose in holding possession is often for safekeeping or for some other purpose more
limited than dealing with the object or chattel as would its owner, and
b. where return of the object or chattel in the same, or substantially the same, undamaged condition
is contemplated
RULE Standards of Care:
a. When benefit to bailee is slight, care is slight, liable only for gross negligence
(i.e. gratuitous bailment like taking care of something or your friend, finders, bailment
created by mistake)
b. When benefit is equal, duty of reasonable care under the circumstances and liable for negligence
(i.e. valet driver or hotel guy ‐ you give them money to take care of your shit)
c. When bailment benefits only the bailee, the merest neglect or damage makes the bailee liable
(i.e. borrowed items)
○ EXAMPLES:
 Allen v. Hyatt Regency ‐ Nashville Hotel (the parking lot had a duty as a bailee because the
facts made it more than a license or hiring of space)
□ No bailment when it was just an unattended parking lot with meters, but the
attendant and the ticket and the one entry/exit in this case meant that there was an
expectation the attendants would protect the cars
□ Ticket says no responsibility but who cares, it was not read and not a contract ‐
consumers don't shop around ‐ we are rationally ignorant of these stupid facts
 Cowen v. Pressprich (a window marked "delivery of securities" does not qualify as an
invitation, so throwing a bond through the window does not mean there is a transfer of
title, thus no obligation as a bailee; and involuntary bailees don't have the same duty of
responsibility as a voluntary bailee)
□ No consent to the mistaking delivery, so no transfer of title, so no obligation as a
bailee
 Involuntary bailees are only responsible if they interfere with the property so
that an implied contract of bailment is created (if they kept [like a finder] the
letter then there might have been an implied contract of bailment)
 P has no right to bring suit when they could not compel D to keep physical
property and when the involuntary bailee did not use unreasonable or proper
means to rid themselves of the mistaking possession
 The Winkfield (a bailee has more rights to the property than anybody else in the world
except than the true owner, so the post office could sue The Winkfield for the lost property
of others)
ABANDONMENT, DESTRUCTION, & TRANSFER
‐‐‐‐‐‐‐ Owner sovereignty includes the right to abandon property, destroy, or transfer property ‐‐‐‐‐‐‐‐‐
RULE Abandonment: Abandoned property is that which an owner has voluntarily relinquished all right,
title, claim and possession with the intention of terminating his/her ownership, but w/o vesting it any
other person and with the intention of not reclaiming further possession or resuming ownership,
possession, or enjoyment
○ Absent proof to the contrary, possession is presumed to be in the party who has record title
○ EXAMPLE: Pocono Springs Civic Association, Inc. v. MacKenzie (even when the party obviously did
not want it anymore PA law didn't allow abandonment of real property when they still held title)
RULE Destruction: The taking of property by inheritance or will is not an absolute right, the state may
say what becomes of the property of a person, b/c death forecloses the deceased's right to control it
and a testator may not impose conditions that are uncertain, unlawful, or opposed to public policy
○ EXAMPLE: Eyerman v. Mercantile Trust Co. (the dead woman couldn't have her nice fancy house
burned down, per her will)
RULE Transfer: Every restraint on alienation of property is not invalid, but one is when it violates right to
transfer property at all
○ EXAMPLE: Lauderbaugh v. Williams (the membership requirement the plaintiff had to meet in
order to sell her house was invalid b/c it took away her right to sell her property and the control
over membership is arbitrary)
RULE Statute of Frauds: Any conveyance of land other than lease 3 years or less must be in writing and
signed by at least one party
RULE Delivery: No delivery = no gift, but you can still will property
○ Deeds must also be delivered
RULE Gifts in Causa Mortis: gifts in contemplation of death must be just as person is about to die, and if
the person lives, gift invalid
○ Gifts trumps a will or heirs
FORMS OF OWNERSHIP
Numerus Clausus: Property, unlike contract, is not freely customizable by parties but rather is
standardized into a closed set of approved forms
○ Designed to reduce costs b/c allowing one person to create an idiosyncratic property right, the
information processing costs of all persons who have or want this type of property right go up
○ Only those who are really willing to pay for it can do it (price discrimination or pollution tax)
MEDIATING CONFLICTS BETWEEN OWNERS: CONFLICTS OVER TIME
RULE Waste:
○ Affirmative Waste is when a life tenant takes some action to unreasonably reduce the value of
the reversionary or remainder interest (cutting down a few trees is ok, but not a forest)
 Open Mines Doctrine: any mining of minerals was waste unless mining had started before
life interest
○ Permissive Waste is the failure of a tenant to repair or upkeep property, or not paying taxes
○ Ameliorative Waste is where an act significantly increases the value of an interest ‐ but this is also
not allowed by most jurisdictions
 Compare Brokaw v. Fairchild (plaintiff can't tear down house because testator's grant
passed on "residence" not just land and plaintiff only has a life estate ‐ the house needed to
be preserved for the future interests ‐ even though a new house would increase value)
 With Melms v. Pabst Brewing Co. (OK to tear down the mansion because it was completely
surrounded by an industrial park and there was no value in preserving the house for
residential or business)
 Posner says courts should just apply simple rule of wealth maximization
□ If the life tenants' action would maximize the present value of the property for both
the life tenant and the reversion or remainder interest, then it should be permissible
 Present possessory O's rights are constrained by law of waste from exercising full rights of
ownership so that non‐possessory Os are protected
□ Doesn't matter that all future interests would be better off economically w/o house
□ Shows why life estate is often a bad idea ‐ ends up binding life tenant
RULE Restraints on Alienation: Complete restraint on alienation of a fee simple is void (even for a
limited time), but partial restraints are OK, still disfavored
○ Against public policy b/c basic premise of owner sovereignty is the right to transfer
○ But restrictions on alienation OK for life estates and generally OK for usage restrictions and
defeasible estates, see Mountain Brow Lodge v. Toscano (use restriction by lodge members only is
OK, but not sale/transfer restriction because it is an absolute restraint ‐ but no difference in
outcome because after removing the restriction clause, it just becomes a defeasible estate)
MEDIATING CONFLICTS BETWEEN CONCURRENT OWNERS
RULE Concurrent Interests: 3 ways where 2 or more people can have possessory interests in the same
property:
a. Joint Tenancy (which includes right of survivorship)
b. Tenancy in common (does not have right to survivorship)
c. Tenancy by entirety (only between husband and wife, includes survivorship and indestructibility)
RULE Joint Tenancy: each party has a single, unified interest in real or personal property
○ Survivorship ‐ if one dies, the other becomes the sole owner
○ Possession ‐ each entitled to occupy the entire premise
○ Equal Shares ‐ identical interests, identical shares ‐ cannot have 1/4 and 3/4
○ Created by single instrument (deed, will) and all tenants at same time
○ Destroyed or severed when one joint tenant conveys an interest to a 3rd party, remaining parties
still have joint tenancy and everything else becomes a tenancy in common
○ Leases do not severe
○ Mortgages usually severe, except in states that treat mortgages as liens, see Harms v. Sprague
(lien is only a security interest in the property, but doesn't change the title)
RULE Tenancy in Common: each tenant has a separate undivided interest
○ No survivorship ‐ each tenant can make a testamentary transfer ‐ interest passes to descendants
○ Unequal shares are allowed
○ Presumption is to favor tenancy in common over joint tenancy (as long as not married)
RULE Tenancy by the Entirety: Only 22 states use this ‐ survivorship, but no severance at all ‐ surviving
spouse gets complete interest
○ Divorce ends the tenancy in entirety and split according to tenants in common (equal shares)
Relationship Between Co‐Tenants
○ No duty to account ‐ i.e. one co‐T does not have to pay the non‐occupying co‐T half of what
normal rent would be
 Unless the occupying tenant ousted the other, see Gillmor v. Gillmor (Co‐T not liable to
other co‐T for rent by merely using common property as long as he doesn't interfere with
other co‐T right to occupy)
□ Ousting a co‐T requires an act of exclusion OR use that necessarily prevents another
co‐T from using his right in the property
○ Payments made by one tenant: missing co‐T not required to reimburse occupying co‐T for
repairs/improvements/taxes made to common property without consent of other co‐Ts
□ Unless other co‐Ts have stood by and permitted him to do so, see Gillmor v. Gillmor
○ Partition ‐ a tenant in common or joint tenant can divide the property or sell it and divide
proceeds, see Delfino v. Vealencis (if impracticable to physically partition property OR interests of
parties better served ‐ court can order a partition by sale)
 Presumption against partition by sale
MARITAL PROPERTY INTERESTS
RULE Community Property: any income or property from income (not gifts or inheritance) acquired
during the marriage is considered for the benefit of the community and equally distributed
○ Death ‐ if the spouse dies with a will, the will disposes of the property, if spouse dies without a
will, the spouse gets everything
 Exception with spousal/forced/elective share ‐ surviving spouse can renounce the will and
received either 1/2 or 1/3 of the estate, including real and personal property
□ To protect the surviving spouse from being "disinherited"
□ Length of marriage doesn't matter
○ Divorce ‐ marital property as defined by statute is subject to equitable distribution
 When marriage was short and there are less assets to divide up, courts often grant alimony
(help spouse who helped you) instead of equal division of assets
 But some jurisdictions say no maintenance award if capable of supporting yourself
 Income earned after marriage ends (future income) treated as separate property
□ Look at actual financial contribution in determining division of assets, not how that
contribution will affect future income
 But see O’Brien v. O’Brien (medical degree is marital property and subject to
equitable distribution, including the value of the degree ‐ based on future
earning capacity)
ENTITY PROPERTY: SEPARATING MANAGEMENT AND POSSESSION
LEASES
○ Leases are a de facto financing device (allows poor people to get things they normally don't)
○ Also, leverage resources so both landlord and tenant can concentrate their limited resources on
specific areas ‐ shopping mall (stores can't run the mall and the mall can't run all the stores)
○ Spreads the risk for both the owner (multiple tenants, all of them can't default); and the tenant
(might get a new job)
OLD COMMON LAW & INDEPENDENT COVENANTS
RULE Independent Covenants: Independent covenants model of the L‐T relationship was that all
covenants must be performed without regard to whether other covenants have been or can be
performed
○ EXAMPLE: Paradine v. Jane (don't give a shit that soldiers invaded the property and tenant was
kicked out, the tenant still owes rent ‐ two independent promises)
 Allocation of risk under a lease here is that tenant will get upside gain, so also takes
downside risk if something bad happens that isn't L's fault
THE RISE OF DEPENDANT COVENANTS & THE EMERGENCE OF THE MODERN LEASE
General RULES:
○ Statute of Frauds ‐ any lease for more than 3 years must be in writing and signed
○ Estates for Years ‐ any lease for a fixed period of time, must have fixed start and end dates and no
notice of termination is required (implied already in lease)
○ Periodic Tenancy ‐ lease continues at end of one period, unless either party terminates it with
notice (common law required one period of notice, most state statutes require 30 days notice)
○ Tenancy at Will ‐ no stated duration and can be terminated at any time by either party
RULE Tenant's Right of Possession: courts split, some require the L to deliver actual possession (new T
can sue L if L doesn't kick out T out), some require legal possession only (new T is on his own)
RULE Tenant's Right of Quite Enjoyment: if L or somebody else under L interferes with T's right to quite
enjoyment and use of the premises, this is a breach of covenant
○ L traditionally not responsible for other T's behavior, but recently L's held liable when the other T
is violating his lease, see Blackett v. Olanoff (T didn't have to pay rent because the loud ass club
next door had a lease that said it wouldn't disturb neighbors)
• RULE Implied Warranty of Habitability: residential T (not commercial) can terminate the lease,
withhold rent, or use rent to make repairs, but must provide evidence (such as breach of a building code
or substantial threat to T's health or safety)
○ No retaliatory eviction
○ EXAMPLE: Javins v. First National Realty Corp. (implied warranty of habitability applied even thou
T knew about the conditions at contract formation)
 Under CL, would have to show breach of duty, substantial and permanent deprivation of
enjoyment of possession and abandonment but we don't have all 3 here
 Now we treat the T‐L relationship as a contract: implied warranty of habitability + implied
duty and T's obligation to pay rent is dependent on L's performance of this duty
RULE Constructive Eviction: the T can stop paying rent if:
i. There is a breach of duty (i.e. repair some shit, or to stop night club from disturbing
tenants ‐ even by eviction of nightclub, see Blackett v. Olanoff )
ii. Substantial and permanent deprivation of T's enjoyment of possession & enjoyment
iii. Abandonment by T in reasonable period of time (T required to abandon premises because it
shows that conditions were sufficiently bad ‐ uninhabitable / unusable)
○ Note that traditional common law applies independent covenants to habitability of premises, so
usually the T cannot just stop paying rent, UNLESS T shows constructive eviction
 BUT modern statutes say T can withhold rent because there is an implied warranty of
habitability by L
RULE Breach of Lease in Commercial Settings (Treated as Breach of Contract):
○ EXAMPLE: Medico‐Dental Building Co. of Los Angeles v. Horton & Converse (L's promise not to
lease to another pharmacy and T's promise to pay rent are dependent, the restrictive covenant
was not incidental, it went to the whole consideration of the covenant)
 The breach was material ‐ evidenced by the "rider" that separately stated the consideration
in exchange for both parties, AND both parties knew the large doctor population was the
only reason for the lease
 The tenant had several legal options here:
1) Rescind the lease due to the landlord's breach and not pay any more rent
2) Continued the rent and sued for lost profits at the end of the lease
3) Treated the breach as the end of the "contract" and sued for damages
 This represents a risk spreading between tenant and landlord
RULE Abandonment: if T abandons and doesn't pay rent, L has 3 options:
a. Treat as surrender and accept  L can sue T for RentL – FMRV
 RULE Surrender: need Ts overt act of surrender and Ls overt act of acceptance of surrender
□ See In re Kerr (L re‐letting the property was implicit acceptance of surrender)
 T released from obligations under lease
 But L can sue for damages – difference between rent due under lease and fair market value
b. Re‐let premises for T  L can sue T for RentL – RentL2
 Makes sense when market has gone down ‐ can sue T for difference between his rent and
current rent collected from second T (not fair market value)
□ But see In re Kerr (L says he took option 2 to re‐let, but since the new lease was longer
than the original, court says he took option 1)
c. Do nothing and sue for rent  L can sue T for RentL as it comes due; no duty to mitigate
 But see Sommer v. Kridel (New Jersey says there is a duty to mitigate ‐ shifting to contract)
□ Court also says unfair to T and wasteful not to re‐let
□ L now required to mitigate by taking reasonable steps to re‐let premises
□ Must show apt along w/ other available apartments
□ But can still reject prospective Ts on reasonable grounds
TEST HYPO: Lease 2 months $1000/month, 12 month lease, after 2 months the landlord changes the
locks, advertising starts in month 5, landlord signs a new lease for the final 5 months, but only at $900
○ Surrender Method:
 The acceptance is the changing of the locks by the landlord so the surrender is good
 Tenant owes $2000 dollars, from the time he left to the time landlord accepted his offer
○ Reasonable Efforts to Mitigate:
 The reasonable amount of time seems to be 1 month, i.e. the amount of time that it actually
took for the landlord to find a new tenant
 The defaulting tenant is going to be liable for 1 month of downtime ($1000) and the $100
difference in rent for remaining months on his lease (9 x $100)
TEST HYPO: T waives IWH rights for a $200 reduction in rent b/c of some defect in apartment, but then
stops paying rent b/c claims Code violations
○ Does Javins apply?
 Conditions existed at time of lease but most courts say Javins applies even to obvious
defects present at time of lease
 L will argue that T knowingly waived this right, bargained around poor conditions
□ But IWH means Ts must get at least our societal standard of housing ‐ courts won’t
allow them to make bargains for sub‐standard housing
□ This will decrease the supply of low‐income housing b/c Ls will either take sub‐
standard apartments off the market or will fix them up and then raise rent
 Those that can’t afford to sue will be put on the street, and those who can
afford to sue are those that could afford higher rent anyway
 But also have to think about cost to society of having sub‐standard housing, i.e.
disease, vermin, fire hazards, etc
 Here public policy overrides certain K provisions ‐ court reading Leg
determination (Housing Code) into lease
 Could Leg just establish rent control?
◊ Economists agree that rent control is bad for the economy ‐ some stay in
rent‐controlled apartments who could afford to move, some are still
closed out of the market
○ So if no waiver, Javins applies, and T has remedies:
i. Could stay and withhold rent until violations fixed
ii. Could sue L to fix apt (specific performance)
iii. Also could receive K damages
○ But Javins says premises may still be worth something
 Court must determine FMRV w/ defects ‐ which may be what T had contracted to pay (and
was here!)
TRANSFER OF THE LEASEHOLD
RULE Transfer of Leases: Unless the parties agree to otherwise, either may transfer his interest
○ L can transfer his reversion interest to 3rd party during term of lease
 When L transfers the reversion, transferee takes property interest subject to T's leasehold
interest
○ T can also transfer his leasehold interest
 Sublease: T carves out an interest for sub‐T which is smaller than T's interest
 Assignment: T transfers entire original interest to assignee (must be entire remaining time)
□ Significance is because assignment means new T1 is liable for rent to L, but sublease
just means that T1 is responsible only to original T
□ See Jaber v. Miller (T has to pay L for rent, not T1, because T‐>T1 was an assignment,
thus L and T are still in privity of contract but there is no privity of contract between L
and T1 (but there is privity of estate)
RULE Running of Benefit or Burden: The burden runs if the promise touches and concerns the
promisor's assignee's interest in the land (promisor's assignee can sue to enforce); the benefit runs if the
promise touches and concerns the promisee's assignee's interest in the land (promisee's assignee can
sue to enforce)
○ EXAMPLE: Mullendore Theatres, Inc. v. Growth Realty Investors Co. (a lease covenant for benefit
of promisee's assignee does not run with the land unless it touches or concerns the land, and in
this case a security deposit was not a benefit to the land) ‐ though isn't a deposit for the benefit
for the land (whether to prevent damages or to insure timely rent)?
Rights after T assigns to T1:
○ T still liable to L , regardless of runs with land or not
○ T can sue T1 if T1 does not pay rent because T1 becomes primarily liable and T is secondary liable
○ T1 liable to L only for promises that run with the land (i.e. promise to pay rent but not contract for
security deposit)
○ L1 is liable for any covenants that run with land, i.e. repairs and upkeep
RULE Limitations on Transfers: L can't withhold consent arbitrarily, standard of commercial
reasonableness
○ EXAMPLE: Kendall v. Ernest Pestana, Inc. (L's refusal of sublease b/c wants to sublet himself in
order to take advantage of increase in FMRV is not commercial reasonable)
 L withholding consent in order to claim a surplus is not a valid reason to refuse
 Reasonable bases for refusal of sublet: poor credit, if T1 was going to use premises for
something costly to other Ts, illegal, etc
 Kendall doesn’t say whether "commercially reasonable" standard will apply to residential
leases, but at a minimum, residential should be just plain reasonable
□ Ls get a little more freedom in residential property
 Often a more personal relationship
 Most residential Ts not subletting for profit (as opposed to T in Kendall)
 Argument to extend higher standard to residential property is discrimination
COOPS, CONDOS, & COMMON INTEREST COMMUNITIES
RULE Common Interest Communities: one party has possession, but another (often managerial
association) has control over certain aspects of that possession (i.e. restrictions on sale, restrictions on
use)
○ Possessor deemed to be O in a fuller sense than T ‐ own in fee simple absolute
○ Managing entity typically agent not just for itself, but in interests of all residents together
○ O of a particular unit doesn't get all of the sticks in the bundle of usual ownership, she gives up
some individual autonomy for a form of collective self‐governance
RULE Restrictions: courts must enforce the covenants, conditions, and restrictions contained in the
recorded declaration of a common interest development unless unreasonable
○ EXAMPLES:
 Nahrstedt v. Lakeside Village Condominium Assoc. (a pet restriction contained in the
recorded declaration of a condo is not enforceable because the presumption is that the
restrictions in the master deed are reasonable because was designed to benefit the
community as a whole)
□ Restrictions should be struck down only when arbitrary or in violation of law or public
policy
□ Owners obviously wanted to maximize profits (business judgment rule), thus do what
is good for the entire community ‐ the bitch should of lived somewhere else
 40 West 67th Street v. Pullman (OK to kick T out by coop board b/c of his objectionable
conduct because the business judgment standard governs a coop's decision to terminate a
tenancy
□ Defer to board's judgment as long as board acts:
1. for purposes of coop
2. within the scope of the board's authority
3. in good faith
TRUSTS
RULE Trusts: 3 legal persona + at least 1 thing
a. Settlor is the person who creates the trust
b. Trustee is the person who receives the trust and responsible for management and control
c. Beneficiary is the person the trust is meant to benefit
RULE Settlor's Rights: The founder of the trust is the absolute owner of his property
○ EXAMPLE: Broadway National Bank v. Adams (the founder of the trust had a right to dispose of it,
absolute gift to his brother, or gift with restrictions or limitations ‐ such as this case where income
of the trust was created for the benefit of the debtor brother; thus could not be reached by
attachment before it was paid to brother)
 Except when you can't figure out WTF the creator of the trust wants, see Wiber v. Ownes (if
the terms of the trust are incomprehensible, to find cy pres ("close enough"):
□ Needs to be construed to the general intent
□ And specific intent is impossible to satisfy or that would violate a public policy
RULE Duty of Executer (Trustee): trustees have a duty to carry out the express terms of the trust, the
duty to prudently invest (do what is good for) trust assets, the duty of loyalty, the duty not to be in a
conflict of interest position (i.e. to profit), the general duty to administer the trust in the best interest of
the beneficiaries
○ EXAMPLE: Rothko v. Reis (2 executors of artist's estate had BIG conflict of interest ‐ basically
ripped them off ‐ so they had to pay appreciation damages because the estate assets are sold
below value)
 The 3rd executor breached the trust by failing to exercise ordinary prudence when he
witnessed the others' divided loyalties ‐ so he is only liable for damages of cost when sold
 Note that the future value of the paintings FAR exceeded what the "appreciation value" that
the courts determined ‐ today the paintings would be worth $100 million instead of $15
TITLE RECORDS AND TRANSFERS
‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ Nemo Dat is the principle that "no one can give that which he does not
have" ‐ so the transferee's rights are derived from those of the transferor ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐
RULE Bona Fide Purchasers UCC: is exception to nemo dat, a bona fide purchaser may have good title to
stolen things, if he doesn't know it was stolen, paid value for it, and the title is "voidable" instead of
"void"
○ EXAMPLE: Kunstsammlungen Zu Weimar v. Elicofon (NY law says owner of German art in NY, who
legally bought it, cannot have good title because only the true German owner has the right to title
in the property ‐ but questionable if the art was stolen per se)
○ EXAMPLE: Kotis v, Nowlin Jewelry, Oinc. (thief received the watch through a transaction of
"purchase" because the watch was given to him voluntarily)
 A straight up theft is not a purchase (void), but a swindle is a purchase (voidable)
 A transferor with voidable title can transfer good title to a good faith purchaser under §
2.403(a), the test for good faith is the actual belief of the buyer
 And the good faith purchaser must pay good value
○ RULE Estoppel Exception: when new owners are bona fide purchasers, if the property owner was
negligent in creating an estoppel, he should have to bear the consequences
EXAMPLE: Hauck v. Crawford (the land transfer was induced by fraud but the property
owner still couldn't get his land back because he was negligent in signing the deed)
□ This is a minority rule ‐ normally the bad party is missing, but it seems the court
might have been influenced by the fact that the property owner could raise an action
against the party that conducted the fraud
RECORDING ACTS
Proving ownership complicated as society moved away from nemo dat
○ Originally the system was that you needed to get the consent of the property owner, but then also
take possession of the property before you could assert your property right against a 3rd party
 Between the parties, it was a private contract that governed
 But against the rest of the world, the possession was necessary
RULE filing systems:
○ Registration resolves potential disputes at the time of the transfer
 More accurate, but more expensive and depends on lazy and incompetent government
workers
 Also leaves a racing problem in case of airplanes, boats, etc
 i.e. USPTO registration
○ Recording leaves disputes to be figured out after the transfer, when they arise
 Problem with inaccuracy, especially with art work because they just forge the recording too
Types of Recording Acts:
○ Race: the winner of the race prevails, the exception to the nemo dat principle
○ Notice: a subsequent bona fide purchaser wins regardless of he records ‐ unless he has notice
(actual, constructive, or inquiry), but a previously recorded interest gives constructive or "record"
notice
○ Race‐Notice: a subsequent good faith purchaser wins only if he has no notice AND records before
the prior instrument is recorded
○ Note to get protection from recording acts, a party must prove they paid "good value" for the
property, as defined in property ONLY, see Hood v. Webster (huge asshole of a brother gets land
even though he broke his promise to take care of landowner widow, because widow did not show
consideration in the property sense ‐ even though the nephews came to the land in order to help
the widow survive, consideration in property =/= detriment in contract law)
The Shelter RULE: O conveys to A, who does not record; then O conveys to B for value, who does not
know about A and records; once B prevails over A, B is given all the rights of ownership, including the
right to make normal nemo dat style transfers, so it doesn't matter if B gifts the property to C or C is
not a good faith purchaser
○ Exception is that B cannot transfer the property back to O, too many opportunities for collusion
The Wild Title: The recording only gives notice when it could be found using generally accepted
methods (i.e. grantee and grantor indexes)
○ EXAMPLE: Zimmer v. Sundell
 O conveys to A, A never records
 A conveys to B, B records
 O conveys to C, C records
 C wins over B, because C has no way of looking up A or B (A‐B deed is outside the chain of
title or "wild")
Adverse Possession Not Recordable:
○ EXAMPLE: Mugaas v. Smith (adverse possession trumps recording acts, even by bona fide
purchasers)
 Because requiring adverse possessors to record is counter‐policy ‐ most "good"
adverse possessions are accidental, so a recording requirement for adverse possession
would only encourage "bad" adverse possessors
THE LAW OF NEIGHBORS
EASEMENTS
Easements Rule: a contract in which an owner agrees to waive his right to exclude certain kinds of
intrusions by another
○ Non‐possessory interest in the use of another's land ‐ protected against interference by 3rd
parties, but no right to exclude
○ Dominant T = holder of easement (extra stick in bundle)
○ Serviant T = holder of land w/ easement (gave up or lost stick in bundle)
○ Affirmative easement is when the DT has right to make active use of another’s land that would
otherwise be a trespass or nuisance
○ Negative easement is when the DT can stop ST from doing something they would otherwise have
a right to do (i.e. DT can stop ST from blocking DT's light and air)
 EXAMPLE: Fontainebleau Hotel Corp. v. Forty‐Five Twenty‐Five (not a negative easement
because we are not treating this as an invasion of property, to do so would mean creating
an easement of light and no legal right to free flow of light, even in "spite" walls)
□ Why not just have spite fences versus spite fences? Policy of best use? Free
economy?
○ Easement appurtenant is when its benefit is intimately tied to a particular piece of land (common
law presumes this unless specified)
 Benefits DT in use and enjoyment of that particular piece of land
 Runs w/ the land, not the individual ‐ so it passes with land when land is transferred, but
only to the extent to which it was granted
○ Easement in gross is when the benefit is not tied to any specific land
 Benefits DT personally – but not in connection with any piece of land
 Not transferrable
RULE Creation of Easements: by express grant, implication, strict necessity, or by prescription
a. Express creation occurs with a deed or will and must be in writing per SoF
 EXAMPLE: Baseball Publishing Co. v. Bruton ("the exclusive right and privilege to maintain
an advertising sign" = easement, not a mere license)
b. Implied creation does not need to satisfy SoF, but requires:
 The land is divided up or severed so that O is selling parts
 The use for the implied easement existed before severance
 Easement reasonably necessary to enjoyment of DT
 EXAMPLE: O conveys house #1 and an implied easement is created because: (1) O was
owner of both houses before easement, (2) the use existed before splitting up the 2
properties, (2) the easement is necessary to reach the garage of house #1
c. Easement by necessity occurs when an easement over one parcel is "strictly necessary" to the
enjoyment of the other, requires:
 At some time the 2 parcels were owned by same O
 No prior use of easement before split required
 EXAMPLE: landlocked parcels,
□ Schwab (Plaintiffs say implied easement b/c of necessity, since their land is otherwise
landlocked)
 But plaintiffs made their land landlocked, court says no easement
d. Easement by prescription is similar to adverse possession ‐ requires SoL to run out (tacking
required) with actual use that is open and hostile, continuous and uninterrupted
 EXAMPLE: Warsaw (Improper to make a DT who gets easement by prescription
compensate other party (by paying to remove encroachments that interfere w/use of his
easement)
 EXAMPLE: Penn Bowling Recreation Center v. Hot Shoppes (Penn Bowling is overusing their
easement in a way that interferes w/ ST’s use – parking rather than merely driving, thus
injunction appropriate because using an easement beyond its scope is a continuing
trespass)
 Defeat prescription in same was as adverse possession ‐ give permission ‐ turns into license,
which is revocable at anytime
e. Easement by estoppel is DT relied on ST’s permission (i.e. OK for DT to use a path if DT builds a
house), and if the permission is revoked, DT will be harmed (can't get to new house)
 EXAMPLE: Holbrook (Easement by estoppel was established here because DT used the road
with ST’s express or implied consent ‐ relied on to build house)
 But if a easement by prescription AND estoppel ‐ give partial permission ‐ not an interest in
land, more of a contract/license to use
RULE Termination of Easements: never by words alone, must have intent plus conduct for
abandonment to be effective
COVENANTS & EQUITABLE SERVITUDES
RULE Real Covenants: covenant attached to fee simple property that under certain circs analogous to L‐
T doctrine of running covenants will bind successors in an action at law to recover damages
○ For benefits (so promisee's assignee can sue) of a promise to run w/ land:
1. Touch and concern
2. Intent for the burden to run
3. Vertical privity
○ Stricter requirements for burden (so promisor's assignee is bound) of a promise to run w/ land:
1. Touch and concern
2. Intent for the burden to run
3. Horizontal privity = relationship b/w original parties or else restriction is not binding on
subsequent parties
4. Vertical privity = if someone succeeds to same state as original promisor/promisee
□ If got lesser estate (i.e. life estate), no privity
○ When one or more requirement missing, might still be able to get an equitable remedy
RULE Equitable Servitudes: equity courts have been more accommodating in granting enforcement of
covenants by awarding injunction or specific performance instead of damages
○ Requirements:
1. Touch and concern
2. Intent for burden to run with land
3. Notice to subsequent owner
○ Privity is not required in equitable servitudes, 2 neighbors can make an agreement not to tear
down each other's house and subsequent owners are bound if they receive notice and the
promise touches and concerns the land
 Notice to subsequent owner can be actual (telling him) or constructive notice (recording)
RULE Who Can Enforce Rights?
When have common grantor, 3 questions:
a. Is land subject to a restriction at all? (explicit or implicit promise)
b. Who can enforce restrictions beyond promisee and his successors in title?
c. Against whom can restrictions be enforced, beyond promisor and successors?
Existence of a common plan often a key ingredient for each question
HYPO (from Sanborn)  O sells 6 lots to A, B, C, D, E and F in that order. In deed to A, A promises to use
land only for residential purposes; O promises that other land will be similarly restricted.
○ B starts building a gas station, can A sue B?
 A can sue B if can show O's intent and B had constructive notice to look at all deeds from
common grantor (this seems like a stretch)
○ What if all deeds contain buyer promises to only use for residential use and A builds gas station,
can B sue A?
 Benefit of A’s promise to O runs to all of O’s successors (post‐promise)
○ What if F put up gas station, O could enforce promise – but can A, B, C, D or E?
 Need to show A, B, C, D and E as 3rd party beneficiaries of F’s promise
□ Even if not express, can be implied beneficiaries b/c promise was only for their benefit
 Could also show that A got an implied reciprocal promise before F even came along
□ If show A reasonably believed O was making implicit reciprocal promise that lots
would be subject to same burdens
□ Still have to show that F succeeded to the burden of that promise
HYPO  O owns 100 acres, sells off 8 lots for single family residential (SFR) use only to A–H. Then sells
10 acre lot to Z, who starts putting up a store. A wants to stop the store.
○ Is Z’s land restricted?
 A will say all neighbors bound by restriction, so Z’s land subject to it as well
 Implied negative covenant when A–H promised O that their lots would be restricted,
implicitly promised that the same would be true for the rest of the land
□ Looking at whether A–H had a reasonable expectation of this
□ Could be based on map of the area plotted out, possibly a recorded subdivision plan;
also things grantor said; etc.
 But mere fact of similar deeds to A–H won’t be enough—have to show evidence
of a common plan, including Z’s lot, that let them to reasonable expect SFR use
restriction on Z’s land
□ Could also potentially have an express grant in O’s deeds to A–H promising entire
common plot would be for SFR use only
○ Conditions change over time – lot presumed residential but Z buys years later. Is Z’s land
restricted?
 Concluded that O implicitly promised a restriction to A–H
 Z can argue he had no notice of this covenant  did title search, found nothing
□ But A can argue Z had constructive notice – depends on whether there was evidence
of a common plan apparent at time of Z’s purchase (Sanborn)
 Can see common plan at time of deeds to A–H
 No notice = no injunction
 BUT if land was implicitly restricted, and Z should have known about the existence of that
restriction  Z can argue that the covenant had been terminated
 Can try to show commercial development in surrounding area
○ Other Equitable Defense Z can raise:
 Laches: if A–H watched Z put up store and didn’t enforce their rights for a long time
□ Need to show (1) plaintiff had knowledge or reasonable opportunity to discover that
he has a cause of action against def; (2) unreasonable delay in commencing that cause
of action; and (3) damage to def resulting from the unreasonable delay
 Estoppel: if Z was given permission for such use and now A–H don’t want to grant
permission anymore (but depends on the affirmative misleading)
□ Need to show (1) an admission, statement, or act inconsistent with the claim asserted
afterward; (2) action by other party in reasonable reliance on that admission; and (3)
injury to that party when the first party contradicts or repudiates its admission
 Unclean hands: if Y also bought land and built store, and Y now bringing suit against Z
 Waiver: if enough has happened and residents have effectively waived the restriction, it is
now unenforceable
RULE Termination of Covenants:
a. When there is a change that makes the purpose of a servitude impossible as a practical matter the
court may modify the servitude or terminate the servitude if it can’t be modified. Compensation
may be awarded as a result of the change or termination
b. If the purpose of the servitude can be accomplished, but the burdened estate is not suitable for
that purpose anymore the court can modify the servitude and still preserve the purpose of the
servitude
Modification or Termination Possibilities:
○ Expiration ‐ some have dates
○ Release ‐ by bargain
○ Abandonment ‐ if no one cares about enforcing them in failed subdivisions
 Must show habitual and substantial violations – a few violations do not constitute
abandonment
○ Merger ‐ you buy the benefitted estate if you are burdened
○ Estoppel ‐ you say you can do it and you are the benefited estate then they rely on that you are
screwed
○ Prescription ‐ you act like you aren’t burdened for the right amount of time
○ Condemnation
○ Changed conditions doctrine rarely applied, unless changed conditions have come into the
development itself – and then looks more like one of the equitable defenses
ZONING, FORBEARANCE, TAKINGS
ZONING
RULE: Most zoning is OK for use zoning (residential only), density controls (height limits), regulating
growth and subdivisions, and aesthetics
BUT exclusionary zoning is not allowed under equal protection clause of the 14th Amendment
○ Federal courts will probably apply strict scrutiny and require that the city acted with a purpose to
discriminate on ethnic or racial grounds
 EXAMPLE: Village of Euclid v. Ambler Realty Co. (zoning regulations that keep multi‐unit
housing out of neighborhood are constitutional, citing public health, safety, morals and
general welfare justifications)
○ Some state courts and suits under the Fair Housing Act merely require a discriminatory effect,
even if there is no purpose
 EXAMPLE: Southern Burlington County N.A.A.C.P v. Township of Mount Laurel (town not
allowed to zone out poor people AND have to do affirmative actions to help build poor
people housing ‐ like helping low‐income developers and allowing mobile homes, etc)
GOVERNMENT FORBEARANCE
RULE: Eminent Domain: state and federal government can take private property for public use, but
under the 5th Amendment there must just compensation.
○ Entitlement protected by a liability rule
○ Must meet 4 requirements/4 questions to be answered:
1. What counts as property?
2. What constitutes a taking?
3. What is a public use?
4. What counts as just compensation?
1. Just Compensation
RULE: Compensation at Fair Market Value at date of taking (hypothetical bargain b/w a willing seller
and a willing buyer)
○ EXAMPLE: Miller assumes FMV by the highest + best use – but not including use of the gov (unfair
to impose this has special value on the property)
 Also don’t get to count assembly gains – value property (knowing the entire area would be
worth more as one giant shopping mall)
 Market doesn’t usually take into account subjective value of property to O
□ Subjective costs difficult to measure ‐ transaction costs would dramatically increase if
had to determine subjective value in each case
□ And increased costs would make public projects more expensive generally
□ But this assumes that eminent domain is really working for the public good
2. Public Use
RULE: Limitation on government's eminent domain power is taking must be for public use
 But if not for public use, government can still try to buy through the market
○ EXAMPLE: Kelo v. City of New London, Connecticut (a taking for economic development is a public
use b/c not main purpose is benefit for public and plan originated in gov, not private party)
 Even more OK if the area was blighted and suffered economic problems
 A taking is unconstitutional if the public benefits are merely incidental
○ HYPO: Is gov empowered to take private land to transfer to GM for a large auto plant?
 GM is a single private property O, and no public use of property itself
 For economic development argument to work, have to show some economic problems (but
doesn’t have to reach the level of “blighted”)
□ Then OK as long as plan as a whole has economic development purpose for benefit of
public, not just GM
□ Relevant whether GM came to gov or vice versa
3. What is a Taking?
a. Is there a literal taking?
 Was some right / interest taken that O had before government action?
□ Look at what rights Os have in land, taking into account conveyances
□ If abating a nuisance, not a taking (b/c O never had right to begin with)
 EXAMPLE Physical Use: Loretto v. Teleprompter Manhattan CATV Corp. (All PPOs
(permanent (indefinite) physical occupation) are per se takings – PPOs entirely take away
O’s right to exclude and right to use and possess w/ respect to the portion that is
permanently occupied
□ Economic impact only matters in calculating just compensation
□ Temporary physical occupation subject to balancing test and
b. If some right was taken, is it a constitutional taking, requiring just compensation?
 RULE: Regulations (zoning, environmental protection, landmark preservation) OK if it
substantially advances legitimate state interests, and unless the regulations go too far
□ EXAMPLE Regulation for Safety: Pennsylvania Coal Co. v. Mahon (government can
usually use its police power for a taking if it prevents harm or noxious to the public)
 Statute not allowing coal to be mined when there is residential on top was a
taking because the state did not act within its police power to prevent harm to
the public
◊ Went too far because it took entire right to mine the support estate
(defines right narrowly and carves down the denominator)
◊ Land O had notice (so no public health and safety problem)
◊ Government should have used eminent domain – can’t sidestep just
compensation by using regulation instead
 Denomination problem: how do we measure the right, in order to determine
the importance of what the gov has taken?
 Brandeis (dissent) says this is a nuisance abatement, not a taking
 Brandeis also analogizes taking the mineral rights from the property to height
restrictions that take away all your air rights, but don’t constitute a taking
 Says can’t separate a smaller interest that is part of the whole property
 RULE Zoning Restrictions: see Penn Central Transportation Co. v. City of New York (Zoning
law for landmark preservation is within police power ‐ wouldn’t have been under Mahon,
but police power has grown since)
□ Balancing test between importance of gov goals / benefits VS harm to the owner
a) Economic impact of the regulation on the claimant (most important factor)
◊ Primary / existing use of the property is unimpaired ‐ note court not
basing on how much was taken, but how much is left (denomination
problem)
► Also, there was an adjacent building trading rule so that definitely
still had a lot of value
b) Extent to which reg has interfered w/ investment‐backed expectations
◊ No negative easement over are rights b/c ‐ court rejects Mahon
conceptual severance – must look at parcel as a whole
◊ Also regulation hasn’t taken all of plaintiff’s air rights – just made them
less valuable
c) Character of the governmental action
◊ Plaintiff not singled out by government, all businesses subject to
landmark preservation law
 RULE: Depravations of Use Restrictions OK unless it eliminates all economical use for the O
□ EXAMPLE Use Restriction: Lucas v. South Carolina Coastal Council (statute barring
plaintiff from building anything on his property to generate income counts as
eliminating all economically viable use and thus a per se taking)
 Even though technically not all use/all value taken – could camp, etc
 If Lucas revives conceptual severance, whole host of per se / total taking cases:
property can be divided up under state law – geographically, in layers (air rts,
mineral rts, support estate, etc), by time (length of lease, etc), and functionally
(easement, servitudes, etc)
 Restrictions that came out of background law means statute is valid exercise of
police power (e.g. nuisance, necessity ‐ i.e. state supreme court says this is a
traditional police power case, where the law is meant to protect the public ‐
SCOTUS says sure OK, but it must be something that was a risk to begin with ‐ he
bought the risk it might be nuisance type lawsuits could be brought against you)
Lucas v. South Carolina Coastal Council (US, 1992)
 Issue: statute barred plaintiff from erecting homes on his beachfront land, making it valueless
 (2) Assuming this is a taking, is it constitutional?
 Court says per se taking when eliminates all economically viable use
□ But this doesn’t mean all use – could camp, etc
□ And doesn’t necessarily mean all value – b/c court doesn’t tell us what value is left
 So Lucas per se rule means  if can’t build anything that can generate income, counts as
eliminating all economically viable use
□ Rule prohibiting all permanent structures violates this per se rule
□ But still some limitations on property rights – gov can still enjoin nuisances, etc
 Gov’s power to regulate all economic use now limited to what it could regulated in public and
private nuisance law  if the regulation merely replicates what could have been accomplished
under nuisance law (or if a gov't imposed easement merely replicates the access rights that
already existed under a public prescriptive easement, e.g.), there can be no taking; nothing has
been taken because the limitation on use/rt to exclude was built into O's title
 What counts as a limitation that adheres in title must be somehow analogous to / as
traditional and established as public and private nuisance law
 Lucas arguably revives conceptual severance move – Mahon still good law so court can go back to
it (but this is all dicta!)
 If Lucas revives conceptual severance, whole host of per se / total taking cases:
 Property can be divided up under state law – geographically, in layers (air rts, mineral rts,
support estate, etc), by time (length of lease, etc), and functionally (easement, servitudes,
etc)
□ So entire course conceivably comes back in under takings law
What does Lucas tell us about nuisance abatement?
 Not enough for Leg to say they are abating a nuisance – must show that Lucas’ building on this
property would be enjoinable as a nuisance under pre‐existing principles
o And here looks like Leg was trying to prevent harm in the aggregate
o Doesn’t matter anymore that Lucas’ action may contribute to a nuisance – too easy for gov
to claim this, so must show individual nuisance (at least under per se rule)
 When literally nuisance abatement under pre‐existing law, flat out exception that will not be a
taking
o Otherwise just going to be one factor in the balancing test
o But unclear how this would be applied if came up in a case like Penn Central
□ Estlund: exception for restrictions in title under background principles is a total
defense of a gov action under balancing test too
 Answers initial question  was anything taken at all?
□ So exception to Loretto and Lucas per se takings
Two categories of regulatory takings 
1. Physical invasions
o Temporary invasions  subject to balancing
□ PruneYard – not PPO b/c property was already open to public
□ Kaiser Aetna – not a permanent occupation b/c people are coming and going
o Permanent physical occupations  per se takings
□ Loretto – permanent means indefinite; occupation means taking up land all the time –
coming and going is not enough
 Easement (non‐possessory use and enjoyment of another’s property) vs. taking
possession (Loretto)
□ But Lucas dicta hints that PPO may not be a per se taking
2. Use restrictions
 Lucas – per se rule for restrictions on land that eliminate all economically viable use
□ Exception for restrictions that came out of background law (e.g. nuisance, necessity)
□ But what about statutory restrictions (e.g. zoning, landmark)
Lucas’ 2 questions 
1. Which limitations inhere in title?
 Temporal dimension – was limitation being challenged already in existence?
□ Property Os will try to argue that the doctrine in question is novel, so can be analyzed
as a taking (i.e. PruneYard)
 Courts will stand in judgment on the novelty / innovativeness of new state regs in takings
law – how do they determine if nuisance exception is from background law?
□ CL  is there a nuisance case that has banned action banned in regulation?
□ Restatement  balance harm vs. utility / social value
 Applying Restatement – look at particular use that gov wants to enjoin
 Not looking at what leg did when it enacted reg – this is a focused, CBC analysis
based on particular facts
2. What counts as a denominator for deciding when per se rule vs. Penn Central balancing test
applies?