Property – Steinfeld – Spring 2012
Acquisition by Discovery – The sighting or finding of uncharted territory that give rise to inchoate title that must be perfected by settling in and making effective occupation.
Acquisition by conquest – Taking of possession of enemy territory through force, followed by formal annexation of the defeated territory by conqueror.
Principle of First in Time – The notion that being there first justifies ownership rights. Can be done by acquisition by discovery.
Rights of ownership:
Right to exclude
Free to use the resources
Right to transfer property
Johnson v. M’Intosh (Supreme Court of US, 1823) – Page 3
Johnson purchased land from Indians, claims he owns land. M’Intosh bought land from US. Johnson arguing Indians had rightful possession of land. Ct. determines Indians have right to possess land, but can they sell it; did they have the right to sell it. Marshall’s decision split the property right, someone can be the owner and someone else can have possession. But, the right to occupancy does not give the right to transfer land.
Pierson v. Post (Supreme Court of NY, 1805) – Page 17
Plaintiff is Post, who was chasing the fox; Defendant is Pierson, shot the fox. The action is trespass on the case, to recover damages from any unlawful injury to the plaintiff’s personal property rights.
Issue: At what point does someone get legal possession of a wild animal?
Hold: Actual physical possession and mortal wounding. One has to render escape impossible, depriving an animal of their natural liberty.
Heirs – no one has heirs while living
Issue – lineal descendants – children
Ancestors – parents, grandparents
Collaterals – siblings and their children
Escheat – if someone dies w/o heirs and intestate the property goes to the state
Heir Inheritance Preference: (only if dies intestate)
Based on individual state statute: (but generically)
§ If spouse and children, share inheritance
§ No spouse, then issue preferred
§ No spouse/issue, then parents preferred
§ No spouse/issue/parents, then collateral preferred
Rule of Primogeniture: eradicated today
Based on how long you have the right to hold the land
Fee Simple Absolute
o “ To A” or “to A and his heirs” – today, the common law words and his heirs are no longer necessary
o Now statutes and judicial decision provide that grantor is presumed to transfer entire estate
o Absolute ownership of potentially infinite duration
o Freely divisible
o Freely descendible
o Freely alienable
o NO future interest
o “To A and the heirs of his body” – virtually abolished in the US today.
o Historically the fee tail would pass to grantees lineal blood descendents no matter what – mission was to preserve family dynasties.
o Today the attempted creation creates instead the fee simple absolute.
o Historically there was a reversion in O. A future interest in some one other than O was a remainder.
Modern Fee Tail Rules: (the State defines property rights)
· Can only be created in Delaware, Maine, Massachusetts and Rhode Island.
· Tenant can convert FT into FS by deed during life (not by will)
· Nullifies Fee Tail
· Enables land to be alienable
· If not conveyed in life to a fee simple, upon death it will pass to their issue
Effect of “To A and the heirs of his body and if A dies without issue to my daughter B and her and the heirs of her body” in states where FT is abolished:
o Non-Fee Tail States:
§ Category I:
· Statues provide limitation of “to A and heirs of his body” created a fee simple absolute in A and that any gift over to A’s issue from the devise is void. (although A could subsequently devise to them). B’s interest is completely void.
§ Category II:
· Tries to balance state interest. A has a fee simple and, if at A’s death, A leaves no surviving issue, B gets it in fee simple absolute only at A’s death. If A does leave surviving issue, B’s interests fails and A’s issue gets it in FSA. In such a case A can devise his fee simple, but as a fee simple conditional, conditional on him having issue, for if he does not, estate goes to B.
§ Common Law:
A had a possessory fee tail, B had a remainder in fee simple, O (grantor) had nothing, because B has fee simple.
Must be measured in explicit lifetime terms and never in terms of years.
o Life estate pur autre vie – Life estate measured by a life other than the grantees.
o “To A for the life of B”
o The life tenant’s interest must be balanced with the interest of the future interest holder(s).
o Future interest if held by the grantor is a reversion, if held by a third party it is a remainder.
o Life tenant is entitled to all ordinary uses and profits from the land.
o The life tenant must not commit waste – must not do anything to harm the future interest holders.
Doctrine of Waste:
Relevant when 2 or more people have rights to possess property at the same time (concurrent ownership) or consecutively (present/future interest). The idea is that one owner should not be able to use the property in a manner that unreasonably interferes with the expectations of another owner.
Law of Waste protects future owners. The shorter the interest in property, the bigger the incentive is to not protect the land, or, pass along the cost to others; thus, the law tries to protect that.
Affirmative Waste – Liability results from injurious acts that substantially reduce the value of the property.
In US, generally, life tenants can make substantial alterations, or even demolish a structure when conditions change, provided the value of the remainder is not diminished by these actions.
Permissive Waste – Failure to take reasonable care of the property. Or, tenant fails to pay property taxes and forfeits her estate.
Ameliorative Waste – life tenant must not engage in acts that will enhance the properties value unless all of the future interest holders are known and consent.
Restraints on Alienation:
Seen as repugnant by court because:
· Make property unmarketable
· Tend to perpetuate concentration of wealth by making it impossible for owner of property to sell property and consume the proceeds
· Restraints discourage improvements on land. Why improve land if you can’t sell it?
· Restraints prevent the owner’s creditors from reaching the property.
· State argues we’re all worse off if the property can’t be put to its most valuable use. If it’s alienable, it will find its way into the hands of those who value it the most.
o Disabling restraint – Withholds from grantee the power of transferring his interest (involved in White v. Brown).
o Forfeiture restraint – Provides that if grantee attempts to transfer his interest, it is forfeited to another person.
o Promissory restraint – Provides that the grantee promises not to transfer his interest (kept to grantees and heirs).
o Partial restraint – Limiting conveyance to certain persons, or, putting a time limit on the restraint, may be valid if the restraint is found to be reasonable in purpose, effect and duration.
White v. Brown (Supreme Court of Tennessee, 1977) – Page 190
Facts: Lide devised house to White “to live in and not to be sold.” P contended she received title to home in fee simple. D and the testators other heirs claimed will conveyed only a life estate to the P leaving the remainder to pass to D’s by intestate succession.
Issue: Did Lide create a life estate or fee simple in White?
Holding: Supreme Court of Tenn. found for P and declared conveyance a fee simple.
Modern Rule: Owner of fee simple is presumed to give entire estate unless words to the contrary, limitations.
Majority Reasoning: Ct. finds under the modern rule, Tenn. statute, one means to pass their whole estate unless with your words you indicate that you mean to pass a lesser estate. Partial intestacy is NOT preferred. The will conveys all real estate belonging to the testator unless a contrary intention appears by words and context. Where a devise is ambiguous, but devises a life estate without any further grant for the remainder, resolve ambiguity in favor of fee simple. Ct. declares Testatrix’s attempted restraint on alienation void as it was inconsistent with incidents and nature of the fee simple estate and contrary to public policy.
§ Policy: Lide wanted to provide for White during her lifetime and had no intentions to consider “fringe relatives” in outcome of will. Lide wanted White to have a place to live.
Dissent: Will not ambiguous. Testatrix gave some of her personal property away, this shows she knew how to make an absolute gift, thus she knows how to make a restrictive gift. Testatrix said White couldn’t sell life estate, therefore it makes devise a
then sold the same thing to the Mahrenholzs. In 1977 Harry conveyed the right of reversion in the school land to Mahrenholz and also disclaimed and released any possible reverter to the school board. Classes then stopped being held on the land, and it was used as a warehouse for used desks.
Issue: Did the original 1941 transfer to the School District convey a determinable fee simple or a fee subject to condition subsequent? Did the P acquire any interest in the school property from the Jacqmains and Harry Hutton, according to the language of the deed?
Hold: The language of the deed, upon construction by the court, was determined that the word “only” in the granting clause of the deed to mean the creation of a fee simple determinable. Thus, pursuit for quiet title granted to the P.
Rule: A determinable fee is created by language, which connotes that the grantor is giving a fee simple only until a stated event happens (“as long as”, “until”, “while”) “The difference between a fee simple determinable and a fee simple subject to a condition, is solely a matter of judicial interpretation of the words of a grant.”
Reas: Court goes by a determination of the construction of the language in the deed. The word “only” is seen as the key term. The word means essentially that the Huttons wanted to give the land to be used for school purposes only as long as it was needed and no longer. The reversion interest is not alienable and can only be inherited. So the transfer to the Jacqmains is not proper. The court says that it is a fee simple determinable and that it belonged to Harry. (If it was a FSD and if the limitation was breached, then Harry transferred a fee simple interest because he automatically had it to transfer upon the event happening, if it was a FSSCS, he could not transfer his future interest).
A later court determined that the condition of the deed had not been breached because it was being used for a warehouse for the school, which is a school purposes. Therefore, the school wins in the end.
Notice Race Statutes: first one to the courthouse wins. The Mahrenholz’s would win.
Notice Statute: in the case of a bona fide purchaser for value. If school board actually paid Harry for something, would be bona fide purchaser for value. If there were no conflicting interests, then they have a superior claim to a prior interest that has been conveyed but hadn’t been recorded. School checked on Sept. 6th and found no competing claims and no record of the agreement with Mahrenholz’s and went ahead with agreement with Harry. The school board would have a good claim and prevail over Mahrenholz’s b/c Mahrenholz’s didn’t record timely.
Common Law – Possibility of Reverter/Rights of Re-entry – Descended to heir upon death of owner, but was not transferable (i.e. Marenholz).
Modern Day – Possibility of Reverter/Right of Re-Entry (a number of variations)
In most American states are transferable inter vivios and inheritable via heirs.
Some draw distinctions between the two interests, saying POR is transferable and ROE is not. In other states, simple transfer of a ROE destroys it.
Does statute of limitations of ROE begin when condition is no longer met (i.e. land no longer used as school ), or when grantor attempts to re-enter?
Quirky states – California and KY have abolished the FSD with statutes that say language creating a FSD creates a fee simple subject to condition subsequent. Often FSD is seen as harsh, immediately grabbing property away from owner without any right/ability to litigate for right to land.