Property I Outline
Property I Outline
I. Introduction
Property
Definition: A tangible or intangible resource that belongs to someone or something.
Legal relationship: The legal relationship between people regarding resources.
Title: Ownership.
Bundle of Rights
Definition: A person has certain rights to do things with his property that are protected by the government. Rights are limited, not absolute.
Possession:
Right to control something; dominion and control.
Right to possess property.
Can transfer the right to possession to someone while still retaining ownership.
Use: Right to use the property and anything created out of it; right to exploit.
Disposition: Right to buy and sell, lease, transfer property by will, destroy.
Exclusion: Right to exclusive possession of the property.
Clear and Muddy Rules
Clear Rule: Easy to administer; so clear that it doesn’t require a court's intervention.
Muddy Rule: Can be interpreted in multiple ways; confusing rule needing court intervention, but is more flexible.
Two Categories of Property
Real Property: Land and fixtures.
Examples: Buildings, fences, dams, etc.
Fixture: Immovable property; personal property that became permanently attached to the land (e.g. dishwasher).
Personal Property: Anything else.
Examples: Car, tables, books, clothes, computers, stocks, etc.
Personal Property
Tangible: Physical nature; can be seen and touched.
Intangible: Assets that cannot be touched or seen but still have value.
Possession
Definition: The controlling or holding of personal property, with or without a claim of ownership. Can be actual or constructive possession.
There are two elements:
Intent to possess: An intent to possess on the part of the possessor.
Actual control: His or her actual controlling of the property.
II. Acquisition of Property
A. Acquisition by Discovery
Acquisition by Discovery
Definition: The sighting or finding of unknown or unchartered territory.
Res Nullius/Terra Nullius: A thing or territory belonging to no one.
Rule of Discovery
Resolves rights between Civilized Nations.
First in Time: The first to discover wins.
The first civilized nation to discover undiscovered lands gets them.
Rights between the discovering nation and the aboriginal population
Aboriginals have a right of occupancy that the nation can extinguish by:
Purchase: Most of the land bought by the English was through purchase because it was cheaper to buy than to fight.
Conquest: Taking land by force.
Labor on Land
Adding labor to land makes it someone’s property.
Indians lived on the land but didn’t use it for labor.
First in Time
Establishes a priority of rights based on the time of acquiring the rights in question.
The chronologically first possessor has the better title.
The first to acquire property has the greatest right to it.
B. Acquisition by Capture
Rule of Capture
Definition: The captor wins if he kills, captures, or mortally wounds a wild animal.
The wild animal must be within the captor’s certain control (e.g., Pierson v. Post).
Investment in the hunt or pursuit of an animal is not enough.
Rule of Sportsmen
Sportsmen must have the prey within their reach or have a reasonable prospect of taking the prey.
Note: Not an actual rule; a position taken by dissent in Pierson v. Post.
John Locke’s Labor Theory
If a person has expended his labor to create something or reduce it to possession, it should belong to him or he should have some right to it.
Idea: We should award someone property if they have expended labor and energy into it.
Example: A guy who collected a pile of horse manure.
Adding Labor and Materials to the Property of Another
Ownership depends on the value of the thing created.
Where only labor is added, the owner of the raw material is given title unless fairness dictates otherwise.
Where both labor and materials are added, ownership is placed in the person who owned the principal material.
If the laborer is a thief or not an innocent improver, he will never get title.
Non-innocent improver: Someone who knows the material doesn’t belong to him and does it anyway.
Law of Accession: When two people claim ownership of property, the one that made the most material contribution owns the property.
Whaling Custom
Fast Fish/Loose Fish: Similar to the rule of capture.
Fast Fish: Have possession of the whale; claimant owned the whale, dead or alive, if it was fastened to the boat.
Loose Fish: Hurt the whale but don’t have possession; exclusive right to capture upon the whaler that first affixed the harpoon and remained in fresh pursuit.
Iron-in-the-Whale/Salvage Fee: Similar to the rule of sportsmen.
Ghen v. Rich: Custom of the industry prevailed.
Court applies custom when: not against public policy, few people, close to legal rule, acquiesced to and industry need, and little external cost.
Rationae Soli (by reason of the soil)
A landowner has certain rights on account of ownership of the soil.
Establishes exclusive right to hunt wild game on a landowner’s property, subject only to government’s right to regulate.
Landowner benefits from his trees, soil, wild animals, etc.
Gives the landowner constructive possession, not ownership.
Trespassers cannot lawfully take possession of wild animals on another’s land.
Interference with Trade
Keeble v. Hickeringill: A person cannot engage in malicious interference with trade.
Malicious intent: Doing it for a particular reason, ruining someone’s trade, etc.
Can interfere with someone’s trade but cannot be malicious.
Honest competition is allowed.
Hunter Harassment Statute: People are not allowed to interfere with hunters.
Relativity of Title
A person’s claim to title depends on where they stand in the chain of title.
Chain of title traces the path of ownership.
Idea: A person can have a relatively better title or right to possession than another while simultaneously having a right inferior to yet another person.
Animus Revertendi
Definition: “Habit of return”.
Used to help determine domestication of animals.
If an animal shows the tendency to return, the owner does not lose a property interest in the animal when it leaves the owner’s possession.
Does not give ownership; just indicates that a person doesn’t lose title.
Escape
If a wild animal escapes, the owner loses possession and the wild animal is again subject to the rule of capture.
Rule of Increase
Offspring of an owned animal belong to the owner of the mother, absent an agreement to the contrary.
Water Rights
Surface Water
Definition: Water on the surface of the earth, with two types of jurisdictions.
Riparian Rights: Right to water based on the fact that the land adjoins the water.
Prior Appropriation: Rights based on seniority, not location.
Whoever started taking out the water first and putting it to a beneficial use has the highest rights.
Common in arid states; cuts off most recent seniority during droughts.
Some jurisdictions are hybrids of both (e.g., Texas).
Groundwater
Different rights:
Absolute Ownership: Rule of capture; first to pull out the water gets to use it.
Common Law Reasonable Use: If someone is on the tract above the aquifer and takes water for use on their land, they can use as much as they want.
Others include Restatement reasonable use, prior appropriation, and correlative rights.
Externality
Definition: Something that someone doesn’t take into consideration when calculating their actions (can be positive or negative).
Example: Tragedy of the Commons - leads to the exploitation of natural resources.
C. Acquisition by Creation
Quasi-Property
Definition: An owner may not hold property rights against the public but may maintain property rights against specific individuals (competitors) (e.g., INS v. AP).
Common Law Invention Protection
Definition: The property embodied in an invention is only protected to the extent of the chattels (e.g., Cheney Brothers v. Doris Silk).
Ideas are not protected because there are IP statutes for this.
Generally, there is no protection against copying under Common Law; others may copy at will.
Intellectual Property
Patents:
Protection of inventions.
Granted for processes or products that are novel, useful, and non-obvious.
Cannot be a naturally occurring substance or product.
Lasts 20 years from the date of the original application, then non-renewable.
Copyrights:
Protection of created works.
Protection of ideas in books, articles, music, artistic works, etc.
Lasts 70 years after the death of the creator.
Trademarks:
Protection of branding.
Includes words and symbols indicating the source of a product or service.
Right of Publicity
Definition: A person has the exclusive right to appropriate their identity.
Exclusive right for someone to use their name, likeness, signature, and voice for commercial purposes; arose out of the right of privacy.
Allows celebrities to gain maximum benefits from their identities.
Name protection extends even after the person dies.
California law extends the rule to include anything that evokes a person’s personality.
Conversion
Definition: Wrongful exercise of ownership rights of personal property of another.
No Property Rights in Body Organs
Case: Moore v. Regents of University of California.
Decision: The court stated the plaintiff had no cause of action based on several arguments:
Plaintiff’s expectations: Don’t expect to have surgery and keep organs.
State laws: Prohibit people from keeping removed organs.
Defendant’s patent: Plaintiff did not create or come up with the patent.
Right of publicity: Covered under duty to disclose.
Character of genetic material: Everyone has these cells.
Privacy and dignity: Covered under duty to disclose.
Public policy: It would hinder research and make researchers liable.
Role of courts: Should be left to the Legislature.
There are property rights in blood, sperm, plasma, hair, and eggs.
Property Isn’t Property Unless We Can Enforce Our Rights
Private ownership comes with a right to exclude.
Nominal damages fail to protect the plaintiff’s right to exclude trespassers.
D. Acquisition by Find
Title of the Finder
Definition: The title of the finder is good against the whole world but the true owner.
True owner has the highest title to the property; then the finder comes next.
Bailment
Definition: Delivery of goods or personal property to the rightful possession of another (the bailee) without loss of title by the true owner (the bailor), usually for a specific purpose.
Basically handing over property without losing title (two types):
Voluntary Bailment:
Requires:
Delivery with intent to control.
Acceptance.
Express or implied contract over disposition of the property.
Example: A student asks you to watch her laptop and you agree, or a student leaves their laptop and you watch it for him.
Involuntary Bailment:
Exists where personal property has been accidentally left by the true owner in the possession of another (e.g., mislaid property).
Courts will impose a bailment; it doesn’t have to be involuntarily or accidentally.
Example: A person is evicted from an apartment, and the landlord stores his stuff.
Types of Bailments
1. For sole benefit of bailor;
2. For sole benefit of the bailee;
3. For mutual benefit.
Bailor’s Duty
To notify the bailee of known or discoverable defects.
Bailee’s Standard of Care
Depends on the type of bailment:
Benefit of bailor: Must exercise slight care; liable for only gross negligence.
Benefit of bailee: Must exercise great care; liable for even slight negligence.
Mutual benefit: Must exercise ordinary care; liable for negligence.
Liability of Bailee
The bailee has a duty to return the property in the same condition, minus wear and tear, as provided for in the contract.
Rebuttable presumption of negligence: The bailor must prove the existence of bailment and that the bailee failed to return the property in the condition as required.
If bailor makes that showing, burden shifts to bailee to show the failure was not a result of negligence.
If bailee makes that showing, the burden shifts back to the bailor to show that negligence occurred.
Lost Property
Definition: Property that is involuntarily separated from its owner.
Example: A finder of lost property has the highest claim to all except the true owner, unless it was buried.
Example: Walking and money falls out of a pocket = lost.
Mislaid: Putting it down and not finding it = mislaid.
Buried Property
The landowner has the highest claim to lost property that is buried based on constructive possession.
Finder as Licensee/Employee
The landowner has a higher claim than a licensee or an employee with a duty to report or find (e.g., hotel maid).
Abandoned Property
Definition: Property over which the original owner has relinquished all rights and claims, but title has not vested in another.
Intent is key: Did they intend to relinquish all rights?
Generally belongs to the finder unless:
The finder is a trespasser whose trespass is more than trivial (in which case property belongs to the landowner).
The finder is an agent of another (property belongs to the principal).
Mislaid Property
Definition: Property that is voluntarily left by its owner, but which the owner cannot find now.
The owner intentionally/purposefully left it but can’t find it.
The landowner has the highest claim to mislaid property, subject to relativity of title.
The landowner is in the best position to get the property back to the true owner.
The finder acquires no rights in mislaid property but is entitled to possession of lost and abandoned property against everyone else except the true owner.
Difference between lost and mislaid property:
Lost: Involuntary; Mislaid: Voluntary.
Treasure Trove
Definition: Money (gold, silver, coin, plate, bullion, sometimes paper) that has been hidden in the earth or some other private place for such a length of time that the owner is likely unknown or dead.
In England, it goes to the crown; in the US, jurisdictions vary (finder versus landowner) and some have statutorily rejected it in favor of distribution via lost/mislaid rules.
E. Acquisition by Gift
Two Types of Gifts:
Inter Vivos: A gift between the living.
Made before death with the intent for immediate passage of title.
Three elements:
Intent: Donative intent on the part of the donor.
Delivery: Delivery to the donee.
Acceptance: Acceptance by the donee (presumed unless expressly rejected by the donee).
Causa Mortis: A gift conditioned on the death of the donor.
Gift is made in contemplation of death.
Five elements:
Donative intent that the gift will take effect upon death.
Delivery to the donee.
Acceptance by the donee (presumed).
Donor must have a disorder making death imminent or be in peril threatening death.
Donor must actually die from the specific disorder or peril (e.g., if B gives a gift because he is dying of cancer but gets hit by a car, the gift will be invalid).
Death needs to occur for the gift to be valid.
Delivery
Delivery is required because it forces the owner to feel the wrench of delivery and realize the official loss of dominion and control.
If the gift is already in possession, the court will not require re-delivery.
Gifts are irrevocable; the donor cannot take them back.
If a person merely says he is going to do something, it is just a gratuitous promise; this is why we require delivery.
A gift causa mortis is higher than something in a will because a will can only transfer property in the estate; a gift causa mortis becomes valid when the owner dies.
Types of Delivery
Manual: Must physically be delivered (if it can be handed over, it must be).
Constructive: Give an object that represents the gift (e.g., a key for a car).
Symbolic: Something that describes the gift.
III. Possessory Estates and Future Interests
A. History
Subinfeudiation
Definition: Chain of command in which each lower person owes services to the person above him.
Example: William gave land to a King and then the command structure began (e.g., William > King > Tenant-in-Chief > Mesne Lords > Tenant in Demesne).
If one person failed to perform their services, the land returned to the tenant-in-chief.
If a lower lord died with a son under 21, the tenant-in-chief became his guardian.
Seisin
Definition: Possession of real property under claim of a freehold estate.
Indicates ownership; landlord has seisin.
Livery of Seisin: Ceremony required to pass seisin.
Statute Quia Emptores
Definition: If someone sold their land, they sold both the land and services; previously, they could only give the land without the services.
B. Terms
Words of Purchase
Specifies who is receiving the property.
Characteristics
Conveyable: Can be sold/given/taken away during life (also known as alienable).
Devisable: Transfer/dispose of property by will after death.
Inheritable: Death without a will results in heirs taking it.
Holographic Will
A handwritten will, usually written on a deathbed, requiring no witness and probably not using proper language.
Hypothecate
Definition: To pledge property as security for a debt.
C. Possessory Estates
Basics
Estate: Duration; how long someone can own something.
Classifies interests and reference to when and how ownership ends.
Every estate, except Fee Simple Absolute (FSA), must be followed by a future interest.
Every conveyance must end up in someone’s hands as an FSA.
The party who holds the right to take actual possession of the property holds the possessory estate.
Freehold Estates
Fee Simple Absolute (FSA):
Description: The longest duration; the best estate to have.
Owner is the only person who can cut it off.
Defeasible Fees:
Fee Simple Subject to Determinable (FSD): Limited; it will end automatically when a stated event happens (E.g., “So long as…”).
Future Interest: Possibility of Reverter (POR) - Created in grantor.
Fee Simple Subject to Condition Subsequent (FSSCS):
Doesn’t automatically terminate; may be cut short or divested at the transferor’s election when a stated condition happens (E.g., “But if…”).
Future Interest: Right of Entry (ROE) created in grantor.
Fee Simple Subject to Executory Limitation (FSSEL):
Estate created when a grantor transfers a defeasible fee simple and creates a future interest in a third party.
Language: “So long as,” etc.
Fee Tail (FT):
Series of life estates in a family bloodline.
Language to create FT: “To A and the heirs of his body.”
Life Estate (LE): Lasts for the duration of the grantee’s life, followed by a reversion or remainder.
Fee Simple Absolute (FSA)
Definition: Longest duration; best estate to have.
Language to create FSA:
Early common law: “To A and his heirs.”
Modern law: “To A.”
FSA is the default estate; lasts indefinitely.
Intestate
Intestate Succession:
Issue/Spouse: Descendants (children, grandchildren).
Ancestors: Parents.
Collateral Kin: Anyone in the bloodline.
Escheat: If there are no blood relatives, the State takes it.
Primogeniture: The eldest son inherits all of the land (not followed by any states except Rhode Island).
Co-Parsony: Daughters must share together if there are no other heirs.
Defeasible Fee Simples
Any estate may be made to be defeasible (i.e., terminate) prior to its natural endpoint upon occurrence of a specified future event.
Three types: FSD, FSSCS, FSSEL.
Fee Simple Determinable (FSD): Ends automatically when a stated event happens.
Language: “So long as,” etc.
Future Interest: Possibility of Reverter (POR).
Fee Simple Subject to Condition Subsequent (FSSCS):
May be cut short when a stated condition occurs.
Language: ”But if,” ”provided that,” etc.
Future Interest: Right of Entry (ROE).
Fee Simple Subject to Executory Limitation (FSSEL):
Estate created with both a defeasible fee simple and a future interest in a third party (not the grantor).
Language: Same as FSD or FSSCS.
Covenant
Definition: A promise made by a grantee that a specified act will or will not occur.
Breach results in injunction or damages, not forfeiture.
Example: C might have a covenant in his house, and if he breaches, it doesn’t mean he will lose his house.
D. Future Interests
Types of Future Interests
Retained by Grantor (created in the grantor):
Reversion (Rv), Possibility of Reverter (POR), Right of Entry (ROE).
Created in Grantee:
Vested Remainder (VRm), Contingent Remainder (CRm), Executory Interest (EI).
Reversions
Definition: The interest remaining in the grantor (or in the successor in interest of a testator) who transfers a vested estate of lesser quantum than that of the vested estate which he has.
Remainders
Definition: A future interest created in the grantee that waits until the termination of the preceding estate.
Types:
Vested Remainders (VRm): Given to an ascertained person and not subject to a condition precedent.
Indefeasibly Vested Remainder (VRm): Vested and cannot be taken away.
Vested Remainder Subject to Divestment (VRmStoD): Vested but can be taken away.
Vested Remainder Subject to Open (VRmStoO): Partially divested by other people in the class.
Contingent Remainder (CRm): Given to an unascertained person and/or subject to a condition precedent.
Example: Alternative contingent remainders are incompatible with each other.
Executory Interests
Definition: A future interest that can divest or cut short a preceding interest, held by a third party.
Two types: Shifting and springing.
Rules Prior to 1536
No future interest could be created in favor of a transferee.
No freehold estate could be created to “spring up” in the future.
Conditions
Condition Subsequent: A condition affecting a grantee’s right to retain possession after the grantee has taken possession.
Condition Precedent: A condition affecting a grantee’s right to take possession before taking possession; must be satisfied beforehand.
E. Marketability
Rules Furthering Marketability
Doctrine of Destructibility of Contingent Remainders: Destructs contingent remainders not vested at natural or artificial termination of the preceding freehold estate.
Rule in Shelley’s Case: Creates a life estate in A and a remainder in A’s heirs in FSA or FT; this then becomes a remainder in A.
Doctrine of Worthier Title: If O conveys “To A for life, then to O’s heirs,” the remainder is void, leaving the reversion in O.
Rule Against Perpetuities (RAP): Ensures that no interest is good unless it must vest within a certain time limit.
Doctrine of Destructibility of Contingent Remainders
Elements:
If a contingent remainder in land does not vest at or before the termination of the preceding freehold estate, it is destroyed.
Seisin moves onto the next vested estate.
Applies only to CRm’s and not others.
Future Interests
Identifying and claiming FDPls are essential to stable ownership of land.
Clarity and Simplicity
Important for preventing disputes over property rights.
IV. Co-Ownership
A. Concurrent Interests
Basics
Three types of concurrent interests:
Tenancies in Common, Joint Tenancy, and Tenancy by the Entirety.
Co-ownership refers to situations where two or more persons have concurrent rights of present or future possession.
Tenancy in Common
Elements:
Separate but undivided interest; interests are descendible, devisable, and conveyable; no survivorship rights; requires unity of possession.
Flexibility: Each tenant can conduct activities on-property as long as they agree.
Joint Tenancy
Elements:
Separate but undivided interests; right of survivorship; must have four unities: Time, Title, Interest, Possession.
Implications of death & survivorship; rights terminate at death.
Severs into a tenancy in common if any interests sever.
Jurisdictions require clarity in creation of joint tenancies.
Tenancy by the Entirety
Elements:
Between spouses only; right of survivorship; requires five unities: Time, Title, Interest, Possession, and Marriage.
Neither spouse can sever by themselves.
Presumptions
Older law presumes it creates a joint tenancy; modern law prefers a tenancy in common in uncertainty.
Tenancy by the entirety has no right to partition by one spouse alone.
Mortgage Theories
Title Theory: Title passes to the mortgagee, but they have a right of redemption.
Lien Theory: The title is only a security title.
Resolving disagreements between co-tenants
Options include voluntary agents, partitions (both types), and accounting for contributions.
B. Marital Interests
Types of Jurisdictions
Common Law Marital Property States: Only separate property considered.
Community Property States: Community property and separate property recognized.
Common Law States
Spouses have separate property; property acquisition varies; many started adopting the Married Women's Property Acts.
Types of Jurisdictions that Influence Tenancy by Entirety Subject to Creditors
Four distinct groups establish the reach of creditor claims in its share.
Distribution at Death
Determines who takes personal and real property upon marital death based on marriage and state laws.