Class Themes1) Due Process Clause: The constitutional guarantee of due process of law, found in the Fifth and

Fourteenth Amendments to the U.S. Constitution, prohibits all levels of government from arbitrarily or unfairly depriving individuals of their basic constitutional rights to life, liberty, and property.

2) WITH DUE PROCESS THERE IS EXTREME DEFERENCE TO LEGISLATORS3) Can keep property in family by giving yourself a life estate for life, then give brother a life

estate for his life and then give remainder in fee simple to someone else in family4) Another way to keep in family: I would advise W to give H the life estate to the inheritance set

up as a trust, and make W's brother B the trustee so that he can manage the property and also get the remainder interest once H dies

5) WHEN TRYING TO KEEP STUFF AWAY FROM SPOUSE. BE CAREFUL OF STRONG V. WOOD

6) Bundle of rights: right to contract, right to exclude, right to dispose of property, right to derive economic value of property

7) Tension between property rights are very important versus government has to regulate for the common good (Calder v. Bull)

8) Ownership v. possession9) Relativity of title: who has the better right10) Property is composed of an aggregate of rights. Takings cases can include disaggregating property

sticks11) Family property12) Will substitutes. How far should cts go into in validating will substitutes?13) What is the proper balance between freedom of testation (freedom to choose where property should

go) versus family protection policies?14) What is the right balance between clear bright line rules and discretionary factor tests? On margin of

clear rules there is always 15) How should law treat nonmarital cohabitation? Property model (I take my stuff and you take yours)?

Contract model? Divorce model (treat us like we were married and are getting divorced)?16) Real estate17) Landlord/tenant law: commercial (commercial law and governed by UCC (lawyer-made law. Have to

interpret contract language and these cases don’t get into court that often.)) versus residential law (consumer/regulatory law. Lots of restrictions on contracts))

18) What about people who rent a store and live in an apt above the store19) Fundamental property rights

a) Right to excludeb) Right to pass down land

20) Conclusion: the Supreme Court generally defers to the state/local government (vertical balance of powers), generally defers to the legislature, with minimal scrutiny of its regulations (horizontal balance of powers), generally construes the Constitution formally and is reluctant to impose judicial activism, and prioritizes the right to derive economic value from property (not necessarily of persons) especially if it's investment-backed.

21) Ways to modify taking rules: taken from Property exam F2007a) Such a rule would categorize as a taking any government regulation or statute

depriving an owner of his property (to any degree) except for those regulations aimed at specific common law nuisances.

b) A second and quite opposite approach would be to articulate an expansive view of the police power that leaves little question as to the regulatory nature of most takings. If police power is viewed broadly enough, there would be no room to quibble over investment backed expectations and conceptual severance

Basic Concepts of Property

1) Basic Concepts of Propertya) Definition: Body of law that concerns relations between persons (individual & corp.) with

respect to things that can be the subject of ownership. (Morris Cohen)b) Most property law is transactional-planning and prevention of disputesc) If you stay clear of the criminal justice system, property is the only other time people really deal

with lawyersi) Wills (disposition of property upon death)ii) Buying and selling property (real estate)iii) Divorce

2) “The Second Treatise of Government” by John Locke: Chapter 5: “Of Property” S-1 p. 3a) Main idea: there are rights (life, liberty, and estate) that exist outside of the state. These rights are

pre-political (rights that came b4 government). So not all our rights came from governmentb) Locke starts with the state of nature: In state of nature have equality and can take as much land

as you need as long as you leave some for others and don’t let stuff spoil. In state of nature everyone enforces stuff themselves…there is not one judge or executive

c) BUT, we leave the state of nature so we can preserve our property and be more secure with our property. Want mutual preservation of lives, liberties, and estates

d) Overall problems: people take more land than they needi) There is also a scarcity of land and there is money: sell perishable goods for money, get more

land, so in a sense you mix your labor with it, but yields inequality of opportunity and distribution

3) “Commentaries on the Law of England” by William Blackstone S-1 p. 35a) Main Idea: Right of property is absolute but it can be taken away, however, only with just

compensationb) Blackstone considered property an absolute individual right like life and liberty yet property

right was something that could be taken away by gov’tc) Blackstone’s theory of acquisition of property

i) 1st user of land (occupying/mixing labor) acquired transient property = right of poss. in the land that continued only so long as the act of possession (the use) lasted -- no permanent property at first

ii) But, due to habitation, permanent food supply and agriculture needs, permanent property developed. “

iii) "Necessity begat property" and to ensure property, we took to relying on civil society, government, laws, etc.

iv) Ownership included right to exclude all others, right to free use, enjoyment and disposal of and without interference except by state

v) As people decided that they like someone else's property better, developed commercial traffic, reciprocal transfer of property by sale, grant, or conveyance

4) The Declaration of Independence S-1 p. 43a) We no longer have life, liberty, and property, but have life, liberty and pursuit of happiness

i) These are unalienable rights and are pre-political. Trying to appeal to loftier values and the common people who did not have as many concerns with property. Locke uses “happiness” and is an idea that subsumes property

ii) Pursuit of happiness: more general than property, which is better during this time of slavery (a divisive issue)

b) Some Lockean ideas in DOI: we enter into gov’t to protect these pre-political rightsi) Also when gov’t doesn’t protect these pre-political rights, we can overthrow this government

c) Locke equated happiness as more like general welfare: the pursuit of good and orderly living

5) The US Constitution S-1 p. 45a) Amendments (Bill of Rights) dealing with property:

i) 3 (quartering of troops), ii) 4 (the right of people to be secure in their houses (unreasonable searches and seizures))iii) 5 (eminent domain, due process), iv) 14 (due process clause…no person shall be denied of life, liberty or property without due

process of law, v) 8 (excessive bail)

6) “Notes on the State of Virginia” by Thomas Jefferson S-1 p. 47a) Said keep the manufacturing and cities in Europe. We will be landed men and will have the

materialsb) Jefferson’s IDEAL SOCIETY: small, agrarian, democratic society

i) He believed that everyone should work in the field -- "[farmers] are the chosen people of God,” also the most virtuous and moral people good influence on government

ii) Workers in cities are like sores to public government, full of corruption/venality -- they destroy laws, the Constitution

7) “Theory of Legislation” by Jeremy Bentham (very into regulatory law) S-1 p. 49a) Legal positivist: no natural rights, rights are a creation of lawb) “Property is nothing but a basis of expectation: the expectation of deriving certain advantages

from a thing which we are said to possess”c) Unlike Locke, he says that “property and law are born together and die together. Before laws

were made there was no property.” i) He is moving towards the idea that there is no property unless you have law to back it up

d) Property cannot exist without law. There is no such thing as natural property. Very opposed to Locke

8) “Property and Sovereignty” by Morris Cohen S-1 p. 51a) Definition of property becomes very popular: Property is the relation between persons with

reference to “things”b) Property is not a thing, but certain rights

i) The essence of property rights is the right to exclude othersii) Law doesn’t guarantee you can use property, just helps exclude others from it

c) He is interested in the rise of entrepreneurial power. He is interested in the power that property gives over others

9) “Transcendental Nonsense and the Functional Approach” (1935), “Dialogue on Private Property” (1954) by Felix Cohen S-1 p. 53a) Economic value of property depends on the extent to which it will be legally protected; has no

value if doesn’t have power of state behind iti) Considers property in economic termsii) The value of property is created by the law, not property itself (as Bentham argues)iii) Right to property is defined by the state

b) Circular reasoning: legal protection based upon economic value, but economic value depends upon the extent to which it will be legally protected

10) “The Last Metaphysical Right” by Richard Weaver S-1 p. 57a) Writing against utilitarianism, which he thought destroyed everything socially useful, and in

response to New Deal; against finance capitalism, monopoly, big business, big stateb) Right of private property is metaphysical insofar as it does not depend on any test of social

usefulness -- people have it regardless of social utility -- ownership of property was absolute, independent of the public. This one inviolable right served as a basis for all other rights and as a framework for evaluating them

11) “Constitutionalism after the New Deal” by Cass Sunstein S-1 p. 71a) New deal gave more power to the federal gov’t as opposed to the state gov’t. and gave more

power to the executive (agencies) instead of the legislature and judiciaryb) The New Deal was a three-part critique of traditional constitutional framework:c) 1) Different conception of legal rights, rejecting common law because it was a mechanism for

protecting the existing distribution of wealth and entitlements at expense of poor, disadvantaged, elderly, etc.

(1) Property was overly protected, while poor were under-protected d) 2) Create institutional entities not burdened by tripartite government (separation of powers makes

it hard for government to act)i) Increase presidential authority and create regulatory agencies to react flexibly and rapidly to

protect poor from economic flux. ii) Saw original const. structure as reflecting the framers desire to protect existing distribution of

wealth and entitlements (a.k.a. property)e) 3) Reject traditional notions of federalism in favor of increase in fed. regulation

i) States couldn't solve economic problems on own due to massive interconnectedness of economy; competition among states produced paralysis

12) “The Greening of America” by Charles Reich S-1 p. 65a) New property is status. You are identified by your status and get happiness through status.

Overall, government is a status dispensing organization. Statuses deal with relationships: I am the CEO of Apple and thus, I have people who work underneath me

b) Statuses are an important part of what is important and valuable to peoplec) Status determines the kind of people that you ared) New legislature is this new power that employers have: can tell you whether to wear a hat, cut

your facial hair etc…e) Status as property

i) becomes chief goal of life for most peopleii) they become a substitute self, and a person loses individual liberty

(1) statuses, the new property, imply a tie to an organization, including require a tie to the fate of that organization

(2) thus, lose liberty and ability to chose subject to power of org

The Acquisition of PropertyI. Basic Concepts from Our Readings

1) “Feudal Society” by Mark Bloch S-1 p. 109a) Through the whole of the feudal era, it was very rare for anyone to speak on ownership. If a

lawsuit didn’t turn on ownership, then what did it turn on? It turns on possessionb) Possession: What counts is possession followed up by long usage (seisin)? Better yet, if you can

prove that your ancestors used it and so did their families, then it is yours. Lawsuits turn not on who owns, but who has a better right of possession.

c) Seisin-possession made venerable by the lapse of time-memory is important to protect; title deeds used to assist memory to show transfer of seisin

2) Excerpts from the Book of Deuteronomy S-1 p. 107a) Property ownership carries with it many legal responsibilitiesb) Relaxation of debt every 7 yrs (bankruptcy)c) Care for neighbors property, return it if know who it belongs to, or keep it until they claim itd) When you harvest your land, you leave some for the widow, alien, and orphane) “You may eat as many of his grapes as you wish, but do not put them in your basket.”- Use

property for sustenance (food) but not for profit3) The Swedish Allmanratt:

a) Allemansratt: freedom to walk on another’s land, collect berries and use the water for drinking, boating etc.…

b) In Sweden, you can walk on another’s land and collect berries, foods etc.… you can walk on another’s land and take wild things, not cultivated things

4) The 1st Rights Movement (17th and 18th century)a) UK 1688: transition from monarchy to constitutional monarchy. Life, liberty, property. And the

greatest of these are properties. This is a Lockean idea. Locke but still quiet because no single constitutional documenti) Magna Carta: gov’t shouldn’t take property unless he compensates

b) US 1776 (Declaration of Independence): life, liberty and pursuit of happiness. Is much more broad than propertyi) But property comes back in the Constitution (1787). Get federalism in constitutionii) 1791: Bill of Rights: Property is back

c) France 1789: revolution that flew the flag of liberty, equality and fraternity. Declaration of Rights and Man wanted a lot of reallocation. Several constitutions in the 1790s.

d) Germany (1795): welfare state: it is the responsibility of the state to provide for those who can’t provide for themselves. Prussian General Code

5) “The Social Contract” by Rousseau S-1 p. 81a) All men have a natural right to what is necessary to them. But can’t take more than what they

needb) Rousseau says that all civil society is illegitimate because it deals more with hitting someone over

their head and taking the property away instead of an agreementc) He believes that legitimacy comes from agreementd) In social contract, you give all your pre-political property to the community to protect it from all

the neighboring communities. So it does help preserve property (this is different than Locke)e) Communitarianism: Communal strength is stronger than private strength

i) State is therefore the source of property rightsf) Slavery is invalid because meaningless-slavery and rights are contradictory; can’t be a person

with rights and liberty and then surrender them6) Declaration of the Rights of Man and Citizen (France) S-1 p. 85

a) See combination of Lockean idea of natural rights (aim of government is preservation of natural rights, including property)- Article 2

b) Article 17 (property is a sacred and inviolable right) is Rousseau’s idea of propertyc) There is a lot of reference to equality in this documentd) No mention of what happens if someone violates these rules

7) “Prussian General Code of 1794” in The Old Regime and the French Revolution by Alexis de Tocqueville S-1 p. 87a) Goal of state is the welfare of the commonwealthb) Individual rights subordinated to public rights-however, individual rights cannot be restrained

except for public utility

c) Welfare notion: state responsibility to provide for those who can’t provide for themselves (food, work, wages, etc.)

d) Recognition of individual rights derived from nature: influenced by Locke and Voltairee) Every citizen entitled to state protection of individual property

8) The Industrial Revolution (late 19th century to 20th century)a) Germany (1871): first country to make a social security system. Lots of social servicesb) UK, France and Germany: all have parliamentary supremacy. All have universal (women can’t

vote) suffrage. Lots of social legislationc) US struck down quite a bit of social legislation in the “Lochner era” because interfered with the

right to contract (violates 14th amendment). In the New Deal, we start to get it back (start getting social legislation back)i) We get social legislation but get it quite a bit later than UK, France and Germany

9) The Second Rights Moment (Post WWI)a) Overall, many countries get judicial review. Many countries adopted constitutions, or revised

their constitutions. Also, many countries made bills of rights.b) We get the beginning of the universal global rights phenomenon beginning with the Universal

Declaration of Human Rights (UDHR)c) UK: spend a lot of time helping to draft the UDHR. UDHR doesn’t property. Is no longer saying

that property is pre-political. Says property is the creature of statuted) France: makes two constitutions. One in 1946 and one in 1958. No judicial reviewe) Germany: you have the German Basic Law of 1949.

i) Property and the right of inheritance are guaranteed, but their contents and limits shall be determined by law.

ii) Property imposes dutiesiii) Property backed up by judicial review

10) West German Constitution of 1949 (Basic Law) S-1 p. 89a) Property and the right of inheritance are guaranteed. Their content and limits shall be determined

by the lawsb) Property imposes duties. It should also serve the public weal (advantage)c) Land, natural resources and means of production may, for the purpose of socialization, be

transferred to public ownership, yet again, must have compensation11) “The Constitutional Jurisprudence of the Federal Republic of Germany” by Donald Kommers S-1 p.

91a) Says that the three traditions that have shaped the German constitution are classic-liberalism,

socialism, and Christian-natural lawb) In the Basic Law there is a sense of people:

(1) Basic Law’s Image of Man(a) Entrepreneurial freedom can exist only if it does not violate the rights of others, the

law, nor morality(b) Coordination and interdependence with the community without touching the intrinsic

value of the person(c) Limits on freedom in order to maintain society. Different degrees of constitutional

protection for different types of property12) Universal Declaration of Human Rights S-1 p. 103

a) Protects propertyb) Many Bills of Rights are based on this documentc) US, UK, France and Germany have all signed this documentd) Most states/ countries like this document (US, UK, France, and Germany). Egypt and India did

not like it because they don’t follow/ believe all these articles and by them signing it, it makes them seem like hypocrits

i) Thus Article 22 was entered for India and Egypt. Basically says that there will be “cooperation in accordance with the organization and resources of each state”

Original Acquisition of Land by Discovery

1) Discovery (largely irrelevant today)a) Rule:

i) First in Time Rule: First person to take possession of an unowned thing owns it. First person to take possession of a thing owns it. Prior possessor prevails over a subsequent possessor. (1) Easy rule to follow(2) Handy method of ascertaining possession(3) Rewards labor(4) Protects investment in resources

ii) Ejectment: an action to recover possession of land. Ex) Johnson v. M’Intoshb) Analysis:

i) Who found the item? c) Case Summaries:

i) Johnson v. M’Intosh DK 3: Johnson purchased land from members of the Piankeshaw Indian tribes. Johnson left this land to his heirs, who are now suing. William M'Intosh purchased from Congress, 11,000 acres of the land originally purchased by Johnson. Upon realizing the competing claims on the land, Johnson's heirs sued M'Intosh to recover the land Plaintiff traces his possession of the land. (1) Court held that the Indians had a right to occupy the land, but could not sell/convey

the land. Indians were not capable of possession. Thus, European discoverers were first in time, and their title passed from them to the US government via treaty. M'Intosh's claim, which was derived from Congress, was superior to Johnson's claim, which was derived from the non- existent right of Indians to sell their land

(2) Discovery gave title to the European nations which passed title to the USii) Haslem v. Lockwood DK 15: Plaintiff had raked into heaps of manure that he had

accumulated in a public street, intending to carry it off the next day. Before he could do so, the defendant found the heaps of manure and hauled them off in his cart.(1) Court holds for the Plaintiff. The manure belonged originally to the owners of the

animals that had dropped it, but had been abandoned. As abandoned property, it belonged to the first occupant, the plaintiff, who “had changed its original condition and greatly enhanced its value by his labor.”

Acquisition by Capture

1) Acquisition by Capturea) Rule

i) Captor in pursuit is not enough (Pierson v. Post). If animal is mortally wounded or trapped so capture is virtually certain, treat animal as captured since don't want to get into gradation of wounding (i.e. person who critically injured the animals gets him). Reasons(1) Competition(2) Ease of administraton

ii) Competition: All have right to compete but not to maliciously interfere with another's livelihood (Keeble)

b) Analysis:i) Did you catch the animal?ii) Did you wound the animal?

c) Case Summaries:i) Pierson v. Post DK 18: Post (P) was in pursuit of a fox while hunting with his hounds.

Pierson (D) killed and captured the fox despite knowing that Post had been pursuing it. Post sued contending that he acquired title to the fox when he began to hunt it. Pierson asserted that Post did not have control over the fox and therefore had not acquired any property interest in it(1) Court held that Pierson got the fox. The mere fact that a person is pursuing a wild animal

does not grant that person a right to the animal. In order to obtain title to a wild animal a person must take it. Had Post mortally wounded the animal, it would have been sufficient to show possession since this would have deprived the animal of its natural liberty. However, the plaintiff was only able to show pursuit and therefore acquired no property interest in the animal.

ii) Popov v. Hayashi : Popov (P) and Hayashi (D) brought baseball gloves hoping that they would catch Bonds’ record setting home run baseball. Just as Popov caught (or was about to catch the ball) the ball he was overwhelmed by a mob engaged in violent Popov was buried face under several layers of people. Hayashi was standing near Popov and was involuntarily forced to the ground. While on the ground Hayashi saw the loose ball and took it.(1) Court held that an award of the ball to the plaintiff would be unfair to Hayashi. It would

be premised on the unsupported assumption that Popov would have caught the ball. An award of the ball to the defendant would unfairly penalize Popov. It would be based on the unsupported assumption that Popov would have dropped the ball.

(2) In order to effectuate this ruling, the ball must be sold and the proceeds divided equally between the parties

(3) EQUITABLE DIVISIONiii) Ghen v. Rich DK 26: Plaintiff Ghen killed a whale at sea leaving his identifying bomb-lance

in the whale. The custom in the whaling industry in Cape Cod had been that one who kills a whale using a specially marked bomb lance owns the whale. If such a whale were found on a beach the finder would notify the killer and receive a finder’s fee. The whale later washed up on shore and was discovered by Ellis. Ellis knew or should have known of the custom and usage of the whaling industry regarding the finding of a lost whale killed by another. Ellis sold the whale at auction to defendant Rich who then shipped off the blubber. Ghen discovered the fate of the whale and initiated a libel action against Rich to recover the value of the whale(1) The custom was upheld and Ghen got the proceeds of the whale. The rule that the killer

of a whale is the rightful owner has been recognized and acquiesced in for many years and embraces an entire industry. A chance finder should not appropriate the fruits of your labor.

iv) Keeble v. Hickeringill DK 30: Keeble (P) placed duck decoys and nets in a pond on his land and sold the captured ducks for profit. Hickeringill fired guns near Keeble’s land merely to frighten and drive away the ducks, not to capture them for himself. Keeble brought an action in trespass(1) Court held: Keeble’s use of his property to capture ducks and sell them for profit was

lawful. Every man has the right to use his land for his pleasure and profit. An action lies in all cases where a defendant commits malicious acts interfering with the profession or livelihood of another. However, if Hickeringill had set up decoys on his own property to capture them for himself, no action would lie because he has as much liberty in the use of his land as the plaintiff

(2) Competition: All have right to compete but not to maliciously interfere with another's livelihood

(3) Motivation important: Can build a duck pond of your own to capture ducks, but if not trying to capture them, can't go onto another person's property and maliciously interfere with ducks

Acquisition by Finding: Relativity of Possession v. Relativity of title (who has a better right to possession)

1) Acquisition by Findinga) Rule

i) Finder is entitled to possession as against all but true owner UNLESS property found in highly private place (home) or finder is a trespasser

ii) Finder = trespasser : O of property where object found always prevails. Discourages trespassing

iii) Finder = employee : Split. Most hold E can't keep object (often, duty to give to mgr. - hotel situation, reward honesty)

iv) Finder on premises for a limited purpose O gets object, since only there for limited purpose (South Staffordshire - pool cleaning)

v) Object embedded in soil : to O because of expect that object belongs to them vi) Abandoned property intentionally abandoned by true owner -- award to findervii) Lost : Property that the owner accidentally and casually lost. Goes to the finderviii) Mislaid ( property intentionally placed somewhere and then forgotten about): goes to O

of premises as against finder because presumably one who has mislaid will return to claim (dictated by concern for True O)

ix) Replevin: Action to recover property ex) Anderson v. Gouldbergx) Bailee: entrusting goods to another person. So the jeweler in Armory is the bailee

b) Analysis:i) Who found the item?ii) Was the item in a public or private place? iii) Was the item lost (O accidentally/casually lost property (slips through hole in pocket))?iv) Was the item mislaid (O intentionally places property somewhere the loses it)?v) Who has the better right to property?

c) Case Summariesi) Armory v. Delamirie DK 98: Armory (P), a chimney sweep, who had a legal right to be in the

house, found a jeweled ring while cleaning a chimney and took it to Delamirie (D), a jeweler, for appraisal. Delamirie’s apprentice took the stones from the socket. Delamirie then offered Armory little money. P refused and sued for money damages for the value of the jewels(1) A finder of a chattel does not acquire an absolute property right (is not the owner),

however he does have rights superior to everyone except the rightful owner (has a better right of possession)

ii) Anderson v. Gouldberg : the plaintiffs trespassed upon the timberland of a third party, cut logs and hauled them off to a mill where the defendants took them. The court ruled for plaintiffs. Bare possession of property, though wrongfully obtained, is sufficient title to enable the party enjoying it to maintain replevin against a mere-stranger(1) This has to do with superior title. Even if the plaintiff wrongfully possessed the item, he

has a superior title than the subsequent thief. iii) Hannah v. Peel DK 101: Peel (D) bought a home in 1938 but never moved in. In 1940, Peel’s

home was used by the military. Hannah (P) was stationed in the house. Hannah found a brooch on a windowsill in a room in a remote part of the house. Hannah gave the brooch to the police and no one claims it. The police gave it to Peel who then sold it for 66 pounds. There was no evidence that Peel knew of the existence of the brooch before Hannah

discovered it. Hannah sued to regain possession of the brooch or its value and Peel in turn asserted that he had superior title because the brooch was found on his property.(1) The court holds that Hannah should get the brooch. The old rule is that the occupier

should prevail over the finder, but in this case, Peel never occupied the home. The brooch was technically not Hannah’s or Peel’s but Hannah has a greater claim over it

iv) Bridges v. Hawkesworth : the plaintiff found money in Hawkesworth’s shop and left it with him in case the true owner returned. After three years Bridges sued for its return and the court ruled in his favor, holding that the finder of lost property has superior title to all but the true owner.

v) South Staffordshire Water Co v. Sharman (Gilber p. 19 &20) : Sharman (D) was hired by South Staffordshire Water Company (P) to clean out a pool located on its land. While he was doing the work, Sharman found two gold rings in the mud at the bottom of the pool. The company demanded the rings but Sharman instead turned them over to the police so they might find the true owner. The police were unable to find the true owner and returned the rings to Sharman. Plaintiff sued for their recovery(1) Court held for plaintiff. The general rule is that the possession of land entails the

possession of all things attached to and underneath the land, as well as the landowner’s power to exclude others from the land. In this case the owner of the pool in which the rings were found had legal possession of them and has superior claim to title

(2) A landowner is in constructive construction possession of the objects located under the surface of her land even though she is unaware of the objects. If A hires B to clean out her pool and B finds a ring at the bottom of the pool, the ring belongs to A, not B, even though A was unaware that the ring was there.

vi) McAvoy v. Medina DK 107: McAvoy (P) saw and took a pocketbook lying on a table in Medina’s (D) barbershop. He gave it to Medina to hold for the true owner but the true owner was never found. McAvoy demanded the pocketbook from Medina, who refused, asserting ownership of the pocketbook(1) This pocketbook was not lost, in which case the finder would have a valid claim to hold

the it until called for by the true owner. Mislaid goods are those, which are placed voluntarily by the owner and forgotten. The lost purse in this case was voluntarily placed on the counter by the true owner and left there accidentally and is therefore mislaid property. Mislaid property creates a bailment that the shop owner holds for the true owner and the finder acquires no rights in the property

The Right to Exclude1) The right to exclude

a) Rulei) Private ownership seems to matter more in terms of property. Court upholds property rights

more when there is private ownership than when you deal with spaces that seem to be more public.

ii) The more you open yourself up to the public, the more you have to respect the speech rights of those who come onto your property

iii) A person’s right to his real property is not absolute. Private or public necessity may justify entering onto his land. (State v. Shack)

iv) Justifications for trespass:(1) Emergency(2) Necessity(3) Coercion(4) Mistake(5) Limited right to recapture (i.e. you hit a golf ball into your neighbor’s land)

v) NOTE: in many states, solicitors in shopping centers are protected under a state constitutional guarantee of free speech!

b) Analysis:i) Was the space open up to the public?ii) Is there a justification for taking the land?

c) Case Summaries:i) Jacque v. Steenberg Homes Inc DK 89: Steenberg (D) sold a mobile home to Jacque’s (P)

neighbor. Steenberg asked Jacque for permission to move the home across P’s land several times and P refused each time. D ignored P’s command and hauled the home across P’s land after first plowing a path through the snow. (1) The court said punitive damages here are fine. Punitive damages are appropriate in

intentional trespass cases even if there are no actual damages. The purpose of the punitive damage in this case is deterrence. Landowners have an interest in protecting his or her land from trespass and the Supreme Court has held that the right to exclude others from his or her land is one of the most essential property rights. An award will not be considered excessive in violation of the Due Process clause when the acts are egregious. Here, Steenberg was unequivocally told no, and still continued on the land. That disregard for the Jacque’s rights amounts to that egregious conduct

ii) Illinois v. Likar S-1 p. 143: Likar wants to show Parisis (neighbor) a letter showing that he reported them on possible unlicensed daycare problems. Dispute about whether he threw envelope into the yard or the wind blew it. He went on the property to retrieve even after Parisi said he couldn’t. Court rules it is not an emergency as other means existed to retrieve the envelope (could have waited for envelope to flutter out, could have asked Parisi to hand him envelope etc.…). Homeowners right to exclude upheld even though the intrusion is rather small

iii) State v. Shack S-1 p. 137: One defendant is a field worker for a nonprofit corporation that provided for the health services of migrant farm workers. Another defendant is an attorney for a nonprofit corporation that provides legal advice and representation for these workers (probably bringing documents about the right to organize). The two defendants went to the farm of the plaintiff, who confronted them at the entrance. The plaintiff offered to bring both men to his office, but the defendants wanted to see the men in their living quarters outside the supervision of the plaintiff. The plaintiff summoned a state trooper, and the defendants were charged with trespass(1) Title to real property does not include control over the destiny of people the owner

permits to come onto his premises. Their well-being is the paramount concern of the law. This case is about balancing between property rights and speech rights. The court sides with speech rights, which is supposedly one of the most fundamental and important Constitutional rights

(2) Migrant farm workers are unaware of their rights and the opportunities available to them, and so can only be reached by the effort of others. The employer may not deny the worker his privacy or interfere with his opportunity to live with dignity and to enjoy associations customary among our citizens. A person’s right to his real property is not absolute. Private or public necessity may justify entering onto his land.

iv) Marsh v. Alabama (1946): Deals with a town-company: privately owned, has own government, stores etc…The Marsh Jehovah witnesses are leafleting in the town-company (i.e. private property). The state arrested them (there was state action). By enforcing its trespass laws, the state is delegating the rights of the state to the property owners. Two first amendment rights (freedom of speech and freedom of religion). Speech and religion win out against property

v) Food Exec v. Logan Valley (1968): deals with union organization information v. mall (has open spaces for congregation). Speech rights prevail against property.

vi) Lloyd v. Tanner (1972): Political leafleting (political speech) in a mall. In this case, property wins out because there were other places where the political leafleting could have occurred.

vii) Hudgens v. NLRB (1976): picketers in a mall. The owner prevails, thus overruling Logan Valley. Property wins out!(1) Logan Valley was overruled because this area of law is constantly changing. Malls at

first were supposed to become the new towns. But, it became evident that they were not going become the new towns (so can restrict free speech)

(2) A private shopping mall is not the functional equivalent of a town and, therefore, not a state actor subject to the requirements of the First Amendment of the United States Constitution.

viii) Pruneyard v. Robins S-1 p. 147: Pruneyard is a shopping center open to the public. It has a policy not to permit any visitor or tenant to engage in any publicly expressive activity, including the circulation of petitions, which is not directly related to its commercial purposes. High school students set up a table in a corner of Appellant’s courtyard and distributed pamphlets in support for their opposition to a United Nations resolution against Zionism. A security guard told them to leave.(1) Court held that since Pruneyard was an entity open to the public, they had to let the

student leaflet because it was permissible under the state constitution(2) Court held that although the 1st amendment rights of the private individuals do not

include the right to express speech on other’s private property, states can interpret their own constitutions to grant more expansive free speech rights to individuals, as long as the states permit the landowner to impose reasonable time, place and manner restirctions and so the speech does not disrupt the commercial activity

(3) A state law which requires owners of large shopping centers to allow members of the public to enter their property to distribute petitions does not constitute a taking of property, even though the law limits the property owner’s right to exclude others from its property

(4) Balancing Test:(a) Character of government action(b) Economic impact(c) Interference with reasonable investment-backed expectations

(5) The overall limits here: (a) Can’t interfere with economy of mall and commercial functions(b) Can place time, place, and manner regulations

ix) New Jersey Coalition v. JMB S-1 p. 161: Protestors against the Persian Gulf War requested permission to leaflet at malls and were denied access. Court held that regional centers must permit leafleting on societal issues, subject to reasonable standards set by the centers

x) Case of Appleby and Others v. The United Kingdom S-1 p. 179: There was a privately owned town and the town square was privately owned. A group was trying to protest a “green area” from being developed and thus, was leafleting. Court finds that this was fine: did not infringe on the various Articles.

d) General Thoughtsi) Supreme Court says “the right to exclude is one of the most essential sticks in the bundle of

rights that are commonly characterized as property.”

Adverse Possession1) Adverse Possession: (ejectment): possession for a statutorily defined amount of time can lead to title

a) Claim of title – expresses the requirement of hostility or claim of right on the part of an adverse possessor.b) Claim of right: person believes that he has a rightful claim to the propertyc) Color of title – refers to a claim founded on a written instrument or a judgment or degree that is for some

reason defective or invalid.

i) Split of authority: Color of title is not required in England and most states, but several do require it. Some states allow a shorter statute of limitations for claims based on color of title.

ii) Only a few states require itd) NOTE: If you leave land without claiming adverse possession even if 4 elements are satisfied, O

gets ite) NOTE: CAN’T GET AP IF YOU PAY RENT TO LANDLORDf) Objective Test: even if the adverse possessor mistakenly believes the property is his, he can claim

itg) Rule: in order to have adverse possession you must have: (4 things)

i) Actual entry-claim of title : such that community would reasonably regard AP as the O(1) Triggers the cause of action (ejectment) which starts SOL running and shows extent of

the APer’s claim(2) If cause of action for action of ejectment brought, NO AP(3) In order to have an entry of a claim of right: what does your state of mind have to be?

(a) Majority rule: most states say state of mind is irrelevant(b) Minority rule: good faith(c) Doesn’t have to be in bad-faith anymore(d) Some jurisdictions have to be in good faith (believing that it is yours). One must

enter upon the land claiming in good faith, the right to do so(e) And some say it is irrelevant whether you know or don’t know that you are on

someone else’s land, just need to be treating property like it is yours (neutral)ii) Exclusive possession

(1) The occupation of the land is not shared by the real land owner(2) Tacking: Possession by two adverse possessors, one after the other, may be "tacked" if

the two are in "privity" (i.e. reasonable connection) with each other. That is, their periods of ownership can be added together for purposes of meeting the statutory period. But if the two successive adverse possessors are not in "privity," i.e., do not have some continuity of interest, then tacking will not be allowed. No tacking for ouster Ex) Howard v. Kunto

(3) Pribity: possessor voluntarily transferred to a subsequent possessor either an estate in land or psychical possession. No privity if not voluntary

(4) Tacking is not permitted where one adverse possessor abandons the propertyiii) Open and notorious : acts must constitute reasonable notice to O that claiming dominion, so O

can defend his rights. O doesn’t have to find out but he should have opportunity to find out(1) Alert O that you’re not just a possessor, you are an APer(2) If the possession of the land is large, there is a presumption that the true owner knows

about the AP. However, there is no presumption of actual knowledge by the true owner when the encroachment is of a small area along a common boundary and is not clearly and self-evidently apparent to the naked eye. So this is bad for the AP ex). Manillo v. Gorski(a) if Rubenstein did not know about the encroachment, G must cede the land back or

pay fair market value of the land if ceding the land back would be too onerous(3) So real owner needs to do more than check deed, must go and actually see the land

iv) Continuous for a statutory period: requires only degree of occupancy and use that an average owner would make of the particular type of property: no break in the essential attitude of mind required for adverse use. (tends to be 10 yrs)(1) Must be continuous for statutory period, but not literally constant(2) Statute of limitations; must bring claim within a certain amount of time. This gives more

predictability (don’t have to worry about someone suing you yrs. later), and it prevents evidence from deteriorating, witnesses dying or forgetting

(a) You have short SOL: because you are going to lose your title so its pretty dramatic so want to see the legal action coming. This is most common in civil law with property

(b) You have long SOL: if the right is very important. In criminal law, you have long SOL because want to give justice

(c) The trend now is to lower the SOL time(3) Can be an APer even in a summer home ex) Howard v. Kunto(4) Tacking (see above)(5) The title once gained relates back to the date of adverse possession and immunizes the

possessor from liability. So if you start adversely possessing in 1990 and get claim in 2000, then the date relates back to 1990 and are not liable for anything that happened in that 10 yr period

v) Constructive adverse possession: one who enters property under "color of title" (i.e., a written instrument that is defective for some reason) will gain title to the entire area described in the instrument, even if he "actually" possesses only a portion. Only applies to vacant land. Must be a reasonable proprotion between size of tract and possession of A’per. MUST SATISFY ALL ADVERSE POSSESSION FACTORS!(1) If A enters in part but under color of title to the whole (that is, if A has valid instruments

purporting to give the whole to A), then A may be deemed to adversely possess the entire property. BUT ONLY IF THE ADVERSE POSSESOR’S POSSESION IS EXCLUSIVE. If someone else is using it who owns it then that person has rights unless there is a distinct physical seperation. But can divide it up in AP’er on 20/100 acres and owner on 80/100 acres.

(2) Since A has a color of title to the land, then the doctrine of constructive adverse possession would apply (meaning he'd get the whole 100 acre tract) BUT ONLY IF the adverse possessor's possession if exclusive. Here, it is not, since G is also using it. Thus, G would have rights to the whole 100 acre tract, UNLESS there is a distinct physical separation between the front of the lot and the back of the lot such that the two should really be considered two separate lots. In this case, then A would be deemed an adverse possessor of the 20 acres he used in the back

(3) If A enters in part but NOT under color of title to the whole, A may only adversely possess the portion which she actually occupies or develops

(4) Exceptions: if some part of the tract is owned by someone else(5) No deed: APer will get what he actually cultivated(6) Entry: even though he has a deed of tract and is in possession of whole, he has not made

an entryColor of title – refers to a claim founded on a written instrument or a judgment or degree that is for some reason defective or invalid.

h) Split of authority: Color of title is not required in England and most states but several do require it. Some states allow a shorter statute of limitations for claims based on color of title.

Doctrine of Constructive Adverse Possession under Color Of Title: 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.

i) This is subject to restrictions.j) A invalidly gives X a deed to Lots 1 and 2. Lot 1 is owned by Z. Lot 2 is owned and possessed by Y.

If X enters Lot 1 and possesses it for the Statute of Limitations, X has a valid adverse possession claim for Lot 1 against Z. X has no valid adverse possession claim for Lot 2 against Y, even with the doctrine of constructive adverse possession, because X did not enter on Lot 2. See Wheatley v. San Pedro.i) A invalidly gives X a deed to an 100 acre farm owned and possessed by O. X possesses 40 acres and

makes improvements upon it, as required. BUT not the other 60, because owner on the other 60. After the statute of limitations runs, X has a valid adverse possession claim to those 40 acres but not to the entire farm even under the doctrine. See Patrick v. Goodsby.

ii) Acquiescence: If there is uncertainty 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

iii) Doctrine of Estoppel: If one neighbor makes representations about the boundary line and the other neighbor begins to rely on that, the first neighbor is estopped from denying the boundary line

k) Analysis:i) Was there an entry?ii) Was the occupation of the land exclusive?iii) Did the AP openly and notoriously occupy the land?iv) Was the AP occupying the land for the statutory time period

l) Case Summariesi) Van Valkenburgh v. Lutz DK 122: For several years Lutz had traveled over land he did not

own adjacent to their lot (basically made a path to make traveling easier). Several years later, the VV purchased the land. There is a meeting after VV buys the land and Lutz says he will remove his stuff, but wants an easement to the pathway (wants a right of use). Lutz sues for this easement and wins. But, he should have sued for adverse possession. In his lawsuit, he admitted that the appellants were the owners of the land (damaging)(1) The court held that there was not any adverse possession because Lutz knew the land

was not his and said that it wasn’t his. Thus, could not be an adverse possessor because knew the land was not his. (actual entry-claim of title)

ii) Walling v. Przybylo : Van Valkenburg v. Lutz is overruled. The court held that there can be a claim of right even if the adverse possessor knows that the land in question belongs to someone else

iii) Ewing v. Burnet S-1 p. 195: Symmes executed a deed to the same parcel of land to Ewing (P) in 1798 and then to Burnet (D) in 1803 (basically sold land twice). Ewing instituted an action of ejectment against Burnet in 1834. D claimed adverse possession for over 21 years. D had resided across from the lot since 1804 and had paid taxes on the lot from 1810-1834. D had claimed exclusive right to the gravel (property used for digging and gravel) on and gave permission to others to remove sand and gravel. D brought actions in trespass against those who did so without permission. There was evidence that Williams had been aware of D’s activity but there was no evidence that Williams had ever opposed D’s entry, demanded possession, or assumed any exercise of ownership over the lot(1) Court held for D. Acts of visible and notorious ownership under color of title over

premises for 21 years are sufficient to demonstrate the notorious requirement of adverse possession. To prevent this from happening, all the plaintiff had to do was occasionally go onto the land, or sell the land since his name was on the deed before the litigation happened.

iv) Manilo v. Gorski DK 136: Gorski (D) and her husband entered into possession of a lot under a purchase agreement and obtained title to the real estate. Mannilo acquired an adjacent lot in 1953. Gorski made improvements in 1953 including a concrete walkway extending to the front and rear of the property, which encroached upon Mannilo’s lot by 15 inches. Gorski had built the walkway with the mistaken belief that the property belonged to her. Mannillo sued Gorski in trespass and Gorski counterclaimed for adverse possession(1) Gorski loses. The court held that a party may acquire land through adverse possession if

that party had a mistaken belief that she had title to the property but still intends to claim title.

(2) However, in order to constitute “open and notorious” possession, the true owner must have actual knowledge of a minor encroachment along a common border. If the possession of the land is large, there is a presumption that the true owner knows about the

AP. Thus, this case was remanded to see if Manillo has actual knowledge of the encroachment or not.

(3) If Manilo knew about it then Gorski could get AP. If Manilo did not know about it then G must cede the land back or pay fair market value

v) Howard v. Kunto DK 142: Several owners of property in a summer resort destination discovered that the land they occupied did not match their deeds. Howard brought suit to quiet title and to assert his ownership of the real estate occupied by Kunto. Kunto contended that although he had been in possession of the land less than one year, he and his successors had been living on the property for longer than the 10-year statutory period and he therefore acquired the land through adverse possession by tacking.(1) Court held that you can establish continuity of possession even though land used

regularly for only certain period each year (summer house). The way this property is used by reasonable people is just to use this as a summer home.

(2) A purchaser of land may tack the adverse use of his predecessor in interest when the land was intended to be included in the deed between them but was mistakenly omitted from the description (there was a reasonable connection). The requirement of privity is merely judicial recognition of the need for some reasonable connection between successive occupants of real property so as to raise their claim of right above the status of a wrongdoer or trespasser(a) Relationship: Privity of estate: a possessor voluntarily transferred to a subsequent

possessor either an estate in land or physical possession. When the transfer is not voluntary, as in the case of ousting, there is no privity of estate

m) General Thoughts:i) Not easy to get adverse possession. The burden of proof is on the adverse possessor. It is

very hard to show adverse possessor, so it is generally not a real threat to property owners.ii) Who has to worry about adverse possession: government (the owner of large tracts of land

that it can’t always check up on)(1) Generally, one cannot get adverse possession from government unless the government

holds the land and the government is not using the land for public property. Government should not lose the land because of the negligence of a few state officers and employees

iii) “Title by Adverse Possession” by Henry W. Ballantine DK 117: Says that a lot of people have a stake in AP: not just the plaintiff or defendant. It affects all the people who may have wrongfully believed the property to be in possession of a certain person

iv) “The Path of Law” by Oliver Wendell Holmes DK 118: A thing which you have enjoyed and used as your own for a long time, whether property or an opinion, takes root in your being and cannot be torn away without your resenting the act and trying to defend yourself, however you came by it

v) “Principles of Political Economy” by John Stuart Mill S-1 p. 193: (1) Efficiency argument: if you are not going to use the property, better for the person

actually using the land to get it.(2) After a certain amount of time, it becomes unjust to take property away from someone

even if they took it wrongfully(a) Even when the disposition was wrongful, the dispossession, after a generation has

elapsed….it should be yours

Adverse Possession of Chattels1) Adverse Possession of Chattels (replevin)

a) Rule: sue in replevini) Same requirements of AP, but it is hard to satisfy “open and notorious” because the chattels

may be small or inside a private places (home, museum etc..)

ii) So, SOL is adjusted to help with this issue (NOTE: SOL with chattels tends to be shorter than with AP 6-7 yrs): When to start SOL can happen in four ways: (1) Could start when the item goes missing (date of theft). This is tough on the owner. It

makes the owner take the initiative and report it right away. This protects subsequent lawful purchasers such as bona-fide purchasers for value without notice. (a) Gilbert p. 69: A BFP happens when one who is in wrongful possession of goods

(e.g., a thief, defrauder, finder, etc.) sells them to one who buys for value. The general rule is that a purchaser cannot obtain good title from a thief. (This is the idea of the trial court in O’Keefe). BFP from a thief takes no title. Unless SOL is run, they are not protected from the O

(2) Discovery rule: the statute of limitations on an action for replevin begins to run when the owner knows or reasonably should have known (with due diligence) of his cause of action and the identity of the possessor of the chattels. Must show due diligence! O’Keefe rule(a) Adverse possession begins to run from the time of theft UNLESS O can show

that she used due diligence and failed to locate the painting. If O can show due diligence, adverse possession begins to run when O locates the painting

(3) New York Rule: SOL starts when the owner knows the article is gone and demands its return, but demand is refused. This gives maximum protection to the owner. Saying we want to protect owners and we want to encourage buyers to look into who they are buying the goods from. Solomon v. Guggenheim rule

(4) Start SOL when the aspects of adverse possession are satisfied. But open and notorious is hard to beat.

b) Analysis:i) When was the item taken?ii) Which SOL rule does the respective state used?iii) Did the AP have exclusive control over the item?iv) Was the item displayed openly and notoriously?

c) Case Summaries:i) O’Keefe v. Snyder DK 151: O'Keeffe, the painter of original works of art, alleges her

paintings were stolen in 1946.  Snyder asserted he was a good faith purchaser of the paintings, had title by adverse possession, and O'Keeffe's action was barred by the expiration of the statute of limitations.  O'Keeffe, upon finding out that the paintings had been taken, did not report the theft to her husband, or to the authorities, nor did she register the paintings.   O'Keeffe did tell some of her art world friends about it, but not until 1972 when she reported the loss to Art Dealer's Association of America. Snyder argues that the SOL had expired and that he had the items by adverse possession.(1) Title to chattels cannot be acquired through adverse possession and the appropriate test is

whether the owner of the chattels has acted with due diligence in pursuing his personal property (discovery rule). By diligently pursuing their goods, owners may prevent the statute of limitations from running.

(2) Court would have preferred an efficient registry of art to be made.ii) Solomon R. Guggenheim Foundation v. Lubell DK 161: Rejected the discovery rule in NYC.

Held that the statute of limitations for replevin does not begin to run in favor of a good-faith purchaser until the true owner makes a demand for return and the good-faith purchases refuses. Until demand is made, possession of the stolen property by a good-faith purchaser for value is not considered wrongful.

d) General Thoughts:i) You can’t orally transfer title through adverse possession

Gratuitous Transfers: Acquisition by Gift

1) Gratuitous Transfers: Acquisition by Gifta) Rule:

i) Will: way to transfer items from one generation to the next(1) Very serious. Have witnesses and there is often a small ceremony to show importance

and sign the will(2) There is probate: the court process (litigation) by which a will is considered valid or

invalid. (a) Wills must be filed with a court. In the 6-9 months, the executor of the will has to

pay all the just debts of the decedent (pays debts/taxes, collects assets, liquidating liabilities). Collects assets: the executor says that this is property of the decedent and another person will say no, so have to litigate. This 6-9 months can be delayed. After that period, the executor distributes the will according to what the statute says.

(b) If you die without a will (intestate), your estate will go into probate and you will have an administrator, which is to be avoided because court can pick any kind of person, and the administrator will collect assets, pay debts, etc

ii) Testate succession: if you have a will, who your property goes to(1) Legatee: person who takes property(2) Legacy: what he/she leaves to the person(s)(3) In cases of real estate, person who takes property is a devisee

iii) Intestate succession: no will(1) Next of kin: person who takes the property

iv) A gift is a present transfer of property by one person to another without any consideration or compensation

v) Gift inter vivos: a gift made during the donor’s life when not under the threat of impending death. These gifts are irrevocable. There are 3 parts:(1) Intent to make a gift

(a) Must give interest now, even if don’t get the actual tangible item until later(b) promise to give property in future not a gift; gifts require transfer of title now. BUT

can make present gift of contingent future interest even if possession not until later as long as you “deliver” interest. Ex) Gruen v. Gruen

(2) Delivery: there must be delivery because it allows you to understand what you have just done. It is designed to prevent fraud because the witnesses have actually seen something take place. It also serves as evidence for the person who gets the gift (she has possession of it so helps with the burden of gift(a) Manual delivery is preferred but there can be symbolic or constructive delivery(b) Symbolic delivery: handing over something symbolic of the property given. Ex)

handing over a written instrument declaring a gift of the subject matter(i) Some states have statutes providing that symbolic delivery by writing is always

permitted(ii) Manual delivery must be impracticable(iii) Written instrument must be delivered

(c) Constructive delivery: handing over a key or some object that will open up access to the subject matter of the gift(i) Manual delivery must be impracticable

(d) Delivery standards are relaxed for family(3) Acceptance (presumed)

vi) Gift Causa Mortis: a gift made in contemplation of immediately approaching death. Revocable. Courts are strict because greater chance of fraud since person is dead and can’t talk.(1) The gift is automatically revoked if the donor recovers from the illness that promoted the

gift OR does no die of the peril contemplated

(2) Typically used as a will substitute (3) If alleged donee already has possession of gift before death, item must be redelivered(4) If you could have delivered the item manually, then just giving a key (constructive

delivery) as in Newman v. Bost is not sufficient(5) Not all states allow it and the ones that do, have many requirements(6) In some states it can only include tangible or movable property, not stuff that is

stationary. vii) Holographic wills:

(1) Written and signed by the testator(2) For emergency situations(3) No witnesses required

b) Analysis:i) Is this a gift inter vivos? Was there intent, delivery and acceptance?ii) Is this a gift causa mortis?iii) Could the delivery been done manually?

c) Case Summaries:i) In Re Cohn S-2 p. 1: Cohn, in presence of his family, writes "I give this day to my wife Sara

500 shares of Sumatra Tobacco co. stock.” At the time of this transfer, the actual stock certificates were held in a safe deposit box in NY by a firm. The stock certificates were held in the firm name. The decedent passed away, prior to his receipt of the shares. Thus, delivery of the promised 500 shares to his wife was never made. The estate says the 500 shares of stock belongs to us and the widow says that this was the subject of the inter vivos gift and it belongs to me.(1) Court said that because it is impracticable to deliver the stock, the writing is a sufficient

symbolic delivery and the gift is good. The birthday note is also evidence of an intent to make a gift in the future. Wife wins because the note showed intent and the delivery, although symbolic, was good because there was an obstacle to delivering the note. The obstacle: the note was in NY and they were in NJ and was in a safety box over there

ii) Newman v. Bost DK 167: While on his deathbed, the decedent gave his housekeeper/fiancé, Newman (P), his keys. He told her that he wished her to have everything in the house, pointing out particular furniture. He also gave her keys, which unlocked a bureau that had a life insurance policy in it. The decedent’s life insurance policy worth $3,000 was found inside a piece of furniture. Newman claimed that the decedent gave this policy to her. The administrator of the decedent’s estate, Bost (D), claimed that no valid gift was made. (1) Court held that as the life insurance policy was present in the room when the

deceased gave his keys to the Plaintiff and the policy was capable of actual manual delivery, the policy was not part of the gift to the Plaintiff. Actual, manual delivery is needed if the item is capable of being given and is in the presence of the donor and the donee.

iii) Gruen v. Gruen DK 174: The Plaintiff brings an action against his stepmother seeking a declaration that he is the rightful owner of a painting. The Plaintiff asserts that his now deceased father wrote him a letter stating that he was giving the Plaintiff the painting for his birthday, but he, wished to retain possession of it during his lifetime. This letter is not in evidence, as it was destroyed per the father’s instructions. Two other letters exist declaring the father’s intent to give the painting to his son as a gift. The Plaintiff never took possession of the painting during his father’s lifetime, but sought possession of the painting upon his father’s death. Son says this was a valid inter vivos gift. (1) Mom says this is not an inter vivos gift: no delivery. BUT, court says it wouldn’t have

made sense for him to deliver it, to only take it back. Court says symbolic delivery is fine. A valid intervivos gift was made, only symbolic delivery was needed as actual delivery of the painting to the Plaintiff would have defeated the donor’s intent to retain a

life estate in the painting and acceptance is deemed presumed as it is a benefit to the donee.

(2) Can give a gift even though keep present interest. Present right to a future interest.d) General Thoughts:

i) 3 purposes of probate(1) making property owned at death marketable again (title-clearing)(2) paying off debts (creditor protection)(3) distribution

ii) Why would people want to avoid probate?(1) Want to avoid the expense, delay and publicity in that 6-9 month period(2) Most people want what a will gives you: power to give property after death but can

control it right now, but don’t want to go through probateiii) Why allow causa mortis gifts at all?

(1) There are situations where people literally can’t get to a lawyer ex) Newman v. Bost(2) Wills in emergency situation: soldiers in combat or mortally wounded people

(holographic wills)iv) Container cases: do you give everything in the container when you give up the container

(1) If the item in the container is of the type that would go normally in that container, then you get those items with the container

(2) But in Newman v. Bost, the insurance policy was not of something that would normally be in this type of container

Will Substitutes & Trusts1) Will Substitutes: legal devices and practice that avoid costs of probate, legal system for transferring

wealth at death. Function like wills, reserves power of O to change beneficiaries, etca) If you have stocks & bonds as JT, need to decide if this is co-ownership or simply a will

substitute. If co-ownership, you get your half. If it is a will substitute, it is revocable and person cannot withdraw money until death of other person. Presumption of gifts, not will substitutes. With joint bank accounts too have to see if they were testamentary or coownership. See Blanchette

b) Rulei) Trust: A trust is a fiduciary relationship with respect to property in which an owner (settlor)

transfers property to another person (trustee) with instructions to manage the property for the benefit of a beneficiary(1) In a trust there are 2-3 people (settlor and trustee can be the same person)

(a) Settlor: person who proposes the trust(b) Trustee: person who holds the property for the beneficiary

(i) Person has active duties(ii) Cannot be a beneficiary(iii) Fiduciary relationship with the beneficiary

(c) Beneficiary: person who is having property held(2) Elements of a valid private trust:

(a) Intent that the property be held: settlor must manifest intent to create express trust(i) Real property: written instrument required by statute of frauds—deed or will(ii) Personal property: inter vivos trust written, spoken, or conduct. Not necessary

that the word “trust” is being used if evidence shows that settlor intended that relationship ex) Elyachar, Smith

(b) Gives a person maximum flexibility(c) Declaration of trust:

(i) If settlor determines himself to be the trustee of X, then no delivery necessary ex.) Smith’s Estate

(ii) Usually but not always benefit the beneficiary(d) Deed of trust: instrument delivered by settlor to trustee establishing trust

(i) Must have delivery (e) At least one beneficiary for whom the property is to be administered(f) An interest in the property which is in existence or is ascertainable and is to be held

for the benefit of the beneficiary(g) Presumptive irrevocability. But you can just explicitly say that is revocable(h) Don’t need a physical delivery of anything

ii) Inter vivos trust: instead of making a gift, which is not revocable, can make a trust that is revocable. Revocable trusts are a substitute for a will because it can be revoked until death. Way to avoid probate

iii) Informal Trusts: (1) Constructive Trust : one which is found to exist by operation of law or by construction of

the court, regardless of any lack of express agreement between or intent on the part of the parties ex) Elychar gift

(2) Or the trust in Smith’s Estateiv) Totten Trust: a trust but there is no fiduciary duty

(1) A person had almost no rights until O dies. Poor man’s will(2) Bank accounts which are payable on death to the named beneficiary but which remain in

control of the settlor during life(3) Can’t convey real property(4) Other person cannot touch money until owner dies(5) Revocable at will(6) Ex) In Re Totten

v) Life Insurance: (1) Most middle aged people have multiple life insurance policies(2) Some are purchased individually and some are from the job(3) Beneficiaries are nonexistent until the testator’s death (ambulatory)(4) Revocable

vi) Pension Accounts:(1) Pension accounts contain will substitutes: beneficiary designations that pass the owner’s

interest to the persons of his choice in the event that he dies before exhausting the account in its retirement payout phase

vii) Pay on Death account: A payable on death to B (not common)(1) Joint and survivor account is a practical substitute for this and is generally valid. Void in

some jurisdictions because is testamentary, not executed with will formalities(2) O (depositor) deposits money with right to withdraw any sum and if any amount remains

at O's death, it goes to Aviii) Joint Bank Account (very common)

(1) Can create a joint account, even without the other person(s) knowledge, then when they die, what is left in the bank account goes to the beneficiaries

(2) Survivor takes everything(3) Revocable and ambulatory(4) While living both can deposit and withdraw money (why different than Totten)(5) Ex) Malone v. Walsh

ix) Joint Ownership of Stock(1) When an owner of some object arranged to take title jointly, his cotenant acquires an

interest that is no longer revocable and ambulatory(2) Used a lot(3) Ex) Blanchette v. Blanchette: if will substitute than can revoke it later. It real co-

ownership, cannot revoke

x) Joint tenancy of personal property: bank accts (Malone); stock (Blanchette)c) Analysis:

i) Which kind of will substitute is being used?d) Case Summaries

i) Smith’s Estate (informal trust) S-2 p. 41: Smith sets aside 13 bonds for nephew, tells nephew’s father, puts bonds in envelope with endorsement for nephew, keeps track of interest earned by bonds. He dies. Bonds held to be a trust with nephew as a beneficiary. Don't need actual transfer to 3rd party when donor (settlor) is a trustee(1) Need clear language, if intent is clear, the informal nature of the writing is okay for it to

be a trust. Deed of trust. Need delivery. “any words that indicate with sufficient certainty, a purpose to create a trust will be effective in doing so.”

(2) Conditions that must concur to raise a trust 1) sufficient words to create it (2) a definite subject and (3) certain or ascertained object 4) terms of the trust be sufficiently declared

ii) Young v. Young (imperfect gift) : Certain bonds were found among the paper of Joseph Young on his death. These bonds were enclosed in two envelopes, signed by Joseph Young and described the bonds, saying they belong to William H. Young and others to John N. Young. But “the interest to become due thereon is owned and reserved by me for so long as I shall live.” The court held that this was an imperfect gift. Not a trust because no intention to hold any legal title to the bonds in trust for the donees.

iii) Elyachar v. Gerel Corporation S-2 p. 51: This is an action by two sons to force their father to deliver to them certain stock certificates. Elyachar effectively established a trust in the form of present transfer of ownership interest, which would mature at his death (paid gift taxes, issues dividends, had stock certificates drawn up in children's names but also intended to retain control over corporations in his lifetime). Court can read trust into a donor’s intent if it manifests characteristics of a trust. In this case where all actions implied a trust in the form of a present transfer of ownership interest which would mature on his death.(1) Held to be constructive trust because intent to make present, complete transfer of

ownership without transferring control during his lifetime. Gave beneficial ownership of the shares to his children, while retaining physical possession of the certificates as trustee for his life. (gave ownership but kept control)

(2) Holding : The father intended to create and created irrevocable, inter vivos trust (or remainder interests) whereby he implicitly declared himself trustee of the shares he gave his children and grandchildren as beneficial owners, which full control over interests to pass to them only upon his death or resignation. The rights of the sons could alternatively be upheld as a gift.

(3) The law will delineate a trust where, in view of a sufficiently manifested purpose or intent, that is the appropriate instrumentality, even though its creator calls it something else or doesn’t call it anything. Intent to create a trust must be established beyond a reasonable doubt.

(4) Rule : The law will delineate a trust where, in view of a sufficiently manifested purpose or intent, that is the appropriate instrumentality, even though its creator calls it something else or doesn’t call it anything. In re Douglas NY (1949). Intent to create a trust must be established beyond a reasonable doubt

iv) Tygard v. McComb (gift by trust) S-2 p. 9: Father gives new bank account to minor daughters; however, he retains possession and use of the account (deposits money and takes money out to loan out to others). Father had no intention to vest control in his daughters until his death(1) Not an inter vivos gift. Father treated bank account as his own. He would deposit and

take money out of it as he pleased. Checked money at his own pleasure. Regarded the

money that he put into the account as his own. No complete delivery. NO GIFT IF THE DONOR RETAINS THE RIGHT TO REVOKE.

v) In Re Totten (gift by trust) S-2 p. 13: Fanny Lattan made a whole bunch of trust accounts, upon her death, the money was supposed to go to her beneficiaries. The plaintiff is upset because he wants all the money that she once deposited in his name (not just the money that is in it now). Plaintiff loses because it is clear from the way she was acting that she did not intend to give money in a trust. Totten trusts are trusts that are payable on death of the beneficiary but which remain in control of the settlor during life. They are revocable so you can shift the contents of the trust around.

vi) Malone v. Walsh (joint bank account) S-2 p. 17: Mary Ryan sets up sets up a joint account with brother to prevent her husband from taking it. She gave a remainder interest to her brother and upholds his rights to take the contents of the bank account upon her death. Still has an interest even though not using the joint bank account.

vii) Blanchette v. Blanchette (current view) S-2 p. 23: Robert Blanchette bought AT&T stock. He took title to several certificates jointly with his wife Marie in order that, if she should predecease her, she would have the stock without probate or lawyer. They later divorced. Robert sued. He said that he never intended it to be a present gift, just intended to create survivorship rights in case he died. Court held for Robert saying that he had not created a joint tenancy with donative intent, but solely as a will substitute. Allows for will substitutes as long as intent is clear.

e) General Thoughts:i) “The Nonprobate Revolution and the Future of the Law of Succession” by John H. Langbein

S-2 p. 65(1) Probate has declined in importance because the use of will substitutes has risen and need

for title-clearing and protecting creditors through probate declines. Will substitutes including life insurance, pension accounts, joint accounts, revocable inter vivos trusts. Argues for recognition of will substitutes as nonprobate wills to present unified law of succession instead of allowing different treatment for these two types of succession

(2) People of modest wealth are using will substitutes and the will is being used as a back-up(3) If it looks like a will, you should treat it as a will

ii) What happens to creditors in probate situations?(1) A creditor who has a substantial claim against an individual is likely to take security for it(2) Most heirs of the decedent voluntarily pay off the credit cards and the other debts. Most

creditors don’t mind the will substitutes because the money to be dealt with is usually small anyway. Most people are older and they don’t spend as much money as young families

iii) Why don’t will substitutes fit under inter vivos gifts?(1) Generally nothing is delivered(2) Also, can’t have an inter vivos gift that is revocable. It must be irrevocable. People

generally want these will substitutes to be revocable.iv) Problems with will substitutes:

(1) In the case of some will substitutes, people use them for so many reasons (joint bank account) and whether or not they are intended to be a will substitute is questionable. The witnesses can be dead. It can be hard to determine intent. People will abuse will substitutes

(2) If you are going to treat the general will substitutes as wills, then why not let the subsidiary law of succession operate as wills?

v) 3 main differences between wills and will substitutes(1) Most will substitutes are asset-specific, deal with a single type of property(2) Property that passes through will substitutes are probate free(3) By using will substitutes can avoid the formalities in the Wills Act

Co-ownership and Marital Interests1) Co-ownership and Marital Interests (3 basic ways of owning real estate (real property) with another

person/Getting Title)): more than one entity owns the land at the same timea) Rule:

i) Rights and Duties of Co-owners (Barbri)(1) Each can enjoy the whole, no matter his/her share. Doesn’t matter that you only

contributed 10% to purchase price(2) Each co-owner receives his/her fair share of rent income from a third party ex) get 10%

of rent(3) A co-owner enjoys a right to contribution during the life of co-tenancy for any repairs

that she reasonably makes ex) if I made an improvement, you have to pay your fair share(4) No affirmative right to contribution during life of co-tenancy for improvements ex) green

neon paper example. One person’s improvement could be another’s nightmare(5) One co-tenant can possess all by himself(6) Accounting for reasonable value by co-tenant in possession: Suppose A & B are co-

tenants. A goes into exclusive possession. B voluntarily remains out of possession. If B is not excluded (ousted) by B, A does not have to pay rent although is exclusively possessing. B can’t get rent unless ousts. (a) Rationale: promotes productive use of property (Gilbert p. 194)

ii) Tenancy in common (default…if a presumption is being invoked, it will be tenancy in common):(1) Have separate but undivided interests in the property: each may use, possess and enjoy

the whole parcel, subject to identical rights in co-tenants (not like you own ½ of the land and I own ½ of the land). has the right to possess the whole.(a) If one lives there and the others don’t, that’s not an issue. As long as they all have a

right to live there, they don’t have any obligations to the other tenant(2) The interest of each is descendible and may be conveyed by deed or will(3) Presumption that shares are equal, but they do not have to be(4) Creation: through express conveyance/devise, inheritance. TC also arises when a joint

tenancy is severed(5) Fully alienable: a tenant in common can sell, give, devise or otherwise dispose of her

undivided share in the same manner as if she were the sole owner(6) No survivorship rights: each is descendable (passes to heirs), divisible (put in will), freely

alienable (can send it)(7) Between A & B: if B dies, heirs just take the place of B. Property goes to whomever B

designates as his heir or if no heir, goes to his intestate heir, not to the other tenant in common

(8) This becomes difficult if B dies and has 3 kids (3 kids have property) then the 3 kids die and their property goes to 12 people (3 people’s kids). Gets very complicated. And if you want to sell the land and transfer title, have to track down all the heirs and get them to sign off

(9) Divisibility: can be divided by partition in kind or by sale(10) May leave their interests to devisees by will: joint tenants cannot do this because

their interests will automatically go to their surviving joint tenant when they die(11) Partition applies

iii) Joint Tenancy (last person standing): (1) To have JT must have 4 unities: time, title, interest and possession

(a) Interest: same amount of control over the property for same amount of time(b) Title: O must convey this property to A and B on the same doc (deed, will, etc)(c) Time: A and B’s control of the property has to start at the same time

(d) Possession: A and B must be able to possess the entire parcel at the same (right to enjoy the whole)

(2) If any of these are severed, the JT reverts to a TiC(3) Alienable: can sell your interest during lifetime(4) Not divisible (can’t leave in will) or descendable (can’t go to heirs)(5) Undivided interest in the whole: joint tenants together are regarded as a single owner(6) It used to be that you couldn’t have unequal shares but this is being ignored by the courts

more and more (A has 1/3 and B has 2/3). Each owns 1/3 and have a right to possess the whole

(7) Survivorship exists (when one JT dies, his share goes automatically to the surviving joint tenant): A&B JT’s. B dies. B's interests just drop out and A as the surviving tenant has the right to the whole estate (it is fully A’s). Or if there are multiple parties, the estate is split up between the remaining parties. BUT can’t convey your land to someone after your death in a joint tenancy. HOWEVER, you can convey your share of prop to 3rd party during your life and 3rd party will become tenant in common with non-conveying party. Ex) Riddle v. Harmor(a) O A and B. If A conveys land to X, then X tenant in common with B.

(8) What if one does not want a right of survivorship, you can destroy the joint tenancy (severance) by getting rid of one of the 4 unities(a) Sale: Can sever through sale. B sells land to a third party and then you have a tenant

in common. (b) Conveyance: Or you can convey to a strawman and strawman conveys back to self.

This is cumbersome so now you can convey to yourself so you are a TiC ex.) Riddle v. Harmon

(c) Lease? Questionable. But generally, leases do not sever joint tenancies. See Swartzbaugh

(d) Mortgage does not sever it ex) Harms v. Sprague. Modern trend is to say that mortgages don’t sever joint tenancies

(e) Partition (come to the end of the road): means available for co-owners to dissolve their relationship. (see below)

(9) Hypothetical: You have A, B, C and they are joint tenants (each owns 1/3 with right to take the whole). C conveys to D. A & B are still joint tenants with D as a tenancy in common.(a) More Complicated: if B dies and has E has heir. A would hold 2/3 in tenancy in

common with D who owns 1/3. E takes nothing because interests not descendable in joint tenancy

iv) Tenancy by Entirety (marital interest. Can’t Touch This): HAVE TO REMEMBER THAT STATES MAY NOT HAVE THIS(1) Like joint tenancy except

(a) Restricted to certain people: Co-owners must be legally married. Recently, partners in civil unions can have it

(b) Generally limited to real estate: (2) Exists in less than half jurisdictions, presumed in conveyance to husband and wife. (3) on divorce (chief difference between JT and TE). After divorce, becomes TC absent

other provisions(4) No severance by one; No partition by one(5) When die, goes to the other person(6) If W dies, H gets it then could convey it to another person and creditors could reach it(7) Can’t convey alone(8) Automatically terminated on divorce BUT NOT LEAVING!(9) Can’t Touch this:

(a) Creditors of only 1 spouse can’t touch this ex) Sewada v. Endo. (b) Neither tenant acting alone can defeat the fact of survivorship by trying to sell to

another. Can’t unilaterally sell to a third party. ANY ACTION MUST BE DONE TOGETHER

(10) Why have this instead of a joint tenancy?(a) Married Women’s Property Acts: gave married women control over all their

property. Her property was immune to her husband’s debts. The wife also gained control of all her earnings outside the home. There was still not full equality. Husband still played role of breadwinner and wife was the homemaker. Gave women right to control and dispose of her property. Generaly provided that a woman could receive, hold, manage, and dispose of her real property as if she were a single woman

(b) Where it is recognized, benefits can include the ability to shield the property from creditors of only one spouse, as well as the ability to partially shield the property where only one spouse is filing a petition for bankruptcy relief. If a non-debtor spouse in a tenancy by the entirety survives a debtor spouse, the lien can never be enforced against the property. On the other hand, if a debtor spouse survives a non-debtor spouse, the lien may be enforced against the whole property, not merely the debtor spouse's original half-interest

(c) States differ to the extent that they let a spouse be immune to spouse’s creditors. (i) Creditor could levy against the property and then could use the money to pay off

the debts. Creditor could also get a lien.(ii) Protects family home and other property from transfer(iii) EXCEPTION: The IRS is the one creditor who can reach the interest of a debtor

spouse. See: United States v. Craft(11) Homestead Legislation: this comes into play with bankruptcy. X dollar amount

of whatever property is determined to be the homestead is immune from creditors. In MA, you have to file for homestead protection. You can get up to $500,000 of property protected. Homestead with tenancy by the entirety really protects your property. Protects married couples and people in civil unions

v) Ouster: An act by a co-tenant that deprives another co-tenant of the right to possession. Two kinds of ouster:(1) Have to show that she was prevented from coming on the premises(2) Adverse possession: can become an owner through adverse possession. Would have to a

clear and convincing proof that the person in possession was no longer a mere co-tenant and had assumed sole possession (rare)

vi) Partition: (1) B wants to sever this, B wants something to call his own. So B wants a partition. (2) This can be done easily through an agreement(3) At partition, improving person gets a credit for improving the land. OR a debit, if

improvements caused a drop in value(4) If parties don’t want to be TiC or joint tenants they can voluntarily partition land in 2

kinds:(a) Physical (preferred)/ In Kind: Divide land while still occupying it (with a fence,

wall, etc). (i) If you divide the land wrong, the person who got more can pay the other person a

loyalty(b) Sale: the interests are split and sold to the other party or a completely new party.

Split the property and divide the proceeds(i) A partition by sale should only be ordered when 1) “the physical attributes of the

land are such that a partition in kind is impracticable or inequitable; and 2) the

interests of the owners are better served by a partition by sale” ex) Delfino v. Vealencis

b) Case Summaries:i) Germaine v. Delaney : The court was called upon to construe a deed to the grantees “jointly as

tenants in common, with equal rights and interest in said land.” the court held that the deed created a joint tenancy because it provided for survivorship

ii) Riddle v. Harmon DK 324: Mr. and Mrs. Riddle purchased property taking the title as joint tenants. Several months before Mrs. Riddle’s death, she went to her attorney to prepare a grant deed in which Mrs. Riddle conveyed the property to herself as a tenant in common (she wants to dispose of her land by will). Next, she disposed of her 1/2 undivided interest in the property through her will. In the past, a person had to transfer an interest to a third party to sever the tenancy.(1) Court held that one in joint tenant can unilaterally sever a joint tenancy without using an

intermediary device (don’t need to use a strawman anymore). Husband still gets his half. Rationale: eliminate cumbersome feudal practice

iii) Harms v. Sprague DK 330: William Harms had taken title to certain real estate with his brother, the decedent John Harm, a joint tenant, with full right of survivorship.   Simmonses owned a lot and home in same town as Harmses.  Simsonses, entered into an agreement to purchase land from DF's.  Because Sprague had no security for the $7K, he asked John to sign the note as co-signor on the note and to give a mortgage on his interest in the joint tenancy property.  John Harms also executed a mortgage in favor of the Simmonses, on his undivided one-half interest in the joint tenancy property (gives a mortgage on his share of the property), to secure payment of the note.  John Harms died.  (1) The Illinois Supreme Court looked to previous case law and found that a mortgage does

not sever a joint tenancy, unless the loan goes into default and the property is seized by the lienholder.(a) A joint tenancy must maintain unity of title. In this case, the brother never lost title to

his interest in the property(b) If the brother had defaulted on the loan prior to dying, then Sprague would have

acquired the brother's interest in the title(c) The whole concept behind joint tenancy is that upon death that person's interest

dissolves. Nothing is transferred to the other partners. The mortgage is connected to the brother's interest in the property. That interest was not transferred to Harms, it just disappeared. So the collateral (half-interest) the mortgage was based on doesn't exist anymore (so the Simmonses and bank are screwed)

iv) Delfino v. Vealencis (partition) DK 338: The plaintiffs, the Delfinos and the defendant owned as tenants in common 20.5 acres of land. On a portion of the land, was the defendant’s house as well as a business she operated (a garbage dump). The plaintiffs brought suit to partition the property by sale(1) Court ordered a partition in kind. Preference for partition in kind over partition by sale. A

partition by sale should only be ordered when 1) “the physical attributes of the land are such that a partition in kind is impracticable or inequitable; and 2) the interests of the owners are better served by a partition by sale

v) Spiller v. Mackareth (ouster) DK 348: Spiller () and Mackereth () owned a building as tenants in common. When the lessee left, began using the building as a warehouse. Mackereth wrote a letter demanding either vacate half of the building or pay half the rental. did neither, sued. Court ruled that there is no evidence the intended to exclude (even though had put locks on the doors) and as long as he didn't, there could not be an ouster.(1) Absent an agreement to pay rent or an ouster of a cotenant, a cotenant in possession is not

liable to his cotenants for the value of his use and occupation of the property. One tenant in sole possession does not owe rent to the other party (no longer in possession) who is

not really using the land since the other person is making the land better and is improving it. Since there was no agreement to pay rent, there must be evidence of an ouster.

vi) Swartzbaugh v. Sampson (lease) DK 348: The Swartzbaughs are married and owned as joint tenants, 60 acres of land. Sampson negotiated with the Swartzbaughs to lease a portion of the land for a boxing pavilion. Mrs. Swartzbaugh objected to the lease. Mr. Swartzbaugh and Sampson signed a lease and Sampson proceeded to take exclusive possession of the leased property by erecting and operating a boxing pavilion. Mrs. Swartzbaugh initiated this action to cancel the lease.(1) The court held that she can’t cancel the lease. Court found that since each T owns equal

interest in property, they each can lease entire property out, BUT co-t whose interests are undermined can recover for loss by obtaining ouster. Husband can deal with his property wants. Sampson stepped into the shoes of the husband and gets his rights.

(2) W could maybe get some rent. (3) If H dies, then the lessee is screwed because it goes to W

vii) Hodel v. Irving S-3 p. 27: Lands were held in trust by the United States in order to protect the allottees from improvident disposition of their lands to white settlers. The allotment program quickly failed because the Indians, who were able to pass down their land by will, leased their allotted lands to white ranchers and farmers, which resulted in parcels being splintered into multiple undivided interests (only making pennies of money in rent/fractioned ownership) that could not be alienated or partitioned, due to the fact the land was held in trust. To address this problem (fractional problem), Congress enacted the Indian Land Consolidation Act of 1983, which contained an escheat provision § 207 (power of state to acquire property).(1) Supreme Court held that § 207 violated 5th amendment because it amounts to virtually the

abrogation of the right to pass on a certain type of property-the small undivided interest-to one's heirs. The right to pass on property-to one's family in particular-has been part of the Anglo-American legal system since feudal time

viii) Sewada v. Endo DK 361: The Sewadas were injured after being hit by a car driven by Mr. Endo. Mr. Endo had no liability insurance. At the time of the accident, Endo was the owner, as a tenant by the entirety with his wife, of a parcel of real property. By deed dated prior to the accident the Defendant conveyed real property to their sons for no consideration. They did this so that the creditor could not levy against husband’s interest. In Hawaii ONLY: tenancies of the entirety cannot be attacked by creditors(1) Hawaii has this rule for public policy reasons. Wants to have family solidarity and

allows for convenient administration of the decedent’s estate without worrying about decedent’s debts.

(2) 1st alternative: could levy against husband’s interest only(3) 2nd alternative: creditor could claim a right to possession and if Endo says no, creditor

could get an ousterix) United States v. Craft : The US Supreme Court held that a husband’s interest in Michigan land

that he and his wife had owned as tenants by entirety was property to which a federal tax lien could attach

c) General Thoughts:i) Freedom of Testation: is the power of a person to choose the heirs of her/his properties upon

his/her death. Limited by dower and curtsey.(1) Dower: Given to wives when husband dies. If the wife dies before the husband or they

divorce, the dower is extinguished.(a) Share: W's life estate in 1/3-1/2 of land eligible to be divided upon death(b) Land: Any land owned in fee simple by the husband alone of as a tenant in common

during marriage was subject to dower

(c) Timing: attaches to land at moment of marriage and is inchoate (only partly formed) until H dies

(d) After an inchoate dower is attached, the husband is powerless to defeat it.(2) Curtsey: given to husbands if wife dies

(a) Share: A widower, at common law, was entitled to life estate in each piece of the wife’s real property if certain conditions were fulfilled

(b) Children Necessary: H only gets this if children born of marriage(c) Extends to W's equitable interests held in possession

ii) Principles of Political Economy by John Stuart Mill S-3 p. 19(1) Question of inheritance is a modern one(2) Should there be a limit on what should be inheritable?(3) Is it intrinsic in right of private property that can dispose of it by will?(4) Mill wants to limit what people can acquire by will

iii) “The Revolution of Family Wealth” by Langbein S-3 p. 55(1) Modern forms of wealth now are education(2) People of modest wealth engage in 1 great round of intergenerational transfers and that is

the education of their children. This is so expensive and thus, the only thing that you can save for is for old age and retirement. Once people pay for education, the only thing that they can save for is retirement.

Marital Property (Systems)1) Marital Property Systems (2 kinds)

a) Rulei) Separate property: property acquired before marriage or during by gift, devise, descent

(1) Premise: I get what’s mine and you get what’s yours(2) Severability: one acting alone can't convert into separate property but can do so by

written agreement without other(3) During Marriage: to see what each person owns look at the Married Women’s Separate

Property Rights. Each spouse is to be regarded as if they were single (his and her). Real and personal property is your own. BUT, there is voluntary co-ownership (joint tenancy of real estate, joint tenancy of personal property). Presumption: anything that is jointly used, there will be half-interest. Ex) Husband buys a house and it is in joint tenancy, then there is interest in both. So there is interest of ½ for each. (a) NEGATIVE: In case of doubt of who owns what, ownership has to be determined for

each asset. This is much more complicated than community property(4) Death: To figure out what is the decedent’s estate, have to figure out what is in his/her

estate. In the case of a spouse leaving a will (testate succession), there are statutes (except in Georgia) giving the surviving spouse a forced share in the decedent’s estate. Forced share is when one spouse elects to renounce the will and claim a forced share of outright ownership Ex) if wife disinherits husband, husband can elect to take a forced share against the will. Forced share can run between 1/3-1/2. Some will give a fractional share of property and a dollar amount.(a) In intestate succession (no will): Share of surviving spouse increases as the law

changes. But supposedly these laws are out of whack with what people truly want(5) Divorce: Inter vivos transfers: right of one spouse to waive the other spouse’s will and

take her forced share relative to spouse’s right to make inter vivos gifts. See Sullivan v. Burkin. This is good or a spouse could make a will to disinherit the spouse

ii) Community Property: 8 states including CA & TX(1) Includes: earnings of either spouse during marriage and property acquired through

earnings. Property owned by either spouse before marriage or acquired through earnings

(2) Does NOT Include: property owned by either spouse before marriage or acquired after marriage by gift, descent or devise

(3) Presumption: strong presumption that the property is community property(4) Share: Earnings of each spouse during marriage owned equally in undivided shares (5) Premise: H & W contribute equally to material success of marriage, so each should own

equal and undivided shares of property—wages, rents, profits, fruits of labor-- acquired during marriage by joint efforts whether or not one is primary wage earner ex) if husband earns $1,000, ½ should go to the wife(a) Whatever is bought by the earnings is community property(b) Property acquired or possessed during marriage by either husband or wife is

presumed to be community property(6) During Marriage: Marriage is like a community. Presumption that this is what most

people would want. All property that accrues after the marriage is 50-50 co-ownership. EXCEPT: gifts or inherited property or pre-marital property. BUT, everything that cannot be proved to be an exception is presumed to be community property. Creditors have to know which property they can levy on. Purchasers have to know who owns the property so they can get title and possess the property(a) Either husband or wife, acting alone, can manage community property; either can sell

it, lease it, invest it, etc..(7) Divorce: community property is usually divided equally(8) Death: Community is dissolved. Each community spouse has their own estate made up of

½ of community (acquest) + pre-marital property and inherited propertyiii) Inter Vivos Trusts

(1) Most states hold that inter vivos revocable trusts created by the decedent are subject to forced share(a) Some require proof of intent to circumvent forced share laws, but most do not care

about intentiv) Some states DO NOT include inter vivos revocable trusts in the decedent’s estatev) For instance, MA first upheld inter vivos transfers even though those transfers were patently

designed to disinherit a spouse (Kerwin v. Gonaghy).vi) However, MA later announced prospectively in Sullivan v. Burkin that inter vivos trusts

executed during the marriage over which the decedent alone had power would be included in the decedent’s estate for purposes of forced share requirements.

b) Case Summaries:i) Kerwin v. Donaghy : In MA “a husband has an absolute right to dispose of any or all of his

personal property in his lifetime, without the knowledge or consent of his wife, with the result that it will not form part of his estate for her.” Upheld inter vivos transfers to disinherit a spouse. Overruled by Sullivan v. Burkin

ii) Sullivan v. Burkin S-3 p. 47 Sullivan had separated from his wife. To prevent her from getting any of his property, he executed a deed of trust, which he controlled. When he dies, wife sought a determination by the court saying that the trust property should be considered part of his estate. The court says assets of an inter vivos trust created during marriage by the deceased spouse will be considered part of the estate of the deceased for the purpose of the forced share.  (Revocable arrangements will be treated as part of the estate for the purpose of the surviving spouse’s share.) Inter vivos trusts executed during the marriage over which the decedent alone had power would be included in the decedent’s estate for purposes of forced share requirements.

Transfers of Land in Contemplation of Marriage1) Transfers of Land in Contemplation of Marriage

a) Rule: If you enter the relationship because were told you would get property, and your fiancé transfers the property without telling you, the court could find fraud and void the transfer

b) Case Summariesi) Strong v. Mik e S-3 p 33: Before marrying Ruby Strong, Mike executed and recorded a deed

conveying property to his children. Ruby did not learn about this conveyance until his death and then sued the kids arguing that she relied on his statement that “she would be well provided for, both before and after his death.” She said transfer of the farm to his children fraudulently deprived her of her marital interest. The court held that there was no evidence of fraud. She was not induced to marry Mike by his ownership of the land. (1) Court says: To establish claim of fraudulent conveyance must show: 1) “a transfer made

during a contract to marry or under such circumstances, including its proximity to the marriage, indicating it was made in contemplation of marriage; 2) “lack of adequate consideration for the transfer”; 3) “lack of knowledge of the transfer on the part of the prospective spouse”; 4) “fraudulent intent on the part of the transferor”; and 5) “reliance by the prospective spouse upon the transferor’s interest in the transferred property as an inducement to marriage.” Presumption of fraudulent intent upon establishment of the first three elements

(2) Suggestion for Mike: leave Ruby a legal life estate so she can live on the farm until she dies. You could also leave a trust that would support her for the rest of her life, so she wouldn’t be homeless when he dies.

Termination of Marriage by Divorce1) Termination of Marriage by Divorce

a) Rulei) Alimony: spouse is entitled to continuation of support though it may be denied to him/her if

she was at fault(1) Don’t see this that much now, unless the spouse needs to be rehabilitated or is in need(2) Uncommon because want to incentivize people to enter into the job market

ii) Common Law: upon divorce, property of the spouses remained the property of the spouse holding title to the property. BAD because if the wife is a housewife, she gets practically nothing

iii) No fault divorce: can get divorced wheneveriv) Equitable Distribution/Discretionary Distribution: property is divided on equitable

principles. All but 3 states have a form of discretionary distribution. Judges look at some of the factors in Rice v. Rice(1) 90% of all divorce cases are settled, but discretionary distribution causes there to be more

litigation.(a) Increased earning capacity that is attributable to degrees. So, you have to assign a

value to the interest (how much money the degree is worth and future earnings) and you pay out in installments, which starts to look like alimony ex) In re Marriage of Graham

v) Reimbursement Alimony: supporting spouse is reimbursed for his or her expenses that were incurred while the other was in school.

vi) Different states define marital property differently to deal with dividing property:(1) All property acquired by spouses, before and after marriage ex) Massachusetts. (2) All property acquired by spouses during marriage by whatever means including

inheritance (3) Only property acquired by earnings of either spouse during marriage (based on

community property principle)b) Case Summaries

i) Norris v. Norris (traditional rule) S-3 p. 95: Husband and wife were married for 22 yrs. He was a farmer and she took care of the home and kids until she got a job outside the home. Court holds that what is in W's name is hers, what's in H's name in his (note: within separate property system framework). Shows the “his and her” property of divorce. This is really hard on a spouse who doesn’t work outside the home or on a spouse whose income goes towards vacations or other consumables

ii) In re Marriage of Graham (CO) DK 371: Mr. and Mrs. Graham were married for six years. During that period, Mrs. Graham worked full time and Mr. Graham worked part time and obtained a Bachelor’s degree as well as MBA. Wife wants interest in the MBA. Held that since degree itself has no exchange value on the market and cannot be assigned, transferred, sold, or inherited, it does NOT constitute property for divorce purposes but may be considered in determining alimony. Degree is not property, but a product of ones abilities. She also does not get alimony because she can support herself.

iii) Mahoney v. Mahoney (NJ) DK 376: NJ declined to recognize a professional degree as marital property. BUT, there can be reimbursement alimony when the supporting spouse is reimbursed for his/her expenses that were incurred while the other was in school. Includes household expenses, educational costs, school travel expenses.

iv) Elkus v. Elkus (NY) DK 378: Couple are married. During their marriage, Plaintiff’s career took off. Defendant traveled with his wife, was her voice coach, attended and critiqued most of her performances and alleged that he sacrificed his own promising career for his wife’s success. Husband wants equitable distribution. Wants interest in the professional goodwill (fame, reputation). Held, since H contributed to W's stardom, her celebrity status is marital property and is subject to equitable division. The court interprets marriage to be an economic partnership so that is why husband should be compensated. Additionally, husband’s contributions and efforts led to an increase in the value of her career, so professional goodwill is a divisible asset.

v) Rice v. Rice S-3 p. 97: Nancy Rice, filed for divorce after 27 years of marriage. Trial Court gave alimony and 1/2 H's assets to W, including his separate property acquired before marriage. Husband appeals because he thought the alimony was excessive and plainly wrong. At end, court says it would be good for judge to write out the factors to make sure that there is not more emphasis being put on one factor (undue influence). Factors to look at when dividing property:(1) Fault -- now no-fault divorce in all states, but evidence of misconduct may bear on

allocation of assets.(2) Need -- ex-spouse supported at level sufficient to stay off welfare (above maintenance

level)(3) Status (station) -- award given to allow for lifestyle which spouse had during marriage(4) Rehabilitation -- needy spouse given money to rehabilitate to point where payments not

needed - vocational job training, etc.(5) Contribution approach - based on view that each spouse contributed to marriage

measured by:(a) Market value of services rendered during marriage(b) Partnership approach(c) Opportunities forgone due to marriage(d) Enhanced earning capacity of spouse because of marriage

c) General Thoughts:i) What is the best approach:

(1) Reimbursement alimony (Mahoney): Best because it is in between the Graham rule and the Elkus rule. You get reimbursed for what you spent. Don’t have to speculate as to how much the degree is worth. It is easy to calculate but it doesn’t take into account lost opportunity. It doesn’t take into account the fact that his income is increasing over time.

(2) Colorado case (Graham): Should not have to get reimbursed.(3) New York Rule (Elkus): Some say this is best because she gave up opportunities and it’s

not enough that she is reimbursed. Also, you would not have gotten through grad school without that person so they are entitled to something

Pre-Nups/Antenuptial Agreements

1) Pre-Nupsa) Rule

i) ALSO NEED TO LOOK AT ANTENUPTIAL TRANSFERS WITH STRONG V. WOOD

ii) Pre-nup: is a contract entered into prior to marriage that divides property in case of divorce. Pre-nups are not that common in US. In some countries, they are very common. Sometimes pre-nups are enforceable and sometimes not. MA pretty much always enforces a pre-nup provided that certain precautions have taken: full financial disclosure or a waiver saying you were offered to accept full financial disclosure from husband/wife, but decided against it, independent counsel, has to look fair and reasonable ex) DeMatteo v. DeMatteo: looks to see if the pre-nup should be set aside. Look to see if the pre-nup is fair and reasonable

b) Analysis:i) Is the pre-nup fair and reasonable?

c) Case Summaries:i) DeMatteo v. DeMatteo S-3 p. 105: A very wealthy husband and his non-wealthy wife signed

an ante nuptial agreement. They divorced and he wanted to enforce it and she didn’t. Although she was represented by counsel, she says she signed the agreement under duress. Court rejects this. To be enforced an ante nuptial agreement must be 1) valid 2) fair and reasonable at the time of entry and 3) must comport with rules of contract formation like consideration, absence of fraud, misrepresentation and duress. To determine if an agreement is valid, look to the “fair disclosure” rules. (Rosenberg) test: the judge must determine whether the agreement 1) contains a fair and reasonable provision as measured at the time of its execution for the party contesting the agreement 2) the contesting party was fully informed of the other party’s worth prior to the agreement’s execution and 3) a waiver by the contesting party was created. The fact that the wife did not work with her lawyer to get a more favorable agreement is her fault (and her lawyer’s) not her husband’s.(1) An agreement can be fair and reasonable even if it’s one-sided (especially where one

spouse is very wealthy.) Cohabitation

1) Cohabitationa) Rule

i) Cohabitation: Can include elderly people sharing homes with caretakers, relatives living together, bf and gf living together, gays who can’t marry living together

ii) Historically: people cohabitating coulnd’t get anything even if there was an express contract because court felt like cohabitation discouraged marriage and weakened family-based society

iii) Common Law Marriage (not formal marriage):(1) Only 10 states still have it. It is phasing out(2) Common law marriage required that people shared a common household, carried

themselves out to be husband and wife, and had to actually be able to get married. To get divorced, have to go to a court, even though this isn’t a real marriage

(3) It is over-inclusive and under-inclusive (excludes people who couldn’t marry like gays)(4) With divorce, divide property like any married couple. Also have alimony (5) When divorce, divide property up like any married couple

iv) Traditional view: contracts between cohabitants were not upheld on the theory that cohabitation discourages marriage and thus weakens the family-based society

b) Case Summariesi) Carlson v. Olson S-3 p. 121: Two people lived together without being married for 21 years

although they told everyone they were husband and wife. The husband paid for this property (held in joint tenancy) and the improvements made on the property. They split up and the wife wants to partition the land. The husband argues that he should be reimbursed for the improvements made and that he did not intend to give her presently effective interest. The court holds that the wife does not have to reimburse him for the improvements made because they are basically like a married couple. The court partitions the land and gives them each a 50 percent interest. The husband cannot get the value of the improvements back (reimburse) because the entire share of the property was an irrevocable gift that he gave in consideration for the wifely and motherly services that she gave.(1) Shows a tacit understanding. Implied contract. Women did wifely duties under implied

contract so doesn’t have to pay upii) Marvin v. Marvin : Cohabitants live together for years and then they break up. Try to decide

how to distribute the property. Contract law is used here to declare what principles should govern distribution of property acquired in a nonmarital relationship. Cohabitants will not only be allowed to make contracts (express contracts), but contracts will be implied as well, by nature of the relationship. (1) Express contracts are enforceable in most states -- two unmarried cohabitants can

expressly make contract rights that would be similar to marital property rights. Overall, court held that the courts should enforce express contracts between cohabitants except to the extent that the contract is explicitly founded on the consideration of meretricious sexual services

(2) Implied contracts – A K to share property or to support one partner can be implied from the conduct of the parties. K to share property can be implied from conduct of parties and it seems like they are working on the basis of some mutual contract. Court holds that in absence of an express contract, the courts should inquire into the conduct of the parties to determine whether the conduct demonstrates an implied contract.

(3) If K is implied by court, it is enforceable, according to certain circumstancesiii) The “implied contract” idea has not caught on – courts less willing to probe that deeply into

the relationship. Also courts tend to treat household services as gratuitousiv) Final Holding: she got an award in the trial court. Gave her $104,000 for rehabilitation but

appellate ct overruled it. Trial court said there was not an express or implied contractc) General Thoughts:

i) American Law Institute says that if people have been living together for a certain amount of time, can divide property like a married couple. This has not caught on though. Thus, now cohabitants have to use the old doctrine of separate property and divide property into his and her.

ii) Policy about the Discretionary Distribution Statutes(1) Freedom to Dispose: We want to be able to dispose of property as we wish and don’t

want to give it to someone that we are mad at(2) Also want to protect people’s reasonable expectations(3) Some statutes think of marriage as a partnership. Treat contribution of each spouse as

equal ex) community property statutes. And Elkus(4) Protecting the weaker and more vulnerable parties. Thus child support is always tacked

on ex) children(5) Predictability: letting people know where to stand. See this with community property(6) Reducing the costs of divorce litigation

iii) 1st problem: overall, people think that all these statutes regarding marital property, divorce, etc… are very unfair. It’s just the luck of the draw.

iv) 2nd problem: a lot of these statutes are only suited for certain kinds of couples. These statutes are not suited for people who have not been married that long or don’t have kids. There are expedited divorce statutes.

v) 3rd problem: these statutes make divorce more expensive. Generally, people could get divorced easier but since there are all these statutes regarding prenups and discretionary distribution things get more expensive

vi) 4th problem: this system takes no notice of minor children in the divorce. System focuses on the spouses and children are an after thought. In England, children are given much more weight.

vii) You cannot contract out of child support. Have to pay child support even if not in a contract. Cannot reduce the amount of money that you give to a wife so that she would be put on welfare.

Property Rights and Civil Rights

1) Property Rights and Civil Rightsa) Rule

i) Civil Rights Act of 1866: “All Citizens of the United States shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property.”(1) Narrower than the 1968 Fair Housing Act: only deals with racial discrimination and does

not cover topics like advertising. (2) Broader than the 1968 Fair Housing Act: does not include the exceptions

ii) 1968 Fair Housing Act: making it unlawful to refuse to or negotiate for sale/rental or sell/rent a dwelling to any person because of race, color, religion, or nat’l origin. Prohibits advertising or making any public statement that indicates discriminatory preference (to find discrimination with advertising, look at what an ordinary reader would take the advertisement to mean)(1) Plaintiff must prove discriminatory effect -- no proof of discriminatory motive or intent

needed(2) Exceptions: person leasing or selling a dwelling he/she owns is exempt provided that (1)

does not own more than 3 such dwellings, (2) does not use a broker, (3) does not advertise in manner than indicates intent to discriminate(a) Small unit operations: person is exempt if offering to lease a room or apt. in her

building of 4 units or less, 1 unit of which she occupies(b) Exempts religious organizations and private clubs under certain circumstances

(3) Conditions on exceptions: in order to be entitled to these exceptions, can’t advertise the rental or sale after notice of any violation of this act, can’t use a real estate agent or broker

iii) 1974 amendment includes discrimination based on sexiv) 1988 amendment includes discrimination against familial statusv) have the exceptions to protect some people type of close personal relationships from what is

thought to be an invasion of privacyb) Case Summaries

i) Shelley v. Kraemer : state courts could not enforce racially restrictive land use agreements entered into by neighbors

ii) United States v. Starrett City S-4 p. 5: Starrett City Associates owned a housing development and maintained a racial distribution to prevent the loss of white tenants. The application card for the apartment asks for race or national origin. As vacancies arise, applicants of a race or

national origin similar to that of the departing tenants are selected from a pool and offered apartments in order to keep a constant racial balance (64% white, 22% black, and 8% Hispanic). Want to keep this balance to prevent white flight. A group of black applicants brought suit, alleging the procedures discriminated against them on the basis of race, violating the FHA. Court found violation of FHA because discriminates against minority applicants by creating disparities in opportunity to rent. Illustrates conflict in FHA between barring discrimination and promoting integration. (1) A plan employing racial distinctions must be temporary in nature with a defined goal as

its termination point. The use of quotas should be based on some history of racial discrimination or imbalance within the entity seeking to employ them

Deed1) Deed

a) Rulei) Deed: conveys title of real property from one party to another. Comes into play during the

closing period. Must be lawfully executed (written and signed)ii) Delivery of Deed:

(1) Either the grantor hands the deed to the grantee upon receipt of the purchase price (immediate transfer of title)

(2) Grantor puts the deed in the hands of a third party (escrow agent) who hands over the deed upon closing the transaction (transfer title when all conditions are fulfilled)

(3) Doesn’t always have to be physical: grantor has shown the present intent to be immediately bound

iii) Conditional Deed: buyers and sellers use an escrow agent. Seller says I will give this to an escrow agent on the condition that the buyer pays the purchase price. If the seller gives the deed to the buyer instead of the escrow agent, the buyer has the deed and can just run away with it without paying the purchase price

iv) Contract mergers: contract merges into the deed, and the deed is deemed the final act of the parties expressing the terms of their agreement. This happens once the buyer accepts the deed. The buyer can no longer sue the seller on promises in the contract of sale not contained in the deed, but must sue the seller on the warranties

v) Types of Deeds:(1) General Warranty Deed: The grantor guarantees that he/she holds good title and this

good title extends back to property’s origins.(2) Special Warranty Deed: Only warrants title against defects arising during grantor's

tenure (grantor guarantees only that he has done nothing to make title defective during his time) [most common]

(3) Quitclaim Deed: Warrants nothing and grantor merely transfers whatever right, title, interest he has, if any

vi) Covenants for Title in Warranty Deeds:(1) Covenant of seisin - grantor covenants that he owns estate or interest that he purports to

convey. Has good interest to convey(2) Covenant of right to convey - grantor covenants that he has power to make conveyance(3) Covenant against encumbrances - grantor covenants that there are no easements,

covenants, mortgages, liens or other encumbrances on property(4) Covenant of Quiet Enjoyment -- grantor covenants that grantee will not be disturbed in

possession or enjoyment of property by 3d party's lawful assertion of superior title(5) Covenant of warranty - grantor covenants he will defend on behalf of grantee any

lawful claims existing at date of conveyance, will compensate grantee for any loss sustained by assertion of greater title

(6) Covenant of further assurance - grantor covenants to perform whatever acts are reasonably necessary to perfect purchaser's title, if it turns out be imperfect (not used much in US

b) NOTE: WHERE THE GRANTOR HANDS OVER TO THE GRANTEE A DEED ABSOLUTE ON ITS FACE, WITH A CONTEMPORANEOUS ORAL UNDERSTANDING THAT THE DEED SHALL NOT TAKE EFFECT UNTIL SOME CONDITION IS PERFORMED, THE GENERAL RULE IS THAT THE DELIVERY IS VALID AND ORAL CONDITION IS VOID P. 450

c) Case Summaries:i) Sweeney v. Sweeney DK 606: Maurice Sweeney owned a farm where he and his brother,

John (defendant), operated a tavern. The two of them went to the town clerk and asked that two deeds be drawn up: one conveying the land from Maurice to John, the other conveying the land from John to Maurice. The second deed was purportedly requested for Maurice’s benefit in the event that John died first. (Maurice did not want his wife to get property). John kept the first deed and gave the second to his attorney. The second deed was later lost in a fire at the attorney’s office. Maurice died, and his estranged wife, Maria (plaintiff), sued for title of the land. If this had gone according to plan, John should have cut up the second deed so John could get the property, no questions asked. John defended on the grounds that the deed was intended to be transferred to Maurice only upon his death and only if he died first (not supposed to be presently effective). John also said the deed was supposed to be conditioned. Maurice’s wife said the deed was delivered and ORAL CONDITION IS THUS VOID. And since Maurice died intestate, she is entitled to get the property.(1) Second deed is valid. There was delivery. Further, this could not have been a

conditional delivery, because it was given directly to a grantor, not a third party (escrow agent) as required.

Purchase and Sale of Residential Property

1) Purchase and Sale of Residential Propertya) Rules:

i) Figure out what is your price range. Then, you go talk to a loan officer and see what kind of pre-loan you can get. Then you find a broker (usually represents the seller, not the buyer) or real estate agent to help find you a home. When you find the home, you submit a bid. The seller will either accept or decline the bid. Then you go into the offer…

ii) Offer: consult real estate broker or agent, employ attorney to draft a proper contract of sale (lawyer-made law, for the most part); have parts of K explained to you

iii) Executory Period (60-90 days)(1) Financing:

(a) B puts down % of purchase and mortgages the rest(b) After signing K, B needs credit AND assurance that seller has good title to convey(c) There’s always a clause in K regarding what to do if B can’t get financing. Usually,

B must make “diligent” efforts to get the loan and show that he submitted the mortgage application. If can’t get financing, forfeits the deposit

(2) Investigation of Title-three kinds:(a) Direct Examination: (1) Examination of all recorded, registered documents to deduce

title, (2) searches usually limited to some conventional period, like 60 years, (3) End by getting a “certificate of title” saying exam was made (4) Atty may demand certificate of insurance from national company: provides additional protection for defects of title not in record

(b) Abstract Examination (most common): (1) Indiv./Corp. makes copy of all public records, re-indexes them and creates a “title plant” (2) Abstractor assembles all

pertinent info and summarizes content, certifying that abstract contains all info relevant to title (3) Sells abstract to purchaser who has it examined by atty who certifies in same way atty certifies after making direct exam (a condensed history taken from public records or documents, of the ownership of a piece of land)

(c) Local Title Insuranceiv) Closing: deed becomes operative

(1) In some states (NY), the transfer of the deed takes place with all parties present. In some states (CA), the transfer is handled by a third part escrow agent.

(2) The lender provides the proceeds of the loan to the seller, who uses that money and the additional funds to pay off existing loans on the property, pay the real estate brokers their commission, pay off legal fees, and he pockets the remaining proceeds

(3) Buyer will sign a promissory note for the loan(4) Buyer will execute a mortgage and pay lawyer fees

v) Recording: see State v. Buyers Service Co.(1) Recording is the act of putting a real estate document into the official records at the

County Recorders or Recorder of Deeds Office. (you usually have to pay for this) Usually, the types of documents that are recorded affect title to real property such as a deed, mortgage, easement, etc.... These types of documents should be recorded with the recorders office in the county where the real estate is located

b) Case Summaries:i) State v. Buyers Service Co S-4 p. 17: Court finds that there must be a lawyer for:

(1) Preparing deeds, notes, and other instruments related to mortgage loans and transfers of real property to protect the public from the potentially severe economic and emotional consequences which may flow from erroneous advice given by persons untrained in law

(2) Preparing title abstracts. Buyers Service may conduct examinations and prepare abstracts ONLY for the benefit of attorneys. Supposedly need expertise for this. Maybe want a lawyer in case there is questionable title

(3) Lawyers shall only conduct closings so that they can give their clients advice if necessary. Also there could be questions about the documents as well that only lawyers can answer

(4) Recording the Deed: Instructions to the Clerk of Court or Register of Mesne Conveyances as to the manner of recording, if given by a lay person for the benefit of another, must be given under the supervision of an attorney. There will be instructions that will be sent with the recording documents (mortgage and deed) and those things have to be recorded in the right order (sequence). So lawyer needs to make sure that the sequencing is right

ii) Messer-Johnson Realty v. Security Savings S-4 p. 25: Plaintiff entered into a K with Defendant to buy a home and lot. It was agreed that the title should be good and merchantable. If the title was not merchantable, the purchaser would get a refund. Purchaser declined to accept the title and complete the purchase on the ground that the title was not good and merchantable. There were some defects in the record: someone who obtained title to the land years before had gotten it without witnesses; there was no deed saying that one of the earlier owners had title to land. Essentially, the seller had the land in adverse possession.

(a) Court held that there can be good and marketable title by adverse possession. However, the burden of proof is on the seller to show adverse possession and to make it clear that the purchaser will have the means to establish his title, if it should be attacked by a third person. Seller here did not satisfy his burden because did not give the names and numbers of witnesses who would have said that vendor had been possessing the land

(b) When you buy a house, there is an implied warranty of merchantability. The title does not have to be free from all suspicion or possible defect, but only requires a title

which a reasonable purchaser, would in the exercise of that prudence which business men ordinarily bring to bear upon such transactions, be willing to accept and ought to accept

c) General Thoughts: i) In general, people don’t get lawyers for small home purchases because these sales aren’t

lucrative so not many lawyers want to do them.ii) Buyers are often the impression that brokers represent them, when in fact, they really

represent the selleriii) Role of attorneys in home purchase:

(1) Counseling: explanation of terms of K, advice buyer needs to be protected(2) Representation in negotiation of terms of K(3) Drafting of K : terms have settled meanings and variations can drastically change(4) Search for title

Disclosure in Real Estate1) Disclosure

a) Rulei) Equitable Conversion (once K signed, B owns land as long as he pays balance at closing):

the minute the contract is signed, the buyer gets equitable title and has a right to specific performance. Seller merely retains legal title and has right to purchase price. Seller also gets specific performance because can force the buyer to go ahead with the deal(1) Buyer gets equitable title in real property from the date of the contract (treated like the

owner).(2) RISK OF LOSS: Does S or B bear loss when damage or destruction by fire, flood or

other cause not the fault of either party occurs between signing of K and closing when no provision in K allocating risk?(a) Majority: Buyer bears the loss

ii) Caveat Emptor: let the buyer beware. Buyer is supposed to inspect the property and buyer takes the risk if he buys the property. Lots of states are moving away from this rule with respect to residential real estate. Commercial real estate is a completely different thing. Exceptions:(1) Fraud: affirmative misrepresentation of a material fact with an intent to deceive. Hard to

find this because does not affirmatively misrepresent, may just not say something(2) Seller has actively concealed some aspect: there is a problem with the roof and the

painter paints over the mark that would show this problem(3) Seller is the builder: there is an implied warranty of fitness, merchantability(4) Seller created the condition that causes the value to change ex) Stambovsky v. Ackley(5) Latent defects ex) Johnson v. Davis(6) Warranty of Workmanlike Quality ex) Lempke v. Dagenis

iii) Broker’s Liability: Broker of seller is liable for misrepresentation only, not failure to disclose. HOWEVER, moving in direction of holding to same standard as seller. As caveat emptor was being eroded, brokers started getting nervous. Now there are mandatory disclosure forms. They protect buyers and brokers. Sellers have to fill out forms in which they disclose information. Pretty much all states have these forms now

iv) Stigma Statute: we are not going to let people get out of contracts just because something bad happened in the house. Shields sellers from a failure to disclose psychological or prejudicial factors that may affect the market value. Ex) murder in the house, former occupant had AIDS

v) Implied Warranty of Workmanlike Quality: imply a warranty of quality or skill construction in connection with the sale of homes.” See Lempke v. Dagenais

vi) Remedies: recission of contract, specific performance, damages

b) Case Summaries: i) Stambovsky v. Ackley DK 553: Buyer purchased home that was haunted. Exception of

Caveat Emptor: Seller created the condition that causes the value to change, so had a duty to disclose. Also need to disclose if it is something that buyer had no way of figuring out the defect (latent defect)

ii) Johnson v. Davis DK 557: The Plaintiffs entered into a contract to buy a house for $31,000. The Defendants knew that the roof leaked, but affirmatively represented to the Plaintiffs there was no problems with the roof. After the Plaintiffs paid the deposit, they discovered water gushing into their new home after a heavy rain. The Plaintiffs brought this action for rescission of the contract. Court held that a seller of real estate must disclose material facts that are not readily observable and are not known to the buyer. This rule will probably spread to all states. (1) Stuff to be litigated under this test: what does “material” mean? What is readily

observable? Etc…iii) Lempke v. Dagenais DK 564: the Plaintiffs’ predecessors in title contracted with the

Defendant, to build a garage. Six months later, the property was bought by the Plaintiffs. Shortly thereafter, the Plaintiffs noticed structural problems with the garage. Plaintiffs contacted the defendant to fix the garage, which Defendant promised to do, but never did. Plaintiffs brought suit for breach of the implied warranty of workmanlike quality. There is no privity requirement in suits by subsequent purchasers against a builder or contractor for a breach of an implied warranty of good workmanship for latent defects for public policy reasons.(1) The implied warranty of workmanlike quality is limited to suits concerning latent

defects which become manifest after the subsequent owner’s purchase and which were not discoverable had a reasonable inspection of the structure been made and can only be brought within a reasonable period of time. Plaintiff also has the burden of proof.

(2) This rule will probably spread to other states, but there will be litigation about it such as what is a reasonable amount of time? What are the buyer’s duties? What is a reasonable inspection? When does the SOL start running?

Estate Planning

1) Estate Planninga) Rule

i) Estate: an interest in land that is or may become possessoryii) Fee Simple Absolute aka fee simple (absolute ownership): The greatest possible estate in

land, wherein the owner has the right to use it, exclusively possess it, commit waste upon it, dispose of it by deed or will, and take its fruits. A fee simple represents absolute ownership of land, and therefore the owner may do whatever he or she chooses with the land. If an owner of a fee simple dies intestate, the land will descend to the heirs. Freely divisible: capable of passing by will. Freely alienable: can be transferable during lifetime. Infinite duration. No future interest!(1) Standard language is “I, John Does grant to Nancy Roe and her heirs…” BUT, heirs

don’t get anything right now(2) There is a strong presumption of fee simple. If it just says “To A” will be construed as a

fee simple. “To A and his heirs.”iii) Fee Simple Defeasible: fee simple terminates when a certain event occurs, so owner might

lose property (potential for infinite duration, but no certainty). No Remainders here!(1) Fee Simple Determinable (automatically terminates. Harsh!): Automatically terminates

without going to court. These typically have language about time: clear durational

language (as long as, for as long as, until…). Example: "for as long as he shall remain a widower” “To A so long as..” “To A during/until”(a) Possibility of reverter- A contingent future interest in real property that a grantor of

a determinable fee possesses after he or she has conveyed property(2) Fee Simple Subject to Condition Subsequent (does not automatically terminate, but

may be cut short when X happens. Right of entry): Someone comes in to end it. Ends because of an event. Not as harsh because not automatic. Only ended when grantor exercises his option to reenter and retake. Example: A can use X, so long as it uses it for educational purposes, if not, I will come and retake premises.(a) Right of entry for condition broker- future interest in grantor and his heirs if

condition is broken(3) A Fee Simple Subject to Executory Limitation (creates an interest in a third party):

Example: A will own the property but if he does not use it properly, B gets it. (a) Executory interest: the future interest that the third person gets. Takes effect by

cutting show another/benefitting from another’s forfeiture.(i) Shifting executory interest: always follows a defeasible fee and cuts short

someone other than O ex) To A, but if B returns from Canada next yr, to B. A has a fee simple subject to B’s shifting executory interest

(ii) Springing executory interest: cuts short O. To A, if and when he marries (A is not currently married so O has it but can lose it to A)

iv) Fee Tail: will necessarily cease when the first fee tail tenant has no lineal descendants to succeed him in possession. “To A and the heirs of his body.” Was used to preserve familial dynasties. Has a future interest: reversion in O or a remainder in some 3rd party(1) Virtually eliminated : created to attempt to keep family land in blood-line (now largely

replaced by trusts)v) Life Estate: The possessory interests of a life estate convey an interest in the grantee for his

life allowing the grantor to determine who will control the remainder of the property at the end of the life estate. If the grantor does not state who will take the property at the end of the life estate the remainder of the property will revert back to the grantor. EXPLICIT LIFE-TIME TERMS. Life tenant must not commit waste: must not do anything that would hurt future interest holders.(1) The right to use or occupy land for his/her life(2) “To A for life” “To A for life of B”. The grantor has a reversionary interest. If grantor

is dead then goes to his/her heirs(3) “To A for life remainder to B/ to A for life then to B”. The remainder is given to a third

party. Waits for the present estate to end before it takes (patient. Don’t cut people off). (4) Vested Remainder: If you know who object goes to. Created in a known taker with no

condition precedent(5) Condition Remainder: has been given to an unascertainable person ex) To A for life

then to B.” But B hasn’t been born yet. B has a contingent remainder(6) Condition Remainder: “to A for life then if B graduates from college, to B.” B has not

yet graduated from high school and thus has a contingent remainder (condition precedent)vi) Interests in Land Less of Estates:

(a) Easements: property right to use the land. Can use a particular segment of someone’s property ex) walk on land like in Valkenburg v. Lutz case (pertains more to the land/area)

(b) Profits: right to remove stuff from the land(c) Licenses: the permission granted by a competent authority to exercise a certain

privilege that, without such authorization, would constitute an illegal act like trespass (pertains more to the action)

(d) Covenants: look like contractual promises but they are a hybrid between a contract and an interest in real property

b) Case Summaries:i) White v. Brown : The Plaintiff filed an action against the Defendants, Helen Brown and others

(Defendants), the remaining heirs of the testatrix, alleging that the Plaintiff was vested with fee simple in testatrix’s house by terms of the will. The will stated that the Plaintiff was to have the home to live in and not be sold. The Defendants claim that the Plaintiff was merely given a life estate in the home leaving the remainder to go to them under interstate succession. Court holds that this is a fee simple. Rules of construction of an ambiguous will favors a conveyance of fee simple absolute.

Non-Freehold Estates-Landlord-Tenant Law1) Non-Freehold Estates-Landlord-Tenant Law

a) Garvin p.223: there are also determinable term of years, terminable at the will of Lb) Rule

i) There are three layers in landlord-tenant law that we see with leases(1) 1st layer: Common law of property and common law of contract(2) 2nd layer: lawyer-made law(3) 3rd layer: statutory and administration regulation

ii) Leasehold Estate: an estate in land. The tenant has a present interest and the landlord has a reversionary interest. If there is nothing else, this is all freely alienable (capacity to be freely sold or transferred from one party to another)

iii) Lease: a contract and a conveyance. It is a contract because it deals with promises between the two parties. But, it is also a conveyance because property is conveyed to you for a certain amount of time. The two kinds are commercial leases and residential leases, which are different!

iv) Commercial Leases: common law of property, common law of contract, lawyer-made law, commercial (UCC): governs the contractual part of commercial leases (big difference between residential leases) The principle engine of change is lawyer-made law. Many commercial tenants of small units seem like they should be treated like residential tenants.

v) Residential lease: common law of property, common law of contract, lawyer-made law, lots of statutory regulation (consumer law. Many things in residential leases are there because the state statutes have to be there.) The principle engine of change is the statutory regulation See Javins v. First National Realty

vi) Non-Freehold Estates: when any leasehold estate is created, a future interest in landlord (L) or 3rd party arises (includes term of years, periodic tenancies, tenancy at will, tenancy of sufferance). Involves possession, but not ownership of the property

vii) Term of Years: “to X for Y years” Estate that lasts for some fixed period of time or for computable time period. Allow one to terminate lease for cause before the end of the period(1) Can easily figure out when it ends (yearly, monthly, weekly)(2) No notice to terminate(3) Statute of Frauds: For greater than 1 yr must be in writing(4) With rents, you typically have term of years defeasible (says what the landlord can do if

you breach the lease or fail to pay rent). Defeasible means “revocable”(5) There are also terms of years absolute

viii) Periodic Tenancy: lease for a period of some fixed duration that continues for succeeding period until either L or T gives notice of termination (i.e.: "to A from month to month"). Continues successively(1) If notice is NOT given, tenancy is automatically extended for another period

(2) Many states have statutes allowing termination any time after 30 days notice: notice must be given to terminate! Usually notice must be given equal to period itself. If more than 1 year, give 6 months

(3) ex) Is a year, then it is month to month after that, and either party has to give 30 days to end the lease

ix) Tenancy at Will: tenancy of no fixed period that endures as long as BOTH L and T desire(1) Duration: ends when one party terminates, though statutes usually require period of

notice of 30 daysx) Tenancy at Sufferance: when T remains in possession (holds over) after termination of

tenancy (technically it's the interval. When old tenancy ended and point where L elects what to do). Usually are short-lived(1) Holding over on the lease is not always best because have the exact same terms as the old

lease and have to pay the same amount. Can’t re-negotiate(2) There are some state statutes that say if a tenant holds over, the landlord can charge

double or even triple the rent(3) Landlords options if tenant hold overs:

(a) Eviction (plus damages)(b) Create a new tenancy: Can hold that tenant over to a new lease. If L permits this by

accepting rent from T, T becomes a periodic T (in other words, treat hold-over as offer for new lease which L elects to accept for another term of not more than a yr. --> this is periodic tenancy arising by operation of law) ex) L takes the rent money after the lease is technically up

(c) There are many EXCEPTIONS because don’t want to unduly penalize T just because he held over for a day

c) Case Summaries:i) Garner v. Gerrish DK 423: Defendant had leased property and had a contract stating that

Defendant could terminate the lease “at a date of his own choice.” But, still had to pay every month and had a 30-day grace period. The landlord died leaving the Plaintiff (executor) to execute his estate. The Plaintiff served the Defendant with a notice to quit to premises. Plaintiff argued that the lease was indefinite and uncertain and therefore was a tenancy at will, which the Plaintiff could terminate with proper notice. The Defendant refused, arguing that this was a life tenancy terminable at the will of the tenant(1) Court holds that this lease creates a life tenancy terminable at the will of the tenant,

which can be terminated by the lessee or at the latest, upon his death. A lessor can create a lease in which the lessee possesses the sole power to terminate the lease, which creates a life tenancy in the lessee

(2) Tenant can terminate lease at day of choice and landlord has right of re-entry. Tenant has period of grace for rent. Landlord dies. Sounds like a tenancy at will but monthly rent makes it like a periodic tenancy; ultimate decision is to break out of the fixed options and try to resolve closer to the real intent of the parties. On a standard lease document but found to be life estate until the death or termination of the tenant.

ii) Javins v. First National Realty : Reconceptualizes the residential lease. “A well known package of goods and services.” Before, residential lease is just the sale of land. Now, the residential is more of a well known package of goods and services which pushes the transaction into consumer law. Established implied warranty of habitability!

Landlord’s Duty to Deliver Possession1) Landlord’s Duty to Deliver Possession

a) Rulei) CL: Every landlord has at least the duty at common law to deliver the right to possession. In

some states, there is the English rule as well

ii) English Rule (Majority view) - L has duty (implied covenant) to deliver actual possession + legal right to possession at beginning of term [Easier on T’s]

iii) American Rule (minority view): L has no duty to deliver actual possession at beginning of term, only has to give legal right of possession. See Dusch v. Hannan Gilbert p. 236

iv) Actions that can be taken by new tenant:(1) Terminate lease , recover damages sustained by finding other housing(2) Withhold rent for portion of term during which was kept out of possession + recover

damages(3) Go directly against 3rd party to recover possession or damages(4) SUE AND EVICT THE HOLDOVER AND RECOVER DAMAGES

b) Case Summariesi) Hannah v. Dusch DK 438: Hannan leased property from Dusch. When the Plaintiff

attempted to take possession of the property, he discovered there were tenants still on the property. Defendant refused to take action to evict tenants and argued that it was the Plaintiff’s duty to see that the premises were available. Tenant sues the landlord(1) Virginia abides by the American rule, which recognizes the lessee’s right to possession,

but imposes no duty on the lessor to deliver actual possession (legal possession but not actual possession)

(2) Rationale: Landlord has not covenanted against the wrongful acts of another and should not be held responsible. However, the lessee may expressly covenant to require the landlord to deliver possession

Sublease v. Assignment1) Sublease v. Assignment p. 281

a) Rulei) Sublease: lessee transfers anything less than the entire interest or reserves to himself a

reversionary interest in the term. Tenant retains some right of reentry onto the leased premises. See these most commonly when you go away temporarily (beneficial because someone is still paying rent) ex) if two years remain on the lease and lessee transfers for a term of 1 yr(1) New tenant (sublessee) gives payment to the sublessor who gives it to the landlord.

Sublessor is still liable for the rent if the new tenant does not pay(2) When a lease allows assignment/sublease only with the prior consent of the lessor, the

consent may ONLY be withheld where the lessor has a commercially reasonable objection to the assignment. See Kendall v. Ernest Pestana

ii) Assignment: If the tenant transfers the entire leasehold estate, retaining no right of reentry or other reversionary interest. Lessee is left with no legal rights either express or implied. He transfers right to possession for the duration of the term(1) Assignee gives rent directly to the landlord so assignee is responsible in default(2) Pro: gives you more autonomy. Don’t have to check up on the assignee

iii) IMPORTANT: Whether you assign or sublease, can’t unilaterally divest yourself of contractual obligations. Must ask for a release

b) Case Summaries:i) Ernst v. Conditt DK 442: The Complainants leased a tract of land to Rogers. Rogers

proceeded to construct a racetrack, fence and undertake other improvements to the land. The lease contained provisions prohibiting subletting, and a duty to clear any construction or improvements at the end of the lease. Rogers sold the business to the Defendant and a new lease was created with an accepted sublease agreement to Defendant. Defendant ceased paying rent and the Complainants brought suit to recover past rent. Defendant argued that Rogers remained personally responsible for the rent. Found it was an assignment, so

Defendant is liable to L for not paying rent. (Even though parties had used word “subletting" in their agreement)

ii) Kendall v. Ernest Pestana (commercial purposes) DK 450 Gilbert p. 288: The City of San Jose owned a hangar at an airport, and leased it to the Perlitchs. The Perlitchs assigned their interest to Ernest Pestana, Inc. Prior to assigning their interest to Defendant, the Perlitchs entered into a sublease with Robert Bixler. The sublease stated that before the lessee could assign his interest, he had to obtain written consent from the lessor, otherwise the lease could be voidable at the option of the lessor. Bixler wanted to sell his business to Jack Kendall and requested consent from Ernest Pestana, Inc., who refused to give it, claiming it had the right to arbitrarily refuse such a request.(1) When a lease allows assignment/sublease only with the prior consent of the lessor, the

consent may ONLY be withheld where the lessor has a commercially reasonable objection to the assignment, even in the absence of a provision in the lease stating that consent to assignment will not be unreasonably withheld.

(2) A lease is a contract, and every contract has a duty of good faith and fair dealing. Some of the factors to be considered in determining good faith and commercial reasonableness are financial responsibility of the assignee, suitability of the use for the particular property, legality of the proposed use, need for alteration of the premises, and the nature of the occupancy. Denying consent based on personal taste, convenience, or sensibility is not commercially reasonable.

(3) PRO: want freedom of alienation, implied good faith and fair dealing applied in commercial leases. This law does not change much because leases that say that it is never okay to assign property will stand.

(4) CON: it is not the court’s role to decide what is alienable and what is not. This is between the landlord and the tenant.

Landlord’s Remedies1) Landlord’s Remedies

a) Rulei) NOTE: if you want to avoid these remedies, try to bargain with the landlordsii) If T is still on premises but hasn’t paid: L can evict or sue for rent dueiii) T is not paying rent and is wrongfully out of possession

(1) T leaves unlawfully with 2 yrs let on terms of yrs (SIR): surrender (L can view T’s abandonment as surrender which L accepts), Ignore abandonment and hold T responsible for rent just as if T was still there (not common), Re-let premises & hold wrongdoer liable for deficiency

iv) Sue: leave apartment open and sue for rent as it becomes due. BUT, landlords don’t want to sue because its expensive. Sue for rent due(1) Duty to mitigate. See Sommer v. Kridel

v) Evictvi) Accept the Surrender: T shows intent to leave the lease and L acceptsvii) Termination clausesviii) Summary process: landlords theoretically recover their property quickly without doing

an ejectment action. BUT, now summary process can be quite extensive due to defenses such as implied warranty of habitability. (MN - supposed to be 3-10 days, actually 114)

ix) Negotiate for a Releasex) Rent acceleration: in commercial actions single default in rent payment. Or other obligation

makes rent for balance of term immediately duexi) Repossess and Relet and continue to pursue any difference

xii) Security Deposit: leases commonly require T to make security deposit at time lease is executed to assure T's performance; L promises to return $ to T at end of term if T hasn't breached(1) In MA, this is heavily regulated by statute. Has to put money in a spate account. Can’t

wrongfully without the security depositxiii) Self-Help: Self help: common law -- L can use reasonable force to expel T

(1) Some jurisdictions permit L peaceable entry(2) Growing # of jurisdictions prohibit self-help, require L to resort to judiciary remedy. See

Berg v. Wiley. No changing locks, removing T’s possessionsxiv)There are 3 situations where even though the lease has expired, landlord can’t kick the tenant

out(1) Public housing tenant: can only be evicted for good cause(2) Tenant in rent control housing. Can only be evicted for good cause(3) In NJ, landlord can’t evict you unless you fit into certain circumstances

b) Case Summaries:i) Berg v. Wiley (breach provision) DK 460: Mr. Wiley leased land to Berg for use as a

restaurant. The lease was for five years and required the tenant to bear all costs of repairs/remodeling and make no changes to the building structure without the Defendant’s approval. The relationship broke down when the Plaintiff allegedly remodeled the restaurant without the Defendant’s approval and allegedly operated the restaurant in violation of the state health code. Per the advice of his attorney, the Defendant changed the locks to the restaurant. (1) The only lawful means to dispossess a tenant who has neither abandoned nor voluntarily

surrendered, but who claims possession of the property, is by resort to judicial process. (Want to discourage self-help where things could get violent)

ii) Sommer v. Kridel (abandon) DK 469: Kridel signed a two-year lease for an apartment owned by the Plaintiff, Sommer (Plaintiff). The Defendant paid the security deposit and first month’s rent. Prior to even obtaining the keys to the apartment, the Defendant broke off his engagement, became a student and attempted to terminate the lease by letter to the Plaintiff. The Plaintiff did not attempt to re-let the apartment until months later. Plaintiff sued the Defendant for the full amount due under the two-year lease.(1) A landlord does have an obligation to make a reasonable effort to mitigate damages due

to notions of basic fairness. Landlord has a duty to make reasonable efforts to attempt to re-let

(2) To assess whether the landlord made reasonable efforts to mitigate, the court should consider whether the landlord offered/showed the vacant apartment, advertisements, among other factors

(3) 42 states hold that the landlord has a duty to mitigate, BUT this is misleading because some states only say this for residential leases

Tenant’s Rights and Remedies1) Tenants Rights and Remedies

a) Rulei) T must maintain premises and make ordinary repairsii) T must not commit waste: willful destruction (voluntary waste), a pattern of neglectfulness

that ultimately hurts (permissive waste), can’t let tenant unilaterally change the premises even if it enhances the value (ameliorative waste)

iii) When T removes a fixture, he commits voluntary waste. Must not remove fixtures (furnace, lighting installations)

iv) T must not remove fixture even when she installed it. Fixtures pass with ownership of the land

v) If removal will cause irreparable harm, the fixture must stay putvi) T must pay rentvii) Duty to pay rent, duty to repair, duty not to damage premises, duty not to disturb other

tenantsviii) Covenant for Quiet Enjoyment (residential and commercial (implicit)): T has right of

QE of premises (right to exclude others, right to peace and quiet, right to clean premises, right to basic services like heat), without interference from L. If not expressly provided, such a covenant is always implied in every lease. Allows T to use the property free from inconveniences and annoyances; should be able to use the premises for what they are for. With this doctrine, tenant can abandon if the breach is substantial. Ex) Reste Realty v. Cooper(1) At common law, this had to deal with title so that the tenant could not be ousted by

someone who had a better title to land than the tenant or landlord. Breach of covenant did not excuse the tenant or landlord from his responsibilities.

(2) If L wrongfully evicts T then violates thisix) Constructive Eviction (remedy): If through fault of L, there is substantial interference with

T's use and enjoyment of leased premises such that T can no longer enjoy premises as parties contemplated AND T vacates within reasonable time, THEN lease terminates and T excused from further rent liability. HUGE change because tenant could not only sue for damages, but could vacate. Gilbert p. 240(1) Substantial Interference due to L’s actions or neglect: the issue has to be somewhat

permanent: a recurrent issue that will not go away. It is so bad that you might as well have gotten evicted(a) This substantial interference can be that the landlord has materially breached his

statutory duty, common law duty, or contract duty(2) Must give NOTICE and L must fail to act meaningfully(3) These are more common with commercial leases(4) This does not help people in the worst housing because those tenants often did not want

to move out, just wanted housing improved. Additionally, if they did move out, there was often no better housing that they could afford

(5) Risks(a) The breach may not be substantial, thus leaving the tenant liable. To avoid this, the

tenant could call the Housing Court and they will inspect and write a reportx) Caveat Lessee (old rule): the Landlord’s only covenant was to deliver possession to the

tenant. Tenant took premises “as is”. At common law, the only exception was for latent defects. There are exceptions:(1) Latent Defects: If L knows of dangerous latent defect and has reason to believe T will

not discover defect, THEN L has duty to disclose condition AND if L does not disclose, L is liable for injuries caused by nondisclosure to T

(2) Public Use: where lease contemplates that premises will be used as place of public admission, L is liable for injury to members of public if the following conditions exist(a) L knows or should know of dangerous condition(b) L has reason to expect T probably won’t fix condition before admitting public(c) L fails to exercise reasonable care to remedy the condition

(3) Repairs by L: if L voluntarily undertakes to make repairs, L owes duty of reasonable care

(4) Common Areas Controlled by L: If L leases part of property and retains control of common areas (halls, walks, elevators, etc.) L is liable for physical injury from defects in such areas if L could have reasonably discovered condition and made it safe

xi) At CL, tenant had a duty not to commit active waste (can’t break things). Tenant also had a duty with respect to permissive waste (tenant must make minor repairs to prevent decay)

xii) Implied Warranty of Habitability (residential leases only) Gilbert p. 249: L has duty of delivering habitable premises and maintaining them in habitable conditions. Landlord will deliver over and maintain, throughout the period of tenancy, premises that are safe, clean and fit for human habitation. Covers all latent and patent defects. To determine if there has been a breach, court should investigate if the claimed defect has an impact on the safety or health of the tenant. Non waiveable. (heat, water, etc)(1) In order to bring a cause of action for breach of implied warranty of habitability, the

tenant must first show that he or she notified the landlord of the problem, must be a pretty serious problem, and allowed a reasonable time for the correction

(2) Tenant does not have to move out! The tenant may withhold rent, tenant may make the repair themselves and can get reimbursed. T could get compensatory damages and punitive damages

(3) Some states have codified this, some have not(4) T’s Remedies Gilbert p. 253

(a) Repair and deduct(b) Leave(c) Reduce or withhold rent until ct. determines full rental value(d) Stay, pay rent and sue for money damages

xiii) Illegal Lease Doctrine: lease was an illegal contract when the lease was made (maybe because violated health and sanitary codes) so tenant can vacate. Minor technical violations do not render a lease illegal, nor do violations of which the landlord had neither actual nor constructive notice. See Brown v. Southhall Realty Co.

b) Case Summariesi) Reste Realty Corp v. Cooper DK 483: Cooper leased from the Reste Realty Corporation the

bottom floor of a building for commercial use. Whenever it rained, the water ran off driveway into the Defendant’s office space. Plaintiff’s management was aware of the problem and promised to fix it. When the manager died, the new management paid no attention to Defendant’s request. Defendant sent a notice of vacation and Plaintiff sued to recover rent for the unexpired term of the lease.(1) Held: L breached covenant of QE, and the Court applied the doctrine of constructive

eviction as remedy for the T.(2) T won because although she knew about the defect, the L had made a promise to fix it

ii) Brown v. Southhall Realty Co (illegal lease) DK 492: the landlord sued to eviction for nonpayment of rent. In defense, the tenant argued that no rent was due under the lease because the unsafe and unsanitary conditions of the leased premises violated the housing code. The court agreed, holding that the lease was an illegal contract made in violation of statutory prohibitions and therefore, unenforceable.

iii) Hilder v. St. Peter DK 493: Plaintiff began occupying an apartment in the Defendant’s complex. This apartment has broken windows, water leakage, falling ceiling paneling, stopped up toilets, no lights, no heat, bad odors and more. Landlord promises to fix the problems, but never does. Plaintiff sues for a refund of rent based on the implied warranty if habitability. (1) Held: Plaintiff is entitled to either withhold rent or seek damages in the amount of rent

previously paid. An implied warranty of habitability exists, requiring the landlord to deliver and maintain through the lease, premises that are safe, clean and fit for human habitation.

iv) Berman v. Jefferson S-4 p. 51: withheld rent and L brought action for summary process. ’s apt. was getting intermittent hot water, which L continually tried to fix. Court found that culpability was irrelevant to whether conditions meet standards of habitability. Ts obligation to pay rent abates from moment notice is given. The rent starts abating as soon as notice of the problem is given to L

(1) Some courts and Restatement say that L has to have a reasonable amount of time to repair after notice of defect is given

Affordable Housing1) Affordable Housing

a) Rulei) Substandard housing is usually found in rural areas and consists of single family housingii) “Privitizing Federal Low Income Housing Assistance: The Case of Public Housing” by

Schill: The most serious problem today is the supply of the affordable housing and affordability (people often pay 50% of their income on housing). Gov’t MUST play some role in addressing the housing issue(1) Programs in which the gov’t supports the construction of new dwellings, either by

building them itself or by subsidizing developers affect supply(2) Programs that provide the recipients of assistance with the funds to purchase housing

services (subsidies, vouchers) increase the demand, and indirectly, the supply. HOWEVER, problem with vouchers is that they run on a lottery basis and there are 4 times as many people who need subsidies and vouchers than the amount of subsidies and vouchers available

iii) Ways to create decent affordable housing:(1) Public enforcement of housing codes(2) Private enforcement of tenant remedies(3) Subsidize tenants (vouchers)(4) Subsidize landlord (tax breaks, loans)(5) Subsidize builders(6) Fair housing acts(7) Rent control(8) Regulate the market

iv) Rent Control: Rent control is a law placing a maximum price, or a “rent ceiling,” on what landlords may charge tenants.(1) If rents are established at less than their equilibrium levels, the quantity demanded will

necessarily exceed the amount supplied, and rent control will lead to a shortage of dwelling spaces

(2) It leads to housing deterioration, fewer repairs, and less maintenance. Landlords are not getting as much profit so don’t maintain the buildings and don’t repair items

b) Case Summariesi) Chicago Board of Realtors v. City of Chicago DK 508 Gilbert p. 246: The Chicago City

Council enacted an ordinance that essentially codified the implied warranty of habitability, as well as established new landlord responsibilities and tenant rights. The Plaintiffs challenged the ordinance as unconstitutional. Posner and Easterbrook argue that ordinance doesn't necessarily promote health and safety of others because it reduces available resources to improving housing by cutting Ls' profits. Ls will be forced to charge more rent and will screen more closely because of cost of renting to poorer people. Principal beneficiaries will be middle class people to whom renting will still remain profitable

c) General Concepts: The State of the Nation’s Housing 2011i) Main Points

(1) No Free lunch: Housing quality comes with a cost. Distributive justice was to help people who can’t afford homes be able to afford it. (a) If owners can’t get money because the tenants are too poor or rent is too low, will let

the quality go to hell.

(b) So you improve quality but do it at a cost: higher costs and disinvestment by landlords. Basically, because we insist on quality, people can’t afford much of housing. People have to spend so much of their income on housing.

ii) Litigation can succeed where politics fail: litigation can produce different effects than politicsiii) Litigation-based reform can point to the way

(1) Gottrell : Chicago case in which there was a discrimination order. Judge says we will help these people move. Offered a limited number of the people to get vouchers or certificates to help them relocate and gave them social services. This had positive results. Lessened the people’s mental stress. So much you can do with a voucher

iv) Public information combined with the threat of litigation can be a powerful way of creating change. Public information allows people to see what is going on in the market and issues can be debated and discussed. This can lead to change(1) Biggest gains in housing had to deal with the flow in capital. The Home Mortgage

Disclosure Act: told lenders that they had to say how many loans they were making and where they were making them. So people observe that the level of lending in minority neighborhoods was very low. Lenders tried to show that it was lower because people there have less money. BUT, studies showed that minorities were applying for loans and were being denied them

(2) Information disclosure shows the problems

Property and Economic Regulation: Lochner Era1) Property and Economic Regulation:

a) Rulei) Our Constitution does not say that there is a right to property. Just says that you cannot be

deprived of property without due process of lawii) Lochner Era: Courts deciding the wisdom of the law. Courts strictly scrutinizing the

legislatures and the legislature’s actions.iii) Lochner court viewed legislative enactments affecting property rights with high degree of

skepticism. Simply calling something “a public purpose” was not sufficient to make police powers justifiable: the ends and the means must both pass judicial scrutiny.

b) Case Summariesi) Calder v. Bull S-5 p. 1: The Bulls, the stated beneficiaries of the will, were denied an

inheritance by a Connecticut probate court. When the Bulls attempted to appeal the decision, they found that a state law prohibited appeals not made within 18 months of the original ruling. The Bulls persuaded the CT legislature to change the restriction, which enabled them to successfully appeal the case. Calder, the initial inheritor of Morrison's estate, took the case to the Supreme Court arguing that law Constitution prohibits ex post facto laws. (1) Held: The legislation was not an ex post facto law. The Court drew a distinction between

criminal rights and "private rights.” Ex post facto laws are for criminal cases only! (2) Justice Chase (natural rights, low deference to legislatures): The right of property arises

from the social contract. There are limitations to legislatures rooted in natural law. Men enter into government as part of social compact (Locke); Right of property in its origin could only arise from compact whether express or implied. Power of courts to overrule legislature should be limited by principles that undergirded social compact. However, legislatures cannot “take from A and give to B.” Doesn’t think that property is a pre-political right

(3) Justice Iredell (Positivist, high deference to legislatures): legislature is accountable but to the people (like Rousseau, Blackstone, Felix Cohen), and only in extreme cases should courts strike down their acts as unconstitutional. People disagree about rules of social compact under natural law. Doesn't want to give judges too much power by allowing

them to determine natural law. We have to stick to the language of the text. There are different interpretations of natural law and courts should not impose their interpretation.

ii) Lochner v. New York S-5 p. 5: The Bakeshop Act prohibited bakery employees from working for more than sixty hours per week or ten hours per day (do this for health and sanitation reasons). Lochner permitted an employee to work in his bakery for more than sixty hours in one week and was convicted of his second offense and fined. Conflict between 14 th amendment right to contract (between employers and employee) and the police powers of the state to maintain safety and health.(1) Held: statute unconstitutional because state police power has been overextended here:

law not necessary to safeguard public health or health of bakers. Due process violated as this is unreasonable, arbitrary exercise of legislature power. Ends are not proper: Bakeries don’t endanger bakers’ health. Clean and wholesome bread does not depend on the number of hours a baker works. The occupation of baking has never been considered an unhealthy one. The 60 hours number is arbitrary. Looks at the purpose of the statute and the means to accomplish that purpose. Low deference to legislatures

(2) Harlan (dissent): Court should apply lower level of scrutiny to means and ends -- if can find rational basis, then should uphold statute (deference to legislature not automatic but more important than as regarded by Majority). Court not free to scrutinize ends.

(3) Holmes (dissent): (like Iredell in Calder v. Bull) thought protective legislation was foolish but constantly voted to uphold because of his belief about judicial role and separation of powers -- thought judges should defer to legislatures. Rejects entire means/ends analysis. Constitutional reasonable argument that statute would infringe text and traditions of our people and our law (unlike Iredell, can’t say just text: admits that text has ambiguities)

iii) Coppage v. Kansas S-5 p. 11: constitutionality of statutes prohibiting "yellow dog" Ks, requiring employees not to be members of unions(1) Decision : statute unconstitutional on grounds that interferes with exercise of personal

liberty and right of private property, which includes right to make employment Ks, and is not reasonable use of state police power. Property as composed of promises. Contracts as a form of wealth.

(2) Rationale (a) LIBERTY: employee should have right to sell labor on whatever conditions he

wants(b) PROPERTY: expands notion of property by including right to make K’s for

acquisition of property, which in turn includes right to make employment K’s. bargaining power, salary is in the nature of freedom; they are formally equal in that they both share in the freedom to make Ks, though

New Deal Era1) New Deal Era

a) Rulei) New Deal Era: Legislatures decide the wisdom of the law, not courts. So long as the law is

not arbitrary or capricious, the court will uphold it. If can find rational basis, then should uphold the statute

b) Case Summaries:i) Nebbia v. New York S-5 p. 25: The New York legislature established a Milk Control Board

that could “fix minimum and maximum retail prices” for milk sold within the state because the price of milk was dropping too much and the income of the farmer was below the cost of production. Mr. Nebbia, an owner of a New York grocery store, was convicted of selling milk for prices in excess of the price set by the Board.

(1) Since the price controls were not “arbitrary, discriminatory, or demonstrably irrelevant” to the policy adopted by the legislature to promote the general welfare, it was consistent with the Constitution.

(2) Rationale(a) PROPERTY, LIBERTY: Property and K rights are NOT absolute(b) PUBLIC WELFARE as fundamental as PRIVATE PROPERTY: “Subject only to

constitutional restraint the private right must yield to the public need.”(c) Milk industry is not public utility but private nature of business doesn't necessarily

remove it from realm of regulation(3) Turning Point: start seeing that courts are not supposed to question the wisdom of the

law. The legislature deals with the wisdom of the law, the courts are only supposed to deal with the constitutionality of the laws

ii) West Coast Hotel Co. v Parrish S-5 p. 29: Elsie Parrish, an employee of the West Coast Hotel Company, received sub- minimum wage compensation for her work. Parrish brought a suit to recover the difference between the wages paid to her and the minimum wage fixed by state law(1) The establishment of minimum wages for women was constitutionally legitimate. The

Court also noted that employers and employees were not equally "free" in negotiating contracts, since employees often were constrained by practical and economic realities. This was found to be especially true in the case of women. So want to protect women(a) This was the first case that really showed us that the Lochner era was over. If not

arbitrary and capricious, we will defer to the legislature. No more strict scrutiny like in the Lochner era

iii) Ferguson v. Skrupa S-5 p. 33 A Kansas statute made it a misdemeanor for any person to engage in the business of debt adjusting. It was challenged as a violation of the Due Process Clause of the Fourteenth Amendment(1) Statute is constitutional because "it is up to legislatures, not courts, to decide on the

wisdom and utility of legislation." Close to backing off of ends/means scrutiny altogether; states can do pretty much anything they want to absent contravention by specific federal const./stat. prohibition. Extreme deference to legislatures. Courts do not substitute their social and economic beliefs for the judgment of the legislative bodies that are elected to pass laws

Takings: Up until 1987 or so1) Takings: Gilbert p. 404

a) Rulei) 5th Amendment: "nor shall private property be taken for public use without just

compensation” Limits gov’t in its(1) Power to take property through eminent domain(2) Freedom to regulate property

ii) Eminent domain: power of government to force transfers of property from O’s to itselfiii) History of Takings Law

(1) Eminent domain can be traced back to ancient Rome where property could be taken for public property

(2) Eminent domain also came from British who used eminent domain. It seems like British may have done it because it was custom. This is an attribute of sovereignty

iv) Federal solution v State solution:(1) Some states have not put any restrictions of eminent domain, some have only put a few

restrictions

(2) Some states have tried to find a middle ground between “anything goes” and having some restrictions. This middle ground could be that the court should remand these cases to ensure that the legislature has done its homework and has reason to rule in a certain way

v) Duty to compensate is justified because it prevents government from abusing its taking power and on grounds of fairness

vi) By the time Berman comes around, SC had established 3 things(1) Public use is a condition on the takings power. Does not mean whatever the legislature

says is “public”(2) It was settled that public use exception does not mean that private person A cannot be

given to private person B(3) Public use extended to takings for abating a public nuisance affecting health or welfare

vii) General rule : where exercise of eminent domain is rationally related to any conceivable public purpose, government may “take” property (deference to legislature) (so long as it pays just compensation)

viii) Berman rule: Public purpose can still be satisfied even if you are technically taking property from person A and giving to person B. Public use = public purpose

ix) Poletown rule: if there is a clear and significant public benefit, it is not a taking even if there is a private benefit as well.

x) Hawaii Housing Rule: if the taking is rationally related to a conceivable public purpose, then it is not a taking. Legislature just needs to have a rational, legitimate purpose.

xi) County of Wayne rule (test a bit stricter than other cases. states can and do take a much stricter stance by applying a strict per se rule): The Court indicated that condemned property transferred to a private entity could meet the public use test in only one of three way(1) There must be a public necessity of the extreme sort that requires collective action ex)

railroads, canals(2) Property remains subject to public oversight after transfer to a private entity(3) Property is selected because of facts independent of public significance rather than the

interests of the private entity to which the property is eventually transferred ex) public health and safety

xii) Kelo rule: economic development is a public purpose!xiii) Overall: low scrutiny. Deference to the legislature. Courts are not place for empirical

debate about wisdom of taking. See this in the New Deal cases aboveb) Case Summaries

i) Berman v. Parker (1954) S-5 p. 35: Congress passed the District of Columbia Redevelopment Act, creating the District of Columbia Redevelopment Land Agency, whose purpose would be to identify and redevelop blighted areas of D.C. Congress gave the new agency the power of eminent domain. Berman owned a department store in one blighted area targeted by the commission and objected. Man says that his store was not blighted and that this is therefore, unconstitutional. Also says that you can’t take land from Businessmen A and give it to Businessmen B.(1) Held: This taking was constitutional. This public use. Just because it is accomplished by

private means does not mean that it is not a public use. It is okay to have a comprehensive plan and go by building by building.

(2) Huge turning point because before, we only saw taking as public purpose for dealing with harm. Now, we see taking as a public purpose for dealing with improvement. Property can pretty much be taken for any reason

(3) Standard for public use is more of a more rational basis language. “It is not for the courts to oversee the choice of the boundary line nor to sit in review on the size of a particular area.”

(4) Public use is broadly construed to mean public purpose!!

(5) Video: Promises not fulfilled, compensation that was not enough economically or cover for other costs, massive displacement of persons. Chief beneficiaries of warranty of habitability seem to be middle class people and for urban renewal the middle class and upper middle class

ii) Poletown Neighborhood Council v. City of Detroit (Mich. 1981) S-5 p. 49: General Motors needs a suitable plant site in the city. A site was found, and the city uses eminent domain to evict the residents from their homes because wanted to provide jobs, keep GM from moving, improve the tax base. Plaintiffs challenge the constitutionality of using the power of eminent domain to condemn one person’s property to convey it to a private person. (Case seems different than Berman because in this case, you knew the land was being taken from a private person to a private business. In Berman, you didn’t know where the land was going)(1) This was not a taking. Court applied heightened scrutiny and the public interest is the

predominant interest being advanced (public must be primary beneficiary, public benefit must be clear and significant.) There is clear public benefit; private benefit is incidental. The Legislature has determined that governmental action of the type proposed here meets a public need and serves a public purpose. The court cannot reverse it unless it is arbitrary and incorrect.

(2) The power of eminent domain is to be used here to accomplish the essential public purpose of alleviating unemployment and revitalizing the economic base of the community. The benefit to private interest is merely incidental

(3) Dissent (Fitzgerald): This holding makes eminent domain endless. Always could give up land to business.

(4) Dissent (Ryan): violates sovereignty(5) Movie: shows the government tearing down places that has sentimental value. People

marched and demonstrated, but eventually they left because they simply could not win. iii) Mississippi Land Case : Nissan was trying to build a factory in Mississippi. State uses

eminent domain to get property. Two black families refuse as there families had lived there for generations. Family wins out! Won because:(1) Plaintiffs got started early, articles were put in the New York Times and thus, they were

able to have a negotiation where they found that Nissan did not actually need all that landiv) Hawaii Housing Authority v. Midkiff S-5 p. 41: Government condemns L’s reversionary

interest in order to break up land ownerships oligarchy and reestablish a free market by selling it to the tenants or lessees who had applied for fee simple ownership. (1) The Hawaii Act is constitutional because it was rationally related to a conceivable public

purpose and was a compensated taking. The Supreme Court gave deference to the state’s determination of what was a public use because it was rational and legitimate (did not want land to be in the hands of a few).

(2) In our constitutional system, it is legislatures, not courts that can find facts on socio-economic factors. In our system, absent constitutional text, it is legislatures and not courts that try to make these determinations

(3) Standard: Rationally related to a conceivable public purpose(4) See the court having deference to economic legislation such as in Skrupa

v) Wayne v. Hathcock S-5 p. 55: Wayne County wanted to acquire property for development as an “aeropark” with facilities and services for business, technology, industry and conferences. Wayne County justified its use of condemnation to transfer property to a private entity to achieve the public purposes of economic development i.e., job creation, property tax base expansion, and tax base diversification(1) The Court indicated that condemned property transferred to a private entity could meet

the public use test in only one of three ways:(a) There must be a public necessity of the extreme sort that requires collective action

ex) railroads, canals

(b) Property remains subject to public oversight after transfer to a private entity(c) Property is selected because of facts independent of public significance rather than

the interests of the private entity to which the property is eventually transferred ex) public health and safety

vi) Kelo v. City of New London S-5 p. 163: New London approved a development plan that was “projected to create in excess of 1,000 jobs, to increase tax and other revenues, and to revitalize an economically distressed city, including its downtown and waterfront areas.”(1) The city's taking of private property to sell for private development qualified as a "public

use" within the meaning of the takings clause. The city was not taking the land simply to benefit a certain group of private individuals, but was following an economic development plan (economic development is a public purpose)

(2) Public use=public property(3) This case differs from other cases because in this case, nothing was wrong with the

property! (4) The court construes ‘public use’ very broadly and gives deference to the decisions of the

city. States are given flexibility and can basically do what they want(5) Kennedy (Concurrence): Kennedy clarifies that the benefit must be not incidental for the

public. Under rational review, if the benefit conferred is purely private, or only incidentally public, the taking is to be denied

(6) O’Connor (Dissent): This hurts people who have little influence and power in the political process. No affirmative harm here. Taking good land and good homes. Is worried about solving problems by taking land just so it could be used for a higher purpose

(7) Thomas (Dissent): He uses a textual argument for actual and original meaning of ‘public use’ and declares it to be much more narrow than the court establishes. In addition, the loss of the home will constitute more than an objective realized loss; the homeowners get nothing for the subjective value of their homes, nor for the indignity suffered for having to move

Regulatory Takings: 1) Regulatory Takings

a) Rulei) All these ad hoc factual inquiries are bad because no judicial fairness. This hinders growth

seeking legislatures who may want to do something for public good but don’t know how court will view it

ii) Inverse Condemnation: the claimant rather than the government institutes the suit, alleging that a taking has occurred and seeking recompense for it. A forced purchase, rather than a forced sale, is the claimant’s objective ex) Lutheran Church case(1) Regulatory action can destroy the use and enjoyment of property just as effectively

as physical occupation or destruction caniii) Pennsylvania Coal Rule/Diminution of value test: if the diminution in value is super high,

then it will be considered a takingiv) Conceptual Severance: refers to the different ways one can look at the question of how much of a

diminution in value a property owner has suffered as a result of the adoption of some regulation. In Pennsylvania Coal, there had been an ACTUAL severance of the property subject to the regulation, that is, the subsurface mineral rights. Consequently, as a result of the regulation, the property owner (the coal company) suffered essentially a total loss of its property. Had the mineral rights still been owned by the surface landowner, the regulation would have taken only a small part of the landowner's value, most of which inhered in the surface rights(1) Easier example: regulation wipes out all economic uses for half of someone's property but the

remaining half retains its value. Under the Brandeis/Brennan view, which rejects conceptual

severance, the landowner has lost, at most, 50% of his total value. But if we conceptually sever the regulated half from the unregulated half, we would say that the landowner has lost 100% of the value of the regulated half. Thus, conceptual severance is a verbal tool popular among those who want to classify more regulations as takings, because by severing the property into its regulated and unregulated pieces, we decrease the denominator of the takings fraction and thereby increase the extent of the diminution in value caused by the taking.

v) Hadacheck rule/Nuisance Rule: If legislature acts to prevent public nuisance or noxious use (condition emanating from P* property that's harmful to others), then no taking and no compensation

vi) Penn Central Multi-factor balancing test:(1) Economic impact of the regulation on the claimant(2) Whether the regulation interferes with investment-backed expectation(3) Character of the governmental action: taking is more readily found when the interference

with property can be characterized as a physical invasion by government.vii) Loretto rule: when invasion reaches permanent physical occupation, it’s always a taking, no

matter how small or insignificant viii) Lutheran Church rule: temporary takings must be compensated!ix) Nolan rule: where a permit condition serves the same legitimate police power, then the

condition would not be a takingb) Case Summaries:

i) Hadacheck v. Sebastian p. 1096: Hadacheck was convicted of a misdemeanor violation of an ordinance prohibiting establishment or operation of a brick kiln within the City Limits of Los Angeles. At the time of purchase, the land was outside the city limits. The land was on a valuable bed of clay of fine quality that far exceeds the lands value for residential use and he had a lot of machinery on property for manufacturing bricks. He claimed the ordinance was unconstitutional because it was directed against him as such operations existed without regulation throughout the area(1) Retroactivity: when I bought this property it was not within the city limits, but it was

annexed within the city(2) Hadacheck says that he is not smelly and not noisy, so he is not a nuisance. Generally, a

nuisance had to deal with livery stables in neighborhoods and noise. Court says things have changed

(3) New categorical rule: nuisance regulation is an exercise of the police power for which compensation need not be paid

(4) Nuisance control measure: curb a public bad! ii) Pennsylvania Coal Co. v Mahon (1922) p. 1103 Gilbert p. 409: Deed conveyed only surface

rights to the homeowners and expressly reserved the right to remove the coal underneath as a separate estate. The Kohler Act prohibited companies in Pennsylvania from mining of coal in such a way as to cause the subsidence of homes and surfaces near improved properties. PA Coal is suing because the Kohler Act rendered the deed useless.(1) Holmes says this is a taking. Limitations on the use of land through the police power

have limits and will be considered a taking under the eminent domain power when the diminution in value of the property reaches a certain magnitude, which depends upon the particular facts. The Kohler Act went beyond a regulation and became a taking. Supports conceptual severance.

(2) Diminution of value test: if the diminution in value is super high, then it will be considered a taking. This regulation goes too far. If the nuisance control measure creates too much of a burden on the property owner, it is considered a taking.

(3) Conceptual severance: This reg. destroys all value of subsurface estate. (Lost 100% of total value). Reassigned the right to someone else who had not contracted for it.(a) A whole estate has been taken

(4) Brandeis (Dissent): Not a taking. He says that the use of the mining out of the columns would have been a noxious use of the land (if we can regulate a nuisance, how can we not regulate here). He doesn’t call this is nuisance but says that this is like a nuisance(a) Anti-conceptual severance: have to compare value of coal kept in place with value of

all other parts of landiii) Penn Central Transportation Co. v. City of New York (1978) p. 1113: New York City passed

a regulation that prevented Penn Central Transportation from adding an office building structure to the top of Grand Central Station.(1) No taking. Regulation upheld. Historic preservation is a legitimate reason for eminent

domain. Preventing the construction of a 50-plus story addition above the station was a reasonable restriction substantially related to the general welfare of the city

(2) Multi-factor balancing test:(a) Economic impact of the regulation on the claimant(b) Whether the regulation interferes with investment-backed expectation (what you

thought you were going to do with the land)(c) Character of the governmental action: taking is more readily found when the

interference with property can be characterized as a physical invasion by government.

(3) Whether the regulation interferes with investment-backed expectation: not frustrated here because did not prohibit all construction. Could possibly still get permit for other kinds of construction

(4) Legislation designed to promote general welfare always burdens some more than others(5) Conceptual Severance: the owners and developers were not deprived of value over all

their estates in the area, so it’s not a taking (biggest denominator we can think of)iv) Loretto v. Teleprompter Manhattan CATV Corp (1982) p. 1082: A NY law authorized a

cable television company to install its components on the property of a landlord, who may not interfere with the installation and may not demand payment from any tenant for permitting CATV, or demand payment from any CATV company in excess of an amount found to be reasonable by the state, which is set at $1(1) A permanent physical occupation authorized by government is a taking without regard to

the public interests it may serve. Such an appropriation is a serious invasion of a property owner’s interest.The size of the area occupied under the taking is not important in this context.

(2) Standard -- reassertion of per se takings rule re: physical occupation(3) Rationale : when invasion reaches permanent physical occupation, it’s always a taking (4) Dissent: The dissent would not hold that there has been a taking because the invasion is

slight and does not amount to a large physical intrusionv) Keystone Bituminous v. DeBenedictus S-5 p. 71: By passing the the Bituminous Mine

Subsidence and Land Conservation Act, the Pennsylvania Legislature empowered the Pennsylvania Department of Environmental Resources (DER) to regulate underground coal mining that damaged structures on the surface. When implementing the Act, DER prevented coal miners from removing more than 50% of coal from mines located beneath buildings. Historically, coal miners acquired rights to "mining estates" separate from the property owned on the above "surface estates." Ever since 1966, Pennsylvania has been more restrictive of coal mining practices. One restriction imposed by the DER since then is that "50% of the coal beneath structures protected by § 4" must be left unearthed to support the surface land above. Id. at 476-77. The petitioners' main contention was that their "support estate[s] had been entirely destroyed" because they had to leave 50% of the coal beneath the surface in place, meaning that they could only mine the mineral estate while leaving the support estate untouched. In answers to interrogatories, the petitioners claimed that from 1966 to 1982 their land use rights at their 13 coal mines had been restricted to the point of a

taking because of the Subsidence Act. As a result, they claimed that they had to leave about 27 million tons of coal in place(1) No taking; distinguished from PA Coal on grounds that here legislature acting to stop

signif. threat to public welfare (prevent coal mine subsidence damage) and no evidence that statute makes is impossible for Keystone to profitably engage in business or undue interference with investment-backed expectations

(2) Factors to consider: A regulation constitutes a taking if it(a) 1) "'does not substantially advance legitimate state interests,'" or(b) 2) "'denies an owner economically viable use of his land.'

(3) Distinguished from PA Coal:(a) Subsidence Act benefits many; Kohler Act just benefits a few private parties(b) Mining in Keystone is compared to a public nuisance(c) The last difference between the two cases was the diminution in value of the coal

companies' properties. In PA Coal, "mining of 'certain coal'" was deemed "commercially impracticable" as a result of the Kohler Act. In Keystone, the court held that there was no "show[ing of] any deprivation significant enough to satisfy the heavy burden placed upon one alleging a regulatory taking.

(4) Even though PA allow support estate as separate interest, land must be viewed as a whole (no conceptual severance)

(5) the Subsidence Act was a legitimate exercise of the State's police power because it was meant "to protect the public interest in health, the environment, and the fiscal integrity of the area."

(6) PA legislature specifically found that there was imp. public interest here(7) Standard -- Glendon notes that there seems to be Hawaii Housing-like deference to the

legislature here, where nothing amts to a takingvi) First Evangelical Lutheran Church of Glendale v. L.A. County (1987) S-5 p.119: The First

Evangelical Lutheran Church of Glendale bought 21 acres of land and constructed Lutherglen, which is essentially a church camp site. A fire destroyed the acreage above the canyon and a flood then wiped out Lutherglen. In response, the County of Los Angeles issued an ordinance, which prohibited the reconstruction of any buildings in the canyon.(1) Decision -- remand to determine whether flood control measure was a taking, but held if

Court does find a taking, compensation must be paid starting from time that taking 1st occurred (that it’s temporary doesn’t make it not a taking)(a) Not clear if there has been a taking or not. If it turns out that it has been a taking,

compensation will have to be paid between the enactment and the time in which it was decided that there was a taking. Where the government’s activities have already effectuated a taking of all use of property, no subsequent action by the government can relieve it of the duty to provide compensation for the period during which the taking was effective

(2) Temporal Conceptual severance: you are being deprived entirely of a certain time slice of your property and have to be compensated for it

(3) Stevens, Blackmun, O’Connor (Dissent): (a) Majority's decision will inhibit orderly, fully informed planning by government

agencies because cautious officials will avoid action that might later be challenged as constituting a temporary taking

vii) Nollan v. California Coastal Commission (1987) p. 1170: The Nollans have appealed from a decision of the California Court of Appeal, which ruled that the California Coastal Commission could condition its grant of permission to rebuild their house on the transfer to the public of an easement across their beachfront property.(1) Held: this was a taking because there is no nexus between the condition (easement) and

the legitimate government interest for having the building permit (viewing the beach).

(a) The reasoning behind having the permit was to help with the public view of the beach. That has nothing to do with the easement. If you want an easement, you must pay for it.

(2) if California had simply required the Nollans to make an easement across their property available to the public on a permanent basis in order to increase public access to the beach, rather than conditioning their permit to rebuild their house on their agreeing to do so, the Court has no doubt that there would have been a taking

(3) Dissent: the condition does not amount to a taking because the Nollans’ proposed building blocks visual access, while the Commission seeks to preserve lateral access, and those two concerns are closely enough related to be rational

viii) Holdel v. Irving (1987) S-3 p. 27-33: strikes down statute preventing certain Native Americans from devising their miniscule interests in real property(1) No one considers this a taking case. Why?

(a) Some may have just thought this deal with Indian law and nothing more(b) It wasn’t a commercial property case

ix) Pennell v. San Jose (1988) S-5 p. 127: San Jose enacted a rent-control ordinance in an attempt to alleviate the problem of skyrocketing rent prices due to the growing shortage of and the increasing demand for housing. Part of the ordinance allowed a Mediating Hearing Officer to consider as one factor "hardship to a tenant" when evaluating rent increases imposed by landlords. 7 factors that need to be considered if you want to increase the rent by more than 8%(1) Held: not a taking. (2) Rationale: hardship of tenant bears rational relation to legitimate public purpose, welfare

of housing consumers(a) Under a Due Process standard requiring “arbitrary, discriminatory, or demonstrably

irrelevant to the policy,” the Court finds that the rent control legitimately advances the policy of affordable housing

(3) Scalia (Dissent): uses the means-end relationship test similar to the one in Nollan. Would find it a taking because there is no relationship between the rent control’s consideration of hardship on the tenant and the supply of affordable housing

c) General Thoughtsi) Gregory S. Alexander - "Takings, Narratives, and Power"

(1) deals with Keystone, Nollan, 1st English, Irving, Pennell(2) Says these cases are stories about power relationships between parties. At the core,

takings deal with power. Judges have a picture in their mind of these big corporations and power-taking people who have less bargaining power property. This seems to be about power relationships

(3) Legal realist take: cases not so much about individual s and s but about structural power imbalances and how judges believe society is and should be organized.

(4) Supports view that who parties are matters a lot.(5) Alexander sees different images of regulators, property owners, property itself(6) Weakness: a bit simplistic

ii) Richard A. Epstein - "Takings: Descent and Resurrection"(1) Deals with Keystone, Nollan, 1st English(2) Sup. Court has not set formula for takings cases, just makes "ad hoc factual inquiries"(3) Now appear to be hints that Court is prepared to recognize that "Takings Clause places

barriers in the way of unbounded social planning, just as 1st A. places barriers in how Congress and the states may regulate religion or speech"

(4) Takings is all confused and contradicted. He says the Takings Clause is easy to understand/clear

iii) T. Nicolas Tideman - "Takings, Moral Evolution, and Justice"

(1) The point of these cases: land and natural resources are common heritage of humanity and must be managed to provide benefits to all

(2) Growing communitarian understanding that land and property has roots in common heritage. Land and natural resources are ours and must be safeguarded within imperfect institutions

(3) Protections that remain against diminution of value of land thru regulation can be seen as safeguards against potential excesses of executive power that might ruin it.

(4) Glendon: it is particularly hard to defend idea that all this is submerged in these cases; maybe Tideman is just inviting us not to concentrate so much on the holding of each case but to look at how much environmental protection legislation is being upheld

(5) Trying to protect land for future persons. iv) Frank Michelman - "Takings, 1987"

(1) Sees court moving towards reformalization of regulatory takings doctrine, away from balancing test of 1987-88 Term. Moving towards direction of bright lines rooms.

(2) Characterizes reformalization as series of categorical either-or: (a) EITHER (a) regulation is categorically a taking of property because(b) Works a permanent physical occupation (however practically trivial) or private

property by government, or perhaps, specifically undermines a "distinct investment -backed expectation" OR

(c) Totally eliminates the property's economic value or "viability" to its nominal owner(d) OR (b) regulation is categorically not a taking

(3) There was a lot of criticism of (b) in class as not being adequately backed up(4) Glendon notes that he seems to have predicted movement toward Lucas (see below)(5) Weakness: that he seems to be ideological “in all the years…the Court has never once

clearly applied the open-ended balancing test in favor of a takings claim and against a regulating gov’t.” He is pro-govt

v) Susan Rose-Ackerman - "Against Ad Hocery: A Comment on Michelman"(1) Believes opposite of Michelman -- recent cases show continuation of trend toward ad

hoc balancing; Court doesn't appear to be articulating consistent formal principles at all in takings area but that it should try to (any bright-line rule better than present circs.), to provide predictability

(2) Ad hoc balancing particularly difficult to do in Takings because of imp. of investment-backed expectations

(3) Sees the recent laws as ad hoc balancing but that what takings law needs is a good does of formalization. These cases have no clear trend. Risk hurts regulators. Took counsel of worst fear that would have too little basis in planning and investment.

Post 1987 Regulatory Takings

1) Post 1987 regulatory takingsa) Rules:

i) Lucas Rule: Land use regulations that prohibit all economic uses of property are takings. UNLESS the prohibited uses are common law nuisances (if it is a nuisance then the person never had a right to do it anyway). Exceptions for background principles!

ii) Dolan Rule: taking unless city shows "rough proportionality" b/t condition and O's proposed development (burden of proof on government). Rough proportionality between the required condition and the nature and extent to the impact of the proposed development.

iii) Palazzolo Rule: A regulation may be found to constitute a taking if it goes too far in light of the property owner’s reasonable investment backed expectations, even though it does not deprive the owner of all economically viable use

iv) Tahoe Rule: It is not a taking if the economic value was only taken for a limited amount of time and would later be reinstated.

b) Case Summaries:i) Lucas v. South Carolina Coastal Council DK p. 1131 Gilbert p. 408: Lucas purchased two

beachfront lots for $975,000 in 1986. He intended to build single-family homes on each lot. But, in 1988 the South Carolina legislature passed the Beachfront Management Act that barred the building. The Act’s stated purpose was to protect property from storms, tides and beach erosion and as an environmental protection. Thus, the property became valueless. Restriction rendered the property valueless(1) This is a taking! Economically valueless claim is questionable because some people may

just want to relax and not build on the property(2) Held: that where O has to give up all beneficial uses for common good, there's a taking

but this particular case was remanded to see if facts here would fall under SC common law nuisance doctrine

(3) Rule: -- "categorical" rule: IF regulations deprive O of all economically valuable use of their property AND they do not prohibit a use that was unlawful under common law nuisance or property law, THEN they effect taking

(4) A state could not deny a landowner all economically beneficial use of a property; however, it made an exception for regulations which were permitted by "background principles of the state’s property and nuisance" law.

(5) Background Principles: limited the rights of landowners who purchased their property after the limitations where enacted

(6) Rationale:(a) One of the reasons that the nuisance rule is under criticism because as in this case,

you can have a regulation that abate a nuisance (prevents harmful use) and confers benefits. This regulation abates a nuisance and confers benefits (helps with tourism)

(b) PRO (total deprivation of beneficial use taking): it’s equivalent to a physical appropriation

(7) Scalia retelling story about pattern he sees in takings cases, as opposed to overruling them: (a) Saw in PA Coal, buried within "too far" language, idea that total wipe - out is always

“too far” -- this was hard-edged category even under discretionary balancing test. This is a new standard of the type that Rose-Ackerman hoped for.

(b) Scalia also deconstructs the courts category of nuisance: “nuisance” was really just primitive way of talking about state police power to regulate for public health and safety -- and such police power. Is now being extended to promote general welfare (i.e.: confer benefit) -- shouldn’t be.

(c) Scalia says we don’t usually see a total wipeout. (8) Conceptual severance: this issue is still alive. (9) Commercial buyers always search for zoning regulations so can see if they can develop

this land or not(10) Dissent: Blackmun, Stevens (Souter, separate statement)

(a) Property has not lost all economic value -- can still enjoy other attributes of Os, like right to exclude others, picnic, swim, camp, alienate property.

(b) State can prohibit O's use of property if harmful to public without compensation, so why does O's showing of total econ. loss prevent state from prohibiting O's use of property if beneficial to public? This is a nuisance case!

ii) Dolan v. City of Tigard DK p. 1178: Florence Dolan owned a plumbing and electric supply store and wanted to redevelop the site. The City of Tigard issued her a permit to expand, but it was subject to the condition that Petitioner dedicate a part of her property to the city to be used as a pedestrian/bicycle pathway. Also must dedicate land to the flood plan. The city

justified their request because the pathway would help prevent some flooding that would occur from a nearby creek with the expansion and it would also offset some traffic demands.(1) Decision - taking unless city shows "rough proportionality" b/t condition and O's

proposed development (burden of proof on government). No mathematical calculation is required but the city must make some sort of individualized determination that the required dedication (condition) is related both in nature and extent to the impact of the proposed development

(2) Bike plan dedication/easement: easement versus impact of the proposed development: have not shown that this development is going to increase the traffic so much that you need an easement so large. Singling out Dolan.

(3) Here, the city has never explained why a public greenway, as opposed to a private one, was required in the interest of flood control. Petitioner has lost her ability to exclude others, which is one of the most essential sticks in the bundle of property rights. It is difficult to see why recreational visitors walking on the land is sufficiently related to the city’s legitimate interest in reducing flooding problems along the creek, and the city has not attempted to make any individualized determination to support this request

(4) Heightened scrutiny. Make sure local gov’ts have done their hw. Need to assess the impact of their regulations on law

iii) Eastern Enterprises v. Apfel S-5 p. 143: In 1950 and 1974, the Coal Mining industry established a pension plan for its workers. Under the plans, workers believed they were to receive a pension and future healthcare. The healthcare aspects of the plan however, were disputed and the Coal Companies did not provide the health care as expected. As time wore on, the pensions slowly sank into depression as more and more coal operators withdrew from plan. Eastern Enterprises was a signatory to the pension plans since 1950 until it sold off its holdings in coal operations in 1987. In 1992 Congress passed the Coal Industry Retiree Health Benefit Act of 1992 which required former Coal Operators to pay into the pension in certain situations when the former employee had worked for the company. Such requirement was in place even when the operator no longer was in the Coal Industry. Here, Eastern Enterprises was required to pay into the pension plans for some 100 past employees even though it had sold off its holdings in coal operations(1) The statute violates the Penn Central v. New York factors and is thus a compensable

taking. Specifically, Eastern Enterprises' (1) economic impact is substantial, (2) the Act interferes substantially with distinct investment backed expectations, and (3) the nature of the government action is unusual as it requires certain individuals to bear a substantial burden, and it does so retroactively

(2) The Plurality argued as follows: (a) The economic impact of the Coal Industry Retiree Health Benefit Act of 1992 was

substantial in that it forced Eastern Enterprises to contribute millions of dollars to a pension fund for employees it employed in the 1950s and 1960s solely because those payments could not be allocated to other Coal Companies that were currently operating in the coal industry. The Plurality said that the retroactive effect of the statute worked a substantial economic injury on Eastern that could not have been anticipated

(b) The statute interferes with distinct investment backed expectations of Eastern Enterprises for much the same reason. In 1987 Eastern Enterprises sold off its remaining holdings in Coal operations and as such completely removed itself from the industry. The statute's requirement that Eastern Enterprises now undertake the obligation at issue clearly interfered with expectations of Eastern when it sold off its interest in coal operations.

(c) The nature of the government action was such that it retroactively applied a substantial economic burden on Eastern Enterprises and such is unusual. The

character of the government action is substantial and invasive. The balance of the factors leads towards a finding of an unconstitutional taking requiring just compensation.

(3) Justice Kennedy concurs in judgment, but feels that the takings analysis employed by the Plurality is unnecessary. Kennedy explained that the retroactive nature of the law results in its unconstitutionality without having to resort to a takings analysis. Justice Kennedy goes even further to state that the takings analysis of the Plurality is not supported by the prevailing case law as no specific property interest was taken as a function of the statute. Says this is not a takings case, this is a due process case! This is the first time since Ferguson v. Skrupa where a justice has put this all on deprivation of property violating due process.

(4) Breyer, dissent: He believes this is a due process case. It doesn’t look like the property issue that we discuss with takings; this deals with money. Property in takings might mean something different than property in due process. This is not a taking because only deals with economics and this is not enough. There is no need to torture the takings clause to fit this case. The matter should be evaluated under the due process clause and traditional notions of fundamental fairness. The law imposes upon Eastern the burden of showing that the statute, because of its retroactive effect, is fundamentally unfair or unjust. Eastern has failed to show that the law unfairly upset its legitimately settled expectations. Eastern continued to obtain profits from the coal mining industry. There was a relationship between coal companies and workers and relationships lead to legal obligations. Not unfair for Eastern

(5) Thomas: retroactivity. How should we treat retroactivity? Maybe we should look at Calder v. Bull. Maybe retroactivity should not only deal with criminal cases.

iv) Palazzolo v. Rhode Island DK 1152: Anthony Palazzolo with SGI (a corporation that he owned) own a waterfront parcel of land in Rhode Island. Most of the property is salt marsh, subject to tidal flooding and would need fill and draining work to be suitable for construction. In 1971, Rhode Island enacted a wetlands regulation that designated the marsh areas to be protected coastal wetlands that could not be developed on. Deprives 90% of his property.(1) Held: Owner was not deprived of all economically valuable use. Remanded for

consideration under the Penn Central analysis. On remand the court would need to make a determination of whether the regulations went too far so as to constitute taking, considering the owner’s investment backed expectations. Eventually found that this was not a taking.

(2) THE COURT HELD THAT PURCHASE OF LAND AFTER ENACTMENT OF A REGULATION REDUCING OR DESTROYING THE LAND’S VALUE DOES NOT FORECLOSE TAKINGS CLAIMS. A REGULATION THAT WOULD OTHERWISE BE A UNCONSTITUTIONAL TAKING IS NOT TRANSFORMED INTO A VALID MEASURE SIMPLY BECAUSE THE AFFECTED LAND WAS PURCHASED AFTER THE REGULATION

(3) Background Principle: The Supreme Court agrees that the land has not been deprived of all economic value but disagrees with the theory of RI that once a law is enacted it becomes a background principle to be considered under the rule in Lucas.

(4) This case stands for the principles that being the successor in title after a regulation has gone into effect does not preclude you from bringing a Penn central or Lucas challenge to that regulation as a taking

(5) Conceptual Severance: SC expressed some sympathy for the argument that the upward parcel could be distinct and separate from the rest of the parcel (some land was good for development and some land was not). However, the Petitioner did not properly raise the argument at the state court level such that the Supreme Court was only considering whether it was a taking as to the entire parcel as a whole. However, the question of what

was the proper denominator, i.e. whether the whole property or just a fraction of the property, must be considered was a question left open for the future

(6) Any diminution short of a TOTAL taking will be analyzed using the Penn Central framework (TOTAL INTEREST, BIG DENOMINATOR)

v) Tahoe-Sierra Preservation Council v. Tahoe DK 1158: This case involves two moratoria ordered by respondent Tahoe Regional Planning Agency (TRPA) to maintain the status quo while studying the impact of development on Lake Tahoe and designing a strategy for environmentally sound growth.  As a result of the two directives nearly all development on a substantial portion of the property subject to TRPA’s jurisdiction was prohibited for a period of 32 months. Thus, property owners sued because want to build and they argue that the economic value of land was taken for 32 months. (1) Held: Not a taking. “Logically, a fee simple estate cannot be rendered valueless by a

temporary prohibition on economic use, because the property will recover value as soon as the prohibition is limited.” Because the economic value was only taken for a limited amount of time, the economic value was reinstated after the moratorium. The moratorium is wise so you can have well thought out and intelligent development.

(2) Temporal Conceptual severance: relevant parcel is the entire parcel. Stevens say if it was taken for a really long time then perhaps it would be compensable. There is no temporal conceptual severance because would get value for the land as soon as the moratorium was over.

c) General Thoughts:i) After Tahoe, we have 4 new Justices, so new cases could technically go in the other directionii) Penn Central is still the basic framework used today along with two bright line rules rules

(1) Permanent physical occupation is still always compensable (2) A total wipeout is still always compensable

iii) The deferential approach to legislature continues except with exactions. Exactions get a closer look ex) Nollan and Dolan. Have a higher level of scrutiny because it is too tempting to use the occasion of a permit to act for dedication for land but also cash payments (impact fees)

iv) After Tahoe, it looks as though Stevens has beaten back the idea of conceptual severance. However, in Hodel v. Iriving, held that a near total wipeout of 1 stick is a taking for which compensation must be given

v) 5 things to think about from here :(1) There is an issue of diminution of value

(a) State cts have tried to put a number on the diminution of value(2) There is still an issue of what do we take as the relevant parcel. Ct would probably

would reject an all expansive (3) What are going to be the limitations on the state’s ability to redefine the limits of

property law ex) Palazollo(4) What is going to be the rule for nuisance? What will be the hard edged rule? Maybe the

rule will become a factor in the Penn Central factored test(5) Retroactivity

Exam Fall 2010

Second Question about Pruneyard, Ferguson v. Skrupa, Kelo & Palazolo

Student’s Proposed Rules (3)

(1) The court’s rules should be as precise as possible. Bright-line rules are better than standards and balancing tests are better than ad hoc decisions. The supreme court has been criticized for ad hoc and vague judgments which create uncertainity for parties, lawyers, and lower court judges

(2) Property rights are social and must serve (and can thus be limited for) the common good. Compensatory schemes like eminent domain are permitted as long as they are reasonable and serve the public good. Because strong property rights are critical to society (especially capitalist ones), however, they should be abridged as little as possible and generally only to deal with negative externalities: costs that should be borne by the party who creates them but, due to market failure, end up borne by others

(3) The court’s review should be limited to ensuring that property infringements are for the public good and, if uncompensated, are to deal with externalities. Otherwise the court should defer to the other branches for the policy details for 3 reasons: 1. Courts should respect the will of the people when possible and the other branches are more representative because elected. 2. The other branches are better positioned to make fact-specific policy determinations. 3. Evaluating policy would impose a heavy administrative cost on the court and create more ad hoc decisions, since policy making is fact specific

Pruneyardo Court held that although the 1st amendment rights of the private individuals do not

include the right to express speech on other’s private property, states can interpret their own constitutions to grant more expansive free speech rights to individuals, as long as the states permit the landowner to impose reasonable time, place and manner restirctions and so the speech does not disrupt the commercial activity

o Should give expansive 1st amendment rights. Like a town squareo Should be able to restrict free speech that disrupts commercial activities or be

compensated by gov’t for disruptiono In the interest of giving guidance to lower courts, the Oblivion court could copy NJ and

adopt its three-part Schmidt test (cited in New Jersey Coalition) to decide whether a shopping center can restrict speech: (1) Is the speech consistent with the normal use of the property? (2) What is the extent of the public invitation to use the property? (3) Does the speech interfere with the use of the property? Applying this test, the court should rule for the individuals

o (1), given the public "town square" nature of the shopping center it is consistent with the normal use of the property. Re. (2), given that the shopping center allows members of the public to go as they please without requiring them to actually buy anything, they are getting a benefit of the increased foot traffic and thus should bear it costs (namely, some people will use the invitation to make political speeches). Re. (3), as long as the speech isn't making the mall's economic activities impossible, the mall shouldn't be able to restrict it beyond reasonable time, place and manner restrictions.

Ferguson v. Skrupa (Due Process)o This situation deals with negative externalities. There is likely imperfect information in

the market as to the educational attainment of the debt-adjusters and the expertise needed. Thus, debt-adjusters will, at least in the short term, get more business than is economically efficient for them to get. Further, when they do a bad job, they will harm individuals beyond the immediate client, since debts are financial instruments that move fluidly around the economy. Thus, the aim of the legislation is appropriate.

o As to how the debt-adjusting should be regulated, the Oblivion court should defer to the legislature (for the reasons outlined in principle (3) above). I would personally prefer a market-based solution where the only regulation is that debt-adjusters must disclose their track records, educational attainment and inform the clients of the risks. Clients will then be able to choose the level of risk they are comfortable with, and overall prices should go

down, since debt-adjusters without law degrees will be cheaper. This, however, is a policy decision and is not for the courts to make

Kelo v. New Londono However, in this case, the court should apply extra scrutiny and ultimately rule against

the government, for two reasons: (1) The individual landowner is in a weak position versus the government and there is a high probability that her interests are not being fully represented, either in the activities of the legislature or in the compensation she will receive. (2) Where the property is being transferred to a private party, there is a danger that it will not be used for a public purpose, and some public oversight is necessary.

o To deal with these issues and to give clear guidance, the court could use the MI court's test in County of Wayne v. Hathcock, which overturned its earlier Poletown ruling and held that eminent domain where property is transferred to a private party would only be allowed in one of the following three cases:(1) Where the public necessity is of an "extreme sort otherwise impracticable" (e.g., railroads and other critical infrastructure that can only be built using eminent domain). (2) Where the private entity remain accountable to the public.(3) Where the selection of the land itself "is based on public concern" (e.g., condemning unsafe buildings and then incidentally giving them to a private company for redevelopment).

o This case does not fall into any of these categories. Downtown redevelopment to invite business is not like critical infrastructure, nor is the only way to accomplish it through sweeping eminent domain actions. Although the private redevelopment corporation in this case has been set up by the government, it is merely a middleman that will transfer the land to private companies that will be completely unaccountable to the public, and may not even use the land (as actually happened in Kelo!). Finally, the land the government seeks is not unsafe or unsightly, nor is the government's primary purpose incidental to the economic rationale.

Palazzolo v. Rhode Islando The first issue here is whether the fact that title to a property was acquired after a

regulation was passed constitutes a per se bar to challenging that regulation under the takings clause. The Supreme Court ruled that it did not create a per se bar because, otherwise, the government would have no reason to limit unreasonable regulations and future generations would suffer accordingly

o The court rejected the argument that its earlier decision in Lucas meant that "background principles" constitute a categorical takings defense because "[a] regulation or common law rule cannot be a background principle for some owner but not for others."

Same essay 2:

Vertical respect (federalstates). Horizontal respect (courtlegislature) Secondly, in the tension between rules versus standards, the Court's decisions in these cases

seems to favor rules. Fourthly, in the debate over constitutional interpretation, the court errs on the side of formalism,

choosing not to be judicially active. Then lastly, the court seems to give different weight to certain property rights in the "bundle of

sticks," generally deprioritizing the right to exclude and right to contract while favoring the rights to derive economic value of property.

Pruneyard: The Supreme Court held that a state can "adopt reasonable restrictions on private property as long as it does not violate the US Constitution." Here, the Supreme Court demonstrates deference to state/local government by giving states leeway to balance different rights (here, the right to free speech against the right to exclude) and only minimally scrutinizes

the statute (thereby defering to the legislature as well), so long as it did not go against the takings clause

Ferguson v. Skrupa: Ferguson was considered as Due Process case and was a high watermark of the Court's horizontal deference to the legislature as well as vertical deference to the states. The court upheld the statute as constitutional because "it is up to the legislatures, not courts to decide on the wisdom and utility of legislation." The court seems to end the means/end scrutiny together and believes that a court cannot overrule a statute just because its bad policy, but only if it’s definitely unconstitutional. Court cannot substitute its own beliefs on the court.

Kelo: defer to local gov’t. minimal legislature scrutiny (horizontal). Court should not second guess the state/city plans. There is a rational, legitimate purpose

Palallozo: a little less vertical and horizontal deference. Perhaps because economic value and distinct investment backed expectations were clearly messed up unlike in Pruneyard.

Federal gov’t give rights to states ex) Pruneyard Court can’t override legislature’s policy just because it is bad policy. Court can’t substitute its

own ideas for the legislature ex) Ferguson Defer to local gov’t and legislature in Kelo Conclusion: the Supreme Court generally defers to the state/local government (vertical balance of

powers), generally defers to the legislature, with minimal scrutiny of its regulations (horizontal balance of powers), generally construes the Constitution formally and is reluctant to impose judicial activism, and prioritizes the right to derive economic value from property (not necessarily of persons) especially if it's investment-backed.