Property
I.
Personal Property
A. Finding
i. Classification of Personal Property—
1. Abandoned property—intentional relinquishment of
possession and ownership of property. The finder of
abandoned property gets ownership if they take possession
of it.
2. Lost property—lost property is such that the owner does
not know where it is and does not come back to claim it.
The finder has a duty to reasonably protect the property
(bailment) and return it or the value if the real owner shows
up.
3. Mislaid property—property that was placed by the owner in
a place where they may come back for it. The owner of the
real property where the personal property was mislaid has a
bailment to keep the property safe for the owner, should
they return.
ii. Cases—
1. Goddard v. Winchell—meteorite was part of the real
property—showed the distinction between real and
personal property—real property includes all objects
growing out of the land or attached to the land.
2. Eads v. Brazelton—Steamboat America at bottom of
Mississippi river. If you find something but cannot possess
it and someone else comes along that can possess then they
get it.
3. Armory v. Delamirie—chimney sweep’s boy finding the
ring. A finder of personal property holds a better title
against all of the world except for the actual owner.
4. Bridges v. Hawkesworth—salesman finds money on floor
of shop (in public area of store) and salesman keeps. This
was lost property and so the finder had the better title. Also
it was found in the public space of the store.
5. South Staffordshire Water v. Sharman—worker finds rings
in pool, owner had no knowledge but worker was on
private property at request of owner—owner keeps.
a. General Possession Theory—if property owner has
possession of land and manifest interest to control it
and all things on it then should also get all things on
land—whether they know that they are there or not.
6. Hannah v. Peel—Army lance-corporal finds brooch in
house where he was stationed—court distinguished this
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from Sharman since the owner of house did not employ
finder nor had he ever lived there.
a. Minority view—should let owner of real property
where object was found to keep the property
because that is where the true owner is most likely
to come back and look for it.
7. McAvoy v. Medina—customer finds wallet in barber shop
on the counter. Court distinguished mislaid property from
lost/abandoned property. Here the owner of real property
has a bailment for the mislaid object and finder has no
claim.
8. Schley v. Couch—buried money in garage is determined to
be mislaid property rather than lost so the owner of real
property has greatest claim to the property not the finder.
Buried property should always belong to the property
owner. If mislaid long enough then it may become ‘lost’.
B. Bailments-- the relationship between the owner of chattel and one who
possesses it lawfully. It is not a transfer of ownership, merely of
possession.
i. Requirements for Bailment—
1. Bailee must have knowledge of possession of chattel
2. May be an express or implied agreement
a. Express—car rental
b. Implied—clothes to laundry
3. Implied in Law—
a. Constructive—party acquires possession through
taking or fraud or finder of lost property is said to
be a constructive bailee
b. Involuntary—owner accidentally leaves property
with another (who knows about it)
ii. Rights of Bailee—
1. before delivery—no right to chattel before in bailee’s
possession. However may have action for damages if it is
not a gratuitous bailment. If gratuitous bailment then
perhaps estoppel (induced reliance).
2. after delivery—bailee has exclusive control of bailment (so
long as use within terms of bailment), has right of
possession against all the world (including bailor) for term
of bailment, can recover full value of chattel irrespective of
liability to bailor if 3rd party damage. Has rights to profits
from possession during term.
3. bailed objects are not subject to creditors of bailee—but
can get right to use under bailment (unless expressly
forbidden)
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iii. Duties of Bailee—
1. general duty to exercise due care to protect and preserve the
bailed goods. Not entitled to compensation for services but
can get expenses for upkeep.
2. Liability—reasonable care.
a. Absolute liability if deliver bailed chattel to
someone other than the bailor—tort of conversion.
iv. Bailment for hire—defined as a bailment for which the bailee is
compensated, as when one leaves a car with a parking attendant.—
v. Cases—
1. Allen v. Hyatt Regency Nashville Hotel—customer parks
car in lot that has gated entry/exit and charges to park and
the car is stolen. Court found that a bailment was created
(bailment for hire)—presumption of negligence
2. Cowen v. Pressprich—bondsmen on Wall Street—wrong
bond was given to broker who tried to return it to
messenger but wrong messenger. Court found that no
bailment existed—relied a lot on customary practices in the
bond business.
C. Bona Fide Purchase—a purchase in good faith for value without notice
(of defects in title)
i. In order to be a good faith purchaser you must buy from a dealer in
goods of that kind. If someone entrusts an item of personal
property with a dealer of goods in that kind then they are barred
from recovery if they sell those goods (statutory estoppel). If you
entrust something with someone that makes it look like it is theirs
(reliance) then you can be estopped from recovery if they sell
(equitable estoppel)—for common law or non-dealers
1. Porter v. Wertz—case dealt with both statutory and
equitable estoppel. Painting loaned to someone who then
sold it. Ruled that the seller was not a dealer in goods of
that kind and the buyer (art dealer) was not a good faith
purchaser (did not inquire as to origin of painting) so no
statutory estoppel. Also, owner of painting had not
bestowed all indices of ownership upon seller so no
equitable estoppel either. Requires something more than
possession.
2. Sheridan-Suzuki v. Caruso Auto Sales—When there is the
general UCC statutory estoppel and a more particular
statute, the more particular statute must be fulfilled in order
for a party to be estopped. Bouton held a voidable title
until the sale was completed (check cleared).
D. Adverse Possession—someone takes another’s property and holds it:
i. in an open and notorious way
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ii. under a claim of right
iii. for a certain time period
then it becomes theirs and the original owner is estopped from recovery.
iv. Cases—
1. Chapin v. Freedland—counters were installed in original
building and then kept throughout ownership of
building/years. If property belonging to another is held
openly under a claim of right then the original owner must
recover the property within the statute of limitations set by
the court or they lose their right.
2. O’Keefe v. Snyder—O’Keefe’s painting were stolen (never
reported) and they resurfaced much later. Because they
were highly concealable (in people’s houses) the clock
should not have started to run until she should have known
(by exercising due diligence) where paintings were.
a. Modification of Discovery Rule—the clock for
adverse possession does not start to run until the
rightful owner discovers or should have discovered
the whereabouts of the item (and have been
diligently seeking the items). This rule is designed
to protect innocent owners from losing items just
because they are highly concealable.
E. Gifts—have three elements of intent, delivery, and acceptance.
Acceptance is usually presumed unless the donee indicates otherwise.
Gifts promised in the future are not valid under the law and not
enforceable.
i. Delivery of tangible gifts normally involves actually giving the
person the object, unless the donee already has possession of the
item or by giving a writing to represent the gift. Delivery of
intangible gifts requires a symbol or token of the object or a
written conveyance.
1. In re Cohn—husband gave wife stock (in form of letter
saying what he had assigned) then died before stock was
actually transferred. Wife owned stock.
ii. Inter vivos gifts—gifts that are given during the lifetime of the
donor to another. They are valid upon delivery of the gift.
1. Gruen v.Gruen—Father gave a painting to his son but kept
possession until his death. Valid inter vivos gift even
though father retained possession.
iii. Causa mortis gifts—gifts given in contemplation of death. The
gift must be delivered (become effective) during the donor’s
lifetime. Causa mortis gifts are revocable by donor and do so
automatically if donor recovers.
1. Foster v. Reiss—Woman tried to give husband property b/c
of her impending death. She wrote it to be effective after
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she died (if she should do so during surgery). Court found
NOT valid b/c no delivery and testamentary in nature.
2. Scherer v. Hyland—Woman signed over settlement check
to live in lover (and left other items) then committed
suicide. Court ruled was a valid causa mortis gift since she
left check on table for him to find and her death by suicide
was clearly impending. However, other property was not
his.
iv. Conditional gifts—gifts given upon the receiver fulfilling a
condition. Usually gifts are not conditional.
1. Lindh v. Surman—man gives woman diamond engagement
ring, breaks off engagement, wants ring back. Court ruled
that gift was conditional upon marriage and without that
she had to return it (no fault rule). The other rules
considered by the court were the fault rule—ring goes to
whichever party was not at fault in breakup or the modified
fault rule—if donor breaks the engagement then the donee
keeps the ring no matter who was at fault.
II.
Real Property
A. Freehold Estates
i. In re O’Connor’s Estate—here the estate escheated back to the
state. Since it was a reversion the state did not owe inheritance
taxes on the property.
ii. Fee Simple Absolute—estate that has infinite duration, is
inheritable, devisable, alienable. In early times you had to include
the words to A and heirs to create a fee simple. Now it is assumed
unless you insert words indicating otherwise.
1. Cole v. Steinlauf—question was about the validity of title
involved in sale. The original deed did not have the words
“and heirs” so question was about whether or not it was
alienable. Court found that it was marketable.
2. Intestate Succession—passes to the next of kin including
the wife and children by various percentages depending on
the statute. There are exceptions for illegitimate children—
get inheritance of mother always and of father if he has
‘claimed’ the child.
iii. Life Estates—estates measured by the term of a life, the life may
be the recipient’s or some other measuring life. These estates are
alienable but not devisable nor inheritable.
1. Lewis v. Searles—estate left to woman so long as she
doesn’t marry. She didn’t marry and wanted to pass along
the land in her will. Court found that she did not meet the
condition to make it a life estate only thus it became a fee
simple subject to divesture if she married.
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2. Moore v. Phillips—Woman has life estate followed by
remainder to daughter and her son. Life tenant allowed
waste on the property and remaindermen could recover
against her estate because of waste. Life tenants cannot
waste land or allow waste to occur. If life tenants do
commit waste then court can terminate the life estate and
give it to the remainderman then.
iv. Defeasible Estates—estates that have a condition that prompts a
re-entry by the donor. They can be of two types:
1. Fee Simple Subject to Condition Subsequent—if event
occurs then the landowner must make an effort to reclaim
the land (does not happen automatically). Usually contains
words such as “upon condition that”, “provided that” and
comes with a right of reentry.
2. Fee Simple Determinable—if condition occurs then the
land automatically reverts to the landowner without further
action. Contain words like “so long as”, “until”, “during”
followed by words of reverter which contains a possibility
of reverter.
3. Oldfield v. Stoeco Homes, Inc.—here the question was
what kind of estate was created (condition subsequent or
determinable). The deed contained both types of language
(automatic reverter in there) but the city did not come in
and take possession. Court found it was condition
subsequent (based on totality of document).
v. Future Interests—estate which will or may become possessory
at some future time. They are inheritable and most are also
devisable and alienable.
1. Future interests in the grantor—
a. Reversion
b. Right of reentry (defeasible estates, determinable)
c. Possibility of reverter (condition subsequent)
2. Future Interests in the grantee—
a. Vested and Contingent Remainders—two types of
remainders:
i. vested—given to a born or ascertained
person and not subject to a condition
precedent
1. vested remainders can also be:
a. indefeasibly vested—not
subject to defeat
b. vested subject to partial
divestiture—class can
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become larger and shares
smaller
c. vested subject to total
divestiture—can be totally
taken away by some act.
ii. contingent—given to an unborn or
unascertained person or subject to condition
precedent.
b. Executory interest—a future interest in a third party
that divests or cuts short a prior estate
3. Cases—
a. Kost v. Foster—Son had life estate followed by
remainder to children or grandchildren (vested).
Before death of life tenant, remainderman conveyed
his portion of title away. Court held this was a valid
conveyance b/c he was vested in the estate and his
share was alienable.
b. Abo Petroleum Corporation v. Amstutz—Sisters
were given life estates with remainders to children
or heirs—contingent remainders are alienable.
Second deed gave them absolute title. Tried to
convey title to petroleum company. Children
argued that their interests were vested thus the land
became theirs at life tenant’s deaths. Court agreed.
Abo held so long as sisters were alive. The
destructibility of contingent remainder doctrine is
rejected here.
4. Doctrine of Destructibility of Contingent Remainders—O
to A for life then to B’s heirs if B is alive when A dies (B’s
heirs are unknown) the remainder fails and it goes back to
O. If it is not destroyed then it remains with O until B dies
then springs to B’s heirs.
5. Rule in Shelley’s Case—when a devise or conveyance
transfers a freehold estate to a person and in the same
instrument also transfers a remainder to that same person’s
heirs or the heirs of his body, and both estates are either
legal or equitable, both are considered to be held by the
first-named freeholder, either for life, in fee simple
absolute. Essentially, the rule picks up the contingent
remainder and gives it to the life estate holder giving them
the fee simple. This is a rule of law and not intent and is
abolished in most states. O to A for life then to heirs is the
same as O to A and heirs.
a. Sybert v. Sybert—Man given a life estate with the
remainder to the “heirs of his body”. Had no
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children. Wife argues that Rule in Shelley’s case
applies and she gets land by intestate succession.
Brothers argue that it reverts and they get it. Court
applies rule and wife gets estate.
6. Doctrine of Worthier Title—in form of O to A for life then
to heirs of O. When there is an inter vivos conveyance to a
person with a remainder or executory interest to the
grantor’s own heirs, no future interest is created and it
reverts to the grantor. Rule against remainder to grantor’s
heirs.
a. Braswell v. Braswell—the conveyance was of form
O to A for life then to A’s lawful heirs, should A
have no heirs then to O or O’s heirs. A did not have
any lawful heirs but devised the property to a
nephew. Since the heirs were determined at O’s
death and not A’s death the nephew could get the
land by his uncle’s devise of his share. The class
was closed (all members vested) so A’s conveyance
to nephew was valid either way.
7. Rule Against Perpetuities—the remainder must vest within
21 years of some life in being at the time of the grant or not
at all. This does not apply to vested remainders but both
contingent remainders and executory interests are subject to
this rule. Look at the grant as it was written and see if you
know when the interest will vest. If not then could have a
perpetuities problem.
a. The City of Klamath v. Bell—the grant of land was
to the city so long as it was used as a library. It was
used as a library for a number of years but ceased.
Since did not satisfy rule the remainder failed and
the land reverted back to the grantor (or their
assigns in the stockholders of the company).
vi. Concurrent Estates—when two or more people own the same
piece of property at the same time (all names on the title). There
are three types of concurrent ownership:
1. Tenancy in Common—two or more people holding land
together. Their interests are alienable, devisable, and
inheritable. Each tenant has a right to possession, nonequal shares are allowed, estates need not be same (life
estate v. fees). This is the presumption to conveyances to
people not husband and wife.
2. Joint Tenancy (with right of survivorship)—people holding
land as joint tenants have alienable rights to land but no
devisable or inheritable interests—because of right of
survivorship. Must have four unities of title to be valid.
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This requires the joint tenants to take at the same time, by
the same instrument with identical interests and right to
possession. If one of the unities is destroyed then the joint
tenancy is severed and you get a tenancy in common. Can
sever by alienating your share, mortgage of share in title
theory states, murder of one of tenants.
3. Tenancy by the Entirety—is only for married couples. The
interests are not alienable, devisable, nor inheritable.
However it protects against creditors of one spouse or the
other.
4. Cases:
a. In re Estate of Michael—two married couples took
title to farm land together (each couple owns
undivided ½ of land). One husband dies, so his
wife owns their entire share. She attempts to devise
her half. PA law favored tenants in common so she
could devise.
b. Laura v. Christian—Four people owned land.
Stopped paying so going to be sold at public
auction. One paid entire payment. Two others got
out. One wanted to pay his share to retain his
portion of land. So one who paid owned ¾ and
other owned ¼.
c. Jackson v. O’Connell—Three sisters held property
as joint tenants. One sister conveyed her share to
other sister (thus destroying unity of title). This
caused sister to own 1/3 as tenant in common with
other sister and 1/3 as joint tenant. She then tried to
devise all 2/3. Court ruled that she had 1/3 to
devise and other 1/3 went to sister via right of
survivorship.
d. Palmer v. Flint—conveyed property to husband and
wife as joint tenants w/r.o.s. Divorced and wife
quitclaims deed to husband (severing the four
unities). Husband has deed reconveyed to him and
his sister (creating all four unities in the new deed).
After husband dies, ex-wife comes back and says it
is hers because of right of survivorship clause.
However, sister gets it b/c has all four unities of
title.
e. People v. Nogarr—husband and wife got property
together as joint tenants. They separate and
husband mortgages his share of property to his
parents. Husband dies and state wants to take land
by eminent domain. Wife claims that mortgage was
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simply a lien on his interest in the property and it
disappeared at his death due to r.o.s. clause.
i. There is a SPLIT in the mortgage between
title theory states—serves to transfer a title
or interest and lien theory states—creates a
lien only on the share of the mortgagee.
f. Mann v. Bradley—property held by husband and
wife as joint tenants. Divorced and wife retained
possession. Divorce action stipulated that the
property was to be sold when one of conditions
were met (wife remarries, youngest child reaches
21, mutual agreement of parties). Woman died and
husband wanted entire property under r.o.s. clause.
Court gave him undivided ½ interest with children
as tenants in common. Because the divorce
intended to create a tenancy in common no further
destruction of four unities is needed.
g. Duncan v. Vassaur—Property owned by husband
and wife as joint tenants. Wife killed husband and
conveyed property to her father under r.o.s. in joint
tenancy. Court ruled that murder severed the joint
tenancy and made them tenants in common, so wife
owned undivided ½ and husband’s heirs owned
other ½.
i. Slayer statutes—
ii. Simultaneous death act—split property if the
order of death cannot be determined
B. Non-Freehold Estates
i. Leaseholds—similar to deed in that it conveys an interest in real
property. Different because it also is a contract. A tenant can
bring an action against a trespasser. Difference between
commercial and residential leases. Tenant has covenant for quiet
enjoyment that says that landlord can’t just bust in anytime. Three
types of leases:
1. Tenancy for term (years)—lease has definite beginning and
ending point. Expires without notice by either party. If
longer than three years must be in writing in order to satisfy
the Statute of Frauds.
2. Periodic Tenancy—tenancy runs from period to period
(months, years). Continues to run unless one party
terminates. Does not have to be in writing. Termination
notice is usually equal to a period with a maximum of 6
months.
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3. Tenancy at Will—lasts as long as either party wants it to
last, ends immediately at notice of one party. Does not
have to be in writing.
4. Cases:
a. Brown v. Southall Realty Co.—Tenant was
reserving rent but the lease was void because it
violated the DC housing code.
b. Adrian v.Robinowitz—commercial lease where
there was a holdover tenant at beginning of lease.
The court ruled that landlord must put tenant in both
actual and legal possession at commencement of
lease (English rule—Majority). The American rule
says that landlord need only put in legal possession
not actual.
c. Commonwealth Building Corp v. Hirschfield—
tenant intended to vacate and did not quite get stuff
out of apartment. Removed by next day. Landlord
wanted to renew for another year term and tried to
charge tenant for entire year for 12 hour holdover.
d. Richard Barton Enterprises v. Tsern—Commercial
lease of two floors of building. Problems with
freight elevator that prevents tenant from moving
things upstairs. Two separate issues: covenant of
tenant to pay rent and covenant of landlord to keep
in repair. Rent abatement by 1/3 b/c couldn’t use
top floor and landlord must fix elevator.
i. Eviction can be actual or constructive—
actual eviction relieves the tenant’s
obligation to pay rent. Constructive eviction
is something that causes tenant to leave even
though not evicted. Partial eviction causes
tenant to leave for a time (rent is abated for
that time).
e. Piggly Wiggly Southern v. Heard—commercial
lease to grocery store with rent to be percentage of
profits over $2 million. Grocery store bought out
by another and shut down and kept empty to
prevent competition. No stipulation in lease that
must continue business so it was okay for them to
do this. “going dark aggressively”
f. Handler v. Horns—Leased 5 story building and
equipped with fixtures to run a particular kind of
business. After lease expired wanted to remove the
fixtures. Could remove trade fixtures but not others
if could do so without damage to property.
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g. Walls v. Oxford Management Co.—woman was
h.
i.
j.
k.
l.
sexually assaulted on property where she was a
tenant. Landlord has duty to protect tenants from
defects in land but not from third party criminal
activity (could have assumed duty by doing
something).
Foundation Development Corp. v. Loehmann’s
Inc.—Loehmann’s had a 20 year lease and had to
pay for a percentage of common area space.
Loehmann’s was one day late on paying rent and
landlord instituted suit. Ruled that breach was
trivial and could not cancel lease.
Edwards v. Habib—tenant was evicted because was
reporting violations to housing authority. Court
ruled in tenant’s favor to discourage retaliatory
evictions.
United States National Bank of Oregon v.
Homeland, Inc—Homeland leased building but
abandoned lease because couldn’t pay. Landlord
got new tenant that also defaulted. Landlord
wanted Homeland to pay for all term that was
without rent. Landlords have duty to mitigate
damages by trying to find another tenant.
Jaber v. Miller—Jaber had original lease and then
assigned it to Norber and Son who assigned it to
Miller. Jaber had favorable lease so got payment
above the rent. Fire destroyed building (Jaber had
original fire clause but assignees didn’t know about
it). Court ruled that extra money was consideration
for assignment and was still due.
i. Sublease—tenant becomes sublandlord.
The subtenant cannot sue or be sued by
original landlord because not in privity of
estate.
ii. Assignment—establishes privity of estate
between original landlord and assignee.
Assignee is liable for rent b/c steps into
shoes of tenant. Original tenant still remains
liable for rent because of contractual
obligation to pay rent.
Childs v. Warner Brothers Southern Theatres—
property leased to someone who assigned lease to
WB who assigned lease to Carolina Theaters. The
assignment to Carolina Theaters was not approved
by landlord so WB was still responsible for all rent
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when Carolina defaulted (although landlord could
have also sued original lessee). Dumpor’s rule did
not apply here.
i. Dumpor’s Rule—when lessor gives
permission for assignment once then gives
permission for all future assignments as
well. Followed in most jurisdictions but
rejected by restatement of property.
m. 21 Merchants Row Corp. v. Merchants Row, Inc.—
lease entered into with clause that could not assign
nor sublet without express written consent of
landlord. Wanted to assign but landlord refused.
Landlord can refuse permission without giving a
reason. Minority rule that landlord must have
reasonable reason.
C. Interests in Land of Another
i. Easements
1. Affirmative easements—easement owner has right to go
onto property of another and do acts.
2. Negative easement—owner of easement may prevent
property owner from doing acts that could otherwise do
a. Appurtenant—runs with the land
b. In Gross—benefits easement holder without regard
to land (no dominant estate)
3. Licenses—privilege to go onto land and do acts, is
revocable at will of licensor. Licensee is not protected
from interference by third parties.
4. Express Consent
a. Mitchell v. Castellaw—woman owned three lots
and conveyed away part of it and tried to reserve an
easement to herself. The easement was appurtenant
to the land and was not personal. Normally cannot
convey away land and reserve easement to self.
b. Willard v. First Church of Christ, Scientist,
Pacifica—woman agreed to deed away property if
an easement was reserved for the church to park on
Sunday mornings. Normally cannot reserve an
easement to a third party but she testified that this
was what she wanted, so they gave church the
easement.
c. Urbaitis v. Commonwealth Edison—grant to
railroad for bed. Is now abandoned. Railroad
wants to give it for rails to trails project, adjacent
landowner says it was an easement and is now
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theirs. Court holds that it was a conveyance
because of words “convey and warrant” in deed.
d. Baseball Publishing Co. v. Burton—Building owner
granted right to advertiser to place a sign on the side
of his building for one year at $25 (w/option to
renew). Advertiser sent money for three years
(always refused). The building owner took sign
down without notice. Language of ‘exclusive
rights’ implied easement in gross for term of years
so landlord couldn’t take down (could have if it
were a license)
e. Stoner v. Zuker—original license granted and
licensee came in and erected a complex water
delivery system. Man then wanted to revoke
license after money spent. Court held that license
had become irrevocable and owner was estopped
from revoking it because induced reliance.
5. By Implication
a. Finn v. Williams—owner conveyed away a
landlocked parcel with no access to roads. At first
had access over others property but now closed.
Court held that easement always existed over larger
parcel by implication—always an easement when
parcel landlocked—easement by necessity.
b. Granite Properties Limited Partnerships v. Manns—
property owner originally owned all parcels in area.
Used parts for driveway before conveyed to
someone else—use was obvious. Court held that
easements existed by prior use.
6. By Prescription
a. Beebe v. DeMarco—interior property owner in
neighborhood drove across back portion of
neighbor’s lot to access street. Had done so for
over 10 years before owners objected. Held that
acquired easement by prescription.
7. Scope—usual remedy is injunction—rarely does violation
of easement use operate to extinguish the easement.
a. S.S. Kresge Co. v. Winkelman Realty Co.—had
easement granted for ingress and egress into
property but defendant began to use for other
purposes. Court held that non-approved uses must
stop but could still use easement for ingress/egress.
b. Sakansky v.Wein—had easement and owners of
servient estate wanted to either move easement or
cut headroom to only 8 feet. Reasonableness
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standard for allowing change. Here must leave
more than 8 feet or build elsewhere.
i. Restatement—burdened estate may change
if equal utility however owner of easement
may not change the easement location.
8. Termination—ways to terminate—
a. By estoppel
b. By prescription
c. By a good faith purchaser
d. By merger with servient estate
e. Necessity ends
f. Consent of both parties
g. Cases—
i. Lindsey v. Clark—confusion as to where
easement was (north or south). Wanted
north easement terminated b/c easement was
reserved on south and south terminated
because of of lack of use. Cannot abandon
easement unless expressly say so.
ii. Real Covenants and Equitable Servitudes
1. Real Covenants—must have intent to bind successors,
touch and concern the land, and have privity of estate
(either vertical or horizontal)—may get monetary damages
or injunction
2. Equitable Servitudes—must have intent, must touch and
concern the land, owner must have notice—injunctive relief
only
3. Cases:
a. Neponsit Property Owners Ass’n. v. Emigrant
Industrial Sav. Bank—there was a covenant for the
property to pay fees for a certain number of years.
The covenant ran with the land and was not
personal to the prior owner. Thus all other owners
in the chain of title must also pay the fees.
b. Tulk v. Moxhay—property contained a covenant
(equitable servitude) that a statue in the park would
be maintained (not in deed but parties had notice).
Someone wanted to build something else on
property. Owner of covenant wanted injunction.
This case substituted notice for privity of estate.
c. Sprague v. Kimball—property owner owned several
lots. Sold lots 1-4 with restrictions on where and
what could be built on the land. Sold back part of
5th lot without restrictions. Was an equitable
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d.
e.
f.
g.
servitude but not in writing so could be sold without
restriction. Must be in writing, cannot be oral
promise. Exceptions include estoppel and part
performance.
Sanborn v. McLean—owner of lot in a subdivision
tried to build a gas station on the back portion of the
lot. Neighbors argued that there was a negative
reciprocal easement on the property b/c of plan for
neighborhood. Cannot build commercial property
on land zoned for residential purposes—
constructive notice.
Cowling v. Colligan—landowner in development
wants to sell land for commercial use. Is on edge of
development. Argues that they are estopped
because allowed churches to be built in
development. Court found this did not estop and
didn’t matter what was happening outside of the
development.
Waldrop v. Town of Brevard—town had land used
for town dump. Contained a covenant not to sue.
Landowners around wanted it declared a nuisance
and the change in the character of the surrounding
land warranted it to be removed. Determined that
the covenant bound all the other landowners as well
because they all arose from the same grantor. This
was really an easement in the guarantee not to sue
or interfere with operation of the dump.
Ways to get rid of covenant—
i. Abandonment by owner
ii. Acquiescence
iii. Estoppel
iv. Relative hardship
v. Changed conditions (within restricted
properties)
iii. Natural Interests
1. Noone v. Price—two houses built on hill. Lower
landowner had retaining wall that had deteriorated and
upper landowner’s house was sliding down hill.
Landowner has duty to support upper land if take away
natural support (strict liability); also duty to support
structures if already there (negligence). No duty to support
house here since it was not there when original excavation
took place.
2. United States v. Causby—US landed planes close to land
so that it was useless. Landowner brought inverse
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condemnation action to get payment. Property does not
extend all way up to sky but here the interest of land had
been invaded so US had taken easement.
3. Edwards v. Sims—man had excavated and explored cave
that possibly ran under other’s land. Court ruled that
landowner owned all the way to the center of the earth and
if the cave ran under their land then they owned it. Strong
dissent in this case that the result was inequitable and
absurd (can’t own to center of earth).
III.
Real Estate Contracts
A. Oral Contract—generally can have leases for less than three years
without putting them in writing. However, the option to buy must always
be in writing.
i. Shaughnessy v. Eidsmo—agreed to oral lease with option to buy
on house and stove (probably a fixture). Made monthly payments.
At end of year notified owner that wanted to exercise option to buy
and asked for contract. Owner claimed too busy to do so and then
filed suit. Court ruled that plaintiffs had performed their part of
bargain and thus owner could not go back on option to buy.
ii. Part performance—equitable doctrine that can force specific
enforcement or oral contract. Look to what has been done to
determine contract’s intent.
B. Written Contract
i. Skendzel v. Marshall—installment contract to buy land. Buyer
had made some payments ahead and behind and seller had
accepted. Missed a payment after paying over half of the purchase
price. Seller wanted default of contract, return of land, liquidated
damages (court decided it was penalty). They were estopped
because they had accepted late payments before and it would be
unfair to forfeit all of land when had paid for more than half.
Turned installment into mortgage where would have to go through
foreclosure to get land (more favorable to buyer).
ii. Wallach v. Riverside Bank—contract for sale of land stipulated
quitclaim deed. Buyer discovered that there was a dower
outstanding on land and refused to take deed. There is a
presumption for a clear title (warranty deed) at sale so buyer does
not have to accept defective deed (unless defect is stipulated in
contract and accepted by buyer).
iii. Bleckley v. Langston—contract for sale of land that contained
pecan trees. Between signing of contract and actual sale an ice
storm destroyed most of trees. Two rules at play: England rule—
the buyer accepts losses between contract and closing.
Massachusetts rule—the seller accepts losses (later adopted in
England but minority rule in US). Determined that if vendor has
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IV.
performed his part of contract and can convey title then losses fall
on the vendee (equitable title doctrine). Here buyer bears loss.
1. North Carolina statute—Uniform Vendor and Purchaser
Risk Act—when neither legal title nor possession of land
has passed the seller bears loss. When either legal title or
possession has passed to buyer they bear the loss.
The Deed—warranty deeds and quitclaim deeds—warranty usually used in
real estate transactions—promises clear title. Warranties—warranty of seisin,
warranty of good right to convey, warranty against encumbrances, covenant of
warranty
A. Execution of Deed
i. Clevenger v. Moore—woman may sell building and gives deed to
escrow agent. Leaves town, escrow agent gives to potential buyer
(without permission of seller) who then sells land to GFP. Woman
wants land back. If deed was stolen then it is void. If Clevenger
created situation by leaving signed deed with escrow agent then
could argue estoppel (b/c of inducement and reliance). To deliver
a deed it must be signed and delivered (just like a gift).
B. Recording System
i. Types of recording systems:
1. Tract system—deeds are arranged by tract number—easier
to search, used primarily out west.
2. Grantor-Grantee system—deeds are listed in two indexes—
one by grantor and one by grantee (some also have tract
numbers)
ii. Title Searching:
1. Develop a chain of title—search the grantee index to
determine the chain of title
2. Look for adverse conveyances—in grantor index determine
if any easement, etc. has been granted away in the history.
3. Read each deed—to look for problems or irregularities
iii. Cases:
1. Mountain States Telephone & Telegraph Co. v. Kelton—
property owners were doing construction on land and did
not notify contractors of underground telephone wires.
They began to dig and damaged the wires. The wires were
not obvious and contractor was under no obligation to
search title to find their whereabouts (however landowner
was). Usually only buyers, lenders are required to search
titles. Irrebuttable presumption that those with interest in
land has notice of what is in the record.
2. Mugaas v. Smith—woman had obtained title to strip of
land by adverse possession. She had ceased to use it and
buyer of property had no way to know about the title since
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it was not in the chain of title. She did tell them to stop
building but they ignored. She could not lose title by
disuse and still held even though not recorded.
iv. Types of Recording Statutes:
1. Pure Race—first person to recording office with deed gets
the land. Notice is not part of the requirement (can know
there are two deeds outstanding)—NC has this type.
2. Race-Notice—first person (without notice) to buy property
and get to the recording office first gets title to the land.
3. Pure Notice—if a bona fide purchaser without notice pays
for the land then they get it—no matter who records first.
a. Mortensen v. Lingo—property conveyed to buyer
who tried to record deed but not indexed. Property
then conveyed to different buyer who recorded the
deed then sold to another person (all under warranty
deeds). First conveyee tried to evict current tenant.
They sue their seller for breach of warranty. Held
that subsequent buyer got land because prior
conveyance was not in record (race-notice statute)
b. Simmons v. Stum—property conveyed subject to
mortgage then subsequently conveyed without
notice of mortgage. The mortgage was recorded
before the deed thus she was on notice of mortgage
and was responsible for it. (race-notice statute).
c. Eastwood v. Shedd—Woman deeded land to
someone (who did not record) then deeded to her
daughter as a gift (did record). The statute in
Colorado does not limit protection to GFP but to all
having an interest in property. Court ruled that CO
statute was race-notice so the daughter kept the
land.
C. Title Assurance
i. Implied covenants of habitability—used to only be for older
houses but trend is to new houses built by builders.
1. Petersen v. Hubschman—people entered contract with
builder to build house and paid earnest money deposit and
also contributed building materials. House had some
defects (not inhabitable) but buyers refused to take deed.
Court ruled that the defects here were included in warrant
of habitability (up to standards of construction).
ii. Adverse possession—if owner of land does not take action to oust
adverse possessor within the statute of limitation period then
cannot assert title and it passes to adverse possessor.
1. Requirements—
a. Open and notorious
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b. Adverse and under a claim of right
c. Continuous for statutory period
2. Howard v. Kunto—owners of summer homes in a row
along canal had been living on wrong property for years
(one lot off). Ruled that current owners could tack prior
owners possession onto their time to reach the statutory
time. Works only if the owners were in privity.
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