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Part 1- Establishing Entitlements
Acquisition by Discovery, Conquest, and Capture
Acquisition by Discovery: finding something unowned which entitles to the discoverer ownership. First person to discover has title
rights, has right to remove occupiers by purchase or conquest.
First-in-time Rule: The first person to take possession of an unowned thing owns it.
o A corollary of the rule is that a prior possessor prevails over a subsequent possessor.
o Two contexts rule is usually tested in are wild animals and finders.
 Wild animals: Law requires capture rather than pursuit. Helps goals of the law: rewarding it fosters
competition and is an easier rule to administer.
Acquisition by Conquest: taking enemy territory by force, followed by formal annexation of the defeated territory by the
conqueror
Acquisition by Capture- way to acquire property in an animal; not universally applicable; only applicable in certain contexts
ratione soli – “according to the soil”; assigns property rights to landowners over resources found on their lands, owner of land has
constructive possession over resources on land
Acquisition by Discovery:
 Johnson v. M’Intosh 1823: Plaintiff Johnson says he’s at the end of chain of title: title was granted by Native tribes in 1773 and
1775. Declaration of Independence signed, and land incorporated in VA. VA conveyed land to US government. Defendant
M’Intosh was granted the land from US government that was handing out grants of land in 1815 and 1818. Johnson brought
action in ejectment.
o Issue: Are land title transfers from Indian tribes to private individuals prior to the American Revolution recognized in a
U.S. court?
o Johnson’s argument: First-in-time.
o Holding: No. Land titles transferred by Indians to private individuals under foreign rule before the American Revolution
are not recognized in the United States. Discovery of land brings with it the right to obtain title either by purchase or
conquest, subject to the Indians’ right of occupancy
 Acquisition by discovery- Marshall says after discovery, native tribes able to occupy land but not transfer it.
Nullified Johnson’s title. Acquisition by discovery went to first discoverer, gave property rights to discoverer’s
crown subject only to native’s rights to occupy.
 Corollary that there is the right of occupancy of natives, but acquirer has right to remove occupancy
of natives in two ways: purchase or conquest. Can purchase land or conquest (by force, expelling
native population).
o Policy arguments:
 Seeds of Locke’s Labor Theory
 Seeds of utilitarian theory- not about recognizing dignity and value of person but wanting what achieves
greater utility for all. Get better consequences when recognize effort that is made.
 Can articulate argument for acquisition by discovery in this way- European powers went out and
discovered places and made them more productive through discovery. Should give discoverer’s rights
because gives more productivity to society.
 Preference for private ownership over common ownership- society doesn’t respect natives hunting gathering
way of living on land. Doesn’t see communal value that land is there for everyone. Has preference for private
ownership.

Locke’s Labor Theory: Seeds of it in Johnson v. M’Intosh. When man “removes out of state that nature” provided and he mixed
his labor in it, it makes it his property. When one works to amass property, it should be enforced. Respect for human dignity and
effort requires us to invest property rights where someone expends their labor. Want to give property rights to recognize labor
but in by individuals; recognizing the autonomy value of a human’s choice to work; mixing labor with something in the world
changes that thing (i.e. property)
o Locke and Indian land- [He] reasoned that the Indians’ occupancy of their aboriginal lands did not involve an adequate
amount of “labor” to perfect a “property” interest in the soil.
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Acquisition by Capture:
 Pierson v. Post 1805: Case is about personal property, not land. Plaintiff Post was hunting a fox; Defendant Pierson captured and
killed the same fox. Post sued for trespass on the case: trespass is invading another’s property, although here it is personal
property (the fox); they are arguing about interference with right to hunt foxes.
o Issue: Does pursuit of a wild animal vest property rights in the pursuer, or is more required?
o Holding: No. Mere pursuit of a wild animal is not enough to confer property rights. Mortally wounding, trapping, or
killing the animal will work. Only actual possession will suffice.
 Policy: Will ensure peaceful and certain ownership. Encourages competition and it is an easier rule to
administer- protecting pursuit and a prospect of capture is difficult to determine, Provides more certainty, less
litigation.
o Dissent: Property of wild animals may be acquired without touch or physically capturing if pursuer is in reach and can
take it.
 Policy: foxes are nuisances and it’s good to get rid of them.

These ideas come into play over law of fugitive resources- gas, etc., resources that move around. Acquisition by capture still
starting point for property rights over those types of resources.

Ghen v. Rich 1881: Plaintiff Ghen killed whale. When whales are killed, they sink and then float to the surface days later. Custom
was to alert Provincetown upon finding whale to award to the rightful owner. Defendant Rich purchased Ghen’s whale at
auction from a third party. Ghen sued to recover value.
o Issue: Does a person establish a property right over whales when he takes possession of the carcass and takes practical
steps to secure it, in accordance with local custom?
o Holding: Yes. A person establishes a property right over whales when he takes possession of the carcass and takes
practical steps to secure it, in accordance with local custom. The whaling industry would suffer if whalers could so
easily lose the fruits of their efforts by allowing another party to lay claim to the whales, they took effort to hunt down.
Court talks about what Livingston said in Post, to maybe should let custom decide. Judge says yes should let custom
rule.
 Policy: Custom. People decide local law for themselves. Part of the argument is that if we don’t accept custom,
it may undermine the industry or negatively affect it. It is also a limited application just to the whaling
industry. Finally, adopting the rule is unlikely to undermine broader legal understandings of rights. Not likely
that because you adopt custom for fin-back whaling it will be the rule for all other animals. Unlikely to be
adopted to different contexts.
 Critiques: Custom doesn’t take into consideration other interests besides of the industry, for example
of conservationists.
Acquisition by Capture (Part 2) and Theoretical Underpinnings of Property Law
 Tragedy of the Commons: when resources are owned communally, there is an incentive to overconsume that resource; leads to
freeriding (refusal to contribute)
 Externalities: External cost is one that is imposed by one individual onto others and not taken into account by that individual.
o Effects are external and fall on others, so person ignore them, and resources tend to be misused/misallocated
o Generally thought of as negative- pollution, overharvesting
o But can be positive also – like beautifying a neighborhood
o Externalities at heart of economic theory of property law: private property rights purpose is to enhance social welfare
by maximizing value of scarce resources
o Internalizing externalities- bringing the costs of the resource’s use on the user by:
 Concentrate costs and benefits of the use on owners, incentives to use their own resources more efficiently
 Reduce the costs of negotiating with others over remaining externalities
 Agreeing to reduce external costs require encounter high transaction costs
 Free-riders: contributions from members of a group for transactions that will have collective benefits
on the group
o If too many free-riders, financial burden on everyone else
 Holdouts: payments made to group to carry out transaction and will fail unless everyone agrees
o “holding out” for higher amount
 When transaction costs high, external effects of using resources are unlikely to be taken into account through
any sort of bargaining process, and the resources are likely to be misused.
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Keeble v. Hickeringill 1707: Plaintiff Keeble had decoy pond on land for luring wildfowl; Defendant Hickeringill had decoy pond
as well; Hickeringill fired off guns to scare away wildfowl on Keeble’s property; Keeble sued for damages for interference;
Hickeringill argued Keeble never had possession of wildfowl to begin with
o Issue: Does a remedy exist for a property owner whose use of his property for profit is frustrated by the malicious act
of another?
o Holding: Yes. A property owner has a right to make lawful use of his property for profit without malicious interference
of others. Where a landowner uses his property for a profit-making venture, it constitutes a trade, and interfering with
a person’s livelihood subjects the interferer to an award of damages. Using decoy ponds to capture wildfowl is legal,
therefore Keeble was making lawful use of his property for profit and Hickeringill’s actions improperly interfered with
that lawful activity. There is no reason to require Keeble to indicate the number of wildfowls diverted from his property
or prove he was in possession of the wildfowl, because the damage here is not the loss of the birds, but rather Keeble
was harmed by Hickeringill’s disturbance.
 This is a narrowly applicable rule because it deals with defendant’s INTENT to harm
 If ∆ said he was just hunting on his property, no liability
 Can’t abuse property rights to harm others
o Policy: Locke’s labor theory- Fruits of your labor. Person who works should be entitled to the value produced of that
work. In order to determine which “labor” is most valuable, need utilitarian analysis. Want to encourage the work of
the most effective worker. In determining entitlement to property, need to consider what society values and what is
the most utilitarian approach toward that end (as a matter of policy).
o Constructive Possession – Possession determined by Judge discretion. Based on value judgment; even if X doesn’t own
the property, allowed to constructively own it.

Popov v. Hayashi 2002: Plaintiff Popov made contact with Barry Bonds’ record setting home run ball; Popov was attacked and
dropped ball; ball rolled to Defendant Hayashi who retained it; Popov sued for ownership. Ball is abandoned property.
o Issue: Is a person entitled to an interest in a piece of property if they achieve significant steps towards possessing said
property, but are thwarted due to the unlawful conduct of another?
o Holding: Yes. Popov and Hayashi both have an equal, undivided interest in the ball because Popov acquired prepossessor rights when he was attacked while catching the ball. Court requires complete control for ownership. When a
person completes a significant portion of the steps to achieve possession of an item but is thwarted due to the
unlawful conduct of another, that person is entitled to a pre-possessory interest in the item. Here, Popov exerted some
control over the ball, but had not yet acquired possession because of the attack. It would be inappropriate to create an
incentive for such attacks, so Popov is deemed to have acquired some interest in the ball along with Hayashi.
o Policy: Court willing to make huge departure from normal way of doing things to stop violence, that’s why they split the
difference. Consensus that could create violence but not consensus about what to do about it. Judges use own rules,
thinking It would prevent it.
Acquisition by Find
Locus Owner v. Finder of property.
 HONESTY
o If we want to reward honesty, we would give possession to the finder
 TRUE OWNER: who to give lost property to?
o Locus Owner: owner of property where item was lost
 True owner is more likely to return to locus to recover property
o Finder: finds property
 Incentivizes search. If finder is rewarded with possession for items she finds, more likely to look for and
discover items.
 And, versus locus owner, would encourage finder to come forward with discovery.

Armory v. Delamirie 1722: Chimney sweeper found a jewel, jeweler’s apprentice took the stones and refused to give it back.
Court found that Finder doesn’t have an absolute ownership, but he can keep it from all except rightful owner. Boy gets
damages of value of jewels (best jewel that could have fit into socket)
o Armory rule: Honest finder holds title (ownership) against all world (any claimant) except for the true owner or prior
possessor.
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Bailment – the act of delivering goods to a bailee for a particular purpose, without transfer of ownership (i.e.
bringing jewel in for appraisal). Leaving property with another for a specific purpose.
Bailee – temporary possessor (appraiser); obligations of caretaking, but no claim to ownership. Transfer of
custody, not ownership.
Bailor – actual owner

Hannah v. Peel 1945: Defendant Peel granted ownership of house; never lived in house; Plaintiff Hannah soldier was quartered
in house; Hannah found a brooch embedded in windowsill; Hannah reported to police who held it for two years; returned it to
Peel; Hannah sued Peel for brooch
o Issue: Does the finder of lost chattel on another’s property have rights to that chattel superior to the rights of the
property owner?
o Holding: Yes. The owner of land possesses anything attached to and under the surface of the land but not necessarily
things lying on top. The general rule is that the finder of lost property has better claim to it than anyone but the true
owner. Here, Hannah found a brooch that had clearly been lost, and the fact that it was found on Peel’s property did
not grant Peel any ownership interest. Peel was never physically in possession of the house and had no knowledge or
control over the brooch. “Fairly clear that man possesses everything attached to/under land. And a man does not
necessarily possess a thing which is lying unattached on the surface of his land even though the thing is not possessed
by someone else”
 Honest Finder – want to reward honestly and hard work
 Locus Owner – owner of property where item was mislaid; give property to locus owners when doing so will
protect tranquility in ownership (true owner most likely to return to where they lost item)
 True Owner
o Cites cases:
 Bridges v. Hawkesworth: Similar facts with locust owner- shopkeeper and honest finder. Honest finder wins.
 South Staffordshire Water Co. v. Sharman: Property embedded in land. Locus owner wins because finder was
employee acting on behalf of owner.
 Elwes v. Brigg Gas Co.: Lessee is finder, landowner who is lessor keeps property
o Policy goals of Acquisition by Find:
 Reward honesty- would give it to finder
 Promote security in one’s property/ getting property back to true owner- locus owner
 Diminishing black market
 Make property productive- no unowned property because it’s unproductive and dangerous.
 Adverse possession- rewarding new owners because owners are creating what is basically unowned
property
 Want to find owners, but can’t rely on courts to do it (Would be in litigation forever)
 We usually rely on possession as good enough proof of possession

McAvoy v. Medina 1866: Plaintiff McAvoy getting haircut at Defendant Medina’s barbershop; McAvoy finds pocketbook and
leaves it with Medina to see if owner would claim; no one came forward; McAvoy demanded Medina return pocketbook;
Medina refused
o Issue: Does a customer who finds lost property in a shop have a right superior to the shopkeeper when the true owner
fails to claim it?
o Holding: No. The simple act of finding misplaced property in a store does not give the finder the right to take it and
claim ownership; it was Medina’s duty to hold onto it in case the true owner returned. Putting an item in a particular
location and forgetting to pick it back up is not the same as losing the item, and therefore McAvoy had no claim to the
item.
 Rule: Mislaid property should always go to the locus owner
 Goal is to get the property back to the true owner. They could retrace steps back to the locus owner.
 Distinction between lost property and mislaid property
 Lost – unintentionally separated from property
 Mislaid – intentionally separated but accidentally left property behind
 Abandoned – walk away from property and leave it to the next person
 Treasure trove – abandoned property temporarily but intended to reclaim when circumstances
allowed
 Finder has no rights in mislaid property. Has two options: can say they are prior possessors, or the property is
lost, not mislaid.
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
To distinguish between mislaid and lost, the circumstances of where item is found can help, but
generally hard to figure out.
Adverse Possession
 Adverse Possession – when one party owns real property (land); another person (not true owner) possesses the property;
possessors have rights to occupy land against everyone except true owner
 Adverse possession requires that there be (1) an entry that is actual and exclusive, (2) open and notorious, (3) continuous
for the statutory period, and (4) adverse and under a claim of right.
o Statute of limitations can turn a possessor into an owner
 Ejectment proceedings have a statute of limitations
 A true owner no longer has claim once statute has run
 If within the number of years specified by the statute of limitations, the owner of land does not take legal action to eject
the possessor from property, a possessor adversely claiming title, the true owner is thereafter barred.
o Consent by true owner will always defeat a claim of adverse possession.
o Good to consider: what interest is the adverse possessor gaining title to?

Policy:
o Earning policy: arguments that say need to reward adverse possessors with ownership when they earn it. Things
they are doing are valuable, important, incentivized. Productive work of adverse possessor. Labor theory coming
in.
 Reward labor; incentivize investment.
o Sleeping owner policy: we can feel comfortable punishing original owners when they are basically asleep on their
rights.
 Utilitarian – societal use versus the sleeping owner.
o Others:
 Attachment to property – psychological attachment
 Quiet title- Determine ownership so as to continue.
 Can categorize these motivations into SLEEPING and EARNING theories.
o Weigh claims: who is more deserving?
Elements:
1. Actual entry: Can’t adversely possess virtually. Have to actually go out and do it.
a. Earning policy- have to physically be there. Primarily earning.
b. Sleeping- feel more justified in taking away from true owner if adverse possessor is actually there.
i. Also have purpose of giving notice. Physical use is an entry.
2. Open and notorious: Putting actual owner on notice (notice not required).
a. Sleeping- easy for owner to notice if open and notorious use as opposed to secretive. Owner would be on guard against
it. Feel justified taking away property if ignored.
b. Idea is that adverse possessor is making use of land that true owner would
i. Physical presence- secret possession is not sufficient
ii. Cultivating land/improving
3. Exclusivity: Exclusive use. Don’t want owner to be confused about who they should sue.
4. Continuity: continuous time spent. Tacking time can be allowed.
5. Adverse and under a claim of right: Adversity means being there without permission. Signage that allows people to use spaces
will defeat adverse possession because permission given. Claim of right asks what the state of mind has to be of adverse
possessor- do they have to intend to trespass or make a mistake? Majority approach is that it doesn’t matter. Some states do
require proof. Majority in Lutz does.
a. Earning policy.
Safeguards?
 Title insurance – can protect you if property turns out to be otherwise.
 Warranty deeds – can have clause in deed where grantor guarantees that she has title and will defend title if she doesn’t
Disabilities: SOL extended for: minor, incarceration, mental incompetence
 After a disability is removed, owner has five additional years to pursue their rights/bring ejectment claim
 True owner gets statutory period or disability extension period, whichever is longer
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No tacking disabilities
Disability is only important at the time entry is made
o Connected to sleeping theory: some true owners aren’t sleeping on rights. There are good reasons why they are
not pursuing their rights. So, we want to give them extra protection.
Van Valkenburgh v. Lutz 1952: Defendant Lutz family had an easement on Plaintiff Van Valkenburgh’s land; over time they
built a structure and started gardening; Plaintiff bought land demanded Lutz remove structures and garden; Lutz agreed but
wanted to continue using the right of way; Plaintiff built fence and blocked easement and sued Lutz for the remaining
structures; Lutz claimed adverse possession
o Issue: May a person claim adverse possession of real property that he knows he does not own by using and
erecting structures on the property?
o Holding: No. In order to establish adverse possession in New York, the claimant must occupy the land “under claim
of title” for fifteen years. Lutz admitted he knew he did not own the land on which he built a shed. He also
admitted he did not have the land surveyed, and thought the shed was on his land. Therefore, Lutz’s possession
was not “under claim of title” or “hostile.”
 Sleeping Theory – want to protect adverse possessors when true owners are not enforcing their rights,
NOT when they are being hoodwinked
 Earning Theory – want to reward productive cultivation and improvement of land
 Claim of Right – requires adverse possessor to remain on land and claim a right that they belong there;
must be made in good faith; subjective ideas on right to be there
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Mannillo v. Gorski 1969: Mistaken boundary case, most common type of AP. Plaintiff Mannillo and Defendant Gorski were
neighbors; prior to Mannillo’s purchasing land, Gorski built steps encroaching 15ft. on Mannillo’s land; Gorski claimed
adverse possession. Minor encroachment.
o Gorski did not obtain title to the property because the open and notorious requirement of adverse possession was
not satisfied. Not open and notorious even though it’s out in the open, because don’t know where the land border
is. Case has outlier view, not even minority view, of issue. Actual knowledge is the standard.
o Claim of Right issue:
 Objective and majority view: doesn’t matter what state of mind is.
 Subjective view: Good faith mistake or Aggressive trespass required
 Mannillos want Maine doctrine because Gorskis didn’t know: aggressive trespass required.
o Maine doctrine is formalist view of nature of adverse possession but criticized for
rewarding the knowing wrongdoer over the “honest, mistaken entrant.”
 Court favors CT rule, doesn’t matter if possessor was mistaken. Discards requirement that the
entry and continued possession must be accompanied by a knowing intentional hostility

Howard v. Kunto 1970: Deed description doesn’t fit the land. ∆ received an erroneous deed; ∏ ordered a land survey and
discovered neighbors were occupying parts of ∏’s land; ∏ sued ∆ to quiet title of land
o Issue: (1) Does using property as a summer house constitute continuous use for purposes of adverse possession (2)
May a previous owner’s time occupying a property count toward the statutory period so as to constitute adverse
possession?
o (1) Yes. For adverse possession purposes, possession is sufficient when the property is used in a manner that is
ordinary and natural given the nature of the property, i.e. typical use. Here, the property is a summer home, so
living on the property year-round was not required to establish adverse possession.
o (2) Yes. In meeting the time period requirement for adverse possession, successive owners of a property may add
their occupancy times together where they share privity in the ownership interest.
 Tacking – tacking on previous owner’s time of adverse possession onto the current owner to meet
statutory period
 Must also establish privity (certain legal relationship): here, need voluntary transfer
 Problem is the deed is wrong. Court allows spatial tacking.
Acquisition by Gift
 Intervivos gifts: Gifts during life
 Causa Mortis (in contemplation of death) gifts are more strictly construed because of intention and clarity of thought

Elements: Three requirements to make a gift of personal property: Elements are independent and no required sequence
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1.
2.
3.
Donative intent: Donor must intend to make a present transfer of an existing interest (may be shown by oral
evidence). Required to distinguish from a bailment.
Delivery: Donor must deliver possession to the donee with the manifested intention to make a gift (requires
objective acts)
a. Physical delivery preferred, but constructive delivery/symbolic will sometimes be permitted
i. Constructive delivery- handing over key/something that will open up access to subject matter of
gift (constructive = access)
ii. Symbolic delivery- handing over something symbolic of the property being given. Usually it’s a
written instrument.
Acceptance: If gifted item has value it is presumed to be accepted; must be refused to defeat acceptance

Why Delivery?
o When people were illiterate it made sense to have physical handing over a requirement. But today:
 Wrench of delivery – giving is irrevocable and should be taken seriously. Don’t want people to
underestimate seriousness of gift giving, want them to feel it by giving up physical custody
 Compare to consideration in contracts
o Evidentiary- practical. Gives evidence of gift to witnesses who see it and recipient who has the object after. Why
else would donee have chattel in question.
 Can see delivery connected to element of intention. Helps us to believe there was an intention to deliver
by donor.

Newman v. Bost 1898: Facts: Plaintiff Newman was housekeeper for decedent; decedent gave Newman keys and told her
she could have everything in house, including bureau (keys unlocked) with life insurance policy inside; Defendant Bost
(administrator) refused to give Neman anything; Newman sued
o Issue: Is a gift of “all the personal property in the house” appropriately established by handing over the keys to the
rooms of the house?
o Holding: No. In order to legally effectuate the giving of a gift, physical delivery of the item is required where
appropriate. If the items are not present or are too large or heavy for manual delivery, then constructive delivery
will suffice. Here, this was not accomplished and therefore those items were not actually gifted to Newman.
Delivery of keys for the bureau, because it was so large, constituted constructive delivery. Thus, Newman did own
the bureau but the insurance policy inside, being small and transportable, was not validly gifted to Newman. Bost
inappropriately took possession of the items in Newman’s room which she is entitled to.

Gruen v. Gruen 1986: Plaintiff Gruen gifted Klimt painting by father; painting to be given upon father’s death (father had life
estate in painting); upon death, Defendant (stepmother) refused to give painting; Plaintiff sued
o Issue: Will a gift be valid if the donor retains a life estate in said gift?
o Holding: Yes. Plaintiff is entitled to the painting because the gift was irrevocable once it was given and decedent
was only entitled to the rights afforded to life tenants with regard to the painting. A gift will be valid when the
donor retains a life estate in said gift, because an irrevocable transfer occurred, granting the donee the right to the
gift once the life estate terminates. When letter sent to son, created life estate for himself, and created remainder
interest for son that is present transfer of interest and is irrevocable.
 INTENT: father intended to make an irrevocable present transfer of ownership; transfer of a remainder
interest. Evidence of intention can be oral, behavioral, etc. don’t need it in writing.
 DELIVERY: Problematic because Plaintiff never possessed painting. Newman court might say painting
could be handed over, and manual delivery required (step moms argument).
 This court says to force them to ship/carry painting to Plaintiff only to have him hand it back so
father can keep for life estate period would be silly. Foolish in light of lifetime possessory rights.
Also, it’s risky, don’t want to move fine art around all the time just for show.
o Court will allow symbolic delivery here. Symbolic because of letter, nothing given for
access. It’s possible that if it weren’t for the life estate, court would have required
manual delivery (but intent would have been problematic)
 ACCEPTANCE: presumed
Acquisition by Creation; IP Tidbits; Property in One’s Persona
 Locke – you own the fruits of your labor in consequence of having “a property in your own person.”
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o
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Trouble is that the fruits of your labor are not always yours alone to exploit, and you do not always have full rights
of property in your own person.
Patents: ideas; Copyright: expressions; Trademarks: brands

International News Service v. Associated Press 1918: Plaintiff AP and Defendant INS are competitors; AP sued INS for
bribing its members to pirate news from AP’s bulletins; published on west coast (time difference)
o Issue: Does a continuing property right exist in published news such that appropriating the published news
gathered by another for further commercial purpose constitutes unfair trade?
o Holding: Yes. INS is liable for unfair competition because it interfered with AP’s quasi-property right in selling its
gathered news. A quasi-property right exists in published news such that appropriating the published news
gathered by another for further commercial purposes constitutes unfair competition in trade. A commercial news
source does retain rights to its material against other news sources, but not the public. The right to exclusively sell
news one has gathered through its own time, labor, and money is a quasi-property right, and interference with this
right constitutes actionable unfair competition.
 Value of news is in its “freshness”; if you want access to AP’s information, you have to buy into the
organization
 “INS cannot reap where it did not sow”
 AP is producing a “public good” and it is therefore a valuable property right

Cheney Brothers v. Doris Silk Corp. (1930): Plaintiff Cheney manufactured silk; law made it impractical to copyright/patent
prints; ∆ copied one of Cheney’s successful prints; Cheney sued
o Issue: May a fabric design be subject to protection from copying in the absence of copyright laws addressing the
situation?
o Holding: No. Unless the common law or statute expressly states otherwise, a man’s property interest is limited to
physical items, which others are free to copy. Cheney’s had a protected property interest in the actual silks they
produced, but not in the pattern of the silks. The patterns are free to be duplicated and further distributed.
 Unique in that copyrights were not available for fabric/patterns at this time
 When you invent something, you have a copyright in its embodiment but not in the replication of it
 Different from AP v. INS because news is more valuable than fashion, therefore we assign different
protection; application of AP rule would squash competition
Copyright: protect the expression of ideas in books and articles, music, artistic works and so on. Must be independent creations,
must be original. A protection against copying a particular expression; last for authors lifetime + 70-120 years; not just about
utilitarian value, but also about creative process of individual author
 Idea versus expression dichotomy- copyright only available to expression, not ideas. Key litigated issues. Expression of idea
could be copyrightable. You can’t copyright concept, but can copyright phrases/drawings/etc.
 Fair use- even copyrighted expression can be used by others because want to be able to have dialogue in society building
on works before. Ex book review- can quote from book.
o Would be bad if every time someone expressed themselves copyright would exist.
 Trade secret- not putting property out there can be protected, sometimes used when other protections don’t work

Feist Publications v. Rural Telephone Service Co. 1991: Plaintiff Rural is a public utility that provides phone service in Kansas.
State law requires phone companies to issue an annual telephone directory. Defendant Feist is a publishing company that
sells areawide telephone directories covering a large geographic range. Compete with Rural for ads. Feist doesn’t have
independent access to information like Rural does. Feist pays phone companies for the right to use its white pages listings.
Rural refused to license listings to Feist. Feist used them without permission. Rural sued for copyright infringement. Facts
are not copyrightable; but compilations of facts generally are.
o Copyright not about quality or value, you can copyright anything with a “modicum of creativity” Just requires
originality. But Rural can’t get there because just list it alphabetically.
 Rural puts fake numbers in listings to see if anyone copies and identify. Can’t sue for copyright of thatcopyright estoppel.
o Why is originality requirement and not quality? – Government might be unwilling to make judgments on quality of
artistic expression. Also rejects sweat of the brow theory- not just going to reward labor and hard work, it’s a way
to encourage new and valuable innovation. Incentivize to create but not too much that others can’t use work.
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o
Why wouldn’t unfair competition argument work- didn’t bring it up. INS was limited. But hard to know how Court
would’ve seen value judgment that’s implicit in INS. But also, Rural and Feist not operating on level playing field.
Rural had statutory requirement and monopoly to provide service
Patent: – inventor has exclusive rights over who can make and distribute patented item for 20 years; have to detail exactly how item
is made (public information); can only receive a patent for processes or products that are useful, novel, and nonobvious
 Operates differently than copyright. Copyright don’t have to register or get approval from office. And terms of statutory
rights are different. Copyright is usually author’s lifetime plus 70 years. Patent is only for 20 years from date of application.
Grounds of patentability different- don’t require originality in same way, instead in they are non-obvious, useful, novel, etc.
 Patent law not about expression, about idea. Patent is going to be infringed if idea is infringed even if expression is not. Ex.
Drugs, ideas of chemicals, etc. will be infringed even if packaging, flavor, etc. is not.
 5 requirements for patent law: patentability, novelty, utility, non-obviousness, and enablement

Diamond v. Chakrabarty 1980: microbiologist who wants to patent a human-made genetically engineered bacterium
capable of breaking down crude oil- would be helpful for oil spills. His claims to the bacteria themselves under contention.
o Issue is statutory interpretation- must determine whether micro-organism is a “manufacture” or “composition of
matter” within the meaning of the statute
o Court uses dictionary to define manufacture and common usage for composition of matter. Says these terms are
expansive, and Congress used them to give patent laws a wide scope
o Legislative history also supports broad construction
o Patent statute says supposed to give protection over broad matter- broad language in statute means we want to
err on side of giving patents, encourage socially valuable activity. IN contrast to Feist- have some standards when
granting limited monopolies.
o Court says concerned with language of statute, Constitution, and labor of person- want to reward and incentivize
people’s hard work
 Micro-organism is patentable because it’s not a discovery, it’s an invention- a product of human ingenuity
o Dissent makes statutory arguments- Plant Acts authorized patentability for different kinds of plant breeding.
Clarified plants were going to be protected. Legislative history.
 These statutes unnecessary if accept Chakrabaty’s argument. Existence of acts suggest Congress wouldn’t
protect his actions/ patent.
 Court rejects this- at time wasn’t understanding of living thing and written description
Property in One’s Person and the Rights to Exclude, Abandon, and Destroy
Property in One’s Person
 Locke’s Labor theory of Property – “every man has property in his own person.”
o Slavery in opposition to that proposition. Can you have property in yourself?
 2 claims- lack of informed consent and conversion. Not informed about commercial interest. Consent claim was a good
claim.

Moore v. Regents of the University of California 1990: Moore treated for leukemia by ∆; ∆ then used Moore’s removed cells
without permission; patented cells and sold commercially; Moore sued for lack of informed consent, breach of fiduciary
duty, and conversion
o Issue: Does a patient continue to have ownership rights in his cells after they leave his body?
o Holding: No. Once cells leave a patient’s body after surgery, she no longer has sufficient ownership rights to uphold
a conversion claim. Conversion occurs when a party interferes with another’s property ownership or right to
possession. To date, no court has allowed a conversion action for use of a patient’s cells in medical research.
Further, permitting a patient to recover in such a case implicates serious public policy considerations related to
medical research. Generally, excised cells are treated as medical waste under statute, and patients have no
ongoing property interest.
 Holding seeks to balance the interest of the patient without encumbering the efforts of medical research
o Arabian Concurrence – the human body cannot be treated as a commodity unless the legislature decides to do so.
Not just about research and utility, but ethical and moral issues. But also, against dissent, permitting conversion
would lead to problem that selling organs for profit, commodification of bodies, moral and social problems that
could occur.
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o
Mosk Dissent – Thinks concerns of majority are valid but can assign property interest in them. Wouldn’t mean he
has complete dominion in every way. Having a property right can be limited. Want them to recognize Moore’s
interest in property but not that he could do everything he wants- like sell it. For example, professional degrees
Right to Exclude: Property is a bundle of rights and it includes right to exclude.
 Property is a relationship among people that entitles owners to include or exclude use or possession of the owner’s
property by other people
 Inclusion/Exclusion are both necessary and sufficient conditions of transferability
 Right to exclude is essential right in the bundle of rights for property.
o Only limitation in exercise of R2E are the rights of others.

Jacque v. Steenberg Homes, Inc. 1997: Defendant Steenberg sold a mobile home to Jacque’s neighbor; best way to deliver
was over Jacque’s property; Jacque refused to grant permission to cross land; ∆ did so anyway; Jacque sued; Jacque won
but punitive damages set aside in appeal
o Issue: Can punitive damages be awarded without compensatory damages in an intentional trespass case?
o Holding: Yes. Punitive damages may, at the discretion of the jury, be awarded when there are only nominal and no
compensatory damages. The general rule in Wisconsin is that punitive damages are unavailable if unsupported by
compensatory damages. The actual harm here is not in any physical damages to the land, but in the denial of the
owner’s legal right to exclude all others. The right to exclude is “one of the most essential sticks in the bundle of
rights that are commonly characterized as property.” A right is illusory if it is unenforceable. Further, repeated
trespasses could actually threaten the individual’s ownership by giving the trespasser rights by prescription or
adverse possession. Here, because ∆ intentionally trespassed on Jacque’s property, Jacque must be entitled to
relief, therefore punitive damages are warranted.
 Why want to enforce trespass- autonomy, privacy, inherently risky/damaging- maybe not in this case but
it could be, utilitarian idea of protecting people’s interest in property; defendant didn’t have good enough
reason to not obey law of trespass

State v. Shack 1971: Defendant Shack entered property of Plaintiff to aid migrant workers at Plaintiff ’s; Plaintiff refused to
give Shack’s privacy to give legal counsel to migrant; Plaintiff sued for trespassing
o Issue: Does an owner’s rights in his land justify his refusal to allow individuals to come onto the land and give aid in
private to the owner’s employees who are housed on the land?
o Holding: No. ∏ Plaintiff’s rights in his land did not justify refusing access to Shack’s when their aim was to provide
aid in private to the migrant workers who were housed on the land. Rights in real property are not absolute and
are limited by the maintenance of the well-being of those people that the owner permits on his land. The
ownership of real property does not include the right to refuse access to individuals providing government services
to workers who are housed on the property. The workers’ rights of privacy and the opportunity to receive such
public assistance are too fundamental to be denied.
 Policy argument. Generally, property owners have right to exclude, but here, have better interests that
override right to exclude.
 Trespass rule is important, but not unyielding. Can still be cast aside if there are other important issues.
 Rights turn out to be relative.
Right to Destroy

Eyerman v. Mercantile Trust Co.: Louise Woodruff Johnston’s will directed the executor to raze Johnston’s house and sell
the land it was on with the proceeds going to her beneficiaries; house in subdivision; neighbors filed injunction because
think it will look bad; If she were alive- they would want her to experience loss, they would want to know what her
intentions are; Court assumes she has no reason to destroy property, so they need to decide based on public policy. Decide
that no reason to destroy is against public policy.
o Policy: Waste; externalities and consequences: dead people don’t have to face consequences
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Part 2- Estates in Land and Future Interests
A. Ways that you can acquire property – Initial acquisition and Subsequent acquisition. 11 possibilities:
 5 present possessory estates
1. Fee Simple Absolute
2. Life Estate
3. Fee Simple Determinable
Defeasible Fees
4. Fee Simple Subject to Condition Subsequent
Simple
5. Fee Simple Subject to Executory Limitation
 6 Future Interests
1. Reversion
2. Possibility of Reverter
3. Right of Entry
4. Vested Remainder
a. Subject to complete divestment
b. Indefeasibly vested remainder
c. Subject to partial divestment (subject to open)
5. Contingent remainders
6. Executory Interest
B. Estates – Ways you can move property around among people.
C. Bundle of Rights Idea – you can split it among people over time, they will still have rights protected by the law.
D. Five Questions to Understand Property Interest (estates in land or future interests)
1. When does possession begin? When does person who hold possession have entitlement?
2. How long can it be held? Duration? Perpetual or cut-off? How long can the interest exist?
3. How (if at all) is it passed, during life and at death? Transferability, alienability.
4. Is it subject to contingencies? Whether the occurrence or failure of occurrence of some particular event
will stand between holder of estate and her right to possession. Only applies to future interests.
5. How (if at all) is it shared?
E. Life Estate = Reversion
Fee Simple Determinable = Possibility of Reverter
Fee Simple Subject to Condition Subsequent = Right of Entry
Vocab:
 Contract of Sale – agreement to transfer land; upon closing, parties are in privity of estate
 Deeds – provide a description of property and what kind of interest is being transferred; statement of consideration;
signature of granting property owner and can sometimes include various promises; land transaction require payment unless
they are a gift
 Quit-Claim Deed – whatever was mine is yours now; no protection for buyer; i.e. if a quit-claim deed is given by a person
who does not actually own the property named in the deed it has no effect
 Title Insurance – provided by the seller; helps to prove clarity of the title and that seller has the right to convey the property
to buyer
 Recording – every jurisdiction has an office where deeds are recorded; provides more protection to owners of deeds;
protects against conflicting claims to land
 Habendum Clause – tells the buyer what kind of interest they are getting with the deed (i.e. life estate, fee simple,
remainder, etc.)
 Words of Purchase – who takes; “From O to A and her heirs”; A takes
 Words of Limitation – what is taken; “and her heirs”; signals what kind of interest is being transferred; doesn’t actually
establish any transfer to heirs
 Heirs – no one is an heir of a living person
 Issue – descendants
 Per stirpes – if a child of a decedent dies before decedent (son dies before mother) and the son has children, the sons
shares of mother’s estate go on to his children
 Filius nullius – a child born out of wedlock cannot inherit at common law
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





Residuary Clause – because wills are ambulatory (revocable until death), clauses exist in wills between drafting and death
that state “everything that remains goes to X”
Ancestors – by statute, parents usually take as heirs if decedent leaves no issue
Collaterals – all persons related by blood to the decedent who are not issue/ancestors
Escheat – if A dies intestate without any heirs, estate goes to the State
Estate – “The amount, degree, nature, and quality of a person’s interest in land or other property”;
Seisin – possession of a freehold estate
The Fee Simple: Most valuable. Begins immediately. Present possessory estate, holder takes possession immediately.
1.
2.
3.
4.
5.
Present Possessory Estate- possession begins as soon as owns it
Can last forever; has no natural end
Freely alienable during life/at death (transferable)
Subject to no contingencies
Can be shared
Creating a Fee Simple Absolute
 “From O, to A and her heirs”

“From O to A”
o Both mean the same thing= Fee Simple
o Does not give any rights to heirs; just code for fee simple
 Heirs technically do not exist until the death of a person
Inheritance of a fee simple
 Intestate- dying without will, property goes to heirs or whatever the statute provides
The Life Estate: For Life. Ends at Death. When a life estate is created, there is always a future interest created with it. Always want to
know who gets the property next. Creates a remainder holder. If a remainder isn’t created, then the grantor keeps the interest as a
reversion. Rule is that grantor passes only what he owns – if you own a life estate you can only pass a life estate, can’t give someone
a fee simple.
 Reversion – when a grantor owns a fee simple and grants a life estate; goes back to grantor after life estate; giving less that
what you have
 Remainder – when there is a life estate and the remainder of the estate is passed on to a 3rd party
1.
2.
3.
4.
5.
Possession begins when conveyed- present possessory
Person who received life estate often called life tenant. Typical for life estate to be governed by the life of the life tenant. But
possible to be given to one person and measured by the life of another. Held by A but governed by life of B; or held by A and
they transferred to B, but still governed by A’s life. Ends at the
Limits on transfer- freely transferrable during life to other parties. But cannot be transferred at death of life tenant if life
tenant’s life governs the duration.
Contingencies- Contingency is event that will affect holders right to immediate possession. Only really applies to holders who
aren’t already in possession. Wouldn’t apply to life tenants. No contingency here.
Life estates can be shared, but still need to be measured by a single life. Constructing life estates for multiple people can get
complicated. Important to identify which is the measuring life.
Creating a Life Estate
 “From O, to A for life

“From O, to A for life, remainder to B”
o Begins immediately
o O holds a reversion- future interest retained by grantor when grantor passes some but not all interest.
o Expires at death; cannot be passed at death
o Per autre vie – based on the life of another

White v. Brown 1977: Jessie Lide died, left a handwritten will. Had no children. Handwritten will suggests Lide made will
herself, without attorney. (Can’t do a holographic will in NY!) Her sister in law Mrs. White and her daughter Sandra White
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lived with her. Mrs. White’s husband is Lide’s brother. Whites filed action to obtain construction of the will, saying Lide gave
them fee simple to home. She wants a fee simple so she can sell it, language that house is not to be sold wouldn’t be
enforceable. Restraints on alienation are not enforceable especially against fee simple absolutes. “repugnant to fee simple
interests.” They get struck down/ignored. Defendants say will only conveyed a life estate, remainder to them. Will is not
clear if Lide intended to convey a life estate, leaving remainder to descend by law/statute, or a fee interest subject to a
condition subsequent
o Court has 2 choices- it’s a life estate and White needs to coordinate with beneficiaries and deal with restraint, or
that its fee simple absolute and cross through restraint so she can sell. But language Mrs. white uses isn’t expert.
o Decides fee simple absolute is passed.
 Two reasons for majority decisions.
 Courts prefer to transfer all interests it can. Goal of avoiding partial intestacy.
 Also, if no language limiting interest, courts will assume it’s a fee simple absolute.
Creating a Term of Years
 “From O, to A for 20 years”
o Begins immediately
o Measured by a specific period of time
Defeasible Fees: Any estate may be made defeasible, which means it will terminate, prior to its natural end point, upon the
occurrence of some specified future event
 An estate is defeasible if it is subject to being defeated or terminated if some potential future event occurs
 Defeasible fees always have a companion future interest
3 types of Defeasible Fees:
Fee Simple Determinable:
 Could theoretically go one forever, but ends automatically when a stated event happens
o Grantor has reversion
 Created by language connoting that the transferor is conveying a fee simple only until an event happens- durational aspect.
1.
2.
3.
4.
5.
When does possession begin? - Immediately on conveyance, as soon as interest held makes it a present interest
How long can it be held? – automatically ends when that event occurs. Estate over immediately.
Transfer? - Majority approach that fully transferable, during life, at death, by will. But some states have limitations on what
granters can do with their future interests- can only be passed by intestacy.
Contingencies? – there is uncertainty about how long it can last, but not contingency because not going to prevent holder of
estate from initial possession, so no.
Can be shared
Classic fees simple determinable:
 To A so long as the premises are used for farm purposes.
 To A while the land is used for farm purposes.
 To A until the land is used for other than farm purposes.
 NOT: TO A for farm purposes. (Just a land use motivation. This is precatory language and conveys a fee simple to A).
o Words of duration or automatic termination a good suggestion of determinable
Possibility of Reverter (PAIRED INTEREST)
 A grantor who grants a fee simple determinable thereby keeps possibility of reverter; statute of limitations begins to run
against grantor as soon as breach occurs
 In order to avoid adverse possession, grantor has to manage property to assure there is no breach of condition
 Fee simple determinable usually has durational language
Fee Simple Subject to Condition Subsequent: doesn’t end automatically but may be cut short when a stated condition happens. If a
certain event happens, grantor has reversion, but will not terminate automatically. Will only terminate when the grantor comes
and asserts his/her rights: right of entry.
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1.
2.
3.
4.
5.
When does possession begin? - Immediately on conveyance, as soon as interest held makes it a present interest
How long can it be held? - requires more than determinable for present interest to terminate. Requires grantor/successor to
retake property either physically by evicting, etc. or by going to court and seeking quiet title, but unless and until they do
something to remove, the fact that event happens doesn’t matter. Major difference between determinable and subsequent.
Transfer? - Majority approach that fully transferable, during life, at death, by will. But some states have limitations on what
granters can do with their future interests - can only be passed by intestacy. *
Contingencies? – there is uncertainty about how long it can last, but not contingency because not going to prevent holder of
estate from initial possession, so no.
Can be shared
Right of Entry (PAIRED INTEREST)
 Fee simple subject to condition subsequent is more valuable than a fee simple determinable because grantor needs to
actually come in and assert rights to remove ownership
 For a fee simple subject to a condition subsequent, there is no adverse possession until grantor comes in and asserts their
rights
 Normally does not include durational language
Classic fees simple subject to a condition subsequent:
 To A, but if A fails to use for farm purposes, the grantor can reenter.
 To A, provided that if A fails to use for farm purposes, the grantor can reenter.
 To A, on condition that if A fails to use for farm purposes, the grantor can reenter.
o Words indicating grantor has an election is a good indication of condition subsequent
o Comma structure- “to a, __” good chance you have condition subsequent.
Fee Simple Subject to Executory Limitation/Interest: when grantor transfers a fee simple subject to condition subsequent, and the
same instrument creates a future interest in a third party rather than in himself (Always a party other than the grantor who will take
over- will always be executory)

Mahrenholz v. County Board of School Trustees 1981: Deed provided to ∆’s provided land “was to be used for school
purposes only; otherwise to revert to Grantors herein.”; school was built but eventually moved; land used for storage by
school; ∏ sued to quiet title to land
o Issue: Did the language of the deed granting land “this land to be used for school purposes only; otherwise to
revert to grantor” create a fee simple determinable?
o Holding: Yes. A person holding a “right of reentry for condition broken” is obligated to make some effort to reclaim
the property when the condition under which it was conveyed is broken. On the other hand, when a person holds
a “possibility of reverter” interest, title in the land is automatically restored to him when the conditions are no
longer met. The phrase “for school purposes only” was not a full grant subject to a condition, but rather a limited
grant creating a fee simple determinable meaning that the grant automatically terminated when the land was no
longer used “for school purposes.” Therefore, ∏ was never required to take action to retake the land.
o Problem of imperfect language; grant claims to revert but is actually subject to reentry
 Close analysis of the wording of the original grant shows that the grantors intended to create a fee simple
determinable followed by a possibility of reverter
 Word “only” seems to be durational and word “revert” suggests coming back without action by
grantor

Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano 196:: ∆ (Toscano) conveyed real property to ∏
as a gift; “for the use and benefit of Mountain Brow Lodge only; and in the vent the same fails to be used by the second
party or in the event of sale or transfer by ∏ of all or any part of said lot, the same is to revert to ∆’s, their successors, heirs,
or assigns.”; ∆’s passed away and ∏ sued to quiet title on the property; ∆’s estate opposed
o Issue: Where a conveyance of real property contains a restriction on how the property is to be used, is the
restriction void as a limitation on alienation?
o Holding: No. A property owner may not restrict the right of a grantee to alienate the property, and courts will not
honor a reversionary clause tied to such a condition. Here, the second the part of the habendum clause (“in the
event sale or transfer…of any part of said lost, the same it to revert to” the Toscano’s) was clearly a limitation on
alienation and could not be enforced. Thus, the second half of the conveyance was void. In contrast, use
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restrictions are valid limitations on property and will be upheld by the courts. While it is possible that restricting
the use of the property for Lodge purposes effectively means that the Lodge is prohibited from alienating the
property, courts in similar cases have nonetheless held that, even where use restrictions effectively prohibit the
future transfer of property, the use restrictions remain valid.
 A use restriction by a specific transferor is the same as a restraint on alienation and is therefore void
 Courts are concerned with people being able to alienate their present possessory estates; this was an
attempt to “dress up” inalienability
 Can’t restrict use only to the holder of the possessory estate; Lodge has Fee Simple Absolute
 The only restriction you can’t place on defeasible fees is alienation restrictions
Future Interests Retained by the Grantor and Vested Remainders
Future Interests: Rights to the enjoyment of property at a future time
Future interests recognized in our legal system are:
 Interests retained by the transferor, known as:
o Reversion
o Possibility of reverter
o Right of entry (also known as power of termination)
 Interests created in a transferee, known as:
o Vested remainder
o Contingent remainder
o Executory interest
 Policy:
o Utility argument: grantor has control over managing land and what happens to it
by constraining future takers. But issue of dead hand control.
Interests Retained by Transferor/Grantor
1. Reversion: Reversion is the interest left in an owner when he carves out of his estate a lesser estate and does not provide who is
to take the property when the lesser estate expires. All reversions are retained interests, which remain vested in the transferor.
1.
2.
3.
4.
5.
When does possession begin? – uncertain what the trigger is, but it’s not going to be immediate on creation of interest
How long – don’t really know answer unless have further descriptor because that tells you how long it’s going to last. Can have
reversion for life, fee simple, etc.
Limits on transfer- freely alienable. No limits or prohibitions. Can be transferred during life, at death, etc.
Contingency- (preceding estate has to terminate before possession. Uncertainty about whether interest is going to become
possessory.) -that doesn’t count as a contingency. No contingencies.
a. True for all interests retained by grantors- no contingencies.
Sharing- very common for reversions to be held under some sharing arrangement because held by a group, like children
Assuming O starts with a fee simple:
1. O -> “to A for life.”
o O has a reversion in fee simple that is certain to become possessory.
o At A’s death, either O or O ’s successors in interest will be entitled to possession.
2. O -> to A for life, then to BE for life, then to C.
a. B has a remainder for life
b. C has a remainder in fee simple
3. O -> “to A for life, then to B and her heirs if B survives A.”
a. O has a reversion in fee simple that is not certain to become possessory.
b. If B dies before A, O will be entitled to possession at A’s death.
c. On the other hand, if A dies before B, O ’s reversion is divested on A’s death and will never become possessory.
 Value of reversions differ because one is certain
 Reversions are transferable during life and descendible and devisable at death
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2. Possibility of Reverter: Always paired with a fee simple determinable; future interest held by the grantor- transferor gives away a
determinable estate. Becomes a possessory interest when condition is breached.
3. Right of Entry: Transferor gives estate subject to a conditional subsequent. Transferor has a right of entry and must assert their
right against possessory owner.
Future Interests in Transferees
1. Vested Remainder: Created at the moment the grant is created but there is no unknown event that could prevent from becoming
possessory, just a delay. Certain to become possessory upon the expiration of the prior estate. Vested if (1) it is given to an
ascertained person and (2) it is not subject to a condition precedent other than natural termination of preceding estate.

Vested if (1) it is given to an ascertained person and (2) it is not subject to a condition precedent other than natural
termination of preceding estate
o Ascertained means known= someone already born, not heirs or future children
o Condition precedent are events that have to happen before taking possession
 Depends where the condition appears in the written grant
 Condition precedent describe in granting language of remainder, not after it
Three types of Vested Remainders:
1. Indefeasibly Vested Remainder: Certain to become possessory. No risk of divestment.
a. O-> To X for life, then to Y and her heirs.
i. Once X dies, Y and her heirs get the estate.
ii. X has life estate; Y has an indefeasibly vested remainder. Y can freely transfer upon possession.
2. Vested Remainder Subject to Complete Divestment: Risk of total loss of possession. Most risk of divestment, could be
entirely displaced by another party.
a. O-> to X for life, then to Y and her heirs, but if Y predeceases X, to Z and his heirs
i. Y has a vested remainder with a condition that could stop possession- future interest capable of becoming
possessory at the termination of the preceding estate. Vested because Y is ascertained and there is
nothing for Y to do but wait until X’s estate expires. Subject to complete divestment because if Y dies
before X then the estate goes to Z.
1. Important where “but if” appears
2. Z has executory interest. If Y dies, Z has a vested remainder.
3. Vested Remainder Subject to Partial Divestment (or subject to open): Risk of diminution of possession. Interest is
diminished because others could come in and share. May have to share the remainder with additional takers.
a. O-> To X for life, then to my children (O and X are alive, O has one child, Y)
i. X has a life estate. O’s children have a remainder. Because O has children, there are ascertained people.
No other conditions than to wait for X’s life estate to terminate.
ii. Y has a vested remainder- but O is alive and can have more children.
1. Not total protection: Y, could be sole owner or end up sharing with many more if O has more
children. Common law assumption is that if you are alive, you can have children.
a. Rule of convenience- after X dies and life estate over, even if O has more children they
are limited from ownership. But just an interpretive tool.
iii. Vested subject to open = starts out vested, but holder might have to share it
Contingent Remainders: remainder that is capable of being possessory but it contingent because its takers are at least one,
unascertained person, or because it’s subject to condition precedent. “Waits patiently for the preceding estate to terminate”
Created entirely in an unascertained person or it is made contingent upon some event other than the natural termination of the
preceding estate
1.
2.
Possession begins when person can be ascertained/not subject to condition precedent and natural termination of preceding
estate. When uncertainties are done, and preceding estate terminates.
a. As a future interest it has to be in future
b. As remainder its natural end of estate
c. And as contingent has to be ascertained person and conditions have to be resolved.
Duration- don’t know just because its contingent how long it would last. Could be fee simple or life estate.
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3.
4.
Yes, freely transferrable (majority approach). Minority of jurisdictions have weird rules on this. But it’s hard to value them and
can be hard to transfer them.
a. When the condition precedent is survival, death would eliminate the condition
i. Why it’s important to distinguish as contingent, because it’s difficult to transfer
Contingency- event other than natural termination that has to happen before possession- yes. There are contingencies. Classic
case where contingencies exist. Events like ascertainment of holders, conditions precedent
a. Matters because of applicability of rule of perpetuities- only contingent remainders can be invalidated
b. Acceleration- what happens when condition remains unresolved. Vested remainders can accelerate and take
possession now. Contingent remainders do not, prevent holders from accelerating into possession.
i. These are legal rules- rule against perpetuities and acceleration.
3 types:
1.
2.
3.
Contingent remainder because remaindermen are unborn/unascertained.
a. O-> To X for life, then to Y’s children. (Y has no children yet).
i. O has reversion. But if Y has child reversion doesn’t exist anymore. If X dies without Y’s children being
born, O has a reversion interest and can take until Y dies because there is a possibility Y will have
children in the future
1. For grants like this, keep in mind the rule of convenience.
ii. Rule: There will always be a reversion when you get to last interest in grant and it’s a contingent
remainder. Any time the final interest in a grant is a contingent remainder, the grantor will retain a
reversion.
Contingent remainder because remainderman is subject to condition precedent.
a. O-> To X for life, then if Y survives X to Y. (X and Y are alive)
i. Condition precedent: “If Y survives X” comes before end of grant “to Y”
1. It literally matters where the end is. Y has to survive X.
ii. X has a life estate.
iii. Y has a contingent remainder.
iv. Z has a contingent remainder.
v. O has a reversion.
Alternative Contingent remainders. Grantor wants to provide for the situation where the initial contingency is not
met. Contingent remainders are often found together.
a. O-> to X for life, then if Y survives X to Y, if Y does not survive X then to Z.
i. X and Y are alive. 2 conditions precedent.
1. X has a life estate
2. Y has a contingent remainder
3. Z has a contingent remainder
4. O has a reversion
ii. When you have a life estate followed by two remainders, and the first is a contingent remainder, the
second one will be one too
1. Second is because condition is prior to end of granting language
2. If you have a life estate followed by two future interests, if first one is contingent, second is
also.
iii. When the last interest is contingent, even with the seemingly conclusive alternative contingent
remainders, the grantor will retain a reversion
b. Language: If the conditional language appears in the grant then it is contingent remainder. If it occurs after,
then it is a vested remainder subject to complete divestment.
i. If grant is ambiguous, courts will favor vested remainders.
Consequences of Vesting:
 O-> To X for life, then to Y and her heirs, but if Y does not reach 30, to Z and his heirs.
o X = life estate; Y = VRSCD; Z = (shifting) executory interest
Executory Interest: Future interest. Becomes possessory immediately upon the occurrence of some event. Something happens, and
the interest “Springs” up and cuts off the preceding estate.; or “Shifting” cuts off the estate of a 3rd party. Different than remainders
because they cut off the fee while it is possessory while remainders wait for estate to terminate (death, etc.). Remainders wait
patiently in line; executory interests are line cutters.
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Executory interests fundamental Q’s:
1. Possession- Determined by statement in grant, but becomes possessory at future, triggering event immediately
2. Duration- Depends on present possessory estate person would have on taking possession. Depends on grant.
3. Transfer- Yes, in same sense that contingent remainder is transferable. If find buyer, freely alienable. But they are uncertain, so
frequently practically difficult to transact and hard to value. Probably going to happen gratuitously. Can pass intestate as well.
4. Contingencies (in contrast to interests that are vested)- there is uncertain, triggering event that may/may not happen that
comes between holder of interest and possession. Also, can be invalidated by the Rule Against Perpetuities.
a. Difference between contingent remainders and executory interest- There are examples of contingent remainders
becoming vested remainders. With executory interests, cannot become vested unless it becomes possessory. The way
it becomes certain Is by triggering possession.
5. Shared- Yes can be shared. To be covered later.
Fee Simple Subject to Executory Limitation: fee simple that, upon the happening of a stated event, is automatically divested by an
executory interest in a transferee.
 Language that would create FS determinable (durational language) and future interest in transferee always creates
executory interest/FS executory limitation.
o Any time, no matter language in first part of grant. Future interest created in 3rd party you’re going to see fee
simple executory limitation paired with executory interest
Fee simple subject to executory limitation fundamental Qs:
1. Possession- when granted. Present possessory estate. Important to see if inter vivos will or at death. Will only possessory when
person dies.
2. Duration- Lasts as long as takes for executory limitation (triggering event) to occur
a. Often a future interest will turn into fee simple subject to executory limitation
3. Transfer- No limitations. Fee interest. Practical limitations in uncertainty, but at least you possess the property now.
a. Want to look for interests in disguise and really restriction on transfer (lodge case)
4. Contingencies- no. already vested.

Difference between remainder and executory interest: Remainder waits until the natural termination of a preceding estate
while XI jumps in and takes possession. Can cut of fee simple subject to executory limitation or vested remainder subject to
complete divestment.

Trust – extremely flexible form of property management.
o Give legal title to a person to manage for the benefit of another person. Courts upheld b/c they knew that it was
helpful to separate management and benefits. Manager was known as the trustee b/c one of the duties was to be
trustful. Use was given a new name, the trust, b/c uses had been gotten rid of.
o Trustee – manages the property for the benefit of the beneficiary of the trust.
Rules Furthering Marketability (including the RAP)
Rule Against Perpetuities: No interest is good, unless it must vest, if at all, not later than 21 years after some life in being at the
creation of the interest. If language violates language, strike (only) that grant out.
Interests tested under the RAP:
 Contingent remainders
 Executory Interests
 Vested remainders subject to open (Class Gifts)
Rule Against Perpetuities: No interest is good, unless it must vest, if at all, not later than 21 years after some life in being at the
creation of the interest.
 “No interest is good” = Unless you meet this rule, interest will be invalid
 “unless it must vest, if at all” = vested means not contingent. So only test interests that have not already vested. Doesn’t
require it to vest, but to know that it will vest if at all. (This is part of understanding policy concern that rule is responding
to- marketability, transactions, alienability, efficiency. Don’t need interest to vest, but need to know who will take it and
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
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resolve uncertainty) Get certainty around who owners are because then land can start going into transactions, freely
moving
“not later than 21 years”
“after some life in being at the creation of the interest” = 21 years after the death of some person who was alive at the
creation of the interest, the moment the grant the was made if inter vivos, or alive at the time the testator died and will
came into effect if it’s a will.
o This doesn’t tell you whose life or when to start counting.
o Look at all the people in the grant who can affect vesting. Look at people whose existence might impact grant.
People mentioned, who can take under it, are affected by it.
 If x dies tomorrow, 21 years later, what will we know about vesting? What about y?
Policy:
 RAP stems from a concern about perpetual contingencies: it’s a compromise btw people interested in maintaining control
of land far into the future and judges and societies interest who didn’t want the “dead hand” to control the property, to
allow for transfer and de-concentration of wealth
 “Dead hand control” – a dead hand controlling land for many generations; setting conditions now about how to use/who
can get property devalues land
 Even when the rule is revised, it is done so prospectively, so they only apply to new interests
 Perpetual contingencies decrease marketability of property
 RAP makes property: more efficient; more developed; put into its best use; fewer transaction costs- the more uncertain
land interests are, the more difficult to transact.
Interests we test under RAP:
 Contingent remainders: not vested. Have to test it to see if within 21 years will know for sure it has vested by becoming
vested remainder or in possessory state.
 Executory interest: contingent interest. Only vest when they become possessory. If have executory interest, figure out
when does it become possessory and transform into FS etc.
 Sometimes rule can invalidate interests that would otherwise be valid because have to cross out that language that
might affect others.
o See this with class gifts. If class gifts are invalid as to any member of the class, have to cross out class gift entirely
even for vested folks. Especially subject to partial divestment.
 Only time a vested interest gets eliminated by application of RAP
Examples:
 O transfers a sum “in trust for A for life, then to A’s first child to reach 21.”
o A is the validating life. You can prove that any child of A who reaches 21 will necessarily reach 21 within 21 years of
A’s death. Valid
 O transfers a sum “in trust for A for life, then to A’s first child to reach 25.” A has no child age 25 or older. There is no
validating life; the contingent remainder is void.
 O -> O in trust for all members of my property class who are admitted to the bar
o Property students = equitable executory interest
o Good under RAP?
 The students are validating lives. All students will die. At deaths we will know.
 We will know all members of class admitted at death of last surviving student and all students are
potential validating lives.
 What if O said, “for the first child of A admitted to the bar?” if A is alive. Good under RAP?
o Should be flagging afterborn takers.
o No, because A’s living children could die without admission and only an afterborn could be admitted more than 21
years later.
 Difference is that in first one, all potential takers are alive at creation of interest. Not in second.
RAP Reform
How to avoid the RAP:
 Careful drafting
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

Saving clause
Take advantage of reforms
o “Wait and see” – waiting to see if interests will vest or fail. If they don’t vest or fail, then the interest is void. Would
still have to know which interests violate the common law rules- still have to identify when RAP would void the
interest.
 For the statutory period (common law perpetuities period)
 For 90 years (USRAP)
o Abolition – generally only applies to certain types of interests held in trust, and only if trustee retain power of sale
over assets
Cotenancies: Answers Question of How is the Interest Shared?


How various interest are shared concurrently- Answer to fundamental sharing Q is that all can be shared by the cotenancies below.
Default Rules for Co-tenancies
o In a grant to two or more parties, the parties will be held as tenants in common unless;
 The grant states that it is made to the parties “as joint tenants” in which case it will create a joint
tenancy, or;
 The grant is made to spouses in a state recognizing the tenancy by the entirety, in which case it will
create a tenancy by the entirety
Tenants in Common – have separate but undivided interests; a tenant can only sell part but is entitled to use of the whole; can
unilaterally transfer what each party has (undivided but separate interest) but can do so during life or at death by will/intestacy; no
survivorship rights between tenants in common: when one person dies other tenant’s share not increased.
 Partition – the act of dividing a parcel of property by physical division so that each party obtains physical control,
possession and ownership of a portion of the property that he or she formerly owned as a member in a co-tenancy;
ultimate way to resolve conflicts between co-tenants
Joint Tenants – have the right of survivorship; treated as a single owner/unit; equal shares in the property; each owns the undivided
whole of the property. Best way to distinguish is right of survivorship. Way to avoid probate.
 Language of intent to create a joint tenancy with right of survivorship is often required
o Language like all interests vest at the same time; equal shares or equal possession to whole
 Joint tenants have right to sever- break it up.
o Can happen by mutual agreement and then become tenants in common.
o Or can sever unilaterally- without mutual agreement. Can convey individual interest to a third party, T, and once
that happens joint tenants 1 and 2 are still joint tenants to each other, but are tenants in common with T. Becomes
a tenancy in common which means that the right of survivorship cannot be transferred
o Can use a straw to sever a joint tenancy
 i.e. From A, to B and C as joint tenants
 B grants to D; C and D hold in FSA as tenants in common
 D grants to B; B and C now hold property in FSA as tenants in common
 No longer joint tenants
o Can use a straw to create a joint tenancy in grantor and A:
 G grants to B
 B holds in FSA
 Immediately B grants to G and A as joint tenants
 G and A hold in FSA as joint tenants
o Judicial severance- bringing an action for partition. Court will split property and sale and apportion proceeds.
 Tenants in common can also sue for partition but not as necessary because already split interests
Difference between joint and common: Right of survivorship. When one joint tenant the interest of other joint tenant persists and
is interest to whole. Whichever joint tenant is left standing at the end will own the whole.
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


Example: 3 joint tenants of 90 acres. When #1 dies, 2 and 3 become joint tenants of whole. #1s interest extinguished by
death.
This consequence is important because of the effect it has in avoiding probate. Probate court must make determinations of
who new owners are of property after someone dies. Whether intestacy statute or will.
o Probate can take a while and is costly. Need lawyers. Fees. Generally, takes at least 6 months, sometimes years, to
pass through probate system. Joint tenancies allow you to transfer outside of probate system.
 Property doesn’t go through transfer system because person, at death, doesn’t own it anymore.
 One of the main reasons for joint tenancy system.
If want to transfer property at death, people may prefer tenancy in common.
Tenants by the Entirety – only available to those legally married; operates more like joint tenants (right of survivorship); tenancy can
only be severed by divorce or death of a spouse; only between spouses at the time of creation, not anticipated spouses.
 Single interest
 Difference between joint tenancy is that no unilateral severance available. Cannot convey or obtain judicial order that
unilaterally severs interest. Must convey together.
o Only way tenancy by entirety will be severed unilaterally is if one party seeks divorce. States have default rules
about what happens to interest.
 Only available in little more than half the states. Community property states don’t need it.
Language
 Cotenancy default rule- In grant to two or more parties and the type of cotenancy is not specified, the default is tenants
in common.
o Unless grant specifies made to parties “as joint tenants” or in joint tenancy, it will create a joint tenancy.
 Anything less specific will be governed by the default rule and create tenants in common.
o Or the grant is made to spouses in a state recognizing the tenancy by the entirety, in which case it will create a
tenancy by the entirety.
Marital Property and Property in Other Committed Relationships
Marital Property in Three Phrases: Separate Property v. Community Property
 During Marriage:
o Where most of the difference between separate and community property is
 Separate keeps it separate. Whoever acquires property has title to it.
 Community means property of both spouses. It’s the marriage’s property.
 Issue comes up about whether you need permission to transact
 Divorce: how do we deal with splitting up the marital property.
o In all separate property states today, there is no presumption that separate property exists at divorce.
o Requires property to be equitably distributed
 Reflective of what community states do
 But community states may have 50/50 splits
o Goals of equitable distribution:
 Fairness- avoiding unjust enrichment
 Valuing non income generating contributions/activity
 Protecting expectations
 Fault, in some jurisdictions
 Empowering spouses
 Protecting vulnerable parties
 Practical solutions- equitable distribution also has to be practical. Allow parties to go off into separate
lives but court won’t be involved forever
o How to assess “equitable” distribution
 Understand what the party’s expectation may be when property was acquired
 Look at the length of the marriage
 Assess contributions made by each party to the marriage
 What is the tenor of the marriage/how did the marriage fall apart?
 Equity and practicality
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
Death- how do we provide for transfer of deceased spouse’s property to others, and what share should surviving spouse
receive?
Separate v. Community Property Protections
 Community property- both parties are owners during marriage. On dissolution because of death or divorce, property needs
to be distributed. Predeceasing property can pass to heirs and devisees and other spouse keeps other half because it was
always co-owned.
o Don’t have anything to worry about in terms of spousal protection. Community property manages regime on its
own.
 Separate property- person who earned or whose named in title owns property. Termination because of death, without
spousal protection, the name on title would control. Spouse needs protection.
 Separate property states can have Elective share/forced share- A Right granted to surviving spouse based on statute.
Common approach gives spouse right to take some fraction of property other spouse had at death, if the spouse elects to.
o Can be avoided by agreement but looked at carefully in case they’re voluntary.
o Exceptions to elective share statute: would not go to spouse under statute
 Joint tenancy property- property doesn’t go through probate. Persists in the surviving joint tenant and
extinguished in predeceasing. Property is never going to go into estate of predeceasing joint tenant.
Property will go to other joint tenant.
 Life insurance proceeds- because of contractual arrangements.
 Property predeceasing spouse transferred away during life- only subject to property owned at death
 There have been cases where property was transferred fraudulently so couldn’t be subject to
elective share and courts forced it back. But rare.

In Re Marriage of Graham 1978: Parties married in 1968; wife was an airline stewardess; husband in school for M.B.A.; no
marital property; wife contributed substantially to education
o Issue: Is an educational degree considered marital property? Property is broadly defined; something either party
acquired during marriage.
o Holding: No. Upon the dissolution of the marriage, the trial court has the discretion to order the distribution of
marital property between the parties. Although the statute defines “property” broadly, it is not so broad as to
cover educational degrees. Educational achievements are personal to the holder, terminate upon death, and
cannot be given away. Does not have any exchange value or objective transferable value on an open market.
Terminates on death of holder, is not inheritable. Does not have attributes of property. Had the couple acquired
some marital property during their marriage, Mrs. Graham’s support for her husband while he earned his degree
could have been taken into consideration during the division of the estate, but there was no such marital property
here.
 Dissent: No question as to Mrs. Grahams support; “property” in question is not the actual degree, but the
increased earning power that comes with the degree
o Practicality problems in determining the earning potential of an M.B.A.
o Most courts follow the Colorado Rule announced here, but some follow the NJ Rule which award alimony to
reimburse for the contribution to the degree with interest

Obergefell v. Hodges 2016: SCOTUS grants cert to determine whether 14th amendment requires a state to recognize same
sex marriage performed out of state and grant same sex marriage licenses.
o Court pointed out that there are many benefits attached to institution of civil marriage
o Marriage also confers obligations on legally married people, existing under both state and federal law
o Goodridge v. Department of Public Health- Massachusetts case that emphasized the property dimension of civil
marriage. Benefits are enormous and touch nearly every aspect of life and death.
o Federal law also confers benefits like right to file a joint tax return, marital deduction, right to create a family
partnership
o Before Obergefell, some states created domestic partnerships for same sex marriages and conferred many of the
same benefits a marriage would. But federal law did not confer benefits on same sex partners.
Other Committed Relationships
 Common law marriage- legal doctrine recognized in minority of states, not widely available
o Expressed intention to be married and act like a married couple but just aren’t married
o There are conditions to be met
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o


Under comity principles, if couple common law married in one state and move somewhere else, new state still has
to recognize it
There are couples who don’t claim to be married, but still claim to each other property.
o Contractual law- obtain rights based on some kind of contract.
o Formative case is Marvin v. Marvin- couples should be able to contract with each other as long as not based solely
on sex. Willing to enforce both express and implied Ks.
 Other jurisdictions all over the map- some adopted Marvin, some only enforce express k not implied ones
(like NY).
Status v. Contract
o Marital status and status of spouse really confers lots of government benefits that are restricted by same sex
marriage- discriminatory effect
Introduction to the Lease
Lease: Conveyance of a leasehold interest. Both conveyance and contract. Typically, not recorded.
 Only four ways a nonfreehold lease can be held
1. Term of Years – lasts for a fixed period of time or a period computable by a formula; To X for 10 years
a. Notice: No notice of termination required
b. Can be long-term, but can be limitations in statutes
i. Term of Years Determinable: Made for period; landlord owns in fee simple, goes back to landlord
2. Periodic Tenancy – lasts for a fixed period but repeats until termination. Year to year, month to month
a. Notice: Common law; half a year’s notice required to terminate year-to-year. For any periodic tenancy of less
than year, notice of termination must be given equal to the length of the period, but not to exceed 6 months.
Has to end on final day of period, not in middle of tenancy. (Ex: March 20 on month-to-month means earliest
you can leave is April 30).
i. NY/NYC: Relationship is licensor/licensee. Licensor can revoke license at any time
3. Tenancy at Will – is not a fixed period of time, but instead lasts until termination. Can potentially last forever.
a. Notice: common law has no advanced notice requirement (over when you say it is); statutes most commonly
requires 30-day termination notice or a full rental period.
4. Tenancy at Sufferance – When a tenant remains in possession (holds over) of a terminated lease tenant becomes
tenant of sufferance; not a fixed period of time, but a landlord can (1) evict, have tenant removed, and seek damages
like lost rent; or (2) convert to new term.
a. no notice of termination required; landlord can evict immediately along with bringing a suit for damages.
b. Tenancy in sufferance intended to be short tenancy during which landlord decides

Garner v. Gerrish 1984: Defendant Gerrish leased a house from decedent; lease omitted termination date but said “Lou
Gerrish has the privilege of termination of this agreement at a date of his own choice.”; Plaintiff (executor) sued to evict.
Plaintiff says tenancy at will and can be terminated at decedent’s death; Gerrish says life estate determinable and can end
when he decides to terminate.
o Issue: Where a lease expressly grants the lessee, but not the lessor, the right to terminate at will, does the lessor
receive the same right by operation of law?
o Holding: No. At common law, a lease created with termination rights in the lessee also created the right of at-will
termination in the lessor. Courts have held that a lease terminable by the lessee is a lease at will for both the
lessee and the lessor. This emerged out of the doctrine of livery of seisin, in which a physical part of the land had
to change hands to affect a life tenancy, or the interest transferred was merely a tenancy at will. Because that
ritual is no longer integral to the conveyance of land interests, there is no reason the law must adhere to the
technicalities generated from those rituals. The lease here granted Gerrish (and only him) the right to terminate
the lease at will. This is a straightforward method of creating a life estate terminable at will. Providing the lessor
with the right of termination is contrary to the terms of the agreement and goes against the will of the contracting
parties.
 The court finds this is a regular freehold interest (life estate)
 Court focuses on the original grantor’s intent
Unlawful Discrimination

Fair Housing Act 42 U.S.C.A. §§3601-3619, 3631: Residential.
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o

§ 3604: Protected categories are race, religion, gender, familial status, handicap, and national origin
 Exemptions:

“Small players” (an owner who owns less than three houses) renting single family homes not using
brokers/advertising
 Owner occupied housing. Concern for owner who has to live with the person.
 Does not apply to owner/occupancy dwellings in an apartment holding less than a total of four families
o § 3604 (c): Prohibits discrimination in advertising
 Applies to “small players”
 “small players” want to be able to sell their homes to particular people; forcing them to adopt
anti-discrimination provisions would be a form of thought policing
 Thus, removing discrimination from public spaces through prohibiting discriminatory advertising
was a compromise
Civil Rights Act 1866: Only applies to racial discrimination; so protected class is more limited. But broader in that also
applies to commercial properties and doesn’t contain the FHA exemptions.
Subleases and Assignments
In a situation with an assignment or sublease, there are three parties
 Landlord (L)
 Original Tenant (T)
 New Tenant (T1)
Privity: Privity means some kind of relationship that gives rise to a legal obligation; will determine whether parties will be able to
successfully sue each other. Landlord has obligation to give possession / Tenant has obligation to pay rent.
 Privity of Estate: relationship with regards to the transfer/sharing of an estate; deals with property obligations in a lease.
Relationship between two parties who are transacting over the same estate of property.
o They will have potentially successful property law claims against each other
o If not in privity, property law won’t really help/govern
 Privity of Contract: relationship with regards to a contract; deals with contractual obligations/relationships; parties to a
valid contract.
This is not usually an issue with landlord and original tenant, as they are both in Privity of Estate and Privity of Contract. Leases
provide for both types; hybrid. Becomes relevant when you “sub-lease.” Relationship is no longer between two parties. Question is:
what rights transfer from these types of privity?
Assignment: Tenant transfers entire property-based interest to T1
 Assignment- all of the remainder of tenancy is transferred (focused on temporal aspect- all time left on lease to assignee)
o Landlord-tenant no longer parties to privity of estate because property interest gone.
o Privity of estate now between Landlord-T1
 Matters if someone concerned about enforcement of property-based obligations
 Tenant no longer available to sue/be sued by landlord
o Privity of contract does not change between Landlord-Tenant. Remain in privity of contract.
 Promises to be paid on certain schedule, etc. those kinds of contractual promises can be enforced.
o Privity of Contract between Tenant and T1.
 If there are new promises with T1, they may also have relationship of privity in contract but with new
promises.
Sublease: Tenant doesn’t transfer entire interest to T1; just some portion.
 Tenant creating mini landlord-tenant relationship with T1. Creating new sub-tenancy.
 Landlord-Tenant still have privity of estate and privity of contract
 Landlord and T1 have no relationship
o Can’t enforce property/contract law against each other
 Tenant and T1 have Privity of Estate and Privity of Contract
o With new agreement, not original agreement
o Any contractual promises set up in new agreement between them
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


Ernst v. Conditt 1964: Landlord- L- Ernst; Tenant- T- Rogers; T1- Conditt. L contacted T about the past due rent who didn’t
answer- said T1 liable. Question is if it’s a sublease or assignment. Defendant, T1, says it’s a sublease so T is liable to L, T1 is
not liable to L. L wants to get money from T1 which is only possible if it’s an assignment, otherwise would have to go find T.
o The general rule as to the distinction between an assignment of a lease and a sublease is an assignment conveys
the whole term, leaving no interest nor reversionary interest in the grantor or assignor. In a sublease a tenant
grants an interest in the leased premises less than his own, or reserves to himself a reversionary interest in the
term
o Modern rule is to follow the intention of the parties
 Court finds it’s an assignment: look at the intention of the parties. Agreement passed term, no reversion;
Rogers parted with his entire interest in the property. T1 paid rent and was in possession the whole time.
o Third Party Beneficiary: Exception to privity. When a promise is undertaken between 2 parties to K for benefit of
3rd party (who is not included in K), 3rd Party can sue because would be harmed by non-enforcement.
 If promise is between T and T1, L can step in under 3PB because L would be harmed by non-enforcement
of T and T1’s agreement. Important, because L can, generally, only sue T in sublease relationship.
 In this case, assignment gives L ability to recover rent from T1 (PoE). Only way to recover for
other promises is under 3PB exception to PoK.
o Should check if the court accepts 3PB at all.
Kendall v. Ernest Pestana 1985: Pestana is L; Bixler is T. Commercial lease has a provision is that the lessee may not assign
the lease or sublet the premises without the lessor’s prior written consent. Issue is whether landlords who have this clause
can withhold consent unreasonably.
o Court adopts requirement of having reasonable reasons- refusal of permission must be for a commercially
reasonable purpose.
 Landlords don’t like this because they bargained for this in their lease, maybe they would have changed
other terms to compensate for this concern. Concern about whether parties are getting what they
bargained for. Also concerned that reasonable might be a narrow standard.
 CA codified rule after Kendall.
 Can this be waived in jurisdictions that follow the commercially reasonable rule? – Some courts
say yes; others say not a waivable condition.
o Factors to consider for what is reasonable: (1) Ensure tenant is financially able; (2)
Alteration to the premises; (3) Legality of Use; (4) Nature of occupancy; (5) Use complies
with uses anticipated by landlord
 Preserving image can be legitimate depending on specific rule.
o POLICY: Concern of freedom of alienability v. freedom to K / lessor allowed to protect
own interests.
 Incorporates idea of good faith and fair dealing into Prop.
Berg v. Wiley 1978: ∆ (Wiley) leased building to Berg to run restaurant; lease restricted modifications to structure; ∆
reserved right to re-enter if conditions breached; Berg assigned to ∏ (sister); ∆ wrote to ∏ claiming lease was violated
because of remodeling; ∆ changed locks on ∏; ∏ sued
o Issue: Is self-help an appropriate remedy for perceived violations of a lease?
o Holding: No. Under the common law rule, a lessor may use self-help to retake possession of leased premises, but
only if the means used to retake are peaceable. Here, changing the locks was not a peaceful means of reentry,
especially in light of the history of animosity between the parties. More importantly, there is a growing trend that
self-help is never an appropriate means to retake property under a lease, and that judicial means must always be
used. Therefore, any lessor who wishes to retake property from a lessee for violations of the lease must seek
judicial assistance.
o Questions about tenant default and whether tenant abandoned
 By the time the eviction took place tenant abandoned. Court says it’s a jury question, jury had sufficient
evidence to find no abandonment, like fact that tenant was physically on the premises
 Benefits of self-help are that summary proceedings are time consuming, expensive, and
inefficient for landlords
o LL changed locks while tenant gone. Example of self-help eviction contrasted with judicial evictions.
 In common law, LLs had options between both, as long as self-help is peaceful.
 Court says have to change rules and not allow LL to self-help.
 Fear of violence, and judicial process is better alternative.
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
We have summary proceedings now that are easier and cheaper and alleviate LLs worries.
Duties of Landlords and Tenants
The Tenant Who Has Abandoned Possession (instead of defaulting)



Sommer v. Kridel 1977: ∆ (Kridel) signed two-year lease with ∏; before moving in, ∆ told ∏ his engagement broke off and
he was no longer able to afford rent; third party inquired and was ready to lease the vacant unit; ∏ said unit was already
rented by ∆; Kridel never moves in. Landlord doesn’t re-rent premises until thousands of dollars in rent accrues; ∏ sued for
rent for entire term of lease
o Issue: Does a landlord have a duty to mitigate damages when seeking rent from a defaulting tenant?
o Holding: Yes. A landlord has a duty to mitigate damages by making a reasonable effort to re-let the premises when
seeking to recover rent from a defaulting tenant. Such a duty is consistent with basic justice and fairness. If a
landlord fails to mitigate damages when he has the opportunity, the defaulting tenant may be relieved of his duty
to pay rent. Here, a third party was ready, willing, and able to rent ∆’s unit and asked specifically about it. This
made ∏’s duty to mitigate very easy as it would have taken little to no effort to re-let the apartment.
 This case shows how much contract law has become a factor in property
Riverview Realty v. Perosio: Carlos Perosio entered into a written lease with plaintiff Riverview Realty. 2-year term from
February 1973 to January 31, 1975. Vacated in February 1974. Landlord filed complaint for payment from February to
October, defendant said there was a valid surrender of the premises and plaintiff failed to mitigate damages, trial found for
landlord.
o Perosio does move in. Apartment is empty for a while. There is no person inquiring about the apartment. But other
than that, the cases are similar.
Both cases followed rule that landlord doesn’t have duty to mitigate damages, which is the majority rule and Re 2d rule. But
new trend in favor of mitigation requirement.
o Reasons for non-mitigation rule- Contract law- can be some kind of expectation damages (k law)- landlord has
expectation that they will get 2 years rent after 2 years lease. And property law- once conveyance is made,
landlord doesn’t have anything to do with property until reversion and it comes back. Landlord shouldn’t have
obligations and should be secure they will receive rent without doing anything else.
o In contract law, have to mitigate damages. Inefficient to allow damages to add up. Break in expectation damages
rule.
o But property law doesn’t have a mitigation doctrine rule because see parties as not having a continuing
relationship- conveyance is a transaction that’s over
Duties, Rights, and Remedies
 Under traditional common law, only thing tenant could complain about was if tenant was evicted, put out of possession.
Complaint about state of premises out of luck. Tenants obligation to fix and upkeep premises.
 Modern law more sympathetic. Development happened over time through series of reforms.
 One with most endurance is implied warrant of habitability.
Quiet Enjoyment and Constructive Eviction
Covenant of Quiet Enjoyment
 Covenants are promises that don’t have to be written down. Every lease includes implied covenant of quiet enjoyment
(some leases explicitly state it): Tenants are supposed to be able to quietly enjoy possession
o Covenant is typically breached by eviction.
 constructive eviction – premises are so poorly maintained that it’s as if the tenant was being forced off.
 Positive- Tenants who were forced off weren’t forced to pay rent
 Negatives- Courts may disagree that premises were so bad they were evicted. Things like periodic
infestation, occasional floods, mold, general disrepair, one but not all plumbing not working- are
hard to predict for tenants. Very factually specific.
o Tenants are taking the risk because to argue constructive eviction they need to leave the
premises first and then use it as claim for damages or not paying rent. But if court
decides it’s not constructive eviction, they would still have to pay other premises (2
rents)
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o




It’s hard for tenants to know that they have this right because its implied in every lease,
not written in lease. Most people don’t know about it.
Every jurisdiction recognizes this covenant, and it applies in every lease, commercial and residential. Something to think
about when facts have poor quality of premises- but note that it’s not a perfect solution.
Actual eviction- being physically removed or kept out. Constructive eviction- conditions amount to a substantial breach of
the covenant of quiet enjoyment and tenant leaves within a reasonable time
o Once evicted, relieved of obligation to pay rent
Dependence of covenant doctrine- allows vacation
The conventional rule holds that where a landlord commits an actual eviction, even though from a part of the premises
only, the tenant is relieved of all liability for rent notwithstanding continued occupation of the balance. The landlord, it is
said, may not apportion his wrong.
o Re 2d rejects rule- tenant may receive an abatement in the rent but may not withhold all rent
The Illegal Lease
 Doctrine from K law
 Tenant who is leasing premises, stops paying rent, waits to be sued, and defends on argument that lease was an illegal K
because the condition of the premises is so bad that leasing it violates housing/building code.
o So there has to be a relevant housing code
o Significant violation
o Condition has to have existed at the time the lease was made, not developed over time
 Has momentary benefit of allowing tenant to stay. But once it’s over the lease is void and tenant is a squatter.
 Doesn’t help a tenant in long term to have premises repaired.
o Good defense for tenant who wants to stop paying rent and wants to wait and see. But not a way for a long-term
solution.
Implied Warranty of Habitability
 More endurance than illegal lease doctrine
 Almost exclusively a protection for residential leases- because it’s about habitability. Some minority has warranty of
suitability for commercial leases.


Hilder v. St. Peter 1984: Tenant keeps paying rent while living in terrible premises and then sue to get compensated for it. ∏
(Hilder) rented apartment from ∆; abundance of problems; ∏ complained to ∆; never fixed problems; ∏ often fixed
problems at own expense; ∏ sued for breach of warranty of habitability
o Issue: (1) Should the court adopt the implied covenant of habitability? (2) If yes, is a tenant entitled to a return of
rents paid for prevailing on a claim of breach of implied covenant of habitability? (3) If yes, is a tenant entitled to
an award of compensatory and punitive damages for prevailing on the same claim?
 Holding: (1) Yes. All residential rentals include an implied warranty of habitability which cannot be waived
or disclaimed. (2) Yes. Because the lease is a contractual relationship between the parties, the standard
contract remedies of rescission, reformation, and damages are available upon a breach of the covenant.
Further, abandonment is not required for a tenant to recover her back rent paid for a substandard
dwelling. (3) Yes. Where a breach of the implied covenant of habitability exists, the tenant has several
options, including withholding future rent payments until the problem is resolved. A tenant may recover
compensatory damages reflecting her discomfort and annoyance arising from the defects, along with
punitive damages if the breach is so wanton so as to justify such an award.
Prohibition on Retaliatory Eviction – creates a rebuttable presumption that increases in rent or refusal to renew a lease
after a complaint is actually retaliation which landlord then has to combat
o If you see a fact pattern that looks like retaliation, flag it and cite facts of a bad faith basis
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Part 3- Mortgages
The Land Transaction
Introduction to Buying and Selling Real Estate
Mortgage: the security interest in land or a home provided by a borrower to get a lender to lend them money; a mortgage is created
by a borrower and subsequently given to the lender
Mortgagee: lender/bank
Mortgagor: borrower/house buyer
 Borrowers need to meet lender’s criteria, and two other requirements:
o 1. Lenders requires buyer to execute a promissory note: contract agreeing to pay back money and interest on
some schedule; fixed rate over some period of time
o 2. Lenders also need to receive the mortgage- security interest
 Mortgage important for if borrowers don’t pay loan/doesn’t follow promissory note: If a promissory note is violated,
mortgagee could go to court and get a damage award, but if a mortgagor can’t make mortgage payments, don’t they not
have money?
o That is why a mortgage gives a mortgagee a surefire way to recoup losses
 Real property is not a liquid asset. Complicated to get value out of it, hard to get liquid value out of it like cash.
o Mortgage intended to provide protection to lender
 When borrowers miss payments first step is for lender to give them notice- governed by statutes, not easy to describe
when it starts
 If the mortgagor defaults and mortgagee wants to implement their rights, they can foreclose on the mortgage
 Possible to add mortgages, can have second or third mortgage. But first mortgage has first priority, second has second
priority, etc. can be more difficult to obtain judgments unless property is valuable.
o New lender willing to make second mortgage because value of home is greater than what first mortgage has on it
o Used by borrowers to obtain liquid capital, get the equity out of their home
 Both mortgagors and mortgagees sell interests. Mortgagors sell house/property, mortgagees sell their mortgage interests.
o Sometimes purchaser takes subject to mortgage or assumes mortgage.
 (similar to sublease and assignment difference)
 Subject to mortgage- new buyer doesn’t take personal liability to pay it off. Mortgage remains with
original purchaser but not obligated to pay deficiency: new buyer takes the land subject to the lien on it
but is not personally liable on the debt. If foreclosed mortgagee cannot sue the new buyer on the debt.
 Assuming mortgage- new purchaser promises to pay off loan. Change in price benefit. If you don’t
assume the mortgage can’t pay it off: new buyer becomes personally liable on the debt, mortgagee can
sue either the new buyer or original mortgagor (as between them, the new buyer is primarily liable).
Foreclosure: selling the underlying property either by, depending on jurisdiction:
1. Judicial Sale: procedural protections to ensure the sale is good for both parties; run by judges, more conclusive than private
sale but takes longer and is more expensive
2. Private Sale: subject to some procedural protections; fast; but might be subject to challenge later like in Murphy
Proceeds from the sale surpassing the outstanding mortgage balance go back to the mortgagor (mortgagee only entitled payment of
what’s owed)
 If a sale yields less than the outstanding balance mortgagor is responsible for the difference- mortgagee can seek a
deficiency judgement for a damage award through the execution of a promissory note
Deed of Trust: Instead of the borrower giving the lender a mortgage, the borrower gives the lender a deed of trust. Borrower
transfers title to lender as trustee. Trustee is legal title holder with power to sell the property only if borrower defaults. Different
mechanism rather than creating a security interest; shifts legal ownership instead.
 Notice is still required but tends to work faster which isn’t good for borrowers. Jurisdictions have made different choices
about retaining alternative or not.
o Option is probably more beneficial to lender but check jurisdictions regulations on them
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Financing Real Estate Transactions
Changes in mortgages and the mortgage market

Murphy v. Fin. Dev. Corp. 1985: Minority rule. ∏ (Murphy’s) refinanced mortgage with ∆; ∏ fell behind payments; ∆’s
notified of intent to foreclose; ∆’s delayed sale at ∏’s request but were unable to pay; ∆’s did not publicize foreclosure sale
or have home re-appraised; only bidder at sale was ∆’s representative; purchased home for $27k and resold for $38k
o Issue: Is a mortgagee under a duty to the mortgagor to exercise good faith and due diligence when conducting a
foreclosure sale?
o Holding: Yes. When a mortgagee conducts a foreclosure sale, it owes an essentially fiduciary duty of good faith and
due diligence to the mortgagor. This means the mortgagee must make “every reasonable effort to obtain ‘a fair
and reasonable price.’” Bad faith requires a purposeful disregard duty or intentional harm. Due diligence requires
the mortgagee to act as a reasonable man would with respect to the sale. Here, ∆’s worked with ∏ to avoid
foreclosure, proving good faith. However, ∆’s did not exercise due diligence to secure a fair price. ∆’s offer to sell
the property for $40k on the same day they purchased it for $27k proves they knew the property was worth more,
but their only concern was recouping the outstanding debt. ∆’s could have set a minimum bid, advertised the sale
better, or postponed when no bidders showed up.
 A mortgagee acts as a fiduciary which is where this good faith and due diligence duty arises from
Secondary Mortgage Markets: Credit wasn’t widely available under old local system so secondary market created by the
government to insure mortgages; mortgagees can sell interest in an open market for someone else to take a chance on the risk and
return (Fannie Mae/Freddie Mac); this expanded access to credit and put more wealth into the market
Mortgage Backed Securities: mortgages put into pools, sliced into smaller securities, and sold as securities to investors. Mortgage
rates went down. Cheaper to get mortgages and more access to credit. But incentive to carefully screen mortgagors also went down
because with more middlemen, there are fewer incentives to check if borrower was credit worthy.
Subprime mortgage market: as mortgage backed securities sold, created demand for them. Created subprime mortgage market for
riskier mortgages to satisfy the demand but loaned with higher interest rates because they were riskier. Issue becomes “Is
everything in the pool safe?”
 This long chain of lenders and investors spiraled because no one looked at how risky these mortgages were so people
weren’t getting their money back and insurance companies couldn’t cover their losses (Financial Crisis of 2007)

Commonwealth v. Fremont Investment & Loan 2008: ∆ initiated a number of subprime, adjusted rate mortgages. Loans
were farm loans. Loans were adjustable rate mortgage loans with fixed terms for first couple of years. But these started
with artificially low rate for first years, and then rates went up at least 3%.
o Adjustable rates not always predatory. But the people loans given to didn’t have income to back up the higher
rates to Massachusetts residents; payments increased after first 2/3 years and required no down payment;
majority ended up defaulting. Bank should have known borrowers could not continue to pay them. Additionally,
loans had low loan to value ratio. Borrowers didn’t have to put any money down. Lot of risk for lender who should
have known couldn’t pay.
o ∆ entered into agreement with ∏ (Attorney General) to consult ∏ before foreclosing on any loans; ∏ objected to
most foreclosures and brought consumer protection enforcement against ∆ claiming they acted unfairly and
deceptively in issuing this series of subprime mortgages
 Court agrees with AG about question of injunction, but all it does is require AGs permission to foreclose
homes. Court does not absolve borrowers of obligations to pay back loans.
 Court is balancing interests of consumers and creditors
 This might make lending harder and increase mortgage rates, WHICH IS GOOD BECAUSE SOME
PEOPLE CAN’T AFFORD MORTGAGES
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Part IV: Private and Public Control of Land Use
Introduction and Creation
Affirmative Easement – most easements are affirmative; rights that give ability to enter the property of another
Negative Easement – allows owner to restrict what the other party can do with their property (easement for light and air restricts
building so as not to block light and air)
Appurtenant Easement – if you have access tied to a particular parcel of land (i.e. Right of Way)
Easement in Gross – no dominant tenement (i.e. easement for advertising/billboard); either party might have land attractive for
advertising; entitles owner to access/control land of servient tenement; no parcel needs to be benefitted
License – an oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would
constitute a trespass; limited duration and express revocability
Dominant Tenement – estate held by owner of easement
Servient Tenement – estate being used
Easements
 Irrevocable interest in land that entitles the owner of the easement to enter or control property held by another
 Easement don’t bind people, but they bind property instead
 Once an easement is made, it’s there despite whether or not the individuals who initially agreed to it are presently
possessing. Can make property more valuable to future owners as well, with a right of way.
o License- revocable permission to use a right of way
 Easements are affirmative or negative
o Affirmative- Right of way. Gives holder of easement right to enter or otherwise do something on other land.
o Negative- Gives holder right to restrict landowner
 Most common is for light and air- to not block windows, prevent neighbor from building a structure that
would block light and air
 Negative easements restricted in common law, so people went to find relief in equity and got RC and
equitable servitudes
 Easements are either appurtenant or in gross
o Appurtenant- easement is to benefit a particular, other parcel of land. Right of way is easement appurtenant.
 Right of way isn’t for anyone to go across, but for easement holder to use. Tied to other parcel of land
(Blackacre). Not having Blackacre’s windows obstructed are also appurtenant.
 Most are appurtenant. When it’s unclear, courts err on side of finding appurtenant.
 Easement travels with the dominant parcels. Typical to define parcels as dominant and servient.
o Dominant parcel is the one that gets the benefit (Blackacre)
o Servient is the one being used for benefit of someone else (Whiteacre)
o In gross- no particular parcel that the easement is meant to benefit. Lack of a dominant parcel.
 Example: easement for a billboard on Blackacre.
 Blackacre is servient, being used. But no dominant- no land is benefited. The billboard company
is benefited. They may not even own real property.
 Was harder to figure out how easements in gross are transferred. They were hard to enforce
after transferred traditionally. Modern law more comfortable with transfer, generally yes you
can transfer easements in gross (except for ones for personal recreational easements that are
generally not). But still won’t have a dominant parcel.
 Usually a distinction is drawn between easements and covenants
o Covenants enforceable at law- real covenants
o Covenants enforceable in equity- equitable servitudes
 Real covenants/ equitable servitudes are hybrid contracts that bind future land owners. Bind not only the
people making the promise but also successors in interest.
 Difference - an easement is a property interested created by grant, whereas real
covenants/equitable are created by promise. RC enforced by damages; Easements enforced by
injunction.
 License: A license is oral or written permission given by the occupant of land allowing the licensee to do some act that
otherwise would be a trespass
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o
Different than easement: license is revocable, but an easement is not
 Exceptions to rule that licenses are revocable:
 License coupled with an interest cannot be revoked
 License becomes irrevocable under the rules of estoppel
 Re 3d- License that cannot be revoked is treated as an easement
Creation of Easements: Can be created by express grant or reservation, by implication, or by prescription
Types of Easement Creation
 Express Easement: clear grant. An easement over the grantor’s land may be granted to another.
o Statute of Frauds requirements: Need a written instrument signed by the grantor, if not, it’s a license
 Easement by Estoppel: starts with permissive use, then improvements that rely on the easement solidify existence of the
easement by estoppel
 Easement by Implication: Created by operation of law, not a written instrument. Except to the Statute of Frauds. But can
only be implied in narrow circumstances indicating that the parties intended an easement or that it is a necessity. Common
owner necessary. 2 kinds:
o Implied from existing/prior use: Existing at the time the servient tenement is separated from the dominant
tenement. It matters that the common owner was also using the property in this way. If, prior to the time a tract of
land is divided into two lots, a use exists on the servient part that is reasonably necessary for the enjoyment of the
dominant part and which the court finds the parties intended to continue after the tract is divided. 3 requirements:
 Can only be implied over land granted or reserved when a tract is divided into two or more parcels.
 If implied in favor of the grantee (transferee), the easement is created by implied grant to the
grantee. (More likely to be found to implied. Construe grants against grantor.)
 If implied in favor of the grantor, the easement is created by implied reservation to the grantor.
(Traditional courts say only find this if there is strict necessity because hesitant to favor grantor)
o Example: O divides Blackacre into 2 lots. Sells back lot with house on it, lot 1, to A,
retains lot with driveway on it, lot 2. Court will imply a grant to A of an easement of way
over lot 1. If O sold lot 2 and kept lot 1, a court would imply a reservation of an
easement over lot 2.
o Van Sandt factors approach: Court would still use this distinction as one of the factors
 Existing use at time of tract division: use of one part of the tract must exist from which it can be inferred
that an easement permitting its continuation was intended, often called a quasi-easement. If subdivided,
quasi-easement requirement is waived.
 Must be apparent: if a grantee could, by a reasonable inspection of the premises, discover the
existence of the use (not the same thing as visible- pipes under house still count)
 Use must be continuous.
 Necessity: Easement must be necessary for the enjoyment of the dominant tenement. Affects the
intention of the parties. Usually means no alternative access without lots of money or labor.
 Most jurisdictions require reasonable necessity, traditional rule is strict necessity.
 Modern rule is to consider all the factors to understand intent.
 NY and TX follow old rule distinguishes between an easement implied in favor of the grantor —
an implied reservation — and one implied in favor of a grantee — an implied grant. an implied
grant requires only reasonable necessity, an implied reservation requires strict necessity
o Re 3d rejects this rule- only reasonable necessity is required for an implied servitude
o Implied by necessity: If the owner of a tract of land divides the tract into two lots and by this division deprives one
lot of access to a pubic road or utility line. Traditional and majority view is must be strictly necessary and not just a
more convenient access. Rests on idea that access is essential to use so parties must have intended to create an
easement but overlooked putting it in the deed.
 The emerging majority rule seems to be that the easement is based on the parties’ intent and that the
parties may create a landlocked parcel if they so intend.
 Minority and Re 3d view is only reasonable necessity required
 Duration: endures so long as it is necessary
 Easement by Prescription: Easement could be acquired by adverse use for a requisition period. Similar to Adverse
Possession. But not permitted to create a negative easement by prescription
o Same elements of adverse possession must be present except for exclusivity: actual use, open and notorious use,
hostile, continuous and uninterrupted.
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o

Public prescriptive easement: In most states can be obtained by long continuous use by the public under a claim of
right- whole public is using land and satisfies adverse requirements. But permission from owner prevents adverse
possession rights by the public. Public prescriptive easement would be easement in gross.
Holbrook v. Taylor 1976: Holbrook’s owned a road. Purchased in 1942, 1944 gave permission to coal mine for roadway to
be used in exchange for a royalty, 1957 they built tenant house and them and tenants used roadway, 1964 Taylors bought
site next to Holbrooks and built a home, H allowed road to be used for machinery/materials during construction; upon
completion, road was widened/improved by T; dispute arose and blocked easement. Taylors suing saying Holbrooks
obstructed their easement. Not an easement created expressly. Argument is that its prescription and estoppel.
o Problem with prescription is continuity and permission. Need elements of adverse possession.
o Estoppel: start with a license (permission), a license is revocable, but holder of license relies on the permission and
granter of easement sits by and watches as they rely on the license. Doesn’t start out as an easement but due to
the reliance and servient parcel watching the reliance, the licensor is estopped from denying the existence of the
easement. By doctrine of estoppel, license becomes irrevocable, and an irrevocable license is an easement.
 Here, the use of the roadway by appellees to get to their home from the public highway, the use of the
roadway to take in heavy equipment and material and supplies for construction of the residence, the
general improvement of the premises, the maintenance of the roadway, and the construction by
appellees of a $25,000 residence, all with the actual consent of appellants or at least with their tacit
approval, means license can’t be revoked.
Implied Easement
 Arises due to the behavior of an owner when the two parcels in questions were owned by the same person. You must have
facts that the dominant and servient parcels were once owned by the same person. The reason is the assumption the court
is making- when the single owner transferred one of the parcels away, they would only have done so assuming there was
an easement involved.
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

Van Sandt v. Royster 1938: Bailey owned three plots of land. Servient parcel sold to ∏ Van Sandt first. Π discovered sewer
line under property after her basement flooded with sewage; ∆ (Royster) was neighbor; also connected to sewer line;
sewage started flooding in π’s basement; ∏ asked ∆ to stop discharging sewage across land via the pipe under home; ∆
refused and ∏ sued. Pipe had been running under the lots since Bailey owned them all.
o Was an implied easement sold to Van Sandt? If yes, they are responsible for clearing it. If not, then no.
 Easement implied by grant: when the implied easement created, the transferee gets the benefit.
 By reservation- original common owner keeps the benefit of the easement.
 Traditional common law approach says we should care because whose responsibility should it be
to write the easement down?
o By reservation- courts less willing
 Traditional courts say unless there’s a strict necessity, no easement implied by prior use through
reservation.
o This court says shouldn’t focus so much on grant or reservation: instead, focus on
intention of the parties.
The factors for determining whether the parties intended to create an easement by implication are: “(a) whether the
claimant is the conveyor or the conveyee (Reservation or grant); (b) the terms of the conveyance, (c) the consideration…,
(d) whether the claim is made against a simultaneous conveyee (where in the chain of title are we? Here we are down
chain of successors, so how much should we assume about intent?); (e) the extent of the necessity of the easement…(alternatives to sewage line?); (f) whether reciprocal benefits result…,” (Royster benefiting from sending sewage but also
getting sewage from Gray- reciprocal benefits); (g) how the land was used before the conveyance, and (h) how much the
parties knew about that use.
o Like most modern cases, this court looks at multi factors to figure out parties’ intention.
 But only when have the factual predicate: common owner and use
Othen v. Rosier 1950: : ∆ (Rosier) received conveyance of land; ∏ received neighboring land; ∏’s land did not connect to
road, and needed to access ∆’s land to access road; ∆ concerned with flooding so he constructed a levee blocking half the
road rendering the path unusable by ∏
o Order of transaction- when land granted out- matters because…
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o
o
Steps:
1.
2.
3.
Necessity: Question is- when the common owner made the transfer out of common ownership, was a necessity
created to reach a road? Doesn’t matter if Othen has access to a road today, only matters when the common
owner made the transfers, did it leave the common owner landlocked.
 What owner would landlock herself and not retain the ability to leave? Can infer that the owner who did
that wanted there to be an easement for access.
 Likewise, purchaser, would have understood that they are buying property that makes them landlockedbuyer would understand that an easement for access is implied.
 That is easement by necessity- the predicate of the common owner who had access and then
sold some of the land and lost access, that’s when you imply an easement.
 Servient owner has obligation to maintain property such that It can be used by the dominant parcel
 The mere fact that the claimant’s land is completely surrounded by the land of another does not, of itself,
give the former a way of necessity over the land of the latter
 Although Othen is landlocked, Hill wasn’t. So, doesn’t have an easement.
 Relevant facts are always the ones that occurred at the time common ownership was split off.
Prescription: Prescription similar to adverse possession. Sleeping/earning theories apply. Only issue is exclusivity.
Othen’s problem is that he had permission, license to use after 1906. After 1906 no hostility. Evidence before 1906
is spotty- difficult to show continuity and that he had possession for the statutory period, and not enough to
establish tacking.
 Othen’s use was permissive and is a license that cannot ripen into a prescriptive right
Express easement?
Do we have prior ownership that would imply easement?
a. Implied easement? Parties intended it but didn’t write it down. Factual predicates.
 One way of telling the story is prior use.
 Another is necessity.
How do we prove it? How do we know it was their intention?
a. Prior use- have to have evidence of prior use made by owner
i. Implied by reservation
ii. Implied by grant- reasonable necessity and apparent use
1. Who was grantor and who was grantee?
2. Modern rule- look at all of the factors- want to understand intent
3. Traditional/strict rule- strict necessity
b. Necessity- just look at necessity. Don’t look at factors or prior use. Focuses on strict necessity; limited on what
types of uses they can be about. Must have access to others parcel to use your land at all- only about access.
i. Confined to easements for access
ii. Want to assume that if a parcel has access to a road, then courts are going to find it’s not a necessity
iii. Can show access affects transferee or common owner or transferor- just need to show strict necessity
iv. Because they are implied by necessity, when necessity ends, the easement terminates. Scope is
determined in a narrow way.
Scope of Easements
 Brown v. Voss 1986: Parcel A granted B easement; ∆ (Voss) acquired A; ∏ acquired B/C; ∏ built house on land bordering
B/C; construction began and ∆ obstructed easement; ∏ sued. When defendants first tried to stop plaintiffs, they had
already spent $11000. Defendants put logs, a concrete sump and chain link fence within the easement. P sued for removalinjunction.
o Issue: Is an easement being misused when its intended to only grant access to one plot of land but is being used to
access a second adjoining plot of land?
o Express grant easement- extent of grant determined from the terms of the grant
 Easement appurtenant to parcel B as the dominant estate
 But no rights to parcel C
o As a general rule, an easement appurtenant to one parcel of land may not be extended by the owner of the
dominant estate to other parcels owned by him, whether adjoining or distinct tracts, to which the easement is not
appurtenant.
 When have appurtenant easement it’s a misuse to use for an additional parcel- even if it’s the same
owner. Not permissible use. Only used for benefit of dominant parcel to which its attached.
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
Misuse is a trespass- remedy is to pay $1 (unusual remedy).
Location: rule is that the location of an easement, once fixed by the parties, cannot be changed by the servient owner without
permission of the dominant owner.
Scope is related to how the easement was created:
 Prior use- prior use determines scope
o When goes back to common ownership, easement terminates
o But can have a new implication if split again
 Necessity- necessity determines scope
o Terminates when necessity terminates
Statutory condemnation procedure: court allows servient estate to be paid for easement while all other creations free
 Policy behind statutory is different than policy of strict necessity
o Statutory- want them to have access
o Necessity- bargain with your neighbor and pay what is required
 Sets up the baseline that parties negotiate with later- who has the power to negotiate
Termination
Easements can be terminated by:
 Agreement: Easement owner can agree to release the easement- Statute of Frauds says should be in writing
 If easement duration is limited, it can end through expiration at the end of the period
 If easement created to end upon the occurrence of some event- a defeasible easement- it expires automatically when it
happens
 Easements by necessity end when the necessity that gave rise to it ends
 An easement ends by merger if the easement owner later becomes the owner of the servient estate.
 May end by estoppel if the servient owner reasonably relies upon a statement or representation by the easement owner.
 May end by condemnation if the government exercises its eminent domain power to take title to a fee interest in the
servient estate for a purpose that is inconsistent with continued existence of the easement
 May end by prescription if the servient owner wrongfully and physically prevents the easement from being used for the
prescriptive period
 Can end by abandonment
o Hard to abandon one’s property and be free of property obligations, particularly real property. (Acquisition by find
was personal property and easier.)
o Commonly said that a fee simple interest in property cannot be abandoned
o But easements can be terminated by abandonment.
Abandonment:
 Marvin M. Brandt Revocable Trust v. US 2014: Issue is what happens to a railroad’s right of way granted under a particular
statute — the General Railroad Right-of-Way Act of 1875 — when the railroad abandons it: does it go to the Government,
or to the private party who acquired the land underlying the right of way.
o Traditional common law: if easement appurtenant abandoned, interest reverts back to owner of land. In this case
Brandt. Standard approach is to show that it’s abandoned- no intention to continue using it.
o Government says shouldn’t use traditional common law. Courts have different policy concerns when government
is involved. Government supposed to be acting in common interest: you see that with how view of giving railroads
rights have changed over time. How government handles land use to further societal goals/policies.
 Government position- when talking about railroad interests, idea was to give the railroads as little as
possible. Special public policy concerns mean there should be reversionary interest, and not treated as
common law.
 Government Rails to Trails- wants to build a hiking pass there
o Governments reversionary interest argument doesn’t work because it argued the opposite in 1942 in Great
Northern Railway Co v. US: US said 1875 granted an easement and nothing more. Now, US saying Great Northern
case is different because it was about who owns the oil and minerals beneath the right of way
 Court decides Government can’t have it both ways. Court doesn’t go into policy arguments.
Negative easements: right of the dominant owner to stop the servient owner from doing something on the servient land.
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
Courts are hostile to negative easements. Only a few that are permitted. Windows, air, removing support, flow of water
from artificial stream. Hasn’t been a lot of expansion beyond them.
o Slow growth of negative easements because of growth of restrictive covenants and equitable servitudes. Didn’t
have to expand because alternatives.
Conservation and other Novel Easements: New negative easement is the conservation easement, used to preserve scenic
and historic areas and open space. Restricts use of land so it won’t be developed. Tax deductions made creation of
easements valuable financially
o Catalyst was Uniform Conservation Easement ACT UCEA 1981. Amount of land protected increased from 9 million
acres to 56 million acres.
o They are perpetual in duration, are transferable, and can be in gross
 Critics have concerns about dead-hand control and the tax deductions
Covenants and Servitudes
Covenants Running with the Land
 Land use interests created by covenants, or promises
o Real covenants and equitable servitudes
 Start off like promises, covenants but end up getting enforced like property interests
o Hybrid contractual form
o Only difference between RC and ES is how they are enforced
 Damages- RC; Injunction- ES
 Difference between negative is that only four areas where negative easements are used. Need to have requirements of
easements first (creations, etc.) and has to be about those four areas.
o Both RC and ES starts with a promise
 Negative easement would start with a grant, conveyance
 But promissory language to do or not to do something “I agree to…” creates RC/ES
 Original Party Enforcement = Contract Law
 Successor Party Enforcement = Property Law
o That’s what “running with the land” refers to.
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We should be more suspect of transferring burdens to unsuspecting people than we are about transferring benefits: Courts are
more worried about RC forced on person burdened by it, than something benefiting someone.
EXAMPLE:
W promises B to maintain Whiteacre as a horse farm
B could:
 Try to purchase a negative easement, but courts wouldn’t enforce it. Not an approved negative easement
 Seek a promise from W. W could be willing to sell/make promise because was planning on keeping it as a horse farm
anyway. But if W wanted to sell in the future, W would have to sell it as a horse farm.
 If B obtains promise:
o B is promisee & benefited party
o W is promisor & burdened party  taking on burden of not using land for anything other than horse farm
W sells to A. A plans to build a housing subdivision.
To enforce, B must show burden will run.
What could B do?
 Injunction- stop it from being built altogether
 Damages- money.
o Sometimes want injunction, sometimes would rather have the money.
o Important to identify which kind of remedy would be better for your client, or seek both in the alternative
B sells to C. W plans to build housing subdivision.
 To enforce, C must show benefit will run.
W sells to A and B sells to C. A plans to build housing subdivision.
 To enforce, C must show burden and benefit will run (new owners).
Spencer’s Case
Landlord/Spencer   Tenant (promises to build a wall)  Assignee (T1) (refuses to build wall)
 LL/Spencer has Benefit; T/T1 has Burden
 In order to enforce promise, Spencer has to show burden would run and bind successors
 Holding has turned into the precedent of requirements needed:
Privity


Don’t need to worry about it at all for ES
Only relevant for RC to enforce burden need both horizontal and vertical; for benefit only vertical
o Horizontal: need to be in the midst of making a grant. Grantor/grantee relationship. When promise was made
were they transacting land? If yes, you have horizontal privity.
 Can use straw
o Vertical: relationship with successor.
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

To enforce burden: have to have same estate in land. FSD = FSD. FSA = FSA. Matching estates is the
requirement.
To enforce benefit: do not have to have the same estate.
For the burden of a RC to run…
1. Writing:
a. No exceptions. Need it in writing.
2. Intent:
a. Need to show it was the intention of the parties to bind successors. Not that it was a regular promise, but a
promise that would run to successors. Important- we don’t want to turn every promise people make among
themselves to be binding on future successors. Concern about it swallowing up regular contract rules.
3. Touch and Concern:
a. Promise has to touch and concern land. Can’t be a promise about just anything- something to do with land
ownership and use of land.
i. Intent and touch and concern often overlap.
4. Horizontal privity (of estate)
a. Requirement is they have to be Grantor-Grantee relationship
i. Spencer and original Tenant: Landlord/tenant
b. Neighbors not in grantor/grantee relationship.
i. People get past this by using a straw. Manufacture grantor/grantee relationship. If subdivision creating
these there is a grantor/grantee relationship.
5. Vertical privity (of estate)
a. Same estate in land, not adverse possessors (not covered)
i. One has a fee simple, other has to have a fee simple. If owner doesn’t sell fee simple, instead transfers
only part, that would be a problem for vertical privity. (ex. Fee simple and life estate).
ii. Covenants don’t run in land, they run in estate in land.
b. Tenant and Assignee
6. Notice: part of recording
a. Didn’t actually come from Spencer’s case, but from recording rules.
For the benefit of a RC to run…
1. Writing
2. Intent
3. Touch and Concern
4. Vertical privity
a. Same estate or lesser interest; still not adverse possession under traditional approach, though some courts are
more flexible
5. Notice
Note**No horizontal privity requirement** Wouldn’t need straw

Horizontal privity = between original parties
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
Vertical privity = between one of the original parties and a successor in interest
*Most people want injunctive relief and ES has easier requirements than RC*
For the Burden or Benefit of an ES to run (both have the same requirements)
1. Writing or common plan/scheme
2. Intent
3. Touch and Concern
4. Notice
Note: No privity required at all!
Covenants Enforceable in Equity: Equitable Servitudes
 Tulk v. Moxhay 1848:
o Tulk   Elms (promises not to build)  mesne conveyances  Moxhay
 Tulk seeks injunctive relief
 Tulk is original benefitted party, so don’t have to show that benefit will run; but have to show that burden
will because original promisor is out of the picture.
 Have RC requirements in US: Tulk sold to Elms: written, intent, horizontal and vertical. This
would’ve been fine in the US but in the UK horizontal privity is only landlord/tenant.
 Court says it’s not fair to allow Elms to purchase at a price that includes promise to maintain gardens; and
then get sell at price from Moxhay that’s higher because of breach of that promise.
 Have ES requirements: writing, intent, touch and concern, notice.
Creation of Covenants:
 Real covenant- must be created by a written instrument signed by the covenantor
o If deed creating real covenant signed by the grantor only, grantee bound because accepted it
o Cannot arise by estoppel, implication, or prescription
 Equitable servitude- similar, but may be implied under limited circumstances, and cannot by prescription
 Writing: Touch and concern requirement does limit subject matter. And other norms like restraints on alienation apply. If
language ambiguous courts resolve in favor of alienation. Interpret restrictions strictly but reasonably.
o Be careful with drafting to not restrict alienation- “You cannot sell” etc.

Sanborn v. Mclean 1925: Case is example of how servitudes used in planned development. Mclean wants to build gas
station on her lot, but subdivision planned for strictly residence purposes.
o Common owner (developer) starts with big plot of land and splits it up and sells lots to others. Some lots include
specific covenant language and others don’t, like the one McLean’s buy. Covenant says residential use only.
o Reciprocal negative easement = equitable servitude
o Problem with it being a real covenant is that it’s not in writing. It’s not in the McLean’s deed. ES allows for
exception to writing requirement.
 Court says- when you have a situation like this, where have a common scheme imposed on lots- other lots
are reciprocally restricted. Court also looks at existing uses- uses made since original deeds transferred
out of common ownership by developer.
 Other cases about common scheme uses both kinds of evidence.
o Intent- same use of other evidence of common scheme: look at how other lots granted and used.
o Notice- 3 kinds of notice:
 this is focused on inquiry notice (look around- you’re buying lot in a subdivision and all lots occupied are
residential use only, you should have known enough to ask- you were on inquiry notice- a reasonable
person would have inquired.
 Other kind of notice is actual notice
 Court also suggests constructive notice is present here- you would get notice by looking at records like the
subdivision plan, deeds around lot of other lots, etc. they would’ve had notice.
 Notice and common scheme similar- courts will probably find notice.
o Majority of courts imply negative restrictions from a general plan, like in this case
Covenants and Servitudes: Scope and Termination; CICs
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Defeasible fees as land use control devises
 Remedy for the breach is forfeiture
 Infrequently used today except in gifts for charitable purposes
 Can be used to create a right of enforcement in a third party or in a person who owns no land
 Defeasible fees can be used, but biggest difference is remedy. If use restriction violated land is forfeited- back to grantor.
Discriminatory Covenants:
 Shelley v. Kraemer 1948: About restrictive covenants excluding certain races from owning or occupying real property  In
St. Louis, agreement that property can’t be occupied by someone not white. Shelleys are black and got a deed from
Fitzgerald, had no knowledge of the restriction. Kraemer are other owners and want Shelleys to be restrained from
possession
o Seeking injunctive relief- equitable servitude
o Shelleys say violate equal protection 14th amendment: State action is enforcing the covenant.
 Racially restrictive covenants can’t be enforced but can still be made
o Held that in granting judicial enforcement of the restrictive agreements in these cases, the States have denied
petitioners the equal protection of the laws and that, therefore, the action of the state courts cannot stand.


Shelley didn’t change much, because of the communicative function of racially restrictive covenants- they served as
important signals of neighborhood racial preferences to real estate brokers and lenders.
o Things didn’t change until fair housing act
A deed containing a restrictive covenant against a particular race or religion or ethnic group violates §3604(c) of the Fair
Housing Act, which prohibits the printing or publishing of any statement indicating a racial, religious, or ethnic preference
with respect to the buyer of a dwelling.
Termination of Covenants: These are all ways to deal with dead hand control problem. Many ways to kill servitudes. Makes it
possible for living to prevent dead hand from continuing to control use.
 (1) merger on the basis of unity of ownership of the benefit and burden by the same person;
o Common ownership
 (2) a formal release, which is normally written and recorded;
 (3) acquiescence, which arises when the plaintiff has failed to enforce the servitude against other breaches and then seeks
to enforce the servitude against the defendant;
o Failing to enforce for a while
 (4) abandonment, which resembles acquiescence except that it makes the servitude unenforceable as to the entire parcel
rather than only as to the plaintiff immediately involved;
 (5) the equitable doctrine of unclean hands, according to which the court will refuse to enjoin a violation of a servitude that
the plaintiff previously violated;
 (6) the equitable doctrine of laches, which involves an unreasonable delay by the plaintiff to enforce a servitude against the
defendant causing prejudice to the defendant (laches does not extinguish the servitude but only bars enforcement); and
o Laches- wait too long to seek enforcement
 (7) estoppel, if the defendant has relied upon the plaintiff’s conduct making it inequitable to allow the plaintiff to enforce
the servitude.
Changed Conditions Termination:
 Western Land Co. v. Truskolaski 1972: Case is typical of court’s hesitation of termination based on changed conditions.
Respondent homeowners in subdivision brought action to enjoin appellant from constructing a shopping center in the
subdivision. When land was subdivided in 1941 it subjected the lots to restrictive covenants- only single-family dwellings
and no stores. District court said they are enforceable. Next court said subdivision changed in recent years and purpose is
nullified. This court agrees with the district court.
o Not enough on the record to say that as a matter of law the objects and purposes of the restricted covenants are
thwarted
o Western land’s risk should’ve been priced into its lot- one outside is less expensive than the ones inside partially
because of changed conditions risk. Courts not willing to base finding based on just the outside lot owners- they
want to look at interior lot owners too. And here, interior is still interested in restriction and still of substantial
value to them
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

Easements don’t have changed condition doctrine. Covenants and servitudes allow for it but require conditions to have
changed broadly, not just the border (like in western land case)
Some local ordinances/statutes require covenants/servitudes to be rerecorded to be enforceable. Something like every 10
15 years. Varies by jurisdiction but also used to manage dead hand.
Common Interest Communities
 Majority of common interest communities are homeowner associations; a smaller percentage are condominiums; and a
much smaller percentage are cooperatives.
 Local governments like them because they can shift local costs like parks and stuff to them
 Statutes usually require a declaration of rules establishing the community. A homeowners association enforces the
servitudes in them and can make new regulations, administer the servitude regime, and carry out other functions.
 The rules about servitudes are applicable to homeowners associations but they can also raise funds
 Place restrictions on use on properties within them. Entity delegated at outset to enforce.
 Entity/association formed by developer before. Voting rights sometimes based on size of the property, like the coop shares
proportional to size/value of unit. Changing restrictions that developer put in at outset are hard to change- require super
majority. Helpful for developers because selling something reliable. But unit owners might be unhappy with how difficult it
is to change.
 Association has authority to take maintenance fees and maintain common areas.
o Courts are now comfortable with covenant/servitude about paying money. They were uncomfortable at first but
now it’s fine.
Condominiums
 Each unit (or interior space) in a condominium is owned separately in fee simple by an individual owner.
 Common areas are owned by the unit owners as tenants in common
 Mortgages are per unit, real estate taxes are assessed according to each unit
 Each owner pays a monthly maintenance charge
 Not just residential condos- lots of commercial condos too. Only thing that makes it a condo is that unit owned separately
in FS and common areas owned as tenants in common.
 Residential don’t have to be apartments to be condos. Just a question of single unit owner making a FS.
 No consequences to neighbors if a unit defaults.
Cooperatives
 The title to the land and building is held by a corporation; the residents own all the shares of stock in the corporation and
control it through an elected board of directors
 Residents have a long-term renewable lease, making them owners of the cooperative corporation and tenants of the
corporation
 Cooperative property has one blanket mortgage. Everyone responsible for each other.
o Members screen applicants to ensure they can pay. Also, social screening.
 New York courts have held that cooperative boards can deny entry to anyone for any reason and without
giving any reason, provided the board does not violate federal and state civil rights laws.
 Each owner not in FS; each is shareholder and corporation owns whole building and finances development/ renovation of
building. Cooperative financing obligation that each shareholder agrees to help support. Responsibility of unit owners to
cover failures of other unit owners for failure to make payments. Other owners have to make up the shortfall to prevent
foreclosure of mortgage on whole building. Reason why coops can be more selective.
o NY courts not good at figuring out when financial screening is smokescreen for something else.


Generally, condos are more efficient but there are lots of coops in NYC because it allows people to choose their neighbors.
Also, there are high transaction costs in switching from cooperative to condominium ownership and the problem of
collective action involved in getting cooperative shareholders to agree to dissolve the corporation
In common interest communities, any requirement of horizontal or vertical privity is met because the original purchasers
are all in privity with the developer and subsequent purchasers are in privity with the original purchasers. Touch and
concern usually satisfied.

Most common CIC litigation is unit owner and association restrictions- to enforce a restriction or get out of one
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



No privity issues usually- there is horizontal and vertical
Could get into touch and concern issues but courts are usually okay with them
We are starting to see contention about how much power CICs have. Courts have different approaches. One of two ways
o As long as it’s reasonable, its enforceable. Reasonableness standard- contestant has to show its unreasonable.
Tends to mean restriction will be enforced. Also turns on what’s common in the community.
o Business judgment rule- when corporate boards make decisions, it’s okay as long as they do some due diligence,
some kind of good faith. Started to be used in cases about coops.
DBR asked about opinions on them. Still being worked out in courts. Pub policy issues.
o Self-segregation can be an issue
 Echo chamber, sanitizing experiences, isolates people
o Positives- provides attractive services, predictability, consistency
o Externality issues- can create externalities
o But people also already have these kinds of experiences in towns that have higher incomes, etc.
Zoning

Zoning operates prospectively – doesn’t prohibit non-conforming uses already in use, grandfathered into the zone.

Village of Euclid v. Ambler Realty Co. 1926: ∏ (Ambler) corporation that owned 68 acres in ∆; ∆ was residential suburb; ∆
created zoning ordinance/board charged with enforcement. 6 zones in Euclid: smallest number is least intense for uses. U1single family; U2- 2 family; U3 civic buildings; U4-U6 up to intense industry. Less intense permitted in higher uses. ∏’s land
in U-2, U-3 and U-6. Uses are cumulative so they include what’s enumerated in the preceding class. Most of his land was in
the one that prohibited industry. They wanted whole property to have all permissible uses. But land was on border and well
situated- where it would have been good to have industry. Ambler said destroyed value of land almost 75%. ∏ sued arguing
deprivation of liberty and property without due process of 14th amendment and denies equal protection of the law and
violates Ohio Constitution. Facial challenge as unconstitutional – wanted broad, sweeping holding that all applications
would be unconstitutional.
o Issue: May cities and municipalities constitutionally pass zoning regulations?
o Holding: Yes. Court looking at it through 14th amendment due process- is part of police power. Not looked at
through takings clause
 If they successfully brought a takings case, they would just get compensated.
 Police power- reserved power of the individual states to regulate because pursuing general public
welfare. Broad power but still limited by due process clause.
 Rational relationship review
 Passes rational relation view
o There are already ways limiting use, it’s a standard thing that governments do. Rational to make an ordinance
because common law already does it in areas of nuisance.
o Restrictions of apartments could be good- considerations could be good because safety, single family home
idealizing, etc.
 Municipal zoning regulations are constitutional, unless they are clearly arbitrary and unreasonable, having
no substantial relation to the public health, safety, moral, or general welfare.

Euclidean zoning- Districts graded from highest (single family residences) to lowest (worst kinds of industry). Uses
permitted are cumulative. Higher and lower doesn’t refer to economic value.
Euclid- zoning in general to constitutional but Court added that concrete applications of specific provisions could prove to
be arbitrary and unreasonable
o Assume state in exam passed standard zoning enabling act
o Need enabling act because states are delegating police power to municipalities

The Structure of Authority Underlying Zoning
 Zoning is police power of the state but is then delegated to local governments
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


Standard State Zoning Enabling Act- allows municipalities to regulate and restrict the height and size of buildings, and uses,
and etc. It permits dividing them into districts- zones.
Act sets up framework with which to zone. Process of zoning, not contents.
Need a comprehensive plan.
o Purpose is to lessen congestion in the streets; to secure safety from fire, panic, and other dangers; to promote
health and the general welfare; to provide adequate light and air; to prevent the overcrowding of land; to avoid
undue concentration of population; to facilitate the adequate provision of transportation, water, sewerage,
schools, parks, and other public requirements.
The Comprehensive Plan
 Might not be a plan exactly- could just be statements. Could be challenged on basis of comprehensive plan because it’s a
requirement but would probably pass rational relation test.
 A comprehensive plan is a statement of the local government’s objectives and standards for development.
 Based on surveys and studies of the city’s present and future needs. Wants to anticipate change.
 Only half the states require it
Zoning Commission
 Rule making body. It drafts the ordinance.
 City must create a planning (or zoning) commission and a board of adjustment (board of zoning appeals)
 Commission recommends a comprehensive plan and a zoning ordinance to the city council
Board of Adjustment
 Adjudicatory body
 Hears appeals on zoning
Flexibility
 Special exception- anticipated in the ordinance itself, more relevant to height/area restrictions than use restrictions
 Variance- the ordinance doesn’t contemplate it in advance. Breach not anticipated in the ordinance.
o Both allow property owner to violate the zoning ordinance – have a factory in a residential zone.
 But the grounds are different (whether anticipated or not)
Amendment
 Enabling Act anticipates amendment and allocates responsibility to when amendments are necessary to the Commission
 Drafts amendment and brings them to municipal government
o Can be how landowner gets around restrictions- amendment instead of special exceptions or variances.
 Concern is spot zoning- changing zoning just for one favored party/constituent. Courts analyze through
due process analysis or procedurally through statute.
The Economics of Zoning
 Zoning can solve the problem of externalities in environments where bargaining (servitudes) or judicial determination
(nuisance law) are not sufficient; can be class and race-based motivations; and some communities can use zoning as a way
to raise property value by creating scarcity

Southern Burlington County NAACP v. Township of Mount Laurel 1975: Mount Laurel outside of Camden near Philadelphia.
Worries about tax base and demand for public services, especially schools funding. Town adopts zoning to encourage the
kind of growth that will lead to positive tax balance of revenue and demand.
o Zoned for expensive single-family homes- large lots. Zones outside allow for different kinds of units like retirement
community and smaller units. But those have restrictions on how many children in home.
 Concerned about expansion of school aged children without expansion of house value- mismatch of
revenue/school costs.
o Projects not designed for low to moderate incomes. Not supportable by them. Even apartments would be
luxurious.
o Large industrial zone, but not cumulative, so for industrial use only. Ended up being undeveloped land. Want to
attract industrial uses to the town – 30% of town – because more taxed revenue with fewer demands for services.
Factories don’t have kids to send to school. Prefer no use if industrial users don’t come in.
o NAACP challenges- impossible for low- and moderate-income people to have housing in town.
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o

Court is careful not to say town is discriminatory at all. Just an externality problem. NJ concerned that other towns
would act like that, and where would low and moderate-income families live. It would pass the rational test and
the cities in NJ would have negative impact.
o NJ Constitution- idea of general welfare for the citizens of the state. That obligation is delegated to municipalities
and have to act for general welfare of states, not just their municipalities.
 Court says must make an appropriate variety and choice of housing possible. Regulations must
affirmatively afford the opportunity for low- and moderate-income housing.
Enforcement: After Mount Laurel 1, Court gave developers standing to sue to get changes to ordinances to put in low to
moderate housing in Mount Laurel 2. That also didn’t work/insufficient- not large enough class of plaintiffs of developers
who want to build low income housing. Court created agency who would review ordinances and then enforce in Mount
Laurel 3.
Eminent Domain and Implicit Takings Under Categorical Rules
Takings linked to zoning because it’s another land use regulation
Eminent domain- government taking title to property owned by private party
 Express removal of title – government says they are taking title
 Government must provide just compensation- but this doesn’t always mean full or fair
Implicit takings- courts call it regulatory takings. Government takes some kind of action in normal course of activities, i.e. passes law
or ordinance, and property owner says regulation is burdensome/costly/impactful on property rights and government should
compensate. Owner is claiming they should have issued eminent domain order. Wants court to stop government action or force
government to pay.
 Also called an Inverse condemnation action
 Owner has to show there’s a taking to begin with
Eminent Domain:
 Taking property from its owners and reallocating it to governmentally preferred uses
 The Fifth Amendment: “nor shall private property be taken for public use, without just compensation”
o Incorporated to constrain state governments under 14th amendment
 Eminent domain is the power of government to force transfers of property from owners to itself.
o Recognition of pre-existing power
 But limited for public use and compensation requirement
 Policy:
o Efficiency argument- egalitarian argument
 Richard Posner- good argument pro eminent domain is that it’s a n antimonopoly decide- bilateral
monopoly: people who have land who know its valuable will tend to hold out for more valuable offers,
which is inefficient
 Holdout problems and free ridership problems can get in the way
 Property v liability- comfortable with property law because believe that parties can efficiently
bargain, but when that’s not available liability and courts setting the price solves the negotiation
problem
o Counter- economic justice argument. Powerful voices/players are more represented. Eminent domain falls on
underrepresented communities more heavily. Political power can influence decisions because underrepresented
communities might not have as huge of a voice.
o Compensate- government doesn’t have to pay market value which may be more efficient when spending money
on social programs
 Critique- compensation not really compensating. It’s just but doesn’t have to cover costs of moving,
displacement, etc.
o Functional argument- Government needs this power to function.
 Counter is once you acknowledge it needs this power, it’s hard to put limitations on it or manage it.
 Duty to compensate: Government may not condemn for private purposes- a lot of litigation is about the meaning of “public
use:
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
Kelo v. City of New London 2005: City of New London in CT purchased property from willing sellers and proposes to use the
power of eminent domain to acquire the remainder of the property- question is whether the plans qualify as a public use
o City needed economic help- high unemployment, low population. For economic revitalization.
o has 7 parcels” 1- hotel, waterfront marina, pedestrian Riverwalk; 2- residences and public walkway, museum; 3office space; 4A-parking, retail; 4B- marina; 5-7- office, retail, parking, commercial uses
 NLDC hoped to create jobs, tax revenue, create leisure and recreational opportunities
 Some uses are clear public use- like the parks. But Pfizer parts are not.
o Petitioners don’t want to haggle or good price- just want to keep property
o Held: Economic development can be a public use. Although city not blighted, its dilapidated and will help. Not that
individuals are struggling or homes falling apart but bigger picture, better for city as a whole.
o Public use v. police power- levels of scrutiny with government actions.
 Does public use add more scrutiny than police power (due process) would?
 O’Connor and critics would say that after this case, no. Doesn’t seem like a limit on what
government can use eminent domain for, as long as its willing to pay.
 O’Connor and other critics want more inquiry, extra requirement for public use like the public
has to be able to use it.
o Majority opinion doesn’t necessarily distinguish police power- what government has right to take, versus what it
has to pay for- public use.
 One reading of the case is that there is not extra scrutiny- eliminated public use as a real constraint. State
can take action using eminent domain powers but would have to compensate- transfers debate from
what is a taking into what is public use.

Kelo is majority law.
Just Compensation Requirement
 Requirement is fair market value
 Might be able to address criticism through this part of the requirement, but its limited to just fair market value. Not
sentimental value, replacement costs, transaction costs, or relocation costs.
 No compensation for dignitary or autonomy costs.
 Way to take sting off of takings but also as a restriction for government
o Way to maybe limit eminent domain
 Future value not being taken into account in pricing- in theory, fair market value includes future value. But appraisal is a
challenging thing.
 Government also has power to affect value. Can think far aheado Put in a zoning ordinance first that would affect the value, and then take it.
o Would be able to get the unzoned value if could prove the manipulation in court. But difficult to prove. In real
world, government has more power to affect value of land they want to acquire than other buyers would be able
to impose.
Implicit Takings Under the Multifactor Test
Categorical Rules for Implicit Takings:
Nuisance Abatement is never a taking
PPO or Total Taking is always a taking (Loretto)
Lucas rule- if a regulation removes 100% of value (total taking) then its categorically a taking
Implicit Takings
 Now the central issue is whether a taking has occurred in consequence of some government activity other than explicit
taking by condemnation- implicit takings
 Claimants wish it were eminent domain. Want to be compensated. Saying that its basically eminent domain.
 Argument is that action triggers takings clause. Question is whether a taking has occurred at all.
 SCOTUS developed a series of rules to decide when regulation has become a taking.
 Categorical rules- once P can show that taking fits the category, there are automatic consequences
o Permanent physical occupation rule (PPO) or 100% value loss- categorically yes, there’s a taking
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o
o

Nuisance Abatement- never a taking
 Owner always wants to be in PPO category because will always win
 Government always wants it to be nuisance abatement
Multifactor test-? Who knows if it’s going to be a taking
Loretto v. Teleprompter Manhattan Catv Corp. 1982: ∏ owned apartment building; NY law required landlords to permit
cable companies to install facilities on property; ∆ has facilities on ∏’s property; ∏ sued alleging taking. Prior to NY law,
cable companies would negotiate with owners for the cable wires. They would be licenses, and licenses are revocable. π
wants to be able to negotiate; not arguing that it’s not a public use, just saying that it requires compensation.
o Issue: Does a minor but permanent physical occupation of an owner’s property authorized by government
constitute a “taking” of property for which just compensation is due under the 5th and 14th Amendments?
o Holding: Yes. A permanent physical occupation authorized by government is a taking requiring the payment of just
compensation without regard to the public interests that it may serve or the fact that it only has a minimal
economic impact on the property owner. A permanent physical occupation requires payment of just compensation
because it destroy the property owner’s opportunity to exercise three basic property rights: (1) the owner may no
longer fully possess the property; (2) the owner can no longer exclude others from using the property; and (3) the
owner cannot property dispose of the property because a permanent physical occupation typically strips the
property of economic value.
 No matter how small PPO is, it is a taking.
 The right to exclude is so important, there is nothing that can be balanced against it, so we need
to apply a CATEGORICAL RULE
o Dissent: Every taking is unique. Shouldn’t be setting up categorical rule. Should look at each case individually and
use multifactor test. Multifactor rule already exists. Character of interference is already one of the factors. Why
wouldn’t just use rule we already use? Other things also considered like cost to landowners, which in this case
would be nothing.
 Rule is dumb
 It’s going to apply to small number of cases
 What’s permanent really mean- how long does it have to last?
 What’s physical
 What’s an occupation versus an invasion
 Dissent is trying to poke holes in test- saying majority is setting up question of what’s a PPO that
is going to be just as annoying as the multifactor test
o Biggest thing with dissent- Dissent is concerned that PPO is not taking into account the
loss the owner takes. What is diminishment of value.
Nuisance abatement rule
 Nuisance is a public harm that the government would be entitled to force a landowner to stop imposing on the rest of
society
 Government wouldn’t have to compensate, could just outlaw it. Land use is just that bad/bothersome.
o Not subject to takings analysis because government is allowed to outlaw
 Common law nuisance
 No property right being taken because there is no property right about doing a nuisance
 SCOTUS case is Hadacheck
Categorical Rules for Implicit Takings:
Nuisance Abatement is never a taking
PPO or Total Taking is always a taking (Loretto)
Lucas rule- if a regulation removes 100% of value (total taking) then its categorically a taking
In between nuisance abatement/PPO is
Multifactor Test: Balancing Test:
 Diminution in value
 Average reciprocity of advantage
 Distinct-investment-backed expectations (Penn central)
 Character of interference (Penn central)
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Derived by Holmes in PA Coal v. Mahon
The Multifactor Test

Pennsylvania Coal Co. v. Mahon 1922: Holmes opinion. When coal company sold land to private property owner, coal co
reserved right to mine coal from under. Owned land under house/structure/surface. PA created a separate estate for this
because of importance of coal to state- support right: right to underground coal. But then, Coaler Act: arrangements of
rights underground not okay anymore. Can’t mine out so much coal that the surface would subside.
o Regulation not 100% loss because can still mine some of the coal; not PPO because government not occupying;
o Held that PA statute interfering with mining is a taking
 There is some limit to government lawmaking- “when the law causes sufficient diminution in property
value, the state must take the land by eminent domain and provide compensation.”
 “One fact for consideration in determining such limits is the extent of the diminution. When it reaches a
certain magnitude, in most if not in all cases there must be an exercise of eminent domain and
compensation to sustain the act. So, the question depends upon the particular facts.”
o Mahon is first step in identifying factors in multifactor test
 Diminution in value
o Big loss of value. Estate law in PA important consideration. Coal companies losing everything because only own
underground.
o Dissent: Brandeis: Brandeis thinks it’s a nuisance abatement- government can abate that. Concerned about
conceptual severance- denominator problem: property owner can play with property value in denominator it’s
easier to become a taking. If we allow property owners to chop up interests and say small part of what owned is
devalued, then takings law easier.
 Argument against diminution in value test is: diminution relative to what?


Case is famous for its standard inquiring whether, on balance, matters have gone “too far”
Diminution-in-value Test: when governmental regulation of a use that is not a nuisance works too great a burden on
property owners, compensation must be paid if the regulation is to remain in effect.

Average reciprocity of advantage: in calculating property owners harm, don’t want to leave out the benefits they are
getting.
o “The idea, of course, is that the apparent losers under a government program might not be losers at all (or not, at
least, big losers) because they are simultaneously benefitted by the very action that burdens them.”
o Ex. Zoning- secures average reciprocity of advantage because you are limited but you are benefited because your
neighbors are also limited
o In Mahon- beneficial that each competitor has to leave mines/pillars in place because that means mines wont
collapse. Safeguards the safety of the miners and investment of the companies.

Keystone v. DeBenedictis 1987- similar case to Mahon but distinguished because its purpose was not just to balance private
economic interests, but rather to protect the public interest in health, environmental quality, and fiscal integrity
o Basically- Brandeis nuisance abatement correct
o Emphasizes that nuisance evolves. What we consider nuisances change over time.

Penn Central Transportation v. City of New York 1978: NYC Landmark preservation law. Have to preserve Grand Centralkeep it as it is. Have to get permission for updates.
o TDR- transferable development rights- transfer them to nearby parcels.
 Ex. Grand central only allowed to be 8 stories tall, other buildings nearby allowed to be 40, grand central
can transfer their remaining stories to other parcels they own or sell them to other property owners -have
to be within certain areas
o Q is whether the application of New York City’s Landmarks Preservation Law to the parcel of land occupied by
Grand Central Terminal has “taken” its owners’ property in violation of the Fifth and Fourteenth Amendments
o The Terminal is owned by the Penn Central Transportation Co. and its affiliates (Penn Central)
o Penn Central entered 50-year lease with UGP. UGP wanted to construct an office building above Grand Central.
UGP and Penn central applied to the landmarks commission for permission. Commission denied application and
both proposals.
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
o
o
o
o
o
o
o
“To protect a Landmark, one does not tear it down. To perpetuate its architectural features, one does not
strip them off.”
 They filed suit in NY court saying that the application had taken their property without
compensation
Court says there hasn’t been a formula for when compensation required. Several factors have been identified:
economic impact on the claimant; character of the government action- whether it’s a physical invasion or comes
from some public program
 Laws upheld that were said to promote health, safety, general welfare- like land use laws and zoning laws.
Court really emphasizes multifactor test.
Adds two factors:
Distinct investment backed expectations- what were the property owners expectations with what they could do
with property at the outset. What were there expectations as they improved on it.
 can think of it as its own question
 or think of it as setting the baseline in diminution in value
 For Penn central, expectation was around use as railroad terminal. That’s not being disturbed.
Not diminishing ability to run the railroad terminal.
Character of interference- is this the kind of governmental interference that would require compensation.
Most important thing to get out of case is filling in the factors in multifactor test
Dissent: Rehnquist: Doesn’t challenge application of multifactor test, but challenges outcome. There is significant
diminution in value. Concerned about single owner being forced to bear burden for public being able to appreciate
it. Would find a taking and then consider whether TDRs are just compensation
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