IRAC – A Legal Analysis Tool Issue

What is the legal question to be resolved? Rule

What is the governing law? Application

How does that law apply to the facts of our case? Conclusion

What is the resolution of the legal question (issue)? Example

Issue: Is Sam smart? Rule: All law students are smart. Application: Sam is a law student. Conclusion: Therefore, Sam is smart.

Another Example Issue: Whether Motorist violated the speed limit by driving 46 mph past the Lincoln

Elementary School. Rule: Under the Traffic Code, the speed limit on streets adjoining elementary schools is

20 miles per hour. State Revised Code tit. 24, § 223 (2007). Explanation: How do we know this is the rule?

What authorities state/support this rule? Why is this the rule; what public policy does it serve?

Application: Police Officer clocked Motorist driving 46 mph in front of the Lincoln Elementary School. That speed is 26 mph faster than the posted speed limit.

Conclusion: Motorist violated the school zone speed limit.

The Capture Rule Pierson v. Post Majority opinion Rule: Mere pursuit alone does not give right to property, a person must attain some sort of occupancy to claim free or found property.Dictum: Actual bodily capture may not be required; mortal wounding, ensnaring or otherwise depriving of liberty might suffice.

Policy: certainty, preserving the peace.Dissent Rule: “Reasonable prospect of taking” the wild animal.

Policy: encouraging labor to better ensure the destruction of noxious beasts.

Types of Gifts Inter vivos

Can be Conditional (but typically unconditional) Testamentary

Also can be Conditional Causa mortis

By its nature, this is a conditional gift Inter Vivos Gifts

Three basic elements: Donative intent Delivery Acceptance

Delivery How is delivery made? Actual physical/manual transfer Constructive Symbolic

What is the purpose of the delivery requirement? When is constructive/symbolic allowed?

Conditional Gifts - Same basic elements for a gift, but is also subject to a condition that may terminate the donee’s ownership.

Conditions Are typically “express” but may, in some cases, be implied. Generally should be in writing. Why?

Testamentary Gift- Testamentary gift requires compliance with Wills Statute: in writing signed by testator attested by disinterested witnesses, and acknowledged by notary(??)

Causa Mortis Gift- Same elements for a gift, but is made in anticipation of the donor’s death from an impending peril (a form of conditional gift).

Because of the condition: The gift can be revoked by the donor before death. In many states, it is automatically revoked if the donor doesn’t die of the

anticipated peril.Jus Tertii

Amory v. Delamirie; Finder does not acquire an absolute property right, but has the right to keep the item against all but the rightful owner.

(true owner) loses necklace -> Wells finds necklace -> Wells loses necklace -> Key finds necklaceWho has better right: Wells or Key?

Jus tertii = asserting the rights of a third party Thus, Key might argue that Wells isn’t the rightful owner, O is (and therefore Key doesn’t have to

return item to Wells). Courts are divided on the use of jus tertii

Russell v. Hill – allowed used of jus tertii where prior possession was acquired wrongfully Anderson v. Gouldberg – cannot use jus tertii against prior possessor (no matter how he acquired

item)Finder’s Law

General Rule: The finder acquires rights to the property that are superior to everyone but the “rightful” owner.

Finder’s rights depend on how the property is classified 4 Categories of finders

Lost; Unintentionally/inadvertently parted with; finder gets rights superior to all but the true owner Policy – Want to reward finder for honesty

Mislaid; Intentionally/voluntarily placed, inadvertently forgotten; owner of locus in quo wins against all but true owner

Policy – True owner will retrace steps to find property. Abandoned; Intentionally/voluntarily relinquished– It will go to the finder against all owners,

including the former owner.-It is the same as being the first possessor. Treasure trove; Coins, currency, & other items buried/hidden and of such antiquity that true owner

is dead/undiscoverable; traditionally belonged to the King, but today, finder gets rights superior to all but the true owner

Policy – Rewards finder. Common Law Finders Factors

Status of the Property Lost, mislaid, abandoned, treasure trove

Location where the property was found Public vs. private place; underground vs. surface

Status of the Finder Trespasser, employee Finder’s honesty?

Policies Encouraging honesty of finders Facilitating return of the item to the true owner

Protecting landowner’s right to dominion and control Statutory Finders Laws

Many states have “lost property” statutes General requirements

Deposit item with public official Notice (attempts to identify/notify true owner) If true owner doesn’t appear, finder acquires item

Common issue: Do these statutes apply only to “lost” property (which means common law still applies to mislaid, abandoned, etc.)?

Bailments- is the rightful possession of an object by one who is not the true owner of the item. Elements

Mutual Assent / Possession / Duties/Liabilities / Duty to redeliver upon demand Voluntary bailment: strict liability for failure to redeliver Involuntary bailment: negligence standard

Duty to preserve/protect Different standards of care

Derivative title Principle – You can only transfer the property rights that you own.

o TRUE OWNER -> THIEF -> (SALE or GIFT) -> Third party gets right of a thiefo TRUE OWNER->FINDER-> (SALE or GIFT) ->Third party gets right of a FINDERo TRUE OWNER -> BAILEE -> (SALE or GIFT) -> Third party gets right of a Bailee

Estoppel An exception to derivative title principle A party can be estopped [barred] by his own acts from claiming a right to the detriment of

another party who reasonably relied on such acts.Bona Fide Purchasers - one who buys item w/o knowledge of someone else’s claim to the item or defect in title.

Common Law; -True owner has clothed seller with possession & “indicia of title” UCC “Voidable Title”; T.O gives seller a voidable title (e.g., as result of fraud, dishonored

check)Indicia of title-cases in which the seller has provided something to seller to assume good title →Bill of sale, title.

o Someone who comes into a store assumes that the seller has the title to that property. UCC “Entrustment”

True owner “entrusts” the item to a merchant who deals in goods of that kindThe Statute of Limitations

Every state has a statute of limitations that governs the time that a landowner has to bring a lawsuit against a wrongful possessor.

How long? – varies from state to state. Illinois -- generally 20 years; but only 7 if the person entered under “color of title.”

Adverse Possession Person who allows another to rely on a misimpression should bear some legal responsibility to her

detriment on statement or misimpression Statute of Limitations

o T.O. loses out and adverse possessor becomes T.O.o A.P. is taking possession/excluding ownership to all others

Rational for A.P.o Requires prompt resolution of claimso Quieting title is a main objective of A.P.o Punishes T.O. who ‘sleep on their rights’ act as a penalty to deter T.O.’s from ignoring property or

otherwise engaging in poor custodyo Interest of preserving the peace

Statute of Limitationso SOL is time period that begins to run when adverse possessor enters land and begins to satisfy

elements of A.P.o If A.P. satisfies elements of A.P. for entire period of SOL, property is therefore owned by A.P.

Elements of Adverse Possessiono (POACHER)

1. P-ossession must be2. O-pen and Notorious3. A-ctual4. C-ontinuous for entire SOL and5. H-ostile/adverse/under claim of right6. E-exclusive7. R-required amount of time

o Actually possess property in a manner that is1. Open and notorious2. Exclusive3. Continuous4. Nonpermissive (adverse or hostile)5. For a period established by Statute of Limitations for ejectment6. Some states have enacted different statutes of limitation depending on whether

possessor has Color of title Paid property taxes on land Occupation was in ‘good faith’ Under a ‘claim of right’

o Actual1. Possessor must physically occupy the premises in some manner.

Ordinary use to which land is capable and such as an owner would make of ito Building a fenceo Not necessary to live on land, must show evidence of significant

activities conducted thereo Clearing land, planting shrubs

o Open and Notorious1. Must be sufficiently visibe and obvious to put a reasonable owner on notice that property

is being occupied by a non onwner with intent on claiming possessory rights Fences are good indicators of ‘open and notorious’ use of land Mowing grass, planting and harvesting crops Physical presence gives fair warning to owner of land Notorious element gives others around land notice that your acts puts T.O. on

notice or ‘should’ give notice of A.P.o Exclusive

1. Type that would be expected of a title holder of the land in question2. Adverse claimant’s possession cannot be shared with the title holder3. Sufficient if exercises ‘typical’ control

o Continuous1. Must continue without significant interruption2. Depends on property in question

Ex. If a summer home, being there during the summer would suffice for A.P. Tacking of successive A.P’s would apply here if the possessors are in privity

with eachothero Adverse or Hostile

1. Must treat property as her own and use must not result from title holders permission to use the land

2. If permission is given it is not hostile Objective

o (Majority rule)o Actual possession not possessors frame of mind matters

Subjective (Minority) Bad Faitho Claim of Righto Intentional dispossessiono Good Faith

Good Faitho I didn’t know I was taking

Tackingo When two or more adverse possessors may ‘tack’ or use time together if they have ‘privity’.

Disabilities and ‘Tolling’

o Many states provide statutes of limitations to be ‘tolled’ (not run) against the true owner if he is legally disabled

o ‘Snapshot’ Rule-requires that the T.O. be looked at the time adverse possessor takes possession in terms of when to start the disability

o Disabilities cannot be successively tacked1. Legally insane2. Prison3. Military service

o Norman v. Allison1. held title to a tract of land, ∆ had title to a portion of land adjacent to that of Π π2. built fence including portion of ∆’s landΠ3. claimed AP against portion of ∆’s landΠ4. Ct. ruled did not ‘intend’ to take land in a hostile manner from ∆ using subjective testπ

Rule: in order to claim AP in states using subjective approach to AP, possessor must show open, notorious intent to possess land

ESTATES in land & Future Interests Estate - The degree, quantity, nature and extent of an interest in real or personal property.

Two types – Possessory – person who has present right of enjoying property now. Future- person who has present right to enjoy property in the future.

Land exists forever, but ownership can be divided up on a temporal basis. Estates as a Mathematical Equation [possessory]+[future-------------------------------------------------]

Key Attributes of Estates How is it created? (“Magic words”) How long does it last? Is it transferable?

Fee Simple Absolute Duration is infinity. Roughly corresponds to layperson's understanding of "ownership." No Future interest.

Transferability of FSA is - Alienable - right to transfer property while alive is the power to transfer or alienate the property Devisable – owner dies he has the right to direct distribution of his property by will Inheritable- (Descendable): If the owner dies without a valid will, the property descends under the

state's intestate succession statute to the owner's heirs. Can be transferred in whole (FSA) or in part (lesser estate)

Wills & Inheritance Terms Testator

Dies with a will Property is “devised” to beneficiaries or devisees Beneficiaries “take” or “receive” property

Estate is handled by executor Intestate Dies without a will Property “descends” to the person’s heirs. Heirs “inherit” property. Estate is handled by an administrator

Heirs Common law: heirs = descendants (a/k/a “issue”).

Primogeniture: limited heirship to first-born male Spouses were not heirs (but did have dower/curtesy rights)

Modern law: heirs = persons who take under the state’s intestacy statute. Generally, a preference for spouses and descendants

Partial Intestacy Where the decedents will fails to provide for all of the decedent’s property.

Most wills avoid this result with a residuary clause: “I leave the rest, residue and remainder of my estate to [beneficiary’s name].”

Creation of Fee Simple Absolute Traditional common law

Words of limitation: “and his heirs” “and her heirs” If those words weren’t used: life estate was created

Modern view = rule of construction Grantor is presumed to transfer entire interest that he/she had unless the will or

deed indicates otherwise. Thus, FSA can be created by saying: “to A”

Words of Purchase and Words of Limitation Words of purchase describe the person(s) who take(s) the property. Words of limitation describe the quantitative estate the grantee receives.

“and his heirs” tell you that A has received a fee simple absolute rather than some other estate

Other Words of Limitation to A “for life”

creates a life estate. to A “and heirs of his body”

creates a fee tail. to A “so long as” “while” or “during”

create a fee simple determinable or fee simple subject to executory limitation. to A “provided that” or “on condition that”

create a fee simple subject to condition subsequent or a fee simple subject to executory limitation.

CompareO conveys Blackacre “to A’s heirs for life”

Words of purchase: “A’s heirs” This means the property goes to the persons who would have taken if the person

died without a will. (So A’s heirs do take something here.) Words of limitation: “for life”

This means that the heirs will take a life estate. Another Example

O conveys “to A for 10 years, remainder to B for life, remainder to the First Baptist Church, its successors and assigns, so long as the premises shall be used for church purposes.”

Life Estate Duration: the lifetime of some person (typically the grantee).

Typical life estate Creation By express grant: “to A for life.” Creation By reservation

“Grantor, Tom Russell, hereby conveys Blackacre to his son, David Russell, subject to a life estate reserved in the grantor.”

Courts are divided on whether a grantor can reserve a life estate for someone else (“Grantor hereby conveys Blackacre to his son, David, subject to a life estate reserved for Grantor’s spouse.”)

Absolute direct restraints: typically void. Partial restraints: courts are divided:

Traditional view: partial, direct restraints are void Modern view: valid if reasonable.

Reasonable purpose, limited in duration, does not restrict to an impermissibly small number of persons.

Compare: forfeiture, promissory, use (indirect) restraints typically valid if reasonable.Alternatives to FEE SIMPLE ABSOLUTE

Life Estate and Fee Tail Transferability of Life Estates

Not devisable or inheritable Alienable, but transferee gets a life estate pur autre vie.

Life Estate pur autre vie A, who owned a life estate, conveys “to B and his heirs.” What estate does B take?

What happens if A dies before B? What happens if B dies before A?

Compare: A, who owned a life estate, conveys “to B for life.” What happens if B dies before A? What happens if A dies before B?

Valuation of a Life Estate Goal: to give life tenant the cash equivalent of the right to possess/use the property for life Measured by:

How long is life tenant expected to live? What is the present value of the right to income from the property for that period?

Life Tenant’s has possessory right to; the undisturbed possession of the land; and the income/profits while in possession.

Limitation on life tenant’s use: Waste- limits the present possessor’s right to take action that would harm the future

interest holder’s interest as the holder of the remainder. Three types of waste

Voluntary an affirmative act causing damage, by changing character

Permissive failure to act when the tenant has a duty to act, or maintain land

Ameliorative changes in the property that increase its value

Remedies for Waste Compensatory damages

Difference in value before vs. after act of waste. Injunctive relief

Only where monetary remedy is insufficient May include order for a sale of the property

Punitive measures Traditional view: forfeiture of the estate Modern view: punitive damages

Ameliorative Waste Traditional view: any material change to the nature/character of the property is waste.

Based upon one of two theories: Grantor’s intent that property remain the same Change would economically harm remainderman

Modern exception No waste if there has been a radical, permanent change in the surrounding

conditions. Examples, page 259

Life tenant (A) wants to tear down house worth $300,000 and build apartments worth $1.9 million. Remainderman (B) objects; wants to live in the house.

Life tenant (X) wants to tear down house in neighborhood no longer suitable for residential living. Remainderman (Y) objects.

Natural Resources Life tenant may be liable for waste for cutting trees, exploiting the natural resources Exceptions:

Timber for personal use/good husbandry If timber harvesting is only feasible use Open mines doctrine (if property was used for this purpose at the time of the

conveyance) Trusts

Most donors today create life estates and future interests through trusts. A trust separates legal and equitable title:

The trustee holds legal title. The beneficiaries have equitable title (i.e., the trustee manages the

property for their benefit).

O conveys “to X, as trustee, to pay income to W for life, remainder to O’s children.” T has legal title W has an equitable life estate (W gets income from the property while

W is alive). O’s children have a remainder (they are entitled to property when W

dies).

Fee Tail (FT)

Keeps land in the family Series of life estates in the grantee and grantee’s heirs. Transferability:  Alienable, but only for the grantee’s life, not devisable (would defeat

the purpose!), is descendible to the extent the grantor intended (all males, all females, etc…).

Most states do not recognize the fee tail anymore (we really don’t need it anymore) Now courts look at it as:

FSA LE in grantee and remainder in grantee’s descendants (IL rule) Some states still recognize FT but allow it to be disentailed.

Words of creation:  “and the heirs of his body”

Fee Simple Determinable:▼ ❑ Definition:

• ❑ If the grantor's intent is to terminate the fee simple automatically the moment the express qualifying condition occurs, the possessory estate is a fee simple determinable.

▼ ❑ Creation:▼ ❑ Classic words of limitation: "to A and her heirs as long as/so long as…"

• ❑ Other words used less commonly but equally effective are "until", "during", and "while."• ❑Where the words are ambiguous = courts prefer FSSCS since they don't like forfeiture of

property interests• ❑ If there is a reverter clause, then there is a possibility of FSD

▼ ❑ Transferability:• ❑Modern: Freely transferable- alienable, inheritable and devisable• ❑ Traditional: Not alienable or devisable, but is inheritable

Fee Simple Subject to a Condition Subsequent:▼ ❑ Definition:

• ❑ If the grantor's intent is NOT to terminate the possessory estate automatically the moment the qualifying condition occurs, but rather to give the grantor the option to terminate - the right to enter and reclaim the property - the possessory estate is a fee simple subject to a condition subsequent.

• ❑ Power of termination or right of re-entry is the grantor's right to re-enter the property once the condition has been broken.

▼ ❑ Creation:• ❑ Classic words of limitation: "to A and her heirs, but if …"• ❑ Other words used less commonly but are equally effective are "however, if.." and "provided

that…"▼ ❑ Right of re-entry clause:

• ❑ Express clause in conveyance giving O the right to re-enter and retake the land. • ❑Words of limitation should be coupled with express clause (after the clause expressing

qualifying condition) which states that the grantor has the right to re-enter and re-take the

right to possess the property in the event the condition occurs.• ❑ If no clause = most likely FSSCS

• ❑ Tie Breaker- Where the words are ambiguous = courts prefer FSSCS since they don't like forfeiture of property interests

▼ ❑ Transferability:• ❑Modern: Freely transferable- alienable, inheritable and devisable• ❑ Traditional: Not alienable or devisable, but is inheritable

▼ ❑ Fee Simple Subject to an Executory Limitation:▼ ❑ Definition:

• ❑ If the future interest is held by a third party (and not the grantor), then it is a fee simple subject to an executory limitation.

▼ ❑ Transferability:• ❑ Traditional Law: they are not alienable, but they are inheritable and devisable

▼ ❑ Example:• ❑ "To A and her heirs, but if A sells alcohol on the land, then to B and his heirs."• ❑ Here, the future interest is taken by the a third party so its is FSSEL.• ❑ Executory interest = future interest for FSSEL

▼ ❑ Term of Years:▼ ❑ Creation:

• ❑ The express language of the conveyance establishes a finite duration which is calculable on the day the interest is created - the end date must be capable of being determined on the first day the interest becomes possessory.

▼ ❑ Examples:• ❑ O --> To A for 5 years.• ❑ O --> To A from January 1, 2006 until December 31, 2010.• ❑ O --> To A for 180 days starting today.

ESTATEFUTURE

INTEREST DURATION OF ESTATEWORDS OF LIMITATION

TRANSFERABILITY OF ESTATE

Fee Simple Absoltue N/A Infinite Duration"And his heirs" Modernly: not

needed?

Alienable, devisable and descendable

Fee Simple DeterminablePossibility of

Reverter (Grantor)

Potentially Infinite but could be terminated or divested by

a condition.

"so long as;" "while;" "during"

(words of duration) in

granting clauseAlienable, devisable, descendable (to the

extent allowed by the condition)

Fee Simple Subject to Condition Subsequent

Right of Entry (Grantor)

"Provided that;" "but if;" "on

condition that"

Fee Simple Subject to Executory Limitation

Executory Interest

(Grantee)

Same as FSD/FSSC but

futre interest in grantee (not

grantor)

Fee Tail

Reversion (Grantor)

Remainder (Grantee)

Series of life estates in grantee & descendents

"And the heirs of his body"

Alienable (life interest) and descendable, but

not devisable

Life Estate Reversion For a person's life "for life" Alienable, but not

(Grantor) Remainder (Grantee)

devisable or descendable

FUTURE INTEREST HELD BY GRANTOR

FOLLOWED BY? DESCRIPTION TRANSFERABILITY

Possibility of Reverter N/AInterest held by grantor following a fee simple

determinable Traditional: Not alienable or

devisable, but is descendable

Modernly: Alienable, devisable, descendable

Right of Entry N/A

Interest held by grantor following a fee simple subject to condition

subsequent.

Reversion N/A

Interest retained by grantor who conveys less than the

estate the grantor had at the time of conveyance.

Alienable, devisable and descendable

FUTURE INTEREST HELD BY GRANTEES

FOLLOWED BY? DESCRIPTION TRANSFERABILITY

(Indefeasibly) Vested Remainder

N/A

Remainder conveyed to person/entity that is born,

ascertainable, not subject to a condition precedent

Alienable, devisable and descendableVested Remainder Subject to Open

N/A (or exec. Interest)

Remainder converyed to a class in which at least one

member is vested, but class is still open (so the vested

member(s) might be partially divested)

Vested Remainder Subject to Divestment

Executive Interest

Remainder that is vested at the outset but is subject to a

condition subsequent

Contingent Remainder (or alternative

Contingent Remainders)Reversion

Remainder conveyed to person/entity that is unborn, unascertainable, or subject

to a condition precedent Traditional: Not alienable, but devisable and descendable

Modernly: Alienable, devisable and descendable

Executory Interest N/A

Divests a vested interest (i.e. divests a possessory estate or a vested remainder)

Future Interests in a Grantor:

Possibility of reverter: follows a fee simple determinable

Right of entry: follows a fee simple subject to condition subsequent

Reversion: when grantor conveys less than the grantor had/Future Interests in a Grantee (Someone other than grantor)

Remainder: grantor conveys less than the grantor had; and gives the future interest to someone else

Executory Interest: a future interest that divest a vested estate/interest

Three Basic Questionso What future interest was created?o Which of the five future interests is it?o Is it vested or contingent?

Duration of the Future Interest Each future interest may/will become a possessory estate

o When it does become possessory, what will it be? Examples:

“to A for life, then to B (and his heirs).” “to A for life, then to B for life, then to C (and her heirs).” “to A for life, then to B so long as the land is used for

farming.” 

O conveys “to my spouse for life, then to my son Robert and his heirs so long as the land is used for farming.”

Vesting Grantor’s future interests are always vested

o (Even though the interest may never become possessory, e.g., possibility of reverter, right of entry).

Future interests held by other parties may be either vested or contingent. Key consequences of being

vested or contingent

Transferabilityo Vested remainders are fully transferableo Contingent remainders were/are not

Rules governing contingent interestso Contingent remainders are governed by the Rule of Destructibility, the Rule Against

Perpetuities, etc.o Vested remainders are not subject to these rules

Remainders: Vested or Contingent?

Contingent remainder – anything not vested, or if the con. Prec. Is in the same clause as the conveyance. Grantee not yet born Not yet ascertained Subject to a condition precedent Examples

O conveys “to A for life, then to A's children.” A is alive, but has no children. O conveys “to A for life, then to A's widow.” O conveys “to A for life, then to B if B has completed law school, otherwise to C.”

Vested remainder Grantee is alive Ascertainable by name Not subject to any condition precedent (other than the natural end of the prior estate)

Three types of vested remainders Indefeasibly vested Vested subject to open (Class gifts) Vested subject to divestment (Indefeasibly) Vested

A remainder that cannot be divestedo not subject to any condition other than the natural end of the preceding estate

Examples: “to A for life, then to B and his heirs.” “to A for life, then when A dies, to B and his heirs.” “to A for 10 years, then to B and his heirs.”

Vested Subject to Open Applies to gifts given to a class

o One member of the class is vested (born, ascertained, not subject to condition precedent)o But his/her interest is “subject to open” if other members may later join the class.

Example:o O conveys “to A for life, then to A’s children who reach age 21 and their heirs.” A has

one child, X, who is 22. Vested Subject to Divestment Remainder that is vested but subject to a condition subsequent.

o Remainder is vested at its creation, but may be divested (taken away) if the condition occurs.

o Compare contingent remainder, which is not vested until the condition occurs. Compare Contingent:

O conveys “to A for life, then to B and his heirs if B survives A, but if B does not survive A, then to C and her heirs.”

Vested Subject to Divestment: O conveys “to A for life, then to B and his heirs, but if B does not survive A, then to C

and her heirs.” How to Distinguish Condition precedent:

o Condition is in/before the granting clause.

o Creates a contingent remainder. Condition subsequent

o Condition comes in a clause after the granting clause.o Creates a vested remainder subject to divestment.

Why does is matter whether it is vested or contingent? Transferability - common law permitted the holder of a vested remainder to transfer that interest

by inter vivos conveyance and by will. However, today, most jurisdictions have rejected the common law approach and both are freely alienable.

Doctrine of Acceleration of Remainders – Only applied to vested remainders Common law rules limiting effectiveness of contingent future interests - Contingent remainders

are subject to the Rule against Perpetuities, the Rule of Destructibility, and other similar rules, while vested remainders are not.

**Whenever the last gift in a conveyance is a contingent remainder, there will always be a reversion in the grantor. This is because there is a possibility the contingent remainder will fail altogether. Thus, the grantor has not given away his entire estate.

Contingent O conveys “to A for life, then to B and his heirs if B survives A, but if B does not

survive A, then to C and her heirs if C survives A.” Vested Subject to Divestment:

O conveys “to A for life, then to B and his heirs, but if B does not survive A, then to C and her heirs if C survives A.”

Kost v. Foster- Grantors convey to their son Ross Kost during his natural life only,at his death to his lawful children, the lawful child or children of any deceased lawful child of Ross Kost to have and receive its or their deceased parent’s share . . .

Remainders are patient They take possession at the natural end of a life estate or term of years.

Executory Interests are aggressive They divest a vested interest; they follow a FSSEL or a vested remainder subject to divestment.

Grantor’s Reversion Following a Contingent Remainder When a conveyance ends with a contingent remainder, the grantor retains a reversion.

Why? Because there is a possibility the contingent remainder will fail (or be destroyed). Thus, the grantor has not given away his/her entire estate.

Example; O conveys “to A for life, then to B if B survives A, but if B does not survive A, then to C if C survives A.”

A has a life estate B has a contingent remainder C has an alternative contingent remainder O has a reversion

Transferability Possibility of Reverter & Right of Entry

o Traditional: inheritable, but not alienable or devisableo Modern: alienable, devisable and inheritable

Reversion & Vested Remaindero Alienable, devisable and inheritable

Contingent Remainder & Executory Interesto Traditional: inheritable and devisable, but not alienableo Modern: alienable, devisable and inheritable

Analyzing Conveyances Identify the present possessory estate Identify the type of future interest Identify the duration of the future interest Check of interests retained by the grantor

Rules Governing Future Interests Analyzing Conveyances; Identify the interests grantor tried to create

o Apply the rules governing future interestso Rule of Destructibilityo Rule in Shelley’s Caseo Doctrine of Worthier Titleo Rule Against Perpetuitieso Merger Doctrine

Merger Rule If the same person has successive, vested estates, they merge into a larger estate. Ex: “To A for life, then to B and her heirs.”

If B subsequently conveys her interest to A:o A now holds life estate + vested remainder in FSAo They merge into fee simple absolute

Rule of Destructibility If a contingent remainder did not vest at, or before, the termination of the preceding freehold estate, the

remainder was destroyed and the next vested estate took possession. How might prior estate end? Naturally (end of life tenant’s life) Prematurely

o Renunciationo Mergero (Also, in feudal times: Treason)

Example: “To A for life, then to A’s children who survive A.” Current Status of Rule of Destructibility

o Majority of states have rejected or abolished the Rule (including Illinois). What happens, then, in this situation?:

O conveys “to A for life, then to A’s children who reach age 21.” A dies leaving two children, ages 5 and 6.

Rule in Shelley’s CaseWhen a life estate in A + remainder in A’s heirs* are created in the same instrument and are both legal or both equitable interests:

Shelley’s Case gives remainder to life tenantLife estate in A + remainder in A

Apply the merger doctrine:A’s life estate + remainder merge into FSA

* Applies only to “heirs” or “heirs of the body” – NOT gifts to children, descendants, issue, etc. Status of Shelley’s Case Majority view – most jurisdictions abolished it.

o But many statutes applied only prospectivelyo So rule applies to documents predating statute

Minority view – still in play in four states?? Doctrine of Worthier Title

Life estate in A + future interest in O’s heirs* Traditional: Apply doctrine as rule of lawLife estate in A + reversion in O. Modern: use only as rule of construction.Ask if there is evidence that O intended otherwise.

* Applies only to “heirs” or “heirs of the body” – NOT gifts to children, descendants, issue, etc. Status of the Rule

o Nine states have abolished DWTo Majority of states still follow the rule.

But generally only as a rule of construction. Rule of Law or Rule of Construction?

o Rule in Shelley’s Case = rule of lawo applies regardless of the grantor's intent.

Doctrine of Worthier Title once used as a rule of law generally a rule of construction today

applied unless there is other evidence to determine the grantor's intent.

Rule against Perpetuities no interest is good unless it must vest, if at all, not later than 21years after some life in being at the creation of the interest. RAP is a rule of law (not rule of construction)

“No Interest is Good” The future interest is void unless it meets the other elements.

o Traditional: the interest is void from the outset o Modern: wait to see if it actually vests too late

Void interests are struck from the conveyanceo “to A and her heirs so long as the premises are used for a church, otherwise to B and her heirs.”o “to A and her heirs, but if the premises are not used for a church, to B and her heirs.”

“Must Vest, If At All” RAP applies only to “unvested” interests:

o Contingent remainders, Executory interestso Vested remainders subject to open

-- “All or nothing” ruleo Also (FYI): options, right of first refusal, leases to begin in the future, powers of appointment.

“Must”o Void if there’s any possibility it will vest too remotely.

“If at all”o Interest must vest or fail within the RAP period.

ExampleO conveys Blackacre “to A for life, then to B and heirs if the Cubs win World Series before A dies, and if the Cubs don't win the World Series by then, to C and heirs.”This interest is valid because it is tied to A’s lifetime. So it must vest or fail by the end of A’s life.

“Within 21 Years of Some Life in Being” Life in being = someone who was alive & ascertainable (and can affect vesting) 21 years = allowed the gift to be contingent until the next generation became adults

o Interpreted to mean: 21 years + period of gestation because a child = life in being from conception

“At the Creation of the Interest” Conveyed by deeds: the interest is created when the deed is delivered. Devised by will: the interest is created when the testator dies. Compare:

o O deeds “to my children for life, then to my grandchildren.” (remainder is VOID)o O devises “to my children for life, then to my grandchildren.” (remainder is VALID)

RAP Analysis Is there an unvested interest?o Contingent remainder, executory interest, vested remainder subject to open.o Options to purchase, powers of appointment, leases to begin in the future. Will it will remain unvested beyond RAP period?o Traditional (Validating lives approach)o Create, kill and count approach (class gifts)

The Traditional Analysis Look for a life in being – someone who

was alive when the interest was created and can affect vesting of the interest

Determine if that person is a validating life is the interest certain to [vest or fail] within 21 years of that person’s death?

Is there a Validating Lifein the Following Conveyances?

O conveys: “to A for life, then to A’s children.” O conveys: “to A for life, then to B’s heirs.” O conveys “to A for life, then to B’s heirs who reach age 21.” (A and B are alive) O conveys “to A for life, then to B if B reaches age 25.”(If B is 6 at the time of conveyance) It is his

own life then he validates throughout his own life meaning as long as he survives to that age. An Alternative Analysis:

Create, Kill & Counto Create a person who was not alive at the time of the conveyance & can affect vesting.o Kill off the people who were alive at the time of the conveyance.o Count 21 years to see whether the interest will be vested (or will have failed).

Compare Traditional (Validating Life): Proves that the interest will certainly vest within 21 years of that life in

being. (Interest is VALID). Create, Kill and Count: Proves there is a possibility the interest might not vest within 21 years after a

life in being. (Interest is VOID). When does an interest vest?

Contingent remainder & Executory interest:o when the contingency/condition is satisfied

Vested remainder subject to openo When the class closes; ando Every member of the class has satisfied the contingency/condition (all or nothing rule)

Problems, Page 315 “to A for life, then to B if he attains age 50.” - VALID VESTED WITHIN HIS OWN LIFE “to A for life, then to B if B is then living, but if B is not living, then to C.” - (A has a life estate, B has

contingent remainder, C alt. contingent remainder) B & C valid [vested in b's life] “to A for life, then to B if the Chicago Cubs win the World Series by 2050, but if the Cubs do not win

the World Series by 2050, to C.”(A has life estate, B has a contingent remainder, C has alt. Contingent remainder) Void - not certain to vest within lifetime and 21 years.

“to A for life, then to A’s first-born child for life, then to A’s heirs who survive the first-born child.” (A is age 12 and has no children.) (A has a life estate, A's first born child has contingent remainder, heirs of first born child has a contingent remainder) - first born child vested in A's life, Heirs of First born child to long???

Problems, Page 315 (cont’d) “to Temple Beth-El so long as used for a synagogue, then to Tiffany.” (Temple Beth el has a fee

simple subject to executory limitation, Tiffany has a executory interest) VOID because nothing tied to a life in being. It would have to be tied to tiffany's life to be valid.

“to Temple Beth-El, but if the land ceases to be used for a synagogue, then to Tiffany if Tiffany is then living.”

Class Gifts Class gifts are not vested u ntil

o The class has closed; ando The interest of every member of the class is vested.

“All or nothing rule”o If the interest of any member of the class might vest too remotely, the entire class gift is void.

Problems, Page 318 “to A for life, then to A’s children who reach 21.” A is alive, has a child who is age 5. Valid “to A for life, then to A’s children who reach age 25.” A is alive, has a child aged 26.VOID “to A for life, then to A’s children for their lives, then to B’s children.” A and B are alive. Valid B is the

validated life “to A for life, then to A’s children for their lives, then to B’s children who survive A’s children.” A and

B are alive Vesting is upon a B's life

“to A for life, then to her children for their lives, then to her grandchildren in fee simple absolute.” A has three children. NEW 1 MONTH OLD IS VESTED BUT NOT PROBABLE TO HAVE GRANKIDS WITHIN THE 21 YEARS( A has life estate, her children have vested remainder subject to open, her grandchildren have a contingent remainder in fee simple absolute)MEMBERS OF AN OPEN CLASS CANNOT BE THE VESTED LIFE

O conveys “to my children for life, then to my grandchildren.” O has three children.(My children have a life estate, my grandchildren have a contingent remainder subject to open) VOID

O devises “to my children for life, then to my grandchildren.” O has three children.( because O devises she is dead, and the children class is considered closed and therefore is VALID

Defeasible Fees & Their Respective Future Interests What’s the Substantive Difference between Defeasible Fees?

Termination of estate (when condition occurs) Transferability (of future interest) Adverse possession

Transferability Possessory Estate

alienable, devisable, inheritable (subject to the condition) Future Interest

Traditional (Minority View) POR & ROE are inheritable but not alienable or devisable E. interest is inheritable & devisable, but not alienable

Modern: All are alienable, devisable, and inheritable Mahrenholz v. County Board of School Trustees

March 1941 Huttons to Trustees (FSD or FSSCS?) July 1941 Huttons to Jacqmain (future interest???) Oct.1959 Jacqmains to plaintiffs July 1951 Mr. Hutton dies Feb. 1969 Mrs. Hutton dies (Harry acquires as heir) May 1973 Property not used for classes May 1977 Harry to plaintiffs

How is a Defeasible Fee Created - Four Rules of Construction Words of limitation Location of the condition in the conveyance

In granting clause = limited grant In subsequent clause = absolute grant with condition appended

Re-entry/reverter clause Tiebreaker: Preference for FSSCS

Problem - O conveys “to A and his heirs so long as the property is used as a residence solely, provided,

however, that if it is not so used, the estate shall cease and revert to O and his heirs, who have the right to repossess the property.”

What estate did O convey to A? Adverse Possession

O conveys “to A and his heirs so long as the property is used for a school.” A immediately turns the property into a boarding house. Twenty-five years later, O wants the property back. What happens?

Hint: When was A’s possession hostile? Same scenario except O conveys a FSSCS to A and attempts to re-enter 25 years after the condition

was breached. Jurisdictions are divided – 3 views:

Possession is not hostile until grantor demands re-entry and is refused. Possession is hostile when condition is breached. Grantor must exercise right of entry within a “reasonable time.”

Duration of the Condition Some states limit the duration of possibilities of reverter and/or rights of entry.

Illinois statute limits enforceability of both interests to 40 years after creation.

Some states limit one or the other (not both) Florida: converts defeasible fee into a covenant after 21 years.

Defeasible Fee or Something Else? Conditional language might create:

One of the defeasible fees. A covenant (Humphrey) A mere wish/hope (unenforceable)(Roberts)

How do courts resolve ambiguity between a defeasible fee and a covenant? Hint: What are the consequences of breaching a covenant vs. breaching

defeasible fee? Waste & Defeasible Fees

Doctrine of waste applies most frequently to “finite” estates Life estate, leasehold, fee tail

But it can also apply to defeasible fees Does it make sense to apply the waste doctrine to defeasible fees? What factors should a court consider in determining whether to grant an

injunction or damages? Defeasances as Restraints on Alienation

Total (absolute) restraints – typically void. Partial restraints

Traditional – void Modern view – valid if reasonable (e.g., purpose, duration, number of

permissible transferees). Use restrictions (indirect restraints)

Typically valid if they are reasonable. Except where the restriction, in substance, acts as a restraint on the power to

alienate. Other Public Policy Limits

Conditions that violate the law Example: conditions that violate Fair Housing Act

Restraints upon marital/family relationships Conditions that have prospective effect of discouraging marriage; promoting

divorce Contrast: conditions in a will that merely “reward” past behavior.

CLASS GIFTS; A class gift is: A transfer to a body of persons that is uncertain in number at the time of the transfer and is to be

ascertained in the future Because all members of the class take in equal proportions, the size of each person’s share depends

upon the number of class members Contingent or Vested Subject to Open?

A class gift is contingent if:o No member of the class has been borno No member is ascertainable by nameo The class is subject to a condition precedent

A class gift is vested subject to open ifo At least one member of the class is born, ascertainable by name and has satisfied any condition

precedent.o But the class is still open for others to enter.

When does a class close?Example: “to A for life, then to B’s children.”

Naturally/physiologicallyo It’s biologically impossible for others to enter the class.o (When B dies and can no longer produce class members)

Rule of convenience

o The preceding estate ends and any member of the class is entitled to take possession.o (When A’s life estate ends; remainder takes possession)

Compare: “To A for life, then to B’s children who reach age 21.” What is the status of title if:

B has one child, X, who is 10. B has a second child, Y, two years later. X turns 21 (Y is age 13). Y turns 21. B dies, leaving X and Y (ages 30 and 22).

Compare: Remainders given to a class Contingent if:

o No class member has yet been born, ascertainedo There is a condition precedent & no one has satisfied it

Vested subject to open if:o One or more members are born, ascertained and not subject to a condition precedent.o But the class is still open (so others can join)

Indefeasibly vested if:o The class is closed AND all members have satisfied any conditions precedent.

CONCURING ESTATES - Three Types Tenancy in Common

o tenancy with two or more grantees creates a tenancy in common (and is thus considered the “default” or “catch-all” co-tenancy when neither joint tenancy nor tenancy in the entirety exists)

Joint Tenancy - o exists when two or more individuals own property with the right of survivorship (i.e., upon the

death of a joint tenant, the interest terminates and automatically goes to the surviving joint tenants). Modern law calls for a clear expression of intent along with survivorship language.

Tenancy by the Entiretyo is a joint tenancy between married persons with a right of survivorship. The same rules for joint

tenancy apply to tenancy by the entirety.o plus the joint tenants must be married when a deed is executed or the conveyance occurs o Neither party can alienate or encumber the property without the consent of the other.o Jurisdiction that favor these tenancy's usually are also community property state.

Alienability of Co-tenancies Tenancy in common

o Each tenant’s interest is alienable, devisable and inheritable (transferee becomes tenant in common)

Joint tenancy ( Right of survivorship)o NOT devisable or inheritable (except by last survivor)

Because of right of survivorshipo Each tenant’s interest is alienable

But transfer severs the joint tenancy, destroying the right of survivorship in relation to that tenant’s share.

Upon death of cotenant: Unilateral Transfer- best way to sever joint tenancies

If a ,b, c all have joint tenancy then a unilateral transfers their interest it defaults a's share to tenancy in common.

Four Unities for Joint Tenancy Time

Must acquire interests at the same time Cannot give yourself and someone else an interest at eh same

times because you already had a prior interest in the property. Straw Conveyances - Done away by statute in most states.

A-> A+B (no Good) A-> X(straw person)-> A+B

Title Must acquire through the same instrument

Interest Must have the same duration/quantity of interest Two people must have 1/2, three people 1/3, and so on. All fee

simple absolutes, contingent remainders, and so on. Possession

Must have the same right to possession of undivided whole. Creation of Co-tenancies

Presumptions:o Traditional – presumed it was a joint tenancy

Ancient times, property was given for a reason, (for doing some service) not wanting to leave property non surviving heirs. NOT TODAY

o Modern – presumes it is a tenancy in common TODAY Married couples presume TENANCY BY THE ENITRETY

Magic Words:o “To A and B and their heirs as joint tenants with right of survivorship and not as tenants in

common”(Joint Tenancy)o To A and B and their heirs as tenants in common and not as joint tenants”(Tenants in common)

Smith v. Ruckero To Smith and Rucker “for and during their natural lives and upon the death of either of them,

then to the survivor of them, his or her heirs and assigns forever in fee simple, together with every contingent remainder and right of reversion.”

Compareo Joint tenancy

Unilateral conveyance severs the joint tenancy (destroying the right of survivorship) Rare exceptions when specific language used in the conveyance.

A TICWROS “cannot be destroyed by the unilateral act of one tenant through an act such as partition.” In one case, the language in the deed that the South Carolina Supreme Court recognized as establishing a TICWROS is as follows: “for and during their joint lives and upon the death of either of them, then to the survivor of them, his or her heirs and assigns forever in fee simple…” Smith v.Cutler, 366

Tenancy in common for life, with contingent remainder in FSA in survivor Unilateral conveyance does NOT destroy the contingent remainder in the survivor.

Severanceo A, B, and C each own an undivided 1/3 fee simple interest in a parcel of land as tenants in

common. o A dies and by will leaves A’s interest in the land to X and Y equally. Who owns what interest in

the property? - x and y have 1/6 and b and C still have 1/3o A, B, and C each own land in fee simple as joint tenants. o A dies and by will devises all of A’s realty to X and Y equally. Who owns what interest in the

land at this point? - B&Co B then died without a will. B’s only heir is Z. Who owns what interests? Ao A, B, and C owned land in fee simple as joint tenants. o A conveyed A’s interest in the land to X. (severs A's interest) B then died. Who owns what

interest in the land? A has 1/3 and C has the other 2/3o O conveyed “to A and B equally for the period they are both alive and then to the survivor at the

death of the other.” A & B have a life estate with a contingent remainder for fee simple.o A conveyed A’s interest to C. A then died. Who owns what interest in the land? Contingent

remainder gives it all to B Recap: Severance of Joint Tenancy

Unilateral inter vivos conveyance

o Of joint tenant’s entire interest causes a severanceo Lesser interest (mortgage, lease) – Courts are divided

Unities test (traditional) v. intent-based test (modern) By mutual agreement Murder of joint tenant by the cotenant Simultaneous death - Illinoise - is there a survivor? Who died first? Title vs. Lien Theory of Mortgages

o Title theory – Mortgage conveyed legal title to the lender until loan was repaid. Mann v. Bradley - An ownership as joint tenancy may be converted to one of tenancy in

common by the mutual agreement or by the actions of the parties from which an intent to treat the ownership as tenants in common may be inferred. MARIED COUPLE formed joint tenancy, and when divorced and formed automatically formed a tenancy in common. Which gave half to mothers kids.

Lien theory – (Illinois) Mortgage is a security interest; foreclosure required before lender gets title.

Harms v. Sprague – Joint tenancy survives the mortgage or lien of another's interest upon death. Brother placed a lien on his half of the property and upon death the bank sought after the brothers interest but could not due to not getting all tenants names on the lien.

Concurrent Estates Part 2: Rights and Obligations of Cotenants Three Types

o Tenancy in common Are alienable, devisable and inheritable

o Joint tenancy Are alienable, but NOT devisable or inheritable (except by the last surviving tenant) Inter vivos transfer severs the joint tenancy

Involuntary Transfers(Creditors’ Rights)Generally: Creditors’ rights are the mirror image of the tenant’s right to alienate.

o Tenancy in common, joint tenancy: creditor can attach because the tenant can voluntarily transfer.o Tenancy by the entirety: cannot defeat a spouse’s survivorship right by a unilateral transfer

Most states prohibit any unilateral transfers of TBE interests.Federal law preempted Michigan state law that is in the majority view. United

States v. Craft; Under Fed. Law, does a husband’s tax debt attach to a property in entirety with his wife, who he conveyed his interest to, non-fraudulently, and the government won’t allow a sale without half of the proceeds, Yes. The court holds that his rights constituted property for the sake of the statute, and the lien could attach and therefore the gov’t. gets half. Reversed.

Tenancy by the entirety property remains subject to lien for the tax liability of both tenants. (decent)

Some states allow a spouse to transfer (and creditor to attach) that spouse’s own survivorship right.

  Some states allow a spouse to transfer his/her own possessory right (but can’t

sever other spouse’s survivorship right).  

Types of Actions - Between Cotenants Contribution

o Action seeking reimbursement from cotenant for fair share of expenses/carrying charges Accounting

o Action seeking a share of the benefits (rents, profits) Partition

o Division of the property in kind or by sale

o Courts prefer Traditional view: Law favors partition in kind. Unless there exists great prejudice from a physical partition. Today this is almost never followed. See partition in sale modern rule.

Example - Schmidt v. Wittenger; Brothers were unhappy about their co tenants so During a forced partition of a tenancy in common, if prejudice exists (meaning the total value of the property combined would likely diminish upon partition) is a partition sale preferred over a partition in kind? Yes, physical split of property is avoided if value would be diminished if done that way.

OWELTY - A SUM OF MONEY THAT BALANCES THE PARTIES RESPECTIVE SHARES, WHEN DIVEDED PHYSICALLY, b gets a better tract partition that is more valuble than its adjecent, and can only do so if B gives a enough money to make the split monetarily equal.

Rights/Liabilities of Tenants Right to Possession Rents

o From a cotenanto From a third party

Profits Carrying charges (taxes, mortgage) Maintenance/Repairs example - cost for repairs

o Some Jurisdictions -Can force cotenants to pay for necessary repairs to the property. (house needs a new roof)

o Most Jurisdictions- do not allow forced contributions, because it could push a cotenant out of their property if they cannot afford it.

Improvements- only get the what the added value is to the property after the (remodeled bathroom, etc…)

Adverse Possession - happens when one cotenant ousts the other. Rents From a cotenant

General Rule Majority view Minority of states

Exceptionso Agreement of the partieso Ouster- Example, one cotenant changes the locks on the doors. o Defensive Offset-Example, one party in possession seeks payment of

TYPES OF MARITAL

AGREAMENT

Common Law Community Property

Rights during marriage

“Owned” by spouse who holds title; can manage/sell.

Each spouse owns half. Each can manage the whole, but no unilateral transfers.

Rights at death Dower/curtesyElective Share

Each spouse gets half of community property

Rights on divorce

Equitable Distribut’n (Property Division)Compare Alimony (Duty of Support)

Each spouse gets half of community property

Landlord and Tenant - The Nature of a Lease & Types of Leasehold Estates - Contract or Conveyance?

Contracts

o Covenants/promises are dependent Leases traditionally viewed as conveyances

o Covenants are generally independento Exception – covenant of quiet enjoyment

Breach of the Covenant of Quiet Enjoyment Actual Eviction

o Tenant is physically ousted/dispossessed – either completely or partiallyo May be by landlord, LL’s agent, paramount title holder

Constructive Evictiono Act/omission that causes substantial interference with tenant’s possessiono May be by landlord, LL’s agent, paramount title holder

Partial Evictionso Traditional view; Tenant relieved of all liability for rent (but still liable for quasi-rent for

portion that tenant still actually uses).o Modern view; Rent is apportioned.

Statute of Frauds Leases that exceed one year must be in writing to be enforceable. What’s required to be in the writing?

Types of Leasehold Tenancies & Notice

Type NOTICE required to terminate

Terms of years (tenancy for a fixed term) No notice required after the fixed agreement has ended.

Periodic tenancy - measured by successive, identical periods, renews without given notice

Can be terminated by either party, or usually notice within time of periodical periods.

Tenancy at will Either party can terminate at any time (traditionally no notice) (not used)

Tenancy at sufferance THE HOLDOVER TENANT RULE - Landlord can then evict tenant,

Landlord’s Options for Dealing with Holdover Tenants Treat tenant as a trespasser

o Evict and/or seek damages Bind tenant to a new term

o What is the duration of the new term?o RENT IS THE MONEY YOU PAY FOR, TO HAVE THE RIGHTS OF THE PROPERTY.