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Property Transactions
University of North Carolina School of Law
Brophy, Alfred L.

Prof. Brophy/Fall 2009/Property

ACQUISITION OF PROPERTY

THINGS TO THINK ABOUT: How you acquire property? Can acquire property by purchasing something? What is ownership?
Restrictions of Ownership: By Gov’t; You/ Predecessors may restrict ownership on property
REAL PROPERTY = Land & improvements attached to the land. (Ex. Buildings, fences, dams)
PERSONAL PROPERTY= All other property other than real property. Tangible personal property = property of physical nature. You can see it & touch it (Ex. Books)
BIG PICTURE ITEMS: The person to get the first grant generally has superior title.
POSSESSION (def) – Two Elements: 1) An intent to possess on the part of the possessor and 2) His/her actual controlling or holding of the property.
RESTRICTION ON ALIENAGE: making it difficult for the property to be sold. EXCEPTION: If restraint is for some public good then ct will uphold. POLICY Ct’s don’t want to discourage grantors from granting to parks or schools.
A. Johnson v. MacIntosh: P purchased land from Indians. D says he owns land by Gov’t grant. RULE: Discovery gave an exclusive right to extinguish the Indian title of occupancy, either by purchase or by conquest; and gave also the rt to such a degree of sovereignty as the circumstances of the people would allow them to exercise. Natives were not empowered to alienate their property—-they only had right to occupancy.
B. Villiage of Euclid v. Ambler Realty Co.Village of Euclid enforced an ordinance which restricted use and area & height. Ambler realty owned a tract of land where the new ordinance would be enforced & argues that the ordinance has severely devalued the land from fair market price of property. RULE: If the common law is a nuisance then you can have restrictions and not have to pay. Ambler could argue that they had investment backs –I spent $ & it was reasonable expenditure. If Ambler had applied for a building permit then it would have shown intent to build. Ambler may also need to have shown more planning such as a list of investors, financing by banks, etc., and thus we are being greatly injured by this zoning.
C. Shelley v. Kraemer D’s (39 property owners) agree to a restrictive agreement, denying people other than whites to occupy the land. This is a use restriction not a sale restriction. (Shelly can buy property but not live in property b/c she is not white) RULE:tate action to deny rights is unconstitutional. Freedom from discrimination by the States in property rights is a crucial aim of the 14th Amendment D’s prevented alienability —prevented a huge portion of population from buying property. S
D. Jacque v. Steenberg Homes, Inc. Steenberg Homes needed to deliver a mobile home & the easiest way to do so would be to go on the Jaque’s land b/c of the roads were covered with snow (P’s afraid of adverse possession). D trespassed on P’s land to deliver Mobile Home. RULE: Ct held as Public Policy: that society has interest in preserving integrity of legal system and that if someone trespasses on their property they will be punished.
E. IMPT NOTES: How do you measure d’s for trespass? Amt of $$ that causes physical d’s to property. Another way of computing d’s = how much did you save by crossing my land instead of using the other road. Why punitive d’s in this case –B/c it deters people from continuing to trespass; Form of preservation of legal system in making sure trespassers are punished. What is the standard for punitive d’s? Examine whether it was it in accidental or intentional. In order to receive punitive D’s we expect some outlandish behavior. In this case the Defendant’s intentionally & with knowledge of Plaintiff’s objections trespassed on land.
F. State v. Shack D went on to the property of Tedesco w/o consent to provide Medical aid & legal aid to workers. Tedesco was owner of property & said he didn’t want lawyers or medical personnel talking to tenants. Tedesco “Invoked Right to Exclude.” (Question of who we are keeping off property) RULE: Private/ public policy may justify entry onto land of another. D’s did not trespass b/c they were acting as a gov’t agency & state law allows gov’t aid to migrant workers.

ADVERSE POSSESSION (Governed by both statutory and decisional law)

A. What functions to adverse possession serve? Utilitarian Principles 1) Land improvement—using the land better is a reason to have it over someone else (Johnson v. MacIntosh) Protects a person who has been depending on the land 2) Decides most correct owner when answer is not clear. 3) Alienability—allows property to be sold more easily.
B. NATURE OF TITLE ACQUIRED BY AP:
1. Once acquired by AP and reflected in a ct judgment, the quality of the title is the same as a title acquired by deed, will, or intestate succession
2. AP cannot acquire a larger estate or interest in the land than that of the true owner (ex. If the person who had the right to sue had only a life estate, the adverse possessor would only acquire a life estate)
3. The title is an original title and not derived from the dispossessed owner. AP takes title and estate free of all claims which could have been asserted against the former owner during the statutory period.
C. ELEMENTS OF AP
1. ACTUAL Possession – As opposed to constructive possession: possession only by a written document but not physically on the land
2. OPEN, VISIBLE & NOTORIOUS (meaning not secret but occupying as an owner would occupy for all the world to see) (ex. In Mannillo, the steps that protruded 15 in. over the property line were not open and notorious) (ex. Merengo Cave, underground inhabitance is not open and notorious – no vigilant property owner would have reason to enforce his rights)
3. EXCLUSIVE (meaning sole physical occupancy or occupancy by another with the permission of the person claiming a title by adverse possession)
4. CONTINUOUS and peaceable (meaning without abatement, abandonment or suspensions in occupancy by the claimant, and also without interruption by either physical eviction or action in court—there must be an unbroken continuity of possession for the statutory period)
a. Continuous is relative to the circumstances: summer occupancy every summer is continuous, Howard v. Kunto
5. HOSTILE & UNDER CLAIM OF RIGHT (meaning that the possession is held against the whole world including the true owner; that the possessor claims to be the owner whether or not there is any justification for her claim, or whether or not there is “color of title” being a paper or other instrument that does not qualify as an effective legal conveyance but that the claimant may believe is effective)
o Color of title: invalid/defective written instrument (deed, will) that leads you to believe that you are the owner of the property. Not required in most jurisdictions. Has advantages in most jurisdictions: Shorter statute of limitations for color of title; Actual possession under color of title of only a part of the land covered by the defective writing is constructive adverse possession of all that the writing describes
o State of Mind Requirement depends on Jurisdiction: Hostile: I knew I didn’t own it, but I intended to make it mine (ex. Lutz); Good Faith: I thought I owned it; Irrelevant, does not enter into court decision
D. STATUTE of LIMITATIONS: typically the cause accrues and the statute begins to run when a possessor without right enters into clearly visible possession of another’s land claiming adversely.
1. However, for future interests, the SOL doesn’t run against a holder of a future interest in existence at the time of adverse possession begins because the holder of the future interest is not presently entitled to possession
E. TACKING the period of AP by one possessor can be tacked to the period of AP of another possessor if the possessors are in privity (contractual relationship w/ other).

F. DISABILITIES: If the person with the cause of action is under a disability at the time the cause of action against the adverse possessor accrues, most states extend the time to bring the cause of action, the statute of limitations, to some period beyond the removal of the disability (Ex. Minority (underage), Legal incompetence, Imprisonment). Disability must exist when the cause of action first begins.
G. INNOCENT IMPROVER DOCTRINE: Under the doctrine of annexation, improvements to real estate made by a wrongdoer belong to the owner of the real estate.
EXCEPTION: When improvements are made by one who mistakenly believed that he owned the land being improved, principles of unjust enrichment could compel a court of equity to refuse to quiet title in the improvement in the landowner, absent payment of fair consideration to the “good faith” innocent improver. Or perhaps a court will have the “good faith” innocent improver pay fair consideration to the owner and keep the improved land thought to be his.
H. Van Valkenburgh v. Lutz – D’s purchase lots 14 & 15 in 1912 & cabin (for Uncle Charlie) which is not on their property in 1920. 1937 P’s buy Lot 19 b/c the property is in foreclosure & build house. RULE:NY Stat provides that if the claimant doesn’t enter with color of title, AP can be claimed only where the land “has been protected by substantial enclosure” or has been “usually cultivated or improved.”
I. Mannillo v. Gorski: D son made addition & changes to D’s home where he extended steps 15 inches to the property, which encroached upon the P’s lands, D claimed AP. Court rejects knowing intentional hostility requirement. RULE: Ct adopts minority view, that open & notorious requires actual knowledge; minor encroachment insufficient for O & N. Ct rejects Maine doctrine & applies Connecticut stating that if you are the “true” owner you would try to recove

ioning rights b/t life tenant & future tenant look to ECONOMIC WASTE. Ct says that Anna should sell the land b/c its economic waste and that Anna should sell it to make more $$ off the land. OR
E. DEFEASIBLE ESTATES – Defeasible estates are a cut down version of a fee simple absolute. They are estates that may not last forever.

FEE SIMPLE DETERMINABLE (WITH POSSIBILITY OF REVERTER) :

FEE SIMPLE SUBJECT CONDITITION SUBSEQUENT

§ Def.: An estate that will last only for a certain period of time; limited duration; the estate will automatically end.FSD = limits not only land, but who may use it.
§ EXAMPLE: Only so long as school board uses premises for school purposes. As soon as school stops using the premises for school purposes the estate goes back to the grantor.
§ Grantor retains is a possibility of reverter. Assumption that Grantor wants to retain a certain amt of power.
§ LOOK FOR WORDS: “SO LONG AS,” “WHILE,” or “DURING”
§ Mt Brow Lodge v. Toscano – Mt Brow Lodge sought quiet title to the property given to them by the Toscano. Property restricted for use & benefit of Lodge; & in event not used by Lodge or in event of sale; to revert to Grantors, their successors, heirs or assigns. RULE: Absolute restraint on alienation is invalid; Restraint on use may be valid by public policy.
Quiet Title Action – A proceeding to establish a plaintiff’s title to land by compelling the adverse claimant to establish a claim or be forever estopped from asserting it.

§ Def.: Upon the happening of the condition, the estate could only come to an end if the holder of the power of termination or right of re-entry for condition broken exercised the power or right
§ Condition grantor has is right of re-entry.
§ Absent re-entry, the holder of the fee simple subject to condition subsequent may continue to possess the estate
§ Note: Future interest holder can terminate
§ LOOK FOR WORDS: “BUT IF, “ON CONDITION THAT,” or “PROVIDED THAT”
§ Mahrenholz v. County Board of School Trustees – Huttons convey 1 1/2 acres to School Board to be used for school purposes only & if not reverts back to grantors. Huttons convey remaining 38.5 + reversion to Jacqmains. Jacqmain’s convey 38.5 acres + reversion to Plaintiff’s (MAHRENHOLZ). Is this FSD or FSSCS? RULE: Ct says that this is a fee simple determinable. BROPHY argues this could be read as a FSSCS b/c you have a complete grant to school board and then its followed by a right of a subsequent coming to take the property back looks like a condition substantive.

F. FEE SIMPLE SUBJECT TO AN EXECUTORY INTEREST = A fee simple that might terminate upon the happening of a condition subsequent, or future interest
G. Condemnation Of Defeasible Fees:
1. City of Palm Springs: City condemned land that was given to the city for purposes of a desert reserve. The city claimed that the power of termination was not compensable b/c the possibility of the breach of condition was unlikely and that their power of termination was valueless. RULE: Violation of condition was imminent; Palm Spring has to pay full market value price for the property
2. Ink v. City of Canton: Usually the value of the possibility of reverter is the full market value of the land discounted by the probability that the reverter will never become possessory.