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Property according to Helmholz (Rules) Aaron D. Lindstrom

Table of ContentsTABLE OF CONTENTS...............................................................................................................................1

PERSONAL PROPERTY.............................................................................................................................4

WILD ANIMALS.............................................................................................................................................4Elements of possession.............................................................................................................................4Other Animals...........................................................................................................................................5

CLASSIFYING PROPERTY AS REAL OR PERSONAL.........................................................................................5Personal Property v. Real Property.........................................................................................................5Rules.........................................................................................................................................................5

ACQUIRING ABANDONED PROPERTY............................................................................................................6Doctrine of abandonment.........................................................................................................................6Notes on Law of Finds and Law of Salvage.............................................................................................6

FINDER’S RIGHTS..........................................................................................................................................6BAILMENTS...................................................................................................................................................7GIFTS.............................................................................................................................................................8

Overview...................................................................................................................................................8Gifts Inter Vivos........................................................................................................................................9Gifts Causa Mortis...................................................................................................................................9

UNAUTHORIZED POSSESSION AND BONA FIDE PURCHASERS.......................................................................9Law of bona fide purchasers..................................................................................................................10

FIXTURES....................................................................................................................................................11

THE LAW OF NEIGHBORS.....................................................................................................................12

ADVERSE POSSESSION................................................................................................................................12Overview.................................................................................................................................................12The Statutory Basis.................................................................................................................................12The Elements of Adverse Possession......................................................................................................12The Policy and Future of Adverse Possession.......................................................................................13

RIGHTS OF LATERAL AND SUBJACENT SUPPORT........................................................................................13Lateral Support.......................................................................................................................................13Modifying the Duty to Support by Statute..............................................................................................14Subjacent Support...................................................................................................................................14

AIR AND LIGHT...........................................................................................................................................14Airspace..................................................................................................................................................14Rights in Air and Light...........................................................................................................................15

WATER RIGHTS...........................................................................................................................................16Riparian and Littoral Rights..................................................................................................................16

LAND CONVEYANCING..........................................................................................................................17

REAL ESTATE AGENTS................................................................................................................................17Process...................................................................................................................................................17Listing Agreement...................................................................................................................................18

CONTRACTS OF SALE..................................................................................................................................19The Statute of Frauds.............................................................................................................................19Equitable Conversion.............................................................................................................................20Contract Deficiencies.............................................................................................................................20Disclosures about the Property..............................................................................................................20Time for Performance of the Contract...................................................................................................21Express “Subject to Financing” Contract Terms..................................................................................21Implied Contract Terms..........................................................................................................................22Breaks in the Chain of Title....................................................................................................................23Express Title Standards in Contracts.....................................................................................................23Quantity or Acreage Disputes................................................................................................................24

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Aaron D. Lindstrom, 01/03/-1,

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Contract Remedies..................................................................................................................................24LAND TRANSFERS.......................................................................................................................................25

History of Common Law Conveyancing.................................................................................................25Modern Conveyancing............................................................................................................................26Statutory Short Form Deeds...................................................................................................................28Deed Covenants......................................................................................................................................28Legal Descriptions..................................................................................................................................30

RECORDING ACTS.......................................................................................................................................31History of the Recording Acts.................................................................................................................31Operation of the Recording Acts............................................................................................................31Indexes....................................................................................................................................................32Bona Fide Purchasers............................................................................................................................32Payment of Consideration......................................................................................................................33Marketable Title Act...............................................................................................................................33Bona Fide Purchaser Filter....................................................................................................................34Recording and Indexing.........................................................................................................................35Exclusions from the Recording Act........................................................................................................35

TITLE INSURANCE.......................................................................................................................................36Notes.......................................................................................................................................................36

ESTATES IN LAND....................................................................................................................................37

THE FEE SIMPLE.........................................................................................................................................37Reasons not to restrain alienation..........................................................................................................37Restraints on Alienation.........................................................................................................................37Defeasible estates...................................................................................................................................38

THE FEE TAIL..............................................................................................................................................40THE LIFE ESTATE........................................................................................................................................41

Other types of tenancies.........................................................................................................................42Waste......................................................................................................................................................42

MARITAL ESTATES......................................................................................................................................43The Common Law...................................................................................................................................43Statutory Changes in Marital Estates.....................................................................................................44Community Property..............................................................................................................................44Homestead Rights...................................................................................................................................45

CONCURRENT ESTATES...............................................................................................................................45Basic Characteristics..............................................................................................................................45The Creation of Concurrent Tenancies..................................................................................................46Relations among Concurrent Tenancies................................................................................................47The Termination of Concurrent Tenancies.............................................................................................47

REVERSION, REVERTERS, AND POWERS OF TERMINATION.........................................................................49Overview.................................................................................................................................................49Reversion................................................................................................................................................49Possibility of Reverter............................................................................................................................49Right of reentry upon condition broken..................................................................................................49

REMAINDERS...............................................................................................................................................51Creation of Remainders..........................................................................................................................51Classification and Characteristics of Remainders.................................................................................53

THE STATUTE OF USES AND EXECUTORY INTERESTS................................................................................55POWERS OF APPOINTMENT.........................................................................................................................58

The Nature of Powers.............................................................................................................................58Varieties of Powers.................................................................................................................................60

THE RULE AGAINST PERPETUITIES.............................................................................................................60

APPENDIX...................................................................................................................................................65

LATIN..........................................................................................................................................................65DEFINITIONS................................................................................................................................................65

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Presumptions and Preferences....................................................................................................................66

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Personal Property

Wild Animals

Elements of possession

Occupation

Pursuit alone isn’t good enoughPierson v. Post: hunters pursuing a fox

Ancient authorities: Justinian Institutes – Roman emperor in sixth century Fleta – an ancient treatise on English law (at end of thirteenth century) Bracton – written in thirteenth century Puffendorf – died 1694 Bynkershoek – commentator on Puffendorf Barbeyrac –

Claims ratione soli:1. A visits B and catches a fox on B’s property. B sues A to recover the fox. Law says B’s

claim is superior by reason of the soil (ratione soli).2. A starts the fox on A’s land and chases it onto B’s land where he captures the fox. B sues

A again. B rests on ratione soli and A rests on pursuit and capture. Law says A prevails but is liable to B for trespass.

3. A starts the fox on C’s land and chases it onto B’s land where A again captures it. Lawsuits could arise between A and B or between A and C. Helmholz hasn’t found any cases of this sort to say how they come out.

Intent

Deprived of natural liberty

Wounding isn’t sufficientBuster v. Newkirk: one hunter wounds deer, but it gallops away; second hunter kills it and so owns it

Within certain control

Possession does not require absolute security against escapeState of Ohio v. Shaw: taking fish from someone else’s net

Possession can be accomplished by only act circumstances allow (custom helps establish this)Ghen v. Rich: harpooning whales gains possession; industry standard

To establish a valid custom in spite of common law, the following requirements must be met:1. Length of time (like in adverse possession)2. Unanimity in use of the custom (no contrary customs)3. Must be a general usage (custom embraced by an industry, the relevant population)4. Custom must be reasonable (this is a rather nebulous standard)

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These rules may be used today, but may go against statutes. (Example: common custom of speeding).

Interfering with way of getting a livelihood gives a tort action, but not property rightsKeeble v. Hickeringill: ducks in a pond scared away by gunshots; damages for disturbance

Rights of a Sovereign

Prerequisite of license because state holds title to animals in trust for publicDapson v. Daly: poacher doesn’t have valid title to challenge another

Rights of a sovereign as not same as full ownershipState of North Dakota v. Dickinson Cheese: cheese company pollutes and kills thousands of fish; state cannot recover damages through property rights

Other Animals

Domestic

Animæ Revertendi

Classifying Property as Real or Personal

Personal Property v. Real Property1. Title can be transferred by oral agreement in personal property; title must be transferred in writing

for real property (statute of frauds)2. Different statute of limitations3. Different forms of action4. Different succession at death (giving a house does not normally include its contents)5. Different taxation

Rules

Finder who adds value has better title than subsequent finderHaslem v. Lockwood: manure gathered into pile, left briefly, and carted off by another; original finder has better rights

Helmholz: When there is a wrongful act of conversion, that party is liable for the value of the item, but is entitled to the expenses he incurred to make the item more valuable, if he does it in good faith. It distinguishes between the amount of recovery when the respondent acts in good faith as when he doesn’t.

Deposits and accretions become property of the owner of the soil (ratione soli)Goddard v. Winchell: meteor falls on land and is carted off by finder; land owner has superior rights because of doctrine of accretions

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Acquiring Abandoned Property

Doctrine of abandonment1. Depends on intention; difficult because intention is not usually spelled out but rather inferred.2. Trash is considered an exhibition of the intention to abandon.3. There is a statute of limitations limiting when an item can be recovered.4. The law sometimes deals with the issue of abandonment by ignoring it and just talking about

finding it. 5. Land cannot be abandoned. Even the express intention to abandon it does not mean it is legally

abandoned.

Requires actual taking (consistent w/ nature of object and circumstances) with intent to reduce it to possession

Eads v. Brazelton: B locates a shipwreck. He leaves it and another raises the cargo first. B did not have property rights.

Notes on Law of Finds and Law of Salvage

Law of Finds Finders, keepers Abandonment can be express or implied. Occupancy required or at least high degree of control Once finder establishes possession, he holds title good against all but the original owner

(unless abandoned or passed statue of limitations).

Law of Salvage

Three elements1. Property rescued must be in marine peril2. Salvage service must be voluntary3. Salvage must be successful, in whole or in part

Notes “‘Possession’ means something less in salvage law than in finds law. In the salvage context,

only the right to compensation for service, not the right to title, usually results.” “[P]ossession need not be continuous, but only as such the ‘nature and situation’ of the

salvage operations permit.”

Finder’s RightsElements of Possession

Intent to Control Act of Control

To be found property must be: Abandoned property: when owner intentionally and voluntarily relinquishes all right, title, and

interesto Goes to finder

Lost property: when owner unintentionally and involuntarily parts with it through neglect or inadvertence and does not know where it is

o Goes to finder

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Mislaid property: when owner voluntarily puts it in a particular place, intending to retain ownership, but fails to reclaim it or forgets where it is

o Goes to the owner of the locus in quo Criticism: finder can’t know owner’s intent

Different from rights to animals, because property cannot regain state of nature, of freedom.

Finder takes against all others save true owner (finders, keepers, but losers not weepers)Armory v. Delamirie: chimney sweep’s boy find jewel and takes it to goldsmith for appraisal, where apprentice keeps it; boy gets damages when jewel “lost”Clark v. Maloney: 10 pine logs, found and gathered by A, end up in B’s possession

Doctrine of specification: a change in species means the thing itself cannot be recovered, only the value of the object lost.

Hypothetical of logs being converted into a violin; damages equal value of the logs, not the Stradivarius

Trespassing finder loses to landowner by ratione soliBarker v. Bates: a stick of timber runs aground on π’s property. The defendants trespassed onto his land, presumably found it, and took it away Idea of constructive possession is sometimes used to explain ratione soli Also, trespassing should be discouraged (doesn’t seem equitable that wrongdoer should

benefit from wrongdoing, so court might be reluctant to find for trespasser)

Honest finder (guest, employee) takes over landownerSouth Staffordshire Water Co. v. Sharman: employee cleaning pond finds gold rings; court says landowner wins; Helmholz: not a typical outcome

Hannah v. Peel: soldier finds ring in house and turns in to police; court awards ring to finder over homeowner

Modern law of conversion:Form of action of conversion: the denial of the rights of a person entitled to a chattel.

1. π must assert a right to possession.2. It requires denying the π’s right; the Δ must hold the item and deny that the π owns it (by

withholding or by selling to another party).3. It requires damages for an action of conversion to be brought.

Not necessary in an action of conversion1. A bad motive (even if you believe you are right, you may still have committed conversion);

state of mind doesn’t really matter.2. Ownership is not necessary; bailment is enough. The right to possession is what counts.

Real property cannot be converted.A non-possessory interest cannot be converted (such as a future or a past interest).

BailmentsBailment transfer of possession of personal property to a person who is not its owner and for a limited purpose; there is a special qualified property transferred from bailor to bailee, together with possession.

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What is not a bailment?1. A debt is not handing over a bail, but creating a promise that a certain amount of money will be

repaid. Bank can’t say, “We are sorry, but your five dollars was burned in a horrible bank fire.” The obligation to repay is part of a promise.

2. Inventory of a salesman. He is the agent of the company; he doesn’t have legal possession of the inventory in the same way a bailee does. He is a custodian of the inventory, according to the terms of the contract.

3. Chattel mortgage. When a car is bought through financing, you are not a bailee and GM the bailor. As long as you keep the payments, you keep possession. This is different because GM can’t reclaim its property as it could if it was a bailment.

4. Lease. You are not a bailee of the dormitory or apartment. A different set of obligations for both you and the lessor.

5. Storage containers. A lease, rather than a bailment.6. Others: a pledge, consignment, a trust, etc.

Damages: The test is not one of simple outward appearances, but rather of what is reasonable given all the circumstances.

Samples v. Geary: fur piece concealed in coat checked in parcel room not covered because the true value of the ring was concealed and so there was no assent

Standard of care: ordinary carePeet v. The Roth Hotel: ring left with cashier of hotel disappears; bailment created

Bailment can arise by implication, creating a duty of careAllen v. Hyatt Regency-Nashville Hotel: car stolen from secure parking garage (w/o keys) created a bailment

Strict liability with respect to delivering bailment back to bailorCowen v. Pressprich: wrong bond delivered to brokers; bailment upheld

Gifts

OverviewA gift a gratuitous transaction in which the property of one person becomes the property of another without consideration.

A gift is not:1. A contract. 2. Similar to a trust, where one person is declared a beneficiary. The trustee is the owner of the

legal title and the beneficiary is the holder of the equitable title. 3. A last will and testament is not gratuitous and must meet certain forms.

Elements to make a gift effective:1. Present intent to transfer the chattel,2. Delivery of the chattel, and 3. Acceptance of that delivery

Gift:Used to be a requirement to pass physical possession, although now a deed can be passed instead.

Reasons for the requirement of delivery:1. The impact on the donor of actually giving it up

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2. Important evidence of who is the owner, that it really was a gift3. Gives the donee notice of what is actually going on; it proves to him what he is actually getting4. Avoid mistakes by donors and fraudulent claims by donees

Gifts Inter Vivos

Delivery must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit

Irons v. Smallpiece: colts given to son by father but father retains possession; no gift

Present transfer of property interest required for valid giftGruen v. Gruen: father gives son a painting but retains a life estate; gift is effective

Conditional gift: can be revoked if the condition is not met

Helmholz Statement of Law: The law is that in order to make a gift that takes effect at death, you must comply with the Statute of Wills, which requires a writing with a testamentary intention and have it witnessed by a certain number of people. If it does not, it fails.

Gifts Causa MortisThey are exceptions to the statute of wills. They do take effect at death, but they do not contradict the Statute of Wills. A soldiers and sailors will is sufficient if it is in the handwriting of the sailor.

Elements of a gift causa mortis:1. Intent to make a gift2. Gift must be of personal property3. Gift must be made while the donor is under the apprehension of imminent death, upon the

essential condition that the property shall belong to the donee if the donor dies as anticipated leaving the donee surviving, and the gift is not revoke in the meantime.

4. Possession of the property given must be delivered at the time of the gift to the donee, or to someone for the donee, and the donee must accept the gift . . . The donee must establish the gift causa mortis by clear and convincing evidence.

Special Requirements:1. Apprehension of imminent death2. The donor must die of the peril he apprehends when the gift is made.3. Only applies to personal property.

Gift must be delivered to be validWoo v. Smart: gift of check held invalid because check is not the actual funds and can be canceled

Unauthorized Possession and Bona Fide Purchasers

Possession gives a presumption of title that can only be rebutted by one with better titleAnderson v. Gouldberg: logs cut on a stranger’s land by trespasser, claimed by B; trespasser wins Easy to apply rule that can be avoided by courts for equitable reasons Without this standard of simple possession, property away from its true owner would be fair

game to all claimants (endless seizures)o However, that assumes thieves will take each other to court, which seems unlikelyo “Courts should not allow wrongdoers to take advantage of judicial resources”

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If presumption raised by possession is rebutted, no title vestsRussell v. Hill: logs cut on stranger’s land, claimed by later “finder”; finder wins

Helmholz: You must have lawful possession to sue to recover. There is no satisfactory way to reconcile these cases (above). Courts with two thieves in front of them, don’t want to let either recover.

Law of bona fide purchasers1. Common law

a. Concerns passage of title. Title used to be passed at the time of sale. If I lend you a picture, and then you sell it to a BFP, there was no intention to pass the title. Nemo dat quod non habet: no one gives what he does not have.

2. “Wrongful possession of chattels: hornbook law and case law,” R. H. Helmholz , 80 NWULR 1221

a. American courts have found the doctrine of simple possession useful when the wrongdoer has sold the chattel to a bona fide purchaser, who subsequently holds it for the statutory period. In this situation, courts often have awarded title to the bona fide purchaser. The result certainly is correct.

i. Clear title must be established at some future point; title eventually must pass out of the original owner.

ii. Otherwise, no one could ever gain secure title. The rule that the law protects even wrongful possession helps to make this result possible.

b. The clearest illustration of the rule's utility involves cases in which a wrongful taker has sold the chattel to a bona fide purchaser and the statute of limitations does contain a fraudulent concealment exception. The question in such cases becomes whether the purchaser falls within the exception.

i. If a court holds that his possession is fraudulently concealed, title will not pass to him no matter how long he holds the chattel. It is a difficult case. On the one hand, he will very likely have 'concealed' the chattel from its owner just as completely as the wrongdoer did.

ii. On the other hand, his conduct will lack the element of conscious fraud or wrongdoing that would have kept the statute of limitations from operating in favor of the original taker. Does his possession retain the character it had in the hands of the thief, or does he take a new, untainted possessory interest?

iii. In this situation, American courts have called upon the hornbook rule of simple possession when the equities have favored the bona fide purchaser. For title to accrue to the purchaser, three things generally must exist: (1) honesty on the part of the purchaser; (2) open use by him for the statutory period; and (3) failure on the part of the owner to take reasonable steps to secure his rights.

3. Exceptionsa. Most romantic exception: market-overt. All sales were free from the claims of a seller

who had retained title. It was okay to sell free from any examination of any title.b. For money and negotiable instruments. A thief acquires title to these items because our

economy relies on transferring money freely without worrying about title.c. Estoppel (classic case): when someone knowingly withholds property from its rightful

owner, he will be estopped to set up the statute of limitations when the owner sues to recover the property

i. Fraudulent concealment: a court held that the defendant's 'willful silence' amounted to constructive fraud and 'constituted a sufficient answer to the plea. The defendant's possession and use of the pocketbook for the statutory period was not enough to 'cure the vice' of the initially wrongful appropriation.

4. UCCa. Changed rules about bona fide purchasing

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Seller cannot pass better title than he possesses – a void title remains voidPorter v. Wertz: painting wrongfully sold to art gallery; bona fide purchaser loses because stolen painting passed by void title

When seller protected from claim, so is bona fide purchaserChapin v. Freeland: adverse possession of two counters justifies ownership; bona fide purchaser protected

Cause of action accrues once return of item demanded and refused (other rules – from time of loss or from time of due diligence)

Solomon R. Guggenheim Foundation v. Lubell: painting stolen from museum and displayed in personal home for 20 years; museum wins Helmholz: According to hornbook law, the possessor of a chattel belonging to someone else

has a valid possessory interest in the chattel, which will ripen into full ownership after the passage of a statutorily fixed number of years.

FixturesThree part test:

1. Real or constructive annexation of the article in question to the realty.2. Appropriation or adaptation to the use or purpose of that part of the realty with which it is

connected.3. The intention of the party making the annexation to make the article a permanent accession to the

freehold, this intention being inferred from the nature of the article affixed, the relation and situation of the party making the annexation and policy of the law in relation thereto, the structure and mode of the annexation and the purpose or use of which the annexation has been made.”

This three-part test does not require all three elements but rather provides a way of looking at all of the circumstances.

Person’s intention impacts whether a fixture or notWyoming State Farm Loan Bd. v. Farm Credit Sys. Capital Corp.: dispute over whether irrigation pipe is a fixture; owner had a chattel mortgage on the pipe, showing his intent to treat it as a chattel, not a fixture

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The Law of Neighbors

Adverse Possession

Overview

Elements of Adverse PossessionTest for adverse possession (no cause of action if one or more lacking)The occupant’s possession must be:

1. Actual2. Continuous for the statutory period3. Exclusive4. Hostile

a. Adverse possessor’s claim must be accompanied by a “claim of right” or “claim of title”

5. Open and notorious

Statute of limitations: Once the right of action is barred, so is the right to the land.

Reasons for statute of limitations1. To quiet men’s estates2. To avoid suits

“Relation back” doctrine: Once the statute of limitations has run, the adverse possessor’s title is treated as though it had existed from the moment his possession began.”

Exceptions“Under American law, except where permitted by statute, title to land held by the federal or state governments cannot be acquired by adverse possession.”

Statute of limitations does not generally run against the government. If you go plant crops on the Midway, you can never gain title over the government’s land. This comes historically from the fact that everyone was a lessee of the king. You can’t acquire title against the grantor of the title. Economists now say that it is just exorbitant search costs it would cost the government to monitor all of its land.

The Statutory Basis

If started running against A, it started against A’s successors (even if they have disability)Fleming v. Griswold: descendant of title holder loses to adverse possessors even though she was disabled by coverture for a period

The Elements of Adverse Possession

Hostile means intent to claim ownership; actual means how an owner would use itAnderson v. Cold Spring Tungsten, Inc.: adverse possession of a cabin owned by mining company as vacation home

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Intention to possess adversely must be clear, distinct, and unequivocalDillaha v. Temple: the river shifted, leaving more land exposed; an issue of accretion (or emulsion when land is lost)

Helmholz: “To pay taxes rarely makes a difference in adverse possession cases.”

Doctrine of law (Helmholz): When you possess property under a deed and only use it adversely as to part of the property, you claim of adverse possession extends to the whole. Entry under color of title gives you right to all the land described on the deed. In Anderson, the deed seems to be only for the cabin rather than for all the land.

The Policy and Future of Adverse Possession

In modern cases, statutory interpretation is central

Color of title limits adverse possession to land recorded on titleMeyer v. Law: incorrect survey leads to fencing in neighbor’s land; adverse possession to fenced property

Justifications for adverse possession:1. To bar stale claims (evidence gets harder to find)2. To provide land for the have-nots in the world; to help out the little guy3. To keep the peace; prevents conflict between neighbors by blessing the situation they are used to4. To promote efficiency; rewards the party who makes more efficient use of the land5. To promote taming the wilderness6. To protect people’s concept of themselves which is associated with the land (personality theory);

the longer you live somewhere, the more attached you become to it

The Marketable Title Act limits adverse possession claims.

Rights of Lateral and Subjacent Support

Ancient rules1. Illustrate natural rights in connection with land. Natural rights are dependent on simply owning

the land, not upon contracts (agreement between parties) or upon negligence (violation of elementary duties). They simply depend upon the fact of ownership of land. Simple ownership is the starting point.

2. Strict (absolute) liability:3. Liability depends upon land in its natural state.

Helmholz illustration of natural state: Excavation on neighboring property. A woman went to hang her wash out, when land collapsed and she was injured. It was held that the added weight of the woman caused the collapse.

Lateral Support

Strict liability for land in its natural state; if it slips and buildings damaged too, must pay for them as well

Noone v. Price: retaining wall cracks, allegedly undermining support

Definitive argument:

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The loss came from the Δ’s failure to maintain the wall that provided lateral support. Part of the deterioration occurred under the Δ’s watch. The wall had to support the land in its natural state. The right of support is a property right and absolute.

Helmholz’s characteristics of lateral support cases: 1. These cases lend themselves to a lot of expert testimony. 2. There are very few appellate cases on this topic. If there are questions of fact, they would tend to

get decided at trial courts. He thinks lateral support cases would be hard for juries to decide.3. The law: Ordinarily the liability is strict, but you may be liable for negligence in using the

property you own.a. Assume you are digging next to the Sears Tower for arrowheads and it collapses.

i. When you look at negligence, you look at foreseeability. It should be foreseeable that your digging might damage the adjacent structure.

Modifying the Duty to Support by Statute

Subjacent Support

Rule: Damages are measured by all loss caused by subsiding if in its natural state. So, if land in natural state would subside – must pay for anything on top of it.

The “right to mine is subservient to the right of the surface owners to have the surface maintained in its natural state free from subsidence or partings of the soil, and this right of support is absolute and not dependent upon any questions of negligence.” (Strict liability)

Island Creek Coal Co. v. Rodgers: underground mining damages house

You can’t get adverse possession by mining underground, because that isn’t open and notorious.

Air and Light

Airspace

Traditional situations1. Suppose the roots of your neighbor’s tree grow into your land. Is that a trespass? Yes.

a. What is the remedy? You can’t cut the roots.2. Suppose a branch of the tree grows over your land. Is that a trespass? Yes.3. Suppose the branch goes over your land and has an apple on it. Can you take the apple? No. If it

falls off, it becomes an accretion. Yes.a. Could you cut down the branch? You can trim it, but not damage the tree itself.

Two historical notes1. The old law of air does not come from Roman law; Romans held that all owned air together.2. Modern American law has retained part that one owns to the depths, even though it has abandoned

the part that one owns to the skies. Other countries have split subsurface rights off as well.

English doctrine of “ancient lights”1. Gives landowner a prescriptive easement for light and air over neighboring lands

a. It arose if landowner had unobstructed and uninterrupted access to light and air across the neighboring land for twenty years.

2. Almost universally rejected in the US

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3. Policy reason: negative easements generally cannot be acquired by prescription in US; idea of adverse possession of an easement does not work with letting light through; the record owner won’t have notice that the easement is being used; it isn’t as obvious as someone walking across your property every day; the owner can’t prevent the sunlight easement from running except by building all over

4. Also, the owner of the land with the easement across it for neighbor’s light won’t be able to look at records and determine an easement exists. That is why we don’t like prescriptive easements.

Common law: landowner owned air above and subsurface as well (column view or cujus est solum)

Murphy v. Bolger: Δ’s roof projects over π’s land; π wins

8, Edwards v. Sims:1. Case about underground cave inaccessible by owner – landowner was allowed to keep out

trespasser, even though he has no access to that cave2. Many have criticized this decision as extreme application of cujus est solum3. Helmholz: Subsurface rights to valuable minerals are very important property rights. Can

these valuable rights be protected without principle of cujus est solum?

Supreme Court rejected “ancient lights” doctrine, but said landowner owns at least as much of the space above the ground as he can occupy or use in connection with the land

United States v. Causby: low-flying aircraft effect a “taking” of land by scaring chickens

The 5th Amendment and the “takings” clause:If the government takes private property, it must provide compensation. (Eminent domain)

Helmholz: People who live alongside a highway inevitably suffer a decrease in the value of their property, but it is never held to be a taking. The nuisance argument does not work against the government also. This might be because the presence of a highway also tends to increase property values.

Servitude: a government taking an easement under its power of eminent domain; (a partial taking)Taking: taking the property outright (under 5th Amendment)

Rights in Air and Light

Cannot erect a structure for sole purpose of annoying neighborSundowner, Inc. v. King: spite fence built 2’ from motel obscuring 80% of building; Π winsThere is a European duty called “abuse of right” that says you can’t exercise your right in such a way that it harms others.

No legal right to the free flow of light and air from the adjoining land (can erect a structure with useful purpose even if it annoys neighbor)

Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc.: construction of Fontainebleau hotel casts shadow over Eden Roc Hotel’s beach, so Eden Roc get TRO; TRO overturned

Easement by implication (page 171)The idea that π had an easement because he needed it to enjoy his property. Therefore, he gets to keep the easement when subsequent owners buy the land on which he needs the easement.If you assume that at one time, the ownership of Blackacre and Whiteacre were the same. The owner of Whiteacre gets whatever easements he needs to enjoy Whiteacre. X owned both. He conveys to W the ownership of Whiteacre. To get to Whiteacre, W needs to drive across Blackacre, so the need to drive across Blackacre implies an easement for Whiteacre.

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Prah v. Maretti: Π first in subdivision and sets up solar panels; Δ moves in later and builds blocking the sunlight to the panels; Π sued; summary judgment overturned, no decision on merits, but court said nuisance law applied

Reasonable use doctrine (from Restatement of Torts): There is a cause of action if the gravity of the harm to the π is great and the utility of the

conduct of the Δ is not. Guidelines for weighing harm:

o The extent of the harm involvedo Character of the harmo Social value of the useo Suitability of the useo Burden on the person harmed of avoiding the harm

Water Rights

Riparian and Littoral Rights

Western and eastern regimes1. American modern law has a western and an eastern regime.

a. Western: looks to the time owners started using the rights, and appropriates water rights based on “first in time, first in right”; appropriation doctrine

b. Eastern: gives equal rights to all riparian owners; riparian doctrine2. Both have statutes that soften each approach towards a combination of the two.

a. In West, water commission and other agency determinations require more sharing.b. Same in east.

Five elements of appropriation1. A qualified “person” must acquire the right. The person does not have to be a natural person, i.e.

he could be a corporation.2. A person must establish that he or she is the first to appropriate the water.3. The appropriation statutes and cases define what waters and watercourses are subject to the prior

appropriation doctrine.4. Water appropriated must be put to an actual and beneficial use.5. Element of priority – first in right.

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Land Conveyancing

Real Estate Agents

Process

Land conveyancing: typical steps1. Seller decides to sell and usually hires a real estate agent2. Seller and buyer enter into a contract of sale3. Sale is “closed”4. Deed is recorded in property records of the county

Real Estate Agents1. Services

a. Bringing buyers and sellers togetherb. Assisting them in making informed decisionsc. Assisting them with terms

2. Supplemental servicesa. Property and casualty insuranceb. Real estate appraisalc. Leasing and management of rental propertiesd. Closing

3. Types of listingsa. Exclusive right-to-sell listings: only broker can sellb. Exclusive agency: only broker or seller can sellc. Open listing: anyone can sell

4. Multiple Listing Service (MLS)a. Similar to stock exchange as it provides information to all brokersb. Commission is split between listing broker (broker of seller) and selling broker (one who

finds buyer)5. National Association of Realtors

a. “Powerful trade association network”6. Real estate controversies

a. Anti-trust violationsi. Uniform commission rates suggest it, but an express agreement to fix prices

must be shown to prosecuteii. Limiting access to MLS services

b. Unauthorized practice of lawi. Which land transfer documents, if any, brokers can draft

7. Defined: a person who markets another’s real estate for sale or lease with an expectation of receiving compensation

8. Must be licensed9. Two classes

a. Salespersonsi. Must complete program and pass exam

ii. Must be supervised by a brokerb. Brokers

i. Additional education

Fair Housing Act It is illegal to

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a. Refuse to rent or sell because of discrimination (race, color, religion, sex, familial status, or national origin)

b. Discriminate in terms offered or services and facilities providedc. Advertise about preferences based on discriminationd. To represent to anyone that housing may not be available because of discrimination

Two clear violations:a. Steering: an agent’s efforts to direct potential buyers toward or away from certain

neighborhoods because of impermissible criterionb. Blockbusting: an agent’s attempts to induce home owners to sell because members of a

protected class are moving in

Should lawyers have a bigger role in modern real estate transactions?1. Most transactions only require lawyer for title work.2. Tendency is to push lawyers aside except in “big ticket” negotiations. Cost is the primary reason,

but real estate agents tend to discourage hiring lawyers as well.3. Real estate agents are on both sides of the transaction, so maybe it is a good idea to have someone

specifically in your corner. (One lawyer cannot represent both parties.)

Listing AgreementListing Agreements

1. General rule of construction: a document is construed against its drafter2. Don’t fall under statute of frauds since they don’t convey a property interest3. Selling agent owes fiduciary duties of

a. Loyaltyb. Integrityc. Good faith

4. Generally not arrived at through negotiation with the buyer

Discussion in Ellsworth Dobbs, Inc. v. Johnson: When “a perspective buyer solicits a broker to find or to show him property which he might be interested in buying, and the broker finds property satisfactory to him which the owner agrees to sell at the price offered, and the buyer knows the broker will earn commission for the sale from the owner, the law will imply a promise on the part of the buyer to complete the transaction with the owner. If he fails or refuses to do so without valid reason, and thus prevents the broker from earning the commission from the owner, he becomes liable to the broker for breach of the implied promise.”

Homeowner does not have to pay broker’s commission if sale is not consummated, unless wrongful act or interference by sellerTristam’s Landing, Inc. v. Wait: broker found a potential buyer who gave a down payment, but buyer backed out; seller kept earnest money; broker sued for commission and lost

The court seems to require an explicit agreement before a broker can get a commission without requirement of completed sale.Helmholz: A court will not be willing to look at extrinsic evidence about the negotiations.

Debate of when broker should get commissionSeller should not have to pay until sale is complete:

1. Contracts should be construed against the parties who make them.2. The contract was an adhesion contract that gives the broker a huge advantage.

Broker should get paid after starting process:1. Broker should get paid for the service provided and for the work done.2. The broker started performing.

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3. Broker wants provision to get paid for work because he has to risk buyer’s remorse that could make all of his work fruitless.

Helmholz: The state of the law is unclear. (Referring to completion of sale required for compensation)

Contracts of Sale(Page 497)

1. Events between contract and closing (executory period):a. Buyer

i. Arranges financing1. Loan application2. Lender checks:

a. Appraisal of propertyb. Credit check on buyer

3. Lender requires:a. Origination feeb. Discount points (maybe)c. Interestd. Escrow for property taxes and insurance

ii. Investigates property1. Title search2. Physical condition3. Applicable zoning

b. Seller

The Statute of Frauds(Page 497)

1. Requires contracts for sale of real property to be in writing and signed (otherwise, no action for breach)

2. Requires contracts that won’t be closed in one year to be in writing and signed3. Ways to satisfy writing requirement:

a. Include “essential terms”i. Specifies parties to transaction, legal description of property, and consideration

b. Include all material termsi. Opens area for later questions of if all material terms were really present

4. Rational for Statute of Fraudsa. Prevention of fraud

i. Under this reason, a person who acts fraudulently may be estopped from enforcing the contract

b. Preventing a person from fabricating a contract where there was nonei. Under this reason, acts as an evidentiary device to determine if contract is

admissible into evidence5. Parol Evidence Rule6. Doctrine of part performance

a. Exception to statute: can substitute for a writing

The statute of frauds requires that sales of real property be made in writing and establish the essential terms of the sale, which includes identification of the land specificallyCash v. Maddox: oral agreement to sell land followed by a check sent by buyer; seller changes mind and gets out of it by statute of fraudsHelmholz: Courts have a hard time with cases like this and have reach different conclusions in other cases. The results are not altogether predictable.

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Equitable Conversion1. When parties have entered into a contract to sale, the buyer is treated as the owner in equity and

the seller is treated as the owner of money owed.2. For it to be applied, it requires a contract that will be specifically enforced. If, for any reason, the

contract will not be specifically enforceable, this doctrine will not apply.3. Consequences of applying the doctrine:

a. Shifts risks of loss of the property to the buyerb. In death of one of the parties, the land in the hands of the seller will be treated as

personalty and in the hands of the buyer as equity4. Taxes: the taxes are paid from the proceeds of the sale as personalty5. Taking of land during eminent domain: the award goes to the purchaser and the contract price to

the vendor (each gets what they expected)6. Rights of creditors: judgment after the contract of sale means the vendor’s creditors cannot

attached a lien to the land

Parties can contract around equitable conversion by specifically allocating the riskBryant v. Willison Real Estate Co.: after contract for sale, a water line bursts damaging property; contract included “owner is responsible” language that shifted risk back to seller

Law of insurable interest: It is a bet that the item being insured will be damaged or, if a person, will die; you must have an interest in something or someone before you can take out an insurance policy on it or them.

Helmholz on equitable conversion: Helmholz: There has been a fair amount of criticism of the doctrine of equitable criticism. Criticism of rule: It isn’t intuitive, and so it should only be applied if the buyer knows about

it. Brokers should be required to notify buyers so they know about the rule. Helmholz: Insurance companies must pay; the proceeds will go to whichever party has to

bear the risk of loss.o I.e., if seller has insurance and equitable conversion, buyer’s loss is covered by

seller’s insuranceo If buyer has insurance and reverse equitable conversion, seller’s loss is covered by

buyer’s insurance Who bears the risk of loss in the interim (executory period)? Many of the risks involve a

change in the property market (market declines, zoning changes, highway put in). In the event of these changes, they are both bound to the contract (seller takes risks of price going up, buyer takes risks of price going down).

If you apply the doctrine to this case, what are the consequences?o The loss of profit to the seller ought to be recoverable from the buyer.o The water damages should be paid by the buyer

Contract DeficienciesExpress title standards in contracts

Use “of record” to ensure the title’s chain has a record for each link in the title

Disclosures about the PropertyReasonable discovery: Disclosure required if no other way of finding out; if the matter is discoverable by reasonable inspection, then doesn’t need to be disclosed. Since haunting and criminal history is not obvious, it must be disclosed, while termites and flooding might be discovered by reasonable inspection.

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Although the seller doesn’t have to volunteer the information, it must answer truthfully the questions asked (or it will be considered misrepresentation).

Examples of counter-intuitive disclosure cases:Suppose a house was infested with termites. Would the seller be required to reveal the termites?Yes – but case on that says noSuppose the house is haunted. Must seller disclose that?No – but a case says there was a duty to discloseSuppose the cellar floods. Must seller disclose?Yes – but a case held no.Suppose criminals lived there before. Must seller disclose?No – but case held yes

Time for Performance of the Contract Courts allow common delay because “the injury caused by delay” is little “Performance at a time later than that specified in the contract is substantial performance.” Common view of courts on delay:

o Little injuryo Custom of frequent delayo Substantial performance is sufficient performance

This is if contract does not specify that time is of the essence

Express “Subject to Financing” Contract Terms

Conditional contracts:1. Conditions are very common in contracts2. Defined: “An event not certain to occur which must occur before performance under a contract is

due.” (Restatement on condition precedent)3. Condition could be frivolous – if it rains tomorrow, I will sell Blackacre4. False conditions

o I promise to give you Blackacre if you pay me $100K. Not a condition because it is the consideration of the contract.

o I promise to pay $100K for Blackacre if I get up before 8:00 am tomorrow. Illusory promise – it is entirely my choice to get up or not to get up

o I promise to pay $100K for Blackacre if 30 days pass. That is not an “event not certain to occur.” Since 30 days will pass inevitably, it is not conditional.

“Subject to Financing” Clause1. Courts treat it as a true condition even though the will of the party is involved.2. Courts look at the substance and the language.3. Financing might be required to be met by a certain date, but a few days late might still uphold the

contract.4. If the financing is moderately late, can the vendor enforce the contract? Yes.5. Can the purchaser enforce the contract if the purchaser does not get financing? Suppose the

purchaser comes up with the financing in another way.a. Enforceable: There is little injury to the seller and the performance is substantial enough

to be sufficient. The goal of the condition is to get the money to the vendor, and that does occur.

b. Not enforceable: The purchaser wouldn’t be able to go through with the deal, so why should the seller?

6. The law: The subject to financing clause is there to protect the purchaser, so the purchaser can waive it.

7. This could be similar to illusory promise if the purchaser doesn’t try hard enough.

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a. The purchaser must use reasonable efforts to secure financing for the contract, or he will be liable for breach. He has a duty of good faith.

Page 512, #2 – subject to financing by a certain bank; courts split on duty to use other lender

Buyer who fails through own fault to secure financing is not protected by clauseBruyere v. Jade Realty Corp.: Πs were a married couple that entered a contract, contingent on obtaining financing, to buy some real estate; they put down $1,000 as a deposit. They initially received financing, but then they decided to get divorced. As a result, the bank withdrew the financing. Πs sued for return of their deposit and lose.

What is the relationship between the subject of financing clauses and equitable conversion? For equitable conversion to occur, there must be an enforceable contract. A contract that is subject to unmet conditions is not yet enforceable. If the house burns in the executory period, would equitable conversion apply?

o No. The contract isn’t final yet, so equitable conversion can’t happen. If there is a condition precedent, the contract might not yet be valid, and so the purchaser should not be held liable. If there is a condition subsequent, then the contract might already be valid and so the purchaser should have to pay. Condition precedent (if-then):

o If you can show me that you have financing, I will sell you a house. During the executory period before the condition is met, the seller bears the risk.

Condition subsequent (unless): o I will sell you a house unless you don’t get financing. During the executory period,

the buyer bears the risk since the condition is met subsequent to transfer of the interest.

Implied Contract Terms

Implied warranty of habitability Extends to land as well as improvements on it Most cases about structural components of house and infrastructure

Implied covenant of marketable title Marketable title a title that is “reasonably free of encumbrances and other title defects, and free

of the risk of litigation Title become unmarketable:

o If vendor lost title through an action or proceedingo If vendor never acquired title because of flaw in the chain of titleo If the title is encumbered

Encumbrance a lien or other non-possessory interest or a non-freehold possessory interest

Zoning: by itself not an encumbrance, but a zoning violation is an encumbrance if it results in

A lawsuit A lien A judgment

o Why is there a defect in a title? It is because some other party has an interest in the land.

Helmholz: The law will assume that you must convey marketable title in order to sell. The law must be drawing a distinction between things that impact the title and things incident to all property (property taxes, building violations (page 514)).

Vendor does not need marketable title until closing

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Curing defectso Defects in the title can be cured, and the seller usually gets reasonable time to cure it. In

Fontainebleau, a zoning variance would be a way to cure the title. Examples:

o Property 08 Nov 01 o Property 14 Nov 01

Adverse possessiono An adverse possessor can never convey marketable title.o A record owner dealing with an adverse possessor doesn’t have marketable title either.

So, this is a good example of when a quitclaim deed, which only conveys whatever interest the party has to convey, would apply.

Helmholz: The majority rule that the purchaser’s agreement to accept a quitclaim deed does not waive the marketable title covenant ruins the effect of a quitclaim deed. I myself regard the majority rule as a very unfortunate development.

Breaks in the Chain of Title

An adverse possessor cannot convey marketable title (without first getting declaratory judgment)Trimboli v. Kinkel: buyer sues lawyer for failing to find adverse possessor of fifty years; lawyer did not investigate adverse possession or do anything to check if there was marketable title or not

Wild deed: a deed outside the chain of title

Express Title Standards in Contracts Marketable title is the basic standard Record title is another approach Checklist

o Four types of title Marketable Record Quitclaim Insurable

o Subject to easements of record Must be brought to attention before signing the contract Something less than marketable title Red flag

o Obvious easements Road running through Red flag to look at land

o Easement that can be removed at the time of the closing but is not at the time of the contract

Such as a mortgage or a lien on the property Another flag

Contract for deed A contract to give possession of the land immediately and then to make payments over a period of

time. All payment is not completed at closing. Similar to rent to own or making payments on a car or “buying on time” More popular in the West. In event of default, seller gets land back.

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Ordinary real estate transaction: At contract a closing date is set to exchange the money for the deed and possession. It is completed at the closing.

How is this different from a mortgage? Mortgage would also give right of redemption and occupancy. Right of redemption: This would allow you to redeem the mortgage for a statutory period, rather than forfeiting everything you have put into the mortgage so far. Rather than getting months to pay up, you would get years to pay up. It gives more time. Right of occupancy: You get to continue to live on the land. You own the land, so you get appreciation of value. Bank gets sale price, plus interest, plus damages.

The deed was placed in escrow (held by third party until the final payment is made). In order for a valid transfer of property, there must be a delivery (similar to gifts inter vivos and bailments)

Warranty deed and contract for deed were two documents. The contract is for promise to give the deed. The deed is the actual conveyance of the land.

The deed has a higher standard of land description than the contract does.

Doctrine of merger by deed The promises included in the contract become merged in the deed and disappear.

o E.g., the seller will convey at the time of closing the property in which the house has been cleaned and the fixtures will be there and you promise to leave the map of buried treasure.

o The deed will not mention the treasure map, the immaculate condition, or the whatever. The promises of a contract, while executory, can still be enforced, but once the deed is passed, the promises are no longer enforceable except as written in the deed. Merged really means disappeared.

Deeds are the primary way of transferring possession, but not the only one: Adverse possession Wills and intestate succession

Quantity or Acreage DisputesSale in gross as applied to a sale of land, a sale by the tract or as a whole, without regard to any warranty as to quantity (acres); sometimes referred to as a “contract of hazard”

Acreage errors must be at least 50% for seller to have breached a material element of a land sale contractTurner v. Ferrin: an agreement to sell 96.73 acres but buyer surveys and finds he only got 90.73; buyer loses.

Contract Remedies

Damages1. Traditional damages for breach of a contract to sell real property are nominal damages (the non-

defaulting party’s expenses for the sale contemplated by the contract)2. Exception: intentional misrepresentation of ownership by vendor3. About half of states allow “benefit of bargain” or consequential damages (difference money

damages)

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a. In event of breach, party can get difference between contract price and fair market value if harmed by breach

4. In most states, if purchaser defaults, vendor gets to keep down payment, contract deposit, earnest money, or binder, as long as it is not more than the customary amount.

a. Standard contracts get around this by providing that vendor gets down payment, etc. as liquidated damages in the event of a breach

5. Dates for vendor damages in falling marketa. Majority of states: from date of purchaser’s breach

i. Justification:1. Consistent with general contract damages theory2. Puts vendor in as good a position as if purchaser had performed3. Mitigates damages (vendor will minimize purchaser’s damages out of

own interest in selling before market falls more)4. Option of specific performance

b. Few states: from date of contractc. Remaining states: from date vendor resells the property, if vendor diligently has

attempted to reselli. Justification:

1. Puts risk of loss during a falling market on defaulting purchaser2. Gives vendor full proceeds he should have received under original

contract

Specific Performance6. Since each piece of real property is unique, presumption is that money damages are an inadequate

remedy for purchasers7. However, since vendor is after money, damages are sufficient8. Remember that court has discretion in granting or denying legal remedies9. Remedies usually attached to request for specific performance:

a. Lis pendens: notice that property is subject of litigation (discourages other buyers)b. TRO to prevent action inconsistent with contract (sale to third party)c. Petition for court to appoint property managerd. Abatement in purchase price, especially if property damaged in executory period

Rescission10. Cancellation of a contract11. Grounds include: mutual mistake of fact, failure of consideration, fraud, intentional

misrepresentation, undue influence, and duress12. When rescission is characterized as an equitable remedy, party seeking rescission must not be in

breach because of the equitable “clean hands” doctrine13. Person seeking rescission must restore or offer to restore all that he received under the contract

(“tender back” requirement)

Other Remedies14. Equitable lien

Land Transfers

History of Common Law Conveyancing1. Before written instruments, possession was the key2. Livery of seisin: ceremony symbolically delivering land from “feoffor” to “feoffee” by passing of

a twig or piece of turf; a formality to show intent3. Fee simple: to him and his heirs4. Fee tail: to him and the heirs of his body

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5. Livery in deed: when livery of seisin took place on the land6. Livery in law: when livery of seisin did not take place on the land; still valid if feoffee takes

possession during lifetime of the feoffor7. Writing optional until Statute of Frauds passed in 1677

Modern Conveyancing1. Deed can convey any interest in land (fee simple absolute or more limited)2. Writing requirements to satisfy Statute of Frauds

a. Names (with sufficient certainty)i. Grantor

ii. Granteeiii. Idem sonans sounds the same

1. Hypo: If Elizabeth Parity and Elizabeth Parody were both in the record, the doctrine would protect a buyer from not having noticed they were different people whose names sound the same.

b. Legal description of the landi. Sufficiently detailed that the land can be distinguished from every other parcel

ii. Methods1. Metes and bounds2. Government survey system3. Subdivision plat

c. Words reflecting grantor’s intent to convey the propertyd. Grantor’s signature

i. Grantee’s acceptance of the deed demonstrates consent to its termsii. Some states require notary public or witnesses for “acknowledgment”

1. In most states, acknowledgment is not necessary for validity, but for recordability

3. Deed need not be supported by consideration, because deed is a conveyance and not a contract

Types of deeds1. General warranty deed

e. Covenants of a general warranty deed (present and future)i. Seisin: warrants that the grantor owns the title that the deed purports to convey

1. Might own it but not be able to convey it if lacked titleii. Right to convey: warrants that the grantor has the right to convey the property

interest in the deed1. Power of attorney to sell might not give right of seisin

iii. Against encumbrances: warrants that the title is not subject to those lesser property interests that do not breach the covenant of seisin

iv.v. Warranty: similar to seisin and against encumbrances, but also requires that the

adverse interest holder must actually assert its interest in the landvi. Quiet enjoyment: same as warranty

vii. Further assurances: requires the grantor to execute any additional document or take such other action as is necessary to perfect the grantee’s interest

1. Enforced by action for specific performance based on the grantor’s failure to convey title properly

2. Different from 1-5 because doesn’t refer to an outside third party’s interest in the land

2. Special (or limited) warranty deedf. Covenants:

i. If any of general warranty deed covenants are missing, deed becomes a limited warranty deed

ii. Warranty might also be limited by time of grantor’s period of ownership

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iii. A limited warranty deed is better than a quitclaim because the grantor has to defend the title against a third party (pays costs, etc.)

3. Quitclaim deedg. Covenants

i. Includes no covenants – undesirable for grantee1. Unless will lose property anyway to adverse possessor, so might get

some money by quitclaiming

Means of transferring title1. Deeds2. Exceptions

a. Dedication: transfer from a private individual to the public (or a public body) of landi. Charitable gift of a park

ii. Requirements are less than needed to transfer1. Need not be by deed2. Oral statement can be enough – announcement3. Location of a park on a subdivision plat may be enough4. Can be acquired by implication – letting the public use the land (ADL:

similar to adverse possession)a. Simple use by the public is not enough necessarily, although it

is a factorb. Adverse possession is against the will of the owner, while

dedication is allowed by the owner.c. Attempting to sell it would negate the presumption of

dedication to the publiciii. Controversial aspect: compelled dedications where city requires dedication of a

park before giving permission to build or giving zoning permission.

Deeds compared with wills1. Similarities

a. Both covered by Statute of Fraudsb. Both must be in writing

2. Differencesa. Wills take effects later, while deeds take effect nowb. Wills require probate (approval of a court) while deeds are valid inter parte without

additional formalityc. Deeds must be recorded, although it has immediate forced. At common law, livery of seisin was necessary for a deed of land, although it was never

necessary for a willi. Similar to delivery of personal property

e. A devise of land under a will took effect at the moment a person died.i. Only God can make an heir. At common law, land passed by succession, not by

choice.ii. So, couldn’t have a will of land in early English law.

f. Consideration: not needed in a will, which is a gratuity, but normally present in a deed (although not required, in the event of a gift).

g. A will is ambulatory (“walking”). It takes no effect until a person dies. If person conveys away the land while alive, the will is incomplete and won’t matter. A will is revocable.

Parts of a deed1. Introduction stating parties and situation2. Granting clause – what conveys the land (consideration, if present)3. Habendum clause: to have and to hold; needs to say the same thing as the granting clause

concerning heirs; may include warranties

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4. Description of the land

Purpose attached to deed1. Statement of purpose of the deed2. Condition subsequent: convey X on condition that they improve the neighborhood

a. Not favored by courts because it results in right of reentry and potential forfeiture3. Bargain/covenant: I convey X to Y who agrees to improve the neighborhood.4. In all three, both parties expect X to improve the neighborhood. In the event X does not improve

the neighborhood, a. in (1) they have just violated the intent; b. in (2) they will lose the land since the condition failed; and c. in (3) they are just promising to use the property and there will be damages for violating

the covenant.

Deeds can be rescinded for fraudAnderson v. Anderson: grandmother promises deed if Altha will take care of her, which Altha never intended to do and never does

Similar situations where deed would look okay but not be1. Deed may be a forgery2. May be fraudulent as to creditors – if granting the land makes the grantor insolvent, the creditors

have a claim to the land better than the grantee3. May be fraud by the grantee or undue influence by the grantee (high standard of proof)4. Grantor may be insane5. Grantor may be incompetent (a minor or senile)6. Grantor may be intoxicated7. Rights of the surviving spouse (statutory most often) – first spouse to die may give away land, but

survivor still has a claim8. Government interest – tax liens, etc.

After-acquired title (or estoppel by deed):If V conveys a deed to P, and later acquires title that he purported to convey to P, that title is passed on to P. If a grantor gives a deed warranting the title, he is estopped from later denying that title passed to the grantee.

Statutory Short Form Deeds(p. 548)

1. Title covenants don’t have to be included in warranty deeds because statute specifies which ones are automatically included

2. Grant, bargain, and sell: includes covenants of seisin, against encumbrances, and quiet enjoyment3. Optional, but should follow the directions4. Habendum et tendendum to have and to hold

a. Includes words of inheritance necessary in common law to convey fee simple absolute title

b. Specified which covenants are includedc. Because of modern law in most states, not really needed, because deed is assumed to

convey fee simple absolute title unless expressly provided otherwised. Can be harmful because includes meanings from many common law cases

Deed Covenants(p. 553)Overview (Covenants)

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Present and future1. Present covenants:

a. Seisinb. Right to conveyc. Against encumbrances

2. Future covenants:a. Warrantyb. Quiet enjoymentc. Further assurances

3. Importance of distinctiona. Decides when breach occurs, thereby triggering the statute of limitationsb. Determines whether the covenant can be enforced only by the current grantee of the deed

or by later purchasers – whether the covenant “runs with the land”

Problems with relying on covenants1. Depend upon continued availability of the grantor – you can’t sue someone you can’t find2. You can’t collect money from someone who has no money – if grantor is insolvent, no money3. Often limited by the language of the deed itself – limited warranty deeds especially4. Covenants are merged into the deed and do not survive the closing5. Present covenants

Breach of Covenants

Future covenants (warranty/quiet enjoyment, further assurances) are breached only by actual or constructive evictionBrown v. Lober: rights to coal sold to company, but previous owner reserved 2/3 of coal rights; suit is barred by the 10-year statute of limitations; quiet enjoyment was never challenged by another taking possession

Constructive eviction is paying off a mortgage or other encumbrance

Seisin, right to convey, and against encumbrances covenants are “personal covenants, not running with the land” against the grantor only. “Since the covenant against encumbrances is personal between the grantor and the grantee, the remedy for a remote grantee, when the encumbrance has not been removed from the property, is against his immediate grantor, whose recourse is against his grantor and so forth back up the chain of title to the original grantor whose conveyance breached the warranty against encumbrances.”

Running with the Land

The covenants of warranty, and of quiet enjoyment, are in the nature of a real covenant, and run with the land, and descend to the heirs, and are made transferable to the assignee. “However, the covenant of general warranty may be breached where steps are taken to enforce an encumbrance.” The “covenantee can found no right to actual damages on the mere existence of encumbrances, but will be limited to a nominal recovery, unless he has paid off the encumbrance or actually lost the estate in consequence of it.”

Only get damages for breach of warranty if actually or constructively evictedProffitt v. Isley: mortgage passed through three owners, and final owner sues first owner for value of mortgage; nominal damages only for breach of encumbrance unless evicted or have paid entire encumbrance off

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Covenants of quiet title and warranty run with the land for the benefit of the ultimate grantee.1. “[A]ll grantors, back to and including the original grantor-covenantor, become liable upon a

breach of the covenant to” the current possessor.2. Neither covenant is breached until there is an eviction under paramount title.3. “Grant, bargain, and sell” words are construed by statute to include covenants of seisin,

against encumbrances, and of quiet enjoyment.

St. Paul Title Insurance Corp. v. Owen: alleged breach of quiet enjoyment; Π wins against original grantor because it is a future covenant. He lost against intermediate grantors because received he took a statutory warranty deed that only protects against acts done by the grantor or his heirs and not by previous grantors. (Types of deeds, special warranty deeds, §2.f.ii)

Innocent Improver: V sells land to P. P makes improvements. What if V never had title?The record owner may have to compensate the adverse possessor/BFP for the improvements.Statutes entitle improver for the increase in value of the land, but the improver must be acting in good faith. If not in good faith, record owner gets the increase in the value.Doctrine: No one can be forced to accept a benefit.

Estoppel by deedX A. Then X gains title from O. X’s new title is passed to A and is held to have been in A from the time he gained it from X. X is estopped from claiming title against A because he conveyed title fraudulently to A.

Legal Descriptions(p. 567-576)

Overview:1. Must be sufficiently detailed to distinguish the parcel from every other parcel of land

a. A street address is normally not sufficiently detailed2. Should use the same legal description for each conveyance of the land to avoid creating questions

Government Survey System1. Also known as the rectangular survey system2. Adopted in 17853. Steps

a. Principal meridian (N-S) and baseline (E-W)b. Six mile intervals from meridians and baselines; N-S lines are “ranges, and E-W lines are

“townships”c. Township also means a parcel of land bounded by range and township lines, making a

6x6 mile square i. Range lines (N-S) don’t line up because of earth’s curvature

d. Sections are square miles in a township

Metes and Bounds1. Describes land by a series of “calls” which consist of direction and distance2. Starts by describing a point of beginning, which should be established by a relatively permanent

and identifiable sourcee. Old: tree or large rockf. Modern: section lines on government survey system or intersection of two streets

3. Lengthy and easy to make mistakes, so best method is a survey

Recorded Subdivision Plat1. Parcel of land subdivided by lot and recorded

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2. Identify subdivision, block, and lot number

Legal Standard for Description (p. 575)1. Court will sustain a deed it at all possible, since it is apparent the parties intended to convey some

property

Canons of constructiona. Language construed against the grantorb. Unambiguous descriptions prevail over ambiguous onesc. If unambiguous on face, look to four corners of deed; if latent ambiguity, may consider

extrinsic evidenced. Order of precedence: monuments, courses (angle), distance, quantitye. Useless or contradictory words may be disregardedf. Particular descriptions control over general descriptions (although a false particular may

be disregarded to give effect to a true general description – huh?)g. Insufficient descriptions may be made certain through incorporation by referenceh. Errors in exceptions in the deed are construed against the grantor to give the excepted

land to the grantee (the entire tract including exceptions).i. If a monument on a boundary has width, the boundary line runs through its centerj. Appurtenances are included even if not mentioned in the deed

Recording Acts1. Overview

a. Allows title to be searchedb. Indexing also important

i. Grantor-grantee index (name index)ii. Tract index (parcel index)

c. Recording also establishes priorities among conflicting claims and promote certainty of titles

History of the Recording Acts1. Early English common law: land transferred by livery of seisin, by enfeoffment

a. Subsequently, transferor had no remaining interest in the landb. “First in time, first in right”

2. Statute of Frauds (1677)a. Land only transferred by written documentb. However, no recording system established

3. Colonization of Americaa. No recording system for all the unclaimed landb. First recording statute in 1640

i. Required grantor and grantee’s namesii. Description of property and estate granted

iii. Date of title transfer

Operation of the Recording Acts1. Hypothetical:

a. Day 1: O Ab. Day 2: O B (O dishonestly sells same land to B)c. Without recording act, A would always wind. With recording act, B can win if he records it first (meaning that O, who no longer had

good title on Day 2, can still pass good title)e. Result: incentive to record

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Assuming that A has failed to record, what must B do to qualify herself under the recording act and take the title as against A?What must B do to prevail against A? Type of Act Prevalence of this type of act1. B must be a purchaser for value and without notice.

“Notice” type About half of states

2. B must record his own conveyance before A records.

“Race” type Only Delaware, Louisiana, and North Carolina

3. B must both be a purchaser for value and without notice, and also record before A.

“Notice-race” or “Race-notice” type

About half of states

Difference between notice and race-notice:Day 1: O A (unrecorded)Day 2: O B (unrecorded, but B is a BFP)Day 3: A recordsDay 4: B recordsNotice: B prevails because lacked notice of A’s claim and paid value at time of conveyanceRace-notice: A prevails because first recorder

Hypotheticals covered in class: Property 26 Nov 01, Property 27 Nov 01

IndexesIndexes: necessary for title examiner to be able to locate the records

Grantor-Grantee Index1. Two indices – one for grantees and one for grantors2. Can check chain of title by following each grantee in the grantee index

a. You only need to look at the grantor index in the period in which the grantor owns the property until he conveyed it to another

3. Can determine interests conveyed (easements, mortgages, leases, restrictive covenants) by seeing what each grantor has conveyed in the grantor index

4. What it doesn’t cover:a. Tax assessments in tax assessor’s officeb. Pending lawsuitsc. Will filed in probate court

Tract Index1. Easier to use, since all documents pertaining to the parcel are listed on one page2. Less widely available because many recording acts specified grantor-grantee indices

Bona Fide Purchasers1. Lack of notice

a. Reason: A second purchaser who knows that a first purchaser hasn’t recorded yet commits fraud upon the first purchaser if he tries to take advantage of the recording statutes.

b. Types of noticei. Actual: if he has information or to circumstances that would lead him to information

ii. Constructive: if a statute charges him with notice (gives him responsibility to investigate?); not really notice but a rule that gives prior purchaser priority

1. If a deed is recorded, all future purchasers have constructive notice.iii. Examples:

1. Purchaser knows of existence of a prior unrecorded deed – actual notice2. Prior deed is properly recorded – constructive notice3. He knows of a properly recorded deed – both actual and constructive

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Lis pendensA pending piece of litigation; at common law, any filing of a suit involving land put purchasers on notice of the asserted rights of the Π in that lawsuit.A v. O lis pendensOB conveyanceB was on notice of A’s interest in O’s land. If A wins against O, B takes subsequent to A (A has priority). By filing the lawsuit, A put the world on notice of his interest in O’s land.

Tough doctrine: How would B find out?

Modern law requires filing a lis pendens notice in the recording office. This filing gives notice to BFP just as a conveyance would.

Judgment lien: encumbers the defendant’s land after judgment is entered for the plaintiff Attach not only to the property owned by Δ at time of judgment but also to property acquired later Effective for years

Lack of Notice

Two rules on defectively recorded instruments Majority rule: An “imperfectly executed instrument ‘is a nullity and is, therefore, incapable

of giving constructive notice.’” If it lacks a signature, it doesn’t give constructive notice.o The substantive law says a contract doesn’t exist if improperly executed, and we

can’t just throw the substantive law out. If it doesn’t exist, how can it give notice? Minority rule: Since the purpose of titles and mortgage recording is to give notice, an

imperfect title or mortgage can still give that notice.

In re Barnacle: a partially signed mortgage (a defective instrument) is held to give constructive notice (minority rule)

Recording a lease creates constructive notice.J.C. Penney Co. v. Giant Eagle, Inc.: grocery chain prevented by injunction from opening pharmacy at shopping center because Penney’s had recorded lease giving it right to have only pharmacy at the center

Buyer has a duty to investigate obvious potential easements

Ambiguities are resolved in favor of land free of easementsMethonen v. Stone: well on subdivision lot has pipes running off to other lots; summary judgment reversed, no decision on merits

Payment of Consideration

Must have consideration to qualify as a BFPGeo. M. McDonald & Co. v. Johns: a mortgage given for a pre-existing debt does not count as consideration

Marketable Title Act“A person who has the legal capacity to own land who has an unbroken chain of title of record for 40 years or more shall be deemed to have a marketable record title.”At a minimum, if you fulfill the requirement, you will have a title that no one can question.

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In the model act, it depends on the root of title. It extinguishes all interests in the land that come before the root of title.

Anderson v. Cold Spring TungstenSuppose that:1940 OTungsten1950 Adverse possession established1985 Tungsten XX can look back to the root of title (at least 40 years back – O in this case). If there is nothing in the record book that impeaches X’s title in those 40 years, X will take from T in the clear. The marketable title act protects against adverse possession if the title is clear for 40 years.

The point of marketable title acts is to simplify the process of searching the record and to get rid of stale claims.

Hypothetical:1900 OA easement1905 OB mortgage1910 OC option to purchase1950 C exercise the option and grants to X (C Y)1970 XY2000 YE

Suppose they are all recorded. No one has done anything wrong.What will E find when he constructs a chain of title?E traces to X and C which goes back to 1910, far more than 40 years. A and B lose their claims (their interest in the property).

How are A and B protected? If A and B wish to preserve their interest, they can preserve it by re-filing every 40 years. Must be re-recorded so that any given purchaser doesn’t have to look farther back than 40 years.

The question quickly arose that these acts were unconstitutional. Retroactive in character, because they applied to existing interests They take property without due process of law It was an impairment of an obligation of contract

All constitutional challenges have failed. They are saved by the legitimate goal behind them (freeing land titles from stale interests) and by the provision for re-recording an interest (no forfeiture of interest, if you are vigilant).

Dramatic cases: Case from Iowa in 1941 (Patrick) Can be harsh in their application

Bona Fide Purchaser Filter

BFP Filter: A “bona fide purchaser of property which was subject to a prior outstanding unrecorded interest may pass title free of the unrecorded interest to a subsequent purchaser who otherwise would not qualify as a bona fide purchaser under the recording act.”

o “Without this rule the bona fide purchaser would be deprived of the full benefit of the purchase – the right to transfer good title to a subsequent purchaser.”

BFP Filter Exception: The exception “prevents the grantor or former owner of the property, who held the property subject to a prior equity, from acquiring the rights of a bona fide purchaser.”

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o This “prevents a holder of the tile from using the [BFP] as a ‘filter’ to cleanse his defective ownership.”

Standard illustration of filter principleOA unrecordedOB recorded without noticeOC with notice of A’s noticeIt doesn’t do any good to be a BFP if you can’t sell the property later.

A BFP cleanses unrecorded interests from the title (exception: owner can’t use it)Chergosky v. Crosstown Bell, Inc.: owner conveys to third party who conveys back to owner, attempting to use the BFP filter, but there is an exception for the owner to prevent this (can’t launder the property)

Recording and Indexing

Recording statutes do not protect those who purchase from strangers to the title (persons outside the chain of title)Zimmer v. Sundell: Π did not have entire chain of title recorded, but tried to use recording act to claim better title than Δ; Π lost because he had strangers in his chain of title

An unindexed instrument is still a recorded instrumentFrank v. Storer: a lien was not indexed by clerk, but still counted as giving constructive notice

The official record is the books, not the computerSkelton v. Martin: tax deed sale, where tax lien was recorded on the books but not on the dialup service; tax deed was valid

Tax sale procedure Tax must be lawful. There is a lot of notice and early warning. Government must follow procedures with “scrupulous exactness.”

o Black wrote a treatise on tax titles.o Examples of sales struck down for not enough exactness

Wrong date on taxes due Statute required printed notice and written notice was posted instead Name of public officer included without title Dollar sign missing from amount due

Exclusions from the Recording Act

List of exceptions Marital property rights Implied easements Interests acquired by adverse possession Short-term leases Mechanic’s liens

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Those who would take by will are not protected under acts that require a BFP

Adverse possession is excluded from the recording actsReasoning: If the adverse possessor had to keep up evidence of hostility, openness, etc., indefinitely, then the statute of limitations would not really have had its desired effect of giving the AP title to the land.Mugaas v. Smith: The property in question was fenced off 3 ½ feet onto neighbor’s land. It resulted from a mistake on where the actual boundary was

Would this be a good case for forced sale? Forced sale would be a law that mimics what the parties would do in bargaining, which would

probably be a purchase of the Smiths of the strip in question. Maybe the Smiths should be obliged to purchase the strip.

o If the law requires that, it becomes a takings question, since the government makes her sell and them buy.

o This is a poor candidate for forced sale. It is similar to someone coming and building a house on my land and then the law making me sell to him.

Only those with a duty to search are on notice by recording a deedMountain States Telephone and Telegraph Co. v. Kelton: contractor damages underground cable that was recorded w/ an easement; not liable because no duty to search

Title Insurance

NotesExample policy on pp. 659-670

Helmholz background: Most policies exclude encroachments, boundary line disputes, and other matters that would be disclosed by an accurate survey of the premises and/or are not on the record.

Helmholz: the general rule is that these policies do not cover adverse possession

Damages under title insurance are the lesser of the cost to remove the defect and the depreciation in the market value.Swanson v. Safeco Title Insurance Co.: Swansons bought property for $180,000. There was also an easement on the land that had been paid off, but not recorded (Jenkinson lien). Swanson got title insurance from Safeco. Swanson claims to have sent prompt notice, but Safeco denies receiving it. Summary judgment reversed, remanded.

The issuance of a title commitment is not an assumption of an independent duty to search.Greenberg v. Stewart Title Guaranty Co.: Greenberg was unable to sell four condominiums because of an alleged defect in the title. He lost condos and had a deficiency judgment as well. He tried to sue the title insurance company for neglect (tort) in searching the records.

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Estates in Land

The Fee Simple

1. Also called fee simple absolute2. The greatest interest owners in land can possess3. Allows owner to convey it or devise it to whomever he wants4. Still restricted by zoning laws, easements, mortgages, etc.

Words Words of purchase define which person is going to get it Words of limitation define what a person is going to get – type of estate What do you do when there is a difference between the habendum clause, the granting clause, and

the warranty clause? The granting clause controls, according to the Court of Appeals in Hall, although intent

should be determined from the whole context

Statute of descent and distribution defines who your heirs are; defines takers of one intestate

Reasons not to restrain alienation Repugnancy: you can’t give a fee simple without allowing the person to sell the land granted (I

give you a Hershey bar but you can’t eat it) Impede the flow of land in commerce: economic reason; want land to go to the person who most

values it Harm to creditors: if Blackacre is given to A but A can’t alienate it, creditors will think it is okay

to loan money to A (after all, he has land) and yet be denied repayment Encourage individual initiative: only if parties can freely alienate land can they have money to

take initiative with Dislike of dead hand control

Restraints on Alienation Outer edges are clear

o You can never fasten a total restraint on alienation.o Restrictions on the use of land are treated very differently than restraints on alienation.o Rules against restraints on alienation are different than the rule against perpetuities,

although some of the reasons are the same and they overlap.o Some restraints are valid if not complete and if they serve a useful social purpose.

Due on sale clause in mortgage: if a house is sold, the entire mortgage must be paid off at sale

Vocabularyo Nature of the restraint

Disabling: you cannot do it, and if you try, nothing happens Almost always invalid

Forfeiture: if you attempt to alienate the property, someone else will come in and take it

Better – sometimes valid Promissory: if you attempt to alienate it, you have to pay O a set fee or a fine

Besto Type of interest

Fee simple

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Current spot


Life estate Easier to restrain alienation since no one wants to buy it anyway

Fee tailo Partial versus total

Can’t alienate outside of the family (more likely to be valid) versus can’t alienate at all (more likely to be invalid)

If the restraint on alienation fits with the type of estate created, it might be allowed (i.e., fee tail and restraint from alienating outside family). If the restraint does not fit with the type of estate, it will not be allowed.

Defeasible estates Types:

o Fee simple determinableo Fee simple subject to a condition subsequento Fee simple subject to an executory limitation

Distinctions:o Who holds the future interest?

O and successors Fee simple determinable Fee simple subject to a condition subsequent.

Someone other than O and successors Fee simple subject to an executory limitation

o Is the defeasance language expressed in terms of time or condition? Time fee simple determinable Condition

Fee simple subject to condition subsequent Fee simple subject to an executory limitation

Fee simple determinable Grantor retains possibility of reverter Automatically expires at end of time period, immediately giving O the legal right to possession Language of time or duration: so long as, while, during

Fee simple subject to a condition subsequent Grantor retains right of re-entry for condition broken Does not automatically expire when the triggering condition occurs; once the condition occurs, the

future interest holder has the option to take action to end the estate Language of event or condition: on the condition that, but if, provided however What action needed?

o In some states, merely giving formal noticeo In some states, must file ejectment or quiet title action

Fee simple subject to an executory limitation Automatically expires when a stated event occurs, but gives the right of possession to a transferee

(someone other than O)

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What is the difference between a fee simple determinable and a fee simple subject to a condition subsequent? In both, the land reverts to someone. Fee simple determinable: words of time or duration (so long as, when, etc.)

o O A as long as x (as long as x continues to happen)o Good as long as x but then it stopso Consequences

When x ceases, property goes back immediately to O (right of reverter) O owes the taxes from when x ceases to be true.

Fee simple subject to a condition subsequent: words of condition (if, etc.)o O A but if non-x (it reverts to grantor)o Good forever as a fee simple, but if x is triggered, it revertso Consequences

When x happens, the grantors has a choice to terminate the grant and take back the title

Creates a right of reentry for condition broken (or a power of termination) not a reverter

A owes taxes until O exercises the option created by x. Statute of limitations applies to both, but the statutes of limitations might be different.

Consequences of distinctionso Liability for rent

If determinable, then A owes O rent once time expires If subject to a condition subsequent, then A owes O rent only from when O acts to end the

estateo Commencement of the statute of limitations period for adverse possession (AP)

If determinable, then continued possession by A starts counting as AP If subject to condition subsequent, then possession by A should not count as AP until O acts

against Applicability of equitable defenses

The purpose of interpreting a will is to give effect to the intent of the grantor.Johnson v. Whiton: testator wills to grandchildren with limitation that granddaughter’s share can only descend to heirs on her father’s side; she gets a fee to allow alienability

Law presumes a fee simple, rebuttable by specific language or grantor’s intentHall v. Hall: husband willed land to wife as long as she remains his widow; created a fee simple subject to an executory interest because of his intent

Helmholz: The law does prohibit certain restrictions on wills. A prohibition of marriage is one of them.

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There is a presumption of reverting to the original owner if the condition is not met.Peters v. East Penn Township School District: Peters conveyed some property to the school district “as long as it is used for public school purposes.” The school district stopped using it for a school, so Peters sued for ejectment to return the property to him and won.

Formal language is not required to create a fee simple subject to a condition subsequent as long as grantor’s intent is clearMountain Brow Lodge v. Toscano: land given to lodge upon condition it is used by lodge; grantor wins when condition fails

A restraint on the power to alienate either for a limited time or only to a particular class or group of persons is void.Bank of Powhattan v. Rooney: Π bank sued to get $2500 that Δ owed. Δ’s father devised a life estate to Δ with the condition that he couldn’t sell it within three years of father’s death. Π wins.

Traditional rule: A restraint on alienation is invalid, period.

Trusts are valid restraints on alienationEstate of Elizabeth Beck: will with condition that money goes to heir, not creditors; intent of testator upheld; court infers a trust

The Fee Tail

A type of defeasible tail, called an entail for short Limited heirs to children (heirs of the body) – down the family tree Takers in tail held a kind of fee simple, but could not alienate it beyond the period of their lives or

to devise it If no heirs of a taker’s body, reverted to either grantor or his heirs or to a remainderman Types of fee tail

o Tail general: heirs of his body by any womano Tail special: heirs of his body by a specific woman (his present wife, for example)o Tail male: heirs passed down to successive males (if first a son, who then has a daughter,

who then has a son, the great-grandson can’t inherit because he doesn’t have all males in his lineage to the grantor)

o Tail female: heirs passed down to successive females Problems with fee tail:

o Can’t be alienated for longer than the tenant’s life, so buyer might think they were seised of the land and then find it reverting back out from under them

Words:o Heirs (or other words of descent) are necessary to create a fee simpleo Body (or other words of procreation) are necessary to create a fee tail

Common recovery, or barring or docking the entailo Action to stop land from reverting under an entail

Blackstone and the Fee Tail He was known for making the law clear, readable, and reasonable. He is criticized for being a

“stooge of the establishment” but here he criticizes the fee tail. Problems with fee tail

o Disobedient children: inherited no matter whato Ousted farmers: life tenant leases to farmer, then dies, and kids take back the land

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o Shorted creditors: life tenant mortgages to creditor, who thinks he will get the land, but when life tenant dies without paying back the mortgage, the creditor gets neither the money back nor the land

o Encourage treason: person could commit treason without worrying about children being affected – quite a stretch

De Donis Conditionalibus A gift of land to B and the heirs of his body created in B an estate in fee tail. Upon failure of the tail, it reverts to O and his heirs. Since words of procreation (“his body”) were

used instead of words of descent (“his heirs”), it reverts to O and heirs.

Rule in Wild’s Case O A and A’s children: if A has no children at time of grant, A takes a fee tail; if A has children

at the time, A and existing children take as tenants in common If in 1925, children were not in existence, she would have a fee tail, which would convert by

statute into a fee simple. If children were in existence, they would be tenants in common. Rule is useful when some are alive at the time, and some are born later.

Forbidding alienation shows an intent to create a fee tailArmstrong v. Smith: deed to mother and her offspring; offspring meant heirs, which created a fee simple or tail

Nomen collectivum collective name Offspring is a collective name, describing a group of people, rather than listing the people by

name. Since it refers to an unnamed group, it refers to people born after the deed.

Definite versus indefinite failure of issue Definite refers to one moment, namely the death of the first taker O A for life, then to A’s children; he has X who has Y

o A has a fee tail; if the line dies out, it goes back to the original grantor Indefinite failure of issue (common law preference) because it is indefinite

where the line might or might not failo If A has a fee simple and his line dies out, it returns to the state (escheat)

Definite failure of issue (modern preference) because it is definite who the failure will be fixed to

Prefer alienable land We are hostile to landed dynasties. We don’t want it to return to grantor.

The Life Estate An estate in land measured by the duration of the life or lives of one or more persons An estate pur autre vie measuring the duration of life not by the person who holds the estate but

by the life of another Not an estate of inheritance

o Cannot be devisedo Will not pass upon intestacy to next generation

Can be alienated inter vivos but there isn’t much of a market because of the uncertain duration Duty to maintain the property

o To preserve property value for future interest holderso In event of a failure to repair, holders of future interests have a cause of action in waste

against the life tenant

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o Right to repair traditionally included right to cut timber (to take estovers) o Not allowed to open mines, lease right to drill for oil or gas, or clear cut the timber with

permission from the future interest holderso No duty to make extraordinary repairs

Life tenant Where a grant is made, subject to be defeated by a particular event, and there is no limitation in

point of time.Thompson v. Baxter: lease “while he shall wish to live in Albert Lea”; life estate because tied to his life or residency

Other types of tenancies

Tenant at will One who enters into the possession of the lands or tenements of another, lawfully, but for no

definite term or purpose, but whose possession is subject to termination by the landlord at any time he sees fit to put an end to it.

Can be terminated by either party

Tenant at sufferance Where the tenant wrongfully holds over after the expiration of his term.

Tenant from month to month Where no definite time is agreed upon and the rent is fixed at so much per period and is terminable

at the expiration of any period for which rent has been paid.

Waste Very pervasive: occurs every time where ownership is divided among parties and one is in

possession (trusts, concurrent tenancies, tenants in common, leases unless specific exception Arises more in long-term leases or life estates since they don’t commonly specify obligations like

short leases do. Definition: a tenant for life may enjoy the premises in the condition in which he or she receives

them … may not do any acts that diminish their value Kinds of waste:

o Voluntary: cutting trees down or tearing buildings downo Permissive waste: not repairing the roof o Equitable waste: doing an act which would otherwise not be waste but becomes waste

because of your motives (p. 251 #2) – i.e. cutting down trees out of spiteo Innocent waste: vandalism occurs and you are obligated to repairo Ameliorative waste: improvements

Remedieso Damageso Injunctiono Receivership: appointing someone to administer the property; available in extreme caseso Partition: splitting the property by selling it and dividing the proceeds; most jurisdictions

do not allow thiso Common law: treble damages and forfeiture

In this case, not an act but an omission. Apparently an omission is considered an act in the law of waste.

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Life tenancy liable for waste for failure to make reasonable repairs, but forfeiture is not a remedySmith v. Smith: brother/sister dispute over will; life tenant allows leaking roof and rotten flooring

Law of waste imposes a duty on the tenant to pass the same thing on to the remainderman.Brokaw v. Fairchild: life tenancy in a residence on Manhattan where tenant wants to tear it down and build a high rise apartment building; life tenant cannot exercise an act of dominion or ownership that destroys the object of the tenancy (i.e. the residency); cites Melms.Contingent remainderman: Take in the event that life tenant does not have issue. The contingent remainderman had

standing since he didn’t have issue at the time of the suit.

In eminent domain, just compensation is determined by equitable principles (government does not pay for improvements it made)New York, O. & W. R. Co. v. Livingston: heir recovers land under fee tail from railroad, which then exercises eminent domain to recover the improved land

Tax sale cannot be used to convert life estate into fee simpleTillman v. Richton Tie and Timber Co.: life tenant loses property to state in tax sale; when life tenant reacquires land from the state, he only resumes his life estate (can’t launder land through state to gain fee simple)

Marital Estates

The Common Law Husband and wife hold title individually to property brought into marriage or acquired during

marriage. Income and property purchased with that income belong to them individually. Exceptions:

o Iure uxoris: husband has right to control property wife has legal title to; wife loses immediate control of property until he dies; husband can alienate property as well. In turn, wife is entitled to support from husband.

o At death of spouse, survivor took a life estate in property of deceased, although was not an heir.

Widow entitled to 1/3 share of any land the husband has been seised of at any time during their marriage (i.e., if H sold land to A, then H’s widow owned life estate in 1/3 of A’s land)

Widower entitled to a life estate in any land the wife held in fee simple or fee tail during the marriage (as long as a child had been born alive during the marriage)

Curtesy Husband gets life estate in all lands which wife had fee interest in while they were married Must have been issue born alive, capable of inheriting, to qualify

Dower Dower only attaches to fees, not to life estate (which is not a state of inheritance). Wife got life estate in 1/3 of husband’s lands, and issue aren’t relevant

Reasons for the abolition of dower Reasons:

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o Cloud on title: meant that property could not be conveyed without attaching a burden on the purchaser of a present estate of 1/3.

o Both only attach to land and not to chattel, which is not the normal form of wealth in modern society.

o Both are easy to beat Difference between dower (widow’s right) and curtesy (widower’s right)

o For curtesy to attach a child had to have been born alive.o For dower, a child was not necessary to attach.

They still exist today, but in limited form.

Class discussion: should we have curtesy and dower at all? Yes:

o It privileges marriage over other relationships, which is good.o The property belongs to the family, so they shouldn’t have to prove need. It is their

property.o We wouldn’t want the spouse to be able to leave nothing to the survivor. Most

young couples don’t plan for survivor. No:

o It privileges marriage over other relationships, which is bad.o It doesn’t have anything to do with need.o Restraint on alienation is bad.o Women now have more earning capacity and so don’t need to be protected.o We do want the spouse to be able to leave nothing to the survivor.o Holdover from a patriarchal age

Dower only applies to land husband seised of during marriageMelenky v. Melen: father conveyed land to son (Δ) with oral promise from son to reconvey upon demand. Son was asked to reconvey and returned only a life estate, not a fee simple as he was given. Father accepted deed. Stepmother sued for being deprived of her dower.

Statutory Changes in Marital Estates Common changes to the common law

o Making the surviving spouse an heir upon intestacyo Widening coverage to include both personal and real propertyo Equalizing the rights of husband and wifeo Restricting the property subject to them to that held at deatho Changing the estate taken from a life estate to a fee simple interest in a percentage of the

decedent’s estateo Giving the surviving spouse an election to take under the will of the first to die, or to take

a statutory share as the decedent’s heir Statutes

o Ohio: 1/3 estate default unless will barred ito Connecticut: survivor may elect either 1/3 or willo Uniform Probate Code: survivor may elect either sliding scale share or will

Community Property Community property

o Property that is earned by either spouse during the marriage belongs to a marital community of which each is half owner.

o Eight states use this Separate property

o Property owned prior to marriage

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o Property acquired by inheritance, devise, or gift during the marriage

How much about community property is it fair for you to know? Only 8 states, but should know something about it for the migrating couple Should recognize its basic characteristics

o It excludes property acquired prior to the marriageo It excludes gifts and devises acquired during the marriageo Difficult areas:

Gains from separate property, such as dividends from separate shares – look at case law and statutes in jurisdiction

Tracing the assets Personal injury awards: one spouse is run down by a bus and collects from the

bus company; is that part of the community property? The facts of Kessler are quite unusual. Why so few cases like this?

o Common law lawyers are ignorant about community property law.o Problems of tracing are too great.o Real property causes the most problems, but inheritance to that hinges on the situs, or the

place of the death.

Spouse owns ½ interest in community property, so other half gained at survival is taxableIn re Kessler’s Estate: under community property widow has to pay tax on ½ of property because she is gaining property; dissent: she already owned the property, so it shouldn’t be taxed

Homestead Rights Right to a homestead exemption from the claims of creditors of either spouse A property interest that cannot be defeated by the conveyance of one spouse without the other’s

consent In some states, homestead must be recorded to have effect Loans to purchase or improve the homestead itself are not exempted, however.

Concurrent Estates

Basic Characteristics Co-ownership of land by two or more persons Each tenant has a right to possess the whole (such as a house, where each family member may

legally enter the others’ rooms Each tenant has a right to partition the property, to divide it into parts (partition in kind) or sell the

whole (partition by sale) Four types

Joint tenancy Marriage irrelevant Owned per my et per tout, by the half and by the whole Each owned an undivided interest in the whole Right of survivorship: on death of one, property automatically passes to survivor(s) without

formalities of inheritance (or probate)o Known as ius accrescendi

Has four necessary unitieso Title: acquire title by same instrument or joint adverse possessiono Time: interest acquired at the same timeo Interest: shares of each must be equal, undivided, and identical in duration

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o Possession: all have equal rights to possess the whole, unless express agreement otherwise

If one violates a unity, others continue in joint tenancy among themselves and have tenancy in common with the violator.

Can be created by conveyance “to A and B as joint tenants, and not as tenants in common”

Tenancy in common Marriage irrelevant Only requires unity of possession Have an undivided interest in the property Tenants do not have a survivorship right (i.e., if tenant A dies, tenant A’s land might go to

someone other than tenant B) Conveyance “to A and B” generally creates a tenancy in common No adverse possession occurs without ouster; not adverse since both entitled to possession of the

whole No rent is payable to the tenants occupying by the ones not occupying One cotenant can recover possession of the property against a wrongdoer without impleading the

others Cannot exclude the cotenants Statute of Anne: rent must be shared by cotenants

Hypothetical comparing joint tenancy with tenancy in commonO A, B & CA DD dies, X as heirB dies, Y as heir

Joint tenancyo A, by conveying, severs the joint tenancy, making it a tenancy in common between

A and B&C (joint tenants)o X takes tenancy in commono When B dies, B’s share survives to C, and does not devise to Yo Outcome: X and C are tenants in common

X has 1/3 and C has 2/3 (yet each is entitled to possession of the whole) In family, all get possession of the entire house, although one may

have a larger interest Tenancy in common

o Outcome: X and Y and C are tenants in common

What are the benefits of the statutes that presume tenancy in common? Joint tenancy means more land in the hands of fewer people Divorce does not necessarily sever a joint tenancy. A tenancy in common keeps the interests

separate.

Coparency Obsolete Where lands passed to two or more female descendants by operation of law Marriage irrelevant

Tenancy by the entirety Marriage required Husband and wife hold as one person Surviving spouse takes the whole upon the death of the other Have to act together to sever the tenancy by the entirety

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No individual right to partition Divorce, since it terminates the marriage, terminates this too Conveyance commonly by “to A and B, husband and wife, as tenants by the entirety”

The Creation of Concurrent Tenancies Current default/presumption is tenancy in common

Creation of joint tenancy: Need all 4 unities to create under common law

o If A owned property and wanted to bring B into a joint tenancy, would need to convey to C and then C convey back to both A & B

Now, need only to create a joint tenant by A & entering it Symmetry in the law

o If you can create a joint tenancy without the four unities, you should also be able to sever without the four unities.

If deed is clear, can’t allow parol evidence; if contradictory language, that which comes first governsCamp v. Camp: deed gives mother and son tenancy in common with rights of survivorship; son’s widow sues for ½ property interest;

Parol evidence rule: Types of contracts:

o Clear and unambiguous: no parolo Ambiguous: parol okay to clear up ambiguity, but if it contradicts, then the parol

inadmissible Parol can clear up attendant circumstances (deaths, etc.), but not contradict the written terms In property, parol evidence is allowed only for these attendant circumstances; for the written

instrument itself, the four corners approach is more commonly followed

Relations among Concurrent Tenancies Under the Statute of Anne (England, 1704), a cotenant who receives rent must pay the others their

share. Cotenants may not exclude other cotenants from enjoying the right to possession of the whole. Examples of waste:

o Extracting natural gas without the consent of the otherso Cutting timber

Cotenants can produce oil but cannot exclude the others from producing oil. If one of the cotenants acquires the title by tax sale or paying off a mortgage, he acquires it for the

benefit of all and all owe him their share of the cost.

The Termination of Concurrent Tenancies

Concurrent tenancies come to an end when the property subject to them is conveyed to a third person

Difference between severing joint tenancy and partitioning the land: Severance: you are seeking to create a tenancy in common Partition: you are seeking to divide the real estate into parts; sometimes means selling it and

dividing the proceedso It is a right for joint tenants and tenants in common. May require going to court to

enforce that right, but not necessary

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Can unilaterally terminate a joint tenancy by conveying to oneself as tenant in commonRiddle v. Harmon: wife conveys joint tenancy property to herself as tenant in common to destroy right of survivorship

Act of severance must not allow severer to retreat from severing the joint tenancyAllison v. Powell: joint tenant commences an action to sever a joint tenancy, but dies; the action does not survive to executrix and title passes to joint tenants

Danger of one joint tenant defrauding the other If A & B in a joint tenancy, A could defraud B by

o Secretly executing a deed conveying his interest to someone, C, and putting it in his safe deposit box to be found after he dies as a valid transfer inter vivos that severed the joint tenancy and ended the right of survivorship

o However, if B dies first, he could destroy the deed and no one would know he shouldn’t have been able to take by survivorship

Hypotheticals on severing a joint tenancy: Can a will sever a joint tenancy?

o Won’t work because the right of survivorshipo Unusual outcome because clear intent in a written document does not govern

Intent doesn’t matter with a right Entering into a contract of sale

o Again, not final and can retreat fromo What about inference of no enforceable agreement – points to possibility of

enforceable agreemento Equitable conversion: when a binding contract of sale is agreed to, the title is

equitably held Long term lease

o Title does not change, so doesn’t severo A & B are joint tenants

A C for 5 years After 5 years: A holds title If A dies during 5 years, B has the fee; C loses property interest, since it

comes from A’s interest, which is goneo Riddle: intention matterso Allison: severs once can’t retreato A wanted to convey to C for five years

Inconsistent during the five years because if it is not severed, then C would be evicted if A died

o After the five years: A has a tenancy in common since the lease severed ito Does Allison support not severing?

Yes: A could retreat from the severance No: Once the unities are broken, you can’t go back;

o What about Tillman (buying through tax sale only recovers life estate)? Can’t get more title, but can weaken it

o What if Riddle is about intention? Mortgage by one joint tenant

o A City Bank a mortgageo Intention to sever? Noo Same as lease, since title doesn’t changeo Two theories of mortgage

Title: mortgager gets title Severs

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Lien: mortgager only gets a lien against the property Does not sever

So it depends on what theory the justification uses? Yes: No: if A were to die, the bank wouldn’t get its money; surviving

joint tenant, B, would take the whole rather than only A’s interest

Some of these questions (particularly long-term lease) are not answered at this point.

Reversion, Reverters, and Powers of Termination

Overview If grantor conveys or devises less than a fee simple absolute, grantor retains an interest Future interest created Interest kept

o Life estate, fee tail reversiono Determinable fee possibility of revertero Fee simple upon condition subsequent right of reentry for condition broken

Rights are retained by implication; explicit mention of them is not necessaryo O to A for life

Creates a reversion by implication, even without reverter clauseo O to A for life, remainder to B if B survives A

Since contingent remainder, reverter is impliedo If O dies during A’s lifetime in these examples, O’s heirs will take the reversion

Reversion The residue of an estate left in the grantor, to commence in possession after the determination of

some particular estate granted out by him. Created when a person with a vested estate transfers to another a legally smaller vested estate. All reversions are vested; yet they might be subject to defeasance. Fully descendible, devisable, and alienable inter vivos

Possibility of Reverter The interest left in a transferor who creates a fee simple determinable A contingent reversionary interest Can be created only in the transferor or his heirs Automatically becomes a present estate in the grantor in fee simple without any election on the

part of the grantor on the occurrence of the condition specified in the conveyance Alienable

Right of reentry upon condition broken A future interest created in a transferor who conveys an estate on condition subsequent It can be created only in the transferor or his successors and never in a third person It is a power to terminate the granted estate on the breach of the specified condition Does not occur automatically Can be waived It is descendible and devisable It cannot be alienated by itself; however, it can be alienated along with a possibility of reverter

o A hope is too intangible to be conveyed Capable of indefinite duration, but limited by statutes in many states

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A breach of a condition subsequent can be taken advantage of only by the grantor or his heirs (can’t convey right of re-entry for condition broken)Village of Peoria Heights v Keithley: grant of land with condition subsequent that it be used for public buildings and that it be a dry area (no sale of alcohol) with reversion to grantor in breach

Right of reentry is a legal right, not a property interest, that can be waivedTrustees of Calvary Presbyterian Church v Putnam: grant of land with condition subsequent that land be used for religious purposes with right of reentry reserved for breach, but heirs waive the right and heirs born later lose the right too; as long as the conditions existed unbroken, the grantor and his heirs had no interest in the estate

Rule in Wilde’s Caseo Since a fee tail is not longer possible beyond one generation by statute

O A and A’s children: if A has no children at time of grant, A takes a fee tail; if A has children at the time, A and existing children take as tenants in common

The interest created in the grantor of a common-law fee tail estate is a vested reversion.Long v Long: dispute over whether possibility of reverter is a vested estate; possibility of reverter on expectation that a fee tail might fail exists, when fee tail not yet converted into fee simple by statute

Hypotheticals about alienating right of re-entry and unclaimed right of reverterProblems on 288 (no definite answers to these)1. Whether the attempt to alienate a right of re-entry for condition broken destroys the right?

o Three possibilities: Estoppel: cannot enforce it because he attempted to alienate and so doesn’t

still have it Policy: should favor fees simple, and so should restrict the exercise of rights

of re-entry for condition broken Indirect transfer: if you can’t do it directly, you can’t do it indirectly

o Estoppel by deed: a party who conveys by warranty deed when it doesn’t have the title, and later acquires the title, the title passes immediately to the grantee of the deed

Year 1: O Year 2: A B warranty deed (promise of passing the title) Year 3: O A (Title immediately passes to B)

o Parallel to estoppel by deed If the attempt to alienate was void, then when the condition actually is

broken, the right to exercise that right passes immediately to Keithleyo Restatement – says the reverse

Attempt to alienate does not destroy the right of re-entry2. O conveys all interest (a right of reentry) to B

o Here attempt to alienate the right of reentry is coupled with a alienable interest – alienating both the reversion and the right of re-entry together makes the alienation of the right of re-entry okay

o Wouldn’t want to split up the reversion and the right of re-entryo Majority view: B does have a right to Blackacre if no longer used for residential

purposeso O A for life upon condition

It is certain that O and his heirs will get the property back O has retained a vested estate, a reversion Reversion can be alienated by itself

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o O A & heirs It is uncertain that O and heirs will get the property back O has a contingent interest, a cause of action, a right of entry for condition

broken Right of reentry upon condition broken cannot be alienated by itself

3. O A fee simple determinable reserving a right of revertero Does the property escheat or remain with A’s successor?

Determinable fee has a reverter which is automatic, so it must escheat You cannot acquire title against the government by adverse possession

If it were a fee simple upon condition subsequent, then it would have a right of reentry, which must be exercised by O’s heirs to get the property

Remainders A future interest created in a transferee which can become a present possessory estate only on the

expiration of a prior estate created in favor of another transferee by the same instrumento Remainder A non-possessory interest to take effect in the future created in a stranger.o Must be created by an express grant and must follow a disposition to someone else

Cannot be remainder after a fee simple or after a fee simple determinable It becomes a possessory estate only on the expiration, and not the divestment, of the preceding

estates created by the same instrument.o A remainder does not cut short a prior estate; it awaits its orderly termination.o Must take effect in possession immediately on the expiration of the prior interest

simultaneously created – no gap in seisin

Types: Indefeasibly vested remainder Vested remainder subject to divestment Vested remainder subject to open Contingent remainder

Common law special ruleso Cannot be created in contingency, so common law preferred vested construction

O’s intent controls, when it can be found In the example above, possibilities:

Does children mean existing children?o At common law, the preference was for children of A who

were in existence at the time of the grant Does children mean future children yet to be born?

o But why didn’t O name the children (X, Y, and Z) instead of describing a class of persons? So maybe should delay until death of A.

What about children who die before A does?o Remainder must be supported by an intervening freehold estate

Creation of Remainders Remainder any future interest limited in favor of a transferee in such manner that it can become

a present interest upon the expiration of all prior interests simultaneously created, and cannot divest any interest except an interest left in the transferor

Can be created in chattels Example

o O Blackacre to A for lifeo O B “all my interest and estate in Blackacre to B and his heirs

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o B gets a reversion rather than a remainder; reversion retains the same character it had in O’s hands, b/c it was not created at the same time as the original grant

Remainder can go to entities other than persons (such as a charity)

Rule in Shelley’s Case: When the ancestor by any gift or conveyance takes an estate of freehold, and in the same gift or

conveyance an estate is limited either mediately or immediately to his heirs in fee or in tail; that always in such cases “the heirs” are words of limitation of the estate, and not words of purchase.

“Heirs” defines the type of estate, not heirs as actual people. Five requirements

o Ancestor must take a freehold estateo Must be created by the same instrumento Only applies to lando Estates must be of the same quality (can’t mix legal and equitable estates, for example)o Words “heirs” must be used in the technical sense – person who are designated as takers

when you die intestate Clues it is not used in technical sense:

Equal shares, since statute of descent & distribution tend not to give equal shares (i.e., wife gets more)

If contingent remainder over goes to someone who could be an heir of previous grantee

Different from doctrine of mergero Changes a remainder in descendant to a remainder in the ancestor

Helmholzo Largely abolishedo It operates to thwart, for no apparent reason, the intention of the grantor, so it doesn’t

seem particularly beneficialo Makes property fully alienable sooner, but so what

Doctrine of devise or bequest by implication When property is limited by an otherwise effective conveyance “to B for life, and if B dies

without issue, then to C” or by other words of similar import, then, unless a contrary intent of the conveyor is found from additional language or circumstances, an inference is required that the conveyor has limited an interest in favor of the issue of B, in the event B dies survived by issue.

McRorie v Creswell: Π sued to determine title. George devised land to wife, Sarah, and daughter Rosanna for their lifetime, provided Rosanna has no heirs, then it shall go to son CW for his lifetime and his heirs at his death; to Rosanna’s issue by implication

Doctrine of Worthier Title Converts a remainder professedly limited to the heirs of the grantor into a reversionary interest in

the grantoro O A for life, then to O’s heirso Outcome: reversion in O

Worthier: O had to use the better method of transferring to his heirs, namely intestate succession Background

o Still usedo Upholds the intent of the grantoro Applies only to remainders in your own heirs

Why do doctrine of worthier title and Rule in Shelley’s case treat heirs differently? Doctrine of Worthier Title (DOWT): tries to give effect to grantor’s intent

o Creates reversion in O instead of giving interest to O’s heirs

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Rule in Shelley’s Case (RISC): goes against expressed intent of grantoro Creates remainder in A instead of giving interest to A’s heirs

Examples O A for life, remainder to A’s heirs in equal share

o Deal’s with A’s heirso RISC: gives interest of A’s heirs to A o So, RISC frustrates O’s intent

So, limiting to only heirs used in technical sense limits application of this doctrine and its damage

O A for life, remainder to O’s heirs in equal shareo Deals with O’s heirso DOWT: gives effect to O’s intent

Heirs do not have a vested interest in trust if it was not the intent of the grantor; grantor retains remainderStewart v Merchants' Nat'l Bank of Aurora: beneficiary attempts to revoke spendthrift trust; he wins, since not vested interest

Classification and Characteristics of RemaindersRemainders:

May be held in the following estateso Fee simple (either absolute, determinable, subject to a condition subsequent or executory

limitation)o Life o Term of years

Common featureso Created simultaneously with and in the same document as a prior possessory interest, and

are what “remains” after that prior interesto Prior interest must be immediately prior to the remainder and there may be no gap in

seisin between them; if there is, it can take effect only as an executory interesto The prior estate must end naturally and cannot be cut short by a divesting event, or the

future interest can take effect only as an executory interesto They must be held by a person or persons other than the grantor of the document in

which they are created Can be vested or contingent

o Vested a present right to a future interest Definition: A remainder limited to a person in existence and ascertained who is

given the right to immediate possession whenever and however the preceding estate or estates comes to an end.

When remainderman is a presently identifiable person and Remainder is not subject to a condition precedent Rule against Perpetuities does not apply Classification

Remainders absolutely vested Remainders vested subject to partial divestment Remainders vested with enjoyment/possession postponed

o Contingent When person not identifiable or When subject to a condition precedent

o Advisability of contingent remainders over vested remainders Vested remainders can cast property to strangers (L in example, if B dead) Tax advantage

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Vested remainders are taxed and incur inheritance tax; B’s estate would have to pay inheritance tax

Contingent remainder: if B dies before A, B’s failure to survive A means his remainder was not vested and so was not taxable

With many vested remainders, tax might be more than the value of the remainders

Common law presumptiono Favored classifying remainders as vestedo O A for life, remainder to A’s children

If A has only B as a child, B has vested interest subject to partial divestment upon birth of sibling C (“subject to open”)

o O A for life, then to B and her heirs, but if the property is used for a tavern during A’s lifetime, then to C and his heirs

B’s remainder is vested but subject to complete divestment Examples

o O A for life, then to B and B’s heirs Vested remainder

o O A for life, then to B’s children Contingent until children born

o O A for life, but when A dies, to B and B’s heirs Vested: A will eventually die; not a legal contingency

o O A for life, then, if B survives A, to B and B’s heirs While A alive, contingent remainder in B (condition precedent to B taking

remainder)o O A for life, then, if B survives A, to B and B’s heirs, but if B does not survive A, to C

and C’s heirs B and C’s remainders are contingent: B on B surviving A, and C on B not

surviving A Alternative contingent remainders or cross remainders

o O A for life, then to B for life, then to C and C’s heirs B: vested remainder in life estate C: vested remainder in fee simple

o O A for life, to B and B’s heirs, but if B does not survive A, to C and C’s heirs B: vested remainder in fee simple subject to complete divestment C: shifting executory interest in fee in C’s heirs

Rule against Perpetuities applies

“By purchase and not by descent” O’s heirs take by a remainder and not by an inheritance from O

Destruction of contingent remainders Here, neither remainder took effect since the contingency did not occur. They both failed. Rule: A remainder must vest at the natural termination of prior estate or it will fail.

o Only applies to remainders Suppose: O B for life, remainder to C’s children who attend B’s funeral

o At death of B, does the remainder take? Does not take affect at the termination of prior estate (because of gap in time

between death and funeral) and so it is treated as an executory interest and is not destroyed (p. 319 Purefoy)

Artificial destruction doctrine (different from destruction of contingent remainders)o If a life tenant purported to convey the fee (a tortious feoffment), the next estate presently

entitled to take would vest in possession immediately. Contingent remainders, not being limited to take immediately, were destroyed.

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o O A for life, remainder to B if B survives A A could destroy B’s remainder by making a tortious feoffment

Destroying intervening contingent remainders (doctrine of merger) Under the ordinary rules of the common law, when two successive vested estates come into

the same hands, they merge. The lesser estate is merged into the greater.

Contingent remainders do not vest until the condition occursRyan v Monaghan: a will leaving life estate to wife and remainder to son’s heirs; contingent remainders do not vest until the condition occurs, so son takes by partial intestacy

Persons who take under the will, as members of a designated class, must be determined at the time of the death of the testator and the estates given to them vest at that time.Buckley v Buckley: dispute over whether remainders vested at death of testator or first taker; presumption in favor of interests vesting upon death of testator

Remainders are vested when intent of the will is to provide for support of widow and she renounces the willDanz v Danz: widow renounces will to take statutory ½ share, but niece and nephew claim vested remainders

Contingent remainders are transmissible where the contingency depends upon an event and not upon the personBlack v Todd: dispute over whether contingent remainder is transmissible; devise to daughter, then to children, then to Mary Brown (granddaughter), then to grandson, with each remainder contingent on previous dying without children; since this was an event, and not just a person, it was transmissible

Conveyance of contingent remainder by estoppel You could convey a contingent remainder by estoppel by conveying with warranty of title, so that if title fell into you it would pass directly to buyer

Common law presumption of early vesting now weighed against factors favoring later vestingBrowning v Sacrison: action to construe a will; grandmother tried to leave son-in-law out, so remainders in grandsons construed to be contingent upon her death and only vesting after death of their mother; if vested, son-in-law might have taken by descent

The Statute of Uses and Executory Interests Statute of Uses (1535): It provided that where one person stood seised to the use of another

person, that other person should be seised of the legal estate he had previously held only in use. An equitable right became a legal estate.

The statute pronounced it unenforceable because it was oral. The statute of frauds requires it to be in writing. Therefore father had only an equitable right based on the son’s fraud. The statute of frauds will not allow frauds, so fraud allows action without a written instrument.

o O to T to the use of A for life, remainder to B and his heirso A held legal life estate and B held legal remainder in fee simple; T took nothingo O (Reuben) T (son) for the use of A (Reuben – promise to reconvey) (Melenky v.

Melen)o If in writing, that would have given Reuben, the father, the legal title – which would have

created dower interest in the widow.

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Allowed conveyancing without the livery of seisin through a paper transaction that involved no entry onto the land

o Bargain and sale passed use to buyer, and now legal title Examples

o O bargains and sells (B&S) to A for 99 years if A so long lives and then to A’s heirs Before statute, A’s heirs would not take because of gap in seisin After statute, A was seised and so could pass to heirs If A got a life estate instead, the rule in Shelley’s case would mean A’s heirs

would take nothing Allowed creation of future interest previously prevented

o Freehold can now commence in the future (allowed “springing” interest) O to A and A’s heirs to commence a year from the date of conveyance

o Contingent interests can now be created to follow a term of years O to A for twenty years, then to heirs of B (B still living)

o Abeyance in seisin can now exist between successive freehold estates O to A for life, remainder to B and B’s heirs if B attends A’s funeral Inevitable gap between A death and his funeral

o Future interests can now cut short an existing freehold estate (shifting interest) O to A for life, but to B and B’s heirs if A marries C

Does not execute active uses or uses upon a use.o O to T to the use of A (and T is given active duties of management)

Use is not executed – A does not have a legal title

Types Shifting executory interest (affects interest of another transferee) Springing executory interest (affects interest of the transferor)

Examples O b&s to A for life, then one day later to A’s heirs

o State of title at time of conveyance is almost always the place to starto Before Statute of Uses

A with life estate and reverts to O A had equitable title, O would have legal remainder, and A’s heirs had an

equitable remainder Chancery would enjoin heirs of O to hand it over to heirs of A

o After Statutes of Uses A with life estate, reversion to O for that one day, subject to a springing

executory interest in A’s heirs Now A’s heirs have a legal remainders

O b&s to A for life, then to B and heirs if B survives A, if not, to A’s heirso Before Statute of Uses

A has legal life estate B has legal contingent remainder in fee simple A’s heirs alternative legal contingent remainder in fee simple

o After Statute of Uses Same thing – it does not violate any rules on p. 317 Commence in futero?

No – because the freehold begins right now, not later Does not follow a term of years – no gap in seisin Rule in Shelley’s Case doesn’t apply b/c too violent to O’s intention to knock

out B; otherwise would be applied O b&s to A for life, then to B and his heirs but if B dies w/o issue to Red Cross

o A has legal life estateo Condition subsequent: B has a vested legal remainder subject to complete divestment

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o Red Cross has an equitable shifting executory interest Executory because fee simple is of potentially infinite duration and so must be

cut short to transfer to RCo After Statute of Uses, Red Cross’ interest becomes legal

O b&s to A and heirs to the use of B and heirso Legal fee simple in Ao Equitable fee simple in B

Rule in Purefoy v. Rogers If, when created, an interest can take effect as either a contingent remainder or as an executory

interest, it will be treated as a contingent remainder for all purposes. If the interest did not vest at the termination of the prior estate, it falls to the ground. It is about possibilities O A for life, then to first person to circumnavigate the globe in a balloon

o Contingent remainder or executory interesto Can it take effect as a remainder?

Yes, it person circumnavigates before A dies It is a possibility

o What if no one has circumnavigated by A’s death? Then the remainder falls to the ground

An interest must be treated as an executory interest if it takes affect, not at the end of the life estate, but in defeasance of it.Blackman v Fysh: Testator wills land to children of his son who live to 21, but also says that if son sells or loses property, it passes to grandchildren.

Class gift and when a class closes Important question for modern practice Introduction to class gifts: Who gets the estate and when do you decide the members of the class O to A for life, then to A’s children who reach 21

o If at A’s death, no child has reached 21, the remainder will fall to the groundo How many children will take?

O to A for life, then to O’s issue surviving Ao When do we determine the size of a class?

Depends on testator’s intento The notion of O’s issue is an open-ended class – he might have more children at any time

So, when do you determine how many of O’s issue will be able to take this remainder?o Determine at the time when someone is qualified to take – when A dieso The afterborn issue of O are excludedo This is a class-closing rule

Those who are alive at the time are entitled to take, and those born afterwards are excluded.

o Why didn’t that happen in Fysh? It is possible that some would reach 21 or would marry after the forfeiture of the

estate So, how do you decide who qualifies?

In the hypo above, we close the class when one member of the class can take.

Here, you might look around at who could take at forfeiture, but court does not do this.

O to Son for life, then to O’s issue surviving A.o Suppose the Son had four children: A (son, 21), B (daughter,

married), C (unmarried daughter,16), D(son, 2). Who takes? Want to give effect to testator’s intention

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What was his intention? “Whether now or hereafter to be born” So, A through D and even E later

o Suppose C dies before reaching 21 Testator wants them to only take if they reach 21, so

C and his heirs are outo The ownership of the property can expand and contract.

Basic starting pointo A class closes at the time when one member of it is entitled to possession of it, but

subject to limitations

O A for 99 years, if A so long lives, then to O’s heirso O’s heirs determined at O’s death would be a different group than O’s heirs determined at

A’s deatho Normal rule: use O’s death, since that is the normal time to determine heirs

It is assumed that O meant as his heirs those who would take under a statute of descent and distribution

O takes reversion if A dies firsto So, what does O’s heirs add to it?

He was assuming that the doctrine of worthier title had been displaced O A for 99 years, if A so long lives, then to O’s issue

o What does O’s issue mean? Children and grandchildreno Use A’s deatho O wanted to support A for his life and then have it pass to O’s issue afterwards

O A for 99 years, if A so long lives, then to O’s issue whenever borno Includes those who come into existence anytime in the future

So, could never alienate Blackacre If you allow the class to grow in perpetuity, you will never be able to convey

Blackacre So we interpret “whenever” to mean whenever during his lifetime

O A for 99 years, if A so long lives, then to O’s children who reach 21o The important question: What did O intend?o Assume O has children who are 22, 15, and 3 at A’s death.

O would intend for the class to be kept open past A’s death. So, class is kept open for 18 years

Class closing rules, as useful as they are, are subject to change if the intention of the grantor. They are only rules of convenience.

Powers of Appointment

The Nature of Powers Basic concept: even a present power of appointment is not an asset of the person who holds it

o It is no more a property right than the power to sing a songo Suppose Helmholz is a great singer and people are willing to pay a lot of money to hear

him. Can he be forced to sing? No, in the absence of an agreement

Starting point: A power of appointment may be exercised, but no one may force you to use it. What happens when someone uses a power of appointment?

o O A for life, then as A appoints By exercising the power, A is accepting an offer to fill in who the property goes

to. Equivalent of: O ___ where A gets to fill in the blank

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A is carrying out a duty or opportunity on O’s behalf

Relation back doctrineo If A fills in the blank with B, B takes from O and not from A.o Consequences

A person who could not make a will was not, by exercising a power of appointment, violating the common law by making a will.

Suppose O could not make a will. O T for A’s life, then as A appoints Effectively the property is A’s and A can appoint at death to B, but he

has not violated the law that kept him from creating a will, since it relates back to O’s conveyance.

Limitso Power in self: Bank of Dallas: there is a real difference between creating a power of

appointment in himself and not exercising it and creating a power of appointment in another who does not exercise it.

The person attempted to escape his creditors by creating the power in himself, and it was held to be unfair to creditors to duck out of his obligations.

o Inheritance tax: Cannot be used to escape inheritance taxes O A for life, remainder to such person as A appoints at death A appoints to his children Do A’s children have to pay an inheritance tax?

Under logic of power of appointment, their conveyance would come from O.

However, it appears to be a tax evasion strategy and so law closed that loophole.

Husband (conveys) to Wife for one year, remainder to such person as Wife appoints at death

o Gets caught by gift tax

Terminologyo Describing the parties and the nature of the interest involvedo Using Stewart

Donor is the person who sets up the appointment (O) – the appellant here Doneee is the person who has the right to exercise the power; b/c it is normally a

gratuitous transfer who could reject – again the appellant Taker in default: since you can’t force a person to exercise that power, there

should be a taker if the power is not exercised Appointee: person in whose favor the power is exercised

o General and special General: can be exercised in favor of anyone Special: can be exercised only among members of a class

Common example: A’s children In Gilman, general power; in Stewart, general as well

o Presently exercisable versus testamentary powers Stewart: testamentary (exercised by will) Gilman: presently exercisable (exercised at any time)

o Powers in trust versus discretionary powers Powers in trust (imperative powers): if the donor directs the donee to exercise

the power, then if the donee fails to exercise the power, the court will do it for him

Donee can’t be personally forced to do it, but court will Example: O A for life, then by will to such of A’s children as A

appoints by will

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o Testamentary and specialo What happens if A fails to choose before he dies?

Probate court will divide the property among A’s children in equal shares because that was what O intended (really his second choice, because he wanted A to appoint)

Discretionary power O A for life, then to appoint by will if A chooses among A’s

childreno Not required to appoint to anyoneo Either a gift over in default of appointment oro Reversion to O’s estateo Why would you want to do this?

So A can only give it to children if they are worthy of it

Would want taker in default clause If nothing specified, it reverts back to O

o Exclusive powers versus nonexclusive powers Exclusive power: gives the donee of a special power the power to exclude a

member of the class O A for life, remainder to such of A’s children as he chooses to

appoint Nonexclusive power

O A for life, remainder to A’s children, in such shares as A shall appoint

Can A give 100% to first child and nothing to others?o Noo What about 1%?

Illusory exercise of power of appointment and so also result in a meaningful portion being passed on (like Maria in In re Rowland’s Estate)

o In which case we have studied, would the creation of a power of appointment have been most useful in carrying out a testator’s intention?

Johnson v. Whiton : given testamentary power of appointment limited to heirs on her father’s side

Would want to include a default clause Class of heirs on her father’s side would be too broad

It is a very useful estate-planning tool.

No title or interest in the thing vests in the donee of the power until he exercises that power. Gilman v. Bell: creditor’s trying to reach land Δ has a power of appointment over; no title or interest vests in the donee until the donee exercises that power (did not discuss in class)

If the settlor reserves for his own benefit not only a life interest, but also a general power to appoint the remainder by deed or will, his creditors can reach the principal of the trust as well as the income.Bank of Dallas v Republic Nat'l Bank of Dallas: spendthrift trust for own benefit with power to appoint remainder by will or deed does not provide protection from creditors (did not discuss in class)

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Varieties of Powers

When nonexclusive members of a power are known, they must be given a meaningful appointment.In re Rowland's Estate: Testator left a power of appointment with friends to distribute the residue of her estate to “any of my close friends” and specifically said to her maid. After she died, the Cuthberts executed that power by distributing the entire residue to themselves. Maria appealed the distribution they finalized in probate court.

The Rule Against Perpetuities Purposes

o To promote the alienability of lando To prevent undue concentration of land in the hands of fewo To strike a reasonable balance between generationso To render title to land marketable

Operates where there is an otherwise valid contingent interest outstanding, but if it were possible to create future interest that remained contingent too far into the future, the land would be inalienable as a practical matter

o Until one can identify the future taker with certainty, no one can give clear title to land Gray’s formulation

o “No interest is good unless it must vest, if at all, not later than twenty-one years after some life in being at the creation of the interest.”

Interests in transferoro Reversions are not subject to the RAPo Rights of reverter and rights of re-entry for condition broken do not violate the RAP

Ways out of enforcing the rule Isen: imply a reasonable time into the option agreement

o Lease didn’t begin until zoning commission approves use of lando Maybe different because required diligently pursuing the zoning, and judge used this to

show the contract would fail on its own after 21 years since that doesn’t show diligent pursuit

o Distinguished by ignoring federal court trying to apply state law; state court is showing it rejects the Eerie meddling

Cy pres: doctrine that where there is an invalid limitation under the rule, the court should rewrite the limitation as closely as possible while making it valid

o Normal application is to take 30 year limit and change it to 21o Isn’t clear how it could be reformed in this case

“Wait and see” doctrine: o If it is actually purchased in the 21 years, it was valid; if not, it wasn’t

Assume 21 years has elapsed. Then someone who was alive at the beginning could jump forward and say, “I’m still alive; count me.”

When does the time period end? What lives do you use? When each employee is dead? When all stockholders are dead? That would not have the benefit the RAP has that it clears up the title

now, rather than extending the period of uncertainty Seemingly strange result – no estoppel

o Person who granted the option says that the option he himself granted was a violation of the rule

o The grantor is not estopped from asserting the RAP against the grantee Most recent cases under the RAP are like this case – they don’t have to do with family settlements

but rather with commercial interests

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Option contracts are unenforceable if they do not necessarily expire within 21 yearsUnited Virginia Bank-Citizens & Marine v Union Oil Co: option agreement to buy land depends on city acquiring right of way to a certain intersection

Interest must vest, if at all, within a life or lives in being and 21 years and 9 or 10 months afterwards

Fertile octogenarian – law assumes you can have children until you are dead Possible circumstances that would violate the rule against perpetuities

o Rule: void unless necessarily vests within a life or lives in being plus 21 yearso Executory interest contingent on a daughter of John & Elizabeth surviving Mary’s

issueo The daughters’ executory interest will violate the rule if it doesn’t necessarily vest

within a life plus 21 yearso Lives in being when will took effect

Mary John & Elizabeth 4 Jee daughters

o Hypothetical: Audley dies at T T + 1 year: John & Elizabeth have a daughter, A, and Mary has B Mary, John, Elizabeth, and 4 Jee daughter die 25 years later: B dies, finishing off Mary’s bloodline

Property should vest in A then, under the will, but that is longer than lives plus 21 years

Jee v Audley: fertile octogenarian; law assumes you can have children until you are dead

In re Manson's Estate: case is incorrect about the unborn widow according to the rule against perpetuities; it was a particular NY statute that made life estate invalid; however, remainder over invalid

An inter vivos trust is effective under the rule only when it becomes irrevocable (by decision or by death)

Second look doctrine Since the exercise of a power of appointment relates back to the creation of the trust and as if

it had happened then, so should a non-exercise of the power relate back and be able to take advantage of the known circumstances.

Sears v Coolidge: revocable trust

Examples1. Valid – because when all measuring lives die, then we will know who the eldest male

descendant is right then, which is within 21 years of end of measuring livesa. “Born or conceived at my death” wording limits

2. Valid – because again vests within period of all measuring lives plus 21 years3. Invalid – children might die immediately, but grandchildren remaining would have to wait 30

years, which is more than 21 years and outside the period4. Valid – no more children could be born, so all the measuring lives are ascertained and plus 21

years after them is attainable by grandchildren5. Invalid – contingency might occur hundreds of years ahead since C’s heirs can pay6. Valid – will be resolved in life plus 21; will know at A’s death if no child and within 21 years

if child will die with before 21

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7. Invalid against grandchild – A’s eldest child’s life estate is valid, since it will vest at A’s death; A’s grandchild is invalid; A’s life is measuring life; his son might live more than 21 years, so grandchild’s interest could vest too late

a. A child at common law meant only legitimate children. Under rule, child means legitimate.

8. Valid9. Invalid – unborn widow problem; measuring life is A and B; after A and B die, B’s widow

might live more than 21 years; contingent remainder herea. Another hypothetical: What if vested remainder (drop “who survive … fee”)?

i. Would children take within life plus 21 years?1. Year 1: A dies2. Year 2: widow is born3. Year 3: B has children4. Year 22: B marries W5. Year 23: B dies6. Year 44: W dies

ii. If children take an indefeasibly vested remainder, they don’t violate the rule.

iii. Purpose of the rule is to keep property alienable; since children can sell their vested remainder, the property is alienable.

1. In re Manson is different because it is a contingent remainder, which cannot be alienated.

10. Valid – term of 21 years cannot violate rule11. Valid – appears invalid since B might have a child one year after A dies and then B dies, so

child might not reach 25 in 21 years; however, C is a measuring life, so rule is not violateda. Contingency: “leaves no child who shall attain 25”b. How do you figure out who the measuring lives are?

i. Think of them in terms of everyone named in the conveyance, and in fact, everyone in the whole world

ii. Because the rule only deals with possibilities, it is possible that everyone might die tomorrow; you have to imagine that everyone dies

iii. This doesn’t work under “wait and see” approach, because then you have to see what actually happens

12. Valid – B’s children take no interest here; they are just used for the condition subsequent; C is a measuring life and we will know if he takes or not by when he dies

a. Ask about alienability, since that is the purpose of the rulei. At B’s death you will know who his children are, but you won’t know yet it

they will liveii. You could alienate the property if C and B’s existing children got together

and sold the property – that would account for all of the interest in the land (all the sticks)

b. Measuring lives approachi. B leaves H1 who reaches 24 and then dies; until that moment, we don’t

know if C will take or not, but C is a measuring lifeii. You are sure to know within 21 years of C’s death

13. Two hyposa. Jurisdiction where contingent remainders fail for lack of a freehold to support it

i. Like Ryan v. Monigan – gap between one estate and the nextii. Suppose B dies and he has a 30 year old child

1. Supported by life estate – no gapiii. Suppose B dies and has a 1 year old child

1. Not supported – gap since child wouldn’t take for 4 years2. Doctrine of destructibility of contingent remainders operates, not

the rule against perpetuitiesiv. Suppose B dies and child is 15

1. Still fails

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b. Jurisdiction where it does not fail (majority of American jurisdictions)i. Invalid – B might die while child 1 year old, so child

1. Suppose B dies and has a 30 year old childa. Invalid – if 30-yr-old not in being at A’s deathb. Blackman v. Fish

2. How do we get around it?a. Use vested subject to divestment – could make it subject

to divestment if another child reaches 25 firsti. 2nd and 3rd children have contingent interests, that

might violate the rule against perpetuitiesb. Trust – can make it vested but postpone enjoyment until

child reaches 25i. But that gives it to first child

c. Helmholz: i. Select some other lives to be measuring lives or

ii. Require defeasance to occur within 21 years14. Invalid – B might have child and C might have child; B and C might die, and both children

might live more than 21 years before B’s child diesa. Good case for looking at when you can alienate

i. Since contingent remainders could not be alienated under common law, so that explains common law

ii. Now, when contingent remainders can be conveyed, you can’t have shifting around within the class after the perpetuities period

Valid – C’s children are measuring lives and they have to be alive to take; they have to survive

Current state of rule against perpetuities Movement to abolish has gathered momentum recently Has been abolished in Alaska, Alabama, Delaware, Idaho, Illinois, Maryland, Ohio, South Dakota,

Wisconsin Not a happy development – he expects it to be revived Opens possibility of perpetual trusts – allows setting up dynastic trusts

o Helmholz: don’t do ito In recent case in Maine, it failed because jurisdiction had not abolished rule against

accumulation of trust (you cannot accumulate the income without paying it out for a period equal to the rule against perpetuities period)

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Appendix

LatinAnimus revertendi animals that, though wild, tend to returnCertiorari to be made more certainCujus est solum, ejus est usque ad coelum et ad infero To whomever the soil belongs, he owns also to

the sky and to the depths.”Domitae naturae such animals as we generally see tame, and are therefore seldom, if ever, found

wandering at largeFerae naturae such creatures as are usually found at liberty Fructus industriale the growing crop annually produced by labor, as opposed to a crop occurring

naturally; considered personal property that the executor or administrator of a deceased tenant may harvest and take regardless of who may have since occupied the land

Fructus naturalaes the natural produce of land or plants and the offspring of animals; considered part of the real property

Idem sonans sounds the sameIus accrescendi on death of one, property automatically passes to survivor(s) without formalities of

inheritance (or probate)Inter vivos between the livingJus tertii the right of a third; the legal right of a third party; because a possessor’s title is good against all

the world except those with a better title, one seeking to oust a possessor must do so on the strength of his own title, and may not rely on a jus tertii, or the better title held by a third party

Locus in quo place in whichNemo est haeres viventis no one is the heir of someone livingNemo dat quod non habet no one gives what he does not haveNomen collectivum collective nameNumerus clausus the law limits the number of interests that can be created in land; individual citizen is

not free to create forms of real interests not provided by the law (p. 223, #3)Ore tenus by word of mouthPrima facie at first view; on the first appearance

Ratione soli claims as a result of ownership of landRes nullius a thing belonging to no one

DefinitionsAbatement a lessening or reduction in somethingBailment delivery of personal property in trustBailor the one who places a thing in trustEquitable estoppel “[T]he principle by which a party is absolutely precluded, both at law and in equity,

from denying, or asserting the contrary of, any material fact which, by his words or conduct, affirmative or negative, intentionally or through culpable negligence, he has induced another, who was excusably ignorant of the true facts and who had a right to rely upon such words or conduct, to believe and act upon them thereby, as a consequence reasonably to be anticipated, changing his position in such a way that he would suffer injury if such denial or contrary assertion were allowed.”

Fee land (under feudal system); in real property, an estate of complete ownership which can be sold by the owner or devised to his heirs

Holographic will a will that is entirely written, dated and signed by the hand of the testator himselfReplevin to recover immediate possession of specific chattels; had to put up bond of twice the value of

the desired object; a prejudgment seizure of the items, with the merits of the claim tried later

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Definitions bookmark


Latin bookmark


Respondent the party against whom an appeal is taken; appelleeSecurity interest an interest in real or personal property which secures the payment of an obligation (i.e.,

a mortgage has an interest in the house that secures the payment; if you don’t pay, you lose the house)

Subrogation to stand in the shoes of another party; substitutionSubsidence any movement of the soil from its natural position; this movement may be in any direction.

It may be of surface of subsurface soil. A shifting, falling, slipping, seeping or oozing of the soil is a subsidence.

Trespass an unlawful act committed against the person or property of another; at common law, a legal action for injuries resulting from an unlawful act of this kind

Trespass on the case at common law, an action to recover damages that are not the immediate result of a wrongful act but rather a later consequence; precursor to modern tort claims

Trover early common law tort action to recover damages for a wrongful conversion of personal property; to recover the value of goods wrongfully converted to another's own use

Presumptions and PreferencesAmbiguities are resolved in favor of use of land free of easements.Possession gives a presumption of title that can only be rebutted by one with better title.The law presumes a fee simple, unless intent to pass a lesser estate or interest appears in specific terms or is

necessarily implied by the terms.Possession will not ordinarily be presumed to be adverse, but rather subservient to the true owner. (Dillaha)There is a presumption of title reverting to the original owner if the condition is not met.Modern court prefer a definite failure of issue construction (time of determination is first taker).Presumption against partial intestacy means the law presumes that a will is complete and disposes of all interest in the land; when no explicit remainder, law presumes a fee simple.Modern law presumes tenancy in common.The law favors the vesting of estates.

Notes from practice examsAddress fee tail if it appearso Mention the statute converting ito Consider if converting it to a fee simple would frustrate the grantor’s intent

What rules effectuate the intent of the grantor and which frustrate? Effectuate:

o Doctrine of worthier titleo Parol evidenceo Unilateral severance of joint tenancyo Class closing rule (if saves from invalidity under RAP)o Second look doctrine and wait-and-see approach to RAP

Frustrateo Perpetuitieso Rule in Shelley’s caseo Parol evidenceo BFP filter exception

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