Methods of acquisition (last updated 9.10)

traditional vs modern rule for Seller Disclosure

Traditional: caveat emptor, Latin for "let the buyer beware" → a seller of real property had no legal obligation to disclose defects to a buyer

• Stambovsky Exception: Caveat emptor does NOT apply if the condition was:

  • Created by seller

    Materially harmful

    Known only to seller

    Not reasonably discoverable

Modern: duty on the seller to disclose all known material defects (important defects that directly affect the value of the property)

Builder Liability for Construction Defects (old vs new)

• Traditional rule: Under caveat emptor, home-builders had no duty to guarantee construction quality unless they expressly agreed to a warranty.

• Modern rule: Most states now recognize an implied warranty of workmanlike construction → automatically imposed by law, even without an express warranty.

Four Categories of Found Property + legal ownership rules for each

1. Lost Property: Owner parts w/ property unintentionally + involuntarily (e.g., wallet falls out of pocket). → legal ownership = True owner 1st if known; if unknown, finder.

2. Mislaid Property: Owner intentionally parts w property (eg, placing wallet down) but forgets it. → legal ownership = True owner 1st if known; if unknown, property belongs to owner of premises where it was left (eg, starbucks) bc true owner likely returns to where item was left.

3. Abandoned Property: Property is abandoned when its owner no longer wishes to possess it (eg, throwing wallet in trash). → legal ownership = entirely to the finder

4. (*theoretical category*) Treasure Trove: Coins/money hidden so long ago that true owner is likely undiscoverable. → legal ownership = True owner 1st if known; if unknown, finder.

Rules for Property Found on Someone Else’s Land— Trespass Exception

If finder is trespassing, landowner is treated as the finder for lost, abandoned, or treasure-trove property → prevents rewarding/encouraging trespass.

NOTE: Mislaid property: No special rule needed bc landowner already has superior claim over any finder, whether or not finder is trespassing.

Benjamin v Lindner Aviation (found property)

$intentionally hidden inside a repossessed airplane = “mislaid”, not “abandoned” property. thus, Bank (premises owner) gets possession</p><ul><li><p>$ carefully wrapped + delib hidden inside airplane wing, indicating the owner intentionally placed it there and intended to retain ownership.

DISSENT

• abandoned bc illogical to assume someone who hid ~$19k simply forgot where it was. Given no owner claim after statutory notice + media publicized, the owner had relinquished the property. thus, Benjamin (finder) gets it.

Favorite v Miller (found property)

D = knowing trespasser who entered private land intending to find/remove statue fragment buried 10” underground, so he couldn’t profit from his wrongdoing.

Because the fragment was embedded in the land, the landowners had the superior claim.

Gift

transfer of property from one person to another without payment; Once A gifts to B, A can’t take it back. Reqs 3 elements

3 elements of a gift

• Intent: The donor's subjective intent to make the gift

• Delivery: The physical or symbolic transfer of the property; distinguishes gift vs promise

• Acceptance: The donee's agreement to receive the gift

Symbolic Gift

cases where physical delivery of an asset is impractical or impossible; typically accomplished by delivering a signed document that officially states the donor's intent to transfer the asset

Engagement Ring Dilemma – 3 diff ct approaches when deciding who keeps engagement ring if couple calls off wedding

• Unconditional gift: Once intent, delivery & acceptance occur, donee keeps ring regardless of breakup.

• Fault-based conditional: Donee keeps ring only if donor caused breakup; returns it if donee wrongfully ends engagement.

• Strict no-fault conditional (modern): Marriage is the condition; if wedding doesn’t occur for any reason, donee returns ring. Fault irrelevant.

Life Estate

Legally protected right to possess and enjoy a piece of property exclusively during one's lifetime; right to possess something before you die

Remainder

right to possess property only after life estate ends. If 1 person is given a life estate in an asset, another person must hold the corresponding remainder interest

Gruen v Gruen (gifts)

Victor gave P remainder interest in painting for his 21st birthday but reserved lifetime possession; P never physically possessed it → P entitled to painting after V dies

• Intent: V sent letters w intent; V kept only a life interest, while Michael received a vested remainder.

• Delivery: Written letters were sufficient constructive/symbolic delivery

• Acceptance: Acceptance presumed bc gift was valuable; M also showed acceptance by keeping the letters and claiming ownership

Lindh v Surman (gifts)

L proposed to S twice + broke it off 2x; S didn’t return ring the 2nd time. holding: S keeps the ring

HOLDING

• STRICT NO FAULT RULE: Engagement rings are conditional gifts conditioned on marriage; if the marriage doesn’t occur, the ring must be returned regardless of fault.

DISSENT

• Cappy: favors fault-based rule—the person who causes the breakup should forfeit the ring

• Castille: favoring a fault-sensitive/equitable approach; depends on factors like fraud and fault in breaking the engagement