Acquisition by Discovery/Conquest (3-13)[edit]

Johnson v. MIntosh (1823) – Plaintiffs claimed title to land under two grants
made by Piankeshaw Indians. McIntosh claimed title under grant by US
Government. "An absolute title cannot exist, at the same time, in different persons,
or in different governments." Pact between European nations (and later the US)
allowed the (government) discoverer of a tract of land to claim title in that land,
but granted to Indian tribes occupancy and use rights. Tribes did not, however,
have sovereignty—no right to transfer title/control of the soil. Because the land in
question had been "discovered" by the colonists and later became property of US
government, US government had exclusive right to transfer title of the land; tribes
occupying land had no such right. McIntosh wins because Piankeshaw tribe had no
right to transfer title to Johnson.For acquisition by conquest to be valid, the
conquest must be legal. Generally, conquest is not legal unless theres a declaration
of warConquest is not ideal because it is super inefficient will just result in an arms
race and/or constant fighting What we learn from this case: Under no
circumstances can two entities claim right to the same soilIf you are going to claim
ownership, then whoever gave you that right better have had the right to convey it
to youBeing "first in time" is significantly important in determining property rights
Case is about chain of title Why First in Time? Promotes peace Encourages
investmentAdministrative easehistoryarbitrary

Acquisition by Capture (13-34)[edit]

Pierson v. Post (1805) – Post was pursuing a wild fox with his hounds, and
at the last moment Pierson, who knew Post was in pursuit, killed the fox and
carried it away. Issue is "what acts amount to occupancy, applied to acquiring right
to wild animals?" Actual bodily seizure of the animal is not 100% necessary to
acquire right to/possession of animal; HOWEVER, the person claiming title must
have mortally wounded the animal, or captured the animal by nets, etc. in such a
 way that the animal has been deprived of its natural liberty and escape rendered
impossible. Such steps taken by the pursuer of the animal "manifests an
unequivocal intention of appropriating the animal to his individual use." Because
Post was only in pursuit of the animal and had not yet wounded, killed or captured
it, Pierson obtained rightful title to the animal when he killed it.PIERSON
WINS.LIVINGSTON DISSENT: Berbeyracs theory should be adopted. Post
should have won because he was in pursuit with hunting dogs and was within
reach or had a reasonable prospect of capturing the animal, were it not for Piersons
intervention.Popov v. Hayashi (2002) – The case about Barry Bonds 73rd home
run ball. Popov almost caught ball, but was then swarmed by other fans and fell to
the ground. Hayashi was also knocked to the ground. While on the ground Hayashi
saw the ball, picked it up, stood up, and put the ball in his pocket.Class 2: Right to
Exclude; What Can Be Property?Readings: 37-44; 62-81; 97-102

Right to Exclude (p. 37)[edit]

Jacque v. Steenberg Homes, Inc. (WI, 1997) – When nominal damages are
awarded for an intentional trespass to land, punitive damages may, in the discretion
of the jury, be awarded. Jacques = a couple. Jacques’ neighbor ordered a mobile
home, easiest path to deliver was across Jacques’ land. Jacques protested to this
method, Steenberg plowed a path through the snow and drove mobile home across
Jacques’ land to deliver the trailer anyway. Jacques sued and won $1 in nominal
damages, and jury awarded $100K in punitive damages. Circuit court set aside
$100K punitive damages. Court of appeals affirmed, saying “award of nominal
damages will not sustain a punitive damage award.” WI Supreme court reverses
here. Reasoning: Individuals have a legal right to exclude others from private
property. Such a right is hollow if legal system does not provide sufficient means
to protect it. Nominal damages award of $1 is not sufficient to protect the right to
exclude—Steenberg could easily decide that it is more profitable to flaunt the right
and pay the $1 than to respect the right of the Jacques. Society’s interest extends
past protecting individual rights of landowners—society has interest in preserving
integrity of legal system. Landowners should have confidence that when their
rights are violated, violators will be appropriately punished. If they feel as such,
they will be less likely to resort to self-help/vigilante justice. Therefore, both
private landowner and society have much more than a nominal interest in
excluding others from private land (and punitive damages are therefore appropriate
 even when nominal damages are awarded).State v. Shack (NJ, 1971) – Tedesco =
landowner/farmer. 2 defendants, Tejeras and Shack. Tejeras is field worker for
federal organization created to aid migrant farmworkers by, among other things,
providing health services. Shack was member of federal organization created to
provide legal services to migrant farmworkers. Defendants entered Tedesco’s
property and asked to speak to a worker regarding health and legal services.
Tedesco said okay, but I have to be present for all of that. Defendants said no, we
can speak to the worker in private, my G. Tedesco called state troopers who in turn
refused to remove defendants unless Tedesco wrote a formal complaint that they
were trespassing. Tedesco filled out the complaint, thus bringing this case to the
court. Ownership of real property does not include the right to bar access to
governmental services available to migrant workers and hence there was no
trespass within the meaning given to the term by the State trespass statute. A
person’s right in real property is not absolute. Common law maxim is that one
should use his property so as not to injure the rights of others. Rights are relative,
and there must be an accommodation when they meet. THEREFORE necessity,
whether private or public, may justify entry upon the lands of another. There is no
legitimate need for the farmer to deny the opportunity for aid available from
federal, State, or local services, or from recognized charitable groups seeking to
assist him. Hence, representatives of these agencies may enter the premises to seek
the worker out in his living quarters. Worker must be allowed to receive visitors of
his own choice so long as there is no behavior that is hurtful to others. Members of
the press may not be denied reasonable access to workers who do not object to
seeing them. On the other hand, farmer has right to make visitors identify
themselves in order to keep himself and his workers secure. Farmer may not,
however, deny workers’ privacy. PRIVACY RIGHTS AND THE RIGHT TO
LIVE WITH DIGNITY ARE TOO IMPORTANT TO SOCIETY TO BE
OVERRIDDEN BY INTEREST IN REAL PROPERTY.

Civil vs. Criminal Trespass (p. 42)

Civil Trespass – An unprivileged intentional encroachment upon property

owned by another.
 Intentional = engaging in voluntary act such as walking. Does not require
specific intent to trespass.

Trespass is unprivileged when encroachment is: without owner’s consent;

lacks necessity as a justification; and is not otherwise justified by public
policy

Criminal Trespass – Trespass is criminal when the defendant enters

another’s land knowing that he lacks the privilege to do so or if the defendant
refuses to leave another’s land after being asked to do so.

Property in One’s Person (p. 62)

Moore v. Regents of University of California (CA, 1990) – Moore had hairy

cell leukemia and went to defendant’s med center for treatment. Consented to
splenectomy and to having tests done/blood and tissue samples taken over next 7
years. Moore told that his samples would be used for research, but was not told that
his cells were unique and that their use in the research could be immensely
lucrative for defendants. Defendants developed a cell line from Moore’s cells and
patented the cell line and other products derived from it. Moore sued for
conversion once he found out how much money was potentially involved. Court
found that Moore had no cause of action for conversion under the traditional
meaning because he did not have possession of the cells once they were removed
and because under California case and statutory law he did not appear to retain any
ownership rights in the cells once they were removed from his body. The court
further found that Moore could not have any rights in the subject of the defendant’s
patent because it was the product not of Moore’s raw cells but rather of the human
ingenuity of the researchers involved in the testing of his cells. The court declined
to extend the tort of conversion to include the type of harm that Moore alleged he
suffered because the court feared it would chill the conduction of research that
would be beneficial to all mankind and because the court found that existing law
regarding doctor-patient disclosures were sufficient to protect against the type of
harm Moore claimed he had suffered.
 IP Interests – Patents (p. 75)

Specific protection granted to patent holders by federal patent statute is the

right to prevent others from making, using, selling, etc. the invention during the
term of the patent. Currently, the term of a patent is 20 years from the date the
application is filed with the USPTO.Patent applications must meet five (5) criteria
for the PTO to grant the patent:

1. Patentable – Invention must fit into one of the following four (4)
categories of patentable subject matter:

Process

Machine

Manufacture

Any composition of matter

2. Novel – To be novel, the idea must not be preceded in identical form

in public prior art.

3. Utility – The invention must offer some actual benefit to humans

4. Non-Obvious – Most important requirement. Invention must constitute a

sufficiently large technical advancement over prior art.

5. Enablement – Requires the patent application to describe the

invention in sufficient detail such that “one of ordinary skill in the art”
would be able to use the invention.

Diamond v. Chakrabarty (US, 1980) – Chakra. Filed a patent for a new

bacteria that he created that had properties capable of breaking down many
 components of crude oil. As such, the bacteria were thought to have a potential
useful application in containing oil spills. Chakra’s filed three types of patent
claim: 1) a claim on the method for producing the bacteria; 2) claims for an
inoculum comprised of a carrier material floating on water and the new bacteria;
and 3) claims to the bacteria themselves. Patent office rejected the third claim
asserting that 1) microorganisms are products of nature; and 2) that as living things
the bacteria were not patentable subject matter under current US patent law. Issue
was whether the bacteria constituted a “manufacture” or a “composition of matter”
under current patent law. The court held that because the bacteria were not a
discovery of a naturally occurring organism; rather, they were a non-naturally
occurring manufacture or composition of matter having different characteristics
from any such composition of matter found in nature, and that they were the
product of human ingenuity. Therefore, the court found that the
bacteria/microorganisms were patentable. What counts as a “product of nature”
after Chakrabarty?Association for Molecular Pathology v. Myriad Genetics, Inc.
(2013) – Court held that Myriad could not patent a naturally occurring DNA
sequence that it had isolated, despite the finding that the isolated sequence
indicated a heightened risk of developing cancer. “Separating [a] gene from its
surrounding genetic material is not an act of invention.” Myriad also removed
introns from naturally occurring DNA sequences, resulting in cDNA sequences
that do not occur naturally in the human body. The court found that such cDNA
sequences could be patented because the lab techs “unquestionably create
something new when cDNA is made”; however, the court notes that Myriad would
still need to show the other elements of patentability (i.e. novelty, non-
obviousness, and specification) in order to actually obtain a patent on cDNA.

Trademarks (p. 97)

Three requirements must be met for trademark protection:

Distinctiveness – Mark must distinguish the goods or services of one person

from those of another.

Non-Functionality – If an aspect of a good is exclusively functional, it

cannot be protected by trademark law (because patent law protects functional
 goods). SCOTUS has explained that a product feature is functional of “it is
essential to the use or purpose of the article, that is, if exclusive use of the feature
would put competitors at a significant, non-reputation-related disadvantage.”

First Use in Trade – Exclusive right to use a mark requires first use, not
just first adoption, of the mark in a particular geographic market. Under the
Lanham Act, the use must be in commerce, which has a more narrow scope than
“trade.”

Qualitex Co. v. Jacobson Products Co., Inc. (US, 1995) – Qualitex makes
pads for dry-cleaning equipment. Qualitex has used same green-gold color for pads
since 1950’s. In 1989, Jacobson started selling pads that were a similar green-gold
color. In 1991, Qualitex files for a trademark on the green-gold color, and also files
a suit for trademark infringement against Jacobson. Issue is whether a color alone
can be trademarked. Court found that a color alone could be used as a trademark as
long as it met the requirements of the Lanham Act. Court held that Qualitex could
trademark its gold-green color because it acted as a symbol of the brand and was
used or intended to be used to distinguish Qualitex’s goods from those
manufactured/sold by others in the marketplace, to with Jacobson.Class 3:
Acquisition by Find; Acquisition by Adverse PossessionReadings: 103-113; 114-
123 (Through Problem 1)

Acquisition by Find (p. 103)

Armory v. Delamire (King’s Bench, 1722) – Chimney sweep found a jewel

and carried it to defendant’s shop. Defendant’s assistant removed the jewel and
offered the boy only the value of the setting that the jewel came in. Court ordered
defendant to either return the jewel or pay the boy an amount equal to the value of
a jewel of the finest quality that would fit in the setting. When a piece of property
is found by an individual, the finder may maintain property rights in the object
against all but the true owner or a previous possessor with better title, such as a
previous finder.Jus Tertii Defense – Latin for “rights of a third party.” Defense
where a party tries to claim the rights of a third party as a defense. In the case
above, the defendant tried to assert the rights of the absent true owner of the jewel.
As is still common, the court rejected the defense. Generally, courts will demand
 that a party stand on his/her own rights, and not the rights of a third party.Trover –
Common law cause of action for money damages resulting from the defendant’s
conversion to his own use of a chattel owned or possessed by plaintiff. Trover is
basically obsolete, having been replaced by the tort of conversion.Prior Possessor
as Thief – Even if the “finder” is actually a thief (i.e. if plaintiff in Armory had
stolen the jewel rather than found it), he still enjoys the same rights over the person
who takes the property from him. “Any other rule would lead to an endless series
of unlawful seizures and reprisals in every case where property had once passed
out of the possession of the rightful owner.” Hannah v. Peel (King’s Bench, 1945)
– Quartered soldier (Hannah) finds brooch lodged in windowsill of house that he
was quartered in. House was owned by Peel, but had never been occupied by him.
Hannah turned brooch in to police. Owner was not found, and police subsequently
returned it to Peel (rather than Hannah), assumedly because Peel owned the house.
Peel offered Hannah a reward for the brooch, but Hannah refused, always
maintaining that he had good title in brooch over all but the true owner (who was
unknown). Peel sold the brooch. Hannah sued Peel for return of or payment for the
brooch, and also for damages for detaining the brooch when Hannah had rightful
title. Court found in Hannah’s favor, more or less reasoning that the true owner of
the brooch was unknown and therefore the law of finds gave Hannah good title in
the brooch against all except the true owner. In finding such, the court also
implicitly finds that ownership of real property where an article is located, without
more, does not give the real property owner better title over the article than its
finder. PER DOLIN: THIS IS A DUMB CASE. THERE WAS NO GOOD
OUTCOME SO COURT HAD TO MAKE A CALL. CASE IS DUMB BECAUSE
THE COURT DOES NOT SUPPORT ITS DECISION. COURT SHOULD HAVE
OUTLINED ITS GOALS IN DECIDING THE CASE AND THEN EXPLAINED
WHY THE DECISION IT RENDERED WAS THE BEST MEANS FOR
ACHIEVING THE GOALS OUTLINED.NOTE: Despite the poorly reasoned
opinion, this case appears to have come out correctly when squared with the
general principles regarding mislaid, lost, and abandoned property below. Given
the circumstances under which the brooch was found (jammed in the windowsill of
an unoccupied house and covered in cobwebs), it is most likely that the brooch
would be characterized as lost, if not abandoned. It is highly unlikely that it would
have been characterized as mislaid, the only situation of the three that generally
awards good title to the owner of the locus in quo.

Mislaid, Lost, and Abandoned Property (p. 112)[edit]

 Mislaid Property – Property is mislaid when the owner intentionally
placed it in a location and then forgot to retrieve it. Owner of the
locus in quo (a.k.a. area where item was left) usually wins against
a finder in such cases. Logic is that with mislaid property, true
owner is likely to retrace steps and find property, so the owner of
the locus in quo should hang on until true owner comes to retrieve
the item.Lost Property – Property is lost when the owner
inadvertently loses possession of it. Lost property usually goes to
the finder (often after a mandatory waiting period) because if the
true owner doesn’t know where he lost the property then he is
unlikely to retrace his steps and find it. This setup is also
considered desirable because it rewards the honesty of the
finder.Abandoned Property – Property is abandoned when the true
owner intentionally relinquishes all rights to the property with no
intentions of conferring his rights on some other person. Most
common example of abandonment is throwing a piece of property
in the trash. In cases of abandoned property, rights generally go to
the finder.

Treasure Trove (p. 112)[edit]

Treasure Trove—Gold, silver, bullion, or money that has been concealed

in a public place. At British Common law, treasure trove belonged
to the King. Modern British practice is to auction the treasure
trove to museums and divide proceeds equally between the finder
and the owner of the land where it was discovered. American law
generally rejects the treasure trove doctrine and instead treat
treasure troves as either lost or mislaid property. In cases where
the found items were buried, American courts generally give them
to the owner of the land on which they were found.

Shipwrecks (p 112)[edit]

Treasure from ships sunk at sea is governed either by maritime law or the
law of finds. Law of finds has generally been applied to ships lost
in territorial waters, and the finder has been held entitled to an
abandoned shipwreck unless the wreck was embedded in land
owned or possessed by another. Given this, the US and several
 states have successfully asserted claims to shipwrecks embedded in
their territorial waters and thus constructively
possessed.Abandoned Shipwreck Act of 1987 (43 USCA §§ 2101-
2106)—United States asserts title to any abandoned shipwreck
embedded in submerged lands of a state and simultaneously
transfers its title to the state in which the wreck is located.Proof of
Abandonment—Evidentiary standard required for proof of
abandonment is high, so in most cases the maritime law of salvage
applies to shipwrecks.Law of Salvage—A ship lost at sea and
settled on the seabed remains the property of the owner— unless
title to the vessel was abandoned—but anyone subsequently
reducing the ship or its cargo to possession is entitled to a salvage
award. Law of salvage is in sharp contrast to property law, which
awards a finder all or nothing subject to the rights of the true
owner.

Acquisition by Adverse Possession (p. 114)[edit]

General Concept of Adverse Possession—That, in certain circumstances,

a property owner may lose title to another person who possesses
the property without the owner’s permission.

Three Policies/Theories for Doctrine of Adverse Possession (p. 114)

[edit]

Avoiding Stale Claims—Theory of adverse possession is founded in

statutory law, namely the statute of limitations for recovering
possession of land in cases of trespass. This SOL is meant to bar
assertion of claims based on old, unreliable evidence by limiting
timeframe in which such claims may be asserted. If owner’s claim
is not filed within the statutory timeframe, owner loses title and
adverse possessor gains new and valid legal title.

Quieting Titles/Correcting Title Errors—Deeds and other legal

instruments of title may contain errors that affect the transferee’s
title (improper execution, error in land description, etc.). Adverse
possession resolves these problems by quieting title after a period
of time.
 Protecting Personal Attachments—Prospect theory holds in part that
people generally regard the loss of an asset in hand as more
significant than forgoing the opportunity to realize an apparently
equivalent gain—in other words, adverse possessors would feel the
loss of the adversely possessed property more strongly than would
the true titleholder feel the loss of the opportunity to add the same
property to his portfolio. As such, adverse possession gives good
title to the adverse possessor after a period of time.

Functionality of Adverse Possession (pp. 114-15)[edit]

Adverse possession does not function as a direct means of transferring

ownership.The running of the statute of limitations in adverse
possession cases does two (2) things: 1. Bars an action against the
adverse possessor by the erstwhile owner; and

Vests a new title, created by operation of law, in the adverse possessor.

Once acquired, the new title relates back to the date of the event that
started the statute of limitations running. The law then acts as
though the adverse possessor were the owner from that date.

Elements of Adverse Possession (pp. 115-16)[edit]

There are five (5) elements to adverse possession:

Actual Entry—Adverse possessor must actually enter property. Entry is

what creates the trespass cause of action, and therefore triggers
the statute of limitations on which adverse possession is based.

Exclusive Possession—Adverse possessor’s possession of property cannot

be shared with the true owner or with the general public; however,
absolute exclusivity is not required (i.e. guests and others may
potentially use the property without invalidating adverse
possessor’s claim).
Open and Notorious Possession—Possessor’s entry and subsequent acts
of use must be such that they would put a reasonably attentive
property owner on notice that someone is on the property.
Objective standard is used—if adverse possessor’s acts would be
noticed by an ordinary person, owner is regarded as knowing what
should have been known, i.e. that someone is on the property.

Hostile and Adverse Possession—Claimant’s possession of property

cannot be with the true owner’s permission.

Continuous and Uninterrupted—Possession must be continuous;

however, claimant may come and go in the ordinary course, given
the nature of the property (i.e. if it is a beach house, it’s possible
that possession only during the summer months would suffice).
True owner may successfully interrupt possession during the
statutory period by bringing an ejectment action against the
adverse possessor or by re-entering the property.

Adversity Requirement and Adverse Possessor’s State of Mind (p. 116)

[edit]

Existing doctrine reflects three (3) different views on state of mind:

State of Mind is Irrelevant—All that matters is conduct of adverse

possessor. Once there is entry, true owner has a cause of action;
therefore, it does not matter what was on the mind of the adverse
possessor. (The “Objective Standard”)

Required state of mind is “I thought I owned it”—Requires a good faith

claim on the part of the adverse possessor. Comes up sometimes in
American decisions and is codified in statutes in a few states. (The
“Good-Faith Standard”)

Required state of mind is “I thought I did not own it, but I intended to
make it mine”—Adverse possessor’s must intend to take the
property even if they know it does not belong to them. (The
“Aggressive Trespass Standard”)
Fulkerson v. Van Buren (Ark. App. 1998)—Fulkerson owned land with a
church building on it since 1949. Congregation of Progressive
Church started using church building as their place of worship in
1985 and made several improvements to building and surrounding
land over next few years. Church did not find out that Fulkerson
owned the land until 1994 or 1995. In 1994, Fulkerson sent letter
to church telling them to vacate. In 1995 Fulkerson filed in Circuit
Court to have congregation removed. Church filed response and
counterclaim claiming title to land by adverse possession.
Arkansas law uses aggressive trespass standard (I thought I did not
own it, but I intended to make it mine) as requisite intent for AP,
and adverse possessors must show that they had requisite intent,
along with the other elements of AP (open, notorious, hostile,
distinct, exclusive) for seven years to be successful on a claim of
AP. Because this case was brought—at a maximum—two years
after the Church acquired the requisite intent (that is, they found
out that someone else had title and continued to use the land as
their own), the court found that the church had not shown by a
preponderance of the evidence that they had the requisite intent for
the statutorily mandated time period. Reversed and remanded.
DISSENT: Because church possessed land since 1985, lower
court’s ruling not clearly erroneous. Court must not read word
“hostile” too literally. Claim of ownership, even under a mistaken
belief, is nevertheless adverse. 10/10 would have affirmed.

The Open and Notorious Requirement (Caves, duh) (p. 122)[edit]

NOTE CASE – Marengo Cave Co. v. Ross (Ind. 1937)—Cave was under
the land of both Ross and Marengo, entrance to cave on Marengo’s
land. Ross did not know that the cave ran under his land. Marengo
started a business and started charging entry fee for cave and
giving tours for many years. Business was well known to Ross.
Court found that Marengo did not have good AP claim because his
possession of the cave under Ross’ property was not notorious.
Finding out that the cave ran under Ross’ land would have
required a survey, and such survey would have required Ross to
get permission from Marengo because only entrance to cave was
on Marengo’s land. Cost of survey was therefore high relative to
 the value of the land in question. Moreover, the discovery rule says
that statute of limitations does not begin to run until plaintiff knew
or should have known of defendant’s wrong. Opinion implies that it
is not reasonable to say Ross knew or should have known of
Marengo’s trespass until the results of the survey are revealed.
Finally, court says underground trespass is a form of fraud. Case
shows that although notorious requirement is usually obvious, it
can be tricky in some circumstances.

The ad coleum Doctrine (p. 122)[edit]

Ad Coelum Doctrine—“Cujus est solum, ejus est usque ad coelum et ad

infernos” (“to whomsoever the soil belongs, he owns also to the
sky and to the depths.”) Marengo case is, at least in part, decided
based on this principle, which is now restricted especially with
regard to the “to the sky” part.

Color of Title and Constructive Adverse Possession (p. 123)[edit]

Color of title refers to a claim founded on a written instrument or a

judgment or decree that is for some reason defective or invalid. All
states provide some advantages to adverse possessors whose
possession is under color of title. In a few states, color of title is
essential to acquiring title by adverse possession.In all states, entry
with color of title may have an advantage where the adverse
possessor enters into possession of only a part of the property.
Actual possession under color of title of only a part of the land
covered by the defective writing is constructive possession of all
that the writing describes. The advantage that a person may gain
from constructive possession is that the activities relied upon to
establish adverse possession reach not only to the part of the
premises actually occupied, but to the entire premises described in
the writing.Class 4: More On Adverse PossessionReadings: 123-
143

Boundary Disputes (p. 123)[edit]

 Boundary disputes are now the most frequently litigated of adverse
possession claims. State of mind comes up in the special context of
mistaken boundaries.Hollander v. World Mission Church of
Washington D.C. (Va. 1998)—WMC owned land, including the
tract of land in question in this case. Hollander and her
predecessors in title believed that her land ran to a line of trees in
the ground, and that the line of trees was the natural barrier
between her land and the WMC’s. Hollander and her predecessors
in title mowed, gardened, and otherwise maintained the land up to
the tree line for a period of over fifteen years. WMC sued to have
the land it owned by good title returned by Hollander. Hollander
responded with a claim of adverse possession for the tract of land
up to the tree line. In claim of AP based on mistaken belief,
adversity cannot be shown solely by a mistake in the description
contained in the deed; however, adversity can be shown if the
adverse possessor mistakenly believed that their property ran to a
particular and definite line on the ground. The practical test to
determine whether adversity/hostility has been shown in such cases
is whether the adverse possessor intended to claim AS HIS OWN
the land up to a particular and definite line on the ground. Because
all other elements of AP had been met and because Hollander
intended to claim as her own the land up to a particular and
definite line on the ground (the tree line), the court found in
Hollander’s favor.

Mistaken Improvers (p. 126)[edit]

A Mistaken Improver is someone who innocently and mistakenly builds on

land that belongs to another. Old rule was that anything built on
the land of another had to be torn down (even if only a small part
of a house). The modern rule is to ease the plight of the innocent
improver by forcing the true owner to convey the land to the
improver at market value, or to give the landowner the option to
buy the improvement at market value.EXCEPTIONS: If the
encroachment is so minor as to be trivial, courts may deny relief to
the true owner altogether; conversely, if the improvement takes up
a significant portion of the true owner’s land, courts may order
removal, notwithstanding the good faith of the improver.Amkco
 Ltd., Co. v. Wellborn (N.M. 2001)—Unintentional encroachment
took up almost 10% of the true owner’s land. Court applied a TWO
PART TEST: 1) plaintiff must show that it would suffer irreparable
harm if removal is denied; and 2) even if irreparable harm is
shown, relief may still be denied under a balancing test that
compares the hardship to the plaintiff if removal is denied to the
hardship to the defendant if removal is granted. If the relative
hardship test precludes removal, the encroaching party acquires
either title or an easement to the land and pays damages
accordingly.

Agreed Boundaries, Acquiescence, and Estoppel (p. 126)[edit]

Doctrine of Agreed Boundaries—If there is uncertainty between

neighbors as to the true boundary line, an oral agreement to settle
the matter is enforceable if the neighbors subsequently accept the
line for a long period of time.Doctrine of Acquiescence—A period
of long acquiescence—though not necessarily as long or longer
than the statute of limitations—is evidence of an agreement
between the parties to fix the boundary line.Doctrine of Estoppel—
When one neighbor makes representations about—or engages in
conduct that tends to indicate—the location of a common boundary
and the other neighbor then changes his position in reliance on
that representation or conduct, the first neighbor is estopped from
denying the validity of his statements/acts. Similar to promissory
estoppel in contracts. Holler at Tief.

Mechanics of AP – Tacking (p. 127)[edit]

Howard v. Kunto (Wash. App. 1970)—The case where everyone’s mother

fucking beach house was on the wrong land. Kunto’s house was on
a tract of land directly east of the land which was described in his
deed. Everyone to the west of Kunto was in the same situation
(deed described land directly west of the land where their house
was sitting). All of the previous owner of Kunto’s house were under
the same mistake of title. Kunto only occupied the house during the
summer, and had only had title for a couple years. Howard had
paper title to Kunto’s land, and wanted to convey half his land to
 someone else. Howard had a survey done, and figured out that
everyone’s house was on the wrong land. Howard got the person
with the deed to the land where Howard’s house was sitting to
convey title to him, in exchange for Howard conveying title to land
where Kunto’s house was to them. Kunto claimed rightful title to
land where his house stood under adverse possession argument.
Court found that Kunto’s occupancy during the summer months
only was sufficient to show continuous possession because it was a
summer beach house and therefore a true owner would likely have
only occupied during those months. Court further held that, under
privity of estate, it was okay for Kunto to tack on the occupancy of
his immediate predecessor to show that he had occupied the land
for the requisite time period because they were all operating under
the same mistake. Judgment entered in favor of Kunto.Privity of
Estate—Privity of estate clearly exists where A, who possesses for
a period of time less than the statutory period, voluntarily transfers
the property to B, who then possesses for a period that, together
with that of A, exceeds the statutory period.

Disabilities (p. 132)[edit]

Every state allows for the statute of limitations to be extended if certain

disabilities are present at the time when the cause of action
accrued. Disability statutes differ, but generally allow for
extending the SOL if the person was a minor, was of unsound mind,
or was imprisoned at the time the cause of action accrued. If,
however, the cause of action began accruing before the disability
existed, or the disability ceased to exist before the cause of action
began to accrue, there is no extension.Adverse Possession Against
the Government—Under the common law rule, adverse possession
does not run against the government. American courts have relied
on this rule, as well as state constitutional provisions restricting
the alienation of state lands. However, a number of states have
changed the rules. Some permit adverse possession against the
government under the same terms as against a private individual.
Other states permit it only if possession continues for a period
much longer than that that would be required in other
cases.Adverse Possession of Chattels (p. 134)
 O’Keefe v. Snyder (N.J. 1980)—[edit]

Three (3) Rules Regarding the SOL for Adverse Possession (p. 142)
[edit]

The Conversion Rule—The statute begins to run against the true owner as
soon as the property is converted. (Rule used by trial court in
O’Keefe case).The Discovery Rule—Cause of action for conversion
does not accrue, triggering the running of the SOL, until the owner
discovers, or by exercise of reasonable diligence and intelligence
should have discovered, facts which form the basis for a cause of
action. (Rule applied in O’Keefe case).The Demand Rule—The
statute of limitations does not begin to run until the true owner
makes a demand for the return of the property and the demand is
refused.

Void vs. Voidable Title Under UCC § 2-403 (p. 142)[edit]

Void Title Rule—If a person acquires possession of a good where the true
owner did not intend to transfer title to the good, then the possessor
acquires no title to that good and cannot transfer good title to it to
anyone else. Title that was void in the transferor’s hand is void in
the transferee’s hand as well.Voidable Title—Exists where the true
owner intends to transfer the good, even though the transfer of the
good was procured through fraud or misrepresentation. Unlike
void title, with voidable title delivery is voluntary. Voidable title is
a defective title, but it is a title that, although the true owner can
rescind, becomes good title if transferred to a good-faith purchaser
for value.“Entrusting” Under the UCC (p. 143)Entrusting—Any
delivery regardless of any condition expressed between the parties
to the delivery and regardless of the fact that the procurement of
the entrusting or the possessor’s disposition of the goods may have
been larcenous.Class 5: Acquisition by GiftReadings: 143-159

Three (3) Requirements for a Gift (p. 143)[edit]

Intent—Donor must intend to make a present transfer of an existing

interest in the property. Must intend to be legally bound now, not in
 the future. Intention to make a gift may be shown by oral
evidence.Delivery—The donor must transfer possession (i.e. “hand
over the property) to the donee with the manifested intention to
make a gift to the donee. Objective acts are required to show
delivery.Acceptance—Acceptance by the donee is required, but
usually not an issue. Courts presume acceptance upon delivery,
unless the donee expressly refuses the gift.

More on the Delivery Requirement (pp. 143-44)[edit]

If manual delivery is not practicable because of the size or weight of the

gift, or because of its inaccessibility, constructive delivery or
symbolic delivery may be permitted.Constructive Delivery—
Handing over a key or some object that will open up access to the
subject matter of the gift.Symbolic Delivery—Handing over
something symbolic of the property given. Usual example is
handing over a written instrument declaring that the subject matter
is a gift—i.e. John hands Mary a written instrument that says “I
give my grand piano to Mary as a gift.”

SECTION II: THE ESTATE SYSTEM[edit]

BASIC ESTATES

Class 6: History; Fee Simple; Life EstateReadings: 161-180Escheat—

When a person dies intestate and without heirs, the person’s
property escheats to the state.

Modern law recognizes only four estates:

Fee Simple

Fee Tail

The Life Estate

Leasehold
 The Fee Simple Estate (p. 166)[edit]

Most common estate. Vast majority of land in US today held in fee simple.
Largest possible estate because its duration is infinite.Key
characteristics of Fee Simple Estate are heritability and
alienability. Heritability—Means fee simple estate can be inherited.
If O does not leave a valid will, O’s fee simple (not a newly created
one) passes to O’s legal heirs.Alienability—Owner’s interest in a
fee simple estate can be freely transferred to others in life and to
his heirs at the time of his death.Creating a Fee Simple Estate—
Originally, a FSE was created by a conveyance transferring from
O “to A and his heirs.” “And his heirs” are the words of
limitation; however, in modern practice these words are no longer
needed—a conveyance from O “to A” is sufficient, but the words of
limitation are still commonly used to avoid doubt.Fee simple exists
only in land. It does not apply to personal property.

Inheritance of a Fee Simple (p. 168)[edit]

Heirs—People who survive the decedent. THE LIVING HAVE NO

HEIRS. If conveyance transfers “to A and his heirs” and A is alive
at the time of the conveyance, we do not know who the transferees
are and will not know until A dies.Spouse—In all states, the
surviving spouse is designated as an intestate successor of some
share of the decedent’s land; however, the size of the share often
depends on who else survives.Issue—Issue are descendants of the
decedent. Issue includes not only the decedent’s children, but also
grandchildren and so on down the line. Issue take by right of
representation.

Right of Representation—If a child of the decedent dies but leaves

children, those children take in their parent’s place.

Ancestors—Parents usually take as heirs if the decedent leaves no

issue.Collaterals—All persons related by blood to the decedent
who are neither descendants nor ancestors. If a decedent leaves no
spouse, no issue, and no parents, the decedents brothers and sisters
(and their descendants by representation) take in all
 jurisdictions.Escheat—If a person dies intestate without any legal
heirs, the person’s property escheats to the state where the
property is located.

The Fee Tail (p. 169)[edit]

Fee tail originated to keep land within a family, back in the day when
land was power. The fee tail prevented the current owner from
cutting off the inheritance rights of his issue.Creation of a Fee Tail
—A fee tail estate in land is created by a conveyance “to A and the
heirs of his body.” Designed to keep dynasties intact. Expires when
the original tenant in fee tail (A) and all of his lineal descendants
are dead.When A’s bloodline runs out and the fee tail ends, the
land will revert to the grantor or the grantor’s heirs by way of
reversion, or, if specified by the instrument, will go to some other
branch of the family. EXAMPLE: O conveys land “to my son A and
the heirs of his body, and if A dies without issue, to my daughter B
and her heirs.” In this example:

A is given fee tail

B is given a remainder in fee simple to become possessory when and if the

fee tail expires.

Every fee tail has a reversion or a remainder after it.Fee Tail has nearly
disappeared in the United States. Can only presently be created in
Delaware, Maine, Mass. And Rhode Island.Only problem related
to fee tail that still pops up is: when an instrument uses language
that would have created a fee tail at common law, what estate is
created today?

All states that have abolished fee tail have answered this question by
statute. Most states fall into one of two categories:

A limitation “to A and heirs of his body” creates a fee simple in A and
any gift over on A’s death without issue is void. With regard to the
example above, under this construction neither A’s issue nor B
takes anything under this conveyance.
A limitation “to A and heirs of his body” creates a fee simple in A, but a
gift over to B if A dies without issue will be given effect in one
circumstance. B will take the fee simple if, and only if, at A’s death,
A leaves no surviving issue.

i) B’s future interest is known as a divesting executory interest, which will

shift the fee simple to B if A leaves no issue at death. ii) If A leaves
surviving issue at his death, B’s interest fails, and A’s fee simple
cannot be divested thereafter. In this case, A can devise his fee
simple to whomever he chooses.

The Life Estate (p. 171)[edit]

Creation of a Life Estate—A conveyance “to A for life” gives A a life

estate that last for the duration of A’s life. A can transfer to B, but
the life estate is still A’s life estate, meaning B’s interest is
determined by A’s life, i.e. when A dies, so does B’s interest in the
property. If B dies while A is still alive, the estate passes to B’s
heirs or devisees until A dies.Every life estate is followed by a
future interest—either a reversion in the transferor or a remainder
in the transferee, or both.

Therefore, if O conveys Blackacre to A for life, then:

A has a life estate

O has a reversion

White v. Brown (Tenn. 1977)—[SUMMARIZE NOTES FROM 176-

180]Class 7: Defeasible EstatesReadings: 180-192Any estate may
be made to be defeasible.Defeasible Estate—An estate that is made
to terminate, prior to its natural end point, upon the occurrence of
some specified future event.Most common defeasible estates are fee
simple defeasible.Primary reason that landowners create
defeasible estates today is to control the use of the land after it has
been transferred.

Types of Fee Simple Defeasible Estates (p. 181)[edit]

 There are three (3) types of defeasible fee simple estates:

Fee Simple Determinable

Fee Simple Subject to Condition Subsequent

Fee Simple Subject to Executory Limitation/Interest

Fee Simple Determinable—Fee simple limited such that it will end

automatically when a stated event happens. Example: O conveys
Blackacre to School Board so long as BA used for school purposes.
Fee simple could last forever, but as soon as land is used for non-
school purposes the Board’s fee simple will end and revert back to
O.

Created by durational language such as “so long as,” “during,” or

“while.”

Must be careful to use words of determination. “To Board for school

purposes” would give Board fee simple absolute.

Every fee simple determinable is accompanied by a future interest.

Usually a possibility of reverter, as in the above example.

Fee Simple Subject to Condition Subsequent—A fee simple that does not
automatically terminate, but may divest (be cut short) at the
transferor’s election when a stated event happens. Example: “O
conveys Blackacre to School Board, but if premises are not used
for school purposes,O has a right to re-enter and retake the
premises.”

Words of limitation are such that Board’s fee simple does not
automatically terminate if BA not used for school purposes, but
once BA not used for school purposes O can divest the Board of its
fee simple interest.
 Unless and until entry is made, the fee simple continues.

Created by a conveyance of a fee simple, followed by language providing

that the fee simple may be divested by the transferor if a specific
event happens.

Common words of limitation: “but if,” “provided, however, that when the
premises . . .,” “on condition that if the premises . . .,” etc.

Future interest retained by the transferor is called a right of entry, also

known as a power of termination

May be retained initially only by the transferor or his heirs

May not be created in a transferee

Fee Simple Subject to Executory Limitation—Created when a grantor

transfers a fee simple subject to condition subsequent and in the
same instrument creates a future interest in a third party rather
than himself. The future interest in the third party is called an
executory interest.

Example: O conveys land “to the County School Board, but if it ceases to
use the land as a school, to the City Library.”

Same language used to create a Fee Simple Subject to Condition

Subsequent, only difference is who retains the future interest

IMPORTANT NOTE: While Fee Simple Subject to Condition Subsequent

is only forfeited upon entry, Fee Simple Subject to Executory
Limitation is forfeited immediately when the specified event occurs.

Fee simple subject to executory interest can be created either in

possession or in remainder.
 Mahrenholz v. County Board of School Trustees (Ill. App. 1981)—In
cases of ambiguous language in a deed, courts are supposed to
look for evidence of the grantor’s intent.

FUTURE INTERESTS

Class 8: Reversion; Possibility of Reverter; Remainders; Executory

InterestReadings: 193-207Modern Future interests are divided into
two (2) basic groups: 1. Interests initially retained by transferor

Reversion

Possibility of Reverter

Right of Entry/Power of Termination

Interests created in a transferee

Vested Remainder

Contingent Remainder

Executory Interest

BE CAREFUL TO LIST ANY FUTURE INTEREST FULLY—IDENTIFY

BOTH THE INTEREST AND THE ESTATE. A future interest is a
presently existing property interest. It is called a future interest
only because the right of possession is delayed to some future time.

Reversion (p. 194)[edit]

If O, a fee simple owner, grants land “to A for life,” the land reverts back
to O at A’s death. O’s future interest is called a reversion. If O dies
during A’s life, O’s reversion passes to his heirs, and at A’s death
whoever owns the reversion is entitled to possession of the land.In
a general sense, a reversion is the interest left in an owner when he
carves out of his estate a lesser estate and does not provide who is
to take the property when the lesser estate expires.The hierarchy of
 estates determines what is a lesser estate.All reversions are
retained interests, which remain vested in the transferor.

Possibility of Reverter (p. 196)[edit]

A possibility of reverter is a future interest remaining in the transferor or

his heirs when a fee simple determinable is created.Example: O
conveys Blackacre “to the School Board so long as it is used for
school purposes.” O has a possibility of reverter.

Right of Entry (p. 197)[edit]

Exists when an owner transfers an estate subject to condition subsequent

and retains the power to cut short or terminate the estate.Example:
O conveys Blackacre “to the School Board, but if it ceases to use
the land for school purposes, O has the right to re-enter and retake
the premises.” O has a right of entry.

DECISION TREE FOR CLASSIFYING FUTURE INTERESTS[edit]

Step 1: Is it a remainder or an executory interest?Step 2: If a remainder,

is it a vested remainder or a contingent remainder?Step 3: If it is a
vested remainder, how is it vested?

Indefeasibly?

Subject to open?

Subject to complete divestment?

More than one of the above?

Remainders (p. 198)[edit]

There are two general types of remainders:

Vested
 Contingent

Vested Remainder—A remainder that is (1) given to an ascertained

person; and (2) not subject to a condition precedent (other than the
natural termination of the preceding estates).

Indefeasibly Vested Remainder—The remainder is certain of becoming

possessory in the future and cannot be divested.

A remainder in a class of persons (such as in A’s children) is vested if one

member of the class is ascertained, and there is no condition
precedent.

The remainder is vested subject to open (subject to partial divestment) if

later-born children are entitled to share in the gift.

Contingent Remainder—A remainder that (1) is given to an

unascertained person; or (2) is made contingent upon some event
occurring other than the natural termination of the preceding
estates. In the latter situation, the remainder is said to be subject to
a condition precedent.

Shortcut Rules for Classifying Series of Future Interests (p. 201)[edit]

Shortcut Rule 1: If LE + FI(1) + FI(2) and FI(1) = CR (in a FS), then

FI(2) = CR.Shortcut Rule 2: If LE + FI(1) + FI(2) and FI(1) = VR
(in a FS), then FI(2) = EI.

Two Important Examples (p. 201-202)[edit]

Dolin went over these in class and emphasized looking at the commas to
determine the outcome of each:Example 7: O conveys “to A for
life, then to B and her heirs if B survives A, and if B does not
survive A to C and his heirs.” The language “if B survives A”
subjects B’s remainder to the condition precedent of B surviving A,
and the language “if B does not survive A” subjects C’s remainder
to the opposite condition precedent. Here we have alternative
 contingent remainders in B and C. If the remainder in B vests, the
remainder in C cannot, and vice versa.Example 8: O conveys “to A
for life, then to B and her heirs, but if B does not survive A to C and
his heirs.” Note carefully: B does not have a contingent remainder.
B has a vested remainder in fee simple subject to divestment; C has
a shifting executory interest which can become possessory only by
divesting B’s remainder.Book Notes on these examples:
Realistically, in both scenarios the property will never revert back
to O; however O still technically has a reversion under the rules
studied. O’s reversion in these examples is called a technical
reversion, “technical” in the sense that it has no practical
significance. Technical reversion is recognized as a vestige of
feudal law that no longer exists. Even though the rule no longer
exists, modern law continues to assume that a life estate can end
prior to the death of the life tenant for the purposes of classifying
remainders. So, there is a third shortcut rule of
classification:Shortcut Rule 3: If LE + CR (FS) + CR (in FS), then
REV (in FS).

Executory Interests (p. 202)[edit]

Executory Interest—A future interest in a transferee that must, in order to

become possessory: 1. divest or cut short some interest in another
transferee (this is known as a shifting executory interest); or

Divest the transferor in the future (this is known as a springing executory

interest).

The distinction between the two types of EI has no legal consequence.

 The System of Estates and Future Interests[edit]

Suppose that a transferor who owns land in fee simple absolute conveys
one of the possessory estates listed in the left column of the table
below. The middle column shows all of the possible future interests
in the transferor, and the right column shows the possible future
interests in transferees.

POSSIBLE
COMBINA
POSSESSORY TIONS OF
ESTATES FUTURE
INTEREST
S

In Transferor In Transferee

Fee Simple Absolute None None

 Defeasible Fee
Simple:

Fee Simple Possibility of

None
Determinable Reverter

Fee Simple Subject Right of Entry

to (Power
None
ConditionSubs ofTerminati
equent on)

Fee Simple Subject

to an Executory
None
ExecutoryLimi Interest
tation

Same as with
Same as with life
Fee Tail life
estate
estate
 Reversion
[indefeasibl
Contingent
y vested]
Life Estate remain
(when no
der(s)
remainder
created)

Reversion [vested
subject to
defeasance] Contingent
(when Remainder(
contingent s)
remainder(s)
created)

Possibility of Remainder vested

Reverter (if subject to
any) open

Right of entry remainder vested

incident to subject to
reversion divestment

Reversion [vested Executory interest

subject to (if
defeasance or any)Remain
indefeasibly der subject
 to
vested] limitational
defeasance

Executory interest
in unborn
None
class
members

Indefeasibly
None vested
remainder

Same as with
Same as with life
Leaseholds life
estates
estates

The Trust (p. 207)[edit]

Separates legal and equitable title.Trustee:

Holds legal title to trust property

Manages the property for the benefit of the beneficiaries

 Usually has power to sell trust assets and reinvest proceeds in other
assets

Is a fiduciary

Duty of loyalty to beneficiaries

Must act for the exclusive benefit of the beneficiaries

Not permitted to benefit personally from the trust

Subject to personal liability for breach of fiduciary duty

i) May be removed by a court

Beneficiaries:

Hold equitable interests (interests enforceable by courts of equity)

Typically hold equitable interests that correspond to the legal possessory

estates and future interests

Have right of beneficial enjoyment of the property

Net income of the trust is paid to beneficiaries

Upon termination of the trust, trust assets are handed over to the
designated beneficiaries, free of the trust

Class 9: Rule Against PerpetuitiesReadings: 208-210 (skim); 210-

222Generally, the purpose of the rule is to curb dead-hand control
of property by the wealthy.

Introduction to Rule Against Perpetuities (p. 210)[edit]

Rationale: Testators can realistically (and perhaps wisely) assess the

capabilities of living members of their family, so with respect to
 them the testator’s informed judgment is given effect; however,
testators can know nothing about unborn persons, so their
assessment of these persons can only be given effect in limited
circumstances.Rule Against Perpetuities—No interest is good
unless it must vest, if at all, not later than 21 years after some life
in being at the creation of the interest.

In other words, an interest is void unless it is absolutely certain that it

will vest within 21 years after the death of a life in being at the time
the interest was created.

Only applies to interests that are not vested at the time of the conveyance
that creates them.

The Mechanics of the Rule (p. 213)[edit]

STEP 1: Which Interests?Only 3 interests are subject to the Rule Against

Perpetuities:

Contingent Remainders

Executory Interests

Class Gifts

STEP 2: What is the perpetuity period? In other words, when does the
perpetuity clock begin to run?Rule against perpetuities is a rule of
logical proof. Must prove that a contingent interest is certain to
vest or terminate no later than 21 years after the death of some
person alive at the creation of the interest.

If this can’t be proven, the contingent interest is void from the outset.

What does “some person alive at creation of the interest mean?

If interest is created by will, then it is a person that is alive at the time of

the testator’s death.
If contingent interest is created by an irrevocable inter vivos transfer, the
life in being must be a person alive at the time of the transfer

In the case of a revocable transfer, RAP does not apply until the transfer
becomes irrevocable (e.g. at the death of the person who has the
power to revoke). Hence, the life in being must be a person alive at
the time that the power of revocation ceases.

STEP 3: What is/are the relevant future events?There may be more than
one future event that must occur in order to resolve the contingency
of the interest.

Be sure to clearly understand what these events are

Sometimes obvious from the language creating the interest

Example: “To A for life, then to B if B is then alive”—B surviving A is the

only event that is made a condition precedent to the vesting of B’s
remainder.

Example: “To A for life, then to such of A’s children as survive A,” and
at the time of conveyance A has no children. Here, two events are
needed to resolve the uncertainty of vesting:

All of A’s children must either be born or remain unborn (i.e. A must die
either with or without children); and

Any children born to A must survive A or predecease him (terminating the

child’s interest).

STEP 4: The Search for a Validating LifeMust look for a person (only
need one) that will enable you to prove that the contingent interest
will vest or fail within the life—or at the death—of that person, or
within 21 years after that person’s death. This person, if found, is
called the validating life. Look only at causally connected lives:

Preceding life tenant(s)

 Taker(s) of the contingent interest

Anyone who can affect the identity of the taker(s) (Such as A in A’s gift to
A’s children)

Anyone else who can affect events relevant to the condition precedent

Test each life with the “what might happen” question:

What might happen question: For this person, is there some possible (not
necessarily probable) chain of post-creation events such that the
contingency might still remain unresolved, one way or another,
after that person’s death plus 21 years?

If you can find one person to whose life you can answer “no” to this
question, you have found your validating life.

If there is no person for whom you can answer “no,” then the interest is
void.

It is important to remember that you are only looking at what might

happen, without regard to what, in the end, actually did/does
happen.ALL POSSIBLE POST-CREATION EVENTS, NO MATTER
HOW UNLIKELY, MUST BE TAKEN INTO ACCOUNT IN A RAP
ANALYSIS.

Class Gifts and RAP (p. 216)[edit]

All or Nothing Rule—Under the Rule Against Perpetuities, a class gift is

not vested in any member of the class until the interests of all
members have vested.

For a class gift to be vested under the rule:

the class must be closed

i) Each and every member of the class must be in existence and

 identified

All conditions precedent for each and every member of the class must be
satisfied within the perpetuities period

Class Closing Rule (aka Rule of Convenience)—A class will close as soon
as one member of the class is entitled to immediate possession or
enjoyment, even if this means closing the class before it closes
naturally, or physiologically, that is, when the possibility of births
(or adoptions) ends (i.e. the death of a class’s ancestor).

When the class closes prematurely under the rule of convenience, no

person born or conceived thereafter can share in the gift.

Rule does not terminate the interests of existing class members whose
interests are not yet vested at the time of creation.

They remain present members of the class

However, they are not guaranteed to share in the gift. They may only
share in the gift if they satisfy the relevant condition precedent.

Perpetuities Reforms (p. 221)[edit]

Statutory Reforms

Some states have enacted statutes to correct technical perpetuities

violations

Example: Common law assumed lifetime fertility. IL statute declares for

purposes of RAP nobody under 13 or over 65 is fertile.

Wait-and-See Test

Instead of pre-emptively invalidating based on possible outcomes (as the

Common Law rule does), this test waits to see whether the interest
 does in fact remain contingent until the end of the perpetuity
period. 2. Looks at what actually happens

Uniform Statutory Rule Against Perpetuities

Adopts a fixed waiting period of 90 years

If at end of 90 year period interest(s) still not vested, rule allows courts to
reform the offending language of the instrument to allow the
interest to vest by that time

Enacted in more than 20 states

Many have modified the rule in various ways, though

Restatement 3d’s Two Generations Approach

Allows for judicial modification if the instrument does not terminate on or

before the expiration of the perpetuity period

Under this rule, “perpetuity period” expires at the death of the last living
measuring life

Measuring lives:

Transferor

Beneficiaries who are unrelated to the transferor and no more than two
generations younger than the transferor

Beneficiaries who are unrelated to the transferor and no more than the
equivalent of two generations younger than the transferor

Qualified Abolition of the Rule, and the Rise of the Perpetual Trust

Nearly 25% of states have abolished RAP in the case of trusts containing
a power of sale in the trustee
 Where these statutes exist, perpetual trusts are now permitted

SECTION III: CONCURRENT INTERESTS[edit]

Class 10: Co-OwnershipReadings: 223-230; 230-231 (skim); 232-251

Common Law Concurrent Interests[edit]

Types, Characteristics, Creation (p. 223)[edit]

Three (3) Modern Concurrent Estates:

Tenancy in Common

Joint Tenancy

Tenancy by the Entirety

Tenancy in Common

Tenants in common have separate but undividable interests in the

property

Interest of each TIC

Is descendible

May be conveyed by deed or will

No survivorship rights between TIC’s

Each TIC owns an undivided share of the whole

Joint Tenancy
 Joint tenants have right of survivorship (key characteristic of joint
tenancy)

Theory behind right of survivorship: Joint tenants are regarded together

as a single owner

Each tenant is seised per my et per tout (by the share and by the whole)

In theory, each owns the undivided whole of the property, therefore:

i) When one dies, nothing passes to surviving tenant; rather ii) The estate
continues in the survivors freed from the participation of the
decedent, whose interest is extinguished

The “four unities” of joint tenancy:

Time—the interest of each joint tenant must be acquired or vest at the

same time

Title—All joint tenants must acquire title by the same instrument or by a

joint adverse possession. A joint tenancy can never arise by
intestate succession or other act of law.

Interest—All must have equal undivided shares and identical interests

measured by duration.

Possession—Each must have a right to possession of the whole. After a

joint tenancy is created, however, one joint tenant can voluntarily
give exclusive possession to the other joint tenant.

Generally, if 4 unities do not exist then it is a tenancy in common rather

than a joint tenancy

Some jurisdictions allow for creation of a JT simply by explicitly stating

the intent to do so.

If 4 unities exist at creation but are later severed, JT becomes TIC

JT’s can convert to TIC’s by mutual agreement destroying any one of the
4 unities.

Any JT can unilaterally convert all interests to TIC by conveying his

interest to a 3rd party

If JT’s cannot settle by mutual agreement, they can bring action for
judicial partition

Court will either physically partition the tract of land into separately
owned parts or order the land to be sold and divide the proceeds
among the tenants

Joint tenants have no interest that can be passed by will at their death

Tenancy by the Entirety

Can only be created in husband and wife (moving toward “married

persons”)

Requires the four unities, plus a fifth (marriage)

Surviving tenant has a right of survivorship

Husband and wife are considered one person under Common Law

Neither can defeat the right of survivorship of the other by conveyance of

a moiety to a 3rd party

Neither, acting alone, has the right to judicial partition

Divorce terminates the tenancy by the entirety because it destroys the

5th unity (marriage)

Exists today in fewer than half the states

Avoidance of Probate (p. 225)[edit]

 Joint tenancies are popular, especially among married coupes

Practical equivalence of a will, but at tenant’s death probate of the

property is avoided

JT’s avoid probate because no interest passes at the joint tenant’s death

Rather, decedent’s interest ends at death

The fact that JT interest ceases at death has important effect for
creditors:

If creditor act’s during JT’s life, creditor can seize and sell JT’s interest
in the property, severing joint tenancy; however

If creditor waits until after JT dies, the JT’s interest has disappeared, and
there is nothing the creditor can seize

Unequal Shares (p. 225)[edit]

Under Common Law one of the four unities (interest) requires joint
tenants to have equal shares

Thus, if A has a 1/3 interest and B has 2/3 interest, A and B would hold as
TIC’s rather than JT’s

Modern approach increasingly ignores this rule and allows for this type
of setup provided it was the mutual intention of the parties to set up
the tenancy that way

Severance of Joint Tenancies (p 226)[edit]

(William) Harms v. Sprague (Ill. 1984)—John Harms was a joint tenant

with his brother William in a piece of property. Sprague bought
some property from Simmons, but was $7,000 short. Sprague
signed a promissory note for the $7K, but had no collateral. JH
decided to help his boy Sprague out by cosigning the note and
 giving a mortgage on his interest in the JT property he had with his
bro. William harms knew nothing of the deal or his brother’s
mortgage on the JT property. JH dies, leaves entire estate to
Sprague in will. WH claims 100% ownership of the JT property,
says mortgage can’t be enforced against him because JH’s interest
died with him. Sprague counterclaimed that he should be
recognized as a tenant in common by way of the will/mortgage.
Issue is whether a mortgage on a JT property, executed by less
than all of the joint tenants, severs the joint tenancy and creates a
tenancy in common. HELD: No. Joint tenancy is not severed by the
mortgage because the unity of title has been preserved. WH’s right
of survivorship under the joint tenancy became operative on the
death of JH, and thus WH is the sole owner of the JT property in its
entirety. The property right of the mortgaging joint tenant is
extinguished at the moment of his death. Upon death, his interest
ceases to exist and along with it the lien of the mortgage.

Secret Severance (p. 230)[edit]

One joint tenant can unilaterally sever joint tenancy without notice to the
other JT’s a. Example: Husband and wife own property in JT. Wife
wants to dispose of her interest by will. She secretly deeds her
interest to herself, then executes a will devising her interest to her
daughter. On her death, the will stands.

Some states now require recordation to sever a joint tenancy

Relations Among Concurrent Owners (p. 232)[edit]

Partition (p. 232)[edit]

When concurrent owners cannot come to an agreement for terminating

co-tenancy, they must resort to partition

Available to any joint tenant or tenant in common

Not available to tenants by the entirety

 Delfino v. Vealencis (Conn. 1980)—[edit]

Modern Partition Practice—Though it is still often recited that partition

in kind is preferred to partition by sale, sale is decreed in the great
majority of recent cases because either

the parties all wish it; or

The courts are convinced that sale is the fairest method of resolving the
conflict Sharing the Benefits and Burdens of Co-Ownership (p.
240)

Sometimes independent property rules are needed to determine how the

benefits and burdens of ownership are to be shared by the co-
owners

When a problem arises that is not touched on in the ownership agreement

When the rights of third parties are in question

When there was never an agreement in the first place

Spiller v. Mackareth (Al. 1976)—Spiller and Mackareth owned a building

together in AL. When a tenant of the building vacated, Spiller
entered and began to use as a warehouse. Previous tenant had
removed the locks, so Spiller put new ones in. Mackareth sent
Spiller a letter demanding that he either vacate half of the building
or start paying rent. Because there was no agreement to pay rent,
the court reasons, there must be evidence that establishes an ouster
before Spiller is required to pay rent. Issues: (1) what constitutes
an ouster in a case adjudicating an occupying cotenant’s liability
to pay rent to the non-occupying cotenant; and (2) was there ouster
in this case? REASONING: For a finding of ouster, the occupying
cotenant must deny entry to the nonoccupying cotenant, regardless
of a claim of absolute ownership. In Alabama, the occupying
cotenant is not liable for rent notwithstanding a demand to vacate
or pay rent. HELD: Before an occupying cotenant can be liable for
rent, he must have denied his cotenants the right to enter. Simply
 requesting the occupying cotenant to vacate is not sufficient
because the occupying cotenant holds title to the whole and may
rightfully occupy the whole unless other cotenants assert their
possessory rights. The fact that Spiller put new locks on the doors
is irrelevant—as long as he did not actually deny access to his
cotenants, any activity of possession and occupancy (such as using
the building and putting locks on the doors) is consistent with his
rights of ownership. Therefore, because there is no evidence that
Spiller intended to exclude his cotenants, he cannot be held liable
for paying rent.Sharing, Rents, Profits, and Costs.One cotenant
may seek to recover from another cotenant:

Rents realized from leases to 3rd parties

Profits realized from using the property for business purposes

Value realized by one or more of the cotenants in occupying the property

as a residence

Some or all of the amount of various expenditures such as improvements,

taxes, mortgage payments, repairs, etc.

Rents and Profits—In all states, a cotenant who collects rent and other
payments arising from the co-owned land from 3rd parties must
account to cotenants for the amounts received, net of
expenses.Taxes, Mortgage Payments, and Other Costs—A cotenant
paying more than his share of these expenses is entitled to recover
contributions from other cotenants, at least up to the amount of the
value of their share of the property. Also, such a cotenant receives
a credit for the excess payments in an accounting or partition
action.Necessary Improvements—There are two formulations:

Most jurisdictions recognize no affirmative right to contributions from

other cotenants absent an agreement

Some jurisdictions provide for contributions of the repairing cotenant

gives notice to the other cotenants
 Improvements—A cotenant has no right to contribution from other
cotenants for expenditures for improvements.

No credit is given for the cost of improvements in an accounting or

partition action

General rule is that the interests of the improver are to be protected if it

can be accomplished without detriment to the interests of the other
cotenants; thus:

If property divided pursuant to partition action, improver is awarded the

improved portion; and

If partition by sale is necessary, proceeds will be distributed in such a

way as to award the improver the added value (if any) resulting
from the improvements

Marital Interests (p. 244)[edit]

Two theories:

Separate Property System—Husband and wife own property separately;

ownership is given to the spouse who acquires the property.
Developed in England, common law view.

Community Property—Husband and wife are a community/marital

partnership and should thus share their acquisitions equally.
Continental formulation originated by the Germanic tribes.

Usually how property is divided upon divorce in the US, but has less of
an effect when property is divided on death

The Common Law System (p. 245)[edit]

Spousal property rights are classified into 3 categories:

Rights during the marriage

 Rights upon divorce

Rights at death

During Marriage

Under historical common law, married woman not entitled to exercise

powers of ownership

Husband and wife regarded as one person—the husband

All property of wife at time of marriage or acquired thereafter (including

earnings) was property of husband

Wife’s property becomes subject to husband’s debts and thus, his

creditors

1800’s—Most common law property states adopt Married Woman’s

Property Acts

Give married woman control over her property

Her property is separate property and immune from her husband’s debts

Give woman control of her earnings outside the home

Sawada v. Endo (Haw. 1977)—[edit]

Modern Approach—In a majority of states, a creditor of one spouse

cannot reach a tenancy by the entirety because one spouse cannot
assign his or her interest

Exemption from creditors a main reason for survival of tenancy by the

entirety

Tenancy by entirety serves to protect family home and other property

from transfer by one spouse and from creditors of one spouse
 Tenancy by the entirety (where recognized) can be created:

i) in any amount of real property; and

ii) in many states, in any amount of personal property

Termination of Marriage by Divorce

Common Law Approach—Property of spouses remains the property of

the spouse holding title, co-owned property remained in co-
ownership. Husband paid alimony arising out of his duty of support
to his wife.

Equitable Distribution—Property is divided by the court, in its discretion,

on equitable principles.

Every state has replaced common law approach with ED

Many statutes allow court to divide all property owned by spouses,

regardless of time and manner of acquisition

Other statutes divide only marital property

Marital Property—Defined in two different ways depending on state:

All property acquired during marriage by whatever means (earnings,

gifts, or inheritance); or

Includes only property acquired from earnings of either spouse during

marriage

Termination of Marriage by Death

Personal property under common law

Widow gets 1/3 if there are surviving issue and 1/2 otherwise
 Widower takes all wife’s personal property absolutely

Real property under common law

Widow got right of dower

i) Life estate in 1/3 of each parcel of land of which husband was seised
during marriage

ii) Attaches to land at moment of marriage if land then owned; or when

acquired

iii) Right of dower inchoate until husband dies

>If wife dies first, dower extinguishes >If husband dies first, wife
becomes entitled to dower possession

Husband got interest in curtesy

i) Life estate in each piece of wife’s real property if certain conditions

met

ii) Curtesy did not attach to land unless issue of the marriage capable of
inheriting the land were born alive

Dower and curtesy abolished in almost all US jurisdictions

The Community Property System (p. 251)[edit]

Currently used in 9 states:

AZ, CA, ID, LA, NV, NM, TX, WA, WI

Fundamental idea—Earnings of each spouse during marriage should be

owned equally in undivided shares by both spouses

Community property includes:

 Earnings during marriage

Rents, profits, and fruits of earnings

Whatever is bought with earnings

Separate Property—Property acquired before marriage and property

acquired during marriage by gift, devise or descent.

SECTION IV: LEASEHOLDS[edit]

Class 11: Lease; Delivery; Subleases and AssignmentsReadings: 264-

285Four main Types of Leasehold Estates

The Term of Years—An estate that lasts for some fixed period of time or
for a period computable by a formula that results in fixing calendar
dates for beginning and ending once the term is created or
becomes possessory

Can be any time period (1 day, 2 months, 5,000 years, etc.)

No limit to time period at common law, but some US jurisdictions impose

a limit

Term must be for fixed period

Can be earlier terminable upon the happening of some event or condition

No notice of termination is necessary since it states from the outset when

it will terminate

Death of LL has no effect on the leasehold

The Periodic Tenancy—A lease for some fixed duration that continues for
succeeding periods until either the landlord or tenant gives notice
of termination (i.e. MTM or YTY leases)
Usually renews automatically until a party gives notice of termination

MTM and YTY are examples of express periodic tenancies, but they can
also be implied

Under common law

i) Half year’s notice required to terminate a YTY tenancy ii) Periodic

tenancy must be terminated by notice equal to the length of the
tenancy period, NTE 6 months

Death of LL has no effect on leasehold

Tenancy at Will—A tenancy of no fixed period that endures as long as

both LL and tenant desire

If lease provides that it can be terminated by one party, it is necessarily

the will of the other party as well if a tenancy at will has been
created

Terminates:

i) At death of either party

ii) When a party terminates

Modern statutes usually require a notice period in order for a party to

terminate unilaterally

Tenancy at Sufferance: Holdovers—Arises when a tenant remains in

possession after termination of the tenancy

At common law, LL’s have two options when faced with a holdover:

i) Eviction (plus damages)

ii) Consent (express or implied) to the creation of a new tenancy

 Tenancy in holdover is usually governed by the same terms as the
original lease unless:

i) parties agree otherwise; or

ii) some term or condition is regarded as inconsistent with the new

situation

THERE IS NO SUCH THING AS A LIFE TENANCY/LEASEHOLD FOR

LIFE

Kajo Church Square, Inc. v. Walker (Tex. App. 2003)—

Subleases and Assignments (p. 278)[edit]

Tenant’s interest in a leasehold is an estate, and is thus transferable to

3rd parties 2. Two types of tenant transfers

Sublease

Assignment

Distinctions between sublease and assignment have important legal

consequences

Ernst v. Condit (Tenn. App. 1964)—The general rule as to the distinction

between a sublease and an assignment is that an assignment
conveys the whole term, leaving no interest nor reversionary
interest in the grantor, whereas a sublease may be generally
defined as a transaction whereby a tenant grants an interest in the
leased premises less than his own, or reserves to himself a
reversionary interest in the term.

Two (2) Tests for Sublease and Assignment (p. 283)[edit]

Test #1: Formalistic; Most Commonly Used Test

If lessee transfers his entire interest under the lease, it is an assignment 2.
If lessee transfers anything less than his entire interest, a sublease

Lessee retains a reversion

Note: if lessee transfers his entire interest in a part of the property, most
courts would consider it a partial assignment rather than a
sublease

Test #2: Based on Intention; Lesser Used Test

Actual words used (“sublease” or “assignment”) in the instrument are

not conclusive, but may be persuasive

Court will attempt to determine the intention of the parties and then make
its ruling

Third Party Beneficiary Contract (p. 283-4)[edit]

Restatement § 16.1, Comment (c)—At the time a transfer of an interest in

the leased property is made, the transferor may exact a promise
from the transferee that he will perform the promises in the lease
which were made by the transferor. The exaction of such a promise
does not relieve the transferor of liability on his promises. It does
give him a direct remedy against his transferee if the transferee
fails to perform the promises, which remedy will continue to be
available even after the transferee has transferred the interest to
someone else. If the holder of the benefits of the promises made by
the transferor acquires enforcement rights as a third party
beneficiary against the transferee by virtue of the transferee’s
promise to the transferor, then the transferee is in privity of
contract with such third party beneficiary and a subsequent
transfer by the transferee of an interest in the leased property will
not affect that privity of contract liability.

Example: In exchange for $20, A promises B (who paid the money) that A
will wash C’s car. Although B is the promisee of A’s promise, C is
the intended beneficiary, and if the local jurisdiction recognizes the
 third party beneficiary contract doctrine, then C has enforceable
contract rights against A. Restraints on Alienabilty in Leaseholds
(p.284)

Though the common law generally disfavors restraints on alienation of

property, this policy has less application to leasehold interests
because LL’s have a legitimate interest in protection their
reversionary interests and assuring that the leasehold covenants
are performed.

This is why it is okay to have a consent clause, as there was in Ernst,

requiring the tenant to get permission from the LL before
subleasing or assigning

Class 12: Subleases and Assignments Contd; DefaultReadings: 285-

306Kendall v. Ernest Pestana, Inc. (Cal. 1985)—A commercial
lessor may not unreasonably withhold his consent to assignment of
a lease, whether or not there is a consent clause.NOTE WELL: The
reasonableness requirement set out in Kendall DOES NOT APPLY
to residential leases.

The Tenant Who Defaults (p. 292)[edit]

The Tenant in Possession[edit]

Berg v. Wiley (Minn. 1978)—When a lessor feels that a tenant in

possession is violating the terms of the lease, the lessor must
exercise judicial remedies to retake the property.

Self-Help at Common Law—A LL entitled to possession could resort to

self-help without fear of civil liability so long as he used no more
force than reasonably necessary 2. Modern View on Self-Help—
The Berg view—LL must resort to judicial remedy to retake

However, some courts continue to allow self-help

Whether or not self-help rule applies only to commercial leases, only to
residential leases, or to both depends on the jurisdiction

Some courts allow the parties to bargain around self-help rules, others
don’t. All depends on jurisdiction

The Abandoning Tenant (p. 299)[edit]

Sommer v. Kridel (N.J. 1977)—A LL has a duty to mitigate damages by

making a reasonable effort to re-let the premises when seeking to
recover rents due from a defaulting tenant. This is the most
commonly-used rule today.Surrender—An agreement between LL
and tenant to prematurely terminate the tenancy. If effected, the
surrender relieves the tenant from liability for future rent.

Tenant is, however, still liable for any past unpaid rent

Normally, express surrender is subject to the Statute of Frauds

Abandonment—Per the Restatement, “an abandonment of the leased

property by the tenant occurs when he vacates the leased property
without justification and without any present intention of returning
and he defaults in the payment of rent.”

Considered to be an implied offer of surrender by tenant

LL is free to accept or reject

3 options traditionally available to LL when tenant surrenders:

Terminate the lease—Accept the implied offer and terminate

Leave premises vacant and recover accrued rent—Reject offer, leave

premises vacant and bring action against abandoning tenant

Mitigate damages, recover any difference in rent—self explanatory.

The “Vacant Stock” Theory—Laid out in Sommer, this theory requires a
mitigating LL to make at least the same effort to re-let the
abandoned property as he would/does with other vacant
units.Class 13: Duties, Rights & RemediesReadings: 306-328

The Landlord’s Duties (p. 306)[edit]

The Duty to Deliver Possession[edit]

American Rule—The LL is obligated only to deliver legal possession, i.e.

the legal right to possession of the premises, when tenancy begins.

It is tenant’s responsibility to oust a trespasser or holdover

Tenant’s remedies are against person in physical possession

i) May sue to recover possession and damages

English Rule—Landlord must deliver actual possession. Upon LL’s

default, tenant may terminate the lease and sue the LL for
damages.

Alternatively, tenant can continue the lease and sue for damages

A majority of jurisdictions in the US now follow the English Rule.

Duties Regarding the Condition of the Premises (p. 307)[edit]

The Original Common Law Approach: Independent Covenants

Leasehold covenants, whether express or implied, were considered

independent of each other.

Covenants must be performed regardless of whether other party is

upholding its covenants. Tenant must still pay rent even if LL not
upholding its covenants.
Quiet Enjoyment—Tenant has a right to possession undisturbed by the LL
or someone claiming through the LL

Breach of the covenant of quiet enjoyment discharged tenant of duty to

pay rent

Initially limited to cases where tenant was actually ousted physically;

expanded to extend to cases of constructive eviction

Constructive Eviction—Actions by the LL and those acting under him that

so substantially interfere with a tenant’s beneficial enjoyment of
the premises that the tenant has no reasonable alternative other
than vacating the premises.

Contract Approach (a.k.a. Modern Approach)

Leases should be viewed as a contract where all covenants are

interdependent. Default by either side will/may result in the other
side gaining a right to terminate.

Quiet Enjoyment and Constructive Eviction (p. 309)[edit]

Village Commons, LLC v. Marion County Prosecutor’s Office (Ind. App.

2008)—MCPO rented office space from VC. Lease said LL would
maintain premises but limited remedies available to tenant in case
of breach to right to sue for an injunction or damages. MCPO had
no right to terminate or withhold rent under the lease. Premises
began having water leaks, destroyed boxes of evidence. MCPO
notified LL, LL told them to move evidence out of problem areas.
VC made repairs but did not fix the issue. VC also declined to pay
for mold remediation despite health risks. By failing to remedy the
problems with the premises, VC had constructively evicted MCPO.
Under Indiana law, a tenant who has been wrongfully evicted may
abandon the premises and stop paying rent, even if the exclusive
remedy provision provides that the tenant may not terminate the
lease or withhold rent if the LL breached. MCPO wins.
 Elements to Prove Breach of Covenant of Quiet Enjoyment and
Constructive Eviction (p. 316)[edit]

Wrongful Conduct by LL (or someone for whom the LL is legally

responsible)—Acts by LL that seriously interfere with the tenant’s
use or enjoyment. Can be:

Affirmative acts

Inaction—Generally only considered wrongful where LL has a duty to act

i) Duty by express clause in lease ii) Duty by Statute iii) Four common
law duties:

> Furnished Dwelling Rule—For short-term leases of furnished

dwellings, LL has an implied duty to make and keep premises
habitable> Common Areas—LL is responsible for care and
condition of the common areas> Latent Defects—LL has duty to
disclose any latent defects existing at the outset of the lease of
which the LL knew or reasonably should have known> Nuisances
—In some jurisdictions, LL is responsible for abatement of
nuisances occurring in the premises if they affect the leased
premises

Acts of 3rd Parties—Traditional rule is that LL’s are not responsible for

acts of third parties. Modern courts are divided:

i) Some apply traditional rule

ii) Others hold that LL is responsible for controlling the 3rd party’s

conduct if the LL has the legal authority to do so.

Substantial interference with the tenant’s use and enjoyment—The

conduct must constitute such a major interference with the tenant’s
ability to use or enjoy the premises that a reasonable person would
conclude that the property is uninhabitable or unfit for its intended
use.
 Minor interferences, such as broken window, do not amount to
constructive

eviction

Vacation of the premises in a timely fashion—Only really an element of

constructive eviction; not always necessary to show in an action
for breach of quiet enjoyment. Tenant must give LL notice of defect
and time to resolve the problem; then, if LL does not resolve,
tenant must leave before constructive eviction remedy is waived (if
it is waivable).

IMPORTANT MOTHER FUCKING NOTE: CONSTRUCTIVE

EVICTION IS ONLY ONE OF A MENU OF REMEDIES FOR A
BREACH OF QUIET ENJOYMENT. Tenant should be, and
USUALLY IS, able to stay in possession and sue for damages equal
to the difference between the value of the property with and without
the breach of quiet enjoyment.

Partial Eviction

Actual Partial Eviction—Tenant is actually physically evicted from a part

of the premises. Tenant is relieved of all liability for rent,
notwithstanding continued occupation of the balance.

Constructive Partial Eviction—LL makes part—but not all—of the

premises uninhabitable, but tenant remains in undisturbed
possession of the balance. In most jurisdictions, tenant is not
relieved of obligation to pay rent.

The Implied Warranty of Habitability (p. 318)

Caveat Lessee (Lessee Beware)—The early common law approach. There is

no implied warranty of habitability. Tenant takes the premises as-is.
 Hilder v. St. Peter (Vt. 1984)—Hilder rented apartment owned by St. Peter
and lived there with 4 kids. There were many problems: broken kitchen window,
no front door lock, non-functioning toilet, bad light fixtures, water leakage, failing
plaster, and leaking sewage. Hilder complained about each problem as they were
discovered. St. Peter usually promised to remedy but never actually did. Hilder
fixed at her own expense in most cases. Hilder paid rent on time. Hilder sued for
breach of implied warranty of habitability when she moved out. Issues: Whether
(1) the court should adopt implied warranty of habitability; (2) if yes, whether a
tenant is entitled to recover rents paid upon prevailing; and (3) if yes, whether
tenant is entitled to an award of compensatory and punitive damages for prevailing
on the same claim? Held: (1) All residential rentals include an implied warranty of
habitability that cannot be waived or disclaimed. (2) Yes. On winning a suit for
breach of implied warranty of habitability, tenant is entitled to recover all rents
paid to LL. It is not necessary for the tenant to vacate the premises and claim
constructive eviction in order to succeed on this remedy. (3) Yes. A tenant may be
entitled to recover compensatory damages for her discomfort and annoyance
arising from the defects. Further, the tenant may recover punitive damages where
the breach is so wanton, willful, or fraudulent that it justifies an award of
exemplary damages.Status of Implied Warranty of Habitability (p. 325)

Adopted for residential leases in all but 3 jurisdictions (AL, WY, and AR)

Most states have adopted by statute rather than judicial reform

Usually does not apply to all residential leases; some may be excluded

Majority of jurisdictions have not adopted implied warranty of fitness or

suitability for purpose for commercial leases.

Implied warranty of habitability does not render useless the doctrines of

quiet enjoyment, constructive eviction, and illegal leases

Standard and Breach of the Warranty (p. 325)

Generally speaking, “adequate standard of habitability” must be met

Breach occurs when the leased premises are “uninhabitable” in the eyes of a
reasonable person
 Housing code violations are considered compelling but not conclusive

Objective is safe and healthy housing

means something more than avoiding slum conditions—i.e. loud noise in

apartment building may be considered a breach

Remedies for Breach of Implied Warranty of Habitability (p. 325)

Generally, tenant may avail himself of all basic contract remedies:

Damages

Rescission

Reformation

Tenants remedies have unique aspects. The following remedies are

available:

Remain in possession and bring action for breach of warranty (Hilder)

Rescind the lease, thereby permitting tenant to vacate premises with no

further obligation to pay rent

Remain in possession and withhold all or part of the rent

Repair the defects and deduct the cost of repairs from rent payments 3.
Three formulas for calculating rent deductions and damages:

Agreed Rent (AR) - Fair Market Rental Value (FMRV) of premises in

defective condition. Most straightforward method because it uses the agreed rent as
the starting point.

FMRV of premises in compliant conditions – FMRV of premises in

defective condition.
 i) Aims to avoid the possibility present in formula (a) that tenant gets zero
because defects existed at outset and tenant was aware of them c. Agreed Rent - %
of rent corresponding to lease value lost as a consequence of LL breach

Consequences of the Implied Warranty of Habitability (p. 326)

New doctrine did not result in fewer eviction cases being filed, indicating
there may not have been an increase in tenant rent withholding

Large portion of LL-tenant cases never reach court—once LL gets the $ or

possession they drop the case. Tenants apparently prefer to move rather than
litigate.

When cases do reach court, most are resolved without reference to condition
of premises. Most tenants are not represented by counsel and lack sufficient
knowledge of the law to assert their rights on their own.

TRANSFERS OF LAND[edit]

Class 14: Contract for Sale, WarrantyReadings: 331-32; 332-45 (skim);

345-64

Introduction to Buying and Selling Real Estate[edit]

First step is to negotiate a purchase and sale agreement, setting forth:

legal description of the property

Price

Provision for an earnest money deposit

 Date for closing or settlement (the transfer of title)

Real estate contracts are almost always executory—title not transferred

immediately on signing because both parties must fulfill certain
obligations between signing and closing

Typical buyer obligations:

i) Title search to satisfy herself that seller can convey good title ii) Obtain
a mortgage loan. Usually K will provide that if she cannot obtain
within a certain time she can rescind K and recover deposit (the
mortgage contingency)

iii) Inspection Contingency—clause allowing buyer to obtain an

inspection of the property and rescind K if cost of remedying any
problem found exceeds a certain threshold.

Lender provides proceeds of loan to seller, who uses the money along
with additional proceeds received from buyer to:

pay off any existing loans on the property

pay the broker commission

pay legal and other fees he has agreed to take care of

pockets the rest

At same time lender advances funds to seller, seller transfers title to

buyers by giving them a deed 5. Buyers will then

Sign a promissory note for the loan

Execute a mortgage or deed of trust in favor of the lender

Pay fees for services provided by lawyer, title company, and any other
parties involved in transaction
 Title company will then usually record the deed and mortgage with
County Clerk

Title company will issue a policy of title insurance promising to defend

against any adverse claims and pay a fixed amount if the title is
later found to be flawed or unmarketable

Buyers now own a home!

The Contract of Sale (p. 346)[edit]

The Statute of Frauds[edit]

Statute of Frauds is English law enacted in 1677 providing that:

except for leases less than 3 years, no interest in land can be created or
transferred except by an instrument in writing signed by the party
to be bound thereby; and

no action shall be brought upon any contract or sale of lands, or any

interest in or concerning them, unless the agreement upon which
such action shall be brought or some memorandum or note thereof
shall be in writing, and signed by the party to be charged
therewith.

When not confined by express language, courts have treated the Statute of
Frauds as principle rather than a statute.

Most law relating to SoF is judge-made rather than statutory

Some judges are strict about it, others are more relaxed 3. 3 minimal
requirements for satisfying the Statute of Frauds

Memorandum of sale must be signed for the party to be bound

Memo of sale must describe the real estate

 Memo of sale must state the price

i) When price agreed upon, most courts regard it as an essential term that
must be set forth

ii) If price was not agreed upon, courts may imply an agreement to pay a
reasonable price

Exceptions to Statute of Frauds (When Oral Agreements are Allowed)

Part Performance—Allows the specific enforcement of oral agreements

when particular acts have been performed by one of the parties to
the agreement

i) Theory 1: When the acts of the parties substantially satisfy the

evidentiary requirements of the SoF, there is part performance

ii) Theory 2: Part performance is a doctrine used to prevent injurious

reliance on the contract, and therefore if the plaintiff shows that he
would suffer irreparable injury if the contract were not enforced,
then the buyer’s taking of possession alone is enough to set the
court in motion

Estoppel—Applies when unconscionable injury would result from denying

enforcement of the oral agreement after one party has been
induced by the other to seriously change his position in reliance on
the contract

Hickey v. Green (Mass. App. 1982)—Green negotiated to sell parcel of

land to Hickey. PArties came to oral agreement, Hickey gave
Green $500 deposit. Hickeys told Green they were going to sell
their house and build on the lot they were buying. Green sold house
less than 10 days after making deposit. Green then told Hickey that
she no longer intended to sell property to them and found another
buyer. Hickeys offered to meet other buyer’s price but Green
refused. Hickey sued for specific performance, Green said SP not
available because agreement did not comply with SoF. ISSUE:
Whether an oral contract for sale of land can be specifically
 enforced if the party seeking enforcement detrimentally relied on
the agreement? HELD: Yes. An oral land transfer agreement may
be specifically enforced, despite violating the Statute of Frauds, if
the party seeking specific performance has detrimentally relied on
the oral agreement and injustice can only be avoided by specific
performance.

Marketable Title (p. 351)[edit]

Seller must convey marketable title to buyer for there to be an

enforceable contract for sale of land

If seller cannot produce, buyer may rescind

Marketable Title—a title not subject to such reasonable doubt as would

create a just apprehension of its validity in the mind of a
reasonable, prudent and intelligent person, one which such
persons, guided by competent legal advice, would be willing to take
and for which they would be willing to pay fair value

Lohmeyer v. Bower (Kan. 1951)—Lohmeyer contracted to buy property

from Bower. Deed that transferred sale warranted that the
property was transferred “free and clear of all encumbrances,” but
“subject to all restrictions and easements of record applying to this
property.” Lohmeyer’s lawyer found two zoning violations.
Lohmeyer told Bower who offered to fix one (but not both) of the
violations. Loh refused and brought suit seeking to rescind the K
and for return of the earnest money deposit. Bower countersued for
specific performance. ISSUE: Do zoning ordinance violations
render a property’s title unmarketable? HELD: Yes. Because the
zoning violations would have put Lohmeyer at risk of litigation
were the sale to go through, they rendered the title unmarketable.
The purchaser of real property may choose to cancel the sale if the
title to the land is found to be unmarketable.

Equitable Conversion (p. 355)[edit]

Doctrine of Equitable Conversion—If there is a specifically enforceable
contract for the sale of land, equity regards as done that which
ought to be done.

Buyer is viewed in equity as the owner from the date of the contract (thus
having the equitable title)

Seller is viewed in equity as having a claim for money secured by a

vendor’s lien on the land. Seller is also said to hold the legal title
as trustee for the buyer

Risk of Loss—Courts have taken three different approaches to who takes

the loss when premises are destroyed between signing contract of
sale and closing when the contract has no provision allocating the
risk of loss:

Equitable Conversion Approach (Majority Approach)—From the time of

the contract of sale of real estate, the burden of the loss is on the
buyer, even though seller retains possession. (treats purchaser as
owner through EC)

Approach #2: Loss is on the seller until legal title is conveyed

Approach #3: Risk of loss is placed on the party in possession

Inheritance—If one of the parties to a sale of land dies and equitable

conversion has occurred:

Seller’s interest is in personal property (right to the purchase price)

Buyer is treated as owner of the land

The Duty to Disclose Defects (p. 356)[edit]

Stambovsky v. Ackley (N.Y. 1991)—Stambovsky entered into a contract

for the purchase of a home with Ackley. Unknown to Stambovsky,
Ackley had held house out to public as a haunted house. Article in
 magazine, included on haunted homes tour of town. Ackely did not
disclose these facts during negotiations. Upon learning that home
was haunted, Stambovsky brought action to rescind sale contract.
ISSUE: Does seller have duty to disclose a condition created by the
seller that decreases the value of the home and is unlikely to be
discovered by the buyer? HELD: Yes. Ackley had a duty to disclose
the fact that he held the home out as being haunted. Because
holding the house out as haunted has the potential to decrease the
value of the home, and because it is not something a buyer should
ordinarily be expected to consider prior to purchase, there was a
duty to disclose. A condition created by a seller that decreases (or
is likely to decrease) the value of a home, and is unlikely to be
discovered by the buyer, must be disclosed by the seller.Johnson v.
Davis (Fla. 1985)—Johnson agreed to sell house to Davis, did not
disclose what he knew about poor structure of roof. Davis
specifically asked about water marks on ceiling, Johnson said they
were not water marks and that roof was in good working order.
After Davis paid deposit, there was a rainstorm and Davis entered
house to find water pouring in from windows and ceiling. ISSUE:
IS a homebuyer entitled to a refund of deposit when the seller knew
of, but failed to disclose, significant leakage problems in the roof of
the home? RULE: Where the seller of a property knows of facts
materially affecting the value or desirability of the property that
are not observable or known to the buyer, the seller has the duty to
disclose them to the buyer. HELD: Yes. A seller is liable for failing
to disclose material problems with the structure of a house if he
knows about them. Because Johnson knew about the problems,
failed to disclose them, and actively lied about them, and because a
leaky roof is a material defect, Johnson is liable and must return
deposit.

Modern Approach: Majority of states now require seller to disclose all

known defects and equate nondisclosure with fraud or
misrepresentation. When seller breaches this duty, buyer can
rescind the contract or sue for damages after the closing.

Most states now have statutes requiring sellers to deliver a written

statement disclosing facts about the property to the buyer.
 In every jurisdiction with a statute, defect must be material to be
actionable 3. Two tests for determining materiality of a defect:

Objective test: Whether a reasonable person would attach importance to

the defect in deciding to buy

Subjective Test: Whether the defect affects the value or desirability of the
property to the buyer

Merger Doctrine—When a buyer accepts a deed, the buyer is deemed to

be satisfied that all the contractual obligations have been met.
Contract nerges into the deed, and buyer can no longer sue seller
on promises in the contract of sale that are not also contained in
the deed.

Doctrine now in disfavor and riddled with exceptions

Normal way to avoid the doctrine is to say that the particular obligation
of the seller is an independent or collateral obligation

The Implied Warranty of Quality—Implied warranty of quality or skillful

construction exists in contracts for the sale of homes by builders,
developers or other merchants of housing. Suits on the warranty
can only arise after the closing has taken place and the plaintiff
has accepted the deed.

Most states do not impose strict liability—defendant is only liable if he

failed to exercise the standard of skill and care exercised by similar
merchants.

Most states hold that the warranty only applies to significant defects

Most courts also hold that warranty only applies to latent or hidden
defects

Class 15: Contract Remedies; Deed & DeliveryReadings: 364-74; 374-84

 Remedies for Breach of the Sales Contract (p. 364)[edit]

There are three (3) remedies available to the non-defaulting party when a
contract for sale is breached:

Damages

Retention of the deposit (sellers) or restitution of the deposit (buyers)

Specific performance of the contract

Generally, the winner chooses which remedy they want

Jones v. Lee (N.M. App. 1998)—Lee contracted to buy a ;piece of

property from Jones for $610K and paid a $6K deposit. Few weeks
later, Lee tells Jones deal can’t be completed for financial reasons.
Lee drafted termination agreement where they would forefeit the
deposit in exchange for cancellation of the deal. Jones rejected.
When Lee could not buy, Jones resold property for $540K. Jones
sued Lee for breaching the sale contract. Trial court awarded
$70K in damages, the difference between the contract price and the
eventual sale price. ISSUE: Whether damages should be measured
as the difference between the actual sale price and the contract
price when a purchaser of real estate defaults on the sale
agreement? HELD: No. The correct way to measure damages is
the difference between the contract price and the FAIR MARKET
VALUE. The trial court in this case made no findings regarding
FMV, therefore, case remanded for further proceedings to
calculate damages.Kutzin v. Pirnie (N.J. 1991)—ISSUE: May a
seller of real estate keep the deposit when the buyer breaches the
contract and the contract of sale does not include a liquidated
damages or forfeiture clause? HELD: No. The buyer is entitled to
restitution of sums paid which are over and above the loss actually
suffered by the seller. THE KUTZIN HOLDING IS A MINORITY
VIEW. The general rule is that when a buyer breaches a contract to
purchase land, the seller may retain the deposit because of the
difficulty in estimating the actual damages and the acceptance of
 the 10% down payment as a reasonable amount.Class 16: Title &
The Recording SystemReadings: 415-441

The Recording System[edit]

Introduction (p. 415)[edit]

Every state has a statute providing for land title records to be maintained
by the county recorder in each county

Recording acts generally do not affect the validity of a deed or other

instrument

Deed is valid and good against grantor upon delivery, regardless of

recordation 3. Three main functions of recording system:

Establish a system of public recordation of land titles

Preserve in a secure place documents that, in private hands, may be

easily lost or misplaced

Protect purchasers for value and lien creditors against prior unrecorded
interests 4. Types of instruments that can be recorded:

Deed

Mortgage

Lease

Option

Other instruments affecting an interest in land

Lis pendens (notice of pending action) may be recorded prior to judgment

in a
 lawsuit affecting title to real property

i) Effectively puts subsequent claimants on notice of the claims being

litigated

Wills and affidavits of heirship of an intestate

A subsequent bona fide purchaser is protected against prior unrecorded

interests

NOTE WELL: the common law rule of “prior in time, prior in effect”
continues to control unless a person can qualify for protection
under the applicable recording act

The Indexes (p. 417)[edit]

Two types of indexes are used in the US:

Tract Index

Grantor-Grantee Index

Tract Index—Do not exist in most states. Indexes docs by parcel ID

number assigned to the particular tract of land.

Grantor-Grantee Index—Separate indexes are kept for grantors and

grantees. Grantor and grantee indexes are each indexed under the
surname of the grantor or grantee.

The reference in the index to a document sets forth its essentials:

Grantor

Grantee

Description of the land

 Kind of instrument

Date of recording

Volume and page numbers where the instrument can be found and set
forth in full

Luthi v. Evans (Kan. 1978)—Owens owned interest in several oil and gas
leases in Coffey County. She assigned some of her interests in 1971
to International Tours. Assignment document specifically described
7 oil and gas leases to be assigned. Second paragraph purported to
convey to Tours “all interest” in oil and gas leases “whether or
not specifically enumerated above.” Owens owned a gas lease in
Kufahl, which was in Coffey County. The ownership of the Kufahl
lease was not described in the first paragraph of the assignment.
Tours recorded the assignment in 1971. In 1975, Owens assigned
the Kufahl lease to Burris. Burris personally checked register of
deeds, and also secured an abstract of title. Neither effort reflected
the prior assignment to Tours. A dispute arose as to the ownership
of the interest in the Kufahl lease. ISSUE: Does recording with the
recorder of deeds a conveyance which does not include full legal
descriptions of the interest conveyed impart constructive notice to
subsequent purchasers? RULE: Conveyances of real property
interests must provide a specific legal definition of the interests
being conveyed. HELD: No. The recorder’s office had a statutory
obligation to index the names of the grantors and grantees as
respects particular properties. Because the Kufaehl lease was not
described in the recorded document, the recorder could not have
appropriately recorded that interest. Assignment was effective
between Owens and Tours, but it was not effective as applied to
anyone else. Because the recordation did not give constructive
notice to Burris, the assignment of the Kufahl lease to Owens is
overridden by the subsequent assignment to Burris.Orr v. Byers
(Cal. App. 1988)—In 1978 Orr secured a legal judgment against
Elliott for $50K.The recorded document misspelled Elliott’s name,
sometimes using one L and sometimes using 2. Elliott subsequently
sold a piece of property to Byers in 1979. This sale should have
triggered Orr’s judgment lien, but because of the spelling error,
 the lien was not identified and the sale was perfected without
Elliott satisfying his debt to Orr. Orr sues Byers, Elliott and the
title company to enforce judgment lien, arguing that the spellings
were so similar that subsequent purchasers of the land had
constructive knowledge of the judgment lien. ISSUE: Does the
doctrine of idem sonans operate to provide constructive notice of
the existence of a judgment lien when the judgment debtor’s name
is incorrectly spelled in the recorded document? HELD: No. The
doctrine of idem sonans assists in establishing the sameness of
identity when a paper spells a person’s name incorrectly, but the
pronunciation of the name as written closely mirrors the correct
pronunciation. Idem Sonans does not apply when the written name
is material, and error would prejudicially mislead a third party.
REASONING: In the case of recordation of judgments, applying
the doctrine would inappropriately burden title researchers by
making forcing them to search for possibly misspelled names.
RULE: When recording a judgment lien, the proper identification
of the judgment debtor is critical to future efforts to enforce the
judgment.

Types of Recording Acts (p. 432)[edit]

Race Statute—Between successive purchasers of a piece of property, the

person who wins the race to record prevails

Earliest type of recording act

Whether a subsequent purchaser has actual knowledge of the prior

purchaser’s claim is irrelevant.

Notice Statute—Subsequent purchaser prevails as long as he did not have

actual knowledge of the prior purchaser’s claim a. Who records
first is irrelevant

Race-Notice Statute—Subsequent purchaser prevails if he (1) did not

have knowledge of
prior purchaser’s claim and (2) records first.Mesersmith v. Smith (N.D.
1953)—Messersmith and nephew each owned one half interest in
land. In 1946, Messersmith executed a quitclaim deed to nephew,
granting him her interest in the land. Deed was not recorded until
July 1951. On May 7, 1951, Messersmith granted Smith a one half
interest in the oil and minerals located on the same land. The deed
for this transaction was executed on the same date. When Smith
noticed there was a small error in the deed, he returned to
Messersmith’s home, tore up the deed, and prepared a new one.
Second deed was then brought to a notary who acknowledged
Messersmith’s signature by phone. On May 9, 1951, Smith
conveyed the one half interest in the mineral rights to Seale. Both
the second deed and the conveyance to Seale were recorded on
May 26, 1951. Nephew sued to quiet title, claiming deed to Smith
was void. Smith defaulted. Seale argued that he was a good-faith
purchaser without notice and therefore protected under the
recording statute. ISSUE: Does a title instrument that was not
recorded according to the statutory requirements provide
constructive notice of the transfer to a subsequent purchaser?
HELD: No. Smith’s recordation of his deed did not provide
constructive notice to the nephew because his deed was not
properly acknowledged. ND is a race-notice jurisdiction. Thus, an
unrecorded transfer of title to real property is void against a
subsequent, good-faith purchaser. The recording of an instrument
that does not meet all of the statutory requirements of recordation
does not provide constructive notice. Because the
acknowledgement was made by phone, the deed was not properly
acknowledged before a notary. RULE: The recording of a title
instrument that does not meet the recording act’s statutory
requirements does not provide constructive notice of the transfer to
subsequent buyers.Class 17: Title & Recording System Part II
Readings: 441-460

Chain of Title Problems (p. 441)[edit]

Chain of Title (Technical Definition)—The period of time for which

records must be searched and the documents that must be
examined within that time period. In this sense, chain of title
 includes, and is coextensive with, those instruments that will be
picked up by the title search required in the particular jurisdiction

Meaning of “chain of title” varies in different jurisdictions

Chain of title includes the series of recorded documents that, in the

particular jurisdiction, give constructive notice to a subsequent
purchaser.

Board of Education of Minneapolis v. Hughes (Minn. 1912)—May 1906

Hughes bought plot of land from Hoerger. Hughes sent his money
and a deed to Hoerger with a copy of a deed to be executed and
returned to hi. The name of the grantee was left blank, but Hoerger
signed and returned the deed. Hughes filled in his name as the
grantee and recorded the deed in December 1910. In April 1909,
Duryea and Wilson also received a quitclaim deed for the lot from
Hoerger. Quitclaim deed was recorded in January 1910. Board of
Education brought suit to determine who owned the title to the
land. Trial court determined Board of Ed was proper owner.
Hughes appeals. ISSUES: (1) Does delivery of a blank deed, with
the understanding that the name of the grantee is to be written in,
constitute valid delivery? (2) May a subsequent purchaser of
property who records his deed first take valid title where the
previous recipient failed to record their title? RULE: One who
records his valid title first is the record owner of real property,
regardless of whether another party has earlier received the same
property. HELD: (1) Yes. Delivering a deed that does not include
the name of the grantee is null until the point where the grantee’s
name is filled in. Hughes had implicit authority from Hoerger to fill
his name in as the grantee, thereby curing the nullity of the original
conveyance and making the deed effective. (2) Yes. If a piece of
real property is conveyed to multiple parties, the first to duly
record his title has superior rights to the property. Because the
transfer from Hoerger to Duryea and Wilson was not recorded,
D&W did not have proper title to convey to the Board of
Ed.Guilette v. Daly Dry Wall, Inc. (Mass. 1975)—A grantor may
restrict the use of his land. A purchaser of property has the burden
 of diligently researching the title to the property to ensure that he
is acquiring clean title.

Persons Protected by the Recording System (p. 449)[edit]

Courts have held, almost universally, that recording statutes do not

protect donees and devisees, even in a race jurisdiction.

As a result, courts sometimes need to determine whether a person is a

purchaser

(protected) or a donee (not protected)

Therefore, court may need to determine what is a valuable consideration

for purposes of obtaining protection under the recording act

i) Some disagreement, but usually must be more than a “nominal”

amount. Could be:

> “Substantial” amount > Amount “not grossly inadequate”

If deed recites that it is for “$1 and other good and valuable
consideration,” this raises the presumption that the grantee is a
purchaser for valuable consideration

Places the burden of going forward to establish the falsity of the recital of
consideration on the party attacking the deed

Lewis v. Superior Court (Cal. App. 1994)—ISSUE: Whether a bona fide

purchaser of property may be charged with constructive knowledge
of an encumbrance on the land where the encumbrance was
recorded, but not indexed, prior to the sale? RULE: A purchaser of
property is presumed to have knowledge of any encumbrances to
the property which can be found at the recorder’s office at the time
of the conveyance. HOLDING: No. A property interest is not fully
recorded until it has been indexed.
Creditors—Many recording statutes protect creditors against unrecorded
deeds and mortgages.

Protect only creditors who have established a lien, such as attachment by

judgment; NOT ALL CREDITORS ARE PROTECTED. (Merely
lending money does not gain protection)

Inquiry Notice (p. 453)[edit]

3 Kinds of Notice a Person May Have With Respect to a Prior Claim:

Actual Notice—Arises where one person is personally aware of a

conflicting

interest in real property

Record Notice—Form of constructive notice. Consists of notice one has

based on properly recorded instruments

Inquiry Notice—Form of constructive notice. Based on facts that would

cause a reasonable person to make inquiries into the possible
existence of an interest in real property.

Waldorf Insurance and Bonding, Inc. v. Eglin National Bank (Fla. App.
1984)—ISSUE: Does a purchaser’s interest in a condo unit vest
title in him at the time the sale is agreed to and the buyer moves in?
RULE: An owner may not further burden a property (for example,
by permitting a lien to be placed on it) after he has quitclaimed his
interest in that property. HOLDING: Yes. A purchaser of real
property receives an equitable interest in the proeprty at the time
the agreement to purchase is made, even if the purchase price has
not yet changed hands.