THEORIES OF PROPERTY RIGHTS

Transcription

1 PROPERTY OUTLINE: BASIC CONCEPT: Relatinal: yu wn things in relatin t smene else Bundle f sticks metaphr: prperty rights are a bundle f sticks, yu can give sme t thers while maintaining the rest fr yurself Purpses f Prperty: divisin int public/private spheres 1.] Privacy 2.] Cmmn Gd: level f rganizatin 3.] Encurages Prductivity: if yu receive fruits f labr yu are encuraged t wrk 4.] Enhances Prductivity: if yu knw yur huse is safe, yu can leave t wrk 5.] Stability 6.] Maintains existing scial rder 7.] Helps allcate scarce resurces 8.] Prmtes individual develpment THEORIES OF PROPERTY RIGHTS: Lcke: LABOR THEORY f Prperty: Unwned thing + Labr = Prperty Limits: 1.] Limits t amunt ne can mingle w/ labr; hwever, ne can cmbine a lt 2.] Limit f wasting: cannt cmbine everything and then let it g t waste -> Gd wuld get mad A persn takes what his family labrs fr Justificatin fr disparity in prperty wnership: 1.] peple have incentive t gather and labr fr mre than they can use 2.] They gather mre and barter fr mre than they can use 3.] Everyne benefits by there being mre gds 4.] Cmmn stck f mankind is increased Blackstne: Prperty rights frm Gd Everything in the wrld is held in cmmn Once it is abandned, it ges back int the cmmn: thery f temprary pssessive rights; yu can use it, but yu dn t have the substance Prblem: n incentive fr peple t make, build, r create mre b/c rights t bjects nt secure; everyne fights ver the same things individual prperty rights ver substance f item needed Prperty used t structure sciety the way we want One grup is ging t have mre pwer than the ther Reich: Prperty rights are creatin f the gvernment, they are n lnger a natural right Prperty allws us t have stability & privacy Prperty seen as a surce f liberty Prperty became a surce f pwer -> abusive Gvernment Pwer erding the pwer and liberty f the individual: 1.] Grants, gvernment cntracts 2.] Prfessinal Licenses Prperty used t be liberty nw the gvernment has the prperty and the individual is dependent upn the public instead f private wealth Regulatin w/ respect t the public interest: 1.] substantive cnstitutinal limits: the Bill f Rights shuld precede any rights the gvernment wants t take away 2.] prcedural safeguards: separatin f functins fllw rules in a fair manner (due prcess): prblem is due prcess is expensive

2 3.] Privacy: draw zne f privacy arund individuals t which gvernment cannt trek d this by giving individuals a prperty right Demsetz: Internalize externalities: d this when the gains f internalizatin are larger than csts f internalizatin Externality: cst f an activity, where that cst f an activity is nt taken int accunt Allcative/Distributive Efficiency: Slutin t free-riders (everyne chpping dwn trees): private wnership; make peple take int cnsideratin the scial csts f their wn decisins Cmmunal wnership encurages ver-cnsumptin Tragedy f the cmmns If transactin csts are sufficiently lw, ecnmic incentives are ging t cause resurces t be used efficiently Case Therem: absent transactin csts, parties will bargain arund the rule t reach the mst efficient utcme ACQUISITION BY DISCOVERY: Jhnsn v. McIntsh (1823): Π granted land by tw Indian tribes. Δ purchased land frm the federal gvernment. Virginia claimed land initially and cnveyed it t federal gvernment. Hlding: Gvernment had the right t pssess and distribute land. U.S. transferred right frm Great Britain t extinguish Indian ccupancy. Rule: First in time (as lng as ccupancy is maintained) trumps pssessin. 1.] Acquisitin by Purchase (1775): Jhnsn wrked the land. (Lckified it s t speak) Jhnsn nly bught the right t ccupancy. 2.] Acquisitin by Discvery ( Cabt) Indians did nt wn the land since they did nt wrk it 3.] Acquisitin by Cnquest: British came in and cnquered Indians defeated natin incrprated/assimilated int cnquering natin First in Time: Prs: 1.] Clear; 2.] Fair; 3.] Disruptive t Change Cns: Rule might nt have been first in time, but first in time w/ a swrd; unequal distributin Cnquerr determines the rights f the captured ACQUISITION BY CAPTURE: Pursuit alne des nt give title: Piersn v. Pst (1805): Π pursued fx w/ dgs and hunds n cmmand. Δ prevented Π frm catching fx by killing and carrying it ff. Issue: Is pursuit enugh? Rule: One must at least wund, circumvent, r capture animal befre it can be cnsidered under ne s ccupancy. (Cnstructive pssessin) First in time means [actual] pssessin, r intent & ability t pssess [cnstructive pssessin], nt t fllw. Puffendrf: Bdily pssessin = ccupancy Barbeyrac: Pursuit + mrtal wunding is enugh; ambiguus ( as lng as yu re likely t get the fx, it s yur fx ) Tmpkins: Less than physical pssessin is smetimes enugh Blackstne: One must seize upn ferae naturae; ambiguus like Barbeyrac Plicy argument: Certainty; less fights w/ ruling best frm certainty and piece f rder argument DISSENT: Matter shuld be left t sprtsmen t decide. Perspective that law is an instrument fr prmting scial gd law shuld be whatever maximizes fxkilling. Better frm perspective f incentive t kill fxes. Pssessin is required and sufficient t establish title: Actual Physical pssessin (Piersn) Cnstructive Pssessin: Mrtal wunding while pursuing w/ intent t kill (Piersn) Animals n yur land whether yu knw it r nt. Keeble v. Hickeringill (1707) Custm replaces Pssessin Requirements:

3 Ghen v. Rich (1881): Custm present: Killer f whale wns it & finder gets a fee. Rule: Ownership awarded t ne wh first injured, killed r tried t gain pssessin. (Finds in favr f custm) Plicy: Creatin f an incentive system; custm must be fllwed r else industry wuld be destryed First in time vs. pssessin: Ghen has first in time, Rich had pssessin. First in time trumps pssessin in this case; pssessin is usual rule Swift v. Giffrd: When custm can be valid 1.] custm must embrace entire industry (at least within scpe f applicatin) 2.] has t be lngstanding 3.] custm has t be f limited applicatin ACQUISITION BY CREATION: RIGHT TO COPY: Creatr has prperty right in thing which is created, but nt in idea: In the absence f sme recgnized right at cmmn law, r under the statutes-and the plaintiff claims neither - man s prperty is limited t the chattels which embdy his inventin. Others may imitate these at their pleasure [Cheney Brthers v. Dris Silk, (1930)] Encuragement f efficient markets Smith v. Chanel, Inc. (1968) Quasi-Prperty - INS vs. AP (1918): Defining what type f prperty news is, is relative t the relatinship b/w the parties invlved: News is quasi-prperty between INS vs. AP INS/AP vs. Public: N prperty right at all POLICY: Sciety will be better ff w/ cpying, nly as lng as cpying des nt undermine ur incentive t gather (as in this instance). Exceptins: Patents: prtect inventins nvel, useful, and nn-bvius prcesses/prducts Trademarks: prtect wrds & symbls f a cmpany Virtual Wrks v. Vlkswagen f America: Where cmpany acts in bad faith t prfit ff anther s trademark, and their actins are in direct vilatin f statutry law (Anticybersquatting Act), they will nt be allwed t use the trademark. Cpyrights: prtect expressin f ideas, nt the idea itself Right f Publicity: bar thers frm expliting persna (Bette Middler) Right t Include/Exclude: relatinship amng peple that entitles s-called wners t include r exclude use r pssessin f wned prperty by ther peple. Chen [transferability] Jacque v. Steenberg Hmes (1997): Persn has right t exclusive enjyment f wn prperty fr any purpse which des invade the rights f anther persn. POLICY: Curt des nt want peple t take the self-help apprach. State v. Shack (1971): There are limits t hw far & what yu can exclude as a prperty wner: title t real prperty cannt include dminin ver the destiny f persns the wner permits t cme upn the premises ACQUISITION BY FIND: LOST/ABANDONED prperty: Finder - Armry v. Delamirie (1722): Chimney sweeper s by fund jewels. Tk it t Δ s shp. Δ ffered Π mney fr jewels, but Π wanted them back instead. Rule: A finder prevails against all but the true wner r prir pssessrs (whether they are thieves r finders). (Gd is fund in public place) Reasns fr ruling: 1.] wnership means prductive use 2.] clear rule: if there is nne, it encurages self-help 3.] assigning respnsibility fr csts

4 4.] encurages return t true wner 5.] finding is scially prductive Cnstructive bailee Finder Tw Finders First finder still gets t keep the jewel against subsequent finders Helmhlz: In case f disputes w/ prir wrngful pssessr and hnest subsequent ne, curts regularly prefer the latter, in DEFIANCE f the hrnbk rule Trespasser: If Hannah were a trespasser, he wuld lse against Peel Bailment: rightful pssessin f prperty by a persn (bailee) wh is nt the true wner (bailr) Land in Qu - Hannah v. Peel (1945): Π statined at huse & discvered a brch. Π handed it ver t plice, wh then handed it t Δ when riginal wner was nt fund. Δ sld brch fr 66 punds. Π wanted brch back. Rule: Finders generally have superir rights in lst prperty t all but the true wner. Owners f land in qu, wn things attached t the land r under it, even thugh they dn t knw it is there. Here, the wner f the lcus in qu, was nt and had never been in actual pssessin f land. He had n knwledge f brch until Hannah had fund it, and therefre had n pssessry right t the brch. Because Peel never tk physical pssessin, he is denied cnstructive pssessin POLICY: Curt rewards hnesty Agency: If a man finds a thing as the servant r agent f anther, he finds it nt fr himself, but fr that ther Suth Staffrdshire Water C. MISLAID PROPERTY: Distinctin b/w mislaid and lst assumptin that persn wh has mislaid prperty wants it back; prperty is intentinally placed, but then frgtten. McAvy v. Medina (1866): Π discvered pcket bk which cntained mney in Δ s barber shp. Π tld Δ t hld nt pcket bk and give it t wner if he were t cme by. Owner never came by, and Π wanted mney back. Rule: Finders f mislaid prperty d nt get t keep prperty; it instead ges t the wner f the lcus in qu. POLICY: Encurage prperty t be returned t the true wner. ADVERSE POSSESSION: ELEMENTS: 1.] Actual pssessin: be n the land; put up a fence, etc. 2.] Open & Ntrius: Reasnable persn must be able t recgnize the adverse pssessr is claiming the land Actual wner need nt be aware that smene is claiming their land 3.] Exclusive: cannt be shared; smene else cannt be there w/ yu 4.] Cntinuus: (piecable) Must avid: 1.] physical evictin; 2.] curt evictin rder Hward v. Kunt: Δ s ccupied land under clr f title (defective deed). Δ s utilized the hme as a summer huse. Δ s immediate predecessrs hired a surveyr, wh cnfirmed they were n the land deeded t them. Δ s put up bundaries and imprvements were made. Π eventually fund ut mix-up f deeds. Rule: Cntinuity is measured based n hw the land is capable f being used. (If it s a summer hme, then yu have t use it in the summer) TACKING: Furthermre, where there is sufficient privity f estate, tacking is permitted. Privity f estate is defined as a reasnable cnnectin b/w successive ccupants f real prperty such that they have mre rights than wrngders. want t prtect purchasers; d nt stretch it t squatters; if there is a physical uster, it des nt cunt. POLICY: Dn t want t have t make peple hire surveyrs after they buy and sell prperty. 5.] Hstile (and under claim f right): state f mind; withut wners intent and with intentin t remain; des nt mean w/ malice

5 1.] There must be a gd faith believe that adverse pssessr wns ccupied land. (criticized b/c it rewards lazy wner and penalizes prductive wner) 2.] Knws the prperty is nt his, but intends t claim it nevertheless (rarely used tday since it rewards trespassers) 3.] state f mind irrelevant: 1.] lack f permissin; 2.] ccupiers acts and statements appear t be claim f wnership (majrity rule) Mannill v. Grski: Π s encrach land by small area; encrachment is nt clear. Hlding: Π s claim fails n pen & ntrius element wner des nt have knwledge f adverse ccupancy. Rule: Δ can still fulfill hstile element f adverse pssessin even if Δ mistakenly ccupied the land. POLICY: Maine Dctrine Hnest mistake is nt hstile; thus if there is mistaken pssessin, there cannt be adverse pssessin. Curt recgnizes dctrine is pr plicy: it creates incentive fr peple t be evil. Curt jettisns rule: Π did nt rely n the fact that there was a mistake. Instead, there was just lack f knwledge. Cnnecticut Dctrine State f mind des nt matter. [Adpted by mst curts] Statute f Limitatins: des nt start running if disability exists when the cause f actin accrued (disability exists befre intrusin) until after the disability is remved (within ten years f remval f disability) [Prblems pg. 161] Disability: unsund mind, minr, imprisned May be used by successrs in interest; hwever, disability cannt be tacked Ex: If successr in interest upn O s death is minr, can nly take frm the 10 year remval f disability frm O Gvernment: One cannt adversely pssess against the gvernment POLICY arguments: 1.] prvides prf f meritrius titles 2.] crrects errrs in cnveyancing 3.] better t take away frm smene whse assciatin w/ prperty has faded w/ time (Hlmes) 4.] encurage prductive use f land ACQUISITION BY GIFTS: Gifts Causa Mrtis gift s made n ne s deathbed in cntemplatin f ne s death Revcable if dnr recvers frm illness Newman v. Bst: Π, female, was husekeeper fr Van Pelt. Prir t death, intestate handed Π keys, and tld her he wanted her take and keep them, and that he desired her t have them and everything in the huse. One f the keys unlcked a bureau in the huse insurance plicy, payable t intestate s estates, and a few ntes. N ther keys which unlcked bureau. Π ccupied rm in intestate s residence fr ten years. Hlding: Π nt entitled t life insurance plicy in bureau: bureau was f alternate uses t the Π; bureau has dmestic uses and is typically used by females; insurance plicy is typically used by males; intestate did nt mentin plicy and culd have taken it ut and handed it t her. Rule: When dealing with gifts causa mrtis, curts tend t get very technical. Curt nly allws a very narrw frm f cnstructive delivery and did nt allw a frm f symblic delivery. POLICY: wills ffer prtectin & are hard t frge; gifts causa mrtis are discuraged since persn sundness f mind is questined, few peple are there, and it is ral. Gifts Inter Vivs gift between thse wh are alive Newman v. Bst: Intent t give Π articles in bedchamber; manual delivery f gds. Gruen v. Gruen: Father wanted t give Π a Klimt painting, but hld nt it fr life. Series f letters indicating intent t dnate. Π acknwledged receipt f gift t friends and displayed letter. Rule: When the wner wishes t maintain a life estate in the chattel, actual manual delivery is nt required, and symblic delivery (handing ver piece f paper) will suffice. Nte: Mving tangible chattel frm where wner has dminin t area f rm where dnee has dminin is sufficient.

6 Father gives away a future interest in the painting Intent is t give gift at current time ELEMENTS OF VALID GIFT: 1.] dnative intent ral evidence; feelings 2.] delivery: transfer f the bject given; have t engage in sme srt f bjective act A.] Actual Delivery: Manual delivery (physical transfer always suffices fr delivery) B.] Cnstructive Delivery: Handing ver key r ther bject which pens up access t gift C.] Symblic Delivery: A piece f paper saying I give this t yu ( deed) Rule: If smething is capable f manual delivery, manual delivery must be had. 1.] want t have clear evidence that gift is given; 2.] wrench f delivery; 3.] clear evidence f intent. 3.] Acceptance: ften presumed FREEHOLD ESTATES IN LAND: FEUDAL TENURES: Feudal hierarchy: pyramid scheme w/ the King at the tp Land held by thse belw; wed duties t thse abve Freehld tenure: tenure f free men As clse t wnership as hlders f the land Develped int ur cncept f wnership f land Nn-Freehld tenure: tenure f peasant wh wrked the land (surf/villein) Akin t renting Pssessin f land & in pssessin they wed duty t thse wh had freehld tenure FEE SIMPLE: abslute wnership in land (freehld estate) Mdern system: rise f heritability & alienability Heritability: Cncept f smene wh wns land can give the land t heirs when they die; wnership can be in perpetuity Alienability: Right f wner t separate himself frm the land and give it t anther while they are alive Escheat: returns t the lrd/king Early cmmn law: t cnvey simple, ne must write t A and his heirs t distinguish heirs (n lnger necessary) Nw all yu need is t A fr life, then B Intestate Heirs: Cmmn Law Issue -> Lineal Ancestrs -> Cllaterals Issue: descendants wh have lineal cnsanguinity (dwn) Primgeniture: eldest sn wuld take (nw per stirpes) Lineal Ancestrs: parents -> grandparents (wh may have descendants) (up) Cllateral Cnsanguinity: brthers, sisters, aunts, uncles, cusins (sideways) Neither spuses r adpted children culd take FEE TAIL: interest created t vest title in ne family hpefully in perpetuity Arrangement f a series f life estates: binding descendants t the land, assuring that the land stays in the family Mdern law: attempt t set a fee tail is treated as a fee simple O cnveys T A fr life, then t B fr life, then t C fr life: Reversin: When A, B, and C die, the time between when C dies and the end f time is retained by O A, B, and C have limited rights f alienability, and n rights f heritability. T A and the heirs f his bdy. If O cnveyed Blackacre t A and the heirs f his bdy, A has a fee tail. If A cnveys Blackacre t B and B s heirs, B des nt have a fee simple abslute, but rather pssessin f Blackacre until A s death, at which pint A1, A s sn, gets pssessin

7 Lasts until all f the lineal descendants f A have died until the end f the bldline. Fllwed by a future interest. Subject n rule against perpetuities LIFE ESTATE: pssessry estate that expires n the death f that specified persn Ambiguus cases between life estate & fee simple: White v. Brwn: Testatrix dies with will stating fr Π t have her hme t live in and nt t be sld. Hlding: Since there is n clear evidence f intentin t cnvey a life estate t Π, and the curt presumes a fee simple, cnveyance is ruled a fee simple with an abslute restraint upn alienatin. Since abslute restraints upn alienatin are vid, it is just a fee simple. Rule: In ambiguus cases, curts 1.] try t carry ut the intent f intestate lk t language f instrument in light f surrunding circumstances 2.] presume a fee simple ver a life estate 3.] Disfavr partial intestacies. When life estate is created, s is a remainder Life estate pur autre vie: Life interest measured by the life f anther WASTE: Balance interests when tw peple have cncurrent r cnsecutive interests in land C-tenants (rmmates r husband/wife) r life tenant & remaindermen Baker v. Weedn: (life tenant & remaindermen) Husband, in last will, left life estate f land t Π, and the remainder upn her death t her children, and if they are nt alive t her grandchildren sharing equally. Π remarried but had n children. Π s incme is insufficient and lks t sell the land. Hlding: Π allwed t sell part f the land. Rule: Where the interest in land is divided between a life tenant and remaindermen, the curt lks t perfrm what is in the best interests f all the parties. Crux: One interest hlder shuld nt be able t use the prperty in a way that unreasnably interferes w/ the expectatins f the ther ***When yu have present and future interests in land, and external circumstances change s that the current use f land has becme unprductive, the curt can rder a sale f the land in rder t preserve all the interest in the land. Curts way balance accrding t respective strengths in interest the parties have in the land 1.] the lnger a persn has an interest 2.] the mre certain the interest the persn has in the land: mre likely t internalize externalities and prtect land Types f Waste: Affirmative: life tenant acts affirmatively t damage land permanently Vluntary waste Ex: cutting dwn trees Permissive: life tenant fails t act reasnably t prtect the deteriratin f the land Invluntary waste Ex: failure t fix a leaky rf Amelirative: life tenant acts affirmatively t change the principal use f the land and increased the value f the land Only actinable when 1.] it is clear the grantr intended fr there t be n change in the use and 2.] the prperty may still be used in the fashin the grantr intended DEFEASIBLE FEES: subject t terminatin upn the happening f a specified event Heritability & Alienability f Reversinary Interests: Cmmn Law: Reversinary interests culd nt be transferred inter vivs and devisable by will -> instead they autmatically descended t heirs Pssibility f reverter and pwer f entry were nt viewed as prperty rights: instead they were viewed as mere expectancies Nw: Freely alienable and devisable. They are treated like future interests.

8 Fee simple determinable: Fee simple that culd last frever, but which never the less terminates autmatically the mment a certain event, stated in the grant, ccurs Pssibility f Reverter in grantr: Autmatic reversin upn certain event ccurring Future interest which always remains with the grantr As lng as, until, while used fr, nly Statute f Limitatins: starts t run nce stated event ccurs; fee simple determinable ends autmatically and frmer grantee has nthing Frmer grantee wh remains n the land, hwever, is an adverse pssessr Mesne prfits: Grantr is entitled t prfits if yu remain n land after expiratin f fee simple determinable; measure is reasnable rental value f land Fee simple subject t cnditin subsequent: Once the cnditin subsequent ccurs, the reversinary interest has the right f entry t enter the prperty and take the land Fee des nt autmatically terminate nce the cnditin ccurs Statute f Limitatins: starts nly upn re-entry r get ff my land r filing a lawsuit Exercised by: 1.] Verbally stating; 2.] G t the land and yu enter Mesne prfits: Are nt given until grantr exercises right f entry Upn cnditin that, prvided that, but if Distinguishing b/w Fee simple determinable & Fee simple subject t cnditin subsequent: Mahrenhlz v. Cunty Bard f Schl Trustees: Huttns cnveyed warranty deed t trustees f schl bard: land t be used fr schl purpses nly; therwise t revert t grantr s herein. Huttns cnveyed reversinary interest t Jacqmain s wh cnveyed it t Π s. Harry Huttn cnveyed interests in land t Π s in 1977, but later disclaimed his interest in the prperty in favr f Δ s. Rule: Use f the wrd nly, phrase therwise t revert, and lack f use f the wrd may, indicate cnveyance f fee simple determinable. Distinguishing b/w the tw is key, b/c if a fee simple determinable was cnveyed, the mment the Schl Bard stpped using the land fr schl purpses it reverted back t Harry, wh wuld then have fee simple. Thus in 1977, Harry cnveyed his interest in fee simple, nt his reversinary interest which at the time were inalienable. If it was a FSSCS, the Schl Bard still wns the land, since rights f entry are nt alienable. Defeasible Fees & Restraints Upn Alienatin: Muntain Brw Ldge v. Tscan: Π cnveyed land, which was initially cnveyed t them by Δ s thrugh gift deed. Gift deed had a restraint upn alienatin, in which Π s were the nly nes wh culd use the land. Deed als cntains a use restrictin: land must be used fr a ldge. Hlding: Deed created fee simple subject t cnditin subsequent. Rule: Cnditins restricting land use are upheld, even thugh they hamper and impede alienatin. Restraints upn alienatin are vid. Restraints upn land use: creates disincentives fr imprving land Plicy reasn fr cnstruing restraints upn use as separate frm restraints upn alienatin: 1.] curt culd be encuraging charitable gifts 2.] uneasy tensin b/w restraint upn alienatin & resistance f defeasible fees: want t encurage ecnmic grwth what if prperty becmes better suited fr a different use Pssibility f reverter is transferable sner than right f re-entry (autmatic vs. nn-autmatic) FUTURE INTERESTS: right t use and enjyment f a piece f prperty at sme future pint in time BACKGROUND: Intangible prperty right Can be vested r cntingent: even if it is cntingent it is still pssessry All f the prperty interests added tgether must equal fee simple Future Interests retained by transferr: 1.] Reversin: Interest remaining with grantr when grantr gives t anther persn anything less in the estate than he has Always vested, transferable freely during life (alienable), and heritable

9 Frm O t A fr life 2.] Pssibility f Reverter: A reversin cannt remain after cnveyance f fee simple, even if it is a fee simple determinable Pssible fr pssibility f reversin and reverter treated by same cnveyance: T B fr twenty years r fr s lng as intxicating substances are nt sld n premises, whichever cmes first. 3.] Right f Entry/Pwer f Terminatin Future Interests retained by transferee: 1.] Vested Remainder 2.] Cntingent Remainder 3.] Executry Interest REMAINDERS: Future interest that is capable f becming pssessry immediately upn terminatin f preceding estate, as ppsed just t an executry interest Alienable: devisable, descendable, transferable inter vivs Requirements f Remainders: 1.] must be created in a persn wh is nt the transferr; if it is created t O, it s a reversin 2.] remainder must be created at same time and in the same interest as the estate which precedes it 3.] must be limited s it can take effect as a present pssessry interest immediately upn terminatin f prir estate. 4.] Prir estate must be a lesser interest than that pssessed by grantr KEY RULE: If the first future interest created is a cntingent remainder in fee simple, the secnd future interest in a transferee will als be a cntingent remainder. If the future interest is a vested remainder in fee simple, the secnd future interest in a transferee will be a divesting executry interest. Vested Remainders: Requirements: Types: 1.] given t ascertained persn 2.] nt subject t cnditin precedent ther than natural expiratin f preceding estates (natural terminatin death) 1.] Indefeasibly vested remainders: Certain t vest in B and his heirs regardless f what happens: t A fr life then t B and his heirs. 2.] Vested remainder subject t partial divestment (a.k.a. vested remainder subject t pen: Where there is a gift t a class f peple T A fr life, then t B s children where B has children X and Y and B is still arund: Share that X and Y get can be reduced by B having anther child, Z 3.] Vested remainder subject t cmplete divestment Fine distinctin b/w it and cntingent remainder: distinguished based n punctuatin Read t the cmma: T A fr life, then t B and his heirs, but if B des nt survive A t C and his heirs. t A fr life : life estate then t B and his heirs : vested remainder but if : cnditin subsequent Cntrasted w/: t A fr life, then t B and her heirs if B survives A. This is a cnditin precedent there is n

10 cmma, the grant and the limitatin are all in ne phrase and the cnditin precedent makes it a cntingent remainder. Remainder can be vested as lng as the persn is ascertained and there is n cnditin precedent t the vesting; hwever, a vested remainder can be divested by a cnditin subsequent Cnditin precedent = cntingent remainder Cnditin subsequent = vested remainder subject t cmplete divestment If the grant is made at the same time, w/ cmmas, the cnditin is a cnditin precedent and nt a vested remainder subject t cmplete divestment If yu have a vested remainder subject t cmplete divestment, the interest that fllws (in third persn), is always an executry interest it cannt be a cntingent remainder Ex: T A fr life, then t B and her heirs, but if B marries befre A s death then t C and her heirs. Ex: T A fr life, then t B and her heirs. Hwever, shuld B marry befre A s death, prperty ges t C and her heirs. Cntingent Remainders: Requirements: 1.] must be given t an unascertained persn 2.] made cntingent n sme event happening ther than natural expiratin f preceding estate (cnditin precedent) Alternative cntingent remainders: O cnveys t A fr life, then t B and her heirs if B survives A, and if B des nt survive A t C and his heirs. If the remainder in B vests, the remainder in C cannt, and vice versa. The law prefers a vested remainder t a cntingent remainder: 1.] Vested remainder becmes pssessry immediately whenever and hwever the preceding estate ends; there is n cntingency that has t be met befre hlder f vested remainder takes prperty 2.] Assignability 3.] Rule f Destructability f Cntingent Remainders: Nt the law tday Cmmn Law Rule: Cntingent remainders that were nt able t becme immediately pssessry were destryed If A is dead, and B has t reach 21 and is 17 nw, temprary reversin fr 4 years 4.] Rule against perpetuities cvers cntingent remainders but nt vested remainders EXECUTORY INTERESTS: a future interest created in a transferee that must divest a prir vested interest in rder t becme pssessry Springing: An executry interest that divests the transferr. (O) Ex: Frm O t A and his heirs this deed t take effect when A reaches 21. Ex: Frm O t A and his heirs this deed t take effect in three years. (Executry interest which divests O; creates a fee simple subject t executry limitatin in O and a springing executry interest in A. Ex: Frm O t A fr life, then t B ne year after A s death. (O has reversin in fee simple subject t executry limitatin; B has a springing executry interest) Ex: T A fr life, then t B if B gives A a prper funeral. (Must wrk ff the assumptin that there are days in between death and funeral. O has reversin f fee simple subject t executry limitatin if B desn t satisfy cnditin) Shifting: An executry interest that divests anther transferee; fllws a vested remainder subject t cmplete divestment.

11 Ex: Frm O t A, but if the prperty is ever nt used as a schl, then t B. (A has a fee simple subject t an executry limitatin. B has a shifting executry interest) RULE AGAINST PERPETUITIES: N interest is gd unless it must vest, if at all, nt later than 21 years after sme lively being at the creatin f the grant. If it is pssible that a cntingent future interest might pssibly vest at sme pint in the future 21 years after all the peple arund the time f the grant are dead, the future interest is vid and is stricken frm the dcument. Purpse: prmte alienability and marketability in land Lk fr validating r measuring life: usually a persn wh is alive at time f grant that yu can use t prve that their future interest will vest r fail within lives in being plus twenty ne years (life in being: persn wh is alive at the time f the grant) Cntingent interest created by will: life in being must be persn alive at testatr s death Cntingent interest created by irrevcable inter vivs transfer: life in being must be persn alive at time f transfer Cntingent interest created by revcable transfer: life in being must be alive when pwer f revcatin ceases Apprach: give everyne a child & everyne dies except the children Rule Applies T: 1.] cntingent remainders in individual r class: then t B, r then t B s issue 2.] vested remainders in a class (subject t pne): then t B s issue; B s issue nt determined until B dies; law presumes anyne is capable f having children: fertile ctgenarian rule 3.] executry interest: shifting r springing Rule Des Nt Apply T: 1.] present pssessry estates 2.] all future interest retained by transferr (reversin, pssibility f reverter, right f entry) 3.] vested remainders in an individual (then t B) Fur Step Apprach: 1.] Determine which future interests have been created by the cnveyance 2.] Identify the cnditins precedent t the vesting f that suspect future interest. 3.] Find a measuring life: lk fr persn alive at the time f cnveyance and ask whether that persn s life r death is relevant t the cnditin s ccurrence; must be relevant t the cnditin s ccurrence. 4.] Will we knw with certainty within 21 years f the death f ur measuring life if ur future interest hlder can r cannt take? Yes cnveyance is gd. N cnveyance is nt gd. Executry Interests: Many shifting interests will vilate the Rule Against Perpetuities. An executry interest with n limit n the time within which it must vest, will vilate the Rule Against Perpetuities. Ex: T A and his heirs, s lng as the land is used fr farm purpses, and if the land ceases t be s used, t B and his heirs. Jee v. Audley: Frm O t A fr life, then t B and the issue f her bdy, and in default f such issue, then t the daughters f Jhn & Elizabeth Jee then living. Relevant Infrmatin: A is dead, B is childless The Jee s are 75, and have fur daughters. B: has a present interest fee simple subject t executry limitatin Daughters have executry interest which divest B and issue When B s issue runs ut and descendants are dead, then daughters take Hypthetical example which vilates rule: B culd have anther child, P, and Jee s culd have anther child, G. If P is brn and B dies, and G is brn and the Jee s and the fur daughters die, P has fee simple subject t executry limitatin. P culd live fr 50 years, and G culd take well utside the perpetuities perid. Crss ut in default f such issue, then t the daughters After-brn widw ex: T A fr life, then t A s widw, if any, fr life, then t A s issue then living.

12 Hypthetical example: A gets divrced, kills A s wife, gets ut f jail and marries a 20 year ld. Then A dies. A s widw culd live fr 80 years. 2000: Cnveyance ccurs 2001: A kills wife 2002: Julia (future wife) is brn 2030: A marries Julia 2031: A and all ther lives in being die 2102: Julia dies. Refrm: Wait-and-see apprach: the validity f any suspect future interest is determined n the basis f the facts as they nw exist at the cnclusin f ur measuring life Statutry Rule Against Perpetuities: cdifies the cmmn law Rule Against Perpetuities prvides fr an alternative 90 year vesting perid Cy Pres: R.A.P. a curt may refrm it in a way that mst clsely matches grantr s intent while still cmplying w/ the R.A.P. Gives the curt the pwer t redraft and recast infirm cnveyance apprximate grantr s true intent while cmplying with R.A.P. Reduce any ffensive age cntingency t 21 years: if yu had cncluded that gift r transfer was infirm, age cntingency will autmatically be reduced t 21 years t allw transfer muster. CONCURRENT OWNERSHIP: Tenancy in Cmmn: basic frm f c-wnership Presumed in ambiguus cases it is presumptive N magic wrds necessary t create tenancy in cmmn Tenants in cmmn wn a separate but undivided interest in a piece f land/prperty Freely alienable, descendable, and transferable Only need unity f pssessin Ex: If Blackacre is given t A&B. A devises prperty thrugh will t E&F. A & B are tenants in cmmn E, F, & B wuld be tenants in cmmn, with E&F having a quarter share a piece. Jint Tenancy: Tw differences f frm: 1.] Must have unity f the fllwing: If ne f the unities is severed, s is the jinttenancy. Tenants are made tenants in cmmn. (Best way t d this is sell ff interest in land title is brken) A.] Time: jint tenancy must be created at the same time B.] Title: have t receive interests by the same dcument/title C.] Interest: wnership stake has t be equal, identical, and undivided D.] Pssessin: each tenant must have the right f pssessin t the whle 2.] Magic wrds: A.] t A and B as jint tenants and nt tenants in cmmn. - smething less than this might nt cunt B.] t A and B as right f survivrship. T A and B jintly will nt cut it ***Key distinguishing feature: Right f survivrship If A dies his share ges t B, if B dies her share ges t A. Unity is nt brken if there is a divrce. REMEDIES fr Tenants in Cmmn & Jint Tenants: Partitin: Any jint tenant r tenant in cmmn can ask fr partitin f prperty; ends the ctenancy in ne f tw ways: 1.] Partitin in kind: draw a line left half t ne tenant, right half t the ther 2.] Partitin by sale: sell the whle thing and give prceeds f sale t tw parties

13 Delfin v. Vealencis: Π and Δ were tenants in cmmn. Δ was nly ne wh lived n the prperty, and she maintained a garbage and waste remval n ne part f it. Π s want t develp prperty int 45 residential building lts. Rule: When deciding n what type f partitin t utilize, curts nly lk t the equities between the c-tenants and nt t sciety as a whle. Partitin by sale - Drastic measure nly used when: 1.] The physical attributes make partitin in kind impracticable 2.] The partitin in kind wuld be inequitable, equity wuld be better prmted by a sale Ecnmic efficiency r right f persn t live there? Tenancy by Entirety: N right t partitin divrce wuld end marriage and tw tenants by entirety wuld becme tenants in cmmn Tenancy by the Entirety: Exists in abut half the states Only created b/w husband & wife: Exact same requirements as jint tenancy except there is a fifth unity unity f marriage Divrce leads t tenants in cmmn Neither spuse can lease prperty w/ ther s cnsent. Neither husband nr wife can sever their interest and thus defeat survivrship by a cnveyance f an wnership interest t a third party bth spuses must cnsent t the sale Harms v. Sprague: Π and brther, Jhn, tk title t land as jint tenants. Jhn gave mrtgage n interest in jint prperty fr piece f prperty Sprague was buying. Harms died, and Sprague was devisee f his entire estate. Title thery f mrtgages: $7,000 frm Simmns t Harms in exchange fr title t prperty. (Under this thery, unities f title and time are brken) Lien thery f mrtgages: Rather than Jhn Harms giving Simmns title, it was rather cause f actin fr right t sue fr $7,000. Hlding: Utilize lien thery f mrtgages. Harms did nt give away title. Williams gets 1/2th interest f Jhn s and he has fee simple. Lien perished alng w/ Jhn s interest Rule: Where a jint tenant gives a mrtgage n his interest in jint prperty, that mrtgage is treated as a cause f actin, and thus at death it is extinguished alng w/ decedent s interest. Schwartzbaugh v. Sampsn: Schwartzbaugh s wned land as jint tenants w/ right f survivrship. Mr. Schwartzbaugh negtiated lease fr small fractin f land fr a bxing pavilin. Π bjected t leases and did nt put her name n them. Sampsn erected bxing pavilin. Π received n rent frm that. Rule: Jint tenants are free t alienate their interests and have the right t pssess the prperty as a whle. Jint tenants are free t cnvey their interests. If Π is excluded frm using the prperty, she can claim uster, and cllect rent Neither partitin-in-kind nr partitin by sale wrk in this instance: curt wuld divide land arund the ring, and Sampsn wuld buy back the sale Accunting: Π can accunt fr the rent and receive rental payments frm her husband. Hwever, this wuld nt allw her t d anything n the leased land. Accuntant: A c-tenant wh receives rental payment frm a sub-tenant can be called t accunt by ther tenants fr prprtinal share f value If husband dies, Π takes husband s interest thrugh right f survivrship Ouster: Tw Types: 1.] beginning f running f statute f limitatins adverse pssessin: claim f abslute wnership and denial f c-tenancy relatinship by ccupying tenant 2.] general uster: liable fr rent when A.] wrngful dispssessin r

14 B.] exclusin f smene frm prperty; denial f access t use and enjy prperty Plicy reasns: Ouster encurages prperty t be used prductively. Prevents windfall t lazy ctenant wh des nt demand rent r entry Encurages party t deal w/ each interactin s parties can srt this ut themselves (cntrary t ther situatins where law discurages interactin) Spiller v. Mackereth: Spiller & Mackereth are tenants in cmmn. Spiller entered and used structure as a warehuse. Mackereth wrte a letter, demanding Spiller vacate r pay half the rent. Spiller did neither, but did put lcks t prtect his merchandise. Rule: C-tenant has the right t ccupy the whle prperty. When the aggrieved party is nt denied entry, he cannt claim uster. Minrity Rule: C-tenant in exclusive pssessin f jintly held prperty must pay rent even if there is n uster. Discurages partitin. LEASEHOLD ESTATES: relatinship b/w landlrd & tenant BACKGROUND: Nn-freehld estates: evlved under the cmmn law frm the estates which had n seisen Deemed even lwer then life estates Lease itself is a persnal estate FEATURES in cmmn amng leasehld estates: 1.] Estate in the tenant: present pssessry estate 2.] Reversin in the landlrd 3.] Exclusive pssessin and cntrl f land by tenant 4.] (mst have 4 th element) cntract b/w landlrd and tenant: lease [d nt have t have a lease t have a leasehld estate] TYPES f leasehld estates: 1.] TERM FOR YEARS: terminates at a specific time Estate which lasts fr a fixed perid f time and terminates autmatically at the end f that time Can terminate befre end f perid f time if lease s prvides (default fr nn-payment f rent) N ntice is required: tenant knws lease is ending Death f tenant r landlrd has n effect n tenancy f term fr years Ex: Tenancy fr term f years determinable: A lease by L t T fr 10 years, r if L decides t terminate the lease befre the ten years is up Statute f Frauds: ral leases lnger than a year must be in writing Ones which d nt cnfrm becme tenancy at will 2.] PERIODIC TENANCY: repeating perid f time Tenancy fr a fixed but repeating perid f time: mnth-t-mnth r year-t-year If ntice f terminatin is nt given by landlrd r tenant, lease is autmatically extended fr anther perid Must be given 6 mnths befre expiratin f ne year term Tenant must give ntice 6 mnths befre the end f the NATURAL term: if nt, the landlrd can hld him ver fr anther ne year lease Must be given equal t length f terms fr terms less than ne year, except it need nt be mre than six mnths Certain states: shrtened general rule s tenancy s less than a year can be terminated at any time fllwing thirty days ntice Death f landlrd and/r death f tenant have n effect n peridic tenancy 3.] TENANCY AT WILL: landlrd and tenant can terminate at any time Terminated when either party dies Must have bilateral pwer f terminatin Unilateral pwer f terminatin: can be made w/ tenancy fr term f years r peridic tenancy

15 4.] TENANCY AT SUFFERANCE: Landlrd can terminate r w/ his ptin cnvert t a new lease Occurs when tenants remain in pssessin after expiratin f lease Creatin f a hld-ver tenant Landlrd has tw ptins: 1.] Treat tenant as a trespasser: evict and sue fr lst rent 2.] Cnsent t creatin f a new tenancy Express creatin Implied creatin: by peratin f law Landlrd cashes a rent check fr a perid after the lease, mst jurisdictins will assume an implied peridic tenancy fr nt mre than 1 year If the rent check is fr a mnth, the hldver perid is mnth-t-mnth Once the landlrd chses trespasser r new tenant, he cannt change his mind Crechale & Plles, Inc. v. Smith: Π sent letter t Δ, treating him as a trespasser past the end f the lease. Δ wrte checks fr first tw mnths after expiratin f lease, which Π cashed. Δ wrte checks fr anther tw mnths, which Π did nt cash. Rule: Once a landlrd elects t treat a tenant as a trespasser and refuses t extend the lease n a mnth-t-mnth basis, but fails t pursue his remedy f ejecting the tenant, and accepts mnthly checks fr rent due, he agrees t extensin f lease n mnth-t-mnth basis. Duty t Deliver Pssessin: Hannan v. Dusch: Δ leased Π real estate. Pre-existing tenant held ver & Π failed t pen prperty r take any actin against the pre-existing tenants. Rule: Where there is a trespassing prir tenant, it is nt the landlrd s duty t bring actin against the pre-existing tenant. He shuld nt have t bear the burden f an independent trt f anther. Right f pssessin: Landlrd has implied duty t deliver right Actual pssessin: Tenant has duty t ust trespassers after he is in actual pssessin Delivery f ACTUAL pssessin: English Rule: Landlrd is better able t knw wh is n the prperty Prs: there is a clser relatinship between L and the hldver tenant. It is easier fr L t ust. Mre fair, since tenant wuld nt sign lease if he knew there was a hldver Cns: Makes it hard t lease while there is a tenant, b/c that tenant culd pssibly hld ver. American Rule: The wrngder is the tenant, nt the landlrd. Tenant has right t pssess but must take actual pssessin himself. Mst states have rules that allw tenant t evict a hldver tenant. Tenants Optins: 1.] cancel lease and sue fr damages 2.] Tenant can retain lease, and nt pay rent fr when he is kept ut f pssessin. 3.] prceed directly against the hldver tenant. Determinable Life Tenancy n behalf f the tenant: Garner v. Garrish: Decedent leased premises t Δ fr term ending at the privilege f the Δ. Decedent died, and executr wants Δ ut f premises. Rule: Even withut livery f seisen, a unilateral pwer f terminatin can still be created n behalf f the tenant, creating a terminable life estate, terminable slely by the tenant. Cmmn law rule: If a lease is made terminable at the will f the lessee, it must als be made terminable at the will f the landlrd. At cmmn law, if yu had livery f seisen it culd be unilateral, but if yu didn t, it must be bilaterally terminable. Curt fllws language f the grant

16 OTHER TYPES OF LEASES: Frm Leases: n bargaining pwer ver terms b/w landlrd and tenant Debate as t whether frm leases are uncnscinable (n bargaining pwer fr tenant) Hwever, they d allcate transactin csts effectively. Unequal bargaining pwer vs. efficient markets. SUBLEASES AND ASSIGNMENTS: Sublease: lease frm ne tenant t a sub-tenant fr less than the entire estate Assignment: lease frm ne tenant t anther f everything that tenant has left Hw curts distinguish between the tw: 1.] Frmal: there is a sublease whenever less than the entire interest in cnveyed 2.] Intentins f Parties: Lk fr actual wrds used f the parties Even thugh the chice f the wrds used is imprtant, they are nt determinative PRIVITY: between landlrd-tenant-subtenant Privity f estate: mutual r successive relatinship t same estate in prperty such as that exists b/w landlrd & tenant r their successrs subtenants, whether they are sublesees r assignees are in privity f estate with the landlrd Tenant, T, wh sublets, nly gives away part f estate t sublesee, S. T retains part f the estate b/c T still wns sme piece f Blackacre. Tenant remains in privity f estate w/ landlrd. If tenant assigns all f his interest t subtenant, tenant is n lnger in privity f estate with the landlrd. Privity f cntract: On the cntract side f the lease, access t all cntract remedies Cnnectin r relatinship which binds tw cntracting parties Tw peple wh make a cntract are in privity f cntract Landlrd & tenant are always in privity f cntract S & L are never in privity f cntract b/c S never signs a cntract w/ L Exceptins: 1.] L, T, and S sign a new agreement (Ernst) 2.] Third party beneficiary cntract: tw peple cntract fr third parties benefit. Ernst v. Cnditt: Π s leased track f land t Rgers. Rgers negtiated a sale f business n land t Δ, wh wanted a tw year lease. Lease was amended, and everyne signed n new cntract: Rgers remained persnally liable fr faithful perfrmance f all terms & cnditins f lease. Δ remained in pssessin until expiratin f leasehld, but stpped paying. Rule: Even thugh the wrd sublet is used in an amended cntract, if the whle estate is given away such that the tenant has n right t re-enter, it is an assignment. Ramificatins: If there is a sublease, Rgers (tenant) is still in privity f estate t Ernst (landlrd), and thus respnsible t him. Restraints Upn Alienatin: Kendall v. Ernest Pestana, Inc.: Perlitch s assigned lease t Δ. Perlitches als entered int sublease w/ Bixlers fr 25 years. Bixlers wanted t assign interest in land t Π (sell their business). Bixler requested cnsent frm Δ, wh refused t cnsent unless the rent was increased and ther cnditins were impsed. Rule: Lessr s cnsent t an assignment f land must be cmmercially reasnable in regards t the assignee r the prpsed use. Califrnia Supreme Curt: adptin f the minrity rule L must be cmmercially reasnable Tw Theries: leases are bth cnveyances and cntracts: 1.] curts imprt general cntract law ntin f gd faith and fair dealing int leases. Denial f request can nly be in gd faith and fr gd reasn. (Tenant s selectin f an assignee can nly be refused in gd faith)

17 Rule nly applies t cmmercial leases Objectins t Minrity rule: 1.] Lease is still a cnveyance: lessr persnally selected tenant as a lessee; lessr shuld be under n bligatin t lk t anyne else fr rent payments Respnse: this is a restraint upn alienatin; there is still a right t refuse, but it must be reasnable 2.] Cntract law bjectin: If lessee wanted a reasnableness clause they culd have bargained fr that and they did nt. Respnse: the better reading is that unless yu have an acting like a jerk clause, cntract is made in gd faith and the ther party must act reasnably (Landlrd has reversin in land: landlrd is n wrse ff then he was and piece f prperty is better ff b/c piece f prperty is being used mre efficiently.) 3.] Stare decisis: curts shuld nt depart frm cmmn law rule; many leases in effect relied n current rule; peple make decisins based n subtle expectatins f what the law is. Respnse: Smetimes the law shuld change particularly where, arguably as here, the benefits f the rule utweigh the csts. Curt has a duty nt just t fllw the law, but in a way that is best fr all parties and sciety as a whle. Califrnia is nt upsetting subtle precedent b/c nbdy knew what the law was. 4.] Ecnmic: landlrd has right t recver appreciatin in value in term f lease Respnse: If this were right, landlrd wuld have right t increase rent payments anytime value f land went up. Landlrd shuld be bund by allcatin f risk. TENANT DEFAULT: Berg v. Wiley: Π tk assignment f lease frm prir lessee. Original lease stated, Wiley had at his ptin t retake pssessin f premises shuld lessee fail t meet the cnditins f the lease. Berg remdeled restaurant. Wiley bjected t: 1.] changes in building structure and 2.] Berg perated an unclean kitchen in vilatin f health regulatins. During tw-week deadline, Berg cntinued t perate restaurant and finally put up sign saying clsed fr remdeling. Wiley eventually lcked Berg ut. Rule: We hld that, subsequent t ur decisin in this case, the nly lawful means t dispssess a tenant wh has nt abandned nr vluntarily surrendered but wh claims pssessin adversely t a landlrd s claim f breach f a written lease is by resrt t judicial prcess. There n sufficient evidence that there was abandnment. Cmmn Law rule: Landlrd can exercise self-help if 1.] he is legally entitled t pssessin 2.] ways he ges abut it is peacable Any self-help is wrngful against mdern trend Minnesta: ne f a minrity f jurisdictins saying self-help is n lnger allwed as a methd fr reclaiming premises ABANDONMENT: Smmer v. Kridel: Δ entered int lease with Π. Δ paid security depsit and first mnth s rent. Δ wrte t Π, stating he culd nt take pssessin and surrendered rights t it. 3 rd party, wh was ready, willing, and able t rent, inquired but was tld apartment was rented. Apartment was nt rented ut again until a year later. Rule: Landlrd seeking damages frm a defaulting tenant is under a duty t mitigate damages by making reasnable effrts t re-let apartment wrngfully vacated by the tenant. [RESIDENTIAL CONTEXT] Landlrd required t carry burden f prf shwing he used reasnable diligence in attempting t re-let premises. Ratinale: landlrd in better psitin t demnstrate whether he exercised reasnable diligence