Property | Hume | Winter 2012
Property – A Contemporary Approach (2009 ed.)
Property Rights – Ch. 1 (pg. 1)
Rights among people concerning things. The primary rights (bundle of sticks_ include:
· Property rights as a “bundle of sticks”
o Right to Transfer
o Right to Exclude
o Right to Use
o Right to Destroy
Rights aren’t absolute and are only held to the extent the gov’t recognizes them (Legal Positivism)
· Typically determined by state law (unless federal statutes apply)
Real Property: Land and improvements on land (e.g. buildings, fences, etc.)
Personal Property: If the thing is movable (all other property). Includes tangible and intangible property (e.g. stock, copyrights), which is represented by a writing
Possession: controlling or holding of personal property. Requires (1) an intent to possess, and (2) actual control or holding of the property.
Relativity of Title: a person can have a relatively better title or right to possession than another, while simultaneously having a right inferior to yet another person.
Pierson v. Post (1805): supporting the first possession approach to property, mere finding and chasing of a wild animal doesn’t give right to possession (must be captured/killed/mortally wounded). Occupancy necessary
White v. Samsung Electronics (1992) (Vanna White): A common law right to publicity (ownership of one’s image) is violated when a celebrity’s identity has been commercially exploited. Intangible property.
Right to Transfer (Alienability)
An owner may freely transfer property to anyone, but the scope is sometimes limited for public policy reasons (who can transfer, what can be transferred, how it can be transferred) to promote efficiency and prevent fraud. Refers to Chain of Title (series of docs. affecting ownership of, rights to, and encumbrances on a parcel of land “linked together” in some manner of recording. An owner is a “link in the chain.”).
Doctrine of Accession: when a person uses his own labor/materials in good faith to fundamentally transform another’s property, he acquires title to the final product. (but is liable for initial value)
Johnson v. M’Intosh (1823) (Native American Land): (refusing to recognize a previous transfer of land from a Native American tribe.) Native Americans are considered merely as occupants to be protected in the possession of their lands while in peace, incapable of transferring an absolute title. If a country has been acquired and held under it, it becomes the law of the land and cannot be questioned. Discovery gave an exclusive right to extinguish the Indiana title or occupancy by purchase or conquest.
Moore v. Regents of the University of California (1991) (Conversion for Unlawful Transfer of Cells): CA statutes: cannot claim ownership over excised genetic material. Since Moore didn’t intend to retain possession of the cells once removed, he must show that he retained an ownership interest. Once cells are excised, owner loses possession and doesn’t retain any ownership interest. Public policy considerations justify this.
Right to Exclude
Owners have the right to exclude anyone from his property, protected by the tort of trespass. Irrespective of harm caused, voluntary entry onto another’s property is a trespass violation. An entry made under a privilege is not trespass, and includes consent or necessity.
Jacques v. Steenberg Homes. Inc. (1997) (Mobile Home Trespass): An intentional trespass violation may be punishable by a large damage award despite the lack of measurable harm (nominal damage is enough; compensatory damages is not necessary). The harm is not in the damage done, but in the loss of the individuals right to exclude others from his property. Society has an interest in allowing a landowner to protect his land from trespass.
State v. Schack (1971) (Migrant Workers Aid): (creating a new category for the property rights of migrant workers) Property rights serve human values – the court must consider the inherent individual rights of workers. A farmer-employer does not have the right to isolate his migrant worker in any respect significant for the worker’s well-being (includes the right to have visitors, privacy, or any other associations customary among our citizens). Representatives from agencies providing aid for workers may enter the premises. These rights are too fundamental to be denied on the basis of an interest of real property.
Right to Use
Traditionally a landowner has the absolute right to use his own property in any way he wished – as long as he does not harm the rights of others. (Sic utere ut alienum non laedas = “use your own property in a manner that does not injure another’s property.”)
Spite Fence Doctrine: No property owner has the right to erect and maintain an otherwise useless structure for the sole purpose of injuring his neighbor. (See Sundowner) Based on example of Crocker spite fence. Court may order injunctive relief and damages (although some jurisdictions reject the doctrine, emphasizing that courts shouldn’t consider motive and intention)
Sundowner, Inc. v. King (1973) (Spite Fence): Because the structure served no useful purpose (determined by an objective standard of commercial reasonableness) and was erected by ill will, it was a spite fence.
Nuisance Doctrine: limitation on an owner’s right to use (typically intangible – e.g light, sounds, etc.)
A private nuisance is (1) intentional, (2) nontrespassory, (3) unreasonable, and (4) substantially interferences with (5) the use and enjoyment of the plaintiff’s land. Modern trend refuses injunctions, but allows damages.
Prah v. Maretti (1982) (Private Nuisance): P seeks an injunction. D’s unreasonable construction of a structure, which substantially interfered with the utility of his neighbor’s (D) solar panels, is a nuisance because a landowner (and society) has an interest in protecting access to sunlight (recognized through nuisance regarding spite fences). This is because access to sunlight has a new significance (energy), and previous rationales of prohibiting land use regulations and allowing for easy and unhindered land development are obsolete.
Coase Theorem: the initial allocation of a resource is irrelevant to economic efficiency (in the absence of transaction costs) because the affected parties will reach an efficient allocation through bargaining.
Right to Destroy: Scope is unclear – law rarely intervenes, unless there’s a substantial value to society.
Everman v. Mercantile Trust Co. (1975) (Historic Home to be Razed): The owner of an architecturally historic house directed her home to be razed upon her death to prevent sale (resulting in a $39k loss). Neighbors protested that it would adversely affect their property rights and be contrary to public policy (desire to prevent waste). To allow the condition in the will would be in violation of the public policy of the state, because destruction serves no apparent good purpose and would severely injure the neighbors, community and beneficiaries of testatrix’s estate. Taking of property by will is not an absolute right (it’s legally created).
Courts recognize the right to destroy property (P would have had the right to destroy it if she were living, regardless of public policy interests). Courts impose fewer restrictions upon how a living person manages, uses or disposes of property than a decedent by will (recognizes reluctance for dead hand control over property)
*Courts will balance expressive interests against substantial economic or social welfare interests.
Real Property – Ch. 2 (pg. 97)
Adverse Possession
Controversial process allowing a person who is not the legal owner of property (and may have entered as a trespasser), but has used the property for enough years, to become the owner of the property and to defeat all the rights of the true owner. If the true owner fails to eject the trespasser within the statute of limitations period (between 7 and 30 years), the adverse possessor obtains an original title to the property. *Adverse possessor holds property rights to the same extent as the previous owner (e.g. if the property is a life estate, the adverse possessor can only hold the title for the same length of time). See notes for justifications.
Elements of Adverse Possession:
1. Actual Possession: claimant must physically occupy the land in the same manner that a reasonable owner would, given its location, character, and nature. (Date of actual possession triggers SOL period)
2. Exclusive: The claimant’s possession cannot be shared with the owner or the public in general. “Claimant must hold the possession of the land for himself, as his own, and not for another.” Gurwit v. Kannatzer. (use by 3rd parties may also prevent an adverse possession claim).
3. Open and Notorious: possession must be visible and obvious, so that if the owner made a reasonable inspection of the land, he would become aware of the adverse claim. (actual knowledge, clearing brush, cultivating crops, building fences or posting signs are usually sufficient).
4. Adverse and Hostile: True owner cannot consent to the possession. 3 different views held by courts:
a. Majority/Objective View: The claimant’s state of mind is irrelevant. What matters is that they treat the property as their own. See Gurwit v. Kannatzer.
Some courts require claim of right – the intention to hold adversely must be clear, distinct and unequivocal – Fulkerson v. Van Buren (holding that possession ceased to be adverse when the church asserted its ownership and “recognized” P’s ownership right. The church did not have the requisite intent to adversely possess the land for the statutory period).
b. Minority/Bad Faith/Intentional Trespass View: Mistaken possession does not constitute hostility. The claimant must act in bad faith by intending to take the title from the owner. (Historically supported view) See Van Valkenburgh v. Lutz; Tioga Coal v. Supermarkets General Corp. (abandoning the bad faith approach in favor of the majority approach).
c. Good Faith View: Require possessor to act in good faith, actually believing he owns the land.
5. Continuous: possession must be as continuous for the entire period as a reasonable owner’s would be, given the location, character and nature of the land (this does not mean uninterrupted).
6. For the Required Statutory Period: Measured by time the adverse possessor is in possession, not by the time a record title owner has title (multiple title owners). Period is tolled for disability (minority, imprisonment, etc.). Color of Title (claims based on invalid instrument) is often easier to meet. Pg. 115.
Some state statutes have additional requirements – e.g. paying property taxes; improvement, cultivation or enclosure of the land. Van Valkenburgh v. Lutz (requiring improvement/cultivation of the entire property).
Claim of Title: claims based on a written instrument that is actually defective. Benefits the adverse possessor by (1) reducing the SOL in some states, and (2) allowing adverse possession claims based on actual possession of a part of a tract to be deemed in constructive possession of the whole tract (unless the true owner possesses part of the described
meliorative waste is not actionable – most courts follow this rule). Kinds of waste:
§ Voluntary (affirmative act that reduces the value of the property)
§ Permissive (failure to take reasonable care to protect the estate)
§ Ameliorative (affirmative act leading to increase in value)
o Corporations cannot have life estates (they do not have lives).
Intestate succession: from a descend to an heir, when a person dies without a will. Property is distributed according to state statute (usually to the closest living relative): Issue (lineal descendants) and surviving spouse à Parents and their issue à Ancestors and collaterals à Escheat (belongs to the state if no living relatives)
Subject to Variations – Defeasible Estates allow a landowner to control the future of his property after he transfers title. An estate may end upon the occurrence of some future event.
· Fee Simple Determinable: a fee simple estate that automatically ends when a certain event or condition occurs, giving the right of possession back to the transferor (automatically cuts the duration short).
o Words of Limitation = words of duration (e.g. so long as, during, while, until). E.g. A conveys to B “so long as she does not sell alcohol.”
o The future interest is a possibility of reverter.
o Freely alienable, devisable, and descendible (but the condition will apply to any transferee) (the possibility of reverter is also alienable, devisable and descendible)
· Fee Simple Subject to a Condition Subsequent: a fee simple estate that may be terminated at the election of the transferor when a certain condition or event occurs (is not automatically terminated)
o Words of Limitation = provided that, but if, on the condition that (often they have a clause providing that the “transferor has the right to reenter and reclaim the property”)
o The future interest is a right of entry (aka a power of termination); grantor must act to reclaim the property – the holder of the fee simple subject to a condition continues to own the property until the grantor exercises this right.
o Freely alienable, devisable, and descendible (but the transferee is still bound by the condition)
o When there is confusion of a grantor’s intent between this and a fee simple determinable, the court will construe a grant as a fee simple subject to a condition subsequent.
· Fee Simple Subject to an Executory Limitation: a defeasible fee simple estate created in a transferee that is followed by a future interest in a 3rd party.
o Words of Limitation = same as the 2 previous categories, but distinguishes that the future interest is held by a 3rd party. E.g. E.g. A conveys to B “so long as she does not sell alcohol, then to C.”
o The future interest is an executory interest.
o Freely alienable, devisable, and descendible (but still subject to the executory limitation). So is the executory interest.
Non-Freehold Estates (less complete form of ownership):
· Term of Years: Interest for a fixed period (resembles a leasehold); alienable, inheritable, and devisable.
Future Interests
Interests retained by the transferor: Reversion (when a transferor conveys a smaller estate than the one she has – does not depend on the occurrence of a condition), Possibility of a Reverter, Right of Entry
Remainder: a future interest created in a transferee that (1) is capable of becoming possessory immediately upon the expiration of the prior estate, and (2) does not divest (cut short) any interest in a prior transferee (the prior interests end naturally)(guaranteed possession is not required – the possibility is enough).
*Must be created in the same transfer document as the life estate.
· Indefeasibly Vested Remainder: (1) created in an ascertainable person (someone alive and identifiable at the time of transfer – excludes unborn heirs) and (2) is not subject to a condition precedent other than the natural termination of the prior estate. E.g. “To A for life, then B.”
· Vested Remainder Subject to Divestment: same as above, but subject to a condition subsequent (interest becomes possessory unless a specific event occurs. E.g. “To B for life, then to D, but if D does not survive B, then to E.”
· Vested Remainder Subject to Open (Partial Divestment): a vested remainder held by one or more living members of a group that may be enlarged in the future (often the possibility of later-born children). E.g. “To B for life, then to D’s children.”
