B. Trespass Trespass is an action to recover money damages for dispossession

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1 Personal Property I. Terminology A. Personal property is all property not classified as real property. i. Tangible (e.g. car or books) 1. Consumable 2. Non-consumable ii. Intangible (e.g. stocks or bonds) B. Possession exists if a person has (all elements) i. Actual dominion and control over property ii. intent to assume dominion over it iii. With or without a claim of ownership C. Title exists if person has ownership with right to possession and transfer. II. III. Right to Exclude An owner of property has the right to exclude others A. Exceptions i. Denying the rights of individuals who are parties with owner in consensual transactions relating to the use of the owner s property State v Shack ii. Necessity, private or public B. Damages for trespass i. Real Property DO NOT need damages 1. Intentional trespass a. Punitive damages may be supported only by nominal damages Jacque v Steenberg Homes, Inc. ii. Chattels MUST have damages to recover 1. Computer network Must have interference with the normal operation of the computer network, even if the owner says you can t use it, sender is not liable. Intel Corporation v Hamidi Acquisition of Title by Judgment A. Replevin Replevin is an action to recover the chattel itself and exists if PL i. Has title or right to possession ii. Property is unlawfully detained iii. DF wrongfully holds possession B. Trespass Trespass is an action to recover money damages for dispossession C. Trover Trover is an action to recover the value of the chattel along with damages for dispossession i. Anyone in actual possession can sue ii. Tortfeasor AND purchasers (even bona fide) can be held liable iii. Value determined as of the date of conversion iv. Title vests to converter 1. Relates back to the date of conversion v. Until the judgment is satisfied, the owner may sue in replevin

2 Rule of Capture IV. Rule of Capture The first person to take possession of a thing owns it A. Wild Animals, Natural Gas i. To acquire title you must acquire (any element) 1. Possession Physically capture / possess Pierson v Post 2. Constructive Possession Trap, with door shut Young v Hitchens a. Un-severed gas beneath the surface of property is in constructive possession Anderson v Beech Aircraft Corp. 3. Pursue and mortally wound Mortally wound animal, without leaving pursuit, such that actual possession is inevitable, a vested property right in the animal accrues that cannot be divested by another s act in intervening and killing the animal Pierson v Post a. Mere pursuit does NOT constitute dominion and control 4. Custom Followed a. in certain trades (e.g. whaling), customs are adhered to (e.g. first to harpoon) ii. You can lose title if (any element) 1. Escape Escaping and resuming natural liberty into the commons a. Exceptions i. Habit of Return If an animal escapes, but periodically returns to the owner s home ii. Escapes, but pursued to recapture If an animal escapes, but is still pursued by the owner iii. Marked Animals Modernly, courts allow title to be retained if animal is marked and the owner is exercising effort to recapture it. iii. Interference by 1. noncompetitor Animal title goes to competitor; noncompetitor liable a. A man is allowed to sell and dispose of his land for his profit, and thus, allowed to recover damages based on interference with the intent of his property. Keeble v Hickeringill 2. competitor Rule of capture applies a. Exception Pre-possessory interest Where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned property and the effort is interrupted by the unlawful acts of others, the actor has a legally cognizable pre-possessory interest in the property. That pre-possessory interest constitutes a qualified right to possession which can support a cause of action for conversion. Popov v Hayashi iv. Role of Property 1. Animals or un-severed gas on a person s property belongs to the landowner a. EXCEPTION Severed gas is treated with the Rule of Capture Anderson v Beech Aircraft Corp.

3 Acquisition by Find V. Acquisition by Find A. Law of Finders A finder has title against everyone but the true owner IF he (all elements) i. Actually discovered ii. Intent to take possession iii. Regardless of 1. Wrongful possession Even a possessor who obtained possession wrongfully retains rights 2. Lost by possessor A possessor who loses property after acquiring it may recover from subsequent possessors Armory v Delamirie A finder becomes a converter of the thing belonging to the true owner IF (any element) i. Attempts to use or transfer i. Finder cannot transfer rights greater than he/she has B. Lost, Mislaid, Abandoned, Treasure Trove To determine if property is lost, mislaid, abandoned, or treasure trove, judging from place where found, would a reasonable person conclude that owner had parted with possession in such a manner. i. Lost Property 1. Defined Property is lost IF owner parted with it (all elements) a. Involuntarily b. Unintentionally c. Without knowing where it may be found 2. Right of possession to the finder against all but owner IF (all elements) a. NOT a trespasser i. A trespasser-finder will not be given possessory rights. They will be given to the landowner. b. NOT found in scope of employment i. If the employee found property by virtue of an act specifically directed by the employer, the employer acquires possessory rights. South Staffordshire Water Co. v Sharman c. NOT a guest or licensee d. Land is (any element) i. Publicly owned ii. Privately owned (any element) o Open to the public a. Unless the property of another has been reduced to the custody or protection of the property owner Bridges v Hawkesworth o NOT open to the public, but owner NOT in possession a. A person does not necessarily possess objects lying unattached to property of which he is the owner. Where an object has never been reduced to possession by the owner of the property upon which it is found, the finder of the lost article obtains title superior to all except the true owner. Hannah v Peel e. Item is NOT buried

4 i. Items buried belong to the landowner due to constructive possession ii. Mislaid Property 1. Defined Property is mislaid IF owner parted with it (all elements) a. Voluntarily b. Intentionally c. Without knowing where it may be found (Forgotten) 2. Right of possession to the landowner against all but owner a. Landowner held as bailee to protect true owner McAvoy v Medina (wallet left in barber shop) Benjamin v Lindner Aviation Inc. ($18,000 found in wing of airplane) Criticism: 1) Penalize finder for disclosing found property; less chance for true owner 2) Presupposes that owners of mislaid property, but not owners of lost property, will go through a mental re-enactment to ascertain where their lost property might be 3) Require the court to suppose lost or mislaid from intentions of owner iii. Abandoned Property 1. Defined Property is abandoned IF owner parted with it (all elements) a. Voluntarily b. Intentionally c. With intention to relinquish all rights, title, and interest in property 2. Right of possession to the finder against universe iv. Treasure Trove 1. Defined Property is treasure trove IF property is (all elements) a. Concealed for a length of time - the owner is probably dead/undiscoverable b. Contains element of antiquity 2. Right of possession to a. Traditionally i. the finder against all but owner Regardless if trespasser b. Modernly i. Apply rules of lost property to landowner since mostly buried ii. Discourage trespass C. Duties of Possessors A finder who acquires possession of the property has a duty to (all elements) i. Bailee As a quasi-bailee, the finder has a right to all except the owner and can even sue to regain possession. ii. Find owner Reasonable means of discovering the true owner, if at hand, should be taken iii. Keep property with due care

5 D. Maritime Law i. Salvage Law Original owner of sunken ship and its cargo retains ownership, but must pay hefty salvage fee to finder. 1. Exceptions a. Previous owner abandons property (any element) i. With clear and convincing evidence ii. Ancient and long lost shipwreck infers abandonment, unless previous owner appears Columbus-America Discovery Group v Atlantic Mutual Insurance Company b. Abandoned shipwreck Act of 1987 The law of salvage and finds does not apply to shipwrecks covered by the act, which lays claims to many abandoned shipwrecks in submerged waters of the US and transfers title to the states in whose waters they are found.

6 Bailments VI. Bailment A bailment is the relationship created when possession of a chattel is transferred from one person (the bailor) to another (the bailee) for a limited purpose. A. Bailment Creation A bailment is created when (all elements) i. Physical Possession by bailee 1. The bailee must have physical control of the chattel. ii. Intent to possess by bailee 1. The bailee must have intent to exercise physical control iii. Knowledge of possession by bailee 1. The bailee must know he has possession of a chattel belonging to another 2. Property concealed in bailed property A bailment does NOT exist with respect to something concealed within bailed property, if the bailee lacks knowledge of its existence. iv. Consent by the bailee 1. A delivery without acceptance by the bailee will not create a bailment 2. Either express or implied agreement 3. Mere custody of a chattel is not sufficient in law to constitute possession. B. Bailee s Duties i. Exercise of due care A bailee must exercise due care of the bailed goods, BUT is not an insurer of their safety 1. For sole benefit of bailor a. Only slight diligence is required and liability upon gross negligence. b. Bailee entitled to no compensation 2. For sole benefit of bailee a. Great diligence is required and liability upon slight negligence. b. Bailee entitled to no compensation 3. Mutual benefit a. Ordinary due care is required. b. Bailee entitled to agreed upon compensation or the reasonable value of such services 4. Exception Contractual provisions Contractual provisions may prescribe the bailee s liability. a. Professional bailee Professional bailee may NOT exempt out of liability created by own negligence, BUT may limit liability IF the bailor (all elements) i. Knows or should know of the limitation o posted signs does NOT constitute a contract a. Unless there exists proof that the bailor read or should have read, considering its size and location, the sign. o Claim check does NOT constitute a contract ii. Consents to it b. Ordinary bailee i. May exempt out of liability created by own negligence ii. Burden of proof for negligence The bailee has the burden to prove that the loss, etc. was caused despite exercise of due care.

7 iii. Liability to third parties The bailee has exclusive possession and is exclusively liable to harm due to use of the bailed item. iv. Duty to redeliver The bailee must redeliver or account for the bailed item in its original or agreed-upon alter form upon termination of the bailment. 1. Improper delivery of bailed chattel to 3 rd persons a. Exception indispensable instrument When the bailee, without notice or knowledge that the 3 rd person was not the original bailor, they are not absolutely liable upon delivery to the 3 rd person. i. e.g. 3 rd person presents lost parking garage ticket 2. Excuses for nondelivery a. During the life of the bailment, the bailor sold the bailed item to the bailee or a 3 rd party and gave notice to the bailee b. A 3 rd party claims the bailed item and has title paramount to the bailor c. Judicial process takes the bailed item from the bailee v. Absolute liability The bailee is absolutely liable for loss or damage without regard to due care IF (any element) 1. Departure from terms of bailment By departing from the terms of bailment, a bailee is absolutely liable as a converter. 2. Breach of agreement Any breach of an express or implied agreement to insure the goods against hazards, results in absolute liability for failure to do so. 3. Improper delivery of bailed chattel to 3 rd persons a. Exception indispensable instrument When the bailee, without notice or knowledge that the 3 rd person was not the original bailor, they are not absolutely liable upon delivery to the 3 rd person. i. e.g. 3 rd person presents lost parking garage ticket C. Bailee s Rights i. Right of Possession against universe Right of possession and control of the chattel, for the term of the bailment, against all the world, including the bailor 1. Right of action a. Against Bailor If the bailor wrongfully takes the bailed item, the bailee can maintain an action for conversion. b. Against 3 rd parties The bailee may maintain a trover, trespass, or replevin action against 3 rd parties, and even the bailor, interfering with possession. 2. Bailor s creditor has no right to attachment 3. Employee cannot be bailee of employer s goods As an employee is always subject to his employer, he cannot be a bailee of his employer s goods. ii. No use of Bailed Goods Unless an express or implied agreement specifies, the bailee has no right to use the subject matter of the bailment. 1. Agreed Use

8 a. Intentional, unauthorized use i. If results in loss or damage absolute liability b. Unintentional, unauthorized use i. If results in loss or damage negligence liability 2. Incidental Use Bailee is under a duty to not make any use, except as is incidental to the performance of services. D. Bailor s Rights i. Actions against bailee Wrongful acts of the bailee which result in the bailed goods being lost or damaged are subject to action by the bailor. 1. Damages for breach of contract 2. Damages for tort action damage to property 3. Conversion (trover) action 4. Replevin ii. Actions against 3 rd parties 1. Bailment of definite duration a. No action for conversion or replevin i. Don t have possession or right to possession b. Action for trespass on the case 2. Terminable Bailment A bailor may treat the bailment as terminated IF (any element) a. gratuitous bailment b. bailment terminable at will c. bailee s unauthorized act And then can bring action of conversion or replevin against 3 rd party 3. Damage to future right of possession A bailor may maintain an action for injury to bailed property for damages to reversionary interest. a. 3 rd party must have been negligent b. Bailee s negligence immaterial E. Compensation and Reimbursement i. Ordinary expenses bailee ii. Extraordinary expenses bailor

9 VII. Adverse Possession of Chattels Adverse Possession Title to personal property by adverse possession results from the running of a statute of limitations. A. Requirements The statute of limitations does not run unless the possession relied on is (all elements) i. Actual and exclusive 1. All or part of the land claimed must be taken to the exclusion of others ii. Open and Notorious 1. The owner must be given the opportunity to see someone is claiming land 2. Stolen property is presumed to be held in secrecy. 3. Finding of lost or mislaid property is presumed to be held openly. iii. Hostile and Adverse 1. There must be some act of dominion or use inconsistent with the absolute right of property in the owner. 2. NOT by consent 3. NOT in subordinate rights to the true owner iv. Claim of right Depending on the state 1. Objective standard a. Possessor must act as owner, as opposed to transient trespasser 2. Good faith standard a. Good faith, but mistaken belief of ownership 3. Aggressive trespasser / Bad faith standard a. Possessor must intentionally act to acquire property v. Continuous 1. Possession must be continuous for the statutory period 2. Seasonal or intermittent use may be sufficient if such use would be made by an ordinary owner of such property 3. Owner s intrusion a. Requires the possessor to start over 4. 3 rd party intrusion a. If the adverse possessor regains possession, does not have to start over. vi. For the statutory period 1. General Rule A cause of action accrues when the owner ascertains, or by due diligence could ascertain, actionable damages 2. Discovery Rule A cause of action accrues when the owner knew or should have discovered that she suffered an injury or impingement and that it was caused by the act of another. Autocephalous Greek-Orthodox Church of Cyprus v Goldberg & Feldman Fine Arts Those who wish to purchase chattel should go through the means to protect themselves, such as background check or authorities a. Exception - Doctrine of fraudulent concealment A adverse possessor who has by deceit or fraud prevented a potential owner from learning of a cause of action cannot take advantage of his wrongdoing by raising the statute of limitations as a bar to the owner s action 3. Demand and Refusal Rule A cause of action accrues when the owner makes demand for return of the chattel and the person in possession of the chattel refuses to return it. a. Gives the owner greater protection b. Places the burden of investigating chattel on purchaser Solomon R. Guggenheim Foundation v Lubell

10 Right of Publicity, Creative Works and Human Tissue VIII. Right of Publicity Protects a person s interest in commercial exploitation of name, likeness, and identity. A. Common law Elements i. Use of identity ii. Appropriation of name, likeness, or identity for advantage iii. Lack of consent iv. Injury B. An actor or actress does not lose the right to control the commercial exploitation of his or her likeness by portraying a fictional character. i. The right of publicity includes anything that brings the celebrity to mind Wendt v Host International (cheers characters) C. Broadcast of film of entire act without consent extend the bounds of right of news reporting given by 1 st and 14 th amendments Zachini v Scripps-Howard Broadcasting Co. (human cannonball) D. Exceptions i. News reporting ii. Unauthorized biography iii. Entertainment parody or satire IX. Rights in Writings, Recordings, Product Designs A. Copyright Authors and inventors have exclusive rights i. Designed to protect expression, NOT utility ii. Author s ownership is in copyright, NOT work itself iii. Includes derivative works iv. No publication required 1. Before publication state common law protection 2. After publication federal statutory copyright protection v. Exception 1. Fair use doctrine a. Grants non-copyright holders the right to take someone s expression and repeat it (even without transformation) as long as use it for fair use, such as i. Criticism ii. Comment iii. News / reporting iv. Teaching v. Scholarship vi. Research b. Consider i. Purpose and character of work ii. Nature of copyrighted work iii. Amount and substantiality of portion used iv. Effect on market value of original 2. Functional aspects of design 3. Useful Articles 4. Ideas / facts a. Compilations of facts MAY be copyrightable i. Something other than alphabetical phone book Feist Publications Inc v Rural Telephone Service Co. NOT to reward labor of authors b. To be copyrightable, there must be i. Collection and assembly of pre-existing material, facts, or data

11 ii. Selection, coordination, or arrangement of materials iii. Creation, by virtue of the particular selection, coordination, or arrangement, of an original work of authorship c. To be infringement, there must be i. Ownership of a valid copyright ii. Copying of constituent elements of the work that are original vi. Rationale 1. Promotion of learning 2. Protection of public domain 3. Granting of exclusive right to author B. Patent i. Designed to protect utility functionality is original (useful invention) C. Patent vs. Copyright i. Copyright 1. lifetime of author + 70 years 2. Registration for Customs service to catch and stop knockoffs 3. Federal X. Trademark Trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others. Trademarks prevent people from using names, symbols, devices, etc. that are likely to cause confusion as to the source of goods or deceiving others. A. Rationale Designed to protect i. Consumers 1. lowers time it takes to find and distinguish goods quality ii. Producers 1. allows for a product to gain secondary meaning 2. protects from disadvantage 3. encourages producers to keep making quality products 4. protect investments in quality B. Color alone, sometimes, may meet the legal requirements for trademark i. Secondary meaning (symbol) Qualitex Co. v Jacobson Products Co. C. Can last forever as long as using it D. Dilution law protects famous trademarks i. Requires proof of actual damages of blurring or tarnishing (dilute reputation) E. Can't acquire by adverse possession against a person who has no interest in copyright F. Trade dress i. Made something that looks so much like ours that it is likely to cause confusion with our product can t protect functionality unless have patent ii. Burden is on PL to prove that the trademark was not functional must show merely decorative iii. Can t extend patent by trade dress XI. Rights in Human Tissue A. A physician who is seeking a patient s consent for a medical procedure must, in order to satisfy his fiduciary duty and to obtain the patient s informed consent, disclose personal interests unrelated to the patient s health, whether research or economic, that may affect his medical judgment. i. Protection of a competent patient s rights to make autonomous medical decisions B. The use of excised human cells in medical research does not amount to a conversion.

12 i. Don t threaten liability on innocent parties engaging in socially useful activities. C. Moore v Regents of the University of CA D. Newman v Sathyavaglswaran E. Property rights in kin s corneas, but none in own spleen

13 Real Property Estates in Land XII. Terminology A. Estate The type of right or title that a person has in land or real property. B. Freehold Legal title or right to hold in possession C. Nonfreehold - Merely right to possession D. Words of Limitation describe what type of estate is being created E. Words of Purchase identify grantees of estate F. Heir any person who survives the decedent and are designated by intestate succession i. Issue lineal descendents ii. Ascendants parents, grandparents iii. Collaterals all persons related by blood to decedent who are neither descendents or ancestors iv. Escheat if person dies intestate with no heirs, goes to state XIII. Present Possessory Estates A. Fee Simple Absolute i. Defined A fee simple absolute is a freehold estate in land that is (all elements) 1. Alienable (Fully transferable) 2. Descendible / Devisable (Fully inheritable) 3. Perpetual 4. NOT subject to a condition ii. Transfer of Interest A transfer from O to A in fee simple absolute: to A and his heirs B. Fee Tail Most states have abolished this estate and conclude it transfers a fee simple i. Defined A fee tail is a freehold estate in land that is (all elements) 1. Alienable (Fully transferable) 2. Limited inheritability to lineal descendents ii. Transfer of Interest A transfer from O to A in fee tail: to A and his heirs of the body C. Estate for Years (Lease) i. Defined An estate for years is nonfreehold estate that is (all elements) 1. Limited transferable 2. Not inheritable The right of possession reverts to the owner of the fee simple on termination. ii. Transfer of Interest D. Life Estate i. Defined A life estate is a freehold estate in land that is (all elements) 1. Limited transferable alienable, but ends at death of life tenant 2. Not inheritable NOT devisable and NOT descendible ii. Transfer of Interest

14 iii. Duty to refrain from waste The tenant has a duty to maintain the property in a reasonable state of repair when necessary to preserve the property s value for the holders of future interests following it. 1. Exception extraordinary repairs E. Defeasible Fee i. Defined A Defeasible fee is an estate in land that is (all elements) 1. Subject to a condition 2. Potentially infinite duration ii. Fee Simple Determinable 1. Defined An estate that is automatically terminated and vested back to the grantor when a condition occurs a. Possibility of Reverter in grantor The grantor retains a future interest as a possibility of reverter i. When condition occurs, possessor becomes adverse possessor ii. Must be expressly retained Then intent of the parties must be shown in a language sufficient to qualify the estate conveyed and must provide that in the case of a breach, the estate will be defeated. Mere expression for the purpose for which the property is to be used without provision for forfeiture or reentry is insufficient to create an estate on a condition and an unqualified fee will pass. Station Associates Inc v Dare County iii. Transferability Most jurisdictions allow the possibility of reverted to be transferred o inter vivos o devised by will o to the owner s heirs if dies intestate iv. NOT subject to rule against perpetuities 2. Transfer of Interest so long as or until iii. Fee Simple on a Condition Subsequent 1. Defined An estate that is terminated, upon reentry of the grantor, back to the grantor if a condition occurs a. Right of reentry in grantor Grantor retains a right of reentry to reenter the land and take back the estate i. Must be expressly retained Right of reentry must be expressly reserved in the grantor The general rule of interpreting the manifest intent of the parties shall not apply to a condition subsequent due to their disfavor for causing forfeiture of land. Red Hill Outing Club v Hammond ii. Brining evidence for breach of condition subsequent A grantor may not offer evidence of a breach of condition subsequent that occurred after the grantor brought the action to reentry, as the grantor is deemed to have taken legal possession of the property. Red Hill Outing Club v Hammond

15 2. Transfer of Interest but if iii. Transferability o NOT transferable inter vivos o Devisable by will o To owner s heirs if dies intestate iv. Waiver A grantor may waive right, but inaction by itself is not waiver v. NOT subject to Rule against perpetuities iv. Fee simple on Executory Limitation 1. Defined An estate that is terminated automatically and vests to a third party if a condition occurs a. Executory Interest The third party retains a future interest as an executory interest 2. Transfer of Interest so long as or but if names a third party 3. Subject to the Rules against perpetuities a. Any time a person creates a fee simple on executory limitation involving a condition that can be violated at any time in the future, the executory interest associated with it is void and the condition stated is no longer effective. i. Solve by tying the condition to A for example o to A and his heirs, but if A [condition] to B INSTEAD of to A and his heirs, but if [condition] to B a. Only A must comply with the condition o A fee simple on executory limitation involving a condition that is tied to the lifetime of a person in existence at the effective date of transfer can never violate the RAP. XIV. Future Interests A future interest is an estate that does not entitle the owner thereof to possession immediately, but will or may give the owner possession in the future. A future interest is a present, legally protected right in property. A. Created in the Grantor i. Possibility of Reverter Exists in a grantor by creating a fee simple determinable ii. Right of Reentry Exists in a grantor by creating a fee simple on a condition subsequent iii. Reversions A reversion is a future interest left in the grantor, which arises by operation of law, as the remnant of the grantor s estate which was not transferred., e.g. life estates 1. Vested Even if it is uncertain whether or not it will ever become possessory interest 2. Transferable 3. Devisable by will 4. Descendible by inheritance 5. Law of waste holder of reversion may sue possessor/3 rd party for waste B. Created in the Grantee

16 i. Remainders A remainder is a future interest created in a transferee that is capable of becoming a present interest upon the natural termination of the preceding estate created in the same disposition. 1. Requirements a. Created simultaneously with & in same document as a prior possessory interest b. Prior interest must be immediately prior c. Prior interest must end naturally 2. Vested a. A present right to a future interest b. Indefeasibly Vested A person (or that person s successor) is certain to have a present interest of property at some time in the future. c. Vested remainders subject to partial divestment Can be subject to a partial divestment / subject to open upon the expansion of the class of remainderman i. Example to A for life, remainder to A s children where A has a child B. B has a vested remainder subject to sharing it upon the birth of subsequent children d. Vested remainders subject to complete divestment May also be subject to complete divestment by a conditional subsequent e. Heir of the holder of vested remainder could inherit/by will/conveyance f. Fully Transferable g. Devisable by will h. Descendible by inheritance 3. Contingent A person s future interest is subject to a condition precedent that must be satisfied before vesting can occur. a. Unborn person b. Unascertained persons c. Subject to condition precedent d. Transferable inter vivos e. Subject to rule against perpetuities remainder in, to, then to ii. Executory Interest Any future interest in a transferee that is not capable of taking on the natural termination of the preceding life estate divests the interest of another. 1. Requirements (any element) a. Follows a gap in time after the natural expiration of a prior estate b. Unnaturally cuts short a prior estate 2. Shifting executory interest Cuts short, on some stated event, the former estate in possession a. To A for life, then to B and his heirs, but if B marries C, then to D and her heirs B has vested remainder subject to complete divestment and D has shifting executory interest 3. Springing executory interest Arises at some point after the expiration of a possessory estate 4. Transferable Inter vivos 5. Devisable and descendible a. UNLESS the holder s survival is a condition to the interest s taking 6. Subject to rule against perpetuities

17 a. Any time a person creates a fee simple on executory limitation involving a condition that can be violated at any time in the future, the executory interest associated with it is void and the condition stated is no longer effective. i. Solve by tying the condition to A for example o to A and his heirs, but if A [condition] to B INSTEAD of to A and his heirs, but if [condition] to B a. Only A must comply with the condition b. A fee simple on executory limitation involving a condition that is tied to the lifetime of a person in existence at the effective date of transfer can never violate the RAP. C. Compensation An owner of a future interest is not entitled to any compensation unless the condition has been breached as of the date of valuation, because the possibility of reversion too remote and speculative to be valued i. Exception If reversion would have been imminent City of Palm Springs v Living Desert Reserve If the condition imminent, might give holder of future interest 100%

18 Freehold Estates Fee Simple Absolute to A to A and her heirs Fee Simple Determinable to A so long as while during unless until Fee Simple Subject to a to A provided that.. Condition Subsequent on condition but if Fee Tail to A and the heirs of his Grantor None Possibility of Reverter Right of reentry Reversion Future Interest 3 rd Person None Executory Interest Executory Interest Remainder body Life Estate to A for life Reversion Remainder Executory Interest Non-Freehold Estates Future Interest Term for Years to A for years Reversion Remainder

19 XV. Rule Against Restraints on Alienation A. Types of restraints i. Disabling restraint any attempted transfer is ineffective ii. Forfeiture restraint any attempted transfer is a forfeiture of the interest iii. Promissory restraint any attempted transfer breaches a covenant B. Rationale Restraints are disfavored because they i. Tend to discourage improvements in the land ii. Prevent the owner from making land available for its most valuable use iii. Keep the property off the market iv. Keep the owner s creditors from reaching the land in satisfaction of debts Any restriction on the transferability of a legal interest in property is void IF C. Disabling restraint D. Absolute restraints on Fee simple i. Exception Partial restraints MAY be upheld IF 1. restraint has a legitimate purpose 2. impact and duration are reasonably limited E. Exceptions i. Right of First Refusal 1. The right to have the opportunity to purchase real estate when it becomes available IF a. it is reasonable (by specifying fair market value, etc.) b. limited time for offer ii. Conditions designed to shift property ownership upon remarriage iii. Restrictions on transferability of leaseholds 1. A provision in a lease prohibiting the lessee s assignment or subletting of leasehold interest without the consent of the landlord iv. Forfeiture and Promissory restraints on life estates 1. Little is lost by giving effect to the transferor s intention to restrict the estate s transferability because life estate is practically inalienable anyways (unlikely to pay for estate of uncertain duration) v. Forfeiture restraint on transferability of a future interest 1. During the period in which the interest is a future interests vi. Reasonable Restrictions in commercial transactions 1. IF part of bargained-for agreement, as opposed to donative transaction vii. Limited restraint 1. affordable housing that is for legitimate purpose and reasonable viii. Indirect restraint 1. restrict property for limited use, even if become unmarketable

20 XVI. Rule Against Perpetuities No Interest in property is valid unless it must vest, if at all, not later than 21 years after one or more lives in being at creation of the interest An interest is void if there is any possibility, however remote, that the interest may vest more than 21 years after some life in being at the creation of interest. Any interest, other than one in the testator, grantor, or transferor, is invalid when it MIGHT i. Vest or fail to vest as a remainder ii. Become possessory, or not, as an executory interest, at a time more distant than 21 years after a life in being at the effective date of the transferor s instrument. The rule is concerned with the postponement of either vesting or coming into possession of future interests, and as such contingencies must be resolved within the perpetuity period, observed at the time of the initial creation of the interest. The option is void unless the instrument that created it expressly provides that it can only be exercised for a period that does not exceed 21 years from the date it was created, or that it cannot be exercised later than 21 years after the death of some named people. B. Step 1 - Applies to i. Legal interests 1. Contingent remainders 2. Vested remainders subject to open 3. Executory interests ii. Equitable interests 1. Interests that beneficiaries have in trusts (except charitable trusts) 2. Options to purchase Symphony Space v Pergola Properties a. Unless i. reasonable time limit inferred ii. Tenant option to purchase leased premises during the lease term, no matter how long the term, until the option has been separated from the leasehold estate b. Grants absolute power to purchase at own whim c. Discourages property owner from investing in improvements d. Impedes owner s ability to sell to 3 rd party iii. Exemptions 1. One charity to another 2. Vested remainders 3. Reversions 4. Possibilities of reverter 5. Rights of reentry 6. Rights of first refusal Metropolitan Transp. Auth. V Brunken Realty Corp. iv. If there is no future interest involved, the time to be considered is the 21 years or whatnot C. Step 2 Determine effective date of transfer At the point it becomes irrevocable i. Will / testamentary trust effective at the death of the testator ii. Deed effective at the date of delivery iii. Inter vivos trust effective when it is stated to be effective D. Step 2 Pool of candidates of measuring lives The pool of candidates used for measuring of lives consists of those persons who are alive at the effective date of the instrument and (any element) i. Can affect the vesting or taking possession of the challenged interest 1. Those who can control the termination of the preceding estate 2. Those who will either make it happen or receive its benefits ii. Are affected with the transaction iii. Exclusions

21 1. Unreasonably large groups 2. Persons with the same impact on vesting or taking possession, if all of them cannot be reasonably ascertained within the perpetuities period 3. Persons whose lives have redundant impacts on the vesting or taking possession of the challenged interest E. Step 3 Find from among all the measuring lives, a validating life If there exists one person for whom there exists no invalidating chain of possible events occurring after the effective date of the document, the interest is valid. i. Speculate on what might occur after the effective date of the transfer 1. What actually happens is irrelevant under common law F. Rationale i. To limit control of title to real property by the dead hand of landowners reaching to future ii. Socially undesirable for property to be inalienable for unreasonable amount of time iii. Ensure productive use and development of property iv. The purpose of the rule was to limit the time that title to property could be suspended out of commerce because there was no owner who had title to the property and who could sell it or exercise other aspects of ownership. G. Examples i. Executory Interest following Defeasible fee violates rule With no time within which it must H. Statutory Reform i. Wait and see An interest is valid if it actually vests during the perpetuities period, regardless of why might have happened. Rejected in Symphony Space v Pergola Properties

22 Adverse Possession of Real Property XVII. Adverse Possession Title to personal property by adverse possession and easements by prescription results from the running of a statute of limitations. A. Requirements The statute of limitations does not run unless the possession relied on is (all elements) i. Actual and exclusive 1. All or part of the land claimed must be taken to the exclusion of others 2. Exceptions a. color of title i. Color of title exists IF (all elements) o Written instrument purports to pass title o But is ineffective because of defect or grantor lacks title ii. Can claim land by constructive possession via color of title IF o Can only claim extra land if not occupied by someone else o Only applies to parcel of land not subdivided (deeds that cover single parcel) b. Renter / Lease i. As long as have someone in possession for you, like a renter or lessee Lawrence v Town of Concord ii. Open and Notorious 1. The owner must be given the opportunity to see someone is claiming land 2. Underground uses a. Indirect evidence of underground uses supports open and notorious Foot v Bauman 3. Minor encroachments Mannillo v Gorski a. Minor encroachments are NOT open and notorious IF i. Intrusion is not clearly and self evidently apparent to the naked eye, but requires an onsite survey b. UNLESS the true owner has actual knowledge of the location of the boundary iii. Hostile and Adverse 1. There must be some act of dominion or use inconsistent with the absolute right of property in the owner. 2. Possession cannot become adverse against one who does not have an immediate and present right to possession 3. Intent of possessor is irrelevant, instead objective test to determine whether the possessor acted toward the land as if they owned it, without permission Nome 2000 v Fagerstrom 4. NOT by consent 5. NOT in subordinate rights to the true owner 6. Owner s knowledge of ownership or in the adverse use is irrelevant 7. If possession starts permissively, must communicate hostility An adverse possessor has no burden to reveal his intentions to the owner absent a special relationship in which a repudiation of the earlier relationship is necessary to put the owner on notice that he should take steps to protect his rights Lawrence v Town of Concord a. Licensor-Licensee b. Landlord-Tenant 8. If grantor stays in possession permission assumed

23 9. Co-tenants Ouster required Sole possession or use by one co-tenant is NOT adverse, unless there is a clear repudiation of the co-tenancy iv. Claim of right Depending on the state 1. Objective standard a. Possessor must act as owner, as opposed to transient trespasser 2. Good faith standard a. Good faith, but mistaken belief of ownership 3. Aggressive trespasser / Bad faith standard a. Possessor must intentionally act to acquire property v. Continuous and uninterrupted 1. Possession must be continuous for the statutory period 2. Seasonal or intermittent use may be sufficient if such use would be made by an ordinary owner of such property, regardless of substantial improvements or absolute exclusivity Nome 2000 v Fagerstrom 3. Owner s intrusion a. Requires the possessor to start over 4. 3 rd party intrusion a. If the adverse possessor regains possession, does not have to start over, but statute of limitations will be tolled against possessor for the time in which possessor did not have possession (see tolling) 5. Renter / Lease a. As long as have someone in possession for you, like a renter or lessee Lawrence v Town of Concord vi. For the statutory period The filing of suit by the true owner is not sufficient to stop the period from running, but they must pursue the suit until judgment and upon winning will relate back to the filing of suit. 1. Adverse possessor only runs against the title currently held when took possession a. The rights of the adverse user are measured by the title as held on the date of the user s first entry. 2. Tacking Successive possessors of property may tack their respective periods of possession IF a. Voluntary transfer of property i. Oral transfers are valid (they are just revocable by transferor), but probably will want to comply with statute of frauds ii. Transfers by the owner are irrelevant b. Consecutive periods 3. Tolling States may protect the property rights of an owner who is under a disability, via age of minority, imprisonment, or unsound mind, when the adverse possessor takes possession by either a. Ohio statute Statute of limitations is the longer of either the original 21 years or 10 years after the disability is removed b. New Jersey statute Statute of limitations only begins when the disability is removed Applies to original adverse possessor and their successor s, BUT two disabilities CANNOT be tacked, even if by the same person 4. Color of title a. Color of title exists IF (all elements) i. Written instrument purports to pass title

24 ii. But is ineffective because of defect or grantor lacks title b. Period required to establish title by adverse possession is often shorter B. Exceptions i. Government-owned land The statute of limitation does NOT run against government-owned land or anyone who acquires title from the state. Kiowa Creek Land & Cattle Co. v Nazarian 1. Government does not have the resources to monitor all of its land for signs of adverse claims ii. Landlords The adverse possessor acquires no more than the estate held by the person entitled to possession at the time the adverse possessor took possession or when the easement user began using the property. The statute of limitations does NOT run against a landlord UNTIL the future estate is vested. 1. If acquire from tenant, get an interest for the rest of the lease 2. If acquire from life estate, get an interest until that person dies 3. If enter before lease made, acquire against fee simple even if lease to someone else 4. If enter after lease made, acquire against the lessee and rights will be lost when lease ends Dieterich International Truck Sales, Inc. v J.s. & J. Services, Inc. Landlords are legally unable to bring an action for trespass because designed to protect possessory, not ownership, interest in land Law of Waste - Landlord has right to sue for injury done to the inheritance C. Relation Back Once the adverse possessor acquires title, title relates back to the entry and the owner s actions for trespass, mesne profits, and ejectment are barred. D. Rationale i. Penalizes owners who sleep on their rights ii. Rewards those who make productive use of the land XVIII. Acquisition of Rights by Public Use Public beaches begin at the high tide mark and extend to the ocean. Any prescriptive easement by the public constitutes a takings that requires just compensation Public Use of Coastal Beaches XIX. Acquisition by Conquest By Force The discover of the Indian-occupied lands of the US vested absolute title in the discoverers, and rendered the Indian inhabitants themselves incapable of transferring absolute title to others. A. Purchasers from Indians are allowed to possess that title only with respect to the Indians Johnson and Graham s Lessee v M Intosh

25 XX. Transfer of Land Statute of Frauds To be enforceable, a land contract must be A. In writing i. Description of the property ii. Parties identified iii. Price B. Signed by the party to be charged C. Exceptions i. Part performance ii. Estoppel XXI. Marketable Title A. A title based in adverse possession can be a marketable title i. Outstanding claimants could not succeed were they in fact to assert the claim ii. No real likelihood that any claim will ever be asserted B. In an action for specific performance by a vendor, where the issue is marketability of title, the vendor is entitled to judgment if at the conclusion of the suit, the court holds the title to be marketable. C. The existence of an encumbrance renders the title unmarketable when it is not mentioned in the sales contract i. Exception if an easement is readily visible D. The existence of zoning and public land use regulations generally do NOT render the title unmarketable, even if the regulations severely restrict or prevent development. i. BUT existing violations DO render unmarketable XXII. Caveat Emptor (buyer beware) A. CA -- requires seller to disclose anything that might be material B. NC may include everything that may be material, but mostly physical defects C. Exceptions i. Confidential or fiduciary relations between seller and buyer ii. Active concealment / misrepresentation iii. Partial disclosure iv. Hidden defects known to seller XXIII. Deed A. Types i. General warranty 1. warrants title against defects arising both before and during time grantor was connected with land ii. Special warranty 1. warrants title against defects arising during time grantor was connected with land, NOT against defects arising before iii. Quitclaim 1. grantor warrants NOTHING B. Delivery Delivery refers to the grantor s intent i. Present operative effect 1. Title pass immediately 2. Irrevocably ii. Conditional delivery when 3 rd party

26 1. Chandler v Chandler No evidence that had retained right to revoke or recall deed XXIV. Recording A. Title search process i. Grantor-Grantee Index 1. Indexed by name of grantor and grantee ii. Tract Index 1. Indexed by description of land conveyed 2. Block lot B. Types of Notice i. Actual notice ii. Record notice iii. Inquiry notice reasonable inspection of property C. Types of Acts i. Grace Period 1. Gives the prior grantee 15 days to record from time transferred 2. Protects bona fide purchaser only if prior purchaser doesn t record within time ii. Notice 1. If have no notice at time of conveyance, win 2. If have notice, no protection first in time iii. Race-Notice 1. If have no notice at time of conveyance AND record first, win 2. If have notice, no protection first in time iv. Race 1. Regardless of notice, if record first, win D. Marketable Title Act i. Only have to go search records for past 30 years 1. reduces the cost of searching ii. Exceptions 1. mineral rights 2. railroad rights of way 3. utility lines 4. conservation servitudes E. Title Insurance i. Protects against 1. things that show up in land records 2. unacknowledged or invalidly acknowledged deeds 3. forged deeds 4. marketable title 5. not landlocked ii. DO NOT protect against 1. zoning laws 2. building permits iii. A title insurance company may be found liable on a negligence claim if the act complained of was a direct result of duties voluntarily assumed by the insurer. Somerset Savings Bank v Chicago Title Insurance Co.

27 Concurrent Estates XXV. Types of Concurrent Estates Cotenants each own an undivided interest in the land. A. Tenancy in common i. Residual form concurrent estate (Default) ii. Anyone can own iii. Fully alienable independently 1. Can transfer independently inter vivos, descendible, devisable 2. No survivorship rights iv. Subject to claims of tenant s creditors B. Joint tenancy with right of survivorship i. Anyone can own ii. Limited alienable independently 1. Can transfer independently inter vivos but destroy joint tenancy tenancy in common 2. NOT descendible or devisable property remains with the survivor iii. Rationale 1. Cheap alternative to creating a will, without hassle of probate 2. Passes property free of any debts created by the deceased joint tenant. iv. Creation 1. 4 Unities a. Time interests vested at the same time b. Title interests acquired by the same instrument c. Interest interests of the same type and duration d. Possession interests give identical rights to enjoyment 2. Modern Some jurisdictions - no more strawmen needed, regardless of unity of time and title. 3. Express Language Required As joint tenancies are disfavored, there must be clear expression of interest a. to A and B as joint tenants with rights of survivorship b. Use of the words joint tenants is sufficient to establish that the property granted is to be held in joint tenancy Downing v Downing v. Severance 1. Inter vivos transfer by one joint tenant Converted into tenancy in common, regardless of voluntary or involuntary a. More than two joint tenants Only grantee holds as tenant in common, other two still joint tenants b. Exceptions in some states i. Judgment liens not considered substantial conveyance to destroy the unities of time and title, UNTIL foreclosure ii. Mortgages iii. Leases just suspend the joint tenancy o Death of lessor split of states between temporary severance (such that right of survivorship resumes at end of lease) and right to possession ends at death 2. Contract to convey by one joint tenant 3. A joint estate is valid even though an estate less than a fee is conveyed to the tenant Downing v Downing (Not severed when leased part of land) 4. Testamentary disposition by one joint tenant has no effect C. Tenancy by the entirety i. May have to be married couple to own