Property Law Outline

I. What is property?; Initial acquisition of property – Property is the set of legal rights and obligations among people with regards to “things”- “things” are typically valuable resources

a. Bundle of Sticks- bundle of rights- common metaphor for property such as right to possess, right to repair, destroy, use, lend- owner has nearly limitless rights

b. “Despotic Dominion”- owner has nearly limitless rights, defines property as my home is my palace, property is about things and having very clear rights in the things that we have

c. Acquisition: Capture and the role of custom i. Pierson v. Post: Mortal wounding and continued pursuit of

securing an animal with a net or a trap, depriving said animal of natural liberty, should get the spoils of their investment

ii. Ghen v. Rich- possession requires mortal wounding (and continued pursuit) of securing animal with net or trap, important to follow custom or usage

1. Why follow custom? Vibrant industry, dangerous not to, only way for practical catch of a whale, recognized and practiced for multiple years

iii. Keeble v. Hickeringill- property interest- productive use of his ladn, social good- more ducks to market

1. Doctrine of animus revertendi- (with intention to return) If wild animal escapes, possessor loses property rights, animal subject to rule of capture.

2. If animal has habit of return, original possessor does not lose title.

3. Reward Productive Behavior4. Why care about wild animals?

a. Relevant for important natural resources such as oil and gas under land of A and B

b. Oil common pool resource- take all of the oil c. Rule of Capture- still applied to natural resources

d. Why have private property? Externalities and the tragedy of the commonsi. Historical Arguments: explain emergence and shape of property

rights1. Social, political and technological changes can change

property rights2. A resource might suddenly become more valuable like for

or human cellsii. Economic Arguments and the tragedy of the commons

1. Communal forest- you own what you can cut down and take

2. Getting the benefit while everyone is bearing the cost

3. Deplete resources like the lobsters until there are no more resources

iii. Externalities: a cost (or benefit) imposed on someone else that the person who creates does not take into account

1. Forcing actors to internalize costs encourages more efficient decisions

2. Can refuse to internalize the cost and the cause externalities to others

3. Comes up a lot in environmental law 4. People try to get as much as they can- deplete the

resources, benefit for you, costs for others iv. Private Property

1. Solve collective action/ coordination problems2. Bear costs of their actions3. Make it easier for people to engage in transactions that

maximize welfarev. Philosophical Arguments

1. John Locke- fruits of your own labor, property in yourself, mix labor with resource and it becomes your property, generally associated with the libertarian view

2. Utilitarian: David Hume, Jeremy Bentham: focuses on actions of society or the stats

a. Without the state, we do not have property just possession

b. Hume: “Our property is nothing but those goods, whose constant possession is established by the law of society that is, by the laws of justice”

3. Civic Republican View: property provides between individual and state- self-sufficiency- genuine poli parte

4. Social obligation- norm- property and society is about human flourishing

e. Why not have property? i. Excludes people from resources

ii. Can perpetuate or exacerbate inequitable distributionsiii. Certain things should simply not be treated as property

(organs/body parts) f. Key Point: These theories can help courts fill gaps in legal doctrines

and help attorneys argue how gaps should be filled. g. Property Law rewards productive activity – encourage and reward

participation even in a dangerous industry h. Property is a set of legal rights and obligations among people with

regards to thingsi. Acquisition: Creation

i. Property in Ideas and Expressions:

1. INS v. AP- deals with specific material, prior case does not apply because it is narrow facts- news is not the same as hot news

2. Cheney v. Doris- Dress designs will take time to copy so Cheney gets limited monopoly – lead time advantage

3. Difference in news- most of the cost is in gathering news which differs from dresses where it is in the production

4. Protection for expression is not for the facts, can’t take the whole story, gives news extra protection, “hot news” – otherwise unfair competition

5. Chanel- imitation is allowed, emphasizes public interest in competition, leads to lower prices

6. Intellectual Property governed by government statutes ii. Property in one’s persona

1. Image and Likeness- Vanna White iii. Property in one’s person

1. Moore case- demurrer- motion to dismiss for failure to state a claim

2. No claim for conversion- interpretation of the statute Uniform Anatomical Gift Act- proper disposal of the cells

3. No property right in something that you cannot sell j. The right to include, the right to exclude

i. Moore- right to include- right to let others have your assets ii. Shack- right to exclude- right to keep people away

II. Subsequent Possession of property a. Acquisition by find

i. Armory v. Delamirir: A finder has a right to the property s/he finds that is a good against the entire world except the “rightful owner”

ii. Ownership of property is relative- who has the better claim at that point

iii. A finder has the right to property he find that is good against the entire world except the “rightful owner” or prior possessors or finders

iv. Court usually decides for the first owner because finder 1 will be closer to the owner.

v. Prior possession: enough to assume ownership – indicates ownership, reward labor- finding of objects, encourage productive use of found good.

vi. General rule is prior possession- but the court leans to the second person if they are an honest person

vii. Court derives two legal principles:1. Landowner possesses everything attached to or under land 2. Does not necessarily possess a thing lying unattached or on

the surface of land.

viii. Hannah v. Peel: brooch was found by Hannah in a house that Peel had owned but never occupied. The court decided that the brooch went to Hannah. They cited three different authorities throughout the case but didn’t apply any of the reasoning to the instant case.

1. Bridges- finder of a lost item, finder is entitled to it except for true owner

2. Elwes- attached to or under the land 3. South Staffordshite Water- attached to or under the

landix. McAvoy v, Medina- property was mislead, intentionally put in a

place and then forgotten about. This was a purse that was left in a barber shop. The item was clearly placed there and then forgotten about it. It goes to the property owner because the owner is more likely to retrace their steps and go back to retrieve the item.

b. When the items are on public property: i. Item Mislaid- goes to the property owner – more likely to go back

to person trying to retrieve it because they left the item intentionally

ii. Item Lost- goes to the finder because the first finder would be more likely to get back to original owner.

iii. Item Abandoned- something of little value was abandoned such as the metro paper- doesn’t belong to anyone/anyone can take it but nobody wants it.

c. Acquisition by adverse possession i. Theory

1. Powell- Social Judgment- after reasonable time period, if record owner fails to assert rights, loses them

2. Ballantine- quiet all titles and correct errors in conveyance3. Holmes- deepest human instincts- if you use and enjoy

something for long time it “takes root in your being”, concern with possessor’s reliance interests

ii. Elements of adverse possession when statue of limitations has been met

1. Actual (entry/trespass) statute only starts when you trespass2. Notorious and open (visible)3. Exclusive – can’t share the property 4. Continuous- act like the true owner 5. Hostile/ Adverse and under a claim of right- can’t have

permission to be on the property iii. Marengo Cave- the cave owner did not adversely possess the land

because it was not open and notorious (under the ground so there was no way of knowing) and it was not exclusive because they were both using the property at the same time

iv. Maine Doctrine- must have a bad mind- know that it is not your property

v. Connecticut Doctrine- state of mind does not matter

vi. Color of Title: claim relies on defective instrument (written conveyance/deed, appears to pass title, but defective (no signature, mistaken description of land, obtained through faulty procedure))

1. Makes adverse possession easier- tacking and shorter statutes of limitations

2. Constructive possession- can take all the land in the titlevii. Tacking

1. Time- add the time of the predecessors as long as you are in privity- all the elements of adverse possessions need to be met for the whole time

2. Physical Land- owns a piece of property and tack on land that isn’t referred to in the deed but they have been using it, they have a good deed to a portion of land and there is a just a little bit that is not being covered

d. Acquisition by gift: three elements that must be presenti. Intent (Donative intent)

ii. Delivery- law prefers manual to constructive and constructive to symbolic

1. Manual2. Constructive- having effect in law although not necessarily

in fact, provides means to take possession of gift (keys to car)

3. Symbolic- (letter, some kind of form of writing) iii. Acceptance by Recipient (assumed if beneficial) iv. Gruen v. Gruen – Gift of painting from father to son through letter

that stated the son owned the painting but the father retained a life estate. Michael got the painting and had to pay the estate tax and sold it at an auction because he couldn’t afford the taxes. He didn’t need the physical presence of the painting because he gave him the future interest and he retained a life estate for himself.

III. Estatesa. Freehold- not terminable at will of lordb. Nonfreehold- leased estates – term of years, tenancy at will, periodic

tenancy c. Forms of Ownership:

i. Fee simple absolute: 1. “To A” – words of purchase, define who grantee is. 2. “To A and her heirs” her heirs are words of limitation –

define type of interest. Heirs get nothing in this scenario. 3. Heirs are when somebody dies intestate or without a will. 4. Duration potentially infinite – whether by will or devise

or if owner dies intestate, generally inheritable 5. Freely alienable- sell, give as gift, otherwise transfer6. Indefeasible 7. No future interest- have everything

8. Only can end if it does not have any heirs so that it goes asheet and goes back to the state.

ii. Fee tail1. “To A and heirs of his/her body” 2. Gets passed on to eldest son- can’t sell fee tail- must be

granted 3. Succession of life estates 4. Automatically descends to A’s lineal descendants 5. Future interest comes in when there are no more first born

sons to go to and the fee tail ends when there are no more issue.

6. Document will specify what happens if no more issue such as go to another line of the family or revert back to the grantor.

7. Policy & History a. Prevent creditors from taking land away from a

family b. Prevented division of large property holdingsc. Gave aristocracy a base of powerd. Largely rejected e. Nearly every state has abolished the fee tail except

for MA and three other states. f. Most states will treat it as a fee simple if they come

across it. (after it passes to the first child, that child now has a fee simple)

g. If A has no issue, it goes automatically to B as a fee simple (eliminates the fee tail).

h. Can’t use the fee tail to shelter from creditors in MA.

i. Can turn in fee tail into fee simple in MA. iii. Life estate

1. “To James for life” – has for the duration of his life 2. It goes back to the grantor when the person dies 3. “To James for the life of Bill” If james dies, it goes to his

heirs until Bill dies. Once Bill dies, it goes back to the grantor. (Life estate pur autre vie)

iv. Waste- abuse or destructive use of property by one in rightful possession

1. Affirmative waste: do something, salt in land2. Permissive waste: don’t do anything, it happens through

neglect 3. Ameliorative waste: increases property value 4. Woodrick v. Wood- Mother and daughter fighting over

whether to tear down a barn off the property. Daughter is claiming that it is waste to take down the barn. The

court decides that it is ameliorative waste because by taking down the barn it increases the property value. The court makes the mother pay the daughter the amount that the barn is worth even though taking down the barn makes her land worth more. Mother has a life estate of the property and her daughter has the remainder interest. The court allows the taking down of the barn and the daughter does not get the injunction that she wanted.

5. At common law, prohibited acts that change character or identity of property.

6. Today, can make alterations, remove structures, so long as the market value is not diminished.

d. Defeasible estatesi. Any estate can be made defeasible

ii. It will terminate prior to the natural end point upon an occurrence of some specified future event

iii. Why create a defeasible estate? 1. Dead Hand control- control your family and what they

do from beyond the grave. 2. Control the use of land or behavior.

iv. Three different types of defeasible estates1. Fee Simple Determinable: use words of time/duration,

the grantor retains a future interest a. Words: as long as, so long as, until, during, while b. “To B so long as the land is farmed” c. “To B for life so long as the land is farmed” d. Automatically divests upon occurrence of the

limitation e. Grantor’s future interest is a possibility of

reverter 2. Fee Simple Subject to Condition Subsequent: words of

conditiona. Words: provided that, on condition that, if, but if,

provided thatb. Grantor needs to enter to take back the land c. Grantor has the right to re-entry/ power of

termination d. The court favors this way better because want to

limit dead hand control. 3. Marenholz v. County Board of School Trustees: Huttons

sold their land and left one plot to the school to be used for school purposes. Huttons had a possibility of reverter or a reverision depending on what type of

defeasible estate because the words are ambiguous. Huttons could not sell their future interest.

a. If it is a fee simple determinable, then if the condition is broken, it will automatically revert to Harry as a present possessory estate

b. If it is a fee simple subject to condition subsequent then Harry inherited future interest when he re-enters on to the land but he still has a future interest.

c. The court decided that the word “only” indicated duration and that the language talked about reverting so it is a fee simple determinable

d. The trial court decided that the condition was never broken so the school got the land at the time of the lawsuit.

IV. Future Interestsa. Future Interests in Transferor

i. Reversion- Grantor contains something less than they have now example: life estate ends, goes back to the grantor, future interest is retained by the grantor.

1. Follows the natural end of the life estate2. Can be implied

ii. Possibility of Reverter: right of entry/ power of termination iii.

b. Future Interest in Transferee’s i. Life estate subject to executory interest

1. Third party has future interest 2. “From Homer to bart for life but if the land is used for a

bar, to Moe” 3. Estate automatically terminates regardless of words4. Languages does not matter5. Cuts off the other interest before it naturally ends 6. Two types shifting and springing

a. Shifting: cuts short the interest of the grantee: “To Ann so long as used for a park then to Bob”

b. Springing: cuts short interest of the grantor “To Ann for life and then to Bob 6 months after Ann’s death”

7. Person with executory interest cuts short the present possessory interest.

ii. Remainder- follows natural end of prior possessory estate, typically a life estate

1. Remainder person waits patiently for present possessory interest to end naturally and then takes

2. Contingent: given to unascertained person or interest will become possessory only upon happening of some

condition other than natural termination of prior estate (called a condition precedent)

a. Example: “To A for life then to heirs of B” unknown the heirs of B until B dies

b. Example: “From O to A for life then to B if B has graduated from nursing school” – condition

3. Vested: recipient is ascertained and interest certain to become possessory upon natural termination of some event

a. Indefeasibly vested- will not change i. “O to A for life, then to B” vested

remainder in fee simpleb. Vested subject to open/ partial divestment

i. At least one class member ascertainable but class recipient can increase

ii. Sometimes known as a class giftiii. “O to A for life then to the children of B”

At the time of the grant, B has a child C. B could have more children, other children would divest C’s interest partially.

c. Vested subject to complete divestment i. “O to A for life then to B, but if B becomes

a Yankees fan then to C” ii. It is a condition subsequent

iii. He could get it then lose it if he becomes a Yankees fan.

iii. Condition Subsequent: will be in a separate clause that follows word of conveyance to grantee

1. “To A, but if A marries, then to B” 2. B cuts short A’s interest

iv. Condition Precedent: will be in the same clause as words of conveyance or in a separate clause that precedes words of conveyance.

1. “To A for life, then to B if B marries.” a. A has a life estateb. B has a contingent remainder in fee simplec. B waits to take A’s interest

c. Some Examples: i. “O to A for life, then to B if she survives A, otherwise to C”

contingent remainder in fee simple – B 1. Condition precedent, one clause, condition in the same

clause ii. “O to A for life, then to B, but if B does not survive A, then to C”

1. B has a vested remainder subject to divestment because if B does not survive A then it goes to C.

2. Condition subsequent – condition is placed in its own clause after who it is.

d. Rule against perpetuities: seeks to limit the ability of grantor to control property into future- such controls can constrain alienability

i. No interest is good unless it must vest if at all, not later than 21 years after some life in being at the creation of the interest”

ii. A future interest is void if it is contingent on a future event that could happen after the perpetuities period.

iii. Does not matter what actually happens, does not matter how far fetched scenario is.

iv. What type of interest does the rule apply to? 1. Contingent Remainders2. Vested remainders subject to open3. Executory interests

v. One exception: charitable entities- the rule of perpetuities does not apply

vi. Elements of the Rule1. Vested- ready to take, the moment it becomes vested, takes

it away, condition that made future interest contingent or uncertain is satisfied

2. Creation of interest a. conveyance/ intervivos transfer- moment of sale or

delivery of giftb. by will/ devise – moment testator dies

3. What is life in being or validating life? a. Someone alive at creation within whose lifetime

plus 21 years interest must vest or fail b. Moment of conception for people who are born

alivec. Look for validating life that will affect the

contingency vii. Rule of Convenience: saves otherwise invalid interest, class closes

“on the distribution date if a beneficiary of the class gift is then entitled to the distribution”.

1. Example: “From Olivia to the children of ben who reach 25” Cindy is 25 – one person has to reach the contingency to close the class. Cindy has vested remainder subject to partial divestment. The class closes and anyone who is alive and under 25 can take once they reach 25. Afterborn children cannot take. It is a way to avoid the rule against perpetuities because they will take within 21 years of a validating life.

viii. Class Gifts- Vested Remainder subject to open- member of a class- but there is a possibility there could be more people in the class.

1. Gift is invalid if it is invalid to one person.

ix. Example: “O to A so long as the property is used for residential purposes then to B”

1. A has a fee simple subject to executor limitation 2. B has a shifting executory interests in fee simple3. RAP invalidates B’s interest 4. B’s interest could vest 1000 years later

x. “Tom devises property to my grandchildren who reach 21” Tom leaves 2 children and 3 grandchildren under 21.

1. Validating lives- tom’s 2 children- they are alive at the time of the grant and Tom cannot have any more children because he is dead.

2. It will happen within 21 years of the death of Tom’s children because their children will reach 21 after they die.

3. Therefore, this gift is not violated by RAP. 4. Vested subject to open- there could be more

grandchildren e. Wait and See Approach- instead of coming up with hypotheticals to

see if it violates the rule against perpetuities- just wait and see what happens

f. Uniform Statutory Rule Against Perpetuitiesi. Majority of states use this

ii. Imposes flat 90 year permissible vesting periodiii. If interest is unvested and invalid at the end of the period,

court can reform interest so that it will vest in time. iv. Will try to act as consistently as possible with grantor’s intent.

V. Co-ownership a. Concurrent owners

i. Tenancy in Common- “To A and B”1. Traditionally each has 50 percent undivided interest 2. Each has a right to possess whole property 3. Can convey interest during lifetime4. At death, interest passes to devises or heirs.

ii. Joint Tenancy: 1. 4 elements

a. Time (has to be at the same time) b. Title (has to be in the same interest) c. Interest (equal interests) d. Possession (right to possess)

2. Right of survivorship – not inheritable or devisable- avoids probate

3. Can be conveyed during lifetime but it cuts the joint tenancy and turns into tenants in common

4. Has to be equal shares between tenancy 5. Right of possession as a whole- equal rights to possess

the whole

6. Severance of joint tenancy a. Convey during life to another personb. Mortgage could sever a joint tenancy

i. Considered a lien on the property ii. Conveyed the title – paid off and got the

title back iii. If one of them gets a mortgage and then

dies and the mortgage company is out of luck if they don’t sever the tenancy.

7. Traditionally needed straw man to create joint tenancy with another in an instrument.

iii. Tenants in the entirety- must have all 4 unities of joint tenancy (time, title, interest, possession) plus the unity of marriage

1. Can be severed through divorce iv. If language is ambiguous, then the court will always decided that it

is tenants in common. v. Courts will entertain action for waste by one cotenant against

another1. But disfavored as compared to waste claims between future

and present interest holders. 2. Concurrent owners and present possessory- work it out by

themselves 3. Future possession- limited in legal rights, might be minor

children and might not be able to vindicate their rights on their own (need the courts help)

vi. Riddle v. Harmon : Ms. Riddle wanted to sever her joint tenancy so that it would be tenants in common and her children would get the property. The court upheld what she did and this gave a single spouse the power to sign a document to sever a joint tenancy and convey her interest in tenants in common. This loses the right to survivorship and muddles the other person’s estate planning. There is also the problem where the wife hides the papers and then when the husband dies first, rips them up (fraud and deception)

vii. Delfino v. Vealencis : Angelo and William Delfino and Vealencis owned property tenants in common. 99/144 interest and 45/144 interest. Vealencis lived on the property and operated her business. Delfino wanted to develop the property.

1. Delfino- wanted Partition by sale – sell the property and they would buy it and then get the whole thing to develop

2. Vealencis- wanted Partition by kind- physically divide up the land. That way she gets to keep her part of the land and the other people get their part of the land.