Prof. Thomas Plank
University of Tennessee College of Law
Nemo dat quod non habet (“you cannot give what you do not have”): the purchase of something from a seller that has no ownership right of the thing being sold does not grant the buyer any ownership right in the thing
Good faith purchaser exception:
Requires a lack of notice
Recording acts requires a deed to be recorded, giving superior interest in the property. When done, good faith purchaser would apply to those who do not record.
Possession gives the possessor (1) power to use the thing, (2) power to transfer the thing to anyone else, and (3) notice to the world that the possessor owns the thing
First possession allows an unowned thing to become one's own
Contractual promises are property interests in the thing being contracted for
Acquisition by Gift
3 requirements to make a gift of personal property:
Donor must intend to make a present transfer of an interest in property
Donor must deliver to the donee with the manifested intention
Delivery is based on objective acts
Reasons for delivery requirement:
Wrench of delivery
Act is unequivocal evidence of a gift to the actual witnesses
Gives the donee a prima facie evidence of a gift
Types of delivery other than manual delivery:
Constructive delivery: example is a key
NO GIFT, when the gifts are not hand-delivered, when practicable, to the donee, even if the gifts are delivered to a place that the donee has control over (Hocks v. Jeremiah, Oregon Court of Appeals, 1988; Decedent hand-delivered 4 $5000 bonds to his sister, rented a safe deposit box that they had joint control over, told her that everything he puts in the box will be hers after she dies, put 22 bonds and a diamond ring in the safe deposit box as well as a note saying that the contents of the box are to be removed only by sister upon his death; Court ruled that sister is only entitled to the 4 bonds that were hand delivered to her and her brother delivering the rest to the safe deposit box did not satisfy the delivery requirement for a gift)
Symbolic delivery: written document or something that represents the property given
Traditional rule: If the thing can be manually delivered, it MUST be. This rule is eroding.
CONSTRUCTIVE DELIVERY, when the donor has intent to transfer the property interest as a gift and when steps taken by the donor must have been deemed by the donor to be sufficient to pass the donor's property interests to the donee, even if the gift could have been manually delivered (Scherer v. Hyland, Supreme Court of New Jersey, 1977; Decedent put check on table in her apartment, which she shared with donee, and also left a note giving the check to the donee before committing suicide)
Traditional rule: Gift promises are unenforceable for lack of consideration.
NO GIFT, while donor retains dominion and control of the gift (Woo v. Smith, Virginia Supreme Court, 1994; Decedent gave P a check, died before P could cash it; Court ruled no gift because decedent still retained dominion over the funds and could stop payment before P could cash it if he chose to do so)
GIFT, even when the donor retains dominion and control over the funds (In re Estate of Smith, Pennsylvania Superior Court, 1997; opposite of Woo case)
Traditionally, symbolic delivery of something you can hand deliver is not allowed, but Third Restatement changes this
Donee must accept delivery
Courts presume acceptance upon delivery unless a donee expressly refuses a gift, which may be shown by oral evidence
Gift causa mortis: a gift made in anticipation of one's death
NO DELIVERY, when the gift is not manually delivered when present and practicable and NO CONSTRUCTIVE DELIVERY when the gifts to be delivered are present but capable of being manually delivered. For gifts causa mortis, the gifts must be either actually or constructively delivered. Recognizes as the statutes of wills as one against fraud. Symbolic delieries of gifts causa mortis will make the Statute of Wills worthless. A gift causa mortis requires (1) intent, (2) delivery, and (3) acceptance. When manual delivery is not feasible, constructive delivery is acceptable. (Newman v. Bost, Supreme Court of North Carolina, 1898; Bureau was ruled to be constructively delivered since, though it was actually present when the intention to give it as a gift was made, it was too heavy to actually move. The life insurance policy inside the bureau was not constructively delivered since it was present and capable of being actually delivered).
Modern trend is to enforce the decedent's intent even if there is some failure to comply with the law of wills, so long as there is clear and convincing evidence of a donative intent (Uniform Probate Code § 2-503 (2008))
Gift inter vivos: gift made during one's life
A. The Fee Simple
Fee simple absolute is an absolute ownership; it may last forever
Creation language: “to A”
At common law, fee simples could only be created by “to A and his heirs.” Now, “to A” suffices because grantors are presumed to give away all that they have, absent some limiting language, in a transfer
Nobody has any future interests in a fee simple absolute
This applies to A's heirs. No living person has any heirs. Therefore, the presumptive heirs have nothing until A dies.
Fee simples absolute are alienable and devisable
1. Inheritance of a Fee Simple
If a person dies intestate (without a will) their real property goes to their heirs
Heirs: persons who (1) survive decedent AND (2) designated as intestate successors under the state statute's statute of descent
Modern statutes of intestacy hierarchy – if A dies, then:
if no Issue, then to Ancestors;
if no Issue and no Ancestors,
that cannot be sold
What if a defeasible grant has durational language (FSD language) and conditional language (FSSCS/FSSEL language)? Ambiguous defeasible grant problem:
Ex.: O conveys BA “to A and her heirs so long as the premises are not used for sale of beer, wine, or liquor, and if beer, wine, or liquor is sold on the premises O retains a right to re-enter the premises.”
FSSCS are preferred. Why? bc courts don't like to forfeit peoples' interests. FSSCS is less likely to cause forfeiture
Essence of a Lease
Lessee has the right to use the property for a term
Reversion to landlord
Four Types of Leasehold Estates
Term of Years
A lease that lasts for some fixed period of time or for period computable by a formula that results in fixing calendar dates for beginning and ending, but can terminate earlier upon the happening of some event or condition
Notice necessary to terminate: no notice necessary.
Lease for a period of time that continues for succeeding periods until landlord or tenant gives notice of termination
Ex.: “to A from month to month” or “to B from year to year”
Notice necessary to terminate: need at least 6 months notice to terminate year-to-year tenancy
For periods of less than a year, notice equal to the period, but no more than six months, is necessary to terminate. Ex.: month-to-month periodic tenancy needs at least one month notice to terminate. BUT 8 month to 8 month periodic tenancy only needs 6 months notice to terminate.
On October 1, L leases to Whiteacre “to T for one year, beginning October 1.” On the following September 30, T moves out without giving L any notice.
What are L's rights? Class answer: No notice of termination required for term of years. L now has right of possession of property.
What if the lease had been “to T from year to year, beginning October 1?” Class answer: 6 months of notice required for year-to-year periodic termination. For our purposes, just use the common law rule; don't worry about state rules.
What if the lease had been for no fixed term “at an annual rental of $24,000 payable $2,000 per month on the first of each month? Class answer: Question is if it is a month period or a year period. If no term is specified, look at rental payment. No principled way to figure this one out