Common Law Property Summary
Contents
Part1: Introduction ...................................................................................................................................... 5
Classification/Characterization of Property ............................................................................................ 6
Fixtures + Chattels .................................................................................................................................. 6
Boundaries .............................................................................................................................................. 6
Biss v Saskatchewan Government Insurance Office .............................................................................. 7
Royal Bank of Canada v Beyak et al ...................................................................................................... 7
Chelsea Yacht & Boat Co. Ltd. v Pope .................................................................................................. 8
Part II: Real Property .................................................................................................................................. 9
Real Property Limitations Act RSO 1990 .............................................................................................. 9
Doctrine of Tenure ................................................................................................................................ 10
Doctrine of Estates ................................................................................................................................ 11
Part 2b: Interests in Land .......................................................................................................................... 12
Fee Simple ............................................................................................................................................ 12
The Rule in Shelley’s Case ................................................................................................................... 13
Re Rynard 1980 ONCA ........................................................................................................................ 14
Life Estate ............................................................................................................................................. 15
Re Waters 1978 Ontario........................................................................................................................ 16
Trustees and Waste ............................................................................................................................... 16
Estate pur autre vie ............................................................................................................................... 17
Qualified Estates ................................................................................................................................... 18
Determinable Fee Simple .................................................................................................................. 18
Fee Simple Subject to a Condition Subsequent ................................................................................ 18
Fee Simple Subject to a Condition Precedent ................................................................................... 19
Remoteness ....................................................................................................................................... 19
Void Conditions ................................................................................................................................ 19
Effect of a Void Condition ................................................................................................................ 20
Re Essex County Roman Catholic Separate School Board and Antaya ............................................... 20
Re McColgan ........................................................................................................................................ 21
Re Down ............................................................................................................................................... 23
Future Interests: Sequential Ownership ................................................................................................ 24
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Common Law Future Interests.......................................................................................................... 24
Future Interests at Common Law .......................................................................................................... 25
Vested and Contingent Remainders .................................................................................................. 25
Common Law Remainder Rules ........................................................................................................... 26
Rule One: No remainders after a fee simple ..................................................................................... 27
Rule Two: No Springing Freeholds .................................................................................................. 27
Rule Three: Timely Vesting.............................................................................................................. 28
Rule Four: No Shifting Freeholds ..................................................................................................... 28
Equitable Estates ............................................................................................................................... 29
Courts of equity have a different approach to future interests in property ....................................... 30
Courts of equity would not disadvantage the bona fide purchaser for value without notice ............ 31
Statute of Uses .................................................................................................................................. 31
Limits of the Statute of Uses ............................................................................................................. 32
Statute of Uses and Legal Executory Interests ................................................................................. 32
The Rule in Purefoy v Rogers ............................................................................................................... 33
Statute of Uses and Conveyance ....................................................................................................... 34
Exhausting the operation of the Statute of Uses ............................................................................... 34
Future Interests under Wills: Statute of Uses (1535) and Testamentary Dispositions ..................... 35
Estates Administration Act RSO 1990 ................................................................................................. 35
In re Robson 1916 ................................................................................................................................. 36
Re Crow 1984 Ontario Court (opposite conclusion than Re Robson) .................................................. 37
Rule against Perpetuities! ......................................................................................................................... 38
An interest must vest ......................................................................................................................... 39
If at All .............................................................................................................................................. 39
Within the Perpetuity Period ............................................................................................................. 39
Scurry Rainbow v. Taylor ..................................................................................................................... 41
Statutory Reform ............................................................................................................................... 42
Perpetuities Act, ss. 2-9 ........................................................................................................................ 42
Concurrent Ownership .............................................................................................................................. 42
Joint Tenancies and Tenancies in Common.......................................................................................... 42
McEwen v. Ewers and Ferguson .......................................................................................................... 43
Consequential Differences: The Right of Survivorship .................................................................... 43
Joint Tenancies: Family Property Arrangements .............................................................................. 44
Simultaneous Death of Joint Tenants ............................................................................................... 44
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Joint Tenancies: Corporations........................................................................................................... 44
Conceptual Distinctions: The Four Unities....................................................................................... 44
Language: Identifying Forms of Concurrent Interests ...................................................................... 45
Statutory Presumption in Favour of Tenancies in Common ............................................................. 45
Tenancies by the Entireties and Co-Parcenary ................................................................................. 45
Rights and Obligations of Co-Owners .................................................................................................. 46
Osachuk v Osachuk 1971 Manitoba Court of Appeal .......................................................................... 46
Severance of a Joint Tenancy ............................................................................................................... 48
Severance of Joint Tenancies: Intention, Negotiation, and Completed Acts .................................... 48
Severance of a Joint Tenancy by Murder ......................................................................................... 49
Unintentional Severance of a Joint Tenancy .................................................................................... 49
Severance and Conveyance by One or More Joint Tenants ............................................................. 49
Knowlton v Bartlett............................................................................................................................... 50
Robichaud v Watson ............................................................................................................................. 50
Rights in the Land of Another .................................................................................................................. 52
Easements ............................................................................................................................................. 52
Four Requirements for Creating an Easement ...................................................................................... 53
Requirement of a Dominant and Servient Tenement ........................................................................ 53
Requirement That the Easement Accommodate the Dominant Tenement ....................................... 53
In re Ellenborough Park .................................................................................................................... 53
Defining the Nature of Accommodation........................................................................................... 54
The Dominant and Servient Tenements cannot be Owned or Occupied by the Same Persons ........ 55
The Easement Must Be Capable of Forming the Subject Matter of a Grant .................................... 55
Shelf Holdings v. Husky Oil Operations Ltd. ................................................................................... 55
Philipps v Pears ..................................................................................................................................... 56
Creation of Easements .......................................................................................................................... 56
Express Grant or Reservation: Hill v Attorney General of Nova Scotia .......................................... 56
Implied Grant or Reservation: Necessity, Common Intention and Non-Derogation........................ 57
Judicial or Legislative Evolution of Easements of Necessity ........................................................... 58
Intention: Wong v Beaumont ............................................................................................................ 58
Principle of Wheeldon v Burrows..................................................................................................... 58
Scope of Easement ............................................................................................................................ 58
Easements by Prescription ................................................................................................................ 59
Real property limitations act ................................................................................................................. 59
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Profits à Prendre ................................................................................................................................ 60
Covenants and the Use of Land ............................................................................................................ 60
General Principles: Privity of Contract and Estate ........................................................................... 60
Freehold Covenants: Enforcement by Law........................................................................................... 61
Benefits of a Covenant ...................................................................................................................... 62
Burden of a Covenant ....................................................................................................................... 62
Freehold Covenants: Enforcement by Equity ....................................................................................... 62
Burden of a Covenant ....................................................................................................................... 62
Policy Rationales for Enforcing Covenants ...................................................................................... 63
Requirement of Notice ...................................................................................................................... 63
Requirement that the Covenant Be Negative .................................................................................... 63
Requirement that the Covenantee Retain Land Benefited by the Covenant ..................................... 64
Summary of Requirements for the covenant’s burden to run in equity ............................................ 64
Benefit of the Covenant ........................................................................................................................ 64
Part III: Personal Property ........................................................................................................................ 65
Concept of Possession........................................................................................................................... 65
Essay time! Carol Rose, “Possession as the Origin of Property ....................................................... 66
Personal Property ...................................................................................................................................... 67
The Tubantia ......................................................................................................................................... 67
Keron v Cashman 1896 (Joint Finding) ............................................................................................ 68
Edmonds v Ronella 1973 .................................................................................................................. 68
The Issue of Intention ....................................................................................................................... 68
Wilson v Lombank ................................................................................................................................ 69
Finders and First Possession ................................................................................................................. 70
Armory v Delamirie 1722 ................................................................................................................. 70
Remedy of Trover ............................................................................................................................. 70
Parker v British Airways Board ........................................................................................................ 70
Bird v Fort Frances ............................................................................................................................... 72
Bailment: Separation of “Title” and Possession ................................................................................... 73
Heffron v. Imperial Parking .................................................................................................................. 74
Farley and Stevens v Goldworthy ......................................................................................................... 75
Bailments and Third Parties .............................................................................................................. 76
The Winkfield ....................................................................................................................................... 77
PART IV: ACQUISITION OF PROPERTY INTERESTS...................................................................... 78
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Requirements for a Valid Gift Inter Vivos ....................................................................................... 78
Delivery............................................................................................................................................. 78
Cochrane v Moore............................................................................................................................. 79
Historical Development of the Requirement of Delivery ................................................................. 79
Defining Delivery in Cochrane ......................................................................................................... 79
Trust ...................................................................................................................................................... 80
Express Trust .................................................................................................................................... 80
Resulting and Constructive Trusts .................................................................................................... 80
Deed of Gift ...................................................................................................................................... 81
In re Cole............................................................................................................................................... 81
Convincing and Law of Property Act ................................................................................................... 82
In Re Rose ............................................................................................................................................. 82
Part1: Introduction
Property is:
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- the network of legal relationships prevailing between individuals in respect of
things
- Property comprises bundles of mutual rights and obligations between subjects in
respect of certain objects
- An inquiry into a variety of socially defined relationships and morally conditioned
obligations
Who can be the subject of property interests has an important political significance
o Delineation of potential right-holders fundamentally affects both the balance of power and
the distribution of goods within a society.
o For example, think how history treated slaves and married women.
Cultural Relativity of Property
 Indian ownership of property is holistic
o Land is communally owned; ownership belongs to the tribe as a whole, not in an individual
o Members of a tribe have an undivided interest in the land; everybody, as a whole, enjoys the
whole
 Indians could not give a fee simple to Europeans because they themselves did not have fee simple
ownership
 Indians can’t give any title; they are not the sole owners; the animals have an interest in the land as
well
 In sum, aboriginal law does not allow land to be transferred; it is inalienable
o The treaties signed were meant to be sharing, not alienation
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Classification/Characterization of Property
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The basic classification is between real property and personal property
This distinction arose from the different remedies available to the plaintiff
o Action in rem (real action): plaintiff entitled to recover property – real property
 Action enforceable against third parties
o Action in personam: action against the defendant personally
 Plaintiff was entitled to the value of the property as damages for wrongful
interference
 Action only enforceable between the two parties
Leaseholds: tenants do not have a proprietary interest in leased land, just a contract
o Leaseholds classified as personal property,
o Personal property now divided into chattels real (leaseholds) and chattels personal (other
personal property)
 Chattels personal subdivided into choses in possession (tangible property) and
choses in action (intangible property) such as promissory notes, bonds, IP
Real property divided into corporal hereditaments (interests capable of being held in possession)
and incorporal hereditaments (non-possessory interests such as easements)
The classification system focuses on the object of proprietary interests
Fixtures + Chattels
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If buying land it is assumed that it will come with all the fixtures
To exclude fixtures from the land, they must be specifically excluded from the sale
Chattels are excluded from the sale of land, unless specifically included
Boundaries
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Boundaries: may be artificial or natural
The person who owns the estate also owns the air above the land up to a height where in a
modern context one can enjoy the property
o Anyone who invades this space will have trespassed
 Principles governing nuisance or if actual physical damage is caused, negligence
will apply
Subsoil: any third party invasion of one’s cone of dirt constituting the subsoil (does not matter
how deep) will give rise to an action in trespass
One of the issues with trespass: do not have to prove damage, an injury; all that is needed is
proof that one crossed one’s boundary
Depending on the nature of the incursion one might also get an injunction if it is likely to be
repeated
Surface boundaries are usually easy to establish, but not always the case
o If there is a stream that comprises a boundary of the lot, what of the boundary in that
case?
 Ask: what is the nature of the body of water concerned?
 Navigable river: boundary is the high water mark
 Non-navigable river: central line through the stream
o If the body of water is private and there are lots around it so that there is no public
access, then one’s boundary extends to include a part of the body of water
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o One does not own a body of water unless one owns the entire pond and it is nonnavigable
o If the pond is shared the issues is murky because one owns the subsurface of the body of
water, but one does not own a particular body of water
If a boundary is a body of water, it is possible that the boundary moves
o One’s ownership can shrink or be enlarged in accordance with the changes in the
waterway
Biss v Saskatchewan Government Insurance Office
Facts
 Plaintiff claims under insurance policy whereby the defendant insured against damage or destruction
to personal property
 The tarpaulin covering the plaintiff’s pool was destroyed by the weight of melting snow
 There was no permanent fastening of the tarp of the pool
 Defendant refusing to cover costs; claims tarp is real property
Issue
Is the tarp a chattel or has it become part of the swimming pool, making it real property?
The test for real/personal property classification
1) Articles not otherwise attached to the land than by their weight are not to be considered as part of
the land
2) Articles which is affixed to the land even slightly are to be considered as part of the land
3) The circumstances necessary to alter the prima facie character are a) degree of annexation and b)
object of annexation
4) The intent of the person affixing the article to the soil is material only so far as it can be presumed
from the degree and object of annexation
Reasoning
 Although the tarp was attached to the land by hooks, it is clear that it was a temporary attachment
for a temporary purpose
o The swimming pool could only be used after the removal of the tarp
 The degree of annexation is obviously temporary and slight for a limited purpose
o Did not in any way change the character of the tarp as chattel
Holding
 The tarp is chattel (personal property); the insurance policy covers the damage!
Royal Bank of Canada v Beyak et al
Facts and Issue
Was the mobile home that was destroyed by fire personal or real property?
Reasoning
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Object of annexation important factors
o Was the building placed on the land for permanent use or was the building mean to be moved
off the land afterwards?
o Was it the owner of the land or some other person who placed the building on the land?
o “What might be only a chattel if erected by a tenant for years, might become a part of the soil
if erected by the owner of the land.”
The parties’ intention, when related to the object and degree of annexation, must be patent for all
to see
o Not to the circumstance of an agreement which may or may not exist between a owner of a
chattel and a hirer thereof
Travis Barker and Imperial Canadian Trust Co. v Reed et al
o Chimney rested upon a concrete pad and were attached with cement; became part of a solid
column of brick; concrete pad was set 10” into the ground
o A building, which only rested on the ground by its own weight, was plastered and connected
to the chimney
o Court held that, through its connection to the chimney, the building became part of the land
In the case at hand, court concludes that the mobile home was only attached by its weight
o It was not imbedded or bolted to the land or to any permanent sub-structure
o The connected porch and wooden deck were not a part of the freehold or set on a permanent
foundation
o The attachment to the power pole and septic tank, both real property, was by a simple pipe
and cord
 By their very nature, detachable, creating only a temporary connection
o Mobile fails to show sufficient degree of annexation
Was the object of annexation patent for all to see to alter prima facie characterization of a chattel?
o Stack v Eaton states that the intention of the person affixing the article is material only so
far as it can be presumed by the object and degree of annexation
o Therefore, the intention must be weighed against the inference of intention gathered from all
surrounding circumstances
o The porch and wooden deck additions are more consistent with an intention to make the best
possible use of a trailer as a chattel, rather than an expression of making the mobile home a
permanent part of the freehold
Holding
 The mobile home is a chattel; resting on its own weight; no presumed intent to create real property
Chelsea Yacht & Boat Co. Ltd. v Pope
Facts and Issue
 Object in question is a converted house boat
 Moored astern to a pontoon by rope mooring lines; anchored in the sea bed
 House boat takes the ground at about half-tide
 The conversion involved removal of the engine and the creation of a permanent living
accommodation
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Agreement only allowed defendant to use it as a single private dwelling
Is the houseboat a chattel or has it become part of the land?
Reasoning
 Elitestone Ltd. v Morris
o Chalet was resting only by its own weight on concrete pillars
o Property could not be taken down and re-erected elsewhere; only removable by demolition
o “A house built in such a way that it could not be removed except by destruction could not
have been intended to remain a chattel and must have been intended to form part of the
realty”
 In considering the degree of annexation, one must ask if the chattel can be removed without injury
to itself or the land
 There must also be a degree of permanence; depends on context
o “Anchor of a large ship firmly affixed in the ground is not considered part of the land
o “Anchor similarly fixed in the sole for bearing the strain of the chain of a suspension bridge
would be part of the land”
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In the case at hand, the houseboat was not permanently immobilized into the freehold
o It rested only periodically on the river bed
o All the ropes/attachments could easily be undone
o Houseboat could easily be moved without injury to itself or the land
o The agreement requires that the houseboat be moved for periodic repairs
o The fact that it could and would have been moved greatly undermines the permanence
argument
 Object of annexation: defendant contests that the attachment was necessary to provide a permanent
home; the court disagrees; not patent for all to see
o The attachment was to prevent the boat from being carried away and to allow for repairs
o
Holding
 The houseboat is a chattel; no sense of permanency; able to move without injury
Part II: Real Property
Real Property Limitations Act RSO 1990
“land” includes messuages and all other hereditaments, whether corporeal or incorporeal, chattels and
other personal property transmissible to heirs, money to be laid out in the purchase of land, and any
share of the same hereditaments and properties or any of them, any estate of inheritance, or estate for
any life or lives, or other estate transmissible to heirs, any possibility, right or title of entry or action, and
any other interest capable of being inherited, whether the same estates, possibilities, rights, titles and
interest or any of them, are in possession, reversion, remainder or contingency; (“bien-fonds”)
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Doctrine of Tenure
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In the 1000’s, William the Conqueror seized ownership of all English land in the name of the Crown
He then parcelled the land to his trusted supporters, creating a feudal system
o The supports would hold an interest in the land only if they remained loyal to him and
provided him with various services
o Whatever interest the supporters held, they held “of the Crown, as the Crown retained
ownership of the land
o This is known as tenure; ‘to hold’
The supporters parcelled their land out as well to others, known as tenants
o The tenants’ interest in a particular section of land was on condition they remain loyal and
render services
o All interests in English land can be eventually traced back to the Crown in this manner
No person held absolute ownership of the land they occupied; the Crown owned all the land
o This is why Common Law distinguishes itself from Civil Law property; no concept of
absolute title
For any parcel of land, there could be a large number of people with concurrent property interest
Feudal services provided the Crown and aristocracy with the resources needed to operate
Classification of Tenure
 Tenure was divided into free or unfree tenure
o Unfree tenure was never introduced in Canada
 Free tenure was distinguished from unfree because the feudal services required were specified in
advance and were certain
o Tenure in socage: most common form of free tenure; tenant rendered agricultural services
o In addition to tenurial services, there were other obligations known as incidents of tenure
 Escheat: only incident of tenure that remains in existence
 Whenever a tenancy came to an end, the land escheated back to the lord
 The land escheated when the tenant died without heirs; practice still exists today!
Seisin
 The feudal system was greatly concerned with the enforcement of the incidents and services
associated with tenure
 The person seised of the land was the person against whom feudal services could be enforced
o If seisin fell into abeyance, the feudal system could not function; need the $$$
o It was essential to always know who was seised of the land at any given time
 Generally, only the person seised of the land could exercise an owner’s rights over the land
 This brought about the practice of livery of seisin
o A formal ceremony whereby a person seised of the land, the feoffor, could convey it to
another, the feoffee
Alienability of Interests in Land
 The tenant, occupier of the land, did not hold both the right of possession and alienability of the land
 Two types of alienation available to tenants: alienation by substitution or subinfeudation
o Substitution: B, who holds A’s land, conveys his entire interest to C
o Subinfeudation: B wants to become a lord!
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B could alienate his interests to C in exchange for which C would assume tenurial
duties toward B
This lengthened the feudal pyramid
Lords disliked this as it deprived them of the right to reclaim the land in escheat
When B dies, only B’s remaining interests escheat to A, which are the tenurial duties
owed by C;
C has the interest in land, which does not escheat to A upon B’s death!
The Statute Quia Emptores (1290)
 The feudal lords abolished subinfeudation by the Quia Emptores statute
 The statute confirmed the right to alienate any interest in land without the Lord’s consent
o Important step towards the overarching principle of free alienability of property
 Statute confirmed that alienation can only be done by substitution
o As a result, no new tenures could be created except by the Crown
 Over a long period of time, most of English land came to be held directly of the Crown
 The feudal system remained with the Crown as the sole remaining Lord
o Kept as a means of taxation
 The Tenures Abolition Act 1660 forced the Crown to relinquish its claims to incidents of tenure
o Converted all remaining tenures into free and common socage tenures
o Free of any tenurial services
o Common in that it was not subject to any special incidents of tenure
o This is the only type of tenure ever introduced in Canada; all lands in Canada remain held of
the Crown in free and common socage
o When a person dies intestate with no statutory successors, the estate escheats to the Crown in
the right of the province because the Crown remains the feudal lord of all the land
Tenure and Reception of English Law in Canada; Treaty of Paris 1763
 Any lands that were ungranted or unoccupied at the time of conquest vested in the British Crown
 The Crown asserted only sovereignty over all the territory and ownership over all ungranted lands
 This principle was applied to territory acquired not by conquest, but by settlement or ‘discovery’
Doctrine of Estates
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The doctrine of tenure fragments interests along the lines of exploitation and alienation
o The tenure by which one holds land determines the quality of the property interest
The doctrine of estates fragmented interests in land over time
o Permits any number of people to hold interests in the same piece of land
o The holders of these estates in land enjoy possession of the land in succession
o The estate determines the quantity of the interest; the period of time during which a
particular holder of the interest will be entitled to possession
o Estates in land can be transferred by sale or gift
Freehold and Leasehold Estates
 Freehold estates
o Life estates, fee simple estates, fee tail estates
o Key feature- duration is uncertain
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 Life estate: unknown when the death of a person will occur
 Fee simple, fee tail: unknown length as we don’t know when the initial tenant will die
 Historically, viewed as a ‘higher estate’, because the freeholder was seised of the land
 Use of remainder interests
Leasehold estates (non-freehold estates)
o Maximum duration, fixed in time
 Either for a fixed term, or if not for a fixed term, it can be terminated on sufficient
notice at any time
o Common method to divide interests in land over time
o Leasehold estates arises whenever land is leased to a tenant for an agreed amount of time
o Landlord retains the right to possession when the lease expires, the right of reversion
 Unlike remainder interests, this interest reverts to the original grantor only
o Ownership concept is unwieldy
 Neither the landlord nor the tenant enjoy sole and exclusive rights of ownership
 Both have interests in the same piece of land
 Tenant has a possessory interest; landlord has a reversion interest
o Leaseholds were historically regarded as a contractual arrangement, not an estate in land
 The landlord remained seised of the land
 The leaseholder not seised, which is why leasehold are non-freehold estates
Capacity to Hold Estates in Land
 Category of ‘legal persons’ include both natural persons and corporations
 Statutory reform grants courts wide powers to order the sale or disposition of a minor’s interest in
property where it is necessary or proper for the maintenance or education of the minor
 By statute, aliens can acquire, hold, dispose of, and inherit real property in Canada
 Because a corporation can exist indefinitely, land held by corporations was immune from many
incidents of tenure, including relief and escheat.
o Taken away by medieval statutes as will be seen later on
o Modern legislation gave back corporations the capacity and rights of natural persons
Part 2b: Interests in Land
Fee Simple
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Originally, the fee simple estate was created by a grant of land to A “and his heirs”
o If A sold his interest to B, the estate B acquired continued as long as A had lineal
descendants. If not, the estate would terminate and escheat back to the lord
After the Statute Quia Emptores, which permitted alienation by substation without the lord’s
consent, the idea of subrogation evolved
o If A alienated his interest to B and his heirs, B’s estate would continue as B had lineal
descendants
o Crucial development of the principle of the free alienation of land
The term ‘heir’ was initially interpreted narrowly to allow for the land to escheat back to the lord
o After the Statute of Wills, tenants acquired for the first time the right to make testamentary
disposition of their property to anyone
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o This essentially eliminated escheating, and fee simple became eternal
The fee simple estate in free and common socage is today the most common way to hold an
interest in land
o The term fee denotes an estate of inheritance
o The interest will endure as long as there are heirs
o It is not subject to any of the services or incidents of tenure
o The largest bundle of rights that one person can hold in land
 Only the Crown can own land
 These rights are not unlimited; the use of land is subject to any number of statutory
restraints regarding land use, environmental protection, and planning laws
Fee Tail (Abolished in all provinces except Manitoba)
 The term tail indicates that only a certain class of heirs can take the land, lineal descendants
 Unlike a fee simple estate, the grantee (A) of a fee tail acquired only a life estate interest
o Upon A’s death, the estate passed to the lineal descendants, or if he had none, it reverted to
the original grantor
o A can only convey his life interest. A conveyed to B his life interest. Upon A’s death, B’s
interest would terminate, and A’s lineal descendent would take the land
 Disadvantage was that the land was effectively inalienable; most purchasers were uninterested in
acquiring only a life estate that could terminate unexpectedly at any time
The Rule in Shelley’s Case
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The common theory is that the rule arose as a way to prevent evasion of certain incidents of tenure
o the enforcement of incidents of tenure was the central movement of medieval common law
property development
o One of the more lucrative incidents was relief
 Essentially an inheritance tax whereby the lord could require a payment from the heir
of the deceased tenant
 Relief was only required when the heir acquired the land by inheritance
 If the land was acquired by an inter vivos transaction (gift), relief was not required
For example: X to A for life, remainder to the heirs of A in fee simple
o B (A’s oldest son) would acquire the interest in fee simple on A’s death, but it was not
inheritance!
 B’s interest arose from the original grant to A, an inter vivos transaction
The Lords were pissed off, so the rule in Shelley’s Case was developed:
o “If a freehold estate is granted or devised to a person, and, by the same instrument, an estate
is limited by way of remainder to his heirs or the heirs of his body, whether the reminder
immediately follows his estate or follows an intermediate remainder, the word ‘heirs’ is
construed as a word of limitation and not purchase”
 As a result, the term ‘heirs’ simply indicates the size of the estate given to the grantee,
in the example a fee simple
 Because ‘heir’ is not construed as a word of purchase, the heir acquires no interest in
the grant
 In the above example, A is actually given a fee simple. A’s heirs, upon A’s death,
would acquire interest via inheritance; will need to pay relief!
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This is called the doctrine of merger
 If the owner of a life estate acquires a remainder in fee simple, the lesser
estate (life estate) is said to merge into the greater (remainder in fee simple),
giving that person an immediate fee simple
 The words which identify the person who is receiving the estate or interest are known
as words of purchase
 Purchaser here is simply a recipient of an estate or interest
 Words of limitation: words that describe the estate or interest being created
Shelley’s rule was triggered only when the word ‘heirs’ referred to the whole line of inheritable
issue over the generations and not just those heirs at the time of A’s death
o If the evidence establishes that the grantor had a specific heir in mind (such as A’s eldest
child), that child would acquire the fee simple in remainder at the time of the grant; A
would only acquire a life estate
Shelley’s rule is a rule of law, not a rule of construction
o The rule applies regardless of the manifest intent of the grantor
Example: X to A for life, then to B for life, remainder to A’s heirs
o A acquires two estates! A life estate, but also an estate of inheritance in remainder following
B’s intermediate life estate
o A’s heirs acquire nothing under the grant itself, only under inheritance!
Shelley’s rule would not apply if the life estate and the remainder interest were not either both legal
or equitable interests
Re Rynard 1980 ONCA
The will had the following clauses:
3. From and after three years after my death my beloved son Kennedy Rynard shall have the use of the
farm until the death of his father, and shall pay to his father an annuity
4. And after my beloved husband’s death my son Kennedy shall continue to have the use of said lands
until his death, and after my son Kennedy’s death, my son Dr. Bernard Rynard shall be paid the sum of
$1500 out of the said lands and the balance shall go to the heirs of my son Kennedy
5. The provisions in this clause shall prevail notwithstanding anything to the contrary contained in this
will:
My son Kennedy Rynard shall not have the right to sell or mortgage his interest in the said lands
or dispose of it in anyway and my Executors shall have full discretion to grant or withhold his life
estate in said lands, and should any creditor attempt to seize, attach or sell his life estate, then his
said life estate shall cease and be determined and shall be null and void and his said life estate
shall become possessed by my son Dr. Bernard Rynard and his heirs, executors, administrators and
assigns absolutely forever.
Legal Issue
 Does Shelley’s Case apply? Appellants submit it applies to clause 4!
o The rule provides that where the ancestor by any gift or conveyance takes an estate of
freehold, and in the same gift or conveyance an estate is limited to his heirs in fee, in such
cases the words “to his heirs” are words of limitation of the estate and not words of purchase
o “To the heirs of my son” is the classic language for the application of the rule
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Threshold question of construction must be dealt with first!
o When the testatrix used the words ‘heirs’, did she mean the whole inheritable issue of her son
down through the line of succession or did she merely mean her son’s next of kin
o The testator may conceivably show by the context that he has used the words ‘heirs’ in some
limited or restricted sense of his own which is not the legal meaning of the words
o If the Court is judicially satisfied that the words are so used, Shelley’s case does not apply
 However, words are to be interpreted in their legal sense as words of limitation,
unless it be made plain to the mind of the Court that they are not so used, and in
what sense they are used by the testator
o If the testator used the words ‘heirs’ to mean simply the children or issue or next of kin of the
tenant for life, then the tenant only has a life estate, and the children take a remainder fee
simply interest
At common law, heir had a very technical meaning referring to the eldest son
o When heirs is used, it encompassed the eldest son of each successive generation of lineal
descendants of A
 However, this principle of primogeniture was abolished in Upper Canada in 1852
In the case at hand, the testatrix has made it plain that she was not referring in clause 4 to the whole
line of inheritable issue of Kennedy, but rather to his next of kin living at his death
o Clause 5 makes it clear that she did not intend Kennedy to take the farm outright in fee
simple, and that his life estate is even determinable in certain circumstances
The defendants cannot impose the repugnancy principle
o This principle is premised on the fact that certain interests in property must, of their very
nature, confer upon anyone to whom they belong the right to do certain things
 If a testator gives a person a certain interest in property, and then imposes a condition
depriving an essential characteristic of said interest, the condition is void, repugnant!
o This principle has no application to determinable interests!
 Does not prevent a testator from giving an interest the duration of which will be
determined by certain events
The testatrix, when using the word “heirs”, did not intend to refer to the whole line of inheritable
issue of Kennedy when in clause 5 she specified circumstances that deprived him of his life estate
Kennedy Rynard only has a determinable life interest
o Cannot use the doctrine of merger to give a fee simple to Kennedy
o Shelley’s rule does not apply to determinable life estate
Life Estate
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X to A for life, and then to B
o A, known as the life tenant, acquires a life estate, and B acquires the remainder interest
o B is the remainderperson
 B’s interest is that which remains after the grant to A
o X, having alienated the land by substitution, retains nothing!
o Both A and B acquire a present estate
 Both have a property interest in the same piece of land
 Although B’s right of possession is postponed until A’s death, B acquires a present in
the land at the time of the grant
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X to A for life
o X, the grantor, has only conveyed a life estate A
o X retains the remaining interest in the land
 When the land reverts to the grantor, it is called a revisionary interest, and the
grantor is called the reversioner
Life estate is an interest in the land that would last only as long as the tenant lived
This is distinguishable from a fee simple, whereby the interest would last as long as there were heirs
o Fee indicates an estate of inheritance
Re Waters 1978 Ontario
Clause 6 of a will and testament:
I give the use of 48 Walker Avenue to Mrs. Ellen Jones for as long as she lives, or until she remarries, or gives to my executors and trustees a written notice that she no longer needs and desires
the use of the property. Taxes, insurance, repairs and other upkeep expenses shall be paid by Mrs.
Jones. Upon the death, remarriage, or notice being given by Mrs. Jones that she no longer needs or
desires the property, it shall become part of the residue of my estate
Issue: The residuary beneficiaries claim that it was the testator’s intent to not give Mrs. Jones a life
estate, but merely a license or personal right to occupy such property, and she has no right to rent the
premises and collect income.
Reasoning
 The cardinal rule of construction that one must place himself in the position of the testator at the
time the will was made to ascertain the testators’ intention, having regard to the language used, the
context in which the language is used and the circumstances under which the will was made
 In the case at hand, clear interest given to Mrs. Jones for life: “I give the use of 48 Walker
Avenue…for as long as she lives”.
o She has a life estate
 The City of Toronto has ordered repairs on the house. Who pays?
o Clause 6 states that Mrs. Jones is responsible for repairs and other upkeep expenses
o The law is clear that where a person accepts a benefit under a will on a condition that she will
discharge a certain liability, she takes the benefit encumbered by the burden
o It was intended for Mrs. Jones to do ordinary and necessary repairs to keep the property
reasonably fit for upkeep
Trustees and Waste
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If there is a trustee: trustee is entitled to benefit of property
o Life tenant is only entitled to the profit that derives to the property; no right to possession
unless the will says so
o Possession follows legal title
Life tenant usually has full enjoyment of property, subject to the laws governing waste (waste refers
to change in the property)
o Categories of waste
 Ameliorating waste:
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Waste that improves the property
o Ex: life tenant putting a new roof on the cottage
 Permissive waste
 Property deteriorates naturally
 Voluntary waste
 Refers to actions on the part of a life tenant who is exploiting the property
o Ex: extracting minerals
 Waste has to be reasonable in the circumstances
 Equitable waste
 Wanton destruction of property by a tenant
Person creating life estate can address the issue of waste, what a life tenant can/cannot do in the
testament
Expenses
o Capital expenses tend to be shared with the remainder person, owner of the revisionary estate
o Operating expenses + taxes go to life tenant
o Mortgage
 remainder person responsible for principal
 life tenant responsible for interest
o Does life tenant have the right to mortgage the property?
 Life tenant would have difficulty getting a mortgage because he only has life estate
(rather than fee simple)
 Ontario, statute which institutes the right of a life tenant to mortgage and lease a life
property
 Max lease term: 21 years
o There is legislation that allows life tenant to apply to the court for a sale of property ; not just
life estate, but also fee simple
Estate pur autre vie
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Life estates can be alienated to third parties. Consider the following two transactions:
o X to A for life and then to C
o A to B
The life tenant (A) can only alienate the interest she has and no more
o The purchase of the life estate (B) acquires a life estate that will last only so long as A lives,
thereby creating a life estate that will last for the life not of the recipient (B) but of another
person (A)
o The remainderperson (C) will take possession of the land upon A’s death
o This is called an estate pur autre vie
The person designated as the measuring life (A) is known as the cestue que vie (he who lives) and
need not have any particular connection with the holder of the life estate (B)
If B predeceases A, B’s interest may pass to his heirs, creating an exception to the general rule that a
life estate is not an estate of inheritance!
What happens if A disappears? The remainderperson wants their fee simple!
o In Ontario property law, A is deemed to be dead if A has been absent for seven years and it
cannot be ascertained if A is dead or alive
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Qualified Estates
Variations on the Fee Simple Estate
 Fee simple estates can either be absolute or qualified estates
 Possible to qualify a fee simple estate and create a freehold interest that is less than an absolute fee
simple estate
 Qualified fee simple estates can terminate not only on the death of the tenant without an heir, but
also at an earlier date in certain circumstances
 Qualified estates arise when the grantor/testator wishes to grant a fee simple estate that will
terminate on the happening of some event
 By contrast, a fee simple absolute will only terminate when the estate holder dies without heirs
 The qualified fee simple permits the grantor/testator to retain some ongoing control over the use of
the land
o The law does not like this! These provisions restrict the alienability of the land
o Qualified estates are of less value because they may terminate if the condition is violated
o As a result, the law has attempted to balance the competing interests of the original
landholder who seeks ongoing control and the current occupant
 Two types of qualified fee simple estates: determinable fee simple and fee simple subject to a
condition subsequent
Determinable Fee Simple
 The determinable fee simple will automatically determine on the occurrence of the specified
event, which may never occur
 The grantor’s interest is called a possibility of reverter
 If the occurrence of the determining event becomes impossible, the determinable fee simple becomes
absolute
 X to A in fee simple until B marries
o A acquires a determinable fee simple
o X retains the possibility of reverter
o If B dies without marrying, the event becomes impossible, and A acquires a fee simple
absolute
 X loses the possibility of reverter and has no interest in the land
 The critical feature is that the determining event itself sets the limit for the estate granted
 If the terminating event is an integral and necessary part of the formula from which the size of the
interest is to be ascertained
 Words such as so long as, during, while, and until typically create a determinable fee simple
Fee Simple Subject to a Condition Subsequent
 Created by the addition of a condition to a fee simple grant which may terminate the estate at the
instance of the grantor
o The condition subsequent is an independent clause added to a fee simple absolute
o If the terminating event is external to the limitation, a divided clause from the grant
 Words such as on condition that, provided that, if it happen that and but if typically create a
condition subsequent
 Purpose is to compel compliance with the condition, on pain of forfeiture
o In contrast, determinable fee simple is intended only to give the land for a stated use and
when this use has ended, the land automatically returns to the grantor
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Grantor retains a right of entry
o Condition subsequent does not determine automatically
o Grantor must re-enter in order to bring the estate to an end
o If the grantor fails to do so, A will eventually acquire a fee simple absolute due to
prescription
 In contrast, determinable fee simple determines automatically; grantor does not need
to reclaim the fee simple
X to A in fee simple on condition that A does not marry Y
Fee Simple Subject to a Condition Precedent
 The grantee will receive nothing unless the condition is satisfied
o A condition subsequent may defeat an estate already granted; a condition of retention
o Condition precedent is a condition of acquisition
 X to A on the condition that she will marry B
o A will take no interest unless the condition is fulfilled; marriage is condition of acquisition
 Difficulties in this one:
o X to A when he reaches 30 provided that he stays on the farm
 Unclear whether A must simple be on the farm when he attains the age of 30, thus
satisfying a condition precedent OR
 Whether A must continue to stay on the farm as a condition subsequent; the estate
may be liable to forfeiture if he ever ceases to stay on the farm
Remoteness
 Common law dislikes interests that might arise at a remote point in time
o Such interests cloud the title of the land and restrict alienation & development
 The system to limit the extent to which such interests can arise in the future is called the rule
against perpetuities
 Rule against perpetuities applied to the right of entry
o If a right of entry might arise at a point too distant in the future, the rule would strike it down
and the condition subsequent became a fee simple absolute
 However, a determinable limitation (setting the automatic termination of the estate) could not last
beyond the limiting event no matter how far in the future the event might lie
o Consequently, the rule against perpetuities did not apply to the possibility of reverter
 This has been changed by statute in most Common Law provinces
Void Conditions
 Many reasons for void conditions
 Condition could be repugnant to the interest granted if the grantor has attached a condition
inconsistent with the freedom of enjoyment, disposition, and management of the estate
o Most common type is a restraint on alienation
o Common Law has held that alienation is an inseparable incident of a freehold estate in land
o Although any restriction that substantially takes away alienation is likely void, partial
restraints may be upheld
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Prohibited restrictions: total prohibition on the sale or mortgage of the land to
anyone, the land can be sold to one person only, the land must be held for the heirs of
the grantee, the land cannot be alienated without the consent of another person
 Total restraints, even for limited periods of time, such as for the life of the holder, or
a substantial number of years after the testator’s death, have been held as void as well
 Partial restraints allowed: prohibiting alienation to a particular person or particular
class of person provided that the class is not so broad amounting to a general restraint
Contrary to public policy if the state has an interest in the condition’s non-performance
o Conditions that incite the donee to commit a crime or other illegal act
o Conditions encouraging the future separation of married parties
o Conditions interfering with parental obligations; a child is not to reside with a particular
parent
o Conditions demoing a change of religion
o Partial restraints against marrying a certain person or class of persons based on religion are
valid
o Discriminatory restraints on alienation are void
A condition could be too uncertain
Effect of a Void Condition
 If a condition precedent is void, the condition cannot be satisfied and the entire grant/devise fails
o The common law favours an interpretation of a grant/devise that permits it to take effect or
vest, the vesting construction
 Courts are generally reluctant to find a condition precedent void, will try to uphold
such conditions
 If a condition subsequent is void, only the condition will fail, transforming the qualified estate into
an absolute estate
o Conditions subsequent give rise to a right of forfeiture, whereas the Common Law tries to
promote the alienation of land
o The vesting construction mean that courts will willingly find such conditions void to allow
the vesting of land in the grantee
o Courts will use a strict test, conceptual uncertainty to such conditions
 Unless it can be seen from the moment of its creation, precisely and distinctly, what
events will cause forfeiture, the court will strike down the condition
 If the determinable fee simple condition is void, the entire grant fails because the determining
event is void
o A determinable interest fails entirely if the terminating event is void, for to treat it as absolute
would be to alter its quantum as fixed by the limitation
o To avoid the current occupant of being dispossessed of the land, the courts sometimes
construe the determinable fee simple as a condition subsequent to avoid the result!
Re Essex County Roman Catholic Separate School Board and Antaya
Facts and Issue
 The respondent’s father granted certain property to the applicant
 The deed contained a covenant that the property was “to be used for school purposes only”
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“The said grantor reserves to himself and his heirs the preference to buy the said property at the
current price should the same cease to be used for the purposes intended.”
Was this grant a determinable fee simple or a fee subject to a condition subsequent?
Reasoning and Application
 Why does this even matter?
o The rule of perpetuities applies to condition subsequent and not determinable fee simple
o The possibility of reverter immediately vests in the grantor, whereas the right of entry for
condition broken may not arise within the perpetuity period
 The determining event in a determinable fee itself sets the limit for the estate first granted
 A condition subsequent is an independent clause added to a complete fee simple absolute whoch
operates so as to defeat it
 The hallmark of a fee simple determinable is the possibility of reverter
o Language of the covenant must reflect this
o Covenant in question only gives the grantor the “preference to buy the said property at the
current price”
 Re Tilbury West Public School Board and Hastie
o The deed granted the property “for so long as it shall be used and needed for school purposes
and no longer”
o “When said land is no longer used for school purposes it shall be returned to the owner”
o This is a fee simple determinable
 A fee simple subject to a condition subsequent merely gives the grantor a right of re-entry to
determine the estate. Unless and until the entry is made a fee simple continues
 Certain words of limitation can help, but they are not determinative
o Must look at how the condition integrates into the devise/testament as a whole
o Is the restriction a superadded condition upon a fee simple grant or is it an integral part of the
limitation?
Holding
 In the case at hand, the deed did not create a fee simple determinable with a possibility of
reverter
o “The said grantor reserves to himself and his heirs the preference to buy the said property”
o No automatic reversion; the grantor simply has the ability to buy back the land
Re McColgan
Facts
Clause III (f) of the will states:
Give all property unto my Trustee upon the following trusts:
To hold my property as a home for Mary Kovalchik until her death or until she is not residing
therein personally, whichever shall first occur
 Marry Kovalchik was residing with the testator when he died, and had lived with him beforehand for
some time
 She stayed in the house for several months until she returned to her hometown.
 She wrote to the solicitors of the applicant advising them that, due to illness, it was necessary to be
under the care of a family doctor in her hometown for an indefinite period
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She stated that “I am not surrendering my rights to make my home at said property
She returned 6 months later and has remained there ever since
Issue
 What estate or interest passed to Mary Kovalchik?
o Is the interest a mere personal license to use, occupy and enjoy the premises?
o If it’s more than a license, does the language suggest a determinable fee simple or a condition
subsequent?
o If a determinable fee simple was intended, is the language determining such life estate clear
and unambiguous, or is it the converse rendering the gift void for uncertainty?
o If it’s a condition subsequent, is the condition void for uncertainty thus leaving a fee simple
absolute?
 Has the estate or interest that was passed to Mary terminated due to her absence for 6 months?
Reasoning and Application
 The question is not what the testator meant to do, but what the written words he uses mean in the
particular case; what are the expressed intentions of the testator
 On the matter of precedence and reported cases:
o When the decision is upon the meaning of words in instrument which differ so much from
each other by the context and the peculiar circumstance of each case, it seldom happens that
the words of one instrument are a safe guide in the construction of another
 In the case at hand, the will’s language goes far beyond the creation of a mere license
o Obligations on trustees to “hold my property as a home for Mary Kovalchik until her death”
and to set aside a fund sufficient to cover the chares referred to in the will
o Much more consistent with the intent to create an interest in the property rather than a mere
license
o The property is to be held as a “home” not held subject to a mere permission to occupy
o We have a life interest
 How to distinguish between determinable fee simple and condition subsequent?
o Whether the words limit the utmost time of continuance of the estate, or whether they mark
an event which, if it takes place in the course of that time, will defeat an estate already
granted?
 The first case is a limitation, the latter case is a condition
 A limitation marks the bounds of the estate, a condition defeats the estate before it
attains its boundary
 In the case at hand, the words “or until she is not residing therein personally, whichever shall first
occur” act as external to the limitation
o It is a divided clause from the grant creating an interest upon condition
o It marks an event which, if it takes place will defeat an estate already granted
 We have a condition subsequent
 Is the condition valid or void itself for uncertainty? Check out the use of vesting construction
o Fillingham v Bromley
o A case that dealt with a condition that the beneficiary live and reside on the property
o Court held that these words were a condition subsequent void for uncertainty
 “What is living and residing: occupation is not living and residing: there are many
purposes…”
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 Unless a clear meaning can be put upon the will, the condition is void
o Clavering v Ellison
o “Where a vested estate is to be defeated by a condition, that condition must be that the Court
can see from the beginning, precisely and distinctly, upon the happening of what event it was
that the preceding vested estate was to determine
o The question is whether you can predicate on reading the will, what it was that was to defeat
the vested estate?
 In the case at hand, the phrase “until she is not residing therein personally” is deemed to be
extremely uncertain and ambiguous
o No problem in deciding when the condition is being complied with
o Very difficult in deciding when the condition has been breached!
 It cannot be envisioned that the testator meant that the condition was breached if the
respondent was required to enter hospital for treatment for a serious illness
Holding
 There was a fee simple subject to a condition subsequent, which was void due to uncertainty
Re Down
Facts
 Provision 5 of the will: “When my said son, Harold Down, arrives at the age of 30 years,
providing he stays on the farm, then I give, devise and bequeath all of my estate both real and
personal of every nature and kind whatsoever and wherever situate unto my said sons Stanley and
Harold Down to be divided between them equally share and share alike”
 Provision 7: “My said farm shall not be sold or encumbered in any way for and during the term of
my natural said sister until Harold arrives at the age of 30 years.”
 Residuary clause of the will: “All the residue of my Estate not hereinbefore disposed of I give,
devise, and bequeath unto my said son Stanley, including my truck and automobile”
Issue
 What was created by the use of the words “provided he stays on the farm”
 Is it a condition precedent or a condition subsequent?
 Is it void for uncertainty or is so void only if it is properly construed as a condition subsequent?
Reasoning and Application
 Arguments for a condition precedent
o The testator could put up to his younger son to come to a decision on reaching the age of
majority whether he wished to farm
o If he so determined and “stays on” the farm to age 30, he would share in the estate equally
with his brother
o Significance on the phrase “stays on” as reflecting a continuation of a way of life chosen at
age 21
 Arguments for a condition subsequent
o The provision is kicks in at age 30, and requires Harold to come at that time or within a
reasonable period thereafter to stay on the farm, and having done so he has satisfied the
contingency; or
o Once he’s 30, Harold must stay on the farm thereafter to avoid a divestiture
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Did the will provide for a gift over on failure to meet the terms of provision 5?
o What is the relation of the residuary clause and provision 5?
o The contingencies in provision 5 make it reasonable to read them together, and to view the
later clase as taking effect upon the failure of the applicant to meet the contingencies
o The fact that “staying on the farm” follows the age prescription (condition of acquisition) is
an indication that it is a condition of retention rather than another condition of acquisition
o Furthermore, provision 7 gives the indication that Harold has an interest in the land when he
attains 30 years, no mention of also living on the farm
 Also, difficulties of construction should be resolved in favour of all the objects of the testator’s
bounty, rather than be allowed to produce a result to one of them, unless the language leaves no
reasonable alternative
o We give property to both brothers, rather denying one while giving it all to the other
 Therefore, provision 5 shall be read as a condition subsequent!
 Remaining issue of certainty and its relation to the vesting construction
o Applies Clavering v Ellison ratio of certainty
o The various meanings of “stay” as a verb (to remain, reside, sojourn, dwell upon) manifest
the uncertainty of what is demanded of the application
o No period of duration is indicated
o The 5th provision, the condition subsequent, is void due to uncertainty
Holding
 Provision 5 is a condition subsequent void for uncertainty, therefore Harold’s interest is a fee simple
absolute!
Future Interests: Sequential Ownership
Common Law Future Interests
 Future interest is an interest in which the right to possession and enjoyment of the property is
postponed until sometime in the future
 An estate less than a fee simple is called a particular estate because it is only a particle of the whole
estate
 X to A for life, remainder to B in fee simple
o B’s estate is a future interest as B is not entitled to possession and enjoyment until A’s
death
o B also has a present interest that B can convey to third parties even before A’s death
o B, as the remainderperson, can also restrain A from committing certain types of waste on
the property
 Called a remainder because it remains away from the grantor
o B’s estate is vested in interest at the time of the grant
 B’s estate will only vest in possession when A’s dies!
o A obtains a particular estate because it less than a fee simple estate
 X to A for life, remainder to B for life, and then remainder to C in fee simple
o A acquires a life estate vested in interest and possession at the time of grant
o B acquires a life estate vested in interest at the time of grant, and vested in possession on A’s
death
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o C acquires a remainder in fee simple vested in interest at the time of grant, vest in possession
after A’s and B’s death
o B and C have future interests because their right to possession are postponed
o Estates that precede one another in a series are called prior particular estates
o If C predeceases A and B, C’s remainder in fee simple pass to C’s heirs
X to A for life
o If the grantor does not create a remainder after a prior particular estate, the property reverts
back to the grantor at the termination of the prior particular estate
o The grantor’s retained interest is called a reversion because the property will revert to the
grantor
 Reversions are not created by express grant but arise by implication
 A reversion is always implied whenever there is an estate grant less than fee simple
Condition subsequent and determinable estate grants also create future interests
o Both the right of entry and the possibility of reverter are future interests in property because
the right of possession and enjoyment of the property is postponed
o No guarantee that the future interests will vest in possession because the conditions may
never be breached
Purpose of future interests is to allow the present estate holder to determine when and upon what
condition the next generation may enjoy possession of the land
o Estate holders do not have unlimited discretion
 Law has always favoured free alienation of property and disfavoured undue and
enduring restraints upon said power
 Common Law and Equity have developed different rules to deal with future interests
Future Interests at Common Law
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Historically, the Common Law has been very hostile to future interests
o Always of upmost importance to know who was seised of the land so that the lord could
easily enforce these obligations
o Avoid any situation where the identity of person seised of the land might become uncertain
X grants to A when she turns 21. (A is 15 years old at the time of the grant)
o A has not yet satisfied the condition precedent
o This grants creates an abeyance of seisin because it was not clear who would be seised of the
land for the 6 years prior to A’s 21st birthday.
To deal with these hypotheticals, courts created the common law remainder rules
o These rules generally prohibited abeyance of seisin
o Accordingly, the above grant would fail at the outset as it creates the possibility of abeyance
Vested and Contingent Remainders
 Vested has two possible meanings
o An estate may vest in possession or vest in interest
o Possession vests when the estate holder is entitled to immediate possession of the property
o Interest vests when interest is granted to an individual from a grant/devise/testament
 X to A for life and the remainder to B in fee simple
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o B acquires a fee simple in remainder vested in interest at the time of grant, conveyable to 3rd
parties
o B’s estate will vest in possession when A dies
o These are vested remainders
X to A for life and then the remainder to B in fee simple when he turns 21 (B is 15 years old)
o B’s interest is subject to a condition precedent because it is contingent on B turning 21
 This interest is called a contingent remainder
X to A for life and then the remainder to A’s widow for life
o The remainderperson, A’s widow, will be unknown until A dies
o Because the identity is unknown, the remainder does not vest until A dies
 At that time, the remainderperson’s interest will vest in interest and possession
simultaneously
 This is a contingent remainder because the vesting is contingent upon determining
the remainderperson’s identity
A vested reminder has 3 requirements:
o Limited to a person who is in existence
 For example, “to A for life and the remainder in fee simple to A’s first born child”
 If A has no children, the remainderperson is not yet in existence
 It’s a contingent remainder because it will not vest in interest until the birth of A’s
first child
o Limited to a person who is ascertained
 Refer to the widow example above
o Not subject to a condition precedent
 Interests in conditions precedents do not vest until the condition is satisfied
If any of the 3 criteria above do not apply, it is a contingent remainder
A contingent interest also arises when there is a fee simple subject to a condition subsequent
o Grantor retains the right of entry for condition broken
o The right of entry is a contingent interest because the interest will only vest if the condition is
breached
Possibility of reverter are not contingent interests; they are vested interests
o Because the determining event is regarded as marking the natural limitation of the
determinable estate, the possibility of reverter is regarded as vested in interest at the time of
the grant or devise
Distinction between contingent and vested interest is important!
o Common law courts hate contingent interests! Will see later with the remainder rules!
Common Law Remainder Rules
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Interests created at common law are known as legal interests
Interests created in equity are called equitable interests and legal executory interests
Remainder rules are not applied by courts of equity and do not apply to equitable interests
Common law courts wanted to prevent abeyance of seisin as much as possible, and originally, only 4
future interests were permitted
o Reversion
 Interest retained by the grantor after having conveyed a particular estate less than that
held by the grantor
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o Vested remainder
 Remainder is the interest that remains out of the grantor on the termination of a
particular estate created by the same instrument
o Possibility of reverter
o Right of entry for condition broken
Common Law initially refused any contingent remainders
o By mid 15th century, contingent remainders were allowed to take effect if they in fact vested
in interest during the continuation of the preceding estate
o Interests that purported to spring up in the future, interests not supported by a preceding
vested interest, were not permitted!
 An example is the “grant to A when he attains 21” (A is 15)
The common law would not permit a vested interest to be defeated in favour of anyone other than
the grantor or the grantor’s heirs.
o The possibility of reverter and the right of entry could not be conveyed or granted to a
stranger
The Four Common Law Remainder Rules are:
Rule One: No remainders after a fee simple
 Once a grantor has disposed of a fee simple the grantor has disposed of all his interest and has
nothing further to grant
o Where property is granted “to A and his heirs, remainder to B and his heirs”, the remainder is
void and B acquires nothing! A has acquired the fee simple!
o This rule also applies to qualified fees
 Impossible for a grantor to convey to a stranger the possibility of reverter or right of
entry
 X to A in fee simple so long as the CN Tower stands, and if and when it falls down, to B in fee
simple
o As it gives B the possibility of reverter, this remainder interest is void because it is a
remainder after a fee simple
o The possibility of reverter cannot be given to a stranger!
Rule Two: No Springing Freeholds
 A remainder must be supported by a prior particular freehold estate created by the same instrument
o This prohibits the creation of a freehold estate that springs up in the future by itself
 X to A’s first born child (A has no children)
 X to A upon A’s marriage (A is unmarried)
 X to A at the age of 21 (A is 15)
o All these grants are void because the rule requires an immediate transfer of seisin at the time
of grant
o There can be no abeyance of seisin prior to the grant taking effect
o In the first example, if the grantor wishes to provide for A’s first child upon birth, the grantor
must support this future interest with a prior particular estate
 X to A for life and then the remainder to A’s first born child
 Contingent remainder now supported by a prior particular estate
 Seisin immediately transferred to A for life
o Particular rules apply to leasehold estates
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A leasehold estate is not a freehold estate because it has a certain duration
The tenant of the leasehold is not seised of the land because seisin remains with the
freeholder
X to A for two years and to B and her heirs upon attaining 21 (B is 20 years old)
 B takes nothing under the grant because there is no prior particular freehold
estate that supports B’s contingent remainder interest
 A does not have a freehold; he only has a leasehold estate
 If B was 21 at the time of grant, B’s interest is no longer contingent
o B would be immediately seised and would have a fee simple subject to
A’s two-year lease
o Valid because freehold interest not springing up in the future
Rule Three: Timely Vesting
 A contingent remainder is void unless it vests in interest by the end of the prior particular estate
o Stems from the intolerance towards any gap in seisin between the prior particular estate and
the next successive estate
 X to A for life and the remainder to B in fee simple upon attaining 21
o B’s contingent remainder must vest in interest by the end of A’s life estate
o If B’s interest fails to vest in time, there will be a reversion in fee simple to the grantor upon
A’s death; B will never take any interest
 This rule avoids any gap of seisin
o Common Law adopts a wait and see attitude to determine if the contingent remainder will
vest in time
 X to A for life and one year after A’s death, remainder to B in fee simple
o Some grants on their face require a gap in seisin
o Because there is a requirement for a gap, this contingent remainder is void ab initio
 X to A and B for life, remainder in fee to the survivor
o There is no gap in seisin if the contingent remainder vests at the moment of the prior
particular estate
o The contingent remainder will vest in interest and possession when either A or B dies
 X to A for life, remainder to such of his children as attain the age of 21
o Remainder will be good only for those children who attain 21 during A’s life
o Class closing rule, the class of persons who can take will close upon the termination of the
prior particular estate
Rule Four: No Shifting Freeholds
 Remainder is void if it operates so as to defeat the prior particular freehold estate
 Remainder is required to vest in possession only upon the natural determination of the prior
particular estate
 This rule only applies where there is a life estate subject to a condition subsequent with a
remainder to a stranger
 X to A for life, but if A goes bankrupt, then to B immediately
o Common law does not permit the grantor convey a right of entry to a stranger (rule 1)
o The remainder purports to defeat the prior particular estate in favour of a stranger, the
condition is ineffective and the gift to B is void
o A will take a full life estate and the grantor retains the reversion
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This rule does not apply to determinable limitations
o Determinable limitation sets the time at which the estate will naturally terminate and
revert to the grantor
o The determinable limitation is a part of the definition of its duration, whereas condition
subsequent are additional conditions
X to A for life or until the CN tower falls, and if it falls, then the remainder to B in fee simple
o Here, B’s remainder interest is not operation to defeat prematurely the prior particular
estate
In sum, the four common law remainder rules prohibit the creation of springing and shifting
interests
o Springing interests: not supported by a prior particular freehold estate or do not vest in
interest during the prior particular estate
 Springing interests ‘pop up’ at some point in the future; no smooth and
predictable flow of seisin from one estate to the next
o Shifting interests: interests that shift abruptly from one person to another upon the
happening of some event
 This occurs when there is a grant to a remainder after a determinable fee simple,
conveying the possibility of a reverter to a stranger
 Also arises when a remainder operates to defeat a prior particular estate
Equitable Estates
 Courts of equity developed a distinct set of interests in property that permitted a much wider
range of future interests than at common law. This began with the doctrine of uses!
 Historically, Statutes of Mortmain prevented corporations from holding interests in land
without a license
o Because corporations can exist indefinitely, land held by corporations effectively evaded
most incidents of tenure!
o Statute of Mortmain was designed to prevent land from falling into dead hands! Lords
want their $$$
o To avoid these difficulties, the conveyance to uses was created
o The conveyance of uses also made it possible to make testamentary dispositions of land
and evade the costly incidents of tenure
 Prior to the Statute of Wills, property owners did not have the right to designate
their heir
 Conveyance of use
o Legal title was conveyed by livery of seisin to a trusted person (called the feoffee)
o The feoffee promised to hold the property for the benefit of the grantor (called the cestui
que use)
o The feoffee also agreed to hold the property for whomever the grantor designated to take
the property upon his death
 The grantor’s designated heir, not being seised of the land, did not have to pay
relief to the lord
o The grantor retained possession of the land acquired the power to designate his heir
o Feoffee remained seised of the land at all times
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In some cases, the feoffee reneged on his responsibility to hold the land in trust!
o Common law courts only looked at seisin to determine who had legal title to possession
o The cestui que use could not find any remedy 
Therefore, the courts of equity were created for situations where justice could not be found
before the common law courts
o Uses were issues of good faith and trust, compelling subjects for the equitable courts!
o Equity had no jurisdiction over legal issues or to amend the common law
o The Courts of Equity did have jurisdiction over the body and mind of the subject from the
Crown’s power as sovereign, and was able to issue injunctions
 The courts of equity would direct the feoffee to comply with his promise or order
him to covey his legal interest in the land to the cestui que use
o The use was treated as creating an equitable estate in land, thus creating the great
cleavage between legal and equitable estates in property!
With the introduction of equitable states, it became possible to separate legal and equitable estate
X to A and his heirs to the use of B and her heirs (prior to the Statute of Uses)
o A, the feoffee of uses, acquired the legal fee simple, recognized by the common law
o B acquired an equitable fee simple, recognized by the courts of equity, giving to B the
use and possession of the property even though B is not seised of the land
X to A and his heirs to the use of B for life and then the remainder to the use of C and her heirs
o A acquired the legal fee simple
o B acquired an equitable life estate
o C acquired an equitable remainder in fee simple
Courts of equity have a different approach to future interests in property
o Equity has no similar concern with seisin
 cestui que use was never seised of the land and was not liable to tenure incidents
o Common law remainder rules did not apply to equitable future interests
o Now possible to create springing and shifting interests in property!
o New class of future interests were called executory interests because they have yet to be
executed or carried into effect
 X to A and his heirs to the use of B and his heirs when B turns 21. (B is 15)
o A acquires a legal fee simple, remained seised of the land at all times
o B’s interest would spring up when he turned 21!
 This was allowed under equitable future interests
 Courts of Equity would require A to hold the land for B until he turned 21
 Until B turned 21, equity imposed a resulting use in favour of the grantor (X)
 Whenever beneficial entitlement to the land was unclear, equity determined that
beneficial ownership would result back to the grantor
 X would receive an equitable fee simple, defeasible on B turning 21!
 X to A and his heirs to the use of B for life, remainder to the use of B’s children who attain 21
o In equity, the class of remainderpersons remained open until there was no possibility of
other grantees meeting the condition
o The class remained open, even after B’s death, and any child attaining 21 before or after
B’s death shared equally in the remainder interest
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X to A and his heirs to the use of B in fee simple so long as the London Bridge stands, and if and
when it falls, to C in fee simple
o B acquires an equitable determinable fee simple
o Equity enforced equitable shifting interests
o C acquired a gift over of an equitable shifting interest if and when London Bridge falls
If legal title were conferred on several feoffees, as joint tenants, feudal incidents could be
postponed indefinitely
o On the death of a joint tenant, the interest of that tenant merges with the title of the
surviving joint tenants
o These survivors can simply appoint more joint tenants as others die!
o Land is consequently never passed by inheritance!
It now became possible to convey equitable interest without the inconvenience and publicity of
livery of seisin
o In common law, if the vendor reneged on a sale of contract, the purchaser could only
bring an action to recover monetary damages for breach of contract
 Not possible to bring a real action to recover property because he was not seised
of the land
o Equity recognized the injustice in these results, and came to regard the contract as giving
to the purchaser an equitable interest in the land
o Courts of equity required the vendor to complete in good faith his promise of livery of
seisin, thereby conveying to the purchaser the legal fee simple: specific performance
Courts of equity would not disadvantage the bona fide purchaser for value without notice
o If the feoffee to uses conveyed his legal title by livery of seisin to a good faith purchaser
who paid market value for land, unaware that the conveyance was in breach of the
feoffee’s obligation
o No equitable grounds to require the innocent purchaser to hold the land for the cestui que
use
o Cestui que use only had a personal remedy against the feoffee; cannot get the land back
 If the purchaser had actual notice of the equitable interest, the purchaser was bound by the
obligation
o Courts also developed the doctrine of constructive notice
o If the purchaser failed to make all the usual and proper inquiries to determine if there
were any outstanding equitable obligations, equity would impose the equitable obligation
on the careless purchaser
 If the purchaser was not a purchaser for value (took the land by gift or inheritance), the purchaser
was bound by the equitable obligation, even in the absence of actual or constructive notice
Statute of Uses
 Use had a detrimental effect on the collection of feudal incidents
 Crown relied on incidents of tenure as revenue; Henry VIII passed the Statute of Uses 1535
o Sought to reunite the legal and equitable title by removing the legal title from the feoffee to
uses and placing it in the lands of the cestui que use, thereby executing the use
 “Where any person is seized of lands, to the use, confidence, or trust, of any other person, or of any
body politic, in every such case such person and body politic that shall have any such use,
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confidence or trust, shall from henceforth be seized, and adjudged in lawful seizin, estate and
possession of and in the same lands, of and in such like estates as they had, or shall have, in use,
trust, or confidence. And the estate, that was in such person that was, or shall be hereafter seized, of
any lands, to the use, confidence or trust, of any such person, or of any body politic, shall be from
henceforth deemed and adjudged to be in him that hath such use, confidence or trust, as he had
before.
o Where one person (A) is seised to the use of another person or body politic (B), the legal
interest held by A will be “executed” and that interest will be transferred to B
o B shall be seised of the land, making B liable for all incidents of tenure
o B holds the same entitlement as B previously held; they were simply converted into a legal
interest rather than an equitable interest
X to A and his heirs to the use B and his heirs
o A’s interest is transferred to B and B becomes seised of the land!
o B now holds a legal fee simple, rather than an equitable fee simple
X to A and his heirs to the use of B for life and then the remainder to the use of C and her heirs
o B acquires a legal life estate
o C acquires a legal vested remainder
 C’s estate vests in interest at the time of grant, vests in possession upon B’s death
Limits of the Statute of Uses
 The Statute did not apply to common law conveyances; they still had to deal with common law
remainder rules
 The Statute did not eliminate all uses and those that survived came in due course to be called trusts
o The Statute only applies when one person (A) is seised to the use of another (B)
 If A is not seised, but instead holds a leasehold estate, the use is not executed
o In describing the feoffee of uses, the Statute does not include the term ‘body politic’
 The Statute does not apply and the use is not executed where the feoffee is a
corporation
 “X to A corporation for the use of B in fee simple” unaffected by the Statute
o The Statute can also be avoided if the feoffee is given active duties to perform in the grant
 Judicial interpretation limited the Statute to are uses where the feoffee had no
obligation other than to hold seisin
 If the feoffee has to manage the property and pay profits to cestui que use, the Statute
does not execute the use
 Without legal title, the feoffee could not fulfill their responsibilities
 Modern trusts use this exception; trust documents require the trustees to maintain or
manage the property in some respect
o The Statute does not apply to personal property
Statute of Uses and Legal Executory Interests
 X to A and his heirs to the use of B at 21 (B is 19)
o After the Statute, the use is now executed
o Seisin passes from A to B, and B is seised of the same interest as he had before
o The Statute forced common law courts to recognize that B holds the same interest that he
held before, even if that type of interest was otherwise not permitted
 Thus, B acquired a legal executory interest that will spring up when he attains 21.
 X retains a legal fee simple defeasible upon B attaining 21
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It is now possible to create executory interests in land recognized and enforced by the common law
X to A and his heirs to the use of B and his heirs, but if B marries C, then to the use of D and his
heirs
o Before the Statute, A was seised of the land and held a legal fee simple
o B held an equitable fee simple with a gift over to D if B marries C
o After the Statute, A’s interest was executed
 B acquires a legal fee simple to a legal shifting executory interest in fee simple (a
gift over) to D if B marries C
The Rule in Purefoy v Rogers
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There remained a legal remainder rule in the form of the rule in Purefoy v Rogers
o The rule applied to contingent remainders contained in a conveyance to uses
X to A and his heirs to the use of B for life and then to B’s first child to attain 21 years of age. (B has
no children!)
o Because of the Statute, A’s interest is executed and B acquires a legal life estate
o Remainder interest is contingent because the remainderperson is unascertained
o The remainder is subject to a condition precedent
o Contingent remainder will vest in interest when the first child attains 21 and vest in
possession upon B’s death
 The contingent remainder may not vest in interest during the prior particular estate if
the first child does not turn 21 before B dies
 In common law conveyance, a contingent remainder that fails to vest during the prior
particular estate is void (springing interest)
 If this interest fails to vest in time, the child’s interest can only take effect as an
executory springing interest when the child turns 21 after B’s death
Common law courts took a very restrictive view when enforcing legal executory interests dealing
with contingent remainders
The Purefoy rule is if a legal executory interest can comply with the common law remainder rules,
it must!
o In the above grant, the first child’s interest must vest in interest during B’s life
 If the child fails to do so, this interest cannot take effect as a legal executory interest
because this interest could have complied with common law remainder rules, but
failed to do so
X to A and his heirs to the use of B at 21. (B is 15)
o Where an executory interest could not comply with the remainder rules, common law would
permit to take effect as a legal executory interest
o In the above grant, the grant cannot comply; it can only take effect as an executory springing
interest
 Courts would permit it do so because the Statute required B would hold the same
entitlement as before the Statute
To avoid the Purefoy rule, the grantor could have done the following:
X to A and his heirs to the use of B for life and then to B’s first child to attain 21 either before or
after B’s death
o The grant now expressly contemplates a gap between the termination of the prior particular
estate and the vesting in interest of the contingent remainder
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o The grant created an executory springing interest that cannot comply with the remainder
rules!
Statute of Uses and Conveyance
 The Statute allowed landowners to evade the livery of seisin requirement
 By the method known as bargain and sale, the vendor would agree to transfer property to B for a
stated price
o Upon payment, an equity in favour of the purchaser was raised and the Statute would operate
o Legal title would pass from the vendor to the purchaser; no need for livery of seisin!
Exhausting the operation of the Statute of Uses
 In the early years after the passage of the Statute, neither court would enforce a use upon a use
 X to A and his heirs to the use of B and her heirs to the use of C and his heirs
o The legal interest held by A was executed the Statute
o B acquired legal fee simple as well as the equitable interest B already held
o C took nothing as there was nothing left to take!
 After the passage of the Tenures Abolition Act 1660, which converted all tenures into free and
common socage, the Crown lost its claim to tenure incidents
o The rationale behind the Statute of Uses no longer existed; no more incidents to collect!
o Accordingly, the Courts of Equity began interpreting use upon a use more broadly
 B would acquire a legal fee simple, moving the equitable fee simple to C
 Use upon a use doctrine
o The Statute executed the first use, passing legal title to B.
 The operation of the Statute was thereby exhausted, and the Statute could not execute
the second use of the fee simple to C
 C acquired an equitable interest in fee simple; this interest is now known as a trust
 The Statute is only exhausted by successive uses of a fee simple
 “X to B in trust for C” does not work!
o Simply describing C’s interest as a trust does not evade the Statute, as the Statute applies to
any “use, confidence or trust”
o In law, there is no difference between use and trust
o In practice, use is reserved for uses executed by the Statute, and trust is used for interests
that remain equitable
 The Statute still applies to a use after a use; it is only exhausted by a use upon a use
o X to A and her heirs to the use of B for life and then to the use of C and his heirs
 B acquires a legal life estate, and C acquires a legal vested remainder
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“X to A and his heirs to the use of B and her heirs to the use of C and his heirs” was refined to:
o X unto B and his heirs to the use of B and his heirs in trust for C and her heirs
 B is seised to his own use and the Statute does not apply where a person is seised to
his own use; the Statute requires that one person be seised to the use of another
 The trust given to C is not executed because the courts of equity determined that the
Statute does not execute a use upon a use
o The language was further compressed:
 “X unto and to the use of B in trust for C” and then finally to:
 X to the use of B in trust for C
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Legal future interests have been abolished in Manitoba
o All future interests can only be created as equitable interests
o Springing and Shifting Interests are allowed
o Statute of Use was abolished allowing for this
o Trusts can be created with the simple words “to A in trust for B”
Future Interests under Wills: Statute of Uses (1535) and Testamentary Dispositions
 Before the Statute, a conveyance to uses was the only way to make a testamentary disposition
o The grantor conveyed his land to the use of the feoffee and the feoffee agreed to hold the
land for the grantor and whomever the grantor designated to take the land upon his death
 The Statute took away this power, which led to widespread protest, so Henry VIII passed the Statute
of Wills
o This gave landowners for the first time the power to devise their lands at their free will and
pleasure
o Common law courts interpreted this new testamentary powers broadly, finding it not
necessary to use the words “and heirs” to devise a fee simple estate
 Common Law determined that devises do not need to comply with the common law remainder rules,
thus permitting the creation of legal executory interests in a devise
o Therefore possible to create executory interests in a devise without employing a use or a trust
o These are called springing and shifting devises
 Modern devolution of estates legislation creates a statutory trust in favour of the beneficiaries by
specifying that the personal representative holds the estate’s property in trust for the beneficiaries
o This has the effect of converting any and all legal interests in a will into equitable interests
 This protects interests from the common law remainder rules and the Purefoy rule
 Re Robson (English case not yet tried in Canada)
o Held that interests in a will are not destroyed when the personal representative conveys the
interests to the beneficiaries
 These interests simply become legal rather than equitable
o Comparable English law to the Ontario Estates Administration Act has been held to have the
effect of converting any and all legal interests in a will into equitable interest, thus protecting
these interests from any of the rules relating to legal future interest including the common
law remainder rules and the rule in Purefoy
 X to A at 21 (devise)
o If A is 15 when X dies, A’s interest simply takes effect as a springing executory devise that
will spring up when A turns 21
 The testator’s estate retains a legal fee simple defeasible to A when A turns 21
o Also, pursuant to devolution of estate legislation, the personal representative holds the estate
in trust for B, which likely has the effect of transforming B’s interest into an equitable
executory springing interest
 X to A, but if B marries, to B
o A acquires a legal fee simple subject to a legal shifting executory interest in fee simple (a
gift over) to B if and when B marries
Estates Administration Act RSO 1990
Devolution to personal representative of deceased
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2. (1) All real and personal property that is vested in a person without a right in any other person to
take by survivorship, on the person’s death, whether testate or intestate and despite any testamentary
disposition, devolves to and becomes vested in his or her personal representative from time to time as
trustee for the persons by law beneficially entitled thereto, and, subject to the payment of the person’s
debts and so far as such property is not disposed of by deed, will, contract or other effectual disposition,
it shall be administered, dealt with and distributed as if it were personal property not so disposed of.
Idem, where under appointment
(2) This section applies to property over which a person executes by will a general power of
appointment as if it were property vested in the person.
Exceptions
(3) This section does not apply to estates tail or to the personal property, except chattels real, of a
person who, at the time of death, is domiciled out of Ontario
In re Robson 1916
Facts
 A testator devised a freehold “unto and to the use of Helen…during her life and from and after her
decease to the use of such of her children in fee simple as shall attain the age of 21 and if more than
one in equal shares as tenants in common”
 The life tenant, Helen, died having had 4 children
 Nicholas and Margaret were 21 when Helen died; the other two children, Jane and Joseph, were not
Issue
 Are the two eldest children entitled to the freehold in fee simple as tenants in common to the
exclusion of the two youngest children?
Reasoning
 There are two reasons for why all 4 children are entitled to the freehold in fee simple as tenants in
common
o A) Contingent equitable limitations are not subject to being defeated by the absence of any
freehold to support them, even though they had while contingent been clothed with the legal
estate
o A devise of an equity to a life tenant with a contingent remainder to a class of children who
attain 21, the subsequent clothing of the equitable life estate and contingent remainder with
the legal estate during the life tenancy is not enough to defeat the testator’s intention that all
children who would attain 21 shall take, although their interests are still contingent at the life
tenant’s death
o B) Application of legislation similar to Estates Administration Act RSO 1990
o “Where real estate is vested in any person without a right in any other person to take by
survivorship shall, on his death, notwithstanding any testamentary disposition, devolve to and
become vested in his personal representatives from time to time as if it were a chattel real
vesting in them”
 This freehold therefore vested, not in the life tenant under the legal limitation, but in
the executors
o “…the personal representatives…shall hold the real estate as trustees for the persons by law
beneficially entitled thereto”
 The executors therefore held the real estate as trustees for the persons by law
beneficially entitled thereto, i.e. the 4 children!
36
o “At any time after the death of the owner of any land, his personal representatives may assent
to any devise contained in his will, or may convey the land to any person entitled thereto as
heir, devisee, or otherwise…”
 In the present case, there was clearly an asset to the devise at some time during the
life tenancy
 Therefore, the legislation applies
 The equitable contingent remainders which were originally created by the will
retained their initial immunity from destruction though clothed from the date
of such assent with the legal estate
Re Crow 1984 Ontario Court (opposite conclusion than Re Robson)
Facts and Issue
 Devise stated: “To R and W, for and during the term of their natural lives and upon their death to
their children”
 “If and R or W do not have children, the children of O who have children would become entitled to
the property.”
 O had two children, J and C; R and W had no children
 When R and W died, J and C did not currently have children
 J and C had children afterwards and are asking for their contingent remainders to be vests!
 Because neither the class nor any member of the class was in existence at the termination of the life
estate, did the gift over to the remaindermen fail?
Legal Reasoning and Application
 4th rule of common law remainder rules restated:
o A remainder was void:
 Unless it was so limited that it could take effect during the continuance of the
particular estate or at the moment of its determination; and
 Unless it did in fact take effect in this way
 The second branch of the rule meant that even if the remainder complied with the branch and so
escaped being void ab initio, it nevertheless failed unless it in fact vested during the continuance of
the particular estate or at the moment it determined
o This is known as the wait and see principle
o Applying to this case, one would wait and see whether at the date of W’s death, there were
children
 Although there are now children, no such children had been born at the date of the
termination of W’s life estate
 This result is same under both executory and legal remainders!
o It’s because it is the second branch of the rule, the wait and see rule, that is offended
o According to the Purefoy rule, because the devise could have been satisfied as a legal
remainder, it must follow the legal remainder rules!
o From Purefoy: “If any limitation, even though contained in a grant to uses or a will, was on
any assumption capable of complying with the legal remainder rules, it was to be treated as a
legal contingent remainder and not as an executory interest!
 3 scenarios under Purefoy. A contingent interest might either:
o 1) Defy the legal rules from the outset
o 2) Comply with them from the outset, and be certain to vest within the common law
remainder rules
37

o 3) Be capable of complying with them, but not certain to do so unless events turned out
favourably
 Interests in 1) were unaffected by Purefoy
 2) and 3) were required to conform to the legal rules and became contingent legal
remainders
In the case at hand, the contingent interest fell into class 3) and unfortunately failed!

Possible counter-argument used the idea of a trust!
o A residuary clause directed that the undisposed portion of the testator’s estate be held by the
executors for the purposes set out there, thereby creating a testamentary trust
 Existence of a trust saved the gift and prevented a gap in seisin
o Cites Chapman v Blisset (English case)
 The remainder rule is not applicable to equitable limitations of freehold estate, and it
has been held that in a similar devise, by way of trust, the limitation does not fail by
the non-existence of objects during the life A, tenant for life, but takes effect in
favour of such objects whenever they come into existence
 “in regard to trusts, the rules are not so strict as at law; for the whole legal estate
being in the trustees, the inconvenience of the freehold being in abeyance, I the
particular estate determines before the contingency does happen, is thereby prevented
o In that case, the testamentary language made it clear that the trust created was to continue to
be administered by the trustees at the termination of the life
 Courts therefore preferred to treat the gift as an executory devise rather than a
contingent remainder invalidating the gift
o Everything depends upon the testator’s intent, as to the continuance of the estate devised to
the trust
 Whether he intended the whole legal estate to continue in them, or whether only for a
particular time and purpose
 In the case at hand, there was no similar intent of the testator
o The words that the gift was to take effect “upon their death”
o The property in question required no continuing administration by the trustees
o The trust does not save the gift from failing due to an unvested contingent remainder!
Holding
 The contingent remainder violates the Purefoy rule, therefore the interest is not vested to the class
that sprung up after the contingency was determined
Rule against Perpetuities!



Future interests restrict the alienability of the land, potentially tying up the land for many generations
and reducing its value by making it effectively inalienable
o Difficult to sell land subject to potential future interests
o Owners of such land are unlikely to invest much in its maintenance or development
The common law remainder rules were created to set limits on when future interests can arise
o Combine powers of the Statute of Uses and the Statute of Wills created a wide range of
executory interests immune from the remainder rules!
X devise to B for life and then to B’s grandchildren who marry before or after B’s death
38

o Common law remainder rule does not apply because its construction violates the remainder
rules; Purefoy rule not applied
o Without any limiting rule, this executory interest may spring up even 150 years later!
 Thus, we created the rule against perpetuities
Rule: An interest is valid if it must vest, if it is going to vest at all, within the perpetuity period. That
period is calculated by taking the lives in being at the date the instrument takes effect, plus 21 years.
An interest must vest
 The rule against perpetuities applies to almost all contingent remainders
o Contingent interests are future interests that have not yet vested in interest (3 requirements)
 Not ascertained, not in existence, subject to a condition precedent
 The rule did not apply to a possibility of reverter as that was a vested interest
o Changed by statute, possibility of reverter are now subject to the rule against perpetuity
 Perpetuities Act RSO 1990, s15 (pg 330) states:
 The perpetuity period shall be measured as if the event determining the prior interest
were a condition to the vesting of the subsequent interest, and failing any life in being
at the time the interests were created that limits or is a relevant factor that limits in
some way the period within which that even may take place, the perpetuity period is
21 years from the time when the interests were created
 The perpetuity period for the purposes of this section shall not exceed a period of 40
years from the time when the interests were created and shall be the lesser of a period
of 40 years and a period composed of the relevant life or lives in being and 21 years
If at All
 If the interest ever does vest, it must comply with the rule against perpetuities
 The rule is concerned with what may happen, not what does happen
o No such wait and see principle as with common law remainder rules
o Common law courts examine the inter vivos grant at the time at which it was executed or the
devise at the moment of the testator’s death
o At this moment, if there was any possibility, no matter how unlikely, that the contingent
interest might vest outside the period, the contingent interest would be void ab initio
 Even if the contingent interest did vest within the period the interest would still never
take effect
 Harsh effect of invalidating many interests that would vest well within the period
 Advantage of certainty: If there was the possibility of being void, the interest would be struck down
immediately and would not operate as a cloud over the tile during any wait and see period
Within the Perpetuity Period
 The period is the duration of all lives in being plus a period of 21 years
o As such, the period does not have a fixed length but varies from one conveyance to another,
depending on the relevant lives in being
o If there are no lives in being, the perpetuity period is 21 years
o Any living person may be used as lives in being
 Only those mentioned in the gift either expressly or by implication are taken into
consideration
 X devises to my grandchildren why marry during the life of A or within 21 years of A’s death
o Devises only take effect on the death of the death
39




 Therefore, the testator cannot be one of the lives in being
 A is the life in being because A is alive and expressly mentioned in the grant
o The contingent springing executory interest given to the grandchildren will arise only if the
grandchildren marry during A’s life plus 21 years
 Because the interest will vest, if at all, during the life in being plus 21 years, the
contingent interest does not violate the rule against perpetuities
X devises to my grandchildren who attain 21
o Because X is deceased, X can have no further children
 Lives of X’s children alive at the time of the devise are the implicit lives in being
o The grandchildren will necessarily vest within 21 years of the death of any of X’s children,
for no grandchild can take longer than 21 years from its parent’s death to reach the age of 21!
X to the use of my trustees in trust for my grandchildren who attain 21
o X may have another child (A) after the trust has been established and then, more than 21
years after the death of all those alive at the time of the grant, this child may have a child
(B).
o B’s contingent interest will not vest during the life of a life in being plus 21 years
o If there were no grandchildren who were 21 at the time when the trust was created, the entire
contingent interest would fail because it was possible, however unlikely, that the contingent
interest could violate the rule against perpetuities
 Even if various grandchildren under 21 were alive at the time of the grant, therefore
certain to attain 21 in the perpetuity period (if at all), the interest would still fail!
o If at the outset it was conceivable that any of the interests would vest outside the period, the
entire contingent interest was void ab initio
Andrews v Partington ‘class closing rule’
o A gift might be saved if it is possible to close the class at a moment when it is certain that the
interests of those class members who are included must vest in time
o In the above grant, if at time of the trust’s execution, there is one grandchild who has attained
21, the class of potential takers is closed pursuant to Andrews.
 Class includes this grandchild as well as all grandchildren alive when the trust was
executed
 There interests would vest, if at all, during the perpetuity period
 Any grandchild born afterwards would not take interest
Traps to watch out for!
o Octogenarian: Common Law supposing that an 80-year old widow could still have a child
o Unborn widow:
 X devises to my son for life, then to his widow for life, and then the remainder to
their surviving children
 Contingent remainder to the surviving children could vest outside the
perpetuity period
 Widow’s identity is unknown until son’s death, cannot be the life in being
o Only son can be the life in being
o Contingent remainder to the surviving children could vest more than
21 years after his death, if his widow survives him by more than 21
years
 Contingent remainder is void, children receive nothing
40

The fee simple to the widow is good because it will vest, if at all, at the
moment of the son’s death, within the perpetuity period
Scurry Rainbow v. Taylor
Issue
 Should the oil and gas ‘top lease’ be rendered void by the rule against perpetuities?
Reasoning
 It is not sufficient that the interest may vest within the perpetuity period.
o Unless it is created in such terms that it cannot possibly vest after the perpetuity period, it is
not valid, and subsequent events cannot make it valid
o Vesting within the period must be evident at that time without regard to subsequent events
 Perpetuity is a limitation upon the common law right of every person to dispose of his land to any
other person at his discretion
 Perpetuity stemmed from the conflict between man`s desire to regulate the future enjoyment of his
property for as long as possible AND the principle of free alienability of land
 The rule against perpetuities is essentially then a judge-made law based on public policy
o “In any system of private property, a prohibitory rule is not lightly to be invoked. The
prohibition should be imposed only upon interests the creation of which would offer a real
threat to the public interest.
o “If the series of interests ties up the property for too long, the offending interests should be
void, but if the series of interests is found not to violate sound policy, they should be held
valid
 “The underlying and fundamental purpose of the rule is founded in the public policy of preventing
the fettering of the marketability of property over long periods of time by indirect restraints upon its
alienation. The rule is to prevent the tying up of property to the detriment of society in general.”
o “The exclusion of property from commercial development for extended periods was
perceived as a public evil.”
o “the mischief that would arise to the public from estates remaining for a long time
inalienable, being a damp to industry and prejudice to trade, to which may be added the
inconvenience and distress that would be brought on families whose estates are so fettered
o Rule against perpetuities was developed to destroy future interest hindering alienability
 Rule against perpetuities prevails over intention; it is not a rule of construction
Application to Case at Hand
 There are hundreds of these ‘top leases’ in Saskatchewan
o Been in practice for 50 years
o Accepted business practice in the oil and gas industry
o Increase competitiveness because oil companies with these top leases have a great incentive
to drill on leased lands
 The “Top Lease” does not offend the policy behind the rule against perpetuities
o Application of the orthodox rule against perpetuities does not reflect moder realities
o Not intended to apply to these leases; no worthwhile social or economic purpose
 Furthermore, application of the wait and see doctrine to the rule against perpetuities would validate
the top lease because the interest actually vested within the perpetuity period
o Some jurisdictions have passed this doctrine as statute
41
o Other courts have implicitly applied this doctrine to avoid harsh results

This case demonstrates the need to re-examine archaic rules of common law which cannot be
justified in modern society
o The genius of the common law lies in its adaptiveness to changing times
o Since common law rules are judge-made rules, the Court can make exceptions to such rules
when changing conditions so mandate
o Rules may be tweaked to do justice between the parties when a rigid and mechanistic
application of a rule would run counter the object and purpose of the rule.
Statutory Reform
 Manitoba has abolished the rule against perpetuities thereby presumably permitting endless future
interests
 Other jurisdictions have replaced the perpetuity period with a fixed period, usually 80 years
 Alberta has added a wait and see rule
o A contingent interest that is capable of vesting within or beyond the perpetuity period is
presumptively valid until actual events establish that it is either incapable of vesting within
the period (invalid), or that it is incapable of vesting beyond the period (valid)
Perpetuities Act, ss. 2-9
Section 3 and 4: Adoption of the Wait and See doctrine
Section 7: Fixes the Octogenarian problem by fixing set time to child-bearing abilities, adoption is not
considered
Section 8 (1): If a limitation sets a specific age for determination higher than 21 years, and the interest
would have vested within the period if the age had been 21, the limitation is reduced to the age nearest
the age specified that would allow the interest to be vested in the perpetuity period
Section 8 (2): Application of the exclusion of class members to avoid remoteness principle if it saves
interests in s. 8(1)
Section 9: Fixes the unborn widow problem by stating that the spouse is always a life in being!
Concurrent Ownership
Joint Tenancies and Tenancies in Common



Difference between concurrent interests and other interests
o Successive interests: X to A for life with a fee simple remainder to B
 A and B have vested interest, their right to possession are successive, not concurrent
o Shared interests in property also created in bailment, leaseholds, and trusts
 In all these examples the right to possession belongs to one party the arrangement at a
time. Possession is not shared.
Concurrent interests: two or more people hold property interests entitling them to share possession
Four forms traditionally recognized
o Joint tenancy
o Tenancy in common
o Tenancy by the entireties (no longer in existence)
o Co-parcenary (no longer in existence)
42
McEwen v. Ewers and Ferguson
Facts and Issue
 “Lot 18…is to become the property of my daughters Janet and Bertha jointly and should they decide
to sell the said property each of them is to have an equal share of the proceeds of the said sale”
 Does this create a joint tenancy or tenancy in common?
Reasoning and Application
 “Under the common law, it would probably be deemed a joint tenancy”
o However, under the Conveyance and Law of Property Act RSO, unless an intention
sufficiently appears on the face of the will, it must be interested as a tenancy in common
 The word ‘jointly’ is not determinative; must look at the entire conveyance/devise
o “…should they decide to sell the said property each of them is to have an equal share…”
 “Equal share” shows a clear intent to create a tenancy in common
o Cases with the words “jointly” AND “equally” have been held to be tenancies in common
o Words of division or distribution such as ‘to be divided’ or ‘equally’ create tenancies in
common
o Use of the word ‘share’ or other similar words connotes a tenancy in common
 Courts lean toward a tenancy in common and will prefer it where there is a doubt
o “Anything which in the slightest degree indicates an intention to dive the property must be
held to abrogate the idea of a joint tenancy, and to create a tenancy in common.”
Holding
 The words employed in the conveyance and the court’s bias = tenancy in common
Consequential Differences: The Right of Survivorship
 Right of survivorship means that when one joint tenant dies, the interest of the deceased joint
tenant is extinguished
o The joint tenant falls out, and the interest of the surviving joint tenant(s) is correspondingly
enlarged
 If we apply the right of survivorship to the McEwen v. Ewers and Ferguson case
o In a joint tenancy, at Bertha’s death, her interest was extinguished and Janet’s interest was
correspondingly enlarged; her interest became an exclusive one
 Bertha’s death terminated her interest in the property, and thus she had no interest in
the property that could be devised by her will!
o In a tenancy in common, there is no right of survivorship
 Each had a devisable one-half share
 Bertha could devise her interest by a will
 Since joint tenancies would reduce the number of co-owners to one remaining titleholder, a joint
tenancy will be preferred in situations where there are advantages to having only one owner
o Common law historically preferred joint tenancy because the right of survivorship reduced
the number of persons from whom tenure incidents needed to be collected from
o Also made title searching less complicated
o Common law usually prefers efficiency and convenience
 Equity preferred tenancies in common
o “Tenancy in common represents certainty and fairness in the property relations of co-owners.
Each tenant in common holds a fixed beneficial interest immune from the caprice of
survivorship. Each share constitutes a tangible quantum of wealth…”
43
Joint Tenancies: Family Property Arrangements
 Joint tenancies are most often used in family property arrangements
o With a husband and wife arranging their interests in the matrimonial home
 Such an arrangement appeared appropriate for couples who expected to remain
married for their whole lives, so that the survivor would become sole owner by right
of survivorship
o This may be inappropriate in modern times with rising divorce rates and couples owning
business property
Simultaneous Death of Joint Tenants
Statute: “Where two or more joint tenants die at the same time or in circumstances rendering it uncertain
as to the order of death, each person is “deemed to have held as tenants in common”
Joint Tenancies: Corporations
 At common law, it was not possible for a corporation and an individual to hold interests as joint
tenants because corporations have an indefinite lifespan
 Statute now allows for corporations to hold property as join tenants with an individual or another
corporation
Conceptual Distinctions: The Four Unities
 Joint tenancy has four unities:
o Possession
o Interest
o Title
o Time
 The absence of any of these unities creates a tenancy in common
 The interest of a joint tenant is a unified interest in the whole
o The essence of a joint tenancy is that each and every joint tenant is wholly entitled to whole
of the land
o Each is invested with the absolute interest in the land
o Entire estate or interest in property, rather than any defined proportion or share in that
property, is vested simultaneously in each and all of the co-owners
 Tenancies in common only have unity in possession
o Interest of a tenant in common is a fractional share; an undivided share
 A tenant in common who holds a 1/3 share cannot identify any particular part of the
property as the 1/3 share, because of the unity of possession enjoyed by all the tenants
in common
 The interest of a joint tenant is an interest in the whole estate, whereas the interest of a tenant in
common is an undivided share in the whole
 The Four Unities mean that joint tenants must have interests of the same quality and duration
o Must derive them through the same title documents
o Interests must commence at the same time
 In Re Speck, an application to create a joint tenancy where one party had an undivided 71% interest
and the other had an undivided 29% interest
o Tenancy in common because there is no unity of interest
 Another scenarios have raised the possibility of joint tenancies with undivided shares
44
o “A husband and wife may purchase a matrimonial home with the wife putting up 80% of the
money, yet they want the right of survivorship. A form of joint tenancy which recognized
unequal interests would seem to satisfy their needs.”
o The Ontario Law Reform Commission has recommend that 4 unities requirement be
abrogated, and that the fundamental determining factor should be solely one of intention
 Did the parties intend the right to survivorship?
 This would make sense as this is the only practical difference between the two
forms of concurrent interest
Language: Identifying Forms of Concurrent Interests
 The requirements of the four unities for a joint tenancy alone do not help to determine which form of
concurrent interests was created.
o Necessary to take account of the language. For example:
 Survivors: right of survivorship
 Successors: tenant in common
Statutory Presumption in Favour of Tenancies in Common
 19th Century statutory reform reversed common law’s traditional preference for joint tenancies
o S. 13 Conveyancing and Law of Property Act, RSO:
o “…it shall be considered that such persons took or take as tenants in common and not as joint
tenants, unless an intention sufficiently appears that they are to take as joint tenants
 The creation of joint tenancy now requires clear words
Tenancies by the Entireties and Co-Parcenary
 Both involve concurrent interests arising out particular kinds of familial relationships
Tenancy by the Entireties
 When property was conveyed to a husband and wife in any estate in such a way that had they been
strangers they would have taken as joint tenants, they took rather as tenants by the entireties
o This happened because of the doctrine of unity of legal personality, according to which
husband and wife were considered in law in one
 There are now five unities: time, possession, interest, title and personality
 Unity was so complete that neither spouse was regarded as having even a potential
share in the property
 Therefore, Tenancy by the Entireties was unseverable!
o Right of survivorship indestructible
 Based on tradition common law conception of the husband and wife
o Repealed in some jurisdiction, unclear if it is applicable in Canada
Co-Parcenary
 When there was an intestacy, the land would then devolve to the common law heir
o If no male heir existed, female heirs together were deemed to be the heir
 They were entitled to the interest together as co-parceners
 Suggested that it can still arise upon the death of a tenant in tail who dies, without barring the entails,
leaving no male heir and more than one female descendant in the same degree
45
Rights and Obligations of Co-Owners


A co-owner in possession was required to pay “occupation rent” to co-owners out of possession in
three situations
o Where the co-owner in possession has excluded the other
 This concept was extended to constructive exclusion in a case where a wife left
home because of her husband’s continued violence
o Where the co-owners have made an agreement respecting occupation and occupation rent
o Where the circumstances requires that the co-owner in possession be regarded as agent for
the other co-owners
Statute of Anne provided that a co-owner was required to account for benefits received as co-owner
from third parties but not for benefits that a co-owner achieved through the co-owner’s own efforts
o Henderson v Eason
 A former co-owner was not required to share farm profits with absent co-owners who
had not been excluded
Osachuk v Osachuk 1971 Manitoba Court of Appeal
Facts
 Husband and wife bought a house in 1955 as joint tenants
 They bought another as joint tenants in 1960 and moved there
 In 1962, they divorced
 The husband moved into the downstairs apartment of the first home
 The upstairs suite remained rented until 1964, and no rent has been received since then
o The trial judge held that the husband’s failure to rent the upstairs suite constituted wilful
neglect or default and to the appellant, against the respondent’s half share of the proceeds of
the house’s sae, one-half of the rental for the upstairs suite, which but for such wilful neglect,
might have been received
Issue #1
Is the husband liable for rent for failing to find tenants for the upstairs suite?
Reasoning
 At common law, there’s no obligation for one joint tenant to account to the others for rents for the
joint property, with two exceptions:
o 1) If one joint tenant expressly undertook to act as bailiff for the other
 “A bailiff is answerable not only for his actual receipts but for what he might have
made of the lands without his wilful default
o 2) If one joint tenant ousted the other was also liable to account
 These obligations are now derived from statute; Statute of Anne:
o “…actions of accounts shall and nay be brought and maintained against the executors and
administrators of every guardian, bailiff and receiver; and also by one joint tenant, and tenant
in common, his executors and administrators, against the other, as bailiff for receiving more
than comes to his just share or proportion…”
 A tenant in common, when sued as bailiff, is answerable only for so much as he has
actually received more than his just share and proportion.
 Henderson v Eason
o One of two tenants-in-common had sole occupation of the land, farmed it, and received all
the profits. The courts held:
46

If one tenant in common occupied and took all the profits, the other had no remedy
against him whilst the tenancy in common continued, unless he was put out of
possession, or assigned a bailment
 A bailiff is answerable only for so much as he actually receives which is more than
his just share
 He is not responsible, as a bailiff at common law, for what he might have
made without his wilful default
 The Statute will only apply where the tenant in common receives money or
something else
 Griffies v Griffies
o “As each party is entitled to enter upon the whole property, there can be no claim by one
tenant in common against another for an occupation rent. As for acts of waste, each tenant in
common has a right to exercise acts of ownership over the whole property, and no charge can
therefore be sustained in respect of such an act
o “There is no general right even in partition suit to charge an occupying owner with an
occupation rent. The obligations of co-owners to account to each are the same in as equity as
at law, are the same in a partition suit as in other proceedings
 In a partition suit, if an occupying owner claims an allowance for his expenditure, he
can obtain it only if consents to be charted with an occupation rent.
 Liability to account to a co-tenant relates only to what has actually been received.
o There is no liability on the part of one co-tenant to account to another for what “but for wilful
neglect or default, might have been received
 Joint Tenancies
o Each joint tenant is entitled to whole estate in jointly held real property
o No distinction between the rights and obligations of one and those of the other
o Each is entitled to possession of the whole jointly with the other
o Each has full rights of user and management equally with the other
 This being said, the joint tenants can create separate agreements as to the
management of the land
 No such agreement in the case at hand
 Clear that the husband desired that the suite remain unoccupied and made no effort to find a tenant
o Wife had full rights to possession equal to those of the husband
o She could have brought prospective purchasers or tenants
o No evidence that the husband stopped her from doing this
 If he had, the exception to accounting of rent would be applied
Holding
 The wife in this case is not entitled to claim rent for the upstairs suite because no rent was actually
received
Issue #2
Does the wife have a valid claim for rent from the husband for occupying the basement suite?
Reasoning
 Some Canadian cases suggest that courts of equity would order an account of occupation rent
o “Mere want of occupation by one, while the other had been in actual occupation, is not
sufficient.” Exceptions:
 “If the one in possession was receiving rent from third parties.”
47

“If the one in possession had done acts amounting to an exclusion of the other from
possession.”
o A tenant in common who made improvements to the joint tenant is not entitled to be paid
unless he consents to be charged from the occupation rent
 Mastron v Cotton
o “Where the joint tenancy is terminated by a court order for partition or sale, the Court may in
such proceeding make all just allowances and should give such directions as will do complete
equity between the parties”
o “One shall not receive credit for payments made on account of interest, taxes and repairs
during the period of occupation unless she submitted to an allowance for use and occupation”
 Ratio: Where the tenant in occupation claims for expenses such mortgage interest, taxes and repairs,
they will not be accepted unless he submits to be charged with occupation rent
o In the case at hand, the husband has not made any claim for an allowance in respect of taxes,
insurance, repairs or utility payments
Holding #2
 The wife cannot hold the husband liable for occupation rent because he has not claimed for any of
the current expenses!
Severance of a Joint Tenancy
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Since a joint tenancy requires the 4 unities, any act that destroys these unities severs the joint
tenancy and creates a tenancy in common
o Severance removes the right of ownership
A joint tenancy can be severed in 3 ways:
o An act of any one of the persons interested operating upon his own share may create a
severance as to that share
 A joint tenant, without consent or notice of the other joint tenants, is as free to deal
with his interest
o Severed by mutual agreement
o Severance by any course of dealing sufficient to intimate that the interests of all were
mutually treated as constituting a tenancy in common
 Not sufficient to rely on an intention, with respect to the particular share, declared
only behind the backs of the persons interested
Two other factors are relevant:
o 1) Well-established judicial preference for the tenancy in common
 Courts will lean in favour of severance
 This developed in the courts of equity to counter the common law’s presumption of a
joint tenancy
 Statutory reform has now reversed this presumption towards a tenancy in
common
o 2) Where a joint tenant and a 3rd party engage in some type of dealing which in itself would
not destroy any of the unities, but in fairness to the 3rd party, severance ought to occur for the
transaction to be fully effective
Severance of Joint Tenancies: Intention, Negotiation, and Completed Acts
 Although it is clear that a conveyance of an estate by one joint tenant to a third party will result in
severance, the grant of a mere “encumbrance” (easement/leasehold) may not
48
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Second severance method, mutual agreement, does not need a registrable deed to suffice
o Robichaud v Watson
 A cohabiting couple separated, and their lawyers conducted “without prejudice”
negotiations to settle claims for a share of the value of a house
 “The negotiations carried on between the parties clearly indicate that each
regarded themselves as tenants in common…and what was at issue in the
negotiations was the value only of their respective interests”
 This case could also be seen as “a course of conduct” third means of severance
o Morgan v Davis
 Negotiations between a husband and wife during divorce did not effect a severance of
their joint tenancy as the divorce decree was silent with respect to any property
settlement
 “There was simply an offer and unreasonable counteroffer, but no agreement.”
 “It seems clear the parties intended to return to the status quo and the matter
was to ‘be resolved at some later date’”
 “Satisfied they knew and understood the meaning and significance of the title
being registered in their joint names”
Third severance method
o Murdoch v Barry
 Murdoch conveyed her estate to herself and then devised her interest in the cottage
property to her sister just prior to her death
 Murdoch executed this deed and declared her intention to sever the joint tenancy in
her affidavit of marital status on the dead
Courts have held that sole possession and payment of expenses is not sufficient to establish an intent
to create a tenancy in common
Severance of a Joint Tenancy by Murder
 Where a joint tenant murdered the other to gain an exclusive interest, the court will:
o Apply the normal rule of survivorship so that the estate accrues to the survivor, subject to a
constructive trust of an undivided one-half interest for the victim’s estate
 “Court is not taking away from the slayer an estate which he has already acquired, but
is simply preventing him from acquiring property in an unauthorized & unlawful way
Unintentional Severance of a Joint Tenancy
 A joint tenancy in law can be held as a tenancy in common in equity in the context of partnership
property or where the purchase price of property is advanced by joint tenants in unequal proportions
o A pays 75% and B pays 25% of the purchase price
 A and B are joint tenants in law
 A and B are tenants in common in equity
Severance and Conveyance by One or More Joint Tenants
 A, B, C are joint tenants in fee simple
o A conveys his interest to D
 B and C are joint tenants
 BC are tenants in common with D in respect to D’s 1/3 share
49
Knowlton v Bartlett
Facts
 Respondent’s parents deeded a substantial part of the property to the respondent in 1951
 Respondent (Bartlett) deeded that portion to himself and his wife as joint tenants in 1953
 In 1977, a decree absolute was granted with respect to the marriage
o “Everett Bartlett shall pay Laura Bartlett $$$ providing that Laura conveys to him all her
interests in the property
o The $$$ was never paid, and Laura never conveyed to her husband her interest
 Laura executed a deed from herself to herself with respect the aforementioned lands
o She appointed Knowlton as the sole beneficiary
 Knowlton asserts that he holds the property as a tenant in common
Issue
 Was there severance thereby eliminating the right of survivorship and creating a tenancy in common
Reasoning and Application
 Until Laura executed the deed, she and her husband held the property as joint tenants
 As per legislation, Laura was able to convey land or vest land in herself
 Murdoch v Barry
o Court held that a conveyance to oneself via an executed deed constituted a severance of a
joint tenancy
o Even without said executed deed, the submitted affidavit with respect to her married status in
which the wife expressly indicated severance of the joint tenancy was sufficient
 Affidavit was sufficient to constitute an irrevocable act on her part
 Statute of Uses
o At common law a party could not deed property to oneself but could employ the Statute, and
thus a joint tenant could create a tenancy in common
Holding
 The executed deed constituted a severance of the unity of title, and that Laura and Everett held the
property as tenants in common
Robichaud v Watson
Facts
 Robichaud and Watson took title as joint tenants in a house
 Robichaud died
 Plaintiff , Robichaud’s mother seeks declaration that at some point before the death there was a
severance of the joint tenancy , therefore Robichaud and Watson held the property as tenants in
common
 Property has been sold
 Robichaud and Watson each paid half of the down payment
 Watson went to England and never returned to the home
 Watson paid 60% of expenses related to property
 Watsom made all the mortgage payments and paid the municipal taxes
 Robichaud made further improvements to the house after the separation
 After separation Robichaud made all of the mortgage payments
 Watson obtained a solicitor to obtain her equity in the house
 Robichaud als obotained counsel
50

Watson was not interested in the property, was happy for Robichaud to take over so long as she
got her fair share of the hosue
On behalf of Robichaud an offer of settlement was made, which was rejected by Watson
No further offers were exchanged and the negotiations ceased
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
Issue
 Were Watson and Robichaud in a joint tenancy or tenancy in common
Reasoning
 Joint tenancy depends on the continuance of 3 unities: title, interest, possession
 Destruction of any of the unities severs the joint tenancy and creates a tenancy in common
 Williams v Hensman
o Joint tenancy may be severed in three ways
 Act of any one of the persons interested in operating upon his own share
 Each tenant can dispose of his own interest in such a manner as to sever it
from the joint fund (losing his right to survivorship)
o Mutual agreement
o Course of dealing sufficient to intimate that the interests of all were mutually treated as
constituting a tenancy in common
 Intention is not enough
 Not so much about whether there was destruction of one of the unities, but rather
whether the has been a course of dealing that reveals a common intention of the
parties that the joint tenancy should be severed
 Burgess v Rawnsley
o Negotiations between joint tenants which did not result in agreement but indicated a
common intention that the joint tenancy should be regarded as severed and thereby
effected severance
 Re Walters
o Husband and wife owned a matrimonial home in a joint tenancy
o In the negotiations the wife took the view that her maintenance claim was dependent on
her interest in the matrimonial home
o Husband acknowledged ½ interest but wanted to give no maintenance
o Husband died during negotiations
o By their conduct husband and wife had established a course of dealing more than
sufficient to intimate that the interests of all were to be considered a tenancy in common
 Ginn v Armstrong
o Husband and wife joint tenants
o Wife left
o Correspondence regarding divorce and disposition of the home
o Letters found to be inconsistent with idea of continuing the joint tenancy
 The negotiations carried on between the parties through their solicitor indicated that each
regarded themselves as tenants in common  interest had been severed and what was at issue in
the negotiations was the value only of their respective interests
 That the parties considered their interst severed is further evidences that Robichaud enjoyed sole
possession of the property while Watson never visited again after separation
 Robichaud should be charged with occupational rent from time of separation until death to be set
off against the claim for mortgage payments and the cost of improvements on the home
 Watson entitled to credit for the mortgage payment she made
51
 Plaintiff gets $4500
Ratio
 Negotiations without actual agreement can result in severance of joint tenancy, yielding a
tenancy in common
Holding
 Negotiations resulted in tenancy in common
Rights in the Land of Another
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This section deals with non-possessory interests. There are 3 in particular:
o Profits à prendre
o Easements
o Covenants
These non-possessory interests are conceptually linked to a larger group of interests that limit the
rights of landowners in their use of land
o Easements and covenants are also characterized as mechanisms of ‘private’ land-use
planning
 Prior to modern urban planning and zoning regulations, easements and covenants
were used to achieve neighbourhood planning objectives
This chapter highlights the contract/property, public/private, and owner-discretion/non-owner
constraint dichotomies
“The property owner is the primary planner of land use. The public role is essentially reactive to the
decisions of the property owner. It is the owner who determines how to utilize his land in light of
geographic, economic, legal and personal circumstances. It is the owner who determines when a
change in existing land use should occur. It is the owner’s decision to change the use of land that
triggers the public reactive role”
Easements
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An easement is a right annexed to land to utilise other land of different ownership in a particular
manner or to prevent the owner of the other land from utilising his land in a particular manner
A right of way is a form of easement
o A right of way is a right to utilise the servient tenement as a means of access to or egress
from the dominant tenement for some purpose connected with the enjoyment of the dominant
tenement
Gypsum Carrier Inc v The Queen
o Gypsum Carrier boat collided with a public bridge
o Gypsum Carrier was held liable for damages to the Crown’s property
o The railway companies that had exclusive use of the railways claimed for damages as well
 Railway companies argued that their contracts created an easement in the bridge
 Railways were given the right to construct and maintain connections between
their own tracks and those on the bridge and its approached
 Railways were given the right to run their trains over the bridge
 Crown had ‘full control over the maintenance and betterment of the property’
o Court held that no easement was created!
 One must ascertain the intention of the parties when they created these contracts
52

Purpose was to create certain contractual rights whereby the railways, in return for
stipulated fees, were permitted to ruin their trains over the bridge
 No intention to create any rights annexed to land, or any interest in land
o Railway companies argued that they created a lesser proprietary interest
 Court rejected this claim using the numerous clausus principle
 The general hesitancy to admit any new forms of proprietary interests
 Courts state that at best a license was created, which does not create liability in this
case
Four Requirements for Creating an Easement
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1) There must be a dominant tenement (that enjoys the benefit of the easement) and a servient
tenement (that is burdened)
2) the easement must accommodate the dominant tenement
3) The dominant and servient tenements cannot be both owned and occupied by the same person
4) The easement must be capable of forming the subject matter of a grant
Requirement of a Dominant and Servient Tenement
 An easement must be linked with two parcels of land, one over which the easement is exercised
(servient tenement) and one in favour of which the easement is created (dominant tenement)
 Ackroyd v Smith
o The plaintiff’s predecessor in title had entered into an agreement to permit the defendant’s
predecessor in title to use a road to cross the plaintiff’s land
o The right had been granted to ‘owners and occupiers’ of the defendant’s land and ‘to all
persons having occasion to resort thereto’
 Court held that the right of way was a license, not an easement
 Words in the grant were too broad might confer rights on those other than
the owner of the dominant tenement
 An easement cannot be granted in gross
 Arguments for an easement in gross
o “If to give effect to what is a socially desirable use of property it is necessary to have
easements in gross, why should such easements not exist?
o Numerous examples of legislatively created easements where there is no dominant tenement
 They relate to public utilities such as water, sewage and electricity
 Courts have held that the ownership of a waterworks system (even though the
municipality owned no contiguous land) constituted a dominant tenement
Requirement That the Easement Accommodate the Dominant Tenement
 The rights must confer a benefit upon the dominant tenement and not merely some purely personal
advantage upon the dominant owner
o Does the right make the dominant tenement ‘a better and more convenient property’
o An easement must accommodate not persons but land
In re Ellenborough Park
Facts and Issue
 There were a number of houses in a square with a garden/park in the centre enclosed by the houses
 Title to the garden was vested in trustees and each of the house owners around the garden paid a
proportionate cost of maintain the garden
53
 The park was to be kept and maintained and should be kept in good order and condition
 Vendors covenanted that they would not erect or permit to be erected any building within the park
 Only those who resided in the houses were entitled to use the garden/park
 Was there an easement?
Reasoning and Holding
 There must be a requisite connection between the right to use the servient land and the enjoyment by
the dominant land
o Defendant stated that there was no sufficient connection and compared it to a scenario where
a purchaser of a house was granted a discount to go to the cricket grounds
 No easement as there is no nexus between the enjoyment of the right and the use of
the house
 Court rejects this analogy
o What actually happened is that the park became a communal garden for the benefit and
enjoyment of those whose houses adjoined it or were in its close proximity
 Collective garden of the neighbouring house to whose use it was dedicated by the
estate owners
 Even for the few houses that were not directly adjacent, there is still a sufficient nexus
between their land and the very-near communal garden
 Easements can be granted to non-adjacent land
o Court distinguishes from Hill v Tupper
 The landowner adjoining a canal was granted the exclusive right to let boats out for
hire on the canal
 Landowner then sought to restrain similar activity by a neighbour by claiming an
easement
 “It was not competent to create rights unconnected with the use and
enjoyment of land”
 The supposed easement had no normal connexion with the ordinary use of the
land, but which was merely an independent business enterprise
Holding
 Court finds an easement, which is enforceable against third parties, and does not allow the erection
of a building in the garden
Defining the Nature of Accommodation
 Authors have criticized the distinction between In re Ellenborough Park and Hill v Tupper
o If Hill v Tupper means that an easement does not meet the 2nd requirement if it serves only
to enhance business activity, then it seems both illogical and inconsistent
o Another possible distinction could be to regard easements as serving to supply an attribute of
ownership normally or frequently associated with the land
 Easements is designed to allow such deficiencies to be remedied
 Because the bundle of rights over land does not include monopolies, the court was
correct in denying an easement in Hill v Tupper
 Others argue that the recognition of easements is imply a value judgment & policy decision
o “The rights which are capable of constituting an easement is heavily coloured by value
judgments.”
o These judgments concern not only the sorts of activity claimed, but also the relative degree of
merit which is thought to attach to the party making the claim
54
The Dominant and Servient Tenements cannot be Owned or Occupied by the Same Persons
The Easement Must Be Capable of Forming the Subject Matter of a Grant
 Easements cannot be created by a transfer of possession. There needs to be a grant!
 3 factors for this 4th requirement:
o Is the right too wide and vague?
o Is the grant inconsistent with the proprietorship or possession of the alleged servient owner?
o Is it a mere right of reaction without utility or benefit?
Shelf Holdings v. Husky Oil Operations Ltd.
Facts and Issue
 Check pg 559 for the actual contract
 The issue is whether the interest was an easement or a possessory interest
o Is the 2nd factor in the 4th requirement violated?
Reasoning
 “There is no easement known to law which gives exclusive and unrestricted use of land”
o At the same time, an easement does to some extent detract from the rights of the servient land
o The purpose of an easement is to confer a benefit on the dominant tenant
 Must always look at intent and language in the contract and statutes conveying interest
o “Together with the exclusive use of said land”
 “Exclusive Use” conveyed an interest in ownership
 Exclusive use of land cannot be equated with an easement
o Acquiring land by ‘appropriation’
 “Appropriate” means to take and keep a thing by exclusive right
 For example, “to appropriate and use the subsoil to construct a tunnel”
 The tunnel is as much their property as if it had been constructed upon the
land which they had purchased and paid for
o Jarvis v City of Toronto
 Statute empowered municipality pass a bylaw authorizing it to land by compulsion
for constructing a sewer
 By private agreement, the municipality gained permission to construct sewer without
passing bylaw
 Court found that the municipality acquired exclusive use of the land
 Determine the right to an easement on the supposed intentions of the parties, irrespective of the
presence of general words in the conveyance
o Degree of occupation or possession will be governed by the document conceding the grant
Application to case and Holding
 Privileges granted to Husky don’t detract from the servient owner’s right of ownership
o Intention that Husky acquire a benefit subject to its compliance with certain terms and
conditions
 Rights conferred on Husky are subject to termination in the event of failure to
perform and observe the terms and conditions
o Servient owner’s right to use the land free from interference has been curtailed only to the
extent of prohibiting it from interfering with the subsoil or to erect works on a specified strip
of land
55
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“Grantor shall have the right fully to use and enjoy [land] except as may be necessary
for the purposes herein granted to the Grantee”
o Curtailment of servient owner’s use of the land does not deprive it completely from the
land’s primary purpose as farm lands
 Grant term requires Husky to compensate for any damages to the ability to farm the
land
 Grant term requires Husky, upon abandonment, to restore the land to the same
farming conditions prior to its use
 The right of way easement will revert back to the servient owner
o Confirmation that ownership did not pass!
The grant is also free of the words appropriate and exclusive use
Philipps v Pears
Facts
 Two houses stood side by side
 House A fell into disrepair and was required to be demolished
 This exposed the House B’s inner wall, which was not weatherproof
 Rain got in and severely damaged House B
 Plaintiff contends that House B was entitled to protection from the weather
Issue
 Is there a right to be protected by your neighbour’s house from the weather? Is there an easement of
protection?
Reasoning and Holding
 Two kinds of easements
o Positive easements
o Negative easement: Gives landowner a right to stop his neighbour from doing something on
his own land
 An example is the right of light
 The plaintiff tries to analogize the proposed right to protection with the right to support, which exists
in common law as an easement
o A man whose house is depend on his neighbour’s house for support is entitled to have that
support maintained
o His neighbour is barred from pulling down his house without providing substitute support
o Right to support can be classified as a positive:
 Right to exert force on neighbour’s house to maintain support
 A right to protection from the weather is entirely negative!
o Law rarely recognizes negative covenants
o They unduly restrict your neighbour in his enjoyment of his own land
o Every man is entitled to pull down his house
 We don’t have an easement here!
Creation of Easements
Express Grant or Reservation: Hill v Attorney General of Nova Scotia
 Easements are created by express grant or express reservation
56
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Can be created in equity by an agreement to grant or reserve that is enforceable by specific
performance
o Also possible to create an equitable easement pursuant to the doctrine of part performance
Easements can also be created expressly by statute, especially in relation to public utilities
Hill v Attorney General of Nova Scotia
o In 1966, the province expropriated land to construct a highway
o The highway severed the farmland into two plots
o Province created entry ramps on both plots
o When province expanded highway, they removed the entry ramps and advised the plaintiffs
that they could no longer access the highway from these two plots
o Plaintiff claimed compensation for expropriation of an easement
 Contention that the 1966 expropriation created an easement (right of way), although
there was no express reference
o SCC allowed claim on the doctrine of past performance
 In 1966, the province permitted plaintiff to cross the highway
 It was contemplated that the plaintiff would rely upon these ramps, which he did for
27 years; the Crown intended for this
 The words and actions of the Crown created an equitable interest in the land in the
form of a right of way over the highway.
Implied Grant or Reservation: Necessity, Common Intention and Non-Derogation
 Easement of necessity when land has been transferred and is completely landlocked, so long as
there is adjoining land retained by the vendor over which an easement can be created
o Courts cautious in recognizing the creation of an easement of necessity
 Hough v Alberta
o Denied easement of necessity over an existing gravel road in circumstances where the
claimant faced inconvenience and expense in constructing its own road
 Hirtle v Ernst
o Applicant purchased land bounded on three sides by a lake and on the fourth side by a
neighbouring land, without access to roadway
o Applicant purchased land knowing it was landlocked and after making unsuccessful attempts
to purchase a right of way
o He wished to build a home on the land but it would have been difficult to transport the
material via the lake
o Court recognized an easement of necessity and formulated the following the principles:
 Doctrine of right of way of necessity is based on public policy- that land should be
able to be used and not rendered useless
 Although there can be no right of way of necessity when there is an alternative
inconvenient means of access, it is a rule of practical necessity, not absolute necessity
 Water access is not considered to be the same as access over land, especially so when
 Water access is not as of right, or is contrary to law
 Access is not available for transporting things needed for reasonable use of the
land
 Where the water access does not have transportation facilities
 Water is not navigable or usable as a highway for commerce and travel
57
Judicial or Legislative Evolution of Easements of Necessity
 Consider the following:
o Law must be able to prevent land from remaining landlocked. The possibility of land
remaining landlocked is contrary to the basic tenet of real property law that land should be
freely alienable. It would seem clearly in the public interest that land should not lie unused
and that its potential for development should be fully realized.
Intention: Wong v Beaumont
 Implied easement may be created by the common intention of the parties, taking into account the
purpose for which land has been granted
 Wong v Beaumont
o Implied easement existed with respect to the construction of a ventilation duct in a restaurant
because it was required by health regulations
 Tenant entitled to construction since the landlord knew of the tenant’s intent to use
the leased property as a restaurant
o It has been suggested that this is simply another example of easement of necessity
 Others have countered that there was no necessity as the property could have been
used for another purpose
 Rationale for an implied easement of common intention is the vendor’s obligation of
non-derogation
 Derogation from the grant not to allow property used as a restaurant
Principle of Wheeldon v Burrows
 A vendor who holds a parcel of land, and who uses a path across one section to gain to another, may
create an implied easement at the time of a transfer of one section to a purchaser
o Division and transfer of the parcel ‘creates’ an implied easement
 Situation prior to division of land called a quasi-easement
 Wheldon applies the principle of non-derogation
o Form of consumer protection, allowing purchaser to acquire amenities that the purchased
land appeared to enjoy
 Barton v Raine
o Implied easement created when a vendor, who owned two adjoining city lots with a mutual
driveway between them, conveyed one lot to his son in 1952
o The use of the mutual driveway had been established prior to the conveyance
o After the transfer, vendor and son continued to share the mutual driveway
 It was obvious and plain to see
 At no time did the father have to gain permission to use the driveway
o The majority of the driveway fell onto one side of the property line
o Years later, both lots were transferred to new purchasers, dispute arose over use of driveway
 “Although the 1952 conveyance made no mention of a right of way, there was by necessary
inference from the circumstances in which the conveyance was made, a common intention of both
parties that, after the conveyance, each party would continue to use the mutual driveway”
 No requirement for affirmative absence admitting of no alternative possibilities
o Court can make a necessary inference based on facts and circumstances surrounding grant
Scope of Easement
 Intention also important when determining the scope of an easement
58

Giecewicz v Alexander
o Express easement had been granted across defendant’s land as the plaintiff had no other
access to a public highway
o Future development allowed for the plaintiff to gain access to the public highway if they built
a suitable driveway
o Consequently, the defendant blocked the former access route on their land
o Court dismissed plaintiff’s claim for an injunction stopping the blockage
 Scope of an express easement depends on the wording of the instrument,
ascertainable by circumstances existing at the time of the grant and known to the
parties or within their reasonable contemplation at the time
 Subsequent changes in circumstances may alter the justifications for the use of the
easement
 A grant may be made for a limited purpose and when it is accomplished, the
right of way shall cease
Easements by Prescription
 Easement by prescription created by length of user of servient land by the dominant tenement
 Differences with the acquisition of title by possession
o Prescription applies to non-possessory interests
 Require acts that are less controlling than those to show possessory title
o Prescription provides for the encumbrance of the servient tenement by the dominant
tenement; the servient tenement rights are only constrained by the other
 Acquisition of possessory title extinguishes the right of the owner, and the new owner
becomes solely entitled to use and possession of the land
o Owner of the servient land obtains no compensation for the rights acquired by neighbour
 This brings up concerns about the need to promote, not punish, neighbourly behavior
 May be inappropriate to create an easement when an individual allows, without
compensation, his neighbour the use of his land for a particular purpose
 Two methods to acquire an interest by prescription
o 1) Proof of usage extending back to time immemorial (only Natives can do this in Canada)
o 2) Doctrine of the lost modern grant
 Assumes the existence of a grant that had disappeared
 Continuous use for 20 years raises a presumption of a lost modern grant
Real property limitations act
s.31
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s.32
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a right to an easement may be acquired by prescription if actually used for twenty years without
interruption
right to an easement is deemed to be “absolute and indefeasible” after forty years unless it was
enjoyed by some consent “expressly given or made…in writing”.
Each of the respective periods of years mentioned in sections 30 and 31 shall be deemed and
taken to be the period next before some action wherein the claim or matter to which such period
relates was or is brought into question, and no act or other matter shall be deemed an interruption
within the meaning of those sections, unless the same has been submitted to or acquiesced in for
59
one year after the person interrupted has had notice thereof, and of the person making or
authorizing the same to be made.
s.33
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No right of prescription to the access and use of light
No right of prescription to the access and use of air
For any dwelling house, work ship or other building
Does not apply to rights acquired by 20 years of use before 1880
Profits à Prendre
 While an easement confers a right to use of the land belonging to another, profits à prendre confers
a right to take something from another’s land (i.e. timber, minerals, wildlife)
 Similar to a license, since both permit the use of another’s land for a defined purpose
Covenants and the Use of Land
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Covenants create non-possessory interests in land
Covenants affect the rights of owners of neighbouring parcels of land
Covenants may limit the scope of activities on servient lands
Covenants involve both contract law and land law
Covenants play an important role as private planning techniques
o “Planning law paints with an extremely broad brush, and is therefore unsuited to the task of
resolving the finer details.”
Covenants are essentially a contractual promise
o As such, it is generally enforceable only where there is privity of contract
General Principles: Privity of Contract and Estate
 Two most important factors are privity of contract and privity of estate
o Privity of contract: Parties stand in direct contractual relation to each other and may enforce
their rights under the law of contract
o Privity of estate: the relationship of tenure between the parties
 This relationship only exists between a lessor and a lessee
 3 situations can exist
o 1) Privity of contract exists!
o 2) Privity of estate exists, privity of contract does not
o 3) Neither privity of contract nor privity of estate exist
 1) Privity of contract
o Exists between a lessor and a lessee, the original parties to the lease
o Exists between a vendor and a purchaser upon a transfer of freehold land
o Personal representatives can enforce contract
o Action lies at law for damages for breach of contract
o Action lies in equity for an injunction or specific performance
o The benefit of the contract (right to sue) is assignable, but the burden (liability) isn’t
o Original parties remain liable to each other for braches during the entire term of the lease
 Privity of estate exists between a lessor and a lessee, because their relationship is based on tenure
o If the lessor assigns the reversion, or the lessee assigns the term of the lease, privity of equity
exists between:
 A) an assignee of the lessor and the original lessee
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 B) an assignee of the lessee and the original lessor
 C) an assignee of the lessor and an assignee of the lessee
2) Privity of estate exists, privity of contract does not
o Spencer’s case
o An assignee of the term or of the reversion may enforce only those covenants that touch
and concern, or relate to the subject-matter of the lease
 Legal test is whether the covenant affects the lessor as lessor, or the tenant as tenant
 Regent Oil Co. v J.A. Gregory: A lease clause providing that the tenant in a
commercial establishment would purchase products from the landlord was
held to touch and concern the land
 By contrast, a covenant by a lessor to repay a security deposit was not
enforceable against the assignee of the lessor, as it “did not touch and concern
the land in the sense of affecting the landlord and tenant relationship”
 Covenants that do not touch and concern the land are not enforceable by the assignees
of the original parties
 Such covenants are enforceable by the original parties themselves
o Privity of estate continues only so long as the relationship of tenure exists, an assignee is
liable only for breaches of covenants that occur while she holds the estate in the land
3) Neither privity of contract nor privity of estate exist
o Between a lessor and a sublessee, since no direct lessor-lessee relationship exists
o Sublessee: person to whom the lessee has sublet part of the term, rather than assign
 In a sublease arrangement, the lessee transfers only part of his leasehold estate,
creating a new lessor/lessee relationship between the lessee and sublessee
 By contrast, when the lessee assigns the leasehold estate, the assignee takes on
the entire interest of the lessee
 As a result, the lessor cannot directly enforce covenants against the sublessee
 Can do so indirectly by enforcing them against the lessee
o In the freehold context, where the vendor of freehold land has retained adjoining or other
land, no privity exists between:
 A) Vendor and the purchaser’s assignees
 B) vendor’s assignee and the purchaser
 C) Vendor’s assignee and the purchaser’s assignee
o Covenant is not enforceable, subject to two exceptions:
 1) In equity, the benefit and burden of a restrictive covenant can run with the land
 2) At law, the benefit, not the burden, of a positive or restrictive covenant that touches
and concerns the land can run with an estate in the land
 The benefit of any covenant, whether or not it touches of concerns the land,
can be assigned in equity, or at law by statute
Freehold Covenants: Enforcement by Law
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Freehold covenants sometimes create by contract between two adjoining landowners to achieve
particular objectives
More often created when a vendor transfers one or more lots to purchasers and creates a burden on a
purchaser’s land in favour of the land retained by the vendor
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In law, when there has been assignment, the benefit of a covenant may pass in defined
circumstances, but the burden of a covenant cannot pass with the assignment of a freehold interest
under any circumstance
Benefits of a Covenant
 Three requirements:
o 1) Covenantee (landowner who receives the benefit) must have a legal interest in the land
o 2) Covenantee and the assignee of the covenantee must have the legal estate in the land
o 3) The benefit of a covenant can pass only if touches and concerns the land
 “Must be shown that the covenant was entered into for the benefit of the land owned
by the covenantee and not merely for his personal benefit
 “It must either affect the land as regards the mode of occupation, or it must be such as
per se, and not merely from collateral circumstances, affect the value of the land
 Where a party covenanted to keep the river banks in good repair, an assignee
of the covenantee was able to enforce this obligation as it touched and
concerned the land”
 There is no distinction between positive convents (requiring the covenantor to take some action)
and negative covenants (requiring the covenantor to refrain from defined activities)
 The running of a benefit of the covenant may occur even if the covenant does not concern the
covenantor’s land
o Pakenham’s Case: Covenantee entered into an agreement with a prior who undertook to
celebrate divine service each week in the covenantee’s chapel
 Assignee of covenant was able to enforce covenant
Burden of a Covenant
 Burden of a covenant relating to land cannot pass
o Because property titles would become heavily encumbered, and the assignability of the land
would be impeded
o Persons subsequently dealing with the land would have great difficulty in ascertain the
existence of such covenants because they do not normally have a physical manifestation
 Parkinson v Reid
o Owners of adjoining lots entered into an agreement under which the defendant’s predecessor
in title covenanted himself and all heirs to construct a stairway to serve as a common
entrance, to repair and replace the stairway as needed, and to permit the plaintiff’s
predecessor in title right of way via the stairway
o SCC refused to grant injunction forcing defendant to construct the stairway
 Would this negative covenant really make the land less alienable?
Freehold Covenants: Enforcement by Equity
Burden of a Covenant
Tulk v Moxhay
 Tulk held the fee simple of the enclosed garden and several houses in Leicester Square
 Tulk conveyed in fee simple the garden to Elms and his heirs and assigns
 Covenant in the deed stated Elms, heirs and assigns, would at their own expense maintain in
sufficient and proper repair the square garden
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Years later, the garden was conveyed to Moxhay, but this conveyance did not include the covenant
in the earlier deed
Moxhay admits that he had notice of the covenant at the time of the conveyance to him
Moxhay intended to demolish the garden
Court grants injunction preventing the demolition
o Question is not whether the covenant runs with the land, but whether a party shall be
permitted to use the land in a manner inconsistent with the contract entered into by his
vendor, and with notice of which he purchased
o In equity, the court will enforce a contract against a party purchasing with notice of it
 No one purchasing with notice of that equity attached to the land can stand in a
different situation from the party from whom he purchased
o Nothing could be more inequitable than that the original purchaser should be able to sell the
property the next day for a greater price, in consideration of the assignee being allowed to
escape from the liability which he had himself undertaken
Tulk v Moxhay regarded as a significant departure from previous authority
o Covenantee now regarded as having a contractual AND a proprietary interest in the land of
the covenantor
o This proprietary interest could run with the land of the covenantor, so as to bind all those into
whose hands that land came
o This case extended the enforceability of the burden of covenants in equity, beyond privity of
contract and privity of estate
Policy Rationales for Enforcing Covenants
 Compare with the Duke of Bedford v The Trustees of the British Museum
o A similar injunction was not granted because the “character of the adjoining lands had
been so altered with reference to the land conveyed, that the restriction in the covenant
had ceased to be applicable according to the intent and spirit of the contract
o “Unlike Tulk v Moxhay¸ the party who was seeking against the other the performance of
the covenant, had himself, by his own acts, placed the property under such different
circumstances”
 Argued that these injunctions are granted on an arbitrary basis; if the result is desirable the
injunctions will be awarded!
Requirement of Notice
 Requirement of notice to an assignee of the covenantor in order for the burden of the covenant to run
in equity
o Covenant not enforceable if the assignee is a bona fide purchaser for value without notice
Requirement that the Covenant Be Negative
 Haywood v the Brunswick Permanent Benefit Building Society
o Court distinguished between positive covenants, unenforceable against an assignee of the
covenantor in equity, from negative covenants, which could bind successors in title of the
covenantor
 This goes back to the policy arguments surrounding land alienability; positive covenants could
render land less valuable
 Recall Tulk v Moxhay
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o Court called it a hybrid covenant, where there was the positive acts to maintain the garden,
and the negative act to not demolish the garden
o Others called it positive in form, negative in essence, since it was designed to prevent the
covenantor form building in the square
Ontario Law Reform Commission stated that positive covenants may enhance property alienability
since “they operate to protect the amenities of neighbourhoods and the competiveness in businesses
o Moreover, land registration systems have eliminated the problem of ascertaining what
covenants may bind successors in title to covenants
Requirement that the Covenantee Retain Land Benefited by the Covenant
 Re British United Automobiles Ltd. and Volvo Canada Ltd.
o A homeowner’s association was unable to enforce a restrictive covenant since it owned no
land capable of benefiting from the covenant.
 This distinguishes covenants “personal” to the covenantee from those that relate to
the land owned by the covenantee”
 Similar to the dominant, servient tenement for valid easement requirement
 880682 Alberta Ltd. v Molson Breweries Properties Ltd.
o Land benefited by the covenant was 200 miles away from the land purchased
 Covenant unenforceable as it did not touch and concern the lands 200 miles
 Not sufficiently proximate; a contract benefiting the individual, not the land
 Important for the covenantor and assigns to be able to identify precisely which lands are benefited
by a covenant
o Where the land to be benefited was not identified in the agreement, Court has held that the
burden of a covenant in an agreement did not run
o Re Ballard’s Conveyance 1937
 Court held that the burden of a covenant could not run because the covenantee had
retained 1,700 acres of land, and it was not reasonable that the covenant could benefit
such a large dominant tenement
o In contrast, Wrotham Park Estate Co. Ltd. v Parkside Homes Ltd. 1974
 Courts will generally accept that a covenant benefited the covenantee’s land unless
there was evidence that it would be unreasonable to do so
Summary of Requirements for the covenant’s burden to run in equity
1. Notice on the part of the assignee of the covenantor
2. Negative or restrictive covenant
3. Land benefited by the covenant retained by the covenantee
4. Covenant touches and concerns the land, not merely a personal covenant
5. Intention on the part of the covenantor to bind successors and not just the covenantor personally
Benefit of the Covenant
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In some situations, the assignee of a covenantee is unable to rely on legal principles for the running
of a benefit of a covenant
o For example, if the assignee has only an equitable interest in the land
Different requirements in equity for the running of a benefit of a covenant
o A) It must touch and concern the land
o B) The assignee must demonstrate entitlement to the benefit
 The covenant was annexed to the land, either expressly or by implication;
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 Covenant was assigned in addition to the conveyance; or
 Covenant was between owners whose parcels of land comprise a building scheme
Annexation of a covenant occurs when a deed expressly provides that a covenant is for the benefit
of an identified parcel of land, or for the benefit of the present and subsequent owners of the
benefited land
o Requires that a deed must specify whether the convenient is annexed to all, or only part, of
the covenantee’s land
 Unclear whether the Federated Homes case created a presumption that a covenant is
annexed to all parts of the land unless a contrary intention appears
o Unenforceable when the deed failed to refer to any land to be benefited
Assignee of the benefit may enforce it, in the absence of annexation, if the covenant has been
expressly assigned
o Necessary for an assignment of the benefit to occur at the same time as the conveyance of the
freehold estate
o Only covenants that benefit the dominant land, not personal covenants, are enforceable
o Assignment must identify the benefited land clearly
Benefit can also be enforced in equity through the creation of a development/building scheme
o Developer imposed mutual covenants on the purchasers of all the lots in a defined area for
the benefit of the development as a whole
o Requirements include:
 Common vendor who had clearly defined the land subject to the building scheme
 Made all the lots subject to similar covenants
 Sold lots with the intention that the covenants should be for the benefit of all the lots
in the scheme
 All purchasers must have expectation that the covenants applied to all the lots and
were intended to benefit all of them
o Clear description of the land and clear notice to the purchasers; requirements common in all
of equity
Part III: Personal Property
Concept of Possession
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“Possession is 9/10 of the law”
Concept of possession demonstrates basic common law principle that property interest are always
relative, never absolute
o Relativity of title
 The plaintiff who can establish a right based on possession that is prior in time to the
defendant’s claim can succeed in an action against the defendant, even if there is a
“true owner” (person with a better title than the plaintiff)
 Defendant cannot rely on the fact that someone else has a claim prior to or
better than the plaintiff’s claim
o This 3rd party is referred to as the jus tertii
o A person’s possession of a chattel may, by itself, create a proprietary interest
 Possessory title
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Essay time! Carol Rose, “Possession as the Origin of Property
How do things come to be owned?
 Common law approach is that possession or occupancy is the origin of property
o Possession is the root of title
 Pierson v Post
o Post was hunting a fox for quite a while
o Pierson appeared, killed the fox, and ran off with it
o Post sued Pierson stating that his pursuit of the fox established his property right to it
o Court held that possession went to the one who killed the animal
 This act brought the animal within the certain control that gives rise to possession
o Possession thus means a clear act, whereby all the world understands that the pursuer has an
“unequivocal intention of appropriating the animal to his individual use”
o Dissenting judge commented that this matter be left to a panel of sportsmen
 Pierson presents two principles for defining possession
o 1) Notice to the world through a clear act
 Consent theory: community requires clear acts, acquiesce in individual ownership
where the claim is clear and no objection is made
o 2) Reward to useful labor
 Labour theory of property; mixes in his labour by hunting
 Common law of first possession, in rewarding the one who communicates a claim, rewards useful
labour
o The useful labor is the very act of speaking clearly and distinctly about one’s claim to
property
 Claim must be in a language that is understood, and the acts of possession that
communicate a claim will vary according to the audience
 Relates back to dissenting judge in Pierson
 Acts of possession are, in modern terms, a text, and the common law rewards the author of that text
 Some objects need to be translated into sets of secondary symbols to attest to possession
o For example, patent and copyright law
 Audiences that do not understand or accept the symbols are out of luck!
o In Pierson, the majority`s clear act rule referred to a wider audience and a more widely share
set of symbols than the dissent`s ruling
o In the history of American territorial expansion, the Indians themselves had never done acts
on the land sufficient toe establish property in it. The Indians had never really undertaken
those acts of possession that give rise to a property right`
 Uncertainty as to claims meant that no one would make any productive use of the
land; no incentive when there is no reasonable assurance of possession
 The audience presupposed by the common law is a commercial people; a people whose activities
with respect to the objects around them require an unequivocal delineation of lasting control so that
those objects can be managed and traded
o Possessory title is the articulation of a specific vocab within a structure of symbols approved
and understood by a commercial people
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Personal Property
The Tubantia
Facts
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Tubantia sunk
Plaintffs assert possessory rights over the wreck and its cotents
Planitffs claim that the defendants trespassed
Plaintiffs claim that there was wrongful interference by the defendands and their servants with
the lawful business of the plaintiffs
Issue
 Whether in respect of the Tubantia and her cargo any rights of the plaintiffs have been infringed
Reasoning
 No proof or presumption sufficient to demonstrate that the owners of the wreck or cargo in
question have lost whatever rights they original had  must have intention to abandon
 The plaintiff ascertained and marked out the area occupied by the Tubantia
 Plaintiffs kept in position craft from which work could be carried upon the hull and in the holds
of the ship
 A thing taken by a person of his own motion and for himself and subject in his hands or under
his control to the use of which it is capable, is in that person’s possession
 Common practice to hold possession of a ship wreck by mooring upon it a single buoy (which
the plaintiffs had done)
 With expert assistance court finds that the plaintiffs were in effective control of the wreck as a
whole and that they were I a position to prevent useful work by new comers
 No new comer could without violence have exercised upon the wreck the kind of control the
plaintiffs had
 There was an animus possidendi in the plaintiffs
 There was the use and occupation of which there subject matter was capable
 There was a power to exclude strangers from interfering
 The plaintiffs did with the wreck what a purchaser would prudently have done
 The defendants fouled the plaintiffs’ moorings; they took a mooring upon the wreck and they
sent down a diver who entered upon the wreck
 These acts were dine with the intention of hampering the plaintiffs and depriving them of any
advantage thy had gained by their work upon and possession of the wreck and of securing
possession for the defendants
 These were intentional interferences with and molestation of the plaintiffs’ workmen in their
work
 Cassman v Weiss
o In the case of a derelict the salvors who take first possession have a maritime lien on the
ship for salvage services and the entire and absolute possession and control of the vessel
o No one can interfere with them except in the case of manifest incompetence
 No manifest incompetence here
 A possessory right is of a limited and transitory kind
 Injunction is properly claimed when there is a threat or danger of repetition of the wrong
complained of
Ratio
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Finders gain possessory interest as against all others except as against the owners of the thing,
unless the thing has been abandoned
Holding
Injunction ordered against defendants
Keron v Cashman 1896 (Joint Finding)
Facts
 Five boys walking home found $775 in bills when an old stocking they were playing with broke
open
 Crawford found the stocking, and the oldest, Cashman, snatched it from them
 Crawford claims sole possession, other boys claim an equal division of the money
Reasoning and Application
 The lost money must be treated as legally found while in the common possession of all boys
o Crawford did not treat the stocking when he initially picked it up as asserting ownership or
possession over it for the purpose of examining or appropriating its contents
 Had the stocking been a wallet, the intention could be shown to be differently
o Common possession arises from the fact that the old stocking was, at the time it broke, in
actual use by all the boys as a plaything, and for the purpose of play only
 As a plaything, the stocking was in common possession of all the boys
 the money must also then be considered to be found by all of them in common
o The money within the stocking must be treated as lost property, which was not `found` until
the stocking was broken open
Edmonds v Ronella 1973
 While rummaging through trash, two boys found an envelope
 A girl came to help them, and together, they picked up the bag and went to her house
 A finder has been defined as the person who first takes possession of lost property but to be a legal
finder, an essential element is an intention or state of mind with reference to the lost property
 Court found that the lost property was not found until the three children had removed it from the
parking lot. They are joint finders and were entitled to an equal share of the money
The Issue of Intention
 Principle entitling an occupier of a building to claim possession of a lost chattel is whether the
occupier has manifested an intention to exercise control over the building and chattels found
within it
 Finder`s intention is relating to determining claims to possession joint finders cases
 Intention in defining rights to possession is relevant to disputes between a finder and someone who
subsequently interferes with the finder`s possession of a chattel
 Can we apply the joint finders’ flexible concept of possession to disputes between a finder &
occupier? See the Parker case below
o A more preferable rule would be one of equal division between occupier and finder
o Merit would bring clarity to claims
o More accurately reflect the ethics of the situation
 Unless the finder is dishonest or a trespasser, neither party has the morally superior
claim
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Wilson v Lombank
Facts
 Wilson claims damages for trespass against Lombank
 Plaintiff bought car from a man not entitled to sell it
 Wilson brought car to garage for repairs
 Garage completed repairs and placed the are on the forecourt of the garage
 Representative of Lombank took the car from the garage (thinking it was the defendant’s)
 Car was owned by Mercantile Credit
 When Lombank found out the car belonged to Mercantile, they returned it to Mercantile credit
Issue
 Was the defendant entitled to take the car and bring it to Mercantile? Liable for trespass?
Reasoning
 Salmond on torts
o Defendant cannot plead the jus tertii
o Exceptions:
 If the plaintiff was in actual possession
 If the defendant got possession of the goods by trespass, can plead jus
tertii
o When he defends the action on behalf of and by the authority of
the true owner
o When he commited the act complained of by the authority of the
true owner
o When he has already made satisfaction to the true owner by
returning the proerpty to him
 If plaintiff was not in actual possession
 Proof of jus tertii will destroy plaintiff’s claim to title
 Ancona v Rogers
o Where the bailor has the property and the bailee has possession
 Where the bailor has no right to demand an immediate return of the article at his
will
 Bailor can sue in right of his property
 Action in right of possession belongs to the bailee only
 BUT where the bailor can at the moment demand the return of the object bailed,
he still has possession
 Plaintiff was in possession of the car
o He had the right to immediate possession
o Never lost possession of the car
 Could have at all times demanded the return of the car
 Since the plaintiff never lost possession of the car, the defendants wrongfully took the car
Holding
 Plaintiff is entitled to recover the full value of the car, cost of repairs should also be added
Ratio
 A third party cannot claim innocence for returning a thing mistakenly owned by another to the
rightful owner, unless
o He defends the action on behalf of and by the authority of the true owner
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o He committed the act complained of by the authority of the true owner
o he has already made satisfaction to the true owner by returning the property to him
The person in current possession still has a better right to the thing than the third party who
returns it
Finders and First Possession
Armory v Delamirie 1722
 Boy found a jewel and carried it to a goldsmith’s shop to know what it was, and delivered it into the
hands of the apprentice for appraisal
 Apprentice never game the jewel back
 Court held that the finder, though he does not by such finding acquire an absolute property or
ownership, has a proprietary interest to enable him to keep it against all but the rightful owner
Remedy of Trover
 Trover is a common law action available to remedy an interference with chattels
o Trover means “to find”
o Remedy is now called Conversion
 Provides a remedy where property is destroyed, or wrongfully “converted” to the use
of another
Parker v British Airways Board
Facts
 Plaintiff found a gold bracelet on the floor
 He gave the bracelet to the official of the defendants with a note of his name and asked for the
bracelet to be returned to him if it was not claimed by the owner
 The owner never claimed the bracelet, but the defendants still sold it for $$$
 Plaintiff claims that the act of finding a chattel which had been lost and taking control if it gives the
finder rights with respect to the chattel
 Defendants claim that they had rights in relation to the bracelet immediately before the plaintiff
found it, and that these rights are superior to that of the plaintiff’s
o Occupier of land has such rights over all lost chattels which are on that land, whether or not
the occupier knows of their existence
Reasoning
 the finder, though he does not by such finding acquire an absolute property or ownership, has a
proprietary interest to enable him to keep it against all but the rightful owner
1. One who ‘finds’ a lost chattel in the sense of becoming aware of its presence, but who does
no more, is not a ‘finder’ in the legal sense and acquires no rights
2. Exceptions to this rule is the trespasser; wrongdoers shouldn’t benefit from their wrongdoing
 Therefore, courts have had to give the rights to someone else, usually the occupier of
the property
 Chattels which are attached to realty (land or buildings)
1. The occupier of the realty will have a better title over that of the finder
 Rationale that the chattel is to be treated as an integral part of the realty, and therefore
cannot be lost; OR
 The ‘finder’ has to do something to the realty to detach the ‘lost chattel’, and can only
do so without being a trespasser if he has some form of a license
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2. South Staffordshire Water Co v Sharman
 Defendant was employed by the occupier of land to remove mud from the bottom of a
pond
 He found two gold rings embedded in the mud
 Plaintiff occupier was held to be entitled to the rings
3. Bridges v Hawkesworth
 Facts: A commercial traveller entered a shop and found a small parcel of $$$
 Traveller gave the parcel to the shop-owner, asking him to keep them until the true
owner claimed the parcel
 Three years later, the traveller demanded the return of the parcel and the shop-owner
refused
 Reasoning: “Right would clearly have gone to plaintiff had the parcel been picked up
by him outside the shop”
 Delivering the parcel to the shop-owner would not have altered his possessory title
 Issue is whether the circumstances of the parcel being found inside the shop makes a
difference?
 Parcel was never in the shop-owner’s custody, nor within the protection of the house
 The unknown presence of the parcel on the premises could not without more, give the
shop-owner any rights or impose any duty upon him in relation to the parcel
 Distinguishable from Sharman’s case because the rings were part of the land, and
that the finders were employed by the plaintiff and directed to return found property
4. From these cases, the general principle is that “where a person has possession of realty, with
a manifest intention to exercise control over it and the things which may be upon or in
it, then if something is found on that land, the presumption is that the possession of that
things is on the owner of the realty
 Impossible to go further and hold that the mere right of an occupier to exercise such
control is sufficient to give him rights in relation to lost property on his premises
5. Kowal v Ellis
 Plaintiff was driving across the defendant’s land when he saw an abandoned pump on
that land
 Court holds that the plaintiff is entitled to possession of the pump, unless the
defendant asserts and proves a title to the pump superior to that of the plaintiff. Such
a superior may arise
 A) independently of the original owner of the pump if the original owner has
dealt with it in such a way as to enable the landowner to assert a claim as
owner of the chattel; OR
 B) by reason of the landowner having himself become the bailee of the chattel
on behalf of the true owner
o What must be shown is that the landowner, who has not acquired
ownership, is a prior bailee of the chattel with all the rights AND
obligations
Rights and Obligations of the Finder
1. Finder acquires no rights over it unless a) it has been abandoned or lost, AND b) he takes it
into his care and control
2. Finder acquires very limited rights over it if he takes it in with dishonest intent or by
trespassing
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3. A finder, whilst not acquiring any property or ownership in the chattel, acquires a right to
keep it against all but the true owner or those in a position to claim through the true owner or
one who can assert a prior right to keep the chattel which was subsisting at the time when
the finder took the chattel into his care and control
4. Any servant or agent who finds a chattel in his course of employment or agency and not
wholly incidentally or collaterally thereto and who takes it into his care and control does so
on behalf of his employer or principal who acquires a finder’s right to the exclusion of those
of the actual finder
5. A person having a finder’s rights has an obligation to take such measures as in all the
circumstances are reasonable to acquaint the true owner of the finding and present
whereabouts of the chattel and to care for it meanwhile
 Rights and Liabilities of an Occupier
1. An occupier of land has rights superior to those of a finder over chattels in or attached to that
land and an occupier of a building has similar rights in respect of chattels attached to that
building, whether in either case the occupier is aware of the presence of the chattel
2. An occupier of a building has rights superior to those of a finder over chattels upon or in, but
not attached to, that building if, but only if, before the chattel is found, he has manifested an
intention to exercise control over the building and the things which may be upon it or in it
3. An occupier who manifests an intention to exercise control over a building and things which
may be upon or in it so as to acquire rights superior to those of a finder is under an obligation
to take such measures as in all the circumstances are reasonable to ensure that lost chattels
are found and, upon their being found, whether by him or by a third party, to acquaint the
true owner of the finding and to care for the chattels meanwhile. The manifestation of
intention may be express or implied from the circumstances including, in particular, the
circumstance that the occupier manifestly accepts or is obliged by law to accept liability for
chattels lost upon his ‘premises’, ex: innkeeper, carrier’s liability
4. An ‘occupier’ of a chattel (ship, mobile home) is to be treated as if he were the occupier of a
building
Application to the case at hand
 Plaintiff was not a trespasser
 He acted with obvious honesty, gaining a full finder’s rights and obligations
o Discharged those obligations by handing the bracelet to an official of the defendant
 Defendant did not have a manifest intention
o No evidence that they searched for lost articles regularly or at all
o Not comparable to the control exerted in a bank vault
o They did control entry into the lounge but this was not a manifest intention
 Restricted entry solely due to class of customer
Bird v Fort Frances
Facts
 Plaintiff was playing with a number of boys when he found a tin with $$$
 Plaintiff gave $$$ to his mum, who hid it under the cushion of the sofa
 Cop secured the money from the plaintiff for the purpose of returning it to the rightful owner
 After failing to find the true owner, the cop turned the cash over to the town treasurer
 The defendant alleges that the moneys were found on premises owned by the late Sandul and were
rightfully retained by it as trustee for the true owner
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 No claim made by the estate of Sandul
Reasoning and Application
 The finder of a chattel, though he does not acquire absolute property or ownership, yet has such
property as will enable him to keep it against all but the rightful owner, and may maintain trover
 Hannah v Peel
o Defendant was the owner of a house which he never occupied
o The plaintiff found in a bedroom a brooch
o No evidence that the defendant had any knowledge of the existence of a brooch
o Court found in favour of the plaintiff

In the case at hand, the plaintiff was not a true finder
o Money was not found in a public place
o No evidence to show that the tin had been lost in the true sense
 $$$ had been carefully put in the container for the purpose of hiding it in the place in
which it was discovered; may have been hidden by a thief
 The person who put the money where it was found put it there deliberately
o Plaintiff had no right to remove it from the property of another = wrongful taker
 Every effort was made to conceal the fact that the plaintiff had taken possession of
the money
o However, this finding does not matter in this case!
 Did the plaintiff part with possession of the money to his money under such circumstances as to
deprive him of his right of action?
o “When certain facts have once been made manifest which confer a right, there is no general
ground on which the law need hold the right at an end except the manifestation of some fact
inconsistent with its continuance”
o “In order to sue for the recovery of goods, the finder or wrongful taker must actually have
taken possession, but when possession is once acquired it is not necessary, in order to retain
it, that the effective control which must be used to gain possession originally should continue
to be actively exercised
Holding
 When the cop was unable to ascertain who the true owner was, he ought to have returned the money
to the custody from which it came.
 The defendant can have no higher right that the cop would have had, had he not handed the money
over to the defendant
Bailment: Separation of “Title” and Possession
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

A license arises when the owner of real property, licensor, agrees to permit another, licensee, to
enter onto the property
A leasehold estate arises when the owner of real property, landlord (lessor), agrees to lease his
property for a period of time to another, tenant (lessee)
Bailment, license and lease involve a division of ‘ownership’ and ‘possession’
a) Bailment arises any time an owner parts with possession of a chattel
 Owner is a bailor, and the borrower is the bailee
 Although the owner retains title, he no longer has possession of the chattel; instead
the bailee is in lawful possession of the chattel
b) Bailment may be contractual or gratuitous
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c) Relationship is typically consensual, although it may arise where there is no consent or
agreement between the bailor and bailee
 The finder of lost property might be considered in law to be the bailee of lost property
 A bailment may arise where one person is in possession of another’s goods,
mistakenly thinking they are his own
Bailees are liable only on the basis of a fault and a different level of care was imposed depending on
the nature of the bailment
a) Bailment for the sole benefit of the bailor, the bailee assumes a low duty of care and is liable
for gross negligence only
b) Bailments for the sole benefit of the bailee, the bailee assumes a much higher duty of care
and is liable for slight negligence
c) Bailments for mutual benefit, a duty of ordinary diligence applies, unless otherwise altered
by the terms of the contract
 Duty of care might be altered if the contractual agreement is characterized as a license
 Where a sufficient degree of control has not been transferred, a license shall be found
 A mere license to enter onto the property will not generally impose any particular
obligation to safeguard chattels
Heffron v. Imperial Parking
Issue
 Is the relationship between the car owner and the parking lot one of license or bailment?
Facts and Reasoning
 Bailment defined as a “delivery of personal chattels in trust, on a contract, express or implied, that
the trust shall be duly executed, and the chattels redelivered in either their original or an altered
form, as soon as the time or use for, or condition on which they were bailed, shall have elapsed or
been performed
 There must be a delivery by the bailor, that is to say, he must part with his possession of the
chattel in question
 License defined as simply the grant of such authority to another to enter upon land for an agreed
purpose as to justify that which otherwise would be a trespass and its only legal effect is that the
licensor until the license is revoked is precluded from bringing an action
 The following facts in the case at hand create a bailor-bailee relationship:
 Car owner delivered the keys and therefore the control over the movement of the car to the
attendant at the attendant’s request
 Parking ticket indicated that surrender of the specific ticket would be necessary in order to
obtain delivery from the attendant of the automobile
 The attendant’s job duty is more than the mere function of receiving money upon the parking
of the car
 No conditions were imposed concerning the removal of cars prior to the parking lot’s close
 The notice of a closing hour reasonably infers an active operation of the parking lot
 No mutual intention of a mere parking of the car by the owner on the owner’s lot without any action
required by the appellants beyond the collection of the fee
 The stipulation that the keys be left in the car so as to enable the lot owners to place and move the
car at their convenience anywhere within the owner’s parking facility, all indicate a relationship
quite different from that of a license passively granted by the lot owner as a licensor to the car owner
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The car owner surrendered and the lot owner accepted control of this valuable and highly mobile tem
of property
 There is a bailment!
Did the parties to this car parking transaction contemplate that upon the delivery of the complete
possession and control over the car, the parking lot operator would be free to maintain silence and
escape any liability upon his failure to deliver the car upon surrender of the appropriate parking
ticket?
 Such an assumption would make meaningless the purpose of parking a car off the highway
on a lot supervised by an attendant
 Upon failure of delivery the car, the lot owner has committed a fundamental breach of the
contract of bailment
 No exclusionary clause or reduction of liability can occur!
What about damages for the goods stored within the car?
 On the facts, the goods are not of such an unusual nature that would not be reasonably be
expected to be regularly found in a car and it, therefore, is not unreasonable for a parking lot
operation to assume that many of the cars left in his custody will contain this kind of property
 Therefore, these goods are constructively included in the bailment arrangements, and
the parking lot owner is liable for these goods as well!
Farley and Stevens v Goldworthy
Facts
 Plaintiff = car dealar
 Defendant agreed to trade in his car and some cash for a new car
 Defendant then said that he would like his wife to see the car, and that he would go ahead with
the trade in if the wife liked the new car
 Plaintiff let him take the car, in return for the old car’s key (which was then parked on the
plaintiff’s lot)
 Defendant returned the car smashed up, and took his car back ( without speaking to the plaintiff)
 When plaintiff tracked down the defendant, the defendant refused to sign the sale agreement
Issue
 Is the defendant liable for damages?
Reasoning
 Definition of bailment:
o Any person is to be considered as bailee who otherwise than as servant either:
 receives possession of a thing from another
 or consents to receive or hold possession of a thing from another
 upon an undertaking with the other person either to:
 keep and return or deliver to him the specific thing
 or to apply the specific thing according to the directions of the other
person
 salient feature of bailment: possession
 bailment was created here
 plaintiff delivered possession of the car to the defendant, defendant had possession of the car
when it incurred damage
 Coggs v Bernanrd  kinds of bailment
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o Depositum Bare naked bailment: good delivered by A to B for the use of B
 Bailee is not liable if the goods are stolen without a fault of his
 Only liable for gross neglect
o Commodatum  lending from A to B for free
 Borrower is bound in the strictest care and diligence to keep the goofs so as to
restore them back again to the lender because the bailee has benefited by the use
of them
 Bailee is liable for the smallest of neglects
 Bailee is required to exercise the utomsost degree of car
o Location et conduction A leaves good with B to be used by B for hire
o Vadium  pawn or pledge
o When goods are delivered to be carried or something is to be done about them for a
reward to be paid by the person who delivers them to the bailee who is to do the thing
about them
o Delivery go goods to someone who is to carry them or do something about them for free
 An ordinary degree of care and skill is required where both the bailor and bailee benefit from the
transaction , greater degree of diligence where the benefit accrues only to the bailee
 Bailee is required in every case to take the degree of care which may be reasonably looked for
having regard to all the circumstances
 Because bailment is a contract, the parties can vary liability through its terms
 That fact that a chattel is lost or injured while in the possession of the bailee raises a prima facie
presumption against him
o Can rebut the presumption by proving that he was not to blame for the loss or injury
 Defendant was a bailee for reward, where the reward was the trade or this was a gratuitous
bailment
 Regardless of the type of bailment, the defendant is at fault
o Drove in wintery conditions with a very marked departure from the standards by which
responsible and competent people in charge of a car habitually govern themselves
o Conduct after the accident was irresponsible: defendant made little effort to contact the
plaintiff
Holding
 Plaintiff is liable for the damages to the car
Ratio
 An ordinary degree of care and skill is required where both the bailor and bailee benefit from the
transaction , greater degree of diligence where the benefit accrues only to the bailee
Bailments and Third Parties
 The owner of a chattel may be liable to a third party in 3 cases:
o If the bailee is acting simultaneously as the bailor’s agent, the bailor may be liable for the
negligent acts of the agent
o The bailor may be guilty of some personal negligence
 If the bailor provides careless instructions regarding the use of the chattel, leading to
injury to the 3 rd party, the bailor must be liable in to tort to the 3rd party
o Bailor may bail complicated machinery, along with an operator, to the bailee, in which case
the bailor will remain liable for the operator’s negligence
 More likely to succeed when injuries are related to a defect in the chattel itself
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 Apply Donaghue v Stevenson
A bailee may maintain a right of action against a 3rd party who has damaged or wrongfully deprive
the bailee of the bailed property, even where they do not have lawful possession
o Minichiello v Devonshire 1967
 Plaintiff had his car stolen from the defendant’s parking lot
 Inside the car were rings that the plaintiff was holding as bailee
 Defendant argued that the plaintiff could not recover the value of rings because the
plaintiff, as bailee, was no longer in actual possession of the bailed jewels while the
car was parked
 Court found the parking lot owner liable as there had been a constructive bailment
of these goods to the defendant
 Court held that the plaintiff was only required to show that he had the right of
possession over the jewels, not actual possession
Although not in possession of the bailed property, the bailor may nonetheless bring an action against
a 3rd party for any wrongdoing with respect to it on the grounds that the bailor is entitled to recover
his property interest in the bailed property
The Winkfield
Facts
 Collision between the Winkfield and the Mexican
 The Mexican carried mail which was lost because of the collision
 This is a claim by the Post-Maste or behalf of himself to recover the value of the letters and
parcels in hs custody as a bailee
Issue
 Can the postmaster as a bailee recover damages from The WInkfield for the loss of letters?
Reasoning
 A bailee in possession car recover the value of goods lost by the negligent acts of a third party
 The wrongdoer who is not defending under the title of the bailor is unconcerned with the rights
between the bailor and bailee and must treat the possessor as the owner of the goods for all
purposes, irrespective of the rights and obligations as between the bailor and bailee
 There is an obligation of the bailee to the bailor to account for what he has received in respect of
the destruction or conversion of the thing bailed
 Armory  a mere finder may recover against a wrongdoer the full value of the thing converted
 As between the possessor and the wrongdoer the presumption is that the person who has
possession has the property
 A person possessed of goods has good title against every stranger
o One who take these goods having no title is a wrongdoer and cannot defend himself by
showing that there was title is a third person
o Against the wrongdoer, possession is title
 The right of the finder to recover full damages cannot be made to depend upon the extent of his
liability over to the true owner
 If this is the case for a finder, it should be the same for a bailee
 Burton v Hughes
o Plaintiff who borrowed furniture and was therefore a bailee was held to be entitled to sue
in trover wrongdoers who had seised it, without giving evidence of the agreement under
which he held the furniture
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o The agreement defining the conditions of the plaintiff’s interest was immaterial
o The right of the bailee in possession to sue cold not depend upon the fact or extent of his
liability over to the bailor
Sutton v Buck
o Possession under a general bailment is sufficient title for the plaintiff in trover
Swire v Leach
o Landlord wrongfully took in distress pledges in the custody of pawnbroker
o Pawnbroker was entitled to recover in action against the landlord the full value of the
pledges
Bailee has a general action of trespass against a stranger, same as in an action of trover
Ruth v Wilson
o Gratuitous Bailee in possession had a right to recover the full value of the horse in an
action on the case against a defendant by whose negligence the horse fell and was killed
Against a wrongdoer possession is tittle
The chattel that has been converted or damaged is deemed to be the chattel of the possessor and
of no other, and therefore can claim for the loss or deterioration of the chattel
As between bailee and stranger possession give title  not a limited interest, but absolute and
complete ownership entitled to receive back a complete equivalent for the whole loss or
deterioration of the thing itself
As between the bailor and bailee, the bailee has to account for the thing bailed so he must acouf
for that which has become its equivalent and now represents it
The wrongdoer having once paid full damages to the bailee has an answer to any cation by the
bailor
Ratio
 As between bailee and stranger possession give title  not a limited interest, but absolute and
complete ownership entitled to receive back a complete equivalent for the whole loss or
deterioration of the thing itself
Holding
 Post master get DOLLA DOLLA BILLZ!
PART IV: ACQUISITION OF PROPERTY INTERESTS
Requirements for a Valid Gift Inter Vivos
 Gift can be made by a deed of gift
o A document in writing that is signed by the donor, sealed, and delivered
 In the absence of a deed, gifts are legally recognized if three requirements are met:
o Intention to make a gift on the part of the donor
o Acceptance of the gift by the donee
o Sufficient act of delivery
 Once all 3 elements are in place, the gift is irrevocable
 “Equity will not perfect an imperfect gift”
Delivery
 The act of delivery provides tangible proof of a gift and helps demonstrate the necessary intention to
make a gift
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o This is the difference between contract law and gifts
 Contract involves an exchange of promises and will enforce with expectation
damages
 A gift, a unilateral promise attaches no significance in the absence of delivery
o It allows donors to change their minds and retract a gift
Cochrane v Moore
Facts
 Benzon by words of present gift gave to Moore, and Moore accepted from Benzon, one undivided
fourth part of the horse, Kilworth
 Cochrane gave a bunch of loans to Benzon
 To settle his debt, Benzon conveyed the horse, Kilwirth, to Cochrane via a bill of sale
 The day before the execution of the bill, Benzon realized he had already gifted Kilwirth to Moore,
and Benzon told Cochrane this
 Cochrane assured him that it should be alright and the bill of sale was executed!
Reasoning and application
Irons v Smallpiece
 “In order to transfer property by gift there must either be a deed or instrument of gift, or there must
be an actual delivery of the thing to the donee”

According to old law, no gift or grant of a chattel was effectual to pass it whether by parol or by
deed, and whether with or without consideration unless accompanied by delivery. Two exceptions:
o Conveyance by deed
o Contract of sale where the intention of the parties is that the property shall pass before
delivery
 You cannot bring an action to give a gift because the fact that you’re forcing someone to give a gift
means that the ‘delivery’, the ‘giving’ hasn’t occurred
 The giving and taking are the two contemporaneous reciprocal acts which constitute a gift. They are
a necessary part of the proposition that there has been a gift. They are not evidence to prove that
there has been a gift, but facts to be proved to constitute the proposition that there has been a gift
Holding
 No delivery = no gift!
Historical Development of the Requirement of Delivery
 Delivery of gift still remains a requirement while livery of seisin has been eliminated
o Survival of requirement likely due to the reasonable desire to protect property of the
individual against ill-founded and fraudulent claims of gift, resting only on the assertion of
oral words of gift, concerning which the evidence may be doubtful and open to controversy
Defining Delivery in Cochrane
 In Hillebrant v Brewer 1851, it was held that the branding of range cattle by the donor with the
recorded brand of the donee constituted delivery
 In State v Weinstein 1944, a gift was found where residents left their waste paper on the curb for
collection by the city
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o This barred a scrap dealer from taking the waste paper for his own use as titled had legally
passed to the city
Trust
Express Trust
 Cochrane v Moore is an example of a transfer of title without a change in possession
o What took place between Benzon and Cochrane before Benzon executed the bill of sale to
Cochrane, constituted Cochrane a trustee for Moore of ¼ of the horse Kilworth
o “Since trusts can be created when a person transfers property to a trustee to hold it for named
beneficiaries, there is an obvious similarity between the transfer of a gift and the creation of a
trust
 A trustee has an equitable duty to the beneficiary and the duty is enforceable in equity against a
subsequent purchaser who has notice of the equitable interest
 To create a trust, a person usually executes a deed of trust
o The deed defines the property that is to form the trust
o Identifies the trustees and beneficiaries
o Specifies the trustee’s duties
 For an express trust, three matters must be certain:
o Intention to create a trust
 Unlike gift, there is no necessity for physical delivery
o Subject matter of the trust
o Object of the trust
 No need for any physical delivery of trust property
o Possible to create an express trust by oral declaration, as seen as Cochrane
 Watt v Watt Estate 1987
o Plaintiff provided unpaid assistance to the running of a marina for 20 years
o Plaintiff and marina owner built a boat; owner had title to the boat
o Plaintiff and owner both had keys to the boat and would use it freely
o Marina owner wrote out a document declaring that the boat was owned jointly by the owner
and plaintiff
o He gave the document to the plaintiff
o Owner died, plaintiff claims entitlement to the boat as a gift from the marina owner
o Court holds that there was no valid gift because the delivery of the keys to the boat did not
constitute delivery of a gift, especially since the marina owner also retained a set of keys
 The document constituted an executed trust which made the plaintiff and his estate a
trustee of the one-half interest in the boat
 Questions to ask: Is it appropriate for a court to hold that a trust exists when there is no valid gift? Is
equity being used here to “perfect an imperfect gift”
Resulting and Constructive Trusts
 Resulting trust arises when there is a transfer of property without an intention to create a gift
o Delivery but no intention of gift
o Recipient of the property holds it in trust for the transferor
 Resulting trust may also arise when one person purchases property in the name of another without
intending to make a gift
o Exception to this is in familial situations, the presumption of advancement
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
Operates to create a gift rather than a resulting trust where a husband/father
transferred property to wife/children
Trust obligations can arise even in the absence of a specific intention to create a trust
o Courts have recognized constructive trust to ensure a just result in cases where a person
without title to property has made a significant contribution to acquiring or maintaining it,
thus preventing the unjust enrichment of the title holder
 Title holder is a constructive trustee and the person who made the contribution is a
beneficiary of a defined interest that corresponds to the contribution he has made
 Pettkus v Becker
o Pettkus denied that he had intended to hold the property for her
benefit, therefore the SCC concluded that there was a constructive
trust in favour of Ms. Becker
Deed of Gift
 No need for delivery if there is a deed of gift
o Deed will serve the function performed by a transfer of possession
o Documentary evidence is less ambiguous than an act of delivery
 Gifts can be given on condition
o For example, a deed conveying the gift can be conditional on marriage
In re Cole
Facts
 Husband brought wife into their new home, took her into a room, put his hands over her eyes and
then uncovered them saying “Look”
 He then showed the rest of the house and chattels within the house
 He then said to her: “It’s all yours.”
Issue
Has there been an act sufficient of being characterized as delivery? Was there a change in possession
either proceeding or following or coincident with the words of gift?
Reasoning and Application
 Wife contends that it is enough for the donee to be brought to the chattels rather than the chattel to
the donee and that she should be ‘near’ the chattels when the words of gift are spoken?
o Court outright rejects this!
 Milroy v Lord
o In order to render a voluntary settlement valid and effectual, he may:
 Physically deliver the property
 Transfer the property to a trustee
 Declare that he himself holds it in trust
 Use a deed
o Even if the property is intended to transfer, the court will not hold the intended transfer to
operation as a declaration of trust, for then every imperfect instrument would be made
effectual by being converted into a perfected trust
 Delivery of possession may be prior to or contemporaneous with or subsequent to the words of gift
o With prior delivery, it may not be necessary that the delivery should have been made by the
donor
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 Pre-existing possession of the donee may be sufficient
 Delivery can be a constructive delivery
o Winter v Winter
 A barge belonged to the plaintiff’s father
 Plaintiff had been put into actual possession of the barge
 Worked it as his father’s agent and was do doing when the father gave it to him by
word
 Court held that it was sufficient; the delivery preceding the gift
o If chattels be many or bulky there may be symbolic delivery
 Lock v Health
 Gift of a church organ
 Donor put his hand upon it in the presence of the donee and accompanied his
gesture with words of gift
 The difficulty arises in contexts, such as the one in hand, where the two parties live together
o A husband might wish to make an absolute gift to his wife
o He might also wish to keep the chattel as his own property and merely let his wife use it
 Kilpin v Ratley
o Father-in-law visited his daughter in the matrimonial home
o Standing in one of the rooms, orally gave her the furniture and then walked out of the house
o This was held to be sufficient for delivery
 An act to constitute delivery must be one which in itself shows an intention of the donor to transfer
the chattel to the donee
o If the act is equivocal – consistent equally with an intention to transfer the chattel or with an
intention to retain possession – the act does not constitute delivery
Holding
 There was no change in possession!
o Generally, where a wife lives with her husband in a house owned and furnished by him, she
has the use of the furniture by virtue of her position as wife
Convincing and Law of Property Act
s.53 Assignment of debt and choses in action is effectual in law so long as there has been a notice in
express writing given to the person from whom the assignor would hae ben entitled to receive or claim
the debt
In Re Rose
Facts
 Testator leaves to H “5000 preference shares, if such preference shares have not been transferred
to him previously to my death”
 Prior to his death testator handed to H a transfer of 5000 preference shares  transfer by way of
gift which when perfected by registration would give rise to a resulting trust
 Company was a private company and so the right to claim registration was subject to restrictions
giving directors discretion in the matter
 Directors decided that it was not in the interest of the company to register the transfer of shares
to Hook
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Issue
 Was there an incomplete gift, in light of the fact that the transfer was not registered in the
testator’s lifetime?
Reasoning
 In re Fry and Milroy v Lord : the deceased donor had not done all in his power according to the
nature of the property given to vest the legal interst in the property in the donee  equity cannot
complete the imperfect gift
o If any act remained to be done by the donor to complete the gift at the date of the donor’s
death the court will not compel his personal representatives to do that act
o The gift remains incomplete and fails
 Here the testator did everything in his power to divest himself of the shares to H
o Executed the transfer, in accordance with company’s regulations
o Handed the transfer certificates to H
o There was nothing lese the testator could do
 H’s legal title would not be perfected until the directors passed the transfer for registration, but
this was not an act which the testator had to do, it was an act that depended on the discretion of
the directors
 The testator’s words do not indicate that the H’s title was conditional on whether the directors
ratified the shares before or after testator’s death
Holding
 This was an inter vivos gift, the transfer of the shares did not occur under the will  H gets
the shares, no incomplete gift
Ratio
 A gift is perfected where the person giving the gift has done all the necessary things for the
transfer to occur, regardless of pending acts of third parties
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