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Property

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Property

Course Info

Professor: Unknown Semester: Spring 2016 Source: Property_sp16.txt

Topics Covered

  • Theories of property: possession, labor, personality
  • Acquisition by conquest, possession, creation (IP), identity (cultural property), existence (body parts)
  • Bundle of rights: right to use, transfer, exclude, destroy
  • Intellectual property: copyright, patent, trademark
  • Adverse possession
  • System of estates in land: FSA, life estate, defeasible fees, future interests
  • Rule Against Perpetuities; co-ownership
  • Landlord-tenant law; transfers of land
  • Easements and covenants
  • Nuisance; zoning
  • Takings (5th Amendment)

Detailed Outline

I. Theories of Property

Possession: Unowned object becomes owned by first possessor with intent to appropriate; simple to administer, hard to justify in distributive justice

Labor (Lockean): Mixing labor with materials creates ownership; rewards productive behavior; hard cases when laboring on another’s property

Personality: Necessary for human beings to reach potential; security and connection to objects (heirlooms, homestead exemptions, inheritance)

Efficiency/Welfare Maximization: Property regimes should maximize social welfare; Tragedy of the Commons problems; Takings for more efficient use

II. Acquisition

By Conquest (Discovery):

  • Johnson v. M’Intosh (1823): Indians mere occupants; Europeans recognized acquisition by conquest; sovereignty passes by conquest; Might makes right; courts of conqueror cannot deny this title
  • Jeremy Waldron’s Supersession Thesis: title can be superseded by later moral claims if holder can no longer “rebuff” claims; but moral hazard
  • Cayuga Indian Nation v. Pataki: 2d Cir. bars all aboriginal land claims in US via laches

By Possession (Wild Animals):

  • Pierson v. Post: Mere pursuit insufficient; need actual corporeal possession OR unequivocal intention + depriving liberty + bringing under certain control
    • Dissent: Look to hunters’ custom; community will respect own rule
    • Actual wounding suffices; constructive possession (ratione soli) on your own land
  • Ghen v. Rich: “done all possible to make it his own” suffices by custom (killing and marking whaling ship)
  • Keeble v. Hickeringill: Interference with business in hunting decoys = cognizable harm

By Creation (Intellectual Property):

  • Copyright: Original works fixed in tangible medium; very broad protection for expression not extending to underlying idea/procedure/process; life + 75 years; “transformative effects” test for First Amendment; Fair use exception: (1) amount and substantiality, (2) impact on market
  • Patent: Novel, useful, and nonobvious methods/processes; exclusive right for 20 years; AMP v. Myriad Genetics (genes not patentable — no creation; but modified gene sequences patentable); Diamond v. Chakrabarty (human-engineered bacterium patentable)
  • Trademark: Word/name/symbol/color identifying goods; first in use; prevents freeriding; Virtual Works v. Volkswagen (bad faith domain name registration → Volkswagen wins under ACPA)

By Identity (Cultural Property):

  • Cultural property can trump individual property rights (UN Treaty; NAGPRA for Native American bones)
  • Williamite meteor: personality theory vs. first possession; compromise — tribe gets ceremonial access

By Existence (Human Body):

  • Moore v. Regents of UC (1990): No property right in own tissue; CA statute eliminates some bundle rights; policy: encourage biotech innovation
    • Causes of action allowed: lack of informed consent, breach of fiduciary duty, fraud
    • Conversion claim rejected: no CL precedent; statute; policy
    • Concurrence: allowing property rights would encourage flesh trade
  • Allow sale of regenerative tissues (blood, sperm, eggs); not organs (kidneys, corneas)

III. Bundle of Property Rights

Right to Use:

  • Blackstonian fee simple absolute: absolute control to use, subject to exceptions (government entry in emergencies; zoning; land-use regulation)

Right to Exclude:

  • Jealously protected in Anglo-American courts
  • Pile v. Pedrick (1895): 1 3/8-inch wall encroachment → tear it down even at great cost
  • Jacques v. Steenberg Homes: Intentional trespass → punitive damages even with $1 compensatory; deterrence
  • State v. Shack: Constitutional rights of migrant workers trump landowner’s right to exclude lawyers/aid workers
  • Property rules vs. liability rules vs. inalienability (Calabresi/Melamed “Cathedral” framework):
    • Property rule: X gets what she wants in kind
    • Liability rule: X gets damages at price state sets (efficient for socially useful but harmful conduct)
    • Inalienability: cannot sell; reserved for body parts, certain civil rights

Right to Destroy:

  • Eyerman v. Mercantile Trust (1975): Court enjoins razing of historic home — “well-ordered society cannot tolerate waste and destruction of resources”
  • But can be buried with jewelry; allowance for personal attachment against economic efficiency

Abandonment:

IV. Adverse Possession

Basic Idea: Labor theory trumps first possession; reward the one who makes the land productive

Standard Elements (most jurisdictions):

  1. Open: Give notice to true owner
  2. Notorious: Community knows of A’s occupation
  3. Continuous: Same character of occupation as surrounding owners (can be seasonal); abandonment breaks continuity; interruption by owner stops SoL
  4. Exclusive: Not sharing with owner or other adverse possessors
  5. Actual: Physical entry and possession (not by signs or constructive notice)
  6. Hostile/Adverse: Legal hostility to owner’s rights
  7. Claim of right: Jurisdictions vary — (1) bad faith intent to claim (minority), (2) good faith belief in ownership (many), (3) intent regardless of knowledge
  8. Color of title (not always required): Defective deed; expands scope of claim to all described land

Tacking:

  • Doctrine of tacking against O: time of successive possessors accrues cumulatively if in privity (e.g., transfer by colorable deed)
  • Cannot tack against government
  • Cannot perfect against lessee — only gets lessee’s rights

Van Valkenburgh v. Lutz (1952): NY: Shack = not improvement; garden = not cultivated under NY statute requiring “usually cultivated or improved”; claimant also voluntarily disclaimed title via prescriptive easement claim

Manillo v. Gorski (1969): Small concrete encroachment; court adopts Connecticut doctrine (intent to claim irrelevant; acts of occupation themselves assert title); equitable remedy if structure can’t be removed without great cost (option to buy or pay)

New York AP statute: Good faith requirement (objective); de minimis encroachments presumed permissive; claim of right required; SoL reduced to 10 years

V. System of Estates in Land

Fee Simple Absolute (FSA): Largest estate permitted; ownership forever; presumed intended absent contrary language; alienable without restriction (no complete restraints on alienation)

  • White v. Brown (1977): “To live in and not to be sold” = FSA; “no sale” = invalid restraint on alienation; presumption for FSA to dispose of entire estate

Life Estate:

  • Possessory estate that expires upon death of measuring life
  • Always followed by reversion (grantor) or remainder (third party)
  • A can transfer life estate, but transferee’s interest ends when A dies
  • Waste doctrine: life tenant can’t engage in active waste (exploiting too much) or permissive waste (letting deteriorate)
  • Baker v. Weedon: Court can intervene to sell distressed property if it benefits all parties (life tenant needs income; remaindermen have future interest)
  • Alternatives: life insurance, equitable life estate in trust (trustee holds FSA; life tenant receives income)

Defeasible Fees:

  • Fee Simple Determinable (FSD): “So long as used for X” / “during”; automatic reversion to grantor via possibility of reverter
  • Fee Simple Subject to Condition Subsequent (FSSCS): “On condition that” / “but if”; grantor retains right of re-entry (power of termination); must affirmatively re-enter
  • Fee Simple Subject to Executory Limitation (FSSEL): Same as FSD or FSSCS but future interest in third party instead of grantor

Future Interests:

  • Reversion: In grantor; follows life estate, term of years, or defeasible fee
  • Possibility of Reverter: In grantor; follows FSD; automatic
  • Right of Re-entry (Power of Termination): In grantor; follows FSSCS; must be affirmatively exercised
  • Remainder: In third party; follows natural expiration of prior possessory estate
    • Vested remainder: Ascertained person; not subject to condition precedent
    • Contingent remainder: Unascertained person OR subject to condition precedent
  • Executory Interest: Cuts short prior interest (shifting) or follows gap (springing)
  • Destructibility (CL): Contingent remainders destroyed if they fail to vest at natural termination of prior estate — mostly abolished

Rule Against Perpetuities (RAP):

  • No interest is valid unless it must vest or fail within a life in being at creation of the interest plus 21 years
  • Applies to: contingent remainders, executory interests, options to purchase, rights of first refusal
  • Does not apply to: vested remainders, reversions, possibilities of reverter, rights of re-entry
  • “Fertile octogenarian” problem; “unborn widow” problem
  • Modern: Uniform Statutory RAP (90-year wait-and-see)

Co-Ownership:

  • Tenancy in Common (TIC): No survivorship; each has undivided fractional interest alienable, devisable, and descendable
  • Joint Tenancy (JT): Four unities (time, title, interest, possession); right of survivorship; can sever by conveying to third party or to yourself (Riddle v. Harmon CA); can sever by partition
  • Tenancy by the Entirety: JT between married spouses; survivorship; neither can unilaterally sever; creditor of one spouse generally cannot reach it
  • Partition: Action in partition allows any cotenant to divide; court prefers partition in kind over partition by sale

VI. Landlord-Tenant

Types of Leasehold Estates:

  1. Term of years (fixed duration)
  2. Periodic tenancy (continues for successive periods until notice given)
  3. Tenancy at will (terminable at will by either party)
  4. Tenancy at sufferance (holdover after lease ends)

Possession at Commencement:

  • English rule: Landlord must deliver actual possession
  • American rule: Landlord must deliver only legal possession (majority → some states accept holdover risk)

Assignments vs. Subleases:

  • Assignment: Tenant transfers entire remaining lease term; assignee in privity of contract with landlord
  • Sublease: Tenant transfers less than entire remaining term; original tenant still in privity with landlord

Constructive Eviction:

  • If landlord substantially interferes with tenant’s use and enjoyment, tenant may vacate and terminate lease
  • Must actually vacate within reasonable time; must give landlord notice and opportunity to cure
  • Village Commons case

Implied Warranty of Habitability (IWH):

  • Modern rule: Landlord impliedly warrants residential premises fit for human habitation
  • Hilder v. St. Peter: Violations of housing codes generally = breach of IWH
  • Remedies: withhold rent, repair-and-deduct, rescission, damages

Fair Housing Act (FHA): Prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status, disability; disparate impact claims available

VII. Transfers of Land

Deeds: Must be in writing; describe land; quantum of ownership; name of grantee; signed by grantor

Recording Acts:

  • Race: First to record wins regardless of notice
  • Notice: Subsequent bona fide purchaser (BFP) without notice prevails over prior unrecorded interest; takes without notice even if doesn’t record
  • Race-Notice: Subsequent purchaser wins only if (1) takes without notice AND (2) records first

BFP Requirements: Pays value; takes without actual, constructive (from record), or inquiry notice of prior interest

Marketable Title: Implied covenant in contract for sale; title reasonably free from doubt (no defects that would subject buyer to litigation risk); adverse possession claims can create unmarketable title

Caveat Emptor: Generally, seller not liable for defects; modern exceptions for: latent defects seller knows about, builder-vendor liability, professional sellers

VIII. Easements

Creation:

  • Express: Deed or reservation; must comply with Statute of Frauds
  • Estoppel: Detrimental reliance on license (Holbrook v. Taylor — allowed neighbor to use road, tenant improved land in reliance)
  • Preexisting use (implied): Prior use on quasi-dominant tenement apparent, continuous, reasonably necessary at time of severance (Van Sandt v. Royster — underground sewer pipe)
  • Necessity: Strict necessity at time of severance; landlocked parcel (Othen v. Rosier)
  • Prescription: Open, notorious, adverse, continuous use for statutory period (similar to AP)

Termination: Expiration; merger; abandonment (physical act + intent to abandon); estoppel; condemnation

IX. Covenants and Equitable Servitudes

Real Covenant (runs with the land at law):

  • Intent to run
  • Touch and concern the land
  • Horizontal privity (original parties in relation of grantor-grantee, landlord-tenant, or mortgagor-mortgagee)
  • Vertical privity (successor holds estate of same duration as original party)
  • Notice

Equitable Servitude (runs in equity):

  • Intent to run
  • Touch and concern the land
  • Notice (actual, constructive, or inquiry)
  • No privity required

Shelley v. Kraemer (1948): Racially restrictive covenants unenforceable in court; judicial enforcement = state action; cannot run with land and be enforced

Changed Conditions Doctrine: Equitable servitude unenforceable if neighborhood character has changed so fundamentally that purpose can no longer be accomplished

X. Nuisance and Zoning

Nuisance:

  • Private nuisance: Unreasonable interference with use and enjoyment of property
  • Restatement § 826 balancing: Gravity of harm vs. utility of conduct
  • Boomer v. Atlantic Cement: Permanent nuisance → permanent damages (not injunction); Calabresi four remedies (injunction, damages to plaintiff, damages to defendant, no remedy)
  • Morgan v. High Penn Oil: Intentional nuisance = unreasonable regardless of social utility
  • Spur Industries v. Del Webb: Coming to the nuisance; developer who moved residential area toward existing feedlot must pay costs of feedlot’s relocation (created the problem)

Zoning:

  • Village of Euclid v. Ambler Realty (1926): Cumulative zoning scheme is constitutional rational basis review
  • Variances: Relief for undue hardship; must not substantially impair zoning plan
  • Special exceptions: Uses already allowed by ordinance under specific conditions
  • Nonconforming uses: Pre-existing uses allowed to continue but generally cannot expand or be reconstructed after substantial destruction
  • Aesthetic controls: Generally constitutional

XI. Takings (5th Amendment)

“…nor shall private property be taken for public use, without just compensation.”

Public Use:

  • Kelo v. City of New London (2005): Economic development (creating jobs, increasing tax base) = public use; rational basis review; states free to provide more protection
  • Hatch v. Amoskeag: Mill Act = valid; common interest justifies private takings under liability rule

Just Compensation:

  • Fair market value at time of taking; does not include consequential damages, lost profits, or subjective value
  • Owner bears cost of obtaining fair market value (not always whole value to owner)

Physical Takings:

Regulatory Takings:

  • Penn Coal v. Mahon (1922) (Holmes): Regulation that “goes too far” = taking; Kohler Act (prohibiting coal mining under homes) = taking because eliminates support estate entirely; Brandeis dissent: “average reciprocity of advantage” — regulation can reduce some property values if owners benefit from regulation of others
  • Penn Central Transportation Co. v. New York (1978): Ad hoc balancing test for regulatory takings:
    1. Economic impact on claimant (diminution in value)
    2. Interference with distinct investment-backed expectations (DIBE)
    3. Character of government action (physical invasion vs. public program adjusting benefits/burdens)
    • Grand Central Terminal historic designation = no taking; railroad still makes reasonable return; still can use air rights elsewhere
  • Lucas v. South Carolina Coastal Council (1992): Total wipeout = per se taking unless background principles of state nuisance law would have prohibited use
    • Categorical rule: 100% diminution in economic value is a per se taking
    • Exception: Background nuisance principles (harmful use always prohibited) = not a taking
  • Tahoe-Sierra Preserve Council v. Tahoe Regional Planning (2002): Temporary development moratorium = Penn Central balancing (not Lucas per se rule); measured across whole parcel in time and space

Key Doctrines

Key Cases

Exam Approach

1. Identify the Property Issue

  • Who claims what interest? What is the source of that interest?
  • What type of property (real, personal, intellectual, body parts)?

2. Acquisition and Title

  • Conquest, possession, creation, cultural identity, or existence?
  • AP elements: ONCAHC (Open, Notorious, Continuous, Actual, Hostile, Claim of right)?
  • Tacking? Color of title? Good faith required in jurisdiction?
  • Recording act problem? Race, notice, or race-notice jurisdiction? BFP status?

3. Estates in Land

  • Classify the interest (FSA, life estate, FSD, FSSCS, FSSEL)
  • Future interests: who holds them and what kind?
  • RAP check: any contingent remainder or executory interest? Find a validating life or find violation

4. Landlord-Tenant

  • What type of leasehold?
  • Constructive eviction? (Substantial interference → notice → vacate within reasonable time)
  • IWH breach? (Housing code violations; remedies: withhold rent, repair-and-deduct, rescission, damages)
  • Assignment vs. sublease?

5. Takings

  1. Physical taking? → Loretto per se rule (any permanent physical occupation = taking)
  2. Total wipeout? → Lucas per se rule (100% economic impact = taking unless background nuisance principles)
  3. Otherwise → Penn Central balancing: (1) economic impact, (2) DIBE, (3) character of government action
  4. Public use? → Kelo rational basis (very deferential)
  5. Just compensation = fair market value

6. Nuisance / Covenants

  • Nuisance: unreasonable interference with use and enjoyment; Restatement balancing gravity vs. utility
  • Covenant runs at law? → 5 elements (intent, T&C, horizontal privity, vertical privity, notice)
  • Equitable servitude? → 3 elements (intent, T&C, notice); no privity required
  • Changed conditions? → Servitude unenforceable if neighborhood fundamentally changed

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