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Property I
Temple University School of Law
Knauer, Nancy J.

v       RELATIONS AMONG NEIGHBORS: ADVERSE POSSESSION.
o         AP of Real Property (flexible standard), 179
§         Test/Questions:
·         When does actual possession become significant enough to start limitations period?
·         Are all 5 elements met?
·         Does color of title affect the situation?
§         Definition of Adverse Possession:
·         When 1 actually possesses another’s property (1-actual possession) in manner that is:
o         (2) exclusive (use is of a type that would be expected of a true owner of land in question, possession cannot be shared with true owner –Smith v. Tippett; can have 2 joint adverse possessors at 1 time; can “oust” co-owner by making explicit statement of intent/notice),            
o         (3) visible (physical visibility/community repute; “open + notorious”, not necessary if owner has actual knowledge, visible to reasonable person),
o         (4) continuous (exercise control over property in ways customarily pursued by owners of that type of property, ex: managing, caring for property), and
§         Privity and Tacking: AP gains interest in property and may eject other APs before statute of limitations runs out. AP can sell or gift his interest to another person + adds time onto 1st possessors time.   Needs to be privity between by K of sale, gift, or inheritance. 
o         (5) without owner’s permission (adverse/hostile possession-presumed non permissive unless proven otherwise; must be inconsistent with true owners rights; ex: tenant or co-owner who refuses to vacate after lease ended or refusing to pay rent) for a period defined by state statute, rules in force transfer title from title holder to AP. 
§         AP must have intentionally acted towards the land as if he owned it.
§         AP state of mind is irrelevantà doesn’t matter if doing with malice.
·         Actual Possession: Must physically demonstrate actual possession of land. Ex: build buildings, do business, farm, etc. 
o         Serves to provide notice to legal owner and others who come to property. 
o         AP does not have to live on the property or pay property taxes.
o         Ex: build house, farm, fence, cut timber, hunt, sell land, mortgaging, or rent it.  
·         Some courts look who, if anyone, paid property taxes, whether occupation was in good faith (meaning only innocent possessors without hostile intent prevailsà most likely in a driveway or boundary line dispute. However, this is a minority view.)
·         AP cannot prevail over government property
·         Color of title: With defective deed, don’t have to show full use of property.
§         Vacant Land
·         Nome 2000 v. Fagerstorm, 187-198
o         Facts (D used land until 1978, build house on property in 1978)
§         Holding: D did adversely possess majority of landà now owners.
o         Rules
§         Whether claimant’s physical acts upon land of another are sufficiently continuous, notorious, and exclusive does not necessarily depend on existence of significant improvements, substantial activity, or absolute exclusivity.
§         Statute doesn’t require specific use (buildings) but only sufficient use similar to that of a property owner based on type occupied.
§         Possible for a court to determine only certain sections of land had been AP. (hiking trails ≠ adversely possessed)
§         POLICY: provides certainty of ownership by eliminating possibility of stale land claims to land title AND encouraging maximum utilization of land. 
·         Economic approach: Quieting title reduces costs and prevents valuable resources from being left idle and increases productivity, but author claims it is more efficient and economic to use prior boundaries. 
·         Sterk: wealth maximization ideology, AP values property more
·         Radin: AP relied on property interes. Morally wrong for owner to allow relationship of dependence to be established and then cut off dependent party.
·         Creates security by encouraging owners to rely on existing practical arrangements, failure of owner to object could be seen as an abandonment of his/her rights, and gives victims incentives to bring lawsuits within a reasonable time.
o         Adverse Possession of Personal Property (225
§         Conversion: When property is wrongfully taken, if it is hidden for a certain amount of time it is considered to be the thief’s.
§         Discovery: Statute of limitations applies when true owner discovered where stolen item is or should have discovered if used due diligence. 
§         Demand
·         Statute of limitations applies when owner demands stolen goods from thief.
·         Ridiculous: must find thief, demand goods, forget about it for a long time.
o         UCC    
§         Definitions:
·         BFP: Person who buys honestly and without notice of any conflicting claim on the property bought, whether or not the purchaser is negligent. BFP acquires title in a transaction in which a fair market value of the object is the consideration (NO DONEES) with a honest belief that he was acquiring title to the object, and under circumstances that would not lead him to think otherwise (expanded under the UCC to have BFP’s use due diligence to investigate offer of title).
·         This does not apply to receivers of gifts/donees because NOT BFP
§         Thief takes something from the true owner, but because thief has no title he cannot sell good title to a bona fide purchaser.
§         EXCEPTION: If true owner “entrusts” property to “merchant who usually trades in those sorts of goods” + merchant sells property to BFP, purchaser gets good title.
·         Ex: dry cleaners, car dealers, jewelry shops.
·         Only deals with entrusted property, NOT stolen property.
·         BFP must have reason to believe merchantà see item in store, in art gallery for sale, etc. NOT in home, in garage, etc. 
·         Ex: Thief takes from TO, sells to merchant, merchant sells to BFPà TO
·         Ex: Thief takes from TO, entrusts with merchant, merchant sells to BFPà TO
·         Ex: Thief takes from TO, entrusts w/ merchant, merchant sells to 2nd merchantà TO
 
§ 2-403. Power to Transfer; Good Faith Purchase of Goods; “Entrusting”.
(1) Purchaser of goods acquires all title which purchaser’stransferor had power to transfer except that a purchaser of a limited interest acquires rights only to the extent of the interest purchased.
Comment: No vendor can transfer a better title than he or she has. 
Void Title Rule: Vendor with a void title cannot transfer any title at all.
 
A person with voidable title (True owner can rescind the transaction and get the property back. Good title UNTIL true owner rescinds at which time the wrongdoer’s title becomes void) has power to transfer a good title to a good faithpurchaser for value.
Comment:Voidable Title Rule: True owner has power to revoke title in hands of transferee while also giving that transferee power to render it absolute by himself transferring it to a BFP. Voidable title is defective, but not wholly so. Instead, it is a title subject to a right of rescission in the transferor or the true owner of the object.
If goods have been delivered under a transaction of purchase, the purchaser has such power to transfer even if:
(a) the transferor was deceived as to the identity of the purchaser,
(b) the delivery was in exchange for a check which is later dishonored,
(c) it was agreed that the transaction was to be a “cash sale”, or
(d) the delivery was procured through fraud punishable as larcenous under the criminal law.
 
Ex: Con artist deceives me and I find outà I get it back. If CA already sold to BFPà BFP has good title. 
(2) Any entrusting of possession of goods to a merchant who deals in goods of that kind gives the merchant power to transfer all of the entruster’s rights to the goods and to transfer the goods free of any interest of the entruster to a buyer in ordinary course of business.
 
Comment: Why? Because commerce would operate best if purchasers were assured they could keep objects they bought from merchants, protected BFP purchasers if they went to a store, etc. Intended to keep trade and commerce with merchants humming by safeguarding purchasers’ rights to what they think they have bought.
**This does not include a pawnbrokerà usual

e, and individual interest of each spouse cannot be sold, transferred, or encumbered by a mortgage without consent of other spouse, and creditors cannot attach property held through tenancy by the entirety to satisfy debts of one of the spouses.
o         Conflicts over Rent and Possession: Constructive Ouster
§         Ouster:
·         Use property in a way that prevents others from usage. Typically need notice.
§         Marital Property, 593-598
·         Separate Property System
o         Each spouse owns whatever property they possessed prior to marriage separately. Property earned after is also owned separately, except legal obligation to support the other.
o         Divorce: equitable distribution, 595 for factors, judicial disc.
·         Community Property System
o         Property owned prior to and property acquired afterwards by gift, devise, bequest, or inheritance is separate property. Earnings acquired during is owned equally between both spouses.
o         Divorce: some states split evenly, some use equitable distribution.
o         Death: Spouse has vested ownership in ½ community property.
§         Marital Dissolution
·         Modern view: “sliding scale”, don’t get 100% if married for 10 seconds.
·         Spouses can sign premarital (ante nuptial) agreements.
·         Traditionally, unenforceable on PP BUT now generally enforceable despite whether or not reasonable, but as long as voluntary.
·         ½ states (UPAA) NOT enforceable if not voluntary, unconscionable + party wasn’t provided fair + reasonable disclosure of property or financial obligation of other party, did not voluntarily waive right to disclosure in writing + didn’t have adequate knowledge of other party’s financial assets.  
§         Unmarried Partners
·         Male-Female Partners
o         Watts v. Watts, 607-616
§         Facts (Couple lived together for 12 years as husband/wife)
§         Rules
·         Unmarried cohabitant may assert K claim against cohabitant if claim is independent of sexual relationship + supported by separate consideration.
§         Analysis
·         Sue Ann claimed there was an implied K that was breached, unjust enrichment, and a constructive trust should be imposed on assets D acquired during relationship.
·         Unjust Enrichment: Benefit must be conferred on D by P, appreciation/knowledge by D of benefit, and acceptance/retention of benefit by D under circumstances making it inequitable for D to retain.
·         Constructive trust: Unjust enrichment AND abuse of confidential relationship or other unconscionable conduct.
·         Partition: P and D were engaged in joint venture as they purchased property together and intended to share all property acquired during relationship.
o         3 approaches: property rights btwn. unmarried cohabitants:
§         Hewitt: Denied any remedy
§         Marvin: Enforced written/oral agreement between parties.
§         Pickens: Provided for property distribution between the 2 due to creation of relationship akin to partnership.
·         Same Sex Partners, 620-622
o         Also allowed to impose constructive trust doctrine to prevent unjust enrichment as an alternative to the enforcement of an express or implicit agreement. Ex: Vasquez v. Hawthorne, 622.
§         Children’s Claims on Family Assets