PROPERTY – SMALL OUTLINE

SPRING 2008

INTRO / ESTABLISHING PROPERTY

  • Property right: protection by the state of a claim to valuable resources
  • Possession: physical control + intent to assume dominion
  • Johnson v. M’Intosh (p. 70): Indians had right of poss, not ownership, so couldn’t convey
  • Popov v. Hayashi (p. 19): poss = phys cont + intent to reduce to poss (constructive!)
  • A prior peaceful possessor > subsequent possessor (Tapscott)
  • Accessions
  • Addition of value to existing good, typically through labor or addition of new goods
  • GR: if labor only slightly increases value, owner entitled to finished product
  • Exc: if labor signif increases value, laborer is entitled (but pay O for raw mat)

RIGHTS BY CAPTURE

  • Fundamental rule: the first person to take possession [of an un-owned thing] owns it.
  • Foster competition!
  • Wild animals – not previously possessed)
  • Rule of capture: they’re the property of no one unless reduced to possession
  • Actual physical control:  property right
  • Pierson: pursuit + possession
  • Mortal wounding or great maiming: + continued pursuit  prop rt
  • Netting: deprive of natural liberty  prop rt
  • Custom: pursuit + wounding + custom re peculiar animal  prop rt
  • Oil and gas
  • GR: If you can characterize it like a wild animal, use rule of capture.
  • Exc: if capture was negligent
  • Mod: regulated.
  • Animals previously possessed
  • If returned to the wild, then it’s unowned
  • Exceptions
  • 2nd capturer has reason to know of prior capture (marked)
  • Not indigenous
  • Animal returns (actual/const knowledge) – still belongs to captor

ACQUISITION BY FIND: OWNERSHIP OF LOST, MISLAID, AND ABANDONED PROPERTY

  • GR: Finder has title against all but the TO.
  • Prior possessor has superior right against subsequent possessor, even if they’re a trespasser or can’t establish TO. Rationale:
  • Prior possession results in an ownership interest. (Armory)
  • Encourage to keep items safe, protect finder (to facilitate return to TO)
  • Reward honest/labor in returning useful item to society
  • Ruling for SP doesn’t deter crime; also too costly to litigate (Anderson)
  • Exceptions to finders keepers ( LIQ)
  • found by trespasser
  • found in highly private place by trespasser
  • includes an invitee to one’s home; still presumed to be “his”
  • BUT: private land open to public ( finder)
  • found by employee within scope of employment
  • found while on premises for limited time
  • embedded rule – since finder would destroy/alter land
  • Favorite – trespass + embedded  goes to LIQ
  • Exc: treasure trove
  • Statutory reform – some say with proper notice  finder
  • Owner doesn’t lose title by losing property; persists even if lost/mislaid
  • Categorical approach(note: this could change if there are other issues, e.g. trespass)
  • Lost: involuntarily part with item.  FINDER
  • exc: trespasser, employee, guest, private place, buried  LIQ
  • Abandoned: voluntary relinq w/ no intention to claim int.  FINDER, if control + intent
  • Mislaid: intent’ly placed where owner can obtain custody, but forgotten/overlooked.  LIQ (since owner will come back to claim it - Benjamin v. Linder Aviation)
  • Treasure trove: gold/s/$ int’lly buried w/ int of returning to claim.  FINDER
  • OTHER ISSUES
  • Private property v. public
  • Attached to land v. under land
  • Lost v. mislaid
  • Employer/employee
  • Salvage
  • Voluntarily render and contribute efforts to saving of imperiled property
  • POSSESSION+ INTENT (to exclude others) + CAPACITY
  • You’ll get a lien against the property, but you’re not the TO
  • Law of salvors
  • Right to compensation, not title
  • Presumed TO has no intention of returning
  • Discovery alone is not enough for ownership
  • Law of finders
  • Title for person who took possession
  • Used more for abandoned stuff, but harder to prove c/c (but can be inferred)

PRIOR POSSESSORSHIP

  • Prior possession is often the best evidence of title. (Tapscott)
  • Best available proof of title.
  • This assures buyers of goods from PPs that they’ll have “good title” or “as good a title”
  • Assures that a person who wrongfully takes property won’t acquire good title
  • Encourages possessors to protect/preserve, knowing their efforts won’t go unrewarded
  • Rewards those who rightfully take poss to protect/return
  • Easy to determine, efficient for allocation b/w competing claimants
  • Avoids multiple lawsuits
  • Used where poss unable to prove title, or doesn’t have good paper title ag wrongdoer w/o title
  • Proof of title often based largely on possession
  • Exceptions
  • Estoppel
  • Voidable title
  • UCC

PROPERTY RIGHTS BY CREATION

  • Property created by exercising the mind. CL allows imitation.
  • Exc: right of publicity (Vanna White v. Samsung)
  • Unfair competition laws protect labor/investment (Int’l News v. AP – quasi-prop int in news)
  • Human body parts and fetuses
  • CL: didn’t recognize body as subject of commerce/trade
  • Mod statutes: permit persons or survivors to donate (experiment/transplants)
  • Davis v. Davis – frozen embryos neither person nor property (“special resp”)
  • Body parts: absent K to contrary, no prop rt in organ removed from body.
  • Exc: removed for profit  liab under informed consent (Moore v. Regents)

ACQUISITION OF PROPERTY BY GIFT

  • Definition: gratuitous voluntary lifetime transfer of property from donor to donee
  • Intent to make gift of an interest in (title to) property at present time
  • Show this by writing or by delivery
  • Promise to make a gift in future is unenforceable absent consideration
  • Albinger – dissent felt intent was key re engagement ring
  • Delivery of subject matter of gift (or substitute) to donor or designee
  • Ritualistic, evidentiary, and protective
  • Actual, symbolic, or constructive (re circs, e.g. SM of gift, availability of donee)
  • Also works when delivered to 3rd, unless 3rd is an agent of donor
  • Note: gifts of keys are often suff as to house but not as to contents/furniture
  • Acceptance by donee
  • Exc: where gift is beneficial to donee, acceptance presumed
  • Types
  • Inter vivos
  • Gift made during donor’s lifetime, not a CM.
  • Irrevocable unless donor retains power to revoke gift
  • Albinger – unconditional gift (ring)
  • Immediate and unconditional (Gruen – Dad could reserve LE in painting)
  • Title vests immediately
  • Cause mortis
  • Lifetime gift made by donor in contemplation of impeding/immediate death
  • Meet other 3 reqs, + intent to make CM gift
  • Automatically revoked if donor survives the peril that motivated the gift
  • Thus no need to request return of gift
  • Also if donee dies before donor
  • Cts are strict about these, since they’re like wills but w/o protective formalities
  • Foster v. Reiss – dying wife’s gift was not CM (no delivery)

BAILMENT

  • Definition and basics
  • K relationship in which owner of goods or PP (bailor) entrusts goods to possession of another (bailee); thus, bailee in lawful possession of goods of another
  • Bailment v. lease: the more control bailee assumes, the more likely a bailment
  • Lease: owner selects location, ticket machine, keep keys, can easily reclaim (Ellish)
  • Bailment: attendant prior to claim check, keys left, harder to claim, ticket says license created (Allen v. Hyatt Regency)
  • Creation: bailor agrees to transfer poss to bailee, who agrees to take actual poss/control
  • Expressly or impliedly (and mistakes don’t prevent formation – Peet)
  • Implied promise to return goods to bailor or designee
  • Refusal/inability to do so  bailee may be held liable for goods or value
  • Title: During bailment, bailee (rightful possessor) has title good against wrongdoers
  • Reflects idea that proof of ownership is difficult, and best proof often = PP
  • Winkfield doctrine: If a 3rd took wrongful possession or damaged, GR: bailee can recover from wrongdoer and wrongdoer can’t defeat claim by showing title in 3rd person
  • in action for loss caused by his N, bailee in poss can recover full value
  • BUT: bailor might not be able to recov too; bound to what bailee recov
  • Standard of care
  • CL: classification affected SOC in taking care of goods, and level of negligence to be proved in order to recover goods or value (if they weren’t returned)
  • Primarily for benefit of bailor: slight care; gross negligence
  • For benefit of bailee: great care; slight negligence
  • Mutual benefit: ordinary care; ordinary negligence
  • Mod: degree of care which an OPP would have exercised in s/s circs (Peet v. Roth)
  • Liability for failure to return (inability or unwillingness)
  • Bailee’s negligence: if lost/destroyed/damaged, bailee liable to bailor if such loss resulted from bailee’s N flowing from his failure to exercise appropriate SOC
  • Bailor’s PF case: PP (or ownership) + delivery + failure to return goods
  • Bailee then must provide an explanation to avoid liability
  • If there’s an explanation, bailor must show that but for bailee’s N, no loss
  • Note: sometimes courts hold BOP on bailee to show freedom from N
  • Conversion: if bailee unable to return b/c he’s unwilling or delivered to someone else, liable in conversion if bailee knew bailor (unlike where F finds lost watch)
  • Limitations
  • Clauses valid as long as 1) don’t limit re GN/W conduct, 2) K provs are agreed to

ACQUISITION BY ADVERSE POSSESSION

  • Basics
  • A person without good title can acquire better title than the TO, if:
  • A) they possess for statutory period of time and satisfy general criteria
  • Against all TOs, if there are multiple
  • B) TO fails to bring action for ejectment within SOL
  • SOL starts when COA accrues, i.e. when wrongful poss begins (entry)
  • Exc: TO has disability when COA accrues
  • Note: if TO dies and interest passes to a minor, that minor inherits the running COA (it’s not tolled)
  • If TO sues before SOL has run, TO wins
  • If TO sues after SOL has run, TO wins unless AP meets all criteria
  • After SOL runs, AP can institute axn to quiet title in poss’s name (Tap)
  • AP bears BOP re criteria
  • This will mean he can have his title reflected in public docs & Js (which is good if AP ever wants to sell prop and avoid J that title is unmarketable b/c it’s not a matter of public record)
  • EXC: state owned land (held in trust FBO public / shouldn’t be lost b/c N official
  • BUT SOL can run when state holds for private purpose (Jarvis)
  • Nature of title earned by AP
  • Good against whole world (Tapscott)
  • Related back to time when TO’s COA accrued
  • can be no better than person with COA had
  • Rationale
  • Punish those who sit on their rights
  • Reward possessor for using land productively and efficiently
  • Promote certainty in land titles, correct conveyancing errors, settle boundary disputes
  • Protect expectations of those who innocently/mistakenly possess for such a long time that they justly rely on their possession of it
  • Protect third parties who rely on belief that AP is TO
  • Criteria to acquire title by AP
  • ACTUAL POSSESSION
  • Actual entry + exclusive possession
  • Must use the land as an average owner would (doesn’t req cult/res/occup/bldg)
  • IT’S NOT ABOUT INTENT; IT’S ABOUT HOW YOU TREAT LAND (AS YOUR OWN)
  • Payment of taxes (some states)
  • OPEN AND NOTORIOUS USE
  • So as to give R notice that claiming dominion adverse to owner’s rts
  • Use consistent with that of average owner
  • No actual knowledge by TO is needed
  • but if they have it  acts not otherwise O/N will be interpreted as such
  • neighborhood reputation of ownership can be evidence of O/N
  • minor encroachmt along common boundary no presump knowl (need actual)
  • Mannillo v. Gorski
  • EXC: possession of underground property is not O/N
  • EXCLUSIVE
  • Use by others with poss’ permission may still be okay
  • Total excl not necessary, if poss only shares use as a TO would
  • If TO is in poss with permission of AP, you can still meet excl requirement
  • CONTINUOUS
  • Just the degree of occupancy and use that an average owner would make
  • Made w/o break in essential attitude of mind required for adverse use
  • Break of continuity  SOL restarts and COA brings with next taking of poss
  • Seasonal use okay, if consistent w/ avg owner taking into acct nature of land
  • Tacking: possession by a tenant of the AP is deemed continuous
  • You can tack/agg period of 2+ possessors who are in privity (incl TO)
  • HOSTILE AND UNDER CLAIM OF RIGHT
  • Occupying without permission
  • GR: must have intended to claim and treat as own – put them on notice
  • GR: poss by a life tenant is not hostile t/w remainderman (since no title)
  • TESTS
  • Good faith
  • Bad faith
  • Obj test: are AP’s acts of own. consistent w/ claim of ownership or right
  • Subj test: SOM; does AP believe another owns prop? (Carpenter)
  • NOTE: if you meet all other criteria and TO didn’t sue within SOL, you can imply (even under subj test)
  • Mistaken boundaries
  • Connecticut rule: look at objective facts of poss (doesn’t matter whether AP acted under mistaken belief re true ownership)
  • Mannillo v. Gorski – A’s SOM not important; A can only win if A’s acts were open using heightened std of openness
  • Maine rule: if poss honestly believed he possessed only his land, as a result of mistaken belief re location of true boundary line, with no intent to claim what was not his, he lacks requisite hostility
  • Note: this rewards the intentional wrongdoer
  • Acquiescence: A way to resolve boundary disputes (like estoppel)
  • Adj landowners + clear/certain recog diving line + long time pd
  • Color of title
  • AP enters under COT when enters under authority of written instrument purporting to convey title (but it’s either defective or invalid)
  • If you have this, you don’t need to prove hostility
  • Some: SOL required for AP is less, if entry under COT
  • Some: actual poss of only a portion  constructive poss  title to entire tract
  • Usually needs to be contiguous tracts, and R relation to size conveyed
  • Lots must have same owner (since O1 didn’t have COA against A)
  • Adverse possession of personal property
  • Same criteria (except you call hostile “under claim of right”)
  • SOL is usually shorter (2-6 yrs)
  • SOL only begins to run when poss is open (display/exhibit)
  • Demand and refusal: SOL begins when TO made demand for return  refused
  • Solomon R. Guggenheim v. Lubell
  • But it might start to run before demand, if TO unduly delayed demand
  • Discovery rule (O’Keefe v. Snyder): COA runs at later of:
  • time for wrongful poss (e.g. theft or concealment)
  • time when TO discovers (or, had he exercised R diligence, would have discovered) facts necessary to put him on notice that he has COA against poss (this includes poss’s identity)

ESTATES IN LAND AND FUTURE INTERESTS

  • Overview – feudal England
  • Feudalism: as owner of land, kind could invest others with rights (“tenants in chief”)
  • Feudal incidences: homage and fealty, aids, relief, wardship/marriage, escheat
  • Subinfeudation: injecting another T into system
  • Estates in land: a) presently or future possessory, b) measurable time of poss
  • They are classified based on how long they will last
  • Words of purchase: who is granted property (“to A”)
  • Words of limitation: duration/type of estate conveyed (“and her heirs”)
  • Freehold estates
  • Seisin: possession + freehold interest
  • Fee simple
  • Fee simple absolute
  • Fee simple determinable
  • Fee simple on condition subsequent
  • Fee tail
  • Life estate
  • Nonfreehold estates (no feudal obligations attach)
  • Estate for years
  • Periodic estates
  • Estate at will
  • Estate at sufferance
  • Present possessory estates
  • Fee simple absolute: estate that will last in perpetuity (highest estate)
  • Wording/intent are important(White v. Brown)
  • Fee simple determinable: may last forever but may end automatically b/c occurrence or nonoccurrence of some limitation set forth in governing instrument
  • Grantor retains future int (possibility of reverter) expressly or by op of law
  • Fee simple on condition subsequent: may last forever but may not b/c occurrence of some condition set forth in governing instrument. BUT doesn’t end automatically (like FSD); it only terminates if grantor elects to terminate interest. Until then, grantee retains.
  • Grantor retains future int (right to reenter) if words as R susc to such interp
  • Fee tail / fee simple conditional: used primarily to assure that lands stayed within owner’s family from generation to generation by seeking to assure land would descend at owner’s death to owner’s heir
  • Life estate: measured by life of holder or by life of another
  • Future interests
  • Reversionary (interests retained by grantor, after present poss int is transferred)
  • All vested
  • Possibility of reverter: future interest retained by grantor of FSD
  • If FSD terminates, retained future interest ripens into FSA
  • Right of entry for condition broken: future interest retained on FSCS
  • Int doesn’t automatically go back to grantor; grantor must elect to enforce it for it to become possessory
  • Reversion: future interest retained by grantor who transfers FT, LE, or future estates of lesser quantum than what grantor had (other than FSD/FSCS)
  • Alienable, devisable, descendible
  • Remainders (interests transferred from grantor)
  • future interest limited in favor of transferee, may become possessory immediately upon termination of prior possessory estate simultaneously created
  • Indefeasibly vested:will become possessory immediately upon termination of prior estate (either in remainderman or successor)
  • Vested subject to open (or to partial divestment): limited in favor of class collectively described, of which there’s at least one living member
  • Contingent remainder: subj to condition prec (incl. remainders limited in favor of unborn/unascert persons for whom condition is being born or ascertained)
  • Vested subject to complete divestment: limited in favor of a born or ascertained individual, or in favor of class of which there is at least one living member that is subject to happening of condition subsequent
  • Note: Conditions S/P important re RODestruct, Acceleration, ROConven
  • Executory (future interests, transferred from grantor)
  • Shifting:future interest limited in favor of transferee, can become possessory only after period of time during which there is no other transferee entitled to freehold estate and which, if it becomes poss, divests grantor of retained int
  • Alt def:future int in grantee, divests preceding estate in another grantee prior to natural termin(“to A but if B returns from Rome, to B”)
  • Springing:future interest limited in favor of transferee which can become possessory only by divesting a present possessory int or vested future int limited in favor of another transferee
  • Divesting (or other grantees) occurs only upon happening of condition
  • Alt def: future int in grantee that springs out of grantor subsequent to its creation, thus divesting grantor(“to A when she marries”)

CLASS CLOSING RULES FOR FUTURE INTERESTS AND THE IMPORTANCE OF VESTED INTERESTS