Johnson Property Spring 2011

8/2/2019 Johnson Property Spring 2011

1/48

Property Law

OutlineProfessor Johnson

Spring 2011

I. The Concept of PropertyA. Five Theories of Property

(i) The Five Theories of Property

(a) Protect First Possession: A property theory that describes how property rights

arise, but not why it makes sense for society to recognize those rights. Firstcome, first serve.

(b) Encourage Labor: A property theory that holds that each person is entitled tothe property produced through his or her own labor. When a person mixes his or

her own labor with natural resources, he or she acquired property rights in this

mixture.

(c) Maximize Social Happiness: Property is recognized in order to maximize

overall happiness in society. Property rights are distributed and defined in amanner that best promotes the welfare of all citizens.

(i) Certainty(ii) Ensuring Order

(d) Ensure Democracy: Civic Republican Theory posits that property facilitates

democracy. People obtain security from ownership of property. Economicsecurity is necessary to make political decisions that serve the common good.

(e) Facilitate Personal Development: A theory that holds that property is

necessary for an individuals personal development. Each person has a close

emotional relationship to certain tangible things, which virtually become part of

ones self.

(i) Personal Attachment to the land.

B. Why Recognize Property?(i) Pierson v. Post

(a) Possession of a Wild Animal is determined by Occupancy. Occupancy

Requirements:1.) The pursuer has an unequivocal intention of appropriating the animal;

2.) the pursuer has deprived the wild animal of its natural liberty; and

3.) the wild animal is within certain control of the pursuer.(b) This case demonstrates the theory of First Possession: property rights in a wild

animal are acquired by the first person to take possession of the animal, a

principle called the Rule of Capture.

(c) Labor Theory example.(ii) White v. Samsung Electronics America, Inc.

(a) Identity can be property

(b) Appropriate of someones identity depends upon Likeness(c) Public policy debate over extending property rights to identity

(d) Property Theories: Labor Theory, Personhood Theory


2/48

2

C. What is Property? The Right to Transfer, Exclude*, Use, and Destroy.

(i) Property is a Bundle of Sticks (Right to Use, Transfer, Exclude, Destroy)(a.) Right to Transfer. See Moore v. Regents of Univ. of Cal.

-Technically, the Right to Transfer is called alienability.

-Generally, any owner may freely transfer or alienate any of her

property to anyone.-Conversion: Intentional interference with an individuals possessory

interest and title or ownership.-The right to transfer can be limited for public policy considerations.-When human created is added to a cell line, the ownership is that of the

doctors. See Labor Theory.

-There is a distinction between replenishable body parts and those thatare not.

(b) Right to Exclude. See Jacque v. Steenberg Homes, Inc.

-Right to Exclude: An owner has a right to prevent another from

interfering with his property; enforced through the Doctrine of Trespass;

considered the most important right in the Bundle of Sticks.-Two Exceptions to the Right to Exclude:

1.) Consent: Agreement, approval, or permission as to some act orpurpose, esp. given voluntarily by a competent person; legally

effective consent.

2.) Necessity: A privilege that may relieve a person from liability

for trespass if that person, having no alternative, harms anothersproperty in an effort to protect life or health.

-Actual Harm is a ground for recovery in trespass lawsuits. Actual Harm

need not be physical damage to property, but may result from thedeprivation of the ability to exclude a trespasser.

-Whenever a trespass occurs, an actual harm occurs.

(c) Right to Use.

-Traditional Rule: A landowner had the absolute right to use his propertyin any way he wished as long as he did not harm the rights of otherssic

utere ut alienum non laedasuse your property in a manner that does not

injure another persons property.-Two Limitations of the Right to Use:

1.) Spite Fence Doctrine: A fence erected solely to annoy a

neighbor, as by blocking the neighbors view or preventing theneighbor from acquiring an easement of light. See Sundowner, Inc.

v. King.

(i) Elements of Proving a Spite Fence:

1.) Defendant acted with malicious intent;

2.) defendant cannot erect a useless structure;

(determined by an objective standardit doesnt

matter if the defendant claims it was a useful structure;

the structure must be commercially reasonable but it is

largely unsettled as to how must commercial value a

structure must have) and


3/48

3

3.) the structure is injurious to the defendants

neighbor.2.) Nuisance Law: A traditional method used to resolve land use conflicts.

See Prah v. Maretti.

(i) Private Nuisance:

1.) Intentional;2.) Nontrespassory;

3.) Unreasonably; and

4.) Substantial interference with

5.) the use and enjoyment of the plaintiffs land

(ii) Factors courts use when balancing the interests of the plaintiff

and defendant:1.) Extent of harm to the plaintiff

2.) Character of the harm to the plaintiff

3.) Burden on the person harmed of avoiding the harm

4.) Suitability of the particular use to the character of the

locality(iii) Distinguished from Spite Fence Doctrine insofar as Nuisance

Law does not require a malicious intent & useless structure.(d) The Right to Destroy. See Eyerman v. Mercantile Trust Co.

-The Right to Destroy may be limited in some instances

(i) e.g. Against Public Policy: that which conflicts with the moralsof the time and contravenes any established interest of society.

-If someone wishes to destroy property in their will, courts look at the

following factors:

(i) The reason why the deceased wishes to destroy property.(ii) Whether destroying the property wastes resources.

(iii) The impact of destruction on those in the

community/neighborhood.

-An individual has a broader right to destroy while living as opposed towhen dead. At last, however, the right to destroy is not absolute.

-An owner has exclusive control over his property subject only to the

limitation that such use may not substantially impair anothers right topeaceably enjoy his property.

-Stahilevitz on the Right to Destroy:

(i) Where the government witnesses a rational person destroyinghis or her valuable property, it should presume that the destructive

act furthers expressive objectives.

D. Summary(i) Theories of Property

(a) First Possession

(b) Labor(c) Utilitarianism

(d) Civic Republican

(e) Personhood


4/48

4

(ii) Legal Positivism

(a) Property exists only to the extent that it is recognized by government. Thus,natural law has little impact on property law.

(iii) Property as a Bundle of Rights

(a) Right to Transfer: Although the law favors the free alienation of property, an

owners right to transfer is sometimes limited for policy reasons.(b) Right to Exclude: The law generally protects an owners right to exclude

others from his property, subject to privileges such as consent and necessity.

(c) Right to Use: An owner is normally entitled to use her property as she wishes,so long as she does not injure the rights of others. The spite fence and nuisance

doctrines are two limitations on the right to use.

(d) Right to Destroy: The scope of the right to destroy is unclear. Generally, thelaw rarely intervenes to prevent destruction, but concern arises when an owner

seeks to destroy property that has substantial value to society.

(iv) Reasons for Property Rights:

(a) Private property rights not only benefit individual owners, but also benefits all

of society.

II. Owning Real Property-Real Property: rights in land and things attached to land such as buildings and fences.

-Personal Property: refers to rights in moveable items such as chairs, pens, and computers.

A. Adverse Possession(i) Adverse Possession

(a) Adverse Possession: Process through which a person who uses property for a

statutorily determined period of time becomes the owner of the property and

defeats all rights of its true or rightful owner, even if the rightful owner had legalor record title.

(ii) Seven Elements of Adverse Possession

1.) Actual Possession: The claimant must physically use the land in the same

manner that a reasonable ownerwould, given the propertys character, location,and nature.

2.) Exclusivity: The claimants possession cannot be shared with the owner or

with the public in general.(a) Use of disputed property by third parties may prevent an adverse

claimant from proving exclusive possession.

3.) Continuous: The claimants possession must be as continuous as a reasonable

owners would be, given the character, location, and nature of the land.(a) Sporadic use may be continuous use if that is the way a reasonable

owner would use the land.

4.) Open and Notorious: Claimants possession must be visible and obvious sothat if the owner made a reasonable inspection of the land, he would become

aware of the adverse claim.

(a) Some jurisdictions require at least a fleeting glimpse.(b) Some jurisdictions require visible, permanent evidence of adverse

possession.


5/48

5

5.) Hostile: Some jurisdictions find the element satisfied if the claimant believes

in good faith that he owns the land; in most states the claimants state of mind is

irrelevant; a third view is that some jurisdictions require bad faiththat is the

claimant must intend to take title from the owner.

(i) Possession authorized by true owner is not hostile.

(ii) Claimant must believe in good faith that he or she owns the land, insome jurisdictions.

(iii) The state of mind is irrelevant, but the court only looks at the actions,

according to the majority of states.(iv) Adverse possessor intends to take property with bad faith, according

to some jurisdictions.

6.) Statutory Period: The period for adverse possession ranges from 5-40 years.Common periods are 10, 15, and 20 years.

7.) Intent: Refers to the state of mind during the element of Hostility.

*States may add additional requirements for adverse possession. See Van

Valkenburgh v. Lutz.

(iii) Four Justifications for Adverse Possession(a) Prevent Frivolous Claims: Adverse possession acts like a statute of limitations

on bad claims. It bars lawsuits based on stale, unreliable evidence, therebyprotecting the occupant from frivolous claims. It also provides the occupant with

security of title, thus encouraging the productive use of land.

(b) Correcting Title Defects: Adverse possession resolves title defects byprotecting the title of the person who actually occupies the land. Lengthy

possession serves as proof of title.

(c) Encouraging Development: Adverse possession may be seen as a legal tool to

encourage economic development. Under this justification, adverse possessionreallocates the title from the idle owner to the industrious squatter, thus promoting

the productive use of the land.

(d) Protecting Personhood: A thing which you have enjoyed and used as your

own for a long timetakes root in your being and cannot be torn away without

you resenting the act. O.W. Holmes.

(iv) Adverse Possession Can Arise Under Two Scenarios:

(a) Under claim of right: Basic type of adverse possession

(b) Under color of title:See Tioga Coal Co. v. Supermarkets General Corp. (i) Defective writing (deed or will)-Must be definitely described tract; not obviously defective-Some jurisdictions require that it be recorded (and there may be other

recording act issues)

(ii)Requirements:

-Same list as usual for adverse possession, BUT:-Hostile/Adverse: courts use objective test

-Continuous: shorter period (usually 7 years)

-Usually requires paying taxes on the land-Benefits: constructive possession

-if a person occupies a portion of property within the scope of writing, she

will have rights to ALL of the property within the scope of the writing


6/48

6

-UNLESS: the true owner is also occupying the property (in which case,

the adverse possessor gets what has actually been possessed)(v) The Adverse Possessors State of Mind (Three Views)

(a) IrrelevantView: When the adverse possessor uses the occupied property

without the owners permission. See Tioga Coal Co. v. Supermarkets General

Corp. (i) A person entering property with the owners permission cannot claim

adverse possession.

(ii) A tenant leasing the property for more than the statutory period cannotclaim ownership because possession was never hostile. (But the tenant

may become a holdover tenant, which may mean he could become an

adverse possessor. The holdover tenant, in some states, must vacate theproperty and then re-enter to begin the running of the statute of

limitations.

(b) Bad Faith or Intentional Trespasser View. See Fulkerson v. Van

Buren.

(c) Good Faith View(vi) Tacking & Privity (Continuity of Adverse Possession) See Howard v. Kunto.

(a) Tacking: Adding the time when the first possessor used the property to the tiethe second possessor used the property is called tacking. For the tacking of time

in possession to occur, the successive possessors must be in privity.

(i) e.g. When one occupant, A, transfers his rights in property to asuccessor, B.

(b) Privity: The connection or relationship between two parties, each having a

legally recognized interest in the same subject matter. Privity of possession is

necessary to have tacking.(i) Common ways of privity: A conveys rights to B; B acquires land from

adverse possessor through will or intestate succession.

(vii) Disabilities

(a) Many states provide that the statute of limitations for an adverse possessionclaim will not run against a true owner who is under a disability.

(b) Rule: If a property owner is unable to eject an adverse possessor during the

statutory period due to the owners disability, the adverse possession period willbe extended.

(c) Disabilities include: imprisonment, minority/age, lack of mental capacity,

away on military service, living out of state.(d) If a disability exists, at the beginning of the adverse possession period,

jurisdictions may either:

1.) Suspend the running of the period until the disability is removed, or

2.) Provide a limited period of time after the disability ends within whichthe suit must be brought.

(viii) Adverse Possession Actions

(a) Quiet Title Action: to recover possession of land wrongfully occupied bydefendant.

(b) As a Defense

B. Summary


7/48

7

(i) Adverse Possession Basics:

(a) Actual Possession(b) Exclusive Possession

(c) Open and Notorious Possession

(d) Adverse and Hostile Possession

(e) Continuous Possession(f) For the Statutory Period

(*) Some states provide additional elements.

(ii) Adverse and Hostile Possession:

(a) Majority Rule: The adverse possessors state of mind is irrelevant;thus, this element is satisfied so long as the owner has not authorized the

occupancy.(b) Minority Rules: Some jurisdictions require that the adverse possessor

believe in good faith that he is the owner of the land.

(iii) Justifications for Adverse Possession

(a) Adverse Possession serves as a specialized statute of limitations.

(b) Correcting title defects(c) Encouraging Development

(d) Protecting Personhood(iv) Mechanics of Adverse Possession

(a) Proof of adverse possession may involve special doctrine: tacking,

privity, color of title, disabilities, and enhanced protection for certainowners.

(v) Exam Tip: ALWAYS CONSTRUCT A TIMELINE FOR ADVERSE

POSSESSION PROBLEMS.

III. Owning Personal Property

-Four ways to acquires rights in personal property: capture, find, adverse possession, and gift.

A. Rule of Capture

(i) Rule of Capture & Ferae Naturae. See State v. Shaw.(a) The rule of capture primarily apples to wild animals, ferae naturae, seized on

unowned land.

(b) Factors important in determining possession: certain control, location of

capture, animae revertendi versus ferae naturae, identifying marks, and role

of custom.

(c) Certain control (captured and confined): the idea that the possibility of escapeis possible but highly unlikely; no intent to release.

(d) Location: when the animal is not native to the location, that

could be a significant fact that lends support to someone already possessing the

animal.(e) Identifying Marks: marks of indicia may give rise to a wild animal being

domesticated.

(f) Role of Custom(ii) Rule of Capture & Baseball. See Popov v. Hayashi.

(a) Pre-possessory interest

(iii) Rule of Capture Synopsis:


8/48

8

(a) Rule originally applied to wild animals, but it has been extended to

include other things.(b) Rule originally meant physical possession, but it has been modifieddepending on the nature and situation of the property.

B. Finders(i) Four Categories of Found Chattels

1.) Lost Property: Property is lost when the owner unintentionally and

involuntarily parts with it.(i) Lost property generally goes to the finder.

2.) Mislaid Property: Property is mislaid when the owner voluntarily and

knowingly places it somewhere, but then unintentionally forgets its.(i) General Rule: A mislaid chattel belongs to the owner of the locus inquo, not the finderthis gives the item to the person most likely to ensure

its return to the true owner.

3.) Abandoned Property: Property is abandoned when the owner knowingly

relinquishes all right, title, and interest to it.(i) An abandoned chattel becomes the property of the first finder.

4.) Treasure Trove: Property is treasure trove when the owner concealed it in ahidden location long ago. Treasure trove is usually limited to gold, silver, coins,

or currency.

(i) Jurisdictions split on who keeps the property:(ii) Personal Property

(a) Bailments: A delivery of personal property by one person (bailor) to another

(the bailee) who holds the property for a certain purpose under an express or

implied-in-fact contract; unlike a sale or gift of personal property, a bailmentinvolves a change in possession but not in title; BAILMENTS APPLIES ONLY

TO LOST ITEMS.

(b) Three Types of Bailments

1.) Mutual Benefits: Bailee has a duty of reasonable care.2.) Benefit of the Bailor: Bailee breaches duty with gross negligence or

bad faith.

3.) Benefit of the Bailee: Bailee has a duty of extraordinary care.4.) Constructive Bailment: Occurs when a person comes

into possession of property accidentally or mistakenly, as where a lost

purse or car keys are found and need to be protected until properlyredelivered a bailment is implied by law.

(c) Types of Personal Property Causes of Action

(i) Trover: A common law action for the recovery of damages for the

conversion of personal property, the damages generally being measured bythe value of the property.

(ii) Replevin: An action for the repossession of personal property

wrongfully taken or detained by the defendant, whereby the plaintiff givessecurity for and holds the property until the court decides who owns it.

(iii) Summary of Finders

(a) LOST:


9/48

9

(i) Owner unintentionally and involuntarily parts with it

(ii) Finder gets to keep the chattel(b) MISLAID

(i) Owner voluntarily and knowingly places it somewhere, but then

unintentionally forgets it

(iI) Landowner gets to keep the chattel(c) ABANDONED

(i) Owner knowingly relinquishes all right, title, and interest to it

(ii) Finder gets to keep the chattel(d) TREASURE TROVE

(i) Owner concealed it in a hidden location long ago

(ii) Usually limited to gold, silver, coins, or other currency(iii) Jurisdictions are split on who gets to keep the chattel

(iv) Finders Law Considerations

(a) Ownership vs. Possession

(i) Possession creates a rebuttable presumption of ownership.

(ii) Possession may provide evidence of ownership.(b) Type of possessor(i) Finder:

-First possessor is generally protected, even if he is not the true

owner of the property.

(ii) Prior possessor

(c) Character of property(i) Lost

(ii) Mislaid

(iii) Abandoned(iv) Treasure trove

(d) Location of the find

(i) Home

(ii) Business(iii) Public place

(e) What is the best result?

(i) Result most likely to get property in the hands of the true owner?(ii) Court usually determines who it wants to have the property and then

works its way backwards in terms of justification.

(f) What remedies are available?(i) Trover

(ii) Replevin

C. Adverse Possession of Chattels (Burden of Proof Rests with the Adverse Possessor)(i) Adverse Possession Elements. See Reynolds v. Bagwell.

1.) Actual Possession

2.) Exclusive Possession3.) Open and Notorious Possession

4.) Hostile Possession

5.) Continuous Possession


10/48

10

6.) Satisfaction of the Statutory Period (shorter than real property, usually 2-

6 years)(ii) Statute of Limitations

(a) The statute of limitations for chattels begins to run from the time of the

wrongful taking or possession, and not from the time when the owner first had

knowledge thereof.(b) Concealment Rule: The principle that a defendants conduct that hinders or

prevents a plaintiff from discovering the existence of a claim tolls the state of

limitations until the plaintiff discovers or should have discovered the claim.(i) Concealment must be an affirmative act.

(ii) Concealment negates adverse possession because it voids the open

and notorious element of the cause of action.(c) The Discovery Rule. See OKeefe v. Snyder.

(i) The Discovery Rule: the statute of limitations period begins to run only

when the owner discovers, or reasonably should have discovered

where the chattel is.

(ii) The Discovery Rule is a limitation to the common law and addressesthe problem that occurs when the limitations period may expire before the

owner learns where the missing chattel is.(iii) The Discovery Rule attempts to strike the balance between an ownersright to recover her property and the possessors right to repose.

(iv) The Discovery Rule Factors:1.) Whether Plaintiff used due diligence to recover chattel at the

time of the alleged theft and thereafter;

2.) Whether there was an effective method for the plaintiff to alert

the world; and3.) Whether the purchaser had constructive notice

(v) The burden of proof shifts from the possessor to the alleged owner,

when the discovery rule is invoked.

(d) Demand-and-Refusal Approach: The statute of limitations is tolled until theowner demands the return of her property from a good faith purchaser.

(iii) Tacking

(a) Most jurisdictions allow tacking of personal property so long as there is privitybetween the possessors.

D. Gifts(i) Inter Vivos Gifts. See Gruen v. Gruen;Albinger v. Harris.

(a) Inter Vivos Gifts: A gift of personal property made during the donors lifetimeand delivered to the donee with the intention ofirrevocably surrendering control

over the property.(b) Gift: (1) the immediate transfer of property rights from the donor to the donee;

(2) without any payment or other consideration.

(c) Three Elements for anInter Vivos Gift:1.) Donative Intent: The donor must intend to make an immediate transfer

of a present interest in property;


11/48

11

2.) Delivery: The property must be delivered to the donee, so that the

donor parts with dominion and control; and3.) Acceptance: The donee must accept the propertyalthough acceptance

of a valuable item is usually presumed.

(d) Three Types of Delivery

1.) Manual Delivery: Occurs when the donor physically transferspossession of the item to the donee.

2.) Constructive Delivery: Requires that the donor physically transfer to

the donee an object that provides access to the gifted item.(i) Constructive Delivery is allowed if manual delivery is

impracticable or impossible.

(ii) e.g. A gives B a key that opens up a locked item.3.) Symbolic Delivery: The donor physically transfers to the donee an

object hat represents or symbolizes the gifted item.

(e) Two Ways to Prove Acceptance

1.) Presumption of Acceptance: For expensive gifts, acceptance is

presumed.2.) Evidence

(e)Inter vivos gifts are irrevocable.(f) Delivery is not necessary when Donee already has gift in his or her possession.

(g) Donor can make an inter vivos gift through a third party.

(h) Possession and Ownership are two different things.(i) If an item can be manually delivered it has to be manually delivered.

(j) Gift by Check:

(i) Majority Rule: The check is not a valid gift until the check is cashed

because the donor retains dominion and control of the funds.(ii) Conditional Gift (Engagement Ring Anecdotes) See Albinger v. Harris.

(a) Majority Rule: The gift of an engagement ring is subjected to an implied

condition that marriage occur; the gift does not become absolute until the

marriage ceremony.(b) Fault versus No-Fault

(i) Many jurisdictions follow a no-fault approach to the disposition of

engagement rings: the ring is returned to the donor if the engagement isbroken, regardless of who was at fault.

(ii) Other jurisdictions consider who was at fault in ending the

engagement: if the donor was at fault, the donee keeps the ring; if thedonee was at fault, the donor keeps the ring.

(c) General Rule: A gift is only completed if the condition is satisfied.

(iii) Gift Causa Mortis. See Brind v. International Trust Co.

(a) Gift Causa Mortis: A gift of personal property made by a living person incontemplation of death.

(b) Four Essential Elements of Gift Causa Mortis

1.) Donative Intent;2.) Delivery;

3.) Acceptance; and

4.) The donors anticipation ofimminent death.


12/48

12

(c) Gift Causa Mortis is Subject to Three Conditions

1.) It must be made in contemplation, fear or peril of death;2.) The donor must dies of the illness or peril which he then fears or

contemplates; and

3.) Delivery must be made.

(d) Gift Causa Mortis is Revocable if:(i) The donor recovers from his illness, but this revocation must occur

within a reasonable time after the donor is no longer in apprehension of

imminent death. If the donor waits too long, he has essentially waived theright of revocation.

(e) Gift Causa Mortis is immediately effective when it is made.

(f) Unlike an inter vivos gift, gift causa mortis is revocable.

E. Summary

(i) Personal Property: Tangible personal property consists of movable items such as

brooches, paintings, and wallets. Possession of personal property gives the

possessor certain rights, depending on how and where possession is obtained.(ii) Rule of Capture: Originally, the rule of capture governed property rights in wild

animals; ownership was acquired only by physical possession of the animal. Therule of capture was later used to determine property rights in other natural

resources such as water, oil, and natural gas.

(iii) Finders:(a) Nature and Location of the item are important in determining the

finders rights.

(b) Generally, Lost and Abandoned items go to the finder, unless the find

is made at an owner occupied residence.(c) Mislaid items usually belong to the possessor of the place where the

item was found.

(iv) Adverse Possessoion:

(a) Statute of Limitations period2 to 6 yearsis usually shorter thanthat for real property.

(b) Traditionally, the limitations period begins when the adverse

claimants possession becomes open and notorious. No Concealment!(c) The Discovery Rule tolls the statutory period until the owner discovers,

or reasonably should have discovered, the location of the property.

(d) A thief cannot transfer valid title to a good faith purchaser unless thethief gains a new title by adverse possession.

(v) Gifts:

(a) Inter vivos gifts:

(i) Donative Intent(ii) Delivery

(iii) Acceptance

(b) Inter vivos gift is irrevocable(c) Gift Causa Mortis:

(i) Donative Intent

(ii) Delivery


13/48

13

(iii) Acceptance

(iv) Donors anticipation of imminent death

(d) Gift Causa Mortis is revocable before the donors death

IV. Intellectual Property

A. Copyrights and Trademarks(i) Copyright

(a) Copyright Law: Copyright Law protects original works of authorship, such as

books, computer programs, plays, sculptures, and songs.(b) Constitutional Basis for Copyright Law:

(i) Article I, Section 8, Clause 8 of the US Constitution: empowers

Congress [t]o promote the Progress of Science and useful Arts, bysecuring for limited Times to Authors and Inventors the exclusive Right to

their respective Writings and Discoveries.

(c) Three Requirements for Valid Copyright:

(i) Originality: The work must be independently created, not copied from

another source. It must also possess at least a minimal degree of creativity.(i) Work was independently created by the author; and

(ii) The works possess some minimal level of creativity.(ii) Work of Authorship: Eight categories of works of authorship arerecognized by statute:

1.) Literary works (including computer programs)2.) Musical works

3.) Dramatic works

4.) Pantomimes and choreographic works

5.) Pictorial, graphic, and sculptural works6.) Motion pictures and other audiovisual works

7.) Sound recordings

8.) Architectural works

*Because these categories are only illustrative, analogous worksmay also qualify for protection.

(iii) Fixation: The work must be written, recorded, or otherwise embodied

in some physical form. Thus, it must be sufficiently permanent or stableto permit it to be perceived, reproduced, or otherwise communicated for a

period of more than transitory duration.

(d) Duration of a Copyright(i) General Rule for Works after 1978: The life of the author plus an

additional 70 years.(ii) For anonymous work, pseudonymous work, or work for hire the

duration is 95 years from the time of first publication or 120 years fromthe year of its creation, whichever expires first.

(e) Proving Copyright Infringement: (Two-Part Test)

(i) Ownership of a valid copyright; and(ii) Unauthorized copying of original elements of the work.

(f) Fair Use Defense: The fair use of a copyrighted work for purposes such as

criticism, comment, news reporting, teaching (including multiple copies for


14/48

14

classroom use), scholarship, or research, is not an infringement on copyright. In

determining whether the use made of a work in any particular case is fair use thefactors to be considered shall include:

(i) Fair Use Defense Factors:

1.) The purpose and character of the use, including whether such

use is of a commercial nature or is for nonprofit educationalpurposes;

2.) The nature of the copyrighted work;

3.) The amount and substantiality of the portion used in relation tothe copyrighted work as a whole; and

4.) The effect of the use upon the potential market for or value of

the copyrighted work.(ii) Note: Parody qualifies as Fair Use because parody uses some

elements of a prior authors composition to create a new one that, at leastin part, comments on that authors work, which can be for comic effect or

ridicule.

(ii) Trademark

(a) Trademark Law: Trademark Law protects words, names, and other symbolswhich are used by merchants to distinguish their goods and services from those

offered by others.

(b) Three Requirements for Valid Trademark:(i) Distinctiveness: A mark must distinguish the goods or services of one

person from those offered b another person. Some types of marks are

considered more distinctive than others.

(ii) Non-Functionality: Trademark Law does not protect a product featurethat is functional, because this area is governed by patent law. In general,

a feature is functional if it is vital to the use or purpose of the article.

(iii) First Use in Trade: The first person to use a mark for good or service

in a particular geographic market obtains rights to use the mark in themarket. Note that the federal Lanham Act requires first use in

commerce, which is narrower than trade.

(c) Spectrum of Distinctiveness: (in Descending Level of Strength)(i) Arbitrary or Fanciful: Mark that indicates nothing about the good or

service; this is the strongest type of mark (e.g. Exxon).

(ii) Suggestive: Merely suggests information about the good or service,thus requiring the observer to use her imagination; (e.g. Roach Motel foran insect trap).

(iii) Descriptive: Merely describes the good or service (e.g. Coca-Cola,

which was originally made with coca leaves and kola nuts).*Note: A descriptive mark is not protected unless it has acquired a

secondary meaning, that is, the public associates the mark with a

particular good or service(iv) Generic: A term that is frequently used as the name for a certain type

of goods or services is generic, and thus not eligible for protection (e.g.


15/48

15

yo-yo was once a protected trademark, but it has become generic over

the years).(v) Color: Colors can be trademarked if it has some distinctive feature.

(d) Trademark Infringement: Plaintiff must prove the following:

(i) She holds a valid and enforceable trademark with priority over the

defendants claim to the mark; and(ii) The defendant used the mark in connection with goods or services in a

manner likely to cause confusion or to deceive consumers.

(e) Trademark Dilution: Refers to the whittling away of the value of a trademarkwhen it is used to identify different products.

B. Summary(i) Copyright Basics

(a) The principle goal of copyright law is to encourage creative effort by giving

authors an incentive to produce works that will benefit the public.

(b) The Three Requirements for a Valid Copyright:

1.) Originality2.) Work of Authorship

3.) Fixation(ii) Fair Use Defense

(a) The most important defense to liability of copyright infringement is the fair

use doctrine, which allows minor use of copyrighted work where the use does notmaterially affect the rights of the copyright holder.

(iii) Copyright Infringement

(a) To prevail in a copyright infringement action, the plaintiff must prove the

following:1.) Ownership of a valid copyright; and

2.) Unauthorized copying of a material amount of the work.

(iv) Trademark Basics

(a) The goals of trademark law are the following:1.) To protect consumers from being deceived about the source of goods

and services; and

2.) To give trademark owners an incentive to produce quality goods andservices.

(b) The Three Requirements for a Valid Trademark:

1.) Distinctiveness2.) Non-Functionality

3.) First Use in Trade

(v) Trademark Infringement

(a) To prevail in a trademark infringement action, the plaintiff must prove thefollowing:

1.) She holds a valid trademark with priority over the defendants mark;

and

2.) The defendants use of the mark is likely to cause confusion or deceive

consumers.


16/48

16

*Alternatively, a defendant may be liable for trademark dilution if his

conduct blurs or tarnishes the plaintiffs famous mark.

V. Estates and Future Interests

A. Transferring Property

(i) Three Ways to Transfer Property(a) Transfer by Deed: A living person may transfer real property by a deed. The

completed transfer is called a conveyance or a grant. The verbs used to describe

the transfer are convey or grant. The person who makes the transfer is thegrantor, while the recipient is the grantee.

(b) Transfer by Will: The property of a decedent may be transferred by a will.

The completed transfer of real property is called a devise. The verb used todescribe this transfer is also devise. The person whose will contains the devise is

the testator if male or testatrix if female, while the recipient is the devisee.

Different terms apply to the transfer of real property by will.

(c) Transfer by Intestate Succession: If a person dies without a will, her

property will be distributed according to state statutes, usually to her closest livingrelatives. The completed transfer is called intestate succession. The verb used to

describe the transfer of real property is descend, while the recipient is the heir.Thus, we might say that Greenacre descends to an heir. Different terms apply to

the transfer of personal property by intestate succession.

(i) Ways that states will typically distribute property if someone dies

intestate: (Descending Order)

1.) Issue and Surviving Spouse: Issues are lineal descendent

children, grandchildren, and so forth. If the decedent leaves a

surviving spouse, the property will be shared among the issue andthe spouse. For example, the state might give a one-half share to

the spouse and divide the other half among the issue. Where the

decedent has surviving spouse, the property is distributed

among the issue.2.) Parents and Their Issue: If the decedent does not leave a spouse

or issue, the property generally will be distributed first to her

parents, and if there are no living parents, to the living issue of theparents.

3.) Ancestors and Collaterals: If the decedent does not leave a

spouse, issue, parents, or the issue of the parents, the property goes(a) to any surviving ancestor and/or to (b) any surviving collateral

(all other persons related by blood to the decedent other than those

already listed above).

4.) Escheat: If the decedent has no living relatives, the propertybelongs to the state under the doctrine of escheatjust like land

reverted to the king if a landowner died without heirs in the feudal

era.(ii) For Each Transfer, Ask the Following Questions:

(a) What kind of transfer is being made?

(i) Deed/will/intestate succession


17/48

17

(b) What are the words of purchase? (Who gets the estate?)

(c) What are the words of limitation? (What was granted?)(d) What are the words of duration?

(e) What are the words of condition?

(f) What is the future interest involved?

B. Six Freehold Estates (Three Non-Defeasible Estates)

(i) Fee Simple Absolute:

(a) A Fee Simple is an estate with an infinite duration(b) A Fee Simple is alienable (transferable or assignable)

(c) A Fee Simple is devisable (owner can transfer it by will)

(d) A Fee Simple is descendible (property can pass by the states intestacy statute

to heirs if the owner dies without a will).(e) Presumption of Fee Simple: Modernly, any ambiguity is resolved in favor of a

Fee Simplethe most marketable estate.

(f) Words of Limitation:

(i) and his heirs(g) Words of Purchase:

(i) to B(h) Example: A conveys Greenacre to B and his heirs.

(i) Under traditional common law: A person could convey a fee simple only ifthe

words and his heirs were included in the deed.(j) A deed can be reformed to vest a fee simple in a grantee where the word

heirs is omitted if it can be determined from the clearly expressed intent of the

parties that fee simple was intended.

(ii) Life Estate (or Legal Life Estate):(a) The possessor of the life estate owns the estate for lifethe life tenant.

(b) A Life Estate is alienable, but note devisable or descendible.

(c) Words of Limitation:

(i) for life

(ii) until B dies

(iii) while B is alive

(iv) for all of Bs life.(d) Words of Purchase:

(i) To B.

(e) Example: A conveys Greenacre to B for life.(i) A retains a future interestReversionthat becomes possessory upon

the end of Bs life estate.(f) Future Interest:

(i) If Grantor: Reversion(ii) If 3d Party: Remainder

(f) Life Estate Pur Autre Vie: The life estate pur autre vie is usually created

when the holder of a life estate conveys his interest to someone else. But, it mayalso be created when the a life estate is measured by the life of a person other than

the grantee. This form of life estate is alienable, devisable, and descendible.


18/48

18

(i) Example: A conveys Greenacre to B for the life of C. When C dies, Bs

life estate ends.(ii) Example: A conveys Greenacre to B for life. B then sells his life

estate to C, C has a life estate pure autre vie. When B dies, Cs estate end.

The reversion goes to A.

(g) Holographic Wills: A holographic will is a will written in the handwriting ofthe decedent and signed by her.

(i) About half of the states consider this a valid will, even though it does

not comply with the stringent formalities necessary for a regular will (e.g.,it is not witnessed).

(ii) Holographic Wills are disfavored by courts because of ambiguity.

(f) Restraint on Alienation: A Restraint on Alienation is a provision in a deed orwill that prohibits or limits a future transfer of the property. If such a provision

expressly prohibits the future transfer or a fee simple, it is void against public

policy. This is because one of the core policies of the American property law

system is freedom of alienation.

(i) Three Types of Restraints:1.) Disabling Restraint: A restraint that prevents the transferee

from transferring her interest (e.g. O conveys to B, and anyconveyance is void).

2.) Forfeiture Restraint: A restraint that leads to a forfeiture of title

if the transferee attempts to transfer her interest (e.g. O conveys toB, but if B ever tries to sell the estate, then to D).

3.) Promissory Restraint: A restraint that stipulates that the

transferee promises not to transfer her interest (e.g. O conveys to

B, and B promises that she will not sell the estate).(g) Waste Doctrine: At common law, the doctrine of waste was developed to

resolve disputes between the life tenant and the future interest holder (reversion or

remainder). In general, the doctrine of waste imposes a duty on the life tenant to

use the property in a manner that does not significantly injure the rights of thefuture interest holders.

(i) Three Types of Waste:

1.) Voluntary Waste: Waste results from an affirmative act thatsignificantly reduces the value of the property (e.g. demolishing a

valuable house).

2.) Permissive Waste: Waste results from failure to take reasonablecare to protect the estate (e.g. failing to make minor repairs or to

pay property taxes).

3.) Ameliorative Waste: Waste results from an affirmative act that

leads to a substantial change in the property and increases thevalue (e.g. building a swimming pool).

(ii) Open Mine Doctrine: The depletion ofnatural resources constitutes

waste unless consumption of such resources constitutes normal use of theland. ButThe life tenant cannot open the land to search for minerals

and other natural resources, but if the quarries or mines were open before

the tenant took the life estate, then it is not waste for the life tenant to
http://en.wikipedia.org/wiki/Natural_resourceshttp://en.wikipedia.org/wiki/Waste_(law)http://en.wikipedia.org/wiki/Life_tenanthttp://en.wikipedia.org/wiki/Mineralshttp://en.wikipedia.org/wiki/Mineralshttp://en.wikipedia.org/wiki/Life_tenanthttp://en.wikipedia.org/wiki/Waste_(law)http://en.wikipedia.org/wiki/Natural_resources


19/48

19

continue their use.

(iii) Fee TailEstate

(a) The duration of the fee tail estate is determined by the lives of the linealdescendants of a particular person.

(b) The fee tail is not devisable, and has limited alienabilty/inheritability.

(i) Possesor of a Fee Tail may only alienate right to possession until death.(c) The future interest created with a fee tail is reversion.

(d) Words of Limitation:

(i) and the heirs of his/her body(e) Words of Purchase:

(i) to B

(f) Special Types of Fee Tails:

(i) Fee Tail Male: A form of fee tail, which passes only to male linealdescendents. A Fee Tail male includes special words of limitation.

(a) Example: O conveys to G and the male heirs of her body.

(ii) Fee Tail Special: A form of fee tail that is created when the transferor

wants to restrict the fee tail only to the descendants of the transferee whoare parented by a particular person. A Fee Tail Special includes special

words of limitation.

(a) Example: O conveys to G and the heirs of her body by R.(g) Note: Fee Tails are extraordinarily rare in the United States, only four states

recognize fee tails.

(h) What happens if a person attempts to convey a fee tail in a jurisdiction thatdoes not recognized such a freehold estate?

1.) The most common result is that a fee simple arises.

(i) Example: O grants Greenacre to B and the heirs of his body,

B receives a fee simple.

2.) The minority of states preserve the fee tail for the lifetime of the firstholder, but then provided that it becomes a fee simple when passed to the

holders children.(j) Disentailing the Tail: The process by which the holder of a fee tail converts

this estate into a fee simple by an inter vivos gift transfer to another person.

C. Six Freehold Estates (Defeasible Estates)(i) Defeasible Estates: An category of estates that may end upon the occurrence of

some future event.

(a) Three Types of Defeasible Estates:

(i) Fee Simple Defeasible

(ii) Fee Simple Subject to a Condition Subsequent(iii) Fee Simple Subject to an Executory Limitation

(b) The Doctrine of Waste does not apply to defeasible estates.(ii) Fee Simple Determinable: A fee simple estate that automatically ends when a

certain event of a condition occurs, giving the right of possession to the transferor.

In effect, the potentially infinite fee simple will be cut short if the event orcondition occurs.

(a) Words of Limitation:


20/48

20

(i) To A as long as

(ii) To A while

(iii) To A until

(iv) To A during

(b) Alienability:

(i) Alienable(ii) Devisable

(iii) Inheritable/Descendible

(c) Fee Simple Determinable estates, like all defeasible estates, are not subject tothe waste doctrine.

(d) Future Interest: The future interest that follows a fee simple determinable is

always a possibility of reverter.(i) Possibility of reverter can only be retained by the transferor (or his

heirs); it cannot be transferred to the transferee.

(ii) The possibility of reverter automatically becomes possessory upon the

happening of the stated condition.

(e) Example: O conveys to G and his heirs until Alaska secedes from the UnitedStates.

(i) Words of Limitation: and his heirs denote the estate is a fee simple.

At last, however, the word until, which connotes duration, creates a feesimple determinable.

(ii) The future interestpossibility of reverteris held by O, thetransferor. Thus, if Alaska ever secedes, then O retains a possibility of

reverter, which automatically becomes a fee simple absolute.

(iii) Fee Simple Subject to a Condition Subsequent: A fee simple estate created in a

transferee that may be terminated at the election of the transferor when a certaincondition or event occurs. If the condition happens, this estate does not end

automatically; rather, the transferor has the power to terminate the estate by

taking action.


(i) To A, provided that

(ii) To A, but if

(iii) To A, on condition that(b) Alienability:

(i) Alienable

(ii) Devisible(iii) Inheritable/Descendible

(c) If there is ambiguity as whether an estate is a fee simple determinable or a fee

simple subject to a condition subsequent, the fee simple subject to a condition

subject is preferable.(d) Not subject to the waste doctrine

(e) Future Interest: Right of Entry/Power of Termination

(i) Right of Entry can only be retained by the transferor (or his heirs).(ii) Unlike the fee simple determinable, the fee simple subject to a

condition subsequent is not automatically terminated breach of the

condition occurs.


21/48

21

(iii) Upon the breach of a condition, the transferor has the right of entry

and must make an affirmative act to regain the property; this act mustoccur within a reasonable time.

(iv) Note: Note interplay with adverse possession: There can be no

adverse possession until the possession is adverse. By not exercising

right of entry, the possession by the alleged adverse party is not hostile.(v) Today, many states allow the transferor to end the estate by giving

notice to the transferee or by filing a quiet title action.

(f) Example: O conveys to G and her heirs provided that if Alaska secedes from

the United States, then O has the right to reenter and reclaim the land.(i) Estate: The words provided that connote condition, not duration; and

O, the transferor holds the future interest. Accordingly, G has a fee simplesubject to a condition subsequent.

(ii) Future Interest: O retains a right of entry. Upon the happening of the

stated event, O has the right to re-enter and end the estate if he wishes to

do so.

(iv) Fee Simple Subject to an Executory Limitation: A defeasible fee simple estatecreated in a transferee that is followed by a future interest in another transferee. While

the fee simple determinable and the fee simple subject to a condition subsequent arefollowed by future interests retained by the transferor, here the future interestexecutory

interestis held by a third party.


(i) To A, as long as, while, until, during, provided that, but if, on

condition thatthen to B.

(b) Alienability:

(i) Alienable(ii) Devisable

(iii) Inheritable/Descendible

(c) Not subject to the doctrine of waste.

(c) A future interest in a third party follows the estate.(d) Future Interest: Executory Interest

(i) This future interest is held by a third party, not the transferor.

(e) Example: O conveys to G and her heirs so long as Alaska does not secede

from the United States, the to M and her heirs.(i) Words of Divestment: so long as creates a defeasible fee simple in G.

Because it is followed by a future interest (executory interest) in a thirdparty, M, G has a fee simple subject to an executory limitation.

(ii) Because M is a transferee and his future interest follows a defeasible

fee simple, it is an executory interest. If Alaska secedes, then M obtains

a fee simple absolute.

D. Modern Future Interests

(i) Future Interest: An existing, nonpossessory property right that may becomepossessory in the future.

(a) Future Interests Retained by the Transferor:

(i) Reversion (Fee Simple, Fee Tail, Life Estate, Term of Years)


22/48

22

(ii) Possibility of Reverter (Fee Simple Determinable)

(iii) Right of Entry (Fee Simple Subject to a Condition Subsequent)(b) Future Interests Created in a Transferee:

(i) Indefeasibly Vested Remainder

(ii) Vested Remainder Subject to Divestment

(iii) Vested Remainder Subject to Open(iv) Contingent Remainder

(v) Executory Interest (Fee Simple Subject to an Executory Limitation)

(ii) Remainders: A future interest in a transferee that:(1) Is Capable of Becoming Possessory; and

(i) Example: O conveys Greenacre to A for life, then to B. B will

automatically be entitled to possession as soon as As life estate ends. Butguaranteed possession is not required; the possibility of possession is

enough. Thus, if O conveys to B for life, then to D if D becomespresident, D has a remainder even though he is an 85-year-old high

school dropout who has never run for political office. It is still

theoretically possible the D might become president, so his interest iscapableof becoming possessory when As life estate ends.

(2) Does not Divest (or cut short) any Interest in a Prior Transferee:

(i) Example: O conveys to B for life, then if D become president, to D.D has a remainder because there is no possibility that D can divest Bs life

estate; his possession begins upon Bs death, as show by the word then.D must wait patiently for B to die before D is entitled to possession.

(Remainder).

(ii) O conveys to B for life, but ifD becomes president, to D. The words

but if show that B holds a defeasible estate (in this case, a life estatesubject to a condition subsequent). D can gain possession as soon as he

becomes president, even if B is still alive, thus cutting short Bs estate. In

this example, D has an executory interest, not a remainder.

(a) Types of Remainders: (Four Types)(i) Indefeasibly Vested Remainder

(ii) Vested Remainder Subject to Divestment

(iii) Vested Remainder Subject to Open(iv) Contingent Remainder

(iii) Indefeasibly Vested Remainders:

(a) Two Requirements:(i) A remainder is vested ifit is created in an ascertainable person; and

(ii) It is not subject to a condition precedent other than the natural

termination of the prior estate.

(b) Example: O conveys Greenacre to A for life, then to B. B holds anindefeasibly vested remainder (a.k.a. vested remainder)a remainder with an

identifiable person that is certain to become a possessory estate.

(c) Ascertainable Person: A person who is both alive and identifiable at the timeof the transfer.

(i) Unborn children are not ascertainable

(ii) A persons heirs cannot be ascertained until that persons death.


23/48

23

(d) Not Subject to a Condition Precedent: A condition precedent is a condition

that must be met before the remainder can become possessory, other than thenatural termination of the prior estate.

(iv) Vested Remainder Subject to Divestment:

(a) This is a remainder that is vested, but is subject to a condition subsequent.

(b) Example: O conveys to B for life, then to D, but if D does not survive B, thento E.

(i) D is an ascertainable person. And his interest is not subject to a

condition precedent: his interest is ready to become possessory unless a

specified event occurs (D dies before B). But if D dies before, Ds interestwill be terminated or divested. D has a vested remainder subject to

divestment.(v) Vested Remainder Subject to Open:

(a) A remainder held by one or more living members of a group or class that may

be enlarged in the future.

(b) Example: O conveys Greenacre to B for life, then to Ds children.

(i) At the time, D has two living children, E and F; D might have morechildren because he is still alive. The remainders in E and F are vested

because (1) they are both ascertainable and (2) there is no conditionprecedent. But E and F may have to share the property with later-born

children of D, who are not presently ascertainable, so the size of their

interests may become proportionately smaller in the future. E and F eachhave a divested remainder subject to open (sometime called a vested

remainder subject to partial divestment).

(vi) Contingent Remainder:

(a) If a remainder is not vested, it is contingent. Thus, a contingent remainder is aremainder that is either: (1) given to an ascertainable person; OR (2) subject to a

condition precedent.

(b) Example: O conveys Greenacre to B for life, then to the heirs of D.

(i) Because the heirs of D are not ascertainable, they hold a contingent

remainder (the heirs arent ascertainable because they technicallydontexist until D dies).

(c) Example: O conveys to B for life, and then to D if D becomes president.

(i) Ds remainder is subject to a condition precedent of becomingpresident, so it is a contingent remainder.

(vii) Significance in Distinguishing Vested from Contingent Remainders:(a) Transfer (at common law): Vested Remainders were freely transferable, but

contingent remainders could not be conveyed by deed or will; they were viewed

as mere expectancies that might not become possessory. Today, both types of

remainders are freely alienable, devisable, and descendible/inheritable in alljurisdiction.

(b) Presumption (at common law): If the wording of a conveyance was judges

presumed the grantor intended a vested remaindernot a contingent remainderthereby maximizing the marketability of land.

(viii) Executory Interests: An executory interest is a future interest in a transferee that

must divest another estate or interest to become possessory. This is the exact


24/48

24

opposite of the remainder. Thus, if a future interest in a transferee is not a

remainder, it is an executory interest.(a) Two Types of Executory Interests:

(i) Springing Executory Interest: When an executory interest divests the

transferor.

(ii) Shifting Executory Interest: When an executory interest divests atransferee.

*Note: There is no substantive legal difference between spring and

shifting executory interests; they are merely convenient titles.(b) Example of Springing Executory Interest: O conveys Greenacre to B for life,then one year after Bs death, to D and his heirs.

(i) Once Bs life estate ends, O regains a fee simple. One year later, when

Ds future interest becomes possessory, it will divest O by cutting Osestate short. (Remember that a fee simple is defined as an estate that may

potentially endure forever). Accordingly, D has a springing executory

interest, not a remainder. In other words, Ds interest is not capable of

becoming possessory at the expiration of Bs life estate.(c) Example of Shifting Executory Interest: O conveys Greenacre to B and her

heirs until humans land on Mars, then to D and his heirs.(i) B has a fee simple subject to an executory limitation. D has a shifting

executory interest because Ds possession immediately follows the end of

Bs estate and D can do nothing to cut Bs estate short, so D does notdivest B.

(d) Executory Interests are freely alienable, devisable, and

descendible/inheritable.

E. Summary

(i) Feudal Foundation: The American modern property system is based on the

English system of estates and future interests, which evolved from feudal

landholding arrangements. A key feature of English feudalism was that multiplepeople could have rights in the same parcel of land at the same time.

(ii) Freehold Estate: There are six basic freehold estates: fee simple absolute; life

estate; fee tail; fee simple determinable; fee simple subject to a conditionsubsequent; and fee simple subject to an executory interest.

(iii) Intestate Succession: If a person dies intestate, his estate is distributed among the

surviving spouse, issue, parents, ancestors, and collaterals. If he has no livingrelatives, it escheats to the state.

(iv) Restraints on Alienation: A provision in a deed or will that expressly or

effectively prohibits a future transfer of a fee simple is an invalid restrain on

alienation.(v) Waste: An estate owner owes a duty to future interest holders to avoid affirmative

waste or permissive waste.

(vi) Future Interest: Three future interests may be created by the transferor:reversion; possibility of reverter; and right of entry. Five future interests may be

created in a transferee: indefeasibly vested remainder; vested remainder subject to

divestment; vested remainder subject to open; contingent remainder; and


25/48

25

executory interest.

VI. Concurrent Ownership and Marital Property

A. Concurrent Ownership

(i) Concurrent Ownership: A key characteristic of concurrent ownership is that

each co-owner, or cotenant, has the right to use and possess the entire property.(a) Modern Concurrent Estates: Today, there are three basic types of concurrent

ownership:

(i) Tenancy in Common;(ii) The Joint Tenancy; and

(iii) The Tenancy by the Entirety

*To clarify any ambiguity as to what concurrent ownership is created, the courtwill apply basic Rules of Construction and look at the Four Corners of thewritten instrument. At last, however, there is a modern trend that allows for the

admission of extrinsic evidence in some jurisdictions.

(ii) Tenancy in Common: Each tenant in common has an undivided, fractional

interest in the property. Each may transfer his interest to another person; it isfreely alienable, devisable, and descendible/inheritable. Each cotenant his the

right to use and possess the whole parcel, even if his fractional interest is smallerthan the others.

(a) Each co-owner holds an undivided fractional share in the entire parcel of land,

and each is entitled to simultaneous possession and enjoyment of the wholeparcel.

(b) Today any conveyance/devise to two or more unmarried persons is presumed

to create a tenancy in common (e.g., to A and B).

(c) A tenancy in common interest is freely transferable during the holderslifetime and at death.

(e) Example: O conveys Redacre to A, B,and C as tenants in common, and then

B conveys her interest to A.

(i) A and C are tenants in common: A holds a 2/3 interest, and C has a 1/3interest.

(ii) C has as much right as A to use and enjoy the entire property. But,

when the property is sold, the proceeds will be divided according to

the proportionate shares.

(f) Preferred Language: to A and B as tenants in common.

(g) Most jurisdictions assume a tenancy in common, unless the written

instrument is expressly clear that a joint tenancy is created. Thus

presumption is for tenancy in common. The reason for this presumption is

that the tenancy is more marketable.

(iii) Joint Tenancy: (Four Unities)(a) At Common Law, Four Requirements to Needed to Create a Joint Tenancy:

(i) Time: All joint tenants must acquire their interests at the same time. If

A and B obtain their interests on different days, the unity of time is absent.(ii) Title: All joint tenants must acquire title by the same instrument. If A

and B receive their interests by different deeds, the unity of title is

missing.


26/48

26

(iii) Interest: All joint tenants must have the same shares in the estate,

equal in size and duration. If A receives an undivided 2/3 interest and Breceives an undivided 1/3 interest, there is no unity of interest.

(iv) Possession: All joint tenants must have an equal right to possess, use,

and enjoy the whole property.

(b) Right of Survivorship: Each joint tenant has a right of survivorship.(i) When A dies, As interest in the estate is removed, and B automatically

becomes the sole owner of Greenacre.

(ii) Because of the Right of Survivorship, a joint tenancy interest is

neither devisable nor descendible/inheritable.

(c) Severance: When one of the joint tenants transfers her interest, the joint

tenancy is severed. Why?(i) Transfer breaks the unities of time and title.

(ii) Transfer renders the Right of Survivorship destroyed.

(iii) Grantee, of the transfer, becomes a tenant in common with the other

concurrent owners.

(iv) Example: A, B, and C are joint tenants, and A sells her interest to D.D has an undivided 1/3 interest as a tenant in common with B and C;

between themselves. B and C remain as joint tenants with right of

survivorship. If D now dies, his tenancy in common interest will

go to his devisees or heirs. But if B dies, her interest in the joint tenancy is

removed, and C now has an undivided 2/3 interest (because of the jointtenancy).

(v) The Effect of a Mortgage on Severance of a Joint Tenancy:

(a) Title Theory (Common Law): Mortgage does severe a Joint

Tenancy.(b) Lien Theory: Mortgage does not sever a Joint Tenancy.

(vi) Leases & Severance:

1.) English Common Law: A lease by joint tenant to a third party

results in the severance of a joint tenancy (because possession isdestroyed).

2.) Temporary Severance: If lessor dies while the lease is in

force, then severance occursextinguishing the joint tenancy. But,if the lease expires before the lessor dies, then the joint tenancy is

undisturbed.

*A joint tenant may, during his lifetime, grant certain rights in thejoint property without severing the tenancy. But when such a joint

tenant dies, his interest dies with him, and any encumbrances place

by him on the property become unenforceable against the

surviving joint tenant. A lease falls within this rule. See Tenhet v.

Boswell.

(d) Partition (applies to both Tenancy in Common and Joint Tenancy): Partition

means the division of the land held in cotenancy into the cotenants respectivefractional shares. If the land cannot be fairly divided, then the entire estate may

be sold and the proceeds appropriately divided.

(i) A partition judgment ends the cotenancy and distributes its assets.


27/48

27

(ii) Types of Partitions:

1.) Partition by Sale2.) Partition in Kind

(iii) Partition by Sale Requirements (To Overcome Partition in King

Presumption:

1.) The property cannot be conveniently partitioned in kind.2.) The interests in one or more of the parties will be promoted by

the sale; and

3.) The interests of the other parties will not be prejudiced(harmed) by the sale.

(iv) Partition in Kind: The partition of land into fractional shares. *there is

a presumption in favor of a partition in kind.(v) Factors Courts Consider in Determining the Type of Partition:

1.) Economic Value (but not dispositive)

2.) Longstanding Ownership of the Property

3.) Sentimental or Emotional Interests; and

4.) Any Prejudice Resulting from the Property Sale.(vi) Policy Reason Contra Partition by Sale:

1.) To have such a rule would permit commercial entities to always

evict pre-existing co-owners, because a commercial entitysproperty will invariably increase its value.

(vii) Policy Reason For Partition by Sale:1.) Partition by Sale may increase the property value and the utility

of the land.

(e) Preferred Language: to A and B as joint tenants with right of survivorship.

(iv) Tenancy by the Entirety:(a) The tenancy by the entiretynow abolished in some statescan only be

created in a husband and wife (e.g., to A and B, as tenants by the entirety).

(b) It requires the same four unities as the joint tenancy, plus the fifth unity of

marriage.(i) Time

(ii) Title

(iii) Interest(iv) Possession

(v) Marriage

(c) It can be terminated only by divorce, the death of one spouse, or mutualagreement of the spouses.

(d) Preferred Language: to A and B as husband and wife as tenants by theentirety.

B. Marital Property

(i) Marital Property(a) Three Systems: Common Law, Separate Property, and Community Property

(ii) Common Law

(a) Reflected profound gender bias. Upon marriage a woman lost the ability to

own, manage, and dispose of her propertyexcept for her clothing and jewelry.


28/48

28

The law gave a husband an estatejure uxorisin all his wifes lands.

(b) If husband died, then widowed wife received a dowera life estate in 1/3 ofall the freehold land which was (1) owned by her husband, and (2) inheritable by

his issue. The wifes dower rights could not be cancelled during the marriage;

they remained attached to property, even if it was conveyed to a third party,

unless she voluntarily released them.(c) Wife possesses a Right of Survivorshipthats it.

(iii) Separate Property System (followed by most states)

(a) Marital property rights arising under this modern separate property system isdivided into three categories: rights during the marriage, at divorce, and at death.

(i) During Marriage

(ii) Divorce(iii) Death

(b) During Marriage: The basic rule is that property is separately owed by the

spouse who acquires it. Still, a wife and a husband could agree to hold property in

concurrent tenancy; or one spouse may make a gift of the property to the other.

(i) Implication: The creditors of a particular spouse can only attach theseparate property of that spouse. Thus, As creditors cannot attach Bs

property.(c) Death: At death, most states offer the surviving spouse a forced share of the

decedents estate. This means that the survivor has a choice: (1) take under the

decedents will or (2) receive a defined portion of the decedents estate, usually1/3 or 2/3 share.

(iv) Community Property System (followed by nine states):

(a) All earnings during the marriageand all assets acquired from those

earningsare owned by both spouses equally.(b) This concept is premised on the idea that marriage is a partnershipthe

husband and wife contribute equally to the marriage.

(c) During Marriage: All earning during the marriageand all assets acquired

from those earningsare owned by both spouses equally.(d) Divorce: At divorce, all community property is divided between the spouses.

In some states, each receives an equal share. In others, the assets are allocated

using equitable distribution factors.(e) Death: At death, the decedent may devise her half of the community property

and all her separate property as she desires. The other half of the community

property belongs to the surviving spouse.(v) Tenancy by the Entirety Approaches (Debtor/Creditor)

(a) Group (1):

(i) Creditors of the Husband could reach all of his entirety interest,

including possession.(b) Group (2):

(i) Creditors of the debtor spouse can reach all of the debtor spouses

interest, including possession.(c) Group (3):

(i) Creditors of an individual spouse cant reach tenancy property

(d) Group (4):


29/48

29

(i) Creditors of the debtor spouse can only reach the survivorship interest

of that spouse, not the possessory interest.C. Summary

(i) Tenancy in Common: Each cotenant has an undivided, fractional interest in the

property, and the right to use and possess the whole parcel. A cotenants interest

is freely alienable, devisable, and descendible/inheritable.(ii) Joint Tenancy: Each cotenant has a fractional share in the property, the right to

possess and use the whole land, and the right of survivorship. Traditionally,

four unities are needed to create a joint tenancy: time, title, interest, andpossession. Any joint tenant can sever the joint tenancy, destroying the right of

survivorship and converting his interest into a tenancy in common.

(iii) Tenancy by the Entirety: The spouses hold the property as one person. In moststates that recognize tenancies by the entirety, neither spouse can delineate his or

her interest, and the creditors of one spouse cannot reach the property.

(iv) Separate Property Systems: Earning during the marriage belong to the wage

earner. Upon divorce, most states apply the principle of equitable distribution to

assets acquired during the marriage, minimizing some of the inequities thathistorically grew out of some of the common law system. The surviving spouse is

entitled to a forced share in the decedent spouses estate.(v) Community Property Systems: Earnings during marriage belong to the

community. Community property is based on the idea that each spouse

contributes equally to the shares of the marriage and that both should shareequally in the assets acquired during marriage.

(vi) Unmarried Couples: Many states enforce both express and implied agreements

between unmarried cohabitants about how their property will be divided on

separation or death.(vii) Same-Sex Marriage: In most states, gay or lesbian couples cannot marry. A

growing number of states allow a same-sex couple to acquire rights and benefits

similar to those of a married couple by entering into a domestic partnership or

civil union.

VII. Leasing Real Property

A. Creating the Tenancy(i) Creating the Tenancy: Selecting the Tenant

(a) Selecting the Tenant: Landlords generally have a broad right to exclude, but

this right is limited by Fair Housing Act.(b) Fair Housing Act:

(i) Unlawful conductSection 3604(a), (b), (c), and (f)

1.) Refusal to sell or rent

2.) Discriminating in the terms, conditions, or privileges of sale orrental

3.) Discriminatory advertising

4.) Discriminating based on a handicap*Handicap defined Section 3602(h)

(ii) ExemptionsSection 3603(b)

1.) Owner occupied, no more than 4 families in unit


30/48

30

2.) Landlord owns less than 3 houses and does not use a real estate

broker/agent(c) FHA and Burden Shifting:

(i) Burden Shifting: If plaintiff can establish a prima facie case of

discrimination against the defendant, the burden is on the defendant to

refute this prima facie case.(ii) Prima Facie Discrimination Elements:

1.) Plaintiff was a member of a protected class and Defendant

knew or suspected that Plaintiff was a member of this class.2.) Plaintiff applied for and was qualified to rent the property.

3.) Defendant rejected the application.

4.) The property remained available thereafter.(ii) Creating the Tenancy: Selecting the Estate

***Four Things You Must Know***

1.) You must have one of these four nonfreehold estates

2.) Landlord has a reversion future interest

3.) Tenant must have exclusive possession and control of the land4.) Usually a written contract between the parties

(a) Four Nonfreehold Estates(i) Term of Years

(ii) Periodic Tenancy

(iii) Tenancy at Will(iv) Tenancy at Sufferance

(b) Term of Years Tenancy: Tenancy with a fixed duration which is agreed upon

in advance.

(i) One the term ends, the tenants possessory right automatically expires,and the landlord may take repossession of the premises without notice.

(c) Periodic Tenancy: The periodic tenancy is automatically renewed for

successive periods, unless the landlord or tenant terminates the tenancy by giving

advance notice.

(i) Example: L leases to Greenacre to T from month to month, beginningJuly 1, 2009. In order to end this tenancy, either L or T must give one

months advance notice to the other. Thus, if T gives his notice oftermination to L on May 31, 2014, the tenancy will end at midnight on

June 30. Month-to-Month periodic tenancies are frequently used in

residential leases. Of course, the basic period could be longer than amonth, which will increase the period for giving notice. For example,

notice must be given six months in advance to terminate a year-to-year

tenancy.

(d) Tenancy at Will: The tenancy at will has not fixed ending point. Rather, it

continues only so long as both the landlord and tenant desire.(i) No Fixed Ending Point.

(ii) The Tenancy automatically terminates if either party dies, the tenantabandons possession, or the landlord sells the property.

(iii) At common law, no notice of eviction was necessary; however, most

states require a notice period.


31/48

31

(e) Tenancy at Sufferance: The tenancy at sufferance is created when a person

who rightfully took possession of land continues in possession after that rightends.

(i) The tenancy at sufferance arises from the occupants improper conduct,

not an agreement.

(ii) The improper occupant is called a holdover tenant.(iii) At common law, Landlord can do one of two things about a holdover

tenant:

1.) Treat Holdover Tenant as a trespasser and evict him or her; or

2.) Renew Holdover Tenants tenancy for another term.(f) Lease v. License:

(i) License: A personal privilege to use the land of another for somespecific purpose; in contrast

(ii) Lease: A lease transfer the exclusive right of possession to the tenant.

*Licensees rights are minimal, while a tenants rights are

extensive.

(g) Note: These categories are strict, and most courts will interpret that these arethe only four categories that exist for nonfreehold estates, BUT

(i) Good Faith Eviction is a possible additional category.

B. Conditions of the Premises/Duties of the Parties

(i) Protection for Tenants in Defective Leased Premises(a) Constructive Eviction: Wrongful conduct by the landlord that substantially

interferes with the tenants beneficial use and enjoyment of the leased premises is

deemed a constructive eviction.

(i) Wrongful conduct by the landlord(a) Examples: No heat and hot water, mice, leaky ceilings,

crumbling walls, sloping floors, lead paint on walls

(b) Wrongful conduct can be both acts and omissions

(ii) Wrongful conduct substantially interferes with use and enjoyment

of the property.(b) Plaintiff Must do the Following or Else may Waive Constructive Eviction:

1.) Complain to landlord2.) Reasonable time to make repairs

3.) Leave within a reasonable period of time

*The doctrine of constructive eviction is most commonly applied tocommercial leases.

*Doctrine of Constructive Eviction is derived from the Implied Covenant

of Quiet Enjoyment.

*Constructive Eviction is a fact specific analysis.(b) Implied Warranty of Habitability: Requires landlords to do whatever is

necessary to put and keep the premises in a fit and habitable condition or bare

living conditions for human being.(i) Justification: Tenants are in a poor bargaining position and this attempt

to level the playing. However, some argue that the cost to keep a rental

unit in fit and habitable condition will be passed on to the tenants. Thus,


32/48

32

making it even more difficult for the poor to afford housing.

(ii) The Implied Warrant of Habitability cannot be waived.(c) Remedies for Breach of the Implied Warranty of Habitability:

(i) Withhold Rent: This is usually the most effective remedy because it

gives the landlord an incentive to repair the premises. In most

jurisdictions, the tenant may withhold all rent, even for a partial breach ofthe warranty. Some courts recommend that rent be paid into an escrow

fund under judicial control. Why cant landlord just evict the tenant?

Breach of the Implied Warranty of Habitability is a defense to an

eviction action.

(ii) Repair and Deduct: In many states, the tenant may withhold rent and

use these funds to repair the defects.(iii) Sue for Damages: The tenant may sue for damage while remaining in

possession or after vacating the premises. Court differ widely on the

appropriate measure of damages.

C. Transferring the Tenants Interest(i) Transferring the Tenants Interest

(a) General Rule: The tenant and landlord are both entitled to transfer theirinterests to third parties. This general rule is in accordance with the core

underlying policy of property lawfreedom of alienation.

(i) Tenant may transfer by and assignment or sublease.(ii) Privity of Contract: Two people are have rights and duties under a

contract (e.g. Landlord and Tenant).

(iii) Privity of Estate: Two people have a relationship arising under

property law (e.g. Lease is a conveyance of estate in land).(b) Assignment: When a tenant (the assignor) transfers (assigns) her entire

interest in the leased premises to a third party (the assignee).

(i) Example: T assigns her rights in a shoe store to U. This creates a

triangular relationship among T, L, and U (Landlord). Privity of contractcontinues between T and L; it also arises between T and U, because their

agreement is a contract. But privity of estate now exists only between L

and U; in effect, U has taken Ts place. T no longer has a property right inthe leased premises. L and U now have mutual rights and duties as a

matter of property law, even though there is no contract between them

(e.g. U has a duty to pay rent).(ii) Mutual Rights and Duties Arising from Privity of Estate

-L and U are obliged to perform all the covenants in the original

lease that run with the land.

(iii) Tenants, generally, always remain liable to landlord regardless of

assignment or sublease. EXCEPTION: When landlord lets tenant out

of contract through novation.

(c) Sublease: The tenant (sublessor) transfers (subleases) part of her interest in theleased premises to a third party (sublessee).

(i) Example: T has 12 years left on her shoe store lease. She subleases the

space to U for 10 years; thus T retains the right to possession for the final


33/48

33

2 years of the lease.

(i) In this situation, L (landlord) and T still have privity of contractand privity of estate, which continues their mutual obligation of

rights and duties; their original landlord-tenant relationship

remains intact. But, a new landlord-tenant relationship arises

between T and U. T and U also have privity of contract and privityof estate, which creates rights and duties between them. But L and

U have no legal relationship. U has no duty to pay rent to L. Of

course, if T fails to pay rent to L, then L can evict U from thepremises.

(ii) Tenants, generally, always remain liable to landlord regardless of

assignment or sublease. EXCEPTION: When landlord lets tenant out

of contract through novation.(d) Assignment v. Sublease (Two Approaches)

(i) Objective Test: Look at the duration of the transfer period.

(ii) Subject Test: Look at the intent of the parties.

*Allows parties who actually mean assignment, but write sublease tonevertheless carry out their intentvice-versa.

(e) Transfer Clauses(i) Sole Discretion: The lease might provide that L may refuse consent for

any reason whatsoever in his sole discretion.

(ii) Reasonableness Clause: The lease might provide that L may refuseconsent only on a commercially reasonable basis (e.g. L might deny

consent if Z has bad credit record).

(a) Reasonableness Factors:

1.) Financial responsibility of proposed assignee2.) Suitability of the use for the particular property

3.) Legality of the proposed usage

4.) Need for alteration of the premises

5.) Nature of the occupancy(iii) No Standard in Lease: The lease might require Ls consent, butcontain no standard to guide Ls decision; such a provision is called a

silent consent clause.

D. Ending the Tenancy

(i) Abandonment: An abandonment of a leased property by the tenant occurs whenhe vacates the lease property without justification and without and present

intention of returning and he defaults in the payment of the rent.

(a) If Tenant Abandons, Landlord has Three Options:

(i) Sue for All Rent: L could keep the premises vacant until the lease termexpired, and then sue T for all the accrued rent.

(ii) Terminate the Lease: L could treat Ts abandonment as an implied

offer of surrender and terminate the lease.(iii) Mitigate Damages and Then Sue for Rent: L could mitigate his

damages by reletting the premises to another tenant, retaining that rent, and then

sue T for the balance. (Actual Mitigation).


34/48

34

(b) Landlords Duty to Mitigate Damages:

(i) Old Rule: Landlord could recover regardless of any attempt to mitigatedamages.

(ii) New Rule: Landlord has a duty to make reasonable efforts to mitigate

damages.

(iii) Justifications for Landlord Having a Duty to Mitigate:1.) Landlord is in better position to whether landlord exercised

reasonable diligence.

2.) Fairness and equity (move away from feudal concepts ofproperty).

3.) Availability of Housing (if landlord can just sit back and collect

rent, then this creates an open property, but this property is notavailable).

(iv) Lost Sale: Occurs when unit 1 is rented to A, and unit 2 is empty. D

abandons the premises; L tries to mitigate damages by advertising both

rental units; and E decides to rent unit 1. Has L now lost the

opportunity to rent unit 2 to E, and thus suffered a net loss?(c) Security Deposits:

(i) The Landlord can use the security deposit for any purpose.(ii) Many states put a cap on security deposits.

(ii) Retaliatory Eviction

(a) If a Landlord evicts a Tenant within six months of a tenant doing one of thefollowing, then there is a presumption of retaliatory eviction against the

Landlord (burden-shifting):

(i) Tenant has complained to a government organization;

(ii) Tenant has complained to the Landlord;

(iii) Tenant has become a member of or organized a Tenants Association;

(b) Retaliatory Eviction Covers more than Evictions:

(i) Increasing rent;

(ii) Decreasing services;(iii) Threatening or bringing an action for possession;

(iv) Failure to renew the rental agree

Johnson Property Spring 2011

Documents