PROPERTY I OUTLINE
MILOT FALL 2008
1) THE EMERGENCE OF PROPERTY RIGHTS
a) Property Rights as a Bundle of Sticks
i) A property owner may hold all the sticks, or just some of them – making property rights less
than absolute.
(1) The Sticks:
(a) Right to Possess
(b) Right to Use
(c) Right to Manage
(d) Right to the Income
(e) Right to Consume
(f) Right to Destroy
(g) Right to Modify
(h) Right to Alienate
b) The Theories of Property
i) Occupation (Maine)
(1) Taking possession of that which has no owner (res nullius) or has never had an owner.
(2) Wild animals, jewels from the earth, undiscovered land.
(3) First person to take possession gets ownership.
ii) Natural Law (Aquinas)
(1) Nature
(2) Property rights are necessary because they create incentives to take care of the
property, creating more orderly and peaceful societies
iii) Labor (Locke)
(1) Property becomes a man’s when he adds something to it which was not there before
(2) Acorns: picking them up (putting labor into something) allows you to assert a right in
them
iv) Utilitarian (Bentham)
(1) Goal of assignation of property is to maximize overall social utility
(2) Utility is maximized by upholding expectations of property rights
v) Economic (Smith)
(1) Goal of property is to allow transfer to those who have highest value.
(a) Pareto-Efficiency: Increase value to one person at a loss to no one
(b) Kaldor-Hicks Efficiency: Total gains exceed total losses.
vi) Tragedy of the Commons (Hardin)
(1) Multiple owners have property rights, cannot optimize use or control
(2) Leads to overconsumption
(3) Recognition of individual rights protects expectations of fairness and stability.
vii) Tragedy of the Anti-Commons (Heller)
(1) Multiples owners have some sticks from the bundle, such as the right to exclude, but
not the right to use
(2) Leads to underutilization
viii) Personhood (Radin)
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(1) People have property within themselves, thus some aspects of oneself take on the
qualities of more tangible things, but not fungible (having a market value)
(a) Voice, likeness, image
2) THE RIGHT OF PUBLICITY
a) The right to use one’s name for purposes of profit
i) Distinguished from the right to privacy as it is a right granted only to celebrities
ii) If used during life for commercial exploitation, rights of publicity may be descendible
(1) Elvis Presley Int’l Memorial Foundation v. Crowell: Corporation was barred from using
Elvis’ name, as the rights had passed through his estate
b) Protects intangible qualities of self (personhood)
i) Midler v. Ford Motor Company: the unauthorized use of a sound-alike in a commercial
violated Midler’s right to publicity
ii) Motschenbacher v. RJ Reynolds Tobacco, Co.: race driver’s car and image were used in a
commercial without authorization, found to have invaded his rights
(1) Cf. Sinatra v. Goodyear: commercial featuring a song by Nancy Sinatra with lookalikes,
but she sued under theory of unfair competition – voice was not copyrightable
iii) Courts will not protect the publicity interests of infamous characters, such as Al Capone and
Charles Manson, because they don’t want to encourage personal gain from reprehensible
behaviors
c) The First Amendment will trump any right of publicity when a celebrity’s likeness is used inan
expressive manner, rather than commercial.
i) ETW v. Jireh Publishing, Inc.: artist Rick Rush was allowed to use Tiger Woods’ image in a
painting of the Masters because it had substantial transformative elements.
(1) Cf. Zacchini v. Scripps-Howard Broadcasting: Supreme Court case in which the
rebroadcast of a human cannonball act was found to violate his right to publicity
3) CULTURAL PROPERTY
a) Property with some cultural significance that belongs to society as a whole but cannot be
reduced to private ownership
i) Usually, specifically designated by each State as being of importance for archaeology,
prehistory, literature, art or science.
ii) The State must prove they have a better claim than the current possessor does
(1) Wilcox v. Stroup: since the state had insufficient evidence to overcome the presumption
of ownership created by long possession of the gubernatorial papers
(2) United States v. Schultz: stolen Egyptian antiquities were returned to their country of
origin because of an Egyptian law prohibiting sale and personal ownership
b) Visual Artists Rights Act (VARA) is a moral right that protects artistic works of recognized stature
and grants the right of attribution (credit for the work), the right of integrity, and the right to
prevent destruction; have the right to waive their right to destruction
i) Carter v. Helmsley-Spear, Inc.: new property owners were able to destroy artwork created
inside their building because it had been a work for hire
4) ENTITLEMENT AND VOLUNTARY TRANSFERS: THE ESSENCE OF PROPERTY RIGHTS
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a) Property law is about assigning the entitlements to give certain rights to individuals in their
property interest
i) Based on this assignation of entitlements, parties can contract around what entitlements
each may have to satisfy both parties
b) Criteria of assignation of property rights (Utilitarian: Bentham)
1. Universality: everything that can be owned, should be owned (except air)
2. Exclusivity: granting exclusive rights to individuals gives incentives to make best
use
3. Transferability: property rights need to be transferable so that if someone has
better use for property , it may be transferred and productivity/utility increases
i.
Protection of Entitlements
1. Property Rule: assures that transfer of property should be determined by two
individuals at a mutuality agreed-upon value.
a. The least amount of state intervention
2. Liability Rule: a person may destroy your right to a thing without your consent
if he is willing to pay an objectively determined value for it.
3. Inalienability Rule: transfer is not permitted between two willing parties. The
value is determined by an organ of the state
1) PERSONAL PROPERTY
a) Personal Property: rights are associated with tangible things such as chattels or goods and
intangible rights that are not associated with land (real property).
i) Some things can be both personal and real
(1) Crops are real property when growing, but become personal property when mature.
(a) Wood v. Wood: separated couple dispute over the classification of crops; court
determined that the corn crops become personal when they are mature and no
longer need sustenance from the land.
(2) Personal property can become real, i.e. stones become a solid stone wall (fixture, which
are considered part of the building or land)
(3) Difficult distinction: attachments vs. fixtures – look at longevity of its stay, how it
attached to the land, and the sale price (included in the appraisal or not?).
b) Categories of Personal Property
i) Abandoned
(1) Owner has voluntarily discarded or forsaken with the intention of terminating
ownership without vesting ownership in any one else.
(a) Finder acquires the right of possession against all but true owner.
ii) Lost
(1) Owner has involuntarily and unintentionally parted with through neglect, carelessness,
or inadvertence and does not know of the property’s whereabouts.
(a) Finder acquires the right of possession against all but true owner, dependent upon
the location of the finding (public or private place).
iii) Mislaid
(1) Owner has unintentionally set down the property in a place where can he retrieve it at a
later time.
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(a) The owner of the locus in quo is presumed to be a bailee for the true owner and is
granted possession and bailment rights until the true owner shows up.
iv) Treasure Trove
(1) Usually, anything that is gold or silver and carries with it an air of antiquity that suggests
that true owner is probably dead and is found concealed in the earth or house.
(a) Finder acquires the right of possession against all but the true owner.
v) Embedded
(1) Chattel embedded in the soil or attached to a structure, such as pottery or the sunken
wreck of a steamship.
(a) Landowner acquires the right of possession.
2) FINDERS
a) Terminology
i) Conversion: wrongful possession of another’s property by exercising dominion or control
over the chattel
ii) Trover: allows the owner of a chattel to recover damages from a person who converts the
chattel.
iii) Replevin: permits the recovery of the actual chattel in question, instead of only monetary
damages
b) Generally, the finder has property rights superior to all but the true owner.
i) Armory v. Delamirie: chimney sweep found a jewel in 18th century England and was allowed
to keep it after a jeweler tried to maintain possession
ii) The Goals of the Property Rights of Finders:
(1) Return the item to its true owner
(2) No dispute over lack of title or receipt for the item
(3) Other policies (trespass, owner of locus in quo maintaining possession) discourage
aggressive finding
(4) Rewarding honesty (Hannah v. Peel)
(5) Fairness
c) The Public/Private Place Distinction
i) Based upon a theory of prior possession
(1) A landowner has constructive possession if he has:
(a) General intent to exercise dominion and control over the property.
(b) Actually engages in substantial acts of control.
(i) Manifested intention to control the property.
ii) The finder is usually entitled to chattels found in a public place.
(1) Bridges v. Hawkesworth: shopper found bank notes on the floor of a shop that was
open to the public; shopper was entitled to keep the notes as finder of lost property.
(a) Shopkeeper had no prior knowledge that the notes lay on the floor, thus he could
not be said to have exercise dominion over them.
iii) The owner of the locus in quo is generally awarded possession of property found in a
private place.
(1) South Staffordshire Water v. Sharman: ring found in a pool by an employee was
awarded to the owner of the pool.
(a) Finder was in the employ of the landowner, creating the presumption that he found
the ring for his employer.
(2) Corliss v. Wenner: soil excavators found jar full of old coins, but upon trial the coins
were awarded to the owner of the land.
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(a) The coins were not considered treasure trove, granting possession to the finder,
because Idaho had not adopted the concept into their common law from England.
(3) Cf. Hannah v. Peel
(a) Major was awarded property rights of a brooch he found in Peel’s house because
Peel had never actually occupied the house.
d) Property found underwater is deemed to be abandoned, but the Law of Salvage usually applies.
i) Grants possession to the original owner of the property but they must pay a substantial
reward to the finders.
(1) Columbus-America Discovery Group v. Atlantic Mutual Insurance: gold coins found on
an old ship were determined to be the property of the insurance company that had
reimbursed the ship-owners 150 years ago, despite a lack of documentary evidence.
e) The Rule of Capture holds that the first person to take possession of an unowned object
becomes its owner.
i) Usually applies to wild animals: Pierson v. Post
ii) Pre-possessory interest can constitute a right to possession when external forces thwart full
control, as it lies between the intent to possess and the actual control required for full
possession.
(1) To prove a pre-possessory interest, an actor must prove that he undertook substantial
but incomplete steps to achieve possession.
iii) The Rule of Capture does not apply to chattels such as a baseball which can be completely
possessed immediately (as distinguished from a wild deer that is possessed when mortally
wounded).
(1) Popov v. Hayashi: Barry Bond’s 73rd homerun ball “caught” by two different men who
were forced by the court to sell it and split the profits.
3) BAILMENTS
a) Bailment is the delivery of personal property by the bailor to the bailee, who holds the property
for a certain purpose.
i) Bailee has the right to possession and sometimes the right to use, among other things
ii) Three Tier System of Bailments
(1) Mutual Benefit: bailee must exercise ordinary care, and will be liable for the loss or
damage of the property.
(2) Benefit of Bailee: bailee must exercise extraordinary care and will be liable for the
slightest negligence.
(3) Benefit of Bailor: bailee is responsible only for gross negligence.
(a) Buena Vista Loan & Savings Bank v. Bickerstaff: bank did not exercise ordinary care
in keeping intact the safety deposit box of a client
b) Involuntary bailments created by accidental or unintentional possession of a chattel. They
become constructive bailments when an affirmative action has been made to retain possession.
(1) Shamrock Hilton Hotel v. Caranas: purse filled with jewels was left in a hotel restaurant
and was handed over to the cashier, who gave the purse to the wrong man.
(2) Putting the property back where it was found does not negate the bailment.
(a) Contributory negligence may determine the liability of the bailee, but misdelivery of
a voluntary bailment is strict liability.
c) Parking cars in a commercial lot constitutes a bailment in certain circumstances
i) Bailment is created when the keys are handed over to an attendant, or when there is an
attendant and security in an enclosed garage.
(1) Allright, Inc. v. Strawder and Allen v. Hyatt Regency-Nashville
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ii) Bailment is not created when the keys are kept by the owner and the lot is open and
unattended.
(1) Rhodes v. Pioneer Parking Lot
4) BONA FIDE PURCHASERS
a) The exception to the general rule that one cannot transfer better title than held in a certain
piece of property, either real or personal.
i) Void Title: no title and is most likely stolen
ii) Voidable Title: the possessor does not have good title, as the true owner legally still has it,
but good title is created when there is a transfer to a good faith/bona fide purchaser (BFP)
(1) Voidable title is created when the true owner voluntarily transfers possession , most
often through fraud
b) UCC § 2-403: Good Faith Purchasers
i) A purchaser of goods acquires all title which the transferor has or has power to transfer
except that a purchaser of a limited interest acquires rights only to the extent of the interest
purchased. A person with voidable title has power to transfer a good title to a good faith
purchaser for value. Voidable title created when, in the previous purchase of the item:
(1) The transferor (true owner) was deceived as to the identity of the purchaser
(wrongdoer), or
(2) The delivery was in exchange for a check which is later dishonored, or
(3) It was agreed that the transaction was to be a “cash sale,” or
(4) The delivery was procured through fraud punishable as larcenous under the criminal
law, but cannot be stolen.
ii) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives
him power to transfer all rights of the entruster to a buyer in the ordinary course of
business.
c) To be a good faith purchaser for value, one must show honesty and fair dealing. Evidence:
i) Reasonably believe that he is getting good title.
ii) Have no reason for suspicion about the quality of the title.
iii) Purchase the property for fair market value.
iv) Conform to industry standards.
(1) Charles Evans BMW v. Williams: wrongdoer bought a car with a fraudulent check and,
pretending to be the true owner, sold the car to BMW. BMW was found to be a good
faith purchaser for value as they had no reason to think that the transaction was
dishonest.
(a) Made a point of having the registration up-to-date
(2) Lindholm v. Brandt: Red Elvis sold to BFP by art dealer and not by the true owner of the
painting, but the BFP was found to have been a buyer in the ordinary course of business,
even going beyond the normal practice by requesting proof of ownership (was denied).
5) GIFTS
a) Requirements of a valid gift:
i) Donative Intent
ii) Delivery: may be one of three types
(1) Physical (most persuasive): manual transfer of the chattel
(2) Constructive: when physical delivery is not possible, provides the donee to means of
access, such as keys to a car
(3) Symbolic (least persuasive): for instance, delivery of a car title, a letter or a picture
iii) Acceptance
(1) Presumed or implied if the gift is of value to the donee
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b) Inter Vivos Gift is complete when the three elements are satisfied, at which time the gift is
generally irrevocable.
i) If one element is not satisfied, a valid gift has not been created.
(1) Simpson v. Simpson: alleged gift of guns to a son by his deceased father was found to be
void because there was no evidence of delivery, either actual or constructive.
ii) Delivery of letters granting the gift can be seen as instruments of the gift.
(1) Gruen v. Gruen: a son was allowed to keep a Klimt painting that his father had given
him, retaining it in life estate for himself.
iii) The only types of revocable inter vivos gifts are engagement rings.
(1) Depending upon the jurisdiction, can be seen as conditional gifts using a no-fault rule
about who broke the engagement.
(a) Lindh v. Surman: majority rule is that the man gets the ring back.
(i) No-fault because of the personal
(b) Albinger v. Harris: minority rule allows the woman to keep.
c) Gift Causa Mortis is made by a donor who is in apprehension of imminent death and, unlike an
inter vivos gift, is revocable by the done either before death or if death does not occur (or it
occurs, but not of the thing apprehended).
i) Distinguished from testamentary transfer, which takes place at the moment of death.
ii) Delivery is not complete until the death occurs, when gift becomes irrevocable.
iii) In some jurisdictions, a gift given in apprehension of suicide will be considered a valid gift
cause mortis.
(1) In Re Estate Smith: man delivered (both physically and through the mail) checks to his
sister, niece, and his girlfriend and her sister before committing suicide. The recipients
were allowed to keep the checks (constructive delivery).
6) PRESENT ESTATES
a) In case of doubt, courts favor granting the highest estate possible (fees simple absolute)
(1) Roberts v. Rhodes: land conveyed to the school district for school or cemetery purposes
found to be held by the school in fee simple for lack of alternative language.
ii) Words of Purchase: “to A”
(1) Indicate to whom the estate is going
iii) Words of Limitation: “and his heirs,” which designates fee simple; heirs have no current
interest in the estate. Also called words of inheritance
iv) Habendum Clause: more specifically defines extent of the grantee’s estate, often indicated
by the language “to have and to hold.”
b) Fee Simple Absolute
i) O -> A and his heirs
ii) The most complete transfer of title by conveying absolute ownership with no conditions on
use (indefeasible).
(1) Presumed to last forever.
iii) May revert to the state (escheat) in the absence of any legal heirs
(1) In Re O’Connor’s Estate: man died intestate with no heirs, so his land was given to the
state of Nebraska.
c) Fee Simple Determinable
i) O -> A and his heirs so long as he maintains Blackacre as a park
ii) Fee simple determinable may last indefinitely, but its continuance depends on a specified
future event or state of affairs called a limitation.
(1) Estate will end automatically upon the triggering of the limitation, reverting back to the
grantor without any notice given to the grantee.
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(2) Triggering event, which may involve performance, failure to perform, or some future
event unrelated to the acts of the grantee, may never occur
iii) Language is temporal:
(1) Until
(2) While
(3) So long as
(4) As long as
(5) During
(a) Mayor and City Council of Ocean City v. Taber: deed transferred to the US
government land that was to be used for a life-saving station on at the beach.
When the land stopped being used as such, it reverted back to the original grantor.
d) Fee Simple Subject to a Condition Subsequent
i) O -> A and his heirs but if A starts smoking, then O has a right of re-entry.
ii) O -> A and his heirs provided _____.
iii) As in fee simple determinable, this defeasible estate may last forever unless a future
triggering event (condition) terminates it.
(1) However, the estate does no end automatically upon the triggering event. The original
grantor has the right to re-entry, but must take action to accomplish the termination.
(a) If the right of entry is not exercised or enforced, the estate continues uninterrupted.
A time lapse may be seen as the grantor’s waive of his right to entry.
(b) If a grantee makes improvements on the land assuming that the grantor has waived
his right, the grantee may be entitled to keep the land.
(i) Lawyers Trust Company v. City of Houston: land given to be a park but no longer
used as such was found to be conveyed in fee simple subject to condition
subsequent, allowing the grantor the right to entry.
iv) When there is doubt over the estate that was intended to be conveyed, courts favor fee
simple subject to condition subsequent over fee simple determinable.
(1) Increases alienability.
(2) Grantor has the option to either take the land back or waive the option so that the land
might be used most efficiently.
v) Language is conditional:
(1) But if
(2) Provided that
(3) On condition that
(4) Subject to the condition that
(5) However
e) Fee Simple Subject to Executory Limitation
i) O -> A and his heirs, but if Blackacre is no longer used as a park, then to B and her heirs.
ii) O -> A and his heirs when and if he marries
iii) Like the above two defeasible estates, may last indefinitely, but continuance is based upon a
future act or event.
(1) The distinction: upon the triggering event, the estate transfers to a third party who
holds an executory interest that cuts short a present estate before its natural end.
(a) Becomes possessory automatically upon that happening of a triggering condition or
limitation.
(i) Springing Executory Limitation: divests the grantor of his estate in the future
1. “Springs” out from the grantor.
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(ii) Shifting Executory Limitation: divests an earlier grantee of his estate in the
future.
1. “Shifts” from an earlier grantee to an alternative one.
(b) City of Palm Springs v. Living Desert Reserve: land given to the city to be used as a
desert preserve (if not, the land would automatically revert to the Living Desert
Reserve). The city decided to use the land as gold course instead, constituted a
triggering event that ended their possession of the estate.
(i) Distinct from a trust, which is a property interest held by one person (trustee) at
the request of one party (settler) for the benefit of another (beneficiary).
1. To establish a Charitable Trust (City’s argument):
a. Manifestation of intent by the settler to create a trust.
b. A trust res (subject matter)
c. Charitable purpose of promoting welfare of mankind or the public at
large.
iv) Puts a condition on the grantee, not a limitation.
v) No specific language, which can be either temporal or conditional. However, the interest is
always granted to a third party.
7) LIFE ESTATES
a) O -> A for life, then to B and her heirs.
b) O -> A: in traditional common law, also conveyed a life estate (though the modern trend
interprets this language as fee simple absolute).
c) Life estate only lasts only so long as the grantee or devisee (life tenant).
i) After the natural termination of the estate, the estate either reverts back to the grantor and
his heirs, or it goes to a third party called a remainderman, who owns a remainder interest.
ii) Life estates can be conveyed to a third party, but the estate will still end upon the death of
the original life tenant.
(1) Life estate pur autre vie (for the life of another).
(2) However, the life tenant can transfer their interest to the remainderman, giving the
remainderman fee simple absolute.
d) When language is ambiguous, some courts will look to fulfill the grantor’s intent, while others
will construe the language to convey fee simple.
(1) Courts disfavor restraints on alienation that life estates create.
(2) Disabling restraints bars the grantee from selling her interest in the property; such
absolute restraints on fee simple property are void.
(a) White v. Brown: in her holographic will, a woman left her house “to live in and not
to be sold.” The debate over what type of interest this created (fee simple, fee
simple subject to condition subsequent, or life estate) was decided in favor of fee
simple absolute.
ii) Multiple life estates can create one of three possibilities when one life tenant dies:
(1) Life estate lasts until the last life tenant dies; the share of the deceased life tenant
passes through her estate.
(2) An estate for joint lives; the life estate ends when the first life tenant dies.
(3) The life estate lasts until the last tenant dies; the share of each survivor increases by
means of a remainder.
(a) Generally favored because it passes the greatest interest to the life tenant.
(b) Williams v. Estate of Williams: man left his three unmarried daughters property
conveyed in life estates, for so long as they never married; the three sisters held a
defeasible life estate which was subject to an executory limitation.
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(i) Modern law sometimes invalidates marriage restrictions.
1. Restatement of Property § 6.1: a donative transfer which is designed to
prevent acquisition or retention of property in the event of a first marriage
is invalid.
e) Limitations on Life Estates
i) Doctrine of Waste
(1) Protects the holder of the future interest from conduct by the life tenant that may
destroy or damage the property.
(a) Affirmative Waste: conduct by the life tenant that removes, destroys, or damages
the property
(i) Tearing down a valuable building or selling timber.
(ii) Also called voluntary waste because it sanctions intentional conduct that
substantially diminishes the value of the property.
(b) Permissive Waste: life tenant’s failure to act has diminished the property value
(i) Failure to make ordinary and necessary repairs to buildings and other
structures, as well as failure to pay real estate taxes (creates the risk that title to
the property will be lost by tax foreclosure sale).
(c) Ameliorative Waste: life tenant takes action that increases the value of the
property but which may substantially change the form of the property.
(i) Modern courts look favorably upon this form of waste in the light of efficiency.
(ii) Woodrick v. Wood: life tenant who also had a 75% remainder interest wanted
to remove a dilapidated barn from the property, but was stopped by the
remainderman, her daughter. The court allowed the removal of the barn but
awarded the remainderman the entire value of the barn.
(d) The remedies for waste can include an injunction, monetary damages, and
forfeiture of the property.
ii) Open Mine Doctrine
(1) Allows the life tenant to continue resource extraction that was taking place when the
testator or grantor created the life estate.
(a) Removal of minerals, timber or other depletable natural resources.
iii) Court can order the sale of land despite a future interest in the property if it is apparent that
the life tenant’s use of the land is unsustainable and the life tenant needs the money from
the sale for support.
(1) Baker v. Weedon: testator granted property to his wife in a life estate, but she was
unable to support herself on the land so the court ordered a sale with the proceeds to
be divided among the life tenant and the contingent remainderman.
Estate
Fee Simple
Absolute
Fee Simple
Determinable
Common
Language
“to A and his
heirs”
So long as, while,
during, until
Fee Simple Subject
to Condition
Subsequent
Fee Simple Subject
Provided, on the
condition that, but
if
Temporal or
Upon Triggering
Event
No Defeasance
Interest Created
In
Grantee
Type of Interest
Created
Absolute Title
Automatically cuts
off the present
estate
Action needed to
cut off the present
estate
Automatically cuts
Grantor
Possibility of
Reverter
Grantor
Right of entry
Third party
Executory Interest:
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to Executory
Limitation
Conditional
off the present
estate
grantee
Springing or
Shifting
1) FUTURE INTEREST
a) Reversions and Remainders
i) Reversion
(1) Future interest retained by a grantor when the grantor conveys an estate that is less
than the estate that he owns.
(2) Can never be created in a grantee or third party.
ii) Remainder
(1) Future interest conveyed to a third party which will or may become possessory after the
expiration of a preceding estate.
(2) Can only be created in a transferee.
(3) A remainder can be one of two main types: contingent or vested.
(a) Vested Remainder:
(i) Two elements that must be satisfied: 1) there is an ascertainable person (who
must be born and identified), and 2) the remainder is not subject to a condition
precedent before it becomes possessory.
1. O -> A for life, then to B and his heirs.
a. B has a vested remainder in fee simple absolute.
(ii) Vested Remainder Subject to Open
1. Has at least one ascertainable owner and is ready to become possessory,
but it is subject to more owners acquiring a share in the property.
2. Also called “Vested Remainder Subject to Partial Divestment”
a. O -> A for life, then to A’s living children. A has one child.
i. A’s living child has vested remainder subject to open, which is
shares with any children of A that might be born.
(iii) Vested Remainder Subject to Defeasance
1. Ascertainable owner and is ready to become possessory, but it is subject to
termination by another future interest.
a. Subject to the risk that the remainder may be taken away if the
condition takes place.
2. Also called “Vested Remainder Subject to Divestment.”
a. “Condition Subsequent” will cause the termination if it occurs.
b. O -> A for life, then to B, but if B divorces A, then to C.
i. B has vested remainder subject to defeasance.
3. Vested Remainder Subject to Executory Limitation creates an executory
interest.
(b) Contingent Remainder
(i) There is no ascertainable owner, and there is a condition precedent that must
be satisfied before the remainder can become possessory.
1. Remainderman is not allowed to take possession before the condition is
met.
a. O -> A for life, then to C when he graduates from law school.
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i.
C has a Contingent Remainder Subject to Condition Precedent, any
may not take possession until he graduates.
(ii) Alternative Contingent Remainder
1. Contingent remainder that calls for the property to go to another person or
class of persons if the first contingent remainder fails to vest.
(iii) Doctrine of Destructibility of Contingent Remainders
1. Under the Doctrine of Merger, a vested life estate merges into the next
vested future interest in fee simple when both are held by the same person,
destroying any intervening contingent remainders.
2. Not commonly used in modern courts.
a. Abo Petroleum Corporation v. Amstutz: parents conveyed property to
their daughters through several deeds, but because the Doctrine was
not applicable in NM, the court determined that the deeds conveyed
contingent remainders in the daughters’ children.
iii) Common law does not imply a survival requirement that would defeat a future interest
upon a person’s death prior to expiration of the preceding estate.
(1) The future interest will pass through the deceased owner’s estate.
(2) Standard rule of construction that words of survivorship in a grant refer to surviving the
grantor, not another grantee.
(a) Swanson v. Swanson: wife inherited her deceased husband’s remainder interest in
trusts created by his father. The interests vested before the husband’s death and
before the conditions subsequent in the provision occurred.
(3) Exception when the language of the conveyance expressly states that the interest will
be taken away based on a failure to survive.
b) Right of Entry and Possibility of Reverter
i) Future interest retained by grantors in fee simple subject to condition subsequent (right of
entry) or fee simple determinable (possibility of reverter).
(1) Are freely permitted to be conveyed and devised in some states such as Washington,
but in others such as Illinois, they are only inheritable.
ii) There is a constructional preference for finding a fee simple subject to condition subsequent
with its right of entry/re-entry.
(1) Cf. Mahrenholz v. County board of School Trustees: property given “to be used for
school purposes” with reversion to Grantor in case of a broken condition. Ambiguous
language read to be fee simple determinable because of the grantor’s obvious intent to
get the land back.
iii) Courts will sometimes look to the purpose behind the conveyance to interpret language in
an ambiguous conveyance.
(1) May use its equity powers to impose limits on the enforcement of rights of entry and
possibilities of reverter.
(a) Nielsen v. Woods: man sold his property with the condition that the grantees
restore his VA loan within a time period; when the grantees did not, the grantor
sued but to no avail because his loan eligibility was duly restored.
2) EXECUTORY INTEREST
a) A future interest created in an alternative grantee that divests (cuts short) a present estate
before its natural end.
i) Like possibility of reverter, becomes possessory automatically upon the happening of a
triggering condition or limitation.
(1) Springing Executory Interest: can divest the grantor in the future
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(a) O -> A when she marries.
(i) O has fee simple subject to an executory limitation.
(ii) A has a springing executory interest.
(2) Shifting Executory Interest: can divest an initial grantee of her present estate
(a) O -> A, but if the property is no longer used as a library, then to B.
(i) A has fee simple subject to an executory limitation.
(ii) B has a shifting executory interest.
ii) Executory Interests are subject to the rule against perpetuities.
(1) Washington State Grange v. Brandt: land conveyed for Grange purposes, to revert back
to the original plot, was found to violate rule against perpetuities.
3) RULE AGAINST PERPETUITIES
a) Imposes a maximum time limit on the potential duration of every contingent remainder, vested
remainder subject to open, and executory interest to which it applies.
i) Each interest must either vest, close, become possessory or fail within 21 years.
(1) Valid conveyance: “To my children for life, then to their children who reach the age 21.”
(2) Invalid conveyance: “To my children for life, then to their children for life, then to their
children for life, and so on.”
b) No interest is good unless it must vest, if at all, not later than twenty-one years after some life in
being at the creation of the interest.
i) Life In Being – measuring life
(1) Life of someone alive when the interest was created whose life will determine whether
and when the interest will vest or fail.
(a) Warren v. Albrecht: life tenant was the measuring life, and court determined that
the contingent remainder must either vest or fail upon his death, thereby satisfying
the rule against perpetuities.
c) Can also apply to option contracts.
i) United Virginia Bank/Citizens & Marine v. Union Oil Company of California: option to buy
property when the city acquired the rights-of-way after a highway had been created was
found to be void as against the rule of perpetuities because it could take longer than 21
years for the option to be available.
d) Flexible rules of construction evolved to address ambiguities arising in normal cases to
determining the ordinary grantor’s intent, so problems arise in abnormal cases.
i) Can be rejected by the courts, unlike rules of law which must be applied no matter what.
(1) Harris Trust and Savings Bank v. Beach: trust created for a second wife, with all interest
in the estate going to his heirs. Issue arose over whether the construction of the words
“heirs” was to be determined at his death or at the death of his wife, the life tenant.
(a) The imbedded rule of construction of vesting remainders as quickly as possible was
rejected.
(b) Doctrine of Worthier Title
(i) If a living grantor uses one instrument to create a limited estate in a grantee,
and a remainder or executory interest in his own heirs, then the future interest
becomes a reversion in the grantor.
1. Has been abolished in most states.
(c) Rule in Shelley’s Case
(i) If any deed or will purports to create a life estate in a grantee with a remainder
in the grantee’s heirs, then the remainder in the grantee’s heirs becomes a
remainder in the grantee.
1. Abolished in all but eight states.
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4) CONCURRENT OWNERSHIP
a) Joint Tenancy: presumption under common law
i) Grants each cotenant a right of survivorship, which means that when a joint tenant dies his
interest in the property passes immediately to the surviving joint tenants in equal shares.
(1) Interest is neither inheritable nor devisable and all joint tenants must have equal
interests in the property
(a) Joint tenant can make a unilateral conveyance, but the grantee becomes a tenant in
common, not a joint tenant.
(2) Ordinarily used by related parties or between unmarried persons.
ii) Georgia does not have joint tenancy
iii) Necessary for the Four Unities to be present
(1) Unity of Interest
(2) Unity of Title (created in the same deed or same transaction)
(3) Unity of Time (all interests created at the same time)
(4) Unity of Possession
(a) Any act of a joint tenant which destroys any of the unities operates as a severance
of the joint tenancy and extinguishes the right of survivorship.
(i) Such a joint tenant would only sever their interest in the property.
1. Jackson v. O’Connell: one joint tenant transferred her claim to another joint
tenant, creating a tenancy in common, but the other interests remained in
joint tenancy.
iv) When one joint tenant murders another, the majority rule is the joint tenancy separates and
becomes tenancy in common with no right of survivorship.
(1) Duncan v. Vassaur: woman killed her husband but was not allowed to get his half of the
property because she had severed the joint tenancy by murdering him.
v) In modern era, a tenancy in common will be presumed unless the language of the deed or
conveyance specifically uses the words “joint tenancy.”
(1) James v. Taylor: deed with the term “jointly and severally” was insufficient to overcome
the statutory presumption of a tenancy in common.
(a) No application of the merger rule.
b) Tenancy in Common: presumption under modern law
i) Cotenants have no right of survivorship and do not necessarily own equal interests in the
property.
(1) Each tenant’s interest is freely inheritable and devisable.
(2) Commonly used by business partners and friends who own real estate together.
(3) Transfer by a cotenant does not destroy the interest; grantee becomes new tenant in
common.
ii) Inheritable, divisible, alienable, partition in kind, partition in sale, and you can restrict or
modify rights to partition through written agreement
(1) Possession is the only unity
iii) Each cotenant has the right to use and enjoy the entire property as if he or she were the
sole owner, limited only by the same right in the other cotenants.
(1) There is no common understanding that one cotenant generally has a right or authority
to prevail over the express wishes of another, whether the issue is the color of the
curtains or invitations to outsiders.
(a) Georgia v. Randolph: a wife separated from her husband invited the police inside
their home to search for drugs without a warrant; this was found to be an illegal
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search because, though the wife consented, the husband did not and they both had
equal rights in the property.
iv) When one tenant in common has exclusive possession of the property and uses the
property for his own benefit but doesn’t receive rents or profits from them, he is not liable
or accountable to his cotenant not in possession unless he holds adversely or as a result of
ouster (Statute of Anne).
(1) Ouster – wrongful dispossession or exclusion of someone from the property
(a) The cotenant in possession must communicate the ouster
(b) Cotenant in possession is not liable to accounting if there is no ouster.
(c) Improvements by the cotenant in possession will offset any rental value that might
be claim by the cotenant not in possession.
(i) Barrow v. Barrow: woman separated from her husband for years sought
partition of their marital home, where he still lived. The court determined that
her claim for rental value was offset by the husband’s expenses in paying taxes
and maintaining the property.
1. The rules of law governing partition are the same for former spouses as for
business co-tenants.
v) Every cotenant has a right to partition, but not necessarily the type of partition that they
wish.
(1) Partition in Kind – division of the property among the cotenants
(a) The property must be able to be fairly and equitably divided
(i) White v. Smyth: the partition of land used to excavate rock asphalt could not be
equally divided and therefore partition in kind was rejected in favor of partition
by sale
(b) Preference in many states, including Texas, for partition in kind
(2) Partition by Sale – court-ordered sale with the proceeds split among the cotenants, but
not necessarily equally.
(a) Barrow v. Barrow
5) MARITAL PROPERTY
a) Generally, the law views a married couple as a single unit
i) Spouses serve as cotenants
b) Tenancy By the Entirety
i) Recognized in less than half the states, and seldom used in many of them
(1) Applicable only to married couple, except in Hawaii where same sex couples can also
own property this way as “reciprocal beneficiaries” under statute.
(2) Like joint tenancy, there is right of survivorship, but there is no right of survivorship and
conveyances by a single spouse are generally ineffective
ii) Often, tenancy by the entirety shields the property from attachment or execution by a
creditor of just one spouse
(1) Despite this, each spouse has sufficient individual property rights, including the right of
survivorship and the right to share in rents and profits, for a federal tax lien to attach.
(a) United States v. Craft: US Supreme Court decision in which a lien was attached to
property owned by tenancy in the entirety because the husband failed to pay
federal income taxes. After the lien attached, the husband conveyed his interest to
his wife.
c) Death
i) Traditional common law: a surviving spouse was entitled to a legal life estate in real estate
owned by the deceased during marriage.
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(1) Dower – surviving wife’s estate
(2) Curtesy – surviving husband’s estate
(a) This traditional system has been replaced in all but four states:
(i) Arkansas, Kentucky, Michigan and Ohio
ii) Today, most states have replaced this with an elective or forced share specified by statute.
(1) A surviving spouse is entitled to a percentage of the deceased spouse’s estate, typically
one-third or one-half.
(a) If the decedent’s will is less generous to the survivor, that spouse has a right to
contest the will and take the mandated share.
(2) Real and personal property are treated the same, and does not give the survivor rights
in property conveyed before the decedent’s death
(3) Problem with the forced share statute:
(a) Operates independently of assets transferred by the decedent outside of probate
(i) Life insurance proceeds, retirement benefits and joint tenancy property.
(ii) Forced share may give too much or too little property
iii) Uniform Probate Code (UPC) – Augmented Estate
(1) Survivor is guaranteed a percentage of the augmented estate, which increases based
upon the length of the marriage
(2) For marriages of at least 15 years, the survivor takes 50 percent.
iv) Prenuptial agreements may allow spouses to contract out of forced share rules.
d) Divorce
i) Traditionally, husband or wife seeking divorce had to bring judicial action to establish
“grounds” for divorce.
(a) Adultery, bigamy, major wrongdoing, desertion, physical injury
(b) Nevada became the nation’s divorce capital because of the ease of obtaining a
divorce
(2) Also, property was divided by the relatively simple process of deciding who owned what
and confirming that ownership (by title).
(a) Wife was usually the poorer spouse with less personal assets, thus was granted
alimony as a personal obligation
ii) Two major reforms:
(1) No-Fault Divorce
(a) Eliminated the need to establish grounds for divorce by making a general finding of
irreconcilable differences or marital discord
(b) The action will succeed even if one spouse wants the marriage to continue
(2) Equitable Division of Property
(a) Separate Property – property acquired by a spouse prior to the marriage and gifts
(including inheritances and devises) made specifically to that spouse during
marriage.
(b) Marital Property – everything else, including income earned during the marriage
(i) Courts often favor a 50-50 split, but will also consider various factors like need,
length of marriage, and contributions by each spouse.
(ii) In a few jurisdictions, including New York, a court will consider a professional
degree such as a license to acquire medicine as marital property if one spouse
contributed greatly to the acquiring of the license.
1. O’Brien v. O’Brien
e) Community Property
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i)
Defines marital property in only nine states(many that were once Spanish colonies):
Arizona, California, Idaho, Louisiana, Nevada , New Mexico, Texas, Washington, Wisconsin
(which adopted the Uniform Marital Property Act in 1986).
ii) Differs markedly from the common law system, which is based on the premise of separate
title (each spouse holds a separate title or ownership to property)
(a) Cotenancies are not implied
(b) Surviving spouse has the right to inherit a share of the deceased spouse’s estate.
(c) If marriage ends in divorce, each spouse has a claim to an equitable or equal share
of the marital share which redistributes property from wealthier to poorer spouse.
iii) Instead, community property is based on the premise that the marriage is a unity or
economic partnership.
(1) Accumulations of wealth belong to the couple together and all income earned during
marriage belongs to both partners, regardless of which spouse is employed or receives
the income.
(2) Spouses may own separate property, which is all premarital property and gifts and
inheritances made to just one spouse.
(a) A spouse who claims a particular asset must prove that it is separate property.
(3) Proceeds of community property are community property, regardless of who holds the
title to an asset such as an automobile or bank account
(a) A couple who has lived in any of the nine community property states but has since
moved is subject to that state’s rules regarding any property accumulated while in
that state.
iv) Retirement benefits and sometimes severance or termination pay can be viewed as
community property to the extent that they represent income that was earned during the
marriage.
(1) In Re Marriage of Horn: former NFL player was given a severance pay that his wife was
able to recover a share of upon divorce.
(a) Cf. disability and workers’ compensation benefits, which are based on an
employee’s status and not to compensate for services previously rendered.
v) Unilateral transfers of community property are not allowed; gifts may be given unilaterally
only if they are no capricious, excessive or arbitrary.
(1) Fraud on the Community
(a) Osuna v. Quintana: husband’s gifts to his mistress from community property were
deemed to be a fraud on his wife and had to be returned to the community funds.
f) Property Rights of Unmarried Couples
i) Unmarried couples have not had property rights equivalent to married couples
(1) Marvin v. Marvin: unmarried couple separate, with the woman suing for
“palimony” after the man had promised to take care of her since he had
accumulated all the wealth and she had taken care of the house.
(2) Gormley v. Robertson: same sex couple separated after ten years together and had a
fight over the division of property. The less wealthy woman was allowed to recover in
order to prevent unjust enrichment of the other party, in whose name the house and
care were put.
6) PROPERTY IN LIVING THINGS
a) Animals and Other Organisms
i) Animals viewed as property
(1) Pierson v. Post: man captured and killed a fox that was being actively pursued. The
court held that the fox, a ferae naturae, did not become property until it had been
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mortally wounded, physically captured, or ensnared (thus depriving him of his natural
liberty).
(a) Occupation Theory
(2) Bilida v. McCleod: raccoon Mia was not considered to be the property of her owner
because a Rhode Island statute prohibited the keeping of wild animals without a permit.
ii) Human-made, genetically engineered bacterium are patentable under the laws of the US.
(1) Diamond v. Chakrabarty: scientist engineered a new type of bacterium by putting
together previously existing organisms; the Supreme Court determined that they were a
new manufacture or composition of matter according to patent laws.
(a) Represented the product of human ingenuity, not naturally occurring organisms.
b) Human Life
i) Dred Scott v. Sandford: human beings seen as property with no rights as citizens
ii) Human cells, having left the body, are not considered the property of the person they were
removed from.
(1) Moore v. Regents of University of California: man with hairy-cell leukemia had his blood
drawn and spleen removed and, unbeknownst to him, the cells were used to create a
new cell line by the doctors.
(a) Biological materials are seen as objects sui generis (of their own kind) which have
not yet been abandoned to the general law of personal property.
(b) The patented cell line created was factually and legally distinct from the cells taken
from the patient’s body.
(2) Human organs are prohibited from being sold for transplantation.
(a) Cal. Health & Safety Code § 7150
(b) Uniform Anatomical Gift Act
(i) Grants next of kin the right to transfer the parts of bodies in their possession to
others for medical or research purposes.
(c) 42 USC § 274e
(i) Unlawful for any person to knowingly acquire, receive, or otherwise transfer any
human organ for valuable consideration for use in human transplantation if the
transfer affects interstate commerce.
(d) Cf. sales not prohibited for research and education.
(i) Also, government permits persons to sell their replaceable body products such
as hair, plasma, sperm, and eggs.
iii) Cells removed from a body no longer constitute part of the body and instead constitute
property whose destruction is not considered bodily injury.
(1) Kurchner v. State Farm Fire & Casualty Co.: man had his sperm frozen in anticipation of
sterility from chemotherapy, but the sperm bank did not freeze the sperm adequately
and it was destroyed.
(a) Florida Statutes that govern the donation and disposition of sperm.
iv) Next of kin have a quasi property interest in a decedent’s body
(1) Newman v. Sathyavaglswaran: presumed consent to remove the corneas of dead
people in a morgue was viewed to be a deprivation of due process under the 14th
Amendment.
(a) Next of kin have exclusive rights to possess the bodies of their deceased family
members, creating a property interest.
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