Property I Outline – Spring 2021
Prof. Seplowitz
General Distinctions
 Real property is immovable property and consists of land, things fixed to land, and things incidental or
appurtenant to land.
o Real property may be converted into personalty by severance and vice versa by an annexation intended to
be permanent.
 Personal property is movable property, which includes every kind that is NOT real property.
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A thing capable of ownership, but not then owned, belongs to the person who acquires actual or
constructive dominion and control over it AND has the intent to assert ownership over it.
 Ad coelum doctrine - relates to the common law rule that a landlord owns everything below and above the land,
up to the sky and below the earth to its core.
o This doctrine applies to all minerals in the land as well.
o This doctrine includes ownership of hard minerals such as coal, but NOT volatile minerals such as oil and
gas.
Wild Animals
 Wild animals (ferae naturae) in their natural state are unowned.
 They become private property upon being reduced to possession.
 A nature preserve is state property, and as per ratione soli, any wild animals located on this property are deemed
to be in the constructive possession and ownership of the state.
 Once a wild animal has been occupied, if the animal escapes, the party having occupancy of the animal does NOT
lose his or her property claim to the animal until the animal returns to its natural habitat. Although the wild animal
appears to be a wild animal again, legally it is NOT because that animal is not native to the area.
Acquisition of Title
 Possession - The first person to exercise dominion and control over such an animal becomes, with possession,
the owner of the animal.
 Constructive Possession - Animals caught in a trap or net belong to the one who owns and has set the trap or net.
o By setting such a trap, one is said to constructively possess those animals snared.
 Mere Pursuit - Mere pursuit does NOT constitute the exercise of dominion and control sufficient to give the
hunter a property right in the animal.
o Where an animal has been mortally wounded so that actual possession is practically inevitable, a vested
property right in the animal accrues that cannot be divested by another’s act in intervening and killing the
animal.
 Trespass - While a landowner is NOT regarded as the owner of all wild animals found on his property, a
trespasser who kills game on another’s land forfeits her title in favor of the landowner.
o This is to prevent the act of trespassing from benefiting the trespasser.
o Violation of Statute - One who violates a statute (e.g., failure to have a hunting license) forfeits their title in
animals caught pursuant thereto.
Loss Of Title
o Escape - If a wild animal, captured and held in private ownership, escapes and resumes its natural liberty, the
former owner loses his property right in it.
o The animal once again is unowned, and the first person thereafter to capture it becomes the new
owner.
 Habit of Return
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Title is NOT lost if:
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(1) If a wild animal escapes and, though wandering about without restraint, periodically returns to
its owner’s home, OR
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(2) though endeavoring to escape, it is still pursued by the owner OR
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(3) is by other means liable to be recaptured by the owner.
 Marked Animals
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When certain animals, such as furbearing animals, have been captured and reduced to private
ownership, it is common for the owner to mark or brand them for purposes of identification.
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If the animal escapes and resumes its natural liberty, the question becomes whether title is lost.
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Normally, modern courts will allow title to be retained in the former possessor as long as the
animal is marked AND the owner exercises all possible effort to recapture the animal.
 The fact that the owner has either lost or mislaid his property does NOT lead to the divestiture of his title.
 Title to such property persists despite the fact that it has been lost or mislaid.
 The owner relinquishes title when he abandons the property.
Lost Property
 Property is “lost” when the owner has accidentally and involuntarily parted with his possession AND does NOT
know where to find it.
 To determine whether property is lost, the key factor is the place where it is found.
o Judging from the place where found, would a reasonable person conclude that the owner had accidentally
and involuntarily parted with possession of it and does NOT know where to find it?
o Ex: A wristwatch found on the floor in a public place will likely be regarded as lost property. Judging
from the place where found, it is reasonable to conclude that one would not intentionally place a
wristwatch on the floor.
Mislaid Property
o Property is “mislaid” when, judging from the place where found, it can reasonably be determined that it was
intentionally placed there and thereafter forgotten.
o Ex: A briefcase found on a desk, table, or counter will likely be regarded as mislaid property. Judging
from the place where found, it is reasonable to conclude that the item was intentionally placed there and
thereafter forgotten.
Abandoned Property
 Abandoned property is property that the owner has voluntarily relinquished all ownership of without reference to
any particular person or purpose.
 It is necessary to show a intent to give up both title and possession.
o Ex: 1) Allowing refrigerators to remain in a building that the owner of the refrigerators knows will be
destroyed is an act of abandonment.
o Ex: 2) A tenant’s act of leaving her apartment for one week and being behind one week’s rent is NOT
enough to constitute abandonment of the property in the apartment.
 A landlord's attempt to charge an extra fee to allow the tenant to regain the property constitutes
conversion.
Distinguish from Lost
 A chattel is NOT abandoned merely because the owner has parted with its possession.
 If the owner of a chattel involuntarily parts with possession of goods, they should be categorized as either lost or
mislaid.
o Lost or mislaid goods are treated differently from abandoned chattels.
 To show that a chattel has been abandoned, one must show that the former owner voluntarily gave up and
relinquished his ownership in the chattel.
Acquisition of Title
 If a chattel can be categorized as abandoned, it becomes unowned.
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As with wild animals, ownership of an abandoned chattel is acquired by reducing it to possession.
Title to abandoned chattel is acquired by:
o (1) actual or constructive dominion and control over the thing, and
o (2) an intent to assert ownership over it.
Escheat
 Where abandoned property is held by an intermediary with no property interest in the property (e.g., unclaimed
funds held by banks or other depositories), the state may assume title to the property through a process called
escheat.
 Property may be escheated only by the state in which the property is located.
 Intangible property is considered to be located at the domicile of the property owner.
o See Delaware v. New York, 507 U.S. 490 (1993), (state of owner’s last known address is state with right
to escheat unclaimed securities funds.)
General Rules for Lost or Mislaid Property
 Once you have established that property is lost or mislaid, you MUST discuss who has the right to possess the
property as against the whole world—except the true owner or any subsequent possessor.
Finder of Lost Property
 General Rule: Finder Entitled to Possession Except Against True Owner or First Subsequent possessor if btwn
two finders
 If property is categorized as “lost,” the one who reduces it to possession becomes its finder.
o Possession is physical control coupled with an intention to assume dominion over the object.
 The intent may be manifested by an effort to keep others away, or may be implied, as in the case of an article
discovered on the land of an owner.
 Generally, the finder of lost property is entitled to possession of it as against ALL except the true owner.
o Ex 1: A boy who discovers a sock and throws it among his friends does NOT have the requisite intent to
assert control over the sock or the money found in it.
o Ex. 2: The act of placing markers over the spot where a wrecked boat is located is NOT a sufficient
exercise of dominion and control to support a claim for title to the abandoned property.
Exceptions to General Rule
o Trespass - To penalize one who trespasses onto private property.
o Most courts would hold that a trespasser-finder will NOT be allowed to secure possessory rights in the
lost property.
o The right of possession will then fall to the owner of the place where the item of property is found (locus
in quo).
o Highly Private Locus
o Where a chattel is found in a highly private locus, the owner of the locus in quo, and NOT the finder, will
acquire the possessory rights b/c:
 (1) The owner of a highly private locus possesses everything within the locus, and therefore
possesses the item that has been lost.
 (2) The true owner, having lost property in such a private locus, will more likely return to the
place to recoup his property.
o Private Place
o For the finder to be deprived of his possessory right in the lost article, the place of discovery MUST be
highly private.
o The rule is generally applicable only to locations wherein the public is not invited, e.g., a home.
o Public Place
o If the place of discovery is open to the public, then the finder becomes entitled to the right of
possession.
o The mere fact that the place of discovery is privately owned is NOT sufficient to render it a
highly private locus.
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Employer-Employee
o There is some authority that holds that an employee who finds an article in the course of his employment
should surrender the right of possession to his employer.
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Within the employer-employee relationship, the basic concept is:
 The employer has the right to direct the employee in his activities.
 On this basis, if the employee found the article by virtue of an act specifically directed by the
employer, the employer should acquire the rights of possession in the article.
Buried Articles
o On a theory of constructive possession, it can be held that the owner of real property possesses all that
which lies beneath the surface of his land.
o On this basis, if one finds an article buried beneath the surface, the right of possession ought to belong to
the owner of the locus rather than the finder.
 The foregoing rules, applicable under the common law, describe who acquires the right of possession as against
the whole world except the true owner.
 Under these rules, however, neither the finder (as to lost goods) nor the owner of the locus in quo (as to mislaid
goods) becomes the title owner of the property.
 He merely acquires the right of possession, and as possessor has the following rights and duties.
Possessor as Quasi-Bailee
 The possessor is a quasi-bailee. His title is good as against all the world except the true owner, even to the point
of suing for the return of the property if wrongfully taken from him.
o Ex: A lost ring belonging to O was found by X, who then lost it himself. It was then found by Y. X may
recover possession from Y or anyone else but O.
Duty to Find Owner
 Should the finder know or have reasonable means of discovering the true owner, he must do so, or he may be
guilty of larceny, and he may be held liable in tort for conversion.
o Ex: X finds a wallet containing identification papers, including the telephone number of its owner, Y. X
does not attempt to contact Y, but holds the wallet (including contents) with intent to return it to Y should
Y ever ask for it. X has converted the wallet and its contents.
Duty of Due Care
 The possessor must keep the goods with due care, considering that he is a gratuitous bailee and considering the
nature of the goods.
 Failure to adhere to this standard will render him liable in negligence
Extent of Obligations
 These obligations persist until sufficient time has passed for the true owner to be deemed to have abandoned her
goods (which will depend upon the character of the goods and circumstances of the case) OR until the statute of
limitations has run.
Acquiring Title
 As a general rule, after a sufficient time has run for the goods to be deemed abandoned, or after the statute of
limitations has run, the possessor becomes the new owner of the goods.
Treasure Trove
 Treasure trove is any gold or silver in coin, plate, or bullion found concealed (e.g., in the earth, in a house, in a
bureau, etc.), the owner of which is unknown.
 Treasure trove has been held to include paper representatives of gold and silver.
 Right of Finder
o Treasure trove, according to the common law, belonged to the finder as against everyone in the world
except the true owner.
o The fact that the finder was a trespasser would NOT deprive him of his possessory rights.
 Modern View
o Today, many states apply the usual rules applicable to lost property in dealing with treasure trove.
o NO exception is made for the handling of treasure trove problems.
Uniform Unclaimed Property Act
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Most states have adopted a version of the Uniform Unclaimed Property Act (the “Act”), which provides for the
disposition of intangible property (such as money, checks, and stock) and property in safe deposit boxes.
Under the Act, such property is presumed abandoned if the owner does not claim it or otherwise demonstrate an
interest in it for the statutory period, generally five years.
The Act provides a procedure for turning the property over to a state administrator, who sells it if unable to locate
the owner.
A holder who disposes of unclaimed property pursuant to the Act is relieved of liability to the owner.
A minority of states use the older Uniform Disposition of Unclaimed Property Act, which differs primarily in
fixing the basic statutory period at seven years.
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Accession is the addition of value to property by the expenditure of labor or the addition of new materials.
If the addition can be detached from the principal chattel, this will be ordered and each party will be put in status
quo ante.
 If the addition cannot be detached from the principal chattel, the issue is one of ownership: Who is the owner of
the chattel in its enhanced state? The answer depends upon whether the trespasser acted in good faith or was a
willful trespasser.
Accession by Innocent Trespasser
 General Rule—Trespasser Cannot Recover
o Where a trespasser adds value to the original owner’s chattel, the original owner retains title, and the
trespasser cannot sue for compensation for the value of his labor or materials added to the chattel.
 Original Owner’s Remedies
o Mass in proportion to their respective interests, regardless of how the confusion took place, and even
regardless of whether the confusion was fraudulent or willful.
 Ex: Where wheat of the same grade belonging to different persons is wrongfully and fraudulently
mingled by one of them and ground into flour, the wrongdoer is entitled to his proportionate share
of the mass.
 Unknown Contributions
o If the confusion was innocent (e.g., by an act of God, act of a third party, or consent), the owners are
tenants in common of the mass.
o If the amount of contribution is unknown, the parties share equally.
 Wrongful Confusion
o If the confusion was caused wrongfully by one of the owners, her agent, bailee, or trustee, the burden is
on such owner to identify her portion.
o If she cannot do so, the entire mass belongs to the innocent owner.
 Ex: Where the owner of bales of cotton fraudulently mingles them with bales belonging to
another so that they become indistinguishable, the wrongdoer is entitled to no part of the goods
unless she can identify her property.
 Negligent Confusion
o In most states, negligent confusion is treated as wrongful confusion, but some states follow the innocent
confusion rules when negligence is involved.
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Title to personal property by adverse possession results from the running of a statute of limitations, which
requires that the cause of action for recovery of the property be brought within a specified period after it accrues.
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When the period specified has run, the presumption that the person in possession has the right to possession
cannot be overcome by the former owner; the party in possession thereafter has an enforceable right to possession
superior to everyone and thus becomes the true owner.
 In an action for recovery of the property, the defendant must plead the statute of limitations as an affirmative
defense.
 Adverse possession law seeks to reward the justified expectations of long-standing possessors of land in the
absence of any objection or interference by the true owner of that land.
Common Law Requirements
1. Continuous
1. A single adverse possessor must maintain continuous possession of the property during the statutory
period.
2. However, the continuity may be maintained between successive adverse possessors if there
is privity between them.
3. If two adverse possessors are in “privity” with one another, then most courts will allow the second
adverse possessor to “tack” or combine his or her time on the land with the time spent by the first adverse
possessor.
4. Privity is a legal term that essentially means that there's a direct connection between the two parties. It can
be established in several ways, such as by lease, descent, or outright sale.
1. For example, imagine that the statutory period for adverse possession in your state is ten years.
Martha has adversely possessed a vacant lot in her neighborhood for seven years, then sells her
interest in the lot to Jane.
2. Jane occupies the land for another three years. This would likely meet the statutory requirement
for ten years of continuity, giving Jane the ability to gain title by adverse possession even though
she herself did not possess the land for the full ten years.
5. An person can still be “in possession” because stuff is still there. The purpose of this requirement is to put
the true owner on notice, and the evidence of the person's occupation was still there, even when the
person wasn't.
2. Hostile/Claim of Title/Claim of Right
1. In this context, "hostile" does NOT mean "unfriendly."
2. Rather, it means that the possession infringes on the rights of the true owner. If the true owner consents or
gives license to the adverse possessor's use of the property, possession is NOT hostile and it is not really
adverse possession.
3. Renters cannot be adverse possessors of the rented property, regardless of how long they possess it.
4. Without permission by the actual owner
5. Objective View – majority –
6. Subjective View - Good Faith – Adverse possessor must believe that he or she owns the property. NY is a
minority (subjective) view jurisdiction.
7. Courts look at the actions of the adverse possessor to determine if there was good faith belief.
8. Bad Faith (subjective view/trespasser view) – adverse possessor must believe that he or she does NOT
own the property.
9. Each view is trying to showcase that the adverse possessor is possessing without permission.
3. Open and Notorious
1. Possession MUST be obvious to anyone who bothers to look, so as to put the true owner on constructive
or actual notice that a trespasser is in possession.
2. One will NOT succeed with an adverse possession claim if it is secret.
3. Open = visible
4. Notorious = Significant enough to put the real owner on notice
4. Actual
1. The adverse possessor is actually in possession of someone else's property.
2. The true owner has a cause of action for trespass, which must be pursued within the statute of limitations.
3. Actual entry and possession starts the running of the SOL/ accrual of the cause of action. This language
will be in the disability statute.
4. In some jurisdictions, actual possession means:
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1. Cultivation of the land
2. Substantial improvements – increases the property value
3. Substantial Enclosure
5. Exclusive
1. The adverse possessor does NOT share control of the property with anyone else (unless in privity with
himself).
2. He excludes other members of the public and other adverse possessors from possession, as if he was
actual owner.
Statute of Limitations
 Title passes when the statutory limitation period has run.
 Tacking - Successive possessors of the property may “tack” or combine their respective periods of possession as
long as they are in privity, e.g., the property is sold, given, or bequeathed to the subsequent possessor.
 Tolling the Statute - Tolling the statute means that the time during which the following conditions are met is
NOT counted in the time period, or that the period, which has otherwise expired, is extended beyond a certain event.
o Disability of Plaintiff - When a person entitled to maintain an action is a minor, mentally incompetent,
or imprisoned on the date the action accrues, she may bring the action after removal of the disability
within a period permitted by statute.
o Defendant Out of Jurisdiction - When the possessor, who is a resident of this jurisdiction, is outside
the jurisdiction, the statute is tolled until the possessor returns.
o Fraudulent Concealment - When a potential defendant fraudulently conceals himself after the action
accrues, so as to avoid service, the statute is tolled until the concealment has ended.
 Bona Fide Purchaser of Stolen Goods
o A bona fide purchaser of stolen goods is NOT protected against the claim of the owner UNLESS the
statute of limitations has run on the owner.
o Since a secret (rather than open and notorious) holding is presumed in the case of stolen goods, the
running of the statute is unlikely. The risk is on the purchaser.
 "Color of title" means a deed or other instrument of conveyance that purports (but fails) to convey title to the land
described in it.
 You can divide the universe of adverse possession claims into two basic types:
o (1) claims of possession under color of title
o (2) claims of possession without color of title
 In many states the existence of color of title shortens the applicable statutory limitations period, thus reducing the
length of time for a claimant to establish title by adverse possession.
 Color of title is a necessary prerequisite for someone to demonstrate "constructive adverse possession."
 The doctrine of constructive adverse possession allows someone (in certain circumstances) to take physical
possession of only part of a parcel, and yet still claim title by adverse possession to the entire parcel.
 Whether one is in possession under color of title is a function of whether the deed actually describes the land
possessed -- NOT whether the possessor believes that it describes the land.
 A claimant cannot possess land under color of title unless the claimant also possesses the land in good faith.
o Ex: If a buyer is unaware that a seller's claim is based on a forged deed, buyer possesses the land in good
faith and under a deed that, although invalid to pass title, does purport to convey the land in question.
Thus, buyer would be in possession under color of title.
 A warranty deed is a deed of conveyance in which the grantor makes warranties of title to the grantee -- that the
grantor has title to the land free of unspecified and unexpected encumbrances and has the right to convey the land.
o If breached -- if the grantor's title turns out to have been defective -- the warranties provide a basis for the
grantee to recover damages from the grantor in contract.
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 A quitclaim deed is a deed of conveyance that makes NO title warranties at all -- it merely conveys to the grantee
"all of [the grantor's] right, title, and interest" in the described land, without providing any general or specific warranty
of title.
o Does allow the grantee to sue the grantor in contract if the grantor's title turns out to have been defective.
Shortening the Statute of Limitations Period
 General rule: state statutes do NOT require that an adverse possessor have possession under color of title.
 In most states, one can acquire title by adverse possession by satisfying all of the required elements for the
applicable statutory period.
 In a significant number of states, color of title is useful because statutes in those states reduce the required
possessory period in cases where the claimant holds possession under color of title.
 In a number of states, legislatures also provide a specific (and typically shorter) duration for persons in possession
pursuant to a deed acquired at a tax sale (a sale of land by the government to satisfy real estate taxes unpaid by the
former owner).
o Why should I need adverse possession law to protect me if I buy from the government at a tax sale? Why
don't I just get good title?
o The problem is that there are often notice defects in tax sales. The due process clause of the Constitution
requires that the government provide an owner of land with notice and an opportunity to be heard before
the government can sell the owner's interest for unpaid taxes. If the government fails to provide the owner
of the land with adequate notice of the tax sale, the tax sale will not be valid to pass title to the land (even
if the purchaser is unaware of the defect). Thus, the purchaser who takes possession under a defective tax
sale can only acquire title to the land via her subsequent acts of adverse possession.
Constructive Adverse Possession
 Unoccupied land is considered to be in the constructive possession of its true owner -- i.e., we say that its owner is
legally in possession of the land even if the owner has not physically occupied the land.
 Under the doctrine of constructive adverse possession, it is possible for someone to lose title to land by adverse
possession, even where a portion of that land was not physically occupied.
 Courts will allow a claimant who possesses only part of a parcel to claim constructive possession of the remaining
portion of the parcel (and thus to claim adverse possession of the entire parcel), BUT ONLY where the claimant is in
possession under color of title -- i.e., only where the claimant holds a deed or other instrument that purports to convey
title to the entire parcel.
 A claimant cannot establish constructive adverse possession under color of title without taking actual physical
possession of some portion of the land described in the instrument.
 If a claimant paid taxes on a lot during her time of adverse possession, ex: 20 years, the claimant's payment of taxes
would, in many states, be a sufficient "act of possession" that would enable her to acquire title based upon
constructive adverse possession.
 Courts have generally held that constructive adverse possession can ONLY extend a claimant's actual possession to
adjacent (contiguous) land
Land That Cannot be Adversely Possessed
 The statute of limitations does not run against government-owned land (federal, state, or local) or
land registered under a Torrens system.
 Different rules apply depending on whether the water rights claimed involve (i) water in watercourses
(e.g., streams, rivers, and lakes, including underground watercourses); (ii) ground or percolating water (e.g., water
normally pumped or drawn from wells); or (iii) surface water (e.g., rainfall, seepage).
 Exam questions normally concern who has priority to use the water from watercourses and from the ground, and
to what extent a landowner may obstruct or divert the flow of surface water
 Watercourses
 There are two major systems for allocation of water in watercourses:
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(i) the riparian doctrine (generally applied in the eastern states where water is or was relatively abundant),
AND
o (ii) the prior appropriation doctrine (generally used in the 17 western states where water is relatively
scarce).
Riparian Doctrine
Under the riparian doctrine, water does NOT belong to the public generally or to the state (with certain
exceptions) but rather to the “riparian” proprietors who own land bordering on the watercourse.
All of these landowners have “riparian rights” and none can use the water so as to deprive the others of these
rights.
What Land is Riparian
Under the majority rule, all tracts held under unity of ownership are riparian if the tracts are contiguous and any of
them front on the water.
o Thus, if a riparian owner purchases a parcel which is contiguous to the riparian parcel, riparian rights
attach to the newly acquired parcel.
The minority rule limits riparian rights to the smallest tract of land ever owned abutting the water.
o Under this view, if a back portion of a riparian tract is sold, it becomes nonriparian and can never regain
riparian rights.
Riparian Owner - Riparian owners include the fee owner of the abutting land and, to the extent of their title,
lessees and easement owners of such land.
Doctrine Applies Only to Riparian Parcel - The riparian doctrine permits use of water only in connection with
activities carried out on the riparian parcel. Riparian rights cannot be conveyed for the use of nonriparian land nor
can they be lost by nonuse.
Owners of surface lands have the right to reasonably use subsurface waters for agriculture. The American rule (in
use in 47 states) holds that groundwater is owned by the landowner, so long as the use is not wasteful.
Nature of Riparian Right
Natural Flow Theory
o Under the “natural flow” theory, a riparian owner is entitled to the water in the bordering stream or lake
subject to the limitation that he may not substantially or materially diminish its quantity, quality, or
velocity.
o Thus, a downstream owner can enjoin an upstream owner’s use even though the downstream owner has
plenty of water for his own use.
o No state appears to adhere strictly to this theory because it operates to limit beneficial upstream use and
leads to “waste” of the resource.
Reasonable Use Theory
o Under the more common theory, all riparian owners share the right of “reasonable use.” The general idea
is that the right of each riparian owner to use the stream (e.g., to divert for irrigation, to pollute, etc.) is
subject to a like reasonable right in other riparian owners.
o Each riparian owner must submit to reasonable use by other riparian owners, and a downstream owner
cannot enjoin such use by an upstream owner unless it substantially interferes with the needs of those who
have a like right (i.e., unless actual damage is shown).
Factors to Consider
o In determining whether an owner’s use of water is “reasonable,” courts generally balance the utility of the
use against the gravity of the harm. (Note the analogy to nuisance law.)
o Six factors are helpful in this balancing process: (i) the purpose of the questioned use; (ii) the destination
to which the water is taken for use; (iii) the extent of the use; (iv) the pollution of water by use; (v)
whether the use involves an alteration in the manner of flow; and (vi) miscellaneous types of conduct
that may give rise to litigation. (These factors may be remembered more easily by using the acronym
MAPPED.)
Natural vs. Artificial Use
o Under either of the above theories, water use is categorized as “natural” or “artificial.”
o Natural uses include those necessary for the daily sustenance of human beings (e.g., household
consumption, gardening, minimal number of livestock).
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All other uses, including irrigation and manufacturing, are artificial.
Natural uses prevail over artificial.
Upper riparians can take all that they need for natural uses. They cannot take for artificial purposes
UNLESS there is enough water for the domestic wants of all.
Prior Appropriation Doctrine
o Under the prior appropriation doctrine, the water belongs initially to the state, but the right to divert and
use it can be acquired by an individual whether or not he is a riparian owner.
o Initially, individual rights were established by actual use.
 Each appropriator acquired a vested property right “to divert a given quantity of water, at given
times from a given place, to use at a given place for a given purpose.”
Reasonable Use Doctrine
o The reasonable use doctrine, followed by many eastern states, allows the surface owner to make
“reasonable use” of the groundwater.
o This rule differs from the absolute ownership rule mainly with respect to exporting water off site:
 Exporting is allowed ONLY to the extent that it does NOT harm other owners who have rights in
the same aquifer.
o Virtually ALL beneficial uses of water on the land are considered reasonable and are allowed.
Appropriative Rights Doctrine
o In many western states, the prior appropriation doctrine applies to groundwater as well as watercourses.
o Priority of use determines appropriative rights.
o In most western states, rights to percolating water are now determined by a state water board which
controls annual yield, prohibits water waste, etc.
Factors to Note for Bar Exam
o Present day acquisition and governance of rights under this doctrine are largely dealt with under complex
state-administered permit systems that are too detailed for coverage here.
o However, it is sufficient for bar examination purposes to note that: (i) appropriative rights were originally
determined simply by priority of beneficial use; (ii) if there is a decrease in stream flow, priority is
accorded in terms of time of appropriation (i.e., the junior appropriators in descending order of priority
must suffer); (iii) in many states, an appropriative right can be severed from the land it serviced when
acquired and transferred (i.e., can be sold to another for use on other land), provided no injury is caused to
existing uses; and (iv) an appropriative right (unlike a riparian one) can be lost by abandonment (intent
and nonuse).
 A gift is a transfer of property in which the transferor (the donor) receives no compensation or other legal
consideration from the transferee (the donee) in exchange for the transfer.
 There are three basic types of gifts:
o (1) Inter vivos gifts (gifts between living persons)
o (2) Testamentary gifts (gifts that take effect upon the donor's death)
o (3) Causa mortis gifts (sometimes called "deathbed " gifts)
 An "inter vivos" gift (literally, a gift "between the living") is a gift in which a living donor makes an immediately
effective donative transfer of an object of property to a living donee.
o Ex: John returns home from work with a vase of roses and hands them to his wife, saying "I love you."
John has made an inter vivos gift of the flowers to his wife.
Elements
 There are three elements necessary to establish an effective inter vivos gift:
 (1) Donative Intent - The donor must have the intent to make a present transfer of ownership of the property to
the donee.
 (2) Delivery - The donor must make an effective delivery of the object of the gift to the donee.
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(3) Acceptance - The donee must accept the object of the gift. Acceptance of a gift is usually presumed where
the object of the gift is beneficial to the donee but the presumption is rebuttable. (i.e. grantee doesn't cash a
check given as a gift because looking into tax consequences.)
The Functions of "Intent" & "Delivery"
 The intent requirement exists to confirm the donor's subjective intent (i.e., in the donor's own mind) to make a
present transfer of ownership.
 The delivery requirement exists to assure that there is an act or acts that provide some objective manifestation of
the donor's subjective intent --- i.e., some action that corroborates the donor's intent to make a presently effective
gift.
 The law requires the donor to satisfy the delivery requirement by physical (manual) delivery of the object of the
gift to the donee.
 The delivery requirement exists in significant part to address the risk posed by fraudulent claims of gift
 The delivery requirement serves an evidentiary function similar to that served by the Statute of Frauds.
 The donor's acts of delivery provide objective confirmation of the donor's subjective intent, making us confident
that the donor really did intend to make an immediately effective gift.
Permissible Types of Delivery
 The common law recognized three types of delivery:
 (1) Manual (or actual or physical) delivery: This is the type of delivery that the law typically requires, and it
involves the donor placing the object of the gift within the actual, immediate physical control of the donee.
o The law and courts encourage persons to make gifts by manual delivery to confirm their donative intent in
the strongest possible terms.
o Objective corroboration of the donor's subjective intent is needed to be confident that the alleged gift is
NOT the product of fraud.
 (2) Constructive delivery: A constructive delivery occurs when the donor transfers to the donee something that
provides the donee with the ability or means to exercise dominion and control over the object of the gift.
o Courts sometimes permit constructive delivery where manual delivery is impossible or impractical.
 (3) Symbolic delivery: A symbolic delivery occurs when the donor transfers to the donee something that is a
"symbol" (or substitute) for the object of the gift.
o Courts sometimes permit symbolic delivery where manual delivery is impossible or impractical. The best
example of symbolic delivery is a deed to land.
o "Title certification" statutes in all states provide that motor vehicles are to be registered with the state and
covered by title certificates. Under these certification statutes, the title certificate is treated as being
symbolic of ownership of the vehicle.
Delivery to a Third Party (Escrow)
 An escrow arrangement can prove very useful in a sale transaction, especially if one of the parties dies or tries to
breach the contract.
o Ex: if A died before the closing occurred, B could still complete the purchase, even after A's death,
because A had already delivered the deed into escrow (thereby placing the land beyond A's dominion and
control as long as B performed its obligation to pay the purchase price). If B completes the purchase in a
timely fashion, the escrow agent could release the deed, and the law would deem that delivery had
occurred at the time A placed the deed into escrow (while A was still alive).
 In certain circumstances where the elements of a valid gift are satisfied, delivery of a gift to a third person who acts
as an agent for the donee will suffice to satisfy the delivery requirement, and will result in a valid gift.
Gifts of Intangibles and Undivided Interests
 Undivided interest in the object of the gift (i.e., where the donor intends to share ownership of the object with the
donee).
When Delivery is Excused
 The Self-Settled Trust
 Trust law will treat clearly denoted stock certificates as a valid self-settled trust, i.e., a valid trust in which the
donor declared that his continued possession of the certificates was in trust for the donee. Under these
circumstances, where there is sufficiently clear and reliable evidence of donor's intent to create the trust, delivery
is excused given that the donor and the donee (the trustee) are the same person.
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 While delivery is typically excused in the case of a self-declared or self-settled trust, there must still be reliable
evidence of the donor's intent
 Gifts to a Bailee
o Where the object of the gift is already in the possession of the intended donee (who, prior to the intention
to make a gift, would be characterized as a bailee), the law of gifts excuses the delivery requirement.
o If there is sufficiently clear and reliable evidence of the donor's intention to make a gift to the bailee, then
that gift is effective without further action by the donor.
Conditional Gifts
 Most donors intend for a gift to be absolute --- that is to say, irrevocable and unconditional (i.e., not subject to a
condition that might terminate the interest of the donee).
 Sometimes, however, the donor may wish to attach some condition to the gift.
 With gifts of land the donor/grantor can simply express the condition right on the face of the deed
o Courts will enforce written conditions expressed in gift deeds of land (assuming that the conditions would
not constitute an unreasonable and invalid restraint upon alienation of the land).
 With inter vivos gifts of personal property --- which tend to occur somewhat more informally --- such
written expressions of intent are less common. Thus the risk of "donor's remorse" is more significant.
 As a result, courts tend NOT to enforce oral conditions upon inter vivos gifts, except in cases where the
donee admits the existence of the condition or there is other compelling and reliable evidence of the oral
condition.
 The gift of a diamond ring is widely and customarily understood to be symbolic of a commitment to
marry.
 As a result, most courts facing this question have concluded that if the donee of an engagement ring
subsequently breaks the engagement, the donor may recover possession of the ring.
Testamentary Gifts
 A testamentary gift is a gift of property that takes effect to pass ownership to the donee only upon the death of the
donor.
 The donor's will is only legally effective to transfer title to the donor's property to the designated recipients (often
called "devisees," "legatees" or "beneficiaries") as of the moment of the donor's death.
 A donor's last will and testament will operate upon the donor's death to make a valid testamentary gift to
the donee if these three elements are met:
o (1) The donor dies
o (2) Prior to donor's death, donor has NOT made a valid inter vivos transfer of gift to anyone else, AND
o (3) Prior to donor's death, donor has not revoked the will which named donee as devisee.
 Generally speaking, however, will statutes require a written declaration of testamentary intent, signed in the
presence of disinterested witnesses ( i.e., persons who are not devisees) and authenticated (i.e., signed in the
presence of a notary public).
 One could NOT make a testamentary gift by means of a verbal statement, a suicide note, or some other
unwitnessed writing.
 The writing, witness, and authentication requirements serve an evidentiary function similar to the delivery
requirement for inter vivos gifts.
 These requirements leave little doubt as to the testator's subjective testamentary intent, they also protect against
bogus or fraudulent testamentary gift claims.
 Testamentary deed (called a "beneficiary deed" in some states) where state statutes authorize that an owner of
land could execute, deliver and record a deed now, but the deed could express that it would only take effect to
transfer title to the land upon the grantor's death.
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o
At the grantor's death, the deed would take effect to pass title to the land to the grantee in accordance
with its terms --- UNLESS the grantor had, prior to his death, made a contrary inter vivos conveyance
of the land or had sufficiently revoked the beneficiary deed.
o A testamentary deed would have to be authenticated in order to be recorded, and this authentication
requirement serves the evidentiary function otherwise served by the state's will statute, protecting the
grantor against bogus or fraudulent claims.
 The statement "I want you to have ____ after I'm dead," alone is insufficient to make a valid testamentary gift
because the testamentary intent would NOT be expressed in appropriate form (i.e., in the context of a valid will
complying with the statutory will requirements).
 In addition to words of conveyance, the elements of a deed include:
 (1) a description of the property,
 (2) identification of the grantor and grantee, and
 (3) the signature of the grantor.
 The validity of a deed does NOT depend on notarization, although typically statutes require notarization for
recording the deed.
Causa Mortis Gifts
 Common law recognized a special type of gift called a causa mortis gift (literally, a gift "in case of death"),
which can be made only by persons in contemplation of their imminent death .
 Causa mortis gift is a special type of inter vivos gift.
 If a donor makes a valid causa mortis gift, the gift is immediately effective to transfer ownership of the object
of the gift to the donee.
o In other words, the donee immediately becomes the owner of the subject matter of the gift, even while
the donor is still alive.
 If the donor then proceeds to die from the peril that placed the donor in expectation of imminent death, the gift
becomes absolute.
 But if the donor recovers, the donee's interest is terminated and the donor may reclaim ownership of the object
of the gift.
 While the donor is still alive, the donor can revoke the gift and terminate the donee's interest if the donor
wishes.
 The law presumes that the donor may intend to make a present gift, BUT ONLY based upon the donor's
expectation of imminent death.
o If the donor knew that he or she would recover and survive, the donor presumptively would NOT have
made such a gift at all.
 The law also presumes that the donor is making this gift as a substitute for making or changing a will, which
might be difficult or impossible under the circumstances of the donor's expected imminent death
 Because the causa mortis gift functions as a type of will substitute, the law thus treats the causa mortis gift as
being revokable by the donor, for any reason, during her life --- in the same way that the donor could revoke or
change her will during her life.
 A causa mortis gift is conditional in nature .
o It is effective to transfer ownership to the donee during the donor's life, but that ownership is subject to
a condition subsequent (i.e., subject to ownership being divested from the donee if, in the future, the
donor either chooses to revoke the gift or recovers from the circumstances that placed the donor in
peril of imminent death).
Elements of a Valid Causa Mortis Gift
 (1) Donor's intent must be the intent to make a present causa mortis gift --- i.e., a gift in contemplation of
imminent death, subject to termination if the donor recovers.
 (2) A sufficient act of delivery by the donor, AND
 (3) Acceptance by the donee.
 By requiring evidence that the donor intended to make the gift presently effective during the donor's life, the law
draws a distinction between causa mortis and testamentary gifts --- and thereby discourages reliance upon causa
mortis gifts as a method of estate planning.
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
The law hopes to limit the causa mortis gift to those situations where careful estate planning would be impossible
or not justified due to the expense involved.
Gifts of Future Interest
 Property law recognizes that ownership rights can be divided into both present possessory rights and future
possessory rights --- known as present estates (or present interests) and future estates (or future interests).
 The requirements for an inter vivos gift of a future interest are no different than the requirements for any other inter
vivos gift.
 For a valid inter vivos gift, there are three necessary elements:
o (1) Donative Intent - The donor must have the intent to make a present transfer of ownership of the
property to the donee.
o (2) Delivery - The donor must make an effective delivery of the object of the gift to the donee.
o (3) Acceptance - The donee must accept the object of the gift. Acceptance of a gift is usually presumed
where the object of the gift is beneficial to the donee.
 Where the gift is of a future interest, the donor's intent MUST be to make a present transfer of the future right to
possession of the subject matter of the gift.
Intellectual Property encompasses:
(1) copyright – expressions (NOT ideas); requirements for copyright protection : originality, work of authorship, and
fixation (work must be fixed in some kind of tangible medium); protects what's not function but artistic
(2) patents – ideas; protects systems or procedures; protects what's functional;
(3) trademarks – brands
(4) Proprietary Secrets – trade secrets
Trademark

Legal protection of trademarks preserves the integrity of the marketplace for consumers. In turn, this reduces
consumers’ costs related to making purchases.
 The law governing trademarks is a combination of common law and federal law.
 Most IP survey courses will focus on the federal law as detailed in the Lanham Act.
 While federal law does NOT create a trademark, the Lanham Act does serve several purposes:
 (1) it allows a trademark that is being used in commerce to be registered on the principal register.
 (2) once registered, the Lanham Act provides legal benefits that help protect trademark owners against
misappropriation of their marks.
 The Lanham Act defines the term “trademark” as any word, name, symbol or device, or any combination thereof used
or which a person has a bona fide intention to use in commerce to identify and distinguish her goods or indicate the
source of goods.
o For example, the word EXXON is used to distinguish the producer of petroleum products.
 The Lanham Act also defines more categories of marks that may be registrable and entitled to protection including:
(1) service mark, (2) certification mark, (3) collective mark, and (4) trade name
 The law organizes potential trademark subject matter along a spectrum of distinctiveness.
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A mark’s distinctiveness affects whether it is protectable as a trademark.
 On one end of the distinctiveness spectrum, there are generic marks.
 On the other end of the distinctiveness spectrum, there are arbitrary or fanciful marks.
 Descriptive and suggestive marks fall in the middle.
 Subject matter can be characterized into one of the four categories along the distinctiveness spectrum. Where a mark
falls on this spectrum can be determinative of what legal standards are applied to assess a mark’s strength.
 It can also impact the outcome of a trademark infringement suit.
 Trademark Distinctiveness Spectrum
 Generic - Eligible for trademark protection? No.
 Descriptive - Eligible for trademark protection? Maybe. Protectable if acquired secondary meaning.
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Suggestive - Eligible for trademark protection? Yes. Inherently distinctive. Protectable and no secondary meaning
required
 Arbitrary or Fanciful - Eligible for trademark protection? Yes. Inherently distinctive. Protectable and no secondary
meaning required.
Patent
 There are three general types of patents—utility, plant and design patents.
 Design patents protect any new and ornamental designs of useful articles such as cookware or furniture.
 Plant patents protect new and distinct plant varieties.
 Utility patents are the most common type of patent.
 A new and useful process or product is eligible for patent protection.
 Section 101 of the Patent Act sets forth four categories of subject matter that are patent-eligible:
o (1) process, (2) machine, (3) manufacture, or (4) composition of matter.
 Patent professionals often group the last three categories under the generic umbrella of product inventions to
separate them from process inventions.
 Machines are probably the most recognizable category of patent-eligible product inventions.
 A machine is any mechanical apparatus. A machine may be as simple as a bottle opener or as complex as an
automobile. One characteristic that may help distinguish machines from other product inventions is that a
machine is generally made up of several parts.
 Manufactures and compositions of matter include a broad range of things made by man.
 A composition of matter is a substance formed from the combination of two or more other substances.
o A new chemical compound formed from an intermixture of ingredients is an example of a composition of
matter.
o Synthetically created DNA qualifies as a composition of matter and is patent eligible.
 A manufacture is an article created from raw materials.
o Ceramics are an example of an article of manufacture.
 Manufactures serve as a catch-all category that covers items that do not readily fall into one of the other product
categories.
 In some instances, an invention may fall into both categories.
Copyright
 Copyright is governed exclusively by the federal copyright statute. The current statute is the Copyright Act of
1976, which has been frequently amended in the three decades since its enactment. Because many copyright disputes
involve works created before the effective date of the 1976 law, however, the previous statute (the Copyright Act of
1909) remains important.
 Material not protected by copyright is said to be in the “public domain.” Most public domain material consists of
subject matter that does not qualify for copyright protection, or of material on which the copyright has expired. Thus
much literature and art from the past—such as the plays of Shakespeare and the music of Mozart—is in the public
domain.
 The initial inquiry in any copyright problem is whether the thing that plaintiff seeks to protect is eligible for
protection under the copyrights laws.
o If the answer is no, the plaintiff may have a remedy under some other theory but copyright remedies
will be unavailable.
 Under present law, copyright is available for any “original work of authorship fixed in any tangible medium of
expression.”
 The current copyright statute provides that “[i]n no case does copyright protection for an original work of
authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery …”
17 U.S.C. § 102.
o Copyright protection is not available for abstract ideas, even if they are original.
o Only the manner in which an idea is expressed can be protected under the copyright laws.
 Thus, there are two threshold requirements for protection—originality and fixation—and a significant
limitation—no protection for ideas.
 Only “original” material can be protected by copyright. Another way to think of the originality requirement is that
the author must create the work “from scratch” in order to merit copyright protection.
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 The work MUST also possess a minimal degree of creativity. This requirement is quite easily met since the SC
said " even a slight amount [of creativity] will suffice."
o Courts have traditionally found single words and short phrases ineligible for copyright, because they
lack the necessary creativity.
o Maps are generally eligible for copyright. Their creativity can be found in the selection of what
information to include, the decision about what symbols and colors to use and other such subjective
decisions of the cartographer.
 The specific categories of works listed are: (1) literary works; (2) musical works; (3) dramatic works; (4)
pantomimes and choreographic works; (5) pictorial graphic and sculptural works; (6) motion pictures and other
audiovisual works; (7) sound recordings; and (8) architectural works.
o The current law goes on to provide protection for “compilations” and for “derivative works.”
o The overall all aesthetic appearance of a useful object cannot be protected by copyright law.
 When an author blends some of her own original material with other pre-existing materials in order to create a
new work, that new work is eligible for copyright protection.
o However, in such cases, the copyright extends only to the original components of the work.
 Originality does NOT require that the author to create something that never existed before; it merely requires that
the work be the product of independent intellectual effort as opposed to copying from another.
 In a case of parallel independent creation, the second author does not infringe the copyright of the first created
work, and the second author is entitled to a copyright of his or her own.
 Fixation
 The tangible objects in which works are fixed are known as “copies” or, in the case of sound recordings, as
“phonorecords.”
 A “copy” need not be perceptible to the naked eye to satisfy the fixation requirement—the statute declares that a
copy is a material object from which the work can be perceived either directly, or with the aid of a machine.
 A copyright owner, and only the copyright owner or one acting with his or her permission, may make “copies” or
“phonorecords” of the protected work.
 Fair use doctrine – when you can use copyrighted material without paying for it because it is meant for fair use.
 To establish infringement – ownership of valid copyright & copying of constituent elements of the work that are
original.
 Fashion industry is NOT generally protected under copyright law.
 A counterfeit copies the design and also the name. They are NOT lawful
 A knockoff doesn't copy the name. Knockoffs ARE lawful b/c it inspires others to make goods at an affordable
price.
 General rule: lower priced goods based on competition by not protecting certain goods is good for the pubic
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The principle that the general public has a right to use the land on the shore covered by the ebb and flow of the tide
for purposes of navigation, fishing, and recreational activities.
The public trust doctrine allows the state to assign higher priority to the conservation of water over private
commercial uses on a case-by-case basis.
The public trust doctrine extends to dry beach area above the foreshore owned by a quasi-public entity.
The public trust doctrine preserves the state’s sovereign authority to protect public trust uses, thereby preventing
owners from acquiring a vested right that would allow them to harm the land.
Under the public trust doctrine, the public must be granted reasonable access to the sea for recreational purposes.
Right to Exclude
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
A right inherent in owning real property, including the right to exclude anyone and anything from one’s
property that one doesn’t want on the property.
 Courts have been quite vigilant in protecting this right, even when there is no significant damage to the
property invaded.
Right to Alienate
 The power of alienation, or the right to sell or gift the property.
 This allows property owners the power to restrict the use of their property and such restrictions persist after the
property is transferred.
o For example, a person may choose to sell a farm, but attach a condition that it must NOT be developed
within 20 years after the sale.
 This policy has given rise to the Rule Against Restraints on Alienation.
 Alienation, in this context, means the ability to resell or transfer the property. Generally, there are three types
of restraints on alienation that are considered void:
 (1) Disabling restraint: This restraint, which is always void, prohibits a grantee from making ANY transfer of
interest in real property.
o An example of a disabling restraint is if a property transfer deed contains a provision that states
“Neither the grantee nor any of the grantee’s heirs shall have the right to transfer the land or any
interest in the land.”
 (2) Forfeiture restraint: states that a grantee will forfeit the real property if the grantee attempts a transfer.
o An example of a prohibited forfeiture restraint is a provision that provides “If the grantee attempts
to transfer Blackacre or any interest in Blackacre during his lifetime, his estate shall cease and title in
Blackacre shall vest in a third-party.”
 (3) Promissory restraint: where a grantor makes a grantee promise not to transfer the land.
o An example of a prohibited promissory restraint is the following provision: “B hereby promises that
he will not transfer Blackacre or any interest in Blackacre without A’s prior written consent.”
 Lesser restrictions on the alienability of property may be valid, depending on how far they go and how much
they negatively impact the stream of commerce.
 A restraint on the usage of property for a limited time after it’s sold, for example, can be valid.
 A partial restraint on alienation refers to a restraint on alienation that is qualified.
 The “reasonable restraints” doctrine provides guidelines for what counts as a valid partial restraint.
 A restraint on alienation will be classified as a valid partial restraint if it restrains property transfers for a: (A)
limited time AND (B) for a reasonable purpose.
o For example, A, who owns and resides on Blackacre, transfers one-half of her interest in Blackacre to
her sister, B.
o In the deed transferring this one-half interest, A includes a provision stating that “During A and B’s
lifetimes, each party promises not to convey her interest in Blackacre to any non-family member
without the consent of the other party.”
o The purpose of the restraint is to prevent either party from being forced to live with someone who is
not a family member. Because that purpose is reasonable and because of the lifetime limitation, this
restraint will likely be considered valid.
 Reasonable restrictions in commercial real property transactions and sales are likewise acceptable.
 Another example of a generally acceptable restraint on alienation is a “right of first refusal,” which means that
the transferor retains the right to have the first opportunity to purchase property upon the owner's decision to
sell, on the same terms offered by a third party (or at terms dictated by the restraint).
o While a right of first refusal limits the ability of the owner of real property to sell it, it doesn’t
necessarily restrict the commercial opportunities available regarding the property because the person
with the right of first refusal still has to match the economic terms of a third-party offeror.
 Rights of first refusal must be reasonable, meaning that the right of first refusal allow the contract holder to
purchase on the same terms and conditions as the other offer.
 Additionally, the contract must provide a clear procedure for exercising the right of first refusal and it must
also provide a reasonable time for exercising the right of first refusal.
 Restraints that prohibit transferability to protected classes of people will almost certainly be voided.
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o
One cannot transfer property while imposing restrictions based on categories such as race, religion,
ethnicity or gender.
Right to Abandon
 Personal property left by an owner who intentionally relinquishes all rights to its control.
 Real property may NOT be abandoned.
 At common law, a person who finds abandoned property may claim it. To do so, the finder must take definite
steps to show their claim.
o For example, a finder might claim an abandoned piece of furniture by taking it to her house, or putting a
sign on it indicating her ownership.
Right to Destroy
 Traditionally been called the jus abutendi: the right to consume, transform, and abuse.
 Today major legal systems implicitly recognize that an owner is entitled to consume or transform the thing that
is the object of property rights.
 Yet the extension of this right to include irrational destruction is controversial because it permits wasting
valuable resources.
Right to Use
 The right to use the property may have to do with whether Owner One's use interferes with Owner Two's
enjoyment, but it does NOT stop trespass.
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"Estates" are those interests in land that give the owner a right to POSSESS the land.
Possessory rights in land are usually understood to include rights to GENERAL dominion and control, rights to
use and occupy the land, and rights to exclude others from it.
 An owner of an "estate" in land always has, by definition, a possessory right in the land, but the owner of an estate
does not always have a right to possess the land right away.
 That is, the owner of an "estate" may have a right to possess IMMEDIATELY, or IN THE FUTURE, or even
only POTENTIALLY in the future.
 The law also recognizes NON-possessory ownership interests in land. These interests are NOT "estates."
 They only allow the holder to make certain LIMITED uses of the land.
o Ex: A person might own a RIGHT-OF-WAY across another's land. Such an interest is known as an
"easement." An easement is a right to make a LIMITED use of another's land.
 An easement is an ownership interest in land, but it is NOT an "estate."
 Non-possessory interests in land are sometimes called "incorporeal interests" in land.
 "Incorporeal" means literally "no body."
 EVERY owner with a POSSESSORY interest in land has an "estate."
 Some people who typically have POSSESSORY interests ("estates"):
o 1. Ordinary "homeowners"
o 2. People who occupy apartments under two-year leases
o 3. "Renters" who orally lease apartments from week to week
 All of these people have "estates" in land. Though, they all have DIFFERENT estates.
Classification of Estates
 The various "estates" are classified in 3 ways:
o according to POTENTIAL DURATION.
o according to TIME OF ENJOYMENT (now vs. later).
o according to so-called DIGNITY (freehold vs. NON-freehold)
 "Non-freehold" estates refer to holdings by lease tenants who are in landlord-tenant relationships.
 Freehold ownership refers to what most people consider "owning" (as opposed to renting)--e.g.,
most modern homeowners are "freeholders."
 Freehold estates:
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1. Fee Simple Absolute
 a. Fee Simple Determinable
 b. Fee Simple on Condition Subsequent
 c. Fee Simple on Executory Limitation
o 2. Fee Tail
o 3. Life Estate
Non-freehold estates:
o 4. Term of years
o 5. Periodic Tenancy
o 6. Tenancy at Will
ANY owner with a present right to possess land is properly referred to as a tenant.
Technically, ANY land holding in which a person has PRESENT possession can be properly referred to as a
tenement.
The instruments of conveyance used to create the three NON-freehold estates are generally called LEASES.
The instruments of conveyance used to create the FREEHOLD estates are called "deeds."
The parties to a lease are referred to as LESSOR and LESSEE (or LANDLORD and TENANT) instead of using
the "freehold" words, grantor and grantee, which refer to the parties to deeds.
Classifications according to TIME OF ENJOYMENT:
o 1. PRESENT interests
o 2. FUTURE interests
Fee Simple Absolute "The Greatest"
 Fee simple absolute is the greatest possible estate in the common law system because it has the greatest
duration.
 Fee simple absolute can last potentially FOREVER.
 If the owner of a fee simple absolute dies WITHOUT heirs and WITHOUT a valid will (a comparatively rare
event), then land goes to the state--a process known as "ESCHEAT."
 In the USUAL case, however, the decedent owner's "heirs" (or, if there's a will, the named beneficiary in the
will) would receive the fee simple absolute at the owner's death.
 The fee simple absolute is an "estate of inheritance."
o It "descends" to the owner's HEIR when the owner dies. When the heir dies, it descends to the heir's heir.
When the heir's heir dies, it descends to the heir's heir's heirs, etc., etc., etc... potentially forever.
 Heir - A person who is DESIGNATED BY LAW to inherit an estate in land when the owner dies.
 Some facts about "heirs"
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(1) Only "heirs" can "inherit."
(2) People who take under a WILL are NOT called "heirs." They do NOT "inherit."
(3) The LAW determines who the heirs are (modernly, Statutes of Descent, and Distribution).
(4) If an owner leaves a valid will devising the land to somebody OTHER THAN the legally designated heirs,
then the "heirs" are cut off. The will controls.
o (a) When people receive land under a WILL, they are said to take by "devise."
o (b) They are known as "devisees."
 (5) Heirs, by contrast, are said to take by "descent."
 (6) The "testator" (author of the will) determines who his/her "devisees" are, but the LAW designates who a
decedent's "heirs" are. That is, the law determines who takes by "descent."
Creating a Fee Simple Absolute
 Estates in land are created in CONVEYANCES.
 The normal way to get a fee simple absolute (or any other estate in land) is to obtain a CONVEYANCE from the
person who has it -- namely, the current owner.
 Most land owners today obtained their ownership in CONVEYANCES from other (previous) owners. The titles
of today's owner can usually be traced, through a chain of conveyances and inheritances, all the way back to a
"conveyance out " from the original owner--the "root" of title (usually the sovereign). This is called the "chain of
title."
 The normal mode of conveyance today is a DELIVERY of a DEED.
 Whenever a GRANTOR (ex. a seller) "delivers" a valid deed of conveyance, the GRANTEE(a buyer) gets an
estate (ownership).
 There are TWO main factors that determine which of the estates a conveyance has created:
 1. The WORDS of conveyance in the deed.
o The grantor's OBJECTIVELY MANIFESTED INTENT as expressed in the words of conveyance.
 2. The grantor's OWN ESTATE.
o A grantor cannot convey a greater estate than he/she has. Or, stated differently, an estate of a given
potential duration cannot be carved out of a "lesser" estate (in duration).
 Ex: A person who has only a life estate CANNOT convey a fee simple absolute
 A grantor who has a fee simple absolute, however can potentially create ANY of the other estates -- because
the fee simple absolute is the GREATEST.
 When a grantor with a fee simple absolute makes a conveyance, the WORDS OF CONVEYANCE (objectively
manifested intent) are the crucial factor determining which estate is created
 The classic phrase used to show an intention to create a fee simple absolute is: "...and his HEIRS"
 This phraseology ONLY indicates that the estate being conveyed is a fee simple.
 The word "heirs" does NOT mean that the named grantee's heirs are co-grantees entitled to share in the
ownership, not even a FUTURE interest at the named guarantee's death.
 The word "heir" means persons who are designated by law to "inherit" an estate in land the owner dies.
o Ex: Since Paula is not dead, she does not (yet) have any heirs. As they used to say: "Nemo est haeres
viventis." ["Nobody is the heir of a living person."]
 Originally, the reference to "heirs" was ESSENTIAL if you wanted to create a fee simple absolute.
o If you didn't use the word "heirs," the transferee got a mere life estate.
 With modern law reforms, the use of the word "heirs" is now optional but it is traditional.
 Under the typical modern rule for interpreting deeds:
o Unless the deed specifies otherwise, the grantee gets WHATEVER estate the grantor has.
o Thus, if the grantor has a fee simple absolute, then the grantee gets a fee simple absolute ... UNLESS
otherwise specified.
Termination of a Fee Simple Absolute
 If the owner CONVEYS before death (or DEVISES by a will, which takes effect at death):
o (1) The owner's heirs are CUT OFF.
o (2) The conveyance PREVENTS the grantor's heirs from inheriting the fee simple absolute.
 When a fee simple absolute is conveyed or devised,
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a) a new person is SUBSTITUTED as the owner, and ...
b) a new line of potential heirs is SUBSTITUTED as the potential holders of the estate through
perpetuity.
 In the case of a conveyance by deed, the GRANTEE is substituted as owner.
 The GRANTEE'S heirs are substituted (for the grantor's heirs) as the "line of heirs" that potentially might hold the
fee simple absolute in perpetuity.
 Conveying a fee simple absolute doesn't per se terminate it.
o From the standpoint of the fee simple absolute, and its perpetual duration, the conveyance doesn't change
much at all.
o It just goes on running toward perpetuity, through the grantee's (instead of the grantor's) heirs.
 The event that really "terminates" a fee simple absolute is when the owner's line of heirs runs out.
 If the owner of a fee simple absolute dies:
 a) still owning it, and b) without a will devising the land to somebody, and c) without any heirs at all (as
designated in law), then the fee simple absolute will "ESCHEAT" to the state, i.e., the state takes over ownership
of the land.
Carving up the Fee Simple Absolute
 The owner's right to possess is, of course, LIMITED:
 It is limited in TIME, and
 It is limited in SPACE
 This divisibility in terms of TIME is a DISTINCTIVE FEATURE of the common-law estate system.
 When a grantor conveys a "life estate" to a grantee, this is TEMPORAL DIVISION (as opposed to spatial
division).
o Grantor has divided up his possessory right in terms of TIME.
 The grantee's life estate has been 'CARVED' out of the grantor's fee simple absolute.
o Grantee now has the right to possess the land for her life.
 Grantor retains the right to possess for the REST of perpetuity, FOLLOWING her life estate.
 Grantor's retained future interest is called a "reversion."
o It's called a reversion because, under it, the possession will "revert" to grantor at the end of grantee's life
estate.
 A reversion is a future interest retained by a TRANSFEROR of a life estate and other "less-than-fee-simple"
estates.
 During grantee's life estate, grantor has NO PRESENT RIGHT whatsoever to possess or use the land.
 He has "transferred" that part of his perpetual right. He thus has only a "future interest" a.k.a. reversion
 Landlords can normally be referred to as "reversioners," meaning persons holding reversions.
 Even though grantor's "future interest" allows her to enjoy her possession only in the future, the future interest
itself exists in the present (much as a ticket to next week's ball game exists NOW, even though it can only be
used at a future time).
 A "future interest," such as a reversion, is an interest that someone has NOW, though the "enjoyment" is
postponed.
o Whenever someone has a future interest, there is someone else, the "present interest" holder, who is
enjoying the present possession.
Fee Tail
 After the fee simple estates, the NEXT "greatest" estate at common law is the FEE TAIL.
 Today, the fee tail estate is, for the most part, obsolete.
 In many ways, the fee tail is like the fee simple absolute in that the fee tail is an "estate of inheritance.
 Differences between a FEE SIMPLE and a FEE TAIL:
 (1) A fee tail can be inherited only by LINEAL descendants.
o (A fee simple can be inherited by COLLATERAL as well as lineal heirs.)
 "Lineal" descendants mean "issue" --> children, grandchildren, etc.
 "Collateral" heirs include siblings, cousins and other non-offspring that are designated as "heirs" in the Statute of
Descent and Distribution.
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Since a fee tail can descend only to "lineal" heirs, it is far easier for the "line of heirs" to run out.
The typical words used to CREATE a fee tail reflect this limited inheritability:
"to A and the heirs of his body"
o The word "heirs" reflects the fact that the fee tail is an "estate of inheritance."
o The words "of his body" reflects the fact that descent of the fee tail is limited to LINEAL heirs.
 (2) A simple conveyance by a "tenant-in-tail" DOES NOT cut off the grantor's heirs.
o On the contrary, it is the hapless grantee who is "cut off."
o Conveyance or no conveyance, the heir of the grantor (tenant-in-tail) is entitled to possession upon the
grantor's death.
o Likewise, an attempt to devise a fee tail by will is ineffective. The lineal descendants of the tenant-in- tail
CANNOT be cut off by will.
 When a fee simple absolute is conveyed, a) a new person is SUBSTITUTED as the owner; and also b) a new line
of potential heirs is SUBSTITUTED as the potential inheritors of the estate through perpetuity. THIS IS NOT SO
WITH THE FEE TAIL.
 The same old line of heirs (the lineal descendants of the original grantee) continues to inherit.
 (3) Because a fee tail can descend only to "lineal" heirs, the death of an owner without an heir could be a
relatively common occurrence.
 So common that the grantor of a fee tail is regarded as retaining a REVERSION, just as the grantor of a life estate
or lessor of a leasehold estate can retain a reversion.
 In the case of a fee tail, possession REVERTS to the original grantor when the grantee's line of heirs (lineal
descendants) runs out.
o The grantor could also provide that, when the line of heirs runs out, the fee tail would go to a designated
third person. This was known as creating a "remainder" to follow the fee tail.
 To meet modern needs and conditions, different jurisdictions have dealt with the fee tail in different ways:
 1. Eliminate it entirely, so that a deed or devise "to G and the heirs of his body" creates a fee simple, not a fee tail.
 2. Eliminate it, but try to retain a bit of its spirit, so that a deed or devise "to G and the heirs of his body" creates a
LIFE ESTATE in G, and a REMAINDER to the person(s) who would have inherited as G's lineal heirs at his
death.
 3. Keep it, but make it easy for owners to make "disentailing conveyances" (i.e., conveyances in which the
grantee gets a fee simple, thus cutting of the heirs in tail).
 4. Keep it, but provide that a fee tail becomes a fee simple after one generation.
Life Estate
 The next greatest estate, after the fee tail, is the LIFE ESTATE
 As the name implies, a life estate is an estate that is limited to exist for the LIFE of some individual, usually the
owner of the estate.
 Whenever an owner of a fee simple absolute makes a conveyance that grants a life estate (or any estate other than a
fee simple absolute), there automatically has to also be a FUTURE interest to be held by somebody other than the
life tenant.
 The right that the fee owner had to possess for all of perpetuity, including the part of perpetuity following the life
estate, cannot just disappear.
 If the fee owner did NOT convey it, then he or she must still HAVE it--in which case it's called a reversion.
 The typical words of conveyance to create a life estate are, very simply:
 "to Cranberry for life"
o This life estate will come to an end at Cranberry's death. Under no circumstances will this life estate last
beyond Cranberry's death.
 A life estate is NOT an "estate of inheritance." The words of creation contain no mention of "heirs."
 A life estate can also be created to exist for the life of someone OTHER THAN the owner of the estate.
o Ex: A Conveyance: "To Cranberry For The Life Of Arthur."
o This Is Known As A Life Estate "Pur Autre Vie " [Old Law French: "For The Life Of Another"].
o A life estate "pur autre vie" also results when the owner of a life estate CONVEYS the life estate to
somebody else.
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Conveyances of life estates do NOT change the person whose life serves as the measuring life (the "cestui
que vie").
 A "remainder" is always a future interest created in somebody OTHER THAN the grantor of the estate that the
future interest follows.
 However, REMAINDERS and REVERSIONS are distinct kinds of future interests. They must not be confused
with one another.
 REVERSION = a future interest retained by the GRANTOR.
 REMAINDER = a future interest to someone OTHER THAN the grantor.
The Term Of Years
 DEFINITION: A term of years is an estate that is limited to end ON or BEFORE a DEFINITE DATE.
 A term of years does NOT automatically renew at its date of expiration.
 A term of years may (despite its name) last for less than a full year; for example, "to A for six months" creates a
term of years.
o Ex: "To A for one day," "To A for 1000 years," & " to A for 1000 years if he lives so long," "are all terms
of years
o "to A for 2 years so long as the rent is paid on time" creates a DETERMINABLE term of years -- that is,
the estate may last for two years or it MAY end earlier (in this case, if A does not pay the rent on time).
Such a term of years is sometimes called a "term of years on conditional limitation."
 The "tenant" in the typical leasing situation is legally considered the "owner" of an estate in land. The estate is
usually a term of years.
 If you've ever been a tenant under a lease, chances are that you had a DETERMINABLE term of years -- one that
would come to a premature end if the rent was NOT timely paid.
 It's not common parlance to refer to the leasehold tenant as an "owner," but the tenant is just as much an owner as
the landlord. They just own different estates:
o The tenant owns the present interest (a term of years).
o The landlord owns the future interest (a reversion).
Carving a Term of Years Out of a Fee Simple
 Every lease creates a property interest in land, to be held by the tenant. Every lease is, therefore, a conveyance.
 When an owner in fee simple absolute transfers a term of years to a tenant, it is just another example of the
familiar carving up of the fee simple absolute.
 A REVERSION is a future interest retained by a CREATOR of a term of years or any other less-than-fee-simple
estate.
 Whenever there is a term of years, somebody HAS to hold a future interest.
o Ex: If O's conveyance didn't designate anyone to possess for any portion of perpetuity following the term
of years, that right to future possession HAS TO be retained by O.
 If a landowner has the right to enjoy possession for all of perpetuity, and he/she does not dispose of that right as to
all of perpetuity, then the owner must still have whatever wasn't disposed of.
 Therefore: ALL estates other than fee simple, when created out of a fee simple, MUST have some kind of future
interest created with them.
 These simultaneously created future interests can be either retained by the lessor (as a "retained" right to future
possession) or granted to some third person, BUT THEY HAVE TO EXIST somewhere.
 "PARTICULAR ESTATES": Estates carved out of the fee simple absolute are sometimes called "particular"
estates, because they are "particles" of the whole fee simple absolute.
o If Olivia leased "to Cranberry for 3 years," what happens if she needs to enter or use the premises before
the end of the 3 years?
o Olivia has TRANSFERRED--conveyed--her right to possess during the 3-year term of years. Cranberry
now has that right.
o During the three years, Olivia has essentially no more right to enter or use the premises than a total
"stranger " to title would have.
 It is basically the same as though Olivia had sold Cranberry a car and, then, tried to take a trip in
it, except that THIS "sale," the lease, carries a reversion.
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When a term of years is "conveyed" to a tenant, the conveyance makes the tenant the "owner" of the
PRESENT (possessory) interest in the premises. The landlord retains only a FUTURE interest.
o If landlord Olivia takes back possession in violation of the lease, Cranberry can maintain an "ejectment"
action against her.
o During his term of years Cranberry CAN hold Olivia liable for money damages in trespass, just as he
could recover trespass damages from anybody else who committed unpermitted invasions of the premises.
 Olivia only "owns" a FUTURE interest and has NO right to trespass on the premises during the
term.
 Olivia will NOT enjoy PRESENT possessory rights until the end of the term of years.
 A term of years in land is considered to be "personal property," a so-called "chattel real."
o The latter term signifies that the term of years is personal property which consists of an interest in land.
 Rather than being "inherited" by "heirs" (terms that are restricted, technically, to "real" property interests), a term
of years goes to the "distributees " of decedent owner's personal property under the Statute of Descent and
Distribution.
Carving Up The Term Of Years
 A term of years can be carved out of an estate of LESSER DURATION than a fee simple absolute.
 Sublease - a term of years will be carved out of another term of years. Happens very often.
 If a reversion will end on or before a definite date (Ex: the termination date of his lease), it is a term of years in
reversion, or a reversion for years.
 A "sublease" means a transfer by a lessee of LESS THAN his/her entire estate (in terms of duration), with the
lessee retaining a reversion.
 During the term of a subtenant's sublease, there is an HIERARCHY of ownership (similar to the old FEUDAL
hierarchy) ==>
o 1) Fee owner/landlord
o 2) Prime tenant/sublandlord
o 3) Subtenant
 As far as the subtenant is concerned, the sublandlord is legally THE landlord.
 The subtenant is NOT considered to have any landlord-tenant relationship directly with the fee owner and main
landlord.
 The sublandlord doesn't have to wait for the subtenant's lease to expire before starting to carve up his
REVERSION by making more subleases.
o He can carve up his reversion by entering into a new sublease that provides for possession to commence
after the expiration of the 1st subtenant's lease.
o The sublandlord has, in other words, leased (i.e., conveyed) a part of his reversion.
o The 2nd subtenant has received a "lease in reversion."
 Assignment vs. Subletting
 An "assignment" means a transfer by a lessee of his/her ENTIRE estate (in terms of duration), without retaining a
reversion.
 "Sublease," by contrast, means a transfer by a lessee of LESS than his/her entire estate (in terms of duration), so
the lessee DOES retain a reversion.
 A sublessor becomes the landlord of the subtenant. An assignor does NOT become the landlord of the assignee.
 Instead, the assignee "takes the place" of the assignor in the original landlord/tenant relationship.
 The assignee becomes the tenant of the ORIGINAL landlord.
Creating a Term of Years
 It is still the law today that a non-freehold estate will arise from the mere fact that a tenant enters into possession
with the permission of the landlord.
 No written LEASE is necessary
 DEMISES = puts down
o Ex: Bill DEMISES (puts down) Blackacre to Joe==>
o Bill is Joe's landlord.
o Bill has DEMISED (put down) Blackacre to Joe.
o That is, when Joe took possession with Landlord Bill's permission,
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THAT was a "demise."
o Such a "demise" always results in the creation of a non-freehold estate.
Under the Statute of Frauds, any lease for a duration of more than 3 years had to be memorialized in a writing,
signed by "the party to be charged". . . or else it was "unenforceable."
o In most states, the maximum period for an oral lease is 1 year.
By "demising" possession to Blackacre, Bill has succeeded in creating an estate.
However, if the oral lease itself is unenforceable (due to Statute of Frauds), Bill's estate is NOT a term of years,
but only a "periodic tenancy" or a "tenancy at will."
Interpreting a Conveyance
 When construing the language of a grant or will of land, a court's primary task is to decide:
"what did the grantor intend to transfer"? and "to whom did the grantor intend to transfer"?
 The general rule for proving intent is normally determined by:
o (1) the language employed in the instrument,
o (2) read as an entirety
o (3) and in the light of the circumstances of its formulation.
o Restatement of Property § 242 (1944).
 The Language Employed in the Instrument
o The written words of a formal document generally control the court's construction of a grantor's intent.
o This preference is reflected in a number of rules: the statute of frauds, wills acts, the parol evidence
rule and others.
Important Vocabulary
 Determinable
o A "fee simple determinable" is created by conveyance that contains words effective to create a fee simple
and, in addition, a provision for the automatic expiration of the estate on occurrence of stated event.
o To identify fee simply determinable, look for language of durational limitations ("so long as" "during"
etc.) and language of automatic forfeiture or expiration.
o A fee simple determinable contains language of limitations rather than language of conditions.
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Distinguishing Conditions & Limitations
o A "condition" may be to or for the benefit of a stranger, who may then take advantage of its
determination.
o Only the grantor, or those who stand in his place, can take advantage of a condition.
o A limitation ends the estate without entry or claim, which is not true of a condition.
o It also differs from a conditional limitation.
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In determining whether, in the case of estates greater than estates for years, the language constitutes a
"condition" or a "conditional limitation," the rule applied is that, where an estate is so expressly limited by
the words of its creation that it cannot endure for any longer time than until the condition happens on
which the estate is to fail, this is limitation.
o When the estate is expressly granted on condition in deed, the law permits it to endure beyond the time of
the contingency happening, unless the grantor takes advantage of the breach of condition, by making
entry.
o It differs also from a covenant, which can be made by either grantor or grantee.
o Only the grantor can make a condition.
o The chief distinction between a condition subsequent in a deed and a covenant pertains to the remedy in
event of breach.
 Breach of a condition subsequent subjects the estate to a forfeiture.
 Breach of a covenant is merely a ground for recovery of damages.
o A charge is a devise of land with a bequest out of the subject-matter.
o A charge upon the devisee personally, in respect of the estate devised, gives him an estate on condition.
o A condition also differs from a remainder; for, while a condition may operate to defeat the estate before
its natural termination, the remainder cannot take effect until the completion of the preceding estate.
Conditions
A condition is a provision making the effect of a legal instrument contingent upon an uncertain event.
o For ex: A conveyance of land contains a condition if the size, duration or even existence of the estate to
be conveyed depends on whether a particular event occurs (or doesn't occur) or the grantor or grantee
does (or doesn't do) a particular act.
Conditions can be either precedent or subsequent
A condition precedent is one that must happen before the estate to which it is connected can vest or be enlarged.
A mere passage of time is NOT a condition precedent.
A condition subsequent is one connected to an estate that has already vested.
If the condition continues to be met, the estate is continued; BUT if the condition fails or is no longer performed,
the estate is defeated.
If the condition is an integral part of the grant (no punctuation or disjunctives to separate it -- often, but not
always, preceding the grant), it is a condition precedent.
If it is a condition subsequent (creating a vested remainder subject to divestment or subject to an executory
limitation), the "if" clause (or other words of condition) will be separated from the grant.
Remainder
The remnant of an estate in land, depending upon a particular prior estate created at the same time and by the
same instrument, and limited to arise immediately on the determination of that estate, and not in abridgement of it.
A future interest created in some person other than the grantor or transferor.
A remainder is always held by a grantee, as distinguished from a reversion, which is held by a grantor.
A remainder always follows an estate that expires (such as a life estate) rather than cutting off an estate through
the operation of a condition or limitation.
Vested
An estate that carries with it fixed rights of present or future enjoyment, free from contingencies, is "vested."
An estate can be "vested in possession," meaning there is a present right to occupy and reap the benefits of the
property.
An estate is considered "vested in interest" when there is a present right of future enjoyment. If that right of future
enjoyment is uncertain -- contingent on some event or the identification of its holder -- it is not considered vested
Contingent Remainder
One which is either limited to a person not in being or not certain or ascertained, or so limited to a certain person
that his right to the estate depends upon some contingent event in the future.
Remember that a remainder is a future interest following immediately upon an estate that expires and held by a
grantee.
A contingent remainder is one in which:
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(1) The grantee is unidentified OR
(2) The future interest is subject to a condition precedent.