Part Two: Nature & Acquisition of Private Property

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PROPERTY

Outline of Cases

PART ONE: INTRODUCTION

1. State v. Shack: Private property rights vs. govt/societal interests; physical use/beings; migrant workers

PART TWO: NATURE & ACQUISITION OF PRIVATE PROPERTY

1. General: (Non)-Traditional Objects and Classifications of Property

1. Edwards v. Sims: Vertical rights of land/air; center of earth directly up to sky; labor theory; cave

2. Moore v. Regents of Univ. of CA: Conversion/strict liability; property rights of body/excised cells; policy concern more of selling body products/parts than whether property; transferability in market not essential

2. “Natural” Interests in Non-Navigable Surface Water

3. Evans v. Merriweather: Reasonable use doctrine; upstream owner can use all to satisfy natural/domestic wants (at any time), even if interfering with existing non-domestic uses;but others before artificial wants (inc. irrigation)

4. Stratton v. Mt. Hermon Boys’ School: Riparian use (quantity, quality, velocity); riparian right runs with land; reasonable use (allowing riparian owner to use water on non-riparian land if no harm to a reasonable use of another riparian owner); usually in western states where irrigation more important

5. Coffin v. Left Hand Ditch: Priority of right to water by priority of appropriation; doctrine of capture; severed “water right” of independent interest from land; sold or non-riparian land; arid states for irrigation; economic benefit

3. Acquisition of Personal Property: Finding

- A possessor prevails against all but true owner if he exercises control with intent to assert ownership,

unless found in highly private place by trespasser, employee, guest, or licensee

a. Prior possessor wins

6. Armory v. Delamirie: Keep against all but rightful owner; prior possessor over subsequent possessor; jewel; right of possession not lost from losing article; even if thief, b/c subsequent has no right to question & no deterrence

7. Eads v. Brazelton: To become prior possessor, must show physical control (actual taking) and intent to assume dominion; shipwreck needed actual means to raise it with salvage boat; abandonment (finder); policy reasons

8. South Staffordshire v. Sharman: BUT constructive possession (if in possession even though unaware) can sometimes substitute for actual possession in becoming prior possessor; intention; presumption; ring in pool

b. Finder vs. owner of premises (assuming owner doesn’t own object)

8. South Staffordshire v. Sharman: Owner over finder employee (acting for employer; contractual duty to report); owner over finder on premises for limited period (under owner’s direction)

9. Goddard v. Winchell: Owner over finder of object under soil; natural rule, occupancy rule; common law + accretion; lost and found; owners expect that objects under soil are theirs and think of them as part of land; aerolite

10. Schley v. Couch: Exception to object under soil rule – treasure trove rule; lost property (finder), mislaid property (owner)

11. Hannah v. Peel: Owner not in possession b/c never moved in or had physical possession; servant/agent; but typically owner always over trespasser to discourage trespass; & typically owner over object found in private home (intent to exclude except for specific purposes, and strong expectation that items in house remain his)

12. Bridges v. Hawkesworth: Finder over lost object in public place; circumstances not showing intentional deposit

13. McAvoy v. Medina: Owner over mislaid object in public place; duty to use reasonable care and assume ring intentionally placed on counter

4. Recording System (title assurance)

- Recordation raises rebuttable presumption of delivery but won’t validate invalid deeds or legal interests

- Under notice statutes, all BFP, without notice @ time of conveyance, (inc. mortgagees & subsequent) protected regardless of whether recorded at all, over prior grantees who failed to record; donees not protected (so then prior)

17. Simmons v. Stum: Race-notice (subsequent BFP protected only if records before prior grantee)

5. Acquisition of Limitation Title by Adverse Possession

- Protects title, bars stale claims, rewards productive use of land, & gives effect to expectations

- SoL: before, adverse possessor only has rights of possession  after, new title and bars owner’s claim

- Must show actual entry & exclusive, open & notorious, adverse under claim of right, continuous & uninterrupted

- Runs against owner and successors if entry before establishing future interests, but SoL doesn’t run if existing at time of entry, until vests in possession to each possessor

- Any title acquired by AP remains subject to any outstanding liens, easements, or equitable servitudes

- In general, govt land is exempt from title through adverse possession

18. Snowball v. Pope: Open and notorious possession through totality of acts giving picture of claim of dominion; SoL; other elements; swamp

19. Howard v. Kunto: SoL; continuous & uninterrupted use requires only degree of occupancy of average owner (consistent with type of property involved) & w/o break in attitude of mind; tacking (transferring possession) can also establish continuity if privity (must be voluntary transfer of estate in land or possession); abandonment, based on intent, will cause break in continuity; interruption by true owner for purpose of regaining possession also stops continuity; good faith; public policy; seasonal use of summer home

20. Chapin v. Freeland: Adverse possession with title to personal property/chattels; once remedies are statutory barred, adverse possessor has title

21. O’Keefe v. Snyder: Purpose of SoL; discovery or due diligence rule (SoL starts when owner first knows, or reasonably should know through exercise of due diligence, where stolen goods are); focus on conduct of owner; otherwise, AP runs from time of theft; BFP of stolen goods not protected against claim of owner unless SoL has run (risk on purchaser)

22. Mugaas v. Smith: Disseisin; record title not marketable if no quiet title decree by adverse possessor

6. Improving Another’s Property by Mistake (Accession – adding labor/materials)

23. Wetherbee v. Green: General; appropriation; where labor added to raw material, owner still gets it unless labor has sufficiently increased value to make unfair (dif species/radical change); depends on good faith motive & factors

24. Isle Royal Mining v. Hertin: Trespass, even in good faith; exception of accession; owner should compensate for labor in return for damages for trespass, where it would be grossly unjust to appropriate labor done

25. Hardy v. Burroughs: Labor & materials; statutory compensation for improvements; UE, improvements at fair value; where innocent trespasser adds both to raw materials, final product awarded to owner of principal material

7. Personal Property: Creation of Bailments

- Bailment created when there is actual physical control (not custody) with intent to possess (not if mistake as to contents, but yes even if value undisclosed to bailee b/c accepts risk when accepting article)

- Standard of care varies on who gets the benefit of the bailment: modern trend is ordinary care under circumstances

- Bailee held to strict liability for re-delivery (b/c breach of contract), but involuntary bailee only liable if negligent

- Bailees can limit liability through contract provisions only if bailor consents, but not for gross/willful negligence

14. Allen v. Hyatt: Duty of reasonable care; garages better situated; presumption; park and lock (circumstances for bailment can include ticket for re-delivery, keys, attendants  depends on expectations)

8. Personal Property: Bona Fide Purchase

- BFP: one who takes possession in good faith, for valuable consideration, & without notice of wrongful possession (actual or inquiry – where facts/circumstances would have led reasonable person to make inquiries)

- A seller can transfer no better title than he has, BUT exceptions: BFP takes no title from thief, but can have title to money & negotiable docs; where seller w/ voidable title; where estoppel & entrust goods to merchant are applied

15. Porter v. Wertz: Statutory estoppel; equitable estoppel where owner entrusted goods to merchant and gave apparent authority to sell them, or stand by (need more than just delivery of possession); UCC 2-403(2)

16. Sheridan Suzuki v. Caruso Auto Sales: Voidable title (equitable principle where one of two innocent persons must suffer by fraudulent act of third person, the one who could have prevented harm to other should suffer loss); equitable estoppel; BFP of stolen goods not protected against claim of owner unless SoL has run (risk on purchaser)

9. Personal Property: Donative Transfers

- Voluntary transfer of property without consideration includes inter vivos and causa mortis (dif based on intent)

- Intent: to pass title presently, not just transferring possession

- Delivery: act giving up dominion & passing control; constructive (means when actual impracticable); symbolic; third person (who controls agent actual with donor’s agent, while delivery upon donee’s agent/independentok)

- Acceptance: but presumed where gift is beneficial to donee

- No gift if revocable and under control of donor (but can transfer personal in trust and still retain power to revoke)

- If donee already is in possession at time of transfer, only req that donative intent must be very clear

26. In re Cohn: Intention to give present gift; symbolic delivery of instrument in writing of stock to wife for bday

27. Gruen v. Gruen: Inter-vivos gift; present and irrevocable transfer of title or right of ownership; symbolic delivery of remainder interest with no physical existence, or chose-in-action (debt), transferred by written assgt

28. Foster v. Reiss: Doctrine of donatio causa mortis; delivery requirement; irrevocable only when donor dies; symbolic delivery of unsealed informal instrument in drawer (debatable; contrast to Scherer)

29. Scherer v. Hyland: Constructive delivery where donor deemed act sufficient; revocation, acceptance; suicide

30. Lindh v. Surman: Marriage proposal not implied condition; fault-based, no-fault, modified no-fault theories

PART THREE: (A) ESTATES IN LAND

- Estate: interest in land that is or may become possessory and measured by some period of time

- By potential duration: FS > FT > LE > leasehold estate (only possession, instead of seisin like the others)

1. In re O’Connor’s Estate: Historical development of estates doctrine; escheat

1. Present Possessory Estates in Land: Fee Simple Absolute

- Absolute ownership of potentially infinite duration with no limitations on inheritability; cannot be divested or end on happening of any event  created at common law by “and his heirs”; now presumed to pass largest estate owned

- Words of purchase (identifying person in whom estate is created); words of limitation (type of estate created) heirs have no present interest, and are just indication of words of limitation

- Statute Quia Emptores: land is freely alienable (right to transfer w/o lord’s consent) Statute of Wills (devise)

- Real property: inherited (“heirs”); under will (“devisees; devised”)

- Personal property: inherited (“next of kin”); under will (“legatees; bequeathed”)

- Common-law intestate succession = primogeniture; modern law = spouse (½) and issue (½), then parents (½)

2. Cole v. Steinlauf: “heirs”; not necessary only if it can be determined from clearly expressed intent of parties that FSA was intended, with sufficient certainty to create a marketable title

2. Present Possessory Estates in Land: Life Estate

- LE per autre vie can be (1) for the duration of another persons’ life, which is measured by the second person’s life; or (2) transferable at any time, but where interest measured still by original life tenant’s life

- LE can be defeasible: determinable, subject to condition subsequent, or subject to executory limitation

- If language, ambiguous, look to facts and probable intent of grantor

3. Moore v. Phillips: Life tenant’s duties; permissive waste; remedies; defense of laches; estranged mother’s house

3. Present Possessory Estates in Land: Defeasible Estates

- Defeasible upon the happening of some event; have the potential but not certainty of infinite duration

- FSD: ends automatically when some specified event occurs  must use words of limitation (not mere expressions of motive or purpose)  may be transferred/inherited automatic reverter, expressly retained or by law

- FSSCS: does not automatically end once condition occurs; ends when grantor re-enters  can be transferred or inherited until grantor re-enters  right of re-entry can be reasonably implied  preferred b/c forfeiture opt.

- FSSEL: automatically divested by executory interest in third person upon happening of event

4. Oldfield v. Stoeco Homes: FSD; FSSCS preferred b/c forfeiture opt.; intention as indicated by whole language

5. Roberts v. Rhodes: FSD; limiting words of duration; intention express or necessarily implied

6. Johnson v. City of Wheat Ridge: No automatic reversion from breach of FSSCS; SoL runs from time of breach

7. Leeco Gas & Oil v. County of Nueces: FSD; possibility of reverter; govt condemnation; compensation

4. Present Possessory Estates in Land: Fee Simple Conditional and Fee Tail

- Fee tail: potential to endure forever, but ends if and when first fee tail tenant has no lineal descendents to succeed

- Tenant in FT couldn’t defeat rights of tenant’s lineal descendants; FT inherited only by issue of original grantee

- Statute De Donis Conditionalibus; common law language of “heirs of his body” (issue or lineal descendants)

- Upon expiration, future interests of reversion and remainder possible under Statute  today, can be converted into FSA by deed (disentailing)  although FT abolished in most states tailored (FT male or FT special)

- Purpose: to keep land in family for succeeding generations (used to be FS conditional upon having issue)

8. Caccamo v. Banning: Fee tail; gift for life and then to heirs of body or issue; if a remainder were limited to take effect on the death of the preceding (FS) tenant without issue, it converted preceding FS into FT (indefinite failure)

PART THREE: (B) FUTURE INTERESTS

- Consider: exact language + sequence  present estate  who has it  how possessory  vested/contingent

- Present and existing, but non-possessory interest capable of becoming possessory in the future

(1) Reversion: left in grantor after conveys lesser estate  express or by law all are vested even though not necessarily possessory (alienable, accelerates into possession on end of preceding estate, not subject to RAP)

(2) Possibility of reverter: left in grantor when FSD is created, estate of same quantum traditionally not transferable inter-vivos, but today alienable  traditionally could endure indefinitely, but statutorily limited now

(3) Right of entry: in grantor when FSSCS created  same transferability and termination as reverter

(4) Remainder: in grantee capable of becoming present possessory estate upon expiration of prior estate  expressly granted in same instrument; following FT, LE or term-of-years  can be same and FT  vested or contingent

(5) Executory interest: equity  legal by deed; Statute of Uses made springing and shifting interests possible

* If alienable, then transferable, and then subject to involuntary transfer too (i.e. reachable by creditors)

5. Future Interests: Vested & Contingent Remainders

- VR: created in ascertained person AND not subject to condition precedent  indefeasibly vested (certain to acquire permanent possession in future)  vested subject to open (class, shares not certain)  vested subject to divestment (condition subsequent or inherent limitation of remainder estate)  alienable inter-vivos, devisable by will, or to heirs

- CR: given to unascertained person OR subject to express condition precedent (but not termination of preceding estate) always creates reversion in grantor (VR never does) condition incorp. w/ remainder VR preferred

9. Kost v. Foster: Distinctions; language that merely refers to termination of preceding estate is surplasage and does not create condition precedent; if alienable/transferable, then reachable by creditors

10. Abo Petroleum v. Amstutz: Doctrine of destructibility (based on continuity of seisin; CR destroyed if it doesn’t vest before or at time that preceding estate, FT or LE, ends); rule of law applying only to legal CR in land; avoided by creating term-of-years or trustees to preserve; abolished; doctrine doesn’t apply to VR, EI, personal property, interests in trust; bypass by creating term of years or trustees (instead of LE)

- Merger (LE can end prior to death of life tenant by merger of LE into next vested estate, or reversion in FS  if not vesting on termination of LE, it is destroyed); no merger when FT or simultaneous creation by same instrument

6. Future Interests: Executory Interests

- Almost always divests or cuts short the prior estate

- MUST be EI if there is no preceding estate, does not follow natural termination of preceding estate, & follows FS Springing interest: future interest in grantee that springs out of (divests) grantor subsequent to its creation

- Shifting interest: divests preceding estate of grantee in another grantee prior to natural termination

13. Stoller v. Doyle: Statute of Uses; remainder; statutory warranty deed; executory interest not subject to doctrine of destructibility

14. Capitol Federal Savings & Loan Assoc. v. Smith: Racial restrictive covenants; springing executory interests

7. Limitations on CR: Rule in Shelley’s Case

- If (1) one instrument (2) creates freehold in land in A (LE), and (3) purports to create remainder in A’s heirs, and (4) the estates are both legal/equitable, THEN A has the remainder in FS or FTabolished in most states

- Involve life estates (FSD or FSSCS), with future interest only remainder must be either both legal or equitable remainders in land applies when there is condition precedent on remainder but not LE (but not opp.)

- Merger will occur if remainder not subject to some condition precedent or if no intervening vested estate (but Rule still applies)

11. Sybert v. Sybert: Positive rule of law; intention immaterial; “heirs” or “heirs of body” trigger Shelley’s Rule

8. Limitations on CR/executory interests: Doctrine of Worthier Title

- Inter-vivos branch: when an inter-vivos conveyance purports to create a future interest in grantor’s heirs, future interest is void and grantor has reversion  rule limited to “heirs” or “next of kin”  comes into play when grantor has LE in trust, with remainder to grantor’s heirs, and grantor wants to terminate trust any preceding estate

- Testamentary branch: if person devises land to heirs, devise is void and heirs take reversion by descent abolished – Common law was rule of law to land only; modern doctrine to both real/personal and rule of construction rebuttable presumption that no remainder has been created unless contrary intent shown still valid today

12. Braswell v. Braswell: Remainder & reversion; presumption & rebuttal; must use “heirs” or “next of kin” to apply; application by devise

9. Rule against Perpetuities

- Applies to all CR and executory interests principal guardian against control of living by dead hand

- No interest is good unless it must vest, if at all, not later than 21 years after some life in being at creation of interest