Property I Outline: *Points for IRAC **Points for IRAC and both sides ***Points for IRAC and both sides and policy. ****Points for IRAC and both sides and policy and cases. The Basics of Property Law: Property law is not about the relationship a person has with their stuff, it’s about the relationship that a person has with everybody else concerning their stuff. Having dominion over something is a symptom of ownership over the thing. You must first have title, then you may claim dominion over that thing. What does it mean to “own” something? If you own it, you have the rights to it. Rights are like a bundle of sticks attached to each item. The right to exclude others, for example, is just one of the sticks in the bundle of a true owner. What is a true owner? A true owner is whatever individual has the best claim to a piece of property. It might be the most recent legitimate purchaser, or someone who has successfully adversed a parcel of property from another. Whoever has the best “title” (bundle of sticks) is the true owner. Why does the property owner need to have the backing of the government to practice rights like exclusion of others? Without government backing, there is no greater power for people like trespassers to bow to. Without backing, it is a society without rules where the strongest own whatever they like. ***Note*** Criminal trespass and Civil trespass are not the same thing. They bear the same name, and often have the same rule, but have very different rules. What are the types of property law? Real Property: Dealing with land Personal Property: Dealing with individual used property. Everything that isn’t real property, generally falls under personal property. Intellectual Property: Dealing with intangible things. What is the most important “stick” in the bundle of an owner’s rights? A property owner’s right to exclude. It is not absolute, and cannot be used to deny the rights of others residing on that property, but it enables the owner to protect their property against most others. In the example of State v. Shack, (found in the cases file) the state ruled that Shack could not exclude the trespassing parties, because they had reason to be on the property for the good of others and no more suitable site was available. What might allow an individual to ignore the “stick” of exclusion? Necessity- The migrant workers don’t have another available space for the lawyer and doctor to meet them. Should being the “first” to own an object matter? Are there other ways of determining ownership? There are many methods that one my gain title over property. Being the first may not bestow the best rights upon you, but it is among the most powerful claims a person can have. What happens if I abandon property? I give up my title and claim. The property remains untitled until another claims it. (Hawkins v. Mahony) Can an owner transfer these sticks? Yes, by any normal means of transferring ownership. Acquisition by Discovery: To claim discovered property, the new possessor must make some improvement on land, or some action to take ownership of an object. They must intend to make it theirs, and then act toward that goal. Fences are common means of marking land as owned. Acquisition by Capture: How do you capture something? To capture something, you must deprive it of its natural liberty. In Pierson v. Post, The winning party killed the fox, though it was being chased by another. The court determined that the fox was no property until successfully captured, maimed, or killed. This is the principle of Deprivation of natural liberty. What is the motivation behind this decision? We like consistent rules, and we like when people who work hard are fairly compensated. This rule seems to reward a lazy party with a lucky shot. Why not reward the party that chased the fox for hours? If the standard were: “The first to shoot claims ownership,” then we don’t encourage successful hunters. We encourage shooting at nearly anything that moves. There are policy implications behind every decision. Is there a time and place for local customs? When the law is looking for guidance on a first impression, it often looks to precedent, but also local culture. (Ghen v. Rich) What are the elements of Acquisition of Capture? Must be rightfully present, Must be first in time, Must deprive animals of its natural liberty. Acquisition by Creation: Intellectual Property Break: What is Intellectual Property? Intellectual property is any property created by an individual. That individual retains rights to property as the creator. What is fixation? Fixation is the physical presence of goods. CDs, harddrives, skin (in the case of tattoos) all represent fixation. What is the “Right to Publicity”? A person has a right to their own image. They cannot be used to promote items without permission. What are the two types of “Right to Publicity” violations? Appropriation of name, and appropriation of image. Is this an easy portion of property law? No, and it’s getting tougher. Modern developments have forced previous systems to adapt. In Carson v. Here’s Johnny Portable Toilets, Inc., the sixth circuit found that using elements of a celebrity's recognizability may give the impression that such products have been authorized or supported by the celebrity in question. To avoid this uncertainty, the courts expanded the rights as previously established. Now if a reasonable person could see the ad as an endorsement by the celebrity, permission must be attained. See White v. Samsung in the case folder. What about Patents? Patent law is thought to be utilitarian; it protects new advancements for the duration of the patent, so that the company making the product may enjoy a period of success without fear of another, larger, and more established company muscling them out of the market immediately. Even still, these companies may have the use of their patented items regulated by federal law. What determines Patentability? The item must fall into one of the categories of patentable subjects, like machines, or processes. Then it must prove Utility, Novelty, Non-obviousness, and Enablement. Utility: It must prove that it is some benefit to humanity (This is an easy test.) Novelty: The object has not been preceded by an identical item, Non-obviousness: Requires the object be enough of an advance as to not be readily available for others Enablement: A normal practitioner in the field that this is intended to enter could use it. Acquisition by Find: When you find an object, several factors come into play. Was the object found on private or public land? If the object was found on public land, then you only have two parties involved in the contest of claims. The finder, and the original owner. If the original owner comes forward, the finder will lose. If the original owner never does, then the finder’s claim is superior to all others. What if the object is lost and found by a different owner? The second finder is only inferior to claims by the first finder and the original owner. Against all others, his claim is superior. (on public land) (Armory,) Original owner > first finder > second finder > third finder > the rest of the world. What if the object is lost and found on private property? The process is more complex. There are now three parties that are involved. True Owner Finder Landowner The True (original owner) still has the greatest claim, but is often not present. The real contest is between the landowner and the finder of property. There are several factors that decide this contest. The finder wins, so long as: They are present rightfully, AND They have full agency over their own actions, AND The landowner is not aware of the item’s presence, AND The item’s attachment is not definite, AND And the object in question was lost or abandoned, but not mislaid, by the true owner. (Hannah v. Peele,) (Several other cases referenced within) The landowner wins if: The finder is trespassing, OR the property is mislaid, OR is firmly attached, OR the finder is an agent of the landowner, OR or the landowner is aware of the item. What are the policies that inform the distinction of “lost vs mislaid?” We want to protect the rights of the true owner first. If the object was lost, and the owner is not likely to return, we want to protect the finder. If the object was mislaid, we want to leave the object with the landowner so that it has the best chance of being returned. Adverse Possession: What is adverse possession? The process of acquiring title to land or chattel and creates a claim against the true owner. If successful, the adverse possessor essentially takes the sticks of the owner. Is it “Title by Theft,” or “Title by use?” Both really. For the landowner, adverse possession is almost a government sanctioned theft. To the adverse possessor, it is the utilization of land or resources previously neglected by the true owner. What are the policies guiding adverse possession? Punish sleeping landowners - If the owner won’t utilize the right to exclude, then why should the court protect that right? Reward the earing trespasser - Give property to individuals that properly care for it and use it. What are the elements of Adverse possession? Generally, adverse possession requires: (1) An actual possession (Essentially, you are trespassing) (2) Open and/or notorious and/or visible possession (Ensures an attentive landowner would see.) (A) For small encroachment, the landowner’s actual (not constructive) knowledge required. (3) Hostile possession (hostile to true owner’s rights) and under a claim of right. (nonpermissive) (A) Three options for hostile state of mind: Intent to take, good faith, or objective. (a) Intent to take requires a knowing trespasser. Rewards land use, but encourages trespass. (b) Good faith requires unknowing trespass. Rewards landowner. Encourages ignorant settlement. (c) State of mind irrelevant, judge only by behavior (4) Continuous possession. Land/object must be possessed and used for the entire statutory period, and in a manner that a normal owner would use it. (Ensures an attentive landowner would see.) (5) Long enough. FOR THE ENTIRE STATUTORY PERIOD. If the run of the statute is 7 years, you need to satisfy all other elements for the full 7 years. What would this look like? Creating a permanent improvement to a parcel of land, that is easily seen, acting as the true owner would (like acting to exclude others) and for a continuous and long enough time should satisfy all elements. Are the elements all we need? No. Each state sets its own extra requirements in statutes. Case law may also create exemptions from the general rules. Arkansas, for example, requires the adverse possessor to have color of title, meaning that they would need to think they have a fair and non-adverse claim to the land. In adverse possession of land, do you need to live there? No. You simply must meet elemental and statutory requirements. No bed required. Sticks are transferred in the condition the owner has them, so if any sticks are damaged or being slowly eroded (see adverse possession and tacking) What is Tacking? Tacking is the enjoinment of two different adverse possessor’s times for the purpose of satisfying a statutory requirement. Essentially, if I adversely possessed property for 5 years, then sold it to Dustin who held it for 3 years, and Arkansas has a statute of 7 years for adverse possession, then Dustin would satisfy the statute so long as Tacking could be applied. (Howard v. Kunto) What does Tacking Require? Privity. See the vocab section for that definition. Can owners be tacked? Yes. An owner sells the stick they have in the condition they have them in. So if an owner sells sticks that are already eroding, it is the duty of the buyer to determine this information. What are Equitable Powers? Equitable powers are discretionary powers exhibited by courts to “do what’s fair.” What is the Maine Doctrine? Adverse possession cannot be by mistake. It must be a purposeful subversion of the true owner’s claim. (Mannillo v. Gorski) What is the Connecticut Doctrine? Adverse possession needs no specific motive. All that matters are the acts a possessor takes. What about Adverse Possession of Chattel? Many elements are similar to adverse possession of land, with a few distinctions. When does the clock start for the long enough element (statutory element?) For our class, it starts when the owner is aware (or should be aware, were they paying attention,) of the facts that give rise to replevin. Replevin? Claim of ownership where the owner wishes to have the item returned. What is the policy directive for this distinction between items and land? Unlike property, which is large and usually open, objects may be moved time and time again. They can be bought and sold, driven and shipped. It would be unfair to the true owner, if we started the clock immediately. It would be unfair to the possessor if we started the clock ONLY after the owner knew the identity of the possessor. What is Privity of Contract? Transactional privity. Selling or trading. What is Privity of Estate? Privity established by gift. Can you transfer title of stolen goods? It depends on the jurisdiction. Some places do not allow thieves to transfer title. Thus any purchaser would never acquire title. Some jurisdictions allow thieves to transfer title, but in no jurisdiction does a thief acquire title over stolen goods. Some jurisdictions have a “Market Overt Rule.” See the vocabulary section. Acquisition by Gift: What are the elements of gifting? Intent, Delivery, and Acceptance. Of these elements, what is the most important? Intent. Modern case law has shifted importance from delivery to intent over time. What forms can intent take? Oral evidence, written evidence, or physical evidence of transfer. If an actual delivery took place, intent is easier to establish. Must deliver transfer the actual object? No, though it is preferred in cases where such a transfer would be practical. The more difficulty associated with physically transferring the gift, the less importance will be placed on delivery as an element. What is a symbolic transfer? A key for a gift of a car or house. A clod of dirt for land. Something that symbolizes a greater (or lesser) gift. What is being delivered? Delivery of the item is actually a delivery of the “sticks” as well. Delivery can take three forms: Actual delivery- a delivery of the object/rights in question. Constructive delivery - a delivery of a means of access to the gift. Symbolic - a delivery of a representative object, like paper with written words, or a jar of dirt. What is a Causa Mortis Gift? A stand in for a will. If the giver lives, the gift is revoked. This only works on the “deathbed.” What if a delivery is attempted through an agent but fails? Delivery through an agent that does not reach the acceptor is still an attempt of delivery. Conveyances Type of Estate How to Create Duration Future Interest in grantor or grantor’s estate Future Interest in 3rd Party grantor Fee Simple To A Forever None None Life Estate To A for life; To A for life, then B: To A for B’s life Until the end of the designated life Reversion Remainder Fee Simple Determinable (FSD) To A so long as X; while X; during X Until the moment X occurs Possibility of None Reverter (P of R) Fee Simple Subject to a Condition Subsequent (FSSCS) To A to A on condition that X, Provided that X, Once Future Right or Entry; interest holder (power of takes action after termination) X occurs None Fee Simple Subject to Executory limitation (FSSEL) To A so long as X, and if X, then to B; To A on condition that X, and if not, then to B Until the moment X occurs Executory Interest None What is Escheating? The reversion of property to the state, or (in feudal law) to a lord, on the owner's dying without legal heirs. What is the typical goal of estates in American property law? Free Alienability of property Can the holder of a fee simple bestow lesser conveyances? A fee simple holder can sell independent portions of their fee simple estate (Essentially split it into two sticks, life estate and remainder) See Gruen v. Gruen. What are multiple remainders at the same level of claim called? Competing contingent remainders What if only a portion of property is discussed in a will? Then the person will pass partially intestate. All non-discussed property passes to the heirs or escheates. Rules of construction: What are the preferences of the common law? Presumption in favor of Fee Simple Presumption against partial intestacy Use of apt language denotes authority to the will. Don’t Strike words from the will (if you can avoid it.) Can a future interest holder prevent a current holder from devaluing the property? Yes and No. A future interest holder cannot interfere with the current owners use, but can appeal to the court for some sort of relief. Relief will be granted if the court finds that waste is present. What is waste? Waste comes into effect when an action would go against the best interests of all parties. Holding onto a property, which is losing value rapidly is waste. So is selling property when the value is rising. What are the two forms of waste? Affirmative waste - Waste created by intentional acts. Permissive waste - Waste caused by inaction. How do you balance the best interest of the current possessor, and the remaindermen? Balancing the nature of interests and the nature of use. Nature of the Interests: Who does this affect, and in what way? Certainty of interest: The more certain we are that the remaindermen will take possession, the more weight we give to their concern. And Duration of interest: How much longer is the life estate holder gonna hold it? The longer the current possessor of the life estate could be expected to possess the property, the more weight we give them. Nature of Use: What is it that we’re doing to the property? Reversible or Nah: Generally, the court will allow the estate holder to do something if it is reversible. They may make the life estate holder pay to reverse the change later on. Impact on value of property: If the actions decrease the value, that is an unreasonable interference with the expectations of the future holder, and less likely to be allowed. If the actions increase the value, a court will not usually get involved. What was happening at the moment of conveyance?: What was the normal operation at the time of conveyance? If oil was being extracted at the time of conveyance, then the estate holder would usually be allowed to continue normal operation. If not, then the estate holder might be restricted from extracting oil. How does the continuation of the status quo harm the American property law system? We don’t want to prevent parties from being able to act. We like free alienability. If the grantor gave a life estate, without knowledge of oil on the property, we want the estate to be able to extract that oil. How do we allow for that alienation for which we hunger? Trusts boi! Trust Basics: Trustee: Given legal fee simple of property. They hold the legal stick. Trust Instrument: Terms of the trust. Trust Beneficiaries: Parties that benefit from the trust. No legal title, but equitable title. The stick that they have, is the right to the benefit of the thing. The Trustee has a fiduciary duty to the beneficiaries. This makes them personally liable if they mismanage the property. The trustee may be a beneficiary themselves. Trust Corpus: The property held by the trust. What does “vested” mean? Opposite of contingent. Actual, current, real. Cotenancy and the Issues that arise What are co-tentants? Co-tenants have mutual full enjoyment of the property. Both co-tenants have the full effect of a fee simple. What types of co-tentants exist? “Tenants in common” and “Joint Tenants” What is the default? Unless otherwise stated, a co-tenancy is created as a tenancy in common. What is the difference? A joint tenancy has the rule of survivorship, a tenancy in common does not. What is the rule of survivorship? If one co-tenant dies, they do not pass their share in will or to heirs. Rather, the share is absorbed by the other joint tenants. Can Co-tenancies be conveyed during life? Yes and no. Tenancies in common can, but a joint tenancy cannot. If a joint tenancy is conveyed, it breaks the joint tenancy and creates a tenancy in common instead. ***NOTE*** If A, B, and C have a joint tenancy, and C conveys their interest to D, only C’s joint tenancy is broken. A and B still have a rule of survivorship between each other’s interest. How are Co-tenancies broken? By partition. What are the forms of Partition? Partition by sale and partition in kind. What is partition by sale? The property is sold and the parties take their fair share. -increased value by selling entire property (generally bigger lots sale for more per acre) - non-uniformity of land makes partition by sale easier. Not all portions of a property are equal. What is partition in kind? The parties take proportional shares of the land itself. What is the perk when partitioning land in kind? - Respects current possession of the land and protects the enjoyment of the land. Which is the default? Partition in kind. People get attached, and that attachment had a deep non-monetary value. Either side of a dispute can push for partition by sale though. The Delfino v. Vealencis court determined that two circumstances allow for partition by sale: 1. Physical attributes of the land render partition by kind impossible or impractical or that too many individuals have an interest in the property and the resulting parcels would be too small. 2. It is in the best interest of the tenants to sell the property than divide it in kind. Is there a middle ground? Yes. A court can split the difference, by using Owelty. What is Owelty? The court orders a forced sale or division and also forces the advantaged party to pay “owelty” to the disadvantaged party. What is required for a judicially ordered sale? There must be necessity. All other options have been exhausted. How is rent handled with Co-tenants? The default rule is rent from co-tenants is equally divided. If an agreement is made, then that is the rule instead. What is an accounting action? An accounting action occurs whenever profit is made from the land. If rent is being paid for the property, then both tenants receive a share of the profit. If Cot. A is farming the land, Cot. B is entitled to proportional net profit from the property. What is a right of contribution? If the tax is $10,000 for the property, and Cot. A paid all $10,000, Cot. A has a right of contribution to get the other tenant to pay their share back to A. (In this case, $5,000) How do you handle repairs and improvements? Repair means to set right, but improvement just means to change and can be good or bad change. Can you claim right of contribution or accounting action for repairs or improvements? No, there are no rights for contribution, and no accounting actions available. When do repairs and improvements come into play? Only when the property is partitioned. In what way do repairs and improvements affect partition? Repairs get credit upon partition (Needs receipts.) Improvements get value upon partition. (Market Values Pre and Post) This even applies if the property is devalued. What is it called when an improvement removes value? Downside Risk What kind of partition suits repairs? Partition by sale. We want the repairing property to reap additional money for their work and costs. What kind of partition suits improvements? Partition in kind. We want the improvement to be in the parcel of land given to the party that improved it, good or bad. Under what conditions can you receive court ordered intervention in a co-tenancy? When an ouster has occurred. What is required for ouster? An explicit attempt to re-enter the property and an explicit denial of that attempt. What is a constructive ouster? An ouster by facts but without explicit denial of co-tenant’s right to enter/enjoy. Routinely rejected by courts. How does Ouster work in conjunction with adverse possession? When a denial of a cotentant’s rights occurs. If one party is acting as if there were no co-tenants. While adverse possession is rare in co-tenancy, it can occur. Rule against Perpetuities A validating life is any life that validates the conveyance. The living person must be alive. Is usually the grantor, the holder of the current estate, or the holder of a future interest. RAP only applies to 3rd party future interests, like: Contingent Remainders, Exec Interests, Vest. Rem Subject to Open A RAP violation only removes language of ambiguity. Any vested conveyances remain. RAP To A for life, then to A’s 1st child to reach age 21. Step 1: ID the interests in the conveyance. A has a life estate. A’s kids, x and y, have Contingent remainders in fee simple. O:Reversion in fee simple. Step 2: ID potential validating lives. A, X, and Y could potentially be validating lives. O does not have any control over this conveyance once it has occured. Step 3: Fun! (Check the validity of the potential validating lives.) Can X be the validating life? No. There is still a chance of uncertainty in the contingent future interest. X could die, and Y could die, and A could have another child that is under 21 on the day when the RAP matters. So No, X is not a validating life. Can Y be the validating life? No, for all the same reasons. Can A be the validating life? Yes. If A is dead, no children can be born that don’t reach 21. Either, a child will reach 21 in the allowable span after A’s death, or we will not What is the result of a RAP violation? A RAP violation only removes language of ambiguity. Any vested conveyances remain. Judicial reformation, ways the courts react to RAP violations. Sometimes courts of equity will slightly modify the terms of the conveyance in order to protect the grantor’s interest. As an example, the court might take a provision that states: “The first child to reach age 25.” and modify it to: “The first child to reach 21.” This is known as Cy Pres. Wait and See is another form of judicial reformation, where a court ignores the possibilities that might destroy a conveyance from the point of conveyance, and rather examine the possibilities as they stand when the validating life is terminated. Type of Estate How to Create Duration Future Interest in grantor or grantor’s estate Future Interest in 3rd Party grantor Fee Simple To A Forever None None Life Estate To A for life; To A for life, then B: To A for B’s life Until the end of the designated life Reversion Remainder Fee Simple Determinable (FSD) To A so long as X; while X; during X Until the moment X occurs Possibility of None Reverter (P of R) Fee Simple Subject to a Condition Subsequent (FSSCS) To A to A on condition that X, Provided that X, Once Future Right or Entry; interest holder (power of takes action after termination) X occurs None Fee Simple Subject to Executory limitation (FSSEL) To A so long as X, and if X, then to B; To A on condition that X, and if not, then to B Until the moment X occurs Executory Interest None O Conveys M’s Sanity to A... (Start) For Life . . . . (Life Estate) O has reversion Then to B. . . . (Remainder) A has life estate B has IDV Remainder in FS Treat B as A on future A Dies On the Condition that X. . . . (FSSCS) So Long as X. .. (FSD) If X Occurs O must act to re-obtain Fee Simple And if X, then to B. A has FSSEL X Acts; X- If X Occurs O has Fee Simple In Fee Simple (End) Exam Answer Example: 1. Continuous occupancy is required 2. Two successive processors may take their time together for the purpose of fulfilling the continuous occupancy and long enough elements. 3. Tacking requires privity between the two parties 4. Privity is defined as: reasonable connection between two possessors for the purpose of continuing their claim. 5. These parties relationship does not satisfy privity for the purpose of tacking. 6. The parties may not tack their time together 7. The continuous occupancy element is not fulfilled. 8. What is the policy behind this ruling?.
