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Property I
Wayne State University Law School
Dolan, John

Property-Dolan-Winter-2011.doc

OUTLINE
PROPERTY – DOLAN

I. Attributes of Property

A. Definition of Property
Real Property, Personal Property = Tangibles – Movables and Immovables
Intangibles – Intellectual Property (Inventions, Copyrights, Ideas)

Property in a legal sense – (versus common language) refers to the right that an individual holds in the subject matter. This right is only enforceable if it is backed up by the power of the state (backed up by the courts).

B. Limitation on Absolute Rights of the Landowner
State v. Shack (pg. 16)
D entered the private property of a farmer to aid the migrant farm workers where they were employed and housed. The farmer stated that D could see the workers while in his presence. D, the aid workers refused, and then D were told that they had to go. The farmer then proceeded to file trespassing charges against D. The lower ct’s found for the farmer/employer. Rule-Landowners rights are not absolute and so in this limited sphere

C. Finder may recover full value from one who deprives him of possession
Right of Possession of Personal Property – Armory v. Delamirie (pg. 95)
P, a chimney sweep’s boy, found a jewel in the course of his work and took it to D’s shop for appraisal. As a finder, P’s property right in the jewel entitles him to recover its full value from D, who received possession from P and new that P had found it. The finder of a jewel does not have absolute legal title but does have a property right against all but the true owner.
When the sweep found the jewel did he have rights – only second to the true owner – this is called – possessory right. This is called involuntary bailment. True owner only has title and title is superior to possession.
True owner still has title. Sweep’s right of possession is worth very little so when it sues the jeweler – can the true owner come along and sue for the full value as well?

D. Objects Placed on the Land by Nature’s Forces
Goddard v. Winchell (pg. 85)
Rule: Any object placed on the soil by nature’s processes becomes part of the soil so that a subsequent taking by finder is wrongful.

E. Property Rights vs. Individual Rights
Jones v. Alfred H. Mayer Co. (pg. 32)
P brought an action under 42 USCA 1982 alleging that D had refused to sell P a home in a St. Louis subdivision because P is black. §1982 – based on the granted power under 14th Amendment. Problem is no state shall deny equal protection of the law – the seller is a private individual not the state. Can’t read the act applying to private individuals – can’t be enforced – Congress does not have that right. 13th Amendment – base argument. This gives Congress the power – action of seller is discriminating against the buyers perpetuates slavery or involuntary servitude.

Rule: Congress may proscribe a private person’s refusal to sell or rent property because of the other person’s race under the 13th Amendment – read broadly enough to apply to this situation and to enforce the act. This overrides the common law principles.

F. Objects and Classifications of Property
Ad Coelum Theory – Edwards v. Sims (pg. 42)
P discovered and commercially exploited the Great Onyx Cave. Lee claimed that part of the cave ran under his land. Lee brought suit to quiet title, and the circuit court directed a survey to be taken of the land to determine if part of the cave was under Lee’s land. P is suing to prevent D, the judge, from enforcing the order.
Rule: A trial court may order a survey of one person’s land to adjudicate a claim made against the owner. The order is within the jurisdiction and power of the lower court.
Two reasons: no one will suffer a great injustice or irreparable injury by the survey and the court was unable to resolve the dispute based on the evidence before it. The intrusion into P’s land is necessary to determine whether P is trespassing.

G. Nontraditional Types of Property
Body Cells – Moore v. Regents of the University of California (pg. 53)
Rule: An individual does not own property rights in his own cells, such that use of the cells for medical research without his permission does not constitute conversion.
A conversion arises when the P establishes an actual interference with his ownership or right of possession. In this case, P certainly did not expect to retain possession of his cells after their removal, so he had no ownership interest on which to base a conversion claim.

II. Role of Property

A. Conquest and Dominion – American Indian Claims
Johnson v. McIntosh (pg. 63)
P claimed land through deeds given by nature American Indians in 1773 and 1775.
Rule: The United States courts cannot recognize title to real property obtained from a grant by an Indian tribe. Discovery gives an exclusive right to extinguish the Indians’ right of occupancy either by purchase or by conquest.

B. Constitutional Limits
Federal and state constitutions and statues have been construed to prohibit enforcement of private agreements that condition alienation or ownership upon criteria that discriminate against certain identifiable classes, the integrity of which society-at-large deems in its best interest to protect.

Racially Restrictive Agreements
Shelley v. Kraemer (pg. 69)
The Shelleys (Ds), who were black, purchased real estate that was subject to a restrictive racial covenant. The Kraemers (Ps) brought an action against the McGhees (Ds) to force divestiture of real property for violation of the covenant, which precluded “occupancy as owners or tenants…by people of the Negro or Mongolian Race.”

In a companion case, McGhee v. Sipes, the Sipeses (Ps) brought an action against the McGhees (Ds) to enjoin violation of a covenant that provided “property shall not be used or occupied by any person or persons except those of the Caucasian race.”

Rule: A racially restrictive private covenant included in a deed to land cannot by enforced in a state court.
The covenant itself is not illegal, but because the state has to enforce, it brings in state action and therefore violates the 14th Amendment.
The Due Process Clause of the 14th Amendment would be violated if state action were allowed to frustrate this ownership. State action is found when state judicial machinery is used to enforce the private restrictive covenants. To allow these covenants to be enforced would allow the state to do indirectly what it is absolutely precluded from doing directly.

C. Private Interests in Land
1. Escheat and inheritance taxes
In re O’Connor’s Estate (pg. 195)
O’Connor died without leaving heirs. By statute, his estate escheated to the state of Nebraska. The county in which the estate was probated brought an action seeking inheritance taxes from the state.
Rule: A local government entity cannot require the state to pay inheritance taxes when an estate escheats to the state.
The state is the original and ultimate proprietor of real estate. What is commonly termed ownership is really only tenancy, which can continue only under legally recognized rights of tenure, transfer and succession. Upon termination of this tenancy, the property reverts to the state. Thus, the term “escheat” means a reversion to the state.

III. Estates
Although a person talks about owning “property” or “land,” what he holds legally is an estate in land. An estate is an interest in land that is or may become possessory, and is an interest measured by some period of time.

A. Types of Freehold Estates
1. Fee Simple
a. Fee Simple Absolute
A fee simple is an estate that has the potential of enduring forever. It is created by O, the owner granting the land “to A and his heirs.”
“To his heirs” are words of limitation/definition. Heirs have no interests in the transaction.
“To A” are words of purchase. “To his assigns” is not good enough because of the long time honored requirement that fee simple advance be so expressed.
b. Defeasible Fees
(i) Fee Simple Determinable
A conveys to B so long as liquor is not used on the premises. Triggered by the words “so long as”, “while”, “until.” That ran with the estate so that if B re-conveyed to X, X took a Fee Simple Determinable. If the party used liquor on premises the estate automatically reverted to the holder of the possibility of reverter upon that event.
Enforcement = 30 years. Strict forfeiture estate.

(ii) Fee Simple Subject to a Condition Subsequent
“Upon the condition that”, “but if”, “provided that.” Power of termination (or right of re-entry) – right of interest that A keeps. A needs to assert his/her rights – grantee has not complied with the conditions – bring an action for ejectment (an action at law not equity) – if don’t bring a suit within one year (whatever the statute of limitations is) then the power of termination expires and returns to a fee simple absolute. By statute today these both can be transferred during the lifetime of the holder. MI = 30 years. Flexible forfeiture estate.

(iii) Fee Simple Subject to an Executory Interest
Put the interest in the hands of the third party. Same words as (1) Someone else police the liquor business –”on the condition that liquor is not used on the property, “but if it is” used, then to “C and her heirs.” C has an executory interest. If condition is broken then C gets fee simple absolute.

Condition – If the condition is not met in all three – this results in a forfeiture.
Covenant – if broken will result in injunctive relief or monetary damages but not forfeiture.
Wishful Expression – You would like it to happen, but there is no cause of action if the requirement is not met.

2. Fee Tail
A fee tail is an estate that has the potential of enduring forever, but will necessarily cease if and when the first fee tail tenant has no lineal descendants to succeed him in possession.
O granting the property “to A and the heirs of his body (or and his issue).”
Never been adopted as a recognized estate in any state of the US.
Heirs take up collectively – their heirs then take up collectively when they die.
A conveys to B a fee tail. If B conveys to C – C takes a life estate for the life of B. It didn’t say that B couldn

how much time does the holder of the enforcing interest have to bring a lawsuit after the condition is broken (second question)? This case said one year to bring the lawsuit. This forces the holder of the enforcing interest to be constantly on surveillance.

5. Economic Value of the Possibility of Reverter
Leeco Gas & Oil Co. v. County of Nueces (pg. 244)
Used “so long as” – created a fee simple determinable – they wanted the land used as a park. Leeco holds a possibility of reverter. The county commissioners decided 50 acres should be developed. The condition that affects the land and we try to develop it then we lose it. They used the county’s power of eminent of domain to take the property (take the possibility of reverter) because it is small and worth nothing – formal condemnation.
Rule: The owner of a possibility of reverter is not entitled only to nominal damages in a condemnation suit.
The proper amount of compensation is the amount by which the value of the unrestricted fee (50 acres used for commercial purposes) exceeds the value of the restricted fee (50 acres used as a park).

F. The Fee Simple Conditional and the Fee Tail
Disentailing by deed – Caccamo v. Banning (pg. 249)
What type of remainder does Anna have? Vested or contingent? Vested if the holder of the remainder is in a position to take up seisin upon the termination of the preceding freehold estate.

Wife dies. What happened to life estate? It was extinguished. What happens to Anna’s vested remainder in fee tail? Takes up seisin and becomes a fee tail in possession.
Next legally significant event? Anna attempts to dock the tail – conveys it over and receives it back. Once she does this what does she have? A fee simple absolute in possession. Children of William have nothing – why do they lose their remainder? Everything else is gone once you get a fee simple absolute.

IV. Future Interests

A. Reversionary Interests
1. Reversion – the undisposed of interest that remains in A after the creation in B of what is technically called the particular estate is a reversion. There is no language that purports to create the reversion. It is freely transferable.
2. Possibility of Reverter
3. Power of Termination

B. Gifts Over
1. Remainders
A remainder must have a preceding estate, and only becomes possessory upon the natural termination of the preceding estate.

1. Vested – not subject to a condition precedent. Ascertained persons ready to take seisin.
(1) Indefeasibly vested remainder – nothing can happen to prevent either B or his heirs, devisees, or grantees from taking possession on the death of A.
(2) Remainders vested subject to open (or subject to partial defeasance) – confined to a single type of case, a remainder to a class of persons which can increase in size between the time of conveyance and the end of the particular estate.
(3) Remainders vested subject to complete defeasance – [To A for life, remainder in fee to B, but if B should die under the age of 21, then to C in fee.] Subject to a condition which may prevent his even enjoying his estate; but unlike the contingent remainder, the condition here is not precedent, but subsequent.

b. Contingent
(1) Remainders to unascertained persons [To A for life, remainder to the heirs of B (a living person)].
(2) Remainders to ascertained persons but subject to an express condition precedent [To A for life, remainder to B in fee if B pays A $1000] Both subject to some condition precedent – first case the condition precedent is the ascertainment that the persons who are to take and in the second case the condition precedent is expressly imposed on a gift to an ascertained person. Condition precedent – express or implied.
Alternative Contingent Remainder – [A conveys to B for life, remainder in fee to whichever one of C and D shall first become a minister.] There are really two contingent remainders, either one of which, but not both, may ripen into a possessory estate. Neither may vest, and A still may add other alternatives or remains a reversion.