Property Unit 2 - Establishing Property Rights

Categories of Property

1) Real Property

2) Personal Property

Real Property

rights in land things attached to land (building, fences, trees)

Personal Property

rights in moveable items (computers, furniture) and intangible things (stocks)

Fixtures

personal property attached to real property (lights, smoke alarms)Se

Severance

removing things from real property and making them into personal property (lumber)

Title

legal possession of property, shown through a deed

Adverse Possession

An occupant obtains title to land through adverse possession if their possession is:

1) Actual

2) Exclusive

3) Open and Notorious

4) Adverse and Hostile

5) Continuous for the Required Period

Actual - (Adverse Possession)

Claimant must physically use the land in the same manner that a reasonable owner would, given the character, location, and nature of the land

Exclusive (Adverse Possession)

Claimant’s possession cannot be shared with the owner or public in general

Open and Notorious

The claimant’s possession must be so visible and obvious that a reasonable owner who inspects the land will receive notice of an adverse title claim

Adverse and Hostile (Adverse Possession)

Must be an actual invasion - cannot have the owner’s permission (not shared with the owner)

Jurisdiction Differences:

• most jxs consider the state of mind to be irrelevant

• some jxs require good faith - the adverse possessor believes the property is theirs

• very few jxs required bad faith - the adverse possessor believes the property belongs to someone else

Continuous for the Required Period (Adverse Possession)

Each element must have been continuous for statutory period.

• Doctrine of Tacking applies

Doctrine of Tacking (Adverse Possession)

The adverse possession of two or more successive occupants may be added together to meet the statutory period.

• the successive possessors must be in privity — met when a prior occupant transfers all of their rights in the property to their successor (usually arises from a deed - sell, inherit, gift)

Continuous - Disabilities Rule (AP)

If title owner is a minor or disabled, an adverse possession claim won’t become ripe until [x] years after the owner is no longer disabled/a minor.

• Number of years set by state statute.

• In many states, a disability only counts for these purposes if it exists at the beginning of the adverse possession period.

Claim of Title

Boiler plate language that doesn’t mean anything

Color of Title

A document, usually a deed, saying you own property but that it is insufficient in some way (invalid due to mistakes)

• strengthens your adverse possession argument

Quiet Title

Lawsuit to establish a party’s title to property

Quit Claim

transfers interest in real property without guaranteeing that the grantor has any legal claim to the property

Public Lands (AP)

In most Jxs, you cannot adversely possess public lands. Some Jxs allow it if the public lands are used for non-public purposes (used as a private owner would use it - ex. timber production, public housing)

Justifications for Adverse Possession

• preventing frivolous claims

• correcting title defects

• encouraging development by relocating title from the idle owner to someone who will use the land productively

  • protecting personhood

Partial Estates

if the owner holds less than a complete title, such as a life estate, the successful adverse possessor can only receive what the owner had

Gurwit v. Kannatzer

Facts: Gurwits purchased uncultivated land, mistaken on ownership of a tract of land.

Holding: AP elements were satisfied. Gurwits not living on the land but visiting it periodically was use like an owner. Open and Notorious because they cleaned brush, cut firewood, gave permission to others to cut firewood, and placed signs. Wasn’t necessary to show full development on the property.

AP Hypo: C held title to a 200-acre tract of remote and unimproved desert land, which she never visited. Driving past the land one day, B noticed that rare and valuable cacti grew there; B spent 20 minutes digging out four small cacti, which he later sold. Over the next 10 years, he visited the property on five more occasions, each time removing a few cacti. B claims title to the tract.

• Not open & notorious - sporadic removal of cacti over ten years, also larger property - hard to find upon reasonable inspection

  • Actual - maybe fine to only visit sporadically, real owner never visited

AP Hypo: C owned a home in a rural subdivision. D owned the house next door. All backyards in the subdivision were unfenced and covered by wild grass. Over the next 10 years, D occasionally watered the wild grass behind his house; he also mowed it three or four times each summer. D then discovered that part of the land he had been watering and mowing (a strip about 20 feet wide) was actually part of C’s original lot. Over the years, C’s children had played on this strip of land on 8 or 9 occasions. D claims title to the strip.

• Not Exclusive - C is still using because of children playing. If D was allowing C’s children to play on the land that would go exclusive

Van Valkenburgh v. Lutz

Facts: Lutz crossed through lots they didn’t own to get to their property. Lutz build a dwelling, cleared brush, made a garden, and did farming activities on the lots. Lutz knew he didn’t own the lots. Began feuding with VV after they bought one of the lots.

Holding: Lutz did not meet elements for AP because of statutory requirement that it be protected by an enclosure or was cultivated. Court ruled that the land was not cultivated enough so did not meet actual occupation element.

Dissent: Lutz conceded in prior trial that he didn’t own property, can’t go back against his admission. Also a factual issue

Fulkerson v. Van Buren

Facts: Fulk purchased parcel with a church on it. Van Buren (reverend) and congregation began using the church without permission. Also began cleaning up land, renovated church. VB learned the church didn’t have the deed when Fulk sent letter about leasing. VB said no to lease. At trial VB said no intent to hold land adversely until years later when Fulk was trying to eject them.

• Jurisdiction required bad faith.

Holding: VB didn’t realize they didn’t have title until years after being on property so would not have met bad faith requirement. After learning they didn’t have title they did not intend to hold land adversely until eviction notice. So bad faith requirement is not met.

Tioga Coal v. Supermarkets General Co.

Facts: Agate street was strip of land on Supermarkets property. It bordered Tioga property. Tioga locked gate to agate street and maintained the lock until 1978. Tioga sued Supermarkets for adverse possession. Tioga though the city owned the land. Trial court ruled Tioga’s possession was not adverse & hostile toward the supermarket b/c they thought city owned the land.

Holding: Court held that since they weren’t ejected by the supermarket and had satisfied all other elements of adverse possession, then hostility will be implied.

Rule: Subjective hostility (mental state) is not required to establish adverse possession.

Howard v. Kunto

Facts: McCall had record title that described his tract to be 50ft track west to his. The erroneous deed passed several times over the year, including to miller who built dock on misdeeded land. Miller then conveyed to Kunto. Howard discovered mistake and brought quiet title action. Kunto countered with adverse possession claim. Trial court found that Kunto had no adverse possession claim because he only lived on land for 3 years,

Holding: Appellate court found that tacking applied because successive owners of a property may add their occupancy times together where they share privity in the ownership interest. Must meet all elements of AP through the length of possession.

Tacking Hypo: A occupies O’s land for 6 years. A then tells his friend B: “You can be here if you want, but I’m leaving.” B occupies the land for 5 more years.

Was there a reasonable connection to show an intent to transfer the land?

• “can be there if you want” - permission, but vague - doesn’t exactly imply B is being give the land

  • So, probably not enough for tacking.

Vertical Ownership (Historically)

Property rights reached from the heavens to the center of the earth.

US v. Causby (Airspace)

Facts: Causby owned chicken farm. US military began flying low military planes. Caused the family to suffer sleep deprivation, nervousness, and led to death of 150 chickens forcing Causby to close his business.

Taking claim - gov cannot take private property without just compensation (5th Amend.)

Holding: SC - landowner owns at least as much of the air above ground that they can occupy or use in connection with the land. (Right to exclude in airspace)

Chance v. BP Chemicals (Subsurface)

Facts: BP was injecting hazardous waste products deep into the ground on land it owned, but the injectate migrated to the subsurface land of other people. Plaintiffs brought suit saying that BP had trespassed onto their land via the injectate.

Holding: The court found that the plaintiffs failed to prove physical damages or interference with the use of their properties, which is required in cases of indirect trespass.

Rule: Landowners only have a right to exclude invasions of subsurface property that actually interferes with reasonable and foreseeable use of the subsurface

Lateral Support

Landowners have a right to their land being supported by adjacent parcels of land.

• if land began slumping because neighboring land was dug out, you would have a claim against that neighbor.

  • Only land in its natural condition is protected

    • If there is a building on the property, you have to prove negligence

Subjacent Support

Rule: Barring a license or agreement regarding use of substrate, a landowner has a right to have their land in its natural condition supported by the earth immediately below it.

• mining coal beneath property causes property to collapse

  • the person who has the right to mine under the property and then doesn’t properly support it, and the property collapses – strict liability (even if there is a building, as long as the building was there when the rights were sold)

Riparian Water Rights

Water rights you get by having your land touch the water source (aka owning riparian land – land that touches body of water)

• no fixed quantity (specific gallon amount)

• subject to reasonable use doctrine:

  • reasonable use of water on your land

  • reasonable method of use of use

  • reasonable method of diversion

  • no unreasonable interference with riparian neighbors

• all riparian rights have equal priority (correlative) — shortages shared with neighbors

• no storage (can for very short period), no longer distance transportation

• Problems when the body of water has dry months and you can’t store water

Watershed

Rainwater falls and naturally makes it way down to the body of water

• Cannot remove water from the watershed because it takes away from the other adjacent owners

Appropriative Water Rights

Water rights gained by use.

• first in time is first in right (if there is a shortage then the person who began diverting water earlier would get the first use of the water)

  • so not correlative

• showing up on public land and using the water is the beginning of asserting your rights

• if you stop using the land and water, then you lose the water rights

Three Elements:

1. Intent to create the right

2. Diversion of water (physical control of a specific amount)

3. Beneficial use of diverted water (only allowed what you beneficially use)

Water Permit System

Requiring a permit for the diversion of surface water, so the government effectively regulates the amount of water that may be withdrawn

• Modern trend

Groundwater Rights - Absolute Ownership Rule - Pure Capture Rule

the owner of the land surface could remove as much groundwater as they wished even if this process caused severe injury to neighbors

• only in Texas

Lost Property

When the owner unintentionally and involuntarily parts with it.

Mislaid Property

Property is mislaid when the owner voluntarily and knowingly places it somewhere, but then unintentionally forgets it.

Abandoned Property

Property is abandoned when the owner knowingly relinquishes all right, title, and interest to it.

Treasure Trove

Property is treasure trove when the owner concealed it in a hidden location long ago. Treasure trove is usually limited to gold, silver, coins, or currency. Person who concealed it is probably dead

Hypo: Juan has a pet fox named Millie. Daniel finds her. He wants to keep Millie for himself. Can Juan get Millie back?

• Expect to see wild foxes running around, so once it gets away it’s lost

• If there is a collar on the fox you are closer but still not there

What if it’s a rhino you find running around?

• wouldn’t expect to see that

• didn’t get there accidentally

  • so someone else has an ownership interest

Armory v. Delamirie

Facts: Armory found jewel while chimney sweeping. Armory took jewel to goldsmith Delamire for an appraisal. Delemarie apprentice took out the stones, appraised it at 3 halfpence, and offered Armory that amount. Armory refused, wanted jewel back. Delamire gave jewel w/out the stones in it. Armory brought trover action against Delamire.

Rule: A person who finds lost property has an ownership interest in the property that is superior to the interest of anyone except the property’s rightful owner.

Valuing the Jewel: Apprentice didn’t present so jury was to presume it was a jewel of the highest quality - without the jewel apprentice can’t prove it wasn’t the highest quality

Theft: Court said no difference if it was stolen, thief would still have a good claim against the whole word except for the true owner

Trover Action

Action to get money back for the property someone took from you (value of property)

*obsolete

Replevin Action

action to get your property back.

*obsolete

Found Property Default Rule

In general, lost property goes to the finder

Hannah v. Peel

Facts: Hannah found brooch in house owned by Peel. Peel claimed brooch on the ground he was the owner of the house.

Rule: The finder of lost chattel on another’s property has rights to that chattel superior to the rights of the property owner. Does not include things attached to or under the surface of the property.

Bridges v. Hawkesworth

Facts: Customer picked up money on shopkeeper floor. Owner of money was not found. Finder sought recovery from shopkeeper.

Rule: Money picked up on the ground goes to the finder because the money was found in the public area of the store. So the money was never in the custody or within the protection of shopkeeper.

South Staffordshire v. Sharman

Facts: Pool cleaner found rings in mud at bottom of pool

Rule: If the person who found the lost property was currently working for an employer, then the employer will likely get possession.

locus in quo

“the place in which” (refers to the place where cause of action arose, in finder’s case it is the location of the find.

McAvoy v. Medina

Facts: While at a barber shop, McAvoy found pocketbook on table. Pocketbook had been placed there by customer and accidentally left there (so mislaid). No owner came forward for the pocketbook. McAvoy demanded the money as the finder. Medina refused.

Rule: Mislaid property is not lost property and therefore is not subject to the rule that the finder has a valid claim to the property against everyone except the true owner.

Mislaid property belongs to the owner of the locus in quo (location of find), not the finder

• gives the item to the person most likely to ensure its return to true owner.

Bailments

the rightful possession of goods by one who is not the owner, temporary transfer of possession (just possession, not a title)

Bailor

Person who delivers the property (owns goods)

Responsibilities:

• If mutual or sole benefit of bailor, must disclose hidden defects that should reasonably know

Bailee

Person who receives the property (holds goods)

Responsibilities:

• Take proper care of the property

• surrender or dispose of the property at the end of the bailment

Bailee has right to recover costs incurred

Bailment Elements

1. Personal Property;

2. Delivery of Possession (exclusive and knowing);

3. Bailment agreement (express or implied)

ex. valet - when handed the ticket a bailment is created

Bailment Termination

Terminated by

(1) The mutual agreement of both parties,

(2) A demand by either party,

(3) The completion of the purpose of the bailment,

(4) An act by the bailee that is inconsistent with the terms of the bailment, or

(5) The operation of law

3 Kinds of Bailments

1. Mutual benefit

2. Primary benefit of bailor

3. Primary benefit of bailee

Mutual Benefit Bailment

Ex. Car rental, storage unit - paying them for the storage

Standard: Reasonable Care

Primary Benefit of Bailor

Like a favor (no payment)

Ex. Coat check, storing someone’s car

Standard: gross negligence/bad faith

Found property is a constructive bailment for the benefit of the bailor (creates a bailment between you and the true owner)

Benjamin v. Lindner Aviation

Facts: Bank repossessed an airplane and took it to Lindner. Lindner employee (Benjamin) found $18,000 concealed in the plane wing. Money may have been left there decades earlier. Bank, Lindner, and Benjamin all claimed the money under Iowa finder statute. Trial court held the money belonged to bank and gave Benjamin a 10% finder fee.

Issue: Was the money found a treasure trove or mislaid?

Holding: Bank owned money and Benjamin was not entitled to finder’s fee. Substantial evidence that the money was mislaid and not lost. Money was wrapped and concealed in a place that could only be accessed by removing screws and panels - so placed their intentionally. Not abandoned b/c it is unlikely that someone would voluntary part with $18,000, more in line with the owner placing it there for safekeeping. Money was found in airplane, not Lindners hangar - if true owner attempts to locate money would look for plane not businesses where airplane was inspected.

Rule: Mislaid property is voluntarily placed by the owner in a specific location and forgotten, and the right of possession belongs to the owner of the premises where it is found. (locus in quo)

Lost Pet Finders Hypo: Suppose X finds a lost dog. X cares for it and unsuccessfully tries to find the owner. One year later, the owner shows up and demands the dog.

Morgan v. Kroupa

• Ruled finder gets the dog

  • Policy reason - encourages finders to take in and care for lost pets. A rule that makes it difficult/impossible for the finder to keep the animal after months or years of care and companionship might deter those efforts and would be against public interest.

Finders - Statutory Approach

Over 1/3 of states have adopted some form of lost property statute. They typically require that the finder to:

1. Notify the police or other gov officials;

2. Deposit the found article with them; and

3. Publish notice of the find

Gift

the immediate transfer of property rights from the donor (person making the gift) to the done (the person receiving the gift), without any payment or consideration.

3 Types of Gifts

1. Inter Vivos Gift

2. Testamentary Gift

3. Causa Mortis Gift

Inter Vivos Gift

the ordinary gift of personal property that one living person makes to another; generally irrevocable.

Elements:

1. Donative intent - donor must intend to make an immediate transfer of property

2. Delivery - The property must be delivered to the donee, so that the donor parts with dominion and control; three types of delivery

3. Acceptance - The donee must accept the property (if give is of value to donee, acceptance is presumed)

Gift Delivery Types

1. Manual: when the donor physically transfers possession of the item to the donee (generally required if practical)

2. Constructive: requires the donor physically transfers to the donee an object that provides access to the gifted item (allowed if manual delivery is impracticable/impossible)

3. Symbolic: The donor physically transfers to the donee an object that represents or symbolizes the gifted item

• Delivery must be as perfect as practical to be valid

• Delivery is not necessary when the property is already in the possession of the donee

• Third party/agent delivery is fine (ex. mail)

Testamentary Gift

Transfers an interest to the donee only in the future when the donor dies; only valid if it satisfies the Statute of Wills (signed writing, two or more witnesses)

Causa Mortis Gift

A gift of personal property made by a living person in contemplation of death; immediately effective when made, but revocable at any time before death.

Elements:

1. Donative intent

2. Delivery

3. Acceptance

4. Donor’s anticipation of imminent death

Revocability Rule: Donor can revoke before death and in most states it is revoked if the donor does not die from immediate cause in immediate future

Gruen v. Gruen

Facts: Dad sent son letter stating he intended to give son a valuable painting, and would be given to him upon Dad’s death, with Dad holding a life estate in the painting. Son talked to friends/family about painting for almost 2 decades. When Dad died, stepmother refused to give son painting.

Holding: Court held it was inter vivos because immediate intent to transfer “remainder interest” in the painting, letters were sufficient to show delivery because actual delivery impractical - symbolic delivery.

Rule: A gift inter vivos can be given while maintaining a life estate in the property.

Can give a present transfer in a future interst, but not a future transfer in a present interest.

Gift by Check

E hands F a check on E’s personal savings account for $250 saying, “F, this is for you.” Is this a completed gift?

• majority rule is that no gift occurs until the check is cashed, because the donor retains dominion and control of the funds

Engagement Rings

While generally inter vivos gifts are irrevocable, engagement rings are a special category.

In almost all states, the gift of an engagement ring is subject to an implied condition that the marriage occur. Thus, the gift does not become absolute until the marriage ceremony.

• Many jurisdictions follow a no-fault approach to the disposition of engagement rings: the ring is returned to the donor if the engagement is broken, regardless of who is at fault.

• Other jurisdictions consider who was at fault in ending the engagement, giving the ring to the other person

Delivery Hypo: O calls P into O’s bedroom. Pointing to a gold pen on the desk, O declares, “I give you my pen.”

Not enough to be delivery

Delivery Hypo: Pointing to his bedside drawer, O declares, “I want you to have my drawer and everything inside it.” O hands P a key that unlocks the drawer; inside are a diamond ring and the title to O’s car.

Not enough for delivery - not physically impractical or impossible to transfer items in the drawer so a constructive delivery is not allowed.

Delivery Hypo: O declares, “P, I want you to have my Van Gogh. It’s in my office in Rome, Italy. Pick it up whenever you want.”

Not enough for delivery - if a certificate/document had been given could be symbolic

Delivery Hypo: Handing P his bank book, O declares, “All the money is now yours.”

Symbolic Delivery

Delivery Hypo: O lends a book to his neighbor P, who takes it home. Several days later, O finds that he has a second copy of the book. O calls P and declares: “Keep that book I lent you. It’s yours!”

Gift and Manual Delivery