Download Property Outline and more Study notes Law in PDF only on Docsity!
Property Outline Professor Wright Spring 2005
NEVER FORGET: YOU CAN’T SELL WHAT YOU DON’T OWN!
A. Possession – it’s nine-tenths of the law! Wild Animals a. Pierson v. Post – Post and his hounds hunt a fox all day, and, in the middle of Post’s pursuit, Pierson steps in at the last minute and kills the fox for himself. T/C held that Post had an interest in the fox – App ct. reversed.
- Occupancy – actual possession, giving a property right. Will vary based on circumstances.. This was the traditional rule for creating a property interest in a creature ferae naturae. Pursuit alone gives no legal right to a wild animal.
- However, court modifies the RULE : occupancy of a wild animal may be through the mortal wounding, with continued pursuit, which unequivocally reveals the intent to appropriate the animal to one’s individual use.
- Intent – key to occupancy. The wounding or capturing of the fox would signify intent.
- Conversion – civil term for theft. If Post’s pursuit alone was enough to give him a property interest in the fox, Pierson’s actions would be constituted conversion.
- The fox, as a wild animal, is a legal determination, not a fact. Oil and Gas a. (^) Elliff v. Texon Drilling Co. – Both parties had adjoining property over a common pool of gas. Texon’s negligent drilling cratered the land, released all of the gas, and damaged Elliff’s property. P sues to recover in damages. P wins in t/c, overturned based on absolute law of capture, then reversed on final appeal.
- Capture = occupancy. Original rule of capture (absolute capture) dates to 1923 in TX – owner of a well owns all of the oil or gas which he produces on his land, though some of the oil or gas may have migrated from adjoining lands. Restated, landowner has absolute title to the oil and gas in place beneath his/her land, subject only to the rule of capture ( anyone else with the legal right to capture may do so ).
- Absolute capture leads to waste because there is no incentive to produce oil or gas in a conservative manner – the only incentive is to capture as much as possible as quickly as possible.
- Court creates an exception – capture is not to be extended to include non-liability for waste or destruction of oil or gas.
- Elliff did not have a property right in the gas, otherwise, Texon would be guilty of conversion.
- Court creates a right in the opportunity to extract the gas.
- Correlative rights – one person’s right to capture was correlative to their neighbor’s right to capture. Texon’s waste infringed upon Elliff’s right to the opportunity to capture.
- Imminent capture – so as to provide some property rights sooner, but not too much sooner, than actual capture, we look for visual notice (e.g. mortal wounding of a fox) – this goes to evincing intent. III. (^) Water a. Surface water
- Diffuse surface water – drainage water from rain, melting snow, and springs that runs over the surface of the earth. May become a pool or marsh, but not stable enough to constitute a lake or stream
- Generally a nuisance that owners are eager to get rid of to prevent flooding, but underground water is valuable.
- Three rules:
- Common enemy – surface water is bad and you can do anything to expel it. You may even flood or otherwise damage your neighbor’s land, and he/she has no legal remedy.
- (^) Reasonableness – modifies “common enemy” rule – no liability as long as you expel the water reasonably.
- Sic Utere/Nuisance – Use your property so not to harm another’s property. If you cause harm, you are liable. Under this rule, you cannot extract too much water. Courts have added a reasonableness rule to the sic utere rule so that you may extract a certain amount before you become liable.
- Who Pays? – The above rules define who pays for expelling the water. b. Groundwater – rules below are really rules of capture.
- Groundwater (percolating water) – underground water diffused through the soil.
- Rules:
- (^) Free use (absolute ownership) – adopted in Acton v. Blundell , an 1843 British case. Each surface owner may withdraw as much water as he likes without liability for depletion of water from under a neighbor’s property. This rule has been modified in most states to require reasonable extraction to prevent waste. Other states are more restrictive and use one of the following.
- Prior appropriation test – rights grated to the owner who first invested in withdrawing the water. This rule impedes use/development (e.g. particularly if the first user dug a small residential well).
- Reasonable use test – each owner must accommodate the interests of neighboring owners – courts may need to enforce this rule.
- Correlative rights test – each owner may withdraw a specified portion, sometimes tied to percentage of aquifer that is below his/her land. The specificity of this rule may not lead to the best use of the land or water.
- Permit system.
c. Streams
- Riparian owners – those whose land borders a lake or stream States may grant riparian use rights.
- Reasonable use test – often used to resolve disputes over the use of a stream. A minority of arid Western states apply the prior appropriation test.
IV. Labor and Investment a. News and the law of unfair competition. i. (^) International News Service v. Associated Press – AP sues INS. Issues: whether INS may be lawfully restrained from taking news from bulletins issues by the AP and selling it to INS clients? Also, 1) whether there is property in the news; 2) whether, if so, it survives the first publication; and 3) whether INS’s activities constituted unfair competition. Held: injunction against INS affirmed.
- Rule of abandonment: 1) intent to give up property right, 2) consummation of that intent – a physical act manifesting that intent – opposite of capture. This is what INS argues. However, AP argues that it intends to transfer its papers for remuneration – it does not intend to abandon them to the world.
- Copyright – protects form (e.g. the choice of words) but not substance (i.e. the “news” itself cannot be copyrighted).
- Unfair competition – protects a business interest – competition is only unfair when an action harms a property right (this makes the case hard, because the court has to find a property right).
- Case turns on unfair competition, which is determined by circumstances. Court holds that ( Rule) news is quasi-property – and is not abandoned relative to a competitor, but it is abandoned relative to the public.
- When you create a private property right, you do so at the expense of the common (i.e. the public).
Downloaded From OutlineDepot.com
- Acceptance – by the donee.
VI. (^) Original Acquisition of Property
- Property rights derive from the sovereign.
- Original title in the US was grabbed from the Indians by conquest, coercion, voluntary cessation, or judicial fiat.
- Chain of title looks like this; Indians colonial powers U.S. (upon independence) indiv. claimants. a. Johnson v. M’Intosh – P claims title to land through purchase from Indians. D claims title granted by U.S. gov’t. Issue: whether Indians could transfer good title. Answer: they could not. Court finds that VA had title to the land prior to the Indian’s transfer to Johnson, therefore, the Indians could not have passed good title to him (you can’t sell what you don’t own).
- Discovery – (European rule, little to do with this case) – granted an exclusive right to extinguish the Indian title of occupancy by either purchase or conquest.
- Conquest – KEY – Might makes right! – conquest gives title, and the Indians merely possessed the right of occupancy (similar to a tenant).
- If full ownership rights are recognized, one must purchase (conquest is no longer an option). The court had to find that the Indians did not have full ownership rights, otherwise that would have fouled up the U.S.’s conquest of Indian lands.
- Sovereignty – the power that the government has to determine property rights – the discoverer acquires sovereignty! The latter is created by the former.
- Usufruct rights – the right to come onto someone else’s property and use, for example, the water, fish, game, etc.
- (^) Rule : first in time deed wins! b. Tee-Hit-Ton Indians v. United States – Sec of State negotiates to sell Alaskan timber, and THTI argue that this is a compensable taking by the US of a portion of land in which they have a proprietary interest (5 th^ Amendment Due Process violation). Court finds that the Indians only had original Indian title , which was a right to occupancy only; thus P had no legal rights to the land that were recognized by Congress. No 5 th^ amendment violation because the Court finds that Indian Occupancy was not a property right. Moreover, no duty to compensate the Indians.
- Recognition – done in treaties and statutes setting up reservations. If formal recognition has been
made, Indians have more than Indian Occupancy.
- Johnson v. M’Intosh – discoverer has the right to conquer or purchase.
- Beecher v. Wetherby – right to dispose of the fee of lands of the Indians has always been recognized by the Court.
- U.S. v. Santa Fe Pacific R. Co. – Congress reigns supreme as to the manner, method, and time of the extinguishment of Indian title based on aboriginal possession – this is a political question, not subject to judicial review. (in M’Intosh, Marshall said Indian occupancy a property right. In THTI, it is not...)
VII. Finders a. Charrier v. Bell – P excavates land, not his own and with dubious permission. Upon discovering 2 ½ tons of Indian burial artifacts, he first hides them and then sues the six nonresident landowners in an effort to get good title. He argues that he should either get title or compensation for unjust enrichment. Court finds that the artifacts belong to the descendants of the tribe.
- Res nullius – ownerless chattels (spec. things that were originally without an owner). Charrier argues that the artifacts were res nullius and he claims title through capture and occupancy. However, court disagrees finding that burial artifacts are not abandoned, because the requisite intent is lacking. If no abandonment, then no capture!
Downloaded From OutlineDepot.com
- Res derelictae – abandoned items that were once owned – the intent to abandon res derelictae requires the intent that whomever comes along may acquire what is found.
- (^) Unjust enrichment (five elements) – Charrier could not prove UE.
- Enrichment – in this case, it is the Indians we care about b/c they wind up with the property rights.
- Impoverishment – not in this case (Charrier’s hands were not clean!)
- Connection between the two
- Absence of justification for the unjust enrichment (e.g. lack of K)
- No other legal remedy.
- Note: the Federal recognition of this tribe was necessary for them to win the case.
- Abandoned property - 1) intent plus 2 )physical act) – finder has a right to keep the property.
- Trespass – a finder who is trespassing will lose a dispute with the landowner over anything he finds.
- (^) Lost property – 1) owner accidentally misplaced it (no intent to give up possession), 2) no intent regarding title.
- True owner has a right to recover lost property from the finder; however, as to third parties, the finder will prevail. (property rights are relative rather than absolute ).
- Mislaid property – 1) owner intends to give up possession, but 2) no intent regarding title.
- Bona fide purchaser – one who innocently purchases goods that have been stolen or otherwise misappropriated. Generally, however, thieves cannot pass good title.
- Possession matters – if you intend to give it up, and someone sells your item to a bona fide purchaser, you may not be able to get it back from the purchaser. You gave the person the opportunity to defraud someone else.
VIII. Relativity of Title – Transfer of Real Property a. Tapscott v. Lessee of Cobbs – Cobbs inherited land from Lewis. Land was unoccupied, and Tapscott then occupied the land without permission. Cobbs seeks ejectment. Chain of title is a bit funky: Anderson Mrs. Lewis --------Cobbs (flaw between Anderson and Lewis).
- Relativity of title – Property rights are not absolute – title may be good against one person but not against another who has a better claim.
- Rule: You cannot claim property rights based on weaknesses in your opponent’s title, only on the strengths of your own. Exceptions: 1) You cannot challenge the title under which you enter the property; and 2) estoppel.
- (^) Ejectment – an action that can be brought against a trespasser by an owner, tenant or guest. All you must prove is the right to possession – this is much faster than novel disseisen.
- If Cobbs did not have possession at the time Tapscott occupied the property, she could only get rid of him by proving true ownership (because Tapscott would then be the peaceful possessor) – she is lucky that the court presumes that, as the heir of Lewis, she possessed the property although there was no evidence either that she did or did not.
- Right to possession – the right to exclude - the second best right – the true owner has the best right. As between the true owner, the possessor, and the ouster: the ouster cannot claim better title against the former possessor just because the possessor was not the true owner.
- Novel disseisen – unlike in ejectment, the issue to be tried here is title – this is a decision about ownership as against the whole world. You have to bring in all of your title records and recognize every party who may have a claim (this explains why there are so many parties in Charrier ).
- Quieted title – a legal determination that the person who has title is the sole and complete owner as against all
B. Present Estates and Future Interests I. Division of ownership over time – some preliminary definitions.
- (SPEI) – Springing executory interest – a condition precedent must be satisfied prior to the ownership interest vesting in the third party (e.g. “O to A so long as used for residential purposes, then to B if B has graduated law school.” )
III.Life Estates and Remainders a. (LE) Life estate – Creates a present estate in A that terminates upon A’s death (condition
subsequent). b. The holder of a life estate does not get to decide who gets the property after his death. c. (LEpav) Life estate por autre vie – “life estate in the life of another.” If A sells her LE to B, B owns an LEpav. When A dies, B loses the property to whomever holds the FI of A’s LE (totally sucks for B – most people aren’t stupid enough to buy someone else’s LE, which is why most LE’s are not particularly alienable). d. (^) (DLE) Defeasible Life Estate – an LE that may be destroyed upon occurrence of a condition subsequent. Ex. “ O to X for life so long as she does not remarry.” e. (TY) Term of Years – “O to A for 20 years, then to B” A’s interest is a TY for 20 years. B has an AVR in FSA. f. Two types of future interests follow LE’s:
- Reversion – FI belongs to the Grantor. “O to A for life” Automatically creates a reversion in O.
- Remainder – FI belongs to a third party. “O to A for life, then to B.”
IV. Vested and Contingent Remainders a. Vested Remainders – those remainders for which there are no conditions precedent to the interest vesting, and for which the persons are identifiable at the time of the initial conveyance. There are three types:
- (AVR) Absolutely Vested Remainders – one that is not subject to change. (e.g. “O to A for life, then to B” – B has an AVR in FSA.)
- (VRSO) Vested Remainder Subject to Open – a remainder that may be divided among persons who will be born in the future. Ex. “O to A for life, then to the children of B” – as long as B has children at the time the interest is created, the remainder is vested; however it is subject to open because any children born to B following the conveyance will also be included in the property right.
- (VRSD) Vested Remainder Subject to Divestment – a remainder that may be destroyed by an event that occurs after the original conveyance. Ex. “O to A for life, then to B, but if B has flunked out of law school, the property shall then revert to O.” b. Contingent Remainders: Remainders not certain to vest. Two types.
- (CRCE) Contingent Remainder, Conditional Event - a remainder that vests only if a condition, not certain occur, does happen. Ex. “O to A for life, then to B if B has graduated law school.” If A dies before B graduates, the property reverts to O, but will spring to B upon graduation. This is current law. Old law held that contingent remainders were destructible and were erased if not exercised within the life of A.
- (CRUP) Contingent Remainder, Unascertained Person – The remainder goes to a person who cannot be identified at the time of the initial conveyance. Ex. “O to A for life, and then to the children of B.” If B has no children yet, the remainder is contingent, because it is not certain to vest (B may never have children).
In Sum FSA and Defeasible Fees Present Estate (PE)
Future Interest (FI) Subject to Rule against Perpetuities?
FSA No future interest – you have all of the sticks!
NO
FSD PR (belongs to grantor, automatic)
NO
FSCS RRE (belongs to grantor, not automatic)
NO
FSEL SHEI or SPEI (belongs to third party)
YES
Life Estates and Remainders
LE, LEpav, TY, or DLE
R – Reversion in O NO AVR NO VRSD NO VRSO YES CRUP YES CRCE YES
V. Fee Simple versus Defeasible Fee a. Wood v. Board of County Commissioners of Fremont County – P conveyed property for use as a hospital, and 40 years later they contend that the deed created a FSD or FSCS. Hospital was sold to a private company in 1983, and in 1984 the company moved the facility and put the property up for sale. P contends that the condition has been triggered so that the property either reverts to them or gives them their RRE. i. Issue: whether conveyance was FSA, FSD, or FSCS. ii. Rule #1: Look at the plain language of the conveying device to ascertain the intent of the grantor. iii. Rule #2: In lieu of explicit language to the contrary, it is presumed that O conveyed FSA.
- Explicit language for FSD would look like “so long as,” “until,” or “during.”
- Explicit language for FSCS would look like “upon condition that,” “provided that,” or “if.”
- It is best to have purpose language + triggering event + “gift-over” language so that intent is apparent, and the court knows to whom the interest goes upon some stated event.
- Precatory language – this language expresses a preference, but is not legally binding. In this case, the court interprets “for hospital purposes” as precatory language; thus the court holds that FSA was conveyed. iv. Rule against forfeitures: the law hates forfeitures, and will interpret conveyances so as to prevent forfeitures. The law prefers:
- Conditional transfer over automatic transfer (ex. FSCS over FSD);
- Covenant over condition; and
- Precatory language over covenant.
b. Some Examples: i. O to A and I hope she lives on it. FSA with precatory language. ii. O to A for residential purposes and I really mean it. FSA with covenant. Covenants call for money damages. Failure of condition does not result in forfeiture. iii. O to A for residential purposes, and if not so used, then I can take it back. FSCS with RRE in O (conditional transfer). iv. O to A for residential purposes, if not so used, then reverts to me. FSD with PR in O (automatic transfer).
Downloaded From OutlineDepot.com
d. Fee tail – an estate designed to create a family dynasty – banned in most states. Traditionally “O to A and the heirs of his body.” This creates a series of life estates in A, A’s lineal descendents, and so on until the blood line runs out, at which point the property reverts to O and O’s heirs. All fee tails are followed either by reversion or a remainder. You have no FSA until the blood line runs out. e. Trusts: i. The trustee maintains Legal title (ownership) to the property contained in the trust, and the beneficiaries have equitable title. ii. Trusts are a legal fiction – the trustee has legal title, but it is impressed by the equitable limitation of having to use the property for the benefit of the beneficiaries. iii. In a trust, you can divide equitable title in many and varied ways, but legal title remains in FSA with the trustee. This means that the property is always alienable, and it may be sold by the trustee if it is in the best interest of the beneficiaries (you no longer have to get the signatures of all those with interests in the property to be able to convey the property). iv. Cy Pres doctrine – applied by the courts when the purpose of a charitable trust cannot be achieved because of impracticability or impossibility. The courts try to comport as closely as possible with the settlor’s intent when reforming the trust.
- When a trust involves state actors, the Cy Pres doctrine may be used to remove discriminatory restrictions.
- When a trust is private, it may be discriminatory. f. The Big Fat Major Regulatory Rules!
- Rule against creation of new estates – all estates and FI’s must be in one of the currently recognizable forms.
- Johnson v. Whiton – grandfather devised property to granddaughter and her heirs on her father’s side. Court finds that granddaughter has FSA and may freely alienate the property. An estate descending only to heirs on the father’s side would be a new kind of inheritance (besides tying up alienability for generations); therefore it is invalid.
- Rule against unreasonable restraints on alienation.
- Rule against perpetuities.
- The interpretive rule prohibiting “waste” of the present estate.
- The prohibition on invalid racial conditions.
- Rule against unreasonable restraints on marriage.
- (^) Rule against unreasonable restraints on competition.
g. Vesting i. A property interest is vested when no condition precedent must occur. ii. “O to A for life, then to B” – T1: initial conveyance, T2: A’s death. B’s interest vests immediately in interest at time T1, then it becomes vested in possession at time T2. iii. “O to A for life, then to B when B graduates.” B’s interest is not vested. B has a CRCE. If B graduates before A dies, his interest will vest and it will become an AVR. If A dies before B graduates, the property reverts to O. If B then graduates, the interest will then vest simultaneously in both interest and possession. iv. (^) Generally, look for the commas, because they will demarcate a new time period.
VIII. The Rule Against Perpetuities (so simple that it’s completely unintelligible).
a. RAP (traditional) – Future interests are invalid unless they are certain to vest or fail to vest within the lifetime of someone who is alive at the creation of the interest or no later than 21 years (and nine months) after her death. i. Designed to limit dead-hand control.
Downloaded From OutlineDepot.com
ii. Promotes alienability through a compromise between allowing owners to determine the future use of their property and freeing current owners from control by prior owners. iii. (^) Requires that property eventually comes back to FSA, when outside of a trust. iv. T1 ---------------------T2 (last of all lives in being to die)---------< yrs/9mos>---------T v. We have to know that all interests vest between T2 and T3. vi. Charitable Exception – executory interest are subject to the rule unless both the present estate owner and the future interest owner are charities.
b. Applying the Rule: Three steps
- Determine what future interests have been created. i. Only applies to non-vested interests: EI, CR, or VRSO (VRSO is only semi-vested because the class is not closed). ii. All future interests in the grantor are exempt from the traditional rule (R, PR, RRE). iii. Options are subject to the rule, but preemptive rights may or may not be depending on the court/state. iv. Names remain fixed! If a RRE is transferred, it remains an RRE and does not become an EI even though it is not retained by a third party.
- If rule applies, determine whether the future interest is valid under the rule. i. Lives in being – If there is ANY chance that a future interest will not vest during the perpetuities period, it is invalid. Look for validating lives. ii. (^) Perpetuities period – the time between the creation of the interest and 21 years/9mos after the death of the last person alive at the creation of the interest. iii. Validating life = measuring life– look for this! – this is the life we are concerned with when measuring the period. The validating life may be any member of a closed class. The VL may not be an entity such as a corporation. If there is no validating life, the FI is invalid. iv. Creation of interest – created by conveyance at the moment of sale, created by will the moment testator dies, created in a trust the moment the document is signed if trust is irrevocable, and if revocable, at the moment it become irrevocable. v. Vest – vesting (in both interest and possession) for an EI occurs the moment the contingency occurs. vi. (^) Contingent remainders – vesting occurs at the moment that the event occurs making the “contingent” disappear (may be in interest, or possession).
- For any interest(s) that is/are invalid, strike it/them out, and see whatever is left. The re-test against the rule. i. Ex. O to A for residential purposes, then to B.
- This violates the rule because B’s interest is not sure to vest within 21 years following the deaths of O, A, or B. We strike out B’s interest leaving, “ O to A for residential purposes.” Instead of A having an FSEL and B having a SHEI in FSA, A now has an FSD, with a PR in O. ii. Ex. O to A, but if the property is not used for residential purposes, then to B.
- (^) Similar to the above, but when B’s interest is struck out, we have “O to A, but if the property is not used for residential purposes.” What the heck is this? Nothing valid, so we strike out the nonsensical clause, and we are left with “O to A.” which gives A FSA.
c. Four Categories that are Likely to Raise a Problem with the RAP:
- Open class following an open class – almost guaranteed to violate the rule.
Modern Modifications: i. Wait and See (second look) – instead of invalidating an interest immediately, the courts will allow the interest to exist until the perpetuities period has passed and they are certain that the interest has not vested. ii. Equitable reformation or Cy Pres – example: an age specification may invalidate a FI: O to A for life, then to the first child of B to attain 25 years of age. This violates because B’s kid may not hit 25 within 21 years after the deaths of O, A, and B; thus the court may reform the age requirement to 21 years. iii. Marketable title acts – requires that future interests be re-recorded periodically for them to stay in force. iv. Cut - offs for PR and RRE – since theses are not subject to the rule, some people will circumvent the RAP by using two transactions. Instead of O to A, as long as used for residential purposes, then to B (rule violation), use transaction #1: O to A as long as used for residential purposes. Transaction #2: O assigns her possibility of reverter to B. Some states limit this by placing restrictions on PR’s and RRE’s so they act more like those FI’s that are subject to the RAP. Fl has a 21 year rule. v. Uniform Statutory Rule Against Perpetuities – for interests that would have violated the traditional rule, allows an extended perpetuities period of 90 years from the date of creation. This employs the wait-and-see test.
f. Options to purchase – RAP usually applies. i. Central Delaware County Authority v. Greyhound Corp.(1991) – P seeks to quiet title in two tracts of land that were conveyed in 1941 and 1950: To CDCA for public use only, if not so used, BL can reacquire upon payment of $5,500. This appeared to give CDCA a FSCS with a RRE in BL. Greyhound acquired the alleged RRE from BL, and opposes this action.
- Perpetuities period is only 21 years in this case because we are dealing only with corporations.
- T/C finds an FSCS (no RAP violation), but App court finds a repurchase option, which is subject to the rule, but refuses to enforce the RAP and invalidate the option because of public policy that to enforce the RAP would chill future grants of land for public use. This court reversed and holds the option void.
- The finding of the option instead of the FSCS (somewhat semantic reasoning is used, according to Wright) goes along with preferring covenants over conditions (if a deed is ambiguous, there is a preference for an option over an FSCS).
- Purchase options may be viewed as closely related to RRE or we can view them as being more closely tied to K rights (property rules do not usually apply). The court applies the RAP stating that there would be too much possible disruption to allow these kinds of options to exist indefinitely. Cutting them off promotes alienability.
- Also, this was a purchase option for a fixed price – would be rather unfair to enforce given that the grant, in one instance, was 50 years old.
- If you want to keep a reentry right, set up a charitable trust, which is not subject to the RAP. ii. Texaco Refining and Marketing, Inc. v. Samowitz – P signed a lease with the predecessor in interest to D for a 15 year term with three 5 year renewal period. Included was an option to purchase for $125m, during the term of the lease or any extension, after the 14 th^ year of the initial term. Texaco gives notice of exercise and D refuses. Action is brought for specific performance.
- Issue is whether the option violates the RAP. T/C and app court hold that it does not and orders SP.
- Court holds that an option to purchase in a long-term lease is valid as long as it must be exercised within the lease term. This is consistent with the policy objectives furthered by the RAP: it encourages improvements and renders the property more marketable.
g. Preemptive Rights – RAP may apply depending on jurisdiction i. Cambridge Co. v. East Slope Investment Corp. – A condo owned by D contained a covenant giving a preemptive right of first refusal to other owners upon D’s receipt of a bona fide offer. Upon exercise of the right, the holder is required to purchase at the same price as the offer. D sold to a third party even though P gave notice of exercising its right.
- D defends, claiming the preemptive right is invalid under the RAP. Although this court usually applies the RAP to preemptive rights, it chooses not to because ( exception to RAP) the right at issue does not implicate the public policy issues that the RAP is designed to protect.
- The right at issue is not for a fixed price, it is not a restraint on alienation, and does not deter investment in the property (note, however, that you can argue that buyers may be less inclined to make an offer if they know that someone else may step buy the unit out from under them).
- RAP applies whenever it makes sense to apply it. Whenever marketability and alienability are not hampered, court may choose not to apply the RAP.
IX.
Downloaded From OutlineDepot.com
XI. Rule Against Unreasonable Restraints on Marriage a. (^) Lewis v. Searles – P seeks quieted title in her name against those relatives who claim title pursuant to the will of P’s deceased aunt. Will specified that the property passed to Lewis subject to the condition that any marriage would divest her of 2/3 of the property which would go to D. P had not married.
- Two issues: Is restraint ok? What kind of estate was left to Lewis?
- Provisions in general restraint of marriage are void (two exceptions)
- Remarriage (generally men imposing restraints on wives remarrying).
- Support: provide for a person who does not have support until such time that the person has support.
- Court finds the restraint valid because it was intended as a means of providing support until such time that she was married.
- Court interprets the estate to be FSA in 1/3 and FSEL in 2/3. If the restraint was invalid, the court would find FSA in 100% in P (this is what she wanted, but she didn’t get that).
- D argued for 1/3 FSA in P and 1/3 AVR in each kid. Court used presumption for FSA when interpreting the will – there was no specific language to suggest a life estate.
- This case may be distinguished from Edwards v. Bradley – in that case, the restraint was on alienation, which you cannot have with a FSA. Here, however, the restraint on marriage is not necessarily repugnant to a fee.
C. Servitudes and Easements I. (^) Servitudes – General a. Servitude – a legal device that creates a right or an obligation that “runs with the land” or with an interest in land. i. An encumbrance/limitation on use – not on ownership. ii. Usually created by K. iii. Benefited side – dominant estate. iv. Burdened side – servient estate. v. Agreement can be reciprocal – both sides are concurrently benefited and burdened. vi. There can be a lack of a benefited side (e.g. a utility easement – benefit belongs not to a neighbor, but to a third party). vii. (^) Once created, the remaining issue is whether the obligation runs to subsequent owners of land. viii. Affirmative (positive) – an obligation to do an affirmative act. ix. Negative – a promise not to do something (e.g. paint house purple) – a limitation. x. “runs with the land” – a right or obligation that passes automatically to successive owners or occupiers of the land or the interest in land with which the right or obligation runs. ( Intent is key in making this determination! ) b. Easement (right of way – A has a right to enter/use B’s land) – a type of servitude that is intended to be permanent or irrevocable. i. Generally, a right to pass over (e.g. a utility easement, or a right to use a road on neighboring property). The owner of the servient estate has given up the right to exclude the benefited landowner from the area described by the easement. ii. Affirmative easement – a right to do something on someone else’s land iii. Two questions related to easements (or any servitude, really):
- How is the easement created? Five ways:
- Writing – express easements – created by explicit agreement of the parties, usually in a deed.
- Estoppel
- Constructive trust
Downloaded From OutlineDepot.com
- Prescription – (note: see outline section on adverse possession. Prescriptive easement is to use what adverse possession is to ownership)
- (^) Implication – necessity, prior use, or plat. Implied easements – recognized in particular relationships even in lieu of express contract. May be applied to effect the intent of the parties or for public policy reasons.
- Does it run with the land?
- If it runs on both sides, the benefited side may subdivide it.
- If burdened side subdivides, each deed must provide for the easement.
- The easement may be moved, but only in a reasonable way that does not interfere with the benefited side’s use. c. Restrictive servitudes ( A’s right to prevent B from doing something on B’s land) : three forms: i. Negative easements – obligations not to do something on one’s own land. ii. (^) Restrictive covenants – K’s entered by landowners to restrict the use of their own land for the benefit of either the LL or neighboring owners (enforced by money damages). iii. Equitable servitudes – like restrictive covenants, but enforced by injunction rather than by damages. Some of the technical requirements of restrictive covenants have been relaxed. d. Profit – (traditionally, profit a prendre ) – the right to remove materials (e.g. minerals, oil, gas, or trees) from another’s property. Once A removes something from B’s property, it becomes A’s. This is not capture because A is actually converting something that belonged to B (it was not unowned). e. Affirmative covenant – an obligation to do something for the benefit of another owner or owners (e.g. payment of maintenance fees). These are generally harder to enforce than restrictive covenants. f. License – a temporary (freely revocable) permission/right to enter granted by an owner. i. “it is a stick” but, because it is revocable, it is “tenuous.” ii. Example: a license to use a neighbor’s driveway. iii. Because they are revocable at will (generally), they are not servitudes, nor are they transferable, inheritable, or devisable. iv. No writing is required to create a license and they may be implied by the circumstances. v. Four instances in which a license is not freely revocable:
- license coupled with an interest – an owner who sells personal property to another that is located on her own land generally gives permission to the buyer to enter the land to remove the licensee’s personal property (e.g. A sells a car to B. B may enter A’s land to retrieve B’s car).
- Promise to grant a license – e.g. theater ticks. This license can be revoked after issuance, but the ticket holder can sue for breach of K. Also, unlike other licenses, theater tickets are transferable.
- Easements by estoppel
- Constructive trusts. (3 and 4 discussed, infra).
II. Easements by Estoppel a. Easement by estoppel (irrevocable licenses) – conversion of a revocable license into an irrevocable easement. b. Oral easements – a grantor may intend to convey an easement but fail to comply with requisite formalities. In these cases, a court may recognize an easement by estoppel to enforce the presumed intent of the parties despite the failure to comply with formal requirements. c. Estoppel : 1) Affirmative act on part of servient property owner; 2) inducing reliance; and 3) causing harm. d. Holbrook v. Taylor – P built a home on land adjacent to that of D. Access was by a road on D’s property, and D granted use of the road, during construction of P’s home, by oral permission (a license). After construction, D permitted P to use and repair the roadway. P widened the road, put
- We have a license here, not a lease; the former does not give a possessory interest, which would include the right to exclude the true owner. BUT, we really have a “license-plus:”
- (^) Owners had the right to xfer, a termination period, use and development, exclusive right in their cabin. This is not a lease, not really a license, kind of like a condo. Also there was a right not to be terminated except for cause. Cabin owners argue that all of these things were part of their rights. Tavenner may have given a gift: intent and delivery.
- If intent was to give all of the above, rather than the plain written license, then the plaintiffs have all of those rights; thus, the license agreement does not appear to represent the intent of the parties.
- Waiver – a voluntary relinquishment of a known right (1. Intent, and 2. Action giving up the right(s)) – license agreement did not reflect the true intention of the parties; thus the court refused to hold that he cabin owners waived their permissive rights in favor of a 30-day cancellation period. (Ward would have to show that the cabin owners knew they had more sticks than were in the license agreements, and they waived those sticks in signing the license agreement).
- Remember rule #1! You can’t sell what you don’t own. If Tavenner gave a stick to the cabin owners, that stick was not available for sale to Ward, even though the deed says FSA in Ward. iv. Held: Court finds a constructive trust, which may be created where the owner of land permits others to improve his property in reliance on the promise or implied promises of the owner. v. Rule of fixtures/annexation – if you have intent (may be constructive) and you affix personal property to real property, it becomes party of the property. This rule is operation in the above case, and technically allowed the owner of the ranch to gain title to the cabins. Constructive trust took that legal title out of Ward’s hands. vi. Constructive trust – This upheld the fact that Tavenner granted the cabin owners more than a naked license, and it proscribed the operations of the rule of fixtures. This is a more flexible equitable remedy than easement by estoppel because it allows for the imposition of terms and conditions, whereas an easement is either granted or it isn’t. d. Irrevocable licenses – a grantor may only have intended to grant a revocable license, thus finding an easement by estoppel would contradict the original intent of the grantor ( e.g. Holbrook and Rase ). Instead of relaxing formalities, the interest here is in protecting the interests of the licensee in relying on a relationship with the owner who granted continuing rights of access to the property. e. Law of irrevocable licenses – whether by estoppel or constructive trust is based on the premise that an owner, who opens up property to others, may create by words or actions reasonable expectations of continued access to the property. When the non-owner expends resources or labor in reasonable reliance on the access, the owner may be held to have waived the legal power to revoke that access. f. Intent – as will all areas of property law, the intent of the grantor is important in determining what, if any, rights have been transferred or leased to the grantee.
IV. Easements Implied from Prior Use a. Easement implied from prior use (quasi easement) – where an owner of an entire tract of land or of two or more adjoining parcels, having employed a part thereof so that one part of the tract or one parcel derives from another a benefit or advantage of an apparent, continuous, and permanent nature , conveys or transfers part of the property without mention being made of these incidental uses. In absence of an expressed agreement to the contrary, the conveyance imparts a grant of property with all the benefits and burdens which existed at the time of the conveyance or transfer, even though such grant is not reserved or specified in the deed. b. Creation requires three elements:
- common ownership (unity of title) of the claimed dominant and servient parcels, and a subsequent conveyance (severance) separating that ownership.
- Before unity was severed, the common owner used part of the united parcel for the benefit of another, and the use was apparent and obvious, continuous, and permanent ; and
- Claimed easement is necessary and beneficial (reasonably necessary) to the enjoyment of the parcel conveyed or retained by the grantor or transferor. c. (^) Granite Properties LP v. Manns – P seeks to enjoin D from interfering with the use and enjoyment of two claimed easements over driveways located on D’s property. The two drives allow ingress/ egress to an apartment complex and a shopping center. Both of P’s parcels were developed prior to the conveyance of lot B to D. i. issue – whether, in conveying parcel B to D, P retained easements by implication over the driveways. (Ultimately held for P). ii. INTENT – easements by implication arise as an inference of the intention of the parties to a conveyance of land. These easements step in to fill gaps left by incomplete or missing writings in the deed. For easements by prior use , proof of the prior use is evidence that the parties probably intended an easement. iii. (^) Ambiguities – usually resolved against the drafter or transferor. However, intent may be inferred based upon:
- whether the claimant is the conveyor or the conveyee (easier for the latter than for the former);
- The terms of the conveyance (there is a presumption, generally, that all rights are conveyed);
- The consideration given for it;
- Whether the claim is made against a simultaneous conveyee;
- The extent of necessity of the easement to the claimant;
- Whether reciprocal benefits result to the conveyor and the conveyee;
- The manner in which the land was used prior to conveyance; and
- The extent to which the manner of prior use was or might have been know to the parties. iv. (^) Rule – degree of necessity is greater to reserve an easement in favor of the conveyor than in the case of conveyee. v. Rule – implication from necessity will be aided by a previous use made apparent by the physical adaptation of the premises to it. vi. Rule – necessity requirement will have different meaning and significance in a case involving proof of prior use than in a case in which necessity alone supports the implication. vii. Reasonable necessity – (because of continuous and apparent use) – when it is reasonably convenient to the use of the land benefited. The more pronounced a continuous and apparent use is, the less the degree of convenience of use necessary to the creation of an easement by implication. Basically, the more apparent the easement, the lower the necessity requirement.
V. Easements by necessity a. Easement by necessity – usually where an owner of land conveys to another an inner portion of said land, entirely surrounded by lands owned either by the grantor or strangers. Unless a contrary intent is manifested, the grantee is found to have a right-of-way across the retained land of the grantor. Likewise, an easement is implied by necessity if the owner retains the inner portion of land, and conveys the balance. b. Necessary – a use is necessary if, without it, no effective use could be made of the land to be benefited by it. c. Creation – requires three elements:
- (^) unity of title ;
- severance; and
- necessity (unlike easements by implication, which requires reasonable necessity , here we require absolute necessity ). d. R3d – A note on INTENT – intent is technically an element of an easement by necessity. However, since it is presumed by the circumstances, it isn’t often an issue on the facts of a true easement by necessity. The R3d tries to push this issue and suggests that intent should trump
Downloaded From OutlineDepot.com
