Phyllis Staub- Outline for
PROPERTY- Professor Mann
Fall 1997
I.
Chapter 1- Introduction to Property
A. Acquisition by Capture- Pierson v. Post, NY, 1805
 Post was hunting a fox on unpossessed wasteland with hounds and dogs. Pierson
intervened and killed and carried it off. Post sued for trespass.
 Issue- Was the fox Post’s property bc he was hunting it or Pierson’s?
 Rule of Capture- Pursuit alone vests no legal property right. Only property when
actually captured. Competition fosters this rule, only the captor is rewarded. This rule is
also easier to enforce.
 Holding- It is Pierson’s fox. A wild beast is not a possession until the hunter deprives the
animal of natural liberty and brings the animal w/in his control. There is unrestricted
access to the hunting on unpossessed soil.
 Ratione Soli- reason of the soil. An owner of land can control access to it. Here, if the
land was Post’s, he would have the rt to capture the fox.
 Traps- if the animal has been wounded in a trap, it is considered captured. It is not
property until the door of the trap has closed. Intent to keep an animal is imp in
determining a property right.
B. Hammonds v. Central Kentucky Natural Gas Co., KY, 1934
 D exhausted gas from a 15,000 acre field, most of which was under lease. Then D
brought in gas from other fields and forced it through wells into vacant underground
reservoirs and withdrew it when necs. Holdings were worth $2 million. P owned 54 acres
w/in boundary which was not leased to D. Some of the gas was underneath her property
w/o her consent. She sued to recover $ for the use and occupation under trespass.
 Issues- is D liable for trespass because it’s property is under hers? Or is the gas released
into its former natural state, like the ferae naturae in Pierson, so that no one owns it?
 Rule- unpossessed migratory substances in their natural state do not constitute property.
Old rule that whoever owns the surface owns the sky and the soil does not apply
anymore.
 Holding- D is not liable bc it does not own the gas (no one does).
 Econ consequences- competition w/ lots of small oil wells so you can grab what you can.
This loads the market with gas and is not efficient. There is no incentive to leave the gas
in the ground. Price fell too low. Env problems- exhausted resource. Holding presumes
an infinite supply. In Texas, the rule created many problems and was eventually
overturned by regulation of oil drilling.
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II.
Chapter 2- Adverse Possession
A. Intro
1. Theory- if the owner of land does not take legal action to eject a possessor who claims
possession adversely to the owner within the statute of limitations, the owner is thereafter
barred from bringing action. The adverse possessor gains legal title. It is a means of
acquiring title through long, uninterrupted possession. A criticism of adverse poss is that
it is like legalizing thievery.
2. Purposes- (1) protects ownership bc it is hard to prove adverse possession, (2) makes
records more reliable by protecting owners whose titles are deficient in some way, (3) S
of L bars old claims, (4) rewards those who use land productively and penalizes owner
who does not use land, (5) honors expectations by allowing possessor to stay on land.
3. Adverse Possessors Rights- before S of L bars owner, adverse possessor has rts of
possessor- he can evict trespassers and sue 3rd parties for damages to the property, he can
transfer his interests by tacking. But he has no interest in the property valid against the
true owner who can retake possession at any time.
B. Requirements
1. Actual entry giving exclusive possession
 Community would reasonably regard the adverse possessor as the owner. It must be
seen.
 Purpose is to officially trigger the running of the S of L and cause of action of owner.
 If there is actual entry on part of the land, the possessor may have constructive
adverse possession over the rest of the land, but actual poss is necs somewhere.
 Exclusive means that the possessor not be sharing possession with the owner or the
public at large. This helps alert the owner to the claim. But more than one person can
jointly acquire adverse poss.
2. Open and notorious possession
 This constitutes reasonable notice to the owner the someone is claiming adverse
possession. Open and notorious acts are those that look like typical acts of an owner
of property.
 Fencing, cultivating and erecting a building in farm land is usually what is considered
open and notorious.
 Some states have statutory requirements. In NY, if one enters w/o color of title, they
must make substantial improvements on the land.
 Minerals- if mineral rts are severed from surface land, possession of the surface does
not include possession of the minerals.
 Caves- possession of a cave underground, of which the surface owner is unaware,
does not constitute adverse poss bc it is not open and notorious.
3. Adverse under a claim of right
 Hostile is also used. The possession must be w/o the owner’s consent.
 State of mind- 4 views
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a. Objective test/Majority view- state of mind of possessor dies not matter, only
his actions. Can be an adverse possessor w/o claiming title. If actions are such that
would not induce the owner to bring suit, there is no adverse poss. Eg- offers to
purchase. This view is held in Eng. Cts often require that the possession be in
good faith though. Squatters usually cannot prevail.
b. Subjective test- “I thought I owned it”- claim of right means that the adverse
poss must have a bona fide or good faith belief that he has title. If he knows he
has no title or that someone else does, his possession is not adverse. A squatter
cannot be an adverse possessor.
c. Mistaken belief- in some states, if the possessor mistakenly believes that he has
title but if he knew the truth, he would not claim title, then he is not occupying
adversely. He has no intention of claim and adversity is missing. Minority rule in
boundary disputes.(Maine doctrine)
d. Aggressive trespass standard- “I thought I did not own it and I claim it.”
 Problem 1, p. 141
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Color of title- diff from claim of title or claim of right. Color of title refers to a
claim founded on a written instrument (a deed or will) or a judgment or decree
which is defective or invalid. In most states, color of title is not required, although
it is helpful to establish constructive adverse poss. Some states have shorter S of L
periods if there is color of title.
 Problem 2, p.143
4. Continuous, uninterrupted possession for the statutory period
 Requires the degree of occupancy and use that the average owner would make of the
particular type of property. It is made w/o a break in the attitude of mind required for
adverse use. Can be in continuous poss even if there are intervals of nonuse.
 Purpose- gives owner notice and entries are not just a series of trespasses.
 Seasonal use may br continuous. (Howard) Nontraditional use that is appropriate may
also be valid, such as using an unimproved lot for digging sand and gravel.
 Abandonment is the intentional relinquishment of poss. If possessor leaves w/o intent
to return, continuity ends.
 If true owner enters to regain poss, an interruption has occurred. This stops the S of L
clock.
5. Payment of Property taxes
 In most states, the adverse possessor must pay taxes in order to prevail.
 This is esp true in the West.
 This originated bc RR companies worried about adverse poss on vast tracts of land
they owned and used for RR but not for actual poss. They paid taxes.
6. Van Valkenburgh v. Lutz, NY, 1952
 D bought 2 wooded lots in Yonkers in 1912. He used an adjacent lot to access his and
cleared a traveled way and later built a small house there (1920). After losing his job
in 1916, D tilled the land. In 1937, P, who lived on the other side of the unclaimed
lot, bought the lot at a foreclosure sale. P and D did not like each other. P told D to
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vacate. D at first agreed but claimed a rt to use the traveled way. P granted the
easement. D later claimed adverse possession over the entire lot.
Issue- can Lutz claim adverse possession without claim of title?
Rule- requirements of adverse poss in NY as established by the NY Civil Practice
Act. S of L is 15 years. Under claim of title, possessor must improve or cultivate the
land and protect it by enclosure. W/o title, land must be protected by an enclosure and
cultivated or improved. Must be under a claim of title.
Holding- D cannot claim adverse possession bc there is no proof of sufficient
cultivation and improvements. D also admitted that the land was not his and accepted
the easement, so he was not claiming title.
Dissent- D did make substantial improvements- the house, enclosure w/ logs and
brush, clearing and cultivating. D admitted it was not his under bad legal advice.
Note-What if Lutz was in NYC? Would that matter? What types of land use should
be rewarded? Economic justice vs. economic prudence.
C. Tacking
 To establish continuous possession for the statutory period, an adverse poss can tack onto
her own period of adverse poss and period by predecessors in interest.
1. Privity of estate- to tack, there must be privity of estate. This means that a possessor
voluntarily transferred to a subsequent possessor either an estate in land or physical
possession. If the previous possessor is ousted, there is no privity.
2. Ouster by 3rd party- What if A is ousted by B but reenters? There are 3 views…
a. S of L starts running anew on A. This is usually rejected as unfair to A.
b. S of L continues uninterrupted from A’s earlier poss. Problem is that there is no
privity bt A and B. Some Cts use this view, esp when A acts promptly to regain poss.
B is treated as a trespasser.
c. A can tack his prior poss onto his later poss, but the S of L is suspended during B’s
poss because in that period the owner had no claim v. A. This view is favored.
3. Abandonment- tacking is not permitted when one poss abandons. S of L starts anew.
4. Problems, p. 149
5. Howard V. Kunto, Wash, 1970
 Parties each had adjacent lots on oceanfront used for summer homes. The Kunto lot
had a dock. This lot had been conveyed in a series since 1946. In 1960, P, who had a
lot 2 over from D, divided their interest in the property and subsequently had a land
survey. The title and the land did not match. This proved to be the case for their
neighbors as well, although no one had known. They discovered they had title to the
land to the right. So they switched title with Moyers, who had title to D’s lot. P ended
up with title to D’s lot and sought quiet title. D claimed adverse possession.
 Issues- Does use of land for summer residence only qualify as continuous occupancy
in order to establish adverse possession? Can a person who receives title to tract A
who believes he has title to tract B and occupies B tack the periods of possession of
previous owners to establish title to B?
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Rule- occupancy is that which ordinarily marks the conduct of owners of a particular
kind of property. Tacking is allowed when there is privity of estate and when a party
claims more land than in the deed.
Holding- D can establish adverse possession. Tacking should be extended to
circumstances when titles are confused. Summer residencies used continually over
time can qualify as continuous possession.
D. Disabilities of owner
 It is unfair to run S of L against disabled owner. Most states give an additional period of
time to bring an action if the owner has a disability.
 Disabilities at the time adverse poss begins are what usually count.
 Common disabilities are age, insanity, imprisonment or even commas.
 No tacking is allowed.
E. Constructive adverse possession- to what physical area does claim extend?
 Valid title trumps invalid one. Actual possession trumps constructive adverse poss.
1. Without color of title- claim extends only to such part of the land as he actually
occupied or controlled in a manner consistent w/ ownership.
2. With color of title- constructive If the claimant goes into actual poss of some portion of the property under color of
title, he is deemed to be in adverse poss of the entire property described in the
instrument.
 Applies only where:
1. poss enters in good faith
2. he occupies a significant portion of the property
3. the tract described is recognized in the community as one defined parcel of land.
If it is 2 or more lots, poss of one is not constructive poss of the other.
 Requirements help give owner notice.
 Problem 2, p. 143
F. Nature of Title/ Misc
 When the S of L has run, the owner’s title is extinguished and the new title is created in
the adverse poss which is good against the world, including the owner.
 The title relates back to the original date of entry by adverse poss.
 Adverse possessor should file a quiet title action against the former owner in order to
record the new title.
 Adverse possession does not affect rights of holders of future interests in the property.
But the S of L runs against owner and his successors in interest.
 Govt land is exempt from S of L.
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Chapter 3- System of Estates
A. Feudal History
 1066- Norman Conquests- took land away from conquered people who would not swear
allegiance.
 New system of organization
 Land divided geographically and hierarchically- feudal chains.
 Based on personal relationships- land in exchange for homage and fealty, military
service.
 Not land as commerce, but land as status, governing, wealth
1. Tenure:
 Strictly organized social and military hierarchy.
 Underlying principle- fighters and priests should govern society, supported by a large
mass of laborers.
 Land tenure- each person’s position was defined in terms of his relationship to the
land. Each man was directly subservient to another, his land lord. All were
subservient to the King.
 Tenants-in-Chief- Anglo-Saxons who resisted William’s claim to the throne
forfeited their land, which was given to William’s supporters, who became his
tenants-in-chief. Each held the land assigned under an agreement to render specific
services for the king, usually military in nature.
 Subinfeudation- the tenant-in-chief parceled out land to a subtenant in exchange for
the service of one or more knights to fight for the king or for some other service.
Land was forfeited if the service was not performed. The lord took homage to enfeoff
a tenant. Ceremonies of enfeoffment down the chain. After a few generations,
personal services were replaced by monetary payments.
 Mesne lord- a lord to those below and a tenant to those above.
 Seisin- possessory use of land. Holders of freehold estates (fee simple, fee tail, life
estates) had seisin. Tenants seised of land were responsible for feudal services. Feudal
law decreed that someone must always be seised of the land. Before 1536, a freehold
estate was created by a ceremonial feoffment with livery of seisin. The grantor and
grantee would go to the land and the grantor, before witnesses, would deliver seisin to
the grantee by a symbolic act such as the handing over of a clod of dirt. Seisin had
real existence as a thing.
 A tenant in demesne had seisin; his lords had the rights to feudal services.
2. Feudal Tenures and Services
a. Free Tenures
3 social orders- men who fight, men who work, men who pray. Free tenures held by free
men. Vassals but not peasants.
1) Military Services-
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Knight service- Mounted knight was central to warfare. Tenant was required to
provide king with knights to fight. W/in 100 years, king began to take monetary
payments instead and employ mercenaries.
 Grand Sergeanty- services including carrying the royal banner of safeguarding the
treasury.
2) Economic Tenure or Socage
 Most common form of tenure. Any kind of service could be requested. Upon a
grant, some service, even if symbolic, was due. The services provided evidence of
the tenurial relationship.
3) Religious Tenures
 land of church. Service from ecclesiasts. Praying for the grantor’s soul was called
frankalmoign.
b. Unfree Tenure- Villeinage
 Castle with surrounding farm.
 Villeins- peasants who worked on the lands. Held land at the will of the lord and were
denied protection by the king’s courts. Not part of feudal system based on personal
loyalty. Came to hold land “by custom of the manor” with their rts on manorial
records. Holding came to be called a copyhold.
3. Feudal incidents
 Services- fixed obligations that could not be changed. Services were later commuted
into money taxes. These lost value with inflation.
 Incidents- like services, they were a form of taxes. They were due on many
occasions, but mainly when the tenant died. Unlike services, they gave the lord
possession of the land. These kept pace with inflation and maintained their value.
Lasted after services disappeared.
a. Homage and Fealty
 Lords needed protection. Homage bound man to man. Each military tenant did
homage to his lord in a solemn ceremony. He knelt, put his hands bt the lord’s
hands, swore a binding oath of loyalty, and became the lord’s man. There was a
separate oath to the crown.
b. Aids- In financial emergencies, a lord could demand aid from his tenants. Later
limited to 3 occasions- the ransoming of the lord from his captors, the knighting of his
oldest son, and the marriage of his oldest daughter.
c. Forfeiture- If a tenant breached an oath of loyalty or refused to perform services, his
land was forfeited. If a tenant was guilty of high treason, the king could seize the
land.
d. Liabilities at the death of the Tenant
 Wardship and marriage- if an heir under 21 was left, the tenant’s lord was the
heir’s guardian. The lord was entitled to possession and to the rents and profits
from the land. He only had to provide the heir subsistence and not commit waste.
The lord had the right to sell the heir in marriage. If the heir refused a suitable
marriage, he had to pay a fine. This right ended when the heir came of age. It
applied only to military tenures. Originally justified bc the lord had to be
compensated for the loss of military services while the heir was a minor. Control
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over marriage prevented marriage to an enemy who could gain control of the
lands (if female).
Relief- When a tenant died, the heir had to pay the lord a sum to come into
inheritance.
Escheat- If a tenant died w/o heirs, the land returned to the lord. Also if T was
convicted of a felony. But in this case, the king had a rt to waste the criminal’s
land for a year and a day.
4. Avoidance of Taxes (Feudal Incidents)
Ways to transfer land:
 Substitution- a tenant could substitute a new tenant for himself who would hold
the land. This required the lord’s consent and homage to the lord from the new
tenant.
 Subinfeudation- tenant could add a new rung to the bottom of the feudal ladder,
w/o the lord’s consent. This diminished feudal services. Could be used to avoid
incidents. Lord could only claim when T died what T received from lower T.
Devaluated wardship and marriage, relief and escheat.
5. Statute Quia Emptores (1290)
 King and barons lost from subinfeudation. In 1290, under Edward I, Parliament
passed this statute prohibiting subinfeudation in fee simple.
 Attempt to strenghten feudalism but actually began its demise. As a price for it.
Lords had to allow free tenants the right to substitute a new T for all or part of the
land w/o lord’s consent.
 The chain of feudalism was too expanded for the barons since it decreased their
control. This was an effort to contract chain. By 16th century, all land was held
directly from the king.
 This established the principle of free alienation of land. Most of the land came to
be held directly from the crown.
6. The decline of Feudalism
 The relation bt L and T became economic. Services and incidents became a form
of taxes. The personal relationship was dying.
 After the Black Death, manors had to hire labor.
 Then there was the commercial revolution and exploration.
B. The Fee Simple (Absolute)
 An estate that has the potential to endure forever. Absolute ownership.
 Language: “to A and his heirs.”
 At common law, this language was necessary.
 A tenant had a status as a tenant of the fee or a tenant for life. In time status became
estate. Each estate is defined by length of time it endures.
 Seisin- A person is seised if he holds a freehold estate and either has possession or a
tenant holds it for him. Seisin was perceived as a thing that someone always had to have.
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Livery of seisin- Originally, parties went to the land and performed livery of seisin, in
which the grantorr gave the grantee a clup of dirt signifying the transfer.
Creation of estates- proper language had to be used. Words of limitation described the
type of estate and words of purchase described the person in whom the estate is created.
1. How Fee Simple Developed
a. Rise of Heritability
 Land was held by the possessor as a tenant of someone else.
 The tenant’s holding, based on personal relationship, could not be inherited by his
heir. T had a lifetime tenure.
 Upon his death, it was customary to allow the heir to receive the land by a regrant
from the lord for a relief and homage and an oath of fealty.
 In time, the lord would consent to allow the heir to receive the land upon T’s
death in advance of the death.
 The land was granted “to A and his heirs.”
 Inheritance slowly became a right, but payment of relief continued.
 Assize of mort d’ancestor developed in 1176- rt o heirs to inherit property.
b. Rise of Alienability
 In the 1st 200 years after the Conquest, the fee was not freely alienable and not
devisable by will.
 Land became higher in demand. Landholders were tempted to sell part of their
land and cut off their heirs.
 The idea that a tenant should be able to convey the fee to another during his life
openly and w/o the lord’s consent slowly caught on.
 Quia Emptores made it law that land was freely alienable.
c. Rise of the Fee Simple Estate
 Once a fee became alienable, realities of conveyance to A and his heirs became
meaningless. Land would escheat only if the current T dies w/o heirs. The fee,
which began as a holding, became an alienable fee simple, a freehold estate not
terminable at the will of the lord.
2. Inheritance of the Fee Simple
 Heirs- if A dies intestate, property goes to heirs. Heirs are persons who survive A. A
living person has no heirs. A spouse was not an heir at common law. Today a spouse
is. Heirs were first Issue (children) and then parents, if none, then collaterals.
 Issue- take to the exclusion on all other kin. Includes children and further
descendents. Rule of primogeniture, that the oldest son inherited whole estate,
controlled. If eldest son died before A, the son’s Issue could receive the land. Only if
there was no son would daughters inherit. A child born out of wedlock could not
inherit. Today they can.
 Ancestors- parents take if no Issue. (This was not allowed at common law.)
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Collaterals- all other persons related by blood. Brothers and sisters take if no
ancestors or Issue.
Next of Kin- refers to persons who succeed to personal property, which was divided
among children,
Escheat- if no heirs, property escheated to lord. Now it goes to the state.
C. Fee Tail
 “To A and the heirs of his body.”
 Word heirs had to be used.
 Many wealthy families wanted land to be inalienable. The heads of these families often
wanted to make it impossible for descendants to alienate it. They wanted an estate in
which the current owner could not cut off his issue. This would keep land in the family.
 Families used a fee simple conditional upon having issue.
 The Courts interpreted this that if A had issue, he could convey a fee simple.
 In 1285, after the Statute De Donis Conditionalibus, the fee simple conditional was
replaced with the fee tail. It descended to A’s lineal descendants and expired when A and
A’s descendants all died. Families got this enacted in reaction to court decisions
allowing transfers out of family.
 Then the land would revert to the grantor or his heirs by way of reversion or to another,
by way of remainder.
 Fee tail has 2 characteristics: (1) it lasts as long as the grantee or any of his descendants
survives and it is inheritable only by the grantee’s descendants.
 Could have fee tail male (or female).
 Fee Tail Special- only went to children of specific spouse (cut off children from
subsequent marriages, affairs).
 The tenant could alienate his possessory interest, but could not cut off the rights of his
issue to the land. In this respect, he really only had a life estate.
 Disentailing- In time the owner of a fee tail could go to court and have it converted to a
fee simple through common recovery.
 Fee tail is virtually nonexistant today. It exists in a few states. But a fee tail tenant can bar
the entail by conveying a fee simple by deed.
D. The Life Estate
 An estate for life. “To A for life.”
 The Grantor can control who takes at the life tenant’s death. This ultimately supplanted
the fee tail. Today most life estates are created in trust.
 A can transfer the eshtate to another, but it expires on A’s death.
 B has a life estate pur autre vie- measured by the life of another (A).
 If B dies before A, the property is w/o owner. Can avoid by saying “to B and his heirs
for the life of A.”
 Defeasible life estates- can be created w/ conditions (see below).
E. Leasehold Estates- Term of Years
 Nonfreehold estates. Tenants have no seisin.
 Originally regarded as personal contracts and personal property.
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Modern leaseholds include term of years, periodic tenancy and tenancy at will. (Ch 6).
F. Defeasible Estates
 A fee simple can be absolute, meaning that it cannot be divested, or defeasable. It could
come to an end on the happening of some future event.
1. Fee Simple Determinable
 Fee simple so limited that it will end automatically when an event happens.
 Ex- O conveys Blackacre to the school board, so long as the premises are used for
school purposes. If this event occurs, the land reverts to O. O has a possibility of
reverter.
 Language- so long as, while, until.
 Correlated w/ grantor’s future interest of possibility of reverter.
2. Fee Simple Subject to Condition Subsequent
 Fee simple that does not automatically terminate, but may be cut short by the
grantor if an event occurs. If not, fee simple continues.
 Ex- O conveys Blackacre to the school board, but if the premises are not used for
school purposes, the grantor has a right to reenter and retake.
 Language- but if, provided, on condition that, however.
 Correlated w/ grantor’s future interest- right of entry.
3. Fee Simple Subject to an Executory Interest
 Fee simple can be followed by an executory interest which can cut it short.
 It will automatically terminate on the happening of some event.
 Executory interest must be for a 3rd party, not the grantor.
 Ex- to B, provided however that if the premises are used for anything but school
purposes, title shall pass to C.
IV.
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Chapter 4- Future Interests
Future interests are nonpossessory interests capable of becoming possessory in the future.
They confer rights to the enjoyment of property at a future time. By creating future
interests, the grantor is able to control inheritance of the land in the future.
Today future interests are the foundation blocks of wills and estate planning.
A future interest gives legal rights to its owner. It is a presently existing property interest.
It can be sold.
A. Future Interests Retained by the Transferor:
1. Reversion
2. Possibility of Reverter
3. Right of Entry (Power of Termination)
B. Interests Created in the Transferee:
1. Vested Remainder
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2. Contingent Remainder
3. Executory Interest
A. Future Interests Retained by the Transferor
1. Reversion
 Earliest future interest to develop.
 f O grants to A for life, land will revert to O when A dies. If O dies in A’s life, O’s
reversion goes to his heirs.
 A reversion is an interest left in the owner when he carves out of his estate a lesser
estate (lesser quantum) and does not provide who is to take the property when the
lesser estate expires.
 Lesser estate refers to the hierarchy: fee simple > fee tail > life estate > leasehold.
 A reversion is transferable during life and devisable at death.
 All reversions are vested interests even though not all will become possessory.
 Ex- to A for life. To B for life, and on B’s death to C if C survives B.
 Problems, p. 265
2. Possibility of Reverter
 Arises when an owner carves out of his estate a determinable estate of the same
quantum.
 Follows a fee simple determinable.
 It arises automatically if the conditional event occurs.
 Ex- to A and his heirs so long as liquor is not sold on the premises. A has a fee simple
determinable, O has possibility of reverter.
3. Right of Entry
 Follows a fee simple subject to condition subsequent.
 Also called a power of termination.
 It does not arise automatically, but must be exerted by grantor.
 Ex- to A and his heirs, but if liquor is served, O has right to reenter. O has right of
entry.
B. Future Interests in Transferees
 Land owner could provide that land would not revert to the donor, but would remain out
for some 3rd person.
 A remainder is a future interest created in the grantee that is capable of becoming a
present possessory estate upon the expiration of a prior estate.
 Remainders cannot follow a fee simple. They always follow a life estate or a fee tail.
 A remainder never divests or cuts short the preceding estate but always waits until it
expires.
 Problems, p. 268 and 271
1. Vested Remainder
 “to A for life, then to B and his heirs.”
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(1) It is given to an ascertained person. (2) It is not subject to a condition precedent.
Remainders must follow a preceding estate.
This was the earliest form of future interest. Grantor decides at outset who gets
remainder. There is a right to immediate possession. A vested remainder accelerates
into possession whenever and however the preceding estate ends.
Vested remainders are preferred over contingent. Cts will construe an ambiguous
instrument as such.
Condition precedent- an express condition attached to the remainder- to B if B
reaches 30.
a. Indefeasibly Vested Remainder
 Holder is certain to (1) acquire a possessory estate at some time in the future and
(2) retain it permanently thereafter.
 It cannot be subject to being divested or defeated.
 Ex- to A for life, then to B and his heirs. B is certain to take possession after A’s
death.
b. Vested Remainder Subject to Open
 Vested in a class of persons which may expand. At least one of the class is
qualified to take possession, but the shares are not yet fixed.
 Ex- to A for life, the to A’s children. If A has a child B, the remainder vested in B
is subject to open up and let in other kids.
 Sometimes called a vested remainder subject to partial divestment.
 Class is closed if it is not possible for another to join. If class is kids of A, it is
only closed if A is dead. Child is in being- alive- from time of conception. Can
also be closed when it vests (rule of convenience.)
c. Vested Remainder Subject to Complete Defeasance
 Either vested subject to being divested by the operation of a condition subsequent
or vested subject to defeasance by an inherent limitation of the estate (such as if it
was a life estate).
 Ex- To A for life, then to B, but if B does not survive A, to C. (condition
subsequent) C’s executory interest will divest B if the condition subsequent
occurs.
 Ex- To A for life, then to B for life, then to C and her heirs. Remainder for life
fails if it does not become possessory in B’s life- inherent limitation.
2. Contingent Remainder
 (1) It is given to an unascertained person or
 (2) it is subject to a condition precedent.
 (3) leaves a reversion in grantor.
 Unascertained person- the person is not yet born or cannot be determined until the
happening of an event.
 Ex- To A for life, then to A’s children. A has no kids.
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Ex- To A for life, then to B’s heirs. B is alive. In these examples, there is a
reversion in O.
Condition Precedent- a condition expressly stated in he instrument.
 Ex- to A for life, then to B if B marries C. If B marries C during A’s life, B gets
vested remainder.
 Termination of a preceding estate is not a condition precedent.
Permits future events to determine who gets the remainder. It is left uncertain.
In order to come into possession, some condition other than the end of the previous
interest is fulfilled.
At common law, it was not assignable during the remainderman’s life and was
unreachable by creditors. It was a possibility of becoming an interest. Now they are
transferable during life.
Destructibility- At common law, contingent remainders were destroyed if they did
not vest upon termination of the preceding life estate. This was because someone had
to have seisin- there could no be a gap. This is generally not the rule now, but is in a
minority of jur.
 Ex- To B for life, then to C if 21. If B dies before C is 21, a jur that destroys
contingent remainders would hold that O gets the reversion. Most jur would give
O a reversion and C an executory interest when 21.
Contingent remainders are subject to the Rule Against Perpetuities.
Language- Difference bt vested and contingent remainders depends on language.
Condition subsequent is language incorporated in the description of the gift (to A for
life, then to B, but if B does not survive A, to C. B has vested remainder subject to
divestment.) Condition precedent is language before the grant which follows words
giving a vested remainder (to A for life, then to B if B survives A, but if not, then to
C. B has contingent remainder.) If ambiguous, vested remainder is favored.
3. Executory Interests
 (1) Divests or cuts short some interest in another transferee (shifting) or (2) divests
the transferor in the future (springing).
 Grew out of Court of Equity.
 Made possible by the Statute of Uses in 1536. Unlike a remainder, it can divest or cut
short the preceding interest.
 Today can be created by deed, will, trust.
 Problems, p. 281
a. 2 Prohibitory Rules: No Shifting Interests; No Springing Interests
 Prior to 1536, these interests were to enforceable at law.
1. Shifting- No future interest could be created in favor of a transferee if the interest
could cut short a freehold estate. O could not create a right of entry in a stranger.
(Ex- to A and his heirs, but if B returns from Rome, to B and his heirs.)
2. Springing- No freehold estate could be created to spring up in the future. A
freehold estate could not be created unless a feoffment with livery of seisin took
place on the land. (Ex- to A and her heirs when she marries B.)
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b. The Rise of Use
 To X and his heirs to the use of A.
 The chancellor in Equity did not care about seisin. He would step in and protect a
transferee when he thought a person should be required to perform a moral duty.
Law courts would not recognize use.
 There developed a protected interest known as use. Seisin could be held for
another’s benefit. Benefits could be accomplished by raising a use.
 X (feoffee of uses) was required to permit A (cestui que use) to take possession,
and to protect the land.
 Use could also be created by bargain and sale and a covenant to stand seised.
 There were no wills before 1540.
 Use was used to circumvent primogeniture. It also avoided feudal incidents
(because seisin did not descend to heirs). This bothered the kings.
c. Abolition of Use: The Statute of Uses- 1535
 Henry VIII needed $. He wanted feudal revenue. He forced the statute to be
enacted. At this time, most land was held in use.
 Purpose of statute was to abolish use.
 It provided that if any person were seised to the use of any other persons, the legal
estate (seisin) would be taken away from the feoffee to uses and given to the
cestui que use (user). This converted use into a legal interest and estate.
 Imp consequences- destroyed the power to devise land in equity. Equitable
interests became legal interests. Made deeds legally valid. In 1677, livery of seisin
was abolished.
 Shifting and springing executory interests became possible.
d. Modern Executory Interests
 Follows some fee. Does not follow a life estate. It divests an earlier interest.
 Springing- a future interest that springs out of the grantor at a date subsequent
to the granting of the interest, divesting the grantor.
 Ex- to A and her heirs when A marries. A can divest O.
 Shifting- a future interest in a grantee that divests a preceding estate in another
grantee prior to its natural termination.
 Ex- to A and his heirs, but if B returns from Rome, to B and his heirs.
e. Rule in Shelly’s Case- At common law, if an estate was given to A and then a
remainder to A’s kids in the same instrument, the remainder was not recognized and A
was considered to have both the free hold and the remainder. To A for life, then to A’s
kids would be a fee simple in A.
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Landlord Tenant and Co-ownership
V. Chapter 5- Co-ownership and Marital Interests
A. Common Law Concurrent Interests
 Common law favors joint tenancies over tenancies in common, sole ownership over
multiple ownership.
 Today, tenancy in common is favored and is the default tenancy.
1. Tenancy in common
 Tenants have separate but undivided interests in the entire property.
 There are no survivorship rights. When tenant dies, interest passes to her heirs. It
does not go to surviving T. Each owns an undivided whole.
 Each has rt to possess and enjoy the whole property. If there is a conflict over
possession, a ct may divide property.
 Equal shares are not necs, although it is presumed that they are equal absent other
info.
 Shares are alienable- they can be sold, given or devised.
 Heirs always take as Ts in common, not joint Ts.
2. Joint Tenancy
a. general
 Tenants have right of survivorship. This rt takes precedent over heirs’ and
creditors’ rts. Shares cannot be devised.
 There is no limit on # of cotenants.
 Regarded together as one entity.
 Each seised per my et per tout (by the share of moiety and by the whole).
 Each owns the undivided whole of the property. When one dies, the property belongs
to the remaining Ts until all have died. The estate continues in survivors freed from
the participation of the decedent.
 Can be converted to a T in common if an interest is conveyed to a 3rd party.
 T can bring an action for judicial partition. The Ct will physically partition the tract of
land into separately owned parts or order the land sold and divide the proceeds among
the tenants.
b. 4 unities- Interests must be equal in all respects, including the 4 unities of:
 time -must be acquired or vest at the same time
 title -acquire title by the same instrument or by a joint adverse possession, can never
arise by intestate succession
 interest -equal undivided shares and identical interests
 possession -each has rt to poss, but once created one can give others exclusive poss
 If these do not exist, there is no joint tenancy. If one is severed after tenancy is
created, it turns into a tenancy in common.
 However, today the need for equal interests is often overlooked. JT can be created w/
unequal shares.
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A strawperson can be used- one who is not intended to have any beneficial interest,
who must convey interest to parties. Often an atty.
c. Avoidance of probate
 Joint tenancies are popular bc it is the equivalent of a will but at death, probate is
avoided. This is the judicial supervision of the admin of the decedent’s property at
death. It can be costly and property can be tied up for months.
 With a joint tenancy, no interest passes, so there is no need for probate. The
decedent’s interest vanishes and the survivor’s ownership of the whole continues.
 Originally jt was a way to bypass medieval prohibition of wills of land. Could
bypass primogeniture.
 A joint tenant cannot pass his interest in a joint tenancy by will.
 Creditors cannot seize anything bc the interest has disappeared.
 But today, joint tenancy is subject to inheritance taxes.
d. Bank accounts
 Many purposes- gifts, payable on death account, convenience
 Like survivorship rts before other tenant dies. An account owned by O with a
power in A to draw on the account during O’s life.
 There is little risk involved.
3. Tenancy by entirety
 Can be created only in husband and wife.
 It is like a joint tenancy. 4 unities- time, title, interest and possession- are required
plus marriage.
 Common law- husband and wife were one legal party- the husband.
 Rt of survivorship exists. Neither can defeat this rt of the other by a conveyance of a
moiety to a 3rd party. Acting alone, neither has a rt to partition.
 Severance is not possible.
 Ts hold as one entity. Both are seised of the entirety, per tout et non per my.
 Divorce terminates the tenancy bc it terminates the marriage.
 Exists in half the states. Presumed the T is T by E.
4. Relations among concurrent owners
 Each tenant is entitled to possession of the entire parcel of land yet he cannot exercise
that possession w/o coming into conflict with the rt of his cotenant.
 Rules distribute in a fair manner the benefits and burdens of co-ownership.
 Partition- the privilege of each co-owner to transform a concurrent estate into estates
held in severality.
B. Marital Interests
1. General
 In middle ages, there were 2 diff systems of marital property. Under the English
system, husband and wife had separate property and ownership was given to the
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spouse who acquired the property. Under the continental system of community
property, husband and wife were a marital partnership and could share their property
equally. This never took root in England.
Common law marital property system was accepted in most states. 8 states have
communal laws.
The English system supported patriarchy. A married woman, supported by her
husband, was not entitled to ownership of property. She was dependent on her
husband.
At marriage, a woman moved under her husband’s cover and ceased to be a legal
person. Couple was regarded as one unit, the husband. Husband had rt to possession
to all the wife’s lands. This was known as jure uxoris and was alienable by the
husband and reachable by his creditors. The wife had a duty to render services in the
home. In exchange, she received his protection.
In the 19th century, many states adopted the Married Women’s Property Acts. This
gave married women control over property and abolished jure uxoris. She could have
separate property. She also gained control of her earnings.
Divorce- provide for an equitable distribution of property. Way to do so vary.
2. Sawada v. Endo, SC of Hawaii, 1977
 Sawada sued Endo for damages after a car accident. Endo and his wife owned by
tenancy in entirety real property. They conveyed the property to their sons after the
suit was filed even though they continued to live there.
 Issues- Is the interest of one spouse in real property held in a tenancy of entirety
subject to levy by individual creditors? Is the conveyance of such property fraud?
 Rule- tenants of entirety are each seized of the entirety from the time of the creation
of the estate. Tenancy in entirety cannot be destroyed or divided. Each spouse owns
the entire estate.
 Holding- the interests of a husband and wife in a tenancy of entirety are not subject
to the claims of his or her individual creditors during the joint lives of the spouses.
The conveyance to the sons was not fraud.
3. In re Marriage of Graham, CO, 1978
 Parties were married for 6 years and then divorced. The wife worked as a stewardess,
contributing 70% of the financial support during the marriage while the husband got
an MBA and worked part time. The wife sought some of the value of the MBA,
claiming it was a property asset that she helped her husband acquire. She wants the
right to some of his earning potential.
 Issue- does an MBA constitute marital property which is subject to division by the
court?
 Rule- Uniform Dissolution of Marriage Act requires division in proportions.
 Holding- The MBA does not constitute marital property. The degree does not have
exchange or objective transferable value, it cannot be inherited or sold.
 Note- These arguments don’t hold very well- other types of property have these
characteristics. P is really after earning potential, not MBA.
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VI.
Chapter 6- Landlord- Tenant
A. Leasehold Estates
1. Term/ Tenancy of Years
 Lasts for some fixed period of time or for a period computable by a formula that
results in fixing the calendar dates for beginning and ending, once the term is created
or becomes possessory.
 Ex- one day, 2 months, 5 years, 3000 years.
 At common law, there was no limit on the number of years permitted. It some states
there are now limits.
 Can also be a lease terminable on some event but of no fixed period- to A for the
duration of the war.
 Cannot be terminated unilaterally by either party prior to the end of the time period.
 Can be determinable on an event- to T so long as used for a sawmill.
 Notice is not needed since both parties knows when lease ends.
2. Periodic Tenancy
 Lasts for some fixed duration that continues for succeeding periods until either the LL
or the T gives notice of termination.
 Ex- to A from month to month.
 Under common law rules, ½ a year’s notice is required to terminate a year to year
tenancy. If less than a year, notice should be the length of the period.
 Death of LL or T has no impact.
 Often created by implication where rent is due in periods.
3. Tenancy at Will
 Tenancy of no fixed period that endures so long as both LL and T desire.
 If the lease provides that it can be terminated by one party, it is at the will of the other
as well. Unilateral power to terminate can exist in other tenancies.
 Both must have power to terminate, not just LL or T.
 Ends when a party terminates it or a the death of one party.
 Modern statutes require a period of notice.
 If only T has a right to terminate, lease may be a determinable life estate, terminable
on the will of the tenant.
 Problem 2, p. 430
Garner v. Gerrish, NY, 1984
 LL wrote out a lease for $100/ month that could continue until T ended it. LL had rt
to reentry if rent was not paid. When LL died, his executor tried to evict D.
 Issue- Does a lease which grants T the right to terminate create a determinable life
estate or a tenancy at will? Can LL terminate?
 Rule- Tenancy at will gives either power to terminate. Determinable life tenancy
gives only T the right to terminate.
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Holding- It is a determinable life estate since LL has no right to terminate. Lease
does not fit any categories. Look at intent of parties.
4. Tenancy at Sufferance- Holdovers
 Arises when T remains in poss after termination of the tenancy.
 Common law gives the LL 2 options- eviction or creation of a new tenancy.
B. Delivery of Possession
1. Legal Right to Possession
 LL has duty to transfer the legal right to possession to T at the start of the tenancy.
 Paramount title- any title or interest in the leased land held by a 3rd party that is
paramount to the interest of the LL. Ex- mortgages, another lease.
 T may terminate the lease prior to entry if paramount title interferes w/ T’s use of the
land of which T is unaware when he signed the lease. After entry, T has no remedy
until he is evicted by the paramount title.
2. Actual Possession
a. English Rule (Majority view) LL has duty to deliver actual possession as well as the right to possession. If the
previous T has not left, LL is in default if he does not get rid of him.
 Rationale- This carries out the intentions of the parties since T bargains for the use of
the property, not a lawsuit v the previous T. LL is more likely to know if the previous
T will move out and is in a better position to pressure him to do so. LL is more
familiar w/ eviction proceedings and can evict holdover at a lower cost. It is more
efficient to require LL to evict previous T.
 Remedies- T can end lease and recover damages, T can refuse to pay rent for portion
of term in which he did not have poss and recover damages, including the cost of
renting somewhere else and ousting holdover.
b. American Rule LL has no duty to deliver actual poss and is not in default if previous T continues to
wrongfully occupy the premises.
 Rationale- lease is a leasehold to T. It is up to T to take poss. T has rt to evict
holdover by summary proceedings and has no need for an additional remedy v LL.
LL is not required to evict a trespasser once lease starts, so he should not be required
to do so before it begins.
 Remedies- T can sue to evict holdover or treat him as a T for another term, collecting
rent. LL can also evict holdover.
c. Hannan v. Dusch, VA, 1930
 Commercial lease for 15 year term. P could not take actual poss bc holdover T
remained. There was no express covenant as to delivery of premises.
 Issue- Is LL required to deliver actual poss and oust holdover Ts?
 Holding- American Rule- LL has no duty to deliver actual possession. There is a Va
statute ensuring that T can sue holdover T.
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Note- should it matter if it is a commercial or residential lease? What do rules assume
about bargaining power?
C. Subleases and Assignments
 LL can sue for rent any person with whom he is in either privity of estate or privity of
contract.
1. Privity of Estate
 A mutual or successive relationship based on the same right in property (such as LL
& T). Each must have some estate in the land.
 Gives LL right to sue the assignee of T on the covenants in the lease and gives
assignee rt to sue LL on covenants.
 Exists bt LL & T, LL and assignee, but not LL and subleasee.
2. Privity of Contract
 A mutual or successive relationship which exists bt 2 or more contracting parties
based on mutual promises.
 Obligations bind LL and T regardless of whether or not they are in privity of estate.
 Can be extended to 3rd party beneficiaries.
 Can bind assignee if he assumes covenants of lease.
3. Assignment
 T transfers his entire interest of the remaining term under the lease when he transfers
the right to possession for the duration of the term.
 T or LL can freely transfer his or her interest in the premises absent express
provisions restricting assignment.
 T pays rent to LL directly.
 During an assignment, the assignee has privity of estate with the LL, which means
that the LL and the assignee are liable to each other on the covenants in the original
lease. Assignee is personally liable for the rent.
 Assignee may also have privity of K w/ the LL if he promised the original T that he
would pay rent. LL could sue assignee as a 3rd party beneficiary of the original T.
 T is also liable for the rent, assuming he had a K w/ LL. If he did not, he is not liable.
T and LL still have privity of contract, but not privity of estate. T is secondarily liable
however.
 T retains no reversion in lease.
4. Sublease
 T transfers less than his entire interest. He retains any part of the lease.
 T retains a reversion in the property after the transfer. The right to poss reverts to T at
the end of the period. If there is no reversion, it is an assignment. A reversion is a
period of time w/in the duration of the leasehold when T will again be entitled to
poss.
 Subletter usually pays rent to T.
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There is no privity of estate or contract bt LL and subleasee. The subleasee does not
hold T’s full estate in land, so her is no privity of estate. Nor does he have a K w/ LL.
LL cannot sue subleasee, but can sue T. Subleasee is not liable for rent to T.
However, the subleasee can assume the covenants in the lease. If he does, he is bound
and becomes liable to LL. LL is considered a 3rd party beneficiary to the assumption.
T can sublease w/o a reversion, but w/ a right to reenter. Sublease is for remainder of
term, but T has rt to reenter if rent is not paid. (Although common law deemed this
situation an assignment).
Subleasee is a 3rd party beneficiary to covenants of lease.
5. Assignment or Sublease?
 Common law- assignment if transfer is of remainder of term, even if the T reserves a
rt of entry. Less than whole lease was a sublease.
 Modern view- Intent of parties can determine whether transfer is an assignment or
sublease, rather than just the words used. If T charges more rent, Cts usually view this
as a sublease. If transferee pays a lump sum to T, Cts usually think this is an
assignment.
 Rent- who T1 pays rent to can be an indication.
 Problem 2c, p. 477
Ernst v. Conditt, TN, 1964
 P leased to Rogers in 1960 for a 1 year term. He built a Gocart track. There was a
clause that T needed LL’s permission to assign or sublease and that T would remain
liable. Rogers quickly subleased to Conditt and LL agreed. D failed to pay some rent.
He told P that he was not liable for rent, but Rogers was.
 Issue- Was there an assignment or sublease? Should the Court look to language or
intent?
 Holding- the transfer was an assignment because Rogers transferred his entire
interest. His agreement to remain liable does not create a reversion. The intent
outweighs the particular wording of the contract. D is liable for rent since there is
privity of estate. There was also privity of K bt D and P, since D is a 3rd party
beneficiary of K bt D and P.
 Note- P could also win against Rogers.
6. Permission to Assign/ Sublease
 LL can restrict rt to assign or sublease in the lease.
 Covenant against transfers is strictly construed.
 Common law- LL did not have to state a reason, but could object to transfer
arbitrarily.
 Modern Rule- LL cannot refuse to consent to transfer arbitrarily. He must state a
reason. Usually this refers to economically sound or commercially reasonable
reasons, such as suitability of a business to the location and financial resp of new T.
 Waiver- LL can waive his consent. This is implied if LL does not object to the
assignment or accepts rent from T1.
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Duty to mitigate damages- is the LL required to help find a transferor or agree to one
if the tenant must move out?
Kendall v. Ernest Pestana, Inc., Ca, 1985
 City leased Perlitches hangar space in the airport. They assigned their interest to D
after subleasing to Bixler. Bixler sold business to P. The lease required written
consent prior to a transfer. Bixler requested from D that he be granted an assignment
to P. D refused w/o giving a reason.
 Issue- Can a LL unreasonably and arbitrarily w/hold his consent for transferring a
lease?
 Rule- Some contractual restrictions are permitted to protect LL’s interest. But these
are strictly construed. The modern rule requires that the LL state a commercially
reasonable reason.
 Holding- adoption of modern rule. LL must state a commercially sound reason for
objection.
 Question- this was a commercial lease. What about residential leases? Should the
rule apply?
 Shopping Mall analogy- malls can have restrictions on what kind of stores are there
and where they are situated. Mall can object to a lease transfer for many different
economic reasons. Ex- tattoo parlor can be kept out.
D. Defaulting Tenants
1. Tenants in Possession
 LL can evict T for not paying rent or other breach of covenant. Provisions for
termination upon breach of covenant are called forfeiture clauses.
 LL must notify T before eviction.
a. Judicial remedies
 Action in ejectment- LL can bring an action in ejectment to recover poss. But
this is rarely brought bc it is time consuming.
 Summary proceedings- LL can recover poss quickly and at low cost. Also called
an unlawful detainer or forcible entry and detainer. Supposed to be quick, easy
and cheap. But this is often not the case.
 Modern trend- T can use as a defense the LL’s breach of covenant such as duty
to repair of covenant of habitability. Under common law, this was not allowed bc
covenants were independent of each other- T could not breach by w/holding rent
bc LL breached covenant. This helps improve the bargaining position of Ts.
b. Self Help
 Common law- if T had no rt to poss, LL could take any steps necs to force out T.
(Although he could be held criminally liable, leaving civil and criminal law at
odds.) Some states still allow reasonable force to be used. Others allow peaceable
means of self help. But what does that mean?
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Modern Rule- self help is prohibited in many states. Self help violates T’s rt to
due process and encourages violence. If LL uses self help rather than the Ct
system, he can be held liable for damages to T.
Rule usually applies equally to commercial and residential leases.
Self help used to be imp when it was difficult to evict T through the legal system.
Berg v. Wiley, Minn, 1978
 P had lease from D (LL) for 5 years for use as a restaurant. P remodeled w/o D’s
permission, as required by the lease. P was also accused by the city of health code
violations. D charged P with breach of lease and demanded she put building back
in original condition. When P did not, D tried to change the locks but then agreed
not to. D eventually called the police and entered w/o telling P and changed the
locks. D re-leased. P sued for wrongful eviction, seeking damages for lost profits
and emotional distress.
 Issue- Can LL use self help to regain possession of property?
 Holding- Adoption of modern rule. LL cannot use self help to evict T. LL is
liable for damages to T if he does.
2. Tenants who have Abandoned Possession
 If T vacates w/o a rt to do so, LL can terminate the lease, sue T for rent or retake
possession and attempt to relet.
a. LL terminates lease- T surrenders
 T’s abandonment is a surrender. LL can accept this.
 What is an acceptance by LL? Look at intent and LL’s actions.
 If LL terminates lease, he can only recover damages for period of abandonment.
He cannot recover for diff bt new rent and T’s rent. If it is not a surrender, LL can
recover diff in T’s rent and new rent.
 Common law rule- LL cannot terminate lease prior to the due date of the rent. If
he does, he cannot recover rent. Must sue after rent is due.
 In some states, anticipatory repudiation is allowed. If LL knows T will not pay
rent, he can terminate lease. LL’s damages are the diff bt rent agreed upon in the
lease and the fair rental value over the balance of the term.
b. LL repossesses and relets
 Cts are divided as to whether this effects a surrender by T. Cts can look to
whether T had notice or intent of LL.
 If LL relets for less than fair rental value and less than original rent, should T be
liable for remaining rent? What if there is excess rent? T usually is.
 Original T’s liability should be the diff bt original rent and fair market value if LL
rents below this.
c. LL does nothing- does he have to mitigate damages?
 LL can sue for rent from defaulting T.
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Common law view- Caveat lesee. LL has no duty to mitigate damages to T by
finding another T. T purchased conveyance. It is not LL’s fault that T broke
lease. T still owes rent. LL should not be forced to look for new T, who he may
not want to accept. Still Majority View.
Criticisms- Views lease as conveyance, not a contract. It wastes housing resources
by leaving vacancies.
Recent trend- LL has duty to mitigate damages. A lease is a contract. Contract
rules imported into property law.
Should it matter whether lease is commercial or residential?
LL can use a rent acceleration clause to protect himself. This provides that rent
for balance of term is payable in full upon T’s default.
Vacant Stock Rule- vacated apt reverts into stock of of available apts. Damages
run until that particular vacated apt rents..
Lost Volume Seller Rule- in a large building, LL may not fill every apt so he
will not recover lost rent. He will always have 1 less unit than he would have.
Usually LL will have to absorb this, but sometimes T will still be liable until
building is rented. This is a contract principle from UCC.
Sommer v. Kridel, NJ, 1977
 D (T) wrote to P after signing lease and paying security deposit and 1 months
rent. He stated that his engagement was broken, so he had to break lease. P never
responded. A 3rd party inquired for the apt and P said it was rented.
 Issue- Does a LL have a duty to mitigate damages when a T breaks a lease by
making reasonable efforts to re-let the apt?
 Holding- LL has a duty to make a reasonable effort to mitigate when he seeks to
recover rent from defaulting T. This might include advertising and showing the
apt. LL has burden of showing attempts were reasonable. Must treat apt as part of
vacant stock. T is liable for diff in rent prices: K – rent + cost of finding new T.
d. LL security devises
 If T does not pay rent, LL can sue or evict T. This is usually allowed by state
unlawful detainer statutes.
 LL can recover damages equal to the diff bt rent in lease and fair market value
when there is anticipatory breach.
 Security deposits- to avoid LL abuse, limits are placed on the amount of the
deposit, deposits are placed in escrow accounts, T’s claim to deposit is superior to
creditors, LL must pay interest, LL must submit an itemized list of deductions.
E. Landlord’s Duties; Tenant’s Rights and Remedies
 Once lease is entered into, LL has incentive to neglect repairs because the costs would be
borne by Ts. Ts have incentive to neglect maintenance. So what is to be done?
1. Quiet Enjoyment and Constructive Eviction
a. Covenant of quiet enjoyment
 T has rt to quiet enjoyment of premises, w/o interference from LL.
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Covenant may be expressly provided in lease. If not, it is implied.
Common law- covenants of LL and T were indep. In early common law, LLs
had no duty to provide suitable premises. Quiet enjoyment was only breached if
LL withheld something included in the terms of the lease.
An early exception was short term leases of furnished dwellings, where there was
an implied duty of habitability. This evolved into a duty to disclose latent defects,
to maintain common areas and to make promised repairs and in some jur, to abate
immoral activity and other nuisances.
b. Constructive eviction
 When, through the fault of the LL, there occurs a substantial interference w/ T’s
use and enjoyment of premises, so that T can no longer enjoy it as contemplated,
T may terminate the lease, vacate the premise and be excused from further rent
liability.
 Common law- covenants of LL and T were indep. Breach by LL did not give T rt
to breach, only to sue for damages. But their was an exception- the obligation to
pay rent was dependent upon T’s quiet enjoyment. If the disturbance was so great
as to amount to an eviction and T abandoned, T was not liable for rent as though
he was really evicted. Ct expanded contract doctrine of dependent promises.
 This gives T a remedy other than suit for damages.
c. Elements of constructive eviction
i. substantial interference
 Use and enjoyment must be substantially interfered w/.
 Measured objectively- reasonable person standard.
 Look to purposes for which the premises were leased, the foreseeability of
the type of interference, the potential duration of the interference, the
nature and the degree of harm caused, and the availability of the means to
abate the interference.
 LL has duty to disclose known defects prior to lease.
 If T has prior knowledge of defects, he has waived the rt to constructive
eviction.
 T must give notice to LL of the objectionable conduct and LL must fail to
remedy the situation w/in a reasonable time to have constructive eviction.
ii. Tenant must vacate premises
 T must vacate in order to claim constructive eviction. He cannot remain on
premises. He must determine at his peril if there is constructive eviction.
 T can stay in poss and bring an equitable action for a declaratory judgment
that LL’s acts constitute constructive eviction. This would let T know if he
could vacate before he does so.
 T can recover damages from LL after cons ev. This may include the diff bt
rent paid and reasonable rental value.
 T must vacate w/in a reasonable time.
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Restatement- T can claim cons ev w/o vacating. T has not received what
he bargained for.
iii. Fault of LL
 Interference must result from some act or failure of LL.
 Wrongful acts of 3rd parties do not apply.
 LL is not resp for actions of other Ts. But a modern trend holds LL liable
if he can control acts of other Ts.
d. Reste Realty Corp. v. Cooper, NJ, 1969
 D leased from P’s predecessor a portion of the ground floor of a commercial bldg.
A driveway ran along the side and was not part of the lease. When it rained, water
ran off driveway into P’s offices causing substantial damages. The resident
manager tried to fix this, but the problem persisted. When he died, P refused to
fix. D left on constructive eviction.
 Issue- Can T break a lease using constructive eviction if LL fails to repair?
 Rule- covenant of quiet enjoyment is implied in lease. Constructive eviction is an
available remedy to Ts.
 Holding- Constructive eviction was justified bc LL interfered w/ D’s quiet
enjoyment. P could not recover lost rent. Common areas should be maintained by
LL.
 Note- constructive eviction is risky. If D lost, she would be liable. And she has
rent in new apt to pay for.
e. Partial eviction
 If there is actual eviction from part of the property, T is relieved of all liability for
rent. Obligation to pay rent rests on T’s poss of entire premises. This imposes a
penalty on a LL who tries to use part of T’s premises and interfere’s w/ T’s use.
2. The Implied Warranty of Habitability
 There is an implied warranty of habitability and fitness in urban leases.
 Dep covenant doctrine applies, so Ts can w/hold rent or terminate lease.
 Restatement- covenant of suitability for residential leases.
 Although more for protection of residential Ts, the covenant has been extended to
commercial leases.
 This covenant extends throughout the lease. The LL has a duty to repair and keep
premises habitable for duration of lease.
 Waiver - T can waive minor defects, taking as is, but not whole covenant. This is
against public policy and may be unsafe or unhealthy. T can’t waive housing
code requirements.
a. Common law
 No implied covenant that premises are habitable. Caveat lessee- let the lessee
beware. T can inspect premises before he rents. LL has no duty unless he gives
an express warranty. No implied duty to repair.
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3 exceptions- furnished house for short term lease (T has no time to inspect),
latent defects (if LL knows of dangerous unseen conditions, he must disclose),
bldg under construction (implied that new bldg will be fit for use).
Indep covenant Rule- T cannot terminate lease or w/hold rent due to defects in
premises. T can only sue LL.
b. Rationale of implied warranty
 In modern urban dwellings, Ts do not have time to inspect premises.
 LL knows more about defects and how to fix them.
 Housing codes are not always enforced.
 Constructive eviction is not a viable remedy for many Ts, esp when there is a
housing shortage.
 Ts have less bargaining power than LLs.
 UCC 2-315 warranty for sales.
 Criticism- Economic grounds. This duty will lead to increased rents to cover
costs or abandonment of bldgs by LL or less investment in new housing.
c. Scope
 latent defects only
 housing code- violation of code is violation of warranty.
 Restatement- unsuitable, unsafe, unhealthy or in violation of code.
 Fit for human habitation. This could be higher or lower standard than housing
code.
 LL has reasonable time to repair after T gives notice.
d. Remedies- Damages, restitution and rescission. Contract remedies.
i. Termination of lease
 Vacate and recover through constructive eviction.
ii. Pay for premises as is
 T pays only for the value of what he is receiving- the premises as is.
 Damages are diff bt agreed rent and the fair market rental value of the
premises as they are during occupancy in unsafe condition.
 No damages if agreed rental price is fair market value for premises.
 Does not serve to force LLs to keep premises in good repair.
 Most likely rejected by Cts.
iii. Loss of bargain Rule
 Give T what he bargained for.
 Measure damages by diff bt fair market rental value of premises if they had
been warranted and the fair market rental value as is. Agreed rent is assumed
to be fair market value as warranted.
 Gaining judicial approval. (See Hilder)
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iv. Percentage diminution Rule
 Assumes agreed rent is proper for premises as impliedly warranted.
Agreed rent is reduced by % of the bargain lost by T as consequences of LL’s
breach.
v. Continue lease and use rent to repair
 T can use reasonable amount of rent to repair.
vi. Continue lease and w/hold rent
 T can put rent in escrow until LL repairs.
 No case has used this.
e. Hilder v. St. Peter, VT, 1984
 P took poss of D’s apt w/ her children. There were numerous unsafe conditionsbroken window, dirt, bad plumbing, crumbling plaster, broken lights, exposed
raw sewage, odors, no free heat, no key or lock. LL never fixed things at P’s
request and would not refund security deposit. P tried to fix things herself, but
lived in squallor. She never abandoned.
 Issue- Can a T receive damages from LL for breach of implied warranty of
habitability w/o leaving premises? What damages should be awarded?
 Holding- implied warranty exists. P should get loss of bargain damages.
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VII. Land Transactions
A. Intro- Steps in Land Transactions
 4 parties- buyer, seller, broker on each side. Plus attys. All have own agendas and
interests.
 Brokers work for the seller and make $ when houses are sold.
John Payne- a typical American purchase
1. Consult a real estate agent. Search for a house and agree on a price.
2. Get an attorney to draft a proper contract. It is more likely that buyers will not do this.
3. Make a down payment and get remainder from a mortgage. Get credit and make sure
the seller has good title.
4. Secure loan.
5. Title Assurance- search the title records! Maybe get title insurance.
6. Bring all parties together in the closing and transfer title by executing and delivering
documents.
7. Final certificate of title.
B. The Contract of Sale
1. The Statute of Frauds
a. History
 Enacted in 1677 to make people more secure in their property and their contracts
by making deceitful claims unenforceable.
 Provided that except for leases less than 3 years, no interest in land could be
created or transferred except by an instrument in writing signed by the party to be
bound. No action shall be brought unless the contract was in writing and signed.
 English statute basically re-enacted in US. Is a principle, not a statute, and is
judge made law.
b. What is needed
 contract of sale must, at a minimum, be signed by the party to be bound, describe
the real estate and state the price.
 Problem 3, p. 593
c. Exceptions
 Part performance- allows enforcement of agreements when particular acts have
been performed. Equitable remedy in suit for specific performance. 2 of following
usually required: possession, improvements or payment. Eg- buyer takes
possession and pays for land.
 Estoppel- unconscionable injury would result from denying enforcement of oral
contract. Unjust enrichment might occur. (See Hickey) Other party can be
estopped from claiming S of F.
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d. Hickey v. Green, MA, 1982
 Sale of lot. D (seller) accepted a check for the land that had a note on the back.
This did not state price or both names. P left D’s name off check bc he was unsure
who to make it to. D later told P that she found another buyer and would not sell.
P had already sold his own house at this time.
 Issue- Is an oral agreement to buy property valid when the buyer relies on the sale
and gives a deposit? Is it unenforceable under the Statute of Frauds?
 Rule- R §129- a sale may be enforced notwithstanding a failure to comply w/ the
S of Frauds if the party seeking enforcement, in reasonable reliance on the
contract, has so changed his position that injustice requires specific enforcement.
 Holding- Contract is binding under estoppel. P reasonably relied. Damages would
not compensate him. P gets specific performance.
2. Marketable Title
 Implied condition of contract of sale is that the seller has marketable title. If seller
cannot convey this, buyer is entitled to rescind. Even implied in quitclaim deed.
 Time- Seller is not required to have good title until the closing.
a. Definition- a marketable title is a title reasonably free from doubt and one which a
prudent purchaser would accept. No reasonable probability that buyer will be
subjected to lawsuit. Perfect title is not required. Good record title or title by adverse
possession show marketable title. Good record title means there are no recorded
encumbrances.
b. Defects in Title- defect in record chain, private encumbrances, easements, covenants,
not zoning.
 Defects in chain of title include a significant variation in the description of the
land from one deed to the next, a defectively executed deed or evidence that a
prior grantor lacked the capacity to convey.
 Future interest held by unascertained parties can make title unmarketable.
 Buyer can waive encumbrances- mortgages, liens, covenants, easements.
 Zoning restrictions do not affect the marketability of title, do zoning violations do.
Lohmeyer v. Bower, KA, 1951
 Contract to buy a lot which provided guarantee of title, free and clear of all
encumbrances subject however to all restrictions and easements of record. The
original subdivider imposed a restrictive covenant requiring 2 story houses.
Zoning ordered that no structure be erected w/in 3ft of of a lot line. The house
was 18 in from line and 1 story. P sought rescission.
 Issue- Does the violation of public and private restrictions render title
unmarketable?
 Rules- Municipal violations such as zoning requirements do not make title
unmarketable. Violation of private covenants may make title unmarketable. Title
is unmarketable when it exposes the buyer to litigation. The defect must be
substantial and which might cause injury.
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Holding- the title is unmarketable due to violations of private covenant. P can
rescind. (Not on existence of covenant, but of restriction of it. There was a waiver
of restrictions, but not violations.)
c. Adverse Possession
 Many states hold that title by adverse possession is marketable title. The adverse
possession must be clearly proven. The seller must offer written evidence or other
proof. In a few states, this is only accomplished by a quiet title action.
Conklin v. Davi, NJ, 1978
 Sale of property. D wanted to rescind, alleging defects in title. P maintained
validity of claim through adverse possession and seeks specific performance.
 Issue- Is title obtained by adverse possession per se unmarketable?
 Rule- Imperfect titles can be marketable. The title as it exists at the time of final
judgment will control after litigation, not title when suit began.
 Holding- No. But burden is on seller to establish title by adverse possession (as
in a quiet title action). If the seller can prove adverse possession, title is
marketable. He has the full executory period to do this. (Bc title is not delivered
until the closing, it only needs to be marketable by then.)
d. Damage Measure
 Loss of Bargain- the difference bt the contract price and the market value of the
property on the date of the breach. (also called benefit of bargain)
 Restitution- if the seller acted in good faith but could not convey marketable title,
in many states restitution will be the remedy. This will be money paid plus
interest and expenses.
 Specific performance- this equitable remedy is available to buyer and seller.
Money damages may be inadequate. Land is unique. Buyer may be able to get an
abatement in purchase price.
 Rescission- Buyer could rescind.
e. Equitable Conversion
 If there is a specifically enforceable contract for sale, equity regards as done that
which ought to be done. Gap bt contract and closing.
 Buyer is viewed as the owner from the date of the contract in equity and has
equitable title. Seller still holds legal title in trust for buyer. Buyer does not yet
have right to possession.
 Risk of Loss- Who takes the loss in the event of accident? Buyer or seller? From
time of contract until closing, burden was on buyer although the seller retains
possession. Some Courts decline to follow equitable conversion and hold the
seller liable until closing.
 Inheritance- who gets the property if one party dies between contract and
closing? Buyer is treated as owner of land, while seller has personal property ($).
 Parties may specifically address this in contract.
3. Duty to Disclose Defects
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Common law- Caveat Emptor- let the buyer beware. Seller did not have a duty.
Modern law is usually a duty to disclose latent defects, but not open and obvious
ones, as the buyer can do an inspection and discover defects by himself.
Nondisclosure can be equated with fraud or misrepresentation.
Defect must be material- affects reasonable person’s decision to buy or affects the
market value.
Disclosure forms- required in many states. They state details about property.
There may not be a duty to disclose covenants and easements in many states.
Broker’s duty- duty to conduct a reasonably competent and diligent inspection of the
residential property for sale and to disclose material facts to buyers. Buyer can sue for
negligence if the broker does not disclose.

Stambovsky v. Ackley, NY, 1991
 P agreed to purchase D’s house. P, who was from out of town, soon discovered
that the house had a reputation for being haunted that D had advertised. D was
not told and seeks to rescind.
 Issue- does the duty to disclose extend to hauntings?
 Rule- caveat emptor. Where a condition created by the seller materially impairs
the value of the contract and is not reasonably discoverable by the buyer
exercising due care, nondisclosure is a basis for rescission.
 Holding- Since it affected market value, there was a duty to disclose.

Johnson v. Davis, FL, 1985
 When selling his home, D told P that there were no problems w/ the roof. The
roof in fact leaked. After making a deposit, P entered the house and saw water
coming in during rain. P sought rescission.
 Issue- Can a buyer rescind a contract if the seller fraudulently conceals defects?
 Rule- Mere nondisclosure is not fraudulent. But seller can be liable for failure to
disclose material defects of which he is aware. If the defects are material and
effect the value of the property, if these facts are only accessible to the seller or
known only by him, there is a duty to disclose.
 Holding- Seller had a duty to disclose. Rescission granted.
C. The Deed
Warranties of Title
1. Intro
 History- earliest deed is feoffment. Statute of Uses made it possible to convey an
interest w/o livery of seisin. Deed could be delivered in solicitor’s office.
 Statute of Frauds- deed must be in writing and signed by the grantor.
 Words- short forms of deeds are often used. Granor, grantee, words of grant,
description of property, signatures and sometimes an attestation of
acknowledgement are required in the deed. Also customary to state consideration.
 Description of tract- methods for description include (1) reference to natural or
artificial monuments and reference to directions and distances (metes and
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bounds), (2) reference to a govt survey, recorded plat or some other record, (3)
reference to street number or name of property.
Seal- old requirement. At common law, a deed was defined as a sealed
instrument. Seals mat still required, but anything can be one.
Fraud- a forged deed is void. The grantor whose signature is forged prevails over
all persons, including subsequent bona fide purchasers. But a subsequent bona
fide purchaser who is unaware of fraud from that grantee takes over the grantor.
Loss on person who could have prevented it.
Indenture- way of copying deeds in past. Parchment was signed and cut
irregularly to prevent fraud. A deed poll was signed only by the grantor.
2. Types of Deeds
a. General Warranty Deed- warrants against all defects in title, whether they arose
before or after the grantor took title.
b. Special Warranty Deed- warrants against defects during grantor’s tenure, not
prior defects. Defects from predecessors are excluded.
c. Quitclaim Deed- Contains no warranties. Conveys what grantor has.
3 . Express Warranties in a Deed
a. Present Covenants- is broken, if ever, at the time the deed is delivered. Do not
run with the land. S of L begins on date of delivery:
1) Seisin- grantor warrants that he owns the property he purports to convey.
2) Right to Convey- Grantor has right to convey. Usually serves same purpose
of covenant of seisin, but a person can have seisin and not right to convey.
3) Against Encumbrances- No encumbrances on property- liens, mortgages,
easements, covenants.
b. Future Covenants- promises that the grantor will do some future act. It is not
breached until grantee or his successor is challenged by paramount claim or is
evicted from the property. Runs with the land. S of L begins at time of eviction.
1) General Warranty- Grantor will defend against lawful claims and will
compensate the grantee for any loss he may sustain by assertion of superior
title.
2) Quiet Enjoyment- Grantee will not be disturbed in possession and enjoyment
by an assertion of superior title. Same as covenant of general warranty.
3) Further Assurances- Grantor will execute any other documents required to
perfect the title conveyed.
4. Brown v. Lober, Ill, 1979
 Former owner of land sold it but reserved a 2/3 interest in the mineral rts. Later
owner, P, contracted to sell mineral rts to coal co and discovered they did not own
it. 10 year S of L barred suit on present covenants (couldn’t sue on covenant of
seisin).
 Issue- Does the warranty of quiet enjoyment constitute a warranty that the grantor
is the owner of the entire estate as conveyed?
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Rule- Quiet enjoyment does not guarantee a perfect title, but poss. and
enjoyment. Possession of surface does not carry possession of subsurface
minerals. To possess minerals, one must undertake the actual removal of the
minerals from the ground or another act of exclusive use. Covenant of seisin may
be broken here, but covenant of quiet enjoyment requires that someone assert
superior title.
Holding- Until someone interferes with P’s rt of possession, there is no
constructive eviction and no breach of quiet enjoyment. Future covenants cannot
be breached until P is evicted by superior title. P loses- he should have done a title
search.
5. Frimberger v. Anzellotti, CT, 1991
 D’s brother subdivided land near a wetland that was subject to govt regulations. He
buit a bulkhead and filled the parcel adjacent to the wetlands and built a house there.
D sold to P by general warranty deed, free and clear of all encumbrances. P decided
to make repairs and requested a survey from the Dept of Env Protection (DEP). DEP
told P that property was in violation.
 Issue- Does a latent violation of a restrictive land use statute or regulation, existing
on the land at the time title is conveyed, constitute a breach of the warranty deed
covenant against encumbrances?
 Rule- The covenant against encumbrances cannot be breached unless the
encumbrance existed at the time of the conveyance. For a deed to be free of all
encumbrances there must be marketable title that can be sold at a fair price. To render
title unmarketable, the defect must present a real probability of litigation or loss at the
time of conveyance.
 Holding- The violation was not a breach of the covenant against encumbrances. P
was not threatened by a lawsuit by govt and should have tried to remedy situation. If
P discovered before closing (as in Lohmeyer) he could have rescinded. Now, there
are no damages to award.
6. Damages for Breach of Warranty Covenants
 Seisin- Buyer is entitled to recover the purchase price.
 Against Encumbrances- if it is removable, then the cost of removal. If not easily
removable, measure is diff bt value w/ and w/o encumbrance. Contract law- put
grantee in position he would have been in- expectancy measure.
 Future covenants- for total eviction, damages are the price paid. For partial eviction,
it is the proportionate amount.
 If seller is in good faith, damages may either be loss of expenses or loss of bargain.
 If seller acted in bad faith, it is loss of bargain.
 Merger- When closing occurs, K merges w/ deed and in the absence of fraud, the
seller is no longer liable on warranty of marketability. This leaves only covenants
contained in the deed. Right to marketable title is a K right only. It permits purchaser
to decline to complete the K if title is unmarketable. There is no action after the
closing. Any rights the buyer has v the seller must be in the deed.
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7. Running with the Land- if a covenant for title can be enforced v. grantor by subsequent
purchaser from grantee, it runs w/ the land.
 Present covenants- if not breached when the deed is delivered, it can never be. If
breached when deed is delivered, then grantee has cause of action. S of L started
when deed was delivered.
 Common law view was that it did not run w/ the land and cause of action could not be
assigned if the grantee later sold the property.
 Minority of courts today hold that chose in action can be assigned and runs w/ land.
(As in Rockafellor).
 Future Covenants- run with land.
 Problem 2, p. 647
Remote Grantee- Rockafellor v. Gray, Iowa, 1922
 Doffing conveyed to Rockafellor by warranty deed. When R defaulted on mortgage,
D foreclosed and Connelly bought. He conveyed to Dixon by general warranty deed.
Dixon conveyed to H&G by special warranty deed. R showed up to invalidate
foreclosure due to lack of jur. R won and got property back. H&G sued Connelly for
breach of covenant of seisin.
 Issue- Does the covenant of seisin run with the land to a remote grantee even if the
original grantor never had actual possession?
 Rule- English Rule (minority)- covenant of seisin runs with land and passes to
subsequent grantees. The recovery for breach of a general warranty deed is either the
loss to the buyer or what the seller received, whichever is less. So H&G get $4000,
price Connelly got, not $7000 they paid.
 Holding- Covenant runs w/ land. Dixon transferred his chose in action w/ the land.
 Note: Connelly can be sued bc he conveyed a general warranty deed. Dixon cannot
be sued bc he conveyed a special warranty deed and is only resp for breaches he
made. H&G could not sue on covenant of quiet enjoyment (which they normally
would bc R claimed a superior title and future coveants always run w/ the land)
because they never had possession. They could not be evicted. So they sued on the
present covenant. The S of L had not expired.
Delivery
 A deed is not effective until it is delivered. Delivery requires words or actions of the
grantor that show intent to deliver.
 Delivery is presumed if: the deed is handed to the grantee, it is acknowledged by the
grantor before a notary, it is recorded.
1. Deed Given to an Escrow Agent
 A deed delivered directly to a grantee cannot have oral conditions, but a deed can
have conditions if delivered through an escrow agent.
 Commercial escrow agents may be used. Seller gives agent the deed to give to
grantee when and if buyer pays for land.
 When instructions are written, the grantor is bound. If they are oral, grantor can
change her mind.
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Relation Back Doctrine- The delivery of the deed by the escrow agent to the grantee
(2nd delivery) is treated as if it took place at the time of delivery of the deed by the
grantor to the escrow agent (1st delivery).

Merry v. County Board of Education, Ala, 1956
 Before her death, grantor and county board were negotiating for sale of land. She
executed to deed and gave it to her atty to deliver if the board accepted her offer.
She died. Not knowing, the board accepted the offer. Attys delivered deed. Her
executors brought suit to void it for lack of valid deliver,
 Issue- Is delivery of a deed by an atty after the grantor’s death valid? Is this valid
escrow?
 Rule- For a deed to be delivered as an escrow through an agent, there must be a
valid contract bt all parties as to the subject matter and delivery. W/o this, grantor
can revoke at any time.
 Holding- There was no contract bt all parties and thus no escrow or delivery.
Since there was no delivery in the lifetime of the grantor, the offer was revoked
on her death. The atty was her agent, and not an impartial escrow agent. There
was no consideration to have the deed in escrow.
 Note- under relation back, if D accepted before grantor died, deed would be valid.
2. Deed Subject to Conditions
 Written- can contain a provision that the deed is to take effect only upon the
happening of some event. This can be interpreted as no delivery until the event
happens or delivery of an interest subject to a condition precedent. Then grantee
would receive an executory interest.
 Will- a deed can act as a substitute for a will.
 Oral- violate S of F. When a deed is handed over that is absolute on its face, but w/
an oral agreement that the deed shall not pass until some event, delivery is usually
valid and the oral condition is void.

Sweeny v. Admin. Sweeney, CT, 1940
 Grantor deeded farm to his brother John. It was recorded. Then John deeded it
back. This was unrecorded and was accidentally burned. This deed was made to
protect Maurice if John died 1st. Grantor lived on farm and ran a tavern there w/
John. When grantor died, John claimed farm. So did Maurice’s wife, separated
from him for 20 years. She claimed delivery was invalid.
 Issues- Is an orally conditionally delivered deed valid?
 Rule- physical possession is not conclusive proof that a deed was legally
delivered. But there is a rebuttable presumption that grantee assented since deed
favors him. A deed is only made conditional if it is held by a 3rd person until the
happening of an event.
 Holding- delivery was valid. Condition is void. Maurice’s intent was to protect
himself if John died 1st and to prevent his wife from inheriting.
 Note- In CT at the time, like other states, spouse was entitled to 1/3 interest if
deceased died intestate. If there was no issue, spouse got all of estate.
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3. Deeds Without Manual Delivery
 Grantors will often execute a deed and put it in a box. It is intended as a substitute
will.
 If the grantor intended the deed to be legally effective before death, it is a validly
delivered deed.
 If the grantor did not intend the deed to be effective until death, the deed is not
delivered during the grantor’s life and is not valid.
 Deed cannot be a will either.
 If grantor did not intend to be bound, there is no delivery.
 But if there is evidence of intent to be bound and that the grantor kept the deed for
safekeeping, it may be enforced.
 Case is strengthened if the deed was kept where the grantee could get to it.

Ferrell v. Stinson, Iowa, 1943
 Before the bedridden grantor died, she made out a quitclaim deed for her farm to
2 cousins and a friend, Ds. She instructed her housekeeper to put it in a box in her
home and told another friend to send it to D when she died. Grantor told her atty
she had deeded the farm and made out a will. P was the beneficiary of the will.
She claimed that the deed was not validly delivered. Ds had received the deed and
recorded it.
 Issue- Is a manual delivery necs if the grantor intended to relinquish control over
the deed and have it take effect as a present conveyance?
 Rule- P has the burden to prove nondelivery bc the deed was duly executed.
Actual manual transfer is not nesc for delivery. The intent of the grantor is most
imp.
 Holding- delivery was valid. Evidence shows grantor intended delivery, but was
too weak to get up to hand deliver.
 Note- diff than Merry- noncommercial setting, personal. Also, Merry was a sale,
this was a gift. Deed is effective as long as grantor intended to pass title presently,
not only in the future.
D. The Mortgage
1. Intro
 Mortgagors- the buyers are the mortgagors bc they give the mortgage interest to the
lender. Interest is known as the equity of redemption, or equity.
 Mortgagee- the lender. Has a security interest in the property as a secured creditor.
 Buyers make loan applications. The lender checks credit rating, earnings, job security
to determine risk.
 Lender will require a security in the form of a mortgage on the property. The lender
will set the terms. Mortgage law is resistant to uniformity.
 Buyer gives lender a note and a mortgage.
 Transfer by the Mortgagor- can transfer interest to another party. Purchaser can
take subject to the mortgage (no personal liability for mortgage debt) or assuming the
mortgage (he will pay off mortgage).
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2. 4 variables of mortgage: amount of down payment, length of mortgage, interest rate,
rate of amortization
a. Down payment- Buyers usually make a down payment of 10% and borrow the rest.
The more $ down, the lower the interest rate on the mortgage. Banks will not loan
$100. If they loan 90%, they have the 10% safety net if the market falls and the value
of the house drops.
b. Length- the longer the mortgage is, the more $ needed to repay. Typical mortgage is
20-30 years. Until 1930s, loans were 10-15 years and not self amortizing. There was a
balloon payment (interest payments w/ principle due at end) at the end which could
become a new mortgage. During Depression, banks foreclosed instead of starting new
mortgage. In 1934, under the Federal Housing Act, the govt insured 25 year
mortgages allowing self amortization.
c. I rate- Higher for 2nd and 3rd mortgages. Rate depends on type of mortgage, amount
of $ down and the market at the time.
d. Amortization- part of each payment goes to interest and part to repaying principle. In
the early years, more goes to interest. In later years, more goes to principle.
Self amortizing loan- equal payments of interest and principle.
3. History
 Deed in fee simple was given to the lender with a condition subsequent that if the
borrower paid off the debt, the deed would become void.
 If the borrower did not pay it off, the lender had a fee simple. The lender received a
windfall.
 Equity Cts soon came to protect the debtor from this. At first, borrower could only
redeem if great injustice would ensue. Later, this became a right.
4. Foreclosures
a. History- Equity permitted foreclosure of the right to protect the lender. Under a
strict foreclosure, the borrower was ordered to pay debt w/in a certain period or be
forever barred. Later, foreclosure sale was used. This allowed an officer of the
court to sell the land and convey title to purchaser. From the proceeds, the lender
was paid the debt and the borrower received the remaining $. This required a suit.
b. Rights of Mortgagor- Many states have passed laws giving the homeowner the
right to buy back the property from the purchaser w/in a period of time.
c. Deed of Trust- the borrower conveys title to a 3rd person (or sometimes the
lender) to hold trust to secure the payment of the debt. Trustee is given power to
sell land w/o going to court. This is quicker than a judicial foreclosure because
mortgagee has the power of sale.
d. Deficiency Judgment- if the land does not bring enough to pay the debt, the
lender can use the borrower on the note for deficiency.
5. Mortgagee’s Duties
a. Minority view- mortgagee must foreclose the mortgage and exhaust the security
before suing on the debt. After foreclosure, mortgagee can get a deficiency
judgment v. mortgagor for diff bt amount of debt and amount realized at sale.
b. Majority- mortgagee can sue on debt or foreclose.
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c. Legislation- many states have statutes to protect mortgagor, such as duty to try to
get fair market value for property.
d.
Murphy v. Financial Development Corp., NH, 1985
 P bought home and had a mortgage, later assigned to D. Home was appraised
at $46,000. P became unemployed and defaulted.. D scheduled foreclosure
sale and acted in compliance w/ statute. D put foreclosure notice in
newspaper. D made the only bid for sale at $27,000. A few days later, a client
of D’s atty bought the property for $38,000.
 Issue- Does a mortgagee who is foreclosing on a property have a duty to
secure a portion of the mortgagor’s equity if possible? Is there duty to protect
P’s interest through good faith and due diligence in obtaining a fair price?
 Rules- A mortgagee, as a fiduciary, who executes a power of sale is bound by
both the statutory requirements and a duty to protect the interests of the
mortgagor through the exercise of good faith and due diligence. He must exert
every reasonable effort to obtain a fair price. Damages should be diff bt a fair
price (not FMV) and the price obtained when mortgagee fails to exercise due
diligence but did not act in bad faith.
 Holding- D failed to exercise due diligence in obtaining a fair price, but not
bad faith. So sale was not set aside. Damages should be diff bt price and fair
price.
Note- setting foreclosure aside hurts the good faith purchaser. This would
discourage people from buying at foreclosure sales.
6. Installment Land Contract- Seller contracts to convey title to the purchaser when
the purchaser has paid the purchase price in regular installments. Seller holds legal
title and purchaser has possession. When the contract is paid in full, seller conveys
legal title. Really the same as a mortgage. There is more flexibility.

Bean v. Walker, NY, 1983
 P sold house to D for $15,000. It was to be paid over 15 years at 5% interest in
monthly installments. P retained legal title which was to be given to D after
payment in full. D was entitled to possession. Provision allowed P to call
remaining balance immediately due or repossess after 30 days if D defaulted.
D made improvements. D paid over $12,000 of which only $7000 was applied
to principle. D defaulted.
 Issues- What are the rights of a defaulting purchaser and a seller? Can the
seller dispossess the buyer for a failure to make full payment?
 Rule- Equitable conversion- Seller has legal title and the buyer is the
equitable owner. Upon full payment, the purchaser acquires title. The seller
holds the title in trust and has an equitable lien for the payment of the
purchase price.
 Holding- The seller may not dispossess the buyer of equitable ownership w/o
1st bringing an action to foreclose the equity redemption.
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Note- some buyers can only buy in this way. Usually used in low value
property. The buyer risks losing everything in event of default. But usually
there is no $ down.
VIII. Chapter 8- Title Assurance
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System to assure purchasers that they have good title to land.
All instruments affecting land title are recorded at the public records office.
A few localities have title registration. The state registers title and issues a title
certificate to the owner, which is reissued to each new purchaser.
People can also buy title insurance from companies. Some companies maintain a title
storage system similar to the state’s system.
A. The Recording System
 Public records of deed began in Plymouth in 1640. It was not an English custom.
 Today in every state, a statute provides for land title records to be maintained by the
country recorder in each county. The records include copies of documents filed w/ the
recorder and indexes to these documents.
 Recording acts do not affect the validity of the deed. A deed is valid against the grantor
w/o recordation.
 Functions of System- establishes a system of public recordation of land titles. Anyone
can ascertain who owns land. The system preserves in a secure place important
documents. In most states, these recorded copies can be admitted directly into evidence.
Recordation protects purchasers against prior unrecorded interests.
 Statutes often specify what documents can be recorded. Generally, any kind of deed,
mortgage, lease, option or other affecting the property can be recorded. Some states allow
affidavits concerning the land to be recorded.
 Recording acts have adopted and broadened the equitable doctrine of bona fide
purchaser. A subsequent bona fide purchaser is protected against prior unrecorded
interests. He is not protected from prior recorded interests.
 Common law rule still applies: “prior in time, prior in effect.”
 Problems, p. 713
B. The Indexes
 2 Types: tract index and grantor-grantee index.
1. Tract Index and Govt Surveys
 Do not exist in most states.
 Obstacle to establishing it was the early deeds in the east described land in metes nd
bounds. There was no short way to describe land.
 In West, where land was surveyed early on, it is very easy to do title search. Each
tract of land has a number and all instruments relating to that land are filed under the
number.
 In 1785, govt decided to survey lands and file plats w/ General Land office.
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The survey did not include the 13 colonies. Division of land into rectangular plots
allowed govt to give land to soldiers and encouraged division into uniform tracts.
Section 16 of each township was granted for schools.
All public land was surveyed into rectangular tracts by running parallel lines north
and south and crossing them to form 6 mile rectangles. The 1st established N-S line
was the principal or prime meridian. There are 34 more in each survey. Parallel to
them are the range lines, which are 6 miles apart. E-W is a base line and township
lines. 6 mile strips bounded by lines are townships, each w/ its own #.
Each township is surveyed into 36 sections, each 1 mile square. They are numbered.
2. Grantor-Grantee Index
 Separate indexes are kept for grantors and grantees.
 In the grantor index, all instruments are identified alphabetically and chronologically
under the grantor’s surname. The same is true in the grantee index, which indexes by
the grantee’s surname.
 There are usually many volumes. There may be separate indexes for each type of
instrument- deeds, mortgages, wills etc.
 Reference in index lists the grantor and grantee, description of the land, kind of
instrument, date of recording, and volume and page #s where instruments may be
found.
3. How to Search Title
 Start w/ whoever owns the property now. Go to the grantee index and look backward
at each year until you find something. If A owns now, you will see that B is listed as
the grantor for A. Look up B to find C and so on back to the original grantor.
 Now you switch to the grantor index, starting w/ O and working forward, hopefully to
end up w/ A. Start each grantor w/ date of execution of the deed, not the date of
recording. Grantor is still record owner after execution of deed but before recordation.
 In running through the grantor index, you see mortgages and conveyances other than
a fee simple. You will see all claims against the particular owner.
 How far back to go varies from state to state. Could be to go back forever, for 60
years, or for some other amount of time.
 Note- if the grantor cannot be found in the index, it may be that he died and title
passed to someone else. The purchaser must check the records for affidavit’s stating
that the heirs are the sole heirs and own the property.
4. Mother Hubbard Clauses A Mother Hubbard clause is a provision in a deed that attempts to sweep w/in it other
parcels not specifically described. Usually, they are not valid against subsequent
purchasers of the undescribed land. To allow so would place too great a burden of
purchaser.
Luthi v. Evans, KS, 1978
 Dispute bt Tours and Burris over ownership of Owen’s interest in Kufahl lease.
Owens was the owner of interests in a number of oil and gas leases. The written lease
was assigned to Tours all such oil and gas interests. It was filed for record in the
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office of the register of deeds on 2/16/71. On 1/30/75, Owens executed and delivered
a second assignment of her interest to Burris, who had checked the records and
secured an abstract title. Neither reflected the prior assignment to Tours. General
language of Mother Hubbard clause failed to state w/ specificity the names, date,
legal description, recording data. B argued that this was not sufficient to give
constructive notice to innocent subsequent purchaser for value w/o actual notice of
prior assignment. Tours claims that the assignment effectively conveyed the interest
by virtue of the general description. Recording gave constructive notice to subsequent
purchasers.
Issue- Does the recording of an instrument of conveyance which uses a general,
“Mother Hubbard” clause to describe property constitute constructive notice to a
subsequent purchaser?
Rules- A deed or other instrument in writing which is intended to convey an interest
in real estate and which describes the property to be conveyed as “all of the grantor’s
property in a certain county” is referred to as a Mother Hubbard instrument. A single
instrument properly executed, acknowledged and delivered may convey separate
tracts by specific description and by general description capable of being made
specific, where the clear intent of the language used is to do so.
Holding- Mother Hubbard clause is not effective as to subsequent purchasers and
mortgagees unless they have actual knowledge of the transfer. The recording of
assignment from Owens to Tours, which did not describe property w/ sufficient
specificity, was not sufficient to impart constructive notice. Since Burris had no
actual knowledge, his assignment prevails.
C. Types of Recording Acts
1. Race Statute
 Earliest type.
 The person who wins the race by recording 1st prevails as bt successive purchasers.
 Whether a subsequent purchaser had actual knowledge of the prior purchaser’s claim
is irrelevant. This limits inquiry into matters off record. Who knew what is not
relevant.
 Only exists in LA and NC.
2. Notice Statute
 If a subsequent purchaser had notice of a prior unrecorded instrument, the purchaser
could not prevail over the prior grantee.
 But the subsequent purchaser can prevail over a prior grantee who does not record if
he does not have notice.
 It is a race statute for only those w/o notice.
 This differs from a race statute bc it protects only subsequent purchasers w/o notice
and protects a subsequent purchaser from prior unrecorded instruments even though
he failed to record.
 States enacted it bc race statute was unfair in that a subsequent purchaser w/ notice
could prevail. Less efficient sometimes bc outcome can depend on facts outside
record- who had notice of what.
 About ½ states have this.
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3. Race-Notice Statute
 A subsequent purchaser is protected against prior unrecorded instruments only if the
subsequent purchaser (1) is w/o notice of the prior instrument and (2) records before
the prior instrument is recorded.
 So he can win by fulfilling race and notice requirements
 This tends to eliminate suits turning on extrinsic evidence. It also provides motivation
to record by punishing nonrecording.
 About ½ of states have this.
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Note- These statutes apply only to unrecorded conveyances, not easements or other
interests arising by operation of law such as adverse possession.
Subsequent purchaser must give valuable consideration to prevail. Only purchasers, not
heirs, are protected by the act. Mortgagees are considered purchasers. If not a purchaser,
race prevails.
Grantee can sue grantor if the grantor conveys to a subsequent purchaser after conveying
to grantee and purchaser prevails over grantee. Grantor is holding unrecorded rt as
constructive trustee and cannot sell what he does not own. Grantee could recover under
unjust enrichment.
A person who takes from a bona fide purchaser will prevail over an interest that the BFP
would have, even if he has notice when BFP did not. This gives the BFP full protection.
4. Acknowledgment- Messersmith v. Smith, ND, 1953
 The actual copying by the recorder of a document into the records does not necs mean
that the document is recorded w/in terms of recording act. It must be authorizedacknowledged before a notary public or other official. This protects against fraud.
Some states also require a transfer tax. If the record officer fails to index, grantee may
or may not recover. Usually, the subsequent purchaser gets the land bc there was no
way of finding deed if it was not recorded.
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
On 5/7/46, Caroline executed and delivered to Frederick a quitclaim deed to the
property which was not recorded until 7/9/51. In the interim, on 4/23/51, Caroline
executed a lease to D which was recorded 5/14/51. On 4/23, D went to Caroline’s
home and negotiated lease. On 5/7/51, Caroline conveyed to D, by mineral deed
containing a warranty of title, an undivided ½ interest in all oil, gas and other
minerals of land. D said this deed was acknowledged by notary. She denies. D
noticed error in deed. He returned and they tore up deed and wrote another. D went to
same notary. Notary called Caroline and got her ackn over phone. This deed was
recorded 5/26/51. On 5/9/51, D executed a mineral deed conveying to Seale the ½
interest. This was also recorded on 5/26/51. D defaulted.
Issue- Can an improperly acknowledged deed be properly recorded?
Rules- Race-notice statute. Recording of an instrument affecting title to real estate
which does not meet the statutory requirements of the recording laws affords no
constructive notice. Acknowledgment is required as a condition precedent to
recording. For acknowledgment, grantor must appear before officer for the purpose of
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ackn, make an admission to officer that he executed. If grantor never appeared,
evidence showing ackn is inadmissible.
Holding- Deed was not acknowledged properly. So record of deed did not constitute
notice. D did not become subsequent purchaser. Fredrick prevails, even though Seale
recorded 1st and had no notice. D and Seale’s deeds were never officially recorded.
Note- Was the influence of this hidden defect fair?
D. Chain of Title Problems
 Chain of Title- the recorded sequence of transactions by which title has passed from a
sovereign to the present claimant. It is the period of time for which records must be
searched and the documents which must be examined w/in that time. Some jur require an
extended search.
 If a deed entered on the records has a grantor unconnected w/ the chain of title, such a
deed is not recorded w/in the chain and does not give notice.

Guillette v. Daly Dry Wall, MA, 1975
 P owns 3 lots in subdivision. D owns a lot also. Recorded deed of Ps’ lots referred to
a recorded plan and contains restrictions “imposed solely for the benefit of the other
lots shown on said plan.” Same restrictions are imposed on each of lots. D’s deed
refers to same plan but not restrictions. D took w/o knowledge of them. Grantor
wanted to maintain subdivision as residential for 1 family dwellings. D did title
search. P sought to enjoin D from building an apt building.
 Issue- Is a subsequent purchaser bound by a restriction contained in deeds to its
neighbors from a common grantor when it took w/o knowledge of the restrictions and
under a deed which did not mention them?
 Rules- If grantor binds land by writing, restrictions can be enforced. Subsequent
purchaser acquires title subject to restrictions in deed to earlier purchaser.
 Holding- As a purchaser of part of the restricted land, D took subject to restrictions.
D needed to do expanded title search, looking at full chain of title. Ps had interest in
remaining land. Search for other deeds by same grantor is not imposs, even if
burdensome.
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IX.
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Chapter 9- Private Land Use Arrangements
Servitudes- agreements that create interests in land, binding and benefiting not only
the parties to the agreement but also their successors. 2 types: Easements and
covenants. Covenants are either enforceable at law (real covenants) or enforceable in
equity (equitable servitudes.) Easements involve a grant and covenants involve a
promise.
Most important Q for easements relate to creation and termination.
For real covenants, most imp Q is whether they will run to assignees. Privity is
required.
For equitable servitudes, imp Qs relate to creation, enforcement by assignees and
termination. Can be implied by scheme. Privity is not required. Notice is imp.
5 types of rights:
a. A is given the right to enter B’s land
b. A is given the right to enter B’s land and remove something attached to the land
c. A is given the right to enforce a restriction on the use of B’s land
d. A is given the right to require B to perform some act on B’s land
e. A is given the right to require B to pay $ for the upkeep of specified facilities
A. Easements
 An easement is a grant of an interest in land that entitles a person to use land possessed
by another.
1. Historical Background
 In Eng, commonly cultivated. People on land had common rights.
 Profits a Prendre- people had rights to take off the land things that were thought
part of the land. Profits went to the common wealth.
 This system began to break down in 16th century. Landowners began enclosing their
own land. By 1820, there was very little common land left.
 Early easements, from the 19th century, included the right to place clothes lines, nail
fruit trees on a wall, water cattle at a pond and take water for domestic use.
2. Creation of Easements
 Creation generally requires a written instrument signed by the party to be bound
thereby. It can be created by implication in certain circumstances.
 Can be created by an express grant, a reservation, an implication or a prescription.
 Must satisfy S of F- be a written instrument signed by the grantor.
 Can be created to last as long as grantor wants. Forever- easement in fee simple.
a. Types of Easements
 Easement Appurtenant- benefits the owner of the easement in the use of
another’s land. Gives owner of easement use and enjoyment of his own land.
Goes with the land, even if the owner changes. The land benefited is the dominant
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tenement and the land burdened is the servient tenement. The easement attaches
to the dominant tenement and passes to successive owners. Land is usually
adjacent, but does not have to be.
Ex- O conveys to A, owner of Whiteacre, rt to cross Whiteacre to reach a road.
The easement over Whiteacre is appurtenant to Blackacre. A’s rt passes to B
when A sells Whiteacre to B.
Easement in Gross- benefits the owner w/o regard to ownership of land. It is a
right to use another’s land. No dominant land. Easement can be assigned. Not
permitted in England.
Ex- O grants A the right to erect a sign on Blackacre. A does not need to own
land. If O sells to B, burden passes to B.
A negative easement is always appurtenant. Cannot be in gross. It protects owner
of easement in enjoyment of his land.
Which is Favored? If an instrument is ambiguous, App. Is favored.
Why? Intention is usually for App., history, elimination of obsolete easements
(easier to ascertain benefited party), land value increases of dominant land while
in gross only decreases servient land
b. Negative and Affirmative Easements
1) Affirmative Easement
 Servient owner gave neighbor right to enter or perform an act on the land.
Owner of easement has rt to go onto the land of another.
 Ex- O grants to A a right of way across Blackacre.
 Burden passes to subsequent owners for easements since it is an interest in
land.
2) Negative Easements
 Right of the dominant owner to stop the servient owner from doing something
on the servient land.
 4 types in England: blocking windows, interfering w/ air flowing into land in
a defined channel, removing the support of your building, interfering w/ the
flow of water in an artificial stream. Light, air, subjacent or lateral support,
flow of stream.
 In Eng, negative easements could arise only by prescription. Other types were
not allowed. Negative easements could not be thought of as a grant.
 English law regarding negative easements did not exist in US bc there was a
recording system. Negative easements could be a promise or a grant.
 In US, there are more than the 4 negative easements. Eg- unobstructed view,
solar, conservation (preserve scenic space).
 In Eng, negative easements were enforced in equity as equitable servitudes.
So it was not necs to have more than 4 types, bc others could be enforced in
equity.
 Promise- almost all negative easements are treated as a promise. In this sense,
they are equitable servitudes.
 If the promise is affirmative rather than negative, it is a covenant. Eg- promise
to maintain a flagpole.
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c. Easement vs. Fee Simple
 Fee simple gives possession while easement only gives use.
 Sometimes hard to distinguish if deed is fee simple or easement.
 This occurred frequently in RR cases.
 Easement disappears in grantee abandons property.
 “To A and her heirs” will not necs clarify issue.
d. Reservations and exceptions
 Reservation- a provision in a deed creating a new easement which did not exist
before as an independent interest. It was difficult to reserve an easement at early
common law. It could not be reserved bc it did not issue out of the land granted.
 Regrant Theory- an easement reserved by the grantor was not a reservation but a
regrant of easement by grantee to grantor. Deed to A reserving an easement in O
was treated as 2 deeds. But the statute of frauds required the deed to be signed by
the grantee as well as the grantor. In US, where only the grantor needed to sign a
deed, the legal fiction was created that by accepting the deed the grantee made it
her own and adopted the signature of the grantor.
 Exception- a provision in a deed that excludes from the grant some pre-existing
easment on the land. An exception can exclude from the grant some part of the
land to which the grantor retains fee simple.
Ex- O conveys easement over Blackacre to A. O conveys Blackacre to B “except
for an easement previously granted to A.”
 Today, the distinction in US is blurred. Treated as same.
 Can have a reservation in a 3rd party. This is the minority view. Could not at
common law. But could be drafted around by conveying to 3rd party who conveys
to purchaser. (As done in Willard) A covenant can be created in a 3rd party.
e. Reservation of easement in Favor of the 3rd Party- Willard v. First Church of
Christ, Scientist, CA, 1972
 McGuigan owned 2 lots- 19 & 20. 20 was vacant. She was a member of the
church which was across the street. She permitted it the use lot 20 for parking
during services. She sold lot 19 to Peterson, who used the bldg as an office. He
wanted to resell to P, a realtor. He did not own lot 20 at the time. Peterson wanted
to buy lot 20 from McGuigan. She was willing to sell it as long as the church
could continue to use lot 20 for parking. She contacted D’s atty, who drew up a
provision in the deed that stated the easement. She sold to Peterson and he
recorded. P paid purchase price and received deed and recorded. The deed did not
mention the easement, although Peterson told P about it. P became aware of the
easement clause months after purchase. McGuigan testified that she bought lot 20
to provide parking for the church and would not have sold it unless the church
could use it.
 Issue- Can a grantor, in deeding property to one person, reserve an interest in the
property to a 3rd person?
 Rules- At common law, a reservation could not vest in a 3rd party.
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Holding- Easement can be vested in a 3rd party. New rule applies retroactively.
Intent of grantor should supercede rule. It is unfair bc original grantee may have
paid a reduced price w/ the easement. Here, that was the case.
Notes- R3rd§2.6 provides that an easement can be granted in a 3rd party.
f. License- permission given by the occupant of land allowing the licensee to do some
act on the land that otherwise would be a trespass.
 Ex- plumber fixes toilet, guest at parties, tickets for theater, UPS truck
 A license is revocable while the easement is not. Can exist at the will of the
servient tenant.
 Can be oral or written. Informal, does not need to satisfy S of F. An oral easement
is considered a license.
 A license is not always treated as an interest in land.
 Compared to in gross- Sometimes it is hard to distinguish. Usually, courts favor
license, which can be revoked.
 When Irrevocable (this makes it like an easement)1) Interest- A license coupled with an interest cannot be revoked. A license
coupled w/ an interest is one that gives the licensee the right to remove
chattels of the licensee which is on the licensor’s land.
Ex- O sells A a car on O’s land. A has an irrevocable license to enter and get
car.
2) Estoppel- license may become irrevocable under the rules of estoppel. If a
licensee has constructed improvements on either the licensee’s or the
licensor’s land, relying on the license, the licensor may be estopped from
revoking it. This would be unfair. But this gives the licensee the entitlement
to the land at no cost. Would it be more fair to continue only if licensee pay
for it?
 Can be revoked when licensee has reaped benefits. May end when he dies.
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Holbrook v. Taylor, KY, 1976
 In 1944. D gave permission, in exchange for royalties, for a haul road to be
cut for the purpose of moving coal from a mine that later closed. In 1964, P
bought 3 acres and built a house. This adjoins D’s land. P used the road w/
D’s permission for a year. After that, D tried to get P to buy the road for $500.
When they would not, D blocked it off.
 Issue- Is a licensor estopped from revoking a license to use a roadway if the
licensee has expended $ in reliance on the license?
 Rules- Where a license is not a bare rt of entry, but includes the right to erect
structures and construct improvements, the licensor may not revoke it after the
licensee has exercised the privilege and erected the improvements. The license
is in reality a grant through estoppel.
 Holding- The license is protected by estoppel, but not prescription, and
cannot be revoked. P was allowed to use road during construction for P’s
home. After construction, which cost $25,000, P continued to use the road. P
widened and graveled the road. It was hard to access damages here, so court
did not grant any.
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f. Implied Easements
 Can be implied in 2 situations- implied from existing use- quasi easement or
easement by necessity (see below).
 Created by operation of law, not by a written instrument. Exception to statute of
frauds. But it can only be implied in narrowly defined circumstances.
 Existing Use/ Quasi easement – an intended easement based on an apparent use
existing at the time the servient tenement is separated from the dominent
tenement. It is implied to protect the probable expectations of the grantor and
grantee. If prior to the time a tract of land is divided into 2 lots, a use exists on the
servient part that is reasonable necessary for the enjoyment of the dominant part
and the parties intended it to continue after division, an easment may be implied.
 Requirements for Quasi easement- implied only over land granted or reserved
when tract divided, existing use at time of tract division, reasonable necessity.
 Called a quasi easement bc O cannot have an interest in O’s land.
 Maps- servitudes can be implied from a map. If map has easement and deed does
not, easement is effective.
g. Quasi Easement- Van Sandt v. Royster, KS, 1938
 Bailey was the owner of a plot on the corner. The 3 lots were numbered 19, 20 and 4.
Bailey’s house was on lot 4. In 1904, city constructed sewer on Highland Ave, west
of lot 19. Bailey constructed a private sewer on lot 4 running through lots 19 & 20 to
the public sewer. She conveyed lot 19 Jones, who conveyed to Reynolds who
conveyed to P. Bailey conveyed lot 20 to Murphy. He built a house and then
conveyed to D. D Gray succeeded title to lot 4. P discovered basement flooded w/
sewage 6-8 inches deep. He found sewer drain existed. D refused to stop using sewer.
Drain pipe was several ft under surface. There was nothing visible.
 Issue- Was there an easement by implication? Can the Court recognize such an
easement?
 Rules- An owner cannot have an easement on his own land. But an owner may make
use of one part of his land for the benefit of another part, creating a quasi easement.
The quasi easement is regarded as vested in the grantee of the land provided the quasi
easement is of an apparent continuous and necs character. American cases- Upon
transfer of quasi easement, there was an implied reservation of an easement in the
conveyor. British- if grantor intends to reserve a right, it is his duty to reserve it
expressly in the grant.
 Holding- Easement by implication was created. P did not purchase w/o notice. P did
not consider how his sewer system was designed. Fact that he did not see it does not
mean he was not aware of it. Enjunction denied.
h. Easements by Necessity
 Implied if the owner of a tract divides it into more than one lot and by this
division deprives 1 lot of access to a public road.
 Supported by public policy that no land be inaccessible.
 Varies as to much of a necessity- can be strict or just inadequate, difficult or
costly to reach property. Usually it is strict though.
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It endures only so long as necessary.
Implied only when land is divided. Implied only over part of divided tract that
blocks access to road.
Cannot be implied if there was not an original common owner.
Unlike quasi easement, no existing use is required.
Servient owner has rt to chose location of easement.
Can be for things other than roads- sewers etc.
i. Easements by Prescription
 Similar to adverse possession.
 S of L originally did not apply since easements are not a possessory interest.
 Can have easement in gross by prescription.
 Occasional trespass is not enough to establish.
 Tacking is allowed.
 Negative easements cannot arise through prescription.
1) History
 Earliest type- easement based upon the use from time immemorial.
 In 1275, Parliament enacted a statute prohibiting challenges to rights of
possession enjoyed since 1189. Any continuous use from 1189 was
unchallengeable.
 As time went on, it was hard to prove back to this date. The rule became that
if the use existed as long as anyone could remember, it was assumed to have
existed since 1189.
 Later, it was held that if one could prove use had existed for 20 years, it was
presumed to go back to 1189. This was in effect an S of L. This presumption
was rebuttable.
 This evolved into the fiction of the lost grant. If a use was shown to have
existed for 20 years, it was presumed that a grant of an easement had been
made and lost. This was not rebuttable.
 American courts rejected all this. Instead, S of L is used. Time period is
usually the same as for adverse possession. A few US jur still use lost grant
theory.
2) Requirements
 The same manner of use is required- open and notorious, continuous, adverse,
under a claim of right.
 Open and notorious can be a problem involving sewers and drains.
a) Under a Claim of Right Under the lost grant theory, owner of the land is presumed to consent or
acquiesce in the use. In US, if the use is made by permission, it is not
adverse. Claimant must show that there was no permission but the owner
acquiesced by not objecting.
 If there is permission, one can still claim adversely if one uses the land.
Ex- paving driveway.
b) Exclusive
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This means not that only the claimant used the land, but that the claimant’s
right to use does not depend upon the rights of others.
 Can claim prescriptive easement if using w/ owner.
c) Continuous- does not mean constant. Can be seasonal.
d) Uninterrupted- The owner can interrupt or stop the adverse use to prevent a
prescriptive easement.
3) Public prescriptive easements
 Easement can be obtained by long continuous use by the public under a claim
of right. Owner must be put on notice by the kind and extend of use that an
adverse right is being claimed by the general public.
 Minority of states do not allow this.
 There is often a customary rt to use beaches.
 Some courts use the theory of implied dedication. It can be used where the
owner evidences an intent to dedicate an the state accepts by maintaining the
land used by the public.
3. Termination of Easements
 Unity of Title- An easement ends when title to the dominant and servient lands are
owned by the same person.
 Release- An easement can be released to the owner of the serivent land by dominant
owner in written agreement.
 It can be ended when the owner of the servient land uses his land in a manner that
wrongfully and physically prevents the easement from being used by the dominant
tenant for the period of S of L.
 Can be abandoned by an act of the dominant owner indicating an intention never to
make use of it again. But nonuse for a period does not constitute end of easement.
 RR easements- Natl Trails Systems Act authorized ICC to preserve for possible future
RR use rights of way not in RR service by allowing interim use as recreational trails.
B. Covenants Running With the Land
 A covenant is a promise to do or not do a certain thing. There are affirmative and
negative promises.
1. Covenants Enforceable at Law: Real Covenants
 A real covenant is a promise respecting the use of land that runs with the land.
 People wanted a property right enforceable v subsequent purchasers.
 Point is to bind person to person.
 Not a real interest in land, but somewhere bt a personal K and an interest.
 Only $ damages, not injunction, can be granted. Damages are decrease in value as
a result of break of covenant.
 A real covenant can be a negative promise or an affirmative promise. It subjects
the promisor to personal liability for damages.
 Real covenant runs w/ the estate in land (so successor not to full estate is not
liable). This means that there is privity of estate.
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a. History
 Old Rule- covenants were not assignable and could not run w/o privity.
 Where there is privity of estate, K is enforceable v assignees.
 Spencer’s case- suit concerning a promise to build a brick wall. The assignee
would not carry promise through. Ct held intent to bind assigns must be
expressly mentioned. Established that horizontal privity must exist for burden
to run.
b. Real Covenant Requirements: Horizontal and vertical privity, intent to bind
assigns, touch and concern, notice. Depends on what you are trying to enforce:
burden or benefit.
A horizontal privity B
Promisee
Promisor
Benefit
Burden
^
^
vertical
vertical
privity
privity
\/
\/
D
C
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A can sue B.
D sues B alleging benefit runs to D
A sues C alleging burden runs to C
D sues C alleging burden and benefit
run. There was mutual promises bt
A & B.
Test for burden is more onerous.
Horizontal privity is between original covenanting parties.
Vertical privity is bt one of the covenanting parties and a successor in
interest.
R§534 states that there must be either a mutual or successive relationship bt A
and B for the burden to run. Horizontal privity is not required for the benefit
to run.
Burden- for burden to run there must be: intent, horizontal and vertical
privity, touch and concern, notice.
 Intent to bind assigns- usually indicated by binding promisor’s heirs
and assigns.
 Touch and concern- must touch and concern the burdened land. Most
jur hold that covenant must touch and concern benefited land also.
Restrictions that enhance the value of the benfitted land touch and
concern.
 Notice- subsequent purchaser of promisor’s land is not bound unless
he had notice of covenant.
Benefit- for benefit to run, there must be intent, vertical privity, touch and
concern. Horizontal privity is not necs.
c. Views on Privity of Estate
 English View/ Tenurial- privity of estate must be contained in the lease. The
burden of the covenant given by the owner does not run at law to assignees.
Privity only exists in LL/T situations.
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Majority View/ Successive- privity is present where the promise is contained
in the conveyance of the fee simple. It is present where one of the original
parties to the promise succeeds to an estate previously owned by the other
party.
Minority View/ Mutual- burden will run if one party has an interest, separate
from the covenant, in the land of the other. Interest could be an easement.
Small Minority- a few jur hold that horizontal privity is not needed for
burden.
d. Creation of Covenants
 Real covenant must be created by a written instrument signed by the
covenantor. It is an interest in land w/in the meaning of the Statute of Frauds.
(In common law, needed to be sealed as well)
 Deed Poll- grantee does not need to sign. By accepting deed poll signed by
grantor, grantee accepts.
 A real covenant cannot arise by estoppel, implication or prescription.
2. Covenants Enforceable in Equity: Equitable Servitudes
 A restriction on the use of land enforceable in equity against successors regardless of
its enforceability at law.
 With the rise in urban population, there was increased demand for land restricted
solely for residential purposes.
 Equitable servitude is an interest in land. It is the same as a negative easement.
 It must be negative, it is a restriction.
 It can be express or implied. S of F required unless implied.
a. Requirements
 Real basis for enforcement is notice as recognized in equity courts. A person who
takes land w/ notice of a restriction cannot be permitted to violate it.
 It requires that the parties intended the promise to run, that a subsequent
purchaser have actual or constructive notice of the covenant and that the covenant
touch and concern the land.
 Horizontal privity does not matter. Vertical privity is not required for the burden
to run, but may be for the benefit. Subsequent possessor are bound by the
servitude.
b. How Different than Real Covenant
 Remedy- For covenant, it is damages. For servitude, it is injunction.
 Writing- a real covenant must be in writing. An equitable servitude can be
implied.
 Notice- required for equitable servitude, not usually listed for real covenant,
although may be needed if BFP has no notice under recording acts.
 Privity of Estate- not needed in equity, but needed at law. This is most
significant difference.
 Both- intent to bind assigns, touch and concern.
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Liability- under an equitable servitude, it is limited to the value of the land bc
remedy is an injunction. For a covenant, liability can be unlimited personal
liability, which courts deem unfair to imply.
Confusion- privity is usually present anyway for an equitable servitude.
Distinction is becoming blurred.
c. Development- Tulk v. Moxhay, Eng., 1848
 In 1808, P, owner of vacant piece of ground in Leicester Square and several
houses in the square, sold a piece of ground to Elm. The deed contained a
covenant to: keep land as a garden (neg covenant), maintain it (affirmative
covenant) and allow others to use it on payment of rent (reservation of interest in
3rd party- probably not enforceable). Land passed to D, whose deed contained no
restrictions. He admitted that he had notice of the covenant. D wanted to build on
the land.
 Issue- May D, not in privity of estate w/ P, disregard a previous covenant
restricting the use of land even though he had notice of it? Is a negative covenant
not to build enforceable?
 Rule- Generally, a covenant that does not run w/ the land will not be enforced v. a
subsequent purchaser.
 Holding- Negative covenant is enforceable. If D had notice, he could not violate
the covenant. Price would have reflected covenant and restrictions. D would get
more than he bargained for if not bound by restriction and would be unjustly
enriched. D had notice. Injunction affirmed. (This would not be enforceable at
law in Eng.)
3. Implied Equitable Servitudes
 May be implied under limited circumstances (eg- from a common scheme). It
cannot be obtained by prescription.
 A reciprocal negative scheme can be enforced in a majority of courts. Minority
holds to statute of frauds- servitude cannot be implied from a scheme.
 In certain cases, a physical inspection would suggest the presence of a servitude.
The buyer is then put on notice of the servitude and should check the records for
restrictions in the chain of title.
 Can be easily implied when there is a clear restriction that should cover a lot, but
it is only recorded in a different chain of title. Physical appearance puts buyer on
notice to look in other lot’s chains of title.
 Harder when written record is ambiguous. There must be a written record
somewhere to imply a scheme.
 Reciprocal- Usually the servitude must be reciprocal- applying to more than 1
lot- for it to be enforceable. Most courts hold that if a lot is bound by a written
recorded restriction, enforcement will not be denied merely because the
restrictions are not reciprocal. A few courts will not enforce restrictions that do
not apply to all lots.
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Negative Covenants enforced- Covenants restricting the use of land have almost
always been held to touch and concern the land. These negative covenants
directly affect the uses to which the land can be put and affect its value.
Affirmative Covenants not- Cts are wary to enforce v. subsequent purchasers.
This can impose large personal liability on the subsequent owner. An affirmative
obligation resembles a feudal service. However, they can sometimes be enforced.
a. Implied by Inquiry Notice- Sanborn v. McLean, MI, 1925
 D owns lot in a subdivision. D started to erect a gas station near the end of the
lot. Street has single, double and apt houses. P are owners of adjoining land. All
trace title to proprietors of the subdivision. There are residential restrictions on 53
of 91 lots fronting Collingwood Ave., Developer deeded most of lots with
restrictions on residential units over $2500. Some subsequent deeds after D had
restrictions and some did not. D’s title ran back to developer in 1893, w/o
restrictions mentioned.
 Issue- Is D’s lot subject to a restrictive negative easement?
 Rule- Reciprocal negative easement- If the owner of 2 or more lots sells one w/
restrictions of benefit to the land retained, the servitude becomes mutual and
during the period of restraint, the owner of the lots retained can do nothing
forbidden to the owner of the lot sold. This runs w/ the land.
 Holding- Reciprocal negative easement attached to lot by acts of the owners and
may be enforced provided D had knowledge. D needed to do an extended title
search. D did, so it is enforceable. Restriction was repeated in many sales.
Considering neighborhood and use of other lots, D was put to inquiry of any
restrictions bc houses were uniform.
 Note- Here, a scheme is defined as more than 1. Does this make sense for 90 lots?
D was put on inquiry notice, which means he should have looked around and saw
the uniformity.
b. Common Scheme- Snow v. Van Dam, MA, 1935
 Shackelford’s tract was bounded northerly by a line through a pond and road
running east to west. To the south was the ocean and a beach. Northerly part is
marshy and was deemed unsuitable for building. In 1907, the whole tract was
divided into bldg lots. Some were further subdivided to equal about 100 lots. Each
of Ps owned one of them. Almost all lots were sold by general owner. Deeds
contained uniform restrictions, including one dwelling residential worth $2500.
Unsold remainder conveyed to Clark, subject to restrictions. Marshy area was
divided in 1919 into 3 parcels, C,D,E. They were given to Clark in 1923 w/
restriction. Clark conveyed lot D, subject to any restrictions in his own deed, to D.
D has erected ice cream store. Ps sought injunction.
 Issue- Can prior restricted owners in a subdivision enjoin use in a separate
subdivision that violates common restrictions, when both were originally owned
by same grantor?
 Rules- A restriction attached to benefit must also be intended to be appurtenant
to the land. In the absence of an express statement, an intention that a restriction
upon one lot shall be appurtenant to a neighboring lot is inferred from the
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relations of the lots. A scheme is often relied on to show an intention that
restrictions be imposed. Where a scheme exists in writing, a grantee subject to
restrictions acquires by implication an enforceable right to have the remaining
land of the vendor, w/in the limits of the scheme, bound by similar restrictions.
Scheme has legal effect if definitely settled by the common vendor when the sale
of lots begins, even though at that time evidence of such settlement is lacking and
a series of subsequent conveyances is needed to supply it.
Holding- D violated restrictions. Since there was a scheme which included the
lands of Ps and D and if the restrictions were imposed in pursuance of the scheme,
all Ps are entitled to relief. Also significant that D’s land was in front of scheme.
2 ways by which a prior purchaser in a subdivision can enforce an agreement
subsequently made by his grantor and a subsequent purchaser, w/ an intention of
benefiting the land: (1) at the time the prior purchaser acquires his land, he
receives an implied reciprocal servitude in the common grantor’s remaining land.
When this this sold, the prior purchaser is enforcing this servitude v the
subsequent purchaser w/ notice. Cannot be used if no scheme. (2) equity is
enforcing a K for the benefit of 3rd party beneficiaries.
c. Affirmative Covenant- Neponsit Property Owners’ Assn. v. Emigrant Industrial
Savings Bank, NY, 1938
 Neoponsit Realty filed a residential subdevelopment plan. Deed from developer
contained covenants with the intention that they run with the land. Covenants
bound grantee to pay a fixed annual charge for the maintenance of certain
common property of the subdivision for public use. D acquired an interest to one
of the lots in a foreclosure sale and refused to pay. Original parties agreed that
unpaid $ would become liens on the land. P is the successor to the original
grantor. P brought an action to foreclose on the liens.
 Issue- Are subsequent purchasers bound by an affirmative covenant to pay $ for
use in connection w/, but not upon, the burdened land? Does this touch and
concern the land?
 Holding- Yes. Because the payment is essential to the enjoyment of the property,
the covenant touches and concerns the land and is binding. P represents all
purchasers and is regarded as a representative form. P is their agent.
 Note- Ct here assumed that a lien to secure a covenant to pay $ to maintain
common facilities cannot be enforced unless the successor owner is liable on the
covenant. This is contrary to general lien theory.
d. Recent Trends in American Housing Developments
 There is an increase in the amount of people living in common developments.
 These can include condos, co-ops, subdivisions and gated communities.
 Many used to be exclusionary. This was outlawed, but it still occurs, if not
blatantly.
 Homeowners Assoc. have gained power- some act as pseudo-govts w/ security
forces, and many restrictions.
 Many negative covenants have been upheld.
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