I. PROPERTY CLAIMS

A. Introduction: Property in Context

1. General Arguments (Policy Considerations) for Social Property Rights

a. Fairness/Justice/Rights

b. Social Utility - good for society

c. Certainty/Administrability - effect on ability to administer

d. Judicial role

2. Justification for Awarding Property Interest

a. Labor and investment

b. Use/waste

c. First possession

d. government distribution of land

d. Need.

e. Family.

g. Relativity of Title - property right not against the public but against a competitor, or not against true owner but against a third party.

B. Original Acquisition and Allocation

Ownership by Occupancy - a thing capable of ownership but not then owned belongs to the person who acquires actual or constructive control or dominion over it and has the intent to assert ownership over it.

1. Labor, investment, and possession

a. Wild Animals

Wild animals in their natural state are unowned. They become private property upon being reduced to possession = occupy. Title can be acquired by: (1) Possession -the first person to exercise dominion and control over a wild animal becomes the owner of it. (2) Constructive possession - animals caught in a trap or net belong to the owner of the trap or net. (3) Mere pursuit --> property right in animal. However, where animal has been mortally wounded so that actual possession is inevitable, then vested property right in the animal that cannot be divested in another's intervening act to kill the animal. Pierson v. Post (fox hunter chasing fox with dogs, and Post kills the prey.)

Capture, reasonable prospect, possession - confers property right in Pierson v. Post. Labor and investment - does not confer property right.

b. Oil and Gas

Capture - each one could drain oil away from beneath land of the other, so long as non-negligent waste (drilling mud of insuffic. weight caused well blow out.) P could sue for waste. Elliff v. Texon Drilling Co. Why does P oil well driller have a stronger possessory claim than either of the fox chasers: the oil is under land each owns.

Rule of Minerals Ferae Naturae - every landowner is entitled to tap any oil or gas to which he has access, regardless of whether others had already tapped it. Majority rule in the U.S. Must be reasonable taking. Public policy used to decide dispute among land owners.

Three rules of right to possession of minerals

(1) Law of capture - the owner of a tract of land acquires title to the oil and gas which he produces from wells on his land, even though part of the oil or gas may have migrated from adjoining lands. He may extract the oil and gas that have flowed from adjacent lands without the consent of the owner of those lands, and without incurring liability to him for drainage. (Supports rapid extraction of resources, but not wasteful extraction)

(2) Correlative Rights - each landowner should be afforded the opportunity to produce his fair share of the recoverable oil and gas beneath his land: correlative rights over a common reservoir of oil or gas. If unable to develop, P could sell right to D.

(3) Reasonable Use - each owner must accommodate the others. Cannot destroy other owners rights to possess through negligent destruction, etc. No owner should be permitted to carry on his operations with reckless or lawless irresponsibility.

c. Groundwater

Prior Appropriation - grants property rights to the first owner who invested in withdrawing the water. Usually applied to water, not mineral or oil and gas rights.

Free use or absolute ownership doctrine - each surface owner is free to withdraw as much water as he likes from beneath the surface of his property without liability, even if it has the effect of withdrawing water from beneath his neighbor's property. Exception: not allowed to withdraw water in a way that wastes it.

Reasonable use test each owner must accommodate the interests of his neighbors; alternatively, the courts have to balance the interests of the parties.

Correlative rights - allow each owner to withdraw a specified portion of the groundwater, perhaps in proportion to the percentage of the aquifer under his property.

d. News

News is quasi-property. News is NOT abandoned when published in newspaper. Publication is abandonment for limited purposes: benefit readers, not for merchandising, not to deprive AP members of just return on expenditures. Int'l News Serv. v. Associated Press This decision rewards labor and investment, unlike Pierson v. Post.

Restraint only to point of unfair competition. AP wins = possession, property right. Opposite result as fox case. Relativity of Title - property right not against the public but against a competitor.

Policy Concerns: 1) unfair to reap what you did not sew; not an unlawful gathering of information. 2) want to reward investment/news gathering not news copying. 3) INS could buy a license from AP - encourage competition by preventing a monopoly.

e. Human Genes

Patient may sue doctor and hospital for breach of fiduciary duty connected to lack of informed consent on development of lymphokines from his body cells, but NOT conversion. Tort damages may be limited to pain and false representation, but property interest would confer control and share of the profits. Element of conversion = prove ownership (property). In this case, LABOR wins, not FIRST POSSESSOR. Judicial Role - let legislature decide if property interest in cells, not judges.

Social Utility: The extension of conversion law into this area will hinder research by restricting access to the necessary raw materials. Once cells taken out of your body, you no longer have any property interest in it.

2. Conquest: Competing Sovereigns

a. Johnson v. M'Intosh (Occupancy right or possession v. ultimate legal title). Must trace land to legitimate owners. The indians had no legitimate title. The U.S did. Marshall recognizes indians have "occupancy rights," but not "ultimate dominion" or "absolute title." 1. Title by Conquest; 2. Title by Discovery.

Johnson v. M'Intosh chooses positivism (law is what law says) over natural law (look above). "This is the law of the land, and cannot be questioned." Conquest gives title, which the courts cannot deny.

3. Government may redistribute lands despite any possessory right claims.

(1) expropriated vast amount of American Indian land. (2) Great deal of land given to railroads for free: circa 1850, 1/9 of total land area for RR use. (3) some land was sold off. (4) Other land in the West was sold or distributed by the government at below market prices. (5) Still other land was sold at fair market value; some of this land went to speculators who resold it. (6) Squatters often defeated federal land policies by trespassing on public lands; many of their claims were later recognized by the federal government. Together: an activist government taking and distributing land for a variety of purposes; fair amount of self-help and creation of law by communities of settlers who squatted on government land.

Factors for homeless squatters on city property: 1) building will be improved, 2) rewards self-reliance, 3) centralize problem. Factors for city: 1) bad to encourage congregation of homeless, neighborhood will go down; 2) quality control issues - safety issues; 3) handout rewards law breaking; 4) plan is in effect.

4. Family, Labor, and Need

a. Factors to consider in a divorce: court will divide property based on duration of the marriage and prior marriage of either party, income-earning factors, custodial provisions, whether apportionment is in lieu of additional maintenance. The court shall also consider the dissipation in value of the respective estates and the contribution of a spouse as a homemaker.

b. Court may create separate fund or trust for the support of children

c. As general rule, award house to custodial parent - so that children will not be uprooted. The court will order the sale of the family home where neither party has the resources to afford the maintenance costs of the home.

d. Community property - each spouse has right to 1/2 of income and wealth accrued during the marriage. Same at divorce.

e. Separate property - husband's income and wealth during marriage is his. Wife keeps hers. At time of divorce, income/wealth during marriage is equitably distributed. Also have separate factors to consider for assets brought to the marriage. This applies to property, not future support.

f. IN RE MARRIAGE OF KING - needs of each of the parties is important. By statute, grounds for divorce not considered in dividing property. These statutory factors not considered: age, health, employability. Gave most weight to children's interests.

g. Statutes give huge discretion to judge. Statute offers standards as opposed to rules.

h. Testamentary freedom - In the U.S. (unlike Europe), parent owners can entirely disinherit their children if they wish. In this sense, individualism trumps family.

i. Testamentary Rights - Married owners in the U.S. cannot entirely disinherit their surviving spouses. If an owner attempts to do so in a will, the spouse can "elect against the will" and receive a certain percent of the estate, despite the contrary wishes of the previous owner. Here family trumps individualism. REWARDS LABOR, meets NEED

C. Lost, Mislaid, and Abandoned Property

Indian artifacts buried with decedents serve some spiritual, moral, or religious purpose of the descendant/owner. Do NOT relinquish ownership to a stranger: desecration of graves. Human remains and burial goods are not "treasure," and therefore not subject to occupancy or discovery. CHARRIER v. BELL

1. Lost - the owner accidentally or involuntarily misplaced it; mislaid - the owner intentionally left it somewhere, and then forgets where she put it; abandoned - the owner intentionally relinquishes all rights in the property. Lost or mislaid property may eventually become abandoned.

2. The finder of lost or mislaid property does not gain ownership rights (title) over the true owner, contrary to the saying "finders keepers, losers weepers." Only abandoned property is up for grabs. Thus whether finder gets to be keeper depends on whether the owner abandoned the property, or merely mislaid or lost it. Title of owner persists when property is merely lost or mislaid.

3. If the true owner does not know the whereabouts of the property and is unaware that it has been found and therefore does not claim it, the finder is entitled to keep the property as against third parties.

4. If property found while trespassing, it goes to the landowner. If found by an invitee, the courts are divided. If found in a private home, usually to the home owner. Some courts give lost property to the finder (perhaps to reward him); mislaid property to the landowner (perhaps because true owner might come back to reclaim it). Many states statutorily give title to the finder if not claimed by original owner in a reasonable period of time.

D. Reliance, Possession, Use, and Title

1. Relativity of Title

a. TAPSCOTT v. Lessee of Cobbs. RULE 1: Plaintiff in ejectment action must have "good title" in order to get the court's help in throwing someone else off the land. RULE 2a: If the original owner or someone has entered on the strength of P's clear title to start with, then he wins the land without dispute. RULE 2b: Whoever has "peaceable possession" over land, he and his heirs have superior possessory rights over other settlers or adverse possessors (intruding strangers). Only Rule 2b applies in this case.

RATIONALE: 1) Avoid disorderly scramble (social utility), 2) Avoid clothing trespasser with means of maintaining his wrong (fairness, justice, illegality); avoid rewarding wrong. 3) For D, labor and possession reward.

b. Bona Fide Purchaser (BFP) - innocent purchaser of property that may be stolen. General RULE: A thief can never obtain title and therefore can never pass a title to a BFP.

TWO Exceptions - VOIDABLE Title - where thief has power to vest title in BFP:

1) Under the UCC, a BFP will prevail over the true owner when the true owner has entrusted the property to a merchant who regularly deals in the goods, but who wrongfully sells good to a BFP.

2) If an owner is induced to sell his property by fraud or duress, the seller may recover the property from the buyer unless the buyer has subsequently transferred the property to a bona fide purchaser.

Rationale: we want people to trust the market and not have to research title for every purchase.

2. Improving Trespasser - may get some or all property interest tempered by cost to pay for it.

Traditional approach: an innocent improving trespasser will be ordered to remove improvements from the land of an innocent landowner, even if this results in a windfall to the landowner. (Clearly favors landowner, even in the event of windfall)

a. Relative Hardship Doctrine: If encroachment is innocent (result of a mistake), the harm minimal, the interference in the true owner's property interests small, and the costs of the removal substantial, the courts often refuse to grant an injunction ordering the removal of the structure; instead they order the trespasser to pay the owner the fair market value of what was lost.

If the removal costs are insubstantial or interference with neighbor's ability to use his property is substantial, then court will usually order removal. Mere inconvenience and expense are not sufficient to withhold injunctive relief. The relative hardship must be disproportionate.

b. Bad Faith Exception - court will usually order removal of structure regardless of cost if builder knowingly built on neighboring property. A bad faith improver -one who deliberately builds on someone else's property - will not be granted a right to compensation.

c. Illustration of the Modern Rule. SOMMERVILLE v. JACOBS - Plaintiff/builder, after non-negligently relying on lot survey, builds warehouse on neighbor's lot by mistake. Court gives D the right either (1) to keep the land but pay P for the cost of the improvements (building) or (2) to sell the land containing the warehouse to P at fair market value minus the cost of the improvements. Rationale: avoid unjust enrichment, promote development, no need for extra surveys, make builders feel secure. Opposing Arguments: avoid unjust enrichment, avoid rewarding trespass, want landowners to feel secure, want careful builders who buy insurance and check lots correctly, avoid involuntary land transfers.

3. ADVERSE POSSESSION

Title to real property through adverse possession. (Easements acquired through prescription.) Title by adverse possession results from the operation of the statute of limitations for trespass to real property. If an owner does not, within the statutory period, take legal action to eject a possessor who claims adversely to the owner, the owner is thereafter barred from bringing suit for ejectment. Moreover, title to the property vests in the possessor.

(6 requirements) - when all requirements are satisfied, then adverse or hostile possession is often presumed. NOME 2000 - P regained land through these six requirements.

(1) Actual possession by adverse party - designed to give the true owner notice that a trespass is occurring and extent of the trespass. As a general rule, adv. possessor only gains title to land that she actually occupies. Actual possession consists of the kind of use a true owner would typically make of the parcel.

Example: A's occupation of an entire parcel of farmland would be actual if he cultivated or enclosed the entire parcel. It would not be actual if she only occasionally grazed cattle on it. However, if the land were range land, grazing cattle might be sufficient if this were consistent with its normal use.

The Fagerstrom's use of the trails and picking up of litter, although perhaps indicative of adverse use, would not provide the reasonably diligent owner with visible evidence of another's exercise of dominion and control. To this, the cornerposts add virtually nothing. Two of the four posts are located well to the west of the disputed parcel.....We fail to see how two posts on a rectangular parcel of property can constitute the "objective act of taking physical possession of the parcel." NOME 2000

Possession of Part: Actual (build a fence) vs. Constructive (deed)

Actual possession of a portion of a tract of land is sufficient adverse possession to give title to the whole of the tract of land after the statutory period if that person, e.g., builds a fence around the entire tract (ACTUAL - closure by boundary). Alternatively, as long as there is a reasonable proportion between that actually possessed and the whole of the unitary tract, and the possessor has color of title (i.e., a document purporting to give him title) to the whole tract (CONSTRUCTIVE), then adv. possession occurs over the whole tract. Usually, the portion will be held reasonable if possession of the portion was sufficient to put the owner or community on notice of the fact of possession.

Policy arguments against / for ACTUAL NOTICE: 1) should not be able to walk away for too long / should be able to walk away; 2) Adverse Possessor values property more / avoid promoting insecurity; 3) owner must be responsible / wasteful vigilance.

(2) Open and Notorious Possession

"possession such as the usual owner would make of the land." The adverse possessor's occupation must be sufficiently apparent to put the true owner on notice that a trespass is occurring. If, for example, Water Company ran a pipe under Owner's land and there was not indication of the pipe's existence from the surface of the land, Water Company could not gain title by adverse possession because there was nothing to put Owner on notice of the trespass. EVIDENCE: testimony of neighbors who thought party acted like owner.

(3) Exclusive Possession - No Sharing with Owner. (1) mainly excluding true owner, and (2) establish some right greater than the general public. Two or more individuals may work together to obtain title by adverse possession. If they do so, they will obtain title as tenants in common.

Example: A and B are next door neighbors. They decide to plant a vegetable garden on the lot behind both of their homes. A and B share expenses and profits from the garden. If all other elements for adverse possession are present, at the end of the statutory period, A and B will own the lot as tenants in common.

(4) Continuous Possession - not required to live on parcel until the statute runs, only that you use it a great deal. Continuous possession during statutory period requires only the degree of occupancy and use that the average owner would make of the property. For example, intermittent grazing of cattle will probably not defeat continuity if the land is normally used in this manner.

Tacking Permitted

There need not be continuous possession by the same person. Ordinarily, an adverse possessor can take advantage of the periods of adverse possession of her predecessor. Separate periods of adverse possession may be "tacked" together to make up the full statutory period with the result that the final adverse possessor gets title, provided there is privity between the successive adverse holders.

Privity - is satisfied if the subsequent possessor takes by descent, by devise, or by deed purporting to convey title. Neither tacking nor privity is permitted where one adverse claimant ousts a preceding adverse claimant or where one adverse claimant abandons and a new adverse claimant then goes into possession. Privity is a link/agreement between two parties that transfers rights.

Policy Arguments against / for privity: 1) true owner sleeping on his rights just the same / reward labor; 2) "peaceable possessor" remedy to invoke the aid of the court (Tapscott) / otherwise encourage piracy just before statute expires.

(5) Hostile Possession

The possessor's occupation of the property must be hostile (adverse). This means merely that the possessor does not have the true owner's permission to be on the land. It does not mean anger or animosity. The state of mind of the adverse possessor is irrelevant. By the large majority view, it does not matter whether the possessor believes she is on her own land, knows she is trespassing on someone else's land, or has no idea of who owns the land. OBJECTIVE TEST: (1) no permission, (2) activities - as if he owned it.

a. LACK OF PERMISSION - often just presumed. Burden on true owner to show that he gave permission to adverse possessor. If the possessor enters with permission of the true owner (e.g., under a lease or license), the possession does not become adverse until the possessor makes clear to the true owner the fact that she is claiming "hostilely." This can be done by explicit notification, by refusing to permit the true owner to come onto the land, or by other acts inconsistent with the original permission.

b. Intentional dispossession - adverse possessor actually says that he is trying to oust the true owner.

(6) Running of Statute

The statute of limitations begins to run when the claimant goes adversely into possession of the true owner's land (i.e., at that point at which the true owner could first bring suit). The filing of suit by the true owner is not sufficient to stop the period from running; the suit must be pursued to judgment. However, if the true owner files suit before the statutory period (e.g., 5, 10, 15 years) runs out and the judgment is rendered after the statutory period, the judgment will relate back to the time that the complaint was filed.

Tolling - if injured, incompetent, or a child owner, then statute may not run as fast or begin until you are well. The statute of limitations does not begin to run for adverse possession (or easements by prescription) if the true owner was under some disability to sue when the cause of action first accrued (i.e., the inception of the adverse possession). Typical disabilities are: minority, imprisonment, insanity.

Examples: 1) O, the true owner, is five years old when A goes into adverse possession. The statute will not begin to run until O reaches majority.

2) O, the true owner, is declared insane six months after A begins using a pathway adversely. The statute is not tolled, since O's disability arose after the statute began to run.

No Tacking of Disabilities.

Only a disability of the owner existing at the time the cause of action arose is considered. Thus, disabilities of successors in interest or subsequent additional disabilities of the owner have no effect on the statute.

Examples: 1) O is a minor at the time A goes into adverse possession of O's land. One year before O reaches majority, O is declared insane. The statute is not tolled by reason of O's insanity (a subsequent disability). Thus, the statute begins to run from the date O reaches majority, whether she is then sane or insane.

2) O, the true owner, is insane when A begins an adverse use. Ten years later, O dies intestate and the land goes to her heir, H, who is then ten years old. The statute of limitations begins to run upon O's death and is not tolled by H's minority. H's minority is a "supervening" disability and cannot be tacked to O's.

TIOGA COAL CO. v. SUPERMARKETS GENERAL CORP. Philadelphia planned to lay street within Supermarket's property and bordering Tioga's property. City never did, but Tioga used the street land and padlocked gate giving access to street. Court finds all the grounds necessary for adverse possession, except hostility.

If a subjective test is applied, then Tioga fails: it thought the land belonged to the city, and you cannot adversely possess gov't land. This court rejects the subjective test. If the true owner has not ejected the interloper within the time allotted for an action in ejectment, and all other elements of adverse possession have been established, hostility will be implied, regardless of the subjective state of mind of the trespasser.

POLICY REASONS for choosing the OBJECTIVE TEST: 1) discerning mental state of adverse possessor is exercise in guesswork (CERTAINTY); 2) promotes use of land against abandonment (SOCIAL UTILITY); 3) equitable consideration for person who has put down roots and become attached to land (FAIRNESS).

Arguments against adverse possession: 1) reward theft, 2) right to security in boundaries, peaceable possessor; 3) Development not always good, inactivity may be good too, 4) deter investment, produces insecurity (SOC UTIL); 5) inviting litigation, adds to backlog (ADMINISTR)

Arguments for adverse possession: 1) reward labor and investment, 2) punish sloth, sleeping on rights, 2.5) different types of use; 3) promote development is good, productive use (SOC UTIL); 5) clear titles, no long chain searches (ADMINISTR).

4. Boundary Line Agreements - another way of getting property rights without satisfying the technical requirements of adverse possession.

This doctrine operates where a boundary line (usually a fence) is fixed by agreement of the adjoining landowners, but later turns out not to be the "true" line. Most courts will fix ownership as per the agreed line, provided it is shown that (i) there was original uncertainty as to the true line; (ii) the agreed line was established (i.e., agreed upon); and (iii) there has been lengthy acquiescence in the agreed line by the adjoining owners and/or their successors.

Establishment Requirement

The establishment requirement can be implied by acquiescence. A past dispute is not necessary to show uncertainty, although it can be good evidence of it. But a showing of original uncertainty is required; otherwise, in a court's view, a parol (oral) transfer of land would result.

5. EASEMENTS Generally

Easements, profits, covenants, and servitudes are nonpossessory interests in land. They create a right to use land possessed by someone else. The holder of an easement has the right to use a tract of land (called the servient estate) for a special purpose, but has no right to possess and enjoy the tract of land. The owner of the servient estate continues to have the right of full possession and enjoyment subject only to the limitation that he cannot interfere with the right of special use created in the easement holder. Typically, easements are created in order to give their holder the right of access across a tract of land, e.g., the privilege of laying utility lines, or installing sewer pipes and the like. Easements are either affirmative or negative, appurtenant (affects use/enjoyment of another tract of land, the dominant estate) or in gross (independent of another tract of land). An easement is attached to the deed to the land and is sold with the land.

a. Affirmative Easements

Affirmative easements entitle the holder to enter upon the servient tenement and make an affirmative use of it for such purposes as laying and maintaining utility lines, draining waters, and polluting the air over the servient estate. The right-of-way easement is another instance of an affirmative easement. Thus, an affirmative easement privileges the holder of the benefit to make a use of the servient estate that, absent the easement, would be an unlawful trespass or nuisance.

b. Negative Easements

A negative easement does not grant to its owner the right to enter upon the servient tenement. It does, however, entitle the privilege holder to compel the possessor of the servient tenement to refrain from engaging in activity upon the servient tenement that, were it not for the existence of the easement, he would be privileged to do. In reality, a negative easement is simply a restrictive covenant.

Example: A owns Lot 6. By written instrument, he stipulates to B that he will not build any structure upon Lot 6 within 35 feet of the lot line. B has acquired a negative easement in Lot 6.

Courts traditionally limited negative easements to protection of access to light, air, support, and protection from interference with the flow of an artificial stream. Many states now recognize conservation easements to protect the environment, solar easements to protect access to light for solar energy, and easements for a view to protect an owner's right not to have a particular view blocked by construction on the servient estate.

c. Acquiescence - means the true owner has failed to attempt to stop the adverse use by bringing a trespass action, build fence, kick us off.

PRESCRIPTIVE EASEMENTS

Acquiring an easement by prescription is analogous to acquiring property by adverse possession. Many of the requirements are the same, although exclusive use is not required. To acquire a prescriptive easement, the use must be open and notorious; adverse and under claim of right; and continuous and uninterrupted for the statutory period. Note that the public at large can acquire an easement in private land if members of the public use the land in a way that meets the requirements for prescription.

1) Open and Notorious

The user must not attempt to conceal his use. Underground or other nonvisible uses, such as pipes and electric lines, are considered open and notorious if the use could be discovered (e.g., through surface connections) upon inspection.

2) Adverse

The use must not be with the owner's permission. Unlike adverse possession, the use need not be exclusive. The user of a common driveway, for example, may acquire a prescriptive easement even though the owner uses it too.

3) Continuous Use

Continuous adverse use does not mean constant use. A continuous claim of right with periodic acts that put the owner on notice of the claimed easement fulfills the requirement. Note that tacking is permitted for prescriptive easements, just as for adverse possession.

4) When Prescriptive Easements Cannot be Acquired

Negative easements cannot arise by prescription, nor generally may easements in public lands. An easement by necessity cannot give rise to an easement by prescription. However, if the necessity ends, so does the easement, and the use is adverse from that point forward.

COMMUNITY FEED STORE Company wins prescriptive easement on neighboring business land to turn around its trucks. Requires only general outlines of the boundaries of the easement, not the precise details of width and length. Open and notorious use will be presumed to be hostile; (trial court assumed absence of hostility as basis for denying easement). Predecessor company had used easement - may tack on time.

Why is hostility presumed? It is inconceivable that if the adverse possessor actually takes possession of the land in a manner that is open, notorious, exclusive and continuous, his actions will not be hostile to the true owner of the land as well as to the world at large, regardless of the adverse possessor's state of mind.

Distinguish: Prescriptive easement (actual use) v. Adverse possession (actual possession)

II. LAND USE REGULATION

sic utere tuo ut alienum non laedis - one should use his property so as not to injure the rights of others.

A. RIGHT TO EXCLUDE AND ITS LIMITS

1. Common Law Public Policy Limits on the Right to Exclude - innkeepers and common carriers could not discriminate. Some states expanded to include service stations, hospitals, theaters. Most states, however, retain the traditional right to exclude without cause and limit the right of reasonable access to innkeepers and common carriers. Common theme: property rights are an important delegation from the sovereign, but they can be used illegitimately.

a. Migrant Workers

Under our state law, the ownership of real property does not include the right to bar access to gov't services available to migrant workers and hence there was no trespass within the meaning of the penal code. STATE v. SHACK

A man's right to property is not absolute. Sic utere tuo ....

RELATIVITY OF TITLE - We see no legitimate need for a right in the landowner to deny the migrant worker the opportunity for aid available from federal, state, or local services, or from recognized charitable groups seeking to assist him. Hence representatives of these agencies may seek out the worker at his living quarters. Migrant worker must be allowed to receive visitors there of his choice, so long as not hurtful to others, and the press may not be denied access so long as migrant worker is willing to speak to him. Landowner may exclude solicitors, peddlers, and others.

Court chose not to clothe migrant workers with protections of tenants, because these workers typically do not pay rent for their lodgings.

Employer may not deny the worker his privacy or interfere with his opportunity to live with dignity and to enjoy associations customary among our citizens. These rights are too fundamental to be denied on the basis of interest in real property and too fragile to be left to the unequal bargaining strengths of the parties. Freedom of Association - FIRST AMENDMENT right - Example where this constitutional right, which normally restricts the government, is applied to a private party. STATE v. SHACK

Policy arguments for Tedesco: 1) right to conduct farming; 2) security; 3) limit responsibility. 4) statements about visitors of choice and customary associations are dicta. FOR WORKERS: 1) customary association, right of association; 2) well-being.

b. Property Open to the Public

The current majority American rule (as of 1982) has for many years disregarded the right of reasonable access, granting to proprietors of amusement places the absolute right arbitrarily to eject or exclude any person consistent with state and federal civil rights laws.

In NJ, (extend common law to) all places of public accommodation, where all of the public has right of reasonable access. When property owners open their land to the public in pursuit of their own business and property interests, they may only exclude with reason. USTON v. RESORTS INT'L HOTEL One reasonable cause - breach of peace, threat to security, disrupt.

c. Common law interests that overcome property interests

1. necessity; 2. Protection of human life; 3. Protection of other property; 4. Privacy and freedom of association (migrant workers); 5. Freedom of speech; 6. Antidiscrimination in property open to public; 7. Access to beach and waterways.

2. Public Accommodation Statutes

To learn what individual words mean, look to the purpose of the statute.

a. Civil Rights Act of 1964

Title II does not mention gender and rightly so. Focused on enumerated groupings: race, color, religion, or national origination. Gender is mentioned in Title VII. Stores are not included in Title II; they may be covered by state civil rights act, which are often more expansive than the federal legislation.

For equal protection, supposed to look at intent. Other areas focus on impact.

b. State statutes. The Minnesota civil rights statute broadens the categories for discrimination and generalizes to any public business. The common law adopts (1) a narrower purview for places covered, but (2) a much broader interpretation permitting no discrimination at all for innkeepers and common carriers.

US JAYCEES v. McCLURE In Minnesota, Jaycees are considered a "public business facility" and thus covered by the state civil rights statute. Jaycees prohibited from excluding women. Old statute focused on sites, new statute focuses on conduct. Jaycees regarded their members more as customers than as owners. By virtue of sale of indiv. memberships, the national organization is a business.

Two criteria for deciding if public or private: 1) the selectiveness of the group of admitted members. 2) the existence of limits on the size of the membership. Jaycees strive for growth and are unselective.

Massachusetts Supreme Court, by contrast, has held the state's public accommodation statute does not apply to the Jaycees. Mass. gave the word "place" its ordinary meaning.

FRANK v. IVY CLUB Since some 90% of upperclass students receive their meals from these dining clubs, the clubs are integrally linked to Princeton University. Princeton is indisputably subject to NJ's Law Against Discrimination. Therefore, women had to be allowed to eat in these traditional all male eating clubs.

c. Other hypotheticals. Consider arguments pro and con for allowing homeless people into stores. Consider also whether a buzzer on a door can be racially motivated. Ostensibly, buzzer is there for security and safety. A buzzer is not quite private enough, still an establishment open to the public.

d. Disability - Americans with Disability Act of 1990 applies very broadly to include work, public establishments, and schools, among others.

B. LAND USE CONFLICTS AMONG NEIGHBORS IN ABSENCE OF AGREEMENT

1. Nuisance

If the land is invaded by intangibles, e.g., odors or noise or radiation, that substantially harm and unreasonably interfere with use and enjoyment, the landowner may bring an action for nuisance. trespass (physical, tangible invasion) Nuisance protects right of quiet enjoyment, not exclusive possession. Both nuisance and negligence may use a reasonableness standard, but nuisance focuses on the result, consequence, or condition, whereas negligence focuses on conduct.

Example: Neighbors of a crack house - want owner to get trespass/ejectment action against the dealers. May want an injunction; they do not own the property and cannot bring the civil law to act on the drug dealers. May want damages for interference with enjoyment of their property. Damages for society's sake - deterrence against just waiting for court action.

Page County Appliances Center v. Honeywell. Radiation interference leaked by an adjacent store owner's computer distorted the t.v. reception of P's store. At trial level, court held this to be a nuisance, but reversed and remanded on appeal for improper jury instructions. RULES: One's use of property should not unreasonably interfere with or disturb a neighbor's comfortable and reasonable use and enjoyment of his or her estate. A fair test of whether the operation is lawful is the reasonableness of conducting it in the manner, at the place, and under the circumstances shown by the evidence.

Priority of occupation and location - "who was there first" is a circumstance of considerable weight. D asserts P's use of his premises amounted to a hypersensitive use and equates this situation to cases involving light thrown on an outdoor theater screen in which the light-throwing Ds have prevailed. Nuisance is ordinarily considered as a condition, and not as an act or failure to act on the part of any responsible party.

SEE PP. 354-363 for social utility theory v. rights v. judicial role v. administrability

2. Factors to consider in Nuisance suits:

(1) Gravity of Harm: Is the harm to P so substantial that it violates P's rights to enjoy his property?

(2) Utility of Conduct: Is the condition unreasonable from social welfare in that the harm outweighs the benefit to society?

(3) Priority in Time: Who was there first?

(4) What are the burdens upon D to change?

(5) Normal expectations of neighbors: Is P engaged in hypersensitive use of land? - Yes, then D not liable.

A rule is fairly rigid (snarl), while a standard is flexible (purr). In a case of rigid v. flexible, a standard sounds better. But we could also phrase it as (predictable, clear) v. (speculative, uncertain, vague), in which rules would come out better.

Many of these arguments will concern FREEDOM v. SECURITY.

Entitlements / Relief

3. Rejection of Nuisance: No Easement for Light and Air

FONTAINEBLEAU HOTEL v. FORTY-FIVE TWENTY-FIVE, INC Hotel cannot enjoin adjacent hotel from adding on to Fontainebleu in a way that shades the adjacent hotel's swimming and pool area. Where a structure serves a useful and beneficial purpose, it does not give rise to a cause of action even though it causes injury to another by cutting off the light and air and interfering with the view that would otherwise have been available. Adjoining landowners have an equal right to build to the line of their tracts and to such a height as is desired by them.

Two competing rules: 1) nuisance; 2) no presumptive right to light and air.

Court rejects notion of negative prescriptive easement. People can buy and sell rights, but in America, there are no negative easements by prescription.

Fontainebleau brings up issue of malice to characterize bldg as "spite fence." Court says if the structure serves any useful purpose, then it can stand regardless of whether it may have been built in spite.

4. Nuisance Doctrine Applied to Provide Light

PRAH v. MARETTI Obstruction of access to light might be found to constitute a nuisance in certain circumstances. The result will depend on each case as to whether the conduct complained of is unreasonable. POLICY considerations: (1) society has increasingly regulated the use of land for the general welfare. (2) access to sunlight has taken on new significance. Access to sunlight as an energy source is of significance both to the landowner who invests in solar collectors and to a society which has an interest in developing alternative sources of energy. (3) the policy favoring unhindered private development in an expanding economy is no longer in harmony with the realities of our society. The need for easy and rapid development is not as great today as it once was, while our perception of the value of sunlight as a source of energy has increased significantly.

POLICY arguments FOR Prah: 1) not unusual for courts to fashion new law to meet case of first impression (alternative energy use). 2) times have changed.

POLICY arguments AGAINST Prah holding: 1) P could have bought easement for light, the court should not interfere 2) unreasonable element missing in neighbor's construction of house on his property, 3) social utility argument not valid, private individual with his energy source; 4) ultrasensitive, occurs in Wisconsin, unfair surprise; 5) internalize costs - P already benefits; 6) not a spite fence, because house serves some useful purpose. Fontainebleau; 7) better area for legislature to resolve than courts; 8) right to build on residential property.

5. Flooding and Diffuse Surface Water

ARMSTRONG v. FRANCIS, Issue: Is damage suffered by the Ps damnum absque injuria, namely the non-actionable consequences of the privileged expulsion by D of waters from its tract as an incident to the improvement thereof. Holding: There is no reason why the economic costs incident to the expulsion of surface waters in the transformation of the rural or semi-rural areas into urban communities should be borne by adjoining landowners rather than those who engage in such projects for profits. Court held NJ would expressly adhere to reaonsable use rule, which had been practiced by lower courts.

Court considered three tests: (1) COMMON ENEMY - water is common enemy and each person may defend himself with immunity. A possessor of land has an unlimited and unrestricted legal privilege to deal with the surface water on his land as he pleases, regardless of the harm which he may thereby cause others. Unlimited legal privilege to use land without liability.

Exception: major quantities, artificial diversions

POLICY arguments against common enemy: lead to unbridled competition, wasted resources diverting water. A case-by-case determination is better than stare decisis rule. Unfair based on wealth distribution - those most hurt may not be able to pay to divert.

(2) NATURAL FLOW CIVIL LAW RULE - a person who interferes with the natural flow of surface waters so as to cause an invasion of another's interests in the use and enjoyment of his land is subject to liability to the other.

Exception: minor alterations.

(3) REASONABLE USE - privilege to use land to divert surface water, but only if reasonable in the circumstances. (Might be able to count heads with this test, but not with common enemy test).

6. Subjacent Support

Friendswood v. Smith-SW Indus. In Texas, landowners who withdrew percolating ground waters from wells located on their own land are NOT liable for subsidence which resulted on lands of others in the same general area. However, in the future, if the landowner's manner of withdrawing groundwater from his land is negligent, willfully wasteful, or for the purpose of malicious injury, and such conduct is a proximate cause of the subsidence of the land of others, he will be liable for the consequences of his conduct. The addition of negligence as a ground of recovery shall apply only to future subsidence proximately caused by future withdrawals of groundwater from wells which are either produced or drilled in a negligent manner after the date this opinion becomes final.

Majority focuses on negligence (conduct), not nuisance (consequence). Adopts rule only for future - not uncommon in property cases. Dissent argues either negligence or nuisance should apply.

Support for P's veto rights: strict liability, R₂P

Support for Reasonableness: Nuisance, Negligence

Support for D's privilege: Acton, East, Restatement (First) Property

POLICY arguments for holding Ds liable for SUBSIDENCE: 1) negative externality, therefore internalize the costs. 2) destroying land by subsidence = destroying land by other unlawful means. Same consequence. 3) Acton, East line of cases dealt with who owned stuff underground. (econ. value). Here we are concerned with destroyed land (econ. harm).

POLICY for holdings Ds immune: 1) easier to predict movement of surface water, but not groundwater. (Not foreseeable). 2) administrative efficiency. 3) Ds relied on past law.

LAW AND ECONOMICS ARGUMENTS - focus on society's benefit rather than justice and fairness. Consequentialist approach. Normative - how courts out to decide; Descriptive - what the law actually does (see evidence of courts trying to get efficient solutions). Often identified with conservatives and neoclassical economics - market best determines value. Individuals are wealth maximizers. Also part of multidisciplinary approach to law.

P's law/econ pro-liability: 1) important to internalize costs. 2) transaction costs = 0. Court has to compensate by awarding rights. 3) market not always efficient, e.g., bid/ask spread. Many of the court assignments of rights will be outcome determinative.

D's law/econ rebuttals: 1) really a question of joint costs, Coase's Theorem. Let market decide. 2) how is the court supposed to know the most efficient use. Market imperfect but the best we have.

External critiques: 1) distributive issues - initial, consequences. 2) how do we define voluntary exchange - medicine?, bargaining power, suspicious of benign characterization of the market. 3) transaction costs. 4) commodification limits - market for babies. 5) misapprehension to believe individuals are fully rational. In Fontainebleau, person located next to hotel in part for spite. 6) wealth maximization is not the highest value.

C. AGREEMENTS AMONG NEIGHBORS

Terminology:

Servient estate - property burdened by easement.

Dominant estate - property benefitted by easement.

License - permission by grantor for limited time and often for specific use of land; usually revocable at will by grantor; not transferable, nor can they be inherited or left by will.

Real convenant - [at law to seek damages].

Equitable servitude - [at equity to seek injunction].

Easement by Estoppel - an investment + substantial reliance. Where the owner is estopped from denying access to his land as long as justice requires.

Easement by reservation - grantor retains easement on land of grantee.

Easement by grant - grantee retains easement to go across grantor's land to get to his (landlocked) land.

Profit, profit a prendre - right to remove objects (pick apples, cut trees) from land.

Four instances where licenses cannot be freely revoked: 1) license coupled with an interest, e.g., to retrieve personal property; 2) promises to grant a license, e.g., theater ticket; 3) easements by estoppel; 4) constructive trusts.

Restrictions on land development and building usually come from real covenants at law or equitable servitudes. If seeking damages, then relief from real covenant at law. If seeking injunction, then relief for equitable servitude. Often encounter LEGAL RULES and EQUITABLE STANDARDS.

Writing and Notice Requirements: Easements generally must be in writing to be enforceable under the Statute of Frauds.

Exceptions: 1) prescriptive easements, 2) easements by estoppel, 3) implied easements, 4) easement of necessity, 5) constructive trusts.

Policy Exceptions: (1) reliance, (2) past dealings

Three types of Notice: (1) Actual - where owners know of the easement, (2) Constructive -where easement is stated in the deed or in the record chain of title and owners should have known if they conducted proper title search. (3) Inquiry - if there are visible signs of use by non-owners, owners should have known of easement if they conducted reasonable inquiry.

1. EASEMENTS BY ESTOPPEL; CONSTRUCTIVE TRUSTS (equitable remedies to prevent unjust enrichment)

HOLBROOK v. TAYLOR

P needs to use road across D's property to get to his house. P has no easement in writing. P had a revocable license, which D tried to revoke. Now P is claiming an easement by estoppel. From D's perspective: if he denies permission, then prescriptive easement; if he gives permission, then easement by estoppel. The majority of jurisdictions allow easement by estoppel to prevent extortion. JUSTICE due to RELIANCE required a continued use, not adverse possession.

Where a license is not a bare, naked right of entry, but includes the right to erect structures and acquire an interest in the land in the nature of an easement by the construction of improvements thereon, the licensor may not revoke the license and restore his premises to their former condition after the licensee has exercised the privilege given by the license and erected the improvements (including construction of a $25,000 house) at considerable expense.

What justifies making a license irrevocable against the wishes of the grantor? Answering this question requires the court to balance the grantor's intent / interest in controlling his property and protecting the grantee's interest in reasonable reliance on continued access.

RASE v. CASTLE MOUNTAIN RANCH

This constructive trust is not really a trust. It is a form of equitable relief. Court not only omits the requirement for a writing, but rules exactly the opposite of what the writing says. Folks build houses around a lake. They have 20 years worth of investment and reliance. The court receives a mixed message. In a mixed message situation, often equity lies on the side of the person who doesn't have a formal document.

The court granted the cabin owners a six month period in which they have the option to be exercised by written notice to the defendant to recieve payment from the cabin structures and fixtures. Otherwise, they may continue to occupy the cabins until December 31, 1987. Beyond that time, the licenses to occupy shall terminate and if the improvements were not removed as set forth in the license agreements, the improvements should become the property of D without payment.

The court seems to want to enforce the parties' intentions, a deal-like structure based on past dealings. "P misled the cabin owners (about the deal)" so the court seems to want to punish him. SOMETIMES PROPERTY RIGHTS ARE ENFORCED THOUGH NOT IN WRITING. PRO-RELIANCE OPINION.

P used license agreement to protect against adverse possession. Court creates a constructive trust in place of easement of estoppel.

STUDENT KICKED OUT OF DORM ROOM FOR EDITORIAL: HYPOTHETICAL

Did the student improve the room? - invest in loft, etc. Time argument here runs against much reliance. Best argument: move will disrupt student's life. Generate reliance arguments. Based on university catalogs, students may reasonably have expected the university to promote open minds and open ideas.

2. IMPLIED EASEMENTS FROM PRIOR USE AND REASONABLE NECESSITY (Quasi-Easement) Based on presumed intent.

THREE REQUIREMENTS: (1) Common ownership - of the claimed dominant and servient parcels followed by conveyance or transfer separating that ownership.

(2) Prior use - one party had to be burdened by apparent, obvious, continuous, and permanent use. The more obvious the prior use, the more likely a court will be willing to grant the quasi-easement. (3) Must be reasonably necessary for the enjoyment of P's land. GRANITE

GRANITE PROPERTIES v. MANNS

Court could have said "you should have reserved easement especially since (1) you were the grantor and (2) use is not necessary." But the court was swayed by prior use being so obvious with these driveways: (1) prior use and (2) defendants' knowledge of prior use. The court presumes that the grantor and the grantee do not intend to render the land unfit for occupancy.

3. EASEMENT BY STRICT NECESSITY

Easment last only as long as necessity lasts, e.g., if town builds road and touches landlocked property, then no longer need for easement.

TWO REQUIREMENTS: (1) Common ownership, (2) very strict necessity - absolute need for the easement. No alternatives.

FINN v. WILLIAMS Where Finn is landlocked and could not get to main road. Other roads in prior use were closed; permission was denied. So new easement carved out of prior owner's land. When permission to travel over strangers' property is denied, the subsequent grantees may avail themselves of the dormant easement implied in the deed severing the dominant and servient estates.

Where an owner of land conveys a parcel thereof which has no outlet to a highway except over the remaining lands of the grantor or over the land of strangers, a way of necessity exists over the remaining lands of the grantor.

POLICIES for easement by necessity: 1) effectuate the intent of the parties; 2) promote the efficient utilization of property.

Private right of condemnation - way for landlocked parcel to bust out, even if land was not prior owned in common.

4. EXPRESS EASEMENTS - in the record or chain of title.

a. Appurtenant - benefit runs with the land through subsequent ownership. Involves adjacent property. The easement cannot be sold separately from the land. There is a strong presumption for appurtenant easements.

b. In Gross - benefit does not run with the land, is not attached to a particular parcel of land, and there is no dominant estate. Runs with the person. Note utility company owns no adjacent land; there is no DOMINANT ESTATE.

c. Three prong test to decide whether appurtenant or in gross: (strong presumption for appurtenant)

1. Look to the writing and the language of the easement.

2. Intent of the parties.

3. Scope: a) type of use; b) intensity of use.

"for ingress and egress" sounds appurtenant; "for roads and utilities" if clause by itself or with particular names then it sounds in gross

d. Transferability.

Easements in gross are now generally assumed to be transferable. This is especially true for commercial easements, such as the right of way of utility lines. It is also true for the subcategory of profits a prendre. Profits are presumed to be freely alienable. If an easement in gross is for personal convenience or enjoyment, e.g., the right to swim in a private lake, courts may rule that the grantor did not intend the easement to be transferable to others. Generally, easement in gross is not assignable unless the owner was excluded from the activity. (Utility company can sell easement in gross to another company to use its cables or place own cables on the utility's poles.) If the easement is nonexclusive - meaning the grantor reserved for himself the right to use the easement in conjunction with the grantee - then it is not apportionable: the grantor could sell further rights to others so long as those new easements did not interfere with the use of the existing easement by the first grantee. The courts presume that the grantor would want to retain the right to obtain the economic benefits of any future easements.

Easements appurtenant. writing, intent, notice. In subdivisions, still appurtenant because easement runs with the land and subdividing is simply a use of the land. However, if more land is bought, the easement does not run with the new land. Therefore, the owner must purchase a new easement.

GREEN v. LUPO There is a strong presumption that easements are appurtenant to some particular tract of land; easements in gross are disfavored. An easement is not in gross if anything in the deed or the situation of the property indicates that it was intended to be appurtenant. FINDINGS to support easement appurtenant: 1) granted for ingress, egress, (OVERSHADOWS) and for road and utility purposes. 2) P's use of the easement was "to obtain access to the land." However, court will place reasonable restrictions on use (SCOPE) to assure that motorcycle traffic does not become a dangerous nuisance.

P & D had contracted to give an easement on D's land in exchange for a deed release to part of land sold to D, to be used as collateral for financing. D: the easement we granted was in gross and not to be used by motorcycles; argument: "To Don Green and Florence Green" Argument for appurtenant: "grant of ingress and egress" Therefore ambiguous, and court looks to parties' intentions.

COX v. GLENBROOK COMPANY Those who succeed to the possession of each of the parts into which the dominant estate may be subdivided also succeed to the privilege of using the easement appurtenant. The Quill conveyance does not contain a restriction that the easement granted is to be appurtenant to the dominant estate only while such estate remains in a single possession, and none may be imposed by judicial declaration. MAJORITY RULE.

The owner of an easement may prepare, maintain, improve or repair the way in a manner and to an extent reasonably calculated to promote the purposes for which it was created. The owner may not cause undue burden (SCOPE) on the servient estate, nor an unwarranted interference with the independent rights of others who have similar use. Here P's attempt to widen the road would cause an undue burden.

Developer brings suit for declaratory relief, so that it can know whether it should develop its land. Court holds easement is appurtenant. Therefore, not limited to single family dwelling. But developer cannot widen road. Developer has use but not economically feasible. Court does not have enough facts yet to determine whether multiple car use on single lane road will lead to overburdening. Leaves developer in great ambiguity. COX

HENLEY v. CABLEVISION In gross easement. One who grants to another the right to use the grantor's land in a particular manner for a specified purpose but who retains no interest in exercising a similar right himself, sustains no loss if, within the terms of the grant, the use is shared by the grantee with others. Thus, insofar as it relates to the apportionability of an easement in gross, the term "exclusive" refers to the exclusion of the owner and possessor of the servient estate from participation in the rights granted, not to the number of different easements in and over the same land. The owner of an easement may license or authorize third persons to use its right of way for purposes not inconsistent with the principal use granted.

The unsurprising fact that the drafters of the 1922 easements did not envision cable television does not mandate the narrow interpretation of the rights and privileges urged by the Ps. It is in the public interest to use the facilities already installed for the purpose of carrying out this intention to provide the most economically feasible and least environmentally damaging vehicle for installing cable systems.

e. Scope

Three issues to consider on whether the easement owner is exceeding the scope: (1) whether the use is of a kind contemplated by the grantor; (2) whether the use is so heavy that it constitutes an unreasonable burden on the servient estate not contemplated by the grantor; and (3) whether the easement can be subdivided.

ANSLEY SUMMARY: 1) subdivider can still use easement; 2) life changes, covenant does not restrict easement to particular vehicles; 3) no problem to pave easement; 4) problem to widen easement; 5) easement is not appurtenant to additional land acquired after easement established. (One can expressly draft around some of these issues)

f. Terminating Easements

Easements last forever unless they are terminated by (1) agreement in writing (release of the easement by the holder), (2) by their own terms, e.g., last only 10 years, (3) by merger, when the holder of the servient estate becomes the owner of the dominant estate, (4) by abandonment, and (5) by adverse possession or prescription of the owner of the servient estate or a third party.

Many states have enacted "marketable title acts," which require that easements, along with other property encumbrances, be recorded periodically (generally every 30 to 50 years) to be binding on future purchasers. The purpose of these statutes is to limit how far back a buyer must look in the chain of title to determine encumbrances on the land. They also have the effect of terminating old easements that were not re-recorded.

5. EQUITABLE SERVITUDES - at equity AND RESTRICTIVE COVENANTS - at law

Often a single document can be interpreted as either an equitable servitude or a real covenant.

When a developer subdivides land into several parcels and some of the deed contain negative covenants but some do not, negative covenants or equitable servitudes binding all the parcels in the subdivision may be implied under the doctrine of "reciprocal negative servitudes." The doctrine applies only to negative covenants and equitable servitudes and not to affirmative covenants. Two requirements must be met before reciprocal negative covenants and servitudes will be implied: (i) a common scheme for development at the time the lots are sold, uniformity requirement (well-defined similarly situated), and (ii) notice of the covenants.

The developer's common scheme may be evidenced by a recorded plat, by a general pattern of prior restrictions, or by oral representations, typically in the form of statements to early buyers that all parcels in the development will be restricted by the same covenants that appear in their deeds. On the basis of this scheme, it is inferred that purchasers bought their lots relying on the fact that they would be able to enforce subsequently created equitable servitudes similar to the restrictions imposed in their deeds.

The requisite notice may be acquired through actual notice (direct knowledge of the covenants in the prior deeds); inquiry notice (the neighborhood appears to conform to common restrictions); or record notice (if the prior deeds are in the grantee's chain of title he will, under the record acts, have constructive notice of their contents).

EVANS v. POLLOCK (1) Provisions in restrictive covenants that the restrictions may be waived or modified by the consent of three-fourths of the lot owners constitute strong evidence that there is a general scheme or plan of development furthered by the restrictive covenants. (2) the restricted district need not be the whole subdivision nor include the whole retained tract. (3) the general plan or scheme may be that the restrictions only apply to certain well-defined similarly situated lots. (UNIFORMITY requirement) (4) The original subdividers intended the restrictions to apply to all the lakefront lots but not to the hilltop.

Lack of uniformity may be enough to remove restrictions on lots that do contain covenants in their deeds.

Once drafted, the negative reciprocal covenant may still contain ambiguities in terms of scope.

DUTY TO LOOK AT DEEDS OF OTHER PROPERTY - depends on jurisdiction.

Arguments FOR requiring DUTY to look at other's deeds: 1) On notice of plan, not so bad to have to search with your plan; 2) rule protects their investment and expectations (against depreciation in value with errant building)

Arguments AGAINST extending DUTY beyond own deed: 1) party should be able to rely on his own deed; 2) more predictable and cheaper. REPRESENTS MAJORITY VIEW: Party would not have to search beyond his own deed. 3) Generally, problem with constructive notice is increased expense, increased liability for attorney, inefficient use of time - not every deed will have covenant for which you are searching.

Arguments FOR real covenants/equitable servitudes: 1) facilitate cooperation; 2) enhance property values; 3) promote rational development.

Arguments AGAINST real covenants/equitable servitudes: 1) exclude poor, Disney-like walls; 2) racial restrictions; 3) anti-restrictions on competition.

5. REQUIREMENTS TABLE

Horizontal Privity - original covenanting parties. Can only happen once. Landlord-tenant, Buyer-seller, Grantor-grantee - OK; neighbor-neighbor - NOT OK. Met by instantaneous privity - covenant created at time title or lease passes, or mutual privity - one of the parties holds an easement in the land of the other. Two most important relationships excluded: 1) neighbor-neighbor w/o conveyance and 2) agreements between grantors and grantees that are not contemporaneous as the conveyance of the property interest burdened or benefited by the covenant. Required for burden to run with the land. In the majority of states today, horizontal privity is not required for the benefit to run. As a consequence, if horizontal privity is missing, the benefit may run to the successor in interest to the covenantee even though the burden is not enforceable against the successor in interest of the covenantor.

EASEMENT: 1 - 3, but exception to writing requirement for implied easements, prescriptive easements, constructive trusts, etc.

EQUITABLE SERVITUDE: 1 - 4, but exception to writing requirement with a common scheme;

REAL COVENANT AT LAW: 1 - 5,

Implied Negative Reciprocal Easements: (EVANS v. POLLOCK) - no writing is required.

Easier for BENEFIT to run with the land - does not deter prospective buyer.

Strict Verticle Privity - must convey entire estate, i.e., retain no future interests in the property. For burden to run with the land, the successor in interest to the covenanting party must hold the entire durational interest held by the covenantor at the time she made the covenant.

Leases and life estates (which have a reversion - future interest in the grantor, or a remainder - future interest in a third party) would not meet strict verticle privity, because person has right to future possession of the property. When a covenant is contained in a lease, rather than in a deed, many courts require privity of estate to enforce the covenant even when the remedy sought is an injunction.

Relaxed Verticle Privity - convey part of estate. The benefit of the covenant runs tot he assigns of the original estate or of any lesser estate (e.g., a life estate). The owner of any succeeding possessory estate can enforce the benefit at law.

Example with no H. privity: Neighbors, A & B, engage in reciprocal negative covenant only to build Georgia architecture. B sells his land to C. A does not have to worry about the benefit, because he is not trying to transfer his land to anyone. A only has to worry about the burden imposed on C. We would not worry about PRIVITY, except that A wants DAMAGES. This agreement cannot be enforced due to a lack of horizontal privity. A might be able to enjoin C, but not get damages.

Assignment and sublease. When a covenant is contained in a lease rather than in a deed, many courts require privity of estate to enforce the covenant even when the remedy sought is injunction. Verticle privity of estate exists between assignor and assignee - where assignee receives all possessory interest in the lease, but not between tenant and subtenant - not transferred all future interest in the lease. This situation represents an exception to the doctrine that privity of estate is not required to enforce a covenant by injunction against a subsequent possessor who takes with notice of restriction.

5. Restraints on Competition and Alienation; Racial Covenants

Common law anticompetition case. WHITINSVILLE PLAZA v. KOTSEAS ORIGINAL: Kotseas (burden) covenant not to compete and build only a certain kind of building with TRUST (benefit) on a land sale. Kotseas then lease their property to CVS. TRUST sells its property to PLAZA. We don't have to worry about privity because PLAZA wants damages. WRITING requirement satisfied, because agreement expressly states "run with the land." NOTICE requirement satisfied. BENEFIT must run with land, so that PLAZA has standing to sue. ORDINARILY, BURDEN must run with the land, or PLAZA would be stuck suing KOTSEAS. But here, CVS made the same promises in its lease agreement with Kotseas, as they made to TRUST. Why? Covenants not to compete were not included in Massachusett's definition of "touch and concern" until this case, and CVS thought the covenants would be unenforceable.

Sherman Anti-Trust Case. DUNAFON v. DELAWARE McDONALD'S Taco Bell wants to locate in shopping mall next to McDonald's. P brings antitrust action under Sherman Act 15 U.S.C. § 26. "Every K in restraint is ... illegal." Like Pierson v. Post, McDonalds - first hunter, Taco Bell - captor. Free Ride (snarl for Taco Bell); Pioneer (purr word for McDonald's). Want to protect incentive for original investor of food establishment: increase competition by preserving this incentive. Rule of reason - echo of the solar energy case. Per se illegality - reserved for a couple of pernicious activities.

Why we don't want restraints on alienation? 1) freedom of association, privacy. 2) freedom v. security.

Racially restrictive covenants. SHELLY v. KRAMER Trial ct. finds no intent for covenant on Shelly's land. MO. Sup. Ct. says no violation of constitutional rights. 14th Amendment applies to "state action." U.S. Sup. CT. says 14th Amendment restricts use of state courts to enforce action = state action. (Int'l global considerations, start of Cold War, servicemen returning, integration of the armed services)

Limits on Real Covenants at LAW: 1) Anti-competitive covenants: sometimes not allowed, but must use Rule of Reason: P must prove that D monopoly is an unreasonable restraint on trade in the area, and that D has obtained market power. Alternative, per se illegality under the Sherman Act. 2) Restraint on Alienation: never allowed except for charities, then allow special flexibility for charity to get out of restriction. Horse Pond Fish and Game Club v. Cormier Ordinarily, Restraints on Alienation presumed invalid. 3) racially restrictive covenants - never allowed.

6. Changed Conditions; Statutory Regulations

EL DI, INC. v. TOWN OF BETHANY BEACH

Restrictive covenant prohibits sale of alcohol in private town. 1) CHANGED CONDITIONS DOCTRINE - way to terminate restrictive covenants. Changes must render benefit incapable of enjoyment. We're brown bagging it all over. FOCUS: benefit to dominant parcel.

2) RELATIVE HARDSHIP doctrine: focus on BURDEN on SERVIENT estate. 3) laches, estoppel. 4) merger 5) prescription.

Problem P. 490

Homeowner's Ass'n wants to keep covenant for day care center on land in subdivision. Rising insurance costs induce current owner to propose a video store instead. Ask Homeowners Ass'n how much interest they have in common. Might have avoided hassels: 1) keep land in trust for homeowner's association, 2) lease land, 3) management contract.

BLAKELY v. GORIN

Negative easement for light and air built into the deal. This court denies injunction that would have prohibited building a 12-story bridge to the Ritz-Carlton hotel. However, the court does award damages to compensate for loss under tort theory. Distinguish: Fontainebleau - negative easement sought by prescription, which court will not allow. Here damages allowed based on contract.

A. IN GENERAL

"Estates in land" are possessory interests in land. These interests may be present estates or future interests. They may be "freeholds," which give possession under some legal title or right to hold (e.g., fees or life estates), or they may be "nonfreeholds," which give mere possession (i.e., leases). Estates in land may be of potentially infinite duration, as in the case of a fee simple, or they may be of limited duration, as in the case of an estate for years. But whatever their characteristics, "estates in land" must be distinguished from nonpossessory interests such as easements, profits, covenants, and servitudes.

How do you create an estate? WORDS

Words of purchase (person): to A

Words of limitation (estate): and his heirs - does not convey a future interest.

"A for life then to the heirs of B" = "A for life then to the heirs of B and their heirs" -creates remainder in heirs of B.

Statute of Uses: created executory interests.

B. PRESENT POSSESSORY ESTATES

1. Fee Simple Absolute

An estate in fee simple absolute is the largest estate permitted by law. It invests the holder of th fee with full possessory rights, now and in the future. The holder can sell it, divide it, or devise it; and if she dies intestate, her heirs will inherit it. The fee simple has an indefinite or potentially infinite duration.

Inheritance: The common law rule requiring technical words of inheritance ("and his heirs") has been abolished by statute in nearly all jurisdictions. Typically, such statutes provide: "A FS title is presumed to be intended to pass by a grant of real property unless it appears from the grant that a lesser estate was intended."

Example: A conveyance from "A to B" is presumed to pass a FS interest if A owned one. At common law, absent the words of inheritance, even a conveyance "to B in fee simple" would convey only a life estate to B; however, if the words appeared in a will, it would convey a FS even under the common law.

2. Defeasible Fees

Defeasible fees are fee simple estates of potentially infinite duration that can be terminated by the happening of a specified event.

a. Fee Simple Determinable (and Possibility of Reverter)

A fee simple determinable, also called a determinable fee, is an estate that automatically terminates on the happening of a stated event and goes back to the grantor. (DISTINGUISH: FS/SCS, where the grantor must take affirmative steps to terminate the estate of the grantee if the stated event occurs.)

It is created by the use of durational, adverbial language, such as "for so long as," "while," "during," or "until." A fee simple determinable can be conveyed by the owner thereof, but his grantee takes the land subject to the estate's being terminated by the happening of the event. FS/Det has no future interests in grantees.

Example: O: "to A for so long as no alcoholic beverages are consumed on the premises." A - FS/Det; O - P/R. If A conveys his FS/Det to B, then B will have FS/Det.

O: "to A, until such time as the property is no longer used for church purposes." A-FS/Det; O - P/R.

a) Possibility of Reverter arises automatically, even w/o express language

b) P/R can be transfered inter vivos or devised by will, and descends to the owner's heirs if she dies intestate.

b. Fee Simple Subject to Condition Subsequent (and Right of Entry)

Grantor must take positive actions (bring suit, make reentry) to regain the property: right of entry or power of termination. The following words are usually held to create conditions subsequent: "upon condition that," "provided that," "but if," and "if it happens that." DISTINGUISH: FS/Det - automatic, FS/SCS - requires action by O to regain title.

Example: O: "to B and his heirs, on the express condition that the premises are never to be used by B for the sale of liquor and in the event that they are so used, then O or her heirs may enter and terminate the estate hereby conveyed." FACTS: B selling liquor on land. B - FS/SCS; O - R/E.

a) Waiver of Right of Entry

Since the grantor can elect whether or not to terminate the grantee's estate, she may waive her right or power to enforce a forfeiture by express agreement or by her conduct. (Such is not the case with a fee simple determinable, where the forfeiture is automatic.)

Inaction by Itself Not a Waiver

The general rule is that when there is a breach of the condition and the grantor simply does nothing about it, the power of termination is not waived. However, where there is any element of detrimental reliance by the fee holder, many courts treat inaction as a waiver on an estoppel or laches theory.

b) Transferability of Right of Entry

Today, in most jurisdictions, a right of entry is still not alienable inter vivos. (Indeed, in a handful of states, an attempted transfer destroys it.) But in most states, rights of entry are devisable; and in all states, they descend to the owner's heirs.

c. Fee Simple Subject to an Executory Interest

FS/SEL: an estate that, upon the happening of a stated event, is automatically divested in favor of a third person rather than the grantor. No future interest in grantor.

Examples: 1) O conveys land "to A Church; provided, however, that if the premises shall ever cease to be used for church purposes, title shall pass to the American Heart Association." Title: A - FS/SEL; Heart Association - EI. The Heart Association's future interest is not a remainder because it divests a fee simple. Note: RAP OK due to "charity-to-charity" exception.

2) "O to B when B climbs tower" O - FS/SEL; B - Springing EI

3) "to B and his heirs, but if C marries, to C and his heirs." B - FS/SEL; C - Shifting EI

d. Construction of Instruments Containing Conditional/Ambiguous Language

Bar examination questions often contain instruments with ambiguous language such as: A "to B and his heirs so long as the property is used for residential purposes, and B covenants for himself and his heirs that the property will be used for no other purpose than residential use; and should the property be used for any other purpose, then A of her successors may retake possession."

1) Construe as Covenant Rather than Condition

Because defeasible fees result in forfeitures, courts will construe, where possible, a purported limitation as a mere declaration of the grantor's purpose for making the grant or as a covenant. Breach of a covenant creates only a cause of action for damages or injunction, rather than a forfeiture of the land.

2) Construe as Condition Subsequent Rather than Determinable Fee

The court's next preference would be to treat the language as creating a fee simple subject to a condition subsequent; for in such case, it is possible to find a waiver of the power of termination, thereby avoiding forfeiture. The least desirable construction would be a fee simple determinable (or, if the reserved interest was in a stranger, a fee simple subject to an executory limitation), for then, forfeiture would be automatic. (However, if an instrument clearly indicates that a fee simple determinable was intended, it will be so construed.)

3. Fee Tail

The fee tail, typically created by the words, "to B and the heirs of his body," limited inheritance to lineal descendants of the grantee. If no lineal descendants survived at the grantee's death, the property either reverted to the grantor or her successors or passed to a designated remainderman. Today, most United States jurisdictions have abolished the fee tail and have enacted statutes under which any attempt to create a fee tail results in the creation of a fee simple.

O: "to A and the heirs of his body, then to B and her heirs." Trad: A-FT; B-IVR

Modern: A - FSA; Modern 2: A - LE, A's heirs - CR, O - Reversion.

4. LIFE ESTATE

a. LE = not terminable at any fixed or computable period of time, but cannot last longer than the life of lives of one or more persons.

Example: "To A for life or until she remarries." A - LE/Det., O - Reversion

"To B and C after the life of A." A - implied LE, B & C - IVR.

Not Examples: "To A for life, but in no event more than 10 years." This is an estate for 10 years, and not a LE, since the estate will end in a fixed period of time.

"To A for 10 years if he lives so long." A - E for 10 years, O - Reversion.

defeasible life estate - creates an executory interest or remainder

b. Life Estate Pur Autre Vie

A life estate pur autre vie is a life estate measured by the life of someone other than the life tenant. Such an estate can be created directly by the grantor, e.g., "To A for the life of B." A's estate ends when B dies. It can also be created indirectly, as where the grantor conveys "to A for life," and A later conveys his interest to B. B owns an estate measured by A's life; it ends when A dies.

C. FUTURE INTERESTS

1. Possibility of Reverter

Grantor's remaining interest conveying a FS/Det.

2. Right of Entry

A right of entry (also known as "right of reentry" or "power of termination") is the future interest retained by the transferor who conveys a FS/SCS.

3. Reversion

Reversions are transferable, devisable by will, and descendable by inheritance. The holder of a reversion may sue a possessory owner for waste and may recover against third-party wrongdoers for damages to the property (to the extent of the injury to the reversion). Reversions - land back to the original grantor.

All reversions are vested, not contingent, because both the owner and the event upon which it become possessory are certain. This is true even if the reversion is determinable or defeasible. Because it is a vested interest, a reversion is not subject to the Rule Against Perpetuities.

A REVERSION ALWAYS FOLLOWS A CONTINGENT REMAINDER

(1) O in FS: "to A for life," or "to A for 99 years." In each case O - Reversion in FS.

(2) O in LE: "to B for 20 years," O - Reversion in LE. If O is still alive when B's lease expires, title will revert to O for life. What happens if, ten years after this tranfers, O dies? B's lease will come to an end, for he was given a lease by one holding only a life estate. O cannot convey a greater interest than she has.

(3) O, owning land in fee simple, conveys its "to B for life, and on B's death to C if C survives B." B - LE, C - CR, and O - Reversion.

4. REMAINDERS

Follows the natural termination of the preceding estate, must be expressly created in the instrument creating the intermeidate possessory estate, and always follows a LE or Fee Tail. A remainder cannot "cut short" or divest a preceding estate prior to its normal expiration. Therefore, a remainder can never follow a fee simple, which has a potentially infinite duration. A remainder cannot tolerate a gap in possessory interest. (Future interests that cut short a preceding estate or follow a gap after it are EIs).

Example: "To A for life, and on A's death to B and his heirs." A - LE, B - IVR in FS

Contrast: On Monday, O conveys Blackacre "to A for life." On Wednesday, O conveys "all of my right, title, and interest in Blackacre" to B. B holds a reversion, not a remainder. B's future interest was not created in the same disposition that gave A a LE. "Once a reversion, always a reversion."

a. Indefeasibly Vested Remainder

An IVR requires (1) ascertained person or persons, (2) no condition precedent, (3) not subject to total or partial divestment: no condition subsequent; (4) no possibility that holder will have to share with other remaindermen.

Examples: "To A for life, and on A's death to B." A - LE, B - IVR. If B dies before A, then B's remainder would pass by will or intestacy to his successors.

Contrast: "To A for life, then to A's first-born son in fee." A - LE, first son born to A - CR, and O - Reversion. The remainder is not vested because it is not created in an ascertained person in being. Also, it is subject to the condition that A have a child.

Two years later A has a son, John. A - LE, John - IVR in FS.

2) Gift by will "to my wife, R, for life, and on her death to my children in equal shares." T is survived by R and three children. This transfer is indefeasibly vested. T being dead, he can have no more children. (Slight qualification of answer: If R is pregnant at T's death, the posthumous child, if born alive, will share in the gift.)

3) O: "to A for life then to B for life" A - LE; B - IVR in LE; O - Reversion.

b. Vested Remainder Subject to Partial Divestment; Vested Remainder Subject to Open

This is a vested remainder created in a class of persons ("children," "brothers and sisters," etc.) that is certain to take on the termination of the preceding estates, but is subject to diminution by reason of other persons becoming entitled to share in the remainder.

Example "To A for life, and on A's death to her children in equal shares." If at the time of this disposition, A has no children: A - LE, children of A - CR, O - Reversion in fee, which will take in possession if A never has any children.

Suppose two years later A has a son, Bob. Title: A - LE, Bob - VRSPD, O - nothing. Bob's remainder is vested, because he is ascertained and his taking is not subject to any condition. It is open because A may have additional children.

Two years later, A has a second son, Ray. Title: A - LE, Bob & Ray - VRSPD held as tenants in common, O - nothing.

Two years later, Bob dies, then A dies. Title: Bob's successors and Ray - FSA as tenants in common.

1) Divesting Interests are Executory Interests

Once the remainder vests in one existing member of the class, the divesting interest in the unborn members of the class is called an executory interest.

2) Effect on Marketability of Title

Note that where there are outstanding interests in the unborn children, the vested remainderman and the life tenant cannot jointly convey a good title. Frequently a court must appoint a guardian ad litem to represent the interests of the unborn children.

c. Vested Remainder Subject to Total Divestment (VRSTD)

A VRSTD arises when the remainderman is in existence and ascertained and his interest is not subject to any condition precedent, but his right to possession and enjoyment is subject to being defeated by the happening of some condition subsequent.

1) "To X for life, remainder to A and his heirs, but if at A's death he is not survived by issue, to B and his heirs." X - LE, A - VRSTD, B - SHIFTING EI.

2) "To A for life, then to B for life." A - LE, B - VRSTD in LE, O - Reversion in Fee.

B's remainder is vested even though (as a practical matter) he must survive A in order to take. But this practical requirement does not make B's remainder contingent. The only condition to B's taking is the natural termination of A's life estate, and this "condition" is inherent in any remainder life estate. However, B's remainder is not indefeasibly vested, for it will be defeated if he dies in A's lifetime.

3) "To A for life, and on A's death to B; but if B predeceases A, on A's death to C." A - LE, B - VRSTD, C - shifting EI.

d. Contingent Remainder

There are two ways to create a contingent remainder.

(1) Subject to Condition Precedent ("contingent as to event").

Examples 1) "To A for life and on A's death to B if B survives A." A - LE, B - CR in FS, O -reversion. Notice the similarity with example 3) above. In classifying future interests, form and not substance counts. In example 3), the contingency of survival is expressed as a condition subsequent: B's remainder is subject to total divestment. But here, the contingency for survival is expressed as a condition precedent: B's remainder is a contingent remainder.

2) "To A for life, and on A's death to B if B marries C." A - LE, B - CR in FS, O - reversion. If B marries C in A's lifetime, his remainder will become indefeasibly vested.

3) A conveys "to B for life, then to C and his heirs if C survives B; if C does not survive B, then to D and his heirs." C - CR in FS, D - Alt. CR in FS, O - reversion.

"to A for life, then to C if she remains unmarried, and if she does remarry, then to D." A - LE; C - CR in FS, D - Alt. CR in FS, O - reversion.

Compare: "to B for life, then to C and his heirs, but if C marries D, then to E and his heirs." B- LE, C - VRSTD, E - shifting EI.

4) "O to A for life then to B if B marries C." Suppose all 3 alive: A - LE; B - CR in FSA; O - Reversion. Suppose B already married to C. A - LE; B - IVR. Suppose C is dead and B is married to someone else: A - LE, B - nothing, O - reversion.

(2) Unborn or Unascertained Persons ("contingent as to person")

Because until the remainderman is ascertained, there is no one ready to take possession should the preceding estate come to an end.

Examples: "To A for life, and on A's death, per stirpes to such of A's descendants as survive her." A - LE, A's descendants who survive A - CR, O - reversion.

"to pay the income to A for life, and on A's death to distribute the trust corpus to A's heirs." A's heirs - CR, O - reversion.

e. Rule in SHELLY's case (Rule Against Remainders in Grantee's Heirs)

The Rule operated (regardless of the grantor's intent) to convert what would otherwise have been a contingent remainder in the heirs into a remainder in the ancestor.

Examples: "to B for life, then to the heirs of B." W/O SHELLY, B - LE, heirs of B - CR in FS. W/ SHELLY (and law of merger): B - FSA.

"to B for life then to C for life, then to the heirs of B." SHELLY's case RULE transforms "CR in heirs of B" into "IVR in FS in B."

This Rule has been abolished in most states today, but arises occasionally where a conveyance was executed prior to the abolition of the Rule. This rule is triggered only by the attempted cration of a remainder in the grantee's heirs.

f. Doctrine of Worthier Title

Under the Doctrine of Worthier Title, a remainder limited to the grantor's heirs is invalid and the grantor retains a reversion in the property. This doctrine is still applied to inter vivos transfers in a majority of states, but most states treat it only as a rule of construction, i.e., if the grantor clearly manifested an intent to create a future interest in his heirs, courts will allow it.

Example: O deeds property "to A for life, and on A's death to my heirs at law." Alternatively, "to A for life, and on A's death to my next of kin." In most states: A -LE, O - Reversion in FS. W/O DOWT: A - LE, O's heirs - CR in FS, O - reversion.

3. EXECUTORY INTERESTS

There are only two future interests: remainders and executory interests. REMAINDERS CAN ONLY FOLLOW LIFE ESTATES (and Fee tails). Therefore, if the preceding estate is not a LE, then the future interest must be an EXECUTORY INTEREST. An EI is not capable of taking on the natural termination of the preceding LE. More specifically, an EI is an interest that divests the interest of another.

a. Shifting EI - Divests or "Cuts Short" a Another Transferee

"To A and her heirs, but if B returns from Canada, then and in that event to B and his heirs." A - FS/SEL, B - Shifting EI.

"to B for life, remainder to C and his heirs, but if C predeceases B, to D and his heirs." B-LE/SEL, C - IVR, D - Shifting EI.

"B and his heirs, but if C marries, to C and his heirs." B - FS/SEL; C - Shifting EI

b. Springing EI - "Follows a Gap in Possession" or Divests a Transferror

"To A when and if A marries B." O - FS/SEL, A - Springing EI.

"To A for life, and one year after A's death to B." A - LE, O - reversion, B - Springing EI in FS. B's interest cannot be a remainder because of the one year gap; it does not take effect upon the natural termination of the preceding LE. It is "springing" because it springs out of the transferor's reversion.

c. EXECUTORY INTEREST FOLLOWS A FEE

A remainder cannot follow a FS interest of any kind (except fee tail). Therefore, any interest that follows a fee and is held by a third person is an EI.

d. Differences Between EIs and Remainders

(1) EIs not destructible, while CRs are still destructible in some jurisdictions. EIs not considered vested, while CRs can become vested. The Rule in Shelly's Case does not apply to EIs, but does apply to remainders limited to the heirs of the grantee for life.

4. Importance of Classifying Interests "In Order"

If 1st FI is CR, subsequent FIs to 3rd parties must also be CRs. Similarly, if 1st FI is a VRSTD, the FIs that follow will be EIs.

1) "To A for life, and on A's death to B if B survives A, but if B does not survive A, on A's death to C." A -LE, B-CR in FS, C-Alt. CR.

Since the contingency on B's survival is expressed both as a condition precedent and (in the next clause) as a condition subsequent, why is B's remainder classified as contingent rather than as vested subject to total divestment? Because interests are classified "in order." Looking first at the clause giving an interest to B, here the contingency is expressed as a condition precedent; therefore, B's remainder is contingent. Then having classified B's interest, we turn to C's interest. But since B's interest has already been determined to be a CR, C's interest is necessarily an alt. CR.

2) "To A for life, and on A's death to B. But if B predeceases A, on A's death to C." A - LE, B - VRSTD, C - EI. If B dies during A's lifetime: A - LE, B - IVR.

5. Transferability of Remainders and EIs

a. Vested Remainders Are Transferable, Descendible, and Devisable

b. Contingent Remainders and EIs are Transferable Inter Vivos

c. Contingent Remainders and EIs are Usually Devisable and Descendible

d. Any Transferable Future Interest is Reachable by Creditors

6. Class Gifts

A "class" is a group of persons having a common characteristic. Typically, they stand in the same relation to each other or to some other person (e.g., children, grandchildren, descendants, nephews and nieces, etc.) In a gift to a class, the share of each member of the class is determined by the number of persons in the class.

Persons in gestation at the time set for distribution are include in a class. The common law presumption is that a child born within ten lunar months or 280 calendar days after the necessary point in time was in gestation at that time.

a. When the class closes - The Rule of Convenience

A class closes when some member of the class can call for a distribution of her share of the class gift. It is presumed that the ordinary testator intends to include all members of the class, whenever born, provided this would not cause any undue inconvenience.

1) Outright Gift - Class closes at time gift is made

When a will makes an outright grift to a class, if any class members are alive at the testator's death, the class closes as of the date of the testator's death.

Example: T's will devises property "to the children of John Brown." John has three children (A, B, and C) at the time of T's death; another child D is born two years later. The class closes at T's death; A, B, and C share the gift. D is excluded by the rule of convenience.

Here, additional members of the class are allowed in up to the time of T's death because there is no inconvenience in doing so. But we close the class at T's death because it is assumed that T would want an immediate distribution, rather than postpone distribution to John Brown's death, which is the only time we would be sure John Brown will have no more children.

a) No Class Members Alive at Testator's Death - Class Stays Open

2) Postponed Gift - Class Closes at Time Fixed for Distribution (e.g., death of the Life tenant)

Children born after the life tenant dies do not share in the gift.

3) Dispositions Subject to Condition of Reaching Given Age

When there is a class conditioned upon the members attaining a certain age, the class closes when (i) the preceding estate, if any, terminates, and (ii) the first class member reaches the specified age. That class member's minimum share should be determined and distributed to her when she reaches the specified age.

Example T's will devises "to the children of John who live to attain the age of 21." At T's death, John has three children: A (age 22), B (age 16), and C (age ten). The class closes at T's death. A is entitled to an immediate 1/3 distribution. If B reaches 21 but C dies before reaching 21, then A and B's shares will increase to 1/2.

If none of John's children was 21 at T's death, the class stays open until a child of John reaches 21, at which time the class closes.

7. Survival

As a general rule, all futures interests are owned interests that can pass at death by will or inheritance. This is true unless the interest's taking is subject to an expressed or implied contingency of survival.

a. Exception for Express words of Survival, e.g., "surviving children"

b. Implied Contingency of Survival - Gifts to "issue," "descendants," or "heirs."

RULES TO PROMOTE MARKETABILITY

1. Rule against creation of new estates.

2. Rule against restraints on alienation (can't give fee & then try to restrain it).

Restraints on Alienation, Marriage, Waste

1. A grantor cannot put restraints on the alienation of land in a grant, because this is against public policy and creates family dynasties. These restraints on alienation are not allowed in any jurisdiction. Hankins v. Mathews "to wife for life, then to Jim Grubb but can't sell for 10 years...." Court strikes 10-year clause as a restraint on alienation.

Exception: restraint on alienation in a co-operative association operates on sellability rather than use - must meet market price.

2. Restraints on Marriage - not allowed in landownership or conditions to ownership. However, if the restraint is not aimed at the marriage itself, but rather out of concern that someone be taken care of, then allowed.

3. Waste of Property - grantee of life estate is generally not allowed to neglect the property and let it go to waste. If she does, she must pay damages to the remainder/executory interest to restore the property to its former value.

THREE TYPES OF RESTRAINTS

Disabling Restraint: Forbids the owner from transferring her interest in the property. ***most disfavored of all. "O conveys Blackacre to A and her heirs, but any transfer of Blackacre shall be null and void." Disabling Restraints generally not enforced on LE, but others are. Equitable interest (trusts) restraints allowed. All disabling restraint on legal interests (fee simple, life estate) are VOID. Disabling restraint particularly offensive: i) unlike other restraints, transfers are totally prohibited; ii) they enable a person to deny the validity of his own conveyance, iii) they exempt the property from the person's creditors even while he is enjoying the property.

Promisory Restraint: Grantee promises not to alienate his interest in the property. "O conveys Blackacre to A in fee simple. A promises for himself and his heirs and assigns that Blackacre shall not be transferred.

Forfeiture Restraint: Provides for a future interest that will vest if the owner attempts to transfer her interest in the property. "O conveys Blackacre to A, but if A attempts to transfer the property, then to B an her heirs."

Total Restraints on alienation for FSA are extremely disfavored. Partial restraints are sometimes allowed.

Valid Restraints on Alienation:

a. Forfeiture and Promissory Restraints on LE

b. Forfeiture Restraint on Transferabilty of a Future Interest

c. Restraint on Partition of Co-Tenants (If limited to a reasonable time)

d. Reasonable Restrictions in Commercial Transactions

e. Right of First Refusal (if reasonable by specifying fair market value)

f. Restrictions on Transferability of Leaseholds (e.g., prohibiting subleasing)

g. Restraints on Alienation of Equitable Interest (Spendthrift Clauses) Are Valid

ROPER V. EDWARDS

Grandmother keeps right to devise one acre out of 136. Looks like a restriction on alienation. But court allows grandmother to control the land based on equity rather than law. Grandmother had bargained-for that consideration in the sale of the other 135 acres.

D. THE RULE AGAINST PERPETUITIES

"No interest in property is valid unless it must vest, if at all, not later than 21 years after one or more lives in being at the creating of the interest."

"An interest is void if there is any possibility, however remote, that the interest may vest more than 21 years after all relevant lives in being at the creation of the interest." Emphasizes possibility of remote vesting. If a situation can be imagined in which the interest might not vest within the perpetuities period, the interest is void. This void result occurs even though the circumstances are unlikely or unrealistic.

RAP applies to the following interests in personal and real property: (i) contingent remainders (conditions precedent; unascertained person); (ii) EIs; (iii) class gifts; and (iv) options and rights of first refusal, preemptive rights.

THREE POSSIBILITIES: 1) vest; 2) become a present possessory interest; 3) go away forever.

ab initio - from the beginning

1. Analysis of the Rule

a. When the Perpetuities Period Begins to Run

The validity of the interests under the Rule is determined at the time the interests are created, taking into account the facts then existing. The "lives in being plus 21 years" period begins to run, and the measuring lives used to show the validity of an interest must be in existence, at that time." (validating lives)

1) Wills - Date of Testator's Death

2) Revocable Trusts - Date Trust Becomes Irrevocable (or on Settlor's Death)

3) Irrevocable Trusts - Date Trust is Created

4) Deeds - Date Deed is Delivered with Intent to Pass Title

b. "Must Vest"

Future interests in grantor are VESTED under RAP: right of re-entry, reversion, possibility of reverter.

To be valid under RAP, the transferee's interest must vest, regardless of what might happen, within lives in being plus 21 years. An interest becomes "vested" when (i) it becomes a present possessory estate, or (ii) it becomes IVR or VRSTD. Remember that RAP only applies to future interests created in third persons; consequently, the Rule generally applies only to contingent remainders, executory interests, and vested remainders subject to open.

Examples "To A for life, then to A's children for their lives, and on the death of the last survivor of A's children, to B in fee simple." A - LE, A's present children - VRSTPD, A's unborn children - CR in a LE, B - IVR. The contingent remainder in A's unborn children is valid under the Rule, because the children's life estates will vest at birth, which will be in A's lifetime. B's interest is valid because it is IVR from the time of its creation.

"To A for life, then to B; but if at B's death she is not survived by children, then in that event to C." (i) A - LE, B - VRSTD in FS, C - shifting EI in FS. (ii) C's interest is valid under the Rule. B's life can be used to show that C's interest will vest within the perpetuities period. If B dies in A's lifetime not survived by children, C's interest will become an indefeasibly vested remainder. If B survives A and thereafter dies not survived by children, C's interest will become an indefeasibly vested remainder. If B survives A and thereafter dies not survived by children, C's executory interest will become a present possessory estate. Of course, B may die in A's lifetime (or after A's death) leaving children surviving her, in which case C's interest is extinguished.

O: "to A for life, then to D for life if one of B's children graduates from college, then to C." A - LE, D - CR in LE, C - IVR. D's life is the validating life for D's CR.

O: "to A for life, then to B's first child, but if that child does not marry by age 35, then to C." (B has no children). A - LE, B's first child - CR. C's EI is void. Validating life for B's first child's CR: B. The child will be born, at which time his CR will convert to a VRSTD, if at all, during B's lifetime.

Compare "so long as" and "but if" wording

O: "to the Unitarian Church, so long as it is used for a church, and if it ever ceases to be so used, then to A." Left with Unit. Church - FS/Det; O - P/R.

O: "To the Baptist Church, but if it ever ceases to be used for church purposes, then to A." Left with Baptist Church - FSA.

c. "If at All"

The interest does not have to take within the perpetuities period in order to be valid; after all, many contingent remainders never vest, because the condition precedent to their taking is not satisfied.

d. Life in Being

Does not include a corporation life. Must be human life. Animals don't count either.

e. Cases from Textbook

Central Del County Authority v. Greyhound Corp

Trial court found FS/SCS + Right of Entry, which is not subject to RAP. Superior court finds it is an option to purchase, which normally is subject to RAP. But this deed conveyed for gov't use (public use), therefore possible exception to RAP? NO. "RAP is a peremptory command of law that is to be remorselessly applied." Then goes on to give policy argument: alienability. Rigid, rule approach.

Texaco Refining v. Samowitz

Option for lessee to purchase the property. Distinguish: Here lessee is also the option (future interest) holder. Here option may give lessee incentive to improve land. Using a standards, flexible approach. (Ansley prefers) /// Ellen Peters opinion.

Cambridge Co. v. East Slope

RAP does not apply to preemptive right or right of first refusal by condo association owners. Avoid "technical and mechanical operation of the rule." 1) must match market price. 2) only occurs when seller wants to sell (voluntarily).

Moore v. Philips

Estranged daughter v. estate of mother for waste (neglect) of farmhouse. Husband: "to widow for life, then to daughter and grandson." Life tenant has responsibility to remaindermen. D-executrix raises laches and estoppel defense. Court holds most damage happened towards the end -- didn't quite wait so long. Why court let them wait? 1) didn't want to deprive her mother of $ at end of her life. 2) mother is trying to disinherit children -- allowed but disfavored. Lawsuit shifts $ from others back to daughter.

WASTE: relationship between life tenant and remaindermen

Permissive waste - damage by neglect - not allowed

Voluntary waste - tear down a house - not allowed

Ameliorative waste - tear down something and build something even better - sometimes allowed.

Hypothetical

85 year-old widow has LE in her farm. Remaindermen are children in N.J. ISSUE: widow needs to sell land for $. But if they wait, value of land will increase with construction of new interstate. A TRUST would have the flexibility to resolve this problem. Can LE holder do something to land against Remainderman's interest: courts may like to use increase in $ value, because $ easy to calculate.

WASTE: doctrine that tries to enforce inter-generational equity

Racial Restrictions

Title often turns on whether land reverts back automatically (FS/Det) or turns into a FSA. New Jersey statute provides for FSA when confronted with racial restrictions, exception for religion.

Lewis v. Searle

Testator leaves property "to Hattie, so long as she is single. If not, then in thirds to nieces and nephews." Hattie not planning to get married at age 95, wants to quiet title. 1) because she might need to sell the property - hard to sell with EI hanging over it. Hattie - FS/SEL, nieces and nephews - EI. 2) As childless, she wanted to use her will as a means to have family care for her. Court upholds testator's restriction as amounting to charity to a single woman.

Generally restraints on marriage are disfavored, but they are allowed when: 1) focus on caring for person in need; 2) partial restraint - e.g., to a jewish person - allowed, must be reasonable, leave recipient with options; 3) remarriage of a spouse - allowed. Restriction on marriage for control - NOT OK.

f. Perpetuities Reform Legislation

WAIT AND SEE - the validity of an interest following one or more life estates is determined by the facts at the end of the life estate, rather than at the creation of the interest. Alternatively, may wait the 21 years after the last life in being.

CY PRES - an invalid interest is reformed to comply with RAP and carry out the grantor's interest as nearly as possible. Private trusts revert back to grantor's heirs if trust cannot be rewritten. (Remainder in FSA to grantor's heirs if trust cannot be rewritten to suit the grantor's interests.) Requirements for Cy Pres charitable trust: 1) purpose must be impossible or impracticable. 2) If so, there must be a charitable intent. Evans case.

UNIFORM STATUTORY RULE AG. PERPETUTITIES - 90 year vesting period. Takes a "wait and see" approach in dtermining whether an interest actually vests in 90 years.

E. GOVERNMENT LAND USE PLANNING

Euclid v. Ambler (1926): Supreme Court upheld that city zoning laws could be enforced through the state's police powers act. Euclidean Zoning: 1) separate uses; 2) density controls - height, area, etc.

1. FOUR TYPES OF ZONING LAWS

a. Use zoning. Land is zoned into separate types of uses. Like industrial use is U7 and residential is U1. U1 can always build in U7, but U7 can never build in U1.

b. Area zoning. Height and area of land being built on. How many houses can you cram in an area. Houses must be at least 3500 sq. ft., etc.

c. Floating zone. When an area is not specifically zoned, but the zoning board knows it will be someday when they figure out what they want to do with it.

d. Spot zoning. NOT ALLOWED. The area cannot be re-zoned to the benefit of a small group which give owners special rights, harm the nature of the community, and is not justified as a police power. Theory: spot zoning = special legislation, which is not allowed. ELEMENTS to establish invalidation: 1) singling out; 2) special benefit; 3) discrimination against others; 4) impact; 5) not police power.

2. PRIOR NON-CONFORMING USE. Do not need to ask permission. Use in existence when the zoning ordinance is passed. Grandfathered in to prevent violation of due process and an unconstitutional taking of property. A zoning ordinance may limit the amount of change that happens with the land. Town of Belleville v. Perillo's (conversion of restaurant into disco held too drastic a change). Permission to change the nonconforming use may depend on the nature of the change and whether it is drastic.

3. VARIANCE. Permission to develop land in a manner that violates the zoning ordinance. Requirements for a Variance: (a) undue hardship to the owner; no other effective use of the land. (b) No adverse impact on adjoining property. Doesn't destroy the general zoning plan. (c) Hardship is not self-imposed. (d) Land is unique or has some special physical characteristic. Commons v. Westwood Zoning Board

4. SPECIAL EXCEPTION. Where zoning laws anticipate and allow certain things to be built if they satisfy specified conditions in the zoning ordinance. A nursery school may be built in a residential area if it has less than 30 students. Special exceptions are less burden to P than a variance.

VESTED RIGHTS - determined on a case-by-case basis. Left ambiguous as to how much is "substantial investment" in property.

**********ANSLEY questioned through here ****************************

III. LANDLORD-TENANT LAW

A. FOUR TYPES OF LEASEHOLDS

1. Tenancy for years - fixed period with beginning and ending of years. May be for less than a year. At end of lease, no notice is required to end the lease, because terms are known.

2. Periodic tenancy - period to period tenancy. Extensions are part of the same tenancy. Landlord must give you notice that you must leave. If you have a month to month tenancy, he must give you a full month's notice before eviction required. Example: LL informs you terminating on Jan. 4. You have until Feb. 28 to remain in apartment.

3. Tenancy at will. No set term. Either party can end the lease at any time. At common law, no notice was required, but now states have some sort of notice requirement. Can end by operation of law: death of LL, or sale of property to a 3rd party.

4. Tenancy at sufferance. Tenant who stays on after lease is over. LL can evict the person or hold them for another term. Leasee must pay rent.

B. Landlord's Duties

1. To deliver possession at the beginning of the lease. (legal vs. actual)

2. Not to interfere with the tenants quiet enjoyment (watch for issues of actual or constructive conditions)

3. Habitability (express warranty, implied covenant, or statutory duty; but at common law, no duty)

C. Tenant's Duties

1. Not to damage premises.

2. Not to disturb other tenants.

3. Not to use property for illegal purposes.

4. Pay rent.

D. Landlord offensive remedies.

1. Self-help (disfavored)

2. Ejectment

3. Summary proceedings/dispossession: expedited court hearings

4. Security deposit.

E. Landlord Remedies When Abandoned

1. Accept the surrender, charge fee for effort and time to find a new tenant. LL forfeits right to recover for full term.

2. Wait and sue: don't do anything, sue for entire term or from time of breach until end of term.

3. Relet on tenants account: with notice, actively look for a new tenant. Can sue the original tenant for full term if not able to find new tenant, or new tenant leaves.

4. Duty to mitigate: some courts hold LL has a duty to mitigate and look for a new tenant at the market rate for rental, then sue for the difference and time and effort. Sommer v. Kridel

F. Assignee vs. Sublet

1. Assignee: Conveyance of tenant's of all property interest without retaining any future rights to reenter the property. L1 --> T1, then T1 --> T2, T2 assumes total responsibility of T1. However, LL can sue T1 or T2. If LL sues T1, T1 can recover from T2 for back rent. LL has privity of estate, but not of contract with assignee.

2. Sublet: Original tenant retains right to regain possession after a stated time on the lease. LL cannot sue T2 if he defaults on rent. LL has no privity of estate with sub-lettor; covenant to pay rent does not run with the land.

****If lease is silent, can use either assignment or sublease.

Most LL prefer assignment: 1) T2 is there; 2) two different people (options) he can sue; 3) screen tenants.

Most leases require owner's consent. Distinction between residential and commercial leases: residential - generally can refuse consent without reasonableness; commercial -cannot refuse consent without commercial reasonableness, and trend to imply this term into commercial leases. Open question whether K can expressly diclaim reasonableness or give LL a piece of the action (higher rent).

Conflict over Occupancy. VASQUEZ v. GLASBORO SERV. ASSOC

N.J. Anti-Eviction Statute (statutory insertion of compulsory terms) enumerates good cause reasons for eviction of tenants. If farmworkers met the criteria, they could get important procedural protections (buy him time to find some place else to live). NJ Sup. Ct. holds farmworkers do not fall into tenant category. Then Court examines unconscionability of the K: 1) English and Vasquez only speaks Spanish; 2) Unequal bargaining power; 3) Peurto Rican Dept. of Labor negotiated. Court equitably reforms K to include reasonable time to find alternative housing. (judical incorporation of compulsory terms)

Arguments against inserting terms: 1. Freedom of K, autonomy (RIGHTS). 2. Depriving party of choice, part is still best judge of what is best for him. (Efficiency) 3. Not forced into signing, gov't protector, could stay in Peurto Rico.

Arguments for inserting terms: 1. Corrective remedy for unequal bargain power ***, level the playing field. 2. Lack perfect information, transaction costs, inadequate for efficiency. 3. No direct partnership by D, not in English, Desperation = duress, indicators: low wages, lack of jobs, left family, live in barracks. 4. Necessity*** housing.

SLAVIN

No sub-lease without consent. Massachusetts court will not impose reasonableness requirement on consent for residential lease. (LL's "duty" to mitigate undermines that right).

KENDALL

Cal Ct. holds good faith and fair dealing required for withholding consent of sublease. Must be "commercially reasonable." Consent given to LL to protect his property interest and his expectation for getting rent. (proposed new tenant is credit worthy, will pay rent). Court did not want consent right to be used by LL to enable him to "cash in." If LL wanted higher rent, he should have bargained for it.

G. Eviction Controls

1. Private Housing: generally can evict for any cause. NJ Exception: LL must have good cause. NOTE: not paying rent is good cause for eviction in any jurisdiction, even if tenant is poor.

2. (Low income) Public housing: requires just cause, constitutional due process, notice, and an opportunity to be heard.

3. Conversion of apartments to condominiums. Some states protect senior citizens and the disabled by conferring a right to remain.

H. Retaliatory Eviction

LL cannot evict a tenant for the tenant's exercise of his housing rights for habitable and quiet enjoyment, or for complaining to the government.

I. Constructive Eviction: 3 requirements

1. LL has acted. In some jurisdictions, an omission of a duty may b considered an action. Blackett v. Olanoff (LL failed to control extremely loud tenants).

2. Substantially interferes with tenant's quiet enjoyment. Breaches implied Covenant of Quiet Enjoyment of land for tenants: exception to the Common Law "no implied warranties" in leases rule.

3. Tenant leaves the land within a reasonable time. (Hard in low income housing).

Partial Constructive Eviction. Some courts under extreme circumstances will relax the rules. Minjak v. Randolph (tenants did not leave the apartment, but were unable to use a significant portion of it: water leaking from above, dust from sand-blasting, brick fell on head. Court gave them a rent abatement, but did not totally excuse non-payment of rent. Punitive damages assessed against LL. NOTE: these tenants had NOT paid rent, therefore legitimate grounds to argue they could not even seek constructive eviction defense.)

J. IMPLIED WARRANTY OF HABITABILITY

**JAVINS v. FIRST NATIONAL REALTY Implied Warranty: The duty of the owner to make the place livable is independent of the duty to pay rent. However, the covenant to pay rent depends on the warranty of habitability. If tenant doesn't pay rent, LL still has a duty to make the place livable. This duty has been applied in every state across the country.

Two ways of defining habitability breach: 1) city housing code - used in Slavin. 2) Distinguish necessity vs. amenity. Heating, lighting, absence of vermin, safety concerns - all regarded as part of habitability.

"Javins defense" in summary proceeding / evidentiary hearing, tenant can remain.

AT COMMON LAW: (1) no implied warranty of habitability; (2) covenants in a lease are independent. Tenant still owed LL rent even if uninhabitable through fire, flood, or pestilence. (3) Exception: if LL actually evicts the tenant, then no duty to pay rent - breach of the Covenant of Quiet Enjoyment.

IV. CONCURRENT OWNERSHIP

1. Tenancy in Common - presumptive tenancy; default tenancy where none is specified (multiple grantees); inherit jointly through intestacy.

a. Two or more people own a single piece of property.

b. Each tenant, no matter how small his fractional share, has the right to possess the entire parcel at any time.

c. Land is divisible and may be sold or leased to third parties.

d. NO RIGHT OF SURVIVORSHIP - at death of one tenant, their interest goes to that tenant's heirs.

e. Unilateral lease by one spouse survives a divorce where land held as tenants in common. Kresha v. Kresha

f. The only "unity" involved is possession: each tenant is entitled to possession of the whole estate.

Carr v. Deking

Father and son hold land as tenants in common. Father executes lease without the consent of son. Father dies. Son tries to evict the lessor. A cotenant may lawfully lease his own interest in the common property to another without the consent of the other tenant and without his joining in the lease. The lease survives the death of the father.

2. JOINT TENANCY WITH RIGHT OF SURVIVORSHIP Can only be created by express language in the conveyance.

a. Each owner must have an EQUAL FRACTIONAL INTEREST.

b. RIGHT OF SURVIVORSHIP. If one tenant dies, then his shares go to the other co-tenants and not to his heirs. (Old days, way of conveying property to a mistress)

c. Possession - Each tenant is entitled to occupy the entire premises.

d. Severance - tenant can sell his interest. If he does so, the joint tenancy is destroyed and holdings become a tenancy in common.

e. FOUR UNITIES: time, title, interest, possession. All of these must be created by a single instrument and at the same time.

f. If one joint tenant mortgages his interest and the mortgage itself does not destroy the joint tenancy, the mortgagee can foreclose on the mortgagor/co-tenant's one-half interest. The foreclosure sale will cause a severance. However, the mortgagee runds the risk that the mortgaging co-tenant will die before foreclosure, extinguishing the mortgagee's interest.

TENHET V. BOSWELL

A lease by one joint tenant does not survive the death of the lessor. You must expressly state joint tenancy, otherwise presumed tenancy in common. Focus on right of survivorship (ROS). Does a unilateral lease sever the joint tenancy?

Traditional rule: yes, it severs. No more unities, because one party now only has a landlord's reversion, and no more right to present possession. But that is contra to intent in many cases, so today, more jurisdictions say, as did Tenhet, no severance.

Is the unsevered land, now in the hands of one, 1/2 subject to the lease? This court said no. Other courts say lessee just steps into the shoes of the ex-co-owner.

3. Tenancy by the Entirety - any conveyance to husband and wife. A tenancy by the entirety is a marital estate akin to a join tenancy between husband and wife. It is not recognized in community property states, but in about 21 common law jurisdictions, it arises presumptively in any conveyance made to busband and wife.

a. RIGHT OF SURVIVORSHIP (shares go to co-tenants not to heirs)

b. Severance limited. A tenancy by the entirety cannot be terminated by involuntary partition. It can be terminated only by (i) death of either spouse (leaving the survivor sole owner of the fee); (ii) divorce (leaving the parties as tenants in common with no ROS); (iii) mutual agreement; (iv) execution by a joint creditor of both husband and wife (a creditor of one or the other could not execute).

c. Individual spouse cannot convey or encumber. A deed or mortgage executed by only one spouse is ineffective.

d. Married Women's Property Act supersedes in many jurisdictions.

e. FIVE UNITIES: time, title, interest, possession, and marriage.

f. At common law, husband could alienate his present possessory interest and ROS.

g. MAJORITY RULE: neither husband nor wife has a separate divisible interest in property held ten. by the entirety that can be conveyed or reached by execution. Estate can only be divided/sold by joint action of the spouses.

Limitations and safety: family protection feature.

HIATUS PERIOD: In Tennessee, 1913 - 1918, no tenancies by the entirety allowed. Converted to tenancies in common.

SAWADA v. ENDO

D in car hits the Sawada sisters. D has no insurance and wants to protect his land, so he conveys it to his sons. (Seems like classic fraudulent conveyance to avoid execution of judgment) Fraud is not an issue if his interest is immune from creditors. Options for the court with Tennancy by the Entirety: (1) no change; (2) allow both spouses to alienate their own PPI and ROS, which would be reachable by creditors. (promote wife); (3) neither spouse can alienate, nor are the interests reachable by creditors of just one spouse (demote husband); (4) TN/KY Cannot attach PPI, but can attach ROS - if wife dies first, then creditor gets whole house.

4. Relations between the Co-tenants

a. If co-tenants rent to a third party, then they must share the rent according to their fractional interest.

b. If major improvements are required on land, some states hold that the tenant in possession must pay for the improvements, but others hold the costs must be shared. In general, necessary repairs, taxes, and mortgages: contribution can be compelled. Improvements: no contribution or setoff, only recouped in action for partition.

c. Remedy of Partition - if parties cannot get along, then the land must be sold or divided.

d. Ouster - when the occupying tenant refuses to permit the other tenant equal occupancy. The ousting tenant must account to the ousted tenant for the latter's share of the fair rental value of the premises. If they really can't get along, then land must be partitioned.

e. Right to profits from use - a co-tenant has the right to retain profits gained by her use of the property and need not share such profits with co-tenants unless there has been an ouster.

Olivas v. Olivas

Marriage incompatability would normally be grounds for ouster. Here husband could not claim ouster, because evidence showed he voluntarily moved out to be with his girlfriend.

B. CONDOMINIUMS AND COOPERATIVES

1. Condominiums

a. Tenants have a fee simple in a certain physical space or parcel, but all residents own "common areas or ground area."

b. Charged for association fees.

2. Cooperatives

a. Generally, corporation owns the building, and each resident is a shareholder of the corporation.

b. Board's right of approval: Board has a right to approve or reject any proposed shares of the corporation.

3. Restraints: allowed as long as restraint is exercised for related purpose.

a. Reasonable restraints on alienation are allowed: (i) Preemptive (right of first refusal) - cannot force a sale, must be voluntary. (ii) RAP - must jurisdictions say RAP does apply, Cambridge Co. v. East Slope said to avoid "mechanical application" of the law.

b. Prior consent requirement for alienation.

c. Ban on leasing (also requires consent)

d. Half states hold cannot be grandfathered into new conditions agreed to by the condo/coop, if you signed in originally under different conditions. Other half do.

WOLINSKY v. KADISON

Condo association tries to prevent via preemptive right single mom from moving from one unit to another in their building. Court finds it to be a violation of the Rule Against Restraints on Alienation. Court holds restraints must be (1) rationally related to purposes - more than just fair market value, (2) fair/nondiscriminatory. (1) harkens back to Kendall "commercial reasonability." Board also violated its fiduciary duty to comply with its own bylaws to obtain majority vote. Unreasonable preemptive right as applied to exclude current members of the association.

DISTINGUISH: in Game Club, Bible Camp, and Serio, requiring consent is violation of restraint on alienation. (No condo association involved)

AQUARIAN FOUNDATION v. SHOLOM HOUSE

Condo owner tried to sell her unit without the prior consent of condo association. Condo Assoc. had retained a possibility of reverter = right of first refusal, because prospective buyers will be leary of buying into property in which the Assoc. is not required to pay until a sale has gone through which they subsequently nullify. Unreasonable as designed. The reverter clause imposes no duty upon the association to compensate the unit owner with a reasonable period of time after the association withholds its consent to transfer.

BREENE v. PLAZA TOWERS

Condo association restraint may not be applied retroactively: MINORITY RULE. Rationale: notice of restrictions through the recording procedures must be given to prospective buyers prior to the conveyance of any condominium unit. MAjority Rule would permit the restraint.

O'BUCK v. COTTONWOOD VILLAGE

Condo association can prohibit antennae on roof of building to protect against wear.

CITY OF OCEANCIDE v. McKENNA

If purpose of restriction against (1) failing to occupy unit (letting it lie vacant), or (2) leasing the unit, is to create a stable low-income housing market, then restraint is allowed. Owner must sell unit if he wants to move to San Francisco.

V. REAL ESTATE TRANSACTIONS

A. BROKERAGE - agents or realtors who help owners sell homes. MAJOR. RULE: brokers only get commission if the sale is completed, not if they merely find a buyer.

Four types of listing arrangments:

1. Exclusive Right to Sell - broker has right to collect the commission if the property is sold to anyone during the period of the contract, even if the sale is to a buyer that the owner found without the broker's help.

2. Exclusive Agency - broker is entitled to the commission, or a share of the commission, if the property is sold by her efforts of the efforts of any other broker, but not if the property is sold by the owner.

3. Open, or Nonexclusive - broker gets commission only if she is the first person to procure a buyer who is ready, willing, and able to buy. If anyone else, including the seller, finds a buyer first, the broker gets no commission.

4. Net listing - the seller agrees to accept a set price for the property, and the broker keeps any amount over that price.

Broker's Duty to Buyer - if the broker fails to reveal relevant information to the buyer, the buyer may sue the broker for fraud, e.g., leaky roof.

B. STATUTE OF FRAUDS - requires a writing to convey land, prevent fraud, evidentiary motive (proof).

Burns v. McCormick

Old man asks couple to care for him in his old age in exchange he will leave them his house. No writing of agreement, man dies == void under the statute of frauds. Family relationship - undercuts enforcement, maybe did out of charity. "The loss of the draying business in Andover does not permit us to disregard the statute, though it may go without requital." Cardozo believes a housekeeper might go to work for her employer without any wages in exchange for lodging and some "indefinite reward" in the long run. In contrast, no buyer would pay a substantial sum to improve land unless he received a promise that it would be conveyed to him. (Evidence of agreement)

Estoppel Exception. Hickey v. Green Oral land conveyance agreement upheld where (1) seller admits to oral contract, (2) seller sells to someone else, and (3) buyer changed position and sold her home in reliance thereon. Court held land sale must go through to P for justice. ELEMENTS: 1) reasonable reliance, 2) change position, 3) clear promise, 4) clear injustice if the court does not invoke estoppel.

Part Performance Exception. Gardner v. Gardner Ps, brothers of D, conveyed his remainder in land to his brother to use as collateral for a loan. D did not get the loan and refused to give the remainder back to Ps. Court ruled that he must reconvey the land because Ps partly performed. The brothers in this case performed their part of the alleged oral agreement by conveying their remainder interests in the land. This was sufficient performance to take the alleged oral agreement from the operation of the statute of frauds. Here Ps allege that D admitted the existence of the oral agreement. Parol evidence may be admitted where the agreement is established by oral evidence of the adverse party. Here family relationship works in favor of trusting parties with oral agreement. Actions give court evidence to ascertain terms of the K.

Is seller making warranty in land sale K? No, Caveat emptor by traditional rule. Now, firm trend for new housing where builder is the vendor: warranties. For other sellers and used housing, Caveat Emptor. Still changing for more liabilities for seller.

C. PURCHASE AND SALE AGREEMENTS

In a sale between buyer and seller, seller would convey to buyer a Warranty Deed, and buyer would give seller the cash price.

More common, seller gives buyer a Warranty Deed, and buyer gives seller a down payment. Buyer then gives a 1) promissory note and 2) a mortgage deed/trust deed to bank, who gives the proceeds of the loan to the seller.

EXECUTORY PERIOD: betweeen sale K and closing: financing, title search, etc.

1. What constitutes a writing: 1) identify the parties to the contract and show that a contract has been made by them; 2) indicate the nature of the contract and the subject matter; 3) state the essential terms ofthe promises to be performed; 4) signed by the party to be charged.

2. Buyer's Remedies in the event of breach of sale agreement.

a) Specific Performance - each piece of property is unique, therefore can often get this remedy.

b) Damages - fair market value minus the contract price.

c) Rescission - buyer rescinds the deal and still recovers the down payment.

d) Allocation of risk - traditional rule that buyer assumes the risk (during the executory period) but this is eroding.

3. Seller Remedies in the event of Buyer's breach.

a) Specific Performance - rarely used because money is not unique.

b) Damages - most often used. Difference between K price and market price.

c) Rescission - if buyer rescinds the agreement, then seller gets to keep the down payment.

d) Risk of loss. Majority of courts hold that buyer assumes the risk through equitable conversion. Modern rule is that seller assumes the risk.

EQUITABLE CONVERSION - Because buyer has the equitable right to have the contract specifically enforced, the buyer is treated as if the transaction has alerady occurred for allocating risk during the executory period. During the executory period, the buyer is treated as the equitable owner, even though the seller still has possession.

DELIVERY - possession of the deed or recording it, or both, may give rise to a presumption that the grantor intended to transfer ownership of the land. May be overcome with evidence

D. RECORDING OF TITLE

Warranty of Title - at closing seller deliver title to buyer for payment of the sale price. Seller warrants that the title is free and the land is unencumbered.

1. Grantor/Grantee Index - lookup the conveyances under names.

2. Notice Statute - a subsequent BFP (i.e., a person who gives a valuable consideration and has no actual notice of the prior instrument) prevails over a prior grantee who failed to record. The important fact under a notice statute is that the subsequent purchaser had no actual or constructive notice at the time of the conveyance. Constructive notice includes both record notice and inquiry notice.

3. Race-Notice Statute - a subsequent BFP is protected only if she records before the prior grantee. Rationale: the best evidence of which deed was delivered first is to look at who recorded first. To induce prompt recording, race-notice statutes impose on the BFP the additional requirement that she record first. O conveys 1 acre to A. A does not record. O then conveys same land to B. B does not know of A. B records. B gets the land because he recorded first and had no notice of conveyance to A.

4. Race Statute - whoever records first wins. Actual notice or knowledge is irrelevant. Very few states have race statutes.

5. Record Notice - Chain of Title - The fact that a deed has been recorded does not necessarily mean the purchaser is entitled to the protection of the recording system. The purchaser will only be charged with notice of all conveyances that are recorded and appear in the chain of title, not for wild deeds.

6. WILD DEEDS - are recorded deeds that are not connected to the chain of title. It does not give constructive notice because the subsequent bona fide purchaser cannot feasibly find it. SABO v. HORVATH You do not need to keep looking back beyond the moment that the grantor received property: you do not need to consider whether grantor gave away land before he owned it. Lowrey conveyed land before he had title by virtue of a patent from the U.S. gov't. No clear title passes to Horvaths, who record deed anyway. Lowrey then conveys land to SABO who records conveyance. Sabo not on constructive notice about conveyance to Horvath = not in chain of title. Sabo gets land, because the Lowrey-Horvath deed is a "wild deed." Horvaths would have prevailed against Lowrey on estoppel by deed claim.

7. Constructive Notice = Record Notice + Inquiry notice. Inquiry notice means that if the subsequent grantee is bound to make reasonable inquiry, she will be held to have knowledge of any facts that such inquiry would have revealed.

8. Forgery - can never gain or sell title if conveyance was forged. Title is void. Even BFP lose land to true owner in forgery.

9. Fraud - if title is gained through fraud, then the title is voidable (as opposed to void). However, if the land is later conveyed to a BFP, he gets to keep the land. Rationale: seller is guilty of some negligence in not reading her conveyance.

10. ESTOPPEL BY DEED - a deed recorded before grantor obtains title. The grantor impliedly covenants that she will convey title immediately upon its acquisition. O to A. When O get title, A gets title by estoppel. However, if O also conveys land to subsequent BFP B when O has title, B would win against A. Estoppel by deed implies that A would prevail in any claim against O, but not against a BFP. This is a personal estoppel only. The grantor is estopped to deny that she acquired title on behalf of the grantee. Consequently, if the grantor transfers her after-acquired title to an innocent purchaser for value, the BFP gets good title. (There is no basis for invoking an estoppel against an innocent purchaser without notice and recordation.)

E. TYPES OF SECURITY INTERESTS

A security interest in real estate operates to secure some other obligation, usually a promise to repay a loan, which is represented by a promissory note. If the loan is not paid when due, the holder of the security interest can either take title to the real estate or have it sold and use the proceeds to pay the debt with accrued interest and any legal and court costs.

1. Mortgage

The debtor/notemaker is the mortgagor; he gives the mortgage (along with the note) to the lender, whois the mortgagee. Most states require that a lender realize on the real estate only by having a judicial (court-ordered) foreclosure sale conducted by a sheriff.

Mortgages - buyer continues to hold the Warranty Deed; Has two documents

1. Promissory note - buyer's promise to make the repayments.

2. Mortgage deed or trust deed - gives the lender the right to have the property sold to repay the loan.

Protections for the mortgagor (buyer) with a mortgage:

1. Equity of redemption: right to pay off the loan before foreclosure.

2. Notice of foreclosure proceedings, mortgagor can bid.

3. Judicial supervision of Foreclosure proceedings.

4. Public notice of foreclosure sale: get fair price.

5. Statutory right of redemption: right to buy back after foreclosure sale.

6. Judicial supervision of price.

7. Fiduciary duty for mortgagee not to exploit mortgagor's default and reap profits that "shock the conscience" of the court. CFS v. Spears (Mortgagee bought mortgage and resold it 12 days later for 2.5x the original price. Court holds mortgagor entitled to difference between price of resale and amount due on mortgage.) Example of judicial supervision of price. Factors: 1) high interest rate, 2) ease of sale.

2. Deed of Trust; Mortgage Deed

The debtor/notemake is the trustor. The trustor gives the deed of trust to a third-party trustee, who is usually closely connected with the lender (e.g., the lender's lawyer, affiliated corporation, or officer). In the event of default, the lender (termed the beneficiary) instructs the trustee to proceed with foreclosing the deed of trust by sale. Many states allow the slae to either be judicial (as with a mortgage) or nonjudicial, under a "power of sale" clause which authorizes the trustee to advertise, give appropriate notices, and conduct the sale personally.

a. Quit Claim Deed - contains no warranty (or covenant/promise) of title whatsoever. It purports to convey whatever interests in the property are owned by the grantor.

b. Warranty Deed - grantor makes one or more promises about the state of title.

Present covenants

(1) Covenant of Seisin - grantor's promise that she owns the property interest (the estate) she is purporting to convey to the grantee.

(2) Convenant of the right to convey - the grantor's promise that he has the power to transfer the interest purportedly conveyed to the grantee. (no LE burden by restraint on alienation, no adverse possessor taken away possession)

(3) Covenant against encumbrances - grantor's promise that no mortgages, liens, leases, unpaid property taxes, or easements encumber the property other than those acknowledged in the deed itself.

Future covenants

(4) Covenant of warranty - grantor proises to compensate the grantee for any monetary losses occasioned by the grantor's failure to convey the title promised in the deed. General Warranty Deed -covenants against all defects in title. Special warranty deed - limits the covenant to defects in title caused by the grantor's own acts but not by the acts of prior owners.

(5) Covent of quiet enjoyment - grantor's promise that grantee's possession will not be disturbed by any other claimant with a superior lawful title.

(6) Covenant for further assurances - rarely used, requires the seller to take further steps to cure defects in th grantor's title, such as paying an adverse possessor to leave the property or paying an encumbrance owner to release the encumbrance.

3. Installment Land (Sale) Contract

In an installment land contract, the debtor/purchaser of the land signs a contract with the vendor, promising to make regular installment payments until the full contract price (including accruing interest) has been paid. Buyer: downpayment + promise to regularly pay installments. Seller: keeps present possession + promise to transfer through legal deed when paid in full. In the case of default, the contract usually contains a forfeiture (rather than a foreclosure) clause providing that the vendor may cancel the contract, retain all money paid to date, and retake possession of the land. See Stonebraker v. Zinn (court allowed repossession of land, because it was not a "forfeiture." Buyer got use of land during period he made payments). Example: If mortgage for $100 K, buyer paid $50 K and defaults, land now worth $250 K, then buyer gets to keep his past possession, and lender gets $250 K amounting to a $200 K profit.

Since forfeiture is a harsh remedy, several states grant the purchaser a grace period. This is roughly analogous to the equity of redemption in mortgage law. A few states have statutory schedules of grace periods, which often give a longer time if a greater percentage of the total price has been paid.

A number of decisions allow actions by the vendor for forfeiture of the land but require her to refund to the purchaser any amount by which the funds received by the vendor exceed the vendor's damages. The court may measure these damages by the property's fair rental value while the purchaser was in possession or by any drop in market value since the contract was executed.

A few states, by statute or case law, now treat installment contracts like mortgages, at least for purposes of the vendor's remedies. In effect, the vendor must foreclose the contract by judicial sale in order to realize on the real estate, and she cannot simply reclaim the land. See Sebastion v. Floyd (in Kentucky, treat land sale contract as mortgage).

Liquidated damages: if the damages for not paying an installment are too high, court will consider them a penalty, and forefeiture will not result.

4. Equitable Mortgages: declared when a transfer of a deed was intended merely to provide security for a loan rather than a sale of the property. Effectively circumvents the Statute of Frauds.

5. Absolute Deed - NOT MENTIONED IN CLASS

A landowner needing to raise money may "sell" the land to a person who will pay cash and may give the lender an absolute deed rather than a mortgage. This may seem to be safer than a mortgage loan to the creditor and may seem to have tax advantages. However, if the court concludes, by clear and convincing evidence, that the deed was really given for security purposes, they will treat it as an "equitable mortgage" and require that the creditor foreclose it by judicial action, like any other mortgage. This result will be indicated by the following factors: (i) the existence of a debt or promise of payment by the deed's grantor; (ii) the grantee's promise to return the land if the debt is paid; (iii) the fact that the amount advanced to the grantor/debtor was much lower than the value of the property; (iv) the degree of the grantor's financial distress; and (v) the parties' prior negotiations.

6. Sale - Leaseback

A landowner needing to raise money may sell her land to another for cash and may then lease the land back for a long period of time. As in the case of the absolute deed, the grantor/lessee may attack such a transaction later as a disguised mortgage. Factors that will lead the court to such a result are: (i) the fact that the regular rent payments on the lease are virtually identical to payments that would be due on a mortgage loan; (ii) the existence of an option to repurchase by the grantor/lessee; and (iii) the fact that the repurchase option could be exercised for much less than the probable value of the property at that time, so that the repurchase would be very likely to occur.

Six factors to consider whether equitable mortage exists: whether a debt exists, the relationship of the parties, whether legal assitance was available, sophistication of each party, adequacy of the consideration, who retained possession of the property.

Financial embarassment of the grantor and inadequacy of the consideration indicate parties did not consider the conveyance to be absolute. Lease-back arangment circumvented the right to redeem. Thus transaction amounted to a mortgage. Koenig v. Van Reken

F. REDEMPTION AND FORECLOSURE

1. Equity of Redemption

At any time prior to the foreclosure sale, the mortgagor has the right to redeem the land or free it of the mortgage by paying off the amount due, together with an accrued interest. If the mortgagor has defaulted on a mortgage or note that contains an "acceleration clause" permitting the mortgagee to declare the full balance due in the event of default, the full balance must be paid in order to redeem. If a lien senior to that of the mortgagee is in default, she may also pay it off (i.e., redeem it) in order to avoid being wiped out by its foreclosure. A mortgagor's right to redeem her own mortgage cannot be waived in the mortgage itself; this is known as "clogging the equity of redemption" and is prohibited. However, the right can be waived later for consideration.

2. Statutory Redemption

About half the states give the mortgagor (and sometimes junior lienors) a statutory right to redeem for some fixed period after the foreclosure sale has occurred; this period is usually six months or one year. The amount to be paid is usually the foreclosure sale price, rather than the amount of the original debt. Be careful to distinguish equitable redemption, which is universally recognized (but only up to the date of the sale), from statutory redemption, which is only recognized by about half of the states and applies only after foreclosure has occurred.

3. Foreclosure

Almost all the states require that foreclosure be by sale. All states allow judicial sale, while about half also allow nonjudicial sale under a power of sale; the latter is often permitted with deeds of trust but not with mortgages. Foreclosure sales are conducted by auction, with the highest bidder taking the property. The lender or its delegate may bid, and in many cases, it is the sole bidder.

4. Deficiency Judgments

Where the proceeds of the sale are insufficient to satisfy the mortgage debt, the mortgagee can bring a personal action against the mortgagor/debtor for the deficiency. However, a number of states limit such actions to the difference between the debt and the property's fair market value, which may be more than the foreclosure sale price. Other states entirely prohibit deficiency judgments on purchase-money mortgages and on deeds of trust which are foreclosed by power of sale.

V. THE STATE, THE FAMILY, AND THE MARKET

EMINENT DOMAIN: Fifth Amendment Takings Clause, applied to states via the 14th Amendment: (1) taking of private property, (2) for public use, (3) without just compensation - constitutionally required, market value. Example: get land for post office.

"Public use" - very elastic concept, e.g., Detroit can take land and give it to General Motors. In Hawaii, redistribute land to more people.

"Taking" - gov't takes title, go lobby legislature if unhappy. What if gov't doesn't take title?

A. Police Power (fire code) v. Eminent Domain (Takings Clause) (land for post office)

1. Exercise of regulatory power by the government; attendant injury is damnum absque injuria. No compensation required.

a. Statute prohibiting alcohol production --> taking of brewery land, because alternative uses for that land. Mugler v. Kansas

b. Virginia can require cedar tree property owners to cut down their trees in an effort to stop the spread of rust disease to the apple orchards. Miller v. Schoene

c. PRUNEYARD SHOPPING CENTER

Jewish students wanted to circulate petition opposing Anti-Zionist resolution in the UN. US Supreme Court: The requirement that appellants permit appellees to exercise state protected right to free expression on shopping center property clear does not amount to an unconstitutional infringement of appellants' property rights under the taking clause. (Cal. Supreme Ct. interpreted Cal. Const. as permitting free speech without taking). "The fact that they may have physically invaded appellants' property cannot be determinative." Have not taken away all rights - % of impairment, look at what is left. There exists no federally protected right of expression in malls, only a California right.

State court decision that persons may exercise free speech rights in large shopping center not a taking because the physical invasion did not unreasonably impair the value or use of their property as a shopping center. "Reasonable investment-backed expectations."

d. YEE v CITY OF ESCANDIDO

City enacted rent control ordinance making it more difficult for mobile home lot owner to evict tenants. P contended this ordinance amounted to a taking, but court said that the ordinance was regulatory and a proper exercise of police power. No physical invasion. Has statute gone too far? No. P voluntarily rented his land, and can still evict, it just takes longer. Yee opened up his property and invited people in: public accommodation restrictions on ability to exclude. Right of LL to get out of mobile home business upheld.

B. PER SE TAKINGS

1. Extinguishing a core property right. CONCEPTUAL SEVERANCE: A partial property interest taken by the government basically affects the whole bundle of rights, so that there is a permanent taking. Effectively left with nothing.

HODEL v. IRVING

Complete abolition of Indians' rights to devise and descend land = taking. Thus the statute is unconstitutional. Conceptual severance. Right to descent and to devise is a core property right that were extinguished by this statute. Allotment system --> fractionated --> escheat to tribe. NOTE: definition of "core" property rights changes over time.

2. Physical occupation/physical invasion. Loretto v. Teleprompter (hold a NY statute authorizing private cable tv companies to install cable boxes on roof of apartment building over landlord's objections is a "physical invasion" and a taking). No diminution in value, yet still a "taking." Contrast with Pruneyard Shopping Center (above).

KAISER AETNA

Holding the governments attempt to create a public right of access to the improved lagoon interfered with Kaiser Aetna's "reasonable investment-backed expectations" for a return on their creation of the lagoon/lake.

3. Denial of all economically viable use, rendered valueless.

LUCAS v. SOUTH CAROLINA COASTAL COUNCIL

Owner of beachfront property brought action alleging that application of the South Carolina Beachfront Management Act prohibiting his building of residential housing on lots constituted a taking without just compensation. HELD: (1) property owner's claim was ripe for review; (2) South Carolina Supr. Ct erred in applying "harmful and noxious uses" principle to decide case. Reversed and remanded.

There are 2 discrete categories of regulatory deprivations that are compensable under the Fifth Amendment without case-specific inquiry into public interest advanced in support of restraint: regulations that inflict a physical invasion and regulations that deny all economically beneficial or productive use of land.

When the owner of real property has been called upon to sacrifice all economically beneficial use of property in the name of common good: to leave his property economically idle, he has suffered a "taking" within the meaning of the Fifth Amendment. (Scalia defers to trial court's fact finding that land is economically worthless).

There are a number of noneconomic interests in land, such as the right to exclude strangers, the impairment of which will invite exceedingly close scrutiny under the takings clause.

In order to avoid paying compensation under state regulation proscribing "harmful or noxious uses" of property, the state had to identify background principles of nuisance and property law that prohibited use as landowner presently intended in circumstances in which property was presently found. For Nuisance Exception to the deprived of all economic use compensation requirement, regulation must do no more than duplicate the result that could have been achieved in the courts by adjacent landowners or other uniquely affect persons under state's law of private nuisance, or by state under its complimentary power to abate nuisances that affect public generally, or otherwise. Expectations: based on common law nuisance (harmful when we developed the common law, not harmful by today's noxious defition) Freezing the common law? If use of this land was a traditional common law nuisance, then proper police power. If a non-traditional common law nuisance, then a taking. KENNEDY: good reasons for change.

Although state may elect to rescind regulation which prohibits all economically beneficial use of land, and thereby avoid having to pay compensation for permanent deprivation of land, where regulation has already worked a taking of all use of property, no subsequent action by government can relieve it of the duty to provide compensation for period during which taking was effective. (Restating principle from Evangelical Lutheran - can't just test out law.)

Distinguish: DENOMINATOR PROBLEM

C. UNFAIR SINGLING OUT

If no physical occupation or extinguishing of core property rights, then still a question of singling out: a taking. Unfair burden. Three factors to look at: (1) character of the government action, (2) economic impact, (3) interference with reasonable investment-backed expectations.

Fair share of burden = police power; Total deprivation of beneficial use = Per se taking. Only applies to land takings.

Linkage cases. NOLLAN v. CALIFORNIA Gov't interest in building permit: visual access; nature of private interest exacted: beachwalking access. The gov't is stuck with diminished visual access. Court held state cannot condition building permit on easement for footpath: no nexus between gov't interest and exacted private interest. Not enough linkage between denying permit to build larger house and government's desire for an easement.

DOLAN v. CITY OF TIGARD

Oregon landowner challenged City Planning Commission's conditions placed on development of her commercial property. SC HELD: (1) city's requirement that landowner dedicate portions of her property to flood plain and for bicycle/pedestrian pathway has sufficient nexus to legitimate public purpose; (2) although city found that planned paved parking lot would increase storm water flow from property, city never stated why public greenway, as opposed to a private one, was required in interest of flood control. Flood control = public good with externality in consumption, not production; (3) city estimated that proposed development would generate roughly 435 additional trips per day. But the city has not met its burden of demonstrating that the additional vehicle trips reasonably relate to the requirement for a dedicated bicycle/foot pathway. The finding that the bicycle pathway "could offset some of the traffic demand" is a far cry from a finding that it will, or is likely to, offset some of the traffic demand. No precise mathematical calculation is required, but the city must offer more than the conclusory statement that the pathway could offset some of the traffice demand generated.

Singling OUT: 5th Amendment bars government from forcing some people alone to bear public burdens, which in all fairness and justice, should be borne by public as a whole. In evaluating landowner's claim that city's requirement that she dedicate a portion of her property as condition of further development was unconstitutional taking, Supreme Court was first required to determine whether "essential nexus" existed between legitimate state interest and permit condition exacted by city; if Court found that nexus existed, it was then required to decide the necessary degree of connection between exactions and projected impact of the proposed development. Nollan case did not reach this point. Nexus here ok: prevent flooding along Fanno Creek, reduce traffic congestion in city's central business district.

"Rough proportionality" test applied to compare exactions to projected impact on proposed development under 5th Amend. No precise mathematical calculation was required, but city must make some sort of individualized study/determination that the required dedication is related to both the nature and the extent of the impact of proposed development.

Distinguish: mutual reciprocity, wrongfullness - noxiousness, competing interests (apples v. cedars), quarantine, foreseeability

D. HISTORICAL REGULATORY TAKINGS

PENN. COAL CO. v. MAHON 1922

Court held statute requiring coal company to leave coal columns in place necessary to support buildings was an unconstitutional "taking." HOLMES: "If the regulation goes too far, it will be recognized as a taking."

Penn CENTRAL TRANSPORTATION CO. v. NY 1978

Court held owner cannot building on top the Penn Central Station, because it is a historic landmark. Holding effectively negates owner's ability to sell air rights. Building permitted under the statute if: (1) certificate of no effect; (2) certificate of appropriateness; (3) insufficient return; (4) diminution in value - % of what - (air rights/entire bundle) or (air rights/air rights)? DENOMINATOR PROBLEM.

KEYSTONE BITUMINOUS

27 mill. tons/146 billion tons of coal must be left in. Dissent: 27/27. DENOMINATOR problem.

E. AMERICAN INDIANS AND TREATY ABROGATION

1. Dawes Act (Allotment Act of 1887) - broke up tribal land mass into individual property holdings.

2. Oneida County v. Oneida Indian Nation - Indians sold land to NY state government and not to the feds in 1795. In 1980s, Indians came back and said this conveyance was illegal. They claimed the government owes the Indians money from the last 200 years. Supreme Court ruled that the statute of limitations does not apply in this case.

3. TEE-HIT-TON INDIANS v. US 1955

Action by an Alaskan clan of Indians to recover compensation from US for taking of timber on Indian-occupied lands. SC HELD: the Indians, whose claims to ownership of land had not been recognized by Congress and who had occupied land in a manner similar to nomadic States indians, were not entitled to compensation for US' taking of timber from occupied land. Title of Occupancy. The permission granted to Indians to occupy portions of territory over which they had previously exercised sovereignty is not an [ownership] right but a right of occupancy which the sovereign grants and protects against intrusion by third parties. These Indians have no rights against taking or extinction by the US, and taking is not compensable under the 5th Amendment. The policy of granting gratuities to Indians for termination of Indian occupancy of Government-owned land belongs with Congress.

4. UNITED STATES v. SIOUX NATION OF INDIANS 1980

Sioux Nation brought suit for taking of Black Hills (due to discovery of gold), in which Indian warriors were disarmed and given rations. HELD: Where Congress, by treaty or other agreement, has declared that Indians are to hold certain lands permanently, compensation must be paid for subsequent takings. The 1877 Act constituted a taking of tribal property set aside under the Fort Laramie Traty of 1868, which obligation now includes the payment of value of land (not value of gold) plus interest dating from 1877 = $17.1 million. Indians win, but on weak standard: good faith effort for compensation on equivalent value.

F. BUSINESS PROPERTY

College Block v. ARCO

20-year lease for gas station [$1000/month]. % of gas delivered. ARCO stopped operation but continued to pay minimum rent of $1000/month. In a percentage lease contract, there may or may not be an implied covenant of continued operations depending upon whether the base rent is considered substantial. Percentage lease contracts hedge against inflation and automatically adjust the rent if they become more valuable.

HELD: To make commercial lease mutually profitable when rent is minimum plus percentage, or is based totally on percentage, covenant to operate in good faith will be implied if minimum rent is not substantial. Parties to a 20-year lease intended that lessee would continually operate gasoline service station on premises for entire leasehold period: lease required lessee to build and operate service station and permitted it to build and maintain any edifices it desired in operating station, lessor was prohibited from conducting gasoline station on its other properties, percentage rent was tied to operation of station, lessee had been given right of first refusal if lessor received offer to sell property, and lessee's use of property was limited to that of gasoline service station.

Entire purpose of lease was to enable lessee to operate service station and, when lessee closed station, it completely frustrated the purpose of contract, which included percentage rent clause.

POLICY Considerations:

1. Landlord -

a. Reasonable expectations - must get the benefit of the bargain.

b. efficiency promotes more bargains.

2. Tenant

a. should have bargained for freedom to terminate if it was important.

b. restrains alienability.

Meinhard v. Salmon

Man gets silent partner to help him finance lease of hotel. Shortly before lease expires, the strong partner receives separate deal for another lease. Silent partner sues to get a piece of the action. Salmon owed a fiduciary duty to Meinhard, his joint adventurer, to tell him about another deal when he was offered a second lease on the property. HELD: Joint adventures, like copartners, own to one another, while the enterprise continues, the duty of the finest loyalty.

Where one holding lease in his own name for himself and another as a joint adventure obtained a renewal lease before expiration of original lease covering not only premises then occupied but additional adjoining premises for the benefit of a corporation controlled by him, without the knowledge or consent of his coadventurer, the other party was entitled to interest (equitable interest, constructive trust) therein in proportion to his interest in the original lease on the theory that as a coadventurer he was charged as a trustee.

One partner cannot appropriate to his own use a renewal of its lese, though its term is to begin at the expiration of the partnership.

Power to walk away v. duty to continue with cooperation.

Westfield Center Service v. Cities Service Oil Co.

Damage suit by franchisee to prevent the sale of business by franchisor. Extreme unequal bargaining positions: heavily legislated. analog to good cause Tenant-Landlord eviction cases. Even though franchise agreement says franchisor can terminate with 30 days notice, New Jersey statute says can terminate relationship only for good cause = dealer fault. Even with good cause (decision to impliment in NJ a national trend toward having only gasoline or gas + minimarket stations), franchisor must pay franchisee for his loss: the reasonable value of the business less the amount realizable on liquidation. Even a franchisor who is good faith and for a bona fide reason terminates, cancels, or fails to renew a franchise for any reason other than the franchisee's substantial breach of its obligations, must pay franchisee. Like the 5th Amendment, but franchisor is not the government. Applies to franchisors due to unequal bargaining power.

US STEEL CASE

USS wanted to destroy Youngstown, Ohio, plants rather than sell to employees, to avoid competing with government-backed employees. Employees bring suit based on promissory estoppel. In pretrial hearing, judge advances vague property right notion. Amended complaint: anti-trust, property counts. Ps seek to keep plants open or alternatively to force USS to sell to them. Court holds there is no federal or state law to support their claims and dismisses case. This high priority issue belongs to legislature to resolve. Can't make laws that prevent a business from closing. If business is unprofitable, a firm should be free to reallocate resources.

Corporations as property entities Shareholder = owners. Inside = managers, shareholders. Outside = employees. Traditional: no external actors had legal right to affect firm's fate. "Nexus of contracts" - Macey. Coffee - web, but warried about managers, takeovers are opportunistic giving to shareholders = taking from managers. State and national issues: if restrict capital mobility in US, company can move to Mexico. PURPOSE of corporations: limits personal liability, capitalize projects.

G. SLAVERY

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