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Wednesday, March 13, 2013 6:14 PM

I. POSSESSION, COMPETITION, CREATION, AND PERSONHOOD A. Acquisition by Discovery 1. The sighting or finding of hitherto unknown or uncharted territory a. Frequently accompanied by a landing and the symbolic taking of possession b. Acts that give rise to an inchoate title that must (on one view) subsequently be perfected, within a reasonable time, by settling in and making an effective occupation 2. Johnson v. M'Intosh, pg 3 a. This is an anti-canonical case b. Facts: Action of Ejectment (get off my land) for lands in Illinois claimed by Ps under a purchase and conveyance from the Piankeshaw Indians, and by the D under a later grant from the US 1. Issue is whether the title by the Indians can be recognized in U.S. court? a) Right to possess and right to transfer (can be split) c. England had possession by discovery, but gave all land taken that way to U.S. by treaty 1. Conquest is the taking of possession of enemy territory through force, followed by formal annexation of the defeated territory by the conqueror a) Res nullius/terra nullius -- a thing or territory belonging to no one 1. "Hitherto unknown territory" 2. Monopsony - U.S. is the only one who could buy land from the Indians a) Right to Mere Possession - cant transfer, can only transfer to U.S. gov't and no one else b) Right to exclude from property 3. Chain of Title - Record of transfer of property from one to another d. Indians have right to inhabitant the land 1. Giving them right that has little value a) More value in the way Marshall says U.S. is going to use the land than Indians are using it e. Issue: Do the Native American tribes have the power of conveying absolute title of their lands to others? f. No. The discovery of the Native American occupied lands of this nation vested absolute title in the discoverers, and while the Native American inhabitants retained title of occupancy, they were nevertheless incapable of transferring absolute title to others. Therefore title cannot be recognized by U.S. courts. 3. Absolute title - exclusive title to land 4. Law of accession, pg 15 a. By labor and addition of new material alone 1. Take something and make it new (??) b. Owner of original material is typically the winner 1. Things get tricky when someone's done some dramatic work 2. Ex. Haslem v. Lockwood manure case c. This area of the law is often muddy why, in other words, cases often are decided in inconsistent ways, with results that appear arbitrary. 5. Labor theory of Property (Locke's) - Person who labored land has more right to it a. Done something to it/used it for some purpose 6. First in time theory - notion that someone who was there first should a. Keeps the peace, minimizes conflict 1. Best way to do it 7. Possession/labor theory - legal conclusions, kind of end product a. Possession is a legal conclusion, not a given fact. 8. Arguments about property can often be categorized as arguments that seek to : a. Promote/Establish certainty while minimizing controversy and/or deter future conflict 1. Simple/Cheap/Easy to administer 2. Will/deter conflict/litigation 3. Pierson v. post majority b. Recognize the pre-legal expectations or customs of a particular community, or that may fit with various natural forces
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natural forces 1. Takes advantage/maps on to custom/nature a) Livingston's dissent in Pierson 1. Law shouldnt get in the way of what people are doing anyway c. Create greater overall utility/promote efficiency 1. Keeble's majority view a) Court decides who should posess them b) Dont wanna drive up the costs for everyone c) This is an example of that kind of reasoning 2. Livingston's dissent a little but not really d. Appeal to notions of fairness, justice, or equity. B. Acquisition by Capture 1. Rule of Capture - wild animals may be one of the few things that are unowned and susceptible to capture a. Actual possession - the usual method of acquiring a property right in a wild animal is actually to possess it - dead or alive b. Carruth if a pregnant cow wanders off of your land and births cows on your neighbors land and your neighbor cares for your cow and the calves, theyre still your calves. 2. Pierson v. Post, pg 18 a. Facts: Post found a fox upon certain wild, uninhabited, unpossessed waste land. He and his dogs began hunting and pursuing the fox. Knowing that the fox was being hunted by Post and within Post's view, Pierson killed the fox and carried it off. 1. Post (Plaintiff) - Fox hunter 2. Pierson (D) - Fox killer b. Issue: Has a person in pursuit of a wild animal acquired such a right to or property in the wild animal as to sustain an action against a person who kills and carries away the animal, knowing of the former's pursuit? c. Held: No. Property in such animals is acquired by occupancy only 1. Mere pursuit vests no right in the pursuer. 2. What acts amount to occupancy? a) Clear-cut rule - whoever has the dead fox d. Livingston's dissent - A new rule should be adopted - that property in wild animals may be acquired without bodily touch provided the pursuer be in reach or have a reasonable prospect of taking the animals. 1. Go by custom, this has happened before, custom says give to the person who's been looking for it all day. 2. Law ought to mirror peoples pre-legal expectations 3. Ghen v. Rich, pg 26 a. Facts: Rich purchased a whale at auction from a man who found it washed up on the beach. The whale had been killed at sea by the crew of Ghen's whaling ship which left Ghen's identifying bomb-lance in the animal. Ghen claimed to be the owner of the whale under the trade usage and sued Rich for the value of the whale. b. Issue: By the trade usage, was the whale placed under sufficient control by the capturing whaler so that it became his property? c. Yes. By using the identifying bomb-lance, Ghen did all that was practicable in order to secure the whale. Custom can be enforced when it is embraced by an entire industry and has been utilized for a long time by everyone engaged in the trade. 1. This particular trade usage was necessary to the survival of the whaling industry, for no one would engage in whaling if he could not be guaranteed the fruits of his labor. 4. Constructive possession - ducks wandered onto Keeble's property, a. Court says he had possession of the ducks even if he hasn't reduced them to capture b. Not as good as real possession c. Legal conclusion that the landowner should prevail? 5. Keeble v. Hickeringill, pg 30 a. Facts: Keeble owned land containing a duck pond. He loaded the pond with decoys to seduce game to come to the pond so that he could hunt them. Hickeringill discharged a shotgun near the pond which induced the game to stay away. Keeble sued and was granted recovery. Hickeringill appealed contending Keeble had no title to the game and thus no cause of action existed. 1. Duck decoy case 2. Guy invests in pond to attract ducks, other guy shooting to scare them away
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2. Guy invests in pond to attract ducks, other guy shooting to scare them away b. Issue: May recovery of damages be had for the frightening of wild game off one's property? c. Held: Yes, although no title to the game existed, K was using his land in a lawful manner and thus H interfered with this lawful use & is liable for damages. d. Better off if we figure out the best result for society, what's going to promote the economic efficiency, get law out of peoples business Rule of Increase - Offspring follows the mother a. All factors point in the same direction, unlike accession b. Tends to be widely followed, even across different legal cultures, and that cases involving this rule tend to be relatively consistent, because all four categories of fundamental arguments about property rights tend to line up behind it. In other words, people tend to agree that the rule of increase does all of the following: 1. Contributes to economic utility and overall efficiency; 2. It is simple, certain, cheap, and easy to administer. 3. It fits in with or takes advantage of existing natural forces or tendencies and human habits, customs, or intuitions. 4. It appeals to widespread notions of fairness. c. Note: These are not magic words, simply concepts you should be familiar with going forward, so that you can recognize and use arguments that relate to them. d. Rules which are not supported by all of these considerations may be more controversial, or more inconsistently applied, than the rule of increase. Utilitarian Theory of Property - efficiency a. "Protection of expectations" Eliff v. Texon a. Elliff owns and is drilling on land adjacent to land that Texon is using to drill (common well) b. Texon well blew out, burning up all of the oil in the common well and causing destruction to Elliffs land c. Issue: Does Elliff have claim to the oil that came from under her land or did Texon own all of it via law of conquest? d. Elliff and Texon have right to drill for oil. Elliff has no claim to the oil that was captured by Texon via drilling. 1. Texon didnt have a right to waste the oil 2. Oil is no longer analogous to a wandering wild animal Another explanation of the genesis of property rights based on evolutionary game theory - individual self interest led early human ancestors to respect the possessions of each other, such that a convention of deference to possession developed naturally even though no individual or group ever intended such a uniform practice in the first place. Intro to law and economics a. Transaction costs - The costs of arranging an offer or deal between parties. 1. Externalities - Cost that you dont have to take into account, on other people a) Those costs or benefits that arise out of your action, and which you fail to fully consider, because some of these costs or benefits fall on other people. 1. You dont bear the cost of it b) An externality is not simply an effect of one persons activity on another person; rather, it is an effect that the first person is not forced to take into account X's activity benefits x $100 and costs A $50. A offers X $50 to change his activity b. Relationship between transaction costs and externalities 1. External effects of using resources are unlikely to be fully considered through bargaining when transaction costs are high, which increases the likelihood that those resources will be misused. a) Inefficiency c. Coase Theorem - in absence of transaction costs it is irrelevant from the standpoint of efficiency whether X is liable to A for costly effects or not. Resources will be put to efficient use in either event. 1. Assume away transaction costs 2. Land under smoke is worth less than if it wasnt, smoke from T. 3. Property could be worth more to spend more a) Pay more to have pollution free property than to get rid of something already polluted b) Pay more to live with it than you would to get rid of it 4. Idea is people will bargain away the existence of externalities (costs that someone creates but 3rd party has to pay)
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party has to pay) 5. How important transactions costs were/rules & laws d. Wealth/endowment effects 1. Wealth effects - Disparity between parties 2. Endowment effects - people will pay more to keep something they already have a) Both show how important the legal rules are b) People over-value status quo 3. Tragedy of the Anti-Commons If you have a strip center with everyone owning a shop in the strip-center, any one owner can act inefficiently for the entire center. a) The problem with the anti-commons is not that the right to exclude is too weak, but the right to exclude is too high (too many people have a right to exclude) 1. Moscow i. Inefficient way of business, over consumption too many people too many rights to exclude ii. Doesnt care about Heller that much 4. "Tragedy of the commons" - tendency to over-exploit a common resource because the full costs of the exploitation are not borne by each user, while the former is an uncritical application of the first possession doctrine to circumstances where sound public policy might warrant a different approach 5. Different people have property rights inefficient results, overconsumption equals too many rights to exclude C. Acquisition by Creation - "part of common law" 1. The assertion is that if you create something (if in that sense you are first in time) then that something is most certainly yours to exploit because Libling argues "the foundation of propriety rights is the expenditure of labour and money (which merely represents past effort)." a. John Locke - you own the fruits of your labor in consequence of having "a property in your own person." 1. Not Locke, just in general - Issue with creation is degree of exclusivity 2. Common property and the rule of capture a. Tendency to over-consume with commonly held property b. First person to get their hands on it to possess c. Exhaust the resource because incentives are to push to get as much as you can get otherwise it'll be gone d. Limits over consuming of resources... 3. International News Service v. Associated Press , pg 56 a. Facts: AP sued to enjoin International News Service from publishing as its own news stories obtained from early editions of AP publications b. Issue: Is the publication for profit of news obtained from other news-gathering enterprises a misappropriation of a property right? c. Yes. News itself is a collection of observable facts which obviously cannot be owned vis a vis the public at large. The nonprofit communication of news, regardless of source, is endemic in a free society and involves no property right. However, when 2 competing news organizations are involved each gaining livelihood from beating the others deadline, the use of news for profit is misappropriation. d. Bray Notes: Everyone who has an idea - we'd be giving them a monopoly 1. Only congress can give that kind of commercial right e. This is the only really precedent for business of gathering news copyright f. I think Bray said something about maybe the court didnt come to the most efficient solution, like copy away everyone else because it will leave us better off -- encourages competition, cheaper, etc 4. Cheney Brothers v. Doris Silk Corp., pg 61 a. Facts: P designed and marked silk garments. D copied a design and successfully marketed it. P which could neither patent nor copyright the design sued for damages and equitable relief under general property law b. Issue: If a person obtain a patent or copyright on its product, can it recover for the copying of it by others? c. (Hand) No. In the absence of statutory protection given a man's creations by parent or copyright law, a mans property is limited to the tangible objects which embody his invention. When another creates a chattel through imitation, the imitated person has no remedy. d. Everyone who has an idea - we'd be giving them a monopoly 1. Only congress can give that kind of commercial right e. More copying drives price down 5. Smith v. Chanel, pg 62
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5. Smith v. Chanel, pg 62 a. Facts: Smith is producing a knockoff fragrance and advertising that its as good as the Chanel original 1. Lower court rules in favor of Chanel, Smith appeals b. Issue: We must weigh incentive for Chanel to create perfume vs. consumer benefits of cheaper competition c. Held: Smith may continue to advertise their knockoff as being as good as the original 1. Extends Cheney to not only copying products but also claims that the copy is = the original 2. Even today, Chanel is still in business and people are willing to pay a premium for a brand name, so allowing copiers doesnt necessarily eliminate profitability of producing. 3. First-movers still have advantages, even if widespread copying is allowed 4. Society may be better off if we allow copying culture disseminates faster & cheaper 5. Not misappropriation/compare to Cheney Brothers 6. Conversion - the wrongful exercise of ownership rights over the personal property of another 7. Moore v. Regents of the University of California, pg 70 a. Facts: Researchers at UCLA unbeknownst to Moore, used specimens of his tissue to produce a potentially lucrative cell line. 1. Conversion is chief legal claim made my Moore b. Held: Majority of the California Supreme Court reject Moores conversion claim, on the basis that he lacked property rights in the cell lines derived by the defendants, f 1. Four points made by the majority to support this holding (4 arguments for property). a) No ownership because he never expected to retain possession of the spleen. b) Would chill medical research c) Moral issues involved out to be left to the politically accountable legislature d) Still had available claims based on asserted breach of fiduciary duty by his medical care providers. 2. To maintain such an action a P must prove interference with ownership or right of possession. Moore clearly had no right of possession, so a conversion action would necessitate interference with a proprietary interest. Cannot be said that a persons tissue is "property." c. Bray: If you give him the right to possess it, would also have to give him the right to sell it 1. Bundle of rights, supra d. Justice Arabians concurrence - human tissue should never be viewed as property, even by the person whose tissue is at issue. 1. Concern about legislative deference and creating a market in human organs. e. Justice Mosks dissent - a person should have at the least the right to do with his own tissue what any other person can do with it. To allow a person to economically benefit from the non-consensual use of another's tissue can be considered a modern version of slavery or indentured servitude. 1. Introduced a bundle of property rights metaphor, including the rights to: a) Possess b) Use c) Exclude d) Dispose 1. (by sale or gift) f. Fait accompli - irreversible D. Acquistion by Find 1. Initial, basic, first-in-time rule in the law of finders: the notion that a finder prevails against all but the true owner or rightful prior possessors. Armory a. Unrelated but in my notes: maybe property right is especially important when unique 2. Armory v. Delamirie, pg 98 a. Facts: Armory found a jewel which he took to D, a goldsmith, for appraisal, but D's apprentice removed the stones which D refused to return. b. Issue: Could Armory, who lacked legal title to the chattel, maintain an action to recover its value? c. Held: Yes. Finder of lost property, although he does not acquire absolute ownership, does acquire title superior to everyone else except the rightful owner. Such title is a sufficient property interest in the finder upon which he maintain an action against anyone (except the rightful owner) who violates that interest. d. Introduced basic, first-in-time rule in the law of finders: the notion that a finder prevails against all but the true owner or rightful prior possessors. 1. This rule might be justified for many of the same reasons we protect first-in-time possession in other contexts.
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other contexts. 3. Abandonment - Intentionally or voluntarily left behind, no intent to get it back a. Might not allow some property to be abandoned, cannot walk away from, things youve done make impossible for others 4. Bailment: the rightful possession of goods by a person (the bailee) who is not the owner. 5. Hannah v. Peel, pg 101 a. Facts: D is owner of house quartered by soldiers 1. P is soldier who found brooch a) Finds it and takes it to the police b) Police give him receipt, no one comes to claim it so he gets it back & eventually sells it b. Held: Court says we might be better to reward the good guy 1. Because P did all the right things morally, court says it seems fair to reward that a) How fairness by a judge is influential 2. Hannah is commendable by bringing it back a) Can also say in some situations where someone is behaving morally right or fair, might make things easier for all of us, b) Could call good faith case, maybe if its a close call Hannah suggests tie breaker c. THIS CASE IS ABOUT GOOD FAITH, THE GOOD GUY BECAUSE HE DID THE RIGHT THING 1. Similar situation doesnt have to do with finders, but if someone's doing the same type of thing as him then could say it may be reasonable to give it to good guy (Hannah) and cite Hannah 2. Maybe different if Peel ever lived there II. THE RIGHT TO EXCLUDE AND ITS LIMITATIONS A. Felix Cohen - property as a relationship among people that entitles so called owners to include or exclude use or possession of the owned property by other people B. Importance of free transferability of property rights 1. Right to include (to sell for example) does not of itself result in a fully effective power to transfer 2. Need right to exclude as well a. Some believe this is the most important right/stick in the bundle 3. These 2 rights are necessary and sufficient conditions of transferability C. Protects right to exclude 1. Trespass 2. Conversion D. Jacque v. Steinberg Homes, pg 89 1. Court upheld a landowners right to bar an unwanted trespasser from moving a mobile home across Jacque's land, declaring that a person has the right to "exclusive enjoyment" of his own land "for any purpose which does not invade the rights of another person" a. P has strong interest in protecting their land b. Society has interest in punishing and deterring trespassers so they dont pursue self help remedies c. Outcome probably doesn't promote certainty? E. State v. Shack, pg 90 1. Held that a landowner had no right to bar a poverty agency worker and a legal services lawyer from his farm where they sought to visit a migrant worker who was an employee and tenant of his farm. 2. Held: Landowners right to exclude ended where the tenant worker's need for reasonable access by visitors began. a. Rights are relative. F. Why did the court allow Jacque to exclude but not Shack? 1. Maybe the reasons why they wanted them off their land a. Jacque owned the property and was protecting his land alone, Shack was keeping them away from protecting people residing on Shack's land G. Limitations on rights you can exclude now but not in Blackstone's time: 1. Civil rights legislation forbidding various forms of discrimination 2. Rent controls and other limitations on a landlords right to evict tenants 3. Law of adverse possession 4. Bodies of doctrine granting public rights of access to private beaches 5. Legislation protecting homeowners who have defaulted on mortgage payments H. Singer - Reliance interest in property - "non owners have a right of access to property based on need or some other important public policy" pg 93 I. Epstein firm right to exclude - absolute rights simply establish the conditions for subsequent market transactions J. Howard v. Kunto, pg 142
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J. Howard v. Kunto, pg 142 1. Everyone lives one house over 2. Tacking - a common problem with continuity is whether one possessor can add (tack) the possession of a prior possessor to his own. If privity of estate exists between the prior possessor and the present possessor, tacking is permitted. a. Privity of estate means the voluntary transfer from the first possessor to the second possessor of either an estate in the land or actual possession of it 1. Common or successive relation to the same right in property 3. Owner - Tacking follows automatically on the owners side. Once the statute of limitations has started to run, the cause of action for ejectment (together with its expiring limitations period) goes along with ownership. 4. DISABILITIES: Statute of limitation typically provide for suspension of the limitations time clock if the owner is disabled from bringing an action to recover possession at the time the cause of action accrues. a. Disabilities include: 1. Minority 2. Unsound mind 3. Imprisonment b. Only disabilities that matter are those that exist at the time the cause of action accrues K. Intro to Adverse Possession: Powell on real property, pg 116 1. Law of adverse possession is a synthesis of statutory and decisional law 2. Adverse possession functions as a method of transferring interests in land without the consent of the prior owner and even in spite of the dissent of such owners 3. Rests upon social judgments that there should be a restricted duration for assertion of "aging claims" a. Passage of reasonable time period should assure security to owner 4. Theory this (AP) rests on - Adverse possessor may acquire title at such time as an action in ejectment (or other action for possession of property) by the record owner would be barred by the statute of limitations L. Law of adverse possession is a synthesis of statutory and decisional law with judicial rules supplementing the statutes of limitation that make up the core of adverse possession III. Adverse Possession A. The traditional doctrine of adverse possession, very widespread not just in common law jurisdictions but, in some form or another, in many other legal cultures, is a specific limitation on the right to exclude that we examine in some detail. B. Procedurally, most adverse possession cases arise in one of two ways: 1. Either an action for ejectment by the original owner O, against the would-be adverse possessor A; a. O wants to get A off his property 2. Or an action to quiet title in the property at issue by A, where A thinks she has met the requirements and moves to snatch the title (often in advance of sale). a. A seeks title from O to land theyve been APing C. ADJECTIVAL ELEMENTS: The essence of these supplemental rules is adverse possession requires that there be 1. An entry that is a. An actual entry b. One reason entry is required - adverse possession depends on a statute of limitations running against a cause of action and the entry (without permission adverse to the rights of the property owner) creates that cause of action for trespass that triggers the statute 1. Entry also helps stake out what it is the adverse possessor might end up claiming 2. Open and notorious a. Sufficiently so they would put reasonably attentive property owners on notice that someone is on their property 3. Continuous for the statutory period and a. Reflects both earning and sleeping principles 4. Adverse/Hostile and under a claim of right/title a. Three approaches to a would-be adverse possessors state of mind that jurisdictions may impose: 1. The Objective rule a) State of mind is irrelevant 2. The Good-Faith rule a) Required state of mind is "I thought I owned it" b) Tend to win more often 3. The Aggressive Trespass rule a) The required state of mind is "I thought I didnt own it, but I intended to make it mine."
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a) The required state of mind is "I thought I didnt own it, but I intended to make it mine." 1. Occupants must intend to take the property even if they know it doesnt belong to them b) One way of dealing with this type is to award title but only if adverse possessor agrees to pay fair market value to the former owner 1. Obligation to compensate would be imposed to punish and deter the consciously wrong activity c) Doesnt matter whether or not the mistake was intentional or not, going to go for the objective standard because we dont care about what's in peoples head. 1. Dont want to reward consciously dishonest people 2. He doesnt like the aggressive trespass b. Nome v. Fagerstrom 1. Color of title/objective rule of hostile part 2. Intent of the Ps is irrelevant. 3. Ps get property because they were using it as an average owner of similar property would. D. Color of title - a claim of adverse possession founded on a written instrument, judgment, decree, or similar writing, which purports to provide title to the property but which is defective or invalid for some reason. Look at Nome 1. Color of title is NOT REQUIRED for adverse possession in most jurisdictions, and therefore is not typically understood as an element of adverse possession, but it may confer various advantages to a would-be adverse possessor: a. The possible effects of color of title on the statute of limitations element; 1. Might shorten b. The potential for color of title to provide a would-be adverse possessor on part of a piece of property to make a claim of constructive possession to the entire lot at issue. 2. Color of title is not claim of right E. Boundary disputes - encroachments by one neighbor onto the land of another are not open and notorious if the encroachment is of a small area and is not "clearly and self-evidently" an encroachment. 1. In such situations, the limitations statute does not begin to run until and unless the owner has actual knowledge of the encroachment. a. Objective test of hostility? 2. Mannillo v. Gorski, pg 136 a. Came into possession by agreement to purchase, husband died, P is suing because thinks its his land? b. More typical context of adverse possession - where its is used to resolve a conflict over the boundaries of particular lots c. Rule: to claim title by adverse possession, the possessor need not have been aware that the land in question was in fact owned by another d. State supreme court rejected what weve called the aggressive trespass standard in favor of the objective rule for the state-of-mind issue related to the adverse/hostile component of the adjectival element. 1. Trial Court concludes D has possession because exclusive continuous uninterrupted visible notorious and against the right and interest of the true owner. 2. Abandoned "Maine Rule" which put a knowing wrongdoer in a better position than an innocent party - a result the law ought not to condone. e. Aggressive trespass standard - doesnt matter whether or not the mistake was intentional or not, going to go for the objective standard because we dont care about what's in peoples head. F. Howard v. Kunto, pg 142 1. Took possession of a summer home under a deed which, unbeknownst to them, described the adjoining property. a. Everyone lives one house over 2. Tacking - a common problem with continuity is whether one possessor can add (tack) the possession of a prior possessor to his own. If privity of estate exists between the prior possessor and the present possessor, tacking is permitted. a. Privity of estate means the voluntary transfer from the first possessor to the second possessor of either an estate in the land or actual possession of it 1. Common or successive relation to the same right in property b. Owner - Tacking follows automatically on the owners side. Once the statute of limitations has started to run, the cause of action for ejectment (together with its expiring limitations period) goes along with ownership. 3. DISABILITIES: Statute of limitation typically provide for suspension of the limitations time clock if the owner is disabled from bringing an action to recover possession at the time the cause of action accrues.
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owner is disabled from bringing an action to recover possession at the time the cause of action accrues. a. Disabilities include: 1. Minority 2. Unsound mind 3. Imprisonment b. Only disabilities that matter are those that exist at the time the cause of action accrues G. Georgia O'Keefe v. Snyder, pg 151, adverse possession of personal property 1. Facts: P (GoK) brought an action against D (Snyder) for replevin for her 3 small paintings that had allegedly been stolen. a. Replevin - an action to recover personal property wrongfully taken 2. Question is did she act reasonable due diligence/reasonable person who owned these paintings would've acted 3. Rule: The discovery rule controls in actions involving the adverse possession of chattels 4. Discovery rule - a cause of action will not accrue until the injured party discovers, or by exercise of reasonable diligence and intelligence should have discovered, facts which form the basis of a cause of action. a. Discovery rule in this context is going to be more protective for original owners than adverse possession in real property context 1. Statute of limitations doesnt begin until actual owner actually knows & demands return of the items 2. Focuses on due diligence 3. Some people think discovery rule is not protective enough b. Due diligence - the standard of care as would be taken by a reasonable person in accordance with the attendant facts and circumstances 5. Guggenheim alternative to discovery rule - not require diligence from true owner reasoning that such an approach would encourage illicit trafficking in stolen art by putting the burden on the true owner to demonstrate that it had undertaken a reasonable search. H. Alternatives to adverse possession in boundary disputes 1. Agreed boundaries - neighbors can agree on a new boundary and record a conveyance to carry it out. a. Oral agreement is not a conveyance but has all the effect of one (would violate the SOF) 2. Acquiescence - if one owner acquiesces in a known encroachment for an indefinite but long time, the acquiescence is evidence of an agreed boundary 3. Equitable estoppel - if one neighbor does or says things that cause the other neighbor to substantially rely to his detriment on the first neighbor's actions, the first neighbor is estopped from denying his statements or actions a. Other neighbor changes their position as a result of their indication b. Estoppel is an equitable doctrine 4. Boundaries are hard to police IV. REAL ESTATE TRANSACTIONS AND THE RECORDING SYSTEM A. One of the chief functions of a real estate contract is smoking out problems with property before deed changes hands 1. Other function: Executory Nature the contract is designed to allow the parties to fulfill various contingencies to take various steps at different points before closing. a. By requiring people to do stuff before the sale, were building failsafes in place to keep transactions on track B. Executory contract 1. Contract that is not the end of the transaction a. Steps before it have to happen before parts of the deal can go forward C. Some things a RE K should include: 1. Purchase Price & how its to be paid 2. Legal description 3. Good Title furnished, title ins. 4. Warranties of title incl. restrictions 5. Date of transfer of possession 6. Proration of taxes/utilities 7. What if fire? Whos responsible? 8. Itemization of personal property included in sale 9. Escrow details 10. Provision for return of deposit 11. Signatures
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11. Signatures D. Equitable conversion 1. Traditional majority rule here is that the buyer bears the risk of loss if the house burns down between contract/closing a. B has equitable ownership of the property 1. Buyer has equitable title - still has to pay for burned down house b. S has legal title as trustee for B c. Often K around or buy insurance 2. Minority rule - If the loss is substantial and maybe if the sellers still in possession than its the seller a. If youve closed than the buyer is maybe on the hook E. Fiduciary Duties and brokers in real estate transactions 1. Fiduciary duties and the possible breaches of these duties: a. Fiduciary duty - a legal obligation to act for the benefit of another, including subordinating one's personal interests to that of the other person 1. Fiduciary - person holding a legal obligation to act for the benefit of another b. Fiduciaries: 1. Must exercise fidelity and good faith; 2. Cannot put themselves in a position antagonistic to their principals interest, 3. and therefore must make a full, fair, and prompt disclosure of all facts which are or may be material, or which may affect their principals rights and interests. c. Breach of fiduciary duty: The failure of a fiduciary to observe the standard of care exercised by professionals of similar education and experience. 1. Fiduciaries can breach their duties by: a) Making material misrepresentations; b) Making false promises likely to influence, persuade, or induce; c) Acting for multiple parties in a transaction without the knowledge of all; d) Any dishonest, fraudulent, or improper dealings. 2. Licari v. Blackwelder, pg 530 a. Facts: Six siblings enlisted a real estate broker to help them sell a home they had inherited and the broker in turn enlisted another broker for further assistance. The second broker himself bought the home for less than market value and sold it six days later for $45,000 more than his purchase price. b. Issue: Must real estate brokers fully, fairly and promptly inform their clients of all known facts that might be material the transaction for which the brokers where employed? c. Held: Yes. Real estate brokers are fiduciaries and accordingly they must act with the highest fidelity and good faith in promoting their clients, and not their own, interests. Those duties flow to a broker who acts as a subagent of another broker if the subagent has the primary broker's express permission to act on the clients behalf. d. Defendant subagents of the broker, who was directly in privity (common relation to the same right in property) with the plaintiffs, also had the relevant fiduciary duties to the plaintiffs F. Statute of Frauds 1. Requires that unless there is some exception available, a contract for the sale of land must be in writing and must be signed by the party against whom it is sought to be enforced . Because both parties wish to enforce the agreement, if necessary, against the other, this means in practice that both parties must sign the contract for sale. a. Requirements: 1. In writing 2. Signed by party to be bound 3. Describe real property at issue 4. If price has been agreed to has to state it b. Two exceptions to the statute of frauds 1. Part performance a) Requires proof of an oral contract and reasonable reliance on the contract b) Equitable doctrine wherein we award relief to somebody who party performs, to their detriment, a contract that fails SoF ( Hickey v. Green , Walker v. Ireton) 2. Estoppel a) May be used to enforce an oral sale contract if the seller has caused the buyer reasonably to rely significantly to his detriment upon the sellers oral agreement to sell. b) Different from partial performance because B is doing things to improve property or in reliance on contract that arent specifically part of the agreement
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reliance on contract that arent specifically part of the agreement c. Both ^^equitable doctrines and thus are generally available only when a buyer seeks specific performance of an otherwise unenforceable contract of sale d. SOF is to help people frauded out of their home 1. A lot of people put a high percentage of their resources into their home so we insist you get it in writing 2. Will carve out an exception to SOF if its really unfair 2. Hickey v. Green, pg 542 a. Facts: Green (D) orally agreed to sell a parcel to Hickey (P) and accepted his check as a deposit. In reliance Hickey sold his home because he was build on the parcel he bought from D. Green found out and refused to sell. P sued for specific performance b. Issue: Can an oral contract for the sale of real estate be specifically enforced if the party seeking enforcement changed his position in reasonable reliance upon the contract? c. Yes, specific performance. P reasonably relied & D was fully aware of this when she refused to honor the contract. Would be manifestly unjust to refuse specific performance. 3. Walker v. Ireton, pg 546 a. Facts: Walker entered into oral contract to purchase farm from Ireton for $30,000. A written contract was discussed but Ireton said he was honest and they didnt need one. Walker gave Ireton $50 check as part payment. Walker sold his own farm without informing Ireton of his intentions. Ireton then refused to convey. 1. Held - Walkers sale of his own farm was not reasonable reliance on the oral contract because the parties had neither discussed that action nor was it foreseeable by Ireton. 2. Because selling his own farm was not within the contemplation and understanding of the parties and not foreseeable by the seller. 4. Difference between Walker and Hickey is Hickey told Green he was selling his house in order to buy hers/build on her lot. 5. Part performance/Estoppel originated in equity a. Pp through specific performance b. Es recognized as defense G. Marketable Title 1. Marketable title is title: a. Free from encumbrances and any reasonable doubt as to its validity 1. "Encumbrances a. Burden on the title, such as mortgages, judgment liens, easements, or covenants. b. General rule that zoning laws are not encumbrances and do not impair marketability of title c. Easements that are open, visible, available, or enhance property aren t encumbrances b. And such as a reasonably intelligent person, who is well informed as to the relevant facts and their legal bearings, c. And who is ready and willing to perform the contract d. Would be willing to accept in the exercise of ordinary business prudence. 2. Hazards of litigation" a. The title to land is unmarketable where it is of such a character as to expose a purchaser to the hazard of litigation by reason of palpable defects in the title, outstanding claims, or some disputed question of fact or of law of such importance as to lead to a reasonable belief that by reason thereof the purchaser may be called upon to defend possession or title, or be involved in litigation with reference thereto. b. Defect in title must be substantial and likely to injure the buyer 3. Distinction between marketability of title and marketability of the land: a. While undisclosed problems with the land may provide many grounds for legal claims by a purchasing party, they may not provide grounds for rescission based on marketability of title grounds. H. Duty to Disclose 1. Three different approaches to the duty to disclose: a. Caveat emptor (buyer beware) 1. Traditional exceptions to this rule: a) Fraudulent misrepresentation b) Affirmative misrepresentation c) Active concealment d) Confidential/fiduciary duty e) Partial disclosure 2. Limited in Stambovsky
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2. Limited in Stambovsky b. The duty to disclose latent and material defects known to the seller, and unknown and not reasonably discoverable by the buyer; 1. Compare to the caveat emptor standard and its traditional exceptions. 2. Johnson, pg 557 c. The duty to disclose all known and material defects, latent or patent. 1. 2 approaches to materiality (how we determine something's material) a) Objective (value of house on market/if defect has decreased value) b) Subjective 2. Stambovsky v. Ackley, pg 553, Ghost case a. P contended that he should be entitled to rescind the contract of sale and recover his down payment because D (owner of the house) did not disclose that the house was haunted b. Rule: Where a condition that has been created by the seller (deliberately fostered) materially impairs the value of the contract and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care with respect to the subject transaction, nondisclosure constitutes a basis for rescission as a matter of equity c. Limited Caveat Empor rule while being moved by the spirit of equity. 1. "Nondisclosure constitutes a basis for recession as a matter of equity. The unusual facts of this case clearly warrant a grant of equitable relief." a) Not familiar with that village's folklore, could not readily learn home was haunted 2. Equity - fairness/justice/the determination of a matter consistent with principles of fairness and not in strict compliance with rules of the law 3. Johnson v. Davis, pg 557 a. D failed to disclose to P certain roof defects prior to conveyance b. Rule: Where the seller of a home knows of facts affecting the value of a home that are not readily observable, the seller is under a duty to disclose - latent defects rule 1. Since fraud occurred after contract execution it was irrelevant c. Latent defects - a defect that cannot be discovered upon ordinary examination 4. Doctrine of Merger a. All the obligations in the contract have emerged into the deed 1. Basically, the sales contract doesnt matter after closing 2. When B accepts deed, B is deemed to be satisfied that all of the contractual obligations have been met. a) Contract merges into deed B cannot sue S for promises in K but not in deed, but must sue on warranties in the deed b. How to get around the doctrine of merger? 1. Collateral to the contract a) Argue that duty was collateral 2. Independent of contract c. Merger is getting riddled with exceptions, easier to make arguments 1. Namely fraud and contractual promises deemed collateral to the deed d. Principally applies to questions of title or quantity of land I. Types of Deeds 1. Three types of deeds: a. General Warranty deeds 1. Everything in the title is good, anything problematic 2. Warrants title against all defects 3. Six covenants of title a) Covenant of seisin 1. Grantor promises that he owns what he is conveying 2. Ownership/right to quiet possession/entitlement b) Covenant of right to convey c) Covenant against encumbrances d) Covenant of general warranty e) Covenant of quiet enjoyment f) Covenant of further assurances 4. Present covenants - broken at the time of transfer a) Seisin, right to convey, encumbrances 5. Future covenants - only find out whether they're going to be honored in the future
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5. Future covenants - only find out whether they're going to be honored in the future a) General warranty, quiet enjoyment, further assurances b. Special Warranty deeds 1. Warranty only against the grantors own acts c. Quitclaim deeds 1. No warranties 2. Elements of a deed a. Name of grantor & grantee b. Words of grant (make clear that its transferring) c. Description of the land d. Signature of grantor e. Notary seal 3. Consideration - stated in deed in order to raise a presumption that the grantee is a bona fide purchaser entitled to the protection of the recording acts against prior unrecorded instruments. a. Keeps the actual purchase price out of the public records b. Not necessary to convey land, just the fact of consideration is stated in deed 4. Forged deed - void, just throw out 5. Deed procured by fraud -is voidable by the buyer J. Financing real estate transactions 1. An installment land sale contract or a contract for deed is an arrangement whereby the purchaser takes possession and the seller contracts to convey title to the purchaser when the purchaser has paid the purchase price in regular installments over a fixed period of time 2. Commonwealth v. Fremont Investment & Loan, pg 630 a. D was predatory lending, contends they were following fairness standards at that time 1. During mortgage crisis b. Rule: Mortgage loans with the following 4 characteristics would likely be unfair under the MA consumer protection statute 1. Loans were adjustable with a preliminary rate for 4 years 2. The initial rate was typically 3 points lower than the usual mortgage rate on 30 year loans 3. The debt to income ratio would exceed 50% after the introductory period expired 4. The loan-to-value ratio was 100% c. Held: D knew or should've known these would be difficult to repay K. Recording System 1. The American recording system is an attempt to keep track of the various interests that may exist in a single piece of property, and a way to give potential purchasers relatively easy and trustworthy information about the nature of title. a. Under all recording acts - A subsequent bona fide purchaser is protected against prior unrecorded interests 1. What kind of notice/priority recording counts to make you a bona fide purchaser 2. Types of notice a) Actual 1. Real, actual knowledge of the prior unrecorded transaction. i. Evidence beyond record necessary to prove actual notice b) Constructive 1. Record - If an instrument is validly recorded, everyone in the world has constructive notice of it and cannot be a BFP i. Unless not within chain of title (& other things so this prob isn't important?) 2. Inquiry - maybe some aspect of deal or As use of land that let B know they should investigate further. (Harper v. Paradise & Waldorff Ins. v. Eglin) i. Ordinary person of average prudence would inquire as to its truth 3. Who counts as a BFP is going to change under certain recording acts a) BFP under race recording act is first to report 2. Three types of recording acts: a. Race statutes - under which, as between successive purchasers, the person who wins the race to record prevails, and which protect subsequent purchasers only if they record first; 1. BFP = whoever records first b. Notice statutes - protect only subsequent purchasers without notice; 1. BFP = subsequent BFP (for value/without notice) prevails c. Race-notice statutes - under which a subsequent purchaser is protected against prior unrecorded
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c. Race-notice statutes - under which a subsequent purchaser is protected against prior unrecorded instruments only if the subsequent purchaser: 1. Is without notice of the prior instrument, 2. And records before the prior instrument is recorded. a) Has been suggested that a race notice statute is preferable because by punishing nonrecording, it provides motivation to record, making the public records complete 3. BFP = Subsequent BFP (for value/without notice) who records first 3. In addition to protecting only subsequent purchasers without notice, a notice statute differs from a race statute because Race statute protects subsequent purchaser only if the subsequent purchaser records first a. A notice statute protects a subsequent purchaser against prior unrecorded instruments even though the subsequent purchaser fails to record b. Important to closely read a recording statute to see who comes within the statutes protection 4. General rule that recording statutes often do not protect donees or devisees as subsequent purchasers, even in race jurisdictions a. Has not given value/consideration 5. Shelter rule - protection given to a BFP under a recording act ends to all takers from the BFP, even if the taker knows of the prior unrecorded conveyance 6. Daniels v. Anderson, pg 686 a. Pro tanto rule protects buyers to the extent of payments made prior to notice but no further. So we can: 1. Let P have land & pay Z for it -> Court chose this one 2. Award Z equity in land proportionate to what Z has already paid 3. Allow Z to complete purchase, but pay remaining balance to P b. Rule: One cannot claim BFP status if he receives actual notice of an unrecorded interest in real estate prior to taking title c. Didnt raise his argument at trial so the S. Court waived it 7. Lewis v. Superior Court, pg 689 a. Lis pendens - a pending action b. Rule: A person who records an interest in real estate after a BFP takes title thereto is inferior to the BFP, even if that BFP has not paid for the property c. Held: Any purchaser without notice who makes a down payment and obligates himself to pay the balance, has every reason to believe that his rights are secure in the property. 1. We dont have to use Davis. If we apply Davis, we penalize an innocent purchaser & Davis is antiquated vs. current industry practice d. Here, Court abandons 99-y/o Davis precedent 8. Harper v. Paradise, pg 693 a. Cant give more than you get/Cant give interest past death b. 2 arguments 1. Adverse possession argument - people haven't possessed the land long enough 2. On notice that Document only for replaced - so there's a document out there, c. Mere occupancy vs. possession 1. Be careful about occupancy in this case d. Rule: A deed which specifically refers to an earlier unrecorded deed puts a subsequent purchaser on notice of the existence of the earlier deed; thus the purchaser claiming under the later deed is not entitled to property, though the later deed was recorded first 1. D had constructive notice of the prior claim when they acquired title 2. Recorded reference to an unrecorded instrument - purchaser is under obligation in many states to inquire about substance to which record refers e. Shows how far some courts may stretch, based on the recorded documents, to find a duty to inquire by subsequent purchasers. 9. Waldorff Insurance and Bonding, Inc. v. Eglin National Bank , pg 697 a. Rule: Subsequent successors to legal title, after a contract to convey title has been executed, take title subject to all equitable interests of which they have notice b. Possession or occupancy of a single condominium unit, even in a large complex, could give rise to inquiry notice by a subsequent purchaser. V. THE RIGHT TO DISPOSE (GIFTS, POSSESSORY ESTATES, AND FUTURE INTERESTS) A. Acquisition by Gift 1. Two important components of a gift: a. The donors intention to make a gift to the donee b. And the actual transfer of possession from donor to donee.
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b. And the actual transfer of possession from donor to donee. c. These can be understood as necessary elements --> 2. Necessary elements of a gift: intent, delivery, acceptance. a. Intent b. Delivery 1. Constructive delivery - when actual physical delivery is possible but impractical, delivery of some object that is the means of obtaining possession of the property constitutes constructive delivery a) Affirms intent/proves gifting happened 1. Grantor must relinquish dominion and control of gift b) Newman v. Bost, pg 167 1. Gift causa mortis - gift made contingent on the donor's anticipated death i. Revocable 2. Rule: A constructive delivery of a gift causa mortis will be effective where it plainly appears that it was the intention of the donor to make the gift, and where the things intended to be give are not present, or where present, are incapable of manual delivery from their size or weight. 2. Symbolic delivery - when actual physical delivery is impossible or impractical, delivery can be accomplished by delivering some object that is symbolic of possession c. Acceptance 1. Assumed when gift is valuable to the donee 3. Gruen v. Gruen, pg 174 a. Facts: Dad sent son a letter saying wanted to give him painting as a gift, but Dad would keep until he died. Stepmom wouldn't give it to him when Dad died arguing that donor retained a life estate and no delivery was made. b. Issue: May a valid inter vivos gift of chattel be made where the donor reserves a life estate and the donee does not take physical possession? 1. Gift inter vivos - a gift that is made and is to take effect while the parties are living c. Held: Yes, a valid gift was made. Donative intent was established constructively through the document of transfer (the letter). Acceptance is implied because the painting had value. 1. Bray: Future interest is something that's hard to deliver d. Introduced Life estate and a remainder. Next heading 4. Intestate - die without will a. People who take dead persons property when they die intestate? 1. Heirs a) First people we look to? 1. Issue - children and descendants b) If no issue? 1. Ancestors c) If no issue, and no ancestors? 1. Collaterals - related by blood pg 196 d) If none of the above? 1. Escheat i. Government takes it 2. Dont know who someone's heirs are until they die B. Estate system - Designed to make clear who is transferring what to whom not just what physical parcel of land or item of personal property but also what sort of ownership measured in terms of the duration of the transferees interest 1. Hierarchy of Estates a. Fee Simple b. Life Estate c. Leasehold 2. Fee simple a. An estate of indefinite or potentially infinite duration 1. Largest, and conceptually the most expansive, estate one can own. b. WHEN YOU SEE & HER HEIRS = FEE SIMPLE - on estates problems c. Remainder - future interest created in a grantee that will become possessory (if it ever becomes possessory) upon the natural expiration of the preceding possessory estate 1. Vested - remainder is vested if it is created in a known person = will have letter/name on exam 3. Estates Problems stuff
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3. Estates Problems stuff a. "O conveys to A" = Fee simple 1. Not in old times b. "O conveys to A for life" 1. A has life estate 2. O has a reversion (when A dies) c. O conveys Greenacre "to A for life then to B" 1. A has life estate 2. B has future interest a) Would call this a remainder (& fee simple) b) When it becomes possessory B gets his hands on it - B will have it and it will be Fee simple d. O conveys Greenacre "to A for 50 years" 1. Will be A's for 50 years 2. Term of years 3. Then what? a) O has reversion e. O conveys Greenacre "to A and her heirs" at the time of conveyance, A has one son, B. 1. A has a fee simple a) Rolls on forever thats it 2. B has nothing (may say 'mere expectancy' - fancy way for nothing) a) I think because you never know who heirs are until they die so right now B has nothing f. O conveys Greenacre "to A for life, then to the children of B." At the time of conveyance (and at the time of A's death), B has one daughter, C. 1. If it starts with 'to A for life' then you always know its LIFE ESTATE 2. A - life estate 3. C- remainder fee simple a) When C gets hands on it, she's going to have fee simple so its ^^^ b) C has vested remainder in fee simple at the time of conveyance 1. When the conveyance is made C is alive, so O knows when he makes the conveyance that A is going to get a life estate and then one child in whom that remainder is vested (know who its going to) i. Might say 'vested subject to open' because B could have some more kids - between the time of conveyance and the time that it vests (becomes possessory) C might be joined by some siblings who also might join in this remainder 4. B has absolutely nothing 4. Life estate a. An estate that lasts for the life of the life tenant 1. Always followed by some future interest- either a reversion in the grantor or a remainder in a third party a) Reversion - back to the grantor after death of person it was first granted to 1. May only be created in a grantor b) Remainder - interest that remains after the termination of the immediately preceding estate 1. Third party 2. Ways that one can convey a life estate, both at early common law and in modern practice b. Life estate and a remainder: 1. Two separate estates representing different interests in the same property, entitling first the life tenant to possession, and then, after her death, the holder of the remainder (sometimes called the remainderman). c. Rule of construction 1. When you have something thats ambiguous 2. That courts/lawyers will apply - great argument 3. Ought to construe things as a fee simple a) Easy/certain d. Standardization of estates - once the estates system developed, judges decided that standardization of estates furthered alienability by facilitating standardized transfers of the same resources, either by the owner or by the owners heirs or devisees. 1. Numerus clausus - prohibition of new or customized property interests, pg 197 a) The more simple we can make 1. The more we can concentrate more sticks in the bundle for as long as possible things will
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1. The more we can concentrate more sticks in the bundle for as long as possible things will be easier b) Applies to estates and all types of property interests c) By requiring that owners create only legally recognized property interests, which have a standardized form, the principle directly restricts freedom of ownership 1. Heller: purpose is to limit fragmentation of ownership and thus promote the easy transferability of property rights e. Life estate pur autre vie 1. When the duration of a life estate is measured by the life of a person other than the estate holder, it is a life estate pur autre vie - for the life of another f. Alienability 1. Sometimes said that a restraint on alienation is "repugnant" to a fee simple, and void for that reason. Pg 208 2. Types of restraints on alienation a) Disabling restraints 1. Withholds from the grantee the power of transferring his interest 2. O conveys Blackacre to A and his heirs but any transfer hereafter in any manner of an interest in Blackacre shall be null and void 3. White v. Brown, pg 202 b) Forfeiture restraints 1. If the grantee attempts to transfer his interest, it is forfeited to another person 2. O conveys Blackacre to A and his heirs, but if A attempts to transfer the property by any means whatsoever; then to B and her heirs c) Promissory restraints 1. Grantee promises not to transfer his interest/alienate the property 2. Enforceable by the contract remedies of damages or injunction 3. Rare except in landlord/tenant 4. O conveys Blackacre to A and his heirs and A promises for himself, his heirs, and successors in interest that Blackacre will not be transferred by any means 3. Distinction between absolute and partial restraints, pg 209 a) Partial restraint - limiting conveyance to certain persons or putting a time limit on the restraint 1. General rule is that a restraint on alienation that is for a reasonable purpose and limited in duration is valid 2. Most are void 3. Might just be bounded in time b) Absolute restraint 1. No matter what type of restraint, a total restraint on alienation of a fee interest is void. i. Economic efficiency - restraints prevent property from moving into the hands of the person who would use it most productively g. White v. Brown, pg 202 1. Facts: Lide died leaving a will that expressly stated he didnt want his home to be sold but for White to live in it. 2. Issue: Will a will be interpreted as conveying a fee estate unless the words and context clearly evidence an intention to convey a lesser estate? 3. Holding: Yes. Interpreting the language here as only a life estate would create a partial intestacy. There is a general policy against creating intestacy where a reasonable alternative interpretation exists. Fee estate in White. 4. Rule: Unless the words and context of a will clearly evidence an intention to convey only a life estate it will be interpreted as conveying a fee estate
C. Trusts 1. What is a trust? a. Take property and split the legal & equitable interest in the property 1. Equitable interest give to the beneficiaries who will enjoy the use and enjoyment of the property 2. Take legal title and give to trustee who runs the trust who has fiduciary duties to manage the property, but only for the beneficiaries a) For the interest of the beneficiary not his own b) No misrepresentations b. When you split it you make the beneficiary of the trust the person you want to help you out with the gift 1. You could have another beneficiary if you want anna to have life interest
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1. You could have another beneficiary if you want anna to have life interest 2. And you want some other people to have it you name them as beneficiary interest with some remainder c. Trustee is going to be bound by fiduciary duties by beneficiaries d. Problems that can arise out of legal life estates (that is, life estates not created in trust) 2. Baker v. Weedon, pg 210 a. Facts: Weedon's will gave his property to his wife for life, remainder to his grandchildren. She ended up needing to sell some because necessary for her support. Court was asked to permit sale of certain real property. b. Issue: May a court order the sale of property which is encumbered by a future interest? c. Holding: Yes, but only if a sale is necessary for the best interests of both the life tenant and the remainderman. Remanded so Anna can motion to sell only enough to provide adequate support for her unless compromise can be reached. d. Rule: A court may order the sale of property which is held subject to a future interest, but only if a sale is necessary for the best interests of both the life tenant and the remainderman. 3. Life estate not created in trust ^^ D. Concept of waste 1. Different types of waste a. Affirmative 1. Actively doing something that makes the property less valuable clearly waste a) For example - start storing toxic waste b. Permissive 1. Dont do enough to take care of it and it just goes to shit c. Ameliorative 1. Someone has done something that makes the property more valuable but future interests in it are still upset 2. Woodrick, pg 218 2. Woodrick v. Wood, pg 218 a. Whether the holder of a remainder interest in a parcel of land may prohibit the life tenant of such property from destroying structures on the land b. Rule: For an act to constitute waste in Ohio, the act must diminish the value of the property c. Daughter got paid twice - court said you can take down the barn but must pay E. Defeasible estates: Any estate that ends, or may end, prior to its natural end point and upon the occurrence of some specified future event. 1. Any estate can be made to be defeasible 2. Three types of defeasible fee simple estates: a. The fee simple determinable 1. Every fee simple determinable is a fee simple that is limited so that it ends automatically when a stated event occurs. 2. Typical language of duration usually used to create a fee simple determinable, such as: a) so long as" b) while used for c) until 3. Possibility of Reverter: the future interest that accompanies a fee simple determinable. a) NEVER SAY POSSIBILITY OF REVERSION b) This is automatic, thats the difference between FSD & FSSC b. The fee simple subject to condition subsequent 1. Such an estate is a fee simple that is limited so that it may be cut short or divested when a stated condition occurs. 2. Typical conditional language usually used to create a fee simple subject to condition subsequent, such as: a) but if b) provided, however c) on condition that 3. Right of entry or the power of termination - two terms for the future interest that accompanies a fee simple subject to condition subsequent a) When grantor retains the power to cut short the conveyed estate before its natural termination 1. Analogous interest in grantee is executory interest c. Fee simple subject to executory limitation.
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c. Fee simple subject to executory limitation. F. Relationship between restrictions on use and restraints on alienation 1. Restraint against alienation - provision restricting the transferees ability to convey interests in the conveyed property 2. Use restriction - a restriction on the right to utilize one's personal or real property 3. Independent Order of Odd Fellows v. Toscano, pg 236 a. Facts: P acquired real property by a gift deed from Toscano. Included in the deed was a clause which purportedly restricted the use and ownership of the property to the P. Upon violation of the restriction, the property was to revert to D. P sought to a court ruling that the restrictive condition was void as a restrict against alienation and that P owned the property outright. b. Issue: Is a limitation on the use of property which also has the effect of restricting its transfer void as a restraint against alienation? c. Hold: No. Limitations on the use of property, although they might also serve to impede its transfer, will not be void as a restraint against alienation. Thus the part of clause that limits use of property is valid, but language expressly restrict the sale/transfer will be stricken as impermissible restraint against alienation. d. Two key points to take away from this case: 1. First, that some state courts have rules of construction for ambiguous conveyances - rules which may state a preference, for example, for a fee simple subject to condition subsequent over a fee simple determinable (a rule which we discussed in connection with an earlier problem); 2. Second, that there are mixed views as to whether and when restrictions on land use should be regarded as restraints on alienation. e. Notes and problems after Odd Fellows, pg 241 4. When does a use restriction embodied in a defeasible fee become so onerous that it amounts to an invalid restraint of alienation? a. When the use restriction materially affects marketability adversely 5. Two general approaches that courts may use to address restrictions on use that may appear to be restraints on alienation: a. One very formal, concerned largely with the language at issue, essentially the approach adopted by the majority in Odd Fellows; b. A second approach, considered by the dissent in that case, which looks at the effect or substance of the restriction, such that a restriction on use might fail as, in effect, an unreasonable restraint on alienation. 6. Factors that courts might consider when attempting to measure the effect or substance of a restriction on use, to determine whether it should fail as an unreasonable restraint on alienation: a. First, the remedy involved. b. Second, the effect of the use restriction on alienation. c. Third, the potential benefits or harms of the restriction to other land. d. Fourth, the extent to which the restriction on use discourages potentially valuable improvements on the property. e. Fifth, the potential impact of enforcing or voiding the restriction on gifts to charity. G. Future interests 1. A future interest is a presently existing property interest, but it confers only a future right to possession. a. Not possessory but are capable of becoming possessory at some time in the future 2. Two general classes of future interests: a. Those retained by the grantor or transferor, such as: 1. Reversion 2. Possibility of reverter 3. Right of entry b. Those created in a grantee or transferee, such as: 1. Vested remainders - vested because we know who its going to go to, remainder because its going to end naturally a) Indefeasibly vested remainders 1. Those that are both certain of becoming possessory and that cannot be divested. 2. In other words, they are: i. Given only to an ascertained person, and ii. Not subject to a condition precedent, other than the natural termination of the preceding estates. iii. Remain possessory b) Vested remainders subject to open
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b) Vested remainders subject to open 1. Such as remainders created in a class of persons. 2. These are remainders in which: i. At least one member of the class is ascertained; ii. But other potential class members may be created to share in the remainder; iii. And there is no condition precedent (other than the natural termination of the preceding estates). 3. To A for life then to the children of B, at the time of death B has another kid or something i. Thats vested because we know after As life estate she's going to take ii. If B has subsequent children after the conveyance but before the vest iii. So like to A for life then to B's children and he has one, then it can be that because who knows if he'll have another one so its subject to open c) Vested remainders subject to divestment 1. 'To B and her heirs unless C comes home then to C and her heirs' 2. IF DECIDING BETWEEN THIS AND CONTINGENT REMAINDERS, THE ANSWER IS ALWAYS CONTINGENT REMAINDER d) On exam - A remainder is vested if its given to an ascertained person (someone who's alive that we know of) 1. Person will have a letter or a name - on exam if its ascertained 2. Contingent remainders a) That might not become possessory at some future time 1. Because we dont know for sure who the people are were going to take because they're not alive yet 2. Or they're subject to something b) Remainders that are either: 1. Contingent because their takers are unascertained, or i. Example: O conveys Blackacre to A for life, then to B's children (B currently has no children) 1. B's nonexistent children have contingent remainder 2. Contingent because they are subject to a condition precedent. i. Example: O conveys Blackacre to A for life, then to B if she graduates from Princeton (B is 12yo) 1. B has contingent remainder - has to graduate from Princeton to be entitled to possession 3. Executory interests a) A future interest held by a transferee that may either divest or cut short some interest in another transferee (a shifting executory interest) or divest the transferor in the future (a springing executory interest). b) Shifting c) Springing 1. Dont need to know how to distinguish c. Basic differences between remainders and executory interests: 1. Executory interests cut short or divest the preceding interest; 2. Whereas remainders wait patiently or politely for the preceding interest to end naturally. d. Difference between an executory interest and a remainder: executory interests do not simply wait patiently or politely," 1. Beginning at the natural conclusion of a preceding estate 2. Rather, they cut off a preexisting interest when a specified condition occurs. H. Doctrine of Cy Pres, pg 306 1. In some situations, its maybe appropriate to reform a conveyance to get it to comply with what we think the granters was 2. Permits courts to revise the grantor's instrument to get as close as possible to the grantor's intentions when the grantor's actual intentions are impossible to accomplish 3. Connection with doctrine of changed circumstances w/r/t termination of servitudes VI. Co-Ownership/Concurrent Interests A. Concurrent interests 1. Five types of concurrent interests known at common law, and focus in this section on three of those types: a. The tenancy in common;
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a. The tenancy in common; 1. Tenants have separate but undivided interests in the property that are descendible and that may be conveyed by deed or will. a) There are no survivorship rights between tenants in common. b) A conveyance of real property to 2 or more persons who are not married to each other is presumed to convey a tenancy in common. c) Potential problems of coordination and exclusion among concurrent owners, and the possibility of an action for partition, either in kind or by sale. b. The joint tenancy 1. Singular characteristic of a joint tenancy is the right of survivorship between joint tenants. a) Advantages 1. Not subject to probate - which is an expensive, cumbersome, time consuming judicial procedure to transfer a decedent's property 2. Creditors of a joint tenant must seize and sell the debtor's joint tenancy interests during the debtor's life because the joint tenant debtor's interest disappears at his death 2. Importance of intent (and the correct phrasing) to create a joint tenancy, and 4 traditional unities a) Intent 1. Clearly expressed intention in the grant itself b) Four Unities a. Time i. Must receive interests at same moment in time b. Title i. Must receive interests under same instrument c. Interest i. Must have identical interest in the property 1. Same share of the undivided whole 2. Same durational estate d. Possession i. Each tenant must have right to possession of the whole property in its entirety c) Common law 4 unities for creation required both tenants acquire interest at same moment which in turn required that one party holding the whole had to convey his interest to a 3rd person ("straw man") who would convey to the joint tenants in order for such party to create a joint tenancy between himself and another. a. Modern law has abandoned this obsolete requirement as to creation - there is little virtue in adhering to cumbersome feudal law requirements. b. Riddle v. Harmon, pg 324 (below) d) Next, we started our discussion of modern trends away from a strict insistence on the four unities, beginning with the possibility of unequal shares. e) Severance - destruction of any one of the unities would operate to sever the joint tenancy, because the four unities were necessary to create the joint tenancy at common law 3. Riddle v. Harmon, pg 324 a) Facts: P's wife owned real property in joint tenancy with P but didn't want her interest to pass to P when she died. Terminated joint tenancy by granting herself undivided one half interest, which makes her tenant in common. Will devising her tenancy in common to a third party was executed. P challenged and wife's executrix D appealed. b) Issue: May a joint tenancy be terminated by the conveyance by one joint tenant of his interest in the joint tenancy property to himself? c) Held: One joint tenant may unilaterally sever the joint tenancy without the use of an intermediary device. a. Straw man not necessary (a 3rd party to whom a transfer of property is made in order to effectuate a transaction that may not otherwise be allowed) d) Rule: A joint tenancy may be terminated by the conveyance by one joint tenant of his interest in the joint tenancy property to himself e) A minority of jurisdictions not requiring reconveyance to a straw man for severance permit termination of a joint tenancy by the filing of a declaration of an intention to do so, eliminating even the fiction of having to convey to sever. f) Different methods and limitations that might be used or required to unilaterally sever a joint tenancy a. We usually dont require recording/notice to sever JT
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a. We usually dont require recording/notice to sever JT b. Deed to yourself as TiC (Riddle v. Harmon) not best way c. Straw man deed to a friend and have them deed it back d. Trust deed it to your kid in trust, naming yourself beneficiary 4. Harms v. Sprague, pg 330 a) Facts: P & Harms owned joint tenancy, Harms executed a mortgage favoring Simmons who assigned his interest to Sprague (D). Harms died and P contended that the mortgage died with him. b) Issue: Does a mortgage on a joint tenants interest survive the mortgagor? c) Held: No, unity of title required for joint tenancy & if mortgage constituted a change it title that would destroy the unity. But Illinois recognizes that mortgage does not constitute a change until foreclosure plus running of redemption period so mortgage does not sever joint tenancy therefore the entire estate of the decedent JT passes to the survivor. This effects a nullification of any liens thereon so Ds interest was extinguished upon Harms' death. d) Rule: A mortgage on a joint tenant's interest does not survive the mortgagor. 5. The crucial difference between this case and Riddle is that the mortgage didnt technically transfer title and, therefore, didnt sever JT 6. Title theory of mortgages a) Holds that a mortgage effects a transfer of legal title subject to an equitable right of the mortgagor to reclaim title by paying off the loan secured the mortgage (equity of redemption) 1. Mortgage by one joint tenancy had the effect of severing JT because unity off interest destroyed. i. Not restored by redemption because time & title unities not present. 2. After mortgage, former JTs would become tenants in common and there would be no right of survivorship 7. Lien theory of mortgages a) Holds that the mortgagee only has a lien against the property (an inchoate right to seize title if the loan is note paid). 1. Mortgage by one JT makes no alteration to title and thus does not sever the JT b) more importantly, the different rules that courts may apply in joint tenancy situations to mortgages and other conveyances, such as leases or life tenancies, that fail to convey a full fee interest; 8. Delfino v. Vealencis, pg 338 a) Facts: P owned undivided 99/144 interest, D owned 45/144. Tenancy in common b) Issue: Are partition sales employed only where partition in kind is unworkable? c) Held: Yes, partition sales should only be employed in extraordinary circumstances because the forced sale of a party's interest should be avoided. 1. In this case limited number of competing interests/ease of division = partition in kind very workable d) Rule: Partition sales are employed only where partition in kind is unworkable. e) Bray thinks owelty is a mistake for something that's going to be related to the partition 1. Paying twice 2. Vealencis got less in the partition in time then they would have in the partition by sale i. Partitions in time can be tricky f) Including both: 1. The traditional presumption (discussed in Delfino) that many courts apply in favor of partitions in kind i. Partition way to remedy isutations when joint tenants not getting along ii. Modern trend to debunk presumption iii. Delfino - The new trend has not yet swallowed up the old trend 2. Modern trend toward ordering partitions in sale, despite this presumption. g) Problems with valuation associated with partitions 1. Arguments that the Delfinos attorneys might have made to try to overcome the traditional presumption as applied in that case. c. The tenancy by the entirety. 1. Partition unavailable 2. Have to be married couple 2. Ouster. a. Ouster exists when the cotenant in possession refuses to allow another cotenant to share the possession
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a. Ouster exists when the cotenant in possession refuses to allow another cotenant to share the possession after the latter has made a demand for possession. 1. Majority rule: a cotenant in exclusive possession does not owe rent to her cotenants, absent ouster. b. One cotenant cannot adversely possess the property against another 1. Because they each have a right of the property of whole c. When one cotenant houses another is when problems arise 1. Cotenant usually liable for rent on the property to that tenant 2. Or for a share in certain profits to that d. Swartzbaugh v. Sampson, pg 351 1. Facts: They're cotenants - husband leased some property to another person who wants to put boxing thing there a) Doesnt want to lose that right of survivorship - wife b) Cannot cancel c) Uses various legal rights to annoy other guy 1. Deny access to the land, but could claim ouster and demand rent from W 2. Use legal rights to annoy (picketing) 3. Possibly Waste argument, but it would be tough 2. Did this lease (between husband and Sampson) sever the joint tenancy? NO a) Different conveyances that sever joint tenancies 3. Issue: Can one joint tenant who has not joined in leases executed by her cotenant and a third party maintain an action to cancel the leases where the 3rd party is in exclusive possession of the leased property? 4. Rule: The act of one JT without express or implied authority from, or consent of, his cotenant cannot bind or prejudicially affect the rights of that cotenant; but, a lease to all of the joint property by one JT is not a nullity but rather is valid to the extent of his interest in the joint property. a) Leases at issue were neither invalid nor severances of the joint tenancy 5. Ouster isn't proper until perfect adverse possession a) Ouster gives her a way to just sue Sampson, goal is to make boxing unpleasant enough for sampson so he leaves 6. Mrs. Swartzbaughs concerns about adverse possession, and the courts conclusions on this issue. a) Bottom of pg 354 B. Servitudes Generally/Easements in Particular 1. Fundamental tensions that exist in many servitudes cases with courts attempting to: a. Achieve fairness between the parties, b. Respect the intent expressed in the easement, c. Acknowledge the interdependence of some landowners, d. Keep property easily marketable, without unnecessary encumbrances. 2. Broad terminological categories of servitudes: a. Easements 1. Agreement that allows a non owner to enter upon and use a piece of property possessed by another person a) When we create them we'll create them so they can run with the land b) This right to use shouldnt be confused with the right to possess (Thats associated with ownership right/not a use right) c) Evolution of easements essential to understanding the subsequent evolution of real covenants and equitable servitudes, and more modern efforts to simplify this area of the law. creation of easements and the application of the statute of frauds. 2. Two ways to classify easements, Appurtenant/in gross (every easement is one or the other) or affirmative/negative a) Appurtenant easement - very clearly going to run with the land, both pieces of property 1. One that benefits the owner of another parcel of land i. Benefited parcel is dominant estate ii. Burdened parcel is servient estate b) Easement in Gross - designed to deliver a personal benefit 1. That means one person holds it personally, if you sell it to neighbor easement will not run with it i. Tended not to be transferable in common law, relaxed now ii. Can assign the rights c) Affirmative easements - permits a person to use the servient estate in a specified manner
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c) Affirmative easements - permits a person to use the servient estate in a specified manner 1. Majority are affirmative, only a few types of negative may be created d) Negative easements - confers only the right to prevent specified uses of the servient estate 1. Confers no right to use the servient estate 2. Holder of easement rights has the right to restrict the way someone else uses their property 3. Creation a) Express Grant 1. Needs to comply with statute of frauds - express easement 2. A writing signed by the grantor 3. Willard v. First Church of Christ, Scientist, pg 768 i. Issues related to the creation of express easements, including the Willard case. 1. Related to Willard, we saw the common law rule that a grantor cannot reserve an easement to benefit a third party (a rule which remains in some jurisdictions), and we also saw the California Supreme Court overturn that rule in Willard. 2. We also briefly discussed some initial categories of easements, such as positive and negative easements, and easements appurtenant and easements in gross. 4. The rest are how easements are created without an express grant b) Estoppel 1. Relied to detriment on his representation that you could use their land or w/e (easement) 2. Holbrook v. Taylor, pg 774 i. Was given permission to use it, used it while building house and other stuff for long time, then dispute arose ii. Rule: Right to the use of a roadway over the land of another may be established by estoppel c) Prescription 1. Satisfies elements we would require for adverse possession we would require for ownership i. Analogous to adverse possession 2. But were talking about it in this sense that its not ownership i. Just continuing to use that door on Davut's land ii. Adverse possession (about ownership) and prescriptive easement (are about use, easements are about use not ownership) 1. Might have established prescriptive easement even if I have established adverse possession its not ownership 3. Elements i. Adverse use under a claim of right 1. Use of another's land must be adverse and not with permission of the owner 2. Objective & subjective tests ii. Open and notorious iii. Continuous for the prescriptive period 1. Same as the limitations period applicable for adverse possession in that jurisdiction d) Implication 1. Prior existing use i. One original owner; ii. Relevant necessity existed at the time of the severance; iii. There was a prior existing use that was apparent, continuous, and permanent; iv. Necessity (varies by jurisdiction). 1. In some jurisdictions, reasonable necessity 2. In some jurisdictions, reasonable necessity if the easement would benefit the grantee, but strict necessity if the benefit would benefit / would be reserved by the grantor. v. Van Sandt v. Royster, pg 779 1. Ps basement flooded. Sued to enjoin D from using sewer 2. Is there an apparent easement even when sewer pipe isnt visible? 3. Rule: Purchaser can be charged with notice of a prior necessary use so as to create an implied easement where the use was not visible, but a reasonable
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create an implied easement where the use was not visible, but a reasonable inspection would have made the use apparent. 4. Held: Apparent easement existed easement need not be visible to be apparent. P knew D had appliances and was using sewer. P bought the house and knew it had plumbing, so was aware of sewer. i) Court: Easement by implication was created was necessary for enjoyment of original grantors property (Bailey who owned the lots when they were all 1 property and installed the plumbing for the benefit of all 3) 2. Necessity i. One original owner ii. Relevant necessity existed at the time of the severance iii. The easement is strictly necessary. iv. Othen v. Rosier, pg 786, easement implied by necessity & the easement by prescription 1. Easement by necessity issue - important for a would-be easement holder to demonstrate that the necessity existed at the time of conveyance, and we talked about the problems with the evidence offered on this issue. 2. Rule: In order to create an easement by necessity, the necessity must have existed at the time that the estate was created 3. Prescriptive easement issue - importance to the court of those facts which, according to the court, showed that Othens use of the alleged easement was permissive, and not hostile. 4. Potential problems with the courts conclusion on the prescriptive easement issue, and additional arguments that some have suggested might weigh in favor of recognizing prescriptive easements in situations similar to this case. 4. Termination of Easements a) Next, we talked about the various ways that an easement can be terminated, including: 1. Expiration i. Expires by its defined terms 2. Release i. Easement holder/dominant estate expressly releases 3. Merger i. If the easement owner later becomes the owner of the servient estate 4. Prescription i. Same way it can be created 5. Abandonment i. Unequivocal manifestation or demonstration of the intent to abandon 1. Mere nonuse not sufficient ii. Got to do something that makes it reeeeeally clear that you dont want to use it anymore iii. Intent to abandon and some conduct that shows you're not going to use 6. Estoppel i. Reasonably relies upon a statement or representation by the easement owner 7. Condemnation b) Preseault v. United States, pg 831 1. Example of abandonment in action. P says feds took their property when it authorized conversion of railroad way over their property to public trail use 2. Issue: Does this change of use constitute a taking? 3. Held: Yes, abandonment effected by acts inconsistent for the use for which the easement exists. When the railroad took out the hardware, that was an act inconsistent with use as a rail line & abandonment was effected & interest D had in P's property was extinguished. Creation of recreation path was not legitimate expansion of original easement but a taking requiring compensation. 5. Rule: A change in use of an easement from a rail line to a recreational path constitutes a taking 6. Court looking at what people are actually trying to do and trying to get the law to conform with peoples' actual practice i. Trying to conform to custom 7. Also issues of easement scope modification, ambiguous conveyances that might be
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7. Also issues of easement scope modification, ambiguous conveyances that might be interpreted as fee or easement interests, and a brief introduction to takings. 5. History of Negative Easements and Conservation Easements a) Four traditional types of negative easements recognized at common law: 1. An easement not to block windows; 2. An easement not to block the flow of air through a defined channel; 3. An easement of support for a building; 4. An easement not to interfere with the flow of an artificial stream. b) Equitable servitudes - attempt to get the same kind of functional thing we're talking about with negative easements if you want it to run with the land under common law c) Conservation easements. 1. Created by statutes b. Covenants 1. Real covenants a) Elements required for the creation of a real covenant: 1. Compliance with the statute of frauds; 2. Intent of the parties to create a covenant running with the land; 3. Privity of estate, including: i. Horizontal privity ii. Vertical privity 4. Touch and concern the covenant must touch and concern the land. b) Various ways a covenant can be terminated: 1. Merger of the benefit and the burden 2. A formal release, usually written and recorded 3. Acquiescence 4. Abandonment 5. Doctrine of Unclean Hands i. If you're trying to enforce a covenant you yourself have broken, trying to get it enforced 1. This doctrine might operate as an equitable bar to legal rights you might have ii. Sort of like a super fair estoppel iii. Can pop up in a lot of diff situations 1. Has a relationship to contractual types of situations 2. Substitute for the representations of estoppel 6. Laches 7. Estoppel 8. The Doctrine of Changed Conditions i. For it to apply it has to apply to all of the affected property ii. Everyone pretty much agrees that conditions changed for those interior lots 1. According to the court they haven't changed 2. Times to have changed for all the property at issue iii. Courts are loathe to apply changed conditions to modify w/e covenant or something iv. Something about refuse equity v. Courts may reinterpret or rescind servitudes if the land is no longer suitable for the original. 1. (Denied) WLC v. Trusk Ct. denies development in covenant-restricted area b/c conditions hadnt changed enough. Area was still fit for covenanted use. 2. (Denied) Rick v. West same as above vi. If you're dealing with an issue of changed conditions/covenants/nuisance type question/termination of a servitude, walk him through the doctrine of changed conditions & any other doctrines that might apply to an easement or servitude and why that easement/servitude should be abandoned vii. "Times a changin'" viii. Western Land Co. v. Truskolaski, pg 882 1. Rule: A restrictive covenant is enforceable so long as its provisions remain of substantial value ix. Rick v. West, pg 887 1. Rule: Courts will not engage in a balancing of equities but will enforce restrictive covenants unless there is a substantial change of conditions in the
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restrictive covenants unless there is a substantial change of conditions in the general neighborhood 2. REMEDIES ARE SUPER IMPORTANT - Choice of remedy matters so much i) Argument about what remedies should apply is just as crucial as winning the doctrine fight ii) She wanted and got injunctive relief 3. You're representing West who wants to stay no matter what, hates Rick, would rather rot in hell then him get that property - job is to deliver what she wants to stay in her house forever 4. Have to win on changed conditions fight first, then win damages 2nd i) Because if you dont: 1. Damages are just as good as injunctive relief (would've been cheaper) 2. Conditions wont be enforced 3. He'd write 1000$ check and get property c) We then talked about extensions of changed conditions to easements in the Restatement (Third) and some jurisdictions, as well as modifications of the traditional application of and remedies for the changed conditions doctrine (for example, in some state statutes). d) Related to this last point, we also discussed in some detail the various alternative remedies that a court might impose for breaches of servitudes, when injunctive relief and damages might variously be important, and the connection between these choices and similar choices in nuisance law. 2. Equitable servitudes a) Attempt to get the same kind of functional thing we're talking about with negative easements if you want it to run with the land under common law b) Substitute for privity - NOTICE 1. Why is notice important? i. Need to give notice that there's something tied to the land to be bound 2. Tulk v. Moxhay, pg 854 i. The court is doing what it thinks is fair ii. Revolutionary example of a court doing basic fairness and justice doing equity iii. Very different legal system we have now iv. In one fellow swoop v. Rule: Privity of estate notwithstanding, a person who acquires real property with notice of a restriction placed upon it will not be allowed, in equity to violate its terms 3. Sanborn v. McLean, pg 859 i. Joined decree kept them from building gas station ii. Think of implied reciprocal negative easements as if implied equitable servitudes iii. You should've taken a look around & realized no one was constructing gas stations and stuff, and you should've had constructive notice 1. Should've asked someone, or should've been able to figure it out iv. Basically dont be a jerk v. Hard to tell what the court says they should've had notice of 1. Court just says should've looked around should've figured it out I guess that building a gas station is a nuisance per se 4. Requirements for an equitable servitude to run: i. The intent of the original parties for the promise to run with the land ii. That successors have actual or constructive notice of the covenant Turk, p854 iii. That the servitude touch or concern the land. Shelley, p877 1. Only covenants and servitudes that compel the covenanter to submit to some restriction on the use of his property touch or concern the land. 2. Modern approaches to the touch and concern element have largely replaced it with a reasonableness standard - looks at the changes in value on your property iv. OLD RULE FOR TOUCH AND CONCERN 1. Servitudes that compel someone to submit to a restriction on the use of property, those much touch and concern the land i) So if you're going to have a restrictive covenant/equitable servitude that has to touch and concern the land ii) Doesnt count at common law - you have to pay this much for gardens or something that doesnt touch and concern your land
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something that doesnt touch and concern your land 2. Restrictive covenant that says you have to pay HOA is not going to be a touch and concern problem because it clearly makes the land have more value 3. Touch and concern is still around, the old rule focused on your property c. Profits d. Licenses. 1. Difference between a license and an easement 3. Discriminatory Covenants, Shelley v. Kraemer, and Touch & Concern a. Shelley v. Kraemer, pg 877 1. Neighbors tried to uphold a restrictive covenant that prohibited the sale of any neighborhood homes to any person "not of the Caucasian race" 2. Cant use courts to enforce racial discrimination covenant so because it becomes state a) Enforces these things would amount to state action, anytime the state enforces covenants of any sort, you have state action 3. State court enforcement of private, discriminatory restrictive covenants constitutes state action under the 14th amendment a) Enforcing racially restrictive covenants would amount to state action and then its laughably racially discriminatory on its face and violates equal protection/14th amendment b) Nothing in this opinion that limits state reach 4. Very limited view of Shelley a) Racially restrictive covenants or covenants that would violate fundamental civil liberties protected by state/federal things b) Limited to racial covenants and other covenants that seem to violate civil liberties c) Huge space in between those 2 poles, between arguing that Shelley has no limits and then that its limited to race and other things like it/civil liberties 5. Under the R3 of Property racially restrictive use covenant would be invalid even if it were not unconstitutional to enforce it 4. Termination of Covenants and Pocono Springs v. MacKenzie a. Pocono Springs Civic Association v. MacKenzie, pg 892 1. Rule: A landowner cannot abandon property to which he holds perfect title 2. MacKenzie case, and the varied (and ultimately unsuccessful, in that case) attempts by the MacKenzies to abandon their property and free themselves from a covenant to pay homeowners association fees. 3. In particular, we discussed the justifications for this result, possible arguments for the opposite result, and what options the MacKenzies might have had after the ruling in this case. 5. Common Interest Communities a. Types of common interest communities that exist: 1. Homeowners associations a) Valid if reasonable b) Ensure they will enact rules and regulations that are reasonably related to the promotion of the health, happiness, and peace of mind. c) BJR 2. Condominiums a) Recorded master deed 3. Cooperatives. a) 40 West 67th Street Corp v. Pullman, pg 913 1. Unhappy about professor who's retired is operating illegal bookbinding there's bad chemicals bad i. Retired prof and wife are up all night 2. Fight is really with the people who are running the co op 3. What's the standard for the people running the co op? i. Business judgment rule (BJR) - generally deferential standard in which courts tend to exercise restraint and uphold decisions made by common interest communities if: 1. they are made in good faith and within the scope of the deciders authority; and 2. they are plausibly within the exercise of deciders business judgment ii. 2 basic parts to the rule (see a lot in biz orgs, directors to shareholders) ^^ 1. In this context: "acting in good faith and on the merits their decision seems to have been carried out in the exercise of business judgment" b. Alternative standards that may be applied in these situations in place of the business judgment rule: the
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b. Alternative standards that may be applied in these situations in place of the business judgment rule: the very similar reasonableness and balancing tests that some courts apply. VII. LANDLORD-TENANT LAW AND HOUSING DISCRIMINATION A. Landlord-Tenant 1. Traditional leasehold estates: a. The term of years; b. The periodic tenancy; c. The tenancy at will 1. Tenancy that can be terminated at the election/choice of landlord or tenant 2. Asymettric tenancy at will - option to terminate is only in the hands of the tenant a) Old rule asymmetric tenancy at will - give the landlord a similar option to terminate b) Other approach to construe what's going on court calls it determinable life estate 1. Trying to effectuate the intent of the grantor 2. Give this tenant something that amounted to a terminate determinable life estate 3. Determinable life estate - life estate means going to end when its holder dies i. Determinable - also going to end or could end when some condition happens 2. Garner v. Gerrish, pg 423 a. Rule: A lease may provide for termination at the will of the tenant only b. Lease which, on at least some interpretations of its facial language and the parties intent, does not easily fit into any of the traditional leasehold categories. 1. Importance of courts fundamental views of the landlord-tenant relationship - effectuate intent B. Housing Discrimination, Unlawful Selection of Tenants, and the Fair Housing Act 1. Constraints on housing discrimination imposed by the Fair Housing Act (as well as the 1866 Civil Rights Act). 2. United States v. Starrett City, pg 435 a. Anti discrimination prong wins out b. Way to talk about how non Ms. Murphy violations of FHA can occur c. Talked a lot about advertising problems with Ms. Murphy, but Ms. Sterrett is like just a straight violation of FHA d. Discriminatory motive, DONT NEED IT C. Subleases and Assignments 1. Assignment - giving over the entire lease a. Sublease is just a portion of the lease 2. Privity of contract - legally significant, going to care about it when it involves a contract a. Privity - denotes a voluntary transactional relationship between 2 or more people or entities, pg 448 b. Landlord/tenants said to be in privity of estate sometimes 1. Sublease does not create privity of estate between landlord and subtenant 3. Used to have to have some commercially justifiable reason to say no to sublease or something 4. Kendall v. Ernest Pestana, Inc., pg 450 a. Commercial lease with a provision prohibiting assignment or sublease without the lessors prior written consent b. Issue: Whether, under such a provision, a lessor may unreasonably or arbitrarily withhold her consent to such a sublease or an assignment. c. Two approaches to this problem: 1. First, the traditional approach, according to which, if the lease contains a general approval clause, a lessor may arbitrarily refuse a proposed assignment, no matter how suitable the proposed assignee and how unreasonable the lessors objection; 2. Second, the approach endorsed by the Restatement (Second), according to which consent may be withheld only if the lessor has a commercially reasonable objection to the assignment. a) Under this approach, the landlords consent cannot be unreasonably withheld unless a freely negotiated provision in the lease gives the landlord an absolute right to withhold consent. D. Tenants Who Default, Self-Help, and Summary Proceedings 1. Trend toward prohibiting self-help repossession by landlords a. Berg v. Wiley, pg 460 1. Facts: D locked P out of the premises when P delayed making certain remodeling changes to meet health code requirements 2. Old common-law rule that a landlord may potentially use self-help without incurring civil liability for wrongful eviction provided the landlord is legally entitled to possession, and provided the means of reentry are peaceable.
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E.

F.

G.

H.

I.

means of reentry are peaceable. 3. Held: Self-help is never available to dispossess a tenant in possession who has neither abandoned nor voluntarily surrendered the premises. a) A landlord may not remove a breaching or defaulting tenant's possessions or bar such tenants access to the leasehold without resorting to judicial remedies 2. Summary proceedings - ostensibly give landlords a quick, efficient means to recover possession, and sometimes rent, after terminating a tenancy. a. Connection between the rise of summary proceedings and the decline of self-help, 1. Landlord concerns probably because too slow 2. If we dont give them the right to self help and not fast way to handle a) Then landlords will stop providing these kinds of rentals Abandonment, Surrender, and Mitigation 1. Distinguish between abandonment and surrender by a tenant. a. Abandonment - If a tenant simply abandons leased property, by vacating without justification, without any intention of return, and with an accompanying default on rent, the tenant still remains liable for the rental value of the leasehold. b. Surrender is a term of art it connotes a tenants offer to end a tenancy, and, if accepted, it extinguishes the tenants liability for future rent. 2. Obligations of a tenant who defaults a. Sommer v. Kridel, pg 469, obligations of landlord 1. D vacated apartment leased from P before lease ended 2. Traditional common law rule on mitigation: a landlord is under no obligation to mitigate damages caused by a defaulting tenant. a) Court here rejected this and applied a rule requiring landlords to mitigate damages arising from tenant default on a residential lease. b) Problem of lost volume, if the landlord rents out a 3rd vacant unit to a 3rd party whos interested in the 2nd unit because they'd make more money 3. Rule: A landlord has a duty to mitigate damages when he seeks to recover rents due from a defaulting tenant a) Objectively reasonable Quiet Enjoyment and Constructive Eviction 1. Reste Realty Corp. v. Cooper, pg 483 a. Implied covenant of quiet enjoyment and the doctrine of constructive eviction b. Quiet enjoyment - the right to the undisturbed use and beneficial enjoyment of real property by a tenant or landowner, often expressly contained in covenants. c. Doctrine of Constructive Eviction - an action whereby the landlord renders the property unsuitable for occupancy either in whole or in part, so that the tenant is forced to leave the premises d. Rule: When a landlord causes a substantial interference with the enjoyment and use of the leased premises, the tenant may claim constructive eviction. Suitability 1. Implied warranty of suitability - sometimes landlords will say if you're willing to waive will give you break on rent a. Commercial equivalent of Hilder, can waive b. Usually dont let people waive implied warranty of habitability (I think he circled the H when I did this) Implied Warranty of Habitability 1. Hilder v. St. Peter, pg 493 a. Rule: An implied warranty of habitability exists in residential leases b. Rented dwelling which is not habitable amounts to a breach of contract by lessor and contract/tort damages are available c. Court in Hilder recognized an implied warranty of habitability in residential leases, according to which the landlord must deliver premises that are safe, clean, and fit for human habitation. Affordable Housing and Related Residential Controls 1. Chicago Board of Realtors, Inc. v. City of Chicago, pg 508 a. Basically codifies IWH - codifying liability 1. Establish landlord responsibilities/tenants rights b. Arguments made against the city ordinance at issue in Chicago Board of Realtors, Inc. v. City of Chicago 1. Having to pay interests on all deposits, going to increase the amount of money landlords are going to have to pay
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to have to pay 2. They think this is going to increase costs to landlords, those costs are going to be passed on to the tenants a) Wont be able to find affordable housing b) Going to something for the development of rental property 3. Setting out a clear rule for repairs & stuff? a) Tenants can do it on their own and hold it from the rent 1. Under the old rules this stuff prob wouldnt get done b) Going to be more expensive for the landlord c) Landlord will raise rents d) Will drive tenants out of the market c. Ways in which these arguments could apply to other landlord-tenant contexts 1. Basic fairness 2. Efficiency J. Nuisance 1. Intersection of property and contract to the intersection of property and tort. 2. Traditional maxim often invoked as one of the guiding principles of nuisance law - expresses the notion that one should use ones own property so as not to injure the property of another. a. Sic utere tuo ut alienum non laedas - meaning that one should use ones own property in such a way as not to injure the property of another. 1. Common law of neighbors - how the law used to fix fights people living close by 3. Morgan v. High Penn Oil Co., pg 731 a. P sought to enjoin D from emitting gas/odors from its refinery and to recover damages from past impairment of use/enjoyment of their property b. Rule: Lawful conduct which is non-negligent may constitute a nuisance if it is intentional and unreasonable under the circumstances c. Broader definition based in part on the Restatement of Torts, according to which a nuisance may be defined as: 1. A substantial and nontrespassory invasion of the use and enjoyment of anothers land, that is caused either by 2. Activities that are intentional and unreasonable, or by 3. Activities that are negligent, reckless, or abnormal 4. Nuisance Liability - doctrinal test a. Interference with [neighbors use/enjoyment of land] b. Substantial c. EITHER 3a. Intentional & unreasonably, or a) 3b. Negligent, Reckless, or abnormal d. Step 1 then Step 2, then either 3a or 3b. 1. Start with OLD MAXIM then go to this 5. Nuisance Liability Torts a. What is a nuisance, and when do we find one? 1. Two approaches to this determination in the case of an intentional/unreasonable nuisances. a) Balancing test (Morgan)- applies a where courts should consider whether the gravity of the harm at issue outweighs the utility of the (defendant) actors conduct. 1. Discussed in the Restatement b) Threshold approach - Jost v. Dairyland Power 1. Essentially, under this approach, instead of comparing whether the social benefits of the relevant conduct outweigh its costs, courts analyze whether the level of interference with the plaintiffs land by the defendants conduct crosses some threshold that marks the point of liability. 6. Nuisance Remedies a. Remedies 1. Injunction 2. Damages < Permanent 1. "Temporary" (split in 2) 3. No or nominal relief 4. Reverse damages b. Rick v. West!!!!! c. Estancias Dallas Corp. v. Schultz, pg 739
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c. Estancias Dallas Corp. v. Schultz, pg 739 1. Rule: Even though a jury finds facts constituting a nuisance, equities must be balances in order to determine if an injunction should be granted 2. Doctrine of balancing the equities, which a court should apply when considering injunctive relief after finding a nuisance. a) Facial requirements for balancing the equities: under this doctrine, a court considers the injury which may result to the nuisance defendant and to the public if an injunction is granted as well as the harm to the nuisance plaintiff if the injunction is denied. 3. If were balancing the stuff, if you think about this in terms of externalities a) Court balances equities and grants injunctive relief 1. If you had argued there's some sort of housing shortage in Houston the apartments would've had more value and maybe overweighed the other thing b) Court says its balancing but Bray doesnt think thats how it decides the issue of injunction or damages 1. If you look at the relevant costs and benefits thats not what happening 2. Defining what you're balancing is the ball game i. If you just look at the apartment owners building 3. Court says its balancing the equities and all this other stuff its hard to see why its not just granting damages d. Boomer v. Atlantic Cement Co., pg 743 1. Court discarded a previous rule from the jurisdiction - provided that whenever the damage resulting from a nuisance reaches a certain point, then nuisances should be enjoined even if marked disparity be shown in economic consequences between the effect of the injunction and the effect of the nuisance. 2. This admittedly settled rule discarded in large part, to avoid the immediately drastic result and remedy of injunction, which would close down the plant at once. 3. Court awards permanent damages a) Imposing permanent damages imposed a servitude on the land of the plaintiffs b) Objections of the dissent to the award of permanent damages in lieu of injunctive relief. 4. Notion of permanent damages here is appropriate because these problems are going to come wherever cement factories are located a) Cant fix dust/noise b) Now we've given cement companies a reason to invest in the appropriate sound and other stuff fix in the future e. How to calculate permanent/temporary damages 1. People who get perm damages probably will move and they already got future damages. Next person will probably buy cheaply and not get anything for damages stuff 2. Temporary damages - All the harm theyve suffered to them and their property to date a) Could say 5 years ahead of time b) THIS MAY BE SWITCHED, CHECK PG 745 f. Courts recognition that imposing permanent damages imposed a servitude on the land of the plaintiffs, and the objections of the dissent to the award of permanent damages in lieu of injunctive relief. g. In conclusion, we talked about the various potential advantages and disadvantages of damages (both permanent and otherwise) compared to injunctions as remedies for nuisances, and when each remedy might be most appropriate. 7. Nuisances Concluded a. Spur Industries v. Del E. Webb Development Co., pg 750, (Spur v. Webb) 1. Rule: The doctrine of coming to the nuisance does not prohibit granting injunctive relief against the nuisance 2. Enjoined a nuisance while awarding the reverse damages based in part about coming to the nuisance concerns. 3. Four possible remedy rules of decision in nuisance cases: a) Abate the nuisance at issue by granting the plaintiff injunctive relief (seen in Morgan and Estancias); b) Award the plaintiff damages (seen in Boomer); c) Deny all relief; d) Abate the nuisance at issue by granting injunctive relief -- provided that the plaintiff indemnifies the defendant for the cost of abatement (seen in Spur). b. Distinction between public and private nuisances, the practical importance of the distinction, and the
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b. Distinction between public and private nuisances, the practical importance of the distinction, and the relationship between nuisance law and environmental controls. 8. History of Zoning a. Moving forward, we began our study of zoning, briefly discussing: 1. the history of urban reform and evolving real estate interests that gave rise to the zoning movement; 2. the relationship between zoning, nuisance, servitudes, and eminent domain; 3. the early history of zoning, the mechanics of zoning and a brief history of the Standard State Zoning Enabling Act, and the litigation background of Euclid. b. Euclid v. Amber, pg 930 1. Cumulative zoning - identifies land use in a spectrum from higher to lower. Least dense single family residential use is the highest use, etc. a) Idea is that all uses at the level of the zoned district and higher will be permitted 2. Rule: A zoning ordinance, as a valid exercise of the police power, will only be declared unconstitutional where its provisions are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare 3. Justifications for allowing zoning in Euclid: a) Benefits of zoning 1. Air & light, fire & safety i. Most important, classic, draws from old law, often cited 2. Safety & security 3. Noise 4. Wholesome family environment 5. parasitic apartment developments b) Look to nuisance law top of p.935 1. Nuisance maxim sic utere tuo ut alienum non laedas so use your own as to not injure anothers property 2. The states power to forbid the erection of a building of a particular kind ... , like the question whether a particular thing is a nuisance, is to be determined, not by an abstract consideration of the building or of the thing considered apart, but by considering it in connection with the circumstances and the locality ... like a pig in the parlor instead of the barnyard. c. With respect to Euclid 1. the courts repeated references to nuisance law 2. the courts use of then-recent urban history 3. the courts defense of elasticity in the application, though not the meaning, of constitutional principles, statutes, and ordinances 4. the courts insistence on legislative deference 9. Zoning and the Nonconforming Use a. Flexibility in land use regulation by examining nonconforming uses: 1. a lawfully preexisting use that does not comply with subsequently adopted zoning requirements. b. PA Northwestern Distributors, Inc. v. Zoning Hearing Board, pg 945 1. One of the chief methods for extinguishing such nonconforming uses - amortization. a) Two approaches to amortization: 1. The conclusion that the amortization of a nonconforming use is per se unlawful; 2. The view that amortization provisions should be assessed under a balancing test, which takes into account the length of the amortization period, a comparison of the amortization period to the investment in the nonconforming use, and the degree of offensiveness of the nonconforming use. 10. Flexibility in Zoning a. Three main mechanisms to achieve flexibility in zoning: 1. Variances a) Kind of after the fact b) In theory, when we set this stuff up - is if you don't qualify for a special exception you, then go to variance and its not supposed to be easy to get, but variance is easy to get in practice, sometimes even easier to get then a special exception 2. Special Exceptions a) Kind of carved into the rules themselves 1. In advance we know we're going to want some of these specific things we just dont
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1. In advance we know we're going to want some of these specific things we just dont know where well put them 2. But we know people want them b) Some means to give people a break if they get into shit with their property 3. Zoning Amendments/Spot Zoning b. Commons v. Westwood Zoning Board, pg 955 1. Variance a) Standard tests to qualify for a variance 1. Exceptional/undue hardship 2. Detrimental to the characterization of neighborhood/detrimental to purposes of land use regulations i. Detriment to the public good or the intent and purpose of the zoning ordinance. b) Area variance - dealing with the size c) Use variance - dealing with the use c. Cope v. Inhabitants of the Town of Brunswick, pg 959 (not in brief book, nor commons) 1. Special exceptions to variances 2. One general way to understand the difference: a) Variances are intended to be occasional, perhaps even rare, grants of permission to engage in what is otherwise prohibited, based on the notion of undue hardship. b) Special exceptions, on the other hand, are a means to deal with situations that can be anticipated in advance and resolved by a list of specific standards and requirements; without that specificity, the special exception arguably should not issue. 11. Flexibility in Zoning; Zoning and Aesthetic Regulation a. Zoning amendments and the potential problem of spot zoning. 1. State v. City of Rochester, pg 962 a) Court - Boards act in legislative capacity, so we give them great deference. Even then, though, we can scrutinize them sometimes: 1. If it looks like spot zoning (oddisland) 2. If amendment hurts community 3. If its inconsistent w/general plan, or 4. If it amounts to a taking w/o compensation b) Court concluded there was a rational basis for believing new use would be compatible. P s complaints of safety, traffic, and character of neighborhood forced court to recognize that they make the reasonability debatable or even dubious, but fail to meet the high standard required to overpower court's legislative deference to board. c) Seen in this case: Importance of legislative deference in resolving disputes about alleged spot zoning 2. Fasano - pg 965 a) Limited minority approach has long been rejected even in its own jurisdiction - courts do not view zoning amendments through the lens of legislative deference, but focus more on the particulars of such an amendment. b. State ex rel. Stoyanoff v. Berkeley, pg 969 1. Zoning and aesthetic regulation, and architectural standards and the decision of architectural board upheld in this case based in large part on legislative deference, because the ordinance at issue was intended to: a) Protect property values, and b) Preserve the character of districts or neighborhoods at issue. 2. Always tie to economic impact c. Deference of zoning boards: 1. Zoning boards are agencies states give zoning power to municipalities who create and empower zoning boards 2. If we see zoning boards as more legislative, we will give them more deference than if we see them as more judicial. d. City of Ladue v. Gilleo, pg 989 1. Intersection of land use regulation and the First Amendment 2. Ct: Ordinance does too much and too little a) Claims to be very broad, but carves out a lot of exceptions b) Doesnt give G a reasonable alternative c) Rules cant do too much to stifle speech citizens need forums to express their opinions
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c) Rules cant do too much to stifle speech citizens need forums to express their opinions 12. Eminent Domain and Regulatory Takings a. Eminent domain - The power of government to force transfers of property from other owners to itself. 1. Condemnation - The usual procedure by which the government exercises its power of eminent domain. b. Three fundamental questions that one should ask when confronted with a potential taking a potential government action that violates the Fifth Amendments Takings Clause, nor shall private property be taken for public use, without just compensation. Those three questions are: 1. Is there a taking? a) Three categorical rules, and then a three-step balancing test if the categorical rules dont apply. The categorical rules are: 1. Permanent physical occupations or invasions are takings. Loretto. 2. Nuisance-control regulation is not a taking. Hadacheck. 3. Government action that deprives a landowner of all economically feasible, beneficial, or productive use of the property, or which amounts to a 100% diminution in value of the property, is a taking. Lucas. i. 100% diminution of value or deprivation of all economic use is a taking 2. If so, is it for a public use or purpose? 3. If so, has there been just compensation? c. GO HERE NEXT if 3 rules don't apply!: The modern three-step balancing test that we studied, after the Penn Central test involves: 1. Evaluate the economic impact of the potential taking 2. Evaluate the extent of the regulations interference with distinct, reasonable, investment-based expectations (RIBEs) 3. Evaluate the character and purpose of the regulation. 13. Test again: a. Economic impact of reg b. Distinct, reasonable investment backed expectations (ribes) c. Character/purpose of regulation 1. Penn central 14. Kelo and Public Use a. Kelo v. City of New London, pg 1065 1. Recent and particularly controversial case even for a takings case setting for the current debate about the limits that the public use requirement sets upon the governments takings power. 2. Majority in Kelo approved the condemnation of private homes pursuant to a local development and economic revitalization plan. a) Majority interprets public use as requiring condemnation to serve some public purpose" 1. Majority saw the situation in Kelo as an extension of prior holdings in Berman and Midkiff b) OConnors dissent - particularly the lines she draws between Berman and Midkiff on the one hand and situations such as Kelo on the other. c) Reaction of many states after Kelo - one invited by the majority opinion 1. How effective they might be in preventing Kelo-type takings in the future. b. Penn Coal v. Mann, pg 1103 1. Mann buys house w/surface rights only; gets a deal by waiving that PA coal may some day subside the house a) Kohler Act prohibits mining that could subside a house 2. Court (Holmes) holds: a) Kohler Act takes property interest away from PA Coal & constitutes taking b) Really, only 1 house not a public nuisance c) Cost to PA coal would be > cost to Mahon (diminution of value) d) Mahons knew what they were doing when they bargained we should stick them with the loss e) Basically, look at what costs would be borne by each party, & decide who we want to make pay the cost. 3. Court's balancing test When a government action causes a sufficient diminution in value of private property, a taking may be found. a) Also important: 1. Character of government action 2. Its relation to nuisance control, well-recognized property interests, rights, and estates
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2. Its relation to nuisance control, well-recognized property interests, rights, and estates 3. The public interest and notions of fairness associated with any particular case will also be important 2. If were trying to balance the general rule that prop can be regulated to a certain extent but if it goes too far its a taking a) Never tells us what counts as too far b) Attempt to make Justice Holmes decision more specific c) With respect to the balancing test that applies if the categorical rules are not applicable, Justice Holmess famous statement of the general rule of takings law in Pennsylvania Coal: [W] hile property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. c. Penn Central Transportation Co v. City of New York, pg 1113 1. Owners of Penn Central Station in NYC want to build high-rise office space on top of it. City has designated Penn Station as a landmark, so they have to get city approval to build. City tells them they cant build, since offices would destroy the character of the building, but gives them TDR credits as a consolation prize. a) TDRs transferable right to build higher than otherwise allowed (Since we re not letting you build on your building, you can sell this ticket to somebody and they can build their building higher than zoning laws allow!) 2. Distinct, Investment-Backed Expectations (DIBEs) What owners could & should have expected to get as a return on their investment 3. 2 issues: a) Has a taking occurred? 1. Ct only looks here. 2. 3-prong analysis. Balance: i. Economic Impact ii. Economic Impact re: DIBE iii. Character of regulation if it looks like zoning, we may be more likely to like it b) If so, are TDRs just compensation? 1. Court doesnt get to this part. Somehow applies on first issue that the issuance of TDRs helps make it not a taking (maybe issuance of TDR fucks with economic impact analysis enough to make it not a taking) 4. Dissent (Rehnquist): a) Court has singled out Grand Central discriminatory and not typical of zoning b) This action doesnt prohibit nuisance d. Loretto v. Teleprompter Manhattan CATV Corp., pg 1082 1. NYC passes law requiring apartment building owners to allow teleprompter company to run cable to the building and install small boxes on some buildings. Loretto sues, contending this is a taking. 2. Court agrees a) Permanent physical occupation of private property by government or mandated by government is per se taking. b) Clear bright line if its physical & permanent, its taking c) This protects the super-sacred right to exclude. d) When the State blows up a dam or something and floods your house, thats a taking and its a permanent physical occupation, so permanent physical occupations are per se taking 3. Intuitively is it clear there's a taking in loretto? a) Yes because new london is economically depressed/ think this would contribute to economic vitality e. Hadacheck v. Sebastian, pg 1096, categorical nuisance rule 1. Hadacheck had a brick lot and LA passed a law making it illegal to operate brick lots. 2. Court: Not a taking if state action addresses a nuisance, it can never be a taking categorically a) Ct has some dicta basically saying that the brick lot was in the way of progress, & progress is a fucking freight train that will mow you the fuck over if you get in its way. b) Court: he can still take his clay somewhere else to make the bricks (its just a lot more expensive) 3. Now we have to look to see whether state is acting to receive a benefit or to stop a harm if theyre acting to stop a harm, its never a taking. 4. Random from my notes: Not going to be a taking if they can convince us that its nuisance control a) If you're doing something that the government can call a nuisance and they pass something
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15. 16. 17. 18.

19.

20.

21. 22.

a) If you're doing something that the government can call a nuisance and they pass something that says you cant do it anymore and then your land value goes down you dont have a takings claim anymore and may not be compensated f. Lucas v. South Carolina Coastal Council, pg 1131 1. Lucas has coastal land and state enacts law prohibiting him from building on it. Lucas sues. Trial Ct. claims Lucass property is absolutely, 100% valueless. 2. USSC sets forth per se categorical rule: a) When the regulation absolutely denies economically viable use of land (total wipeout), it constitutes a taking 1. Exception for things that constitute nuisance under the common law 2. Exception if owner didnt have full title in the first place b) when the owner of real property has been called upon to sacrifice all economically beneficial uses in the name of common good, that is, to leave his property economically idle, he has suffered a taking c) Ct claims this will help alleviate the public benefit or nuisance control headache 3. Blackmuns Dissent: a) Today, the court launches a missile to kill a mouse. 1. Missile = outrageous & inept per se rule (& equally outrageous & inept common law nuisance exception) 2. Mouse = the case at hand is really pretty innocuous & nuanced. Cleaning up urban blight ( Berman) Breaking up land oligopolies in HI ( Midkiff) When we dont like zoning amendments we call them spot zoning If we think a conveyance is in trouble lets think of reforming it to effectuate the intent of the grantor a. Obvious connection b/t the doctrine of cpray (if a conveyance is in trobule were going to reform it to keep it valid while keeping the originail grantors intent the best we can) and the Doctrine of changed circumstances when we think about termination of servitudes (intent is no longer possible to effectuate) Presumption today w/r/t joint tenancies/tenancies in common a. Its tenancy in common, dont like joint tenancies today b. If you want that right of survivorship you have to straight out say that, make intent really clear Common law was the other way around/liked joint tenancies a. Traditioanlly needed to have the 4 traditional unities b. Traditionally If you met those you might not have had to say c. "I created a joint tenancy with blah blah, and I know this means right of survivorship" d. Dont need to know speciifc phrases ot show clear itnent 1. Just know you have to show really clear intent, overall rpesumption is in favor of a tenancy of common e. If they get severed may no longer have Jtenancy Also Really good to die last if you're in jtecnancy a. Its set up to give someone tthat right of suriviorship so whoever dies last wins/estate plans win out if their JT is preserved until the end What might sever a joint tenancy a. A lease or a mortgage b. What if you give alife estate or tenancy c. Note 2 after harms v sprague - point of this note is that this case is about mortgages and more than mortgages d. Tricky questions about what cuts off a JT e. And what counts for severance f. Not necessiraly just talking about mortgages

VIII. Breathe.

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