Property

Theory1. Labor theory- natural law premise that every person owns himself. You own your labor,
when you mist that labor with something unowned by anyone, you own the resulting
mixture.
2. Other natural law theories- some theories explain property as a prepolitical entitlement,
something natural. The problem with this view is that conceptions of natural property
might vary greatly. Its strength lies in the fact that it is a near universal human trait to link
possession of an object with ownership. But this linkage can also be explained by
utilitarian theories
3. Utilitarian theories- property was nothing more than a self-interested acquiescence in
social and legal rules. We accept legal protection for others property bc we desired the
same protection for our own.
4. Utility and efficiency- economists explain property as an efficient response to scarcity.
Efficiency is utilitarian. The economic explanation is that externalities (costs that are
produced by an activity but not borne by the person reaping the benefits of the activity
are internalized (borne by their maker). This makes the production of goods needed for
human life more efficient. Similarly few ppl would undertake costly, time consuming
activities unless they could be assured they could keep the benefits of their actions.
Recognition of a property right in the crop internalizes its benefits.
5. Custom- some observers point out that property rights or often occur by custom, and they
note that the customs are intended to maximize the aggregate wealth of the customary
participants.
1. Rule of 1st occupancy- invoked where claim to property is owned by no one
(wild animals, water/gas/oil, asteroidscapture, and require dominion over it
a. Rule of capture
2. Labor Desert- ppl ought to own what they produce (should have right to own what
they produce)
3. Property and power- personhood theory- idea that in order to fully realize your
human potential you must have some resources, so try to direct resources to ppl
who dont have themno property=no power
4. Critical legal studies- descriptive theory- power to wealthy, but adverse possession
allows finders to keep
5. Economic efficiency- property rights ought to promote efficiency, legal rule should
promote efficiency
Doctrine of Possession- the simples doctrinal answer to the question of what is property is
to say that property is whatever the legal system protects as property. Courts tend to break
property down into three core elements:
1. The right to exclusive possession
2. The right to exclusive use
3. The right to dispose or transfer
But there is no formula by which you can assemble these elements into property.
Possession
Everyone presumes that possession of an object implied a property right in it. But some
ppl (thieves are wrongful possessors) others (finders) have property claims that are only
relative to the claims of others.
Two meanings:
Possession means two diff things. It describes a physical act and a legal conclusion.
Sometimes physical possession is the fact that produces a legal conclusion of possession
that flows from ownership of property. People, including judges, are careless I their usage
of the terms

I. Sources of title
Original Title (first occupancy, first possession) - property that doesnt have
an owner yet
Possession of unowned things: Acquisition of property by Discovery,
Capture, Creation
1. Discovery: not much is undiscovered today, but the idea that property could be
acquired by discovery has some modern implicationsa. Johnson v McIntosh (1823) rival claims over ownership of land in Illinois. Johnsons
claim was the last link in the chain of title going back to the Indians. McIntosh said
his title was better BC it came from the US, (although after the Indians conveyance
to Johnsons predecessor). The court held for M b/c the Indians only held an
aboriginal title, a right of occupancy that could be cut off at any moment by the US,
the successor to the European discoverers of the land. This Eurocentric approach to
discovery was supplemented by the idea that the US also derived its ownership by
conquest of the Indians.
i. Person must establish some type of permanent presence, many different ppl
could claim to have discovered America
b. The fact of conquest as a source of property rights is a reminder of the socially
contingent nature of property. Property rights are defined by the society in which
they are at issue. The Indians were seen as conquered so their rights were less
than that of the dominant society.
If dont own it, cant sell it or pass title
c. Two theories:
i. Acquisition by discovery entails the sighting or finding of unknown
territory, frequently accompanied by a landing or symbolic taking of
possession- must happen within reasonable time of finding
ii. Conquest- taking of possession of enemy territory through force, followed by
formal annexation of the defeated territory by the conqueror
1. in this case- no one conquered the Indians and established ownership
or limits rights of the previous owner, nothing changes- and Indians
would own
2. Capture/first occupancy- Ferae Naturae= wild by nature- no one owns while in
the wild- must establish ownership by first occupancy-capture
wild animals may be one of the few things unowned that are 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.
i. Pierson v Post (1805)- rival claims of ownership of a dead fox. Post chased fox
for sport on unowned, common land. Before Pose wounded or captured the
fox, Pierson intervened, killing and taking it, even though he knew of Posts
pursuit. Court held that post didnt own the fox until he had physical
possession of it. Mere pursuit was not enough.
b. Custom- customary rules often arise to maximize the well-being of the group
creating the custom, to ensure that individuals do not grab benefits for themselves
that impose net losses on the group as a whole. Individuals conform to customary
rules out of self-interest.
i. Ghen v Rich (whale case)- harpoon with explosive charge used to kill whales,
then cut line and wait till it floats ashore- when on shore the harpoon was
marked so ppl could report it to the person who killed it to come get the
whale. D knew that was the custom, but didnt report and sold to 3 rd party.
Court didnt follow rule of Pierson v post- it used custom and awarded title to
harpooner.

c. Policy importance- courts try to serve human values and they tinker with the
doctrine to serve policy. Generally the property doctrine tried to serve four
important values:
i. Reward productivity and foster efficiency
ii. Create simple, easily enforceable rules
iii. Create property rules that are consistent with societal habits and customs a
iv. Produce fairness in terms of prevailing cultural expectations of fairness
1. Keeble v Hinckeringill (1707)- landowner has decoy pond to trap ducks
to kill for food. K has pond, H his neighbor frightened ducks away by
shooting gun maliciously. Court said it was actionable b/c malicious
interference with lawful activity. Notion that fair competition improves
society. Lawful to lure away, but not to frighten away- competition
improves society if it is fair
d. Relative title- actual possession isnt everything. One persons claimed property
right is almost always good (or not good) only in relation to others.
i. Ex. Pierson v PostIF the hunt was on Posts land and Pierson was trespasserpeirsons actual possession of fox would have given him property right in it,
but only until or unless Post trumped by invoking his right to exclude others
from his land.
1. Post would have better claim to fox (not because he was prior
possessor) b/c he was entitled to deprive trespassers of what it found
on his estate. Would have constructive possession of animal society
thinks its more important to discourage trespass than reward first
possession.
e. Escapees and domesticated animals- when wild animal escapes, it is unowned.
It belongs to the next first possessor. Domesticated animals arent wiles, so they
continue to belong to their prior possessor when they wonder off. A wild animal
becomes domesticated when, it demonstrates a propensity to return home (animus
revertendi)
i. Escape/release- if capture and not kill, you have ownership, but it can be lost
if animal returns (released/escapes) to former status as a wild animal
unowned.
1. Exception- domesticated wild animals- if have habit of returning to
owner (animus Revertendi) then there is constructive possession by
the owner. (deer on public land that return home to owner cant be
hunted)
2. Animals of natural habitat, that escape and clearly arent in their
natural habitat (chinchilla ) then owner has constructive possession
and no one can recapture
f. Fugitive resources: Oil and gas- policy considerations- because fugitive minerals
such as oil and gas appear to be similar to wild animals, the courts initially applied
legal doctrine pertaining to wild animals. The underlying issue in those cases is
really how best to foster productivity by the efficient exploitation of oil and gas.
i. Barnard v Monongahela Nat Gas 1907- underground reservoir of oil was open
to all drillersdeemed fugitive resource, location didnt mean owned, capture
by drilling well) = earlier approach Common Pools Rule
ii. Union gas v Fyffe 1927- overexploitation of the unowned resource might be
susceptible to injunction. Tragedy of the Commons- tendency to over exploit
a common resource because the full costs of exploitation are not born by
each user
iii. Approaches1. Rule of Capture - Hammonds v Kentucky Gas 1934- public utility
stored gas in opening underground (they had captured and owned it,

but released it) - analogy to escape and release of wild animals, made
it unownednot responsible for it. --- no longer owned by injector, --this didnt consider policy of efficiency of storage--- wild animal theory
was abandoned 20 years later:
2. Well Spacing Lauis- (issue ppl trying to pump too fast to beat others)various land owners own land over it, some states adopted well
spacing statutes to section off far apart to prevent interference
3. Pooling- 1930s- formation divided into unites when doesnt correspond
to property lines (one well per unit)
4. Unitization- takes entire formation and gives each owner of land pro
rata portion of what they own based on how much land they own.
iv. Water law- many states diff laws for ground/surface
1. Ground water- closest to rule of capturea. Absolute ownership- earlier cases, water owned by no one- so
rule of capture applied
b. Replaced by Reasonable Use rule- similar but only could draw as
much water as could use on own land (prevented cities
municipals from taking all water)
c. Correlative rights Doctrine- find out rate of replenishment and
determine how must water can be drawn by all lawn ownersallowed to draw pro rate amount based on land (similar to
unitization)
d. Permit system- some states (KY) use issue permits to users with
specified amount able to use
2. Surface Watera. Riparian Rights-Eastern US- land bordering water- rights based
on riparian land (natural flow doctrine) can withdraw water as
long as doesnt diminish flow
b. Reasonable use rule- treated stream as common pool resource
if wont harm others riparian rights then can use as much as
want
c. Prior apportion rule (rule of capture) Western US- derived from
miners dug ditches (wasnt permissible under riparian b/c
didnt own riparian land) issues develops b/c 1 st person up
stream gets as much as wants, 2nd person down gets whats left,
etc.
d. Permit systems- limit KY uses- exempts to ag usage and maybe
municipal use--- large scale industry permits
3. Creation- many intangible property rights are created. A novel is a creation of an
inventive and communicative mind. Its property right is the copyright of the creator- the
right to control the reproduction and distribution of the creation. Some creations are also
discoveries, and the law protects them by patent and the law of trade secrets. Idea
of Labor Dessert theory- if didnt exist prior to you bringing it into being, then you have
best claim over it.
1. Copyrights- limited duration, life of author + 50yrs. Doctrine of Fair use- quote
excerpts are allowed, and parody of things are allowed
2. Trademarks- common law, or get registers- various limits though. But it is indefinitebut must be based on commercial use/must have enterprise thats using it, its then
protected against copycats.
a. Property in ones ideas and expressions: general principles of intellectual
property:
Exclusivity- the problem of imitation: the key issue is the degree of exclusivity
the property owner has in exploiting the intangible right. Some argue that BC

information can be used by many ppl at once the owner ought not be able to
insist on exclusive use. Free availability of information may make the public as a
whole better off, as long as this freedom to imitate doesnt destroy the incentive
of ppl to come up with new ideas.
i. The law of misappropriationthe branch of unfair competition law that
protects new ideas- tries to answer the question of when imitation is
permissible and when it is not bc it will destroy the incentive to create
ii. Ex. International news service v Associated Press (1918)- held it was
misappropriation for INS to copy Aps news and release it before AP could. AP
extended money and effort to gather the news. The court thought INS was
attempting to reap what it had not sown. But courts later held that selling
imitation of Chanel No. 5 and seasonal fabric designs (Cheney brothers)
wasnt misappropriation.
1. The conflict is between the inefficiencies produced by a monopoly over
creation (higher prices, less accessibility to a desired good) and both
the sense of unfairness of allowing copycats to reap what they havent
sown and feat that without protection creators will not create.
2. Rights of originator and rights of public are balanced by limiting
duration of right to the originator- give monopoly to encourage
advancement and creation, but not for unlimited time. And there is a
limit of what (scope) you can patent. Said there is a public benefit to
competition and lesser price, and a monopoly prevents competition.
b. Personal Image as property: (persona)- public figures
Today the ability to exploit your image for profit is recognized as a valuable
property right BC we have created a culture of celebrity in which money can be
made from selling image.
White v Samsung- S game depicted vana white robot in wheel of fortune gamecourt determined it infringed on W common law right of publicity. Was criticized
as too much protection
o Right of Publicity- CL right- protects public figures and certain aspects
of their character- not defamation, but good will in business-ppl who
appropriate their likeness for commercial
o Performance Rights- concerts- can copyright a performanceprotected
from trademark infringement and someone passing off as them.
Various rationales- brought up to justify right of publicity- labor
desert- unfair to allow someone to misappropriate the goodwill
gotten by their efforts; utilitarian-if want to encourage ppl to invest
in developing person then must reap benefits.
What does it cover?
o Pics/representations- except newstories
o Memorabilia-statues, if its art its protected by 1 st am. But if
commercial production its violating right of publicity
o Is it transferable? Terminate upon death?
c. Your bodyproperty rights to your own person (cells and body parts)
i. Moore v Regents of Ca (1990)- M spleen was removed and the drs used it and
created valuable patented cell line without his consentheld- there was no
cause of action for conversion ( a tort that is the wrongful exercise of
ownership rights over the personal property of another) said M has no
ownership b/c he never expected to retain possession of his spleen. Court
reasoned that it would chill medical research if they found for M.
1. Shows conflict between M right of first possession of his body parts and
scientists right to own the unique cells developed from M voluntarily
discarded spleen. Court concluded that M spleen wasnt his property

ii.

iii.
iv.
v.

in that he didnt own in the sense of being able to profit from it after
discarding it. As long as it was in him he had exclusive possession
and use.
This reflects the view that body parts ought not be for sale
1. Reasons against transfer of tissues:
a. Paternalism- ppl cant be trusted in these transactions
b. Distributive justice- market in body parts- poor seller/rich buyer
c. Market failure- problem of monopoly creation (cell lines) not in
societies best interest
d. Human dignity- pre-embryos- body is a temple
Blood/Plasma- property right in blood- ability to transfer/sell it--few/no
restrictions (regulated only for health reasons)- its renewable, plentiful, not
exploiting ppl who sell it
Organs- dead ppl can donate, will- distributive justice concern of free market
sell of organs
Sperm/eggs- no moral problems w/ sperm, eggs different?

Possessionright to exclude: the right of possession is usually conceived as

containing a corollary right: the right to exclude others from possession. That principle
was called into question with respect to intellection property where the full value can
sometimes be reaped even if the right to exclude is taken away, but what about real
property? Should owner of land have an absolute right to exclude others?
a. Jacque v Steenberg Homes 19970 upheld landowners right to bar an unwanted
trespasser from moving a mobile home across the landowners land, declaring a
person has a right to exclusive enjoyment of his own land for any purpose which
does not invade the rights of another person.
b. State v Shack 1971- held that land owner had no right to bar a property agency
worker and legal services lawyer from his farm where they sought to visit a migrant
worker who was an employee and tenant of owners. Owners right to exclude ended
where the tenant workers need for reasonable access by visitors began.
Derivative (subsequent) title (someone else owns, how do you transfer title to another
person) (subsequent possession)
I.
Informal transfer (involuntary)
a. Find
b. Adverse possession (stealing- occupancy of land hostile to true owner for
certain time)
c. Status (marital property divorce)
II.
Formal Transfer (voluntary)
a. Gift
b. Sale
c. Inheritance
d. Devise (by will)
-

I.

Informal transfer (involuntary)

A. Acquisition by find
Finders Keepers?a property owner continues to own his property even after he loses or
misplaces it. But lost property often ends up on a finders pocket. The finders claim to the
property depends on who the rival claimant is and whether the property was lost, mislaid or
abandoned by the true owner. A finder has relative title the policy objectives in finders law
are to restore the property to the true owner, reward honest finder, deliver the reasonable
expectations of landowners, discourage trespassers and other wrongdoers, and encourage the
productive use of found property.

1. Abandoned property -- general rule- abandoned property is property to which the

true owner has voluntarily given up any claim of ownership. Generally a finder of
abandoned property acquires title, but this rule is not invariable. Trespassers are not
likely to be rewarded with the fruits of their wrongful behavior, and the owners of land
where abandoned property is discovered may sometimes have a strong, and reasonable
expectation of ownership of such abandoned property. Statutes, can also modify the
general rule.
o Ex. TO (true owner) puts old computer on sidewalk in front of house with note saying
free, take me= TO has abandoned ownership. The first possessor becomes the next
TO. But if TO abandon his computer by placing it under living room sofa of Neighbor,
and Guest then discovers the abandoned computer while searching for his contact
lenses, it is not so clear that G should prevail against N. Property is not usually
labeled as abandoned. The conclusion of abandonment usually has to be made from
circumstantial facts.
o Ex.- TO places newspapers outside house for recycling, has he abandoned? Yes- his
actions show intent to renounce ownership. If Scavenger takes papers, he has
acquired ownerships.
Intention to relinquish ownership is critical. A TO may be prevent from
possessing his property but, so land as he never intends to give up his claim of
ownership, the property remains his.
o Ex. 1857 Steamship Central America sank carrying gold. Insurers paid off and thus
acquired ownership of the insured cargo. In 1988 the wreck was discovered and cargo
recovered, even though 131 years had passed, elapse of time was not enough to
prove abandonment.
o Trespassing finders of abandoned property are denied title unless the trespass
is trivial or merely technical
2. Lost and mislaid property general rule- a finders title is good against the
whole world except the true owner, prior finders, and sometimes the owner of
land where the object is found.
o Lost property is lost (slid out of hole in pocket),
o Mislaid property is property that the true owner placed somewhere with the
intention of returning for it but which cannot now be located, (wallet left on grocery
counter).
o Ex. Armory v Delmairie 1722: chimney sweep found a gem and took it to jeweler for
appraisal.. The jewelers apprentice removed the gem and refused to return it. The
sweep was awarded damages, measured by the value of the finest stone that would
fit the setting
If the jeweler had been the true owner of the gem he would have won.
FINDER ONLY HAS RELATIVE TITLE
a. Prior finders- prior finder prevails over later finders
Ex. true owner loses watch, found by first finder, who loses it and its found by
second finder. First finder prevails over second finder on the basis of prior
possession, and true owner would prevail over both. This principle applies
even if first finder had stolen the watch from true owner.
o Rationales for protecting prior possession is to encourage finders to
make productive use of their finds rather than hid them and to
provide easy cheap means of establishing presumptive title
b. Finder v landowner- conflicts frequently arise between a finder and the owner of a
land upon which the property was found (often called the owner of a locus in quo).
Of course there is no conflict if the land owner also owns the object. But if true
owner is not finder or land owner there is conflict

Trespassing finders- as is true of abandoned property- trespassing finders of lost or

mislaid property lose
Employee finders: older cases tend to find that employee finders must surrender
their find to their employer if the employer has a contractual duty to report finds
Invitee finders- landowners often invite workers and others on their property for
limited and specific purposes. Finding property is almost never one of those
purposes. An invitee who finds property in the course of doing whatever he was
invited to do must surrender it to the landowner.
o South Staffordshire water v Sharman (1896) - landowner employed S to clean
out pool, in doing so S found two gold ring. The rings went to landowner who
wasnt aware of their existence until their find. Landowner was treated as
constructive possessor of the rings, a label that is simply a legal conclusion
that the landowner should prevail
o Reason- leaving property with landowner might slightly improve the
odds of return to true owner, and landowners have expectations of
ownership of immobile things on their land. Perhaps value should be
split between finder and landowner
Embedded objects and treasure trove:
o When property is embedded in or under the soil it is awarded to the land owner,
in the rationale that the landowners expectations of owning things in the dirt
itself are especially strong.
o Elwes v Brig Gas co- Landowner leased land to mining co for 99 yrs.
with reservation of minerals. Ancient boat found in ground--- was not
lost, it was abandoned. Landowner won b/c it was in the ground
Deeper in the ground = the more landowner favored over
finder.
o Treasure trove- England had treasure trove go to crown, America split- as to
finder or landowner. Treasure trove= gold, coin, silver or bullion, or moneyif
not those thing as it belonged to finder under CL- now usually split among both
o Shipwrecks- if military ship it belongs to country of origin (or its successor).

Private homeso Homeowners are awarded objects that are found inside their homes and, to the
extent that the property was mislaid, the odds of its recovery by true owner are
increased by leaving it with the homeowner. When the homeowner is an
absentee owner, not in position of the home, resolution of the question turns on
whether the homeowner was in constructive passion of the home. If the
homeowner is briefly absent, he is in constructive possession of objects found in
her absence. But if never moved in:
o Hannah v Peel 1945- Peel purchased house and never moved in. When WWII
broke out, the crown requisitioned house to quarter soldiers. Hannah found a
valuable brooch while adjusting a curtain. He reported the find, and two years
later, the true owner hadnt claimed it, it was turned over to Peel who sold it.
Hannah demanded the proceeds and won. B/c Peel had never moved in, he
never had constructive possession of house unknown lost contents.
o All or nothing approach seems poorly fitted to the goals of finders
law. Ownership by Peel is punishment to honest finder, and
ownerships in H defeats P reasonable expectations that he owns
everything that came with his house. Perhaps best method would
have been to split
Public placeso Lost property found in public places goes to the finder.

Bridges v Hawksworth- P found money in public part of store, gives

to store owners to try to give to TO, who ever came- P wanted back
court said finder should keep it (found in public area, he wasnt a
trespasser)
Mislaid property in public places goes to land owner.
o Rationale- odds of restoring lost property to true owner are slim,
while the true owner of mislaid property might return to place it was
mislaid.
o Ex. Mcavoy v Medina 1866- if wallet found on barbershop counter it
was probably placed there by customer who forgot it. A mislaid
property goes to the shop owner- but if the wallet was found on the
floor it was probably dropped there unintentionally by TO and lost
(and therefore would go to finder)
o

B. Acquisition by Adverse Possession-

Virtually all legal causes of action must be brought within the period of time set out in a
statute of limitations. If the true owner of land fails to start legal proceedings to
remove a person who adversely possess his land within the period of the statute of
limitations, the true owner is forever barred from removing the adverse possessor. B/c
there is no other owner the adverse possessor has taken title of the land and can
obtain a judgment to that effect. The adverse possessor has taken title to the land and
can obtain a judgment to that effect. The adverse possessor acquires whatever title
the property owner had. This is the doctrine of adverse possession. It combines two
broad requirements:
1. Expiration of the relevant statute of limitations (statutory, and its elements are
determined by statute)
2. Adverse passion during the limitations period (consists of series of common law
elements concerning the nature of the possession that must be proven)

Rationales for Adverse possession- there are three major justifications for AP
Sleeping theory- owners who are ignorant of ppl using their land deserve to be penalized. By
failing to bring timely action to recover possession, they create a problem, stale claims are
difficult to adjudicateduse it or lose it
o Earning theory- people who use land productively and beneficially for a long time out to be
rewarded. Even though the land is owned by someone else, the actual possessor has
invested time and effort into making it productive. After long enough time adverse
possessor has earned some interest in the land.
o Stability theory- AP enables disputes or doubts about land titles to be cleared expeditiously
by delivering title to the person who has occupied the land as if she were owner for long
time without objection
Elements of Adverse possession- to acquire title by adverse possession, the adverse
possessor must prove four elements:
1. The possessor must actually enter and take exclusive possession that is
2. Open and notorious
3. Adverse or hostile to the true owners interest and under a claim of right, and
4. Continuous for the limitations period.
o

1) Actual and exclusive possession-

a. Actual entry means that possessor must actually, physically, take possession of
the owners land. The owners cause of action accrues at that moment and the
clock of limitations period starts to run at the moment of actual entry.
b. Exclusive possession means the possessor has excluded the public and the
owner. It doesnt mean that only one adverse possessor can occupy. A group of

people adversely occupying may acquire a shared title -- concurrent ownership-by adverse possession.
i. Some states actually define actual possession by statute vanvalkenburg v Lutz 1952- required AP occupying without color of title
to prove they had substantially enclosed or usually cultivated or
improved the property

2) Open and notorious possession-

Occupation must be open and notorious. This means that the AP must be readily
visible to any inspector of the property. The idea is that the true owner would know of
the occupation if he visited his property. Open ad notorious occupation constitutes
notice to the owner that his rights are being violated. Occupation is open and
notorious if it is the type of occupation a true owner would make:
a. Ex. An AP of a fenced pasture would possess openly and notoriously if he kept
cattle in the pasture. AP of urban home would possess openly by moving in and
coming and going without concealment. AP of undeveloped land must do
something to leave a visible mark of his control, such as building a cabin, fencing,
sign announcing occupancy
i. Adverse possession of subsurface minerals- b/c AP takes whatever title the
true owner had, an AP of the surface acquires title to subsurface mineral if TO
had title to them.
ii. Boundary disputes- some jurisdictions hold that encroachments by one
neighbor onto the land of another are not open and notorious if the
encroachment is a small area and is not clearly and self-evidently an
encroachment. In such situations the limitations statute does not begin to run
until and unless the owner has actual knowledge of the encroachment
- See MANILLO
3) Hostility or adverse claim of right- An adverse possessor must occupy the land without the consent of the owner, and
with intention to remain. This element is often called hostility, but doesnt mean
with malice or ill will. It just means that the AP has no permission to be there and also
claims the right to stay there. Consent or permission means the possessor has
occupied it in some capacity subordinate to the owners title.
a. Courts apply three tests to decide whether possessor claims the right to stay:
i. Subjective- good faith occupation= the AP must have genuine, good faith
belief that she owns the occupied property. Possessor who know that the
property they are occupying is not their own can never acquire title by
adverse possession in a jurisdiction applying this test for hostility (test applied
in Lutz- hard to establish title by APusually used only in western states,
where concerned railroads lobbied to keep squatters off
ii. Subjective- Aggressive trespasser (bad faith) - there are a few old cases that
require the occupier know the property is not his own but intend to claim it
nevertheless. Maine Doctrine- almost always restricted boundary disputes
(idea to protect TO from situations with small encroachment where they didnt
know it was going on)
iii. Objective- state of mind irrelevant- (majority) state of mind of occupier is
essentially not relevant. Court looks at :
- Lack of permission ( in the sense that the occupation is not
subordinate to the owners title)
- Whether the occupiers acts and statements objectively appear to
be claims of ownership (have you acted like true owner would?)
Disclaimer of ownership- if AP orally disclaims ownership in order to
persuade owner not to sue the possessor has stopped being adverse.
Adversity element is destroyed and limitations clock is stopped.

Van v Lutz 1952- D is AP for 30 years, but put up fence and when was
sue he said it was a right of way, which disclaimed adverse
possession. When D appealed he tried to say he owned by AP- but he
had already disclaimed ownership.
Boundary disputes- often one land owner mistakenly occupies a strip of
her neighbors land in the belief that it is her own. Most courts apply
objective test of hostility in these cases. If the encroaching owners
actions appear to the world to be the true owner (built a fence), she
occupies adversely to her neighbor.
o Maine Doctrine (obsolete)- subjective test- occupier is not
possessing adversely if she occupied under a good faith but mistaken,
belief that the land is hers, but she would not have occupied if she
knew the true facts
o must be intention to claim title, one in ignorance of actual
boundaries takes and hold possession by mistake, belief
that its true line and intention to claim title will gain title
o If party thru ignorance inadvertence, or mistake occupies
beyond boundary bc believes to be true line but has no
intention to claim title to that extent if it should be
ascertained that fence on neighbors land, = no adverse
possession ----- if intention is not absolute, but provisional ,
and the possession is not adverse
o

Connecticut Rule (favored) - persons motives and purposes arent

of concern. The very nature of the act (entry and possession) is an
assertion of his own title, and the denial of the title of all others. It
doesnt matter that the possessor was mistaken and had he been
better informed wouldnt have entered upon the land

Color of Title not claim of right- Claim of right is the term often used to
describe the element of hostility or adversity. It seems to be confused
with color of title.
o A possessor who enters under color of title is one who has a
defective deed or other writing that purports to deliver title to
the possessor, but possessor doesnt know its invalid
o But possessors who enter under color of title satisfy the
adversity element.
o Only a few states require color of title to satisfy hostility or
adversity. C

4) Continuous Possession- An adverse possessor must occupy continuouslywithout interruptionduring the

limitations period. Means the AP must occupy the property as continually as would be
reasonable and average true owner of the property. If the possessor ever abandons
the property = intentionally gives up possession with no intent of returning- continuity
is destroyed.
a. If they return later- new statute of limitations starts over. If the possessor always
intended to return, and actually occupied the property for as must time as an
average owner would, this element is satisfied.
b. Ex. Howard v Kunto (1970)--occupied summer residence under color of title
(defective deed). When H, the record owner, sought to eject K. (all the titles were
shifted down from where they actually livedsummer beach houses). K defense
is AP, argued the S of L had expired and that he was there continuously because
he was there every summer, which the property was intended for (and he bought

it from previous owner who lived there)) Two issues- was K occupation continuous
for purposes of AP and was there tacking by privity of estate- with using previous
owners time in home toward S of L time.
Key is to decide what normal use of the property is. If the adverse
possessor makes that use, he has likely occupied continuously. But
intermittent used that is not sufficient to satisfy continuity may be enough
to create a prescriptive element= right to use anothers property for a
limited purpose (but not to acquire ownership)
Requisite possession requires such possession and dominion as ordinarily marks
the conduct of owners in general in holding, managing, and caring for property
of like nature and condition
Continuity of possession may be established although the land is used regularly
for only a certain period of each year.

i. TACKING- Adverse possessorsa common problem with continuity is

whether one possessor can add-tackthe possess 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= voluntary transfer from the first
possessor to the second of either an estate in the land or
actual possession of it.
ii. Tacking- Owner-- tacking automatically follows on the owners side. Once
statute of limitations has started to run, the cause of action for ejectment
(together with its expiring limitations period) foes along with ownership.
iii. Ouster- if AP is ousted from possession by a third party, the third party may
not tack the possessors period of possession to his own. Privity is lacking
because the transfer wasnt voluntary. Courts take three diff views of what
happens if the ousted possessor returns:
- View most favorable to TO- least preferred in American courts- is
that the limitations period starts anew with reentry.
- Most favorable for AP- ouster doesnt interrupt the continual
running of the limitations period. The problem with this view is that
it permits the ousted possessor to tack her possession after reentry
to the third partys possession but there is no privitycourts ignore
it by saying that the third party is a trespasser and threats ousted
possessor as having constructive possession for time trespasser is
on land
- Preferredousted possessor can tack her new possession onto her
old possession but cant take credit for time of third party on land.
The AP must possess the limitations period plus the period of third
party occupation.
c. Some states (mostly western) require AP show he paid property taxes during SL
period.

Mechanics of Adverse possession:

Extent of the property acquired by AP- once the AP has satisfied these elements for the
limitations period, he acquires title to the occupied property. Question is, what is the physical
extent of the occupied propertydepends on whether the AP entered with or without color of
title (under defective deed or other instrument of title but without knowledge of the defect)
1. Entry without color of title- AP without color of title acquire only the land they have
actually physically possessed for the limitations period
2. Entry under color of title- deemed to possess all the land described in the defective deed.
So long as it consisted of a single parcel, and the possessor has occupied a significant

portion of the parcel ( possessor lacks color of title if he doesnt believe in good faith that
his defective deed is valid)
Statutory issues- AP law is a blend of statutory law and CL.
a. Length of limitations period- varies from statute, from 5-21 years. States with shorter
period often require payment of taxes to establish AP
b. When the cause of action accrues- the owners cause of action to recover possession
accrues (begins) when there is an adverse entry of the land. Once that happens the clock
of limitations period starts running.
o Disabled owner- Statute of limitations typically provide for tolling (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.
Statutory disabilities Include- insanity or other unsound mind; imprisonment; or
condition of being a minor.
o Typical statute provides that if owner is disabled at the time the cause of action
accrues, the owner may bring suit for some specified period after the disability
ceases, even though the normal limitations period has expired.
o ONLY applies to disabilities existing at time cause of action begins
o Ex. If owner is imprisoned when AP enters in 1970 and released in 1995, and
statute said O has 10 yrs. after end of disability to bring, even after 21 yr. SL, O
has till 2005 to file suit.
o Ex- A enters land in 1970, 1982 O dies and leaves to H who is 2 yrs. old. H
cause of action ends in 1991 regardless of fact shell only be 11 BC H wasnt
disabled at time the cause of action accrued.
o Lienholders, and future interest owners- lienholders (mortgage lenders) have a claim
on property but no right to possession until/if there has been a default or foreclosure,
so their claims arent destroyed by the expiration of limitations period. Future
interest holderspresent ownership interests in property of a right to possession at
some future time are also not entitled to possession now. AP doesnt cut of their
future claim to possession. When the future interest holder becomes entitled to
possession, his cause of action accrues, and limitations period starts running:
Ex. W owns life estate, P owns remainder (right to possession after W death). S
enters and adversely occupies in 1970. W does nothing, in 1991 S acquires AP
(consisting of W life estate). In 1995 W dies, P cause of action now accrues. P has
till 2016 to bring suit to eject S.
Adverse possession by tenants and coowner
- Tenants arent usually capable of AP against their landlords BC their entry was
permissivesubordinate to the owners claim of title. They lack the adversity or
hostility. It is rare and takes clear, explicit action on tenant part to repudiate lease
hold and become AP. . . .
- Coowner cannot AP against other, both equal right to possession. In order to AP against
other co-owner, the adverse co-owner must oust the other by excluding them from
possession and claiming sole ownership

Adverse possession for personal property (Chattels)-

The law of AP was created to deal with real property, not personal property, but title in
personal property can be acquired by AP. A different, shorter, statute of limitations
usually applies. The principle reason AP is not well suited for personal property s the
fact that the possession of a personal property in the manner of the true owner is not
very open and notorious. The traditional answer is that the open and notorious
possession is satisfied as long as the possessor uses the object the same way an
average owner would.
o Ex. Georgia OKeefe case- 1980- painting stolen. Years later it appeared for sale in art
gallery. So the gallery owner argued that his predecessor in interested had acquired

the title by adverse possession. The answer hinged on whether the possessors
exhibition of the painting in is owned home was sufficiently open and notorious.
Court ruled law of AP ought not to apply. The court said limitations period of
recovery for personal property starts to run at the earlier of:
o When the loss occurs (except where there is fraud or concealment) or
o When the owner first discovers, or thru reasonable effort should have
discovered, the cause of action (including the identity of the possessor)...
o This turns focus onto the owners conduct, rather than the
possessors conduct, and encourages owners to report loss and
undertake reasonable investigation

a. Title by theft- Voidable title--- approaches:

Traditional rule: replevin/conversion- S of L not run if fraudulent concealment:

o Good faith purchaser doesnt hid the item, because he assumes he has a good
title, doesnt make it hard for TO to find)
Adverse Possession- Open and Notorious (visible)
Discovery Doctrine S of L tolls as long as true owner exercises due diligence to
find lost item- if stops looking then S of L starts running against TO. AP can tack
with previous owner (OKEEFE)
b. Voidable title- (person who fraudulently has obtained item) - item not stolen, but acquired
by fraud (ex. Bad check), TO has voluntarily surrendered possession (but can still get it
back if acts quick enough) - however, if fraudulent purchaser sells item to a Bona fide
purchaser- (one who acts in good faith and pays fair value for property, then TO is out of
luck, can only sue person who committed fraud.) then the BFP cuts of TO rights. (burden
on TO to be careful, not contribute to loss of item by allowing fraud)
c. Entrustment theory- if in ordinary course of business you buy product from merchant, your
title is good against the TOdont want ppl to worry about buying goods and having to
give them up. UCC- codified CL rule of voidable title
Title acquired by adverse possessor
- When AP acquire title, they acquire a new title. The former owner has transferred his
interest, rather the law has stripped him of his title and created a new one in the AP.
But the new title cannot be any better or greater in scope than the former owners title.
The AP only gets what the TO had.
Ex. If TO had only life estate, then AP can only get life estate title thru Adverse
possession
An AP new title cant be recorded in the public land records because there is no
written record of it. The AP must bring suit against former owner to quiet title in
the AP. That judgment can be recorded. While and AP can transfer his title by
deed (statute of frauds- requires writing) there will be no evidence in the record of
title by Ap. The transferee from the AP receives the AP title but must still act to
quiet title.
Alternatives to AP in boundary disputes:
Some courts have modified AP for this type case. But there are other ways to solve:
1. Agreed boundaries- neighbors can always agree on a new boundary, put in writing, and
recorded a conveyance to carry it out. If neighbors orally agree on a new boundary when
there is a genuine uncertainty about the boundary the oral agreement is a binding method
of locating the boundary.
2. Acquiescence- if one owner acquiesces in a known encroachment for an indefinite but long
time, the acquiescence is proof of an agreed boundary
3. Equitable estoppel- if one neighbor does or says things that cause the other to
substantially rely to his detriment on the first neighbors actions, the first is estopped from
denying his statements or actions. ( trust me, that fence is the line--)
Accession-

Accession occurs when a person in good faith adds his labor to the property of another,
r when a person in good faith mixes his labor and his property with the property of
another. When issue who owns the resulting product:
o General rule- when only labor added, the owner of the original property owns the
resulting product, unless the value added by labor is substantial. In that case the
laborer owns product, but must compensate the owner of original property for
trespass. When labor and new material are mixed with anothers original property,
the resulting product goes to whichever person supplied the more significant and
valuable material. If that is the good faith improver, she must pay for her trespass.
o Mistaken improver of real property- the mistaken improver doctrine- variation of
accession that is applied to real property. A person who in good faith constructs an
improvement on the land of another (neighbor) creates in the neighbor an option
to either:
o Sell the land to the improver at its fair market value (net of the improvement) or
o Pay the improver the fair value of the improvement itself.

II. Formal Transfer (voluntary)

A. Acquisition by gift
-

To make a gift of personal property, the donor must transfer possession (hand over the
property) to the donee with the manifested intention 6o mwk4 w gift to the donee. Both
intention and delivery must be present. Acceptance by the donee is also required but
seldom an issue (the court presumes acceptance upon delivery, unless donee expressly
refuses a gift. Intention to make a gift may be shown by oral evidence; delivery
requires objective acts.
If manual delivery is not practicable b/c of the size or either of the objet, or its inaccessibility,
constructive or symbolic delivery may be permitted.
- Constructive delivery is handing over a key or some object that will open up access to the
subject matter of the gift
- Symbolic delivery is handing over something symbolic of the property given. (usually a
written instrument declaring a gift of the subject matter
Traditional rule of gift: if an object can be handed over it must be. But this is eroding
- One case- court said constructive delivery adequate when the evidence of donative intent
is concrete and undisputed, when there is every indication the donor intended to make a
present transfer of the subject matter of the gift, and when the steps taken by donor to
effect such a transfer must have been deemed by the donor as sufficient to pass the
donors interest to the donee.
Personal Property Acquisition by gift:
- A gift is a voluntary transfer of property for no consideration. To accomplish a gift of
personal property, the donor must:
o Intend to make a gift
o The property must be delivered to the donee (recipient) Methods of delivery
Manual (preferred)
Constructive ( too heavy- transfer keys)
Symbolic (paper title)
o Donee must accept the property
-

Gifts commonly divided into:

o Gifts intervolves (during life)
Made with no knowledge of impending death and are irrevocable
o Gifts Causa Mortis (in contemplation or impending death)
Made under knowledge or threat of impending death and motivated by that
fact.

Is revocable if donor recovers from illness or threat, or if donor dies of some

other cause that didnt prompt the gift.
Often viewed skeptically b.c the donor is dead and the completed gift is a
substitute for a will

1. Intent-a. For a gift to occur, the donor must intend to transfer title. If the Donors intent is
merely to transfer possession, the gift is not accomplished. Evidence for this
element is usually circumstantial, unless the donor executes a deed or some other
written expression of donative intent.
i. Gifts Causa Mortis- revocable if D recovers from threat of death that
motivated gift. The D intention is presumed to be to make the gift only
because of impending death. But if D intends gift to be irrevocable
regardless of impending death then it is an inter vivos gift.
2. Deliverya. The general rule is that the subject of the gift must be delivered by the recipient in
order for the gift to be complete. The best form of delivery is actual physical
possession (not always required. When physical delivery is impractical or
impossible, delivery may be accomplished by symbolic delivery or constructive
delivery
b. rationale- delivery performs three valuable functions:
i. making abstraction of reality- donor will part with object only if truly wishes to
give it, actions speak louder than words
ii. objective evidence of intent- intent is subjective, but delivery is objective and
is a second check on intent
iii. objective evidence of acceptance by donee
c. Relationship of delivery to intent- to the extent that the element of delivery is easily
satisfied by something other than delivery of actual physical possession (symbolic
or constructive) the element of delivery virtually becomes the same as intent
d. Delivery by deed- Delivery can be accomplished by deed of gift or some other
writing under seal. Unsealed instruments may still accomplish delivery if theyre
adequate to constitute symbolic or constructive delivery
e. Symbolic delivery- when actual delivery is impossible or impractical delivery
can also be accomplished by delivering some object that is symbolic of possession.
i. Ex. Dad wants to give copy write possession to his son, he write on paper
that he gives it to son, and then gives the paper to son. Or same with grand
piano that wont fit in sons house, paper saying its now the sons is enough
for delivery
f. Constructive delivery- when actual physical delivery is possible but impractical,
delivery of some object that is the means of obtaining the possession of the
property constitutes constructive delivery. Where it plainly appears that it was the
intention of the donor to make the gift, and where the things intended to be given
are not present, or capable of manual delivery form their size and weight. But
where the articles are present a capable of manual delivery it must be done.
i. Ex. Newman v Bost 1898- P alleges that the intestate of the D gave her all
his furniture and other property in his house as a gift cause mortis. (Life
insurance policy located in a bureau he gave her key to as a gift) P brought
suit against the administrator for recovery of vale of the property alleged to
have been converted (sold). As intestate was dying he asked P to hand him
his private keys (she was 10 yrs. his maid) he handed P the keys and told her
to take and keep them, and he wanted her to have them and everything in
the house, and then pointed at the bureau clock and other furniture items
and in hall at other rooms and said everything was hers. P claims insurance
and property belonged to her as a donation cause mortis and that the

Exam- look at
each item,
check categories
and see what
applies when.
See back of brief
for analysis

bedroom furniture and piano belonged to her as gift inter vivos Judgment- B/c
the paper was capable of manual delivery- the insurance didnt pass to P but
the bureau and furniture that went with the keys was Ps.. The furniture in P
bedroom was gift intervolves, intention to gift was shown and demonstrated.
ii. Ex. - P has two keys to safe deposit box, full of valuables. P gives one key to
M saying everything in safe is yours. Cases are split on if the gift is complete:
some say retention of 2nd key negates constructive delivery BC P didnt
surrender her control over box. Others say that the delivery of one key
constitutes Constructive delivery BC the key is literally the key to possession.
Courts usually look to other factors to determine real intent.
g. Special problemsi. Agent- when Donor delivery to agent of Donee, delivery is complete (not
always clear if person is an agent of the donor or doneelike if donor delivers
to his lawyer to give to the donee). If delivery is to donors agent there is no
delivery
ii. When donee is already in possession there is no need to perform act of
shifting back and forth to prove delivery. It has already been delivered before.

3. Acceptance
- Gift not complete until accepted by donee. Delivery triggers the presumption of a
completed gift, but it can be rebutted by donees rejection of the gift. The presumption of
acceptance is strongest when the gift benefits the donee and virtually nonexistent when
the gift is (rarely) of no benefit.
Gruen v Gruen- illustrationG wrote letter to son telling him when he is 21 he is giving him
painting, which was at G home and G still wished to retained possession for rest of his life (life
estate). This letter was held to be completed and valid gift to son of remainder interest in the
painting, a property right that would automatically become possessory when G died. G
manifested donative intent at time of gift BC the remainder interest was presently existing
property right. The letter was sufficient delivery b/c it would be silly to deliver when he intended
to retain it for life. S accepted by acknowledging gift to friend and retaining the letter for 17
years.
The system of estates (leaseholds aside)
-

Various ways ppl can own land ( free hold estates)

- The various free hold estates are contemporary adaptations of medieval ideals about
land ownership. Past notions, even no longer relevant persist
Estates are rights to present possession of land. An estate in land is a legal construct,
something apart from the land itself. Estates are abstract, land is real and tangible. An
estate can and does travel from person to person, or change its nature or duration, while
land doesnt
Fee Simple Absolute is the most important estate- the FSA is what we normally think of
when we think if ownership. It is capable of enduring forever
Life estate is a right to possession for the life of some living person, usually (but no
always) the owner of the life estate. It is sure to expire
There are three defeasible feesestates that will come to an end upon the
occurrence of some specified event:
o A Fee simple determinable results when grantor grants possession only until an
even occurs, or only so long as something remains true. (O to A so long as )
When the defeasible condition occurs, the grantor automatically reacquires
possession. The granters right to possible future possession is called possibility
of reverter
o A Fee simple subject to condition subsequent results when grantor grants
possession apparently without limitation or condition, but then immediately

attaches a condition by which the grantor may take repossession ( O to A, but if

the O may retake possession). Grantor must act to retake possession when the
defeasible condition occurs, --- retained right to possession sometime in the future
is called a right of reentry
o A fee simple subject to executory limitation results when either of the above
defeasible fees is created but the right to future possession is transferred to a third
party ( O to A so long as and if not then to B). the third partys right to a future
possession is an executory interest
Four basic free hold estates- - fee simple, fee tail, defeasible fees and life estate.
Leaseholds are nonfreehold estates. The main difference in the free holds is the duration

Fee Simple
-

Most common freehold estate. Two types of fee simple:

o Fee Simple Absolute- can last forever
o Three forms of Defeasible Fees. can be terminated upon happening of some
specified future event.
Fee Simple Absolute absolute in the sense that the duration is perpetual. It may last
forever. (But is not absolute in the sense that no one can restrict the owners use,
possession or alienability of the estate). The state can and does impose restrictions.
o Common law: To A and his heirs. A= person taking the FSA and to his heirs=
words of limitationwords that limit the duration of the estate. (This meant that A
was granted estate that was capable of inheritance and potentially therefore infinite
in duration.
o Modern view: it is not necessary today to use the magic words and his heirs to
create a FSA. Either by statutory chance or judicial decision, the usual rule is
that the grantor conveys his entire estate unless the grant is to the
contrary.
o Alienability and the inheritance of a fee simple absolute: FSA is freely
alienable, devisable by will ,or inheritable in intestacy (dying without a will)
Alienation: O of FSA can convey the entire FSA to another person. If O
conveys FSA to A then the FSA continues without interruption, just with a new
owner. O can also split his FSA into lesser estates, the sum of the estates will
add up to FSA.
EX- O to A for life (life estate) and a reversion is retained by O.
(Reversion is future interest that entitles O to future possession upon A
death. Together the two equal a FSA.
Devise: today owner of FSA can sent it to whomever he pleases, or split into
pieces that equal FSA--- in old England estate in land couldnt be devised and
only passed to ones heirs at death.
Inheritance- means transfers of property owned by a person dying without a
will. This is called intestacy, is dealt with by states that specify the heirs.
Strictly speaking a person dying w/o a will doesnt have heirs, he has
devisees (of his real property) and legatees (of his personal property). In
early CL, the heirs were the decedents issue and the rule of primogeniture
applied: estates in land wen tot eh decedents first born son, daughters only
inherited in absence of sons. Usual statutory scheme of today sets aside
some portion of the decedents property for the surviving spouse, and
distributes the remainder to the children. In the absence of spouse or kids,
the Decedents parents are their heirs. If none, the heirs are his collateral kin
(bros, sis, aunt uncle etc.). If absolutely no heirs, the property will
escheat to the state.

o Fee Tail: to A and the heirs of his body

Virtually extinct, purpose was to allow nobility to keep their power over land
centralized in their families (prior to that A and heirs of his body was
interpreted to be fee simple conditional that was only FSA conveyed if and
when A had kids). Fee tail automatically passed from one generation to the
next, expired only when the lineal bloodline ran out, upon expiration estate
reverted to original grantor thru inheritance or devise ( grantors living remote
heirs or devisees).
Every fee tail was followed by a reversion in grantor or remainder in third
party because blood line might die out.
Eliminationabolished in US by statutes- an attempted to create a fee tail
will result in : a fee tail that cant be ended by a simple conveyance; a FSA; a
FS subject to executory limitation; life estate followed by remainder in the
issue of life tenant; or a FS conditional

Life Estates: to A for life

-

Possessory estate that expires upon death of a specified person. Usually expires upon
death of life estate holder.
Judicial recognition of a life estate had two important consequences:
- It meant the grantor of a life estate could control who take the property at the life tenants
death. The life estate ultimately supplanted the fee tail as a device to control inheritance
- As land and stocks and bonds came to be viewed as income producing capital, trust
management of the life tenant developed. Under modern trust management, one person
(corp- such as bank) manages property for the benefit of the life tenant, paying the life
tenant the income thereof--- today most life estates are called a trust

Life Estate is always followed by some future interest- either a reversion in the grantor or a
remainder in a third party. A reversion may only be created by the grantor and a
remainder may only be created by a transferee
a. Life Estate pur autre vie: when the duration of a life estate is measured by the life
of a person other than the estate holder. ( for the life of another)
i. Ex- O to A for life. A conveys to B, then B owns life estate measured by As
life.
b. Defeasible Life Estates- Life estates may be defeasible, and came rules apply to
defeasible life estates as to defeasible fees.
i. Possibility of reverter: O to A for life, so long as he never dances. A has a
determinable life estate and O has possibility of reverter ( will become
possessory if A dances) and a reversion ( which will become possessory on A
death even if he never dances)
c. Life Estates in a group or class of people: a LE may be created in a group of ppl.
The problem is that some of the life tenants will die before others, and there is some
uncertainty whether the surviving life tenants take the deceased share or whether
remainderment, or reversion holder is entitled to possession
d. Ambiguous grants- recurring problem. Courts try to follow the grantors intent,
which is sometimes indeterminable. Other factors are often relied on to decide
whether life estate or some other interest is created.
i. White v Brown- O handwritten will: I wish W to have my home to live in and
not to be sold Court said it was a FSA uses statutes to determine, they said
that unless specified otherwise it was transfer of whole estate. Treated no
sale restriction as an invalid attempt to restrain alienation of FSA rather than
evidence of a life estate.
e. Transferability and valuation- LE is freely alienable during life, but the transferee
receives the transferors life estate. The market value of LE is fraction of value of

FSA. The fraction is determined by multiplying life expectance (in years_ of the
person whos life measures the duration of the estate, by the annual value of
possession and discounting the product to reflect the fact that the payment must be
made now to receive value over time.
Attempt to restrain alienation must be void for public policy and nature of
estate devised
objections to restrains on alienation:
1. Restraints make property un marketable
2. Tent to perpetuate concentration of wealth by making it impossible for
owner to sell property and consume proceeds of sale
3. Restraints discourage improvements on land, unlikely to improve if cant
sell
4. Prevent owners creditors from reaching the property and therefore
extending credit
Restraints on alienation:
o Disabling restraint- withholds from the granter the power of transferring interest ( O
conveys to A and his heirs but any transfer hereafter in any manner of interested in land
shall be null and void)
o Forfeiture restraint- if the grantee attempts to transfer his interested it is forfeited to
another person ( o convey to A and his heirs, but if A attempts to transfer property by any
means whatsoever then B and her heirs
o Promissory restraint- grantee promises not to transfer his interest ( o grants and A
promises he and his heirs will not be transferred by any means)

i.

Or if Life tenant and remaindermen split proceeds of property if sold: figure

out property worth, and figure out what LE worth (prevailing interest rate and
remaining life tenants life expectancy)

ii. Baker v Weedon 1972W devised farm to widow for life and then to W
grandkids by prior marriage- Widow lived on farm which was rising in value
b/c of urban development but earned very little annual from farm rent. She
wanted to sell and invest proceeds to increase income, but remaindermen
unwilling to do so BC value was raising rapidly and her life expectance was
short.
f. The modern Life Estate- the equitable LE is a common and important modern
estate, but the legal life estate is uncommon and a bad idea. An equitable le is a
property interest owned for life in the assets of a trust. A legal LE is an estate for life
in the assets themselves.
i. Ex. O devises land to A, trustee, to hold for benefit of B for life, then C and D,
outright. A Trustee has legal title in FSA; B is beneficiary has equitable life
estate. C and D= beneficiaries are concurrent remainder owners. If O had
left to B for life then C and D, B would have legal life estate and C D would
own remainder.
1. Trustee has fiduciary duties to equitable owners of the trust, but is free
convey and exchange assets in order to benefit the owners.
2. Equitable life estate is much more flexible, courts try to avoid effects of
legal life estate by construction (implement grantors intent) Judicial
sale( order sale of LE and remainder and either divide proceeds
between life tenant and remainderment or order proceeds held in trust
with income payable to life tenant and trust corpus preserved for
remainderment. (rarely done)

a. Equitable Necessitywhere it can be proved that the sale is in

the best interests of all parties and only practical method to
effectuate grantors intention to provide for material comfort of
Life tenant, and preservation of assets value for remainderment,
court might invoke equity powers and order sale of all or part of
property
i. Baker v Weedon- Ct ordered that sale of all the farm
wouldnt
b. Waste avoidance- courts may also order sale when it is
necessary to avoid waste (A argued this^) the deterioration and
destruction of the property. The idea is what the best interest of
all the parties to sell the asset before value is destroyed
g. Waste- inherent in LE is the idea the life tenant gets use of property for life, thus
deriving economic value of possession (rent, farm income). Use must be consistent
with the fact that the property will be handed over to the remaindermen upon life
tenants death. Waste is term to describe actions of Life tenant that
permanently impart the propertys value or interest of the future interest
holders. Waste categorized as follows:
i. Affirmative waste: LT acts affirmatively to damage the land (voluntary
committed waste).
ii. Permissive waste: LT fails to act reasonably to protect deterioration of the
land, permissive/involuntary waste.
1. Question of which omissions are unreasonable is dependent on the
circumstances. The LT must use ordinary care of a prudent man for the
preservation and protection of the property
iii. Ameliorative waste- LT acts affirmatively to change the principle use of the
land, and there by increases the value of the land. It is actionable, however
only when it is clear the grantor intended for there to be no change in use of
the land, and the property may still reasonably be used in the fashion the
granter intended.
1. If the grantor makes it clear he doesnt intend for the property to be
preserved in its original use, or if the land may no longer be used in
reasonable fashion the way intended ameliorative waste is not
actionable
2. If grantor fails to specify intentions, even though ameliorative waste
may not support an injunction, damages equal the value of the
destroyed asset may be given.
a. Wood v Woodrick 1994O devised interest in family home to
wife for life then P. the property contained dilapidated barn,
which wife proposed to knock down. P objected and claimed it
would constitute waste. Removal of the barn would increase
property value, so P injunction request was denied, but she was
awarded the value of the increased amount.
Problems with life estates:
- Sale- Circumstances might arise that makes the sale of property advantageous
o Life tenant cannot sell a fee simple unless all other persons having an interest I the
property consent or unless a court of equity orders sale and reinvestment of the
proceeds
- Lease- might be advantageous for the life tenant to lease the property for a period
extending beyond the life tenants death
- Mortgage- bank ordinarily doesnt lend money for improvements if the security is a life
estate rather than a fee simple

Waste- life tenant may want to take minerals or cut timber, or take down a usable
building. This might constitute waste entitling the remainder men to an injunction or
damages
- Insurance- the life tenant is under no duty to insure buildings on the land. If the life
tenant does insure buildings and they are destroyed the life tenant has been held entitled
to the whole proceedings and the remaindermen nothing.
Person creating a legal life estate can draft instrument so that life tenant has power to sell or
mortgage a fee simple beyond the duration of the life estate.
Life estates in personal property create special problems- movable and easily sold, some state
have statutory solutions.
Protecting life tenant by creating a use- more flexible, and more desirabletrustee holds the
legal fee simple, and the payments of income of property may directed to life tenant, or let the
life tenant into possession

Defeasible Fees
-

Any estate may be defeasible (subject to termination) upon the happening of some future
event
Distinction between a fees simple absolute and defeasible fee simple is that no future
event can terminate or divest a FSA , but a DFS is subject to termination or
divestment upon the occurrence of a future event
o The future event might not happen, in which case the DFS endures as long as a FSA,
but there is always the threat of termination.

Three types of DFS:

Words evidencing intent to create FSD- so long as until during while are
indicative of grant for limited duration, and likely to be construed as FSD. Express
language of grantor indicating retaining a possibility of reverter bolster the conclusion.

1. Fee simple determinable- with possibility of reverter

Terminates automatically upon the occurrence of the future event
2. Fee simple subject to condition subsequent
Terminates only when proper action is taken to terminate the estate following
the occurrence of the future event
3. Fee simple subject to executory limitation
The future interests that cuts short the fee simple subject to executory
limitation is held by third party (not the grantor or the holder of fee), while
the future interest that cut short either the FSD or FSSCS is vested (at least
when created) in the grantor
Fee Simple Determinable possibility of reverter O A and his heirs as long
as/until/during/ while Condition then automatically reverts to O
- Can last indefinitely and it must express event/condition in instrument and transfers
automatically to holder of possibility of reverter upon occurrence of the event/condition
- Created when the grantor intends to grant a fee simple only until a specified future
event happens and uses language in the grant that manifests intent
o Ex. O to A for so long a time as used as library. O has created a FSD in A. estate will
only last until it stops being used as library, if had only said to A for the purpose of
use as library, it wouldnt be a FSD, would have been FSA, mere expression of
purpose is inconsequential.
o Because FSD is less than a FSA, the grantor of the determinable fee retains an
interests= possibility of reverter. Which must become possessory as soon as
the FSD possessory estate terminates.
FSD + Possibility of reverter = FSA

EX. Mahrenholz v Board of School trustees 1981O conveys land to yacht club
only for so long as land used as the clubhouse, and if not so used, the estate shall
automatically terminated and all right, title and interest in the land shall revert to
granter.
Transferability- A FSD is a freely transferable estate, but the nature of the estate stays the
same. The transferee takes the estate subject to the limitation that makes it defeasible
Abolished in some estates- CA and KY have abolished FSD. An estate that would be a FSD
is instead a Fee Simple subject to condition subsequent.

Fee Simple Subject to Condition Subsequent- Right of Entry O-> A and his
heirs, BUT IF condition O may reenter and eject grantee.

Created when the words of the grant support the conclusion that the grantor intends to
convey a fee simple absolute but has attached a sting to the grant so that if a specified
future event happens (the conditions subsequent to the grant), the grantor may pull the
string and get his FSA back. Conceptually grantor has conveyed FS forever but has added
as an afterthought a condition that will enable him to get it back. (contrast with FSD which
is that grantor conveyed FS only for limited time)
Interest doesnt automatically terminate upon event or condition occurring, depends on
holder of right of entry who must reenter in order to get property back. A continues to
have FSSCS until O steps up.
o Ex. O to A provided that if land should ever be used for any purpose other than a
library, O may enter and retake possession of and title to land. O indicated intent to
part with entire estate (which alone would be FSA) but there is the provision if land
should every be used and it retained power by saying grantor may this
provision shows O didnt actually intend to convey FSA--- instead it is a FSSCS
Because grantor has parted with less than a FSA he retains an interest= Right of Entry
(or power of termination). Unlike possibility of reverter which automatically becomes
possessory interest upon occurrence of event, the holder of a right of entry must actually
exercise the power to terminate the FSSCS in order for that defeasible fee to come to
an end. The holder of a right of entry has the option to terminate the FSSCS
o In example above, if used as a store instead then A estate wouldnt end unless and
until O takes affirmative action to retake possession and terminate the estate of A.
Words evidencing intent to create FSSCS- if the words indicate grantors intention to
convey whole estate, coupled with conditional right to take it back, courts will construe as
FSSCS.
o provided however but it on condition that
Action necessary to assert right of entry: holder must take substantial steps to recover
possession and title. The holder need not actually reenter and retake possession, but must
do more than merely proclaim his intention to retake possession. Filing suit to recover
possession is enough. Letter demanding possession is debatable
Transferability- freely transferable during life, is inheritable and may be devisees by will.
Preference for FSSCS- often difficult to determine which defeasible fee has been created.
In ambiguous cases courts prefer to find FSSCS BC FSD produces automatic forfeiture and
FSSCS makes forfeiture an option of the holder of right to entry. Courts try to avoid
forfeiture of title bc its harsh and deprives fee holder of reliance interest developed
o Sometimes courts rely on extrinsic evidence-evidence wholly apart from the grant
itself, to decide. This usually occurs where the consequences of automatic forfeiture
are severe

Consequences of classification of defeasible fees:

Because possibility of reverter is automatic, the holder has right to possession once
limitation occurs, a cause of action accrues at that moment against the person in
possession of property. The possessor who used to occupy under FSD is now adverse
possessor, if suit isnt timely instituted, a new title by AP may result. For right of entry the
cause of action only accrues when right of entry is exercised.
Effect under the Rule of Perpetuitiesa doctrine designed to foster alienability and
marketability of property. Under the rule, when uncertainty concerning ownership of a
future internet persists too long the future interest will be destroyed. Possibility of reverter
and right of entry are exempt. But executory interest is subject to rule and likely invalid.
Illustration: Mahrenholz v County Board School of Trustees
Appellate Ct Illinois 1981

Facts/PH
Huttons executed deed to the school district (succeeded by the current school district) to be
used for school, land to be used for school purposes only; otherwise to revert to the grantors
herein They gave the land surrounding the school to J, supposedly including the reverter
interest in school, in 1959 J gave deed to M (P here). H died with son as heir. In 1973 school
used the building for storage, not longer a school... Son sighed over interest in the land to M in
1977. And then later signed disclaimer and release of his interest to the school. P filed
complaint to quiet title to school in themselves, trial court dismissed complaint. School purpose
only, otherwise revert to grantors, ambiguous- what is school purpose. Issue: Whether trial
court correctly concluded that the P could not have acquired any interest in the school property
from the J and Son. Discussion This issue depends on the legal interpretation of the language in
the original deed from H to school, and must consider the alienability of interests created and the
effect of the subsequent deeds. CH transferred a defeasible fee simple to school, and gave rise
to future interest in grantors, did not convey a fee simple absolute.
Issue 2- whether P could have acquired this interest from Son. Resolution of this depends on the
construction of language in original deed.
Discussion Son didnt act to retake the property he conveyed interested to M.
- If Son had only right of reentry for condition broken, he could not be owner of the property
until he reentered and that right cannot be conveyed intervolves
- If Son had possibility of reverter in property, he owned the property as soon as it stopped
being used as a school. , the M could have acquired an interested if Son inherited the
possibility of reverter from parents
Rule- difference between a fee simple determinable and condition subsequent is sole a matter of
judicial interpretation of the words of a grant.
- H would have created fee simple determinable if they had allowed the school to use the
property as long as, or while it was used for school, or until ceased to be so used.
- Subject to condition subsequent would have arisen had H given the land upon the
condition that; or provided that
Discussion- wording shows the grantors intended to create a fee simple determinable, followed
by a possibility of reverter. only demonstrates wanted to give as long as needed and no
longer; contains limitation within the granting clause The proceeding phrase by which
possession is returned seems mandatory return , not permissive may
Holding- Upon a grant of exclusive use followed by an express provision for reverter when that
use ceases, courts and commentator have agreed that a fee simple determinable, rather than a
fee simple subject to a condition subsequent is created.
Illustrates difference between FSD and FSSCS.

Exam question?- must methodically identify what interest is, if cant then explain options
(FSD and FSSCS) and is the condition broken or unbroken. There will be four possibilities
(FSD broken FSD not broken, FSSCS broken FSSCS unbroeknt--- discuss ALL FOUR
pssibiilties and results ( see back of brief for analysis on this question)
Words used are important, examine all parts.
Pg 233 problem two- classic exam question- language suitable for either FSD or FSSCSexamine both possibilities and what happens under each, what takes to violate condition,
dicusss adverse possessin angle. (see brief for analysis)
Problems with defeasible fees: issues presented by creation of defeasible fees and their
associated future interests:
- Invalid restraint on alienation?: all defeasible fees restrict the use that may be made of the
property. Restraints on alienation of property are disfavored BC they inhibit economic
efficiency and productivity; such restrains prevent resources from being reallocated by the
market into the hands of a person who values them highly and will make productive use of
them. When does use restriction in defeasible fee become so onerous that it is invalid
restraint on alienationgenerally when the restriction material affects the marketability
adversely
o Ex. Mountain Brow Lodge Odd fellows v Toscano 1968T gave L a lot adjacent to
its building, he restricted its use to the lodge only, and stipulated that in the event
of a sale or transfer of the property or a failure but lodge to use the property, title
would revert to T. Court voided the no sale or transfer restriction as an invalid
restraint on alienation but upheld the use restriction. Saying that T meant to convey
a determinable fee to L rather than merely restrict alienability the restriction of use
was valid.
- Defeasible fee or covenant- a use restriction might be seen as limitation or condition in
defeasible fee, or as a covenant enforceable by suit seeking injunction preventing violation
of promise or damages for breach. Creation and enforcement of use covenants
servitudes--. if language is ambiguous the court might interpret the use restriction as a
servitude, bc remedy is damage/injunction vs loss of ownership
- Valuation of defeasible fee and associated future interest: placing separate value on a
defeasible fee and its associate future interest is harder than valuing a life estate
separately from its associated remainder. Here the condition isnt as limited as the
eventual death.
o Ex. Ink v City of Canton 1965- I conveyed land to city so long as it was used for
Public Park. State took most of park by eminent domain and made highway. Suit
arose between city and I family (owner of possibility of reverter) regarding how the
proceeds of condemnation should be divided. Owner of possibility of reverter got
nothing if city didnt violate condition- gave I something

Fee Simple Subject to Executory Limitaton

A fee simple that is divested or shifted from one transferee to another transferee upon the
occurrence of some future event. Both the FSD and FSSCS involve the creation of a defeasible
fee with a future interest retained by the grantor (possibility of reverter or right of entry). But
the same defeasible fee estates can be created with the future interests transferred to a third
party instead of retained by the grantor, which creates a FSSEL.
- If a grantor uses the words necessary to create a FSD but instead of retaining the
possibility of reverter, the grantor transfers that interest to a third party, the interest

created in the 3rd party is called an executory interests, and the interest created in the
immediate transferee is a FSSEL.
- If grantor uses the words necessary to create a FSSCS but instead of retaining the right of
entry, the grantor transfers that interest to 3rd party it is called and executory interest and
immediate transferees interest is FSSEL.
- Prevailing doctrine says that a FSSEL is automatically divested in favor of the executory
interest no matter whether the divesting condition is phrased in the form a FSD or FSSCS
- Ex. O conveys to A and her heirs for so long as land is cultivated annually, and if not, to
B and her heirs. O has uses words indicating his intent to convey land for limited time (so
long as ). If the grant had stopped there, there would have been FSD and possibility of
reverter to O---but the O then gives what would have been his possibility of reverter to B.
o A has fee simple subject to executory limitation
o B has executory interest
- The executory interest automatically becomes possessory if the divesting condition
occurs.
- The difference of language between FSD and FSSCS doesnt have legal consequences
when dealing with executory interests the consequences if the O had retained possibility
of reverter is that the land automatically becomes possessory and right of entry it
doesnt. but all executory interests automatically become possessory upon
breach.
Restraints on Alienation of Free hold estates:
- Types of restraintsattempts to prevent alienation of free hold estates are generally void.
There are three types:
o Forfeiture- forfeiture restraint purports to cause forfeiture of the estate if alienation
is attempted, O to A but if he ever attempts to transfer in any fashion, to B
o Disabling- disabling restraint purports to disable the owner by depriving him of any
power to transfer the estate O to A but no further transfer by A of any interested
in the land shall be valid
o Promissory- purports to extract a promise from the transferee that she will not
alienate the property o to A and A promises he will never transfer any interest in
the farm
- Total restraints on a fee interest: no matter what type of restraint is uses, a total
restrained on alienation of a fee interest is void. Rationale- economic efficiency.
Restraints prevent property from moving into hand of ppl who would use most
productively
- Partial Restraints on a fee interest: some partial restraints on alienation of a fee interest
are valid, but most are void. General rule: a restraint on alienation that is for a
reasonable purpose and limited for duration is valid
- Restraints on life estates- restraints on LE alienability are more upheld, but validity
depends on type of restraint and type of life estate to which its applied.
o Legal life estate- a life estate is theoretically alienable but not readily marketable by
itself Thus, the practical effect of a restrain on alienation of a LE is to prevent gift of
the estate or creditor seizure of it. Courts almost always void disabling restrains on
alienation. Courts sometimes uphold forfeiture and promissory restrains, because
they can be released
o Equitable life estates- disabling restrains on equitable life estates are freely
permitted. Such restrains are called spendthrift trusts, usually created in a trust to
prove a spend thrift relative with income but prevent him from folly by denial of
power to pledge trust assets as security for loan or extended credit

Future estates
Future Interests

Future interests are legal interests in property that are not possessory but are capable of
becoming possessory at some time in the future. A future interest is a presently existing
property interest, but it confers only a future right to possession.
a. Ex. O to A for life, then to B and her heirs
i. A has life estate (present possessory interest
ii. B has a remainder (future interest) the remainder is in existence now but
will not become possessory until the expiration of A life estate

b. Five types of future interests:

i.
ii.
iii.
iv.

Reversion(retained by grantor)
Possibility of reverter(retained by grantor)
Right of entry (power of termination)(retained by grantor)
Remainder (grantee)
1. Are either contingent or vested
a. Contingent interest is subject to 1 or both uncertainties:
i. Either granted to unknown person or
ii. There is some condition precedent to the future right to
possession
v. Executory interest (grantee)
1. Future interests that divest (cut off) either :
a. Another transferees possessory or future interest (a shifting
executory interest) or
b. The grantors interest at some future time (a springing executory
interest)

Future Interests retained by the Grantor:

A. Reversion-

The reversion is the future interest that is created when the grantor conveys a lesser
estate than he originally owned. A reversion is freely alienable during life and may be
devised or inherited.
a. Ex. O owns land in fee simple absolute, conveys to A for life (life estate- which is
less than a fee simple absolute) when A dies the life estate will end, and someone
will be entitled to possession (the owner of the reversion). O retained reversion,
even without mentioning it in the grant because he conveyed less than his estate
(fee simple absolute). O can convey the reversion, or it might have passed in O
will.
i. Reversion is created automatically whenever the grantor conveys less than
his entire interest in the property. It need not be expressly retained, and the
person doesnt have to own a fee simple absolute to convey a lesser estate
and create a reversion.
1. The conveyance of any estate that is less than the original
estate owned by the grantor will create a reversion
b. Ex. O owns fee simple absolute and conveys to A life estate. If A leases to B for a
year, then A retains a reversion which will become possessory upon expiration of
the lease. If A conveys to B for Bs life, A still has a reversion. B has a life estate in
life estate pur autre vie (measured by A life). If B dies before A then As reversion
become possessory. If A dies first, A life estate ends and terminates Bs life estate
pur autr vie and O reversion becomes possessory.
i. A reversion is not necessarily certain to become possessory in the future.
c. Ex. O has fee simple absolute, conveys to A for life and then to B and his heirs if he
survives A. O has retained a reversion, but it will never become possessory if B
survives A. B has a contingent remainder= a condition precedent to possession is
that B must survive A. If she does her remainder become a possessory estate- fee
simple absolute and O reversion is then destroyed because B would own O original

estate. If B doesnt survive A, her remainder will be destroyed since the

contingency never occurred, a and O reversion will become possessory
i. A reversion is not created when the grantor conveys to one person part of his
estate and simultaneously conveys the rest of his estate to another person.
d. Ex. O of fee simple absolute conveys to A for life, then to B and his heirs. O has not
retained reversion. A has a present possessory life estate. B has a vested
remainder in fee simple absolute. B is a known person and there is no condition
precedent to her taking possession upon the expiration of A life estate. B vested
remainder is a fee simple absolute bc the grant make it clear it is to B and his
heirs ( O has conveyed his entire interest)
i. Person has not conveyed their entire interest when they convey a lesser
present possessory estate and followed by a contingent remainder in fee
simple absolute.
e. Ex. O convey to A for life then to B and his heirs if he survives A. now B has a
contingent remainder in fee simple absolute. While B is a known persons, it is
unknown whether the express condition precedent to her possession (survival of A)
will occur. O has retained a reversion
i. Reversions are always vested: even though not all reversions will
certainly become possessory, all reversions are vested interests. Normally for
a future interest to be a vested interest, it must be created in a known person
and must not be subject to a condition precedent. Reversions are vested b/c
they are created in one person who owned the entire estate at the moment of
creation. B/c the grantor has not parted with all he owned, his retained
interest is regarded as vested even though his future right of possession is
uncertain. This is imported because, being vested at creation, it is not
subject to destruction by the Rule against perpetuities
ii. Distinguished from a remainder, possibility of reverter, and power of
termination: a remainder looks like a reversion but is created in a transferee,
not retained by a grantor. A possibility of reverter is retained by the grantor,
but is the future interest created when the grantor conveys a determinable
version of the same estate he owns. A power of termination (right of reentry)
is also retained by the grantor but is the future interest created when the
grantor conveys his estate subject to a condition precedent.

B. Possibility of a Reverter
-

A possibility of reverter is created whenever the grantor conveys the same quantity of
estate that he originally had, but conveys it with a determinable limitation attached and
retains the right to future possession if and when the determinable limitation occurs. That
future interest in the grantor is a possibility of reverter.
Whenever there is a determinable state created, the grantor retains the possibility of
reverted, unless the grantor simultaneously creates in a 3 rd party what would be a
possibility of reverter if retained by the grantor
a. Ex. O to A so long as it is used as a warehouse.
i. A- FSD and O- retained possibility of reverter.
ii. Although the possibility of reverter is usually created when the grantor
conveys FSD, it can be created by the conveyance of any determinable estate
b. Ex.O to A so long as land used as single family residence and if not to B and her
heirs.
i. A= FSD B=future interest that would be possibility of reverter if O had
retained it, but because its created in 3 rd person it is an executory interest.
(possibility of reverter can never be created in granteealways an
executory interest)

c. Transferability- CL didnt permit transfer of possibility of reverter intervolves, or by

will, only buy inheritance. Today most states permit alienation intervolves, devised
or inherited
d. Termination- both possibility of reverter and right of entry can endure forever,
because:
i. The triggering limitation might never occur and
ii. Both future interests are vested at creation and so are immune from
destruction under the Rule against Perpetuities. Some jurisdictions have
made statutes that terminate the possibility of reverter or right of entry after
some period (usually 30 yrs.)
e. Statutory abolition- few states have abolished determinable estates by statute, the
possibility of reverter has also been abolished

C. Power of Termination or Right of Entry

Created whenever the grantor retains the power to cut short the conveyed estate
before its natural termination.
a. Ex. O to A and his heirs, but if land should cease to be used as farm, O may
terminate the convey estate and retake possession.
a. A has FSSCS; O has right of entry
b. Right of entry can only be created in the grantor. The analogous interest
created in grantee is an executory interest
b. EX. O to A and his heirs, but if land cease to be used as horse to B and his heirs,
who may terminate the conveyed estate and retake possession
a. A- FSSCS; B- executory interest; O= retained nothing
o Transferability at CL right of entry was like possibility of reverter, not alienable inter
vivos or devisable by will, only inheritable. Today jurisdictions are split over whether
to use CL rule or permit free alienability. Very few jurisdictions hold that the mere
attempt to alienate a right of entry destroys it, freeing the possessory estate of the
condition subsequent
o Effect of abolition of determinable estates- in the few states that have abolished
determinable estates and thus possibility of reverted, what would have been a
possibility of reverter is converted into a right of entry
o

Future interests in Transferees (grantees):

1. Remainders
-

A remainder is a future interest created in a grantee that will become

possessory (if it every becomes possessory) upon the natural expiration of the
preceding possessory estate. Some remainders are certain to become
possessory, others only have possibility of becoming possessory. But all
remainders never divest another estate. The only way a remainder become
possessory is the natural expiration of the prior estate
The term remainder simply identifies the type of future interest it is. A remainder is a
future interest in some estate- fee simple, fee tail, life estate, or term of years.
o Ex. O to A for life, then B for five years, then to C for life, then to D and the heirs of
his body, then to E and her heirs
A- LE; B- remainder for term of years; C-remainder for life; D- remainder in a
fee tail (if permitted); E- remainder in FSA

Classification of remainders: remainders are classified as vested or contingent. The

purpose of distinguishing between the two is to id the remainders that are of uncertain
ownership or ultimate possession. Persistent uncertainties of these sorts make property
difficult or impossible to alienate. CL devised marketability rules to destroy contingent
remainders if the contingency lasts for too long
Method- to classify future interests must classify each interest created by
the grant in the order of creation. Examine the 1st interest created is it
presently a possessory or future interest? If it is future interest then what kind is
it? If it is a remainder, is the interest created in a known person? If so, is ultimate
possesson subject to any condition precedent? If not you have vested remainder.
Do this over and over for each subsequent interest in the grant

then
o
o

Ex. O to A for life, then to B and heir heirs if she has published novel, but if not to Cs
living children and their heirs.
A- present possessory life estate
B-future interest- remainder (because it will become possessory, if at all, upon the
natural expiration of LE. It is Contingent remainderBC although B is a known
person, there is no certainty that B will have satisfied the condition precedent to
possession a novel. (B has contingent remainder in FSA)
o Cs then living children- remainder (will become possessory if at all upon the natural
expiration of LE of A, it is a contingent remainder---b/c t 1) the class of grantees
( Cs then living children) is unknown and cant possibly be known until A death, and
(2) there is a condition precedent to possession that C children survive S ( Cs
children have a Contingent remainder in FSA)
o O has retained a reversion (none of the conditions might be fulfilled)

A. Vested Remainders
-

A remainder is vested if it is created in a known person and possession is not subject

to any condition subsequent. As a result a vested remainder must necessarily
become possessory whenever the prior possessory estate expires.
Ex. O to A for life, then to B and her heirs.
o B remainder is vested bc she is a known person and there is no conditions
precedent to her possession, when A dies C or her heirs will take possession
o The natural expiration of the preceding estate is not a condition precedent
Ex. O to A for life, then to B and her heirs if B survives A, then there would be a condition
precedent to B possession- surviving A. but in above example there is no condition
Three types of vested remainders:

1) Indefeasibly vested remainders:

-

Certain to become and remain possessory. Nothing will prevent possession

from happening eventually, and once possession occurs, it will last forever.
i. Ex. O to A for life, then to B and his heirs.
- LE; B(or heirs)- indefeasibly vested remainder in FSA [B is certain to obtain
possession after expiration of A LE and once he has possession B cannot be
divested by his possession. He has a FSA]
ii. Despite the certain to become and remain possessory rule, an indefeasibly
vested remainder is subject to the qualification that any estate can expire
naturally, and that expiration might occur while the interest is still in its future
interest form. In such cases, the indefeasibly vested remainder is not divested; it
has simply expired in accordance with its natural or inherent limits.

Ex. O to A for life, then to B for life then to C and heirs. ---- B has an
indefeasibly vested remainder in a LE, but if B dies before A his LE will
naturally terminate, even though he never enjoyed possession. B interest
wasnt divested by C, and it ended naturally, so C is owner of indefeasibly
vested remainder in FSA, and will possess upon A death.

2) Vested remainders subject to complete divestment

-

Remainder created in a known person and not subject to any condition

precedent, but it is subject to a condition subsequent that, if it occurs will
completely divest the remainderment of his interest.
- Ex. O to A for life, then to B and her heirs, but if C should ever return from Vietnam
then to C and his heirs.
i. A- LE;
ii. B- Known person and no condition precedent to her possession (if A dies today B
will be entitled to possession. But both B remainder and her possession should it
occur, can be taken away from her if C returns)
- If A dies before C returns the B will possess a FSSEL and C executory
interest will continue until Cs death. ( if C never returns, exec interest will
terminate on his death)
- Note- A LE is subject to Exec limitation in favor of C, if O wants A to have
LE not subject to Exec Limitation he must make intent clear.
- VRSCD are still vested and they may be transferred intervolves, devised, or
inherited. But it can be created in a way that it cant be passed on at death
i. Ex. O to A for life, then to B and heirs, but if B doesnt survive A then to C and
heirs.
- B vested remainder is subject to complete divestment by C executory
interest, b.c the divesting condition subsequent is B failure to survive A, B
could never pass his remainder at death. If B dies before A, his vested
remainder is divested in favor of C. if A dies before B the B acquires
possession and the divesting condition subsequent can never occur and
terminates Cs interest. So B has a FSA to pass at his death.

3) Vested remainders subject to open( partial divestment)

-

Remainder created in a class (or group) of grantees, at least one of whom is

presently existing and entitled to possession as soon as the preceding estate
expires, but which is capable of expansion to include unknown people. It is called
subject to open BC the class is left open for entry of new members.
- Ex. O to H for life, then to such of my children who have graduated law school. O
created a remainder in a classher children who have graduated law school.
i. If at moment of creation O has 3 kids, A B C, non has graduated law school, then
the remainder is contingent
ii. The moment A graduates from law school, he acquires a vested remainder, but it
is subject to open (partial divestment) BC it is possible B and C or both will
graduate. If B does, then A and B must share possession of land. If C does then
the remainder of A and B are diluted more.
iii. If the remainder shared by A B C is indefeasibly vested when O dies and can
have no more kids, then all her kids have satisfied the condition precedent. Then
the class is closed.
iv. The classification of these future interests will change as future events occur.
Future interests are dynamic.
- Vested remainders subject to open are VESTED. Even though they are
subject to dilution, the interest will survive its holder.
i. Ex. ^ if A graduated and got his VRSO, then died, his vested remainder would
pass to his heirs.

A vested remainder can be subject to both partial and complete

divestment
i. Ex. O to A for life, then to Bs children and their heir, but if C returns from Turkey
then to C and his heirs. At Os death B is living and has 2 kids, D and E.
- the class of Bs kids has a vested remainder subject to partial and
complete divestment. B might have another kid that would partially
divest D and E. C might return and completely divest D and E and any
new members of the class of Bs kids.
Class gifts: whenever a grant creates an interest in a group of people, it is a class
gift. The group can be any ascertainable body of ppl, but it is most often a family
group; e.g. to my children, or to my surviving nieces and nephews or to my
grandkids that have reached age 21.
i. A class is open if it is possible for new ppl to enter it and is closed if new entrants
arent possible.
Class closing rules: A class closes when one of two events occurs:
i. It is no longer physiologically possible to have new entrants or
- Ex. O devises to A for life then to Os children and their heirs. O is survived
by two children, B and C. O has created an indefeasibly vested remainder
in the class of children b.c the class if Os kids is closed. O is dad and cant
have any more kids, B and C are entire class
ii. If the rule of convenience applies. this is an interpretive rule (not rule of
law) and says that a class closes if any member of the class is entitled to
immediate possession and that result is consistent with the intent of the grantor
making the class gift
- Ex. O to A for life, then immediately to my grandkids and their heirs. O is
survived by A and one child B, who has two children C and D. C and D
(grandkids of O) hold a vested remainder subject to open. When A dies
they will be entitled to immediate possession. The rule of convenience
probably applied b.c of the term immediately suggests that O intended
that his class of grandkids would be determined immediately at As death,
if B later has another kid, that kid doesnt share class gift.

B. Contingent remainders
Contingent Remainders-all created in 3rd person
o Unascertained remaindermen- do not know who remaindermen is until a future
event occurs. When the event happens they will become vested or..
o Unborn remaindermen- usually a class gift. Create a remainder in unborn children.
May never become possessory because not have children.
o Subject to a condition precedent- if suggests condition precedent.
- Remainder created in an unknown person OR that had a condition precedent to
ultimate possession.
o Ex. Unknown persons- O to A for life, then to Bs kids. B is 12 yrs. old and has no
kids.
Bs nonexistent kids have a contingent remainder, O has reversion
o Ex. Unknown persons- O to A for life, then to As heirs.
As heirs arent known until A dies, so the class of As heirs has a contingent
remainder. (heirs are ppl who inherent by intestate succession) O has
reversion
o Ex. Condition precedent- O to A for life, then to B if she graduates Harvard. B is 12 .
B has contingent remainder, she must graduate in order to be entitled to
possession. O has reversion

Contingent remainders have no certainty of becoming possessory, but that is also true of
VRSCD. Dont make error of thinking that certainty of ultimate possession is the dividing
line.
CR in FS will always leave a reversion in the grantor

Conditions precedent- must be expressed in the grant. Neither the natural expiration
of the prior estate nor precatory language in the grant constitutes a condition precedent.
Ex. O to A for life, then to B if graduates Harvard. The condition of graduating is
expressed and is condition precedent to B possession
o Ex. O to A for life, the B If survives A. Condition expressed and condition precedent
to B possession
o Ex. Not a condition precedent- O to A for life, then B. B no right to possession until
natural expiration of A LE, B has vested remainder
o Ex. Not- O to A for life, and in event of A death to B. Language of in event, is
precatory and adds nothing, just descriptive of natural expiration.
Difference between condition precedent and condition subsequent.
o Difference between VRSCD upon occurrence of some condition subsequent and
CRSCP can be very subtle. Pay attention to language. If condition is made integral
part of the grant in remainder, it is a CR, if grant uses words to create vested
interest, and then proceeds to add a divesting condition, its is VRSPD or VRSCD
Ex. Vested remainder to A for life, then B, but if B ever goes to Canada then to
C. B has a VRSCD upon occurrence of condition subsequent (going to Canada).
C has executory interest. Because O created a vested remainder in FS he hasnt
retained a reversion
Ex. Alternative contingent remainders: O to A for life, then B if she has never
gone to Canada, but if she has ever gone to Canada then to C. Now B has
contingent remainder BC the condition is expressed as an integral part of the
grant in remainder to her. C also has a contingent remainder BC the same
condition is repeated as integral part of grant to C. These are alternative
contingent remainders. Because they are contingent, O has a reversion ( which
is only possessory in unlikely event of A LE termination before A death)
Alienability- with few exceptions, CL didnt permit alienability of Contingent interests. But
today nearly everywhere permits alienability. If contingency is survival, then the interest
cant be passed by will or intestate succession, and if the contingency results from the fact
that the holder is unknown (not born), there is no owner to convey it so its not alienable.
o

2. Executory interests
Future interest in transferee that must, in order to become possessory:
- Divest or cut short some interest in another transferee (this is known as a shifting
executory interest) or
- Divest the transferor in the future ( this is known as a springing executory interest)
A fee simple subject to an executory limitation- a fee simple that upon the happening of a states
event, is automatically divested by an executory interest in a transferee. Such a fee simple can
be created either in possession or in remainder.
Ex- O conveys to A and his heirs, but if A dies without issue surviving him, to B and her
heirs.
o A has possessory fee simple subject to an executory limitation. B future interest
can become possessory only by divesting A.
- Ex. O conveys to A for life then B and her heirs, but if B dies under age 21, to C and her
heirs. B is age 15. B has vested remainder in fee simple subject to an executory
limitation (or subject to divestment by C executory interest if B dies under 21)

Executory interests are ordinarily treated as contingent interest, b/c they are subject to a
condition precedent and do not vest until they become possessory.
Defeasible fees- possibility of reverter or right of entry can only be created in transferor, so if
transferor wants to create a further interest in a transferee, after a defeasible fee, must create an
executory interest.
-

Future interests in a grantee that divest either:

(1) Another grantees possessory or future interest as a shifting interest or
(2) The grantors interest at some future time (a springing executory interest)

History- resulted from Henry 8th desire to eliminate the USE- an early form of the trust, in
order to stop death tax avoidance by means of the use in order to provide economic
benefits of land to another, a feudal granter might enfeoff (convey possession of a
freehold estate) to another person, to hold for the use and benefit of a third party. The
law cts didnt recognize the use, but the equity courts (with power to act only upon a
person) would command the feoffee to uses the administer the land in accordance with
the instructions in the use. Lawyers began to convey property by deed, in which the buyer
would pay valuable consideration for the property, rather than be bothered with livery of
seisin which required seller handing dirt to buyer on the property.
o Lawyers and Landowners recognized other advantages of flexibility provide by the
use. CL forbade the creation of interests springing out of the grantor at some future
time, BC the ritual of livery of seisin couldnt be performed in advance. And forbad
the creation of interests shifting ownership of freehold estates from one grantee to
another. These arrangements could be accomplished thru the use.
o Henry ended the tax avoidance by Statute of Uses converting the beneficial
interests in the uses to legal interests. Bc the Statute of Uses executed the use, the
term executory interest eventually was bestowed upon those future interests that
would have been beneficial interests in a springing use or shifting uses prior to its
adoption
Springing Executory interests:
o Future interest created in a grantee that divests the grantor at some future
time after the conveyance. This it springs out of the grantor
Ex. O to the first student in his property class who becomes a judge, this
unknown student has a springing executory interest.
Ex. O to A for life, then to B if he shall give A a proper funeral. B has springing
executory interest, not a contingent remainder. It is not possible for B to give A
a funeral until at least some time after the expiration A LE.During that interval
of time, possession reverts to O (or legal successor to her reversion). Thus when
B delivers the proper funeral for A possession will spring out of O.
Shifting Executory Interesto Future interest in grantee that divests another grantee upon occurrence
of some condition. By such divestiture, the shifting executory interest cuts off
the preceding estate prior to its natural expiration.
Ex. O to A, but if B should ever be released from prison, to B. B has shifting
executory interest that will divest A, another grantee, by cutting off his FSSEL if
and when B is released
Ex. O to A for life, then to B, but if B do not survive A, then to C. C has shifting
executory interest that will divest B, another grantee, of her VR in FS Subject to
EL if B doesnt survive A.

Trust-

Future interests are most commonly employed in trusts

Basics- the central feature of a trust is the division of legal ownership from equitable
ownership (beneficial ownership).

A person (trustor or settlor) may transfer legal title of his assets to a trustee,
who become the legal owner of the assets, but who is charged with the
responsibility to manage those assets (in accordance with term of the trust and
legal fiduciary standards), for the benefit (economic) of the trust beneficiaries,
who have equitable ownership of the assets.
- Advantages- enables a person to place assets in the hands of property manager who can
respond to changing conditions by selling assets and acquiring new ones all for the
advantage of ppl who may be unknown to the settlor (grandkids unborn). There is great
flexibility in property management and concentration of the assets for the benefit of the
beneficiaries for some distance in the future and will often last well past the lifetime of
settlor.
- Spendthrift trusts- CL prohibited restraints on alienation of otherwise absolute grants of
legal ownership of property. But American courts have held this prohibition doesnt apply
to equitable or beneficial interests in property. BC the trust beneficiaries have only an
equitable interest in the trust corpus, a trust settlor may provide that the beneficiarys
interest may not be alienated by him. This means that creditors of the beneficiary may not
reach the trust assets in which the beneficiary has an equitable interest to satisfy the
beneficiarys debts.
Allowed settlors to arrange their assets in ways that maximize flexibility in property management
as well as transfer wealth to future generations.
- Trustee holds legal title to the trust property and manages the property for the benefits of
the beneficiaries, who have the right of beneficial enjoyment of the property. The trustee
has power to sell trust assets and reinvest proceeds. The net income is paid to
beneficiaries and upon termination of the trust the trust assets as of then are handed to
the designated beneficiaries.
o

Trustee- to hold legal title and generally has administrative responsibilities.

Beneficiaries- have equitable interest. Entitled to income/benefits of trust. Benefits can
be income or future interests (remainders).
Settlor (trustor)- person who sets up trust, puts money in trust and appoints trustee
comes from idea of settling property. Settlor can act as trustee. Settlor can also act as
beneficiary. Can technically do all three as well.
Intervivos trust- created by tester during testors lifetime
Testamentary trust- created after testors death

- Revocable trust- settlor can revoke it

- Irrevocable trust- cannot be revoked (in theory), can be modified today
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Class examples and Problems 2/25-2/28 (mixture)

Property 2-25
COMMON LAW
Remainders
Uses
Legal versus beneficial interests
Example 5
To A for life then to the heirs of B.
The remainder is contingent because the heirs of B cannot be ascertained until B dies. When B
dies B heirs would have a vested remainderan indefeasibly vested remainder because there
are no longer any conditions on the remainder. If A died before B we would have a problem

because we dont know where the remainder would go. In this instance the remainder interest
would fail, property would revert to O.

Example 6
To A for life then to B and her heirs if B survives A.
If attaches a condition precedent. If B does not survive A then the interest fails and O has a
reversion.
Example 7
To A for life then to B and her heirs if B survives A
And if B does no survive A, then to C and his heirs.
Either B will survive A or B wont survive A.called alternative contingent remainders. The twist
in this problem is that O has a reversion. O continues to have a reversion when alternative
contingent remainders are created.
PROBLEMS pg. 261.
1. Not really a condition, must be certain to happen or not happen. B would have an
indefeasibly vested remainder.
If B conveys back to O. O would have a remainder, not a reversion. A reversion is retained
when the other interests are createdthis is not the case here.
2. A has a possessory life estate. B has a vested remainder for lifepossible B will not
survive A, however survivorship is not a condition. C has a vested remainder (same
reasoning as C-survivorship is not a condition).
3. A and B have two interests.
4. Remainder is contingent, not vested remainder subject to open. If A is still alive when B
turns 21, B has a vested remainder subject to openvested remainder is subject to open
because it can be partially divested by other children who reach the age of 21 born of A. O
can still have a reversionary interest.
Example 8 pg. 261. O conveys to A for life, then to B and her heirs, but if B does not survive A to
C and his heirs.This is not an alternative contingent remainder (no condition)B does not have a
contingent remainder. B has a vested remainder in fee simple subject to divestment; C has a
shifting executor interest which can become possessory only divesting Bs remainder (cuts off Bs
interest). B has vested remainder subject to complete divestment. With this example there is no
reversion to Owith vested interests they accelerate. Bs interest would accelerate and become
a possessory fee simple. Cs interest is contingent, but not a contingent remainderIt is a
conditions subsequent not a condition precedent.
Vested remainder accelerates into possession when
Contingent remainder cannot accelerate so long as it remains is contingent.

There is a difference between vesting and possession.

Converted uses into executor interests
Gave rise to the modern trust
Executor interests branched out into power of appointment.
Statute of Uses
1. Executory Interests

2. Bargain and Sales Deed

3. Modern Trusts
4. Powers of Appointment
Example 9- O conveys whietacre
(1) to A and his heirs
(2) but if A inherits blackacre, then to B and his heirs
Traditionally A could not do this. When seisen is in someone it cannot go to someone else.
Example 10- O
Conveys to A and her heirs when A marries B
traditionally no, seisen was transferred immediately. Seisen could not spring out of grantor at
some future date. O would continue to have fee simple absolute in property, A would have
nothing.
This situation could be avoided by the useit splits the title into legal and equitable
components, one person has legal title and another person equitable title. you keep legal title
and Ill use the land.
Ways use can be created
(1) Feoffment to uses (ex 11)- O would go through seisen ceremony to X, but at the time
ceremony occurred the language would be different.
(2) Bargain and sale deed
(3) Covenant to stand seised
Example 11
O conveys
(1) to X and his heirs
(2) To hold for the use of A and his heirs
(3) But if A inherits the family Manor, then to the use of B and his heirs
Xs interest= feofee to uses
A/Bs interest = cestui que use
Way in which freehold estate could be conveyed by a use.
(1) O conveys to X and his heirs
(2) For the use of O for life
(3) Remainder to A and his heirs.
Statute of uses executed usesit converted equitable interests into the equivalent legal
interests.
O conveys to A and his heirs , but if A dies w/out issue surviving him, to B and her heirs. A mas a
possessory fee simple subject to an executor limitation. Bs future interest can become
possessory only by divesting AB has shifting executory interest.
O conveys to A for life, then to B and her heirs, but if B dies under the age of 21, to C and her
heirs. B has a vested remainder in fee simple subject to an executor limitation. A=possessory life
estate. B= vested remainder. Interest can be divested by C if B dies before 21 (even occurs). If B
reaches 21 then Cs interest is terminated. Not a contingent remainder. Vested remainder
followed by executor interest. If B dies and A is still alive, C has an indefeasibly vested remainder.

Example 16. O conveys to school board, but adds if the premises are not used for school
purposes during the next 20 years to the town library. library has an executory interest. If this
was to a private party vs. a public entity then you would have to worry about the rule of
perpetuities.
Example 17. O conveys to school board so long as the premises are used for school purposes,
then to Library.school boards interest terminates automatically. Sounds like remainder, but
book calls it executory interest. Proceeding interest is different, it is not limited by its own terms
but it cut off by executory interest.

Property February 27
When an interest becomes POSSESSORY it is a fee simple absolute. With possessory fee simple
cannot have a possible remainder. Executory interest- interest in property which will only pass to
another in the future, or never if certain events occur.
Pg 270
1. O conveys
(1) to a for life
(2) then to As children and their heirs
(3) but if at As death, he is not survived by any children then to B and her heirs.
A=life estate. As children= unborn remainder (a contingent remainder). Bs interest is also a
contingent remainder. Lets say A has two children they have vested remainder subject to
open/to partial divestment (because their could be future children). (3) is an executory interest.
Suppose that C dies during As lifetime and that A is survived by B and D. Bs executory interest
cannot cut off if there are children. If one child survives then all the childrens interests are
protected from Bs executory interest.
(b) O conveys
(1) to A for life
(2) then to such of As children who survive him
(3) But if none of As children survive him, then to B and her heirs
Do not use subject to open terminology in remainders. Fact that more than one child might
survive and future children might be borndont use subject to open. (2) is a contingent
remainder (3) is a contingent remainder as well.
O would have a reversion but only if As life estate failed for some reason. If B died without heirs
and As children died before A the property would escheat.
(c)O conveys
(1) to A for life
(2) then to B and her heirs
(3) but if A is survived at his death by any children, then to such surviving children and their
heirs.
(3) B has a vested remainder subject to complete divestment(because As children have an
executory interest which cuts off Bs interest).

2. T devises 10,000 to my cousin, Don Little, if and when he survives his wife, what does Don
Little have. Fee simple subject to executory limitationassuming he survies his wife
cant have fee simple in personal property
Review Problems
1. O conveys
(1) to A for life
(2) then to B for life
(3) then to Cs heirs
b= vested remainder for life
C= has nothing
Cs heirs= as long as C is alive, dont know Cs heirs so that means there is a reversion in
O. If A and B die while C is alive then O has a reversion. If C dies before B then Cs heirs
would have a vested remainderit would be indefeasibly vested in cs heirs. And Os
executory interest in reversion would fail.
3. O conveys
As children as attain age 21- condition remainders. Condition precedent associated with each
child is that each child reach the age of 21. O would have a reversion because neither child nor
any other may not reach the age of 21. If oldest child reach 21 then Xs contingent remainder
becomes a vested remainder, but since A and the other child are still around, there is a vested
remainder subject to open. X would have an executory interest.
4. O lost reversion when Xs interested vested. If X has children they would have a remainder
subject to open. Still subject to open because Y can reach age of 21 and additional children by A
can reach age of 21.

Property 2-28 (not in book)

T Devises B/A
(1) to A for life
(2) then to As children and their heirs
(3) but if A dies w/out surviving children, to B and her heirs.
B would have an executory interest.
If A has a child, C, C would have a vested remainder subject to open (partial divestment from
other unborn children).
If C has a child, D, but C predeceases A, who would get the property? D would be out of luck,
based on language of problem B would get the property because A would die without a surviving
child. (under common law) If (3) said surviving issue that would have a broader reading and D
would get the property.
(1) to A for life
(2) then to As children and their heirs
(3) but if any children dies in the lifetime of A, such childs share shall go to his issue who
survive A
If A has two children they would have an vested remainder subject to open and vested remainder
subject to complete divestment.
A is alive and has 2 children, B and C at Ts death.
B has A child, E.

E has an executory interest. If C had no children then Es executory interest would never be
operative. If A had another child, G, and G has a child, H, what are their interests. H has
possibility to cut off Gs rights. G would have a vested remainder subject to open and vested
remainder subject to complete divestment.

Pg. 271
6. A has possessory life estate. X has vested remainder subject to open. As unborn children
have an executory interest.
8. A=possessory life estate
B has a vested remainder subject to a complete divestment. C has an executory interest.
Remainders typically use language vested remainder subject to a complete divestment. Fee
simples use language fee simple subject to executory limitation. Both are technically the same
thing though.
10. A has a springing executor interest because she is not yet enrolled in college. O would have a
reversion until A graduated from college.
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The Marketability Rules

Marketability Rules
CL judges devised a number of rules to increase marketability of land by eliminating
uncertainties of title that inhibited alienability. These rules are considered here. Three
Doctrines: (mostly abandoned today)
- Destructibility of contingent remainders,
- The Rule in Shellys Case
- Doctrine of worthier title
The principal modern marketability rule is The Rule Against Perpetuities.
A. Destructibility of Contingent Remainders- at CL a contingent remainder in land
was destroyed if, at the expiration of the preceding freehold estate, it was still contingent.
To become possessory, a contingent remainder had to vest at or prior to the termination of
the prior freehold estate.
a. Ex. O to A for life, then to B if he should be knighted. B has a contingent remainder,
his possession is subject to the condition precedent that he receive a knighthood. If
B is knighted before A dies then his remainder will become vested bc the condition
precedent will have been satisfied, and after A death he would have FSA. BUT if B
isnt knighted before A death, his contingent remainder will be destroyed leaving O
reversion as the possessory interest in the land in FSA.
b. This rule was created when seisin was still important. The holder of seisin was
responsible for feudal obligations. Bc seisin couldnt be passed from an expiring
freehold estate to a contingent remainderment, a person who could not hold seisin,
the contingent remainder must be eliminated bc seisin must go somewhere.there
could be no gaps in seisin. This is useless today but of American states haven
abolished the rule.
c. The effect of merger- the rule had significant impact on contingent remainders
following a life estate because it applied at the natural termination and at the
artificial termination of a LE. An LE could terminate early (before life tenants death)

by forfeiture or merger). Forfeiture occurred if the life tenant committed treason or

tortuously attempted to convey a FS. Merger occurred if the same person held the
present possessory freehold estate (LE) and the next vested estate, in which the
two titles would merge to form one possessory fee simple. (Note- if LE was followed
by a contingent remainder, the next vested estate would be a reversion.) The
merger doctrine enabled conspiracies by the life tenant and the holder of
reversion to destroy the interfering contingent remainder.
d. Limited Effectiveness of the rule the destructibility rule had lots of loopholes so it
wasnt very effective. B/c vested remainders were exempt, the inclusion of a vested
remainder before a contingent remainder would block the merger doctrine.
Executory interests arent remainders, and so the rule didnt apply to them, despite
the fact that they are contingent interests. (because it posed no threat of gap in
seisin)
e. Modern replacement of the rule: Rule against Perpetuities.

B. The Rule in Shelleys Case:

a. Named after Wolfe v Shelley 1581 was originally intended to prevent avoidance of
feudal incidents (death taxes). After the abolition of feudal incidents in the mid-17 th
century, the rule survived because it improved marketability of land. That function
is fully performed by the Rule against Perpetuities. The Rule in Shellys case has
been virtually abolished. In those few states where it survives, it usually applied
only to grants made prior to the elimination of the rule.
b. The Rule: If (1) one instrument (2) creates a freehold in real property and (3) a
remainder in the freeholders heirs (or heirs of the freeholders body), and (4) the
freehold estate and the remainder are both equitable or both legal, then (5) the
remainder become a remainder in the freeholder.
i. Ex. O to A for life, then to As heirs. In this single instrument, O created a LE
in A and a purported contingent remainder in As heirs. The Rule in Shelleys
Case converts the remainder in As heirs in to a remainder in A. That is all the
rule in Shellys case does. The Merger Doctrine operates independently to
give A a FSA, making the land easily alienable by A rather than only after his
death.
1. Freehold estate- given the extinction of fee tail, the only freehold
estate that can be followed by a remainder is a LE. Rule in Shelleys
case problem will occur only if the freehold estate is a LE.
2. Remainder only- the Rule in Shelleys case applies only to remainders,
not executory interests, but foes apply in rare case of a LE and
Remainder combined with an executory interest.
a. Ex. O to A so long as cars never enter land, and if so to B for life,
then to Bs heirs. This shifting executory interest is split into a LE
in B and a remainder in B heirs. The Rule in Shellys case
applies, giving B the entire shifting executory interest.
3. Heirs- CL courts means this to describe an infinite line of succession of
heirs- class of ppl over time, who would be heirs in each successive
generation. That meant that if the remainder is phrased to describe
only the specific immediate heirs of the freeholder, the Rule doesnt
apply ( As heirs, and is children)
4. Both estates legal or both equitable- Rule doesnt apply if one of the
them is equitable and other legal.

C. Doctrine of Worthier title:

a. If an intervolves conveyance creates any future interest in the heirs of the grantor,
the future interest is void. Instead, the grantor retains a reversion.
i. Ex. O to my son A for life, then to my heirs. O has created a future interest, a
vested remainder in his heirs. This doctrine voids that interest. O left with
reversion- can be conveyed by him during life, devised or inherited by his
heirs.
ii. Very few courts applied this to testamentary gifts, mostly applies to
intervolves conveyances. In its modern form it is a RULE OF CONSTRUCTION
it raises a rebuttable presumption that the grantor did not intend to create
a future interest in his heirs, and is more likely to create the interest in his
will.
b. Operation- the scope of the doctrine is very broad. It applies to both real and
personal property and to any kind of future interest. Is applies regardless of the
nature of the preceding estate and regardless of intervening future interests in ppl
who arent grantors.
i. Heirs of the grantor- Worthier title applies to future interests in the heirs of
the grantor so long as it appears that the term heirs is used to mean
indefinite succession rather than specific immediate ppl.
ii. Trust revocation0 worthier title can become an issue when a person
establishes an irrevocable trust for the benefit of himself and his heirs but
has a change of heart and wishes to revoke it.
c. Distinguished from Shelleys case- RSC involve the grant of a future interest to the
heirs of the life tenant, which worthier title involves grant of a future interest to the
grantors heirs. RSC is completely independent of WT

D. Rule Against Perpetuities

-

After the statute of Uses lawyers began using shifting executory interests to tie up
ownership of property for very long periods of time into the future. The marketability rules
considered so far mostly applied to remainders and not executory interests. A rule was
needed that would apply to all contingent future interests to prevent uncertainty about
future ownership and possession form continuing so far into the future that the land would
become inalienable.
Summary of the rule: no interest is good unless it must vest, if at all, not later than
twenty one years after some life in being at the creation of the interest

Vesting- the Rule is designed to eliminate uncertainty about ownership that persists
too long. If an interest is certain to vest or certain not to vest within the permitted
period, it is good. But if there is any possibility, no matter how unlikely, that the
vesting could occur after the expiration of the permitted period, the interest is void.

Permitted period of uncertainty- an interest is good under the Rule if it will

certainly et or certainly fail to vest within:
21 years from its creation, or

During the life of some person alive at its creation or

Upon the death of some person alive at its creation or
Within 21 years after the death of some person alive at its creation.
Thus the rule requires you to identify some person, living on the
effective date of the grant, whose life can serve as the measuring life
(or validating life) for the interest in question. That person who could
consist of a class or group of ppl, is always a person whose life is
germane to the grant---a person who can affect vesting of the interest.
If an effective measuring life cannot be identified, the interest is void

Future interest to which the Rule applies: the Rule applies to all contingent future
interests (executory interests, contingent remainders, and vested remainders
subject to open) except for interests created in the grantor (reversions, possibilities
of reverter, and rights of entry.) The latter interests are regarded as vested at the
moment of creation, bc the represent a retained protection of the grantors estate.
The contingency concerning future possession is thus permitted to persist forever.
Whenever the latter interests are created in a grantee (and so are executory
interests) they are subject to the Rule.
Validity tested at creation- the validity of future interests under the Rule is tested
when they are created. This means that in order to prove validity/invalidity, you
must conjure up what might happen in the future. The Rule boils down to proof. If
you can prove that the future interest in question is certain to vest or fail to vest
within the permitted period, the interest is valid. If you can prove any single
scenario, no matter how improbable of actual occurrence, in which uncertainty of
vesting will continue until or after the permitted period the interest is void.
Ex. 1997 O dies and devises land to As first child to graduate from college.
As only child B is a senior in college. The validity of this springing executory
interest is tested at the moment of its creation, 1997. It is void. It is possible
(though unlikely) that B will die before graduation, or that A will have another
kid M in 1998, B will die and M will graduate 23 yrs. later. Etc. The only
conceivable validating lives are A and B. the hypothetical Ms hypothetical
graduation could occur more than 21 years after the expiration of all
conceivable measuring lives
For an interest to be valid, it must be proven that the interest will necessarily vest
or fail to vest within the permitted period.
Ex. M devises land to my husband W for life, then to my children for their
lives, then to my grandkids then living. At M death she has 2 kids, T and L.
the LE in W is presently possessory. The remainder to M children is vested at
its creation (BC there is no condition precedent to the class of M children
closes at her death around T and L), so the Rule does not apply to it. The
remainder in M grandkids who survive both T and L is contingent, but that
contingency will be eliminated the instant that both T and L are dead. At that
moment, the remainder will certainly vest(there will be surviving grandkids)
or certainly fail to vest (there will not be any grandkids). Because both T and
L are lives in being at the creation of the instrument this interest will certainly
vest or fail to vest at the expiration of the second of 2 lives in being. The
interest is valid
Vesting- with one major exception, an interest is vested for perpetuities purposes
when it has either become possessory (referred to as vesting in possession) or has
vested in interest (the owners are known, exiting people and there are no
unsatisfied conditions precedent). Some interests (e.g. an executory interest

following or divesting a defeasible fee) can only vest in interest at the same time
that they vest in possession. But many interests can and do vest in interest well
before the vesting in possession. An interested that is vested for classification
purposes is vested for perpetuities purposes except for vested remainders
subject to partial divestment. The reason is that, for purposes of the RAP, a gift
to class of people is not vested in any member of the class until it is vested
in every member of the class. For this to happen, two things must be true: (1)
the class must be closed and (2) any conditions precedent must be
satisfied by every member of the closed class.
Ex. 1997 O to K for life, then to K children for their lives, then to Ks
Grandchildren. O is survived by K, her kids V and A, and K sole grandchild N.
K LE is possessory and not subject to the RAP. V and A have a vested
remainder subject to partial divestment, as K may have more kids. While this
remainder is vested for classification purposes, it is not vested for
perpetuities purposes. The class of K kids wont close until K dies, and BC K is
a life in being at O death, the effective date of the grant, the remainder is
certain to vest in every member of the class of K kids no later than the end of
K life, and so it is valid. N VRSO is vested for classification purposes but not
for RAP purposes. The uncertainty about the identity of K grandkids will not
be removed until her kids are dead. There is no certainty that the class of K
grandkids will close at K death or within 21 years after her death (V might
have a child 22 yrs. after K death)
While death of K children will close the class of K grandkids, the class of K
children is not a life in being, BC that class isnt closed. (There could be
another child born to K after O death, and unless every possible member of a
class is alive at the time the interest becomes effective, the class is not a life
in being). Thus none of the lives of K, V or A provides sufficient certainty to
serve as a validating life, and the remainder in K grandkids is void in its
entirety.
Measuring or validating Lives- the concept of measuring or validating life is crucial
to the RAP. To validate future interests under the Rule, you must prove that the
interest is certain to vest or fail to vest within the lifetime of one or more people
alive when the grant become effective, or within 21 years after the death of that
person or persons. This person serves as the measuring or validating life. This
person will be found among the relatively small number of people whose lives are
relevant to the interest in questionthey can affect vesting of the interest in
question.
O to T for life, then T children who reach age 21. The contingent remainder in
Ts adult kids is valid bc (1) uncertainty as to the Id of Ts children will be
resolved at T death (2) the uncertainty as to which, if any of T children will be
resolved no later than 21 years after T death. T, a life in being when O died, is
clearly relevant- she can affect the vesting of the remainder, and her life will
serve to prove the validity of the remainder.
The validating life isnt always mentioned in the grant
EX. E, an orphan, devises to my nieces who reach 21. E is survived by
2 sisters, and 5 nieces who range from 3-15. The springing executory
interest in the nieces is good BC the class of E siblings (not mentioned
in grant) can serve as validating or measuring lives. BC E parents are
dead, the class of E siblings is closed; all possible members of that
class are lives in being. The contingency in the executory interest (the
identity of the nieces and which will reach 21) will be resolved no later

than 21 years after death of both E sisters. Different lives may be used
to validate different interests
EX. A to B for life, then to B widow for life, then to C if she is alive, if
not then to C heirs. The CR in B widow is good BC we will know who
she is when B dies. (B is the validating life). The CR in C is good BC it
will vest or fail during (during or at the end) of C life. Either C will
outlive B widow (and her remainder will vest during C life) or C will die
before B widow dies (and C remainder will fail to vest). C is the
validating life for her contingent remainder. The alternative CR in C
heirs is good bc it will vest/fail no later than upon the death of C. if C
outlives B widow, the CR in C heirs will lapse and thus fail to vest; if C
predeceases B widow, the CR in C heirs will be indefeasibly vested bc
we will know the id of C heirs and there will be no Condition Precedent
to their taking possession after B widow dies. C is the validating life for
the CR in her heirs.
o A person is a life in being if in utero at the effective date of the
grant. CL considered and still does, a person born within 9-10
MThs of the effective date of the grant to be a life in being at the
effective date.
o Class of persons as measuring lives- it is possible to use a group
or class of ppl as measuring or validating lives, but every
possible member of the class must be alive at the effective date
of the grant. In other words, the class must be closed at the
effective date of the grant for a class of persons to be
effective as validating lives
Class closing rules and the Rule of Convenience- ordinary, a class
closes when every possible member of the class has been identified.
The class of As children is closed upon A death, for example, BC all of A
possible kids will be known at that moment. The Rule of Convenience,
holds that a class closes artificially when any one member of the class
is entitled to present possession (or present distribution from a trust).
The rule of convenience is a rule of construction and will be ignored if
the grantor provides adequate evidence that he doesnt wish it to be
applied.
o EX. V to such of A children as reach 2. At V death A has 2 kids. B
(26) and C (22). B is entitled to possession immediately, so
under the Rule of Conveniences, the class will close and consists
of B and C (who holds and EI that will become possessory and
partially divest B if and when she reaches 25). The ROC saves
this class gift from destruction under RAP. Without the ROC, the
class of A children would remain open until her death.
The problem of defeasible fees- DF is followed by either a POR or Right of entry (if
retained by the grantor) or by an executory interest (if transferred to a grantee). EI
are subject to the RAP, but neither a POR or RE is subject to the RAP. Thus, the
identical contingency can last forever if preserved by a POR or RE by may well be
destroyed by the RAP if created in a grantee as an executory interest. That is
curious enough, but even more curious is the fact that, due to the differing
grammatical construction of a fee simple determinable, as opposed to a FSSCS, the
estate left after destruction of the EI will differ
EX. EI following a Determinable Fee- T to E and his heirs so long as land never
fences, then to P and his heirs. The EI in P is void BC you cant prove that it
will necessarily vest or fail to vest within 21 yrs. after any life in being at the

time of conveyance. The condition of no fences may not be broken for

generations, if ever. P EI is erased. It is as if the grant stopped at fenced
with the final clause expunged. The effect of this removal is to leave E with a
FSD. The law then operates to create a POR in T. T could avoid this by first
conveying FSD to E then conveying separately his POR to P.
Ex. EI following a FSSCS- T to E and his heirs, but if land ever fences, then to
P and his heirs. As I the prior ex. The EI in P is void bc you cant prove it will
necessarily vest. Fail within 21 yrs. after any life in being at the time of
conveyance. P EI is erased, so that the grant stops at E and his heirs and
the final clause expunged. The effect is to leave E with FSA. T could avoid
this by conveying first the FFSSCS to E then separately a ROE to P.
A number of states have enacted statutes that automatically destroy
POR and ROE a specific number of years after creation, usually 30 yrs.
o Statutory Destruction of all future interest following Defeasible fees- some states
have enacted statutes that automatically destroy possibilities of revert and rights of
entry and EI following a defeasible fee a specific number of years after their
creation-30 yrs. These typically allow preservation for addition period if notice of
that intention is recorded prior to the expiration of the initial period.
o Charity to Charity exemption- EI following a DF is exempt from Rap if the DF and EI
are both owned by charities.
Classic traps for the unwary- this section discusses two of the classic traps of the RAP.
Each results from the Rule insistence on considering future possibilities, no matter how
outlandish, rather than probabilities
o The fertile octogenarian: the rule presumes that a person of any age, whether male
or female, can produce a child. This can lead to some harsh results.
Ex. O to M, but if M ceased to have any descendants, to the children the
living of J and E. at the time of E death, M is 65 and J and E are 80 with 2 kids
O and A, each 50. M has a FSSEI in favor of the open class of J and E children.
EI in J and E kids is void. Though biologically impossible, the RAP assumes M
and E are capable of conception and childbirth. They could have kids and not
vest within 21 yrs.
o The unborn widow- without more, a bare reference to As widow is construed to refer
to the unknown person who answers the description at A death, not necessarily the
person who is A wife when the instrument is drafted. The R presumes the possibility
that aged men and women might substitute young for old matesso the young
might not even be alive at time of grant.
Applicability of the RAP to commercial transactions- criticized but the RAP applies to
commercial option agreements with respect to real property. The optionee has an
equitable interest in the property, consisting of a specifically enforceable right to purchase
on the terms of the agreement
o The symphony Space Inc. v Pergola Properties- b sold building to S for less than real
value, in return for which it leased the building for nominal rent and option to
purchase the building if exercised before July 2003. Value increased, and B
exercised the option. S said the option violated RAP. BC corporations were
involved, and have no life span, the period during which the option must
either vest of fail was the naked 21 yrs.
Reform Doctrines- Statutory reform evaluates the validity of future interest under the RAP
as events unfold, not at the time of creation of the interests by construction of the grant, if
possible, and some are willing to engage in reformation of the grant in order to save
interests created by it form destruction
o Wait and See Approach- An interest is valid if it actually vests during the perp
period irrespective of what might have happened (would survive here). About 2/3 of
the non USRAP wait and see states wait for the period permitted by the CL RAP. This

means you must still determine the appropriate measuring or validating life for the
interest in question, even if it wont work to validate the interest or under the CL
rule, and then wait for that life (or lives to expire plus 21 yrs.).
o USARP- wait and see for 90 yrs. - Uniform Statutory Rule against Perpetuities,
provides for waiting for a max of 90 yrs. after the creation of the interest to see
whether it has vested. This avoids the necessity of locating lives that measure the
CL perp period, but it may in some cases permit uncertainty to persist for a longer
period than under wait and see for the CL period. If at the end of 90 yrs. wait, the
interest has still not vested or lapsed, USRAP commands that the contingent interest
be judicially reformed to vest within the 90 yr. period and conform as closely as
possible to the grantors intent.
Construction of the instrument- most modern courts will construe an instrument to save
future interests from destruction by the Rule, if possible to do wo without plainly violating
the grantors intent.
Reformation of the instrument- some modern courts apply the cy pres doctrine to reform
the grant to make it comply within the RAP. Cy pres is a doctrine of wills and trusts (usually
applied with respect to gifts and charities) that permits courts to revise the grantors
instrument to get as close as possible to the grantors intentions when the grantors actual
intentions are impossible to accomplish.
Perpetual Trusts, end of the Rule? - Over 20 states have either repealed RAP totally, or
made it inapplicable to interests in trusts (which is where almost all future interests are
created). Some allow trusts to endure for 1000 years. Wide spread adoption of the USRAP
permits contingent interest to endure for 90 yrs. and reforms those that remain contingent
at that time.

Co ownership and Marital Interests

o

Ownership may be divided between 2 or more ppl in the sense that they have
Consecutive rights of possession. The division results in possessory and future
interests not co ownership.
Co ownership refers to situation where 2 or more ppl have concurrent rights of
present or future possession.

A. Common Law Concurrent Interests

- When the same interest in property is owned by more than one person at the same time,
there is concurrent ownership. There are at least 5 forms of concurrent ownership
recognized by the CL, three of which are studies- Tenancy in common, joint tenancy and
tenancy by the entirety.
1. Types, Characteristics, Creation
- CL has known at least 5 types of concurrent interests. (ignore 2 one not important the
other too important) Remaining 3 are:
o Tenancy in common
I.
Tenants in common have separate but undivided interests in the same property.
The interests of each is descendible and may be conveyed in a deed or will.
Conceptually, each tenant in common owns the entire property but must
necessarily share that ownership with the other tenants in common. 2 people who
own a sailboat as tenant en common each on a fraction of the entire boat, so are
each entitle to sail it but cant prevent the other from doing so. Much of the law of
concurrent ownership is designed to mediate the friction that can arise from coownership of same thing.

II.

A tenancy in common may be alienated, devised, or inherited separately from the

other tenancy in common interests. Unlike the joint tenancy, there are no
survivorship rights among tenants in common
Ex. T devises land to A and B. A and B are tenants in common. If A conveys
his interest to C B and C are tenants in common. If B dies intestate, Bs heir
is a tenant in common with C.
Each tenant in common owns and undivided share of the whole.
III.
Presumption of tenancy in common- by statute or judicial decision, a conveyance
of real property to 2 or more persons who arent married to each other, is
presumed to convey a tenancy in common. That presumption is rebuttable with
evidence of an alternative form of co ownership.
Property that is passed by intestate succession to 2 or more heirs is always
taken as a tenancy in common
IV.
Right to possession- each tenant in common is entitled to possess the entire
property. This means that a tenant in common can possess the entire property if
no other cotenant objects. Often regulate their rights amongst themselves. But if
they disagree they are governed by default rules of law
V.
Uneven shares, different estates- Tenants in common may own unequal shares
and different estates.
o Joint tenancy
I.
Joint tenants have the right of survivorship- the outstanding characteristic of joint
tenancy- upon the death of one tenant, the share held by the remaining tenants
increases proportionately.
Theory- CL regarded as single owner (each seised by per my et per tout by
share or moiety and by whole)each owns undivided whole of the
property- so if one dies nothing passes to the joint tenants. The estate
just continues in survivors freed of the participation of the decedent- whose
interest is extinguished.
Each joint tenant owns it all. When a joint tenant dies, his interest dies, no
interest passes to the survivors, BC they already own the entire property.
May be created only by an intervolves conveyance or a will. Property
acquired by multiple heirs through intestate succession is taken as tenants
in common
II.
CL insisted their interests be equal in all respectsfour unities of joint tenancy
were essential- (in most states if these dont exist then joint tenancy isnt created)
Time- the interest of each joint tenant must be acquired or vest at the same
time
Title- all joint tenants must acquire title by the same instrument or by a joint
adverse possession. A joint tenancy can never arise by intestate succession
or other act of law
Interest- all must have equal undivided shares and identical interest
measured by duration: each must have the same duration of estate and
same share of undivided whole
Possession Each must have a right to possession of the whole. After a joint
tenancy is created, however, one joint tenant can voluntarily give exclusive
possession to the other. (unity of possession is essential to a tenancy in
common as well)
III.
Severance of Joint tenancy--If the four unities exist at time joint tenancy created
but are later severed, the joint tenancy turns into a tenancy in common when the
unities cease to exist.
Joint tenants can change their interest into a tenancy in common by mutual
agreement destroying one of four unities.

IV.
V.

Or if one tenant conveys his interest to third party he unilaterally turns it to

a tenancy in common --- severs joint tenancy because it destroys one or
more of the unities
o Unilateral severance- conveyance to selfCl regarded a conveyance of
an interest held by a person to himself as an empty act, devoid of legal
effect. So to convert a JT to a T in Common, the JT would have to
employ a straw man, to whom the severing conveyance would be
made and from whom the re-conveyance would be made. Riddle v
Harmon.
Ca held that Riddle could validly sever the JT with her substance
by conveying herself from herself to herself as a TC.
o Mortgage- jurisdictions differ as to whether JT is severed by the act of
one JT mortgaging his interest. Resolution of this issue traditionally
depended on whether the jurisdiction adhered to the lien theory of the
title theory of mortgages, but the distinction has mostly broken down
for this purpose.
Title theory of Mortgages- a mortgage effects a transfer of legal
title, subject to an equitable right of the mortgagor (borrow) to
reclaim the title by paying off the loan secured by the mortgage.
as a result, a mortgage by one JT had the effect of severing the
JT BC the unity of interest was destroyed. They would become
tenants in common after mortgage.
Lien theory of Mortgages- holds that mortgagee (lender) only has
a lien against the property (an inchoate right to seize title if the
loan is not paid). A mortgage by one JT makes no alteration to tile
and doesnt sever the JT.
Issue of if mortgaging JT death before loan unpaid, does
the survivor have to deal with the mortgage? No they are
free and clear
Lease- at CL if one JT leased his interest, the JT was severed. The unity of
interest was destroyed BC the leasing joint tenant retained only a reversion
in the property. Today, most jurisdictions of not regard JT as severed by one
JT lease of his interest. The survivorship right continues by as with
mortgages, the problem is presented as to whether the lease survives the
death of the leasing JT---no
Agreement- a JT can be severed by agreement as long as the intention is
clearly manifested. This usually occurs in the context of marital dissolution
Operation of law- most severance issues begin with some voluntary act of a
joint tenant that immediately implicates one of the four unities and thus,
joint tenant. Homicide and simultaneous death, the law severs a JT in
absence of voluntary acts
o Uniform simultaneous death act- the death of joint tenants at same
time result in division of the JT into separate shares unless there is a
clear and convincing evidence that one person survived the other by
120 hrs. or a governing instrument provides otherwise
If tenants in common or joint tenants cant solve problems by mutual agreement
either can bring action for judicial partition. The court will physically partition the
land into separately owned parts or order land sold and divide proceeds.
Evidence in instrument insufficient to create joint tenancy To A and B as joint tenants- ordinarily adequate to create joint tenancy, but
some sates hold that failure to include with right of survivorship makes this
a joint life estate with contingent remainder in survivor (KY)

To A and B jointly- problem- usually used to show any form of coownership

To A and B, joined together- probably tenancy in common
To A and B and jointed tenancy, and then to survivor and her heirs
hopelessly ambiguous

Tenancy by entirety- can be created only in a husband and wife (exists today in less
than half the states)gives rise to marital interests of importance in many states
I.
It has the four unities like a joint tenancy, but ads a fifththe unity of marriage
II.
Surviving tenant has right of survivorship
III.
Husband and wife are considered to hold as one person at CL. (Both are seised of
the entirety). So neither can defeat right of survivorship in the other by
conveyance to a third partyonly a conveyance by husband and wife together
can do so.
IV.
Neither acting alone has right to judicial partition of property held as tenants by
entirety.
V.
Divorce terminates the entirety bc it terminates the marriage- which is requisite
for tenancy by entiretyusually become tenants in common

PresumptionsI.
today presumption favoring joint tenancy is abolished in all states (by statutes
providing a grant or devise to 2 or more persons creates a tenancy in common
unless and intent to create a joint tenancy is expressly declared)even language
like jointly might not suffice
II.
CL presumed intention to create tenancy in entirety if conveyed to husband and
wife, some today will be presumed to create tenancy in common or joint... but still
has force

Rights and Obligations of Concurrent OwnersA. Introduction- in general, the rights and obligation of co-owners are the same regardless of
the type of concurrent ownership. The expectations, of course, are the rights and duties
inherent in the type of concurrent ownership (e.g. the right of survivorship that forms part
of the joint tenancy and tenancy by entirety)
B. Partition- a JT or TC may demand partition of the property at any time for any reason. A T
by the Entirety may not demand a partition- must get divorce. Absent agreement among
the parties, partition is accomplished by a suit in equity. The court will order either (1)
physical division of the property or (2) sale and division of the proceeds
a. Partition in Kind- Physical division of the property is the preferred method. The
court twill order partition in kind unless a party can prove either that a
i. Physical partition is impossible or extremely impracticable or
ii. That a physical partition is not in the best interest of all parties
1. Evidence germane to this prong includes economic costs/gain involved in a
particular partition, and the subjective costs imposed on the tenant in
possession by ordering the partition by sale
a. Delfino v Vealencis concurrent estates, one has 1/3 the other 2/3, one
wants to operate garbage dump and lived on their part of land, the other
wants to build a subdivision and demanded partition by sale even though
the property was able to have partition in kind. Although the evidence
showed that selling the property as whole would be maximized by sale and
development, the court held it wasnt in the best interest of all parties to sell
entire property. The value of continued possession was sufficient to order a
partition in kind.
b. When implementing a partition in kind, courts strive to divide property so
that the value of each divided parcel (as a fraction of the value of the entire

property) is equal to the ownership share of the recipient. If not , the

recipient of the disproportionally valuable parcel must pay the difference to
the other
2. Partition by Sale- not favored, it is the most common method. This is because
it is impracticable or impossible physically to divide most real property in
America, houses, stores, etc. Rural economic land is the most likely to be
physically divided. After partition by sale, the net proceeds are divided among
co owners in proportion to their ownership interest. In the absence of express
evidence in title of unequal shares, courts employ a rebuttal presumption that
each owner is entitled to equal share
3. Agreement not to partition- thought courts often say a partition between
cotenants is an absolute right, an agreement between cotenants not to partition
is enforceable if it clearly manifests the partys intent not to partition and its
duration is limited to a reasonable period of time.
4. Rents profits and possession- each Co-owner has the right to possess the entire
property, and no co-owner may exclude his fellow co-owners. If co owners
cannot agree on who they share possession the default rules apply:
a. Exclusive possession by one coowner- BC each has the right to possess all
the property, exclusive possession by one co-owner is presumptively valid. If
it is pursuant to agreement of all co owners, it is conclusively valid. If not by
agreement, the cotenant in exclusive possession has the following
obligations to his cotenants:
i. Rental value of exclusive possession- jurisdictions split on the question of
whether the co tenants for their share of the fair rental value of his
exclusive possession. Here are the 2 views:
1. No liability absent ouster or special duty- the majority rule= that the
cotenant in exclusive possession has no liability for her share of the
rental value of possession unless:
a. The other cotenants have been ousted or
b. The cotenant in possession owes a fiduciary duty to the other
cotenants or
c. The cotenant in possession has agreed to pay rent.
i. This rule is premises on the fact the each cotenant is entitle to
possession. The exceptions reflect instances in which the
cotenant in possession has voluntarily assumed a duty to his
cotenants (by agreement to pay rent or actin as fiduciary) or has
prevented his cotenants from exercising their right to possession
(ouster).
d. The corollary to this rule is that the cotenant validly in exclusive
possession is obligated to pay the carrying costs of the property
(mortgage, tax) up to the fair rental value of the property.
e. Ouster occurs if the tenant in exclusive possession either
i. Actually prevents or bars physical entry by a cotenant or
o Like changing locks
ii. Denies the cotenants claim to title
o Express statements denying that the cotenant out of possession has a
valid claim to ownership of property
2. Liability for rent- the minority rule is that he cotenant in exclusive
possession is liable to cotenant out of possession for their share of the
fair rental value of the occupied premises, unless there has been an
agreement among the parties to excuse the tenant in possession from
this obligation.

a. There is no need to show ouster, or agreement to pay rent, or

fiduciary obligation. The burden is on cotenant in possession to
prove agreement excusing him from obligation to pay rent
b. Rents from third parties- a co tenant who receives rents on the property from
a third party is obligated to account to his cotenants for those rents. If the
rents are greater than their share, he must pay the excess to cotenants.
c. Profits from the land- normal rules regarding possession apply to exclusive
possession for farming, animals, ag, but if a cotenant permanently removes
an asset from the land, he must account to his cotenants for the reduction in
value. If minerals removed, must pay the others their proportionate share.
Lumber nothing due unless cuts more than his share
Sharing the benefits and burdens of co ownership
- Concurrent owners might enter into an agreement concerning their rights and duties
with respect to use maintenance and improvements of property
- Spiller- in the absences of agreement to pay rent or an ouster of a cotenant, a cotenant
in possession is not liable to is cotenants for the value of his use and occupation of the
property.
- Ouster- describes two situations- 1. The beginning of the running of the statute of
limitations for adverse possession and 2. The liability of an occupying cotenant for rent
to other cotenants.
- Normal fact situation that will render an occupying cotenant liable to out of possession
cotenants is one in which the cotenant refuses a demand of the other cotenants to be
allowed to use and enjoy the land, regardless of absolute claim of ownership.
- Before a cotenant can be liable for rent, he must have denied his cotenant the right to
enter. Simply requesting an occupying cotenant to vacate is not sufficient BC the
occupying cotenant holds title to the whole and may rightfully occupy the whole unless
the other cotenants assert their possessory rights.

Landlord Tenant lawA. the types of leasehold estates;

Leaseholds (tenancies) are non-freehold estates. The principle leaseholds are the term of years,
the periodic tenancy and the tenancy at will.
1. term of years- an estate that lasts for some single, fixed period of time or for a period
computable by a formula that results in fixing calendar date for begin and end, once the term is
created or becomes possessory
CL there was no limit on number of years permitted, but in some American states statutes
limit the duration of number of years.
o Term must be fixed for set period but can be terminable upon the happening of
some event or condition.
May be determinable or subject to condition subsequent
o Because the term of years states from the outset when it will terminate, no notice of
termination is necessary to bring the estate to an end.
Indeterminate term- such as until the end of the war- courts find this to be
tenancy at will
Length of term- CL permitted a term of years of any length , but some states
enacted statutes restricting length of leasehold term
2. Periodic tenancy- lease for a period of some fixed duration that continues for succeeding
periods until either the landlord or tenant gives advance notice of termination. Recurring period
of time, such as month to month, or year to year. CL required at least 6 mth notice to terminate a
year to year tenancy, and notice equal to the length of the period (but not more than 6 MThs) for

periods less ant a year (e.g. a months advance notice to terminate a month to month tenancy).
A periodic tenancy is created by the partys intentions or operation of law
- Ex. A from month to month
If notice is not given the period is automatically extended for another period
CL- half year notice is required to terminate a year to year tenancy.
For any tenancy of less than a year, notice of termination must be given equal to the
length of the period but not to exceed 6 MThs. The notice must terminate the tenancy on
the final day of the period, not in middle of the tenancy
Death of landlord or tenant has no effect on the duration of a term of years or periodic tenancy
but does on a tenancy at will.
3. tenancy at will- a tenancy at will is a tenancy of no fixed period that endures so long as both
landlord and tenant desire. If the lease provides that it can be terminated by one party it is
necessarily at the will of the other as well as if a tenancy at will has been created.
Tenancy at will ends (among other ways) when one of the parties terminates it, or death of one
party. Modern statutes ordinarily require a period of notice to terminate. Principle feature- can
be terminated by either party LL terminates by giving notice and T terminates by giving notice
or abandoning.
4. Tenancy at sufferance- holdovers: arises when a tenant remains in possession (holds over)
after termination of the tenancy. Legal limbo- T has no right to be there but isnt automatically
treated as a trespasser, not a true tenancy. The LL hasnt consented to T occupation. Only lasts
until the LL exercises one of their two options:
CL rules give landlord confronted with holdover 2 options: eviction (plus damages), or
consent (express or implied) to the creation of a new tenancy- binding T to new term.
Eviction and damages- a L may evict holdover T and recover damages, measured by the
reasonable value of the uses of the property over the holdover period
o Eviction- every state provides an expeditious procedure for eviction and recovery of
possession. Some states permit the L to use reasonable self-help to evict holdovers
and recover possession
o Damages for wrongful possession- an L who opts for eviction may also recover
damages- fair market value of premises plus any special damages for injury to the
premises.
Election of a new term-most treated as periodic tenancy, provisions of old lease except
time apply. L can expressly make election, or can be inferred from his actions.
Remedy must be done in reasonable time
Complications:
o Say tenant holds over- but sends landlord regular monthly payment which is accepted and
cashed- -- since LL hasnt evicted, there seems to be a new tenancy varies depending on
jurisdiction- most= holding over gives rise to a periodic tenancy, in the balance, it results
in a term. The term is determined differently in diff jurisdictions- often based on original
lease.
o Tenancy resulting from holding over is usually subject to the same terms and conditions as
the original lease
o Many states have made leg to deal with hold overs, various ways- some specify the length
of the holdover tenancy, others convert to tenancy at will

Tenants obligationso Defined by the lease, but in absence of express lease provision the law presumes the
existence of certain duties.

Pay the rent, by last day of term

Waste avoidance- duty to avoid damage and keep in good repair, ordinary wear and
tear expected.
o Frustration of intended purpose (commercial lease)
Landlords Remedies for T default
o Rent acceleration- makes rent for entire balance of term immediately payable
o Security depositso Eviction for default of any lease obligation
o If the lease provides that L may terminate upon T default, the L has retained right of
reentry which must be properly exercised before the L becomes entitled to
possession and may evict. If the lease provides that it terminates automatically
after the L notifies T of termination following T default, the lease is determinable
and the L is entitled to immediate possession
Right of Reentry- must notify the T of default and permit reasonable time to
cure default
o Summary proceedings- unlawful detainer- the most expeditious judicial evictionpreviously known as unlawful detainer, created by statute:
Notice to quit- L required to give T minimal notice before filing suit,
Speedy, L must prove the lease has been terminated and he is entitled to
possession
o Ejectment- was the traditional CL remedy and is still available. Not used much bc t
is not a summary proceeding
o Landlord Self Help- at CL the landlord was entitled to use reasonable force to oust
the tenant himself. Jurisdictions vary
No self-help- minority states forbid self-help, the tenant may recover personal
and property damages if ousted non-judicially by the L. Berg v Wiley- the
only lawful means to dispossess a tenant who hasnt abandoned or
voluntarily surrendered is judicial process
Reasonably forceful self-help- some sates prefer reasonable force to be used
to oust T
Peaceable self-help- CL rule, many still used, limits self-help to peaceful
ouster, but many states define force broadly, so that no oust is considered
peaceful
o Tenant abandonment- if T abandons the property in midst of valid lease term, the
tenant is regarded as having surrendered the lease. 6. Abandonment--o At common law, if a tenant abandoned the property before the end of the lease
term, the landlord was under no obligation to find another tenant. Instead, the
landlord could allow the property to remain vacant and sue the tenant for accrued
rent at the end of the lease term. Most courts now require landlords to exercise due
diligence to find a new tenant in order to mitigate the damages that would
otherwise be owed by the original tenant
o Traditionally the L had 3 options:
Accept the offered surrender and terminate lease
Reject surrender by leaving premises untouched, and preserving the L
entitlement as to rent as it comes due for the remainder of the term
Retake possession and relet the premises for the benefit of the tenant.
o Today some jurisdictions prohibit the 2nd option forcing the L into 1 and 3 options in
order to discharge, and have a duty to mitigate damages.
Termination- if the L elects to terminate the lease after T abandonment, the T
is treated as having surrender the Lease. T obligations cease at the moment
of termination and surrender, not the moment of abandonment. If L elects to
terminate, termination becomes L exclusive remedy. T liability for unpaid rent
o
o

accrues to the moment of termination plus damages created by

abandonment
Damages- most of the damage created here is by transactional cost of
finding new tenant, plus whatever shortfall exists between the lease
rentals for the remainder of the surrendered lease and the fair market
value of that remainder.
Leave premises untouched- minority but traditional view- the T free to
abandon his unpaid for property but is still liable before the payments if L
elect to leave premises undisturbed. Doesnt make L mitigate damages
Retake and relet- the L may retake and relet for the tenants account either
voluntarily or pursuant to a duty to mitigate the damages imposed by law.
Most states say L not free to do nothing

Landlords Obligations and T remedies

o

The L obligations are either implied or imposed by operation of law. These and other
obligations can also be imposed by agreement in the lease. The T remedies for breach of
these obligations follow

The Covenant of Quiet Enjoyment (Constructive Eviction)

o

Every T has the right to quiet enjoyment of the leased premises. An L may explicitly
promise this, but it is also implied in law. L obligated to deliver to the T the legal
right to possession of the premises and the duty of the L to refrain from wrongful
actual or constructive eviction of the T. unlike other lease obligations, CL made the
tenants duty to pay rent conditional upon the L performance of this obligation
Constructive eviction is based on the theory that the landlord has breached the
covenant of quiet enjoyment (which can be express or implied) by creating, or in
some cases allowing, a condition to exist which substantially deprives the tenant of
beneficial use of the premises. Since the covenant to pay rent and the covenant of
quiet enjoyment are dependent, the tenant can unilaterally terminate the lease if
the landlord's conduct amounts to a constructive eviction. In theory, constructive
eviction should apply to both residential and commercial leases.
Actual total eviction- A T who has been totally ousted form physical
possession of the leased premises-whether by L or someone with better title
than the L, no longer is obligated to pay rent and may elect to terminate the
lease
Actual partial eviction- the traditional rule is that actual physical ouster of the
tenant from any part of the premises relieves the T of the obligation to pay
any rent at all until and unless the T is restored to possession of the entire
leasehold property. This is true even if T remains in possession of the rest of
the property
Constructive eviction- if the L substantially interferes with the T use and enjoyment
of the property, so must so that the intended purposes of the T occupation is
frustrated--= constructive eviction. It is constructive rather than actual BC the T
hasnt been ousted physically. The utility of physical possession has been virtually
destroyed. The T may terminate lease and move out, and be excused from any
further obligations
Three elements:
Wrongful act or failure of L
Substantial and material deprivation of the T beneficial use and
enjoyment of the premises and
Complete vacation of the premises by the T
L wrongful act- if t is failure to act, he must have duty to act

Substantial interference- T must be so essentially deprived of the beneficial

enjoyment of the leased premises that they are rendered unsuitable for
occupancy for the purposes of which they are leased
Complete vacation = T may not remain in possession and still press this
claim, must completely vacate premises within reasonable time after the
interference
T can recovery damages caused

The Implied Warranty of Habitability

The traditional rule is that the L has no implied obligation to warrant that property is
suitable for the intended purposes of the T, so long as the T has a reasonable opportunity
of examining the property and judging for himself as to its qualities. A L has an obligation
only if he expressly makes such a warranty, otherwise the rule of caveat emptor applies.
This rule has partially broken down, but even where the warranty is implied, it may not
extend to all residential leases. Typical exceptions include single family homes, ag leases
most courts do not extend warranty to commercial leases
o In many states, a residential lease gives rise to an implied warranty of habitability. This
"warranty," which cannot be disclaimed, requires the landlord to keep the premises in safe
and habitable condition. If this warranty is breached, the tenant may vacate, withhold rent
or deduct the cost of repairs from the rent. The tenant is also entitled to "loss of bargain"
damages, damages for discomfort and emotional distress and possibly punitive damages.
The implied warranty of habitability applies to residential property. However, there is a
split of authority as to whether it applies to commercial property as well.
o It is implied in law that the L has obligation to provide premises that are fit for human
inhabitation, both at start and throughout lease term. This obligation consists of 2
obligations:
o An implied warranty of habitability that properly refers to the warranty implied at
inception of the lease, and
o An implied continuing duty of repair.
o The measure of habitability is usually the standards set by the local housing code. L must
be notified of the condition and given reasonable opportunity to correct eh problem
Tenants remedy for breach of ^- terminate an leave (usually given relocation costs), stay and
withhold rent, stay and repair, or stay and recover damages (rent abatement or deduction plus
some jurisdictions give damages for discomfort and annoyance)
o T cant waive this duty of the L
o

The Land Transaction

1. Contracts for the Sale of Land
A. Intro
a. Brokers- the seller hires a broker (listing agent), to sell the property on terms and for
commission specified in the listing agreement.
i. Fiduciary Duties- owed to the seller with the agency relationship. Must put S interests
ahead of his own
b. Lawyers- most residential sales transactions are done with a standard, preprinted K, with
critical terms (price, financing, closing costs) to be supplied by the parties. Often brokers fill
these gaps and lawyers arent involved. B and S are well advised to consult with lawyers in
making the K, but most dont. In some states lawyers are used to prepare a title abstract
(history of the chain of title) and an opinion as to the state of the title.

c. Mortgage Lenders- very few ppl buy real property without borrowing a substantial portion of
the purchase price. Key portions of any sales K deal with the S existing and the B proposed
mortgage. Mortgage lender is usually a 3rd party but sometimes the S will become the
mortgage lender by agreeing to receive a portion of purchase price in the form of the
buyers promisor note secured by a mortgage on the property
d. Closing- Real estate sales are 2 step transactions. The nature of real estate sales
transaction is that some time will elapse between the execution of the sales contract and
the closingthe actual exchange of title and purchase price. Time is needed for B to
arrange financing, for proper examination of title, and inspections. Usually conducted thru
escrow agent. Critical items to be deposited into escrow ==the executer deed, purchase
price, mortgage executed to the buyer. The escrow agent makes various judgment of the
purchase price to reflect pro rata apportionment of taxes and other prepaid expenses, and
the disburses a portion of the purchase price to extinguish the S old mortgage, records the
deed and buyers new mortgage, and finally delivers the balance of purchase price to the S.

B.Statute of Fraudso

The Statute of Frauds requires that a contract for the sale of land must be in writing and
must be signed by the party against whom enforcement is sought. Ordinarily a contract for
the sale of land is signed by both buyer and seller. The contract must also describe the
property and state the selling price. The contract will usually set a date for the transfer of
title and may contain other provisions and conditions as well.
o Formal K not necessary- so long as key terms are present, price, description of the
property, and the partys signatures. Parol evidence is permissible to remove
ambiguities
o Single instrument not necessary- K need not consist of a single document, so long
as the multiple writings are consistent, embody the essential terms and are signed
by both parties
o Conditions- K often makes B obligation subject to financing conditions- that the B
obtain loans in the amount sufficient to meet purchase price and terms acceptable
to B. must exercise this in good faith
o Exceptions to SoF- part performance and equitable estoppel. Each is an equitable
doctrine and thus generally available only when B seeks specific performance of an
otherwise unenforceable K
Part Performance- elements necessary vary from state to state. All require
proof of an oral K.
Unequivocal evidence of K- some require must be sort of performance
that wouldnt occur without a K, taking possession, payment of
purchase price, making improvements
Reasonable reliance- require proof of oral K and reasonable reliance on
the K (modern trend)
o EX. Hicky v Green- G agreed to sell H lot for 15k, accepted
check, but didnt deposit the part payment. H sold house and G
refused to complete sale. H reliance was reasonable and equity
requires specific performance of the oral sale K
Enforcement by S- in most states, S may invoke to compel specific
performance of the B, if the B acts are sufficient to constitute part
performance and the B acted to diminish the value of the property in
the hands of the sellers
Equitable Estoppel- may be used if the S has cause the B reasonably to rely
significantly to his detriment upon the S oral agreement to sell. This is not
must diff form the reasonable reliance ^
o Revocation of Ks- most states do not apply the SOF to revocation of a K for sale of
realty. Both parties orally agree to revoke is sufficient

Implied Obligations- there are a number of obligations implicit in every K for the sale of
realty:
o Good faith- parties required to act in good faith in discharging the express duties of
the K. this has particular force when the obligation to complete the transaction is
expressly conditioned upon future events that are subject to influence by the
parties. (financing, satisfactions) failure to exercise reasonable efforts to discharge
the duties = default
o Time of closing- most K set date for closing- the completion of the transaction. But if
closing doesnt occur on specified date, it make still be enforce in equity if full
performance is rendered within a reasonable time after the closing date. To avoid
uncertainty, Ks usually stipulate that time is of the essence of the agreementmaking it an essential term of the agreement.
o Marketable title- every K for sale of realty contains an implied duty of the seller
to deliver marketable title to the buyer. This obligation can be expressly disclaimed
by the agreement between the B and S. marketable title is a title a prudent buyer
would accept, one reasonably free of doubt that there is any other rival to the title
or any portion of it. Any defect in the title must be substantial and likely to result in
injury to the buyer.
o Unless the contract provides otherwise, the seller agrees to provide the seller with
marketable title to the property. Marketable title is one whose validity is not subject
to reasonable doubt and which a reasonable and informed buyer paying fair value
for the property would accept.
o

Title based on adverse possession may qualify as "marketable" under this standard
even though someone other than the seller is the owner of record. However, to
qualify as marketable, the property must be free of encumbrances, such as liens,
easements and covenants unless they are expressly excluded.

Proof of Marketable Title- a S can deliver marketable title by either

Producing good record titlea recorded chain of title, showing an
unbroken transfer of title form some original root of title in the past to
the seller, with no recorded encumbrances (e.g. mortgages,
easements, or servitudes) or
Proving title by Adverse Possession-either thru a successful quiet title
action or evidence sufficient to establish that the rival claim will ever
be asserted.
A careful buyer will insist on a K term obligating the S to deliver good record
title, thus depriving the S of the ability to deliver marketable title by proof of
AP
Root of title- to deliver good record title, it is usually not necessary to
trace the chain of title back to the original possessor of the property.
About 20 states have marketable title acts, which provide that a deed
at some distance in the past (20-40 yrs.) is a root of title, and cuts of
any claims of title found on earlier instruments. Even if states without
marketable title acts, good record title may be products by a title
search that goes back to the point that is deemed acceptable under
local practice. The rationale is that a search of the records for the
preceding 80 yrs., fore example, is adequate to reveal virtually all
present claims to title and any prior claims found will be barred by SOL
Defective title- to be unmarketable, a defect in the title must be
substantial and likely to injury the buyer. Defective title does not always
prevent the transaction from taking place. B can and do waive certain defects

(easements, or mortgage that can be assumed by the buyer) and other

defects can be removed prior to or at the closing. Common defects in title:
Defective chain of title- chain of title may have a faulty or
nonexistent link. If a deed describes the wrong land, it is a faulty link. If
there is no record evidence of a deed from B to C in chain of title
purportedly from A to B to C to D, the nonexistent link makes D title
unmarketable. BC a chain is only as strong as its weakest link, such
defects make title unmarketable unless there is adequate proof of AP
sufficient to create a new, valid and marketable title
Encumbrances- generally make title unmarketable. An encumbrance
is a burden on the title, such as mortgage, judgment liens, easements
or covenants.
o Exception to general rule- an easement that benefits the
property (utility) is sometimes not an encumbrance so long as
the easement is known to the buyer before entry into K;
Covenants restriction use are encumbrances, but some
courts treat them as not making the title unmarketable if
the sale K specifies a particular use that is permitted by
the restrictive covenants.
Zoning restrictions- use limits imposed by public authority thru zoning
laws arent encumbrances on the title
Default and Remedies- Default = when one party has tendered performance in the time and
demanded other parties performance, which isnt forthcoming. Remedies for breach are
damages, rescission and specific performance.
- Specific Performance- Land is unique, damages are thought to be inadequate
compensation for breach, but bc specific performance is an equitable remedy the D may
assert the usual defenses (undue hardship)
B usually able to demand, if the S title is defective (an easement) and B still
wants, he is entitled to an abatement of the price to reflect the diminution in
value attributable to the defect
S able to demand, but new trend is to deny if S still able to sell property at a
commercially reasonable price. S entitled to SP will be required to reduce
the price if there is an insubstantial defect in title
Equitable Conversion-if a K for sale of land is specifically enforceable, this
doctrine treats the B as equitable owner form the moment the K becomes
effective, even if title passes later.
Under the doctrine of equitable conversion, when the parties execute a valid
contract of sale, the seller is deemed to have transferred equitable or
beneficial title to the buyer, while retaining legal title. Legal title must be
transferred from the seller to the buyer by delivery of a deed. Traditionally,
the buyer assumed responsibility for any damage to the property between
the time the contract was executed and the time of closing.
o
Damages- if P doesnt want or cant obtain specific performance, may have
money damages. The measure of damages is usually the benefit of the
bargain, but one alterative for B breach is retention of the B deposit.
Sometimes damages are limited to recovery od out of pocket money
Duties of disclosure and implied warranties: duties imposed by law on the S to disclose
known defects and the implied warranty, implied by operation of law, of quality in the
construction of buildings.
o Duties of disclosure: Under the traditional rule of caveat emptor, the seller had no
duty to disclose defects in the property. However, the seller would be liable to the

buyer if he or she made intentional false representations of fact or engaged in

fraudulent concealment of defects. The majority rule now appears to impose on
the seller a duty to disclose all known conditions that materially affect the value of
the property unless they are obvious. In some cases, the seller may also be
required to disclose information about off-site conditions. If the seller breaches the
duty to disclose, the buyer may rescind the contact or sale or may sue for damages
if title has already passed. This rule of Caveat Emptor was justified on the theory
that buyers ought to use diligence and care to examine the property for themselves.
Caveat Emptor has been largely abandoned today
Fiduciary Relationships: even under Caveat Emptor, if the parties were in
fiduciary relationship (where one party is dependent upon and reposes
special trust in the other) the fiduciary was obligated to reveal all defects
know to him. This duty arises from duty to place others interest above his
own
Disclosure of seller-created conditions- the narrowest departure from caveat
emptor is the rule that a seller is obligated to disclose conditions that are (1)
created by the seller (2) materially impair the property value and (3) are not
likely to be discovered by a reasonably prudent buyer using due care
Poltergeist case- S advertised and marketed as being haunted, P
wanted to rescind, court held that caveat emptor didnt apply, S
promoted the reputation as haunted and it wasnt likely to be
discoverable, and the reputation materially impaired the value of the K
Disclosure of Latent material defects- majority rule is that the seller must
reveal all latent defects. A latent material defect is a defect that (1)
materially affects the value or desirability of the property (2) is known to the
seller (or only accessible to the seller) and (3) is neither known to or within
the reach of the diligent and attention and observations of the buyer
Statutory disclosure obligations- some states have enacted statutes the
require S to disclose specified conditions, like structural/soil defects,
hazardous materials, underground tanks, encroachments, nuisances
Brokers Disclosure obligations- same duties as on seller in some states
Post-closing survival of causes of action for non-disclosure- CL doctrine said
that upon passage of title, all warranties in the K were merged into Deed.
Now has many exceptions- claims for fraud and actions based on promises
collateral to the K survive.
As is sales- if the K stipulates that the B take property as is, S is generally
relieved of disclosure obligations for defects reasonably discoverable, absent
fraud.

The Implied Warranty of Quality or Habitability

o

Many states now provide that developers and builders of new housing impliedly
warrant that the building has been properly constructed. This obligation does not
apply to private sellers who are not in the business of building or selling homes.
However, because privity of contract is not required in most states, subsequent
purchasers can still sue the original builder or developer for breach of the implied
warranty of quality and recover for physical damage to property as well as economic
losses such as loss of bargain or the cost of repairing the defective condition.
Traditional rule was that builder had no liability to anyone for his poor workmanship
unless gave express warranty of quality. Over time warranty of quality was implied
into K between builder and owner, but the builders liability for economic loss was
limited to those he was in privity of K with- the immediate purchaser. Recently most
have abandoned and now imply warranty of quality by the builder of a new home, that
may be enforced by subsequent purchasers of the structure

I.

Lempke- D built garage for owners, who sold to L. L took possession and notices
structural problems with roof, sued D for neg and breach of implied warranty.
Court concluded that the implied warranty runs for the benefit of the subsequent
purchasers with respect to latent defects that become apparent after the remote
purchaser has acquired title and which couldnt have been discoverable prior to
the acquisition of the property
No disclaimer- CTs agree that the implied warranty of quality in favor of
subsequent purchasers may not be disclaimed (public policy of placing loss
on party best able to avoid it and protect consumers)
Limitations period- courts permit subsequent purchasers to bring suit against
the original builder for a reasonable time. (usually period long enough for
latent defects to become apparent) some states have SOL- 6 yrs. from initial
sale

The implied warranty of quality seems to be limited to new residential construction.

Purchasers of commercial buildings must rely on express warranties. It appears that
the implied warranty of quality can be disclaimed, although this right to disclaim is
limited. Finally, unlike the UCC's implied warranty of merchantability that applies to
the sale of goods, the duty imposed on sellers by implied warranty of quality seems to
be one of reasonable care rather than strict liability.

Remedies for Breach

When one party defaults, the other party may sue for rescission, specific performance
or damages. Damages include loss of bargain damages, special damages and
sometimes punitive damages. The measure of loss of bargain damages is the difference
between the purchase price and the actual market value of the property at the time of
the breach. The parties may include a liquidated damages clause in the contract which
a court will enforce if the liquidated damage amount is reasonable.
- During the time between making of the K for sale and the closing, various bad things
can happen, the property can be destroyed or damages or one or both parties may die.
CL reacted to possibilities by notion of equitable title (equitable conversion)
o Equitable title- equitable ownership of the subject property passes to the buyer the
moment the K of sale is made. The S remains legal owner until closing, but for
purposes of equity the B is treated as owner.
Deeds
1) Formal requirements and component parts- A deed is the usual method by which title to
realty is transferred.
- Writing required- SOF required writing signed by the grantor in order to transfer an
interest in land. A deed signed by the grantor is the usual method of compliance, but
other writings will suffice. BC the grantor is the only party bound by the deed, the
grantor only needs to sign the deed
- Notarial Acknowledgement- is the act of a notary public attesting to the fact that the
grantors signature and to the identity of the grantor. A deed is valid without
acknowledgment, but almost all deeds are notarized bc its universally required for
recording the deed in public records
- The grant- the first clause is the granting clause- which recited the parties, the words
making the grant, the consideration and description of property
2) Warranties of title- A S warranties concerning the state of the title conveyed are expressly
contained, if at all, in the deed. NO warranties are implied. There are three types of deeds:
(1) general warranty deeds; (2) special warranty deeds; and (3) quitclaim deeds. The
general and special warrant deeds contain covenants that warrant the state of title;
quitclaim doesnt.

A. General Warranty Deed

o Contains 6 covenants concerning title. Each covenant is a promise that the title is
absolutely free of the warranted defect regardless of whether the defect arose before
or during the time the grantor had title.
o A general warranty deed contains three present and three future warranties of title.
The grantor warrants against any failure of title arising from acts committed by
himself or his predecessors in title prior to the conveyance.
I.
The present warranties of title include: (1) the covenant of seisin, (2) the covenant
of right to convey, and (3) the covenant against encumbrances (that is, liens,
leases, easements, etc.). The present warranties are breached, if at all, at the time
of the conveyance and the statute of limitations begins to run at that time.
Normally, present warranties extend only to the grantor's immediate grantee and
do not run with the land.
I.

Future warranties of title include: (1) the covenant of general warranty, (2) the
covenant of quiet enjoyment, and (3) the covenant of further assurances. Future
warranties may be breached any time after the conveyance and may be enforced
against whoever made them, that is, predecessors in title. However, a
predecessor in title is only liable for the purchase price that he or she received for
the property.

Covenant of seisin: the grantor promises that he owns what he is conveying

by the deed
Covenant of right to convey- grantor warrants he has the power and
authority to convey the property
Covenant against encumbrances- warrants there are no liens, mortgages,
easements, covenants restricting use, or other encumbrances upon the title
to the property other than those specifically excepted in the deed
Covenant of general warranty- the grantor warrants that he will defense
against lawful claims of a superior title, and will compensate the grantee for
any loss suffered by the successful assertion of superior title
Covenant of quiet Enjoyment- the grantor warrants the grantee will not be
disturbed in his possession or enjoyment of the property by someones
successful assertion of a superior title to the property. This covenant is
functionally identical to the covenant of general warranty, and is often
omitted from general warranty deeds
Covenant of further assurances- grantor promises to do whatever else is
reasonably necessary to perfect the conveyed title, if it turns out to be
imperfect. Frequently dropped from gen deeds too.

B. Special Warranty Deed

a. Contains the same 6 (or fewer) covenants of Gen Warranty Deed. Only difference
is that the grantor warrants against defects of title that arose during the
grantors time of holding title. Defects arising before ownership arent
covered. He basically warrants that he hasnt created or suffered a defect to
ownership.
II.
A special warranty deed warrants against acts committed by the grantor, but not
against acts committed by the grantor's predecessors in title.
C. Quitclaim Deed
o A quitclaim deeds contains no warranties or title and merely purports to convey
whatever interest, if any, the grantor might have in the property.

D. Breach of covenants of title- if a present covenant is breached it is at the moment

deed delivered, future covenant breached when grantee is actually or constructively
evicted at some time in the future
a. Present:
i. (present)Breach of Covenant of Seisin- broke if doesnt own what he
purports to convey, regardless of if he is aware of defect or not. Broken
even if grantee knows the grantor doesnt own interest
ii. Breach of covenant of right to convey- broken if the grantor lacks the
power or authority to convey the interest
iii. Breach of covenant against encumbrances- breached if the title is
encumbered (other than in the deed) at the time of delivery of the deed,
whether or not the grantor is aware of the encumbrance. Most states said
grantees knowledge of the encumbrance doesnt excuse or obviate
breach, minor say that grantees knowledge (actual or constructive) of
open and visible encumbrance prevents breach.
1. SOL- BC the breach of present covenants occurs, if at all, at the
moment the covenant is given, the SOL begins to run at that
moment. 3-6 yrs.
b. Future: these are representation as to future events, guarantying the grantees
security of title in the future. They are breached only when the grantee is
actually or constructively evicted, which always occurs sometime after the
transfer. Actual eviction is the actual dispossession from title or possession.
Constructive eviction occurs whenever the grantees possession is interfered with
in any way by someone holding superior title.
i. EX. Bost v Brown- Bost conveyed 80 acres to Brown under gen warranty
deed containing no exceptions, even though Bost only owned 1/3 of the
mineral rights. After the SOL on the present covenant had expired, Brown
tried to sell rights to Coal and was forced to accept less money than
agreed to bc discovered Brown only owned 1/3 rts. Ct said Brown had not
been constructively evicted BC the mere existence of a paramount title
doesnt constitute breach of covenant of quiet enjoyment. If the owner of
2/3 had mined coal under Browns land he would have been constructively
evicted.
1. Breach of future covenants- only when grantees possession has
been disturbed by someone holding superior title, can occur years
after transfer
2. Benefit runs with the estate- if there is privity of estate between
original grantor and remote grantee, the benefit of a future
covenant given to the original grantee runs with the estate
conveyed to remote grantee. If the original grantee has neither
title not possession there is no estate created with which a
covenant can run
c. Limit on damages for breach- grantee may not recover more than what the
grantor in breach received for the property
E. Delivery- a deed must be delivered by the grantor in order to be effective to transfer
interest in the land. Delivery means that the grantor has said or done things to
demonstrate grantors intent to transfer immediately an interest in land to the grantee.
Delivery doesnt necessarily require the physical act of handing over paper deed. Key
is intent of grantor

Mortgages and Other Financing Devices

Buyers may employ a variety of financing devices to pay for the purchase of real property
when they are unable to pay the full purchase price in cash. These financing devices
include mortgages, deeds of trust and installment sales contracts.

1. Mortgages A mortgage is a consensual lien placed on real property to secure a debt. The
debtor also signs a promissory note for the amount of the debt. If the debtor defaults on
the loan, the creditor may sell the mortgaged property in order to pay off the loan. In
addition, the debtor may be personally liable on the promissory note for any deficiency if
the proceeds of the sale of the mortgaged property are not sufficient to pay off the loan.
The debtor is known as the mortgagor and the creditor is known as the mortgagee.
a. Types of mortgagesi. First and second
ii. Fully amortized mortgage principal is retired over life of the loan
so payments are consistent
iii. Balloon payment mortgage- small payments of principal during the
life of loan,
-

A debtor may obtain more than one mortgage on a particular piece of property. The
mortgage that is obtained first is known as a first mortgage and is senior to any
subsequent mortgages. If the debtor defaults on a second mortgage, the second
mortgagee can foreclose on the mortgaged property but must pay off the first mortgage
before receiving any of the proceeds of the foreclosure sale.
o Example: A purchases a house for $100,000 from B. A makes a $10,000 down
payment, obtains a $75,000 first mortgage from C, a bank, and obtains a $15,000
second mortgage from B. A subsequently defaults and C forecloses. The house only
brings $50,000 at the foreclosure sale. C gets $50,000. C may be able to recover the
balance of the debt from A if A has any assets. Likewise, B may try to recover the
balance of A's debt to him by suing him personally. However, B will get nothing from
the sale of the house because his mortgage was junior to C's.
- Title or lien- states take different views of whether a lender has title to the mortgaged
property or only a lien on the property.
o Title theory (east) - Lien theory (west), difference isnt practical consequence now BC
title theory states treated lenders title as for security purposes only, so its
indistinguishable from a lien. Only difference lies in who is entitled to possession.
I.
Title theory- mortgagee entitled to possession, some states say mortgager entitled
until default and the mortgagee entitle thereafter.
II.
Lien theory- mortgager entitled to possession until foreclosure.
- Sale or transfer by the mortgager- always free to transfer his equity- is interest in the
property. Equity is the term used to describe the value of the borrowers interest in the
propertythe difference between market value and the principle balance of the loan
secured by the mortgages. A buyer of the mortgagers interest can acquire interest
subject to mortgage or can assume the mortgage
o Assumption of mortgage- if new buyer assumes existing mortgage he is personally
liable for the loan
-

Default- When the debtor defaults, the creditor normally asks the court to order a
foreclosure sale. This sale is known as a judicial foreclosure sale and is conducted by
the sheriff or some other public official. Many states permit the creditor to include a
power of sale provision in the mortgage which allows the creditor to conduct a private
foreclosure sale. In either case, the creditor can only recover the amount of the debt
and must turn over any surplus, known as the equity of redemption, to the debtor. Most

courts now hold that the creditor who sells the property in a private foreclosure sale
must exercise due diligence to protect the debtors equity of redemption.
In most states the lender has the option of a suit to collect the debt or to foreclose and
effect a sale of property to satisfy the debt. A few states require the lender to first
foreclose and sell before seeking to enforce the debt personally by obtaining a
deficiency judgment
I.
Inadequate sale price at foreclosure- the fact that the sale price at foreclosure is
inadequate, in the sense that it is less than fair market value, will not by itself void
the foreclosure sale. Usual rule is that the price will stand unless it is so far below
market value that it shocks the conscience, or fraud or other overbearing
unfairness is present. Some states impose on mortgagee a fiduciary duty to act in
commercially reasonable manner in conducting a foreclosure, such that
reasonable efforts are made to realize a fair price.
Lender must act diligently to generate a fair price, which can be below the
fair market value bc fair market value can be expected to be realized in a
voluntary exchange with plenty of opportunity to shop for buyers, in a forced
sale, some diminution in price is reasonable.
2. Deed of Trust (is used in many states as the form of mortgage)
- When a deed of trust is used, the debtor transfers title to the property to a trustee. The
trustee has the power to sell the property at a private foreclosure sale if the debtor
defaults. The trustee is required to re-convey the property to the debtor when the debt
is paid off.
- How it works- the borrower conveys the real property to a 3 rd party as a trusts for the
lender, for the limited purpose of securing repayment of the debt. The trustee is often a
nominee od the lender (lawyer, employee), the deed of trust gives the trustee the
power to sell the property upon default (power of sale), to use the proceeds to pay off
the debt and return any excess to the borrower
- Different from the mortgage- traditionally, judicial foreclosure was required to enforced
a mortgage, which meant bringing suit and conducting a judicially supervised sale- time
consuming and costly. Power of sale vested in trustee, is quick and cheap. Sale
conducted by 3rd party trustee at lenders requires.
o

3. Installment Sales Contract

- When an installment sales contract is used, the seller retains title to the property. The
contract of sale typically requires the buyer to make a series of equal payments to the
seller (with interest) until the debt is paid. The contract also requires the seller to
convey title to the buyer at the end of payment period.
- Installment sales contracts often provide that a buyer who defaults can be removed
from possession and will forfeit all payments previously made pursuant to the contract
(as liquidated damages). However, courts now tend to protect buyers against such
forfeiture provisions and require the creditor to conduct a foreclosure sale. Thus, as far
as debtors rights are concerned, there is not much difference between a mortgage and
an installment sales contract.

Servitudes: Land use limits created by private bargain

Servitudes are non-possessory interests in land. They include: (1) easements, (2) real covenants
and (3) equitable servitudes.

I.

Intro:

a. Concept- neighbors often desire to make private agreements concerning the use of
their land and BC owners come and go, want those agreements to bind future
owners/occupants. These agreements come in 2 varieties- (1) one land owner may

grant to another person the right to use his land for some specific purpose or in
some manner (creates either an easement or profit a prendre). (2) One
landowner may promise another landowner that she will use (or refrain from using)
her land in a specified way. Depending on what remedy is sought for enforcement,
these agreements create either a real covenant or an equitable servitude.
b. Easements- principal issues surrounding easements are:
i. creation,
Easements are created by:
express grant,
by equitable estoppel,
by implication from prior uses of an owner who divides land into separate
parcels,
by necessity resulting from an owners division of land into separate parcels
leaving one or more without access,
by prescription (similar to Adverse possession)
ii. scope of the permitted use
- issues involve identifying the land owner (or person) who is entitled to
use the easement and deciding the proper intensity of permitted use
iii. termination
- may be terminated by:
a. abandonment,
b. merger
c. release
d. actions inconsistent with the granted right and prejudicial to the
burdened landowner
e. accidental destruction
f. prescription
g. markedly changed circumstances
c. Covenants running with the land- these promises concerning land use consist of real
covenants (enforceable at law to recover damages for breach) and equitable
servitudes (enforceable in equity by an injunction)
i. Real Covenant- enforceable at law- principle issue concerning these
covenants (created only by express agreement) is whether they may be
enforced by or against subsequent owners of the land burdened or benefits
by the promise. Issue is usually whether or not privity of estate exists.
- Traditional view- vertical privityprivity of estate between the
promisor and his assignee and between the promisee and his assigneemust exist for a real covenant to be enforceable by or against
successors to the estate, although that view is under attack. Reason
for seeking to enforce a real covenant is to obtain damages resulting
from its breach
ii. Equitable servitudes- enforceable in equity- these promises may be
created by agreement, or in some states, by implication from a development
scheme undertaken by a common owner. Privity isnt required for these
promises to be enforced by or against successors to the estate, but promise
must be intended to bind successors, and the successors must have
notice of the promise, the nature of the promise must touch and
concern use of the burdened land, and the promise must benefit
neighboring land. Equitable servitudes are enforceable by injunction and in
some cases, a lien.
Easements

A. Defined and distinguished from a fee simple- An easement is an interest in land that
entitles the holder to use land owned or possessed by another person. It is not a freehold
estate. An easement almost always gives the owner a right to use another persons land; a
free hold (fee simple) gives it owner a right to exclusive possession of ones own land. In
rare circumstances and easement may give its owner the right to prevent another person
from using their land ascertain way
a. Ambiguous grants- some grants arent too clear about whether theyre an easement or
a fee simple was intended, but if the interest conveyed is a limited area for a limited
purpose, especially if no defined boundaries, an easement is likely intended. Most
courts employ a rebuttable presumption
B. Types there are 2 ways to classify easements:
a. Affirmative or negative or
b. Appurtenant or in gross (which boils down to 4 basic types :)
i. Affirmative appurtenant,
ii. negative appurtenant,
iii. affirmative in gross and
iv. negative in gross
Distinction between Easements appurtenant and in gross: (every easement must be one or the
other)
o Appurtenant- one that benefits the owner of another parcel of land. The benefited
parcel = dominant estate; the burdened parcel= servient estate. An easement
appurtenant passes with the dominant estate whenever the dominate estate is
transferred to a new owner. The easement right is incidental to, or appurtenant to,
the dominant estate
Ex. O owns Blackacre, and A owns Whiteacre. A grants an easement across W
for Black acre for trail to the beach. The easement benefits whoever possesses
Blackacre
o Gross- designed to deliver a personal benefit, rather than to benefit a landowner.
Easements in gross arent attached to, or appurtenant to, any parcel of land. They
create a personal right to use the servient estate, but that personal right may be
assigned if the parties so intended
Ambiguous grants- courts prefer to construe ambiguous grants as creating
easements appurtenant
Ex.^ A grants to O and his assignees the personal right to enter upon and cross
whiteacre to reach the beach.easement in gross in favor of O
Distinction between Affirmative and Negative easements- the vast majority are affirmative. Only
a few types of negative easements may be created
o Affirmative- permits a person to use the servient estate in a specified manner
o Negative- confers only the right to prevent specified uses of the servient estate;
confers no right to use the servient estate.
CL recognized 4 neg easements, all appurtenant- for light, air, subjacent/lateral
support, and for continuing the flow of artificial streams ( the owner of the
servient estate couldnt block off his neighbors light, air or excavate to
undermine neighbors structure.
Modern- view, (same as light and air); solar collection (variation on light).
o Conservation Easements- almost all states permit- do not benefit any dominate
estate but are for the benefit of conservation organizations.
An easement is a nonpossessory interest in the land of another. Most easements are easements
appurtenant. This means that the owner of one tract of land, known as the dominant tenement,
is entitled to a benefit from the land of another. The land that is subject to this burden is known
as the servient tenement.

Example: If the owner of tract A has the right to cross tract B to reach a public
highway, this would be an easement appurtenant. Tract A would be the dominant
tenement and tract B would be the servient tenement.

If a tract of land is burdened, but no adjacent land benefits from the easement, the easement is
known as an easement in gross.
- Example: The telephone company has the right to put telephone poles and wires
across A's land. A's land is burdened, but there is no nearly property belonging to the
telephone company that is benefitted. A's land is subject to an easement in gross.
If the easement is an affirmative easement, the holder of the easement can enter the land that is
burdened by the easement or maintain something on it.
- Example: The owner of tract A has the right to cross tract B to reach a public
highway. The easement that burden's tract B is an affirmative easement because
the owner of tract A can enter tract B in order to exercise the easement.
If the easement is a negative easement, the burdened land is subject to a restriction but there is
no right to enter the land.
- Example: The owner of tract A has agreed to not to construct any building on the
property that is more than 20 feet in height in order to prevent solar collectors on
tract B from being blocked from the sun. Tract A is subject to a negative easement.
License permission to enter anothers land. (guests, workers, etc.), may be oral or written
and are revocable at any time
o License or Easement in Gross- the same language may be construes as either. The
difference in consequence is that an easement may not be revokes and continues to
bind successors the servient estate who have notice of it, while a license is revocable
an binds only the licensor so long as it remains alive
o Assignment- Licenses are generally not assignable, but this rule is not invariable.
Licenses are assignable if the parties so intend, and also if a license becomes
irrevocable through operation of equitable estoppel, thus effectively becoming an
easement appurtenant
o Irrevocable licenses- can become irrevocable in 3 ways:
Intention of licensor
Equitable estoppel-if reasonable reliance to make substantial improvements to
the property, equity requires that the licensor be estopped from revoking the
license.
Ex. Holbrook v Taylor- H let T use roadway to get to Ts property, with H
knowledge and no objection, T constructed a home, H then blocked road. H
was equitably estopped from revoking license
Easement of indefinite duration can last forever.
C. Creation of Easements- can be created by grant, estoppel (usually called an irrevocable
license) and by implication (in 2 diff ways, and by prescription (similar to Adverse
possession)
a. Easement by Grant- most easements are created expressly by a deed or other grant.
Because an easement is an interest in land, its creation is subject to SOF, which requires
a writing signed by the grantor. There are exceptions to SOF which permit creation of
easements by estoppel, implication, and prescription
i. By reservation- Grantor sometimes convey land and, in the same deed, purport to
reserve an vestment in favor of the grantor or a 3 rd party

1. In favor of grantor- Cl distinguished between such a reservation (which created

a new easement) and an exception (which passes title subject to a preexisting
easement).
2. In favor of 3rd party- majority continue to treat reserved easements in favor of
3rd party as void. in which case must use 2 conveyances instead of one to create
the easement
a. EX. Willard v First Church 1972- M conveyed lot by deed that purported
to reserve an easement for parking during church hours for the benefit
of an adjacent church to P who conveyed it to W that didnt mention the
parking easement. W learned of easement and sought to quiet title. Ct
said the CL rule frustrates the clear expressions of grantor intent and
delivers windfall profits to ppl like P who are shady
b. Easement by Estoppel- an irrevocable license, the functional equivalent of the
easement, can be created by estoppel.
c. Easement by implicationo Most easements are express easements and must be created by a written
instrument executed in accordance with the requirements of the Statute of Frauds.
When the grantor reserves an easement in the land that is sold, the instrument is
known as a reservation; when the grantor creates an easement in favor of the land
that is sold, the instrument is known as a grant. Easements may also be implied by
prior use or by necessity. In addition, easements can arise through prescription.
o May be implied in law under 2 circumstances (1) where property has been divided by
a common owner and prior to the division, one portion of the property has been used
in an easement type fashion for the benefit of another part of the property (implied
by prior use) and (2) where property has been divided by a common owner in such a
manner that an easement for access is necessary (implied by necessity)
Easement implied from prior use- An easement implied from a prior use may
arise if a common owner uses his or her land in such a way that one portion
benefits from the use while another portion is burdened. This is known as a
quasi-easement. An implied easement may come into existence when the land
is subsequently divided into two or more portions.
The problem is to identify when parties to a conveyance intend to create an
easement without explicitly saying so. The following elements, which are often
stated to be necessary to establishing an easement implied from prior use, are
the principle factors that tend to establish an inference that there parties
intended to create an easement:
o Common owner: prior to division, the quasi servient estate and quasi
dominant estate must be owned by the same person
o Reasonable necessity- the prior use must be reasonably necessary for the
use and enjoyment of the quasi dominant estate
o Continuous use- prior use must be continuous, not sporadic
o Intended continuation- parties must intend, at the time of division, to
continue prior use
o Existing use- prior use must be existing at time of division, a requirement
implied by element of intended continuation
o Apparent- the prior use must be apparent, which doesnt necessarily
mean visible
Common owner- person may devote part of her property to a use that
benefits the other part. There is no easement created while property owned
by one person, but this prior uses creates a quasi-easement, an inchoate
easement in waiting. When the common owner slips up the property by
selling part to another person, an easement from prior use may be created.
If the owner and grantor retains the quasi servient estate the implied

easement is by implied grant. If the owner and grantor retained the quasi
dominant estate (benefited part) the implied easement is by implied
reservation
Reasonable necessity- the easement must be reasonably necessary for the
owner of the dominant estate to use and enjoy her property. This ensures
that the E was likely intended to continue after division. One corollary
implication is that an E implied from prior use can only be appurtenant.
o Necessity is usually found it would be costly or difficult to use the
dominant estate without the easement or if the price paid for the estate
reflects existence of the easement
o Ex. VanSandt- had 3 lots, build sewer line across them, sold them all
three. Later owners on lots with sewer line across them build houses,
then have plumbing problems, said no easement had been created. Court
said
Continuous use- the use must be continuous. Concept that use must be
such that both parties intended for it to continue, doesnt mean constantly,
rather means that the easement must be embodied in some permanent
physical alteration
Indented continuation- fundamental element- price paid helps determine bc
if intended to continue then would likely settle on price reflecting its value
Existing use at division= if not no reason to think parties intended
continuation
Apparent use- doesnt mean must be visible, cold be apparent if could be
detected or inferred from a reasonable inspection of the premises
Scope- includes not only uses known or discoverable at the time of the
severance but also those uses that a party might reasonably have foreseen
that the other party wouldve expected to be included in the implied
easement
Easements implied from a subdivision map- when common owner divvies
under a deed that incorporates or refers to a map on which proposed
streets or rights are platted, an easement in favor of the grantee is implied
even though there has been no prior use

d. Easement by Necessity - An easement by necessity is created when property,

owned by a common owner is divided into one or more separately-owned portions in a
way that leaves one portion land-locked. This is known as strict necessity. An easement
by necessity is implied to allow one owner to cross the land of the other to reach a
public road.
i. Common owner- an E by necessity can be created only over property owned by the
person who also owned the landlocked parcel and who divided the property to
create the access problem. In cases of multiple division, an E by necessity is created
at the moment a parcel is landlocked and thus the easement burdens the last parcel
split off by the common ownerthe parcel that completed the land locking
1. Othern v Rosier- H owned land, sold in bits and pieces over time. One parcel
was landlocked and title was acquired by O, who used the road over Rs land to
reach public road, R sometimes left roadway impassable with water (to prevent
erosion) O sued R to enjoin interference with right of way, implied by necessity.
Ct said no E by N proven BC there was no proof that when H conveyed to Rs
predecessor that the conveyance was the one that landlocked the parcel. O had
some E in N on some property, but wasnt necessarily Rs
2. E by N cant ever burden property never owned by the common grantor who
create d the problem

ii. Necessity at severance- not prior use- necessity must exist at moment the property
is divided. No prior use is needed to establish an easement by necessity. The
necessity of access is present the moment the parcel is landlocked, though the
practical need may lie dormant for years
iii. Duration- lasts as long as the necessity exists. If necessity removed (by creation of
other access) easement is terminated
iv. Location- once servient estate is identified, the O of the servient E is permitted to
select reasonably convenient location for the easement, on the theory that the
servient estate owner can best minimize damage to the servient estate
e. Easement by prescription- An easement can arise by prescription, a concept that
is similar to adverse possession. In the United States, only affirmative easements can
be acquired by prescription. To acquire an easement by prescription, one must use the
land for the requisite period in a manner that is open, notorious and hostile to the rights
of the true owner.
Example: O and A are adjacent landowners. For many years, A crossed O's
land without O's permission in order to reach a public road. After the
prescriptive period has expired, A will have acquired a legal right to cross O's
land. In other words, A will now have an affirmative easement appurtenant or
right of way across O's land.
o In most states, to stop the prescriptive period from running, a landowner must
physically prevent a person from using the land or must bring a lawsuit against him
or her. However, a few states follow the lost grant theory which bases prescription
on the presumption of a lost grant and the landowners acquiescence of the
prescriptive user. In this case, the landowner can stop the statute of limitations from
running by conduct that is inconsistent with such acquiescence. This rebuts the
presumption of a lost grant.
o Elements of prescriptive use- virtually the same as needed for AP (1) adverse use
under a claim of right that is (2) open and notorious and (3) continuous for the
prescriptive period. Note however, that the exclusive uses element is so altered
from its meaning in AP that it is effectively not required
Prescriptive period- same as the limitations period for AP
Adverse use under a claim of right- the use of anothers land must be adverse
and not with permission of the owner. As with AP, there is an objective and
subjective version of this test. Objective- whether a neutral observer would
thing the used is under a claim of right and not permissive. Subjective=
required the adverse user to prove that she had in good faith belief that she had
right to use the land and not just permission to do so
If a use is permissive it can never ripen into a prescriptive right, no matter
how long it goes on. However a permissive use can become adverse if the
used does things inconsistent with mere possession and that give the owner
notice of the users claim of right
An adverse use can be rendered non-adverse if the owner of burdened
estate grants permission for the use
Use of an easement by Necessity after it has terminated is likely adverse
and may ripen into an easement by prescription. Use of an easement by
necessity is by right and thus no prescriptive, but if the necessity ends, the
easement by necessity terminates. Further use of terminated easement is
adverse unless permission to use is granted
Open and notorious use-to be open and notorious the adverse use must be
conducted so that the use may be discovered by a reasonable inspection. It
may not be carried on in secret or concealed

Continuous use- satisfied if the adverse user continually asserts her claim of
right my making whatever uses is consistent with the nature of the claimed
easement, even if that use is periodic and episodic
Exclusive use- so altered form AP that its not required, if doesnt mean that the
adverse user was the only user, it means that the adverse users claim does not
depend on a like right in others. Exclusive use is shown by claiming an
easement from ones owner se, not in common with public or someone else
o Public prescriptive easements- some jurisdictions permit public at large to acquire
prescriptive easement in private lands, so long as all the elements of prescription are
satisfied. Others achieve same result thru an implied dedication, custom or the
public trust doctrine.
Prescriptive easements in favor of general public- general rule is that the public
at large can obtain a P E as long as the elements of prescriptive use are
established.
Implied dedication- pseudonym for public prescriptive easement- owner
intended to dedicate his property to public uses, but the , of such intent is
inferred from long standing public use and owners failure to halt the use
Custom- beach front property owners own he dry sand portion of beach, be their
title usually extends to the high tide water mark. To establish a customary right
the public must prove immemorial usage without interruption that is,
reasonable, certain, and consistent with other customs.
Public trust doctrine- some states approach the issue of public beach access by
invoking this doctrine, under which the water and beach front below the mean
high tide mare is held by the state in public trust, to enable the public to use
these tidal waters and lands for swimming, boating, fishing, and other common
pursuits, this approach can be problematic bc access to such public lands is
often only through privately owned land
EX. Raleigh beach ass v Beach Club- private beach club must permit the
public to enter and use dry sand. Entity must give public access and use of
sand areas where reasonably necessary
o Prescriptive easement not permitted- two types of E cant be acquired by
prescription
Negative easements and easements upon public land
D. Transfer of Easements
a. Easements appurtenant are transferable, they are part of title to the freely transferable
dominant estate.
b. Easements in gross- bc the owner of an easement in gross is not nearly so easy to
locate as the owner of an easement appurtenant and thus the burden on the land may
persist long after its practical utility has ceased, courts tend to restrict transferability of
easements in gross. The general rule-commercial easements in gross are assignable,
noncommercial easements in gross are not unless the parties intended to permit
assignment
E. Scope of Easements- involves 2 questions- how extensively and intensively may the
easement holder uses the E? To what degree may the owner of the servient estate use or
interfere with the easement?
a. Partys intentions control- determining scope identify and uphold the parties
intentions, but this is not always so easy bc intentions frequently must be at least partly
inferred. CTs look at these factors:
i. How easement created
ii. How conditions have changed to affect the originally intended use
iii. What changes in se were reasonably foreseeable by the parties
iv. What changes are necessary to achieve the intended purpose of the easement
v. Whether a changed use imposed an unreasonable burden on servient estate.

F. Termination of Easements- An easement may be created that is of limited duration.

(expiration) An easement may also be terminated by merger, release, prescription or
abandonment.
a. Expiration- an easement created by grant may expire by its terms
b. Merger- if easement holder also acquires title to the servient estate, the easement is
extinguished bc an easement exists only in land owned by someone else
c. Actions of the easement holder- the easement holder may do a number of things
that will extinguish the easement:
i. Release- holder may release the E, either unilaterally or as a part of agreement
with servient owner. Generally, a release must be written, BC affects an interest in
real property, and so is within scope of SOF. An oral release is valid, thru equitable
estoppel, when the servient estate owner relies on it to his substantial detriment
ii. Abandonment- an easement may be extinguished by abandonment if the E holder
manifests clear and unequivocal intention to abandon the E. mere nonuse will
not suffice to prove abandonment. Even if the easement is never used, it is not
extinguished by nonuse. Abandonment is established by acts of the easement
holder that clearly and unequivocally establish either present intent to
relinquish the easement or a purpose inconsistent with its future
existence.
1. Ex. Railway owned right of way easement for rail line, ceased operation moved
tacks. Later the trial judge ruled that the railway abandoned its easement. The
easement holders conduct manifesting intent to abandon can be affirmative or
negative
iii. Alteration of dominant estate- if the dominate estate owner alters the dominant
estate so that the easement may no longer be used, E is extinguished
iv. Cessation of purpose- if the purpose of the easement has completely ceased, the
easement is extinguished.
d. Actions of the servient estate holder- 2 ways can extinguish an easement
i. Intentional destruction of servient estate
ii. Prescription- a servient owner can extinguish E burden the servient estate by
adverse use sufficient to constitute prescription.
e. Changed circumstances surrounding the area- may extinguish a real covenant or
equitable servitude, but does not apply to easements
Negative Easements- A negative easement imposes a restriction on the burdened land.
Negative easements can be either appurtenant or held in gross. In England, there were only four
types of negative easements that were recognized: light, air, lateral and subjacent support and
flowage.
- In the United States, prescriptive negative easements are not recognized. However,
most states now recognize three additional types of negative easements: scenic
easements, solar easements and conservation easements.
Real Covenants
A. A covenant is a promise and is generally the province of the law of K. a real
covenant is a promise about land usage that runs with an estate in land, meaning
that is binds or benefits subsequent owners of the estate. A real covenant may be
affirmative or negative. A promise to use the land in a specified fashion is
affirmative and not to use it in specified way is negative.
B. A real covenant is a promise respecting the use of land. An affirmative covenant
requires the promisor, or his/her successor in interest, to pay money or perform
some act or service. A restrictive covenant requires the promisor, or successor in
interest, to refrain from doing something on the land.

According to Spencer's Case (1583), in order for real covenants to benefit or burden
successors in interest: (1) the contracting parties must intend to bind their successors in
interest; the burden (and possibly the benefit) of the covenant must "touch and concern"
the land; and there must be privity of estate between the original parties and between one
of the original parties and a successor in interest. Real covenants are subject to the
Statute of Frauds and cannot arise by implication.
Privity of estate includes horizontal and vertical privity. Horizontal privity refers to the
relationship between the original contracting parties. In most states, the horizontal privity
requirement is satisfied if there is a grantor-grantee relationship between the contracting
parties at the time the covenant is made. However, the recently-published Third
Restatement of Property does not require horizontal privity for either the burden or the
benefit to run to remote parties.
Vertical privity refers to the relationship between one of the original parties and the
present owner of the land that is either benefited or burdened by the covenant. Under the
Third Restatement of Property, if the covenant is negative in nature, the restriction can be
enforced by all users and possessors of land that is burdened or benefited. On the other
hand, the burdens and benefits of affirmative covenants generally run those who satisfy
the traditional requirements of vertical privity. However, the burden of affirmative
covenants will run to adverse possessors.

Equitable Servitudes
An equitable servitude is nothing more than a promise respecting the use of land that is
enforced in equity. (By injunction) against a successor to the burdened estate who
acquired it with notice of the covenant. Covenant need not meet all the criteria of a real
covenant to be enforceable as an equitable servitude. Covenants are more commonly
enforced as ES than RC, BC they are easier to enforced by or against successors, and most
ppl prefer enforcement of a covenant by injunction than by damages for its breach. Like
real covenants, equitable servitudes can be either affirmative or negative (i.e. restrictive).
When residential subdivisions are involved, equitable servitudes are often called deed
restrictions.
In order to enforce a promise as an equitable servitude:
o (1) the original promisor and promisee must intend to bind their respective
successors in interest;
o (2) the promise must "touch and concern" the land; and
o (3) remote parties must have notice of the promise in order to be bound by it.
Horizontal privity of estate is not required for an equitable servitude to run with the
land, nor is vertical privity required for the burden to run.
Difference between real covenants and equitable servitudes: a covenant about land use
may be a real covenant, an equitable servitude, or both. There are four major differences:
o Remedy- a RC is enforceable at law by an award of money damages. An ES is
enforceable in equity by an injunction
o No privity needed- neither horizontal or vertical privity is needed for either the
benefit or burden of an ES to run to successors in the burdened or benefited estates
o Creation- ES may be created by implication in many jurisdictions, RC can only be
created expressly and in writing
o Origins of ES- in Tulk v Moxhay (1848). T sold area to E, who promised for himself
and his assignees not to build on the land. With knowledge of the covenant, M
purchased the land from S and proposed to build. Under Eng. Law the burden of the
covenant would not run BC horizontal privity is lacking, so T obtained an injunction.
Ct said unfair for M to purchase knowing of the covenant and ignore it. Bc the

covenant was intended to bind successors, its substance touched and concerned
the land, and M had notice of it, it was enforceable in equity against M

Normally, servitudes are subject to the Statute of Frauds just like real covenants. They
may be placed in individual deeds are recorded on a subdivision plat. However, most
states will allow equitable servitudes to arise by implication under the theory of reciprocal
negative easements. Under this theory, when a landowner, pursuant to a common
scheme of development, places a restriction in the deed of a buyer, the grantor's
remaining land is subject to the same restriction (which is really an equitable servitude).
This restriction will bind all subsequent grantees who take with actual or constructive
notice. Moreover, the physical character of the area may be sufficient to put a buyer on
"inquiry" notice to discover the restriction in another landowner's chain of title even
though it is not in the buyer's.
Creation- they are interest in land, so SOF requires they be created in writing and signed
by promisor, but acceptance of a deed containing a promise made by the grantee of the
deed suffices even though the grantee doesnt sign the deed. There is a major exception
to this rule: many states permit negative equitable servitudes (a promise to refrain from
using ones land in a specified fashion) to be created by implication when there is a
common scheme of residential development
o By implication from a common development scheme- many states will imply a neg
ES where a real estate developer sells lots in subdivision on the promise that all the
lots will be burdened with the same use restriction (single family home only etc.) ,
and later fails to carry thru on the promise to burden all the lots
o Ex. Sanborn- courts sometimes call the covenant implied a reciprocal negative
easement- term implied reciprocal covenant is more accurate- it is (1) reciprocal
(common schemed contemplates covenants burdening all lots for reciprocal
benefit) and (2) negative (it restricts land use rather than requiring affirmative acts
or use). Although not an easement, it is in the nature of an easement BC an
equitable servitude is an interest in land.
o For an implied reciprocal covenant to be implied the following elements must be
present:
A common scheme of development- uniform in character and recognizable as
such by purchasers. Otherwise there is no basis for concluding that purchasers
were relying on reciprocal covenants burdening everyone use in order to
produce a developed of uniform character
when does the scheme begin- in general the following factors are used to
determine the existence of a common schemeo advertisements mentioning RC
o Use of map showing the entire development as a sales aid in
conjunction with sales of burdened lots
o Representations to buyers that all lots will be similarly burdened
o Sal of a significant number of lots with common use restriction
No covenants on lots conveyed before the common scheme begins
Negative covenant- Ct will imply reciprocal covenants only when the substance
of the covenant is neglimiting the use that may be made of the property
rather than requiring some positive act on the part of the owner of the
burdened land
o No implied covenants- some courts Ca, and Mass reject creation by implication
Enforceability by or against successors- as with RC, certain requirement must be met in
order for the benefit or burden of an equitable servitude to run to successors to the
original estate. These are not the same as for RC: some are identical, but there are
differences:

Intent- (same as RC) if the parties expressly or impliedly intend to run to successors
it will run
o Privity not required- (diff) neither horizontal nor vertical privity of estate is required
for either the burden or benefit of an equitable servitude to run
o Notice- as with real covenants, a purchaser who pays real value for an estate and
has no notice of the servitude at the time is not bound by the servitude. Notice can
be actual or constructive. Constructive notice most often comes thru the records
but can be a product of circumstances that should trigger inquiry on the part of the
buyer that would reveal the servitude
Actual notice- can happen on purpose or by accidental discovery
Record notice- if servitude is in the chain of title, the buyer has constructive
notice
Inquiry notice- few have ruled that B should inquire about existence of servitude
if neighborhood exhibits a common character
o Touch and Concern-like RC, traditional rule is that in order for either benefit or
burden of an equitable servitude to run to successors in interest, the substance of
the covenant must touch and concern the benefited/burdened land. The meaning
of touch and concern is that same for equitable servitudes and real covenants.
Identifying the benefited land: by (1) ascertaining the intentions of the parties and (2)
determining whether the land intended to be benefited has actually received a benefit.
o Land retained by promisee- if the party imposing the covenant owns land adjacent
to or near the burden land, cts presume the covenant intended to benefit the
retained land.
o Enforceability by 3rd parties- sometimes the benefit of a covenant is sought to be
enforced by a person who is neither a successor to the covenant nor a successor to
land benefited by the covenant, but who was intended to be the beneficiary of the
covenant. These situations are of 2 types:
The intended beneficiary is prior purchaser of a lot in a subdivision developed
by a common grantor or
The intended beneficiary is complete stranger in the chain of titlethe
beneficiary did not acquire his property from the person who imposed the
covenant. Intended beneficiaries are generally but not always able to enforce
covenant
Prior purchasers- a prior purchaser of a subdivision lot burdened by
covenants restricting use may enforce the benefit of the covenant, under 1
of 3 theories
o Thru chain of title to the person imposing the covenant
o Unrestricted 3rd party beneficiary theory- any intended 3rd party
beneficiary can enforce the benefit of the covenant burdening land
o By implication from a common scheme- mirror of implied reciprocal
covenants- uses common scheme of development to id the property
benefits by covenants that are expressly created
Complete strangers- a landowner who is not part of a common scheme,
and who did not acquire the land (immediately or remotely) from the
persons imposing the servitude, may only enforce the benefit of a
covenant if (1) the landowner is the intended beneficiary and (2) the
jurisdiction permits any 3rd party beneficiary to enforce the benefit of a
covenant.
o

Equitable servitudes may terminate at the end of a specified period of time as provided in
the instrument that creates them. In addition, a court in equity may refuse to enforce an

equitable servitude if there is a change in the character of the area, the parties have
abandoned or waived their right to enforcement or because of laches or estoppel.

Constitutional and Statutory Restrictions

Equitable servitudes and real covenants are subject to constitutional and statutory
limitations. Thus, restrictions on the use of property may be held invalid under state law
due process grounds if they are unreasonable. In addition, restrictions that discriminate
on the basis of race, religion or national origin may be struck down on equal protection
grounds. Finally, restrictions may be held invalid if they conflict with the Fair Housing Act,
Americans with Disabilities Act or some other federal or state antidiscrimination statute.