Acquisition by Discovery - Johnson v. M’Intosh
1. Case Heading:
Parties:
Year: 1823
Court: Supreme Court
2. Disposition: Affirm the judgment.
3. Holding: The Indian title amounted to nothing.
4. Issue:
5. Procedural History: The trial court ruled in favor of M’Intosh.
6. Facts: Johnson acquired lands in Illinois through conveyance and a purchase from the Piankeshaw Indians. The land was granted by the US to M’Intosh. Johnson brought a suit for ejectment of M’Intosh.
7. Rule:
8. Reasoning: title – legal ownership of the land.
Chain of title – history of how the legal ownership moved from one person to another.
Did the Great Britain or the native Americans discover and have the right to the land?
Court: Rule of Discovery - the rule is that the ownership goes to the first European discoverer.
The principle is that being first in time is first in right
Court: The right of occupancy – The native Americans have the right to be on the property but not of ownership.
Rule – Native Americans have a right of occupancy.
Bundle of rights / bundle of sticks – NA have right of occupancy and Europeans of ownership. (modern day landlord-tenant relationship).
Discoverer can extinguish the right of occupancy by 1) purchase or conquest.
Respects private ownership but exception when the population is incompatible.
Justifications: 1) cultural assumptions 2) customary international law 3) fear of consequences -> preserving expectations 4) limited power of the judiciary
Locke’s labor theory of property: NA will not be productive but Europeans will be; cultural assumption in the opinion
Conflict between the religious moral rights and fears of consequences of reality.
Property concepts: first in time principle, Locke’s labor theory
Acquisition by Capture - Pierson v. Post
1. Case Heading:
Parties:
Year: 1805
Court: Supreme Court of New York
2. Disposition: Reverse.
3. Holding: Mere pursuit is insufficient for ownership through capture and requires certain control.
4. Issue:
5. Procedural History: The lower court found in favor of Post.
6. Facts: Post was hunting a fox and Pierson, seeing this, captured and killed the same fox. Post brought a trespass suit claiming that he had legal possession of the fox.
7. Rule:
8. Reasoning: Majority looks at legal scholars. Dissent – bad animals should be destroyed.
-Mere pursuit is not possession; possession is an exercise of dominion and certain control
-Fear of consequences and preserving
-Dissent: Can own through capture where there is (1) intent and (2) reasonable prospect
-Utilitarianism: The goal is to protect the farmers from the ruins by foxes.
-Fairness and certainty; majority rule promotes certainty and dissent promotes fairness.
Rule of capture – mere pursuit through capture is not enough; requires certain control.
On public land - Ghen v. Rich
1. Case Heading:
Parties:
Year: 1881
Court: USDC D of Mass.
2. Disposition:
3. Holding: Judgment for Ghen.
4. Issue:
5. Procedural History:
6. Facts: Fin-back whales, as opposed to other whales, sink when killed, then float back to the surface one to three days later and are often located far from where they were killed. The custom of the Cape Cod area at the time of this case was such that a person who finds the body of a fin-back whale sends word to Provincetown, and the whaler sends someone to the whale to remove the blubber. A small fee is granted to the finder of the whale. Ghen killed a fin-back whale for commercial purposes. Several days later, Ellis found the whale and, contrary to custom, sold it at auction to Rich, who harvested the blubber and oil from the whale carcass. Ghen sued Rich seeking to recover the value of the whale.
7. Rule:
8. Reasoning:
-Exception to rule of captures - where certain control is not practical and the act of appropriation accepted by custom prevails.
-For rule of custom: (1) applied and works (2) judges do not have the expertise (3) very specific (4) predictability
-Against rule of custom: (1) reduces certainty -> difficulty of determining custom (2) serves only the users of the rule and not the public at large
On private land - Keeble v. Hickeringill
1. Case Heading:
Parties:
Year: 1707
Court: Queen’s Bench
2. Disposition:
3. Holding:
4. Issue:
5. Procedural History: The lower court found in favor of Keeble and awarded him damages for the disturbances. Hickeringill moved the King’s Bench for arrest of judgment, arguing that Keeble never had possession of the birds.
6. Facts: Keeble owned land where he set up a decoy pond, which he used for the lawful purpose of luring wildfowl to his property. Keeble took the wildfowl as part of a profit-making venture. Hickeringill had a decoy pond of his own. On three separate occasions, Hickeringill, from his own property, fired off guns near Keeble’s pond for purposes of scaring away the wildfowl that had gathered there. Keeble sued for damages resulting from Hickeringill’s actions.
7. Rule:
8. Reasoning: Doctrine of ratione soli -> owner of private land is assumed to have constructive possession of wild animals on the owner's land.
Constructive possession -> landowners are regarded as the prior possessors of animals on land.
-RATIONE SOLI TRUMPS RULE OF CAPTURE ON PRIVATE PROPERTY
Oil and gas
Rules of capture (likened to wild animals, reasoning that oil and gas cross property borders as they seep and spill through crevices underground) led to once common wasteful overproduction.
-> states created spacing laws, which prevents wells from being drilled too close together;
to protect landowners who were no longer able to drill on smaller tracts of land, states created pooling laws, which allow owners of adjacent tracts to combine their interests to form drilling units that meet spacing requirements;
many states created forced pooling laws, which force unwilling owners to be part of a drilling unit to protect their neighbors’ rights to benefit from their mineral rights and to prevent waste and promote economic activity.
Hammonds: when B sues to recover for the use and occupation by reinjected gas by A, A is not liable, with an analogy of an escaped animal returning to its natural habitat.
-Consequences of rule of capture is (1) overexploitation of resources; (2) unfairness
Water - groundwater
English rule, rule of capture: water pump could induce water to flow to his well, the owner.
American rule of reasonable use: adds that wasteful uses of water were unreasonable and unlawful. (modification)
Surface water
Western states - Prior appropriation: person who first appropriates (captures) water and puts it to reasonable and beneficial use has a right superior to later appropriators.
Eastern Rule- riparian rights. Each owner along a water source has a right to use the water, subject to the rights of others around him.
Acquisition by creation
If you create something and you are first in time, that is yours to exploit.
-quasi property – principle is no ownership of ideas or tales. Rule: no property right in news against the public. Rule: quasi property right in news against competitors.
Arguments for intellectual properties rules: (1) Locke’s labor theory. (2) utilitarian -> creating incentives. (3) fairness.
Arguments against intellectual property rights: (1) access -> public domain for creation -> utilitarianism
(2) competition
Copyright
For works of authorship
Registration is not needed but just fix it in some tangible way.
Originality
Duration: life of author plus seventy years
Thin protection (<-> thick)
International News Service v. Associated Press
1. Case Heading:
Parties:
Year: 1918
Court: Supreme Court of the US
2. Disposition: Affirm the court of appeals.
3. Holding:
4. Issue: Can INS be lawfully be restrained from appropriating news taken from bulletins issued by AP or any of its members for the purpose of selling it to INS clients? -is there property in news? -does the property in news survive the instant of its publication in the first newspaper to which it is communicated by the news-gatherer? -does defendant’s admitted course of conduct in appropriating for commercial use constitute unfair competition in trade?
5. Procedural History: The District Court granted a preliminary injunction to AP on its first and second allegations against INS. However, it refused to grant an injunction restraining INS’s practice of stealing news from AP’s bulletin boards and early editions. The appellate court sustained the injunction and extended it to include AP’s third allegation.
6. Facts: AP brought suit against INS seeking an injunction prohibiting INS from pirating AP’s news. Specifically, AP alleged INS was bribing its members to furnish AP news to INS so it could then publish the news to its own clients. Additionally, AP alleged INS induced its employees to ignore company by-laws and provide news to INS before publication. Finally, AP alleged INS copied news from bulletin boards and early editions of its newspapers, and then sold the news to its own customers.
7. Rule:
8. Reasoning: AP’s news matter is not copyrighted.
Necessary to recognize its dual character in considering property in news matter, distinguishing between the substance of the information and the particular form or collocation of words.
The news element is publici juris – the history of the day.
-taking information and expressing in own words
Int property is defended on the basis of Locke’s labor theory of property.
Copyright protects artistic or other creative expression. Copyright holders have the right to prevent others from reproducing their work, creating derivative works, distributing copies of the work to the public, performing the work publicly, displaying the work publicly, and performing the work by digital audio transmission.
Requirements for copyright protection: originality (work must be an independent creation of the author and must demonstrate at lease some minimal degree of creativity), work of authorship and fixation.
Work of authorship: literary works, musical works, dramatic works, pantomimes and choreographic works, pictorial, graphic, and sculptural works, motion pictures and other audiovisual works, sound recordings, and architectural works.
Literary work covers computer programs but does not cover any idea, procedure, process, system, method of operation, concept, principle, or discovery. Strictly functional works (systems and procedures) are protected by patent and not copyright law.
Feist Publications, Inc. v. Rural Telephone Service Co.
1. Case Heading:
Parties:
Year: 1991
Court: Supreme Court of the US
2. Disposition: Reverse the judgment.
3. Holding: Rural’s selection of listings is a “selection” but (alphabetical) lacks the modicum of creativity necessary to transform it into copyrightable expression.
4. Issue:
5. Procedural History: USDC for the D of Kansas granted summary judgment to Rural based on the claim for copyright infringement based on the fact that Feist used the information in Rural’s white pages. The Court of Appeals for the 10th Circuit affirmed.
6. Facts: Rural published a phonebook which lists the names of its subscribers alphabetically in its white pages. Feist distributed a similar phonebook although covering a larger geographical area. Rural obtained the information for its white pages directly from its subscribers. In order to obtain its white pages listings, Feist contacted Rural and other phone companies offering to pay to use their white pages listings. Rural denied Feist permission to use its listings because the two companies compete for advertising revenue. However, Feist used Rural’s listings anyway, without its permission. When Rural found out, it sued Feist for copyright infringement.
7. Rule:
8. Reasoning: (1) Facts are not copyrightable; (2) compilations of facts generally are.
The distinction is one between creation and discovery: the first person to find and report a particular fact has not created the fact; he or she has merely discovered its existence.
Sweat of the brow: courts erroneously found that directories and the like were copyrightable per se without any further or precise showing of original-personal-authorship. Not permitted by 1909act
To establish infringement, prove: (1) ownership of a valid copyright and (2) copying of constituent elements of the work that are original.
-de minimus quantum of creativity (low level threshold for creativity required)
-copyright in expression not in facts
-rejection of the sweat of the brow theory
-Compilation: a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.
-Thin copyright protection for compilations
Patent law grants a limited monopoly to patentees, encouraging creative and socially useful enterprise. The specific protection is the right to prevent others from making, using, selling the patented invention during the term of the patent. Currently, the term of patents is 20 years from the date of application.
Patent applications must meet: patentability (invention fits in one of the general categories of patentable subject matter), novelty (invention has not been preceded in identical form in public prior art), utility (invention offers some actual benefit to humans), non-obviousness (whether the invention is a sufficiently big technical advance over the prior art), and enablement (describes the invention in sufficient detail that one of ordinary skill in the art would be able to use the invention).
-thicker protection
Diamond v. Chakrabarty
1. Case Heading:
Parties:
Year: 1980
Court: Supreme Court of the US
2. Disposition: Rule in favor of Chakrabarty.
3. Holding:
4. Issue: In statutory interpretation of construing 35 USC 101, does Chakrabarty’s micro-organism constitute a manufacture or composition of matter within the meaning of the statute?
5. Procedural History:
6. Facts: Chakrabarty filed a patent application for a human-made, genetically engineered bacterium capable of breaking down multiple components of crude oil for use in oil spills. His claims were of three types: process claims for the method of producing the bacteria, claims for an inoculum comprised of a carrier material floating on water, and claims to the bacteria. The patent examiner rejected claims for the bacteria on the grounds that living things are not patentable subject matter under 35 U.S.C. 101.
7. Rule:
8. Reasoning: Diamond cites 1930 Plant Patent Act that affords patent protection to certain asexually reproduced plants and 1970 Plant Variety Protection Act which protects sexually reproduced plants. -> Congress recognized the distinction as between products of nature and human-made inventions.
Diamond argues that micro-organisms cannot qualify as patent subject matter until Congress expressly authorizes such protection. -> Once Congress has spoken, it is the province and duty of the judicial department to say what the law is.
Dissent: Congress legislated 101 to not encompass living organisms and it is their role to broaden or narrow the reach of the patent laws.
In holding that a living, genetically altered microorganism is patentable, Supreme Cour opened the door to subsequent waves of patent applications.
In AMP v. Myriad, the Court held that such cDNA could be patented.
-Products of nature doctrine: cannot get patent over nature. Does not apply where invention is a non-naturally occurring product of human ingenuity.
-patentable for -> everything under the sun made by man
-can patent non-naturally occurring phenomenon that is a product of human ingenuity.
Moore v. Regents of the University of California
1. Case Heading:
Parties:
Year: 1990
Court: Supreme Court of California
2. Disposition: Reverse and remand.
3. Holding: Complaint states a cause of action for breach of disclosure obligations but not conversion.
4. Issue:
5. Procedural History: The trial court granted Regents’ motion for summary judgment on the conversion count and dismissed the other counts. The court of appeal reversed, finding that Moore adequately stated a cause of action for conversion.
6. Facts: Moore underwent treatment for hairy-cell leukemia at the UCLA. Regents told Moore that the condition was life-threatening and that his spleen should be removed, without saying that Moore’s cells were unique and that access to them was of great scientific and commercial value. Moore’s spleen was retained for research purposes without his knowledge or consent, and his tissue and blood and other fluids were taken on each of Moore’s visits. Regents established a cell line from Moore’s cells, received a patent, and entered into agreements. Moore sued for lack of informed consent, breach of fiduciary duty, conversion, and other counts.
7. Rule:
8. Reasoning: Conversion – tort that protects against interference with possessory and ownership interests in personal property.
Federal law permits the patenting of organisms that represent the product of human ingenuity, but not naturally occurring organisms. It is this inventive effort that patent law rewards.
Inappropriate to impose liability for conversion because: (1) a fair balancing of the relevant policy considerations counsels against extending the tort; (2) problems in this area are better suited to legislative resolution; (3) the tort of conversion is not necessary to protect patients’ rights.
The extension of conversion law into research on human cells will hinder research. To expand liability by extending conversion law into this area would have a broad impact.
Note2: because the cells were Moore’s, they were not some doctor’s to take, but neither were they Moore’s to sell in a market transaction.
-Moore has to show that he has property over his body part.
-Arguments for granting ownership in body parts: right to ownership separate from right to sell -> bundle of rights; respect, fairness, and protection from exploitation
-Arguments against granting ownership in body parts: commodifying the body enabling sale; chilling research.
-Patients v. Researchers: patients have no property rights in body specimens; researchers have property rights in invention based on body specimens.
Armory v. Delamirie
1. Case Heading:
Parties: a chimney sweeper’s boy and a goldsmith
Year: 1722
Court: King’s Bench
2. Disposition:
3. Holding: The finder may maintain trover.
4. Issue:
5. Procedural History:
6. Facts: Armory found a jewel and carried it to Delamirie’s shop. Delairie’s apprentice weighed it and offered Armory money, but Armory refused and insisted on having the jewel again, and the apprentice delivered the socket without the stones.
7. Rule:
8. Reasoning: -action in trover (get money) and replevin (get object).
-Finder is entitled to possession against everyone except the true owner.
Hannah v. Peel
1. Case Heading:
Parties:
Year: 1945
Court: King’s Bench Division
2. Disposition: Judgment for Hannah.
3. Holding: The brooch was lost in the ordinary meaning of the word and found by the plaintiff in the ordinary meaning of that word. Peel had his notice drawn to this matter by Hannah.
4. Issue:
5. Procedural History:
6. Facts: In 1938, Peel was granted ownership of a house. There is no indication that Peel ever lived in the house. In 1940, Hannah lived in the house while it was requisitioned for the quartering of soldiers. While there, Hannah found a brooch embedded in a windowsill. Hannah reported his find to the police, who held the brooch for two years. When no owner was found, the police gave the brooch to Peel, who sold it for 66£ in 1942. (The brooch was subsequently resold by the jeweler for 88£). In 1943, Hannah sued for return of the brooch or for its value.
7. Rule: Bridges v. Hawkesworth: customer picked up a parcel and the court found for customer, South Staffordshire Water Co. v. Sharman, Elwes v. Brigg Gas Co.
8. Reasoning: -(1) the possessor of the land is entitled against the finder to all chattel found on the land. (2) Armory rule – finder is entitled against all but the true owner or prior possessor. (similar to first in time)
Distinction: private (possessor of estate), public property (finders keepers) (open to public)
Mislaid -> goes to the owner of the property. Lost -> goes to the finder. Abandoned -> finder
McAvoy v. Medina
1. Case Heading:
Parties: Customer and barber
Year: 1866
Court: Supreme Judicial Court of Mass.
2. Disposition: Exceptions overruled.
3. Holding: McAvoy acquired no original right to the property and Medina’s subsequent acts in receiving and holding the property does not create any.
4. Issue:
5. Procedural History:
6. Facts: McAvoy saw and took up a pocket-book upon a table. Medina counted the money, and McAvoy told Medina to keep it and give it to the owner should the owner come, or advertise it. The owner was not found and McAvoy demanded the money as the finder.
7. Rule: Lawrence v. The State: to place a pocket book upon a table and to forget to take it away is not to lose it.
8. Reasoning:
Adverse possession: Something is owned by A. It comes into the possession of B. B might own.
Powell on Real Property 91.01
Every jurisdiction has statutes of limitations that fix the period of time beyond which the owner of land can no longer bring an action, or undertake self-help, for the recovery of land from another person.
Adverse possession functions as a method of transferring interests in land without the consent or despite the dissent of the prior owner.
Adverse possession requires that there be (1) an entry that is actual and exclusive; (2) open and notorious; (3) continuous for the statutory period; and (4) adverse and under a claim of right.
-adverse possession requires (1) actual entry; (2) exclusive; (3) open and notorious (e.g. collecting fossils is not) -> could have known; (4) adverse (=without permission. e.g. back forty acres); (5) claim of right/claim of title (a) good faith (b) bad faith (aggressive trespasser) (c) objective standard; (6) continuous for statutory period.
1) Actual Entry (bring any claim of title/color of title issues up in discussion of this element)
-use the property as the average owner would use it under similar circumstances
-Should be viewed as exercising true dominion
2) Exclusivity
-If 2 companies are coming, one that is true owner, one that isn't, you could not win an adverse possession suit. Even if two trespassers are on the land you can't win because it would be impossible for the court to determine adverse possession.
-The use of a person claiming adverse possession must be exclusive
-If the person claiming adverse possession gave some kind of permission or license, they could still have a claim to adverse possession (prerogative of ownership.)
3) Open and Notorious
-Even if the true owner actually knew, it doesn't matter.
-If the true owner did not know but they could have, this would be enough.
-WHETHER OWNER COULD HAVE KNOWN! (were the acts sufficiently open and notorious that they'd put reasonably attentive property owners on notice that someone is on their property.)
4) Adverse
-As a policy matter, we want people to permit others to live with them
-Has to be hostile/can't have permission to be on the land from the rightful owners, their permission would defeat hostility
5) Claim of Right/Claim of Title (Different STD. depending on jurisdiction!)
-Intent/State of Mind is the only thing that matters
-This is the only element that varies among jurisdictions
a) good faith standard
-to win, you need to be in good faith/you need to have made an honest mistake
b) bad faith/aggressive trespass
-you should have known you were taking someone else's land
c) Objective Standard (MOST COMMON)
-Don't care what state of mind is
-Doesn't matter if you made a mistake or if you intended
6) Continues for statutory period (10-30 years depending on jurisdiction)
Van Valkenburgh v. Lutz
1. Case Heading:
Parties:
Year: 1952
Court: Court of Appeals of New York
2. Disposition: Reverse the judgment and rule in favor of Van Valkenburgh.
3. Holding:
4. Issue:
5. Procedural History: The trial judge agreed with Lutz and held that Lutz had acquired title to the land by adverse possession. The intermediate appeals court affirmed.
6. Facts: The Lutz family bought Lots 14 and 15 in Yonkers in 1912. Between then and 1947, they accessed their property by cutting across Lots 19-22 (collectively, Lot 19). Over time, Lutz built a structure and started a gardening business on Lot 19, which he knew that he did not own. In 1947, the Van Valkenburgh family, with whom the Lutzes did not get along, purchased Lots 19-22 and demanded that Lutz remove his structures and garden from Lot 19. Lutz agreed to do so, but claimed that his family should be permitted continuing use of the path through Lot 19 to access his property. He then removed some of the structures from the land. Van Valkenburgh erected a fence blocking the path that Lutz had claimed a right to use. Lutz sued Van Valkenburgh, arguing that while Van Valkenburgh owned the land, he (Lutz) had established a right of way through it. The court ruled in Lutz’s favor, holding that Lutz had the right to use the path. The court of appeals affirmed. Van Valkenburgh later sued Lutz, complaining that the remainder of Lutz’s structures (a garage and a shed) infringed upon his land. Lutz generally denied the allegations, and additionally filed a counterclaim asserting that he owned the land claimed by Van Valkenburgh by virtue of having adversely possessed it for more than thirty years.
7. Rule:
8. Reasoning: The proof concededly fails to show that the cultivation incident to the garden utilized the whole of the premises claimed. The proof fails to show that the premises were improved.
Dissent: plentiful evidence supports substantial dimensions of Lutz’s farm. The nature of the cultivation engaged in by Lutz was more than adequate to give the owner notice of an adverse claim.
-operation of law, quiet title action. 1) promoting use of property. 2) protecting justified expectations. 3) clarify title -> focusing on who is in possession.
-section 40: either (1) where it has been protected by a substantial enclosure (2) where it has been usually cultivated or improved
Mannillo v. Gorski
1. Case Heading:
Parties:
Year: 1969
Court: Supreme Court of New Jersey
2. Disposition: Remand for trial.
3. Holding: Any entry and possession for the required time which is exclusive, continuous, uninterrupted, visible, and notorious, even though under mistaken claim of title, is sufficient to support a claim of title by adverse possession.
No presumption of knowledge arises from a minor encroachment along a common boundary. Only where the true owner has actual knowledge thereof may it be said that the possession is open and notorious.
4. Issue:
5. Procedural History: The trial court concluded that Gorski clearly and convincingly proved possession.
6. Facts: In 1946, Gorski entered into possession of Lot No. 1007 in Block 42. Mannillo own Lot 1008 in Block 42 that was acquired in 1953. In 1946, son Gorski made additions and changes to the house. Steps and concretes encroached by 15 inches upon the lot that the Mannillos later purchased.
7. Rule:
8. Reasoning: Gorski states that she has title to the encroached land by adverse possession. Mannillos states that Gorski’s action was not of the requisite hostile nature (intentional tortious taking is lacking).
Abandon the Maine doctrine and favor the Connecticut doctrine.
-objective standard: doesn’t matter what intent is or whether it is good or bad faith.
-encroachment was visible and o.a.n. <-> relationship to the boundary is not open and notorious.
-for minor encroachment -> open and notorious only if true owner has actual knowledge.
-Traditional remedy is to remove the steps and wall.
-one of the goals of property law is to let the property used and developed -> removal is against
-If they cannot be removed, should be compensated.
Claim of title: one way of expressing the requirement of hostility or claim of right on the part of an adverse possessor. (state of mind)
Color of title: a claim founded on a written instrument or a judgment or decree that is for some reason defective and invalid. (means of becoming an adverse possessor in document; instrument written that they are the owner of the property)
Hypo: If Amy occupies and cultivates 10 acres, constructive possession of all 300 acres
Color of title -> constructive adverse possession doctrine (title even though…)
P1: A has actual possession of the 40 acres because it is actually on the land. A has constructive possession of the 60 acres (document says that A owes the whole land).
P1b: O is on 1 acre. O and A have constructive possession of 59 acres. O is the true owner and wins.
First exception to adverse possession: true owners or prior possessors, whether through actual possession or constructive possession, prevails over the adverse possessor’s constructive possession claims.
Second exception: adverse possessor cannot get constructive possession of land not owned by the owner of the land actually possessed. (Y in P2 has no reason to suspect anything wrong)
P2: Lot 1, A has actual possession. Lot 2, A has constructive possession. A v. X, A wins. A v. Y, Y wins. Second exception does not apply if a different owns the property not entered into.
Howard v. Kunto
1. Case Heading:
Parties:
Year: 1970
Court: Court of Appeals of Washington
2. Disposition: Reverse the judgment and dismiss plaintiffs’ action. Enter a decree quieting defendants’ title to the disputed tract of land.
3. Holding:
4. Issue: (1) is a claim of adverse possession defeated because the physical use of the premises is restricted to summer occupancy? (2) may a person who receives record title to tract A under the mistaken belief that he has title to tract B and who subsequently occupies tract B, for the purpose of establishing title to tract B by adverse possession, use the periods of possession of tract B by his immediate predecessors who also had record title to tract A?
5. Procedural History: The trial court granted quiet title remedy to Howard.
6. Facts: McCall resided in the house in 1932. McCall had a deed that erroneously described the 50 foot wide parcel on the shore as not the one upon which his house stood but that of directly west of that upon which the house stood. Millers built a dock on the misdeeded property. Howard, who had land east of that of the Kuntos, made a survey and discovered that they were the record owners of the land occupied by the Moyers and Moyers occupied the land of Kuntos. Moyer conveyed to the Howards record title to the land upon which the Kunto house stood. Howard brought suit to quiet title on the land occupied by Kunto.
7. Rule:
8. Reasoning: Tacking of adverse possession is permitted if the successive occupants are in privity… the technical requirement of privity should not be used to upset the long periods of occupancy of those who in good faith received an erroneous deed description.
Record title:
Deed: at the end of the sales transaction, it is executed and transfers the property.
-occupation of the adverse possession has to be continuous for the length of the statutory period.
-summer house marks continuous use? … as ordinarily marks the conduct of owners in general.
-tacking is permitted with privity. Has to be successive party. Voluntary transfer of estate from previous AP, or voluntary transfer of possession from previous AP accompanied by an erroneous deed.
Adverse possession against the government
Under the common law, adverse possession does not run against the government but some states allow.
-Majority rule: cannot file an adverse possession suit against govt. Minority rule: can file.
Rationale for limiting ap against govt: (1) Government is holding public property in trust for the public, (2) government does not have to hire people to monitor or file suits, (3) undeveloped land is hard to monitor
Gift
Requirements to make a gift of personal property: (1) the donor must intend to make a present transfer of an existing interest in the property. (2) the donor must deliver possession to the done with the manifested intention to make a gift. (physical delivery) (constructive delivery-giving access, symbolic delivery- describing the gift) (3) acceptance by the done is required but seldom is an issue.
Constructive delivery: handing over a key or some object that will open up access to the subject matter of the gift. Symbolic delivery: handing over something symbolic of the property given.
Newman v. Bost
1. Case Heading:
Parties:
Year: 1898
Court: Supreme Court of North Carolina
2. Disposition: New trial.
3. Holding: There is no such thing in this state as symbolical delivery in gifts either inter vivos or causa mortis.
4. Issue:
5. Procedural History: Verdict was in favor of Newman.
6. Facts: Newman allege that Van Pelt gave her all the furniture and other property, including a policy of insurance of $3000, in his dwelling-house as a gift causa mortis. Bost, administrator of Van Pelt, collected the life insurance and sold the household and kitchen furniture. Newman alleges conversion by Bost. Van Pelt left his keys to Newman including ones that unlocked the bureau that contained all important documents.
7. Rule: Thomas v. Lewis
8. Reasoning: To constitute a donation causa mortis, need: (1) an intention to make the gift, and (2) a delivery of the thing given.
The doctrine of causa mortis (gift made in contemplation of and in expectation of immediate approaching death) is in direct conflict with the prevention of fraud.
The bureau and any other article of furniture did pass and she became the owner thereof. Delivery of the keys was a constructive delivery of these articles, equivalent to an actual delivery.
-court accepts constructive delivery.
-Gifts inter vivos (gift given when alive) -> piano. Gifts causa mortas (at deathbed) -> others.
-The person making the will is no longer alive to testify. -> how courts determine gifts: (1) Concern of fraud. (2) Cautionary/ritual requirement.
p.127 2a: no. 2b: no, because he gave bureau but not the insurance policy.
Gruen v. Gruen
1. Case Heading:
Parties:
Year: 1986
Court: Court of Appeals of New York
2. Disposition: Affirm.
3. Holding: Son presented clear and convincing proof of his acceptance.
4. Issue: Whether a valid inter vivos gift of a chattel may be made where the donor has reserved a life estate in the chattel and the done never has had physical possession before the death. If it may, which factual findings on the elements of a valid inter vivos gift more nearly comport with the weight of the evidence in this case.
5. Procedural History: Special Term found that Son failed to establish any elements of an inter vivos gift and Father’s attempt to retain a present possessory life estate in a chattel invalidated a purported gift of it. The Appellate Division found the elements of a gift established, reversing and awarding Son.
6. Facts: The Art was purchased by Father in 1959. In 1963, Father wrote a letter to Son stating that he was giving him the painting but that he wished to retain the possession of it for his lifetime. The letter was destroyed but two other letters, a substitute gift letter and another, were retained. Son did not take possession of the painting. Father died and Mother refused the possession by Son.
7. Rule:
8. Reasoning: To make a valid inter vivos gift, there must exist the intent on the part of the donor to make a present transfer; delivery of the gift, either actual or constructive to the donee; and acceptance by the donee. The proponent of a gift has the burden of proving each of these elements by clear and convincing evidence.
Donative intent- Inter vivos gift requires making an irrevocable present transfer of ownership. Gift by will requires making a testamentary disposition effective after death.
Mother: Father only expressed an intention in 1963.
Court: three letters are considered as a single instrument and establish that Father intended to make a present gift.
Delivery- for a valid inter vivos gift, there must be a delivery of the gift, either by a physical delivery of the subject of the gift or a constructive or symbolic delivery such as by an instrument of gift, sufficient to divest the donor of dominion and control over the property.
Letters serve as instruments of gift. Father gave title with no right of possession until his death.
Father gave Son a present ownership interest in the painting, with possession postponed.
-Michael got a remainder in the painting. Father had a life estate in painting.
-Symbolic delivery was made but Mother says manual delivery was required.
-Father gives painting to the Son and Son back to Father because it’s life estate -> burdensome
-Subinfudeate system. Quia emptores: can sell the property for money. -> economy based on service to king to money.
Possessory estates: owned now.
Fee simple: largest possible estate because its potential duration is infinite. Heritability: fee simple passes to legal heirs. Alienability: fee simple freely transferrable during lifetime.
Conveyance “to A” transferred a life estate, and to “to A and his heirs” transferred a fee simple. Words of limitation: denote what estate the grantor has given A. Words of purchase: who is the transferee.
-Heirs have nothing but hope (expectancy).
Fee simple absolute: it cannot be divested nor will it end upon the occurrence of any future event.
Defeasible: it will terminate, prior to its natural end point, upon the occurrence of some specified future event. The fees simple defeasible is the most common defeasible freehold estates.
The primary purpose of defeasible fees is land use control; to a lesser extent they control behavior not related to any particular use of land.
Types of defeasible fees simple:
(1) the fee simple determinable (fee simple so limited that it will end automatically when a stated event happens; accompanied by a future interest; future interest retained by the transferor is a possibility of reverter; so long as…, while…, during…, until… {durational language}),
(2) the fee simple subject to condition subsequent (fee simple that may be cut short or divested at the transferor’s election when a stated condition happens; however…, but if…, provided…, on condition that… {conditional language}), and
Right of entry or power of termination: the future interest retained by the transferor to divest a fee simple subject to condition subsequent.
(3) the fee simple subject to executory limitation (fee simple subject to condition subsequent and in the same instrument creates a future interest in a third party)
Executory interest: the future interest in the third party.
Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano
1. Case Heading:
Parties: non-profit organization and the trustees and administrators of the estates.
Year: 1967
Court: Court of Appeal of California
2. Disposition: Affirm the judgment. (in favor of Toscano)
3. Holding:
4. Issue: Does the habendum clause amount to an absolute restraint on its power of alienation and is void or does it create a fee simple subject to a condition subsequent and is valid and enforceable?
5. Procedural History:
6. Facts: Mountain seeks to quiet its title to a parcel of real property it acquired by gift deed from Toscano.
7. Rule:
8. Reasoning: Does the use condition serve as a restraint against alienation or create a defeasible fee? Court: habendum clause created a fee subject to a condition subsequent with title to revert to the grantors, their successors or assigns if he land ceases to be used for lodge, fraternal and similar purposes for which the appellant is formed.
Dissent: if sale or transfer are expunged, the property still cannot be sold. The terms are alike.
-Direct restraint (cannot sell or transfer) on alienation is void and the remedy is to cut it out.
-Lodge argues: the restraint is on who can use it not on alienation.
-Indirect restrictions on who can use it; material adverse effect on marketability. Figures out by restricting alienation to an impermissibly small number of people.
-Lodge: args for limits on restraints on alienation. -> against the use of property, inefficient and restricts use of property for best purpose, affects marketability, limits improvements and ability to get mortgage
-Toscano heirs: args for restraints on alienation -> honor grantor’s desires, discourages gifts for social uses
Absolute restraints on fees are uniformly held invalid, but reasonable restrains are held valid.
Estate for life: lifetime tenure (ownership for life to be passed to someone else after the death of the grantee). Remainder: a future interest; the property will be received by a grantee after the owner of the life estate dies. Consequences: (1) Grantor of a life estate could control who takes the property at the life tenant’s death. (2) Trust management for the life tenant developed.
Per autre vie: B, done, estate is measured by A’s life-span. Every life estate is followed by a future interest, either a reversion in the transferor or a remainder in a transferee.
Knopf v. Gray
1. Case Heading:
Parties:
Year: 2018
Court: Supreme Court of Texas
2. Disposition: Reverse and render judgment that the will granted Gray a life estate and Knopf the remainder interest in the property and remand.
3. Holding:
4. Issue: Whether the testator intended to devise a fee-simple interest or a life-estate interest to her son.
5. Procedural History: The trial court granted the motions and found that the provision contained an invalid disabling restraint, the will vested Gray with a fee-simple interest, and Knopf received no remainder interest. The trial court held that the will unambiguously devised a fee-simple interest, entitling Gray to summary judgment. The court of appeals affirmed.
6. Facts: Allen’s will disposed of her entire estate to Gray and that the land is not to be sold but passed on down to Gray’s children. Bobby conveyed the land in fee simple to Polasek Farms, and Knopf, children of Gray, seek a declaratory judgment that Allen devised a life estate to Gray that preclude him from delivering interest to Polasek. Polasek and Knopf filed cross-motions for summary judgment.
7. Rule:
8. Reasoning: A will is ambiguous when it is subject to more than one reasonable interpretation or its meaning is simply uncertain. When a will’s meaning is ambiguous, its interpretation becomes a fact issue for which summary judgment is inappropriate.
The law does not require any specific words or formalities to create a life estate. The words used in the will must only evidence intent to create a life estate (estate held for the duration of a life).
Knopf: second clause demonstrates intent to grant Gray a life estate with the remainder interest going to her grandchildren.
Gray: the instructional language devises the land to Gray in fee simple or is an invalid disabling restraint, is nontestamentary, or is technically insufficient to create a life estate.
Court: Allen grants with limitations that he not sell it, that he take care of it, and that it be passed down to his children. This represents the essence of a life estate. Allen’s words unambiguously refer to elements of a life estate and designate her grandchildren as the remainderman.
Baker v. Weedon
1. Case Heading:
Parties: Remaindermen and life tenant/widow.
Year: 1972
Court: Supreme Court of Mississippi
2. Disposition: Reverse and remand.
3. Holding:
4. Issue:
5. Procedural History: The chancellor granted Anna's request on the theory of economic waste. The Bakers filed an appeal to prevent Anna from selling the land in which they possessed a future interest, vesting after Anna’s death.
6. Facts: Weedon married Edwards and had Baker and Jones as children. Weedon next married Howell and Plaxico. Plaxico was integral in working on the land in Alcorn County. Weedon had a strained relationship with the two children. John’s will provided that all of his property was to go to Plaxico “during her natural life” and then to her children after her death. If Plaxico were to die without children then the property would go to “my grandchildren” in equal shares. Plaxico rewed but had no children. A right-of-way through Oakland Farm was sought by the Mississippi State Highway Department and located Baker’s three children as remaindermen. Henry Baker reached a settlement and Plaxico received some amount. The value of the farm is expected to increase. Plaxico sued due to economic distress so that the property is sold and the proceeds invested to provide for her.
7. Rule:
8. Reasoning: Baker argues that since Oakland Farm is not deteriorating income from rental was sufficient to pay taxes, a judicial sale was not proper.
Court: consideration should be given to whether a sale is necessary for the best interest of all the parties – the life tenant and the contingent remaindermen. The best interest would not be served by a judicial property because it would cause great financial loss to the remaindermen.
-Anna’s children have contingent remainder. Weedon’s grandchildren have alternative contingent remainder. Anna only has and can sell life estate.
-Anna has only a life estate, and she cannot sell as a fee simple unless she has a consent of the remaindermen. Anna can talk to the remaindermen to sell the land as fee simple.
-prevent waste -> necessity -> 1) financial need of the life tenant. 2) property deteriorating (protect the interest of the remaindermen). All has to be in the best interests of all parties.
Waste: when two or more persons have rights to possess property at the same time, A should not be able to use the property in a manner that unreasonably interferes with the expectations of B.
Affirmative waste (arising from voluntary acts): liability results from injurious acts-acts that substantially reduce the value of the property in question-that have more than trivial effects.
Permissive waste (arising from a failure to act): failure to take reasonable care of the property.
Ameliorative waste (resulting from changes to the property): uses by the tenant that increase the market value of the land.
-Goal of the waste doctrine is to avoid actions that fail to maximize value.
-Open mines doctrine: If someone is using the property in a certain way (E.g. cutting down trees / extracting minerals) you can continue to use it in this way even if it is not the most efficient way or there is waste.
Future interests: confer rights to the enjoyment of property at a future time. Future interests retained by the transferor are reversion, possibility of reverter and right of entry. Future interests created in a transferee are vested remainder, contingent remainder, and executory interest.
Reversion: O, a fee simple owner, grants the land to A for life and the land reverts to O or under his will or to his heirs at A’s death. The interest remaining in the grantor, or in the successor in interest of a testator, who transfers a vested estate of a lesser quantum than that of the vested estate which he has.
Fee simple > fee tail > life estate > leasehold estates. Reversion is transferable, descendible, devisable.
Possibility of reverter can be retained when a life tenant conveys his life estate to another, determinable on the happening of an event. It is a future interest remaining in the transferor or his heirs when a fee simple determinable is created.
The transferor has a right of entry when it transfers an estate subject to condition subsequent and retains the power to cut short or terminate the estate.
Remainder: the land would not revert but would remain out for some third person. The earliest form of a remainder was a future interest in a transferee that is certain to become possessory upon the expiration of the prior estate created at the same time. A future interest that is capable of becoming possessory at the termination of the prior estate.
Vested remainder: the transferor decided who is to take the property upon the life tenant’s death. (1) it is given to an ascertained person and (2) it is not subject to a condition precedent.
Indefeasibly vested: it is certain to become possessory in the future and cannot be divested.
Vested subject to divestment: vested remainder but subject to a condition subsequent.
Vested subject to open: remainder created in a class of persons is vested if one member of the class is ascertained and there is no condition precedent.
Contingent remainders: remainder contingent because its takers are unascertained.
Contingent remainder: permits the transferor to let future events determine this question. (1) it is given to an unascertained person or (2) it is made contingent upon some event occurring other than the natural termination of the preceding estates. Always has an implicit reversion.
The executory interest divest or cut short the preceding interest.
The Rule against perpetuities: (1) three interests are subject to the Rule: contingent remainders, executory interest, and class gifts. (2) whether the given interest might not vest within the perpetuity period of lives in being plus 21 years. (you must prove that a contingent interest is certain to vest or terminate no later than 21 years after the death of some person alive at the creation of the interest).
Tenancy in common: separate (control over her share of the property; autonomy) but undivided interests in the property. The interest is descendible and may be conveyed.
Joint tenancy: have the right of survivorship. Joint tenants are regarded as a single owner. Each tenant is per my et per tout. Nothing passes to the surviving joint tenant and the estate continues in survivors freed from the participation of the decedent.
Need to have (1) intent, equality in (2) time (the interest of each joint tenant must be acquired or vest at the same time), (3) title (all joint tenants must acquire title by the same instrument or by a joint adverse possession. A joint tenancy an never arise by intestate succession or other act of law), (4) interest (all must have equal undivided shares and identical interests measured by duration), and (5) possession (Each must have a right to possession of the whole). If a unity is severed, joint tenancy becomes a tenancy in common.
Tenancy by the entirety: four unities and the unity of marriage are required and the surviving tenant has the right of survivorship. Both partners are seised of the entirety, per tout et non per my. Only a conveyance by both spouses together can defeat the right of survivorship.
Severance of Joint Tenancies- Riddle v. Harmon
1. Case Heading:
Parties:
Year: 1980
Court: Court of Appeal of California
2. Disposition: Reverse the judgment.
3. Holding: We discard the archaic rule that one cannot enfeoff oneself… the decedent could have accomplished her objective, termination of the joint tenancy, by one of a variety of circuitous processes.
4. Issue: Is a strawman required to terminate a joint tenancy?
5. Procedural History: The court refused to sanction her plan to sever the joint tenancy and quieted title to the property in her husband.
6. Facts: The Riddles purchased a parcel of real estate as joint tenants. The attorney advised Mrs. Riddle that the property would pass to her husband upon death. Mrs. Riddle requested that the joint tenancy be terminated so that she dispose of her interest by will. Mrs. Riddle granted to herself an undivided one-half interest in the subject property. The document terminated joint tenancies and the attorney prepared a will disposing of Mrs. Riddle’s interest.
7. Rule:
8. Reasoning: An indisputable right is the power to convey a separate estate by way of gift or otherwise without the knowledge or consent of the other joint tenant and to thereby terminate the joint tenancy.
Creation of a joint tenancy by direct transfer: may be made from a sole owner to himself and others or from joint owners to themselves and others as specified in the code.
The requirement of livery of seisin is that one could not enfeoff oneself- not be both grantor and grantee in a single transaction.
Harms v. Sprague
1. Case Heading:
Parties:
Year: 1984
Court: Supreme Court of Illinois
2. Disposition: Affirm the judgment of the appellate court.
3. Holding: A mortgage given by one joint tenant does not sever the joint tenancy and plaintiff’s right of survivorship became operative upon the death of his brother. The mortgage executed by John does not survive as a lien on plaintiff’s property. A surviving joint tenant succeeds to the share of the deceased joint tenant by virtue of the conveyance which created the joint tenancy, not as the successor of the deceased.
4. Issue: Is a joint tenancy severed when less than all of the joint tenants mortgage their interest in the property? Does such a mortgage survive the death of the mortgagor as a lien on the property?
5. Procedural History: The trial court held that the mortgage given by John Harms severed the joint tenancy; the mortgage survived the death of John Harms. The Appellate Court reversed, finding that the mortgage given by one joint tenant did not sever the joint tenancy and William owned the entire property.
6. Facts: William Harms took title to certain real estate with his brother John Harms as a joint tenant. Sprague purchased a lot and home from the Simmonses. John Harms co-signed Sprague’s promissory note and gave a mortgage on his interest in the joint tenancy property. The sum was to be paid from the proceeds of the sale of John Harms’ interest in the joint tenancy property. John died and devised his entire estate to Sprague. Williams filed a complaint to quiet title and for declaratory judgment against Sprague, the executor and devisee of John Harms.
7. Rule:
8. Reasoning: Haas: a judgment lien secured against one joint tenant did not serve to extinguish the joint tenancy.
Van Antwerp: when a levy is made under execution upon the interest of the debtor joint tenant… the estate of joint tenancy has been severed and destroyed.
Jackson: in attachment of a judgment lien upon the interest of a joint tenant, the estate of joint tenancy had not been destroyed.
Court: a lien on a joint tenant’s interest in property will not effectuate a severance of the joint tenancy, absent the conveyance by a deed following the expiration of a redemption period.
Delfino v. Vealencis
1. Case Heading:
Parties:
Year: 1980
Court: Supreme Court of Connecticut
2. Disposition: reverse and remand.
3. Holding: The property in this case may practicably be physically divided and the interests of all owners will better be promoted if a partition in kind is ordered; the trial court erred in ordering a partition by sale and Vealencis is entitled to a partition of the property in kind.
4. Issue: Did the Superior Court properly order the sale of property owned by Delfino and Vealencis as tenants in common?
5. Procedural History: The trial court concluded that a partition in kind could not be had without material injury to the respective rights of the parties and that the property be sold at an auction.
6. Facts: Delfino and Vealencis own real property as tenants in common. Delfino owns an undivided 99/144 interest in the property and Vealencis owns 45/144. Vealencis operates garbage and rubbish removal business. Delfino propose to develop the property into forty-five residential building lots. In 1978, Delfino sought a partition of the property by sale with a division of the proceeds according to the parties’ respective interests and buy the entire property. Vealencis moved for a judgment of in-kind partition and the appointment of a committee to conduct said partition.
7. Rule:
8. Reasoning: Vealencis alleges that the conclusion that the parties’ interests would best be served by a partition by sale is not supported by the findings of subordinate facts.
General Statutes authorizes courts of equitable jurisdiction to order, upon the complaint of any interested person, the physical partition of any real estate held by tenants in common, and to appoint a committee for that purpose.
A partition by sale should be ordered only when two conditions are satisfied: (1) the physical attributes of the land are such that a partition in kind is impracticable or inequitable; and (2) the interests of the owners would better be promoted by a partition by sale.
Vealencis alleges that the trial court’s conclusion that the rights of the parties would best be promoted by a judicial sale is not supported by the findings of subordinate facts. Court: agree.
The court’s concern over the possible adverse economic effect upon the plaintiffs’ interest in the event of a partition in kind was based essentially on four findings: (1) approval would be difficult; (2) lots might not sell; (3) lots would have to be consolidated and would be lost; and (4) extension would have to be rerouted.
Spiller v. Mackereth
1. Case Heading:
Parties:
Year: 1976
Court: Supreme Court of Alabama
2. Disposition: reverse and remand.
3. Holding: That Spiller placed locks on the building, without evidence that he intended to exclude the other cotenants, is insufficient to establish his liability to pay rent. No evidence supports a legal conclusion of ouster.
4. Issue:
5. Procedural History: The trial court found in favor of Mackereth and awarded him $2,100 in rent from Spiller.
6. Facts: Mackereth and Spiller owned a building as tenants in common. When a lessee vacated, Spiller entered and began using the structure as a warehouse. Mackereth sent Spiller a letter demanding that Spiller either vacate half of the building or pay Mackereth rent for half of the rental value. Spiller refused to do either, and Mackereth sued him.
7. Rule:
8. Reasoning: In the absence of an agreement to pay rent or an ouster of a cotenant, a cotenant in possession is not liable to his cotenants for the value of his use and occupation of the property. Ouster describe two fact situations: (1) the beginning of the running of the statute of limitations for adverse possession and (2) the liability of an occupying cotenant for rent to other cotenants.
Before an occupying cotenant can be liable for rent, he must have denied his cotenants the right to enter.
Minority rule: The occupying tenant is liable for the rent, even in the absence of an ouster.
Swartzbaugh v. Sampson
1. Case Heading:
Parties:
Year: 1936
Court: Court of Appeal of California
2. Disposition: Affirm the judgment.
3. Holding: There is no showing that plaintiff ever demanded that Sampson let her into possession of her moiety of the estate nor is there anything to indicate that he is holding adversely to her.
4. Issue: Can one joint tenant who has not joined in the leases executed by her cotenant and another maintain an action to cancel the leases where the lessee is in exclusive possession of the leased property?
5. Procedural History: The trial court granted a nonsuit.
6. Facts: Swartzbaughs owned sixty acres of land planted to bearing walnuts as joint tenants. Sampson negotiated with Swartzbaughs for the leasing of a small fraction of the land for a boxing pavilion. Mrs. Swartzbaugh objected to making the lease and an option and a lease were signed by Sampson and Swartzbaugh. At the site, walnut trees were removed and boxing pavilion was built. Mrs. Swartzbaugh received no part of the rental of the leased property.
7. Rule:
8. Reasoning: It is a general rule that the act of one joint tenant without express or implied authority from or the consent of his cotenant cannot bind or prejudicially affect the rights of the latter.
-Ms. can collect rent from sampson (ouster) or from husband. Partition in kind / by sale.
A cotenant who collects from third parties rents and other payments arising from the co-owned land must account to cotenants for the amounts received, net of expenses.
Separate property system: spouses have separate property; ownership is given to the spouse who acquires the property. Community property: spouses are a marital partnership and should share their acquisitions equally.
The property rights during the marriage: The English marital property system had a woman move under her husband’s protection or cover, becoming a feme covert. All personal property owned by the wife or acquired became the property of the husband. The husband had the right of possession to all the wife’s lands during marriage, including land acquired after marriage. Jure uxoris, the right, was alienable by the husband and reachable by his creditors.
Married Women’s Property Acts removed the disabilities of coverture and gave a married woman control over all her property.
Sawada v. Endo
1. Case Heading:
Parties:
Year: 1977
Court: Supreme Court of Hawaii
2. Disposition: Affirm.
3. Holding: An estate by the entirety is not subject to the claims of the creditors of one of the spouses during their joint lives, and the conveyance by Kokichi to their sons was not in fraud of Kokichi’s judgment creditors.
4. Issue: Whether the interest of one spouse in real property, held in tenancy by the entireties, is subject to levy and execution by his or her individual creditors.
5. Procedural History: The trial court refused to set aside the conveyance.
6. Facts: Sawadas were injured when struck by a vehicle operated by Endo. Sawadas filed suit against Endo. Endo was the owner as a tenant by the entirety of a parcel of real property. Endo and his wife conveyed the property to their sons. Son Endos knew that Kokichi was involved in an accident and that he carried no liability insurance. Sawadas were awarded judgment on their complaints, but frustrated in their attempts to obtain satisfaction of judgment, the Sawadas brought suit to set aside the conveyance.
7. Rule:
8. Reasoning: tenancy by the entirety- Group I states, the estate is essentially the common law tenancy by the entireties, unaffected by the MWPA. (only H can convey and only H’s share can be seized)
Group II states, the interest of the debtor spouse in the estate may be sold or levied upon for his or her separate debts, subject to the other spouse’s contingent right of survivorship. (spouse can convey interest subject to other spouse’s right of survivorship, creditors can seize subject to other spouse’s right of survivorship).
Group III states, an attempted conveyance by either spouse is wholly void, and the estate may not be subjected to the separate debts of one spouse only. (spouse cannot convey their interest, creditors cannot seize one spouse’s interest).
Group IV, contingent right of survivorship appertaining to either spouse is separately alienable by him and attachable by his creditors during the marriage. (spouse can only convey their right of survivorship, creditors can only seize a spouse’s right of survivorship).
Hawaii join Group III that hold that under the MWPA the interest of a husband or a wife in an estate by the entireties is not subject to the claims of his or her individual creditors during the joint lives of the spouses.
The effect of the MWPA is… no longer could the husband convey, lease, mortgage or otherwise encumber the property without her consent.
Court reject that it would be unfair to the creditors of either spouse to hold that the estate may not be levied upon for the separate debts of either spouse. Court: creditors are no entitled to special consideration. If the debt arose prior to the creation of the estate, the property was not a basis of credit, and if the debt arose subsequently the creditor presumably had notice of the characteristics of the estate which limited his right to reach the property.
Dissent: the restriction upon the freedom of the spouses to deal independently with their respective interests is both illogical and unnecessarily at odds with present policy trends. Should be set aside.
-Endo does not want the house to be seized.
-Common law property system: Community property system:
Upon divorce, property of the spouses remained the property of the spouse holding title. Property held as tenants in common or as joint tenants remained so. Property held in tenancy by the entirety converted into a tenancy in common. (severing marriage only affects the element of entirety)
No-fault divorce and a rule of equitable distribution (property is divided by the court on equitable principles) are modern trend.
Equitable division authorize a court to divide all property owned regardless of the time and manner of acquisition. Others authorize a court to divide marital property (includes all property acquired during marriage by whatever means, or includes only property acquired from earnings of either spouse during marriage.)
In re Marriage of Graham
1. Case Heading:
Parties:
Year: 1978
Court: Supreme Court of Colorado
2. Disposition: Affirm the judgment.
3. Holding: If maintenance is sought and a need is demonstrated, the trial court may make an award based on all relevant factors.
4. Issue: Whether in a marriage dissolution proceeding a MBA constitutes marital property which is subject to division by the court.
5. Procedural History: The trial court found that an education is jointly-owned property to which the other spouse has a property right. The future earnings of MBA were evaluated at $82836 and Anne was awarded $33134. The court of appeals reversed, holding that an education is not itself property subject to division although it was one factor in determining maintenance or in arriving at an equitable property division.
6. Facts: Throughout the six-year marriage, Anne was employed full-time as an airline stewardess and Dennis worked part-time and pursued education. He obtained BS and MBA degrees and obtained a job at a salary of $14000 per year. Anne contributed 70% of the financial support. No marital assets were accumulated, both managed an apartment house, and Anne did the majority of housework and cooking.
7. Rule:
8. Reasoning: Ellis v. Ellis: military retirement pay was not property because it does not have cash surrender value, loan value, redemption value, lump sum value or value realizable after death.
An educational degree is not encompassed even by the broad views of the concept of property.
Todd v. Todd: a law degree is not a community property because it cannot have monetary value.
For a spouse who provides financial support, such contribution may be taken into consideration.
Dissent: it is the increase in the husband’s earning power concomitant to the degree which is the asset conferred on him by his wife’s efforts.
-rent-controlled apartment, social security benefits are examples that can’t be transferred but are properties.
Land should stay in the patriarchal family, but surviving spouses should be supported for their lives. A surviving widow took one-third of personal property if there were surviving issue and one-half otherwise. A surviving widower took all personal property absolutely.
Dower is a gift made by the bridegroom to the bride. The law gave dower to a surviving wife in all freehold land of which her husband was seised during marriage and that was inheritable by the issue of husband and wife. -> land owned in fee simple or as a tenant in common during marriage was subject. Dower was a life estate in one-third of each parcel of qualifying land. Both should sign deeds to release.
Curtesy: a widower was entitled to a life estate in each piece of the wife’s real property. Attached to all freehold land the wife was seised during marriage and that was inheritable by the issue of husband and wife. Did not attach to land.
Elective share in all property to surviving spouse and not only entitled to support but to an ownership share in the decedent spouse’s property. Applies only to property the decedent owns at death.
The Community Property System
Spouses must elect how they will hold the property: (1) to hold all their property in separate ownership, (2) to hold property acquired from earnings as community property, and inherited property as separate property, or (3) to hold all their property from whatever source as community property.
Community property includes earnings during marriage and the rents, profits, and fruits of earnings.
Community property can exist only between married couples. Neither spouse can convey undivided one-half share of community property, except to the other spouse. Each spouse has the power to dispose by will of one-half the community property at death. At the death of one spouse, the entire community property receives a stepped-up tax basis for federal income tax purposes.
Term of years: estate that lasts for some fixed period of time or for a period computable by a formula that results in fixing calendar dates for beginning and ending, once the term is created or becomes possessory.
Periodic tenancy: lease for a period of some fixed duration that continues for succeeding periods until either the landlord or tenant gives notice or termination.
Tenancy at will: a tenancy of no fixed period that endures so long as both landlord and tenant desire.
Tenancy at sufferance: tenant remains in possession after termination of the tenancy -> eviction or consent. Consent usually gives rise to a periodic tenancy.
Conveyance: a lease transfers a possessory interest in land. Contract: leases usually contain a number of promises. Form leases: standardized documents offered to all tenants on a take-it-or-leave-it basis.
Landlords are constrained by Fair Housing Act.
Ernst v. Conditt
1. Case Heading:
Parties:
Year: 1964
Court: Court of Appeals of Tennessee
2. Disposition: Affirm the Chancellor’s decree.
3. Holding: The facts and circumstances -> the parties intended an assignment rather than a sublease.
4. Issue:
5. Procedural History: The Chancellor found the instrument to be an assignment and awarded Ernst.
6. Facts: Ernsts leased a tract of land to Rogers for a term of one year and seven days. Rogers constructed an asphalt race track and other improvements such as floodlights. Rogers negotiated with Conditt for the sale of the business to him. Rogers and Conditt visited Ernst to extend the term of the lease. Conditt operated the Go-Cart track and paid rent for Aug., Sept. and Oct. Ernst contacted Conditt for Nov. rent and Conditt stated he was not liable to them for rent. Conditt last paid rent in June 1961 and remained in possession of the property until the expiration of the leasehold. Ernsts notified Conditt of lease expiration and demanded a settlement of the past due rent and removal of improvements. Ernsts filed a bill based on the idea that Conditt received an assignment of the lease. Conditt states that the agreement is a sublease and Rogers is directly and primarily liable.
7. Rule:
8. Reasoning: Conditt states the amendment was for the express purpose of extending the term of the lease and obtaining the consent of the lessors to a subletting of the premises. It was the intention of Ernst to hold Rogers primarily liable. Rogers would have the implied right to reenter and perform the lease. Rogers retained a reversionary interest in the property.
If the transfer is a sublease, no privity of contract exists and Conditt could not be liable on the covenant to pay rent and the expense of the removal of the improvements. If assignment of the lease, privity of contract exists and Conditt would be liable directly and primarily.
Assignment conveys the whole term, leaving no interest nor reversionary interest in the grantor. In sublease, a tenant grants an interest in the lease premises less than his own, or reserves to himself a reversionary interest in the term.
Court: the agreement is an assignment of the lease. Rogers agreeing to remain liable did not create a reversion or a right to reenter. By assignment, the privity of estate is terminated, but the privity of contract remains. (privity of estate or contract are not affected by a sublease).
By sale of the business, Conditt became the owner of the improvements with the right to their removal.
-Privity of estate: possession in any way. Privity of contract: contractual obligation to the landlord.
-sublease and assignment: assignment if tenant gave the entire interest and sublease if the tenant gives part of their interest. When tenants give a sublease, they retain a reversion.
-Assignment has only privity of contract: Because original tenant has nothing left but has contract with the original landlord (sublessee assume duties to the landlord. Privity of contract demands rent requirements.). Sublease has privity of estate and contract: because .
Distinguishing between a sublease and an assignment: (1) formalistic; assignment arises when the lessee transfers his entire interest under the lease. If the transfer is less than his entire interest, a sublease results. The lessee retains a reversion and the right to possession reverts to him at the end of the period designated in the transfer.
The lessee transfers his entire interest, but the instrument of transfer provides that if the transferee breaches, the original lessee may terminate the arrangement and retake possession (a power of termination or right of re-entry).
(2) intention of the parties.
If the primary lease prematurely terminates: If the landlord exercises a power to forfeit, then the landlord is entitled to possession as against sublessees and assignees. But if the tenant surrenders the primary lease, the rights of possession of sublessees and assignees remain intact.
Leases give rise to privity of contract and privity of estate. Privity: a voluntary transactional relationship between two or more people or entities. Conveyance from the landlord to the tenant creates privity of estate. If the lease contains promises by one to the other, it creates privity of contract. If third party assumed the promises, the third party is liable on a privity of contract theory. If not, it is only liable to parties with whom it is in privity of estate.
Kendall v. Ernest Pestana, Inc.
1. Case Heading:
Parties:
Year: 1985
Court: Supreme Court of California
2. Disposition: Reverse and remand.
3. Holding: Policy against restraints on alienation and the implied contractual duty of good faith and fair dealing support adoption of the rule that where a commercial lease provides for assignment only with the prior consent of the lessor, such consent may be withheld only where the lessor has a commercially reasonable objection to the assignee or the proposed use.
4. Issue:
5. Procedural History: The trial court sustained demurrer to the complaint without leave to amend.
6. Facts: The City of San Jose leased Municipal Airport to Perlitches who assigned their interest to Pestana. Prior to assigning their interest, the Perlitches entered into a 25-year sublease with Bixler. The sublease covered a five-year term plus four 5-year options to renew. The rental rate was to be increased every 10 years. Bixler was to use the premise as an airplane maintenance business. Bixler operated “Flight Services” until, in 1981, he sold the business and the lease to Kendall. Bixler requested consent from the Perlitches’ success-in-interest, Pestana. Pestana refused to consent and demanded more onerous terms as a condition of consenting. Kendall seeks declaratory and injunctive relief and damages.
7. Rule:
8. Reasoning: Minority rule on the validity of approval clauses in leases: a restraint on alienation without the consent of the landlord of a tenant’s interest in leased property is valid, but the landlord’s consent to an alienation by the tenant cannot be withheld unreasonably, unless a freely negotiated provision in the lease gives the landlord an absolute right to withhold consent. Refusal is a question of fact.
Denying consent solely on the basis of personal taste, convenience or sensibility is not commercially reasonable. The lessor’s desire for a better bargain has nothing to do with the permissible purposes of the restraint on alienation.
Arg 1) lease is a conveyance of an interest in real property and the lessor is under no obligation to look to anyone but the lessee for the rent. -> undermined by the rule that lessors have a duty to mitigate damages.
2) an approval clause is an unambiguous reservation of absolute discretion in the lessor over assignment of the lease. -> the clause is not clear and unambiguous; it must have been in the contemplation of the parties that the lessor be required to give some reason for withholding consent.
3) based on stare decisis, the court should not depart from the common law majority rule -> majority viewpoint is far from universal and not adopted here.
4) increase in the market value of property during the term of a lease belongs to the lessor. -> A lessor is free to build periodic rent increases into a lease. Any increase beyond this belongs to the lessor.
A tenant default occurs when it fails to pay rent or observe some other lease obligation or is holding over after the termination and the landlord wishes to recover possession.
Berg v. Wiley
1. Case Heading:
Parties:
Year: 1978
Court: Supreme Court of Minnesota
2. Disposition: Affirm the judgment.
3. Holding: Because Wiley failed to resort to judicial remedies against Berg’s holding possession adversely, his lockout was wrongful as a matter of law. The lockout was nonpeaceable.
4. Issue: (1) is there sufficient evidence that Berg had not abandoned or surrendered the leasehold before being locked out by Wiley. (2) Whether Wiley’s self-help repossession of the premises by locking out Berg was correctly held wrongful as a matter of law.
5. Procedural History: The trial court found that the lockout was wrongful. The jury found no liability on Berg’s IIED claim and no liability on claims for damages to the premises but awarded Berg. The jury found that berg did not abandon or surrender the premises.
6. Facts: Wiley lent, through a written lease agreement, land and a building for use as a restaurant. The lease was for a 5-year term and specified that the tenant bore all costs of repairs and remodeling, to make no changes in the building structure without prior written authorization, to operate in a lawful and prudent manner, and to retake possession should the lessee fail to meet the conditions. Berg took assignment from the prior lessee and opened a “family affair restaurant.” Wiley objected to Berg’s remodeling of the restaurant without procuring written permission and her operation in a state of disrepair with alleged health code violations. Wiley’s attorney charged Berg with breaching lease items 5 and 6 by hanging the building structure without written authorization and health regulation violation. At the end of the 2 week deadline, Wiley tried to change the locks and Berg closed the restaurant. Berg and friends allegedly removed paneling from a wall, Wiley allegedly demanded admittance, and sheriff came. Wiley took possession of the premise and changed the locks. The premise was re-let to another tenant.
7. Rule:
8. Reasoning: (1) Berg intended to retain possession. The lockout cannot be excused on the ground of abandonment or surrender of the leasehold.
Landlord may use self-help to retake leased promises without incurring liability for wrongful eviction when: (1) the landlord is legally entitled to possession, such as where a tenant holds over after the lease term or where a tenant breaches a lease containing a reentry clause; and (2) the landlord’s means of reentry are peaceable.
Under the CL, a tenant who is evicted may recover for wrongful eviction where the landlord had no right to possession or where the means used to remove the tenant were forcible, or both.
The tenant was in possession, claiming a right to continue in possession adverse to the landlord’s claim of breach of the lease, and had neither abandoned nor surrendered the premises. -> Wiley’s means of reentry was not peaceable. Our policy discourage public disturbance.
-traditional rule: self-help is allowed if means of entry are peaceful.
-Modern approach: self-help is not allowed.
Summary proceedings: a response to the shortcomings of ejectment and self-help; aims to be a quick and efficient means to recover possession after termination of a joint tenancy. The statute requires only a few days’ notice.
Sommer v. Kridel
1. Case Heading:
Parties:
Year: 1977
Court: Supreme Court of New Jersey
2. Disposition: Reverse the judgment.
3. Holding: There is no standard formula for measuring whether the landlord has utilized satisfactory efforts in attempting to mitigate damages, and each case must be judged upon its own facts.
4. Issue:
5. Procedural History: The trial court ruled in favor of Kridel, reasoning that justice and fair dealing imposed upon the landlord the duty to attempt to re-let and mitigate. It also ruled that Sommer’s failure to respond to the unequivocal offer of surrender was tantamount to an acceptance. The Appellate Division reversed in a per curiam opinion.
6. Facts: Kridel leased an apartment from Sommer from May 1, 1972 to April 30, 1974 with six weeks rent concession. Kridel expected to begin occupancy around May 1, 1972, but his plans were changed and wrote Sommer asking to be released from the lease, which Sommer did not respond. A third party inquired about renting the apartment but she was told that it was already rented. Sommer did not re-enter or exhibit the apartment to anyone until August 1, 1973. A new tenant moved in on September 1, 1973. Sommer sued Kridel in August for the total amount due for the full two-year term and then amended the term to until Sept, 1973.
7. Rule:
8. Reasoning: Perosio leased from Feb 1973 to Jan 1975. Perosio occupied the premise until February 1974 and vacated it. Riverview filed a complaint in Oct 1974 demanding money from Feb 1974 through Oct 1974. The trial court granted the landlord’s motion for summary judgment. Appellate affirmed. Reverse and remand because no factual determination was made regarding the landlord’s efforts to mitigate damages and Riverview did not answer the interrogatories.
Majority rule equates a lease with a transfer of a property interest in the owner’s estate.
Where there is a claim for damages under a residential lease, it must be governed by more modern notions of fairness and equity. The landlord shall be required to carry the burden of proving that he used reasonable diligence in attempting to re-let the premises.
-CL: the landlord has no duty to mitigate.
Security deposit protects the landlord in the event of a default, of damaging the premises, or other breaches.
Characterize a payment as “consideration,” “bonus,” or “advance rent” for execution of the lease.
Rent acceleration: upon the tenant’s default, all rent for the entire term is due and payable.
Village Commons, LLC v. Marion County Prosecutor’s Office
1. Case Heading:
Parties:
Year: 2008
Court: Court of Appeals of Indiana
2. Disposition: Affirm the judgment.
3. Holding:
4. Issue: (1) Whether the exclusive-remedy provision of the lease between Village and the MCPO barred the MCPO from asserting that it was evicted by acts or omissions of the Village; (2) whether the trial court’s findings that the MCPO was both actually evicted and constructively evicted were clearly erroneous; and (3) whether a provision limiting the MCPO’s time to sue barred the MCPO’s defenses and counterclaims.
5. Procedural History: Village alleged breach of the lease. The MEPO counterclaimed based on a wrongful eviction theory and stated that it was constructively evicted in August 2002. The trial court held that (1) the MCPO’s defenses and counterclaim were not barred by the lease’s exclusive-remedy provisions; (2) the MCPO was actually evicted in Oct 2002 and constructively evicted in Jan 2003; and (3) the landlord did not mitigate its damages reasonably. The MCPO was awarded.
6. Facts: The MCPO leased the basement of the Victoria Centre from Lombard. Lombard sold the Victoria Centre to Village. The MCPO was to rent the space for seven years and five months, commencing in August 1999. The payment obligation increased over time. The lease required Village to maintain all equipment in common use and the premises in good order, condition and repair. In the event of a breach, the MCPO could sue but was not entitled to terminate the lease or withhold rent. Beginning in 2001, there was a series of water intrusions from the outside and leaks from building equipment that affected the MCPO space. In March 2001, the restroom area leaked. In June 2001, the MCPO’s evidence room leaked. Leaks continued. Village hired Indoor Air Management but the leak continued. The main water supply pipe broke and evidence room was damaged, but Village did not follow the Mold Remediation Services’ recommendations. IAM informed the MCPO that additional demolition was necessary. IAM recommended steps to deal with the moisture and molds. The problems continued and in Jan 2003, the MCPO elected to vacate the leased premises and paid the last rent and did not pay three years and eleven months worths of rent. In Feb 2004, Village filed a complaint against the MCPO.
7. Rule:
8. Reasoning: Village argues that the trial court ignored the exclusive-remedy provision by concluding the MCPO was constructively evicted. -> from the unambiguous language of the lease the MCPO did not have the right to terminate the lease or withhold, setoff, or abate any rent due.
Actual eviction: when the tenant is deprived of the occupancy of some part of the demised premises -> material. Constructive eviction: the lessor, without intending to oust the lessee, does an act by which the latter is deprived of the beneficial enjoyment of some part of the premises in which case the tenant has his right of election, to quit, and avoid the lease and rent, or abide the wrong and seek his remedy in an action for trespass.
The general rule is that a tenant will be relieved of any obligation to pay further rent if the landlord deprives the tenant of possession and beneficial use and enjoyment of any part of the demised premises by actual eviction.
Sigsbee v. Swathwood, constructive eviction: if an act or omission by the lessor materially deprives the lessee of the beneficial use or enjoyment of the lease property, the lessee may elect to abandon the property and avoid further obligations under the lease.
Upon the occurrence of eviction, it is the lessor’s act or omission that ends the obligation to pay rent, not the lessee. It was Village’s own act or omission that resulted in extinguishing MCPO’s obligation.
Evidence that the water intrusions were recurring and not transitory or fleeting. Evidence supports that the MCPO was deprived.
-Past, caveat emptor: buyers beware. Not easy to fix houses in modern times -> landlord owe duty.
-traditional rule: actual eviction results in no liability for rent.
-minority rule: deprivation of partial occupancy results in partial rent reduction.
-constructive eviction -> breach of covenant of quiet enjoyment -> acts or omissions of landlord substantially interferes with tenant’s ability to enjoy their property.
-Court will imply quiet enjoyment clauses (because landlords are powerful and pursue fairness)
Covenant of quiet enjoyment: in every lease there is an implied covenant that the tenant shall have the right of possession, occupancy, and beneficial use of every portion of the leased premises.
Breached when the landlord’s conduct had the effect of depriving the lessee of the beneficial use of the demised premises, whether by positive acts of interference or by withholding something essential to full enjoyment and included within the terms of the lease.
Actual eviction: being physically removed or kept out by the landlord.
Constructive eviction: (a) the condition of the leased premises amounts to a breach of the covenant of quiet enjoyment; (b) if the breach is so substantial as to justify the tenant absenting the premises; and (c) if the tenant thereafter leaves within a reasonable time.
Hilder v. St. Peter
1. Case Heading:
Parties:
Year: 1984
Court: Supreme Court of Vermont
2. Disposition: Affirmed in part reversed in part and remanded for hearing on additional compensable damages.
3. Holding: (1) yes. (2) no indication on how the court reached $1500 figure. (3) both are liable.
4. Issue: Did the court correctly calculate the amount of damages awarded the plaintiff? Was the award proper since the plaintiff remained in possession the entire fourteen month period? Was the finding that S. Peter acted on his own behalf and with the apparent authority of Patricia Peter was error?
5. Procedural History: Superior Court ordered Peter to pay Hilder for all rent paid and additional.
6. Facts: Hilder began occupying an apartment at Peter’s apartment with three children and one grandchild. Hilder agreed to pay Peter $140 a month and a damage deposit of $50. The previous tenant left garbage and personal belongings and Peter offered to refund Hilder’s damage deposit if Hilder clean up herself. Hilder did not receive the deposit and Peter denied receiving one. Hilder discovered a broken window, and Peter promised to repair it but Hilder fixed it with her expense after a week. Peter promised but never provided a front door key. Hilder installed a padlock at her own expense. Toilet, bathroom light, and wall outlet were inoperable. Water pipes leaked. Plaster fell and dangled, making Hilder remove all from the back bedroom. Odor of raw sewage permeated with a broken sewage pipe.
7. Rule:
8. Reasoning: CL, caveat lessee: the tenant took possession of the demised premises irrespective of their state of disrepair. The land was regarded as the essence of the conveyance and the landlord was under no duty to render the premises habitable unless there was an express covenant to repair written.
Constructive eviction: if the landlord wrongfully interfered with the tenant’s enjoyment of the demised premises, or failed to render a duty to the tenant as expressly required, the tenant could abandon the premises and cease paying rent.
The landlord is more familiar with the dwelling unit and mechanical equipment attached to that unit, and is more financially able to discover and cure any faults and break-downs. Tenants vying for the limited housing are virtually powerless to compel the performance of essential services. -> in the rental of any residential dwelling unit an implied warranty exists in the lease that the landlord will deliver over and maintain premises that are safe, clean and fit for human habitation.
In determining breach, look to local or municipal housing code. To bring a cause of action for breach of the implied warranty, the tenant must first show that it notified the landlord of the deficiency or defect not known to the landlord and allowed a reasonable time for its correction. The measure of damages shall be the difference between the value of the dwelling as warranted and the value of the dwelling as it exists in its defective condition. Damages from a tenant’s discomfort and annoyance from the breach is allowed.
Withholding the payment of future rent: The tenant must show that (1) the landlord had notice of the previously unknown defect and failed, within a reasonable time, to repair it; and (2) the defect, affecting habitability, existed during the time for which rent was withheld.
When the landlord is notified of the defect but fails to repair it within a reasonable amount of time, and the tenant subsequently repairs the defect, the tenant may deduct the expense of the repair from future rent.
Punitive damages are available when breach is of such a willful and wanton or fraudulent nature as to make appropriate the award of exemplary damages.
When a landlord, after receiving notice of a defect, fails to repair the facility that is essential to the health and safety of his or her tenant, an award of punitive damages is proper.
The Statute of Frauds sought to make people more secure in their property and their contracts by making deceitful claims unenforceable.
Sections 1-3: except for leases for less than three years, no interest in land could be created or transferred except by an instrument in writing signed by the party to be bound thereby.
Section 4: no action shall be brought upon any contract or sale of lands or any interest in or concerning them unless the agreement… be in writing, and signed by the party to be charged therewith.
Statute of frauds requirements: writing, signed by party to be bound, describes real estate, states price, if price was agreed on.
Exceptions to the Statute of Frauds: part performance (allows the specific enforcement of oral agreements when particular acts have been performed by one of the parties to the agreement) and estoppel (unconscionable injury would result from denying enforcement of the oral contract).
Exceptions to SoF: part performance examples: (provision of purchase price, valuable improvements, buyer taking possession).
Estoppel (actions taken on injurious reliance on the contract; example: selling home).
Hickey v. Green
1. Case Heading:
Parties:
Year: 1982
Court: Appeals Court of Massachusetts
2. Disposition: Remand.
3. Holding: The conveyance of Lot S by Green should be required now.
4. Issue:
5. Procedural History:
6. Facts: Green owns a lot (Lot S) and advertised it for sale. Hickey and his wife discussed purchasing Lot S for $15000. Green accepted a deposit check of $500 and Hickey had left the payee line blank because he was uncertain whether Green or her brother would receive the check. Hickey stated that his intention was to sell his home and build on Lot S. Hickey advertised his home for sale and received a deposit check. Green told Hickey she did not intend to sell Lot S but sell it to another for $16000. Hickeys seek specific performance.
7. Rule:
8. Reasoning: Ms. Green’s conduct cannot be condoned. It is a permissible inference that Hickeys’ house sale was appropriate and expected.
-Specific performance -> reasonable reliance, based on the assent of the other party or foreseeable reliance, change in position that is unjust.
E-sign: a signature, contract, or other record… may not be denied legal effect, validity, or enforceability solely because it is in electronic form.
Marketable title is a title not subject to such reasonable doubt as would create a just apprehension of its validity in the mind of a reasonable, prudent, and intelligent person.
Lohmeyer v. Bower
1. Case Heading:
Parties:
Year: 1951
Court: Supreme Court of Kansas
2. Disposition: Reverse and remand.
3. Holding: Cancel and set aside the contract.
4. Issue:
5. Procedural History: The trial court rendered judgment for the Bowers and decreed specific performance.
6. Facts: Lohmeyer entered into a contract to buy lot 37 from the Bowers. The contract provided that Bower would convey a good merchantable title. Lohmeyer gave the abstract of title to a lawyer and learned that Emporia had a zoning ordinance where no frame building could be erected within three feet of a side or rear lot line. Bower offered to purchase and convey to Lohmeyer two feet along the north side, but Lohmeyer refused. Lohmeyer brought suit to rescind the contract and Bowers sought specific performance.
7. Rule:
8. Reasoning: Is the property subject to encumbrances or other burdens making the title unmerchantable and are they such as are expected by the provision of the contract?
Violation of ordinances and restrictions so encumber the title as to expose the party holding it to the hazard of litigation and make such title doubtful and unmarketable.
-private covenant: restrictions between neighbors to what to do or not in the property.
-Encumbrances -> private restrictions (covenants, mortgage, easement)
-Government restrictions -> mere existence is not an encumbrance.
-Violation of a government restriction is an encumbrance.
-Just an existence is of a private encumbrance; not so in government restrictions.
Stambovsky v. Ackley
1. Case Heading:
Parties:
Year: 1991
Court: New York Supreme Court, Appellate
2. Disposition: Reverse and remand.
3. Holding: The first cause of action seeking rescission of the contract reinstated.
4. Issue:
5. Procedural History: The district court dismissed the complaint.
6. Facts: Stambovsky purchased a home that is reputed to be haunted. Ackley reported the presence of spectral apparitions in national and local press. The impact of the reputation is it impairs both the value of the property and its potential for resale.
7. Rule:
8. Reasoning: The Court is moved by the spirit of equity to allow rescission. Caveat emptor is not so all-encompassing doctrine… where fairness and common sense dictate that an exception should be created… the most meticulous inspection and search would not reveal the presence of poltergeists.
D: as is clause bars recovery. Court: the facts are peculiarly within the knowledge of the party invoking it. Effect is limited to tangible or physical matters not paranormal phenomena.
-Caveat emptor (buyer beware) exception: fraudulent misrepresentation, fiduciary duty (e.g. trustee selling to beneficiary), active concealment, affirmative misrepresentation, partial disclosure (e.g. discloses living room but does not disclosure the leak in the bedroom).
-When (1) the seller creates the problem, (2) materially impair the value, (3) within seller’s knowledge or (4) unlikely to be discovered by buyer with due care, they have an additional responsibility to disclose the latent defect.
Johnson v. Davis
1. Case Heading:
Parties:
Year: 1985
Court: Supreme Court of Florida
2. Disposition: Affirm.
3. Holding: The Johnsons’ fraudulent concealment entitles the Davises to the return of the deposit plus interest.
4. Issue:
5. Procedural History: The trial court found false representation entitling Davis to rescind.
6. Facts: The Davises entered into a contract to buy the Johnsons’ home. The Johnsons knew the roof leaked but stated roof had no problems. Davis deposited and entered the home and discovered water gushing down from the windows and ceiling. Davis sued to rescind the contract and return the deposit.
7. Rule:
8. Reasoning: The distinction between concealment and affirmative representations is tenuous.
The tendency of the more recent cases has been to restrict rather than extend the doctrine of caveat emptor. -> moves toward that the full disclosure of all material facts must be made whenever elementary fair conduct demands it.
-Second approach (Johnson approach) duty to disclose latent defects when: (1) seller knows it; (2) materially affects value of the property; (3) not observable or known by buyer
-Third approach: duty to disclose all defects, whether patent or latent.
-Deeds must (1) be in writing; (2) identify the grantor and the grantee; (3) describe the property to be conveyed; (4) state the grantor’s intent to convey; and (5) contain the grantor’s signature.
-Description of the deed: (1) reference to natural or artificial monuments and reference to directions and distances; (2) reference to a government survey, recorded plat, or some other record; and (3) reference to the street and number or the name of the property.
-General warranty deed: warrants title against all defects in title, whether they arose before or after the grantor took title
-Special warranty deed: warrants only against the grantor’s own acts but not the acts or others.
-Quitclaim deed: contains no warranties of any kind.
-Present covenants: covenant of seisin (grantor owns the estate), covenant of right to convey (grantor has the right to convey the property), covenant against encumbrances (no encumbrances on the property). Broken at the time the deed is delivered. Statute of limitation runs when deed is executed.
-Future covenants: Covenant of general warranty (grantor will defend against lawful claims and will compensate), covenant of quiet enjoyment (grantee will not be disturbed in possession and enjoyment of the property by assertion of superior title), covenant of further assurances (grantor will execute any other documents required to perfect the title conveyed). Promises that the grantor will do some future act. Statute of limitation runs when breach is revealed.
-Estoppel by deed: grantor conveys land it does not own and warrants the title. Grantor subsequently acquires title to the land, and the grantor is estopped to deny that he had title. The law automatically passes the subsequently acquired title to the grantee.
To be effective, a deed must be delivered with the intent that it be presently operative.
The grantor hands the deed to the grantee upon receipt of the purchase price (immediate transfer), or the grantor puts the deed in the hands of a third party who hands over the deed upon closing the transaction (when all conditions are fulfilled).
When the escrow agent delivers the deed to the grantee, the title will relate back to the date the grantor handed the deed to the agent.
The most common case of delivery without manual tradition arises when the grantor executes a deed and places it in a safe deposit box, usually with the thought that the grantee will take the land at the grantor’s death. If the grantor intends to pass title or a future interest now, there has been a delivery even though possession may be postponed until the grantor’s death. If the grantor intends that no interest should arise until death, no delivery during life has taken place; the deed cannot take legal effect at death because the grantor intended it to be a will, no a deed.
Promissory note: borrower’s promise to repay the amount of the loan plus interest. Mortgage: security that the loan will be repaid.
The only type of mortgage in the U.S. was a fully amortizing fixed interest rate mortgage.
Deposit Institutions Deregulation and Monetary Control Act allowed lenders to charge whatever the market would bear. -> institutions began to experiment with adjustable rate loans (rate increases according to an index).
Subprime or Alt-A market: risky segment of the mortgage market.
Prior to the New Deal, there was one mortgage market. Now, there is Fannie Mae and Freddie Mac. Now, loans are largely made, sold, securitized, and then placed under the administration of a servicing company.
Securitization increases liquidity of the mortgage market, removes loans from lenders’ balancing sheets, and transfers the responsibility of loa servicing to a separate party.
Equity of redemption
After default by the debtor, the lender had title to the land but the mortgagor could redeem at any time -> the chancellor permitted the mortgagor’s right of redemption to be foreclosed.
Strict foreclosure: a proceeding in which the mortgagor was ordered to pay within a given period or be forever barred.
Foreclosure sale: direct an officer to sell the land at a public sale, conveying title to the property to the purchaser and paying the debt to the lender and paying any amount exceeding the debt to the borrower.
Nonjudicial foreclosure: the mortgagor grants the mortgagee a power of sale, which permits the mortgagee to hold the public sale itself or through a public official, after giving notice to all interested.
Deed of trust: the borrower conveys title to a person, usually a third person but possibly the lender to hold in trust to secure the debt.
Statutory right of redemption: allows the mortgagor to buy back the title from the purchaser at a judicial foreclosure sale for the sales price plus costs within a specified period after the foreclosure sale.
If foreclosure is through a judicial proceeding the sale price is ordinarily not challengeable.
Murphy v. Fin. Dev. Corp.
1. Case Heading:
Parties:
Year: 1985
Court: Supreme Court of New Hampshire
2. Disposition: Reversed in part and affirmed in part.
3. Holding:
4. Issue: Did the master err in concluding that the lenders failed to comply with the rule that a mortgagee executing a power of sale is bound both by the statutory procedural requirements and by a duty to protect the interests of the mortgagor through the exercise of good faith and due diligence?
5. Procedural History: The lenders moved to dismiss, arguing that the plaintiffs failed to petition for an injunction, and the court denied and ruled for the plaintiffs, holding that the lenders failed to exercise good faith and due diligence.
6. Facts: The plaintiffs purchased a house in 1966 with a mortgage. They refinanced in 1980. In 1981, Richard Murphy became unemployed and the plaintiffs were months in arrears on payments. After unsuccessful discussion, the lenders gave notice of their intent to foreclose. The plaintiffs paid the seven months’ mortgage arrearage but failed to pay some costs and fees. The lenders scheduled the foreclosure sale. The plaintiffs failed to pay fees and the lenders’ attempt to arrange new financing failed. The sale proceeded as scheduled on Dec 15. The lenders’ representative made the only bid of $27000. Attorney Hollis’ client, Dube, contacted the lenders and negotiated to purchase at $38000. The plaintiffs sued for 1) damages and 2) set aside the sale.
7. Rule:
8. Reasoning: There is ample evidence to support the finding that the lenders failed to exercise good faith and due diligence in obtaining a fair price. The lenders offered the property for sale at a price sizably above that for which they had purchased it -> had reason to know that they could make a substantial profit on a quick turnaround sale.
The substantial amount of equity in the property, the knowledge of the lenders as to the appraised value of the property, and the plaintiffs’ efforts to forestall foreclosure by paying the mortgage arrearage within weeks of the sale -> the lenders had a fiduciary duty to take more steps -> lender had to exercise reasonable care to obtain a fair price and failed.
Lenders failed to exercise due diligence, but damages awarded equal to the difference between the fair market value and the price obtained at the sale was in error.
-Note and mortgage is assigned to secondary mortgage market to Colonial.
-Majority: Focusing on the process. Procedural irregularity that is prejudicial or chilled bidding.
-Minority (Murphy): Mortgagee owes fiduciary obligation to exercise due care to receive fair price.
Courts invalidate a foreclosure sale based on price when: (1) inadequacy of the sale price is an insufficient ground unless it is so gross as to shock the conscience of the court, warranting an inference of fraud or imposition; (2) in the absence of some other defect in the foreclosure process, the price must be grossly inadequate before a sale may be invalidated. Chilled bidding, unusual hour of sale, and other instances may invalidate a sale.
The purchaser may buy the mortgagor’s equity either subject to the mortgage (does not assume any personal liability for the mortgage debt, for which the mortgagor remains liable) or assuming the mortgage (the purchaser promises to pay off the mortgage debt).
Acceleration clause: mortgagee declares the whole amount due upon transfer of the mortgagor’s equity.
Due-on-sale clause: increase the loan interest rate to current rates upon transfer of the property.
The recording acts do not affect the validity of a deed or other instrument. (1) it establishes a system of public recordation of land titles. (2) the recording system preserves in a secure place important documents that may be easily lost or misplaced. (3) protects purchasers for value and lien creditors against prior unrecorded interests.
Prior to judgment, any party may record a lis pendens (notice of pending action). Wills and affidavits of heirship of an intestate are entitled to be recorded.
A subsequent bona fide purchaser is protected against prior unrecorded interests.
Tract indexes: indexes documents by a parcel identification number assigned to the particular tract.
Grantor-grantee index: separate indexes are kept for grantors and grantees. Grantor index: all instruments are indexed alphabetically and chronologically under the grantor’s surname. Grantee: ‘’ grantee’s surname.
Searching title: (1) trace backward for ancestors and then under each ancestor fill in the names and relationships of his or her descendents. Go backward in time to an acceptable source or root of title, then search forward from that source. Search backwards for the grantee index and forward for the grantor index.
In running the grantor index under each name, pick up any mortgages given, any attachments or lawsuits filed against the person, and any conveyances by the person of interests less than a fee simple. Run the grantor index under the owner’s name forward from the time of the execution of the first deed giving title to such owner to the time of recording of the first deed out from such owner.
Search under the date of execution of the deed rather than at the date of recording.
Luthi v. Evans
1. Case Heading:
Parties:
Year: 1978
Court: Supreme Court of Kansas
2. Disposition: Reverse the judgment of the Court of Appeals.
3. Holding: Since Burris had no actual knowledge of the prior assignment, the assignment to Burris prevails over that to Tours.
4. Issue: Whether the recording of an instrument of conveyance which uses a Mother Hubbard clause to describe the property conveyed constitutes constructive notice to a subsequent purchaser.
5. Procedural History: The district court found for Burris and the appellate court for Tours.
6. Facts: Owens was the owner of interest in a number of oil and gases leases. Owens assigned to Tours all such interests. Owens owned the Kufahl lease, not described in the first paragraph of the assignment. The second paragraph of conveyance described the Kufahl lease. Owens executed and delivered a second assignment of her working interest in the Kufahl lease to Burris. Burris personally checked the records in the office of the registrar of deeds and secured an abstract of title to the real estate; neither reflected the prior assignment to Tours.
7. Rule:
8. Reasoning: Tours cites the second paragraph of the assignment to argue that the Kufahl lease was conveyed to Tours, and the recording gave constructive assignment. Burris contents that the general language in the second paragraph fail to state with specificity the names of the lessor and lessee, the date, any legal description, and the recording data and were not sufficient to give constructive notice. Register of deeds could not identify the real estate and he was not aware of the assignment.
Mother Hubbard instrument: deed intended to convey an interest in real estate and describes the property to be conveyed as all of the grantor’s property in a certain county.
The second paragraph validly transferred the Owens interest in the Kufahl lease to Tours as between the parties to that instrument.
An instrument which contains a Mother Hubbard clause is not effective as to subsequent purchases and mortgagees unless they have actual knowledge of the transfer. -> recording was not sufficient to impart constructive notice to a subsequent purchaser. Burris had no actual knowledge.
Race statute: the earliest type of recording act; the person who wins the race to record at the recorder’s office prevails. Actual knowledge is irrelevant. Limits inquiry into matters off the record and is more efficient.
Notice statute: If a subsequent purchaser had notice of a prior unrecorded instrument, the purchaser could not prevail over the prior grantee. Protects a subsequent purchaser against prior unrecorded instruments even though the subsequent purchaser fails to record.
Shelter rule: a person who takes from a bona fide purchaser protected by the recording act has the same rights as his grantor. (A grantee from a bona fide purchaser grantor who is protected under the recording statue has the same rights as his grantor)
Race-notice statute: a subsequent purchaser is protected against prior unrecorded instruments only if the subsequent purchaser (1) is without notice of the prior instrument and (2) records before the prior instrument is recorded.
Actual notice: one is personally aware of a conflicting interest in real property, often due to another’s possession of the property.
Record notice (constructive): notice one has based on properly recorded instruments.
Inquiry notice (constructive): based on facts that would cause a reasonable person to make inquiry into the possible existence of an interest in real property.
P1. Rose prevails under both statutes. P2. Matt in race statute. Lili in notice statute. Matt in race-notice.
Inquiry notice: purchaser discovers some facts that would cause a reasonable person to start asking questions about whether the title might be in conflict with other valid rights.
Harper v. Paradise
1. Case Heading:
Parties:
Year: 1974
Court: Supreme Court of Georgia
2. Disposition: Reverse the judgment of the trial court and rule in favor of Harper.
3. Holding:
4. Issue:
5. Procedural History: The trial court granted appellees’ motion for directed verdict and overruled the appellants’ motion for directed verdict.
6. Facts: In 1922, Susan Harper conveyed by warranty deed a farm to Maude Harper for life with remainder in fee simple to Maude’s children. In 1957, Clyde Harper, a named remaindermen, recorded the deed. In 1928, Susan Harper’s living heirs executed an instrument to Maude Harper, recorded 1928. In 1933, Maude Harper executed a security deed to convey the entire fee simple to Thornton to secure a fifty dollar loan. Thornton foreclosed the property, receiving a sheriff’s deed executed and recorded. Paradise claim the property as grantees under a warranty deed executed and recorded in 1955. Paradise also claim adverse possession.
7. Rule:
8. Reasoning: Paradise contend that the 1928 instrument executed must be treated as having been executed by the heirs as agents or representatives of Susan Harper, making 1922 and 1928 deeds derivative of the same source.
Court: 1928 deed was to Maude, who was the life tenant in the 1922 deed. 1928 deed serve as a disclaimer by the heirs that they were so holding or apparently holding the land.
It was incumbent upon the appellees to ascertain through diligent inquiry the contents of the earlier deed and the interests conveyed therein.
Adverse possession claim, Court: the remaindermen had no right of possession until life tenant’s death.
Marketable title acts limit title searches to a reasonable period, typically the last 30 or 40 years. When one person has a record title to land for a designated period of time, inconsistent claims or interests are extinguished.
They seek to extinguish old title defects automatically with the passage of time. If a person has an unbroken chain of title from the present back to his root of title (the most recent transaction in his chain of title that has been of record at least forty years), then he has the sort of title in favor of which their extinguishment feature will operate. Claims and interests antedating the root of title are null and void. The acts do not require a person seeking their benefits to be a bona fide purchaser.
To ensure that his leasehold is preserved from extinction, a person must file a notice of claim under the act every forty years after the date of his lease.
U.S. rejects Torrens registration and title insurance assures land purchasers. Title insurance is bought at the time of closing via an upfront premium paid. The premium is based on the purchase price for a homeowner’s policy and amount of the loan for a lender’s policy.
Title insurance is the opinion of the insurer concerning the validity of title, backed by an agreement to make that opinion good if it should prove to be mistaken.
Title insurance guarantees that the insurance company has searched the public records and insures against any defects in the public records unless such defects are specifically excepted from coverage in the policy. Excludes: losses arising from government regulations affecting the use, occupancy, or enjoyment of land; claims of persons in possession not shown by the public records, as well as unrecorded easements, implied easements, and easements arising by prescription.
Sic utere tuo ut alienum non laedas: one should use one’s own property in a way as not to injure the property of another.
Morgan v. High Penn Oil Co.
1. Case Heading:
Parties:
Year: 1953
Court: Supreme Court of North Carolina
2. Disposition: Withstand the motion of Oil for a compulsory nonsuit (affirm).
3. Holding:
4. Issue:
5. Procedural History: The jury found nuisance and set damages at $2500. The trial judge entered a judgment to that effect and enjoined Oil from continuing the nuisance.
6. Facts: The land that Morgan purchased contain a dwelling house, a restaurant, and accommodations for thirty-two habitable trailers. The High Penn Oil Company operated an oil refinery at 1000 feet from the dwelling of Morgan. Numerous structures are situated within a radius of one mile of the oil refinery. The oil refinery emitted nauseating gases and odors in great quantities that invaded the land owned by Morgan and others, making persons of ordinary sensitiveness uncomfortable and sick, and Oil failed to put an end to the pollution after notice and demand.
7. Rule:
8. Reasoning: the feature which gives unity to this field of tort liability is the interest invaded.
An invasion is intentional in the law of private nuisance when the person whose conduct is in question as a basis for liability acts of the purpose of causing it, or knows that it is resulting from his conduct, or knows that it is substantially certain to result from his conduct.
Oil intentionally and unreasonably caused noxious gases and odors to escape onto the nine acres. Oil will cast noxious gases and odors with such recurring frequency to inflict irreparable injury -> injunction is necessary.
-Intentional and unreasonable.
-Unintentionally invades and negligent, reckless, or ultrahazardous.
-Harm factors are the extent and character of the harm, the social value of the plaintiff’s use, its suitability to the locality in question, and the burden on the plaintiff of avoiding the harm.
-Utility factors are social value of D’s activity, its suitability to the locality in question, and the impracticality of the defendant or burden of preventing the harm.
-Jost test/threshold test: looks at the level of interference.
-Additional restatement: (1) serious injury and (2) defendant can compensate and stay in business.
Spur Industries, Inc. v. Del E. Webb Development Co.
1. Case Heading:
Parties:
Year: 1972
Court: Supreme Court of Arizona
2. Disposition: Affirm the trial court’s enjoinment. Remand for a hearing upon the damages sustained by Spur.
3. Holding: Spur’s is both public and private nuisance. Webb must indemnify Spur for a reasonable amount of the cost of moving or shutting down.
4. Issue: (1) where the operation of a business such as a cattle feedlot is lawful in the first instance, but becomes a nuisance by reason of a nearby residential area, may the feedlot operation be enjoined in an action brought by the developer of the residential area? (2) Assuming that the nuisance may be enjoined, may the developer of a completely new town or urban area in a previously agricultural area be required to indemnify the operator of the feedlot who must move or cease operation because of the presence of the residential area created by the developer?
5. Procedural History: The trial court permanently enjoined the operation of the feedlot.
6. Facts: In 1954, a retirement community of Youngtown was commenced. In 1956, Spur’s predecessors developed feedlots. In 1959, Del Webb developed an urban area known as Sun City. Del Webb started construction of a golf course and Spur’s predecessors started leveling ground for more feedlot area. Spur purchased the properties and expanded them. Del Webb built 450 to 500 houses and did not consider odors from the Spur feed pens a problem, and expanded southerly until sales resistance became so great that the parcels were difficult to sell. Spur filed suit alleging that lots in the south were unfit for development as residential lots because of the Spur feedlot. Millions of pounds of wet manure per day for 30000 head of cattle would create an unhealthy situation for the residents.
7. Rule:
8. Reasoning: A private nuisance affects one or small number of persons in the enjoyment of private rights, while a public nuisance is one affecting a considerable number of people. -> Spur’s is both public and private nuisance -> affirm the judgment permanently enjoining the operation of feedlot.
Residential landowner may not have relief if he knowingly came into a neighborhood reserved for industrial or agricultural endeavor. There was no indication at the time Spur located that a new city would spring up alongside. -> Spur is required to move not because of any wrongdoing but because of a proper and legitimate regard of the courts for the rights and interests of the public.
Del Webb is entitled not because it is blameless but because of the damage to the people who have been encouraged to purchase. -> it does not seem harsh to require a developer who took advantage to indemnify who are forced to leave as a result. -> Webb must indemnify Spur for a reasonable amount of the cost of moving or shutting down.
Since a private nuisance arises from interference with the use and enjoyment of land, only owners of interests in land can bring suit. Since a public nuisance arises from interference with public rights, any member of the affected public can sue but usually only if the person bringing suit can show special injury (injury or damage of a kind different from that suffered by other members of the public).
Land use arrangements: agreements involve multiple parcels of land and the purpose of the agreements is to increase the total value of all the parcels involved. The agreements (commonly called servitudes) create interests in land, binding and benefiting not only the parties but also their successors.
Traditional servitude law draws a dichotomy between types of easements and covenants. Covenants are divided into covenants enforceable at law (real covenants) and covenants enforceable in equity (equitable servitudes).
Easement: an agreement allowing a non-owner to enter upon and use a piece of property.
Affirmative easement: A is given the right to enter upon B’s land. (gives a neighbor the right to enter or perform an act on the servient land)
The person who gets the right has the dominant estate. The person who allows has the servient estate.
Profit: A is given the right to enter upon B’s land and remove something attached to the land.
Negative easement: A is given the right to enforce a restriction on the use of B’s land. (easements forbidding one landowner from doing something on his land that might harm a neighbor)
Equitable servitude: A is given the right to require B to perform some act on B’s land.
Real covenant: A is given the right to require B to pay money for the upkeep of specified facilities.
The law of servitudes is a study of how the tides of urbanization and the demands of the market for efficient control of externalities swept around the artificial barriers limiting one form of servitude and forced courts to recognize and develop other forms.
Easements, real covenants, and equitable servitudes were merged into one, simply called the servitude.
Common field system declined during the reign of the Tudors. As population grew and the price of foodstuffs increased, so did the demand for enclosure of land in separately owned tracts, withdrawing some portion of open fields or wasteland from use in common. Common fields and shared pastures gave way to fenced fields and consolidated farms.
Affirmative easements included: rights of way, the right to place clothes on lines over neighboring land, the right to nail fruit trees on a neighbor’s wall, and the rights to water cattle at a pond and take water for domestic purposes.
Negative easements: easements forbidding one landowner from doing something on his land that might harm a neighbor.
Appurtenant: gives the right of land that they do not own to whomever owns a parcel of land that the easement benefits. Require both a dominant tenement and a servient tenement. Transferable along with the dominant tenement. Benefits the easement owner in the use of land belonging to that owner.
In gross: gives the right of land that they do not own to some person without regard to ownership of land. Involves only a servient estate. May be alienable or inalienable. Personal in the sense that they do not attach to any parcel of land owned by the easement owner. Transferability raises special problems. Benefits the easement owner personally rather than in connection with use of land which that person owns.
An easement is within the Statute of Frauds.
Willard v. First Church of Christ, Scientist
1. Case Heading:
Parties:
Year: 1972
Court: Supreme Court of California
2. Disposition: Reverse the judgment.
3. Holding: The record does not disclose any reliance upon the old common law rule, and there is no problem of an ancient title.
4. Issue:
5. Procedural History: The district court entered judgment quieting the Willard’s title, because the clause was invalidated by the common law rule that one cannot reserve an interest in property to a stranger to the title.
6. Facts: McGuigan owned lots 19 and 20. McGuigan permitted the church to use lot 20 for parking and sold lot 19 to Petersen, who used the building as an office. Petersen listed lot 19 with Willard and Willard signed a deposit receipt for the sale of lots 19 and 20. Petersen delivered a deed for both lots in fee simple. Petersen approached McGuigan with an offer to purchase lot 20, and McGuigan conditioned the purchase on the church continuing to use the lot for parking. The church’s attorney drew up a provision for the deed and McGuigan sold the property to Petersen, and he recorded the deed. Willard paid, received deed, and recorded the deed, which did not mention an easement for parking by the church. Petersen did not mention the easement clause contained in the deed he received. Willard became aware of the easement and sought quiet title against the church.
7. Rule:
8. Reasoning: McGuigan would not have sold the lot unless she was assured the church could use the lot. McGuigan had discounted the price by about one-third because of the easement.
The common law rule derives from reservations from a grant. A reservation allows a grantor’s whole interest in the property to pass to the grantee, but revests a newly created interest in the grantor. Reservation could theoretically vest an interest in a third party, but it has been criticized.
Court’s primary objective in construing a conveyance is to give effect to the intent of the grantor. The common law rule may frustrate the grantor’s intent or produce an inequitable result because the original grantee paid a reduced price for the encumbered property.
Willard argues that the old rule should be applied because grantees and title insurers have relied upon it. Court: Policy of title insurance was not issued and Willard did not read the deed.
-Easements can be reserved for the benefit of the third party.
Reservation: a provision in a deed creating some new servitude which did not exist before an independent interest.
Exception: a provision in a deed that excludes from the grant some preexisting servitude on the land.
Regrant theory: an easement reserved by the grantor was not a reservation at all, but a regrant of an easement by the grantee o the grantor.
License: oral or written permission given by the occupant of land allowing the licensee to do some act that otherwise would be a trespass. A license is revocable whereas an easement is not. Exceptions: license coupled with an interest cannot be revoked; license may become irrevocable under the rules of estoppel.
Mund v. English
1. Case Heading:
Parties:
Year: 1984
Court: Court of Appeals of Oregon
2. Disposition: Reverse and remand.
3. Holding: Defendant did grant an irrevocable license to plaintiffs, and the trial judge was in error in refusing to allow plaintiffs’ motion to amend the pleadings to conform to the evidence. Grant one-half interest in the well and water system to plaintiffs and an easement over defendant’s property and share equally the cost of maintenance.
4. Issue:
5. Procedural History: The trial court found for defendant.
6. Facts: In 1977, plaintiffs and defendant purchased adjoining one acre parcels of property and a water well was drilled on defendant’s property. Plaintiffs and defendant received water from one well. The parties quarreled about their rights to the well and water, with plaintiffs claiming that their interest in the well was to have been a permanent and irrevocable interest. Defendant claims that plaintiffs’ rights were not permanent and were subject to certain conditions.
7. Rule:
8. Reasoning: D: irrevocable license can only be established when there is proof of an agreement for a permanent easement taken out of the SoF by part performance. Court: when a licensee makes valuable improvements on the basis of a promise, the licensor will not be permitted to assert that the license could be revoked. An irrevocable license does not depend on proof but arises to prevent an injustice.
Circumstances show a permanent arrangement. Shared the installation costs and operating expenses; plaintiffs secured a loan and constructed a residence on their property and there is no other source of domestic water.
Van Sandt v. Royster
1. Case Heading:
Parties:
Year: 1938
Court: Supreme Court of Kansas
2. Disposition: Affirm the judgment.
3. Holding: An easement by implication was created under the facts as found.
4. Issue:
5. Procedural History: The trial court found that an appurtenant easement existed in the said lateral sewer as to all three of the properties involved and denied plaintiff’s prayer for relief and decreed that plaintiff be restrained from interfering with the lateral drain.
6. Facts: In 1904, Bailey was the owner of a plot of ground lying east of Highland avenue. Bailey’s residence was on lot 4. The city constructed a public sewer west of lot 19. A private lateral drain was constructed from lot 4 through lots 20 and 19. Bailey conveyed lot 19 to Jones by general warranty deed with the usual covenants against encumbrances. Jones erected a dwelling and conveyed the north 156 feet to Reynolds and Reynolds conveyed to Van Sandt. Bailey conveyed lot 20 in a general warranty deed to Murphy, who built a house, and by mesne the title passed to Royster. In 1936, Van Sandt discovered his basement flooded with sewage and filth and discovered a sewer drain. Van Sandt sued after Royster refused to cease draining and discharging their sewage.
7. Rule:
8. Reasoning: Plaintiff contends that easement was never created, and even if created, he took the premises free from the burden of the easement. Defendant contends that an easement was created by implied reservation on the severance of the servient from the dominant estate of the deed from Bailey to Jones and there is a valid easement by prescription.
Quasi easement: an owner makes use of one part of his land for the benefit of another part.
When Jones purchased the lot, he was aware of the lateral sewer. Van Sandt purchased with notice of the lateral sewer.
Requirements stated to imply an easement from a prior existing use: (1) severance of title to land initially undivided; (2) an apparent, existing, and continuing use of one parcel at the time of severance; and (3) reasonable necessity for the use at the time of severance.
Othen v. Rosier
1. Case Heading:
Parties:
Year: 1950
Court: Supreme Court of Texas
2. Disposition: Affirm the judgment of the Court of Appeals.
3. Holding:
4. Issue:
5. Procedural History: The trial court found that Othen had an easement of necessity. The Court of Civil Appeals concluded that Othen has no easement either of necessity or by prescription and found for the Rosiers.
6. Facts: Hill owned 2493 acres of land. Hill conveyed the 100 acre tract and this tract came into the hands of the Rosiers by mesne. Hill conveyed the 60 acre tract and Othen acquired it by mesne. Hill conveyed the 53 acre tract and the 16.31 acre tract to separate purchasers, who conveyed the 53 acres to Othen and 16.31 acres to the Rosiers. Othen’s land is not contiguous to road and he must cross someone’s land to get out. Othen has continuously used the disputed roadway to get to and from the highway from and to his home. The Rosiers caused a levee due to waters flowing into the lane and deprived Othen of ingress and egress to and from his farm. Othen filed suit praying a temporary writ of injunction enjoining the Rosiers from further maintaining this levee.
7. Rule:
8. Reasoning: Before an easement can be held to be created by implied reservation it must be shown: (1) that there was a unity of ownership of the alleged dominant and servient estates; (2) that the roadway is a necessity, not a mere convenience; and (3) that the necessity existed at the time of severance of the two estates.
Othen’s claim means that it was necessary for Othen to travel over the land from the land owned by Othen.
*****
Othen’s use of the roadway was merely permissive, hence a license not a prescriptive right.
-order of sales is important because it shows intent of the parties at the moment.
Easements may be acquired by prescription. A statute of limitations upon the recovery of possession does not cover actions concerning easements, which involve use and not possession of land.
Presumes adversity when all the other elements of prescription are established.
When the land being used is wild, sparsely inhabited, unenclosed, or unimproved, presume that the use is permissive.
The court presumes that the claimant’s use has occurred with the landowner’s consent, even when a claimant provides prima facie evidence of the other elements of a prescriptive easement claim.
Most courts require exclusive use for prescription. The use need not be exclusive in the sense that it must be used by one person only. Rather, the right must not depend upon a similar right in others.
A public prescriptive easement can be obtained by long continuous use by the public under a claim of right. The landowner must be put on notice, by the kind and extent of use, that an adverse right is being claimed by the general public.
Express dedications are essentially grants and usually involve gratuitous transfers of land to a government body or the public at large.
Implied dedication seeks a substitute for a grant. It is used where the landowner evidences an intent to dedicate an the state accepts by maintaining the land used by the public.
The state holds the beach from the water to the mean high-tide line in public trust. The dry sand portion of the beach between he mean high-tide line and the vegetation line is subject to private ownership.
Long usage of beaches by the public is protected as a customary right.
Jacque v. Steenberg Homes, Inc.
1. Case Heading:
Parties:
Year: 1997
Court: Wisconsin Supreme Court
2. Disposition:
3. Holding: Punitive damages are appropriate in intentional trespass cases.
4. Issue:
5. Procedural History: A jury awarded nominal and $100000 punitive damages to the Jacques. The circuit court set aside the punitive award. The Court of Appeals affirmed.
6. Facts: Steenberg had a mobile home to deliver. The easiest route of delivery was across the Jacques’ land. Steenberg plowed a path through Jacques’ field. Jacques sues Steenberg for intentional trespass.
7. Rule:
8. Reasoning: Jacques refused the request to move the home across the field.
Private landowner’s right to exclude others from land is one of the most essential sticks in the bundle of rights. A series of intentional trespasses can threaten the individual’s very ownership of land.
State v. Shack
1. Case Heading:
Parties:
Year: 1971
Court: New Jersey Supreme Court
2. Disposition: Reverse and remand.
3. Holding: Defendants invaded no possessory right and their conduct was beyond the reach of the trespass statute.
4. Issue:
5. Procedural History: Shack was convicted of trespassing.
6. Facts: Defendant Tejeras wanted to go upon Tedesco’s farm to find a migrant worker who needed medical aid for the removal of sutures and called Shack. Shack also wanted to discuss a legal problem with another worker. Defendants arranged to go together and carried a literature about assistances. As Defendants neared the camp site they were confronted by Tedesco. Tedesco asked about their mission and offered to locate the people, but asked that consultation take place in his office. Defendant declined. Tedesco summoned a State Trooper and executed the formal complaints.
7. Rule:
8. Reasoning: Ownership of real property does not include the right to bar access to governmental services hence there was no trespass. Title to real property cannot include dominion over the destiny of persons the owner permits to come upon the premises.
Unthinkable that the farmer-employer can assert a right to isolate the migrant worker in any respect significant for the worker’s well-being. We see no legitimate need for a right in the farmer to deny the worker the opportunity for aid available from federal, state, or local services.
Termination of Easements:
-the easement owner may agree to release the easement. SoF.
-If the duration of an easement is limited to some way, it ends through expiration.
-An easement created to end upon the occurrence of some event, a defeasible easement, expires automatically if and when the event occurs.
-Easements by necessity end when the necessity that gave rise to it ends.
-An easement ends by merger if the easement owner later becomes the owner of the servient estate.
-An easement may end through estoppel if the servient owner reasonably relies upon a statement or representation by the easement owner.
-An easement may terminate by condemnation if the government exercises its eminent domain power to take title to a fee interest in the servient estate for a purpose inconsistent with continued existence of the easement.
-An easement may terminate by prescription if the servient owner wrongfully and physically prevents the easement from being used for the prescriptive period.
-An easement may terminate by abandonment upon non-use for the statutory period of time.
Courts may modify or even terminate real covenants and equitable servitudes on the basis of changed conditions. Easement does not recognize a changed conditions doctrine. Changed conditions doctrine applies to all types of servitudes: a court may modify or terminate a servitude if a post-creation change of circumstances has made it practically impossible to accomplish the purpose for which the servitude was created.
License made irrevocable by estoppel is treated the same as any other easement unless the parties intended or reasonably expected that it would remain irrevocable only so long as reasonably necessary to recover expenditures.
If the dominant tenement and the servient tenement come into the same ownership, the easement is extinguished altogether. It will not be revived by a severance of the united title into the former dominant and servient tenements. When the united title is redivided, a new easement by implication can arise if the circumstances at that time indicate a new easement was intended.
An easement by necessity endures only so long as it is necessary.
A negative easement is the right of the dominant owner to stop the servient owner from doing something on the servient land. English courts recognized the right to stop neighbor from: (1) blocking windows; (2) interfering with air flow to land in a defined channel; (3) removing the support of building; and (4) interfering with the flow of water in an artificial stream.
Judges objected to negative easements because England was without an effective system of public records of land titles, the traditional negative easements could arrive by prescription in England, and judges had a hard time deciding whether negative obligations should be analyzed as easements or as covenants.
A right created by promise should be treated the same way as a right created by grant.
*** Negative restrictions on land can be treated as equitable servitudes.
Conservation easement prevents the servient owner from building on the land except as specified in the grant.
Statutes have been enacted authorizing conservation easements. Uniform Conservation Easement Act: enable durable restrictions and affirmative obligations to be attached to real property to protect natural resources and to ensure that these restrictions are immune from certain common law impediments which might be raised. -> protect undeveloped lands.
Popularity because environmental concern about the pressure for residential or commercial development, that family farm may be sold, and that significant tax deduction is available for donations of conservation easements.
Conservation easements are perpetual, transferable, and can be in gross.
Uniform Environmental Covenants Act: help remediation and development of brownfields (parcels previously contaminated by industrial use).
Variations: easement agreements with historic preservation, façade preservation easement (device for preventing the façade of a house registered on the national Register of Historic Places from being altered), primary residence easement.
A real covenant must be created by a written instrument signed by the covenantor. SoF applies.
Equitable servitude may be implied in equity. It cannot be obtained by prescription.
Land use interests created by covenants: real covenants and equitable servitudes.
Real covenants – landowners wanted judicial recognition of a contract right respecting land use enforceable not only against the promisor landowner, but against his successors in title as well.
Contract to bind one’s successors to an interest in land must meet: (1) the agreement must be in writing; (2) the parties must intend to bind future successors; (3) the promise touched and concerned the land; and (4) there was privity of estate between the covenanting parties.
Horizontal privity: privity of estate between the original covenanting parties. Courts defined privity of estate between landowners to be a successive (grantor-grantee) relationship. Horizontal privity of estate is required for the burden of a covenant to run at law but not for the benefit to run.
Vertical privity: privity of estate between one of the covenanting parties and a successor in interest. Require vertical privity for the burden and the benefit of a real covenant to run. On the burden side, the covenant is enforceable only against someone who has succeeded to the same estate as that of the original promisor.
Touch and concern requirement: aims to identify those covenants whose content relates to land use or enjoyment in such a way that it is appropriately enforceable by and against successors. Covenant restricting the use of land touch and concern land. Courts have been wary of enforcing affirmative covenants against successors. Courts are reluctant to issue orders to perform a series of acts requiring continuing judicial supervision. Courts saw covenants to pay money as imposing a large personal liability on a successor.
Tulk v. Moxhay
1. Case Heading:
Parties:
Year: 1848
Court: Court of Chancery, England
2. Disposition:
3. Holding: This motion must be refused.
4. Issue:
5. Procedural History: Master of the Rolls granted the injunction to restrain Moxhay from using the garden for purposes other than square garden and pleasure ground.
6. Facts: Tulk sold vacant piece of ground in Leicester Square and passed by divers mesne into Moxhay. Moxhay admitted that he purchase with notice of the covenant in the deed. Moxhay sought to alter the character of the square garden and build upon it and Tulk, who owned houses, filed injunction.
7. Rule:
8. Reasoning: there is a covenant from the purchaser not to use it for any other purpose than as a square garden. The purchaser may violate it. Can a party be permitted to use the land in a manner inconsistent with the contract entered into by his vendor? The price would be affected by the covenant.
The question does not depend upon whether the covenant runs with the land. If there was a mere agreement and no covenant the Court would enforce it against a party purchasing with notice.
Equitable servitude: a covenant respecting the use of land enforceable against successor owners or possessors in equity regardless of its enforceability at law. Requires: (1) intent; (2) touch and concern; and (3) notice. Horizontal or vertical privity is not required. All subsequent owners and possessors are bound by the servitude. Notice of the covenant is required for the burden of an equitable servitude to run with the land but is not required for the running of the benefit. Equitable servitudes are enforceable against successors who give no consideration whether or not they have notice. Only subsequent purchasers, not donees, are protected against prior interests of which they have no notice.
Where the remedy sought is damages in a suit at law, the covenant will be treated as a real covenant. If the remedy is an injunction or an equitable relief, the covenant is subject to the law of equitable servitudes.
The plaintiff can sell the injunction to the defendant. Equitable servitude turned into an interest in land. It has no privity requirement like easements. Original promisor cannot be sued after conveying the land.
If the deed creating a real covenant is signed by the grantor only and contains a promise by the grantee the promise is enforceable against the grantee. The grantee is bound by acceptance. A real covenant cannot arise by estoppel, implication, or prescription.
Equitable servitude may be implied in equity. It cannot be obtained by prescription.
Sanborn v. McLean
1. Case Heading:
Parties:
Year: 1925
Court: Supreme Court of Michigan
2. Disposition: Decree in the circuit is affirmed.
3. Holding: If the portion of the building constructed can be utilized for any purpose within the restrictions it need not be destroyed.
4. Issue:
5. Procedural History: The circuit court directed that the work done on the building be torn down.
6. Facts: McLeans started to erect a gasoline filling station at the rear end of their lot and they and the contractor, Weir, were enjoined by decree from doing so. Sanborn, who are owners of land adjoining and trace title to the proprietors of the subdivision, claim that the proposed gas station will be a nuisance per se, is in violation of the general plan fixed for use of all lots for residence purposes only, and that MeLeans’ lot is subject to a reciprocal negative easement barring a use so detrimental to the enjoyment and value of its neighbors. McLeans deny.
7. Rule:
8. Reasoning: The subdivision was planned strictly for residential purposes. Previous to 1893, reciprocal negative easement had attached to lot 86. P run back with their title to a common owner. The common owner had burdened all the lots retained with reciprocal restrictions. P and D’s lots were burdened.
Court: D should have inquired with the notice he had from a view of the premises on the street, clearly indicating the residences were built and the lots occupied in strict accordance with a general plan the benefits thereof serving the owners of lot 86 and the obligations to prevent a departure from the general plan.
Shelley v. Kraemer
1. Case Heading:
Parties:
Year: 1948
Court: Supreme Court of the US
2. Disposition: Reverse the judgments.
3. Holding: The States have acted to deny petitioners the equal protection of the laws guaranteed by the 14th Amendment.
4. Issue:
5. Procedural History: The Supreme Court of Missouri and the Supreme Court of Michigan ruled in favor of Kraemer.
6. Facts: Thirty out of thirty-nine owners of property fronting Labadie Ave signed an agreement and recorded a statement that property shall not be occupied by any person not of the Caucasian race. Shelley, who is black, received a warranty deed to the parcel in question. Shelley had no knowledge of the restrictive agreement. Kraemer, owners of other property, sued to restrain Shelley from taking possession of the property and divest title out of Shelley and revesting title in the immediate grantor. Shelley alleges that the judicial enforcement of the restrictive agreements violated rights under the 14th amendment and they have been denied equal protection of the laws.
7. Rule:
8. Reasoning: particular patterns of discrimination are determined by the terms of agreements among private individuals. Does this distinction removes the cases from the operation of the prohibitory provisions of 14th amendment? These are cases in which the purposes of the agreements were secured only by judicial enforcement by state courts of the restrictive terms.
The action of state courts and judicial officers is regarded as action of the State. But for the active intervention of the state courts, Shelley would have been free to occupy. The judicial action in each case bears the clear and unmistakable imprimatur of the State. When the effect of that action is to deny rights, it is obligation of this Court to enforce the constitutional commands. Freedom from discrimination by the States in the enjoyment of property rights was among the basic objectives by the framers.
Covenants may be discharged by (1) merger on the basis of unity of ownership of the benefit and burden by the same person; (2) a formal release, normally written and recorded; (3) acquiescence, when the plaintiff has failed to enforce the servitude against other breaches and then seeks to enforce the servitude against the defendant; (4) abandonment, which resembles acquiescence except it makes the servitude unenforceable as to the entire parcel rather than only as to the plaintiff involved; (5) the equitable doctrine of laches, an unreasonable delay by the plaintiff to enforce a servitude against the defendant causing prejudice to the defendant; and (7) estoppel, if the defendant has relied upon the plaintiff’s conduct making it inequitable to allow the plaintiff to enforce the servitude. Also may be terminated by eminent domain and on the basis of prescription.
River Heights Associates L.P. v. Batten
1. Case Heading:
Parties:
Year: 2004
Court: Supreme Court of Virginia
2. Disposition: Affirm the judgment of the trial court.
3. Holding: What is required is a leveling exercise in which fair consideration is given both to conditions in the subdivision and those in the surrounding area. Changes are not so radical as to defeat the purpose of the covenant.
4. Issue:
5. Procedural History: Wood demurred. The trial court overruled the demurrer and allowed Batten to file an amended bill of complaint. Batten filed an amended bill and Wood filed an answer. Wood contended that Batten had failed to state a cause of action upon which relief could be granted, that the restrictive covenant was unenforceable, and that the covenant did not apply to his property. The trial court held that the restrictive covenant against commercial use apply to the four lots and covenant was enforceable.
6. Facts: Batten and other owners of lots sought a declaration favoring the enforceability of restrictive covenants prohibiting commercial use of four unimproved lots. Woods are beneficial owners of the lots. The restrictive covenants were established in 1959 and state that the property is to be used for residential purposes only… In 1960, Section C was subdivided into 19 lots. In 1962, Lot2, Section C was resubdivided into four lots. In 1969, comprehensive zoning ordinance classified the lots a commercial district and the zoning was continued in 1980. Route 29 now became highly developed commercial lot.
7. Rule:
8. Reasoning: Wood alleges that the trial court erred in failing to remove the residential restrictive covenant in light of a change of conditions. The trial court wrote that Wood failed to prove that radical changes both in and around the neighborhood have occurred. Court: if a radical change takes place in the whole neighborhood… equity will not compel observance of them by injunction.
Common Interest Communities boomed as the local governments used public powers to tilt the market for new housing construction in favor of CICs.
Condominiums became popular in the 1960s with the rising cost of single family homes, the availability of shared amenities at lower cost, the tax subsidy to owner-occupied housing, the increasing affluence of apartment dwellers permitting a greater proportion to invest in equity ownership, the belief that real estate is an inflation-proof investment, the availability of FHA mortgage insurance on condos, the fear of rent control by investors in rental housing.
Each unit in a condo is owned separately in fee simple by an individual owner. The common areas are owned by the unit owners as tenants in common. Each owner obtains mortgage financing by a separate mortgage on the owner’s individual unit. The declaration of condominium provide for an association of unit owners to make and enforce rules, to manage the common areas, and to set maintenance charges. Each condo unit owner is liable for a monthly charge. The association may have the right to make improvements and assess the owners their fractional share.
In a cooperative, the title to the land and building is held by a corporation; the residents own all the shares of stock and control it through an elected board of directors. Each resident has a long-term renewable lease. The property is subject to one blanket mortgage securing the money lender. If one cooperator fails to pay his share, the other cooperators must make it up or the entire property may be foreclosed. Members of a cooperative screen applicants.
Nahrstedt v. Lakeside Village Condominium Association, Inc.
1. Case Heading:
Parties:
Year: 1994
Court: Supreme Court of California
2. Disposition: Reverse the judgment of the Court of Appeals.
3. Holding: The recorded pet restriction is not arbitrary but is rationally related to health, sanitation and noise concerns held by residents.
4. Issue: Whether a pet restriction contained in the recorded declaration of a condo complex is enforceable against the challenge of a homeowner.
5. Procedural History: The trial court sustained the Association’s demurrer and dismissed Nahrstedt’s complaint. The Court of Appeal reversed the trial court’s judgment because whether a condo use restriction is unreasonable hinges on the facts of a particular homeowner’s case. The Court of Appeal concluded that the HOA can enforce only upon proof that the cats would interfere with the rights to the peaceful and quiet enjoyment of their property.
6. Facts: Nahrstedt sued to prevent the HOA from enforcing a restriction against keeping cats, dogs, and others in the condo. Nahrstedt asserted that her three cats are indoors, noiseless, and created no nuisance. In 1988, Nahrstedt purchased a Lakeside Village condo and moved in with her three cats. The Association demanded cats’ removal and assessed fines for each month in violation. Nahrstedt sued the Association, asking to invalidate the assessment, to enjoin future assessments, and to declare the restriction unreasonable.
7. Rule:
8. Reasoning: For a stable and predictable living environment, the Legislature in section 1354 afforded restrictions a presumption of validity and required of challengers that they demonstrate the restriction’s unreasonableness by the deferential standard. -> enforcement of a restriction does not depend upon the conduct of a particular condo owner but must be uniformly enforced unless the plaintiff owner can show that the burdens it imposes so substantially outweigh the benefits.
Covenants, conditions, and restrictions are enforceable only if the restriction sought meets the requirements of equitable servitudes or of covenants running with the land. Some courts adopted a standard where restrictions will be enforced so long as they are reasonable. Others limit the standard to restrictions adopted by majority vote or enacted and would not apply this to restrictions included in a declaration or deed.
Hidden v. Basso: two categories of use restrictions: use restrictions set forth in the declaration or master deed and rules promulgated by the governing board of the condo owners association or the board’s interpretation of a rule. The latter should be subject to reasonableness test, and the former should be upheld even if they exhibit some degree of unreasonableness.
When enforcing equitable servitudes, courts will not enforce restrictive covenant that violates public policy or that are arbitrary. Under Civil Code 1354, restrictions should be enforced unless they are wholly arbitrary, violate a public policy, or impose a burden on the use of affected land that far outweighs benefit. Presumption of validity discourages lawsuits by owners and promotes stability and predictability by providing substantial assurance to prospective condo purchasers that they may rely with confidence on the promises and it protects owners from unanticipated increases in fees to defend legal challenges.
To allow one person to escape obligations under a written instrument upsets the expectations of all the other parties. It would impose great strain on the social fabric of the common interest.
The Court of Appeal failed to consider the rules governing equitable servitudes. Bernardo Villas and Portola Hills failed to apply the deferential standards of equitable servitude law.
Dissent: CC&R’s are arbitrary and unreasonable. Burden of the restriction outweigh utility.
Nuisance law did not prevent nuisances from arising but merely gave damages or injunction. Law added the risk that capital sunk may later be declared a nuisance. Restrictive covenants were useful only in new subdivisions and other developments of large acreage occurring under a single owner. Turned to zoning, designed to prevent harmful neighborhood effects.
Zoning spread rapidly in the years after 1916.
Village of Euclid v. Ambler Realty Co.
1. Case Heading:
Parties:
Year: 1926
Court: Supreme Court of the US
2. Disposition: Decree reversed.
3. Holding:
4. Issue:
5. Procedural History: The court held the ordinance to be unconstitutional and void and enjoined its enforcement. The court overruled a motion to dismiss because Ambler had made no effort to obtain a building permit or apply to the zoning board.
6. Facts: Ambler is the owner of a tract of land situated in the westerly end of the village. In 1922, an ordinance was adopted by the Village Council, establishing a comprehensive zoning plan. The village is divided by the ordinance into six classes of use districts, three classes of height districts, and four classes of area districts. The uses are cumulative; that is, it includes uses enumerated in the preceding classes. Ambler’s tract of land comes under U-2, U-3, and U-6. The enforcement of the ordinance is entrusted to the inspector of buildings, under rules and regulations of the board of zoning appeals. The ordinance is assailed on the grounds that it is in derogation of the 14th amendment in that it deprives Ambler of liberty and property and denies it the equal protection. The prayer is for an injunction restraining the enforcement of the ordinance.
The tract of land is vacant and has been held for years for the purpose of selling and developing it for industrial uses.
7. Rule:
8. Reasoning: Ordinance attempts to restrict and control the lawful uses of Ambler’s land so as to confiscate and destroy a great part of its value, …
The exclusion is in general terms of all industrial establishments; not only offensive or dangerous industries will be excluded
The village is politically a separate municipality, with powers of its own and authority to govern itself as it sees fit within the limits of the organic law of its creation…
Where the equitable remedy of injunction is sought not upon the ground of a present infringement or denial of a specific right or of a particular injury in process of actual execution, but upon the broad ground that the mere existence and threatened enforcement of the ordinance constitute a present and irreparable injury, the court will not scrutinize its provisions.
The complaint is about that a portion of the land of the appellee cannot be sold for certain enumerated uses because of the general and broad restraints of the ordinance.
Court: follow the method of a gradual approach to the general by a systematically guarded application and extension of constitutional principles to particular cases as they arise.
Euclidean zoning: districts are graded from highest to lowest. The uses permitted in each district are cumulative.
Plaintiff attacked the zoning law in its entirety. Court held zoning in general to be constitutional but that concrete applications of specific provisions could prove to be arbitrary and unreasonable.
Zoning is an exercise of the police power to protect health, safety, welfare, and morals. The police power is delegated to local governments. The Standard State Zoning Enabling Act empowers municipalities and permits division of municipalities into districts and provides that regulations may vary from district to district. To enact a zoning ordinance, a city must create a planning commission and a board of adjustment, composed of citizens appointed by the mayor. The commission recommends a comprehensive plan and a zoning ordinance to the city council. City Council enacts zoning ordinance. The board of adjustment ensures that broad zoning regulations do not operate inequitably on particular parcels of land. It may grant a variance when the zoning restrictions cause the owner practical difficulty or unnecessary hardship. It also may grant a special exception when specific requirements in the zoning ordinance are met.
A comprehensive plan is a statement of the local government’s objectives and standards for development. The plan is based on surveys and studies of the city’s present situation and future needs, where the idea is to anticipate change and promote harmonious development. Zoning is a means of giving effect to a larger planning enterprise that led to formulation of the comprehensive plan.
The appropriate allocation of land proved unforeseeable. By the late 1960s, zoning had become a reactive enterprise responding piece by piece to changing conditions.
The justification for zoning that it solves the problem of externalities in environments where bargaining or judicial determination are not sufficient. Critics say it suppresses housing production and increases housing prices; promotes economic inequality; inhibited mobility. Single family zoning strongly tends to not change. There have been recent moves to end single family zoning and to expand it.
All zoning in exclusionary as its central purpose is to minimize or eliminate unwanted effects in a given district. Zoning measures commonly aim not to ban uses but rather to relegate them to what the zoners regard as their proper place in the community. Exclusionary zoning may also close an entire community to unwanted groups.
Southern Burlington County NAACP v. Township of Mount Laurel
1. Case Heading:
Parties:
Year: 1975
Court: Supreme Court of New Jersey
2. Disposition: Vacate the trial court’s judgment ordering the preparation and submission of the study, report, and plan.
3. Holding: every municipality must presumptively make realistically possible an appropriate variety and choice of housing. It cannot foreclose the opportunity of the classes of people mentioned for low and moderate income housing and in its regulations must affirmatively afford that opportunity, at least to the extent of the municipality’s fair share of the present and prospective regional need.
4. Issue: Can a developing municipality validly, by a system of land use regulation make it physically and economically impossible to provide low and moderate income housing in the municipality for the various categories of persons who need and want it and thereby exclude such people from living within its confines because of the limited extent of their income and resources?
5. Procedural History:
6. Facts: Zoning controlled the nature and character of the growth. 29.2 percent of land was zoned for industry and small land was zoned for retail business. Four residential zones of R-1, R-1D, R-2, R-3 permit only single family, detached dwelling, one house per lot. Requirements realistically allowed only homes for people with at least middle income. Planned unit developments occurred but were not for low-income families. A new zone of R-4 was created as a multi-family housing for elders but was not designed for low income retirees. The court found that Mount Laurel discriminated the poor to keep down local taxes on property without regard for the people. The Court states that city dwellers desperately needs much better housing and living conditions.
7. Rule:
8. Reasoning: All police power enactments must conform to the basic state constitutional requirements of substantive due process and equal protection of the laws. A zoning regulation must promote public health, safety morals, or the general welfare.
If a zoning regulation violates the enabling act, it is theoretically invalid under the state constitution. The demarcation between the valid and the invalid in the field of land use regulation is difficult to determine.
The presumptive obligation arises for each municipality affirmatively to plan and provide the reasonable opportunity for an appropriate variety and choice of housing, including low and moderate housing, to meet the needs, desires and resources of all categories of people.
Judicial attitudes must be altered to require a broader view of the general welfare and the presumptive obligation on the part of developing municipalities at least to afford the opportunity by land use regulations for appropriate housing for all.
Mount Laurell’s zoning ordinance is presumptively contrary to the general welfare and outside the intended scope of the zoning power in the particulars mentioned.
Township: by reason of NJ’s tax structure which substantially finances municipal government and educational costs from taxes on local real property, every municipality may allow only such uses as will be beneficial to the local tax rate. Court: relief from the consequences have to be furnished by other branches of government.
Court: we see no reason why the entire zoning ordinance should be nullified. Adopt amendments to correct the deficiencies herein specified. The municipality should have full opportunity to act without judicial supervision.
The government, to exercise the power of eminent domain, begins by attempting negotiated purchases. If the process does not result in a voluntary sale, the authority file a petition in court followed by notice to all persons with interests in the property. At a trial, the government must establish its authority to condemn. The court can give the government permission to enter and inspect the subject property. At the conclusion of a successful condemnation action, the government must pay the compensation plus interest.
Law of regulatory takings: issue of whether a taking has occurred as a consequence of some government activity other than explicit taking by condemnation.
Pennsylvania Coal Co. v. Mahon
1. Case Heading:
Parties:
Year: 1922
Court: Supreme Court of the US
2. Disposition: Reverse the decree.
3. Holding: So far as private persons or communities have seen fit to take the risk of acquiring only surface rights, we cannot see that the fact that their risk has become a danger warrants the giving to them greater rights than they bought.
4. Issue:
5. Procedural History: The court of common pleas found that Co would cause damage to prevent which the bill was brought, but denied an injunction, holding that the statute would be unconstitutional. Supreme Court of the State agreed that Co had rights protected by the Constitution but held that the statute was a legitimate exercise of the police power and ruled for Mahon.
6. Facts: This is a bill in equity brought to prevent the Co from mining under their property in such way as to remove the supports and cause a subsidence of the surface and of their house. The deed executed by the Co conveys the surface but reserves the right to remove all the coal under the same, and the grantee takes the premises with the risk, and waives all claim for damages that may arise from mining. Mahon says that Kohler Act took away the Co’s rights to mine.
7. Rule:
8. Reasoning: The statute forbids the mining of anthracite coal in such way to cause the subsidence…
Implied limitation must have its limits… a fact for consideration is the extent of the diminution. When it reaches a certain magnitude, there must be an exercise of eminent domain and compensation.
On Mahon’s position alone, the statute does not disclose a public interest sufficient to warrant so extensive a destruction of the rights.
The act cannot be sustained as an exercise of the police power.
The rights of the public in a street purchased or laid out by eminent domain are those that it has paid for.
A strong public desire to improve the public condition is not enough to warrant achieving the desire by a shorter cut than the constitutional way of paying for the change.
Dissent: The restriction here in question is merely prohibition of a noxious use. Whenever the use prohibited cease to be noxious, the restriction will have to be removed…
A fact for consideration in determining whether the limits of the police power have been exceeded is the extent of the resulting diminution in value… but values are relative.
Where the police power is exercised to protect the public from detriment and danger, there is no room for considering reciprocity of advantage.
Pennsylvania Coal test says that when govt regulation of a use that is not a nuisance works too great a burden on property owners, compensation must be paid if the regulation is to remain in effect.
Brandeis dissent states that the Kohler Act was merely controlling a nuisance and no compensation was required; he then attacks the diminution-in-value test.
Penn Central Transportation Company v. City of New York
1. Case Heading:
Parties:
Year: 1978
Court: Supreme Court of the US
2. Disposition: Affirm the judgment.
3. Holding: The application of NYC’s landmarks law has not effected a taking of appellants’ property.
4. Issue: Can a city place restrictions on the development of individual historic landmarks without effecting a taking requiring the payment of just compensation? Can the application of NYC’s Landmarks Preservation Law to the parcel of land occupied by Grand Central has taken its owners’ property in violation of 5th and 14th Amendments?
5. Procedural History: Appellants sued in NY Supreme Court that the Landmarks Preservation Law had taken their property without just compensation and sought a declaratory judgment and injunctive relief. The court granted the injunctive and declaratory relief. The New York Supreme Court Appellate Division reversed and held that the restrictions on the development were necessary to promote the legitimate public purpose of protecting landmarks and therefore that appellants could sustain their constitutional claims only by proof that the regulation deprived them of all reasonable beneficial use of the property.
6. Facts: In 1967, the Commission designated the Grand Central Terminal a landmark and designated the city tax block a landmark site. UGP and Penn Central applied to the Commission for permission to construct an office building atop the Terminal. Two plans, Breuer I and Breuer II Revised, provided for the construction of a 55 or 53 story building. The Commission rejected the certificates.
7. Rule:
8. Reasoning: Appellants did not seek judicial review of the denial. The did not avail themselves of the opportunity to develop and submit other plans.
Appellants do not contest that: NYC’s objective of preserving is an entirely permissible governmental goal; the restrictions imposed on its parcel are appropriate means of securing the purposes; parcel must be regarded as capable of earning a reasonable return and the transferable development rights afforded by virtue of the Terminal’s designation as a landmark are valuable.
Airspace above the Terminal is a valuable property interest. It effects a taking because its operation has significantly diminished the value of the Terminal cite. -> any restriction imposed is not a taking.
The NYC law does not interfere with the present uses of the Terminal. Its designation permits that appellants may continue to use the property precisely as it has been used for the past 65 years.
Rights may not constitute just compensation if a taking had occurred, it mitigates whatever financial burdens the law has imposed on appellants.
Dissent: Penn Central is prevented from further developing its property because too good a job was done in designing and building it. Would remand for a determination of whether Transfer Development Rights constitute a full and perfect equivalent for the property taken.
Loretto v. Teleprompter Manhattan CATV Corp.
1. Case Heading:
Parties:
Year: 1982
Court: Supreme Court of the US
2. Disposition: Reverse the judgment.
3. Holding: Affirm the traditional rule that a permanent physical occupation of property is a taking. The property owner entertains a historically rooted expectation of compensation and the character of the invasion is qualitatively more intrusive than any other category of property regulation. Conclusion that 828 works a taking of a portion of appellant’s property does not presuppose that the fee which many landlords had obtained is a proper measure of the value of the property taken.
4. Issue: Does a minor but permanent physical occupation of an owner’s property authorized by government constitute a taking of property for which just compensation is due under the 5th and 14th amendments?
5. Procedural History: The Supreme Court granted summary judgment to Teleprompter and the city. The Appellate division affirmed. The Court of Appeals upheld the statute. The law requires the landlord to allow both crossover and noncrossover installations but permits him to request payment from the CATV.
6. Facts: Appellant Loretto purchased a five-story apartment building. The previous owner granted Teleprompter permission to install a cable on the building and furnishing cable television services to the tenants. Teleprompter had crossovers cable lines extending from one building to another, and two years later connected a noncrossover line, one that provided CATV service, by dropping a line to the first floor. She did not discover the existence of the cable until she had purchased the building. She brought a class action against Teleprompter, alleging that Teleprompter’s installation was a trespass and a taking without just compensation.
7. Rule:
8. Reasoning: Section 828 provides that a landlord may not interfere with the installation of cable television.
To the extent that the government permanently occupies physical property, it effectively destroys each of these rights. First, the owner has no right to possess the occupied space himself. Second, the permanent physical occupation of property forever denies the owner any power to control the use of the property. The owner may retain the bare legal right to dispose of the occupied space by transfer or sale, but the permanent occupation by a stranger will ordinarily empty the right of any value.
We find no constitutional difference between a crossover and a noncrossover installation.
Teleprompter: law applies only to buildings used as rental property. -> court: we fail to see why a physical occupation of one type of property but not another type is any less a physical occupation.
T: The State has effectively granted a tenant the property right to have a CATV installation. -> 828 does not purport to give the tenant any enforceable rights with respect to CATV installation.
Lucas v. South Carolina Coastal Council
1. Case Heading:
Parties:
Year: 1992
Court: Supreme Court of the US
2. Disposition: Reverse the judgment and remand.
3. Holding:
4. Issue:
5. Procedural History: South Carolina state court found a taking, but the SC Supreme Court reversed, holding that a regulation designed to prevent serious public harm deserves no compensation.
6. Facts: Lucas paid $975000 for two residential lots, intending to build single family houses because no parts were critical areas. The Beachfront Management Act barred Lucas from building any permanent habitable structures on his two lots.
7. Rule:
8. Reasoning: The law required owners of coastal land in critical areas to obtain a permit prior to committing the land to a use other than the use devoted.
Regulatory action compensable: regulations that compel the property owner to suffer a physical invasion of his property, and where regulation denies all economically beneficial or productive use of land.
When the owner has been called upon to sacrifice all economically beneficial uses in the name of the common good, to leave his property economically idle, he has suffered a taking.
Tahoe-Sierra Preservation Council, Inc. v. Tahoe Regional Planning Agency
1. Case Heading:
Parties:
Year: 2002
Court: Supreme Court of the US
2. Disposition: Affirm the judgment of the Court of Appeals
3. Holding:
4. Issue: Whether a moratorium on development imposed during the process of devising a comprehensive land-use plan constitutes a per se taking of property requiring compensation.
5. Procedural History: The district court entered an injunction. The Court of Appeals affirmed. The district court expressed uncertainty over whether cases required a holding that moratoria on development automatically effect takings and ordered TRPA to pay damages to most petitioners for the 32 month period. The Court of Appeals held that the regulations had only a temporary impact on petitioners’ fee interest in the properties and no categorical taking had occurred. Lucas involved a regulation denying all productive use of an entire parcel whereas the moratoria involved only a temporal slice of the fee interest.
6. Facts: The case involves two moratoria. The two ordinances led all development on a substantial portion of the property subject to Tahoe Regional’s jurisdiction was prohibited for 32 years. TRPA was working on the development of a regional water quality plan to comply with the Clean Water Act but could not meet the deadlines of the Compact. TRPA enacted 81-5 imposing the moratorium on development and then 83-21 that imposed an 8-month moratorium prohibiting all construction on high hazard lands. Resolutions effectively prohibited all construction on sensitive lands for eight months. Ordinance 81-5 and Resolution 83-21 prohibited all construction on sensitive lands and on all SEZ lands for 32 months. When 1984 plan Resolution was adopted, CA filed an action seeking to enjoin its implementation on the ground that it failed to establish land-use controls sufficiently stringent to protect the Basin.
7. Rule:
8. Reasoning: TRPA successfully challenged the District Court’s takings determination and TSPC unsuccessfully challenged the dismissal of their claims based on the 1984 and 1987 plans.
Whether a temporary moratorium effects a taking depends upon the particular circumstances of the case.
Compensation is required whenever government temporarily deprives an owner of all economically viable use of her property…
Dissent: the distinction between temporary and permanent prohibitions is tenuous. The Court ignores the practical equivalence between respondent’s deprivation and the deprivation resulting from a leasehold. Applying Lucas, temporary denial of all viable use of land for six years is a taking. For preserving Lake Tahoe, the Constitution requires that the costs and burdens be borne by the public at large, not by a few.
Cedar Point Nursery v. Hassid
1. Case Heading:
Parties:
Year: 2021
Court: Supreme Court of the US
2. Disposition: Reverse the judgment and remand.
3. Holding: No traditional background principle of property law requires the growers to admit union organizers onto their premises. The access regulation is not germane to any benefit provided to agricultural employers or any risk posed to the public. The access regulation constitutes a per se physical taking.
4. Issue:
5. Procedural History: The District Court rejected the growers’ argument that the access regulation constituted a per se physical taking, because it did not allow the public to access their property in a permanent and continuous manner for whatever reason. The Court of Appeals affirmed, identifying regulatory actions in takings jurisprudence: regulations that impose permanent physical invasions, regulations that deprive an owner of all economically beneficial use of his property, and the remainder of regulatory actions. The first two constitute per se takings and the third evaluated under Penn Central.
6. Facts: In 2015, members of the United Farm Workers entered Cedar Point’s property without prior notice. The organizers moved to the nursery’s trim shed and disturbed operations. Cedar filed a charge for taking access without giving notice. He union charged that Cedar Point committed an unfair labor practice. The growers sued Board members believing that the union would likely attempt to enter again.
7. Rule:
8. Reasoning: When the government physically acquires private property for a public use the Takings Clause imposes a clear and categorical obligation to provide the owner with just compensation. The government commits a physical taking when it uses its power of eminent domain to formally condemn property.
To determine whether a use restriction effects a taking, apply the flexible test developed in Penn Central, balancing factors such as the economic impact of the regulation its interference with reasonable investment-backed expectations, and the character of the government action.
The essential question is whether the govt has physically taken property for itself or someone else or has instead restricted a property owner’s ability to use his own property.
The access regulation appropriates a right to invade the growers’ property and constitutes a per se physical taking.
Given the importance to property ownership of the right to exclude, the Court has treated government-authorized physical invasions as takings requiring just compensation.
Ninth Circuit: access regulation did not quality as a per se taking because it does not allow for permanent and continuous access all time. -> Court: insupportable.
Dissent: majority threatens to make many ordinary forms of regulation unusually complex or impractical. Majority concludes that the regulation amounts to a physical taking of property, likening its case to cases held that appropriation of property rights amounts to a physical per se taking. The regulation does not appropriate anything. It gives union the right temporarily to invade, limiting the landowners’ right to exclude certain others.
A right of access such as the right at issue here, a nonpermanent right, is not automatically a taking. It is a regulation that falls within the scope of Penn Central.