Property I Outline

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The key takeaways are that property law governs ownership rights over things and consists of a bundle of legally enforceable rights known as title. Property rights exist within a balance between private ownership and public interests.

The main types of property interests discussed are the fee simple determinable, fee simple subject to condition subsequent, and adverse possession. A fee simple determinable automatically ends ownership upon an event while a fee simple subject to condition subsequent allows the grantor to reclaim ownership upon an event.

Adverse possession is a method of acquiring title to property through possession for a statutory period, usually around 5-10 years. The possession must be actual, open and notorious, hostile, under claim of right, and continuous and uninterrupted for the whole period.

Property I Outline Kiel Fall 2012

I. Overview of Property Law The Bundle of Sticks A. What does it really mean to own something? 1. Rights among people that concern things. 2. Property consists of a package of legally recognized rights held by one person in relationship to others with respect to something or other object. 3. What you own are legally enforceable rights regarding the property. 4. Two aspects of property: 1) rights among people, 2) that concern things. 5. Legal Positivism rights, including property rights, occur only through the government. 6. Natural Law Theory the role of govt. was to enforce natural law, not invent new law this theory has diminished. B. Property Law as ownership of a bundle of rights 1. Title (the sticks of your bundle) 2. Promotes stability, Productivity, Alienability 3. The most important sticks are (however, not necessary for property). a. Right to excluderight to exclude others from use or occupancy of a certain thing b. Right to transfer right to transfer the holders property rights to others i. Transfer may be during ones lifetime or at death. ii. There are restrictions to transfer cant transfer any way you wish. c. Right to possess and use Have the right to use land how you want i. However, there are ordinances that restrict how you can use your land. i. Ex. If home is a historical structure, law may prevent owner from destroying it. ii. You can release your right to possess and hold and still have property rights i. Ex. give a 10 yr. lease. C. Competing Interests Private Owner vs. Public Interest 1. Property owners both hold rights and owe duties. 2. Law wants to promote the public interest. a. Ex. law requires one to preserve the habitat of an endangered species this would limit property rights, but it is a duty the property owner owes to public. 3. Property rights are a balance b/w owners rights and societys rights. D. Primary Topics of Property Law 1. How is a property right acquired? How do you get that first stick? 2. What can an owner do with something acquired? What can the owner not do? What other sticks do you get? 3. How does an owner dispose of some or all of her sticks? 4. What happens to an owners property rights (sticks) when she dies? 5. How often can or should the government/law interfere with property rights. E. Who Owns the Watch? 1. Critical Facts: P lost watch in city park, placed posters around area with reward for watch while, lasted about two weeks and gave poster to coworkers, 33 years later, D finds watch in park. Defendant kept watch. Found in a public place. P sees D wearing watch and demands back. 2. Narrowing Questions: a. Was finder on notice? no b. 33 yrs. Passed. 3. Remedial Questions a. Finder made investment into watch. b. Finder labored in finding watch. 4. A Rule? Rules? a. We want to encourage finding so as to keep the property active. We encourage finders fee so that the property continues to be used and it encourages rights of loser. b. Finder is keeper against whole world accept original owner.

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c. Loser keeps possession so long as he is acting diligently to find. d. Finders keepers losers weepers. F. The Competing Interest of the Private Property Owner and the Public Interest 1. Right to include: you have a right to allow others to enjoy your property. a. Limitations: you cannot invite a fugitive, cannot treat poorly, cannot force, and cannot hold in custody. Limitations are for public interest intentions 2. Right to exclude a. This is the competing interest between society and property owners. b. If you dont want someone on your property, you have a right to exclude them. c. You can still own property and not have a right to exclude d. If you have an easement on your property that legally allow people to use it. e. Might rent to a tenant therefore releasing right to exclude. 3. Jacque v. Steenberg Homes Mobile Home Punitive Damages Trespass a. Facts Steenberg intentionally trespassed on Jacque property. Steenberg asked to use a path on Jacques land. Jacques repeatedly refused, excluding him. Steenberg used it anyway. Jacques sued Steenberg for intentional trespass. Steenberg argued that no compensatory damages had been proved and that no punitive damages could be set without compensatory. i. Facts that drove opinion: Intent, conduct, reprehensibility, purpose, and necessity. ii. Conduct of Jacques actually excluded D. iii. Intent of Steenberg malicious iv. Reprehensibility the D was to blame for his malicious action v. Purpose Steenburg did this for his own commercial purpose as opposed to public/humane purpose. b. Holding: Crt ruled in favor of Jacques, jury awarded $1 nominal and $100,000 punitive to Jacques. Appeals ct. overruled the punitive. Supreme ct. decided punitive could be allowed in this situation so as to prevent continuous trespass. c. Damages and Remedies i. Nominal damages purpose is to acknowledge the violation of rights. ii. Compensatory damages purpose is to make P whole from damages. iii. Punitive purpose is to punish and make example of rights violator. d. Rule: With regards to intentional trespassing of land, there need not be compensatory damages to have punitive damages. e. Court decided that actual harm to rights was done in removing the stick from Jacques it was a 100,000 stick. f. Public Policy: Protecting the right to exclude.
g. Effects on Jurisdiction of this Case: i. Mental State of Owner- Matters least. This stick matters regardless of the owners state. ii. Intent This could have been softened. By eliminating the permission requests and Steenbergs notice of desire, mental state of owner could have been effected iii. Necessity Was this a necessary measure. The mobile home could have been sold w/ price markups. iv. Purpose - Ambulance? Public Service that depends on time. This changes the jurisdiction recognized as a public service purpose is different not private NARROW RULE: i. Punitive damages could be awarded when there is an unnecessary trespass and does not serve public service. This is extremely narrow. BROAD RULE: i. Punitive damages may be awarded in the case of intentional trespass even where no compensatory damages are awarded. What mattered in Jacque, the mental state and actions of the property owner, Rights Violator they knew what they were doing, Purpose, Necessity.

h.

i.

j.

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4. State v. Shack Migrant Workers Rights Trespass Case a. Facts: P, farmer, employs migrant workers, housing them on his property as part of compensation. Ds
work for nonprofit corps funded by gov. agency providing health services and legal advice/ representation for these migrant workers. Both D representatives entere d Ps property together to provide services on behalf of the migrant workers. P confronted and requested his presence with a group consultation. D declined stating they have the right to see the men in the privacy of their living quarters and without Ps supervision. P sued D for trespassing. Held: The Ds invaded no possessory right of the farmer-employer, not liable.

b. Tedescos stick are thrown out, unlike Jacques.--> bc Human rights trumps property. c. Contrast with Jacque : i. State dealing with public. Jacque, the private ii. Rights are relative. iii. Intent: the doctor and lawyer had same intent as Steenberg to trespass. iv. Purpose: to help migrant workers. Necessity here court ruled it was necessary while Steenberg was not necessary. d. A property right is not absolute, but inhibited by society, for the promotion of the best interest of others who operate within society. Human cannot be used as a shield to block human values. e. An employer may not deny the worker his privacy or interfere with his opportunity to live with dignity like other citizens f. Public Policy: Getting aid to migrant workers g. Shack Factors Property Owner; Rights Violator rights are relative (owners dont supersede workers rights AND right to exclude can be shrunk; purpose; necessity. h. A critical determinative fact. Hypothetical if the workers did NOT live on the land, it would NOT be a necessity that the Ds visit the workers, and now it is trespassing. II. Acquisition of Property: A. First Possession 1. Acquisition by Capture Title to Wild Animals a. General Rule: i. You must have actual possession, or else constructive possession by inflicting a mortal wound; pursuit does not vest title. ii. First person to capture or kill gains title. (formalist approach) iii. Pierson recognizes a hunter who actually kills or captures a wild animal, and immediately has possession of it, acquires title. It also suggests that the mortal wounding of an animal by one not abandoning his pursuit may constitute capture. iv. Rule: Freddy can give good title assuming that he captures or mortally wounds the fox before the pursuing hunter does. i. Under Pierson v. Post, title to a fox is not obtained until the fox is mortally wounded even if a hunter has been pursuing the fox for a significant amount of time and expending significant effort. ii. Policy Reason Rule: This rule provides greater certainty in assigning title to wild animals, such as foxes, and encourages more efficient fox hunting, and minimizes quarrels. b. What to Consider when creating an Acquisition Rule i. Productivity Want to encourage use of formally title less things. ii. Predictability/Stability we want stability in our society therefore we want predictable laws. iii. Fairness and equity whether something is fair or not. iv. Creativity find right balance b/w encouraging people to be creative and allowing ability to exploit creativity. v. Conservation preserving of thingsenergy. c. Acquisition Rules How to assign title i. Labor Theory we want to reward the person who does the work.

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ii.

iii.

iv.

v.

i. Good because it encourages people to do work. ii. Bad because it might encourage too much work conservation problems. iii. Bad because it might breach the right to exclude. Possession theory Ive got it, its mine. First person to take occupancy or possession owns it. i. Bad because it could encourage the waste of natural resources. If it is first come first serve, then it would encourage people to use up as soon as possiblebefore others can. Its my land Theory/site theory i. If animal is on your land it is your animal usually this rile needs to be accompanied by another rule like you capture it. Labor+ pursuit theory People are entitled to the property produced by their labor. i. Labor plus pursuit is idea that I did work and am still doing the work so I own it. ii. Ex. you might not have captured it but are still working. iii. This discourages laziness. Custom Theory: whatever the areas custom is the rule. Ghen v. Rich

d. Pierson v. Post The Fox Hunting Case i. Post, , was hunting for a particular fox. Pierson, , was hunting for the same fox. Knowing they were both hunting for the same fox, Pierson deliberately, in the sight of Post, killed the fox. Lawsuit on action of trespass. Held: In favor of , had no property right to the fox, merely a game of pursuit. ii. Mortal wound approach: (1) is objectively likely to deprive the fox of his natural liberty; (2) shows a subjective manifest intention to seize the animal (i.e., not just for the enjoyment of the chase iii. Rule: Pursuit alone not enough to acquire titlePursuit + Mortal Wounding=Owner iv. When looking at acquisition rule consideration, it is to determine who killed or captured providing stability. v. socially useful enterprisemajority accepts that killing foxes is a socially useful enterprise; dissent elaborates that it protects activities of chicken farmers (wants to protect pursuit as possession to encourage more hunting; intruder should not gain from labor of first person) vi. Other reasoning: keeps the peace, decreases litigation (the end of the hunt is an objective measure, so we know where the law stands-less suits), clear and easy to administer vii. Dissenting opinion encourages labor plus pursuit theory saying that the goal is to kill foxes and labor + pursuit encourages killing more. This is a fairer rule, but harder to apply b/c what does constitute pursuit? e. Capture by Custom Rules: i. Capture by custom means even though Ghen did not take immediate possession of the carcass and in fact left the area, he did not abandon his pursuit. In Ghen the court said, the fisherman does all that is possible to do to make the animal his own, that would seem to be sufficient. ii. Ghen v. Rich The Whale Hunting Case iii. Rule: When a hunter catches an animal according to established custom, title to the animal is acquired. iv. P is a whale hunter and has shot the whale in question. A local whale-hunting custom stands that the whale hunter attaches a waif to the whale, the whale corpse floats to shore, and the local town identifies the whale hunter identified by the waif - of the surfaced corpse. D has purchased the whale in question at an auction from another who found the whale on the shore. P sues D. Issue: Whether the whale is considered the property of P under the local custom usage. Held: Yes, the whale is Ps property. based on custom theory of industry.

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i. Reasoning: In this case, whale hunter had already marked and shot the whale. This custom provides a more distinguishable marking of ownership people who find the whale killed by hunters would contact hunters and would receive payments in return. v. Custom recognized as basis for property right when: (1) its application is limited to those working in the industry (2) custom is recognized by whole industry (3) requires of the first taker the only possible act of appropriation (4) necessary to survival of industry (5) and works well in practice vi. Custom is bad when: (1) formulated for the benefit of the industry but not society as a whole (2) may be dangerous to those employed in the industry (3) wasteful of a resource (i.e., the whales that floated out to sea and werent recovered vii. Public Policy: keeping the industry running. If a fisherman does all that is possible to make whale his own he owns that whale. f. Comparing Ghen and Pierson: i. The holding is no different in either case: Pursuit + Mortal Wounding. i. They both endorse labor + pursuit. ii. Difference is custom and policy i. Pierson Based on policy. (At time they were wanting to kill foxes.) ii. Ghen Custom based on whale industry. Court does not necessarily want to kill as many whales as possible, but if the custom is as such, this is the rule. No ownership of wild animals just because they are on your land. g. Review Acquisition of Title and the Law of Capture i. Blackletter law i. Acquire title with pursuit + mortal wounding. The law of capture. This varies by animal. ii. The Role of Custom i. In Ghen v. Rich, it is a binding role. ii. In GENERAL, it is a persuasive authority. The industrys interest and the publics interest may not be in line. iii. The Role of Policy i. The policy underlies the rule. ii. State v. Shack underlying policy: Protect the rights of migrant workers. Have to violate Shacks right to exclude. iii. Ghen v. Rich Whale industry keeps the overall Mass. Economy intact. 2. Acquisition by Creation a. Intellectual Property 1) Law of Creation if you are the first to create something, then you have title. 2) Balance the desire to promote creations, by granting monopolies, by balancing the desire to promote competition, by limiting those monopolies. 3) Constitution Art I, Sec 8, Clause 8 Congress shall have power to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. 4) Patents inventions. i. Must be patentable subject, utility, novelty, and non-obviousness ii. Exclusive right for 20 years. After 20 yrs, passes into public domain. 5) Copyrights expression of ideas. original words of authorship fixed in any tangible

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medium of expression i. Must be original, work of authorship, and fixation. ii. Books, stories, songs, computer code (debatable). iii. Protects original and independent creations. Not necessarily novel. iv. Lasts, typically, 70 years after the death or author of creator. Longer, but more limited. v. Exceptions Defense of Fair Use If using fairly a copy of a book or article, this can be used. i. Allows reasonable use of copyrighted material without the owners consent 1. Purpose and character of use, nature of the copyrighted work, amount and substantiality of portion used in relation to whole, and the effect of the use on the potential market 6) Trademarks i. Requirements: distinctness, non-functionality, and first use in trade ii. Words or symbols used to indicate a source. (Coke bottle, Mickey vs. Marty Mouse). iii. Protection prevents others from using similar marks only where confusion would result. b. Property Right in Publicity i. Elvis v. ElvisThe Using Elviss Name Case a) Facts: P and D are non-profit organizations disputing over their respective rights to use Elvis Presleys name as part of their corporate names. P filed an unfair competition action against D to dissolve it and prevent it from using Elvis Presleys name. Elvis Presleys estate intervened on behalf of D, asserting that it had given D permission to use Elvis Presleys name and that it had not given similar permission to P. Issue: Whether Elvis Presleys name and image entered into the public domain upon his death or if the Right to Publicity holds that his name and image are descendible to his estate. b) Rule/Held: The right of publicity is descendible under Tennessee law. c) Reasoning: a) Right of Publicity An individuals right to capitalize upon the commercial exploitation of his name and likeness and to prevent others from doing so without his consent. i. Right to Include Right to License ii. Right to Exclude Right to Protect. b) Recognizing that the right of publicity is descendible recognizes: i. That an individuals rights of testamentary distribution is an essential right; ii. One may not reap where another has sown; iii. Consistency with a celebritys expectation that he is creating a valuable capital asset that will benefit his heirs upon his death; iv. The value of the contract rights of persons who have acquired the right to use a celebritys name and the likeness; v. Will further the publics interest in being free from deception with regard to the sponsorship, approval or certification of goods and services. c) Encourage Creativity Balance between protecting creativity with future celebrities, and also protecting an overabundance of creative usages of Elvis name. d) Protection of Society/Community Protects city where Elvis made his fame (Memphis Int. Airport v. NY Int. Airport). c. Zacchini v. Scipps Human Cannonball Case 1) Rule: The right to publicity is a property right, you can exclude people from taping/broadcasting your entire act without payment or consent.

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2) Facts: Petitioner Hugo Zacchini had a human cannonball act which he performed at various venues. During August of 1972, he was performing his act at the Geauga County fair at Burton, Ohio. On August 30th, Zacchini noticed a freelance reporter from Scripps-Howard Broadcasting videotapped. Zacchini asked the reporter not to film his act. The reporter did not film Zacchini's act that day, but did film him the next day. The footage taken by the reporter was about fifteen seconds long, sufficient to capture Zacchini's entire act. Holding: The First and Fourteenth Amendments do not immunize the news media from civil liability when they broadcast a performer's entire act without his consent, nor does the Constitution prevent a State from requiring broadcasters to compensate performers. d. A Dissent on the Right to Publicity a. White v. Samsung The Vanna White Look-A-Like Case Facts: D features advertisement of game show with P resemblance. P sues D for infringement of IP rights. Issue: Whether false representation meets a violation to a celebritys right of publicity. Held in favor of P. i. Rule: extended protection to a celebritys identity or persona ii. Overprotection vs. Under-protection 1. Danger of Under-protection If there is no right, there is an overuse problem. 2. Danger of Overprotection You strangulate creativity. Making one have to get permission from every landowner to get land. b. Dissent: Claims the majority opinion creates a new and broader property right, in which there is an overprotection of IP. Its now a tort to REMIND the public of a celebrity. i. Concerned that the next time there is a game show, V. White is going to sue any blonde wearing an evening gown. She does not own the right of that plot. B. Subsequent Possession

1. Acquisition by Find
a. Goals of the Law of Find: i. Get property back to the rightful ownerReturn to True Owner ii. Reward honesty iii. Ensure propertys use productivity iv. Predictability want people to know whats going to happen and what to do b. Remember the Watch c. Rules: i. The finder of property, though he does not acquire absolute ownership, may keep it against all but the rightful owner. Armory v. Delamirie ii. Finder has possession and title over everyone but the true owner. Hannah v. Peel iii. The finder of mislaid property acquires no rights in that property, rather the site owner retains possession over all but the true owner. McAvoy v. Medina d. Three classification of found property: i. Lost property a. Rule: Title goes to the finder (finder has title over the whole world but the owner) b. Because the wallet was found on the floor (and not on a stand), it is considered lost property. Bailey v. Hawkesworth. c. Rule: Lost property goes to the finder because there is less likelihood that the true owner will approach the site owner seeking to reclaim the lost property. ii. Mislaid property a. Title goes to the site owner (best chance of being recovered by the true owner) Exception to Finders Keepers Rule. b. Rule: The finder of mislaid property acquires no rights in that property, rather the site owner retains possession over all but the true owner. McAvoy v. Medina c. If wallet found on stand, then mislaid.

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Abandoned property a. title goes to the finder (finder has title over the whole world, including the owner b. Rule: Essentially, abandoned property is title-less and the first-in-time to discover/capture it gains title to it. iv. Treasure Trove a. Treasure trove is gold, silver, currency, or something that is intentionally concealed by an unknown owner for safekeeping in a secret location in the distant past. Because this watch is buried under the ground, the title of the watch would be awarded to the landowner either treating it is an object embedded in the soil or mislaid property. b. Property buried in Neighbors yard: Freddy cannot give good title to the watch unless Freddy had permission to be on his neighbors property, the watch does not belong to his neighbor, and his neighbor does not know about the watch. The facts do not indicate that Freddy had permission to be searching on his neighbors property (but neither do they indicate that he did NOT have such permission). Typically, a land owner has constructive title to personal property on his or her land. Trespassers cannot obtain good title simply by finding lost items on someone elses property this is to discourage trespassing/scavenging onto others property. e. Armory v. Delamirie Finders Keepers of Jewel in Chimney i. Facts: P, a chimney sweepers son, found a jewel and brought to D, a goldsmith, to determine the value. D tried to offer money so that he could keep the jewel. P filed a tort to recover property against D. Issue: Whether the jewel belonged to P, the finder. Held: P may recover the property. ii. Armory Rule: The title of the finder is as good as against the whole world but the true owner. Finders Keepers iii. Exception: Objects left in a private home or public place are generally awarded to the owner of the premises. 1) For public place, you must determine whether the property is lost or mislaid. f. McAvoy v. Medina Finders Not Always Keepers of Money in Barbershop Mislaid i. Facts: P, shopper, finds wallet/money in shop of D, barbershop. P asks D to advertise the lost money, no one claims the lost money. P files tort against D to recover money. Issue: Whether the money belonged to P, and whether this money was considered a find or a voluntarily item left behind? Held: Store keep the wallet. ii. Rule: The wallet on table is not to be treated as lost property. This property was voluntarily placed on the table in Ds shop. It is mislaid property which is an exception to the finders keepers rule. (i) Relevance of Place of Finding (ii) Relevance of Circumstances of Loss g. Hannah v. Peel: Lost Brooch Case i. Facts: Plaintiff, who was a soldier staying in the house owned (but not occupied) by Defendant, found a brooch and then gave the brooch to the police who later, after not finding the rightful owner, gave the brooch to Defendant, who then sold the brooch. ii. Holding: Plaintiff gets money for brooch bc D never resided in the house. It was lost property. h. Objects found in Private Home or Public Place 1) Usually awarded to the owner of the premises. i. Mislaid or Abandoned 1) Public place is determined by decided whether the property was lost (Accidently left by owner) or mislaid (intentionally placed somewhere and then forgotten). 2) Lost property goes to the finder, and mislaid property goes to the owner of the premises.

iii.

2. Acquisition by Adverse Possession


a. Theory and Elements i. Rules:

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1) Def: Adverse possession is essentially the acquisition of title by theft. It is meant to reward individuals who are making use of property that is not otherwise being made productive by true owners. 2) Rule: In order to establish adverse possession, an adverse possessor must possess anothers real property (a) actually and exclusively, (b) openly, visibly, and notoriously, (c) hostilely, (d) continuously, and (e) for a long enough period to satisfy the relevant statute. 3) Policy Rule: AP seeks to reward individuals who are making productive use of property by removing title from title holders who are sleeping on their rights by both not being productive with their property and not acting to eject trespassers (the adverse possessor). In addition, AP helps ensure that the reality on the ground is reflected in the actual holding of title. 4) Co-tenancy and AP: Typically, it is not possible for one cotenant to adversely possess against another cotenant. This is because the hostility element is absent. Because each cotenant has the right to 100% full enjoyment of the property regardless of the size of their share of the co-tenancy, possession of the property is not properly described as hostile. a) Ouster Rule: The property being adversely possessed in this situation is Tobys right of full enjoyment of the property held as tenancy in common with Stanley. 5) If a landowner does not bring action to eject an adverse possessor within the statutory period, the owner is thereafter barred from bringing an ejectment action. 6) A way of transferring land interest from one owner to another without the consent of the first owner. ii. Requirements of Adverse Possession Title by Theft An adverse possessor must show: 1) Actual and Exclusive Possession a) Rule: Actual and exclusive possession is required to start the clock of adverse possession. Until an adverse possessor is actually on property, he or she cannot be making productive use of the property. b) Actual occupation of the property during the statutory period must be clear and convincing to acquire title by adverse possession. Van Valkenburgh v. Lutz c) You have to actually possess in same manner as true owner (Actual), and not at the same time as the true owner (Exclusive) Majority Approach d) Triggers the start of the adverse possession clock e) Minority Approach claimant must cultivate, improve, enclose, etc. 2) Open, Visible, and Notorious Possession a) Rule: Open, visible and notorious possession is required to put the true owner on notice that another individual is possessing his or her property. Without notice, the true owner cannot be said to have slept on his or her rights in failing to eject the trespassing adverse possessor. b) In Ouster question with co-tenant compare adversely possessing right of full enjoyment v. adversely possessing the actual property. i. Once ousted, you are on notice that you are being adversely possessed. c) Also meant to trigger the start of the clock, but for a different reason: unless you are open and visibly there, must be able to be seen by the true owner d) Cant be sneaky and do hidden activities Make certain the true owner has notice that his property has been invaded. e) Possessors Burden to Make Possession Open: Puts the burden on the possessor to know it and put the owner on notice or if the possessor trespasses accidentally, then the possessor risks losing his/her improvement. 3) Hostile or Adverse Possession Under Claim of Right

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a) Broad Rule: Hostile possession is required in order to ensure that a true owner is not lulled into losing his or her property to an adverse possessor who was present with permission. b) Claim of Right There to assure that you are not there with the permission of the true owner long term tenant cannot be an adverse possessor bc he has permission by owner c) 3 Competing Jurisdictions Regarding Hostility: i. Objective Test Actions 1. Rule: does not look into adverse possessors state of mind, but rather looks to the possessors objective acts to determine if they are the acts of a fee simple holder. 2. State of mind is not a factor; Actions must appear to be that of an owner. (Majority Approach) Reflects reality. 3. You can do it by accident or intentionally. ii. Good Faith - Subjective Test 1. Rule: which requires that an adverse possessor be unaware that the property being possessed belongs to someone else 2. Policy Rule: A good faith jurisdiction rewards the accidental adverse possessor in the name of fairness. 3. Under GF, claiming not to own the land defeats the hostile element. Valkenburgh v. Lutz 4. Minority Approach Rationale: Protect accidental encroacher. Look at GORSKI Stair case 5. Policy Flipside: Do not want to reward a thief. iii. Intent to Take Opposite of Good Faith 1. Rule: Which requires that an adverse possessor be aware that the property being possessed belongs to someone else 2. Policy Rule: An intent to take jurisdiction rewards the aggressive adverse possessor in the name of productivity. 3. Know that the land is not yours 4. Subjectively intend to take title from the true owner d) Boundary Disputes Mistake Boundaries i. Majority: Objective Test bc he occupied strip of land without owners permission and met all elements then he is A.P. ii. Minority Maine doctrine A.P. must intend to claim title to all the land up to a specific line whether or not it is the true boundary. iii. EXPAND FROM BOOK e) Hostility in Co-tenancy/Ouster in Co-tenancy complicates further i. In the cotenancy context, there would be no reason (nor any right/ability) of a cotenant to eject another cotenant who is enjoying the property. Thus, to recognize adverse possession in such a situation would frustrate the purpose of the hostility requirement by allowing a property holder to lose property through adverse possession to an adverse possessor who actually had permission (a right, even) to be on the property. ii. Exception: There is an exception however to the general rule regarding the inability of cotenants to adversely possess against one another. That exception is where one cotenant has denied the presence of the cotenancy and is behaving as a sole property holder. This most typically occurs when one cotenant ousts another cotenant from possession. (See requirement for ouster) iii. Application: Fact that this is an adverse possession among cotenants complicates this factor. Stanley has permission to be on the property

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since he has a right to full enjoyment of the whole as a tenant in common. However, he does not have permission to exclude Toby, which is the behavior that triggers the adverse possession clock. iv. In an intent to take or objective jurisdiction, there is no doubt that Stanleys behavior is hostile he has excluded Toby from entering or enjoying property that Toby has a right to full enjoyment in. He has done so with the changed locks, the locked fence, and the refusal to respond to Tobys letter. In a good faith jurisdiction, Stanleys behavior is not hostile, since he is taking property in bad faith. 4) Continuous, Uninterrupted Possession a) Rule: Possession must be continuous in order to give the true owner the maximum possible notice that his or her rights are being possessed by another. If possession were not required to be continuous, then adverse possessors could come and go and true owners may never be aware that they had a cause of action to eject the trespasser. b) Rule: Continuous possession does not require permanent 24/7 possession, but rather requires possession in the manner of a usual owner of similar property. Howard v. Kunto Summer Vacation Home c) Ouster Argument: i. Argument for not continuous for required time: left and abandoned property. He voluntarily left property ii. Argument for continuous for required time: Left sufficient physical materials in house, planning on coming back, put locks on door so still demonstrating the right to exclude. Also he left to pursue career like a typical owner - knew that when conveyed. Still had to pay taxes/mortgage. Just away temporarily d) Ought to be there and behaving like a typical owner would e) Seasonal Use (Can be considered A.P. if this is the same as avg. user) f) Abandonment (Intentional Abandonment - A.P. is broken) g) Exception: Tacking i. Continuous possession established by tacking periods of possession by predecessors in interest voluntarily giving this interest. ii. Successive periods of adverse possession by different persons may sometime be combined together to satisfy the statutory duration requirement. Tacking is permissible only if the people are in privity with each other (by deed). Howard v. Kunto h) Interruption by True Owner (If the owner interrupts the A.P. by reentering with intent of regaining possession, continuity is broken. Obj. test used.) 5) Possession for the Statutorily required period a) Statutes require possession to be a certain length of time before adverse possession can be achieved. b) Policy Reason Rule: This is needed because although adverse possession seeks to reward productive use of property, it does so by having true owners forfeit their property; as a matter of policy and stability, that forfeiture should not happen too fast. c) In this jurisdiction, the amount of time required for adverse possession is 5(or #) years. iii. Reasoning for Adverse Possession Doctrine 1) Stability Sleeping Theory a) We have adverse possession in order to punish land owners for not doing anything with their land i. Sleeping on their rights 2) Productivity Earning Theory

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a) This person is making use of the property, we like that, lets award them with title 3) Quit title (but not too quickly) iv. * Remember Ouster of Co-tenants can start Adverse Possession Clock! v. Personal Property and Adverse Possession 1) General Rule: Title to Personal Property may be acquired by Adverse Possession. Majority View holds that cause of action accrues when the owner knows, or reasonably should know through exercise of due diligence, where the goods are. b. Van Valkenburgh v. Lutz Facts: , Valkenburgh, purchased lots 19-22 of a subdivision in Yonkers, NY in 1937. The Lutz family began using a portion of the land that bordered their property since 1920. The Lutzs had done the folling to/on the land. *built a one-room living structure *cleared brush and lumber *utilized a pathway through the land & more. Mr. Lutz admitted that he knew the land was not his. P claimed his right to the land over D. P was awarded a right of way over the traveled way but was ordered to remove his items off the properties.) i. Rules: :Actual occupation of the property during the statutory period must be clear and convincing to acquire title by adverse possession. Van Valkenburgh v. Lutz 1) Claiming not to own the land defeats the hostile element. Valkenburgh v. Lutz 2) Cultivation of the whole property is not required as a claim for adverse possession. Dissent in Valkenburgh v. Lutz ii. The factors analyzed: 1) Statutory Period: 15 years in this case. (Lutzs meet that amount of time.) 2) Actual Occupation: a) Majority: Majority says no. The majority opinion says that he was in the back portion and was not utilizing the land as a whole. b) Dissent: Who said you have to look at the land as a whole. Dissent says physical presence is actual. 3) Hostility a) Majority: Applies Good Faith. Not hostile. Mr. Lutz admitted that he knew the property was not his and he even agreed to take his stuff off the land after the Van Valkenburghs purchase. b) Dissent: Actions speak louder than words. Mr. Lutz took the property as his own and improved it. He further used the property to provide for his family as if it were his own land. c. Mannillo v. Gorski The Encroaching Stairs Case Facts: P seeks an injunction against an alleged trespass upon their lands against D. D entered in possession of lot in 1946 under agreement to purchase, with actual conveyance of lands in 1952. In 1946 and 1953, D made renovations to the house, including modifications to the size with a stair design extension. P acquired title to land adjacent to Ds lot in 1953. D admits the steps and concrete walk encroach upon Ps land by 15. D claims a title by adverse possession. i. P is claiming there was no Intent to Take Maine Doctrine ii. Court says- Rewarding intentional wrong-doers and punishing accidental wrongdoers. iii. Holding: Remanded to determine owners Actual Knowledge: If there is no easy way to determine encroachment, only if the owner actually knows that the minor encroachment exists will the encroachment meet the open and notorious element. Court uses CT Doctrine Objective Test. iv. The Trouble with Small Encroachments a. Balancing Burdens b. Owners Burden to Monitor c. Possessors Burden to Make Possession Open Know where the boundaries are and make it so open and notorious as to keep it open and notorious. - If you do it by accident, you risk access to accidental taking.

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- Earning theory Burden on Adverse Possessor. *** - Punishment/ Sleeping theory Burden on Owner.*** v. Holding: Whether the owner had Actual Knowledge of the 15 encroachment if so, this satisfies the open and notorious element. a. In a case of an minor encroachments, actual knowledge can make what is unopen, open. Or, a third person can provide that open knowledge to the owner and thus it becomes open and notorious. vi. What to do with mistaken improvers (like Gorski)? a. The court in this case determines that if the minor encroachment is difficult tobe removed (including very costly to P) and insignificant to owner then the court can force a sale. Remands for that determination. vii. Why do we have adverse possession, when it may seem that it hurts large landowners? a. It rewards people who put land to use i.e. small home, person been living for years on a large ranch. b. As a landowner, you have rights/sticks, but you also have a responsibility to survey land and ensure no one is living, adversely possessing. c. There is a high bar to fit the criteria for adverse possession several elements to meet. d. Common when a sale is pending: Small encroachments, probably frequently -i.e. fences encroaching boundaries, etc. d. Howard v. Kunto The Summer Home Adverse Possession Case Facts: Case concerns lots A-G. Kunto thinks he owns C but actually owns D because his deed actually describes D but he took possession of C. Kunto does to Howard and says Ill give you the appropriate deed. Everybody has one deed for the house down. Kunto has not lived in the house for the statutory required time but he and his predecessor have, so if you put the two together, they satisfy the statutory requirement. Howard, seeing an opportunity, sues and gets title to the land that Kunto is living on. Issue: Continuity of possession/The Summer Home Problem i. It matters in an adverse possession context what everyone else is doing with the property? Is everyone else using it as summer property. ii. The Courts Answer Bc of tacking/privitySo Kunto adversely possesses. iii. Hypos: campsites and out-of-season use 1) What if the Kuntos have not permanent structure a campsite, tent, etc., everyone else has houses? This could be called summer Vacation USE instead of summer vacation HOME. 2) What if the Kuntos build the campsite in the winter Kuntos counsel could change Description to Seasonal Usage. a) Howards counsel could then dispute based that if everyone else is there during the summer and all they see is the empty lot, then the Kuntos winter stay could be considered un-open and not notorious. b) Ruling will likely be in favor of summer usage only, as the adverse possession theory rules in favor of what the other occupants are doing. 3) What if Kunto occupies in the winter months only, but have a permanent structure? a) In this case, although they are only residing in the winter months, they have continued existence of the improvements on the land and beach area, constituting uninterrupted possession within this rule Howard v. Kunto, b) Continuous possession does not require human presence. A continuous structure can suffice. Lutz case rules that possession can be taken not just from a home structure, but an enclosure, i.e. a fence.

3. Adverse Possession of Chattels - Personal Property


a. Differences between real property and personal property i. Personal property can be hidden, real property cannot. ii. Makes the open and notorious rule of adverse possession a more difficult rule to establish for personal property.

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iii. If the item is hidden, there is no question of its openness. iv. If item is not hidden, it is open and notorious, OKeefe will lose.
b. Replevin: an action for the repossession of personal property wrongfully taken or detained by the defendant, whereby the plaintiff gives security for and holds the property until the court decides who owns it c. Majority of states: statute of limitations starts when the adverse possessor obtains possession of chattel. Unlike in Okeefe that starts upon discovery. d. Rules: The statute of limitations for a claim of adverse possession begins when the original owner discovers the dispossession. OKeefe v. Snyder i. Discovery Rule- a limitations period does not begin to run until the plaintiff discovers (or reasonably should have discovered) the location of the chattel 1) Will only apply when due diligence of the true owner has been proven 2) Think about good faith adverse possessor will not know that he needs to put original owner on notice/publish in paper unlike that of a bad faith adverse possessor. ii. Courts have a variety of options when deciding when the statute of limitations begins to run: 1) Discovery of the current possessor 2) Discovery of the loss of the chattel 3) The loss itself 4) Current possessor locates the true owner 5) Date of public display 6) Current possessor refuses to return to the true owner 7) Current possessor goes public 8) Date true owner stops diligently searching 9) Discovery of the chattel e. OKeeffe v. Snyder i. Facts: P, painter, seeks replevin of 3 paintings from D. P alleges ownership of the paintings which were stolen from a NY art gallery. D asserted he was a purchaser for value of the paintings, he had title by adverse possession, and Ps action was barred by the expiration of the 6 year period of limitations pertaining to an action of replevin.) ii. Georgia OKeefes story Claims paintings are stolen in 1946. Reports the theft in 1972. 1975 the paintings are spotted in another art gallery. iii. Snyders version Good Faith Purchase iv. History If there is theft here, there can be no title by adverse possession. App. Ct. also says element of open and notorious has not been completed by D, thus clock did not start running. v. Court rules she needs to know more than its gone, but also needs to know where it is the Discovery Rule- the clock starts running upon knowing they are gone AND needs to know where it is. The amount of due diligence proves the importance of the missing item. 1) Failure of Due Diligence will not always cause you to lose case If you can prove even with all due diligence, that you still will not find the property. Example: Only if person has hidden the painting. vi. When Does the Statute of Limitations Begin to Run? An Openness Question 1) Majority View holds that cause of action accrues when the owner knows, or reasonably should know through exercise of due diligence, where the goods are. vii. OKeeffe and the problem of the Good Faith Purchaser 1) Two Innocent Parties Innocent Loser vs. Innocent Purchaser 2) What happens when you purchase from thief? If you purchase from a thief, you cannot get good title. 3) Court states, if purchasing from a thief, no good title, if you are a good-faith purchaser and purchase from someone who has voidable title, voidable title is title that is not quite right, but not quite wrong. viii. Summary: Voidable Title and Good Faith Purchasers P.80 1) General RULE:A purchaser gets title identical to the title held by the seller.

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a) General Rule. A seller of personal property cannot pass on better title than he or she posseses, even to a bona fide purchaser. b) Puts heavy burden on the buyer to investigate the validity of the sellers title and deters policy goal of theft! c) For instance, if the seller is a finder and has title against the whole world but the true owner, then that is what the purchaser gets. 2) EXCEPTION: Where the seller has voidable title, the seller has the power to transfer good title to a good faith purchaser for value (also known as a bona fide purchaser). a) There are two instances in which the voidable title exception typically appears: i. When the seller has obtained the goods by fraud (bounced check, trickery, etc.) and sells to a good faith purchaser; and ii. When the seller has been entrusted with the goods by the true owner (art gallery, consignment shop, etc.) and sells to a good faith purchaser. b) To be a bona fide purchaser, a buyer must both (1) pay valuable consideration (2)believe in good faith that the seller holds valid title. c) These exceptions protect the title of the bona fide purchasers d) In painting question where, A gives fraud check of 1.5 to B(original seller). Then A sells to C for $1 Mil i. Yes, the result could have been different because having paid $1 million, it is clear that C paid valuable consideration. The question then turns not on whether C is a good faith purchaser, but rather whether A had voidable title. In the event that A had void rather than voidable title, then no matter how much C had paid, C could not gain good title; however, if A had voidable title, then C is likely to be awarded the painting having paid $1 million

Adverse Possession to Real Property Element Actual and Exclusive Possession Purpose Actual ensure that possession is truly happening Exclusive ensure that adverse possessor is not sharing land with true owner (a lulling concern). Primary Question Is the adverse possessor actually possessing as an owner? Potential Answers Actual possession only satisfied with regard to land actually used (Lutz) Actual possession satisfied so long as adverse possessor uses as an ordinary owner would use similar land (Lutz dissent) Actual possession may be satisfied by construction of an enclosure (statute cited in Lutz)

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Open, Visible, and Notorious Possession

Put true owner on notice that her land is being adversely possessed. Starts the clock on the statute of limitations for ejectment.

Has the owner been sufficiently put on notice?

For large encroachments on and obvious improvements to the land, objectively open and visible possession can satisfy this element by putting a reasonable true owner on notice For small encroachments, actual knowledge on the part of the true owner of the adverse possession may be required to achieve notice (Mannillo) Objective state of mind is irrelevant; look only to the actions to determine if adverse possessor was acting hostilely to true owners rights (Conn. Doctrine; Mannillo) Good Faith only the good faith adverse possessor will be rewarded (Lutz when referring to shed and garden) Intent to Take only the truly hostile possessor will be rewarded (Maine Doctrine; Lutz when referring to garage encroachment)

Hostile Possession

Prevent adverse possession by trickery. Protects owners from losing land after being lulled into believing no claim of right to the land would be made by an adverse possessor.

What is the required state of mind of the adverse possessor to achieve hostility? Is that state of mind satisfied?

Element Continuous Possession

Purpose Ensure that only an adverse possessor that has earned title over a number of years will be rewarded by adverse possession doctrine. ***REMEMBER TACKING/PRIVITY

Primary Question Is the possession either objectively continuous or of the nature of an ordinary owner of similar land?

Potential Answers Objectively continuous possession (uninterrupted human presence) can satisfy this element regardless of what an ordinary owner of similar land would do Possession during the period and/or for the amount of time that an ordinary owner would possess similar land can satisfy this element (Howard)

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Possession of a nature (such as building a permanent summer home) similar to that of an ordinary owner of like land can satisfy this element Possession for the Statutorily Required Period Extinguish the right of ejectment of the true owner. **REMEMBER TACKING/PRIVITY How long has the adverse possessor been present? Begins on date all adverse possession elements are achieved Tacking may be allowed when a subsequent adverse possessor is in privity with a previous adverse possessor this allows subsequent adverse possessor to include possession of previous adverse possessor in determining whether required time has been met (Howard)

4. Acquisition by Gift a. 2 parts to complete an acquisition by gift: acquisition of title and conveyance of title b. Elements: i. Intent of the donor 1) May be explicit or implied 2) May be shown by oral evidence 3) The best evidence to show intent is some sort of delivery ii. Delivery to the donee 1) Actual Actually handling over of the object. 2) Constructive Handing over a key or some object that will open up access to the subject matter of the gift. Havent given the object, but have given the key to get the object. [i.e. Key to unlock bureau(Newman v. Bost), Ability to get the item, brand a cow] 3) Symbolic Handing over something symbolic of the property given. Given something which is NOT the actual gift, but symbolic of the gift. i.e. letter. 4) Historical rule - If it is possible to actually delivery, then you MUST actually delivery. Possible is grey. 5) Evolving Rule: Constructive delivery is adequate when the evidence of donative intent is concrete and undisputed, when there is every indication that the donor intended to make a present transfer of the item, and when the transfer is deemed sufficient by the donor to pass the interest. 6) Purpose(s) of Delivery Requirement Emphasizes the feeling of giving it away. Proof of intent. A way of showing without any question that there was intent to give the item. Prima facie proof that there was a gift. A way of protecting the donee. iii. Acceptance 1) Person receiving the gift must accept 2) Assumed in most cases where there is a gift that has some value c. Rules: i. To constitute a donation causa mortis, there must be an intention to make the gift and delivery of the gift. Newman v. Bost ii. Constructive delivery is permissible when the donors intent to make the gift is clear, and where the items intended to be given are not present, or if they are present, they must be incapable of manual delivery because of size or weight. Newman v. Bost iii. When the item is present and capable of manual delivery, manual delivery is required. Newman v. Bost

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iv. A valid gift becomes effective as long as there is a present transfer of rights (not required to be willed), even if there is not a present transfer of the object (no physical delivery). Gruen v. Gruen v. A party may give a future interest in chattels as a gift while reserving the life estate in himself. Gruen v. Gruen d. Examples (Problems P. 158- #1. i. O owns a pearl ring. While visiting her daughter A,O leaves the ring on the bathroom sink. After O leaves, A discovers the ring. When A telephones O to tell her of the discovery, O tells A to keep the ring as a gift. Has O made a gift to A? 1) Yes, It is a gift when left on sink, person says keep the ring, she keeps the ring. ii. Can O change her mind next day and require A to return the ring. -- A gift cannot be revoked. iii. It is a gift when A finds ring, gives back to O, O gives to A as gift, A accepts by wearing, trying on, O keeps to resize, O dies wearing ring. Witness of delivery by friends will prove this gift. --- A gift cannot be revoked. iv. It is not a gift when O promises to give ring to A when she dies. This is legally enforceable as a promise; there is no symbolic delivery to constitute the gift. The only way to make a gratuitous promise enforceable is to put in a will. v. An engagement ring does not need to be kept by the donee, this gift is CONDITIONAL upon acceptance of the marriage. Legally, the ring is kept by the person who does NOT break up the engagement. e. Newman v. Bost Life insurance policy in bureau drawer i. Facts: On his death bead, intestate gave keys to P, who was his live-in maid for 10 years after his wife's death. He said the house was to be hers and pointed to all the furniture and said that was to be hers as well. Locked in one of the drawers was a life insurance policy for $3000. Intestate's administrator, D, sold some household property for $200, and took the $300 in insurance on the piano, and the $3k insurance policy. P sued to recover. Held: Should have bee manualy delivered/no evidence of intent! f. Gruen v. Gruen Giving Painting to son after death i. Facts: P seeks a declaration that he is the rightful owner of a painting which he alleges his father, now deceased, gave to him. He concedes that he never had possession of the painting but asserts that his father made a valid gift of the title in 1963, reserving a life estate for himself. Ps father wrote a series of letters to P stating that he would give him the painting for his birthday but that he wished to retain the possession of it for his lifetime. 1) Ps father retained possession until he died in 1980. D, Ps stepmother has the painting and refuses to turn over to P. ii. 2 Distinct Present Ownership Sticks 1) Title & Possession Common for one person to hold both sticks, but they are two different sticks. 2) Title: Present and Future right 3) Possession: Present and Future right 4) Gruen is about a person wanting to give the stick of Title, but keep the stick of possession. Present and future right to title, future right to Possession 3 sticks total. Court is trying to figure out if this can be done. iii. 2 Distinct Temporal Ownership Sticks 1) Ownership Now & Ownership Later a) Present right to title. b) Future c) Life Estates and Remainders iv. Held: As long as the evidence establishes an intent to make a present and irrevocable transfer of title or the right of ownership, there is a present transfer of some interest and the gift is effective immediately. 1) The Courts standard for Intent: The court is saying you do not actually have to give the physical painting, but you do have to give the title now!

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2) Delivery - Letters constitute a symbolic delivery of the title to the painting. Actual? No, there is not a deed to the painting, and there is not a need to actually deliver the painting and then take back the painting. 3) Acceptance: When a gift is of value to the donee, the law will presume an acceptance on his part. The title has value. III. Chapter 3: Possessory Estates A. History/Overall: right to property now 1. Free Hold Estates: The law traditionally recognized six basic types of estates: three freehold estates (fee simple, life estate, defeasible fee) and three nonfreehold estates (term of years tenancy, periodic tenancy, and tenancy at will). Today we view freehold estates as forms of owning land, while nonfreehold estates are merely forms of leasing land. 2. Why is a system of estates necessary? a. Strong desire to turn the abstract into the tangible title of property is a very abstract idea. b. Need for Consistency/Uniformity we need uniformity so transfers can happen more easily. You need to know what transferring title means so people dont have different ideas. 3. Why did this system come about? a. Rise of Heritability the ability to inherit property b. Rise of Alienability ability to give away or dispose of property. c. Rise of Transferability allows private transactions B. The Possessory Estate: 1. Modern law recognizes only certain types of estates that are equated with ownership, traditionally called free hold estates. If the language of a deed, trust, or will creates a freehold estate it will be deemed to be one of the following: a. Fee simple absolute (fee simple); b. Fee simple determinable; c. Fee simple subject to a condition subsequent; d. Fee simple subject to an executory limitation; e. Life estate absolute (life estate); f. Some form of defeasible life estate; or g. Fee tail (not common anymore). 2. Creations of Estates a. Estates and their accompanying future interests originate in two main sources: Deeds and wills. b. Certainly estates and future interests can arise from trusts, but inevitably either a deed (if an inter vivos trust) or a will (if a testamentary trust) is employed to transfer the property into the trust. c. Similarly, estates and future interests that already exist may be transferred (but not created) through intestate succession (law of the State providing for the inheritance of property from a person who dies without leaving a will). i. Example: O holds a fee simple absolute in Brownacre; he wants to create a present estate in P for the duration of Ps life and a future interest in Q that matures into a present estate when P dies. O could accomplish this goal by executing a deed that immediately conveys Brownacre to P for life, and then to Q and his heirs. Or O might execute a will that (effective upon Os death) devises Brownacre to P for life, and then to Q and his heirs. 3. Classifying Estates: Relevance of classification system it is strict because it has to be uniform. Whether something ends up being fee simple or life estate is a big deal (White v. Brown). 4. Duration of Estates a. The technical distinction between the three basic free hold estates is based on duration. i. Example: A fee simple is potentially infinite while a life estate only lasts for the lifetime of a particular person. b. Each type of estate creates different rights and duties in its holder: i. The fee simple stands alone as the largest bundle of permissible property rights, unencumbered by any future interest. 1. By definition, all other freehold estates are accompanied by a future interest in another

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person, and the rights of the estate owner are accordingly diminished. a. Example: A holds a life estate in Greenacre, someone else must hold the right to possession of Greenacre after As death. As rights over Greenacre are limited by this future interest. For example, A cannot destroy the productive apple orchard on Greenacre b/c this would permanently interfere with future enjoyment of the property and therefore constitute waste. C. Fee Simple 1. Characteristics: a. Roughly corresponds to the laypersons understanding of ownership. b. Rule: An estate in fee simple absolute is the largest estate permitted by law. It invests the holder of the fee with full possessory rights, now and in the future. The holder can sell it, divide it, or devise it; and if she dies intestate, her heirs will inherit it. c. Lasts Rule: The fee simple has an indefinite and potentially infinite duration. i. Ex: If O holds this estate it may endure forever. It does not end if O conveys it to another person; nor does it end if O dies. Rather it endures over time, being transferred in multiple transactions by wills, deeds, or intestate succession to perhaps an infinite number of new owners. ii. The theory that a fee simple might end is more theoretical than real. In theory at least it might be terminated by escheat. Ex. Suppose O dies without leaving a will (in other words intestate) and leaves no legal heirs who are entitled to his property under the rules governing intestate succession. Under these circumstances his fee simple absolute is transferred to the state by operation of law, a process called escheat. iii. In a few states escheat is seen as ending a fee simple. However, in the majority of states the escheat process simply transfers a continuing estate to the state as a new owner. 2. Creation: a. Under the older common law approach, a fee simple estate could be conveyed only if a precise legal formula was used this reflected the laws early preference for life estates. Unless the correct language was used to convey a fee simple it would be considered a life estate. b. Modern American law assumes that an owner normally intends to convey the entire estate rather than a lesser estate. This produces a preference for the fee simple. i. Today the words to A and his heirs still belongs solely to A these words tell that a grantor intended to grant more than a life estate. Example: O holds fee simple absolute in Greenacre, and executes a conveyance to A. Unless O uses language that clearly evidences his intent to create a lesser estate, his conveyance will be construed as transferring fee simple absolute to A. Ex: If O grants Greenacre to A, A receives fee simple absolute. b. Rights and Duties of Estate Owners: a. Rule: Fee simple absolute provides an owner with the maximum quantum of rights recognized under American Law. i. Ex: H, an unmarried man owns fee simple absolute in Greenacre, consisting of ten acres of apple orchards. By definition no one has future interest in the property, and thus H owes no duties to other interest holders. Hs rights are affected by various utilitarian restrictions imposed to benefit society as a whole. b. What are Hs (fee simple holders) basic rights? i. Entitled to the use of Greenacre forever ii. As a fee simple owner, she has the right to do with it as she pleases, including dividing it and selling it as she has done here. Fee simple holders like Meredith typically have the right to exclude others from their property. i. Servitude Exception: However, one exception to the right to exclude occurs when another entity holds a servitude entitling it to utilize the property in some way. iii. Entitled to Sole possession of Greenacre, which generally allows him to exclude all other persons from the land. i. Can include/exclude strangers from his property ii. Exception: A wide range of nonpermissive entries is sanctioned by the law (e.g.,

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police officers may enter in pursuit of a fugitive). a) State v. Shack: Supreme Court extended this principle by holding that employees of publicly-funded health and legal services organizations could enter a farm to meet with workers living there despite protests of employerowner. iv. May transfer rights in Greenacre (sell all/partial, lease, will it) i. H may convey his estate by deed to whoever he wishes; alternatively, H may devise his rights by will to the devisees of his choice. In either case, H can opt to transfer either all or part of his land. a) Example: H could grant a life estate to his sister with a reversion. c. Technical Terms: i. Heirs: If a person dies intestate (without a will) the decedents real property descends to his or her heirs. Heirs are persons who survive the decedent and are designated as intestate successors under the states statute of descent. No one is heir of the living; a living person has no heirs (yet). i. If there is a conveyance to the heirs of A, a living person, we do not know who will take the land yet. ii. Spouse: Today in all states the surviving spouse is designated as an intestate successor of some share of the decedents land; the size of the land often depends on who else survives. a) Example: The surviving spouse may only take if the decedent leaves one child, 1/3 if 2 or more children, and all if decedent leaves no children, no more remote issue, and no parent. iii. Preference for Classes of Kindred: under modern statutes of decedent preference is usually: first issue; if no issue, the parents; and if none then collateral. ii. Issue: Where the decedent leaves issue, but no surviving spouse, the issue takes the entire estate. Issue is synonymous with descendent. i. Ex. O has 5 children before her spouse dies; O then dies intestate, survived by all 5 children. Distribution of Os estate is simple each receives an equal share 1/5 ii. Ex 2: When O dies she is survived by only 4 of her 5 children (ABC and D) and by 2 grandchildren (F and G) who are children of her deceased fifth (E). The share of a predeceased child typically goes to his or her issue, if any, by right of representation. Thus, here A, B, C. and D each receive a 1/5 share of the estate. The share that would have belonged to E is equally divided b/w F and G, each receiving 1/10 interest. iii. If a child is born out of wedlock inherit from mother and if paternity is proven from father. iv. Adopted child inherits form adopted parents and natural parents. iii. Ancestors: By statute the parents usually take as heirs if the decedent leaves no issue. iv. Collaterals: All persons related by blood to the decedent who are neither descendents nor ancestors are collateral kin. This includes brothers, sisters, nephews, nieces, uncles, etcIf no spouse, no issue, and no parents brothers and sisters take after that. v. Escheat: If there are no heirs the property goes to the state where property is located. D. Life Estate 1. Characteristics: Future Interest a. Life estate is a freehold estate whose duration is measured by the lives of one or more specified persons not fixed period of time but cant last longer than the life. b. Substantial difference: duty to life estate holder to NOT WASTE LAND bc someone else has future interest. See law of waste below. c. It can discourage productivity bc someone might not want to put money into land since it could revert back d. Can only alienate what you have e. Thus, a life tenant can transfer his estate to others, with the caveat that, no one being able to transfer

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more than he has to begin with, the third parties right to continue using property end with the original life tenants life. i. Ex: A grant to B for Bs life creates a life estate in B for as long as she lives. B as holder of the life estate is called the life tenant. ii. Ex: The duration of life estate may be measured by the life of a person other than the grantee (To B for the life of C) called pur autre vie. f. The life estate is the smallest of 3 freeholds. g. The life estate is most commonly encountered in the family gift. i. Ex. W owned a farm and wanted to support her aged sister S and to ultimately give to Ws grandchildren W might devise a life estate in the farm to S followed by a remainder in Ws grandchildren. The modern life estate is an equitable estate, usually created to facilitate a family gift in trust. 2. Creation a. There is no traditional usage of words required to create a life estate. Thus to A during her lifetime, to A for the term of her life, and to A for life are all life estates. b. It can be implied by the language of the conveyance: i. Ex: O transfers To B when A dies. A has a present interest, held in a life estate, implied from the words of limitations when A dies. c. Rule of Construction: Ambiguous language in a conveyance by a grantor holding fee simple (e.g., to b) is judicially interpreted as transferring Fee simple Absolute. look at grantors intent. White v. Brown i. White v. Brown a) TN Supreme Ct. construed a will that provided: I wish Evelyn White to have my home to live in and not to be sold. Concluding that this sentence did not clearly state the intent of the testatrix, the court held that it devised a fee simple estate. b) Thus, today the holder of fee simple estate can create a life estate only by using language that clearly reflects this intention (e.g., to B for life or to B for his lifetime). In this case, because she did not say to Evelyn and then to whomever, then it goes to the grantor or grantors estate. d. Steps court takes when faced with an ambiguous will i. Try to discern the intent of the grantor ii. Rules of construction- Tell us in a statutory context, how do we interpret a statute? 1. Presumption against partial intestacy- If some of the things are conveyed in a will, then all of the things are conveyed in the will 2. Presumption against partial devise of real estate- if its unclear whether someone has given a fee simple or something less than a fee simple, it is presumed that the intent was to give a fee simple a) Fee simple is best for productivity and alienability, so it is assumed that intent of the grantor was to uphold this b) If intent is clear, the rules of construction do not apply iii. Alternative rules of construction 1. When you have conveyed something once correctly, and you convey something wrong elsewhere, then it is assumed the wrong conveyance was done purposely 2. Give effect to every word of a conveyance. Dont strike portions of the conveyance, especially when it was marked with importance. iv. Grantor or testator conveys her full interest in the property unless the intent to pass a lesser estate is clearly expressed or necessarily implied by the terms of the deed or will. White v. Brown 3. Accompanying Future Interest a. By def. whenever a life estate is created a future interest also arises. b. Ex. If O, holding a fee simple absolute in Greenacre, conveys to A for life, he has granted A less than the sum of his property rights. Os resulting right to possession of Greenacre upon As is called a reversion. But if O creates a future interest in a third party, it is called a remainder.

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4. Rights and Duties a. Right 1:The life tenant is entitled to the use and enjoyment of the land, including any rents and profit. But, the life tenant cannot commit waste. b. Right 2: Life tenant has restricted right of transfer. A life tenant may transfer(possession of the land for the duration of the life estate) but nothing more. (see below) c. Duty: Law of waste you own some duty to the future interest holders to not waste. Cannot make value of future interest holders go down i. Rules: 1. Triggered whenever two people have sticks with regard to the same property 2. One person cannot use the property in a way that unreasonably interferes with the expectations of other interest holders 3. The law of waste is necessary because the present interest holder has no incentive to preserve the property for future generations since her interest will ultimately be terminated (i.e., she doesnt get to devise it to heirs) and the future interest holder wants the property preserved but has no legal right to the property at present (and therefore cannot stop wasteful behavior) 4. Policy Reasoning: The law of waste seeks to balance the interests of present and future interest holders. The law seeks to allow present interest holders to make productive use of their property while at the same time recognizing the legitimate expectations of the future interest holder 5. Reasoning: Grantors Intent: The law of waste rests on the idea that the grantors intent is to have the future interest holder take the land in approximately the same state as the land was initially given. Therefore, the general rule is that activity in existence at the time of conveyance is allowed to continue, even if it depletes the lands resources; activity not in existence at the time of conveyance that would deplete the lands resources is not permitted 6. Courts seek to determine and follow the grantors intent where possible. 7. Counter Argument: If goes against grantors intent, you can say that there were unforeseen circumstances. Also not allowing harvesting, prevents productive use. ii. If there is a competing interest bw the future interest holder and present interest holder? 1. Court has to determine whose interest wins a) Look at Type of behavior- is it truly waste? b) Look at the nature of the property itself- is it farmland, commercial property? i. If the life estate holder is behaving as a true fee simple holder of similar property then it is less likely to be called waste c) Look at the nature and certainty of the interests i. Likely length of the estate- is the life estate holder 80 or 20 years old? ii. How certain is it that the future interest holder is going to get the property? iii. Example: If T has a life estate in the apple orchard, Greenacres, she is entitled to harvest the apples or not to harvest them, as she chooses; but T cannot chop the trees down, for this would be considered waste. iv. Affirmative/Voluntary Waste: occurs when the life tenant actively changes the propertys use or condition, usually in a way that substantially decreases the propertys value. -- A court will enjoin affirmative waste. v. Permissive Waste: life tenant fails to prevent some kind of harm to the property -- ordinary repairs, the pay interest on debt, to pay taxes. vi. Open Mines Doctrine: Sets out rules applicable to natural resources. A life tenant may mine or remove minerals (and keep profits) if the grantor had opened the mines or began the removing before granting life estate. The presumption is that the grantor intended the life tenant to continue using the property as the grantor had been using. Life tenant cannot

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start mining or removing if none was done before unless consented by future interest holders. vii. Economic Waste: Occurs when the income from the property is insufficient to pay the expenses the life tenant has a duty to pay: ordinary maintenance, real estate taxes, interest on mortgages, and in some jurisdictions insurance. The life tenant can bring action to sell property if economic waste occurs. d. Restraints on Alienation: (see restraint on alienation section below) i. A life tenant may transfer what he or she has possession of the land for the duration of the life estate nothing more. Thus, while a life tenant in theory might lease, mortgage, or even convey his or her interest, the land is bound by these transfers only for so long as life estate endures. ii. The normal life estate cannot be devised or inherited. iii. Hypo: What if T owns a life estate measured by the life of U. If T dies before U Ts life estate continues and may be transferred to others. iv. Exclude you can exclude people with life estate v. Objections to restraints on alienation: 1. Make property unmarketable 2. Tend to perpetuate the concentration of wealth by making it impossible for the owner to sell property and consume the proceeds of sale 3. Discourage improvements on land 4. Prevent the owners creditors from reaching the property, which is a working hardship on creditors who rely on the owners enjoyment of the property in extending credit vi. Classification 1. Disabling restraint withholds from the grantee the power of transferring his interest 2. Forfeiture restraint provides that if the grantee attempts to transfer his interest, it is forfeited to another person 3. Promissory restraint provides that the grantee promises not to transfer his interest a) If valid, is enforceable by the contract remedies of damages or an injunction vii. An absolute restraint on a fee simple is void viii. A partial restraint (limiting conveyance to certain persons or time limit on the restraint) is valid if, under all circumstances of the case, the restraint is found to be reasonable in purpose, effect, and duration. Restatement (Second) of Property ix. An absolute disabling restraint on a life estate is void, but a forfeiture restraint is valid. e. Right to sell: The life tenants right to sell his or her interest is often illusory because its value is uncertain and speculative. i. Rules: A court of equity has the power to order a judicial sale of land affected with a future interest and an investment of the proceeds where this is necessary for the preservation of all interests in the land. Baker v. Weedon 1. When the court orders a sale of land, the proceeds of the sale are held in a judicially created trust. Baker v. Weedon 2. The beneficiaries of the trust are the persons who held interests in the land, and the beneficial interests are of the same character as the legal interests which they formally held in the land. Baker v. Weedon 3. The court has jurisdiction to order the sale of land to prevent waste. Baker v. Weedon 4. The Baker court embraced a new rule: Such a sale would be proper if necessary for the best interest of all the parties. Most states have adopted this rule. So now if it is necessary to preserve the estate or if in interest of all the parties. ii. Ex. Ts life estate in greenacre may be very valuable (If T lives 50 more years; or worthless (If T dies tomorrow).

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iii. What if the life tenant wishes to maximize the value of the interest by forcing sale of the affected land over the objection of the remainder men? iv. Baker v. Weedon (Economic Waste Case) a) Facts: The Appellee, Anna Plaxico Weedon is the life tenant of a piece of property that was once used as a farm, but is no longer farmed for agricultural use due to a highway bypass that runs through the land. The land is appreciating in value due to the development of the surrounding area. The Appellee wishes to sell the property to provide adequate income for the rest of her life, as she can no longer farm the land. The Appellants hold a future interest in the land and do not wish the land to be sold, as it will be worth a great deal more in the future. Weedon not allowed to sell bc not in everyones best interest. P sought a judicial decree that would 1) order the sale of the fee simple absolute over the remaindermens objections and 2) recognize her life estate in the proceeds. b) Prior Miss. Decisions authorized sale only where necessary to preserve the estate. 5. Evaluating Life Estate a. Today the legal life estate has been overtaken by the trust. b. As Baker shows, the legal life estate is relatively inflexible. c. If an owner creates a life estate in trust (equitable life estate), the trustee holds legal title and can accordingly take appropriate steps to protect all parties against changed circumstances. E. Defeasible Estates ends upon an event of defeasance a. Def: A defeasible estate is subject to a special provision that may end the future estate prematurely if a particular future event occurs. b. Types of Defeasible Estates i. Fee simple Determinable; ii. Fee Simple subject to a condition subsequent; and iii. Fee simple subject to an executory limitation. **Two basic distinctions are used in categorizing a defeasible fee: Who holds future interest? Is the defeasance language expressed in words of time or words of condition? c. Presumption: Where the granting language is so ambiguous that the above guidelines are unhelpful, most courts will construe the estate as fee simple subject to a condition subsequent to avoid forfeiture. While the fee simple determinable causes automatic forfeiture when the stated event occurs, the fee simple subject to a condition subsequent presents only the risk of forfeiture. 1. Fee Simple Determinable a. Created using words of time i. During, while, so long as ii. Ex: W owns fee simple absolute in Silveracre and grants to City for so long as Silveracre is used for a park. This conveyance creates a fee simple determinable estate in City. b. Lasts: ends automatically upon the event of defeasance, immediately giving the transferor the legal right to possession. c. Accompanied by a future interest possibility of reverter. d. Mahrenholz v. County: the grant of land to be used for school purposes only; otherwise to revert to Grantors herein was held to create fee simple determinable. The appellate court reasoned that the term only indicated an intent to give the landonly as long as it was needed no longer. 2. Fee Simple Subject to a Condition Subsequent a. A fee simple where the granting words are followed by a limiting condition in favor of the transferor. b. Created using Words of condition i. On the condition, But if, provided, however c. Future interest held by the transferor: right of entry. d. Lasts: does not automatically expire when the triggering condition occurs. Once the condition occurs, the future interest holder has the power to take affirmative action to end the estate. If the holder fails to exercise this option, the estate continues. i. Example: W holds fee simple absolute in Silveracre and grants to City, but if land is not used

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as a park, W may re-enter and retake the premises. If City uses Silveracre as a park for 10 years and then builds a sewage plant, the Citys estate does not automatically end. Instead, W merely has a right to end the Citys estate, which W may or may not choose to enforce. Until W acts the City estate continues. e. Today physical re-entry is no longer necessary in US. In some states, the future interest holder can end the estate simply by giving formal notice to the estate owner; other states require that the future interest holder file an ejectment or quite title action. 3. Fee Simple Subject to an Executory Interest a. A fee simple estate that automatically expires when a stated event occurs (like fee simple determinable), but gives the right to possession to a transferee third party (unlike fee simple determinable). i. Example: O conveys Silveracre to City, but if the land is not used as a park, then to Z and his heirs. ii. Here the future interest owned by Z is an executory interest, which will automatically divest or cut short the Citys estate if the park use ceases, without any affirmative act by Z iii. A conveys To B while she lives in Midtown. If B doesnt live in Midtown at time of conveyance, then A holds FSSEL and B holds executory interest 4. Consequences of the Distinctions: a. Differences b/w FSD and FSSCS: i. Liability for rent 1. Once a fee simple determinable automatically expires, the former estate owner has no legal right to possession and is liable to the new owner for the fair rental value of the land. 2. FSSCS has no rent liability until the future interest holder takes affirmative action to end the estate. ii. Commencement of the statute of limitations period for adverse possession. 1. Once FSD ends, continued possession by the former estate owner starts the adverse possession period. 2. FSSCS period does not start until interest holder takes affirmative steps because the estate continues until then. iii. Applicability of equitable defenses. 1. Sometimes equitable defenses like waiver and estoppel are used to bar future interest holders from terminating FSSCS. 2. Since FSD ends automatically usually inapplicable. b. Difference between FSD and FSSEL i. FSD: When x happens the grantor or estate takes the fee simple immediately ii. FSSEL: When x happens the 3rd party gets the estate immediately c. Mahrenholz Rules: i. The type of interest held governs the mode of reinvestment with title if reinvestment is to occur. Mahrenholz v. County Board of School Trustees ii. If the grantor had a possibility of reverter, he or his heirs become the owner of the property by operation of law as soon as the condition is broken. Mahrenholz v. County Board of School Trustees iii. If he has a right of re-entry for the condition broke, he or his heirs become the owner of the property only after they act to retake the property. Mahrenholz v. County Board of School Trustees iv. Upon a grant of exclusive use followed by an express provision for reverter when that use ceases, courts have agreed that a fee simple determinable, rather than a fee simple subject to a condition subsequent is created. Mahrenholz v. County Board of School Trustees d. Rights and Duties of Estate owners i. The owner of a defeasible estate generally has virtually the same rights and duties as an owner of the parallel absolute estate, except that he or she cannot commit waste.

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ii. Allows grantors to keep their claws in the property they own iii. Use (or not) with restrictions iv. Alienate e. Courts and Defeasible Fees i. American courts have traditionally been hostile toward defeasible estates. Part of this has to do with the concern for free alienation of land. ii. Property held in defeasance is often difficult to sell, lease, mortgage, or transfer. iii. Limits alienability iv. Limits productivity if this land would be better used for a casino then a school, and there is a condition on it for school there is a productivity problem. v. Limits autonomy ex. to A so long as A does not smoke ciggs. These would be personal controls that limits present interest holders autonomy. Courts dont like 2 limit autonomy. vi. Courts Hate Forfeitures defeasible fees are filled with forfeitures. Ex. if someone builds a casino and that ends estate that causes a forfeiture. A forfeiture is when someone is not compensated for their work they just lose it. Losing an interest you had without any compensation whatsoever f. Mechanisms to limit scope of defeasible estates: i. Require precise language to indicate a clear intent to impose a condition on the estate. ii. Rules of construction- if there is any ambiguity whether it is a defeasible fee or a fee simple with a covenant, it will be ruled a fee simple with a covenant iii. Rules limiting duration of defeasible estates. statutes encourage avoidance of using them.

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Possessory Estates Chart

Type

Possessory Interest

How Created

Duration

Absolute Absolute

Fee Simple Life Estate

To A.
1. To A for life 2. To A for Bs life (for someone elses life) (O has kept reversion) 3. To A for life, then to B (A gets life estate, then B takes remainder) 4. To a for life, then to B for life, then to C (A=life estate, B= Remainder in life estate, C=remainder in fee simple

Forever.
Length of a Specified Life. (they gave some sticks use now, title now, possession now)

Defeasible

Fee Simple Determinable

1. Words of time. 2. To A so long as. used for school purposes 3. While, 4. during

Ends automatically upon event of defeasance occurring.

Defeasible

Fee Simple Subject to a Condition Subsequent

1. Words of condition. 2. To A on condition that. 3. but if, provided, however

Until affirmative step by future interest holder after event of defeasance (Nonautomatic.)

Future Interest in Grantor or Grantors Estate None. Reversion future interest. (Sent back to Grantor by law if Grantor is dead, passes along to grantors heirs.) Possibility of Reverter. (There is NO time limit to the possibility of Reverter, unless the deed-holders claim time limit of adverse possession.) Right of Entry. (There is NO time limit to the right of entry.)

Future Interest in 3rd Party Grantee

None. Remainder: FI that grantor give to some third part grantee. (This is written out in will.)

None.

None.

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Defeasible

Fee Simple Subject to a Executory Limitation

1. Gives it to 3rd party 2. To A while then to B 3. To A on condition that then to C 4. A conveys to B while she lives in Midtown 5. Words of time and condition arent relevant bc still going to 3rd party

Ends automatically upon event of defeasance occurring.

None.

Executory Interest.

IV.

Chapter 4 Future Interests


A. Introduction 1. A future interest is a right to receive possession of property at a future time. Future interest gives legally recognized rights to its owners it is a presently existing property interest 2. Remainders (Vested and Contingent) follow life estates; remainders become possessory automatically upon the expiration of the life estate 3. Rule of Construction: Courts interpret ambiguous remainders as vested, not contingent. 4. Future Interest Recognized in our legal System: a. Interest retained by the transferor: i. Reversion ii. Possibility of reverter iii. Right of reentry (power of termination) b. Interest created in transferee/ Remainders: i. Indefeasibly Vested ii. Vested remainder subject to divestment iii. Vested remainder subject to open iv. Contingent remainder v. Executory Interest 5. Classifying future interests after a life estate: a. If the first future interest created is a contingent remainder in fee simple, the second future interest in a transferee will also be a contingent remainder b. If the first future interest created is a vested remainder in fee simple, the second future interest in a transferee will be a divesting executory interest 6. Ex. To A for life, then to B and her heirs a. B has a present legal right he can sell or give away her remainder. She can enjoin A from committing waste. She can sue a third party who are injuring the land or claiming hostilely. b. If B dies during As life Bs remainder will be transmitted to Bs heirs or devisees. B. Future Interests in the Transferor 1. Reversion: Life Estate a. When an owner carves out an estate deemed smaller than the estate he holds, he retains a future interest called a reversion. b. Example: O conveys blackacre, to A for life. As life estate is smaller than Os fee simple absolute because life estate is shorter in duration than fee simple O fails to convey entire estate. i. O does not have to take any action for his interest on As death by law it automatically reverts. ii. O has a reversion in fee simple that is certain to become possessory. iii. At As death either O or Os successor in interest will be entitled to possession. c. Example: O conveys To A for life, then to B and her heirs if B survives A. i. O has a reversion in fee simple that is not certain to become possessory. If B dies before A, O will be entitled to possession at As death. On the other hand, if A dies before B, Os

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reversion is divested on As death and will never become possessory. ii. In these examples O either knows or is uncertain of the reversion they are both still called reversions. 2. Possibility of Reverter Fee Simple Determinable a. When a transferor creates a fee simple determinable, the future interest is called a possibility of reverter. b. Example: O conveys To L for so long as the property is still used as an orphanage, and then to me. i. This is has expressly reserved a possibility of reverter. Like reversion, this occurs by operation of law c. Example: To L so long as the property is still used as an orphanage. i. This is the same as the previous except not expressly stated. ii. In either ex. once L stops using the property as an orphanage it automatically stops ends without any action by O, leaving O with fee simple absolute. Ls occupancy thereafter will trigger statutory period for adverse possession. 3. Right of Re-entry F.S. Subject to Condition a. When a transferor creates a fee simple subject to a condition subsequent, the future interest retained is most commonly called right of entry. b. Example: O transfers blackacre to L but if L fails to use the property as an orphanage, then O may reenter and retake the premises. i. In this ex. she has expressly stated right of reentry. ii. If L changes blackacre into something else Os right of entry is not automatically transformed into fee simple absolute. iii. O must take affirmative action in order to end Ls estate, most commonly by giving L formal notice or bringing a quit title action against L. Until O acts, Ls estate continues. Statute of Limitations does not begin until for adverse possession until O elects to end Ls estate. 4. Transfer of Interest a. Reversion i. Reversion is freely transferable. If O holds a reversion in Blueacre he may convey or devise it if he dies intestate it will go to heirs. b. Possibility of Reverter and Right to Entry i. Common Law: You could not convey a right or re entry or possibility of reverter. ii. Modern Law: Most jurisdictions today allow you to transfer these interests convey, devise, and inherit. C. Future Interests in Transferees 1. Remainders Definition: A future interest created in a transferee that is capable of becoming a possessory estate upon the natural termination of a prior estate created by the same instrument. a. Must be created in transferee Can ONLY follow LIFE ESTATE!! b. Prior estate must be created by same instrument. i. Ex. Deed, trust, will if instrument merely creates a future interest (A if B never smokes) then not remainder. c. Capable of becoming a possessory estate when the prior estate naturally ends. i. Remainder waits patiently for natural termination. ii. It cannot divest or cut short the prior estate. iii. Remainder can only follow life estate. iv. Can be no gap b/w prior estate and when remainder becomes possessory. v. Ex. To B for life, then to C and his heirs. 1) Made in transferee 2) Made by same instrument convey indicates deed and made at same time. 3) C Gets at natural termination. 2. Primary difference between remainders and executory interests i. Way in which they begin (shift from future interests to present interests) a) Remainders- Naturally

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b) Executory- Cut short upon an event of defeasance (vests and the prior estate is divested) 1) Ex. to A so long as it is used for school purposes, if not, then to B (Executory Interest) i. A= FSSEL; B= EI 2) Ex. To A for life, then to B (Remainder) i. A= LE; B=remainder 3. Four Types of Remainders: Indefeasibly vested remainder, vested remainder subject to divestment, vested remainder subject to open, and contingent. a. Indefeasibly Vested Remainder i. The identity of the holder is certain and the remainder is certain to become a possessory estate. Not subject to any condition or limitation. ii. Example: To B for life, then to C and her heirs. a) Cs remainder is certain to someday become a fee simple absolute will become fee simple because there is no condition put on Cs remainder. b) The holder of the interest is a known person. c) With this remainder it does not mind if C dies before it divests it will then go to heirs, o if there are no heirs it will escheat to state. iii. If the future interest holder dies before the life estate terminates, the remainder will escheat to the state when the life estate does terminate (does not revert back to the grantor). b. Vested Remainder Subject to Divestment i. A vested remainder that is subject to a condition subsequent. ii. The identity of the interest holder is certain and the remainder is certain to become possessory estate, unless specified event occurs. If the event occurs, the remainder is extinguished (divested). iii. Example: To B for life, then to C and heirs, but if C ever smokes a cigar during Bs life, then to D. a) C clearly has a type of vested remainder because C is an ascertainable and is not subject to a condition precedent. b) Cs remainder is ready to become possessory immediately when Bs estate ends except it is subject to divestment or termination if ever smokes. iv. Difference b/w condition subsequent and condition Precedent. a) CP Event must occur before the remainder can become possessory. b) Ex. To A for life, and then if B reaches 21, to B and his heirs. 1) Not ready to become possessory until 21. Condition is before conveyance. 2) CS To A for life, and then to B and his heirs, but if B does not reach 21, then to C and his heirs. i. There is a completed gift to B, and then adds on a later, subsequent condition later on. ii. It will become possessory unless b does not turn 21. c. Vested Remainder Subject to Open i. A vested remainder in one or more ascertainable members of a class that may be enlarged by the addition of presently unascertainable persons. ii. The identity of the interest holder is certain and the remainder is certain to become a possessory estate, but the size of the holders share in the estate is uncertain. iii. If more interest holders are identified then the size of the share will decrease. iv. Example: To B for life, then to the children of C and their heirs. a) If at that time C has only one living child, D, then D is immediately ascertainable and her interest is not subject to a condition precedent. Ds interest cannot be entirely diminished because it is not subject to a condition. b) However, the size of the interest may shrink if C has anymore kids. As long as C is alive the class is still open. d. Contingent Remainder

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Hallmark of contingent remainder is an element of uncertainty or chance. A remainder is contingent if it is either: a) Subject to a condition precedent (other than natural termination of the prior estate), or b) Created in an unascertainable person. iii. Either way it is not ready to become possessory when the prior estate terminates. iv. Does not become unless and until the condition precedent is met or the holder is identified. v. Example until event occurs: O devises Greenacre to A for life, and then to B and his heirs if B reaches age of 21. a) B is ascertainable, but if B is now 10 his remainder is subject to a condition precedent. b) B must reach age of 21 before his remainder is eligible to become possessory upon As death. c) This may not occur. If B dies before 21 his remainder ends. vi. Example Unascertainable person: To A for life, and then to Bs heirs. a) It is impossible to determine who Bs heirs are until B dies. A living person has no heirs. e. Example of Remainders: i. O conveys Blackacre to A for life, then to B for life, then to C and his heirs. a) B holds an indefeasibly vested remainder for life. b) C holds an indefeasibly vested remainder in fee simple absolute. c) Both are remainders because both are able to become possessory in natural way not cutting short. d) Both indefeasibly vested because 1) holder of each is known; and 2) neither is subject to any limitations or conditions. ii. O devises Greenacre to A for life, and if B survives A, then to B and his heirs. a) B holds a contingent remainder in fee simple absolute. b) Bs interest is capable of becoming possessory when As life ends, and hence a remainder. c) But Bs is subject to a condition precedent; B must survive A before become possessory therefore contingent. iii. O conveys Greenacre to A for life, then to B and his heirs, but if B does not survive A, then to C and her heirs. a) B holds a vested remainder subject to divestment in fee simple absolute. b) Bs remainder is vested because B is identifiable, and no condition precedent must be met for remainder to take effect, other than the natural expiration of As life estate. c) But if a future event occurs (B dies before A), then Bs remainder will be destroyed or divested. d) Cs interest is an executory interest in fee simple absolute. iv. O devises to A for life, then to the children of B who survive A and their heirs. a) Assuming A is alive, the class of the children of B who survive A have a contingent remainder in fee simple absolute. b) It is contingent because 1) the holders are presently unascertainable and 2) the interest of each holder is subject to a condition precedent (surviving A). v. O conveys to A for life, then to As children and their heirs. a) If A has a living child at the time, B, the B holds a vested remainder subject to open in fee simple absolute. b) The remainder is vested because B is identifiable and there is no condition precedent. c) However, assuming A is still alive, the additional children of A might be born and expand the class subject to open. vi. Transformation into Other future interests a) Events may transfer a remainder into other types of remainders or executory interests. b) Ex. O to A for life, and then to L and his heirs if L reaches 21.

i. ii.

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vii.

1) Assuming L was 10 when became effective, he held a contingent remainder because his interest was subject to a condition precedent. 2) If A is still alive when he is 21, it will become a Indefeasibly vested remainder. a) Ex.: To A for life, then to the children of B. a. Bs children while B is alive will have a vested remainder subject to open, but if B dies while A is still alive it will become indefeasible vested remainder. The main significance b/w vested and contingent the rule against perpetuities applies to the contingent and not vested.

D. Executory Interests a. A future interest created in a transferee that must cut short or divest another estate or interest in order to become a possessory estate. b. A future interest created in a transferee other than a remainder. c. May Divest an estate, almost always fee simple or life estate: d. Example: O conveys to B and his heirs, but if C returns from France, then to C and her heirs. i. Bs defeasible fee simple estate has no natural termination point; it may potentially endure forever. ii. In order to become a possessory estate, C must cut short Bs estate. e. Future interest following a determinable estate is executory interest: i. Example: O conveys black acre to B and his heirs for so long as C remains in France, and then to C and his Heirs. ii. Cs interest is considered an executory interest even though it seems to follow what mi ght be deemed a natural chain of events. f. Executory interest might divest a vested future interest: i. Example: O conveys Blackacre, to A for life, then to B and his heirs, but if C returns from France, then to C and her heirs. ii. B receives a vested remainder subject to divestment in fee simple absolute. iii. In order for Cs interest to become possessory it must divest Bs remainder therefore executory. iv. General Rule: if one instrument creates a vested remainder in fee simple in one transferee that is followed by a second future interest in another transferee, the second interest is an executory interest. g. Types of Executory Interests: depends on the identity of the person whose estate or interest is divided i. Shifting Executory Interest: One that divests another transferee. 1. Example: O conveys Blackacre to B and his heirs, but if C returns from France, to C and her heirs. 2. C holds a shifting executory interest because it would cut short the fee simple estate held bu B, another transferee. ii. Springing Executory Interest: One that divests the transferor. 1. Example: O conveys to C and her heirs, if C returns from France. 2. To become possessory Cs interest must cut short the estate held by O, the transferor. h. Examples of Executory Interests: i. O conveys Greenacre to A and her heirs upon birth of As first child. 1. A holds a springing executory interest in fee simple absolute. 2. A will automatically become possessory estate which will divest Os prior estate. ii. O devises to A and her heirs, but if A becomes an attorney, then to B for life. 1. B holds a shifting executory interest for life, that is, in a life estate. 2. Bs interest becomes possessory only if an event occurs that cuts shorts As defeasible fee simple. 3. Note: O retains a reversion following Bs life estate. iii. O conveys Greenacre to A for life, then to B and his heirs, but if C gets married, then to C and her heirs.

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1. C holds a shifting executory interest in fee simple. 2. Cs interest becomes a possessory estate only if an event occurs that divests or cuts short Bs interest. iv. O devises Greenacre to A for life, then five years after her death, to B and his heirs. 1. B has a springing executory interest in fee simple absolute. i. Creation of Interests i. Future interests may arise by implication in a transferor, but not in a transferee. ii. If O conveys to a for life. There is an implied reversion future interest in transferor. 1. But, if O wants to convey an interest to a 3rd (transferee) party it must be expressly stated. iii. Remainders and executory interests cannot arise by implication. iv. The proper place for remainders and executory interests are in a will or deed these future interests cannot be created through a process of intestate succession; rather they arise only from voluntary decision of owner. v. Transferability: Remainders and executory interests may be freely transferred by devise, descent, or conveyance; and inter vivos in most states. j. Restraints on Alienation i. Courts rule that any restraint on alienation is void. 1. Restraints on Alienation will never be enforced. 2. General Rule: American courts uniformly hold that any total or absolute restraints on alienation of a fee simple estate (whether absolute or defeasible) is null and void regardless of the form of the restraint. 3. Modern American view is that forfeiture and promissory restraints are allowed but that disabling restraints are void. 4. HYPO: To A so long as farm is not sold. This will not be enforced by court. 5. Negative because society and grantee loses, only winner is the grantor because he is able to control. 6. The Law chooses to favor the Grantee ii. Rules Regarding Alienation 1. Absolute restraints on alienation are void. 2. Restraints termed in language of defeasance are void and the language struck (195-196). a) Forfeiture restraints: if O devises Greenacre to B, but if B ever attempts to transfer Greenacre, then to C Void b) Disabling restraints: To B, however, any transfer of land shall be void. c) Promissory restraint: A promise by the grantee not to transfer the property is generally held unenforceable. To B who promises not to sell land. d) More ambiguous restraints each case diff. To A, who will never sell the land outside the family; To A, who shall not sell the land for 10 years. e) What will court look at? How limited is the field of buyer? How long is restraint for? What is the purpose of the restraint? iii. Importance of Free Alienation 1. preventing the maximum utilization of land. 2. It protects the good faith expectations of creditors by allowing them to execute on property in order to satisfy unpaid debts 3. It prevents the undue concentration of wealth that particularly in young US was seen as a potential risk to democratic values. iv. Restraints on fee Simple 1. Example: O devises Greenacre to B, but if B ever attempts to transfer Grenacre, then to C, courts will find the restraint void Thus B owns fee simple and C receives no interest. 2. Example: O conveys to A on condition that the property not be sold so long as the Grizz is located in Memphis. If A attempts to sell, then to B. 3. Restatement 2nd of property however takes a broader view suggests that a partial restraint that is reasonable given its purpose, nature and duration should be upheld. v. Restraints on Life Estate: less concerned bc its limited duration already impairs marketability.

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Modern Rule is that forfeiture and promissory restraints on life estate are valid, butsomewhat illogicallythat disabling restraints are void. When does it Can it be forfeited? become a If so, When? Possessory Estate? No. Indefeasibly Ascertainable Automatically Vested Person(s) at the upon expiration of the prior estate. Remainder time of conveyance Vested Remainder Subject to Divestment Vested Remainder Subject to Open Ascertainable Person(s) at the time of conveyance Automatically upon expiration of the prior estate so long as defeasance has not occurred. Yes. At any point upon the occurrence of a condition subsequent. Future Interest Who Holds It? Example

To A for life, then to B.

An unclosed Automatically upon expiration of class of person(s) at the the prior estate. time of conveyance Automatically May be ascertainable or upon conclusion of prior estate ONLY not IF contingency has occurred. -focuses on condition precedent Ascertainable Person Automatically upon event of defeasance. (divests prior estate.)

Contingent Remainder

Executory Interest follows defeasible

To A for life, then to B, but if B smokes a cigar during As life, then to C. Unless No. To A for life, then to But it can be shrunk if Bs children (B has 2 the class of persons children, C and D.) grows. (Or it can be enlarged if the class or persons shrinks.) No. 1) To A for life, then Once contingency to Bs oldest living occurs, it becomes an child at the time of indefeasibly vested As death. remainder. 2) To A for life, then to B if B reaches the age of 21. 3.) if the Yankees win No. 1) To A, but if B Once event of returns from France, defeasance occurs, it then to B. becomes a possessory (Shifting). estate. 2) To A so long as A -may never become returns from France. possessory (Springing.)

E. The Rule Against Perpetuities a. The rule furthers marketability by destroying contingent future interests: i. It is a rule against alienability ii. Destroys future interests by a violation of the RAP never valid, void from outset. iii. The idea is that such future interest makes it very difficult to sell land. Courts want these future interests out to make the land more marketable. b. Common Law Rule: No interest is good unless it must vest, at all, no later than 21 years after some life in being at the creation of the interest. actual rule. i. Must vest

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ii. Within 21 years iii. Life in being at the time of conveyance iv. Must vest or not vest within 21 years of a Life in being at the time of conveyance. c. Application of Rule/Process i. Step 1: Identify the Future Interest 1. Contingent remainder 2. Contingent Executory interests 3. Vested remainders subject to open a) For a class gift, every member of the class must satisfy the gift for it to be good. 4. Not subject to RAP: a) Reversions, possibility of reverter, or right of entry b) Indefeasibly vested remainders, vested remainders subject to defeasance. c) Rule also does not apply to charitable gifts ii. Decide when the perpetuities period begin 1. One life plus 21 years period begins when the instrument that creates the interest becomes legally effective. Only a person living can be used as a life. iii. What must happen for the interest to vest or forever fail to vest? 1. The interests of all class members must comply with the rule in order for the interest of any class member to be valid. 2. Cannot vest until the class is closed and then it will be vested. iv. Step 2: Identify potential validating lives 1. Must be alive at the time of conveyance 2. Almost always, they have something to do with the vesting or non vesting of future interest. 3. It could be the Grantor of the Future interest, Holder of the FI, any person that could affect a future precedent. v. Step 3: Do the Hypos: 1. If you can find one validating life where the vesting must occur within 21 years, then the future interest is valid. 2. If you cannot find a validating life where it must vest, then FI is void. 3. It is a rule of possibility not probability. 4. The question is not whether it is going to vest at all, the question is whether we are sure whether it will or will not vest Are we going to know whether it is going to vest. 5. If there is any possibility that it will not vest within the 21 year then it is invalid. Must vest within that period. d. Examples: i. O devises Blackacre to A 21 years after my death. 1. This is valid under the rule because we are sure whether this will be vested or not 21 years after his death. ii. O conveys to A for life, then to the first child of A to reach age 30 and the heirs of that child. 1. If A is alive and has no living children 30 or older at the time of conveyance, is invalid under the common law Rule at the very minute it takes place. 2. A court will construe it as if O devised Blueacre to A for life, which leaves O= reversion. iii. A conveys to land to B for life, then to Bs children who reach the age of 25. 1. Rap violation. A=reversion, B=life estates e. Reforming the Rule: i. Why reform? it is harsh because it is clear that the grantor intended to do something, but under the rule, where the rule is violated, it often frustrates the intent of the grantor. ii. We are always balancing the intent of the grantor with the autonomy of grantee. iii. Types of Reform 1. Wait-and-see rather than saying at time of conveyance that that might happen, we wait until 21 years until after the life in being and see if we know if it is vested or not, and if it

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is an open question it is invalid. a) Gives benefit because it does not look at what might happen but what did happen. b) Least common of 3. 2. Judicial Reformation Power this allows the judges to change/adjust the conveyance if it violates the rule of perpetuities so that it does not violate the rule against perpetuities so we maintain the intent of the grantor. a) If wait to kids reach 25, change to 21. 3. Uniform Statutory Rule Against Perpetuities (What we have in TN) developed b/c the problem with wait and see is that you would have to wait for the 21 years there is a lot of tracking people involved very cumbersome and impractical. In its place we developed this rule. a) It is a flat 90 years from moment of conveyance. When you make a conveyance that might violate, in 90 years you look and see where it stands. b) It is a wait and see plus if you wait the 90 years and it is invalid, the court has ability to reform at that time. F. Trust a. Probably most likely to deal with in practice as compared to Possessory estates. b. Basic premise the seperation of legal from equitable title. i. Legal title is basically what we have talked about so far who is title in name of? ii. Equitable title who has the right to the benefit of the property. c. The trust involves a special fiduciary relationship in which one or more persons (the trustees) manages the property on behalf of others (the beneficiaries). The trustee holds legal title to the trust property, while the beneficiaries hold beneficial or equitable title. The trustee is obligated to manage the trust property in the best interest of the beneficiaries. Most of time property consists of income producing assets (land, stocks, bonds). The beneficiaries are totally passive. They have no right to manage or control property, and are merely receive income or principle payments from trustee. d. Example: Baker v. Weedon i. Grantors intent? Take care of Anna. ii. Grantors intent served? Intent was frustrated. Anna was stuck with land, which she could not sell. She had both legal and equitable life estate. iii. Trust As Alternative: Grantor could have devised his land to his wife Anna as trustee in trust for Anna for life, then to Annas children, if Anna has no children then to grantors children. iv. Trustee=legal title. v. Beneficiaries=equitable title Anna, grandkids, etc vi. Anna=equitable title (life estate) vii. Grandkids (equitable title contingent remainder). e. Trustee As Fiduciary i. Trustees job is to manage trust for beneficiaries fiduciary duty. ii. Stock-Broker stocks if you can claim that the business judgment was within some reasonable standard of business this will be seen as the business person is not personally liable. iii. Fiduciary Duty Stringent requirement as to what the trustee can do with the land and who can benefit from the trust. Legally enforceable so that the trustee can be sued by the beneficiaries for violation of the fiduciary duty. Potential personal liability. 1. If fiduciary screws it up he can be liable. If it is not in best interest of beneficiaries. 2. If they make a bad investment, you look at whether it was a reasonable investment at the time of investment if it was the trustee would be ok, but if it was not reasonable, they would be liable 3. Duty of Loyalty Fiduciary cannot do something to benefit himself at the expense of the beneficiaries. 4. Effect of the Sale of the Trust Corpus: The issue of the beneficiaries wishes for selling the land is no longer valid, rather, the trustees assurance that a sell of the land is in the beneficiaries best interest. f. When does a trust end?

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Terminates when grantor says it terminates. Under common law, the trust stops 21 years after the death of all validating lives. Subject to RAP. iii. Statue write statutes that allow trusts to go on for a set amount of years or forever (perpetual trusts). g. Trusts and the RAP i. Estate Tax ii. Perpetual trusts a trust that endures so long as there is a trustee who holds a power of sale of the trust assets; because any trustee who dies can be replaced by a successor trustee, such a trust might last forever. Perpetual Trusts are useful for promoting alienability and efficiency but also increases inequality. The trusts allow the grantor to keep money in the family and for the most part, evade taxes. (not subject to Rule of Perp.: what?... rich people are getting away with monopolies. h. Trust and Alienation i. Almost all trust documents give the right to alienate to the trustee ii. There is no restraint on alienation i. Testamentary Trust: i. Created as part of a will, and takes effect only after the death of the settlor. A well drafted trust ecifies in detail the duties and powers of the trustee and the rights of the various beneficiaries. ii. Benefits: 1. Flexibility to implement the settlors intent a) The trustee is empowered to sell, mortgage, lease, or otherwise dispose of the property in a manner that best carries out the intention of the settlor. If held life estate, you cannot force a sale of fee simple absolute over the objections of the remainderman. 2. Professional Management a) The life estate holder or children might not have the knowledge, skill, and diligence that is required to successfully operate a business on the land. By vesting the management responsibility to a qualified trustee, you can be assured that it will operate to the best of its ability. 3. Easy to remain true to the intent of the grantor 4. Helps guard against spendthrift beneficiaries who may squander a conveyance 5. Doctrine of Restraint on Alienation (avoids rules against perpetuities) a) Does not apply to equitable interests 6. Financial (estate tax benefits) a) A well-drafted trust may lower the beneficiaries income tax liability and also reduce the estate tax burden upon the beneficiaries deaths. j. Inter Vivos or Living Trust i. Created by: settlor must (1) declare himself to be trustee of property for a particular beneficiary or (2) transfer property in trust to a third person as trustee for the beneficiary ii. Trust is revocable or irrevocable iii. Benefits 1. Allows the settlor to exercise control over assets during his or her lifetime 2. Avoids the delay and cost of estate administration(unlike the will) Chapter 5: Co-Ownership and Marital Interest I. Concurrent Interests 1. Concurrent estates and Intro a. Simultaneous Holding of a Stick i. All tenants have full access and ability to enjoy the whole. b. Goals of Concurrent Estate Jurisprudence i. Efficiency, Use The right of full enjoyment of the whole. ii. Fairness, Equity

i. ii.

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II.

Types of Concurrent Interests (non-marital) A. 3 Types 1. Tenancy in Common a. Characteristics: i. The simplest concurrent estate and most frequently encountered. ii. Each co-owner of this estate holds an undivided, fractional share in the entire parcel of land; and each is entitled to simultaneous possession and enjoyment of the whole parcel. iii. Tenants in common do not have right of survivorship, unlike joint tenants or tenants by the entirety. a) Upon death of B, his share will go to his heirs not the other tenant in common. iv. No matter there percentages, they have right of enjoyment of the whole land. v. Adverse Possession General Rule: Generally, cotenants cannot adversely possess against one another because one of the key characteristics of a tenancy in common is that all cotenants share a right to full enjoyment of the whole of the property regardless of the size of their stake. As a result, the requisite hostility for adverse possession is lacking since the cotenant has a right to be on the property, they cannot be said to be behaving adversely. a) However, there is an exception. Cotenants can adversely possess against other cotenants where there has been an ouster and the adversely possessing cotenant is behaving as though there is no cotenancy. Thus, the first issue is whether there has been an ouster in this situation. b) See Ouster below. Have to have ouster first to start adverse possession clock!! vi. They can be tenants in common even if the acquired their interests different times and by different instruments, and even though the fractional size of their shares is different. a) Ex. A and B are tenants in common in fee simple absolute in a 100 acre farm. A holds a 75% undivided interest and B holds the remaining 25% interest. B is entitled to possession of all 100 acres, as is A. The law views B as owning an undivided share of the entire 100 acres. b. Creation i. Today any conveyance or devise to two or more unmarried persons (e.g., To A and B) is presumed to be a tenancy in common, absent clear language expressing intent to create a joint tenancy. ii. Involuntary Creations a) Intestate Succession suppose D, holding fee simple in Blueacre, dies intestate and leaves three children E,F, and G as her only surviving relatives. These kids will own 1/3 interest in common. b) Also, a tenancy in common will arise when 1) severance ends joint tenancy, or 2) Divorce ends tenancy by the entirety. c. Transferability/Management i. A tenant in common has the right to transfer, sell, or otherwise transfer all part of his interest without consent of the other co-tenants; and such transfer does not end the tenancy in common. ii. Relatively free alienability. iii. Policy: Not encouraging killing in order to inherit the oldest survivor as in Joint Tenancy. iv. Answer to Question a) Rule: In T in Common, either cotenant has full management abilities an can manage the property without the other cotenants approval. i. Facts of Case: Is the conveyance explicity stated that T in common? If not, presumed to be T in common. ii. Application: One tenant has ability to bind both spouses(tenants) by giving approval to third party to assign lease, b) Counter Rule: Where a party knows that it is bargaining with only one cotenant against the approval of the other cotenants, that party is only bargaining for the portion of the property owned by parties with whom he is bargaining. Swartzburgh Case

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was about joint tenants i. Facts: Did lease tenant receive approval from both cotenants or just one. Does lease tenant know that one cotenant does not approve? ii. Application: Unless H can prove that leasee knows that H does not approve of the assignment from T, then the lease is for both portions of the property. BUT IF H does prove that R knows that H does not approve, then R's rent payments will be held to represent a payment only for W's portion of the property. iii. Policy Reasoning: Stability and predictability. Law wants to protect parties, like R, who enter transactions where there is implied consent among cotenants. Unless there is actual knowledge of lack of consent, expectations of R that he is leasing the full property should be protected. d. Rights of Creditors to T in Common Yes i. Rule: Creditors may reach any assets that a debtor can voluntarily assign. (Sawada ) a) Facts of Case: H and W hold the property in tenancy in common. In a tenancy in common, each cotenant's portion is freely devisable, alienable, and conveyable. b) Rule Apply to Facts: Because W's portion of the tenancy in common can be voluntarily assigned, W's creditors can reach her portion of the property. Note that this means the creditors may become tenants in common with H and have no ability to attach his portion of the property. ii. Counter Argument: Policy goal, recognized in Sawada , is to protect the family unit generally, and the family domicile in particular. Because this property is ultimately to be part of the family domicile to be used by C, the court should not allow W's creditors to reach it. a) This piece of property is not the family domicile and is easily distinguishable from Sawada . In addition and in further distinction from Sawada , this is held in tenancy in common rather than tenancy by the entirety. iii. Reasoning Rule: Creditors' right to collect on a debt should extend to all investments of the debtor and should not be frustrated simply because debtor is a cotenant. 2. Joint Tenancy a. Characteristics i. Regarded as a single owner each owns undivided whole 50% and 50% a) Like Siamese twins ii. Each joint tenant has a right of survivorship. a) If B and D are joint tenants in fee simple absolute, each has equal undivided right to simultaneous possession and use of land but if one dies, the other gets right to sole ownership of land. iii. Idea behind this is that each owned the entire estate, since the surviving tenant already owned entire estate, the others death was not seen as creating a new right in survivor rather death merely removed the interest. iv. If B and D die simultaneously, they treat it as a tenancy in common B and D are seen to have owned and the interest goes to heirs. v. Upon the last surviving joint tenants death interest goes to their heirs. b. Creation i. Four unities are essential: a) Time: Joint tenants had to acquire the title at the same time. b) Title: Had to acquire title by the same deed or will, or by joint adverse possession. c) Interest: Had to be identical meaning each joint tenant owned the same fractional interest in the same estate. d) Possession: Each joint tenant had to have equal right of possession of the entire parcel. ii. Example: O conveys undivided share in Greenacre as a joint tenant to E on Monday, and then conveys similar interest to F on Tuesday, E and F are not joint tenants because the unities of time and title are missing. Instead they are tenants in common.

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In common law it everything was presumed to be joint tenancy unless indicated otherwise in modern law everything is considered to be tenants in common unless otherwise indicated. iv. Language: a) Usually language like to E and F as joint tenants, or to E and F as joint tenants with right of survivorship.; Phrases like To E and F jointly might not suffice. c. Transferability i. Virtually inalienable as opposed to tenancy in common. ii. Due to right of survivorship, a joint tenants interest ends on death, so interest cannot be devised or descend by intestate succession. iii. Any inter vivos conveyance of joint tenancy interest will break the unities of time and title, severing the joint tenancy; thus, grantee receives merely a tenancy in common interest. iv. Harder to convey a joint tenancy. v. Example: If three joint tenants exist, and C sells his joint tenancy to D; A and B still have their joint tenancy, and D not owns a tenancy in common and will still enjoy the while of the property. d. Survivorship is the big difference B/w tenancy in common and Joint i. Tenancy in common=default. e. Rent Rule for Joint Tenant Lease - In a joint tenancy, the lessee is not liable to anyone but his lessor for the rent, unless the other co-tenants attempt to enter and he forbids their entry, or unless, being in possession with them, he ousts or excludes some or all of them. f. Reaching Creditors in JT: Yes, if the property can be voluntarily assigned by the debtor, then the creditor can reach it. i. In a joint tenancy, one tenant can voluntarily assign his portion. Therefore, the creditors would be able to levy and execute upon the separate interests in property. c. Tenancy by the Entirety (look below) i. Created only in husband and wife. ii. Husband and wife holding hands holding the stick of possession g. Same unities as joint tenancy plus a fifth: i. Unity of Marriage ii. Surviving tenant has the right of survivorship iii. Divorce terminates the tenancy by the entirety because it terminates the marriage. Parties usually becomes tenants in common. B. Partition of Concurrent Interests 1. A tenancy in common or joint tenancy may sue for judicial partition, which ends the co tenancy, distributes the property among the former cotenants as solely owned property, and provides a final accounting of them. 2. A partition ends joint tenancy and depends on partition sale or kind as to what they get. Right of survivorship ENDS. 3. Absent an agreement, each cotenant has a right to obtain a partition without proving any cause or reason. ii. Policy: a) Free partition is central to the efficient use of land b) If cotenants are stalemated by mutual disagreement about the future of their common property, the land may not be developed for its most productive use. 4. In a lease: a. Rule: A cotenant seeking to end co-tenancy may seek judicial partition and divide the concurrent estate into multiple estates held individually, thus giving up full enjoyment of the whole. b. It is unclear whether a partition - either by sale or in kind - would affect the terms of R's lease. Once the lease term concluded, the partition would take effect with H and W holding fee simple to 50% of the property (or splitting the proceeds from a sale). c. Contract damages of breaching lease have to let lease stay there for term of lease. 5. Two Kinds of Partition: a. Partition by kind: i. Partition in kind is where the court divides property that is held in cotenancy among the cotenants, giving fee simple in the property to each cotenant in portions representing their iii.

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respective shares. ii. Rule: Since the property in this case may practicably be physically divided, and since the interests of all the owners will better be promoted if a partition in kind is ordered. Delfino v. Velencis T in Common 1. Preferred technique physical division of the property into separate parcels. 2. Example: If E, F, and G all own equal shares as tenants in common in Redacre, a 300 acre unimproved farm tract, a partition in kind would probably assign each one sole ownership of a parcel. 3. While this might not be completely fair due to issues like where the property is located, or running water courts can assign owelty which orders a money payment from other tenants. 4. Owelty: The difference, which is paid or secured by one coparcener to another, for the purpose of equalizing the partition. b. Partition by Sale: i. Partition by sale is where the court sells the property held in cotenancy and divides the proceeds among the cotenants according to their respective shares. ii. If physical division of land is impossible, impracticable, or inequitable, a court may order partition by sale. Delfino v. Velencis iii. Example: It is usually impracticable to divide a single-family dwelling. iv. Under this technique, the property is sold, and sale proceeds are divided among the cotenants according to their respective shares. 6. The general default rule is partition in kind. a. Burden is on the persons who want to sell. b. Partition by kind or Partition by Sale??? i. Is it impractical or inequitable? 1. Here, the property appears to be capable of partition in kind. Lisa has already drawn up plans to build an additional house on the property. In addition, there are only two cotenants, so the practicality of splitting the property is somewhat simple. ii. Would the interests of the owners be better promoted by a partition of sale? 1. Finally, it seems that both Bart and Lisa would prefer a partition in kind. Bart is already living on the property. Lisa seems to want to be in a new house on the property, in part to be near to her beau, Millhouse. 2. In this context, ct will likely do partition in kind. 7. Delfino v. Vealencis ( and are tenants in common of 20.5 acres of land in CT. occupies the dwelling and a portion of the land and operates a rubbish and garbage removal business. propose to develop the property, upon partition, into 45 residential building lots. brought action at trial court seeking partition by sale. Issue: Whether a partition by kind would promote the best interests of the parties. Held: Since the property in this case may practicably be physically divided, and since the interests of all the owners will better be promoted if a partition in kind is ordered, we conclude that the trial court erred in ordering a partition by sale). a. What about Rocking Chair example? As we learned in Delfino, the court will not order a partition in kind if it is unreasonable, but in this case partition in kind may be appropriate by dividing time instead of property lines. The court forced the parties to come to an agreement by dividing time in a way that required each owner to take the chair to the other for his allotted amount of time. The court got creative in order to satisfy both parties wishes. 8. Rights and Responsibilities of Co-tenants a. Right to Possession: if get ousted, pay rent or adverse possession starts. i. In theory each cotenant has an equal right to possession and enjoyment on the whole property, regardless of the size of his or her fractional share. ii. Rent Rule: Under the majority rule, even a cotenant in exclusive possession of the property is not liable to the other cotenant for rent. iii. General Rule: In the absence of an agreement to pay rent or ouster of a cotenant, a cotenant in possession is not liable to his cotenants for the value of his use and occupation of the property.

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iii.

Spiller v. Mackreth 1. Rationale: This is because each cotenant has the right to full enjoyment of the whole. The idea of receiving rent for the use of property that you also have the right to use is inconsistent with the concept that rent should only be received when you have given away one of your sticks. Is there an agreement here? a. There is no basis for Lisa's claim for rent for 2005 and 2006 in most jurisdictions. Unless the jurisdiction has a rule that claims that simply exclusive possession of one cotenant constitutes ouster (a minority rule), then more is required to constitute ouster. b. If Springfield is in a jurisdiction that allows for ouster upon refusal of a rent request, then Lisa will be entitled to rent from 1/1/07 through the date of suit. However, as noted in Question A, if Lisa is successful in claiming that rent is due from 1/1/07, then she may have inadvertently ensured that Bart's adverse possession claim succeeds. This would not be a favorable result for Lisa. Her lawyer must consider this situation in planning a strategy. c. Because of the relationship between ouster and adverse possession, Lisa should argue most forcefully that the true ouster occurred on 1/1/08 when Bart refused Lisa's request to build an additional house on the property. Thus, she would be due rent from 1/1/08 through 1/2/12 and not be in danger of losing her property through adverse possession. d. The question of ouster is a question of fact. It is not clear from the facts given the extent of Bart's refusal and the conversation among Lisa and Bart about the additional house. The clearer it is that Bart was asserting his right to exclusive possession and denying the presence of a cotenancy, the more likely it is that what occurred would be considered an ouster. 2. Ex. If A, B, and C are all tenants in common in Blue Acre, and A holds sole possession of the land, in most jurisdictions A is not required to pay rent or other compensation to B or C. Exception to the rule that no cotenant had to pay rent: OUSTER a) Ouster: Occurs when a cotenant in possession refuses the request of another cotenant the right to fully enjoy the property. Action that constitutes and ouster varies by jurisdiction. (see actual and constructive ouster below) b) An ouster describes either 1) the beginning of the running of the statute of limitations for adverse possession, and 2) the liability of an occupying cotenant for rent to other cotenants i. Rule: Ouster triggers an obligation to pay rent for utilizing the sticks of other cotenants and also begins the adverse possession clock. c) Rule: Ouster occurs when one cotenant prohibits another cotenant from enjoying his or her right to full enjoyment of the concurrently held property. The ousting cotenant typically behaves as a F.S. owner, even exercising the right to exclude other cotenants. Usually needs explicit, affirmative ouster for cotenants in A.P. d) Ouster may be affirmative or constructive, though most jurisdictions require an affirmative ouster to begin the adverse possession clock. i. Affirmative ouster occurs when a cotenant explicitly prohibits another cotenant from enjoying concurrently held property. (Majority/ Othen) ii. Constructive ouster occurs when a cotenants use of the property is such that other cotenants are not practically able to enjoy concurrently held property. (ex: boxes everywhere in storage room) e) Argument for Ouster: i. When changed locks/put up fence and didnt give key to other co-tenant. Reasoning bc: excluding him from property and cant enjoy ii. Or ouster occurred when person tried to use land/turned key and showed up with his stuff and was prohibited. Or sent letter

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iv.

v.

vi.

f) Argument against Ouster: i. General Rule: In the absence of an agreement to pay rent or ouster of a cotenant, a cotenant in possession is not liable to his cotenants for the value of his use and occupation of the property. Spiller v. Mackreth ii. Spiller Case: sending letter not enough to be ousted and try and collect rent or trigger adverse possession clock iii. Never returned letter so wasnt affirmative ouster iv. Bc majority approach is to explicitly prohibit someone and the other person has to explicitly try to enter property then no ouster. g) Example: i. A holds sole possession of Blueacre; B appears at the front gate to Blueacre and demands that A unlock the gate to allow him to enter and use the land; if A rejects this demanded, he has ousted B. 1. As an ousted cotenant, B is entitled to recover his pro rata share of Blueacres fair rental value from A. 2. However, if B simply demands A pay him rent no ouster has occurred because B has failed to demand shared possession. Spiller v. Mackereth ( and own downtown Tuscaloosa building as tenants in common. Upon lessee, Auto-Rite, vacating the building, entered the building and began using as a warehouse. wrote letter to requesting that either vacate half of the building or pay half of the rental value. When did neither, brought suit. Held: Taking the majority ruling approach, evidence does not support that an ouster occurred because upon occupying the building never denied to enter the building.) a) General Rule: Is cotenant liable for rent? i. General Rule: In the absence of an agreement to pay rent or ouster of a cotenant, a cotenant in possession is not liable to his cotenants for the value of his use and occupation of the property. b) Exceptions: i. Contract ii. Ouster 1. Occurs when you deny the other persons right to enter and full enjoyment, and exercise your right to exclude. 2. The beginning of the running of the statute of limitations for adverse possession. 3. The liability of an occupying cotenant for rent to other cotenants. c) Issue: Was there an ouster? i. Majority rule: No it is not an ouster because there has been an exclusion, no actual entry denied. The locks could have been protecting the property as a whole itself. d) Holding: Places a burden on non-occupying joint tenant to exert his land ownership the other joint tenant has equal right to full enjoyment, unless this occupying joint tenant ever denies the other the right to enter, then he is valid to enjoy without rent. How does Adverse possession come into play? a) It is not a part of this case, however, in general, something would need to occur, i.e. an ouster, which starts the adverse possession clock. Analysis: Should cotenant in possession have to pay rent? a) Fairness, Equity b) It probably depends on expectation of parties c) If they have known going in that one of the joint tenants may occupy, it may not seem fair to charge rent. i. Example: Children have joint tenancy over home. Child 1 has been living in home for 30 years. It is unlikely child 1 should have to pay rent. ii. Example: Same situation but the child 1 has not been living at the home,

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rather moves in after joint tenancy is established and doesnt have to pay rent expectations may change so that this child may have to pay rent. iii. Example: Same situation, Child 1 will use the house for business and/or rent out the home, this may seem that this person really may need to pay rent. 1. All of this illustrates that the factual differences lead to different expectations of the parties and lead to the judgment of whether or not rent payment is fair. vii. Efficiency Use The right to enjoyment of the whole. a) Does this decision encourage productivity of the warehouse? b) This result encourages an empty warehouse. 3. Right to Rent and Profit (see below for 3rd party rents) (see above for rents from co-tenant) a. Remember strategy move of Co-tenant who wants the most backed rent so the earliest ouster date but at the same time cant go to far back that the land is not hers anymore bc adverse possession. b. Each co tenant is entitled to pro rata share of rents received from a third party for use of the land. i. Example: If A, B, and C each own equal shares as tenants in common in Blueacre, and A receives 30,000 in rental income from X for use of the property, B and C are entitled to 10,000 from A. If a refuses, C and B can bring an accounting action against A. c. Similarly, if a cotenant exploits natural resources on the co tenancy property such as minerals or timber, each cotenant is entitled to a pro rata share of the resulting net profits. 4. Liability for Mortgage and Tax Payments (see below) a. General Rule: all cotenants are obligated to pay their proportionate share of mortgage, tax, and other payments that could give rise to a lien against the property if unpaid. b. Such payments are considered necessary to prevent foreclosure. c. If one cotenant pays more than pro rata share can recover in a contribution action. d. Example: K and L are tenants in common each owning share. If land is subject to a mortgage requirement of 2,000 a month, and K is forced to cover these costs for 1 year (24,000) because L refuses to pay, K is entitled to recover half of his payment from L. e. However, if K was sole possessor that year he will not be able to recover. 5. Liability for repair and improvement costs (see section below for repairs and improvements) a. Majority rule: cotenant who pays for repairs or improvements to the common property is not entitled to contribution from the other cotenants, absent a prior agreement. i. Exception Rule when Sell house: An overpaying repairing or improving cotenant can only recover anything upon partition of the property or if the cotenants have a contractual agreement. b. Why? Policy Reasons for Majority Rule i. Cotenants exercising their business judgment may disagree over the necessity, character, extent, and cost of improvements and repairs. ii. If law permitted contribution actions for expenditures, courts might be forced to adjudicate multiple lawsuits b/w the same cotenants over comparatively minor disagreements. iii. Ultimately, courts are seeking fairness among cotenants. c. Exception: Remedy of Partition i. Any cotenant that cannot agree with another can permanently end the relationship with partition. ii. Cotenant that paid Repairs can recover the costs of the repairs upon partition. Overpaying repairing cotenants are given credit for their overpayment upon a partition. In this case, since Stanley overpaid by $6000, Stanley will first get that $6000 back before the remainder of the property is distributed. a) Under partition, a cotenant will receive excess costs of reasonable repairs he has borne. iii. Improvements under partition, co-tenant that paid for improvements does not get credit for the costs of improvement. Rather, overpaying improving cotenants take the change in value caused by the improvement, whether a positive or negative change. This is known as taking the upside-downside risk of improvement. a) In this case, a court would have to calculate the fair market value of the house before

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there was a pool and the fair market value of the house with a pool. If the value has increased, then upon partition Stanley will receive that upside value before the rest of the property is distributed. If the value has decreased, Stanley will be penalized that downside value before the rest of the property is distributed. b) Improvements are treated similarly; when partitioning the property, the court will either assign the improved portion of the property to the improving cotenant if feasible, or award the cotenant a credit for the added property value produced by improvements. 6. Liability for Waste a. A cotenant is liable for waste when he or she uses the common property in an unreasonable manner that causes permanent injury, under much the same standards that govern likfe tenants and other owners of present estates accompanied by future interests. (see life estate law of waste) b. However, some acts usually treated as waste like cutting of trees or extracting minerals are considered income(like rents from 3rd party) that must be distributed between the co-tenants and not considered as waste. 7. Swartzbaugh v. Sampson a. Joint Tenants with husband and wife. Husband signed lease with Sampson for part of the land to be used as a boxing pavilion, without wifes permission. Issue: Can one joint tenant who has not joined in the leases executed by her cotenant and another maintain an action to cancel the leases where the lessee is in exclusive possession of the leased property? Held: The leases from Husband to are not null and void but valid and existing contracts giving the same right to the possession of the leased property that husband had.) b. The husband was the only one who conveyed, he was able to convey his share of the joint tenancy. c. Wife and Sampson are joint tenants. d. General Joint Tenancy Rules i. Ejectment not allowed. ii. Rent applied to third party leases. iii. No cotenant can to any act to prejudice his cotenant. iv. The act of one cotenant without express or implied consent of the other cotenant cannot bind or prejudicially affect the rights of the other cotenant. e. General Rule Conveyances i. General Rule: The act of one joint tenant without express or implied consent form his cotenant cannot bind or prejudicially affect the rights of the latter. ii. There is no showing that ever demanded that husband let her into possession of her moiety (half) of the estate nor is there anything to indicate that he is holding adversely to her. f. Holding: Affirmed lower ct. wife cant void the lease. 8. Remedial Choices of disagreeing Cotenants (Tenancy in common or joint tenants) a. Evict/Sue to Cancel the Lease i. Rule: The T in common cotenant(H) has no legal ability to evict the leasee, even if the leasee is only leasing W's portion, because R has right to full enjoyment of the whole. In addition, unless the leasee violates some covenant in the lease, there is no cause of action for eviction or cancellation of the lease. Under the facts given, this remedy is not available. ii. In T in Common, this option will usually fail because even if one co-tenant gives consent then that is enough. T in common does not require consent by both parties. Therefore, outcome will be the same either way. The leasee is still able to be on the land. iii. Can lease under joint tenancy Swartzburgh Case - split authority if lease/mortgage severs joint tenancy (see how joint tenancy section /how can end) a) Due to the right of survivorship, a joint tenants interest ends upon death, so the interest cannot be devised or descend by intestate succession. Similarly any intervivos conveyance of joint tenancy interest will break the unities of time and title, severing the joint tenancy; thus the grantee receives merely a tenancy in common interest b) If she were going to sue she would sue the husband because he is the joint tenant. c) She will lose if husband only gave what he had so therefore if she sued she might not get what she wants.

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d) In a joint tenancy, the lessee is not liable to anyone but his lessor for the rent, unless the other co-tenants attempt to enter and he forbids their entry, or unless, being in possession with them, he ousts or excludes some or all of them. b. Partition (see Termination by Partition in earlier section) i. T in Common/Joint Tenancy: a) Rule: A cotenant seeking to end cotenancy may seek judicial partition and divide the concurrent estate into multiple estates held individually, thus giving up full enjoyment of the whole. ii. Problem wife loses right of survivorship. iii. Partition by sale or kind? a) The Partition in kind is an actual split of the land and is no longer a joint tenancy. b) Where it is not possible to perform a partition in kind, then a partition by sale would be performed and then Sampson would receive of the sale, and the wife would receive of the sale. c) Only the fair market sale is split the market improvement or decline in the property value is only gained or lost by the person making those improvements or declinations to the land c. Accounting Action action against other cotenant(s) (see other rent section below) i. Rule: Cotenant is entitled to fair share of profits actually received from property held concurrently. ii. Rule: Distinction bw Ouster: In an Accounting Action, Co-tenant(H) only recovers amounts actually received by the other co-tenant(W). a) Application: if cotenants hold 50% each, and have lease of $1000, then each get $500. iii. If co-tenant only leased her interest, then might not be liable to co-tenant for rent But if Wilma conveyed other co-tenants interest (exclusive joint tenancy), then you can use accounting action to make her pay of rent. However general rule is that all rent has to be paid to both. iv. Calculation Depends on Amount Actually Received v. Problem What does the lease purport to convey? a) Joint Tenancy Rights Only What does Sampson think he is getting? He knew that wife was not signing the papers and knew it was the likely result that the wife wouldnt be happy and therefore only getting a joint tenancy. b) In an accounting action of suing for joint tenancy rent against husband, the wife gets NOTHING, because she has lost nothing. As a joint tenant, she remains having 100% possession, it just so happens that now Sampson, the lessee pays $15 for his joint 100% usage taking the husbands stick. c) If the lessee thought he had exclusive tenancy, and acted more like an ouster, then the wife can win in the accounting action his pay has been calculated on exclusive possession, and now the wife can redeem this amount. vi. Exclusive Tenancy - Met only when, a) Lessee thinks he is getting the exclusive possession. b) Rent bargain must be fair market value or above. i. If it is less than fair market value, then the wife can only take of the total rent number. ii. Accounting action is limited to the amounts actually paid. d. Get Ousted and Recover Rent (see ouster in above section) -> FMV of use of property i. Ouster Def: An ouster occurs when one cotenant exercises his or her right to exclude against a cotenant who has an equal legal right to enjoyment of the land. ii. Rule: An occupying cotenant must pay rent to a non-occupying cotenant if the non-occupying cotenant has been ousted and is being denied full enjoyment of the property. (Spiller) iii. In a T in Common lease, (2 ousters 1 against cotenant for FMV and 1 against lease) a) H may claim that W has ousted him by allowing leasee to takeover T's lease against H's consent. If H is successful in this argument, H may recover the fair market value of 1/2 use of the property.

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b) H may attempt to have R oust him from the property. This may be accomplished by seeking to enjoy R's property and having R deny him that ability. This theory is predicated on the idea that R is only leasing W's portion of the property (discussed above). If H can prove that R is only leasing W's portion (by proving that R knew H did not approve of the assignment), then H may recover additional rent (on top of the $1000 R is paying for W's portion) from R if R ousts him. iv. Calculation of Rent = Fair Market Value a) She would receive of the Fair Market Value. b) The improvement or detrimental costs are not shared by wife. v. What is Gained? Ejectment or Money? a) There is no legal right for wife to eject Sampson. e. Remedy When Husband Dies i. When Husband dies, the land leased by Sampson will automatically revert back to Wife. ii. The improvements made by Sampson are then all the wifes. iii. This is the risk that Sampson takes upon leasing or buying a joint tenancy from only ONE of the joint tenants the risk of the husband dying automatically terminates the lessees joint tenantship 9. Concurrent Ownership Accounting for Benefits, Recovering Costs a. When it is useful i. This is all what occurs if there is not an agreement concerning the exact written payment details. These are default rules better to have spelled out. b. Benefits that Accompany ownership i. Rents and Profits collections from 3rd parties must be accounted to cotenants a) Profiting cotenants must account to non-profiting cotenants. b) But, an exception, if it is obvious that what is being paid for rent is only for the joint tenantship, then there is no money to be accountable to the other cotenants. c) Each co tenant is entitled to pro rata share of rents received from a third party for use of the land. d) Joint Tenant Lease Rule: In JT, the lessee is not liable to anyone but his lessor for the rent, unless the other co-tenants attempt to enter and he forbids their entry, or unless, being in possession with them, he ousts or excludes some or all of them. e) Example: If A, B, and C each own equal shares as tenants in common in Blueacre, and A receives 30,000 in rental income from X for use of the property, B and C are entitled to 10,000 from A. If a refuses, C and B can bring an accounting action against A. f) Similarly, if a cotenant exploits natural resources on the co tenancy property such as minerals or timber, each cotenant is entitled to a pro rata share of the resulting net profits. ii. Taxes and Mortgage Payments right of contribution for overpaying cotenant a) General Rule: all cotenants are obligated to pay their proportionate share of mortgage, tax, and other payments that could give rise to a lien against the property if unpaid. i. Rationale: This is because all cotenants' rights are protected by not having the property go into tax foreclosure. Because the rights of all cotenants are protected, no cotenant should bear a burden disproportionate to his or her share of the cotenancy. b) If one cotenant pays more than pro rata share can recover in a contribution action. c) But, an Exception/ limitation i. There is an exception to the general rule: where one cotenant is in exclusive possession, they may be held responsible for a larger share of the tax burden than they would otherwise based on the size of their share. ii. If I am an overpaying tenant and I live exclusively on the property with no other cotenants live there, then my payments of taxes and mortgage is my fair payment for the extra ability to live on the property since my other tenants are not living there, although you are not legally forced to pay rent to

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the other tenants. 1. It is not clear exactly how much of the tax burden Bart would be responsible for under the exception to the general rule. It is possible that it would be something less than 100%, in which case, Bart would be able to recover something from Lisa. However, it could be 100%, in which case, Bart would not recover anything. d) Example: K and L are tenants in common each owning share. If land is subject to a mortgage requirement of 2,000 a month, and K is forced to cover these costs for 1 year (24,000) because L refuses to pay, K is entitled to recover half of his payment from L. i. However, if K was sole possessor that year he will not be able to recover c. Repairs and Improvements: i. Remedy of Partition: a) Any cotenant that cannot agree with another can permanently end the relationship with partition. b) Majority rule: cotenant who pays for repairs or improvements to the common property is not entitled to contribution from the other cotenants, absent a prior agreement. c) Exception Rule when Sell house: An overpaying repairing or improving cotenant can only recover anything upon partition of the property or if the cotenants have a contractual agreement. d) Why? i. Cotenants exercising their business judgment may disagree over the necessity, character, extent, and cost of improvements and repairs. ii. If law permitted contribution actions for expenditures, courts might be forced to adjudicate multiple lawsuits b/w the same cotenants over comparatively minor disagreements. iii. Ultimately, courts are seeking fairness among cotenants. ii. Repairs: no right of contribution a) Cotenant that paid Repairs can recover the costs of the repairs upon partition. Overpaying repairing cotenants are given credit for their overpayment upon a partition. In this case, since Stanley overpaid by $6000, Stanley will first get that $6000 back before the remainder of the property is distributed.(cost of roof repair=12,000) i. Under partition, a cotenant will receive excess costs of reasonable repairs he has borne. ii. The capital youve invested for repairs do not give you any right of contribution; however, if the property is sold, then you will get the value that is rewarded for the repair improvements. iii. The reason for not giving right of contribution for repairs: 1. Hard to determine whether repairs are necessary 2. And whether repairs were reasonable cost. iv. Repairs no right of contribution, but repairer recovers costs of repair upon partition 1. Whereas, if you put in $10,000 for kitchen repair, this amount gets taken out of sale and given to you before being split. iii. Improvements No right of contribution, but can recover value upon partition. a) Improver is the one who realizes the value or loss of improvements takes both an upside risk and downside risk. No right of contribution, does not occur until the property is sold. b) Improvements no right of contribution, but improver recovers value of improvement upon partition c) Upside Down Rule i. Where possible, the improver gets improvements. ii. The downside risk is that the improvement may not add value if you put in $10,000 in improving a kitchen, and it only adds $200, you do not get

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iv. v.

back that $10,000. d) Improvements under partition, co-tenant that paid for improvements does not get credit for the costs of improvement. Rather, overpaying improving cotenants take the change in value caused by the improvement, whether a positive or negative change. This is known as taking the upside-downside risk of improvement. i. In this case, a court would have to calculate the fair market value of the house before there was a pool and the fair market value of the house with a pool. If the value has increased, then upon partition Stanley will receive that upside value before the rest of the property is distributed. If the value has decreased, Stanley will be penalized that downside value before the rest of the property is distributed. ii. When partitioning the property, the court will either assign the improved portion of the property to the improving cotenant if feasible, or award the cotenant a credit for the added property value produced by improvements. Jury decides distinction b/w improvements and repairs. Example: a) Home worth $10,000 w/ okay roof. Home after hurricane worth $2,000 with NO roof. Options for new roof: $3,000 to put on OK roof. $6,000 to put on A+ Roof. = $3,000 is the repair cost $3,000 is the improvement cost. b) House sells for $17,000 with A+ Roof. i. $7,000 increased value. ii. Improver gets $3,000 in Repair costs. iii. + $7,000 in the increased value of improvements. iv. Remaining $7,000/2 is split btw Improver and Non-Improver. v. Improver total = $13,500. vi. Non-improver total = $3,500 c) House sells for 11,000 with A+ roof i. $1,000 increased value. ii. Improver gets $3,000 in Repair costs. iii. + $1,000 in the increased value of improvements. iv. Remaining $7,000/2 is split btw Improver and Non-Improver. v. Improver total = $8,500. vi. Non-improver total = $3,500 d) House sells for 8,000 with A+ roof i. 2,000 decreased value ii. Improver gets 3,000 in repair costs iii. Improver gets minus 2,000 in decreased value iv. Improver total = 4,500 v. Non improver=3,500

III.

Marital Estates 1. Why do we not want to discourage marital estates? Law encourages marriage. 2. Gender Bias a. The law to marital estates is, was, and was founded upon gender bias. Women had no rights at all. Upon marriage, the woman had no legal rights. (Not fair.) 3. Tenancy by the entirety (now abolished in many states) a. Characteristics: i. Husband and wife as a single unit controlled by the husband. ii. Under this logic a wife could not hold title as tenants in common or joint tenants because wife had no existence as a legal person. iii. Has to be explicitly conveyed.

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Joint Tenancy and tenancy in common = both hands are on the stick Tenancy by Entirety = Both are holding hands as one unit and then holding stick. Creation Five Essential Unities: a) Time b) Title c) Interest d) Possession e) Marriage vii. Right of survivorship -b. Effects of Differences i. Where a husband and a wife holding as a unit, only as a unit can conveyance be made, sell, lease, etc ii. In tenancy by the entirety, I cannot even ask for partition the unit holds the property. c. Termination can only be terminated by divorce of couple, death of one spouse, or agreement by both. d. Transferability Either spouse has the power to manage and control marital property, including property held in tenancy by the entirety. Consent of both spouses required for conveyance. e. Rights of Creditors i. Rule: Creditors may reach any assets that a debtor can voluntarily assign. (Sawada ) ii. Rule: Creditors cannot recover from the tenancy on the entirety because the debt is the individuals and not the units. Sawada iii. Policy Reason: Sawada Ct notes that this result protects the integrity of the family unit by ensuring that real property was available as housing and as security for educational and other expenses. Unfairness to creditors was avoided because (1)they were charged with notice of a spouses limited estate in deciding whether to extend credit or (2) never relied on the asset in the first place. iv. Arguments against: Frustrates creditors rights remember fraudulent conveyances before bankruptcy Two Systems for Marital Estates Common Law and Community Property Common Law Marital Estates Separately acquired property Jointly acquired property 1. Common Law Marital Property a. Title to anything acquired during marriage goes to the acquirer if acquired separately. b. Jointly acquired property is held jointly in one of the 3 concurrent estates. c. Property acquired before marriage, is held by the separate spouse. 2. Sawada v. Endo a. Is jointly acquired marital property reachable by creditors of one spouse? (s were in car accident with . Judgment entered against for monetary damages. After the date of judgment, conveyed propert y owned by tenancy in entirety with his wife to his sons. sought judgment against s land in order to make up for the payments owes to . Held: A tenancy in entirety allows for the land to only be used in judgment and conveyances in which both husband and wife are jointly concerned, and therefore a judgment against a husband is not able to be against the land jointly owned by husband and wife. b. Development of common law system v. Group 1: the original common law system. Husband-centric. (wifes hands were not on the stick, it was just the husband- wife was property.) vi. Group 2: MWPA lifts the wife. (Both can voluntarily assign and creditors can reach either persons debt.) vii. Group 3: MWPA downgrades the husband (Neither spouse can convey without consent and creditors of neither can reach either persons debt.) viii. Group 4: splits the stick giving one to wife and one to husband neither can convey without consent, the creditors can attach the future interest (right of survivorship). (TN). c. The courts choice: group 2 and 3

iv. v. vi.

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a. Things to consider a) Rights of Creditor i. The creditors have the right to collect their money however they need to, pursuant even to the sale of a piece of property right to collect on any asset held by the debtor. b) Right of spouses i. Non-Debtor spouse ii. Debtor spouse c) Policy Balance Family Unit v. Creditors rights i. It may make more sense to protect these involuntary creditors v. Irresponsible creditors. d. Holding and Rationale a. Aligns with group 3 i. Distinctive features of the tenancy by the entirety 1. Both hands on stick. It is indivisible. Neither can convey without others consent. 2. If it is not that then why have tenancy by the entirety at all? b. Policy: A mode of protecting a surviving spouse. 3. Termination of Marriage upon Divorce: Property held in tenancy by the entirety, upon divorce is converted to T in common. a. Old Common Law Marital Property i. Old Def: Background: Historically, separately maintained property was distributed to the spouse with title. Since the husband was the only one capable of holding title, the wife was often left with nothing. To remedy this situation, the law developed the equitable distribution. Now the equitable distribution in common law states recognizes that marriage is a partnership, much like the theory of marriage in community property states. ii. Title holder of separately acquired property gets the property. iii. Under common law, property goes to the title holder, and since husband was the title holder husband gets all the property upon divorce. iv. Upon divorce there was no effect as to jointly held property. b. Common law rule out: Modern Common Law Equitable distribution i. Common Law def: General: Common law jurisdictions recognize equitable distribution. This is meant to ensure that neither spouse is left with nothing after a divorce. ii. Policy: Recognition that marriage is a policy and that the fact of formal holding of title does not necessarily represent the contributions of either spouse to the marriage. Considers marriage an economic partnership. iii. Rule: Under the law of equitable distribution, property (defined differently in different jurisdictions, see below) will be distributed equitably among the divorcing spouses regardless of in whose name title is held. iv. Further: In making an equitable distribution, the distribution is not necessarily "equal." Courts may take into account a variety of factors in making an equitable distribution, including the earning power of each spouse, the separate property held by each spouse, the contributions of each spouse to the marriage, the circumstances of the divorce. (see rights of equitable distribution below.) v. Different jurisdictions define property for the purposes of equitable distribution differently. (see 3 ways below) vi. Common law rule is out. All states have enacted this instead. Look at factors: 1. Who is at fault? 2. Who contributed? 3. Big Question: Which property is equitably distributed? a. All property held together during marriage with both titles b. Gifts given to the couple during marriage. c. Separate property pre-marriage is not in pot

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d. Separately acquired property during marriage is not in pot (Vespa) e. Gifts just given to one spouse are Not in pot 4. Each state has factors that they consider to determine how to divide the property. a. TN statute (Marital property together and separately acquired property minus willed property vii. What property falls into the pot of equitable distribution? Stuff acquired during marriage and acquired separately is not pot If gift to one spouse? o Some say it doesnt fall in o Some jurisdictions say it does fall in Inheritances of one spouse? o Split jurisdictions of this idea Income from pre-marriage separate property? o Stocks you held before marriage, and income comes in during marriage; this is split Increased earning capacity of one spouse o Jurisdictions split in this field o Degree of some sort/license c. With T In Common House upon Divorce i. Upon divorce, property held in T in Common in not affected. Because co-tenants live in a common law state and hold the property in T in Common, they will continue to hold the property in T in Common following divorce 1. Because each spouses property is considered separate, it may be factored into an equitable distribution. d. Rights Upon Equitable Distribution: i. Under this approach, the divorce Ct distributes property between wife and husband based on equitable principles after considering a variety of criteria relating to each spouses needs, abilities, and circumstances. (duration of marriage, occupation and vocational skills, income and property of each spouse at time of marriage, age and health of each spouse, income/property of each spouse when divorce action begins) e. 3 Approaches for defining Property in Equitable Distribution: (2009 exam) i. All property: Equitable distribution covers all property owned by either spouse, acquired at anytime and from any source 1. Policy: This recognizes in the purest sense the concept of marriage as an economic partnership. Once the parties are married, they cease having separate property under this theory. 2. Calculation: Add all property up and then divide by 2. It is unclear if the earning capacity of each spouse ought to be included in the "all property" subject to equitable distribution. It seems unlikely because neither spouse gave up any job opportunities to support the other on their way to their current job (as in the MBA case). Both had their jobs before the marriage and continued to have them a year later as the marriage ends. 3. Additional Point: The $161K split assumes an "equal" distribution. Since equitable distribution do not necessarily mean equal distributions, it is possible that a court may not split the property exactly equally. For instance, because Wendy has a higher income, she may be awarded slightly less than Hector in an equitable distribution. ii. All Marital Property: Equitable Distribution to property acquired during marriage by either spouse from any source (including property obtained by gift, bequest, devise, or descent) 1. Policy: This recognizes that although marriage is an economic partnership, parties to a marriage enter the partnership with differing assets. It also recognizes, however, that once married, parties cease having separate property - thus, anything acquired during marriage is subject to equitable distribution. 2. Calculation: Property acquired separately prior to marriage would be excluded from the equitable distribution pie. Thus, Orangeacre ($110K) would go to Wendy and Car #1 ($3K) would go to Hector. In addition, it is likely that Wendy's stock portfolio ($27K) will go to Wendy as separate property; however, since Wendy has demonstrated that she was willing to

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f.

utilize the funds from the stock portfolio for the marriage, Hector may argue that the portfolio should be subject to distribution. This is unlikely to succeed, however, since the stocks were clearly owned by Wendy prior to the marriage and are thus properly classified as separate property. 3. The property included in the equitable distribution pie would be the joint bank account ($19K), Car #2 ($13K), and the inheritance ($150K). This totals $182K, so each spouse would be awarded $91K through the equitable distribution. 4. Additional Point: Again, this split of $91K each assumes an equal distribution. Since equal distribution is not necessarily the rule, it is possible that the court could award less to one spouse than the other. Under these circumstances, it seems highly plausible that the court would award more of the $182K to Hector than Wendy. This is for several reasons. First, Wendy has a higher income than Hector. Second, Wendy's separate property (Orangeacre and stocks) is significantly more than Hector's (Car #1 only). 5. Additional Point: If Wendy or Hector can prove through deposit and withdrawal history which portion of the bank account comes from their separate property, they may be able to exclude that from the equitable distribution pie as well. This is unlikely, but plausible. iii. Limited Marital Property: Some jurisdictions hold that property acquired during the course of the marriage, but not acquired by gift or inheritance goes into the equitable distribution pie. 1. Policy: This recognizes that gifts or inheritances given to a single spouse (i.e., not intended to go to the marital partnership, but rather to one member in the marriage) are not properly property of the marital unit. This is typically in line with the intent of the grantor/gift-giver. In addition, this recognizes that only property that is "earned" during marriage should properly be considered a result of the marital partnership - property that is simply obtained through gift or bequest is not "earned" by the marriage and the presence of the non-grantee spouse is irrelevant to the grantee spouse's receipt of the property. 2. Calculation: Property acquired separately prior to marriage would be excluded from the equitable distribution pie. Thus, Orangeacre ($110K) would go to Wendy and Car #1 ($3K) would go to Hector. In addition, it is likely that Wendy's stock portfolio ($27K) will go to Wendy as separate property; however, since Wendy has demonstrated that she was willing to utilize the funds from the stock portfolio for the marriage, Hector may argue that the portfolio should be subject to distribution. This is unlikely to succeed, however, since the stocks were clearly owned by Wendy prior to the marriage and are thus properly classified as separate property. 3. Property acquired by gift or inheritance will also be excluded from the equitable distribution pie. Thus, Hector's inheritance ($150K) will be given to Hector outside of the equitable distribution 4. Car #2 as Gift: Hector may also argue that Car #2 was given to him as a gift from Wendy and should thus be excluded from the equitable distribution pie. Without more facts regarding the use of Car #2, it is unclear whether this argument is plausible. 5. The property included in the equitable distribution pie would be the joint bank account ($19K) and Car #2 ($13K) (assuming Car #2 is not a gift). The total is $32K, thus each spouse would get $16K worth of property. 6. Additional Point: If Wendy or Hector can prove through deposit and withdrawal history which portion of the bank account comes from their separate property, they may be able to exclude that from the equitable distribution pie as well. This is unlikely, but plausible. In Re Marriage of Graham: Modern Equitable distribution education subject to equitable dist. Upon divorce ix. Husband and wife file for divorce after 6 years of marriage. Throughout marriage, the wife, , supported husband with full-time employment and providing housework and cooking, while husband worked part-time and sought M.B.A degree. Wifes monetary input equaled 70Whether the M.B.A degree may be considered for marital property, which is subject to division by the court? No, the husbands degree is not a tangible property, it cannot be conveyed to another, it was not obtained only by the wifes support, rather it is personal to the

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husband and something which he spent his lifetime working towards. Courts Rationale: a) Dissent: What about her investment in him? This was not separately acquired property but her investment. Specifically, the majoritys description ignores property that may be intangible, and undividable, etc. in defining property. xi. Majority Approach: Degree not Marital Property In Re Graham a) Most jurisdictions refuse to recognize degrees or licenses as marital property. b) Colorado Ct held in In Re Graham, that an educational degree is simply not encompassed even by the broad views of the concept of property. The degree did not have any of the traditional characteristics of property: no exchange value, was personal to holder, could not be transferred, ended on death of holder, not inheiritable, and could not be assigned, sold, transferred, or pledged. Rather it was simply an intellectual achievement that could assist in future acquisition of property. c) Reasoning of Ct explained in 2 themes: i. Whether human abilities should be considered property subject to ownership came from abilities before marriage ii. Practical difficulty of appraising the value of education (very speculative) xii. Reimbursement Alimony a) Agreeing that graduate degrees are not property, but rewarding reimbursement alimony to compensate the supporting spuse for economic sacrifices made during the marriage. b) Remedy is quite limited. Usually out of pocket expenses for tuition. c) Court makes ruling to provide a fair and effective means of making an equitable ruling for professional contributions. i. This would be the case if she at least got her money back. The court said that whether future earnings should go in pot is too difficult of an issue. All we are going to do is that you get back what you put in you are in as good position as you would have been in had you not invested maybe add interest. xiii. New York Approach: Degrees are Marital Property - OBrien and Elkus a) moved to remove her career and/or celebrity status from constituting marital property subject to equitable distribution in the divorce between her and her husband. had just embarked on the career at the start of marriage and went from earnings of $2,250 to $621,878 between 1973 and 1978. b) Increased Earning Potential as Marital Property. c) Elkus v. Elkus celebrity status as marital property? d) 2 perspectives: i. Not marital property supporting spouse already compensated. ii. Marital Property recognized contributions of supporting spouse e) Holding: Singers career yes. Goes in pile. f) Note: Prenuptial (anuptial) agreements i. Enforceable so long as ii. Fair and Reasonable at time of signing; and iii. Based on full knowledge of each others property. 4. Termination of Tenancy by entirety by Death Common Law a. Old rule: separately acquired property stays in the name of the person that acquired it, and upon the death of that person, remains in that parties estate i. Personal property- widow gets 1/3 if there was a surviving issue and otherwise ii. Dower- given to a wife in all freehold land of which her husband was seised during marriage and was inheritable by the issue of husband and wife i. Was a life estate in 1/3 of each parcel of qualifying land ii. Attaches to land at marriage if owned, or when acquired x.

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If the wife dies before the husband, or they are divorced, the dower is extinguished iv. Once attached, the husband is powerless to defeat it, unless the wife releases it iii. Curtesy- widower (husband) is entitled to a life estate in each piece of the wifes real property if certain conditions were fulfilled a) Dont need to know about this, other than it existed b. Modern Days Elective Shares i. General Def: Common law jurisdictions all have statutes providing an elective share to a surviving spouse. An elective share is a portion of the decedent spouse's estate that the surviving spouse is entitled to take regardless of the terms of the will or the intestacy laws. ii. Historical Def: Without elective share statutes, a decedent spouse was able to will away any property held in his or her name. Historically, this meant that the husband (the only spouse able to hold property) could will his entire estate away, leaving a surviving widow with nothing. The elective share seeks to prohibit such a situation. iii. The percentage taken by a surviving spouse through an elective share statute will differ by jurisdiction. In Tennessee, the percentage taken depends on the length of the marriage. iv. Elective share is a Choice: The surviving spouse may elect to either (a) abide by the terms of the decedents will or (B) take a share(normally or 1/3) of all property the decedent owned at death. v. Marital Property/Elective Share at Death: Property subject to an elective share: Any property that is part of the decedent spouse's estate goes into the elective share pie. This includes anything that is held in the decedent spouse's name; encompasses EVERYTHING brought into marriage and gained during marriage. a) A share of property (real and personal) of the dying spouse that can be elected to be taken by the surviving spouse b) Proceeds from life insurance policies not included. c) Some debt taken out before calculated. d) Inter vivos gifts given to spouse from decedent are not put in pot vi. How big a share? a) It is anything that the decedent has title to. (2009 exam) b) Applied: Items that would be included in Wendy's estate include Orangeacre ($110K) and the stock portfolio ($27K). This totals $137K. (both held separately before marriage) c) Hector will keep Car #1 ($3K), Car #2 ($13K/ received this during marriage with his name and her money), and the inheritance ($150K/ given to him during marriage) regardless of the fact that Wendy willed her entire estate to her niece. d) At issue: Hector may argue that the stock portfolio should not be considered Wendy's exclusive property because she treated it as marital property during her lifetime when she liquidated $13K to buy a new car. This argument will not succeed so long as the stock portfolio is in Wendy's name. If she has the title, then it is part of her estate. e) At issue: It is unclear how the bank account is held. If it is held in joint tenancy, as seems to be implied, then it all ($19K) passes to Hector through the right of survivorship. However, it is held "in common," then half of the account is devisable and part of Wendy's estate (and also, therefore, part of the property subject to the elective share). Thus, if the bank account is held "in common" rather than through joint tenancy, then an additional $9.5K would be included in the elective share pie, for a total of $146.5K. The remaining $9.5K in the "in common" scenario would be retained by Hector. f) In Tennessee, the statutory percentage would be 10% since the marriage was only 1 year long. Thus, Hector would take $13.7K or $14.65K depending on the status of the bank account. vii. Share of What?

iii.

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viii.

ix.

a) Currently, the amount to be reserved for a spouse is determined by the law of the state where the estate is located. In most states, the elective share is between 1/3 and of all the property in the estate, although many states require the marriage to have lasted a certain number of years for the elective share to be claimed, or adjust the share based on the length of the marriage, and the presence of minor children. Some states also reduce the elective share if the surviving spouse is independently wealthy. If the spouse chooses the elective share, he or she forfeits any other interest they have. b) In Tennessee: (dependant on length of marriage) i. 0-3 years 10% ii. 3-6 years 20% iii. 6-9 years 30% iv. 9+ years 40% Election: Which is bigger? a) Elective share v. Will v. Intestate share b) Elective Share Surviving Spouse will not choose to take the elective share according to the elective share statute when the Will grants the spouse more than the elective share. c) When the Will does NOT grant as much as the elective share, then the surviving spouse may take the elective share. Problem: Termination by Death a) Life Insurance $60K, to W. House $60K, H/W as joint tenant. Bonds, Land, Cash total $120 K b) H conveys all of his estate to D. i. W gets $60K L.I., 60$K House, W and D split 50/50 the $120K. c) If instead H/W own house in tenancy in common rather than joint tenancy H has fee simple in half. i. Hs 50% of house goes into pot ii. Ws 50%--> she gets out right, so doesnt go into pot iii. And no right of survivorship in T in C 1. Equitable distribution in T in C= 2. 30,000 +120,000=Equitable Distribution 150,000 /2 = W gets 75 and D would get $75 iv. W gets $60K L.I., 30$K House, W and D split of remaining house total + 50/50 of the $120 = W E.S. $75, D other E.S. $75 d) Problem p 337 What goes in elective share? i. H dies, spouse has an elective share. ii. Property in estate: 1. $60K life insurance policy (payable to wife) a. Outside of the pot upon his death, wife is beneficiary 2. $60K house (joint tenant with wife) a. Outside of the pot 3. $90K land a. Goes into the pot 4. $20K stocks a. Goes into the pot 5. $10K cash a. Goes into the pot iii. How is the estate distributed? 1. Total in the pot = $120K 2. Wife gets half = $60K + other property outside the pot 3. Daughter gets half = $60K iv. Steps for distributing elective share: 1. Identify which property can go into the pot

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IV.

2. Total the amount in the pot 3. Divide the amount in the pot among surviving spouse and person property is willed to v. If a person intentionally conveys land with the purpose to defeat an elective share, then that conveyance can be undone vi. During life, how could the decedent have avoided a fraudulent conveyance but still defeat the elective share: 1. Prenuptial agreement 2. Put the property in a trust 3. Create a life estate for the surviving spouse, with a remainder in the party you want the property to go to x. Major Loop Hole: Defeating the Share: a) Intervivos Gifts to a third Party b) Before he dies, he transfers all he has to third party. One week later he dies, and wife is penniless. This is called defeating the share. However, Cts will rule against this and give option of elective share. c) The decedent spouse has an estate. In that estate is all the property that the decedent spouse has the ability to put in his or her will. By statute, the surviving spouse has the opportunity to elect some share of the decedent spouses estate before the will takes effect. Community Property System of Estates 1. Difference be Community and Common law: a. Difference upon divorce in a community property state: In community property states, rather than classifying property as marital or separate upon divorce, property is classified as either community or separate upon acquisition. b. Separate property includes property obtained prior to marriage and, typically, property obtained by gift or inheritance. It also may include income generated during the marriage by property obtained prior to marriage or by gift/inheritance. c. Community property includes anything obtained by earnings during marriage. d. The rebuttable presumption is that property acquired during marriage (other than by gift or inheritance) is community property. 2. Theory of equal partnership a. Earnings of each spouse during marriage should be owned equally in undivided shares by both spouses b. Both contribute equally to the material success of the marriage, so each should own an equal share of property acquired during marriage by their joint efforts c. Includes: earnings during marriage, rents, profits, and fruits of earnings 3. Entirely different system than Common Law Property/Tenancy by Entirety. No State has both. (TN does not practice Community Property.) 4. Defining Characteristic earnings (cash and otherwise) during marriage and property purchased with earnings are community property. a. Earnings could be wages, but is also anything that is earned during marriage. i. Gifts, intestate inheritances to one person not considered community property or earned during marriage. b. Title held by the Marital Community When purchased with community earnings, its a community title not husband or wife separately. c. Presumption #1 Any property acquired during marriage is community property and subject to equitable or equal distribution (depending on state) upon divorce. (see below) i. Exception: With the consent of both spouses, property acquired during the marriage that would typically be considered community property may be held and treated as tenancy in common. If exception applies, the property remains in tenancy in common, rather than being included in the community property assets subject to equitable or equal distribution. ii. Almost similar to anything acquired being held as tenancy in common, yet while holding stick with two hands holding each other (the only trait similar to tenancy by entirety).

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d. Neither spouse alone can convey his or her undivided share of the community property, except to the other spouse i. Need consent of the other 5. What Remains Separate property? a. Pre-Marriage separate property b. Gifts, Devise, descent to one spouse (inheritances) c. Anything that the parties agree that should be separate property d. *Separate property Acquired during marriage prior to moving to community property jurisdiction e. Income from separate property? Depends on jurisdiction i. Some states say the income is considered community property ii. But majority of community states say that income derived from separate property normally remains separate in character if it is put in a separate bank account and not comingled with community funds. iii. Default rule: things acquired from separate earnings during marriage automatically become community property, but can be rebutted/ spouse can argue. Such as podium bought with separate earnings maybe from separate property) f. Jointly held (concurrent property) i. Presumption 1 again: go back to default rule and real property becomes community property. ii. Exception get around that by saying that we are going to hold that as joint tenants or tenancy in common, but you have to explicitly say you are going to hold jointly in order to gain the right of survivorship. iii. Why would one want to make it a jointly held property? a) Community property husband and wife each get a stake. When the husband or wife dies, the husband or wife can will his one half stake in the community property. If he dies and gives it to X, now X has a one half interest and community property becomes tenancy in common b/w X and Wife. Can only give away at death. b) You would want it to be a joint tenancy so that when the husband dies all goes to the wife. c) So you do that to get benefit of right of survivorship iv. No tenancy by the entirety in community property states. v. Couples cannot hold both community property and joint tenancy or tenancy in common. 6. Commingled Property a. Something between separate and community property. i. Inception theory: when it was acquired (starts payments) (like before marriage starts purchase) ii. Vesting theory: when it vests (acquires complete ownership b. The situation where community property mixes with separate property sometimes arises when property is acquired before marriage, but part of the purchase price is paid after marriage with community funds i. Presumption #1 again anything acquired during marriage is community property a) Anything owned is held 50/50 by the spouses and nothing can be done with the property without consent by both spouses ii. Presumption #2 character of real property reflected by names on the deed iii. Problem #2 (p. 343) 3 options a) Split the proceeds b) Pay the investor back, split the remainder c) Gift c. P. 393 Question 2: i. H purchases 20,000 land ii. $5,000 is paid by H from separate funds for down payment iii. 15,000 in community property bank account/mortgage iv. End up selling property for 40,000 v. How does it get separated? 3 ways

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1. Husband 5,000 is gift so 40,000 is all community property 2. Reimbursement alimony pay husband 5,000 back and then 35,000 would be community property viii. 3. Proportional slit investment; 25% goes to husband; 75% goes to community property 7. Division Upon Divorce -- varies by state equal or equitable a. Common Law Anything considered marital property subject to equitable distribution b. Community i. Equal State Community Property state that will divide community property EQUALLY. Anything community property NOT separate property looked at. ii. Equitable State- Community Property state that will divide community property EQUITABLY. Might look at other things such as separate property. c. Property earned or acquired during marriage (not by gift or inheritance) goes into the pot for division; Purchased during marriage = community property d. Earlier Example Difference applied: In this case if it were in a community property jurisdiction, Orangeacre ($110K) and the stock portfolio ($27K) would be Wendy's separate property. Car #1 ($3K) and the inheritance ($150K) would be Hector's separate property. Everything else - Car #2 ($13K) and bank account ($19K) - would be community property. The community property total is thus $32K. e. Point of contention: Hector could again argue that Car #2 is not community property, but is rather a gift to him from Wendy. The facts do not indicate whether this argument would be successful though. f. Point of contention: If either party could trace the funds in the bank account to their own separate property, then they may be able to have that portion of the bank account considered separate, rather than community, property. For instance, since Wendy had a $10K bank account and Hector had a $2.5K bank account prior to marriage, Wendy could argue that the only portion that is truly community property is the $6.5K difference between the value of the account upon divorce ($19K) and the amounts each spouse put in ($10K + $2.5K = $12.5K). The facts are not sufficient to evaluate this argument. g. Point of contention: Hector may argue that the stock portfolio was treated as community property since Wendy liquidated stocks to purchase a car for the marriage. This argument is not likely to succeed. Simply because Wendy donated a portion of separate property to the marriage should not mean that all separate property of a similar nature (i.e., stocks) should also be converted to community property. 8. Migrating Couples a. Character of property depends on state of domicile at the time of acquisition and does not change without consent. b. W buys a car in a common law state and she has title. Couple moves into a community property state. (We use the common law state because that is the location where the property was acquired). c. Common law property states generally recognize community property when it is brought into the state from a community property state d. When a person dies, the law of the decedents domicile at death governs the disposition of personal property, and the law where land is located governs the disposition of land. 9. Division upon Death a. There is no elective share in a community property state. Rather, because property is classified as either community or separate upon acquisition and because each spouse has an equal one-half share in all community property, the surviving spouse is already protected. i. Again, here, the community property would be Car #2 ($13K) and the bank account ($19K) (assuming that the argument above regarding tracing the funds in the bank account to exclude portions as separate property is not successful). Each spouse therefore has a one-half interest in that property. ii. Wendy's estate therefore consists of Orangeacre ($110K), the stock portfolio ($27K), one-half interest in Car #2 ($6.5K), and one-half interest in the bank account ($9.5K). In a community property state, all of this will pass to Wendy's niece. vi. vii.

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Hector will keep Car #1 ($3K), the inheritance ($150K), one-half interest in Car #2 ($6.5K), and one-half interest in the bank account ($9.5K) even without any elective share statute. iv. Note: all of the side arguments made previously regarding the severability of the funds in the bank account, the gift nature of Car #2, the conversion of the stocks into community property could also be made here. Since they have already been discussed, they are not repeated here. b. Default Rule: Decedant can will up to 50% of community property; other 50 % goes to fee simple for surviving spouse surviving spouse will not have right to willed 50%. c. It depends on where you die. (where your domicile is when you die). d. Compared to elective share (lose elective share if you are in the community property state) i. Elective share surviving spouse could take up to 40% of decedents percentage. a) Always elective share in common law property state. b) Never elective share in community property ii. Better or worse depends on how much community property v. Separate property. e. Tax Benefit: Spouses holding assets as community property receive a special federal income tax benefit known as stepped up basis when one spouse dies. f. Ex: property held in husbands name but acquired during marriage i. Presumption #1: If wife and husband buy house it is presumed that it is community property but you can overcome that presumption by explicit intent for it to not by community property ii. If husband and wife wanted survivorship rights so they would have to be explicit that they wanted it to be joint tenancy (so if wanted their wife to get it if they die then have to be explicit) g. Death of H with Property with another T in Common other than wife - Marriage in Community i. H & X=T in common (husband obtained this stake during marriage) 50% and 50% ii. Husbands stake is community property iii. If husband dies, what happens? iv. X keeps 50% v. Of husbands 50% then wife gets 25% and Hs will gets 25% 10. Death and Migrating couples a. Depends on where you die where your estate will be settled. b. If H earns money in community law, and then moves to common law and dies. W gets half of community property and then receives an elective share in Hs half c. Common law to community can be problematic (money held separate and then moved to community and died. Did not get benefit of elective share or benefit of it being held as community property) 11. Management of Community property system a. Default rule: Husband and wife have equal rights to use, manage, and otherwise control community property. For example, either spouse can sell community property, although some states require both spouses to consent to the sale of the community real property. Split authority of gifts to third parties as well. i. Default rule: both spouses can manage cannot convert, sell or lease without consent by both a) Exceptions i. If one spouse or the other is solely controlling the property (title still held by both) then the management division default rule can be ignored b) Fiduciary duty of managing spouses i. Each spouse must act in good faith in exercising authority, but good judgment is not necessary ii. The manager can sell community personal property and, if joinder of the other spouse is not required by statute, community real property b. Liability to Creditors i. Creditors can look at the husbands 50% (at best) to satisfy debts, but can never touch the wifes half to settle the debt ii. In most community property states liability to creditors follows management and control i. The creditors of a managing spouse can reach whatever community property the creditor spouse is legally entitled to manage

iii.

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Chapter 10 Law of Servitudes I. The Law of Servitudes a. Exception to fee simple: one exception to the right to exclude occurs when another entity holds a servitude entitling it to utilize the property in some way. i. In a servitude, there is a dominant/benefiting parcel (here, Buzzkills ringleblume farm) and a servient/burdened parcel (here, Merediths beet farm) b. Private Land Use Controls this is another people can have joint interest in land. i. One person own a fee simple, and the other owns a servitude servitude is a use stick (I can come on to your property for certain purpose) ii. The classic servitude is one parcel uses part of another parcel (like a driveway) to get to a main street. c. A burden on a parcel not a party d. Servitudes as Conveyances this is one easy way to get servitudes. A conveys servitude to B. It is easy to identify, but the scope is not as easy. i. It has to be in writing, it has to be signed by grantor, and it has to give description. ii. It is not a contract there is no need for consideration. What A gives to B are property rights, not contract rights. iii. Therefore, when B is selling to C, C has a right to the easement. Because C is property owner, B had property rights and upon selling the house to C, B conveys those property rights to C. iv. After the original promisor has conveyed the burdened land, the promisor cannot be sued on the covenant in law or in equity 1. The original promisor has lost control of the land when the entire interest is assigned cannot be penalized for the conduct of the future owner e. Ways that a servitude can be created (are all private agreements that restrict a fee simple holder): i. Rules: There are 4 ways to create a servitude explicitly, implied by prior use, implied by necessity, and by prescription. Only the servitude implied by prior use or by necessity are viable here ii. Explicit iii. Implied 1. By Prior Use 2. Necessity a. This is a situation where a parcel is locked away form access to a road no way to get that road except through persons land that is easement by necessity. iv. Prescription 1. Adverse possession to get use. f. Typical Functions: i. Guarantee entrance onto the parcel of another ii. Allow entrance onto and removal of materials from the parcel of another iii. Restrict the use of a parcel iv. Require some performance by the owner of another parcel v. Require contribution for upkeep of a parcel from the owner of another parcel g. Servitude Labels keep in mind these are rapidly merging i. Easements ii. Covenants 1. Real covenants (covenants enforceable at law) 2. Equitable Servitudes (covenants enforceable in equity) h. Explicit, Implied, Necessity, Prescription ways a servitude can be conveyed. i. These are all private restrictions to a fee simple owner. A cant infringe upon the easement. ii. These are called private land use controls this is B or C telling A what they can do with their property. i. Typical functions i. Guarantee entrance onto the parcel of another

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II.

ii. Allow entrance onto and removal of materials from the parcel of another oil or trees or something valuable, and a company wants to come on and take something off the land they dont get any possessory interest they may get a servitude to remove stuff we might see contracts in that situation as well. iii. Restrict the use of a parcel this is a negative servitude for ex., if there is a forest providing shade for someones backyard the forest is on someone elses property this could be used to prevent the person with forest from cutting down the trees because it provides the shade. iv. Require some performance by the owner of another parcel v. Require contribution for upkeep of a parcel from the owner of another parcel may require one to pay the other for upkeep. Easements probably the most common of the old servitudes can be classified in a number of ways. a. Affirmative and Negative i. Affirmative I have the right to do something on your property. ii. Negative you do not have the right to do something on your property so I can enjoy my property. 1. Conservative easement used to restrict development of servient land, usually to protect its natural resources or scenic value. b. Appurtenant and In Gross i. Appurtenant the easement is related not to the owner the person who owns the easement but is attached to the land itself so the idea is that if the person who has the easement sales her land the person who buys has right to come in and use the easement. it is the parcel not the person who is benefiting. ii. In Gross this is where the benefit is to an entity where the benefit is personal it is personal to person who has easement even if they do not live next to land ex. right to come and take material from a land. c. There is always a burden parcel parcel whose use is restricted some way it is always a parcel that is restricted never a person who is restricted. d. Creation of Easements 1) Explicit Easement - Willard v. First Church 1. Creation of an easement for a third party a. Old Rule: Cannot create an easement to a third party (no 3rd party benefits) b. New Rule: recognize the intent of the grantor therefore and ignore the old rule if the intent was to create an easement in a third party. 2. An explicit servitude is created when a property owner intentionally conveys the right to use their property to another entity. a. Apply: Here, there is no such conveyance under the facts as given. It is plausible that Merediths conveyance of the ringleblume farm to Buzzkill contained such a servitude, but that fact is not present in the question 2) Types of implied easements: i. Easement implied from a prior existing use 1. There is apparent and continuous (or permanent) use of the tract existing when the tract is divided 2. The existing use is often described as a quasi-easement 3. Is implied to protect the probable expectations of the grantor and grantee that the existing use will continue after the transfer ii. Easement by necessity 1. The easement is necessary to the enjoyment of the claimants land 2. The necessity arose when the claimed dominant parcel was severed from the claimed servient parcel 3. Only reasonable necessity is required 3) If the dominant tenement and the servient tenement come into the same ownership, the easement is extinguished ii. By Grant:

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1. Creation of express easement by grant is simple. The deed conveying the easement must comply with the same Statute of Frauds requirement applicable to all deeds. 2. It must be: a. In writing b. Identify grantor and grantee c. Certain words indicating intentions to create easement d. Describe affected land. e. Be signed by grantor 3. Exceptions of estoppel and part performance also apply here. iii. By reservation: 1. Formal requirements are the same as express easement by grant only difference is the issue of whether it can be created in a third person. 2. At common law, an easement could only be reserved in favor of a grantor. 3. Any attempt to reserve an easement in favor of a third person was invalid. 4. Many courts have abandoned the traditional rule because of Willard v. First Church: a. It reasoned that the original reason for the rule no longer existed. b. It said that the traditional purpose for no third party was to protect the livery seisin but that has been done away with so there is no need to follow that anymore. c. We need to abandon it so we can follow intention of grantor. iv. Willard v. First Church 1. Essentially this is a easement determinable when the building stops being used for church purposes it goes back to the grantor easement can be an easement for life, and easement determinable. 2. In this case the church is the benefiting party and lot 20 is the burden parcel. 3. Willard is arguing that it is an ineffective easement because the old rule says that you cannot create an easement that benefits a third party to the conveyance. 4. The court disagrees with Willard and gives us a new rule they say it might not have been conveyed at all if this easement was not allowed. a. New Rule can grant to a third party when you weigh the grantors intent v. old rule. 5. Main Point Used to not be able to create an easement in 3rd party but now you can. 6. The determination whether the old common law rule should be applied to grants made prior to the court's decision involves a balancing of equitable and policy considerations: a. injustice which would result from refusing to give effect to the grantor's intent v. the injustice, if any, which might result by failing to give effect to reliance on the old rule and the policy against disturbing settled titles. 7. Judicial Objective in Interpreting Easements what the grantors intent was v. injustice of not going by old rule 8. This is an appurtenant easement because it says in the easement that it is specific for property. 9. Church in situations like this is the basis for any religious purposes. 10. In this, intent seems to be in gross while language seems to be appurtenant. 11. How long does it last? like a determinable so long as it is used for church purposes then back to the grantor e. Easement Implied from Prior Use (preferred over necessity bc termination rule) i. Required Elements: 1. Prior Unity of title between the dominant and servient estates (common owner) 2. Use of the claimed servitude at the time that the title to those estates was severed (i.e., a previous existing or prior use); 3. Use that is apparent or actually known 4. Use that is reasonable necessary -> does not mean strict necessity like implied by necessity ii. Preferred over Implied by Necessity: If a servitude implied by prior use is created, it lasts indefinitely and is not terminated even if the reasonable necessity ceases to exist. It is thus preferable to a servitude by necessity and will be pursued first by Buzzkill. iii. Policy Reasoning Rule: The policy behind implied by prior use servitudes is to follow the apparent

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f.

intent of the parties about whether the servitude continues after the time that the dominant and servient estates separated. 1. Grantors intent Rule: Bottom 2 elements seek to demonstrate intent. 2. The requirements of apparent or known use and reasonable necessity seek to demonstrate that intent. If a use is apparent or known and reasonably necessary while the dominant and servient parcels are under a unity of ownership, it is presumed (implied) that the parties expected that the use continue even after the ownership is severed. Conversely, if the use is unknown or unnecessary, then the parties intent cannot be so implied. 3. Talk about what Grantor intended at time of conveyance: a. Argument for servitude: thats the reason purchaser bought the land in first place so seller had to know that it was implied that he use the servitude on her land. b. Argument against: IT was not implied bc since there were roads around that it was intended for purchaser to use those roads iv. Severance of title 1. Ex. S owns greenacre, a 100 acre tract of unimproved land that adjoins a public highway on its southern border. For years before the sale, S regularly reached the north half of greenacre by using a road that rins from the highway to south half of land. On Jan. 1, S conveys the northern half of greenacre to B. 2. Severence is met because S divided Greenacre into two parcels, selling one to B and retaining other. v. Apparent and Continuous use 1. While the common owner still owns both parcels, he or she must use one parcel in a manner that benefits the other parcel. This pre-existing use must be so apparent and continuous that parties presumably intended it to continue. 2. Reflects grantors intent vi. Reasonable Necessity 1. Must be convenient or beneficial to dominant tenement. 2. Reasonable necessity does not mean strict necessity when discussing a servitude implied by prior use. It is enough that the use be reasonably necessary for the enjoyment of the property. 3. Argument for: only way to access land. Without access, land would have no value to owner anymore. Even if surrounded by roads, it would be costly and destruct some of his farmland. 4. Argument Against it being reasonable necessity: presence of other roads surrounding property and that owner is not landlocked if cannot use servitude bc other possible routes. vii. Policy 1. Parties intent 2. Productive use of land. Implied Easement by Necessity i. Elements: 1. Prior Unity of title among the dominant and servient estates 2. Strict necessity for the claimed use present at the time that the unity of title is severed ii. Rules: 1. Policy Reasoning Rules: The policy behind servitudes implied by necessity is that property should be productive; specifically, property should not be left without access to and from it (land-locked) because leaving property in such a situation would not allow the property to be utilized. Thus, to avoid that situation, courts imply servitudes by necessity. 2. Strict Necessity Rule: With regard to necessity, the bar is significantly higher to create a servitude by necessity than to create a servitude implied by prior use. The claimed use must be strictly necessary for the reasonable enjoyment of the property. a. If roads present around property, then not strict necessity b. only if surrounded by water and volcanoes c. If not strict necessity bc other ways, then could say way to expensive to craft other road. (topography of the land and the affect construction would have on land) 3. Termination of Easement ENDS when no longer a necessity unlike implied by use.

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4. Majority view: This is similar to implied but rather than reasonable necessity, it is usually strict necessity. 5. Minority View: Reasonable necessity 6. No need for easement at time of severance Rule: With easement by necessity, there could be an easement even if there was no easement at time of severance. iii. Problem #2 (p. 695) 1. A owns 5 adjoining tracts of land 1through 5, all of which were previously owned by O Prior unity of title 2. A dies and the lots are separated and given to heirs severance of property 3. Concerned with lot 5 and access to the roads a. There has never been an easement no implied by prior use b. Where should the road go? i. Find the least burdensome point, create the easement by necessity, and require contribution from F and the other unburdened parcels c. Courts will have to determine how to spread the burden equally to all parties 4. Necessity must be created at the time of severance if the road was there before severance it would be prior use and therefore implied iv. Othen v. Rosier 1. Issue: Under TX property law, does the creation of a dam to inhibit water flow, which sits on the southern end of a shared road and well before the parties moved there, also inhibit ingress and egress on what the PL/appellant says is an easement of necessity and of prescription. 2. Holding: No. The intent of the original owner was not for a joined use of the easement, and the easement itself was permissive, not prescriptive in nature, as there was no adverse possession. 3. Othen is saying that Rosier has trespassed on his servitude by making it impassible. 4. Rosier is saying that it is not a necessity and therefore not an implied easement. 5. Two theories for Othen: 1) Either I need it or no way to get to road (necessity); or 2) Ive had it because Ive had it for so long I have it (prescription). 6. Public Policy & Othens Theory we do not want people to be trapped on land because it will disrupt productivity if Othen cant get to land, he will not make productive use to land. g. Easement by Prescription i. Rule: A servitude by prescription is created by adverse use over a long period of time and is similar to adverse possession. ii. Rule: Prescriptive servitudes are established when a party uses another's property for an extended period of time. The use must be open and notorious, hostile, and for a period sufficient to satisfy the statutorily required period of time. iii. Diff in AP Rule: Prescriptive servitudes are similar to adverse possession except that rather than claiming title by adverse possession, the party claiming a prescriptive easement is claiming merely use. As a result, it is typically not required that the use be exclusive, but rather simply non-permissive. iv. Time Rule: Typically, the statutorily required period for a prescriptive servitude is parallel to the period required for adverse possession. Here, that period is 5 years. 1. Applied: Bart has been "regularly" using the skateboard ramp for a period of more than 5 years. There is no indication in the facts that his use has been permissive - in other words, his use has been hostile. His use, apparently, has been open and notorious (assuming that he is using the skateboard ramp in such a way that would put a normal owner on notice of his presence (e.g., not only using it at midnight). 2. If Springfield is in a jurisdiciton that requires exclusive possession, then it would need to be determined whether Millhouse has likewise been using the skateboard ramp - if so, it is possible that Bart's quest for a prescriptive servitude will be defeated. 3. The problem here is that no one has any clue what jurisdiction Springfield is in!! 4. Buzzkill example: Here, Buzzkills use of Merediths driveway has taken place for only a matter of weeks and so there is no possibility of there having been a servitude by prescription created v. Very similar to adverse possession.

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1. Main difference the result a. With prescriptive easement you merely receive an easement in land with adverse receive title to land. 2. Negative easements cannot be established through prescription. vi. Elements: 1. Open and Notorious 2. Hostile/Adverse and under a claim of right; and 3. Continuous and uninterrupted for statutory period. vii. Open and notorious 1. Claimants use must be sufficiently visible and apparent that a diligent owner who was present on the land at the time would be able to discover it. Must not be concealed or hidden. 2. However not necessary that owner have actual knowledge. viii. Hostile/Adverse and under claim of right 1. Objective test (majority) Claimant need only use the land as a reasonable owner would use it, without permission from the servient owner; claimants subjective intent irrelevant. 2. Subjective (minority) requires the claimant to have good faith belief that he or she is entitled to the land. ix. Continuous and uninterrupted for statutory period 1. Needs to be only as frequent as is appropriate given the nature of the easement and the character of the land. a. In rural areas seasonal use may be sufficient. 2. Uninterrupted If true owner does something that interrupts the use it resets the time a. Ex. Use of a road original owner cuts a tree down that blocks road interrupt time starts back when interruption stops. x. Policy Productivity of land xi. Exclusive use 1. Generally means that the use be exclusive and distinguishable from general public not that it must be completely exclusive. 2. Some courts list exclusive use however this element has a special and narrow easement when comes to prescription and is rarely important usually covered by open and notorious. h. It is always better to have an explicit easement. If there was an explicit easement, the Rosiers ability to interfere with the easement is gone. i. With easement by necessity, there could be an easement even if there was no easement at time of severance. j. 2:16, 2:17 Servitudes by Prescription under restatements rule exclusivity is not required. Court in Othen takes the other side saying that exclusivity is required. Restatement is not the law it is the way that the law is most likely going. It is a good guide but not necessarily the law. So, know whether in your jurisdiction the exclusivity requirement is there. In most jurisdictions the exclusivity requirement is not there for prescription. k. 2:16 Servitudes Created by Prescription: Prescriptive Use 1. A prescriptive use of land that meets the requirements set forth in 2.17 creates a servitude. A prescriptive use is either: a. A use that is adverse to the owner of the land or the interest in land against which the servitude is claimed, or b. A use that is made pursuant to the terms of an intended but imperfectly created servitude, or the enjoyment of the benefit of an intended but imperfectly created servitude. l. 2:17 Servitudes Created by Prescription: Requirements i. A servitude is created by a prescriptive use of land, as that term is defined in 2.16, if the prescriptive use is: 1. Open or notorious, and 2. Continued without effective interruption for the prescriptive period. m. Termination of Easements i. Abandonment ii. Misuse

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iii. Prescription

Type Explicit Implied by prior use

How created? Contained explicitly in the conveyance 1. Prior unity of title 2. Prior use at time of severance 3. Expectation that the use will continue - Apparent - Reasonably necessary

Requirement

Cases

In writing + signed by the Willard grantor Van Sandt

Necessity

1. Prior unity of title 2. Necessity (not mere convenience) 3. Necessity at the time of severance

Othen

Prescription

1. Adverse use 2. Permissive use under an improperly created servitude (think you have permission but you dont)

Either 1 or 2 + open, Othen notorious, continuous and long enough use

RAP I.

Social Goals and Policies a. Centuries ago it became possible for a transferor to control the manner by which future interests would pass to future generations. Unfortunately this control could last for numerous generations. b. To combat this problem the rule against perpetuities was created.

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Examples: FSSCS 1. Alex conveys To B provided that she not get married. -Invalid condition against public policy to not encourage marriage. 2. A conveys To B so long as she remains unmarried. --Ok because it attempts to support Betty until she gets married. Present Interests and Future Interests 1. O transfers blackacre to A for life, then to B for life, then to C. -A owns a present interest held in life estate. - B has a vested remainder in a life estate once A dies she will have present interest in LE - C has a vested remainder held in fee simple absolute Once B dies she will have present in Future Interest by Grantor or transferor 1. O transfers Blackacre to A and his heirs, but if A does not graduate lawschool by time he is 30, then to B. -A has a present interest in a fee simple subject to an executory limitation. - B has a future interest, an executory interest held in fee simple absolute. 2. O transfers to A for life, then to B and her heirs if she graduates from lawschool before or after As death. -B has a present interest in a life estate. - A has an executory interest it shifts if becomes possessory before As death, but springs if it becomes possessory after. 3. O transfers to A for life so long as she farms black acre, but if she does not to B. -A has a life estate determinable. -B has a vested remainder b/c she is for sure going to get it no matter what. Vested And Contingent Remainder 1. O conveys to A for life, remainder to Bs heirs. -Contingent remainder living person cannot have heirs so it is contingent on heirs being alive at Bs death. 2. O conveys to his son, A, for life, and then to As children. A is alive. A has 3 children (B,C, and D). -Vested remainder subject to open. RAP applies here. 3. O conveys to A for life, then to As Widow. A is married to B. -As widow is an unascertainable person -- contingent. B may expect to be As widow but not certain. B is not a recognized property interest. Condition Precedent and Condition Subsequent 1. O conveys Blackacre to A for life, then if B survives A, to B and his heirs. -A has a present interest in a life estate. -B has a contingent remainder (remainder because it naturally follows termination of As life estate). requirement is a condition precedent, must outlive A. -If A survives B then on As death O and his heirs take a reversion. 2. O conveys to A for life, and when A dies, to B and his heirs. -A has a present interest in a life estate.

FS

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-B has a future interest in a fee simple indefeasibly vested remainder held in fee simple absolute. 3. O conveys to A for life, then to As surviving spouse and her heirs. -A has a present interest in a life estate. -Spouse and heirs have a contingent remainder because survivorship is an express condition precedent to taking the interest. 4. O conveys Blackacre to A for life, then to B and his heirs, but if B does not survive A, then to C and his heirs. -A has a present interest in life estate. -B has a vested remainder subject to divestment in a fee simple absolute. -C has an executory interest. 5. O conveys Blackacre to A for life, remainder to Bs children. B is alive with two children, C and D. -A has a present interest in a life estate. -Bs two children have a vested remainder subject to open there interest is vested because it follows natural way subject to a divestment if class grows. 6. O conveys to A for life, remainder to Bs children who attain age 18. B is alive and has one child C, who is ten. -A ha s a present interest in life estate. -C has a contingent remainder in fee simple absolute. -If C is 11 when A dies it is a reversion back to O and C have it if he reaches 18 from O. 7. O conveys Blackacre to A for life, then to B if B attains the age of 21; but if B does not attain 21, to O. -A has present interest in a life estate. - B has contingent remainder condition precedent. -O has a reversion if not 21. 8. O conveys to A for life, and then to B if B reaches 21, if not to C. -A has a life estate. -B and C have alternative contingent remainders -O has a reversion Executory Interests 1. G deeds Blackacre to J when he graduates from law school. -J not a remainder since it does not follow natural termination it is a springing executory interest. Unitl J graduates G still holds it but if J graduates he cuts into Gs. -G interest is a reversion. 2. O conveys Blackacre to A for life, then to B and his heirs, but if A uses Blackacre for commercial purposes, then Blackacre goes immediately to B and his heirs. -A has present interest in a life estate subject to an executory limitation. - B has an 2 interests 1 )Vested remainder if it follows natural termination; 2) Shifting executroy interest if he cuts in. 3. O conveys to A and his heirs, but if A dies without issue to B and his heirs. -A has a present interest in fee simple subject to an executory limitation. -Bs interest is shifting executory limitation. 4. O trasnfers Blackacre to B to take effect if and when B agrees to farm Blackacre. -O has a present interest in Fee simple subject to executory limitation. -B has a springing executory interest. 5. O transfers Blackacre to A so long as Blackacre is used for farming, then to B and his heirs. -A has present interest subject to executory limitations

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-B shifting executory interest.

Vested Remainder Subject to Divestment 1. O conveys Blackacre to A for life, then to B and her heirs; but if B does not attain age 21, to C and his heirs. -B has a vested remainder subject to divestment in fee simple absolute. -C has a shifting executory interest in FSA. 2. O conveys Blackacre to A for life, then to B and her heirs; but if B stops farming Blackacre, to C and his heirs. -A has present in life estate -B has vested remainder subject to divestment. -C owns shifting executory interest. Subject to Open 1. Os will devises Blackacre to W for life, then to As children who attain age 21. A has 2 children :K (age 8) and L (age 5). -K and L have contingent remainders, contingent on attaining age 21. -The class of As children remain open to any after born children of A. 2. When K is age 15 and L is age 12, A has another childe, M. -The 3 children KLM have contingent remainders. -The class is still open for As children born later. 3. K reaches age 21, and now has a vested remainder subject to open. The class does not close physiologically since A is still alive and can have more children. 4. A has a fourth child N N has a contingent remainder and will share Blackacre as long as reaches 21. 5. K dies at age 23. -k is still vested. The condition precedent is 21. -Ks heirs will take his share. 6. W dies when L is 21, M is 9, and N is 2. A is still alive. -The class closes since K and L have satisfied -M and N are still members of class and will come in if reach 21. 7. Two years after previous example A has a fifth child X X does not belong to class because born after class closed. 8. N dies before 21 N will not receive any and neither Ns heirs.

2009 Exam Short Answer: Question 1: Your client comes to you with the hopes of conveying his land to his two children. He wants to ensure that both children can benefit from the land and that once one child dies, the other will take full ownership of the land. Draft a conveyance that satisfies your clients intent. Briefly explain why your choice is superior to other options. Best Answer: Trust, with children as beneficiaries, trust to terminate at death of first child to die and at that time to distribute trust corpus to surviving child Second best: Joint tenancy. Note: must be done with the four unities. Ensures right of survivorship for surviving child Rationale: The joint tenancy is superior to a tenancy in common because of the right of survivorship inherent in a joint tenancy. In a tenancy in common, the grantor's intent that the surviving child take the entirety of the property would be defeated - instead, the will of the first decedent child would dictate what happened to his share of the

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property.The trust is superior to the joint tenancy because a joint tenancy can be terminated (and the right of survivorship thus defeated) when one joint tenant seeks to sell his interest. Such an act would end the joint tenancy, leaving a tenancy in common in its place. As described above, a tenancy in common does not satisfy the grantor's wish to ensure that the surviving child takes the entirety of the property. By separating the legal and equitable title, the trust option ensures that the property will be for the benefit of the children. If not, the trustee will have violated a fiduciary duty. In addition, the trust option more definitively ensures that the surviving child will take the property (even if the property has been sold and is now in a different form) upon the death of the first child. The trust provides greater control to the grantor and allows the grantor's intent to best be followed. Question 2: Which, if any, of the following situations results in the creation of a servitude? (may be more than one) Expound on your answers as necessary. . 1) John, the owner of 2 contiguous plots, conveys Plot #1 to Sam and Plot #2 to Alex. Plot #1 has a house on it that John lived in. Plot #2 has a swimming pool on it that John always used. The conveyance to Alex reads as follows: John grants Plot #2 to Alex subject to the ability of the owner of Plot #1 to utilize the swimming pool located on Plot #2. Answer: Explicit Servitude . 2) John, the owner of 2 contiguous plots, conveys Plot #1 to Sam and Plot #2 to Alex. Plot #1 has a house on it that John lived in. Plot #2 has a swimming pool on it that John had always used. The conveyance to Alex reads as follows: John grants Plot #2 to Alex. Answer: Not servitude, ability to use pool is not reasonably necessary to the enjoyment of the property. . 3) John, the owner of 2 contiguous plots, conveys Plot #1 to Sam and Plot #2 to Alex. Plot #1 has a house on it that John lived in. Plot #2 is bisected by a driveway that connects the house on Plot #1 to the only road adjacent to the property. John has always used that driveway. The conveyance to Alex reads as follows: John grants Plot #2 to Alex. Answer: Is a servitude either by implied by prior use or by necessity. For both prior use and necessity servitudes, there must have been prior unity of title. Here, that is accomplished as John once owned both parcels. For a servitude implied by prior use, the use must be apparent and reasonably necessary at the time of severance of the title. Here, the use of the driveway was apparent. Use of a driveway is reasonably necessary to the enjoyment of the property. Thus, this is a servitude implied by prior use. The policy in favor of servitudes implied by prior use is that it protects the intentions and expectations of the parties involved. So long as a use is apparent and necessary, then it should have been in the expectation of the grantor and grantee that the use would continue. For a servitude by necessity, the use must be strictly necessary. Access to the parcel is necessary. Thus, this is a servitude by necessity. . 4) John, the owner of 2 contiguous plots, conveys Plot #1 to Sam and Plot #2 to Alex. Plot #1 has a house on it that John lived in. Plot #2 is bisected by a driveway that connects the house on Plot #1 to a road. John has always used that driveway. In addition, Plot #1 is bordered on another side by an additional road. There is a forest between the house on Plot #1 and the road bordering Plot #1. The conveyance to Alex reads as follows: John grants Plot #2 to Alex. . Answer: is a servitude, either by implied by prior use or necessity. Might not be strict necessity since there is another road. Conveyances: Question 3: O conveys land To A on condition that the Grizzlies NBA franchise remains in the city of Memphis. . a) At the moment of conveyance, who holds what interest? A=FSSCS, O=right of entry . b) If the Grizzlies relocate from Memphis, who holds what interest? A=FSSCS, O=right of entry, O must exercise right of entry before that future interest becomes possessory. O can do it at any point prior to the expiration of the statute of limitations for adverse possession. That statute will begin running at the moment of defeasance. Question 4: O conveys land To A on condition that the Grizzlies NBA franchise remains in the city of Memphis, but if the Grizzlies relocate from Memphis, then to B.

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. a) At the moment of conveyance, who holds what interest? A=F.S. B attempted executor interest violates RAP . b) If the Grizzlies relocate from Memphis, who holds what interest? Same as above Question 5: O conveys land To A on condition that the Grizzlies NBA franchise remains in the city of Memphis, but if the Grizzlies relocate from Memphis during As life, then to B. . a) At the moment of conveyance, who holds what interest? A=FSSEL, B=shifting executory interest . b) If the Grizzlies relocate from Memphis during As life, who holds what interest? B=F.S. . c) If the Grizzlies have not relocated when A dies, who holds what interest? As heirs=F.S. Question 6: O conveys land To A with the understanding that if the Grizzlies NBA franchise relocates from Memphis during As life that B will take fee simple. . a) At moment of conveyance, who holds what interest? understanding is Contract rights so no defeasible fee A=F.S. . b) If the Grizzlies relocate from Memphis during As life, who holds what interest? Same as above Question 7: O conveys land To A for life, then to B, but if the Grizzlies NBA franchise relocates from Memphis during As life, then to C. . a) At the moment of conveyance, who holds what interest? A=life estate, B=vested remainder subj to divestment in F.S., C=contingent remainder . b) If Grizzlies relocate from Memphis during As life, who holds what interest? A=life estate, C=indefeasibly vested Question 8: O conveys land To A for life, then to As children, but if the Grizzlies NBA franchise relocates from Memphis during As life, then to B. At the time of conveyance, A has 3 children X, Y, and Z. X subsequently conveys her interest to D. Y subsequently dies, leaving everything by will to E. . a) At this point, who holds what interest? A=life estate, D,E,Z=vested remain subj to open; B= contingent remainder . b) A subsequently has an additional child, W. A then dies while the Grizzlies are still located in Memphis. At this point, who holds what interest? WDEZ=Tenants in common where each hold of fee simple Question 9: O conveys land To A on condition that the property not be sold so long as the Grizzlies NBA franchise is located in Memphis. If A attempts to sell, then to B. . a) At the moment of conveyance, who holds what interest? A=fee simple bc language is invalid restraint on alienation . b) If A executes a conveyance to C, who holds what interest? C=fee simple

Fall Exam 2010 Conveyances #1 O conveys property To A for life, then to As children. At the time of conveyance, A has three children B, C, and D. Before As death, C dies, leaving 2 children (E and F). (A) At the time of conveyance, who holds what interest? A has a life estate (1 point) As children have a vested remainder subject to open (1 point) in fee simple (1 point)

(B) At As death, who holds what interest?

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B, D, E, and F are each tenants in common (1 point) holding the property in fee simple B and D hold 1/3 each (2 points) E and F hold the final 1/3 (1 point) as a separate tenancy in common (1 point)

#2 O conveys property To A for life, then to B, but if the Pyramid in downtown Memphis is occupied at the time of As death, then back to O. (A) At the time of conveyance, who holds what interest? A has a life estate (1 point) B has a vested remainder subject to divestment (1 point) in fee simple (1 point) has a reversion (1 point) [Note: 0.5 points given for O has executory interest]

(B) The Pyramid remains unoccupied at the time of As death. However, three years after As death, Bass Pro Shops moves into the Pyramid. At that time, who holds what interest? Briefly explain your answer. B has a fee simple (1 point) We look at the world at the time of As death because that is what the language of the conveyance dictates. Because the Pyramid was not occupied at the time of As death, the contingency didnt occur and never can, therefore Bs vested remainder subject to divestment will not divest and B takes in fee simple. (2 points)

(C) Alternatively, if Bass Pro Shops moves into the Pyramid prior to As death, who holds what interest at the time Bass Pro Shops moves in? A has a life estate (1 point) O has a reversion (1 point) B has nothing as Bs remainder has been divested (1 point) [Note: if students identified vagueness of fact that Bass Pro could conceivably move out before As death and therefore make Pyramid again vacant and ultimately vacant at time of As death, points were given for identifying the interests in such a case A has life estate, B has vested remainder subject to divestment again, O has reversion]

#3 O conveys property To A for life, then to B on condition that the Pyramid remain unoccupied at the time of As death, and if the Pyramid gains an occupant prior to As death, then to C. (A) At the time of conveyance, who owns what interest? A has a life estate (1 point) B has a contingent remainder (1 point) in fee simple (or could read as in fee simple subject to condition subsequent) (1 point for either) C has a contingent remainder (1 point) in fee simple (1 point)

(B) Bass Pro Shops moves into Pyramid prior to As death. A conveys her interest to D. At that time, who holds what interes t? D has a life estate (1 point) per autre vie for As life (1 point) C has an indefeasibly vested remainder (1 point) in fee simple (1 point)

#4 O conveys property To A on condition that the Pyramid remains vacant. Currently, the Pyramid is vacant. In 2011, Bass Pro Shops moves into the Pyramid. (A) At the time Bass Prop Shops moves into the Pyramid, who owns what interest in the property O had conveyed? A has a fee simple subject to condition subsequent (1 point) O has a right of entry (1 point) in fee simple (1 point)

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(B) In 2017, assuming that nothing changes (i.e., A remains in possession), who owns what interest in that property? Briefly explain your answer. A still has a fee simple subject to condition subsequent (1 point) O still has a right of entry in fee simple (2 points) This is because the right of entry does not become possessory unless and until the future interest holder (here, O) takes action to eject the present interest holder (here, A). (2 points)

#5 O conveys property To A while the Pyramid is vacant. Currently, the Pyramid is vacant. In 2011, Bass Pro Shops moves into the Pyramid. (A) At the time Bass Pro Shops moves into the Pyramid, who owns what interest in the property O had conveyed? O has fee simple (3 points) (the exam mistakenly forgot to ask for an explanation the explanation is as follows: A initially had a fee simple determinable and O had a possibility of reverter. When the defeasance occurred as Bass Pro moved in, the possibility of reverter automatically became possessory and O took over as the fee simple holder, regardless of whether A vacated or not)

(B) In 2017, assuming that nothing changes (i.e., A remains in possession), who owns what interest in that property? A has fee simple (3 points) (the exam mistakenly forgot to ask for an explanation the explanation is as follows: When the defeasance occurred, O became the fee simple holder. At that point, A became an adverse possessor. If A has been on the property for long enough and in such a manner as to satisfy the requirements of adverse possession, then they will have acquired title to the property by adverse possession)

#6 O conveys property To A while the Pyramid is vacant, and if the Pyramid gains an occupant, then to B. Currently, the Pyramid is vacant. (A) At the time of conveyance, who owns what interest? Briefly explain your answer. This conveyance violates the rule against perpetuities (2 points) unless the jurisdiction has adopted a reform of that rule, such as wait-and-see or the Uniform Statutory RAP (1 point) Since it is a RAP violation, you strike the violating language leaving the conveyance as To A or To A while the Pyramid is vacant meaning that A either has a fee simple or a fee simple determinable (1 point) If it did not violate the RAP, A would have a fee simple subject to an executory limitation and B would have an executory interest in fee simple (1 point)

(B) If Bass Pro Shops moves in, then who owns what interest? Briefly explain your answer. Again, the conveyance violates the rule against perpetuities (2 points) unless the jurisdiction has adopted a reform of that rule, such as wait-and-see or the Uniform Statutory RAP (1 point) Since it is a RAP violation, you strike the violating language leaving the conveyance as To A or To A while the Pyramid is vacant. If To A, then A still has a fee simple. If To A while the Pyramid is vacant, the O has a fee simple having taken over upon the moment of defeasance. (1 point) If it did not violate the rule against perpetuities, then B would take in fee simple (1 point)

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SHORT ANSWER #1 Harry and Wilma were married in a community property jurisdiction in 2004. They have lived most of their married lives in community property jurisdictions; however, they did spend 2 years (2006-2008) in a common law jurisdiction. Prior to Marriage (pre-2004), they had the following property: - Harry had a bank account - Harry had a minivan - Wilma had a convertible - Wilma had a stock portfolio - Wilma had a bank account During the 2 years they lived in a common law jurisdiction (2006-2008), they acquired the following property: - The couple purchased a sailboat as tenants in common - Wilma purchased a Vespa Not in equitable distribution bc separate in common law Upon returning to the community property jurisdiction (after 2008), they acquired the following property: The couple purchased a home together; both spouses are listed on the mortgage and title - Harry inherited a relatives living room furniture - As a housewarming gift, the couples friends give them patio furniture - Wilma purchased a second convertible and gave Harry the old convertible - Harry sold the minivan and put the money in his own stock portfolio, held separately Wilma is considering filing for divorce. However, she wants to know how the property will be distributed if the couple does divorce. Briefly describe the general rule for distribution of property upon divorce in a community property jurisdiction and provide a list of only the property that would be subject to equitable distribution. Answer: The general rule for distribution of property upon divorce in a community property state is that all community property is subject to equal or equitable distribution. The presumption is that any property acquired by either spouse, titled in whatever way (separately or together), obtained however is community property. That presumption is rebuttable and may differ in different jurisdictions for instance, some jurisdictions may exclude gifts, inheritances, and/or income from separate property from being community property (and thus exclude from equitable distribution upon divorce). Separate property (obtained prior to marriage or, in certain jurisdictions by gift or inheritance) is not subject to equitable distribution upon divorce. However, separate property may become community property if it is commingled and used for the benefit of the marriage. Finally, property obtained while domiciled in a common law state is not community property and maintains its original common law status even if the couple moves into a community property jurisdiction. Clearly Classified as Community Property Subject to Equitable Distribution: - Home - Second convertible - Patio furniture (even though it is a gift, it is a gift to the couple)

Potentially Classified as Community Property Subject to Equitable Distribution: - Living room furniture (depends on whether the jurisdiction considers gifts to a single spouse during the marriage to be community property or not) - Old convertible (clearly was separate property of Wilma initially; then, it was a gift to Harry during the marriage this will depend on whether the jurisdiction considers gifts to a single spouse during the marriage to be community property or not; this is further complicated by the fact that the gift is an intra-marriage gift; we would need additional facts on the extent the old convertible was used for the benefit of the marital couple, as opposed to solely for Harrys benefit) - Harrys stock portfolio (this will depend on whether the minivan was commingled to the extent that it would stop being separate property and start being community property; in addition, it depends on whether the jurisdiction treats income from separate property as community property or not; finally, if it is not already community property, this will

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depend on the extent to which the stock portfolio is commingled and utilized for the benefit of the marital unit (as opposed to for Harrys sole benefit) - Anything that has been commingled and utilized for the benefit of the marriage (bank accounts, vespa)

Question: Instances of property law balancing the public interest with the rights of private property owners: 1. Adverse Possession the right of the private owner to do or not do whatever she wants with her property against the public interest in having property be productive 2. Right to Exclude the right of the private owner to control access to his property against the public interest in traversing private property for public good. State v. Shack 3. Lost v. Mislaid - the right of the private owner or finder of property to quiet title in her name against the public interest in returning items to their rightful owner. 4. RAP the right of the private owner to control property after it has been conveyed against the public interest in assuring the alienability of property. 5. Law of Capture the right of the private owner to secure what she has captured against the public interest in protecting industries, such as whaling.
ACME ADVERSE POSSESSNG CITY/NATURAL RESOURCES (Old Exam Problem) Question 1: Title to the land. Issue: To whom should title to the Valuable Stuff be awarded?

Issue with City's Theory:

Is City truly the rightful title-holder to the land upon which the Valuable Stuff was discovered OR has another party acquired title to the land through adverse possession? The conveyance from City to RR was of a fee simple determinable because language of time was used ("so long as"). City therefore maintained a possibility of reverter. At an event of defeasance, a fee simple determinable terminates automatically. Adverse possession begins to run from the event of defeasance and previous FSD holder immediately becomes a trespasser. The language of defeasance states that when RR stops having its world headquarters located on the land, then that is the event of defeasance. On May 1, 2000, RR stopped having its world headquarters on the land, though it maintained a large office. On May 1, 2002, the office on the land was shut down. On August 1, 2002, Acme took over the facility and located its world headquarters there.

Facts:

Defeasible Fee Rule:

Facts:

Potential Event of Defeasance 1:

Upon the acquisition of RR by Big RR, RR ceased having its world headquarters on the land.

City's Theory Counter-Argument:

This was an event of defeasance. City retakes title by exercising its future interest (possibility of reverter). Because this was a fee simple determinable, the adverse possession clock begins to run from the event of defeasance and the 5 year period for City to eject has expired, so Acme gets title through adverse possession. [See Adverse Possession discussion below]

Acme's Theory 1:

This was not an event of defeasance because the size and workforce of the facility remained the same. The intent of the parties was to protect City from the departure of RR or a company like it from the downtown area and that intent is served even when a Big RR satellite office (and not necessarily RR's world headquarters) is located on the land. Adverse possession applies. Adverse possession requires possession that is a) actual and exclusive; b) open and notorious; c) hostile; d) continuous; and e) for the statutorily required period of time Because this was an event of defeasance and because the adverse possession clock began to run immediately (since original conveyance was fee simple determinable), Acme has acquired the land by adverse possession.

Acme's Theory 2: Rule:

Applied:

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Counter 1 to Acme's Theory 2: Facts: Response:

If this is a jurisdiction that requires good faith intent on the part of the adverse possessor, then Acme fails to achieve the hostility requirement for adverse possession and City, therefore, is still the title-holder. At the time Acme began possession the property, Acme was not sure if its possession was lawful. If this is a jurisdiction that uses either the objective or intent to take standards of intent on the part of the adverse possessor, then Acme's conduct satisfies the hostility requirement. Acme has not adversely possessed for the requisite time period because Acme cannot be allowed to tack its possession onto the adverse possession of Big RR. Acme is in privity of contract with Big RR and therefore, tacking should be allowed. It is not possible to adversely possess against the government. Language in the deed requiring RR to keep world headquarters on land is an invalid restraint on alienation. (Falls City ) Courts do not like to enforce restraints on alienation because such restraints limit the marketability of property. This is precisely the type of situation courts seek to avoid by refusing to enforce restraints on alienation. Because of the language of defeasance, RR can never sell the land to anyone. The restraint is therefore an absolute restraint on alienation and courts do not enforce such restraints, especially in the commercial context. Given ambiguous restraints on alienation, courts look to how limited the field of buyers (in this case, there can be no buyers); how long the restraint is for (in this case, forever); and the purpose of the restraint (in this case, to protect City from having prime downtown property fall into disrepair or unsanctioned use). The court would have to balance these factors, but given the facts, is likely to conclude that this restraint is invalid. Because the restraint on alienation was invalid, the court will consider the grant to RR as the grant of fee simple. Acme, therefore, holds in fee simple. Because courts do not like restraints on alienation and because courts should try to give effect to all clauses written into a conveyance (rule of construction), the court should consider the language of defeasance as more flexible. The court should consider the purpose behind the language of defeasance in order to give it effect. The purpose here was to protect City from having prime downtown space go to a party that would not desirable (either because it is an unsavory or pollutive business or simply because it would not hire as many residents or pay its city taxes promptly). Given this purpose, the language of defeasance could be read in such a way that the sale of RR to Big RR would not constitute an event of defeasance, but the closing of Big RR's offices would be an event of defeasance. However, since the adverse possession period has not been satisfied since that time, then Acme is a trespasser.

Counter 2 to Acme's Theory 2: Response: Counter 3 to Acme's Theory 2: Acme's Theory 3: Reasoning:

Applied:

Applied Further:

Result:

Counter to Acme's Theory 3:

Counter Applied:

Counter Applied Further:

Acme's Theory 4:

Where language of defeasance is ambiguous, court will construe the language as a contract condition or covenant rather than language of defeasance attached to a conveyance. Courts do not like the forfeitures potentially created by defeasible fees and therefore require very specific language in order to create a defeasible fee. The language used here ("so long as") is clearly the type of language required to create a fee simple determinable. Because there is no ambiguous language, the court must convey the language as a defeasance attached to a conveyance.

Reasoning:

Counter:

Potential Event of Defesance 2: Facts:

Upon the shutdown of Big RR's offices on land, a headquarters-type operation ceased being on the land. The conveyance includes language of defeasance that requires RR's headquarters to be on the land. There is no headquarters on the land as of May 1, 2002. The conveyance is of a fee simple determinable.

City's Theory: Applied:

This was an event of defeasance both based on the plain language of defeasance in the conveyance and based on the intent of the parties to protect City from having the land unused and its citizens unemployed. Because the conveyance from City was a fee simple determinable, City retained a possibility of reverter. Once the event of defeasance occurred, City retained fee simple title to the land. Because the requisite adverse possession period (5 years) has

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not expired, City may still exercise its right to eject Acme from the land. Counter-Argument: City's conduct in waiting until the last moment before the adverse possession period had run suggests bad faith in waiting to assert its right to eject and the court should not reward such action. Even if the court does not award Acme title to the property, the court should require City to pay Acme for the amounts invested to turn its factory into a Valuable Stuff manufacturing plant. Law should not reward a title-holder that allows an adverse possessor/trespasser to improve property before ejecting. Allowing such conduct may discourage productivity. Courts do not like forfeitures.

Remedial Opportunity:

Reasoning for Remedy: Reasoning for Remedy 2:

Acme's Theory:

This was not an event of defeasance because after the shutdown of Big RR's office, Acme constructed its world headquarters on the land. Thus, the intent of the parties to protect City from having the land unused and its citizens unemployed was served by Acme's purchase of the land. Because it was not an event of defeasance, Acme maintains title to the land and should enjoy profits from Valuable Stuff. An event of defeasance cannot be undone.

Applied: Counter-Argument:

Question 2: Profits to the Valuable Stuff

Acme's Theory:

Title to previously title-less things, such as natural resources, should be awarded based on labor plus pursuit by an individual. (Pierson )

Facts:

Acme has expended considerable labor in pursuit of the Valuable Stuff, including conversion of their entire business model and construction of a facility made specifically to manufacture Valuable Stuff. Law should seek to encourage productivity. This rule will encourage parties to work and be productive because it rewards such labor with title. Because Acme has expended considerable labor and because the law should reward such labor by awarding title, Acme should be given title to the Valuable Stuff and the profits realized from the sale of the Valuable Stuff. Title to previously title-less things, such as natural resources, should be awarded to the party that discovers the property. Law should seek to encourage discovery of natural resources. Because Acme first discovered the Valuable Stuff, Acme should be given title to the Valubale Stuff and the profits realized from it.

Reasoning:

Theory Applied: Acme's Theory 2: Reasoning: Theory 2 Applied:

City's Theory:

Title to property discovered on the land of another should be awarded to the owner of the land upon which the property was discovered. Law should discourage trespassers from pillaging for natural resources on the property of another At the time of discovery, City was the rightful title-holder to the land upon which the Valuable Stuff was discovered. Because City was the rightful title-holder to the land upon which the Valuable Stuff was discovered, title to and profits from the Valuable Stuff should be awarded to City. [From here, go to discussion of adverse possession above] Event of defeasance occurs when Big RR acquires RR on May 1, 2000. Adverse possession achieved on April 30, 2005. City, as title holder to property, is entitled to profits through April 30, 2005. Acme, as title holder to property after 4/30/05, is entitled to profits after that time.

Reasoning: Facts: City's Theory Applied: Practical Result 1: Applied:

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Potential Remedy for Acme: Practical Result 2: Applied: Potential Remedy for Acme:

Acme may be able to recover costs of making Valuable Stuff profitable prior to April 30, 2005. (Ghen ) Event of defeasance occurs when Big RR office shuts down on May 1, 2002. Adverse possession cannot be achieved until April 30, 2007. City, as title holder to property, is entitled to all profits. Acme may be able to recover costs of making Valuable Stuff profitable. (Ghen)

Additional Remedieal Issue:

Can Acme recover costs of conversion of factory from roadrunner catching devices to valuable stuff production? Even if the court does not award Acme title to the Valuable Stuff or awards title only through April 30, 2005, the court should require City to pay Acme for the amounts invested to turn its factory into a Valuable Stuff manufacturing plant. Law should not reward a title-holder that allows an adverse possessor/trespasser to improve property before ejecting. Allowing such conduct may discourage productivity. Courts do not like forfeitures.

Acme's Remedial Claim:

Reasoning 1: Reasoning 2:

Question 3: Any difference if the conveyance had been a fee simple subject to condition subsequent? Unlike a fee simple determinable, a fee simple subject to condition subsequent gives rise to a right of entry future interest. This means that the present estate does not terminate automatically upon an event of defeasance, but rather an event of defeasance simply gives the future interest holder the right to exercise that interest. Had the conveyance from City been a FSSCS, City would have retained the future interest of a right of entry. If any of the events qualified as events of defeasance, then City can at any time exercise its right of entry and evict the present estate holder. Having now initiated an action for recovery of title, City should win. Only if there has not been an event of defeasance can the present interest holder maintain possession of the property. There may be no difference because many states have adopted statutes limiting a right of entry to a specified amount of time following an event of defeasance; this amount of time is typically the same length of time as adverse possession (here, 5 years); thus, if the state has such a statute, then there is no effect to the conveyance being a fee simple subject to condition subsequent as opposed to a fee simple determinable

Difference:

Applied:

Applied 2:

Counter-Argument:

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