Property I: Michael Davis, Fall 2011
1. WHERE PROPERTY RIGHTS IN AMERICA BEGAN: Johnson v. M'Intosh
1.1. FACTS: P, Johnson, claimed that he owned the land via purchase and conveyance from the Piankeshaw Indians. D claimed he owned it under a later grant from the US government. First in time was the person who bought from the tribes. Second in time is the person who bought from the US government. Johnson v. M'Intosh
1.2. LAW: The court held that absolute title, in regards to newly discovered lands vested solely in the sovereign nation that found it (whether via paid agents or citizens of that sovereign) against all other competing sovereigns. The original occupants (Piankeshaw tribe) had no rights to transfer title. The title granted from indigenous peoples (Piankshaw ) to the D, therefore is not a recognized title in the US courts. The US Indian tribes retained title of occupancy, but not absolute title, as that vested in the sovereign nation that discovered the land. A title of occupancy does not transfer as an absolute title, thus the decision of the court. The court’s rationale here is based upon the European history of obtaining and losing lands for centuries: the discovering nation retains absolute title. Disagreements over that discovery (and absolute title) result in treaties or war.
2. RIGHTS IN PERSONAL PROPERTY
2.1. Property Rights in Wild Animals
2.1.1. The Origin of Property Rights
18.104.22.168. The concept of private property offers a guarantee to farmers that they literal can reap what they sow. Encourage people to do useful things. Sweat equity and money coming out of putting the land/private property to good use for both private and public good.
2.1.2. The Capture Rule in General
22.214.171.124. FACTS: P, Pierson, was fox hunting. Having run out a fox onto a barren, unoccupied stretch of beach that was un-owned, the Defendant, Post, subsequently killed and took the fox as his own. (*He was not a member of the hunting party Pierson v. Post
126.96.36.199. LAW: The rule of law states that that pursuit alone does not constitute occupancy of a wild animal nor does it vest any right to occupancy in the pursuer. Property in a wild animal vests upon occupancy of that wild animal.
2.2. Common law forms of action
2.2.1. Trover: Money damages from the D for conversion to his own use a chattel owned by P.
2.2.2. Replevin: A lawsuit to obtain return of the goods
2.2.3. Trespass damages for unlawful entry onto land
2.2.4. Ejectment: to recover possession of the land
2.3. Finders of Personal Property
2.3.1. Personal property: Possession is very important in personal property because we don’t have titles. Possession sometimes said to be both physical control over the item and the intent to control it, but the definition is blurred.
2.3.2. Acquisition by finding:
188.8.131.52. True owner depends on who claimants are. The property rights of a finder enable him to keep ownership of the property against all except the original owner. So if he loses the property, he is protected against a subsequent finder. His claim would prevail over that subsequent finder. “First possession”
184.108.40.206.1. Armory v. Delamirie KB 1722: Chimney sweep’s assistant who finds jewel takes it to the goldsmith’s shop to obtain a value and the goldsmith steals jewels. Court says the finder does not have an absolute property ownership, but has a property interest that will enable him to keep it against all except the rightful owner. Goldsmith ordered to pay damages.
2.3.3. Landowner as finder
220.127.116.11. Hannah v. Peel: Does the owner of premises who had never possessed the property have right of first possession over a chattel found on his property? No. The owner was unaware of it, had no responsibility for it. Finder wins.
3. Possession of land carries with it possession of everything which is attached to or under it, whether or not owner is aware of it.
3.1.1. In pursuit (hunting)
18.104.22.168. Pierson v. Post NY 1805: Pursuit alone of the fox vests no property right in the huntsman of the beast ferae naturae, except perhaps of those mortally wounded
22.214.171.124.1. “Mere pursuit gave Post no legal right to the fox, but that he became the property of Pierson, who intercepted and killed him.”
3.1.2. Unconscious Possession
126.96.36.199. Money dropped in shop was in the possession of the finder, not the owner of the shop who was unaware of it until finder handed it over: shop owner was not responsible for it when it lay in the public part of his shop, therefore not a possessor of it.
3.1.3. Property Purposely laid and then forgotten is different than lost
188.8.131.52. McAvoy v. Medina: owner of barbershop has possession of wallet left behind by customer, not finder. His duty is to hold for rightful owner.
184.108.40.206. Taking possession of a chattel already owned by another (Bailors and Bailees): We often turn our goods over to people voluntarily, sometimes for our benefit, sometimes for their benefit (clothes to dry cleaner, borrow my car
220.127.116.11. Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business.
18.104.22.168. Important common law:
22.214.171.124.1. If a bailee misdelivers the good (gives to someone else before you get it) they are liable, regardless of care. They owe you. They give your dry cleaning away, they are liable.
126.96.36.199.2. If it’s just a matter of damage to your goods – they wreck your car – in some jurisdictions there’s a sliding scale of liability. Ex. If the bailment is for bailor’s benefit (take my care to service station) the person is only responsible for gross negligence and only have to show slight care. If for bailee’s benefit (can I borrow your car), must exercise extraordinary standard of care
188.8.131.52.3. Any expertise of the bailee comes into play also
4. ACQUISITION BY ADVERSE POSSESSION
4.1. If you have possession long enough, the reward is title.
4.2. Adverse possession is often a defense
4.3. Factors that a possessor must show for ADVERSE POSSESSION (KS law):
4.3.1. Possess the property
4.3.2. Open and notorious
184.108.40.206. Manillo v. Gorski NJ 1969: D’s improvements encroach just slightly onto P’s land (sidewalk). P sues for trespass asking for injunction, D’s defense is AP.
220.127.116.11.1. Cannot be open and notorious if true owner doesn't know about it – which is likely in slight boundary encroachments.
18.104.22.168.2. If innocent trespasser of small portion of land adjoining boundary line cannot without great expense remove encroachment, true owner can be forced to convey the land for fair value.
22.214.171.124.3. The court decides to scrap requirement of knowing, intentional, hostile and go with “Connecticut Rule” or objective standard (see under hostile below).
126.96.36.199. Howard v. Kunto Wash. 1970: Deeds for summer homes were incorrect and resulted in Howard owning lot where Kunto’s house sits
188.8.131.52.1. Issue 1: Possession is uninterrupted? B/c summer property. Kunto wins because judge says ordinary possession is what’s required, and summers only is ordinary of a summer home.
184.108.40.206.2. Issue 2: Claim of right has been made for statutory period – because Kuntos have possessed for only one year. Kunto tries to tack his ownership to ownership before him to constitute 10 years possession. Tacking ownership requires privity – passing of deed from one owner to the next. Issue here is there is no privity because Kunto’s deed bought from Miller’s did not actually list property lived upon. Court rules that this is enough of a “reasonable connection between successive occupants.”
220.127.116.11. Cannot allow another to adversely possess against your possession
4.3.5. Hostile (Adverse)
18.104.22.168. Hostile or under claim of right (not renters, not with owners permission). This goes to state of mind.
22.214.171.124. Three schools of thought:
126.96.36.199.1. Objective standard: state of mind irrelevant (England)
188.8.131.52.2. Good faith standard: thought it was mine
184.108.40.206.3. Aggressive trespass standard: knew it wasn’t mine but intended to make it so.
220.127.116.11. Van Valkenburgh v. Lutz NY 1952: Court said not under “claim of title” since they acknowledged another owner. Goes into Lutz’s mind. Bad decision b/c it says you can only adversely possess land you already own. Overruled.
18.104.22.168.1. Dissent said that since Lutz owned land by adverse possession from 1935 onward, it doesn’t matter if he said he didn’t own it after 1935
4.4. Statute of Limitations for throwing someone off your property (start ejectment proceedings) is usually 10 years (used to be 20)
4.5. Color of title
4.5.1. Faulty deed conveys title, faulty deed holder acts/thinks in good faith as owner
4.5.2. Shortens SoL in some jurisdictions: color of title may move the statutory period sooner b/c the date the deed
4.5.3. Required for adverse possession in some jurisdictions
4.5.4. Another benefit- winning adverse possession with color of title means you get the whole place, not just the part you’re using
4.5.5. Mannillo v. Gorsky: If innocent trespasser of small portion of land adjoining boundary line cannot without great expense remove encroachment, true owner can be forced to convey the land for fair value.
4.6. Adverse possession of chattels
4.6.1. Common law for AP of chattels was the same as property: Open and notorious, continuous possession for an amount of time, but many jurisdictions have abandoned.
4.6.2. Now use discovery rule: SoL doesn’t commence until the owner discovers or should have discovered an important fact (such as discover painting was stolen and replaced with forgery)
22.214.171.124. Court can begin SoL
126.96.36.199.1. Potential discovery of loss (should have known)
188.8.131.52.2. Actual discovery of loss
184.108.40.206.3. Potential discovery of whereabouts or ID
220.127.116.11.4. Actual discovery of whereabouts or ID of thief
4.6.3. Entrustment – and exception to the common law rule that a purchaser from a thief cannot acquire title. If the owner entrusted to a merchant dealing in those kinds of goods and they were sold.
18.104.22.168. CLASS NOTES ON THIS:
22.214.171.124. The uniform commercial code does recognize a couple of exceptions where purchaser wins Section 2-403 of UCC
126.96.36.199.1. Means: if I defraud someone of her personal property in one of four ways in UCC (NOT THEFT), and then sell it to purchaser who has no knowledge of fraud, purchaser wins. Both original owner and purchaser are both innocent, but the purchaser is the most innocent because original owner should have protected themselves against fraud.
188.8.131.52.2. Any entrusting of possession of goods to a merchant who deals in goods of that kind gives him power to transfer all rights of the entruster to a buyer in ordinary course of business
184.108.40.206. Hypos about entrusting to merchant:
220.127.116.11.1. Old baseball autographed by Lou Gerhig, stolen and taken to baseball collector shop. They sell it to innocent purchaser, who has no reason to suspect anything. Who can you recover from?
18.104.22.168.1.1. You can go after store owner for converting your goods, but you cannot go after innocent purchaser.
22.214.171.124.2. You take your watch to be repaired at a place that sells new and used jewelry (jeweler is bailee). They sell your watch. What can you do?
126.96.36.199.2.1. You cannot get it back from innocent purchaser. You can get the value of your watch from the shop.
188.8.131.52.3. Case from St. Joe, MO 1920s. Nice coat and stole. Stole in sleeve of coat and checks coat. Stolen. Night club says we were never in possession of stole. What will the court say?
184.108.40.206.3.1. Court says stole could be expected to be in/on coat so they are liable for stole (but not a diamond ring in pocket)
220.127.116.11.4. Parking your car downtown – workers at lot are not in possession of car if you park it. If you turn over your keys and they park it, they are in possession of your car.
5.1. Law requires physical transfer of gifts. Possession provides done with prima facie evidence that gift was made.
5.2. Gifts Inter Vivos
5.2.1. Require 3 element: Intent, Delivery & Acceptance
5.2.2. Intent: Donor must intend a present and irrevocable transfer of interest, either possessory interest or future interest.
18.104.22.168. Gruen v. Gruen: Whether a donor can make an inter vivos gift of a chattel reserving a life estate, or whether it constitutes a testamentary disposition, which is invalid unless made by will. (1) Painting was a valid inter vivos gift. Ownership transferred on day of letter. Symbolic delivery of gift was letter itself. Deli
igns so long as the premises are used for school purposes”
7.3.3. Drafting a fee simple determinable:
22.214.171.124. M. Davis deeds ocean-blue acre to the KU endowment association on the condition that KUEA, it’s successors and assigns, only use it solely for the benefit of the KU School of Law. But if KUEA does not use it solely for the benefit of the KU School of Law, then M. Davis may exercise his right to re-enter Ocean-blue acre and retake the entire property.
126.96.36.199. *Again, state the intent sentence: “The intent is to create a fee simple determinable…” and include the details.
7.3.4. Every fee simple determinable is accompanied by a FUTURE INTEREST
188.8.131.52. Usually a possibility of reverter.
7.3.5. The rule of law states that when a deed creates a fee simple determinable creating a possibility of reverter, ownership is automatically transferred back to the grantor the immediately when the condition is broken. Mahrenholz v. County Board of School Trustees
184.108.40.206. FACTS: P, Mahrenholz, sued to quiet title to land deeded to the school district to be used “for school purposes only; otherwise to revert to Grantors herein” when the school stopped using the land/building for classes and instead were using it for storage. The heir of the grantors (NOT Mahrenholz) conveyed his interest in the land to P. P argues that the original conveyance was a fee simple determinable creating a possibility of reverter. D’s claim the original conveyance created a fee simple subject to a condition subsequent creating a right of re-entry. Hutton, son of the original grantors said to P “You have everything I am entitled to own” and then, 4 months later, he said the same thing to the school board. Future interest is passed inter vivos via the deed to Jacqmains and then the Mahrenholzs. Ps want the last 1.25 acres from the school. Court found for the D: a fee simple subject to a condition subsequent creating a right of re-entry and that P had no right to the land as the heir had not enforced his right of re-entry, thus, heir had no right of possession to convey to P. P appealed and the appellate court reversed and remanded for a new trial.
220.127.116.11. APPLICATION: The court made the distinction between right of re-entry and reverter and the fee simple deeds that create them. The court determines it is a fee simple determinable. (You would think the Ps would win, but they do not.) WHY? Because the court determined that using the school for storage was still using it for school purposes. (*This was determined at the re-trial.) The Ps claim a f.s. determinable: they want this. Why? Because these things, according to statute, cannot be transferred inter vivos. They CAN be inherited. So, Harry the son, inherited the future interest in 1973 when they stopped using the school for school purposes, Harry automatically gained ownership of the tract through the possibility of reverter, getting a fee simple absolute of the 1.5 acres. He then gave the Mahrenholzs all rights, giving the P’s a fee simple absolute. Harry never exercised his right so the school never lost title. Then, when he, in May 1977, he transferred his future interest in the 1.5 acres, it doesn’t matter because future interests cannot be transferred inter vivos. Harry never gave the M’s (P) anything
7.3.6. The rule of law states that where land limited by a deed with a right of reverter, the eminent domain damages should be divided between the owner/possessor of land (the fee holder) and the holder of the right of reverter (the heirs of grantor.) Ink v. City of Canton
18.104.22.168. FACTS: Ink, P, granted the city, D, a 33-acre parcel of land, stating in the deed that the city could only use the space as a park. If D used the land for any other purpose, the property revered back to Ink’s heirs. The state took the vast majority of the park land for a highway project, leaving only 6 acres to the city. The trial court awarded the eminent domain damages ($130K) to the D’s and P’s heirs appealed. The trial court awarded the eminent domain damages ($130K) to the D’s and P’s heirs appealed. Supreme court reversed, found for P.
22.214.171.124. APPLICATION: Seeking the most equitable result, the courts moved away from the common law history granting the damages to the holder of the fee. Additionally, the remaining 6 acres of land do NOT revert back to the heirs
7.4. Fee Simple Subject To A Condition Subsequent:
7.4.1. A fee simple that does NOT automatically terminate but may be cut short or divested at the tranferor's election when a stated condition happens.
7.4.2. The language is important: the right of re-entry is created upon a stated condition but does not automatically happen:
126.96.36.199. Ex.: O to A, its successors and assigns but if the rpemises are not used for school purposes, the grantor has a right to re-enter and retake the premises.”
188.8.131.52. “on condition that if the premises”, “provided however that when the premises”, ” on condition that premises”
184.108.40.206. *The difference between fee simple determinable and fee simple s.t.c.s. is subtle but worth millions of dollars if you get it wrong (or right!)
7.4.3. Created by a conveyance of a fee simple, followed by language providing that the fee simple may be divested by transferor if a special event occurs.