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Property Outline

Table of Contents


A. Conceptions of Property: 3
1) Right to thing: Jacque
2) Bundle: Hinman 4
3) Philosophical Perspectives
B. Trespass/Nuisance
1) Nuisance
2) Exclusion v. Governance 5
3) Coase Theorem
C. Property and Equity 6
1) Use of equity: Injunction/Bldg Encroach
2) Property Rules and Liability Rules (Calabresi) 7
D. Restitution 8
1) Mistaken Improver

CHAP 2: Original Acquisition 9

1) First Possession: wild animals/open access/abandoned property
2) Discovery 10
3) Creation: News/Publicity/Patent 11
4) Accession: Doctrine/Increase/ad coelum/accretion/fixtures 12
5) Adverse Possession: Exclusive/O & N/Adverse/Continuous 13

CHAP 3: Values subject to ownership 15

1) Personhood: Human body/artists’s rts/cultural patrimony
B. Academic Perspectives: Demsetz internalizing/Radin personhood/mkt inalienability16
2) Public Rights: Navigation Servitude/Public Trust/Custom/Easement/Commons17
3) Electronic Communication: Radio Waves/Internet/Trademark 19

CHAP 4: Owner Sovereignty and Limits 20

A. Protecting Right to Exclude
1) Criminal Laws: Larceny/Trespass
2) Civil Actions: Trespass/Ejectment/Nuisance-Replevin/Conversion/Trespass21
3) Self Help
B. Exceptions to right to exclude: Necessity/Custom/Public Accomodation 22
Laws/Antidiscrimination Laws/Racist trespass
C. Other Powers of Sovereign owner: Licenses/Bailments/Abandon/Destroy/Transfer24

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CHAP 5: Forms of Ownership 28

A. Intro
B. Divisions by Time:
Present Interests: Fee Simple/Life Estate/Defeasible Fees
Future Interests: Grantor/Grantee/Vesting
C. Maintaining the System: Conservation of Estates/Estate Planning/Numerus Claus30
D. Mediating Conflicts over Time: Waste/Valuation/Restraints on alienation/RAP 32
E. Co-ownership and Mediating Conflicts b/w Co-owners: TIC/JT/TBTE/CP 35
Legal Remedies: Partition/C & A/Severance of JT/Bank Accts
F. Marital Interests: Distribution in case 38

CHAP 6: Entity Property 39

A. Possessory Interests
1) Leases: Types/Indep Covenants/Dep/
Covenants/Transfers/Assignment/Sublease/Rent Control
2) COOPs/Condos 46
B. Nonpossessory Interests: Trusts 47

CHAP 9: Law of Neighbors 49

B. Servitudes:
1) Easements 49
2) Covenants 54
3) Equitable Servitudes 56
C. Zoning and Other Land Use Regulation 57
1) Zoning: Goals/Policy/Exclusionary/Religious Land Use

CHAP 12: Takings 58

A. Eminent Domain 59
1) Intro
2) Public Use Requirement
3) “Taking”
4) Regulatory Takings 60
5) Just Compensation 61
6) Denominator Problem
7) Exactions Problem: conditions imposed 62
8) Temporary Takings
9) Litigating Takings Cases 63

• Do not only write simple answer
• Broaden possible options, what could parties ask for and what could courts do,
even if they won’t work out.
• Explain options to provide hooks for all you know on topic.
• Say we have a number of options and can bring in policy and doctrine arguments
for each
• If think something is essential to assume, say “assuming that ___”.

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• Apply logic to new situations

• Speak as if you know you’re right. Be certain of answers
• The best outlines try to organize the material around such arguments,
justifications for a body of law like AP, and efforts to change the law, as well as
the obvious doctrinal distinctions that we need in order to grasp the material (like
the requirements of open possession, claim or right, etc.).
-do not have to cite cases but can explicitly talk about cases to compare or inform
policy argument on short questions

Major Issues in the course:

Which institution should resolve: legislature or judiciary
What is the bundle of rights in property?
Rule like fashion or case by case basis
Parallel issues from the case law
Fixed rule/Flexible standards
Transaction costs
Coasean argument
Unintended consequences
Ex Ante/Post Ante
Property/Liability Rules
Open Access problems
Numerus Clausus

Policy Question:
Key will be to structure your answer. You can do this according to what you
view as important themes/problems from the casebook, or by each clause in the proposed
policy in terms of arguments for and against and with a sense of whether the analysis is
different for joint tenants or tenants in common

CHAPTER I What is Property?

A. Two Conceptions of Property
1) A right to a thing, good against the world (essentialist, exclusivity
i) Exclusion Theory: management of resources are delegated to the owner
(a) Right to privacy
(b) Protection (to prevent self help)
(c) Expectation (people can have most efficient use of their land)
(d) Jacque v. Steenberg Homes, Inc: Absolutist view of right to exclude,
not allowed to cross another’s property to deliver mobile home. Right
to exclude is essential stick in bundle of property rights and nominal
damages are not enough to deter so need punitive (100,000).
Considerations: self-help avoidance, history with adverse possession
experience, audacity of Steenberg. Good example of Property Rules
(Calabresi) with entitlement given to plaintiff.

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(e) Can lead to efficient outcome (Coase) if parties willing to negotiate in

good faith.

2) A bundle of rights, with content that varies according to content and policy choices
i) Governance Theory: courts authorize what exactly is allowed to be done on
the property
(a) Hinman v. Pacific Air Transport: Court allows planes to go above
property, limitation of the right to exclude (trespass, see also easement,
tenant). Public and private restrictions to land use. Ad coelum is not
taken literally; must have dominion (or capability) over property to
have ownership rights. Otherwise absurd results.
Considerations: Reasons to avoid literal reading of ad coelum; tho
each is problematic
1. Landowner can only sue for trespass of land they’re in
possession of, asserted dominion over. (but owner of land is
assumed to be in “constructive” possession of land even not under
his control)
2. Requirement of actual harm (Jacques)
3. Implied license: by also having benefit from air travel
(takings?, what if somebody doesn’t use)
4. Public space: no surface owner has any claim of private
prop rts

3) Conceptions of Property – Philosophical Perspectives

(a) J.E. Penner, Idea of Property in Law
i. In rem: rights against the world
ii. In personam: bind only specific individuals, party to the
iii. Exclusion thesis: right to property is right to exclude others
fro things which is grounded by the interest we have in the use of
things (not just the use, nor just the exclusion)
(b) Tom Grey, Disintegration of Property
i. Meanings of property in law that cling to their origin in the thing-
ownership conception are integrated least successfully into
general doctrinal framework of law, legal theory and economics
ii. Discourse about property has fragmented into a set of
discontinuous usages, bundle of rights
iii. Restatements definition: Legal relations between person
with respect to a thing.
B. Trespass/Nuisance Divide: Trespass requires physical displacement/interest in the
land, while nuisance protects use and enjoyment of land against more intangible
1) Nuisance
(a) Nontrespassory invasion that diminishes use and enjoyment of
someone’s land

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(b) Substantial and unreasonable interference with private use and

enjoyment of another’s land. Includes intentional, unreasonable,
negligent or reckless, or results in abnormally dangerous conditions or
activities in inappropriate place
(c) Intrusion with large object able to physically displace plaintiff (home,
person, vehicle): trespass
(d) Invasion by smaller objects (gas, sound, light waves): nuisance
(e) Noninvasive spite fence: nuisance
(f) Hendricks v. Stalnaker: Claim that another’s water well position is
nuisance b/c cannot build septic tank due to distance regulations.
i. Reasonablenss test, harm caused, recklessness, danger,
intentional, malice
ii. Balance of interests test (gravity of harm vs. utility of
offending conduct): is water well as essential as septic tank?
iii. Invasion test: does one “invade” the other (here they both
iv. Normal use test: which use is more normal?
v. Temporal issue: who came first?
vi. Neighborliness
vii. Example of governance: parties perceive that their land can
be used either for groundwater extraction or sewage disposal but
likely cannot be used for both. If exclusion, could decide
whatever they wanted to do with their land.

2) Exclusion and Governance

i) Two different strategies for resolving disputes about scarce resource use
(a) Exclusion strategy: decisions about use are delegated to owner who
acts as manager of resource. To implement this authority, law allows
owner to repel any intrusions without his consent
(b) Governance strategy: Focuses on particular uses of resources and
makes particular rules about permitted and prohibited uses.
(Societal norms, contracts, government regs, etc)

3) The Coase Theorem

i) Ronald Coase, Problem of Social Cost
(c) An argument for how judges should decide nuisance issues
(d) There is reciprocity in damages between parties
(e) to avoid harm on B would be to harm A
(f) Without transaction costs, reach efficient result b/c of bargaining
(g) Parties take harmful action into effect b/c factor in opportunity cost of
potential payoff
(h) Legal rights/entitlements damage the efficiency
(i) So do bargaining problems: holdout/bilateral monopoly (only one
entity can provide the need)/assembly problems (large number of

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(j) Judges should be wary of placing entitlement because transaction

costs do exist so if entitlement is inefficient, since bargaining will not
work, it will stay there
ii) Resolving Property Disputes by Contract
(a) Contractual modifications (Coasean bargains) may be cheaper and
more efficient than litigation (Hendricks v. Stalnaker could have used
alternative solutions/compromises)

C. Property and Equity

1) Traditional maxim of equity is that property rights enjoy special protection in
courts of equity, such as granting specific performance to enforce contract for sale
of real property, even though breach of contract ordinary results only in damages
i) Injunction: court order to perform act or refrain from act, when violated pay
damages or held in contempt
(a) Conditions for equity:
i. Clean hands
ii. No adequate remedy at law
(b) Repeated Trespasses: possible reason for equity/injunction (Baker
v. Howard County Hunt)
i. Dogs from Hunt club kept overrunning property and causing
ii. Equity affords injunctive relief against series of trespasses
part of single course of conduct which seriously interferes with
right to peaceful enjoyment of property
iii. Move into equity from trespass/damages b/c of
• repeated trespass
• cannot assess damages
iv. CL rule: dogs can go wherever they want unless: owner has
power to prevent or owner takes them to prohibited area and
knows it will happen
v. No possibility of Coase bargain because in rem rights w/
respect to world (assembly problems); cannot make bargain with
everybody who would trespass
vi. Considerations: custom, equity requirements, implicit
agreement, habit evidence
(c) Building Encroachments
i. If building encroachment has not existed for period of
statute of limitations, no AP claim.
ii. Under CL, could force removal of encroachment. Pile v.
Pedrick: Unintentional 1-2 inch building encroachment; plaintiff
demanded nothing but complete destruction of the wall. Offer to
treat as permanent trespass with compensation or removal,
plaintiffs chose removal. Court enforced injunction and split
costs because of plaintiff intransigence? . Strict view of ad

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coelum; defendant has no right at law or in equity to occupy land

that does not belong to him
iii. Modern law: sometimes good faith improver gets some
relief. May allow to remain if pays damages (Golden Press); or
court gives to landowner and he must pay value to encroacher; or
court can give option of paying encroacher the value of the house
or selling the encroacher the land at fair market value.
• Considerations: encroachment magnitude, plaintiff’s
affected use, damage, cost of removal, plaintiff’s malice?
iv. Generally, courts today would deny injunctive relief and
award only damages
v. An intentional encroacher must remove the encroachment
if the neighbor demands
2) Property Rules and Liability Rules
i) Calabresi & Melamded, Property Rules, Liability Rules and
Inalienability: One view of the Cathedral
(d) Entitlement: law decides which party will prevail; states then decide
the manner in which the entitlements are protected and whether an
individual can sell or trade the entitlement. Three types of
entitlement protections: property rules, liability rules and
inalienable entitlements. Remedial orders do not define the
appropriate degree of protection, just are indicative of it.
(e) Property rule: Entitlement cannot be taken without holder’s consent.
Least amount of state intervention. Ex: Buying/selling house
(f) Liability rule: someone may take away initial entitlement if willing to
pay objectively determined value for it; determined by court, fair mkt
value. Ex: eminent domain. But court determined costs not always
reliable; no subjective value valued; discourages doing it on your own;
(g) Inalienable: transfer is not permitted between willing buyer and
willing seller. Ex: intoxicated sale of house

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Property Liability
Rule Rule

Rule 1
Rule 2
Plaintiff Golden Press:
Assignment of
Entitlement Rule 3
Hinman: airplanes Rule 4
Defendant can fly they would Plaintiff can force
need consent to stop return for $ (factory
can continue polluting
but not if P pays $)

Rule 4: Polluter can keep polluting and plaintiff can stop him if he pays
If transaction costs high, go with property rule and they can sort it out.
Give entitlement to the party who the non-efficiency factors favor. Unclear if
high transaction costs.
p. 61
Rules have advantages and disadvantages

ii) The Ex Ante/Ex Post Problem

(a) Ex ante: analysis before conflict arises
(b) Ex Post: analysis afterwards
(c) Ex Post may produce much lower maximum joint benefit (once the
building goes up)
D. Restitution
1) a) Enrichment of defendant b) at expense of plaintiff c) under circumstances that are
(a) Not bargained for benefit and harms: contracts
(b) Not bargained for harms: torts
(c) Not bargained for benefits: restitution
i) Mistaken Improver
(a) Traditionally, the rule is that if someone erected a structure on
someone else’s property, became fixture of the property (accession);
intended so that people think before they build
(b) Producers Lumber & Supply Co. v. Olney Building Co.
i. Orts ordered destruction of building he unintentionally built
on land belong to plaintiff
ii. Trespasser has remedies if built in good faith
iii. Here, Ort’s good faith is negated by his malicious

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iv. Improver is never authorized to go upon land of another,

without his knowledge and demolish improvements. If he does,
must pay landowner for such waste (value of building)
v. Dissent argues that as accidental improver, has right to
remove his property and pay any damages caused to P’s land
ii) Origins and Basis of Restitution

CHAPTER II Original Acquisition

-Five general principles to establish ownership other than through voluntary
conveyance from previous owner
-First possession, Discovery, Creation, Accession, and Adverse Possession
1) First Possession
Rule of Capture: first person to take possession of a thing owns it
i) Wild Animals
(a) Must be captured to be owned
(b) Mere chase is not enough
(c) Pierson v. Post: Property of ferae naturae is acquired by occupancy
only. What amounts to occupancy? Proximity rules: Spot, pursuit,
close in, wound, trap, kill: when do you have possession/ownership?
Majority says must wound and not abandon. Dissent says pursuit
with reasonable chance of capture. Advantages to each choice
(protection of investment, rewarding of initiative/success). What
notice must one give?
(d) An owner of land does not automatically own the wild animals on the
land. But see rationale soli
(e) Generally, captor must acquire physical control over animal absent
custom. Ghen v. Rich: custom to shoot whale with mark and finder
must return has been existence for long time and without would be no
incentive to whale hunt. As long as does not infringe on others’ rights
or go against maritime law, it’s ok even though CL says otherwise (see
State of Oregon ex rel. Thornton v. Hay for custom requirements)
(f) Cannot hinder another in his trade by scaring off animals. Unfair
competition will discourage participants. Keeble v. Hickeringill:
Defendant shot gun at plaintiff’s decoy pond, scaring off wildfowl
intentionally. Court gave defendant right to the ducks in his decoy
pond under the protection of his livelihood. One who hinders another
in his trade is liable for an action. But if damage caused by same
employment, no action
• No trespass b/c not on land, would be nuisance today
• Considerations: action brought for disturbance not the loss
of fowl, this business is good for society

ii) Open Access and the Commons

Eggertsson, Open Access versus Common Property
Commons, Anticommons and Semicommons

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(a) Open access: (Rule of capture/fishing) access is open to all members

of particular community or jurisdiction
(b) Common Property: complex structure that involves rules and
enforcement mechanism
(c) Open access problems when independent actors have incentive and
ability to withdraw at will. Supply and demand effects
i. Supply: no incentive to invest or maintain resource since
cannot exclude others from benefits
ii. Demand: excessive withdrawal can deplete to zero
iii. External effects: if people not responsible for all costs and
benefits that follow their actions, watch average values instead of
marginal values, leading to inefficiency
(d) Solution: contracting among parties for regulations, private owner or
state regulatory access (landlord, coop, condos, corporation)
(e) Semicommons: somewhere in between the two extremes (doctrine of
fair use in copyrights)
(f) Anticommons: too much exclusion; prevents rights to larger resource
or good because fosters stability

iii) Other Applications of First Possession

(a) Finder must (like wild animal capture) acquire physical control
over the object and have intent to assume dominion over it. Eads v.
Brazelton: E prevails b/c B has shown only intent to take possession
but has not shown sufficient acts of physical control. Must have
placed boat over wreck with the means to raise it, to give notice of
(b) Home run baseballs: Popov v. Hiyashi: Popov dropped and
Hiyashi recovered, judge ruled they divide value b/c once the ball in
Popov’s mitt, had exclusive pre-possessory interest when mob
interfered, even though could not prove est’d possession and did not
have control. Consider: intent, control, custom, pre-possessory interest

2) Discovery
i) Discovery of Land
(a) When faced with conflicting claims to single piece of property,
recreate “chains of title.” Johnson v. M’Intosh: Since rights of Indians
were impaired with European dominion (right to dominion supersedes
right of occupancy), Indians’ sale of land invalid. Natives had status
of occupants but not title.
(b) Land Grants from the Federal Public Domain
How the land was dispersed
 Land Ordinance of 1785: created townships according to
 Squatter problems
 Homestead act of 1862: any citizen could claim 160 acres
(c) The Mining Camps

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• Miners concerned about absence of legal rules to assign

ownership of valuable mineral land
• Formed over 600 mining camp governments in Far West to
devise local rules for recognizing and enforcing private
mineral rights
• These rules later incorporated into state legislation
• Expected aggregate gains were large and most of the
contracting parties expected to share in those rights
(d) Gary D. Libecap, Contracting for Property Rights

3) Creation: Recognition of property by creation is to reward labor. How do we

define “creation”?
i) News requires large investment to produce but copying and reproducing is
zero, so different from tangible goods
(a) Use of information by one consumer does not diminish the use by
another, so a “nonrival” good.
(b) Primary reason for creating property rights in information is to
provide incentives for producing more of it, not to assure that it is
allocated efficiently among potential users of it
(c) Labor can assert property right, should not reap what another has
sown (Locke). International News Service v. Assoc. Press: INS copied
news from AP for distribution. No right in uncopyrighted news after
publication but quasi-property with limitations to others in the
business (not against the world). Unfair competition.
ii) Publicity:
(a) Used to be a name or a likeness; but courts have expanded this to
vague notion of celebrity’s persona; unauthorized use of an attribute of
Midler’s identity (publicity) in Midler v. Ford Motor Company.
(b) But can hurt the public if applied too broadly (satire, free speech). The
celebrity’s labor in creating a persona of value is protected against
another’s using it for profit.
iii) Patent:
(a) Shows boundaries of time limited right to recover investment; does not
give any positive rights which come from CL.
(b) Balance between protecting creativity and not creating
monopolies/stifling creativity.
(c) Need to be more than first (as in discovery), actual novelty
required. Cannot be “obvious”. Trenton Industries v. A.E. Peterson
Manufacturing Co.:
• Plaintiff showed demo of new high chair and they decline
to use but produce own version
• Cannot have patent protection for something “obvious”-
this standard changes with time though
• Used to be needed, “Flash of creative genius” but this
changed as recognition of how r & d occurs

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• Equity in agreement can be implied by showing item to

party before patented
(d) In copyright, “newness” requirement is “originality”. Supreme Ct said
that names and numbers in telephone book cannot be copyrighted b/c
not “original” enough (Feist Publications, Inc. v. Rural Telephone

4) Principle of Accession
i) Used to establish title to property. Should award things that are unowned,
to the owner of the most prominent thing to which ownership has been
ii) Principle of Accession: family of doctrines, each which shares common
features: ownership of some unclaimed or contested resource is assigned to
owner of some other resource that has particularly prominent relationship to
the unclaimed or contested resource
iii) Doctrine of Accession: narrower common-law doctrine that is part of larger
family of doctrines – when someone mistakenly takes up physical object that
belongs to someone else and transforms it through labor and new materials
into fundamentally different object.
(a) Where A adds labor to B’s raw material, the courts usually award the
final product to the owner of the raw material (B), unless A’s efforts
have sufficiently increased its value or complete change of chattel
to make it unfair to award the final product to B. A must have acted
in good faith.
(b) Wetherbee v. Green: Wetherbee cut down trees with permission and
fashioned into barrel hoops (huge increase in $). Turns out was
somebody else’s land and they want to keep the hoops (replevin)
• When trespass is in good faith, and significant labor put
into it, product belongs to new operator, who should make
satisfaction to former owner for materials converted (J.
• Accession b/c value of labor has swallowed up and
rendered insignificant the value of original materials
• Considerations for doctrine of accession: Mental state of
improver, degree of transformation, degree of value added

iv) Increase:
(a) Animal offspring belong to owner of mother. Partus sequitur ventrem
(offspring follow the mother). Carruth v. Easterling: Calves born
while on another’s property court ruled belong to cow’s owner
v) Explaining the Principle of Accession
*David Hume, Treatise of Human Nature
*Robert Sugden, Economics of Rights, Cooperation and Welfare
vi) Ad Coelum Rule

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(a) Accession by ad coelum: whoever owns surface owns incremental

values below as surface is most prominent pre-assigned property, or
accession by labor
(b) Edwards v. Sims: Valuable cave underground with entrance on his
property. Did his labor add significant value to underground parts so
they should become part of his property (accession)? Court found that
ad coelum applies so cave does not belong to the discoverer (who is
trespasser in the earth below neighbor’s lot).
(c) If capture rule was used, giving ownership to owner of entrance, may
be more efficient and reward exploration. Lower transaction costs
than surveying and profit sharing among many owners.
(d) Underground resources: Rule of capture has been applied to oil and
gas by courts. Some characterize them as analogous to wild
animals, which might wander from A’s property to B’s (even if
drained from neighbor. Reason to apply rule to give incentive to
produce the resource.

vii) Accretion
(a) Accretion: gradual process (changes boundary of the river)
(b) Avulsion: sudden change in stream path (does not change boundary)
(c) In Nebraska v. Iowa, question whether accretion or avulsion as the
river has characteristics of both.
(d) Accretion considered accession because small deposits of sand are
absorbed into more significant large land

viii) Fixtures
(a) A thing which, although originally moveable chattel, is by reason of its
annexation to, or association in use with land, objectively shows
intent to improve the realty, regarded as part of the land
(b) Can be default rule or doctrine of accession because can acquire
objects by owning land that originally were personal property
belonging to someone else who had no intention to make a voluntary
(c) Strain v. Green: Greens sold house but took many things when moving
out. Strain sued arguing they were fixtures. Court says as times
change, some things considered chattel have become fixtures
(bathtubs, hot water heater). Cannot consider secret intention of
sellers, must judge based on nature of article affixed.
(d) Modern trend is to be liberal in permitting tenant to remove any chattel
he installs on leased premises, as long as substantial damage not

5) Adverse Possession
i) Owner sits on right to exclude, and statute of limitations for challenging
original unlawful entry expires, barred from asserting right to exclude and

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new title springs up in adverse possessor. Retroactive ownership rights (may

have to pay taxes)
ii) To acquire legal title, AP’er has to file quiet title action against former owner
iii) Justification:
(a) Gatekeeper: responsibility to be gatekeepers of land
(b) Avoid disrepair, reward productivity
(c) Personal relationship of AP to the land
(d) Reliance Issue
(e) Reduces costs of investigation who really has title
iv) Requirements for AP:
(a) Actual entry giving exclusive possession
i. Exclusive possession: cannot share possession with owner
nor public generally
(b) Open and Notorious
i. Must constitute reasonable notice to owner so owner can
defend his rights
ii. Look like typical acts of owner, appropriate to land
iii. E.g. fencing, farming, building; granted permission, sued in
trespass, paid taxes (Ewing v. Burnet)
(c) Adverse and under a claim of right
i. Must hold adversely to the owner under a claim of right
(without owner’s consent)
ii. Majority view: actions of possessor must look like claims
of ownership, without permission of owner
iii. Minority view: AP’er must have bona fide or good faith
belief he has title (Carpenter v. Ruperto: knew she did not have
title and held not to be AP )
iv. Color of title: Claim founded on written instrument (deed,
will) that unknown to claimant, is defective or invalid. Not
required to be AP in most states
(d) Continuous, uninterrupted possession: degree of occupancy and use
that the average owner would make of the particular type of property.
Continuous when made without a break in the essential attitude of
mind required for adverse use. Sometimes ok even with intervals of
i. Purpose: to give owner notice of AP and not just trespasses
ii. Seasonal use: Use during summer home during summer
only is continuous use (Howard v. Kunto).
iii. AP’er cannot abandon
iv. Tacking by successive AP’ers:
1) Can tack on previous periods of AP by predecessors in
interest to establish continuous possession (Howard v. Kunto)
2) Must be privity of estate b/w AP’ers: Voluntary transfer
by estate in land or physical possession

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(e) If owner fails to prevent use as opposed to possession, then

prescriptive easement
v) Adverse Possession against the Government
Under CL, cannot use AP against crown, this followed to US Government.
Open ended adverse possession problem
vi) Disabilities
State statutes slow statue of limitations for owners suffering from certain
narrow classes of disabilities (under age, insane, legally incompetent, etc.). Not poverty.
vii) Future Interests: Statute of limitations does not run against remainder
existing at the time of entry by an AP’er b/c the holder of the remainder has
no right to eject the adverse possessor from possession. But if AP’er entered
before life estate started, and never gained possession, would never go to
remainder (see p. 39 Gilberts)
viii) Chattels: Can take AP to chattels just like land. Same requirements as
land but period is shorter.
(a) Difference: Open and notorious requirement
i. NY: statute of limitations starts when owner knows who
has the goods and makes demand for return that’s rejected
(Songbyrd: possession of recordings)
ii. Majority: S of L starts when owner should reasonably
know where stolen goods are ( but runs as long as owner
continues to use due diligence in looking for them)
F. Sequential Possession Issues
G. Competing Original Acquisition Principles

CHAPTER III Values Subject to Ownership

• Certain interests are inappropriate for treatment as property because they are too
closely connected to personhood (people, peonage)
• Two questions: 1) who has decision making authority over the interests and 2)
Can the government restrict that authority
i) Property and the Human Body
(a) Body parts: US v. Garbar: blood plasma is transferable property
(replenishable parts; with non-replenishable parts, more restrictive)
(b) National Organ Transfer Act: prohibits sale/transfer interstate
commerce organs for valuable consideration. Excludes paired organ
donor, perhaps for scientific purposes.
(c) Dead bodies as property: Next of kin have exclusive right to possess
bodies of deceased family members, creating property interest, even
though inalienable. (Newman v. Sathyavaglswaran). But one could
argue that it’s personhood and a body cannot be “owned”.
(d) Concern about making body parts property that could be sold. Moore
v. Regents of the Univ. of CA: Man does not have property right in his
spleen following removal by doctors (abandonment?) who made
valuable patented cell line; they acquired original ownership

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(accession?). However, not all property is alienable. Argument that

cell line was not Moore’s property b/c it was factually and legally
distinct from the cells taken from Moore’s body. Considerations: could
be property for hospital but not Moore, abandonment (like hair at
salon), medical progress, human privacy
(e) Sperm deposited in sperm bank was found to be property of donor and
could be devised by will. Hecht v. Superior Court: Interest was in the
nature of ownership (interim category of property/quasi property).
(f) Penner’s separation thesis: only items thought of as separate from
their owners can be “things” and hence objects of property (spleens
and sperms after separation)
(g) Trend in CA away from personhood, more towards property

ii) Artists’ Moral Rights

(a) Personhood rights implicated when individuals create things that are
expressions of their beliefs and experiences (accession/creation?).
Issue of artist retention of control over use to which creations are put
by future owners.
(b) Sometimes legislation protects physical defacement or alteration of a
work of fine art for certain amount of time (Moakley v. Eastwick)

iii) Cultural Patrimony

(a) Personhood interests implicated when cultural artifacts taken from
communities in which they have particular significance. I.e. Native
American Graves Protection and Repatriation Act (US v. Corrow:
even when Indians sold the item still illegal under act)
(b) To be considered “cultural patrimony” object must:
i. Have ongoing historical, cultural or traditional importance
ii. Be considered inalienable by the tribe culture (good
indication is if communally owned)

B. Academic Perspectives on Domain of Property

What values should be subject to property rights?
Harold Demsetz, Toward a Theory of Property Rights
 Economic terms why and when property rights emerge in
resources that previously were regarded as not being subject to
 Property rights develop to internalize externalities when the gains
of internalization become larger than the costs of internalization
 For example, before the fur trade the Indians did not have property
 The rise in prices of furs was a gain that resulted in internalizing
the costs of monitoring property rights
Margaret Jane Radin, Property and Personhood
Anti-Commodification and Inalienability Rules

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Moral basis for regarding certain things as inappropriate subjects for

treatment as property
Two types of property: Fungible property (held purely instrumentally) and
Personal property (bound up with a person)
Rights afforded to property go on spectrum of somewhere between
personal and fungible (but can go to extremes like fetishism)
As things move towards more personal should have stronger
entitlement/protection, harder to take away, broader liberty of control
But you can’t go too far or you get fetishism
Things too personal cannot be considered property at all (personhood)
Radin, Market-Inalienability
 Three possible methods of justifying market-inalienability:
prophylactic argument, assimilation to prohibition, and domino
 Prophylactic: people should not be allowed to sell things that are
too personal, would be destructive to personhood (slavery, body
parts, sexual services)
 Assimilation to prohibition: commodified object is different from
“same” thing noncommodified and embedded in person
relationships; market-inalienability is prohibition of the
commodified version, resting on some moral requirement that it
not exist (may create and expose wealth and class-based
contingencies for things critical to life (healthcare))
 Domino theory: slippery slope; allowance of commodified version
of thing will affect all and commodity
2) Public Rights
Things too public to be parceled out into private ownership. Inherently public and
remain accessible only on equal terms to all members of the community
i) Navigation Servitude
(a) Navigable Waters
i. English framework of these rights exported to US.
Supreme Court expanded from waters subject to ebb and flow of
tides to all navigable waters to federal government
ii. Federal navigation servitude on all waters of US that are
navigable. No state gov’t, individual or corp acting under
authority of state law can obstruct or interfere with public’s right
to free use of waterways for transportation; related to Commerce
iii. Title to submerged lands subject to state law; may be
different if waters subject to ebb and flow of tides or not
(b) Navigable Airspace
i. Supreme Court held that federal control principles of
navigable waterways extends to navigable airspace
ii. Airspace above safe flying altitude
iii. Test is whether use of airspace harms the surface owner. In
US v. Causby, Supreme Court held that planes flying low over a

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farm was a taking b/c ruined the chicken business. Gov’t had to
pay compensation b/c of action for inverse condemnation
(government takes but does not use formal eminent domain)
iv. Private parties may be liable in nuisance if substantial
interference via air that is unreasonable as measured by
sensibilities of an average person (not an uncommon use of land
where more harmed than average person)

ii) Public Trust Doctrine

(a) If property held in trust for the people for the state, it cannot be
abdicated. Illinois Central Railroad Co. v. Illinois: Held that state has
ownership of lands under navigable waters (Chicago Lakeshore) and
cannot give control to private corporation
(b) Resources covered under Public Trust Doctrine: Mostly navigable
water; can sometimes extend to public parks and state wilderness
areas unconnected to navigable waters; question whether federal
land held in public trust, no court has ever endorsed
(c) State has no power to transfer public lands except to the extent that
selling small parcels promotes public interest or transfer does not
substantially impair public interest in the land and waters remaining
(Illinois Central). Dissent: only necessary to invoke doctrine if private
company violates public rights
(d) Debate over what is public interest (Lake Michigan Federation v.
United States Army Corps of Engineers: Loyola Univ. sought twenty
acre landfill on its Lake Shore campus in Chicago with some benefit to
public; cleared environmental, legislative, federal hurdles until
injunction brought by Lake Michigan Federation)
i. Courts should be critical of attempts by state to surrender
valuable public resources to private entity
ii. Public trust is violated when primary purpose of legislative
grant is to benefit private interest
iii. Any attempt by state to relinquish its power over public
resource should be invalidated under doctrine
(e) Purpestures: Encroachments on public lands by private persons, dealt
with by nuisance laws, not trespass law
(f) Easement by prescription to the public: State of Oregon ex rel.
Thornton v. Hay: Issue whether state can prevent landowners from
enclosing dry-sand area contained within the legal description of their
ocean-front property. Trial court found public had easement by
prescription for recreational purposes. Appellate court thinks custom
is better b/c can cover larger area
i. Custom: such usage by common consent and uniform
practice has become the law of the place, or of the subject manner
to which it relates
1) Must be ancient
2) Exercised w/o interruption

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3) Peaceable and free from dispute

4) Reasonableness
5) Certainty of what it covers
6) Must be obligatory
7) Not be repugnant or inconsistent with other customs or law
Carol Rose, Comedy of the Commons: Custom, Commerce, and
• Wants to have theory of public rights immune to attacks
against it
• Extrapolates form other laws to see how they apply to
public rights
• Original doctrines grew out of need for commerce but
later applied to recreation and conservation
• Argues for public rights because of diffused
publics/economics of scale/nobody could handle the
• Believes that there is inherently public property, with
ownership vested in society
Inherently Public Property
D. Water
3) Electronic Communications
i) Radio Waves
(a) Before Congress passed regulatory framework, CL showed can have
property rights to wavelength. Tribune Co. v. Oak Leaves
Broadcasting Station, Inc.: Restrained defendant from broadcasting
over same wave length or in close proximity. Guyon: cannot have
property rights to wavelength; Coase: idea is not about wavelength but
devices used to broadcast and receive wavelengths. Considerations:
Industry customs, labor theory notions, first possession/property in
ii) Internet websites
(a) Peta v. Doughney: Peta sued Doughney after creating website
(people eating tasty animals) as parody on trademark infringement.
Held it was trademark infringement.
(b) For trademark infringement/unfair competition must prove
i. It possesses a mark
ii. Defendant used the mark
iii. His use of mark occurred “in commerce”
iv. Used mark in connection with sale… of goods or services
v. Used in manner likely to confuse consumers
vi. *Court in Peta said was in “connection with goods and
services” even though not commercial b/c prevented users from
obtaining or using PETA’s goods or services due to frustration
(huge expansion)
(c) Trademark: requires no novelty or originality, different from
copyright/patent/other IP
i. Generic terms cannot be trademarks

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ii. Nongeneric descriptive marks must acquire secondary

meaning, association in minds of consumers between mark and
product to be protectible (Dunkin Donuts)
iii. Fanciful marks (“Exxon”) and arbitrary marks (“Apple” for
computers) need only be used in commerce to be protected
iv. Traditional test is consumer confusion but trend to allow
trademark dilution cases even when no confusion

CHAPTER IV Owner Sovereignty and its Limits

A. Protecting the Right to Exclude
A. Protecting the Right to Exclude
Begin surveying various ways in which law recognizes and protects right of an
owner to exclude others from her “thing”. Then various exceptions to the right to
exclude: necessity, custom, public accommodation laws, anti-discrimination laws. Then
Basic powers associated with owner sovereignty: right to include others (license), right to
transfer custody but not ownership (bailment), right to abandon or destroy property, right
to transfer ownership.
1) Criminal Laws
i) Criminal Laws Protecting Personal Property
Needed to prevent people from resorting to self help among other
(a) Larceny
i. At CL: prohibited taking personal tangible property by
trespass (diminished this requirement-store customer) from
the possession of another without legal authority with the
intent to permanently deprive. How do you define
“possession” though (in a store)?
ii. Protects the right to exclude
iii. Person can be charged with larceny for shoplifting while
caught with goods inside the store if the evidence
establishes the elements of larceny (People v. Olivo)
iv. Case law focuses on actor’s intent and exercise of
dominion and control over the property; if customer
exercises dominion and control wholly inconsistent with
continued rights of owner and other elements of the crime
are present, larceny has occurred
v. Considerations: concealment of goods, furtive unusual
behavior, proximity to exit, possession of known
shoplifting device
(b) Criminal Laws Protecting Real Property (Trespass)
State v. Shack
i. Trespass: used to block one from “taking possession” of
owner’s property;
ii. Exception to trespass: necessity
iii. State v. Shack: Rights to exclude from private property can
be violated when trespassers seek the welfare of the tenants

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(necessity); here to aid migrant farmers medically and

iv. Similar to public trusts: public right to medical care and
legal counsel precludes other rights
v. Owner still has right to exclude solicitors or peddlers and
require ID from anybody in the interest of safety
vi. Criminal law systematically more concerned with
protection of persons than property; most severe
punishments for property (arson and burglary) threaten
people as well
2) Civil Actions
i) Civil Actions Protecting Real Property
(a) Trespass: used to vindicate interest that person in actual possession
has in exclusive possession to land; damages and injunctions
(b) Ejectment: used to vindicate interest of person who has title to land
against person wrongfully in possession
(c) Nuisance: protects interest in use and enjoyment of land; damages and
ii) Civil Actions Protecting Personal Property
(a) Replevin: plaintiff can recover possession of goods; can be used in
variety of circumstances involving wrongful taking of personal
property in which plaintiff wanted to recover possession
(b) Conversion: wrongful possession or dispossession of another’s
property as if it were one’s own; willful interference with an item of
property in manner inconsistent with another’s right, whereby other is
deprived of the use and possession
(c) Trespass to chattels:
i. Allows recovery for interference with possession of
personal property not sufficiently important enough to be
classified as conversion
ii. Rarely used until recently with hacking, spamming,
unwanted internet intrusions
iii. No trespass to chattels when no damage or impairment
(actual injury; loss of productivity not enough): Intel Corp
v. Hamidi
iv. Intel Corp v. Hamidi: Unwanted emails that do not damage
computer system or impair functioning but costs effort and
expense to remove is not trespass to chattels
v. Creating absolute property right to exclude undesirable
communication from email will raise costs to society, lost
openness of communication
vi. Dissent: do not need actual damage if repetitive
vii. Can invasion by electrons be considered nuisance?
3) Self-Help
i) To what extent can owner or possessor use self-help to vindicate interest in

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(a) MPC: can use reasonable force to prevent unlawful entry onto property
or unlawful carrying away of tangible movable property
(b) Many jds say can use deadly force to avert burglary
(c) Retaking of lease premises, need two conditions:
i. Landlord is legally entitled to possession
ii. Landlord’s means of reentry are peaceable
(d) Berg v. Wiley: Wiley changed locks when tenant Berg was away, with
police officer present. He was worried about her causing damage to
the property.
i. Self help repossession of landlord’s premises by locking
out tenant is wrongful here b/c not done in peaceable
ii. Trend to use judicial process as proper way to evict since
forcible changing of locks can cause violence (can never be
(e) Repossession of property: Repossession of car at night is allowed and
not considered “breach of peace” under UCC (Williams v. Ford Motor
Credit Company)
(f) How is “breach of peace” defined: force or threat of force?

B. Exceptions to the Right to Exclude

1) Four categories of exceptions stated above:
Public accommodation laws
Anti-discrimination laws
. Issue whether to apply in rule-like fashion or on case by case basis
i) Necessity
(a) Can allow trespass in unexpected situations
(b) Ploof v. Putnam: P sailing and caught in storm, needed to moor his
boat. D’s man unmoored it, ship was destroyed and injuries
resulted. Doctrine of necessity applies with special force to
preservation of human life
(c) Preserve human life; to protect property from unexpected nature; to
stop property that is uncontrollable (an animal)
(d) Necessity rule transfers property rule to liability rule (how?)
ii) Custom
(a) Custom allows hunting on forest lands that are unecnclosed and the
owners cannot negate this (McConico v. Singleton)
(b) Many states allow people to hunt unless there is a sign excluding
(c) Where custom causes damage, may be overridden (see Baker hounds)
iii) Public Accomodation Laws
(a) Owners of public accommodation have more qualified rights than
private owners to exclude.

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(b) Subject to general duty of nondiscrimination, must provide service

to customers on first-come, first-serve basis and charge reasonable
(c) Title II of Civil Rights Act of 1964: all persons entitled to full and
equal enjoyment of places of public accommodation (inn, hotel, motel,
restaurant, lunchroom, cafeteria, motion picture house, theater, concert
hall, etc.). Does not include private clubs and non-public
establishments, schools and hospitals
i. Courts have said that use of a group as a public
accommodation makes them enforceable under the act
(Boy Scouts)
ii. Discriminatory name on public accommodation can effect
P’s enjoyment of it (Redskins, racist name)
(d) Common carrier regulated under Commerce Clause (interstate
(e) Private venues governed by govt commission (gambling) lose their
total right to exclude; that right transferred to government commission
and they don’t have rule against card-counters (Uston)
(f) Uston v. Resorts Int’l: Common law right to exclude is substantially
limited by competing common law right of reasonable access to public
places. The more public access, the less you can exclude in an
arbitrary manner. This applies not only to common carriers,
innkeepers but to all property owners who open their premise to the
(g) But still have right to exclude those whose actions disrupt operations
of premises.

iv) Anti-discrimination Laws

(a) Private owner can exclude based on race from his home or apartment
(b) Restrictive covenants: See requirements below
(c) Shelley v. Kraemer:
i. Neighbors signed agreement restricting for 50 years
purchase of property by non-whites. Property sold to
Shelleys (blacks) and neighbor sued to restrain Shelley
from possession of property
ii. 14th Amendment (Equal protection clause) only when
government involvement, does not affect private
iii. Since enforcement of agreement was done through state
actions, satisfies criteria. But for intervention of state
courts, would have been free to occupy the property. But
“voluntary action” not to sell would not be a problem if no
state action involved.
iv. Racist covenants can also be argued against by saying
violate public policy

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v) Use of Trespass Actions to Exclude Persons based on race

(a) Supreme Court held that prosecutions for criminal trespass were state
action when segregation required by law.
(b) In Bell v. Maryland, argued that restaurant owner relied on police and
courts to enforce racist preferences transforms private discrimination
into state action and forbidden by 14th amendment. But J. Goldberg
wrote that no need to show that it’s state action to enforce. He wrote
that framers of 14th Amendment intended to constitutionalize common
law rights of equal access to inns and common carriers as part of the
civil rights enjoyed by all persons. This was positive b/c did not
threaten to transform all judicial enforcement of trespass law into state
(c) Sup Ct ducked question whether enforcement of trespass law for
racist reasons is state action b/c Civil Rights Act prohibited racial
discrimination in any public accommodation affected by interstate
(d) But b/c never resolved question above, meant that owners of property
not open to the public can continue to call upon the power of the
state to enforce their right to exclude, even when that right is
exercised in a discriminatory manner
vi) Fair Housing Act
(a) Prohibited discrimination in renting, selling, pricing of housing except
for single family house with conditions and religious
organization/private club (on 468).
(b) Objectives: Eliminate discrimination and promote diverse
(c) Allowed to discriminate discreetly? but not allowed to advertise b/c
gives sense that it’s allowed (woman who wants female roommate);
this requires loose reading of the act
(d) Cannot discriminate in housing based on marital status. But when
right to exercise religion is weighed against right to discriminate
against unmarried cohabiting couples, courts can allow (Attorney
General v. Desilets); marital status discrim not as intense state concern
as other discrimination; law already discriminates against unmarried,
cohabiting couples by giving benefits to married couples

C. Other Powers of the Sovereign Owner

Basic powers of inclusion and exclusion that sovereign owner can exercise:
License: give permission to someone to access property
Bailment: transfer temporary custody of property to someone else
Power to abandon and destroy property
Power to transfer property to someone else by gift or sale

i) Licenses

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(a) “Permission slip” from owner of asset to another person allowing

gaining access to land or property on certain terms. Waiver of
owner’s right to exclude.
(b) Statute of Frauds does not apply; not considered interest in land.
Can be oral or implied.
(c) At CL, licensor can revoke license at any time.
(d) Automatically revoked when licensor dies or conveys title to someone
(e) Can be irrevocable when license coupled with interest.
(f) Only irrevocable for time taken to use interest.
(g) Also can become irrevocable if reasonably rely on statements of
(h) Marrone v. Washington Jockey Club of DC: Marrone brings action of
trespass for preventing him from entering race track after he bought
ticket of admission. By throwing him out, asserts that they trespassed
on his “property” (right to use the racetrack)
i. An attempt to overthrow the commonly accepted rule that
tickets do not create right in rem.
ii. A contract creates personal right while an in rem right is
person against entire world.
iii. A ticket is a contract and does not create an interest in the
property that it may concern unless it’s also a conveyance. It does
not convey an interest in the racetrack.
• His only recourse was to sue for breach of contract, could
not use self-help to resist being thrown out
(i) Was assumed that entertainment ticket created a revocable license. In
Hurst v. Pictures Theatres, Ltd: the ticket gave a contract not to revoke
the license for the entire show. Or could say was a grant to see the
show and a license to be on property; a license with a grant is not
(j) To make license irrevocable:
i. Give license and interest (ltd only to the interest)
ii. Make a license into an easement
(k) If exceed scope of permission of license, can be guilty of trespass
(l) If ticket revoked: can sue for breach of contract
(m) License agreement can be shrinkwrap or clickwrap and are
enforceable even if not on outside of box. Impractical to put entire
contract on the box. (ProCD, Inc. v. Zeidenberg)
ii) Bailments
(a) Owner of property (bailor) temporarily transfers custody of the
property to another (bailee) for some purpose (Must be full transfer of
possession and control of subject matter to bailee to exclude it from
possession of the owner and all other person (sole custody and
control of);
(b) Exception: car parked in secured lot and kept keys. Since lot had
controlled entrance/exit, uniformed security guards and owner had

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limited access, court found bailment created (Allen v. Hyatt Regency

Nashville Hotel)
(c) Generally, need Delivery, custody and control
(d) Once the purpose is accomplished, understood that the property will be
(e) Some of the bailor’s rights associated with ownership, most notably
the right to exclude others from owned thing, are transferred to
(f) Bailmee has more rights than licensee. He has exclusive right to
possess it, may maintain actions against violating third parties
(damages, breach of contract, conversion, replevin). If not gratuitious,
can maintain action against the bailor. Can sue for damages from
breach of contract or conversion or replevin.
(g) Depending on who the benefit is for, the bailee’s responsibility
changes (slight, ordinary, extraordinary)
i. Bailee’s Duty of Care
• Roman code: complicated 6 fold classification of bailments
and standards of care
• Justice Story: Degree of responsibility depends on who the
benefit is for
• Things within normal scope of bailment need to be returned
but unexpected items may not be in scope of responsibility
• Strictly liable for misdelivery
(h) Involuntary Bailee: not responsible for property at all unless he
exercises dominion over it; lesser liability than ordinary bailee,
reasonable care.
i. Only liable if negligent in delivering goods to wrong
person (Cowen v. Pressprich)
ii. In Pressprich, unclear whether bailee, involuntary bailee or
stranger. If involuntary, no contractual understanding but did
possess it for 15 seconds. Court says voluntary possession never
established, that Pressprich is stranger to the bond.
(i) Bailee treated as surrogate for ownership:
i. Bailee has general action of trespass against stranger and
can recover damages for property he was responsible over
(Winfield: Postmaster (bailee) files claim on behalf of mail owners
(bailors). Jus Tertii: rights of third party limit your ability to sue.
Refutes theory here that just b/c postal customers can’t go after
Postmaster, that Postmaster cannot go after them. Bailee has
special property rights independent of bailor’s rights.
ii. Bailee has right to sue over chattel converted.

iii) Abandonment and Destruction

(a) Owner sovereignty commonly thought of to include right to abandon
property or destroy it

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(b) Makes sense if think of property as individual right (efficiency) but

maybe not from view of broader social welfare
(c) Opposite of first possession: parting with possession to no one in
particular with no intention of resuming possession
(d) Law in PA (and traditional rule) does not allow abandonment of
real property if have title to it (so that cannot abandon hazardous waste
without cleanup and impracticalities of abandonment process). This
results in MacKenzies’ unable to abandon property that is costing them
fees and taxes (Pocono Springs Civic Assoc. Inc. v. MacKenzie)
(e) Easements, mineral fields or anything that can be thrown out can be
(f) Limits to destruction: Court allows injunction to prevent testatrix
from razing home after death. Court says home is necessary for
property, architectural values, available housing and overall monetary
loss to society (Eyerman v. Mercantile Trust Co.)
(g) Pro-destruction: economic gains (efficiency), expressive value
(h) Anti-destruction: lower property values, against public good/policy,
dead-hand control (Everman)
iv) Transfer
(a) Rules Designed to Enhance Transferability:
i. Transferability good for efficiency (Coase) but some things
may be inappropriate for transfer (body parts) yet still be
afforded attributes of property (right to exclude)
ii. Inalienability: Original owner barred from engaging in
transfer that that absolutely limits future transfers. Partial
restraints will be allowed if “reasonable”
iii. In Lauderbaugh v. Williams: court says that rule requiring
membership in organization to buy property was
unreasonable restraint on alienation. If standards to
membership were articulated, courts would have basis
for reviewing for abuse and discretion (reasonableness) but
since no standards, court didn’t like
iv. Coops and condos: acceptable to be more picky since
more close substitutes for condos than vacation lots and
more about interdependence and keeping up common
v. Statute of Frauds: Any conveyance of property right in
land (other than short term lease) and any contract for the
assignment, surrender or sale of property right in land must
be in writing and signed by at least one of the parties
vi. SOF has served to increase overall security of property
rights (and  lower costs). The requirement is restriction
on alienation (selling without writing) but increases overall
transferability of property

(b) Delivery Requirement

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i. Some transfers take place by law only when thing being

transferred, or evidence of title, is delivered to transferee (deed-
formal writing evidencing sale or easement, etc.)
ii. Irons v. Smallpiece: colt was never delivered after oral
promise. But perhaps other evidence could validate the transfer
iii. Delivery requirement for gifts: writing which establishes
donative intent does not fulfill affirmative action requirement of
delivery of the property by the donor, which is a separate and
distinct requirement for gift causa mortis (made in expectation of
death) (Foster v. Reiss)
iv. Purpose of the delivery requirement for gifts causa
• potentially override more formal methods of
disposing property upon death
• Court worried about fraud
• Provide additional assurance that donor adequately
appreciates decision
v. Wills: must be in writing and witnessed by one or two
disinterested parties; sometimes need notarization. Holographic
wills acceptable in half of estates (no witnesses)

CHAPTER V Forms of Ownership

A. Intro
Seisin: somebody must have possession of the land to pay feudal dues
Livery of Seisin: ceremony to give notice of the transfer
Property rights were “Usufructuary” – means deriving benefits from land owned
by someone else (King). If you had no sons, land would revert back to King.
B. Divisions by Time: more efficient use of land; limited number of ways to do
(numerus clausus)
Estates in Land
Present Possessory Interests (as opposed to non-possessory interest where limited
i) Fee Simple Absolute (90% of privately held land, rare to use other forms)
(a) “to Marge and her heirs”. Resembles absolute ownership.
(b) Potentially infinite duration
(c) At ancient CL, needed to say “and his heirs” or it would be life estate
(no more tho)
(d) Fee Tail: no longer in US, “To A and the heirs of his body”; used to
create succession of life estates to keep in the family
ii) Life Estate: Comes to natural end with death of named person, usually holder
of estate.
(a) “To Marge for life, then to Lisa”.
(b) If Marge sells, when she dies, Lisa will take; cannot sell or lease more
than she has
(c) Purchaser will receive pur autre vie (life estate according to Marge’s

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(d) Can be followed by “reversion” or “remainder”; see Future Interests

iii) Defeasible Fees: May end on happening of named contingency
(a) Fee Simple Determinable: ends automatically upon occurrence of
named event, where grantor or successor takes property (possibility of
i. “To Springfield Law School, as long as it is used for
instruction in the law, then to O”
ii. Language of duration: “as long as”, “while”, “during”
(b) Fee simple subject to condition subsequent: Continues until
happening of named event, then right to retake by grantor or successor
(right of reentry)
i. “to Springfield Law School but if it is not used for X, then
O has the right to reenter and take the premises”
ii. Transfer not automatic
(c) Fee Simple subject to Executory Limitation: If Defeasible fee is
followed by interest not reserved to the grantor.
i. “To Springfield Law School, as long as it is used for
instruction in law, then to Springfield Animal Hospital
ii. Vests immediately in third party regardless of words of
limitation or condition

Future Interests:
iv) Interests Retained by the Grantor
(a) Reversion: when owner has not disposed of the entire fee
i. “To Marge for life, then to O.” or implicitly if just “To
Marge for life”
(b) Possibility of Reverter: interest reserved to grantor that follows fee
simple determinable.
i. “To Springfield Law as long as used for instruction in law,
then to O.”
ii. Can be implicit
(c) Right of Entry/Power of Termination: Interest retained by grantor
following defeasible fee simple subject to condition subsequent
; not automatic
v) Interests Created in Grantee
(a) Remainder: Like reversion, follows life estate but goes to party other
than grantor
i. “To Homer for life, then to Bart, Lisa, and Maggie and
their heirs”
ii. Indefeasibly vested: identity of takers is known and no
other contingency that has to be fulfilled b/f interest ready to
become possessory other than natural termination of preceding
one; see above. Even if Homer dies before Marge. Can be for
term of years: vested remainder in term of X years.

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iii. Contingent remainders: some uncertainty exists to

identity of the class of takers or the occurrence of the condition
(*Subject to RAP)
iv. Vested subject to complete defeasance (Contingent):
occurrence of a condition can cause interest to shift to someone
1) “To Homer for life, then to Bart; but if Bart fails to
graduate from High School by age 19, then to Lisa”
v. Vested subject to partial defeasance (subject to open)
(Contingent): more members could enter the class (*Subject to
1) “To Homer for life, then to his children and their heirs”.
-----Maggie has not yet been born.
(b) Executory Interest: Interest in a transferee (not retained by grantor),
that divests or cuts short a previous interest such as fee simple or life
estate (*Subject to RAP). Derives from Fee Simple subject to
executory limitation.
1) “To Bart, but if alcohol is ever consumed on the premises,
then to Ned Flanders”
2) Shifting: like above, b/c divests interest of a 3rd party
3) Springing: If divests interest of the grantor
a. Marge grants to “Bart for life, remainder to Lisa 5 years
after his death”. Reversion to Marge in five-year period after
Bart’s death. Lisa divests Marge’s (grantor) interest.
vi) Vesting:
(a) Interest vests in possession when becomes present possessory one.
(b) Vests in interest means that various types of uncertainty about the
interest have been resolved
(c) Once have vested remainder, even if life estate subject dies before
grantor, still have remainder.
(d) If B has life estate remainder but dies before life estate, remainder
goes to heirs of B since indefeasibly vested.
(e) Future interests are now often transferable and devisable
C. Maintaining the System
i) Conservation of Estates: everything must add up to fee simple; last interest
involved in situation when it becomes possessory has to be in fee simple
absolute; courts can add interest when unclear to maintain fee simple absolute
ii) Flexibility of the Estate System
Using the Estate System for Estate Planning
(a) Heirs at law (intestacy):
i. Intestacy statute: how property gets divided without will
according to state
ii. Spouse gets b/w ½ and 1/3
iii. Law of Gravity: inheritance moves downward first. After
spouse, descendants. If no descendants, then parents.

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iv. Uniform Probate code approach: growing minority idea

that tries to more closely adhere to what people would want to do.
If not, 3 methods to figure out how to divide up stuff for kids:
v. Per stirpes: By the stocks/branches. used by 14 states;
initial division occurs at level immediately below decedent so if
one child (X) already died, X’s children divide his interest. Even
if no surviving children at the immediate level.
vi. Modern per stripes (majority rule): used by 25 states;
initial division occurs at level where there is living descendant. If
A had 2 kids and both dead, and has 3 grandkids, each will get 1/3.
vii. Per capital at each generation: adopted by 13 states; initial
division first level where there’s a survivor but after that,
remainder gets divided equally for next generation (everyone on
same level, same amount of inheritance). If intestate has 3 kids
and 2 die, surviving child gets 1/3 but remaining 2/3 divided
equally among survivors.
viii. If no parents, brothers and sisters and children will be next.
ix. Nearer blood relatives take precedence over more distant
ones but states very whether based on consanguinity or on
parentelic system
i. Cosanguinity: counts distance in terms of number of
generations to common ancester
ii. Parentelic (majority rule): priority is given to those close
by in terms of sharing a common ancestor so grandnieces (4th
degree under cosang) are higher than aunts (3rd degree) b/c
descended from decedent’s parents
(b) Will construction: Williams v. Estate of Williams: Parsing of language
in the will to determine whether intent was fee simple or life estate
defeasible or determinable on marriage. But cannot penalize b/c of
(c) RAP does not apply to reversionary interest but does to executory
interest. In City of Klamath Falls v. Bell, Corporation gave executory
interest to its two principal shareholders so was subject to RAP and
void. But this invalidation implied possibility of reverter in the
grantor, the company, and since it was dissolved, still went to their
(d) Interests less than fee simple can be held void for reasons of public
policy or constitutionality (willed land for white persons use only
deemed invalid and implied reversion)
iii) Disclaimer
(a) Cannot be forced to take property against will and can disclaim it
(b) Considered predeceasing and goes automatically to heirs (avoids
(c) Must put disclaimer in writing and identify the transfer and sign and
deliver within 9 months of its vesting

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(d) If accept any benefits of ownership of that property, lose right to

(e) Once disclaim, considered passing away before testator
iv) Numerus Clausus:
(a) Closed system of property interests, unlike contract
(b) Property is in rem rights, difficult to communicate to all people what
their responsibilities are
(c) Other parties would lose out by search costs of whether property has
new category (Merrill and Smith)
(d) Excessive fragmentations (anti-commons)
(e) Gives power of creating and destroying forms of property to the
(f) Argument against limitation: decreases control of property, less
(g) Merrill and Smith, “Optimal Standardization in the Law of Property:
Numerus Clausus Principle”
i. Need for standardization stems from externality
involving measuring costs; parties who create new property
rights will not take into account the full magnitude of the
measurement costs they impose on strangers to the title
ii. Allowing even one person to create idiosyncratic property
right, costs of all who have potential interests in this type of
property go up
iii. Individual’s interest in creating the non-standard right,
extra benefit, is less than additional measurement costs imposed
on other market participants, rationale to prohibit their creation
(h) In Johnson v. Whiton: Question whether language creates new fees
structure that would limit alienability of property (estate descending to
heirs only on the father’s side new kind of inheritance), so Holmes
rejects it. Also numerus clausus.
(i) Garner v. Gerrish: Court says that lease of indefinite duration creates a
life estate in the tenant, determinable on his death. Other courts will
say it creates a tenancy at will.
(j) Personal Property: Can create estates in chattel (trusts, bonds, etc.)
but some restrictions on creation of future interests in “consumable”
chattel (food, current crops). Interesting line-drawing exercises.
Solution is to make specific grants of personal property
D. Mediating Conflicts Over Time
i) Waste
(a) Historically, tenant had limited opportunities to change land. Angy act
of life tenant that does permanent injury to inheritance is waste.
(b) Waste is most important cause of action that can be brought by
persons who hold non-possessory interests in the property against
other owners currently in possession
(c) Affirmative waste: Life tenant actively causes permanent injury
(destroying buildings, removing resources)

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(d) Permissive waste: Land is allowed to fall into disrepair or fails to

take reasonable measure to protect the land, failing to pay taxes
(e) Ameliorative waste: Principal use of land is substantially changed
(tearing down building) but increases value of the land. May be
actionable if:
i) The grantor intended to pass land with specified buildings
on it and
ii) The existing building can reasonably be used for purposes
built by grantor. Brokaw v. Fairchild: contingent remainder
holders claim that planned demolition of mansion is waste,
even though an apartment building would be more valuable.
Erector intended to pass “my residence” on to B.
(f) Minority view permits ameliorative waste where can be justified by
changed circumstances (Melms v. Pabst Brewing Co.)
(g) General rule: structure must be maintained as is unless testator’s
purpose cannot be served without it being destroyed (see Changed
Circumstances, Cy Pres)
ii) Valuation of Interests
(a) PV=C/(1+discount rate)^n
(b) Used to value various interests carved out of fee simple
(c) Present value of future estate is cost divided by (1+ discount
rate)^number of years deferred
(d) Once you valuate PV of future interest, can subtract that from purchase
price to determine life estate value

iii) Restraints on Alienation: courts will strike down restraints on alienation and
turn them into fee simple (Blackacre to A so long as A does not alienate)
(a) Reasons against inalienation:
i. Take property out of market
ii. Inefficient
iii. Unmortgageable and therefore unimprovable
iv. Concentrates wealth in elite class
v. Prevents creditors from reaching property to pay owner’s
(b) Sale to member of club: effective unless no reasonable standards for
admission to association and have arbitrary power to deny membership
(see Restrictions on Transfer above)
(c) Reasonablness test: partial restraints on fee simple valid if reasonable
(Preemptive option to reserve right of first refusal if owner decides to
sell; sale of coop with permission of board)
(d) Restraints on use of property: Usually upheld. Mountain Brow
Lodge No. 82 v. Toscano: upheld restraint limiting use to club.
“property is restricted for use and benefit of second party only, if they
fail to use or they sell or transfer all or part of property…, it reverts
back to first parties, their successors and heirs, etc.” Is it fee simple
subject to condition subsequent (valid) or restrictive language

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amounting to absolute restraint because of vagueness, the restriction is

not on the land use but on who uses, therefore absolute restraint on
power of alienation and void? Criteria used to analyze:
i. How severe is the remedy involved if one fails to abide by
restriction (Penalties/injunctions or Forfeiture)
ii. Effect of land use restriction on number of potential buyers
iii. Benefits to land in area from the restriction?
iv. Does restriction discourage improvements?
v. Dissent: can fragment into thousands of descendants when
it reverts; impossible to track them down

iv) Rule against Perpetuities

(a) Invalidates interests that gave too much control to “dead hand”.
i. Costly to the owner b/c cannot sell it or give away
ii. Focus on needs of future generation more than dead person
iii. Testator cannot be expected to see all the contingencies

(b) Allows people to control use of property for one generation into
future plus next generation up to traditional age of minority.
(c) “No interest is good unless it must vest, if at all, not later than
twenty-one years after some life in being at the creation of the
(d) Elimination of the suspense element:
i. contingent remainder: ascertainment of identity of the taker
and satisfaction of all conditions precedent
ii. executory interest: taking of possession
iii. remainder subject to open: closing of class
(e) Rule of two charities: an interest does not violate the RAP, if interest
involves a transfer from one charity to another, as opposed to City of
Klamath Falls, where executory interest was given to stockholders of
donor corporation and violated RAP.
(f) Future interests only have to vest in interest, not in possession,
within the statutory time limit to be valid under the Rule.
(g) A remainder to A’s children is valid since it must vest or fail at A’s
death (cannot have more children after death). A is the validating life.
(h) When an interest violates the Rule, it is struck and the remaining valid
interests stand. This may leave a fee simple determinable if language
struck is “as long as…” or fee simple absolute if language is struck is
“but if … then…”.
(i) Rule only applies to contingent remainders and executory interests,
not to any grantor’s interests (reversions, rights of entry,
possibilities of reverter)
(j) Corporations and RAP: Symphony Space, Inc. v. Pergola Properties,
Inc: Court held that RAP applies to corporations as well, and when
no validating life, 21 years. Option agreement to repurchase property

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violated RAP. Defeats policy goals of RAP: disincentive to develop

and hinders alienability. Ways to avoid problem:
i. Option to purchase land that originates in lease provision
and not exercisable after lease expires
ii. If option was construed so can only apply within 21 years
iii. Separability Doctrine: when instrument conveys future
interest that may vest upon one events or more, and one occurs
within period and next one may not, then that conveyance is valid
if occurrence happens at the first time and void if it happens in the
iv. Wait and see doctrine: (E.g. Wait to see whether or not
additional children are born; if not interest valid) does not apply
because if there is a contingency beyond the period, interest has to
be void
(k) Interpretation and Implication: drafters and courts can insert
perpetuities savings clause. Cts can invalidate only part of it, so if
gift made to A’s children, interest is held to vest even if a child might
be born too remotely. Interest simply fails with respect to that child
only (rejects all or nothing approach)
(l) Uniform Statutory Rule Against Perpetuities: (USRAP): allows
someone to petition a Ct to reform a disposition in the manner that
most closely approximates the transferor’s plan
v) Vestigial Maintenance Doctrines:
(a) Served at one time to clean up conveyances and make them more
alienable than they otherwise might have been.
(b) Recently, future interest have been made more fully alienable than
they were at common law, alleviating some problems courts
traditionally faced.
(c) Also, most future interests are now created in trust, where trustee can
be given powers of alienation and appointment and entire arrangement
as far as management and distribution of the proceeds is concerned,
can be customized to degree impossible within catalog of legal estates
and interests.
(d) No longer in effect except Merger Rule: Any combination of transfers
that puts in the hands of a single person a series of interests that add up
to a larger estate, that person would be given a fee simple absolute.
i. Method to evade taxes by giving intervivos life estate and
reversion at end of life estate, which adds up to fee simple
absolute, avoids estate tax.
(e) Rule in Shelley’s Case: landowners would attempt to convey property
while still alive in such a way that persons would take as purchasers
rather than by descent. If someone creates life estate in A, and
remainder to A’s heirs, then life estate and remainder are both legal
and interest becomes fee simple. Has been abolished in most states

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E. Co-ownership and Mediating Conflicts between Co-owners: can be concurrent

ownership in fee simple, life estates and remainders of executory interest
i) Types of Concurrent and Marital Estates
(a) Tenancy in common: Two or more person own the property with no
right of survivorship between them; when one dies, interest passes to
her heirs or devisees
i. Each has right to entire property subject to same right in
cotenant. Independently descendible and conveyable
ii. Equal shares not necessary
iii. Whenever conveyance made to two or more person not
husband and wife, presumed to take as Tenants in common
iv. Heirs always take as tenants in common
(b) Joint Tenancy: Two or more person own property with right of
survivorship; when one joint tenant dies, survivor takes all.
i. Four unities requires under CL. Interests must be equal in
all respects.
ii. If one of four entities not present, tenancy in common
created: TTIP
1) Time: Interest must vest at the same time (heirs ascertained
at different times would not work)
2) Title: Must acquire title by same deed or will, or by joint
Strawperson: Cannot convey to another as joint tenants;
need to use strawperson to convey; but many states no longer
require strawperson.
3) Interest: each must have same legal interest in property,
such as fee simple, life estate, lease, etc. although not
necessarily identical shares
4) Possession: Each JT must have right to possession of the
iii. Traditionally, if any of first three unities destroyed, JT is
severed and TIC is created.
iv. Each JT has power to unilaterally transfer his interest while
living. Once transferred, that interest becomes TIC. If at least two
others in JT, they still share JT.
v. JT is only appropriate for intimate relationship like
committed relationship or family business.
vi. Can change JT into TIC without consent of other parties by
using straw man but a growing number of jurisdictions require
some form of notice to the other joint tenant for such a severance
to be valid
vii. Movement away from four unities to try to honor intent
of grantor.
(c) Tenancy by the Entirety: Exists only b/w husband and wife, with
right of survivorship that cannot be severed without consent of both
spouses or divorce

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i. Only minority of states have

ii. Only available to married couples.
iii. Like JT, right of survivorship. No unilateral exit as long
as couple stays married.
iv. Both spouses can use a “straw” to become tenants in
common but cannot do on own except through divorce.
v. In addition to four unities, require fifth, marriage in
some states.
vi. If property acquired without marriage, even though intend
to be TBTE, default would be TIC. Minority follows intention
and JT would most closely resemble what they chose so it would
be JT.
(d) Community Property:
i. Some states of South and West have community property
for married couples.
ii. All property acquired during marriage automatically
becomes community property.
iii. Any alienation must have consent of both spouses
iv. Upon divorce, each spouse has to be able to trace property
and show who it came from

ii) Legal Remedies

(a) Partition: most important legal remedy for concurrent owners. Can
sue for any reason or no reason and court will grant request.
Terminates co-tenancy and divides common property; not available to
tenants by the entirety b/c neither spouse can destroy right of
survivorship of other spouse
i. Partition in kind: partition property into separate tracts if
feasible. Each party then owns her tract alone in fee simple. If
not equal in value, one must pay owelty (cash payment) to other.
Can be favored for personhood/business reasons or if
significant improvements made.
ii. Partition sale: If physical division not feasible, court will
order property sold and proceeds divided equally. Houses,
apartment bldgs, urban lots, commercial property do not lend
themselves to physical partition usually.
1) Physical division not feasible
2) Interests of owners would be better served by sale
iii. In Delfino v. Vealencis, partition in kind was practicable
and partition by sale would have forced defendant tenant to
surrender her home and perhaps jeopardize her livelihood, even
though her operation of rubbish and garbage removal service on a
portion of the land might reduce fair market value of the proposed
residential lots. Partition in kind the default because sale of one’s
property without consent is extreme exercise of power warranted
only in clear cases. Also may cause loss in value.

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iv. Partition may be to blame for decline in African-American

farming b/c less likely to use wills and under intestacy ownership
became more fragmented to increasing number of decendants

(b) Contribution and Accounting:

i. If one cotenant rents to third party, obliged to share
payments with other cotenants. If not, non-renting cotenant can
bring action for accounting
ii. In ouster, deprives another co-tenant of right to possession,
co-tenant may sue for his share of rents and profits from common
property. An ouster starts clock ticking for AP.
iii. In Gillmore v. Gillmore, sued for accounting and recovery
of damages in being denied right to use land. Court held that
defendant exercised exclusive possession and use of common
properties in such a manner as to exclude plaintiff from using the
land (if she had put more animals on, it would have damaged the

(c) Severance of Joint Tenancy

i. Either joint tenant can unilaterally ‘sever’ the joint tenancy
which destroys right of survivorship and converts tenancy into
tenancy in common
ii. Actions leading to under CL, destruction of one of four
unities (time, title, interest, possession) creates severance
iii. Modern law may be lenient when unintentionally severed
iv. Mortgages: In title theory states, a taking out a mortgage
gives title to lender and JT is destroyed tho can argue and say not
an actual conveyance; in lien theory states, lender only has lien to
the property and legal title and JT remains. Debate over whether
surviving joint tenant takes one-half subject to the mortgage if
debt not paid off b/f debtor joint tenant dies. In Harms v.
Sprague: held that survivor has right to debtor’s half
unencumbered by the mortgage (lender loses his security). Lender
who knows of this rule will not give credit to one joint tenant;
lender who doesn’t know loses security and survivor gets windfall.
Minority view.

(d) Special Problems of Joint Bank Accounts:

i. Joint and Survivor Bank Account: either party on the
account can withdraw the amount deposited and survivor takes
remaining sum when other JT dies.
ii. Convenience Account: O needs another person A to pay
bills. If this is the intent, A can write checks but has no rights of
iii. Presumption that joint account provides survivorship
rights but this can be overcome with clear and convincing

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evidence. In re Estate of Filfiley, estate could not prove that it was

a convenience account, therefore statutory presumption prevails
that was true joint tenancy. The surviving daughter is entitled to
entire fund
iv. Will substitute: to avoid will and probate process, can use
survivorship feature of JT of the account
v. A JT cannot withdraw entirety of fund (or deed)
F. More on Marital Interests
i) Marital Issues:
i. Special rules for marital interests emerge in context of
divorce and inheritance.
ii. In CL states, divorce division governed by principles of
equitable division unless pre-nup.
iii. Central issue is how to treat increases in human capital
during marriage.
iv. Community property distribution: NY was one of last
states to switch from title theory to equitable distribution.
Things held in your name, stay with you after marriage (title
theory). Equitable distribution: ad hoc approach that considers
dozen factors. No presumption for 50/50 split.
v. Is property Marital property or separate property?
vi. Professional degrees: Split approach.
1) Not divisible property
2) Reimbursement alimony (restitution remedy)
3) Divisible property (NY – O’Brien v. O’Brien)
• Could make argument for accession
• Exchange value not required for property interests
• Question is not if degree is property but if expected
earnings interest is
vii. Unmarried Partners:
1) Most states hold that express contract b/w partners on
division upon separation or death is enforceable
2) Some say contract can be implied from conduct of
parties. Although contract is unenforceable to extent that it
explicitly rests upon sexual services, not the case in Marvin v.
Marvin b/c does not solely rest upon it.
3) Courts may employ principles of constructive trust or
resulting trust to prevent unjust enrichment. Dissent: this is
better system than marriage, etc. Do we want to provide these
benefits to people who do not get married?

CHAPTER VI Entity Property

A. Entity Property: Possessory Rights
To provide for more effective management of resources in complicated settings
(hi-rise apts, business firms, pension plans) law developed certain devices that allow
owners to switch to a governance strategy for the mgmt of resources. Three forms of

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legal ownership of greatest continuing importance are fee simple (and full ownership),
lease, and trust

1) Leases
i) Why so popular?
(a) De facto financing device. Owner lends possession in return for
periodic payments of money called rent. Certain financial positions
prefer lease to ownership
(b) Risk spreading device. Can always move out or kick tenant out.
(c) Form of entity property in which complexes of assets can be
integrated and professionally managed
ii) Lease Types
(a) Term of years: Fixed time at which terminates or ends. Neither
landlord nor tenant needs to give notice before terminating
relationship. Simply ends. Most state SOFs say need to be in writing
if year or more
(b) Periodic Tenancy: Automatically rolls over, usually for year or
month. Requires that each give notice to other if they desire to
terminate lease, usually same period as rollover. At CL, year to year
was 6 months but now mostly one month.
(c) Tenancy at will: lasts only so long as both parties wish it to continue.
Either can terminate for any reason at any time. At CL, no notice
needed but mostly need equal period of time at which rent payments
are made.
(d) Tenancy at sufferance: Individual who was once in rightful
possession of property, holds over after right has ended. Not
trespasser b/c original entry not wrongful. Landlord is free to evict.
Not really a form of lease but can be used by courts to force rent to
be paid.
(e) Numerus clausus: only four types under CL. If for “duration of war”,
may put in term of years at 50 or maybe tenancy at will.

iii) Independent Covenants Model

(a) Until recently, promises in leases were assumed to be independent
of the other party’s performance (quiet enjoyment to tenant,
payment of rent to landlord). Conception of lease creating a property
interest was preferred to the conception of lease as creating promises
(b) Paradine v. Jane: Even if farm is overrun by army of alien enemies
and building destroyed, still need to pay rent. Just as can have
unforeseen profits, can have risk of losses and tenant bears risk. Even
if landlord fails to perform covenant, tenant must continue to perform
his covenant. Remedy is to sue for breach of contract.
(c) Partial Eviction: Smith v. McEnany: Exception to rule of
independent covenants in Paradine v. Jane. Covenant to pay rent
was recognized to be dependent on the performance of the

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covenant of quiet enjoyment. Partial ouster by landlord (building

encroachment) completely absolves tenant from performing covenant
to pay rent. Tenant has made it an absolute condition that he should
have the whole of the demised premises, at least against willful
interference on landlord’s part. However, tenant still has independent
covenant to repair which is in force. Rule would not apply to de
minimis encroachment.
(d) Complete eviction terminates obligation to pay rent
(e) Obligation to deliver premises:
i. American Rule: landlord must only provide legal
possession of the leasehold estate. In other words, they must only
put the lessee in superior right of possession. They have no duty
to ensure that the property is open for entry. This rule assumes
that the tenant has adequate remedies against the holdover tenant,
and it reduces lawsuits
ii. English Rule: landlord has an implied covenant promising
that the premises will be open to entry to the lessee at the time
fixed by the lease. If the premises are not open to entry, the lessee
has a cause of action against the landlord. This rule assumes that
the landlord is in a better position to ensure the property is open
and is in a better position to take legal action to force off any
holdover tenants
(f) Caveat Lessee (tenant beware). In Sutton v. Temple, no implied
warranty that the leased premises will be fit for tenant’s intended
purposes (eatage for the cows). Judges distinguished from implied
warranty of habitability in a furnished cottage b/c was mixed nature of
furniture and house, which had an understanding to be reasonably fit
for immediate habitation (less ability to inspect?)
(g) Constructive eviction is defense against paying rent. Substantial
interference with tenant’s use and enjoyment of the leased
premises, tenant may terminate lease, vacate premises and be
excused from further rent liability.
i. Substantial interference
ii. Tenant must vacate premises (risky though, and does not
necessarily prove anything); minority says do not need to vacate
iii. Fault of the landlord (modern trend to hold landlords
responsible for acts of tenants that they could correct) Blackett v.
Olanoff (have the lounge turn off the music!)
(h) Surrender: courts reasoned that landlord and tenant could create
mutual release of further lease obligations by implied contract.
Tenant vacates with intention never to return (offer to surrender),
landlord takes action inconsistent with tenant’s continuing right
(accepts surrender).
1) In In re Kerr: in absence of express provision in lease
authorizing landlord to relet, making of new lease is acceptance
of tenant’s surrender of then existing lease. Even when we

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have a statute in lease allowing landlord right to relet, only

allows for balance of term of lease. If new lease extends
beyond term of bankrupt’s lease, landlord presumed to be
acting on own account and accepted surrender

iv) Model of Dependent Covenants: 1970s revolution in landlord-tenant law,

characterized by repudiation of “property” conception of leases in favor of
“contract” model of leases. More accurate to say, contractual aspect of
landlord-tenant law moved decisively away from model of independent
covenants to model of dependant covenants.
(a) Dependent covenants. Rule that covenants that run to entire
consideration of contract are mutual and dependent. The restrictive
covenant in defendant’s lease in Medico-Dental Building Company of
LA was of such a nature. Because it was not honored, had remedies,
including rescission of lease.
(b) Contract law can apply to leases. If breach is sufficiently serious,
goes to essence of consideration, options of promisee include
rescission and termination of further performance. If less serious
covenant, promisee could sue for damages only. Major breaches
treated under model of dependant covenants, and minor breaches
under model of independent covenants.
(c) Implied warranty of habitability:
i. Under CL, no implied covenant b/c tenant able to inspect
the premises and protect himself. Except for furnished house for
short term rental, hidden defects, building under construction.
ii. The W of H: implied covenant of initial habitability and
fitness in leases of urban dwellings, including apartments (not
commercial settings)
iii. The dependent covenant doctrine applies and tenant is
relieved of his obligations when landlord breaches the implied
covenant of habitability.
iv. Rationales:
1) No time to inspect premises (but sometimes do)
2) Landlord knows more about defects and better position to
remedy them
3) Housing codes impose duties on landlord and are enforced
4) Tenants have less bargaining power than landlords
5) UCC imply warranty of fitness for purpose intended in sale
by merchant where buyer relies on seller’s skill, similar
warranties should be applied to sale of leasehold
v. Criticism:
1) Economic grounds: raises rents to cover costs
2) Poor will lose more housing

vi. Scope of Warranty: not everything in the housing code

but those that have substantial impact upon safety or health
(Javins v. First National Realty). Statutes govern now

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vii. Remedies: Contract remedies of damages, restitution,

and rescission. Using rent for repair or withholding. Tenant can
move out and recover any prepaid rent or stay in possession and
recover damages (rent reduction). Trier of fact determines what’s
viii. Landlord responsible for common areas under CL
ix. Waiver by tenant: May be against public policy for tenant
to waive defects. In Javins v. First National Realty, tenants are
not able to waive.
x. Other doctrines introduced in late 60s: Doctrine of
retaliatory eviction: cannot retaliate for reporting code violations.
Illegal lease doctrine: if leases property that’s subject to one or
more code violations, so unsafe and unsanitary, lease is void and
cannot sue for unpaid rent.
xi. Damages for violation: Could not subtract cost of lease w/
violations from cost of lease w/o violations b/c that’s what they
were already paying! Courts devised other ways to actually create
damages but can be viewed as arbitrary
xii. Consequences of Implied Warranty of Habitability: may
be bad or good for people depending on demand curve. Some will
benefit, others will be priced out.
xiii. Duty to mitigate when breach: Have moved away from
original conception of lease where no duty to mitigate, where
landlord would not be better party to find new tenant (Absentee
landlords); today, in urban residential area, landlord will have
presence on the premises and in a better position to find substitute
tenant when original tenant breaches. Must make reasonable
efforts to relet apartment wrongfully vacated by the tenant.
(Sommer v. Kridel). Aspects of contract law.
v) Transfer of Interests: Some situations where property-like notions
continue to hold sway so not complete shift to contracts. .
(a) Transfer of possession to the tenant: lessee acts as gatekeeper of
property and can exercise in rem rights of exclusion associated with
possession of property (like bailments). State v. Shack?
(b) Transfers of landlord’s reversion or tenant’s leasehold interest to
third party during term of lease: generally, transferee takes reversion
subject to tenant’s leasehold interest, like someone acquiring property
in which another has a life estate would acquire subject to the life
i. Assignee and tenant are in privity of estate
ii. But they are not in privity of contract. Original landlord
and tenant remain in privity of contract
iii. Ordinary rule: new owner of reversion takes property
subject to ongoing leasehold interest but perhaps can
contract around (“leasehold will terminate upon any
transfer by landlord”)

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iv. Ordinary rule: when reversion is sold, new landlord and

original tenant not bound by all provisions in lease, only
by those that “run with the land” (like covenants)
v. “Run with the land” Test
1) Whether parties intended covenant to run
2) whether covenant “touches and concerns the land”
vi. Mullendore Theatres, Inc. v. Growth Realty Investors Co:
defines “Touches and concerns the land”: so related to the land
as to enhance its value and confer a benefit upon it. Court says
that provision in lease stating that all covenants run with the land
will not be enforced if the covenant does not in fact touch and
concern the land. Promise to repay security deposit needs to
restrict use of funds to the benefit of the property, which it does
not here. Person in this district would want to make sure that
deposit is transferred to future landlords and spell out functions of
security deposit
vii. Touch and concern the land (murky):
1) Some say affects use and enjoyment of land
2) Some say affects market value of land
(c) Assignment and Sublease
i. Creation
1) Assignment by Tenant:
a) At CL, tenant transfers entire remaining
term of leasehold
b) Assignee comes into privity of estate with
the landlord but not privity of contract. Unless is
novation/assumption new contract b/w L and T2
leaving T1 out of the picture.
c) Privity of estate makes the landlord and the
assignee liable to each other on the covenants in the
original lease that run with the land (see test above).
d) If landlord assigns the reversion, assignee
and tenant are in privity of estate
e) If T1 retains right of entry, mostly say not
enough of retained interest to create sublease and
still assignment

2) Sublease by tenant
a) At CL, if tenant transfers less than entire
remaining term of his leasehold
b) Sublessee is not in privity of estate with
landlord and cannot sue or be sued by landlord but
landlord can: Terminate original lease due to
breach which would extinguish right of T1 and
deal directly with T2. Or LL can go after T2 in
equity b/c LL was third party beneficiary

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c) Cannot be sued on contract either since no

privity of contract
d) Sublessor is the landlord to the sublessee
(both privities)
3) Jaber v. Miller: Intend of parties determines whether a
transfer is an assignment or a sublease (modern rule).
Transfer of the lease for lump sum, even if payment is to be
made in deferred installments, indicates an assignment.
4) Covenants against assignment or sublease: unless
covenant to contrary, leasehold is freely transferable by tenant
without L’s consent.
a) Arbitrary denial of consent: if lease
contains covenant against transfer w/o L’s consent,
older view: may arbitrarily refuse to accept new
tenant. Minority/Modern view: denial of consent
must be reasonable (Kendall v. Ernest Pestana,
Inc., where court abandons traditional doctrine that
landlord has sole discretion over when to approve a
transfer, even tho L has reversion interest. Profit is
not reasonable denial.
ii. Privities
1) Of Estate: (Landlord/tenant relationship) Concept
designed to enable landlord to sue assignee of the tenant on
the covenants in the lease (e.g. rent) in addition to assignor
and give assignee right to sue landlord on his covenants (e.g.
right to repair) even tho no privity of contract. Can sue for all
covenants that run with the land. (test above)
2) Of Contract: parties have agreed with eachother to do or
not do certain things; obligations bind even if not in privity of
estate. Can sue for all covenants in the lease.

Think in terms of triangles (landlord, primary tenant, transfer of some kind)

Landlord T1

f. A Form Lease

**Variety of ways to look at document and determine if lease, easement or license

If lease: LL cannot engage in self help and recover property; need to evict
Tests: If can keep out people

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If can relocate
Retention of power to move

vi) Rent Control

(a) Reasons/Method
i. Used during wars/inflation to prevent undue hardship
ii. First rent freeze, then stabilization
(b) Problems
i. Shortage of housing, waiting lists
ii. Conversion to condos
iii. Deterioration of housing
iv. Less new development
v. Restricts mobility of labor market
(c) Benefits
i. Rent stabilization better
ii. Promotes stability (enhances personhood values-Radin)
iii. Affordable housing
(d) Constitutionality:
i. 12 Sup Ct cases on whether rent control is taking which
requires just compensation from owners. Never ruled
ii. Three prong balancing test of whether “taking” or not.
What is the property being taken? Financial opportunity?
Expectation of monetary gain?-in Lucas v. S. Carolina Coastal
Commis. Price regulation.
iii. Held constitutional on theory that bears rational
relation to legitimate public purpose: welfare of housing
(e) Reasonable Return: Rent control ordinances must provide landlord
with just and reasonable return on her property. If does not have
mechanisms for changing economic conditions, considered
confiscatory and taking of landlord’s property without compensation
(f) Eviction of tenant: If could evict at end of term, would defeat purpose
so always include provision requiring renewal of lease unless good
cause to evict

2) Cooperatives, Condos and Common Interest Communities

i) Recent rise in use of coops, condos and common-interest communities
(Hansmann, Condo and Coop Housing: Transactional Efficiency, Tax Subs,
and Tenure Choice)
(a) Cooperative: occupants lease their individual units and collectively
own the building thru shares; finance mortgage collectively
(b) Condo: Occupants each own units they occupy; collective ownership
to common areas (tenants in common); must finance individually

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(c) Collective decision making costlier and less efficient than

landlord/housing corp
(d) Condo spread due to tax reasons/subsidies and less risk based on
others than in coops
(e) But Coops may save b/c only one mortgage
(f) Operate outside of bounds of federal constitutional issues because
viewed as private entity.
(g) Local governments like them because increase tax base but not
increase in services municipality would provide because homeowner
provides more services (landscaping, garbage, etc.). Privatization

ii) Rules of Conduct/Governance

(a) Generally the test of validity is reasonableness but courts moving to
applying different standards to different rules
(b) Restrictions appearing in originating document have strong
presumption of validity. Trend is to invalidate only if arbitrary or
violative of constitutional right b/c buyers agreed to be governed by
these terms and entitled to rely on enforceability.
(c) Nahrstedt v. Lakeside Village Condo Assoc: upheld prohibition on
pets, even though pets were only inside her home. “Reasonablenss”
test by legislature should not be based on specific facts of the case but
to common interest development as a whole (arbitrary, more
burdensome than beneficial to affected properties, etc.).
(d) 40 West 67th Street v. Pullman: Coop society ejects troublesome
tenant. Question of which standard to use (business judgment rule or
“Competent evidence”). Court uses unanimous vote as competent
evidence to justify eviction.

B. Entity Property: Nonpossessory Interests

1) Trusts
i) Creation:
(a) Settlor: creator of trust; Must manifest appropriate intent to manifest
trust relationship (“given for the use of benefit of another”)
(b) Would not fail if unaware of who trustee is (court can appoint)
(c) Do not need actual words “trust” and “trustee”
(d) Precatory language: avoid if creating trust (reciting of moral intent- I
wish to)
(e) Trustee: has all managerial responsibilities; serves as fiduciary for
benefit of beneficiaries (benees). If no responsibilities to perform,
trust fails. Property must be delivered to trustee.
(f) Trustee can be beneficiary but not sole trustee and sole beneficiary
ii) Features
(a) Trust assets in absolute ownership so trustee can treat as full
owner would

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(b) Very flexible, can be used to get around tax problems; on behalf of
people not capable of managing their affairs.
(c) Discretionary trust: trustee can have flexibility on payment; easier
to avoid creditors
(d) Trusts v. Life Estates
i. Life estate difficult to sell interest without permission of
other remainders but in trust law, trustee has power of sale.
ii. Life tenant can be sued for waste by remainder holders
iii. Trust interests can be placed out of reach from creditors
iv. Trustees have power to get loans based on trust, while life
estate holder is not; broad powers of management
iii) Spendthrift Trusts
(a) Settlor imposes valid restraint on alienation, providing that
beneficiary cannot transfer his interest voluntarily and creditors
cannot reach it
(b) Despite general invalidity on alienation, validity of spendthrift
restrictions on equitable interests in trust has been recognized in most
states (Broadway National Bank v. Adams: where spendthrift clause
said that creditors cannot reach any assets until in hands of
beneficiary). Then, creditors are free to go after (but it’s a nuisance).
Just as creditors cannot impose lease on future potential gifts if settlor
were still alive. Not exactly the same tho, since benee has vested right
in the money while none to gifts in his lifetime.
(c) In NY only money needed for support is immune to creditors in
spendthrift trusts. Different rules but majority of states look at
variety of specific uses of the money and declare that those are
impossible for creditors to attach to.
iv) Trust Fiduciary Duties
(a) Held to highest standards of conduct and is personally liable
(b) Prudence: must make property productive, invest in prudent fashion.
(c) Undivided loyalty: can reap no personal advantage from his position
nor put himself in situation of possible conflict of interest.
i. Rothko v. Reis: Trustees set up contract with certain gallery
giving exclusive right with very good deal. Terms of agreement
alone were not enough to support breach of duty. Was confluence
of events: Relationships, Stamos contract w/ gallery, Levine’s lack
of objection, contract to sell all the paintings.

v) Changed Circumstances
(a) Often in charitable trusts, conditions may change in ways that were not
foreseeable when created
(b) Cy Pres (“so near”): operates where settlor who cannot be consulted,
expressed specific charitable intent but is impossible or
undesirable to fulfill. Where also expresses related general charitable
intent, may still be fulfilled with some judicial modifications of
interests created and trust is not terminated

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(c) Wilber v. Owens: specific intent to use his notes impossible, but court
says that dominant intent is improving the world by charitable uses so
trust does not fail (Cy Pres)
(d) Courts are increasingly expansive in use of cy pres; more

2) Corporations and Partnerships: not on the exam

CHAPTER IX Law of Neighbors

B. Servitudes: encumbrance consisting of a right to the limited use of a piece of land or
other immovable property without the possession of it. Important contribution is that
they are contracts that “run with the land” and bind all future owners of both parcels.

1. Easements
a. Intro
Baseball Publishing Co. V. Bruton
Varieties of Easements
b. Creation of Easements
Schwab v. Timmons
Warsaw v. Chicago Metallic Ceilings, Inc.
Holbrook v. Taylor
Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc
Blocking sun: no cause for nuisance but was cause when
blocking solar collector (Prah v. Maretti).
c. Termination of Easements
d. Misuse of Easements
Penn Bowling Recreation Center, Inc. v. Hot Shoppes, Inc.
2. Covenants
a. Equitable Servitudes
Tulk v. Moxhay
b. Real Covenants
Neponsit Property Owners’ Association, Inc. v. Emigrant
Industrial Savings Bank
c. Requirements for Covenants to Run
Real Covenant Theory
Equitable Servitude Theory
Third restatement
Eagle Enterprises, Inc. v. Gross
d. Notice and the Common Plan
Sanborn v. McLean
e. Conservation Easements
f. Termination of Covenants
Bolotin v. Rindge
Peckham v. Milroy

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Servitudes: Inability to resolve all conflicts with contracts

Justifications: get around problems of bargaining in bilateral monopoly

1) Easement: Owner agrees to waive right to exclude certain kinds of intrusions

(run with the land; in rem rights). Gets around problems of bargaining in bilateral
monopoly. In between lease (transfer of possession) and licenses (revocable)

General Categories

i) Appurtenant: An appendage of a particular tract of land (the dominant

estate); carved out of the servient estate; belongs to whomever owns the
dominant estate. Parcels usually adjacent. Cannot be switched to In Gross
without new agreement.
(a) Favored b/c it’s the usual intent and increases land value by more than
the decrease in servient land (efficient) while In Gross just decreases
ii) In Gross: Belongs to a particular grantee, not an appendage to a tract; only
permissible if for commercial land use (primarily by RR companies). Gives
owner right to use servient land but not considered appendage to his
land. Assignable if parties intend. Ex: the right to erect a sign on another’s
land (Baseball Publishing Co. v. Burton)

iii) Appurtenant/In Gross:

(a) Transferability:
i. Appurtenant: benefits and burdens pass automatically to
assignees of land to which they are appurtenant, if the parties
(a) intend and
(b) the burdened party has notice of the easement

ii. In Gross: also transferable unless involves a

recreational easement (hunting, fishing, camping, etc.) if the
parties so intend

iv) Affirmative: Easements begin with affirmative rights to enter land and
perform an act on it (e.g., place clothing on lines over land, nail fruit trees
onto neighbor’s wall, water cattle at pond on another’s land)

v) Negative: Forbid owner of servient parcel from doing something on his land
that might harm a neighbor (courts more wary of creating these); much rarer
(a) England: limited to four categories (light striking window, air flowing
in a defined channel, lateral support of a building, flow of water in an
artificial stream); each could be created by prescription; no other
categories allowed

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(b) U.S.: not limited to four categories; possible to create other negative
easements (e.g., negative easement of view); no negative easement by
prescription though

vi) Different from Licenses:

(a) Licenses are mostly revocable
(b) Licenses do not run with the land
(c) Although some licenses are irrevocable (estoppel, movies tickets are


i) Express: Written instrument signed by the party to be bound (because in

land, must satisfy Statute of Frauds); if gives orally, grantee has a license; if
intention not clear, assume an easement over fee simple if for limited purpose.

ii) Implication: Show that land and another parcel were (a) once held in
common ownership and (b) at time of severance, the common owner was
making an apparent use of the now servient estate for the purpose you now
want to establish as a legal right. The use must also be (c) reasonably
necessary for access.
(a) Example: O owns parcels A and B. Private road crosses A to reach a
house on B. O transfers B to X. The road is reasonably necessary for
access to the house on B. X has an easement by implication over A.

(b) The prior existing use that forms the basis for implication is a “quasi-
easement” because the use pattern looks like an easement but a
unitary owner cannot hold an easement against himself

(c) No easement by implication when original owner made no use that

was so obvious and continuous to show it was meant to be permanent.
No easement by implication if a use is not reasonably necessary for
the beneficial enjoyment of land (Schwab v. Timmons)

(d) Notice argument against implication: It is so easy to express any

limitation to be reserved over land or conveyed with it that the
necessity of raising any such reservation by implication is not apparent
(Schwab v. Timmons) ????

iii) Necessity: No need to show prior use of the easement, but strict construction
of the necessity requirement governs. Strict necessity means that easements
by necessity will usually involve cases where the owner (a grantee) is now
landlocked. Does not just mean suffering inconvenience (Schwab)
(a) Rationale: public policy or parties intended to create but overlooked

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(b) Example: Parcels A and B abut. O transfers B to Y. B is now

completely landlocked. A route of access across A is a matter of
extreme necessity if parcel B is to be used productively. Y has an
easement by necessity.
(c) Extinguished: When strict necessity disappears (another road is built,
(d) No easement by necessity if party seeking the easement caused the
parcel to become landlocked through conveyance (i.e., grantors may
not seek necessity for a retained parcel that is now landlocked)
(Schwab v. Timmons)
(e) Impeaching your own grant: O transfers A to Y and keeps B for
herself. O argues that an easement over A to get to B should arise by
implication or necessity. O has impeached her grant and the courts
will likely deny an easement. O is in the best position to retain a use
in the deed to Y. (Did herself in)
iv) Public Easement: States have used custom for public beach rights; NJ uses it
as public trust.

v) Estoppel: If there is no writing (express grant), prior unity of title between

now neighboring parcels and apparent use (implication), or strict necessity,
find whether landowner gave oral permission to use land for a certain
purpose and substantial expenditure in reliance on that permission was
made, without objection

(a) A license to use land becomes irrevocable through estoppel when

the licensee makes a substantial expenditure in reliance on the
licensor’s permission and it would be unfair to permit revocation of
the license (Holbrook v. Taylor)
(b) Easement by estoppel = irrevocable license (license + interest =
irrevocable); lasts as long as necessary to vindicate the owner’s
reliance interest

vi) Prescription: Stepchild of AP. If there is no writing, prior unity, strict

necessity, or oral promise and reliance, consider whether there was use of
land for a substantial period of time (for the running of the state’s statute of
limitations), and the requirements of (a) actual, (b) adverse, (c) open and
notorious, (d) continuous, and (e) exclusive use are met. As opposed to
AP, requirements in terms of use and not ownership.

(a) Adverse: Majority: Presume the use is adverse

Minority: Presume adverse once Open and Notorious is met
Minority: Presume permissive use (often based on distinct variables
– whether parties are related, land is unenclosed, etc.)

(b) Open and Notorious: As with Adverse Possession, may be based on

constructive knowledge

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i. Issue often comes up with underground sewers/drains. If

could reasonably be discovered by inspection, satisfied.
(c) Continuous: Extent depends on nature/character of the use; may be
seasonal but not sporadic and occasional.

(d) Exclusive: Greater flexibility than for Adverse Possession (one or

more individuals)

i. Use of road must follow a definite and certain line of

travel; slight deviations and for the same purpose sufficient
(Warsaw v. Chicago Metallic Ceilings)
ii. Continuous use of an easement over a long period of time
without true owner interference is presumptive evidence of its
existence in the absence of mere permissive use (Warsaw v.
Chicago Metallic Ceilings)
iii. Adverse User is using property in the way a party with a
granted easement would use it; there is no need to show use
approaching ownership

(e) No negative easement by prescription in the U.S.: No trespass, no

prescription (notice-serving function). Since the owner had no cause
of action on which the statute of limitations has run, would be unfair to
give other party a prescriptive right that owner could not prevent from
arising. Fountainebleau Hotel: no new negative easement for sunlight
unless by express grant, not prescription. But can claim nuisance if
solar panels blocked.

vii) Conservation Easement: Tax incentive: by giving gov’t agency this

easement that you will not develop land, get tax benefit


i) By deed (release/extinguish the easement), law (gain common ownership),

adverse possession (easement is blocked and dominant owner does not
object, SOL runs); abandonment (prolonged nonuse and indication of intent
to abandon)

ii) One cannot use an easement for land other than the dominant parcel; if
the use is too intertwined, the use will be enjoined (Penn Bowling Recreation
Center, Inc. v. Hot Shoppes, Inc.). Servient owner can use the easement as
long as does not unreasonably interfere with it.

iii) Appurtenant easements may not be expanded beyond the scope defined at
the time of creation, except in the event of reasonable and foreseeable
changes in use that benefit the dominant owner and/or that occur as
technology changes or improves.

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iv) Courts have applied injunction (Penn Bowling) as well as liability (Brown v.
Voss) to remedy the addition of parcels to the dominant parcel

v) Intensity of use will be assessed according to rule of reasonableness (Penn


2) Covenant: Promise regarding use of land (right to insist on use/nonuse) (no

duties of forbearance in third parties). Agree to abide by certain restrictions on the
use of his land for the benefit of one or more others. To do or not do something.
Less often prescribe affirmative behavior on part of burdened landowner. More of a
governance than easements.
Ex: building use, building height, door color, promise to maintain fence
Covenants run with the land if conditions are met. More in personam than
easements because generally do not give rise to rights against third parties, other than
successive owners.

i) Real Covenant : runs with the land at law. (remedy for breach is damages
in a suit at law); if want equitable relief must show that covenant qualifies as
equitable servitude.


(a) Notice requirements:

i. Covenant must be in writing (unless implied covenant)

ii. Purchaser of servient estate is on notice
iii. Original parties intended for both the burden and benefit to
run with the land
“This will run with the land”
iv. Privity of Estate:
1) Original parties were in privity of estate with each
other (for burden to run) (HORIZONTAL)
Horizontal: traditional test required covenant to be
part of a lease or deed dividing property between
present and future interests (creating simultaneous
interest); now any grantor-grantee relationship will do
(establishes instantaneous privity)
-Courts wanted to be more strict with burden – to
keep land free of burdens undiscoverable; since benefits
do not adversely affect marketability, no horizontal
privity requirement

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2) Subsequent owners in privity of estate with original parties (for

benefit or burden to run) (VERTICAL)
Vertical: traditional test required an owner to
succeed to the entire interest held by the original
covenanting party (not the entire area of land, but an
estate that lasted as long as the prior estate) (e.g., a life
estate conveyed from a fee simple would not create
vertical privity)
Modern: strict test still often followed for burden to
run; for benefit to run, party need only succeed to some
of the interest in the estate
Exception: Homeowners’ association: may sue to
enforce benefit of covenant even though association
succeeds no land owned by original promisee.
Regarded as the agent of the real parties in interest who
own the land (Neponsit)
-Bona fide purchaser of the land is not bound
at law if has no notice of the covenant.

(b) Substantive requirement (which restrictions are allowed):

i. The covenant touches and concerns the land

ii. T&C: usually satisfied when covenant restricts use of
servient land and is of use to owners’ of dominant estates
iii. Modern tests include: affects the quality, value, or mode
of the interest conveyed; rule of reasonableness; alters legal
relations/advantages or burdens of owning tract of land

1) Compulsory fees for maintenance of public areas

appurtenant to ownership of estate touch and concern the land
(Neponsit Property Owners’ Association, Inc. v. Emigrant
Industrial Savings Bank)

2) While a promise to spend money on property

affected by covenants benefiting the burdened lots is akin to an
affirmative covenant, it T&C the land because it alters the
legally enforceable advantages and burdens of the parties
as owners of interests in land (Neponsit – very broad view)

ii) Affirmative covenants: requires affirmative conduct of the servient

owner (e.g., repairing a fence or road, paying a sum of money)

(a) Haywood v. Brunswick Permanent Benefit Building Society (England):

burden of affirmative covenant does not T&C

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i. Exceptions: covenant to repair fence on boundary line or

driveway (usually when the agreement was prospective and
imposed on land of each party a burden, such as dedicating a
portion of each lot to a party wall)

(b) Miller v. Clary (NY court commits itself to the English rule prior to
Neponsit): court will not compel grantor to forever operate machinery
on retained parcel

(c) Reasons courts are reluctant to enforce affirmative covenants

against successors:

i. Orders to perform acts require judicial supervision;

enforcing an affirmative covenant may impose a large personal
liability on a successor while a negative covenant is limited to
successor’s loss of investment in the land itself; affirmative
covenants look like perpetual rent or feudal services. May be
changed circumstances or fear of dead hand control with no
benefits (Eagle Enterprises, Inc. v. Gross)

iii) Negative: restricts a use which can be made of the servient land
iv) To make change to covenant in complex, need unanimous approval
v) Sunset provision: E.g. covenant lasts 30 years
TERMination of covenants at end of equitable servitudes

3) Equitable Servitude: Covenant (whether or not running with the land at law)
where remedy for breach is injunction in a suit in equity

i) Requirements:

(a) Purchaser of servient estate is on actual or constructive notice at

time of purchase (for burden to run)
(b) Exception: Negative equitable servitudes may be implied from
general plan for development of residential subdivision even if no
writing (Sanborn v. McLean)
i. Done b/c purchaser relied on promise of subdivider to
restrict other lots
ii. If developer had general plan and purchasers had notice of
covenants in prior deeds, court will imply covenant
iii. General plan must exist at time developer sells first
burdened lot within general plan; if arises later, cannot impose
burdens on lots previously sold without burdens.
iv. Servitude is Reciprocal (similarly binds other lots in
subdivision), Negative (forbids some use of land/courts will not
imply affirmative) Easements (interest in the land)

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(c) Original parties intended covenant to run with the land

(d) The covenant touches and concerns the land

(e) No horizontal or vertical privity of estate required
(f) Exception (for benefit to run): when a covenant is made for the
benefit of a third party, it cannot be enforced by the beneficiary
unless he can show that he acquired title to his land from the original
covenantee, either before or after the covenant was made. In these
jurisdictions, privity of estate is required in equity for enforcement of
the benefit by the third-party beneficiary

ii) Remedies compared: an injunction may be more efficient overall

(a) Ex: A wants to build commercial, gain of $75 but B will lose $30.
If liability rules, A will pay 30 to B and build. If injunction, B can
bargain with A and get 30-75 for the injunction. If buys off for 55, A
gets 20 gain and B gets 25. Both are better off.
(b) No privity requirement for equitable servitudes because, unlike a
real covenant which attaches to an estate in land, an equitable
servitude burdens the land itself. In this respect, it is like an
(c) Restatement treats negative easements and restrictive covenants as
both “negative covenants.”

i. Restatement: also treats both equitable servitudes and

real covenants as “covenants running with the land” if there is
intent, notice, and enforcement does not violate a statute or public
ii. Restatement: a court may enforce a covenant running with
the land by any appropriate remedy or combination of
remedies, including declaratory judgment, compensatory
damages, punitive damages, nominal damages, injunctions,
restitution, and imposition of liens

(d) It is inequitable for the purchaser of a parcel at a price reflecting the

burden of a covenant to be able to charge his purchaser the price of
unburdened land (Tulk v. Moxhay where buyer of land planned to build
even though was covenant prohibiting such)
iii) Termination of Covenants and Servitudes:
(a) Merger: if burdened and benefited land become property of one
(b) Equitable servitude: estoppel, hardship outweighs benefit, change of
(c) Abandonment: but an affirmative covenant cannot be abandoned
(d) Eminent domain: government takes burdened land and condemns
covenant, owner of benefited land entitled to damages

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C. Zoning and Other Land-Use Regulation

1) Zoning and other land use regulation:
i) Created by state and local law
ii) Nuisance and covenant not enough to deal with problems of congestion,
factories, industry, unfit areas to live. Not effective b/c
(a) Nuisance: courts didn’t enforce in all situations
(b) Covenants: mostly used for subdivisions, not effective everywhere
iii) Zoning goal was to plan ideal cities: Resulted in:
(a) Segregated land use, although we know now it’s inefficient
(b) Single Family Housing, or duplexes if not possible: highest on
hierarchy of land uses
(c) Open Space
(d) Anti-Apartment Bldgs: cause traffic, accidents, difficult fire
management, health problems for children, air circulation, etc.
iv) Village of Euclid v. Ambler:
(a) Established constitutionality of zoning, not in violation of due process
by diminishing potential value of land; led to increase
(b) Supreme Court justified with “rational basis test”: rationally related
to legitimate public purpose. Doesn’t need to be the best way to
achieve the objective.
v) Arguments against zoning: Deprives of due process, cannot be justified by
compelling state interest, deprives of equal protection b/c no rational
relationship to permissible state objective, Taking (of property without
vi) Nonconforming Uses: typically, grandfather nonconforming uses of property
in existence when zoning plan enacted.
vii) Zoning Policy: controversial: can potentially deal with land-use externalities,
increase value of home, provide services homeowners will want but: can be
poor planning, bureaucratic, high costs, class/racial segregation
viii) Exclusionary Zoning: Southern Burlington Country NAACP v.
Township of Mt. Laurel: town faced with rapid growth and wanted to save
money on property taxes caused by schools. Encouraged middle to upper
income housing and precluded low and moderate income housing. Made no
provision for low income housing and court found that patterns resulted
in economic discrimination. Holding: cannot use fiscal reason alone to
justify, housing is a basic right. No requirement to build low income
housing but need to make it possible. Other courts go further and require
affirmative steps.
ix) Religious Land use and Institutionalized Persons Act (RLUIPA):
(a) Claims of discrimination and exclusion contend with municipalities’
stated desire to protect tax bases and amenities from religious land use
(b) RLUIPA: forbids gov’t agency to impose or implement land use
regulation in manner that imposes substantial burden on religious
exercise of a person… unless it’s in further of compelling gov’t
interests and is the least restrictive means of furthering that interest.

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(c) Sts. Constantine and Helen Greek Orthodox Church, Inc. v. City of
New Berlin: city concerned about use repercussions of allowing church
in residential neighborhood (may later revert to non-religious
institutional use) and Church sues over RLUIPA and wins.
(d) Issues are what constitutes a “substantial burden” (ordinance that
wholly excludes houses of worship in residential areas?) and does this
legislation go too far in favoring religion.


A. Eminent Domian
1. Public Use requirement
2. Just compensation
B. Regulatory Takings – Basic Contours
C. Regulatory Takings – Extensions and Applications
1. Scope of Police Power
2. Denominator Problem
3. Problem of Exactions
4. Temporary Takings
5. Litigating Takings Cases

A. Eminent Domain
1) Intro:
i) 5th Amendment: nor shall private property be taken for public use,
without just compensation
ii) 14th Amendment: Due Process Clause
iii) General idea that owners should be protected when costs of improvements
should be covered by everyone (compensation)
iv) Coase:
(a) ED transforms property rule protection into “liability rule”
protection. Government allowed to compel transfer of property rights
in return for payment of just compensation
(b) Avoids bilateral negotiating problem and compensation avoids
extreme difficult for landowner
v) Requirements: public use; just compensation; notice; opportunity for hearing

2) Public Use Requirement

i) USSC hold that public use means “public advantage” and that preservation
of jobs or taxes qualify. Restrictive usage would be actual “use by the
public” not favored by Sup Ct.
ii) Federal courts have almost never invalidated taking of property for failing
public use requirement but economic use justification, trend is changing
iii) Kelo v. City of New London: Government may use ED to transfer land to
private individuals if benefits the public with economic development (but

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strong arguments against- too broad, advantage to private company, slippery

slope). Great deference to legislature

3) What is “Taking”?
i) Taking title
ii) Taking permanent possession; physically invades property permanently, no
matter how trivial the invasion (Loretto). Can be done through 3rd parties too
(cable comp)
iii) By physical possession: lose right to exclusion, autonomy, property value
while regulatory takings only chop out some sticks in bundle
iv) Different from easements: permanent right to use vs. right to possess
v) Miller v. Schoene: State decides that cutting down one tree to save another
averts the greater harm and compensates (Coase)

4) Regulatory Takings
i) Does not involve physical entry but regulation under police power to
protect public welfare (zoning)
ii) Regulatory Takings Doctrine: if regulation is especially severe, regulation
deemed taking and requires compensation
iii) Tests to determine whether permitted without compensation or taking
(ED or police powers):
iv) Pennsylvania Coal Co. v. Mahon:
(a) Diminution of value: if more severe, need ED
i. What “property” is damaged (units of analysis)?
ii. PA Coal: Holmes: rights to coal; Brandeis: overall rts
iii. Penn Central: Maj: surface rts and air rts; Dis: air rts
(b) Average Reciprocity of advantage: not a taking if reciprocal
advantages and disadvantages (restricted owner gets some utility -
But: Brandeis says this is disregarded when stopping nuisance
(c) Protection of public from nuisance harms: if protecting, don’t need
ED; Holmes: damage to one house not public nuisance b/c not
v) Penn Central Transportation Co. v. NYC: mirror image of Penn w diff result
(a) Economic Impact/Diminution of value
(b) Character of gov’t action: physical invasion or just adjustment of
benefits and liabilities of owner
(c) Interference w/ reasonable investment backed expectations: does
not impair present use and expectations of train station profitability
(d) Removes: “preventing nuisance” and “reciprocity of advantage”
which were in PA Coal
vi) Lucas v. South Carolina Coastal Council: law prevented development on
beach after he bought
(a) Destruction of all economic value: if regulation denies all
economically beneficial uses of land it is categorical taking, unless

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state can justify its actions as preventing common law nuisance

(protecting the coast from development does not fall under this)
(b) Criticism: Nuisance is too narrow a confine for the exercise of
regulatory power in a complex and interdependent society. When is
property wiped out? Is it when the total value is destroyed or partial?

Things to look for

(1) physical occupation not in context of easement
(2) right to advise property at death.
(3) rule apply in Lucas—denial of total economic use.
(4) rule apply in Dolan
In Dolan and Nollan: say that regs requiring dedication of permanent easement of
public access would be takings under Loretto.

5) Just Compensation
i) Approaches for estimating
(a) Recent transactions in which property in question was sold
(b) Recent transactions in other parcels in area
(c) Estimating and capitalizing rental value
(d) Determining replacement cost of land and improvements taken and
adjust downward o reflect depreciation and wear and tear
(e) Opportunity Cost of having land taken away: highest and best use of
land other than the use proposed by condemning authority (e.g.
subdivision development) (US v. Miller)
ii) Problem: no recovery for subjective value owners attach to property
Should residential props have higher standard of review? Radin
iii) Value in time: US v. Miller: Value paid was to be before gov’t authorized the
project to avoid windfall
iv) Eminent domain typically used when negotiations break down so no true fair
market value (failure of property rules, go to liability rules)
v) Quick Take Statutes: transfer title to condemning authority before all
contested issues raised are resolved (streamline) to avoid costly delays from

6) The Denominator Problem

i) Denominator Rule: must compare values before and after
Numerator: value of property taken by regulation to the
Denominator: value of property before the regulation
ii) How do you determine the denominator (for the denominator rule)? Courts
argue over how. Then came with penn central, and keystone which overruled
Penn Coal. In Keystonethe court said separate support estate is a legalistic
notion with nothing to do with how we should define the denominaror.
Regulation had more clearly expressed public benefits that the regulations in

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Penn Coal. In Penn Central, said we won’t separate the air rights. It seemed
to do away with conceptual severance in the courts.
iii) As in Loretto, we see the issue is not dead. That court suggests the notion of
complete severance (.

Philips v. Washington Legal Foundation—NOT RESPONSIBLE FOR

Palazzolo v. Rhode Island—

If you have notice of a regulation prior to acquiring it you do not automatically
preclude your ability to challenge the regulation.
Like Penn Coal, there can still be claim without a total
diminution in value.
While post regulation purchase is fatal to a claim, it may have
baring to it (you bought the property cheaper because it was regulated).

Tahoe-Sierra Preservation Council v. Tahoe Regional Planning

Complete ban of activity for 32 month period, the temporary
destruction of value will not be considered a taking.
The court refuses to accept conceptual severance (that the 32
months is a separate entity).
The denominator should be something physical and geographical
and temporal for the denominator (which allows the majority to say there
is not a per se takings). The 32 month period is a small fraction of
the whole and therefore is not a taking.

7) The Problem of Exactions

i) When apply for building permit, city may impose condition on development
which benefits city not the owner (e.g. public path)
ii) Exaction must be logically related to specific public need or burden that
owner’s building creates or to which it contributes; mitigates impact of
iii) Must be essential nexus to dispel suspicion that it’s subterfuge to allow
physical occupation of property without paying (Nolan)
iv) Test: Is exaction legitimate state interest; Is there nexus between legitimate
state interest and permit condition; is there reasonable relationship to
projected impact of petitioner’s proposed developer (Rough Proportionality
Test) (Dolan v. City of Tigard)

8) Temporary Takings
i) Temporary and Partial takings also subject to compensation

First English Evangelical Lutheran Church v. County of LA

Government’s should we require a period of damages before that
regulation is considered null and void.
The takings clause by its terms is self executed (that a

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sovereign government must be compensation). Because of this nature of

the clause, it trumps all other kinds of limits that can be placed on
judicial relief (e.g. sovereign immunity).
It applies to the states through the 14th amendment.
Tahoe-Sierra Preservation Council v. Tahoe Regional Planning
Agency (2)
A temporary taking of value is not a per se taking and must be
evaluated under the ad hoc balancing test of Penn Central.
The moratorium on development.
3 precedents that do not apply:
First English sets down the rule that L owners who believe that
their property has been taking by government regulations may seek
damages from the government for that temporary takings. First English
is only controlling regarding remedies (they assume there is already a
takings and just comment on the remedy).
Lucas doesn’t control here because that case only found that a
regulation that permanently denied an owner an economic and productive
use was a property. Here is a moratorium.
The precedent that is available to the court in context to
physical takings, that should not automatically deal with regulatory

9) Litigating Takings Cases

Williamson County Regional Planning Comm. V. Hamilton Bank of
Johnson City.
Test: 2 prongs if you want to have a takings claim to be “ripe”
for a hearing in a federal court. You must do 2 things
(1) A final decision by a government entity in charge of
enacting regulation.
(2) If you want to go to the federal courts with your takings
claim, you must first bring an as applied takings claim in state court
and after that your claim will be ripe.
• By the time you do this, such as issue and claim preclusion will
do away with 99% of the case.
Ripeness is necessary to prevent cases that don’t have a
concrete injury from being heard.
For takings law, the fitness for issues of review is a federal
It is setting up a false bargain, that if you do what we say and
then you will not be able to bring it to the supreme court.
San Remo Hotel v. City and County of SF
Is devestaing on when you can bring a takings claim and in what
A constitutional right to compensation that is only violated if
you have the very goverrnemnt’s arm that is taking it away from you
declare it a taking and even then the federal court may not review it.

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Policy question and ½ dozen short answer questions is where to be
creative. Does the material translate into other contexts. Look at the
outline and see other vehicles that will get you across the course. Ex.
Possession started with original acquisition and the timeline labor
theoryproximity rulesIP (is this 1st possession or 1st possession +
creativity)accession doctrine. Is 1st possession a sufficient basis to
build property rules. Could we build it around something else, e.g. the
labor theory?

1) A lot of tools with dealing with problems, some have evolved into
others into years. How do you look at them and decide which is best to
solve a problem. Eg. Nuisance and servitudes  servitudes.
Leases v. licenses v. life estates. Trusts v. life estates.

2) Unwritten rules and custom.

3) Various times you see attempts to plug gaps in existing laws what we
want to do (e.g. Fair housing act when looking at other methods
available before the act was enacted).

4) Role of property rules and liability rules. Why do we have both?

Which one do courts use?

Servitudes at the end of the day are important stuff(A) what is the
difference between the two and waiving the rights to exclude (easements)
and promises (covenants), Than you have moving into licenses. Then you
have courts tend to view implied easements with skeptism. The language
in the easmenetn is important, the languages must be … Parties creating
easements and impeaching their own land. Then there is compensation for
easements. Also switching from proerpty to liability rules in an
adverse user who gets easement (which rule would be better).
Prescriptive easements that approach a level of comprehension that it is
almost AD but doesn’t have as many requirements. 4 negative easements
allowed under CL. NOTICE.

Covenants seemed odd because it was one of the few areas trending more
towards property than a contract based rights.

Question for short answer: Chose 2 areas of property law that utilize
possession in different ways and which is better?

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Assignment-Sublease: L leases to PT term of years 5 years for $900 a

month and the T covenants to pay rent and not to sublet or assign w/out
permission of the L. Later, with the L’s permission, PT assigns to T1
(not assumption of any of the responsibilities) and now T1 assigns to T2
without the L’s permission and T2 defaults. L sues T1, what will he be
able to collect? The key rule to solve this problem. When somebody
assigns with a L’s permission, all subsequent assignments are ok unless
the L explicity rejects all future assignments. The future assignement
to T2 will be allowed. T1 is no longer in privity of estate (which is
T2) and doesn’t have privity of contract (which is T).

The REP does applies to trusts (but some states now allow for it).

For Coase, just be clear what it is saying. Given the fact that there
are transaction costs, how do we mimick in a world that does not have
transaction costs. It assumes reciprocity of causation, it doesn’t
translate well outside of nuisance. The broader point is that
entitlement doesn’t matter because ppl will bargain ot the same number if no
transaction costs.
Given the transaction costs, that his how we make one decision over
another (ppl making decisions vs. firms (who minimize transaction
costs), gov’t regulation.

Prescriptive easements similar to AP (except AP vs. Adverse Use). The

difference would look like that for any of the 5 prongs, you are
focusing on use that would be akin to what someone holding a real
easement would do (PE) vs. use that soemnoen with real ownership would
do (AP).

two issue-spotting questions - 1 hour apiece

one law/policy question - 30 minutes

three short essay and/or problem questions at 10 minutes apiece

one short essay - 15 minutes

30 minutes extra to plan your answers