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Property I
Wayne State University Law School
Mogk, John E.

PROPERTY OUTLINE
 
Property is an interest or right which an individual holds in a subject matter recognized and backed up by the power of the state.
 
A transferee takes no better title than his transferor.
 
Is the condition a promise, covenant or wishful desire.
 
To Determine Actual Intent of Parties:
Plain Meaning of Language in Deed
Look to “Four Corners” of Instrument for Intent
Still Ambiguous => introduce extrinsic evidence of intent.
Still Ambiguous => Go to Rules of Construction (based on generalizations & not parties intent)
·        Aka Statutory Presumption
·        Construe Against Drafter of Deed or Construe in favor of Grantee
·        Abhor Forfeiture, Escheat
·        Favor Fee Simple Absolute
 
MI SPECIAL RULES:
Contingent Remainders are transferable & indestructible.
Shelley’s Rule is abolished. Cutesy is abolished. MI has dower still.
If an EI or CR doesn’t vest in 90 years, it terminates (R ag Perpetuities)
The life of an interest in land runs for 30 yrs (different from S/L of a cause of action).
 
Defenses to Enforceability: Laches (unreasonable delay), Fraud, Impossibility of Performance, mutual mistake of fact, frustration of purpose, failure of consideration.
 
Anytime there is a br of wrty, issue lurking is reliance. For implied wrty of fitness of purpose LL-Tenant, reliance is not an issue – even if T is aware of cockroaches, LL is liable.
 
State v Shack Sup Ct NJ 1971
Court found it unnecessary to explore constitutional arguments b/c court held that under state law ownership of real property does not include the right to bar access to governmental services available to migrant workers living on private land & hence there was no trespass within the meaning of the penal statute.
 
A man’s right to his property is not absolute; a maxim of CL is that one should so use his property as not to injure the rights of others.
 
Sierra Club v Morton: Standing to sue refers to whether party has a “personal stake in the outcome of the controversy” where a party does not rely on a specific statute. Under specific statutes, one needs to allege an “injury-in-fact” where alleged interest is within the zone of interest to be protected by statute.
 
Once a party has proper standing, they may argue public interest to support their claim.
The injured interest need not be economic, it may harm to environment or recreational interest.
The Club has no standing b/c it did not prove injury to its members.
 
The dissent says bona fide organization like Club should have standing OR litigation can be on behalf of inanimate objects about to be despoiled.
PUBLIC TRUST DOCTRINE: Public owned lands are held in trust for benefit of public at large – govt has fiduciary duty to protect it.
 
Jones v Mayer: Sec 1982 bars all racial discrimination, private & public, in the sale or rental of property & this statute is a valid exercise of the power of Congress to enforce the 13th Am.
 
13th Am= Neither slavery nor involuntary servitude shall exist in US & Congress shall have power to enforce this article by appropriate legislation.
 
Edwards v Sims: D seeks to prevent judge from enforcing order to survey cave.
Higher ct will prevent lower ct if:
It has no jurisdiction & there is no remedy for appeal
Ct has jurisdiction but is exercising its power erroneously & would result in great injustice or irreparable injury to P & there is no adequate remedy for appeal (must satisfy all 3)
 
Moore v Regents of UCLA: Generally owner has rt of return of property or compensation of full value. But if wrongdoer so modifies property to change its character & increase its value, W acquires title by accession. The owner is not entitled to return of subject matter but to some compensation.
Conversion arises when P establishes actual interference w/ his ownership & rt of possession. In this case, P did not expect to retain poss’n of his cells after their removal, so he had no ownership interest on which to base a conversion claim.
Alternative grounds of recovery – unjust enrichment, lack of informed consent, br of fiduciary duty.
 
Johnson v McIntosh: US courts do not recognize title to real property obtained from a grant by an Indian tribe b/c ultimate title to property is vested in the US by right of discovery & by right of conqueror. Indians only have right to occupancy.
 
**Shelley v Kraemer (1948)
14th Am: “…no state shall make or enforce any law which shall abridge the privileges or immunities of citizens of US nor shall any state deprive any person of life, liberty or property w/out due process of law nor deny to any person w/in its jurisdiction the equal protection of the laws…”
 
Private restrictive covenants are OK under CL so long as no State action is used to enforce them.
US Supreme Court holds that judicial enforcement of a private racial covenant forbidding use of property by black persons was discriminatory state action forbidden by the Constitution – under the “equal protection of the laws” guaranteed by the 14th Am.
 
CHAP 13: HISTORICAL DEVELOPMENT OF ESTATES
 
In re O’Connor’s Estate: The state is the original and ultimate proprietor of all lands. A state does not have to pay tax when a property escheats/reverts to it for a lack of heirs. The tax is intended only for succession of property by inheritance, will or by transfer made in contemplation of death & this is distinguishable from a reversion.
 
CHAP 14: FREEHOLD ESTATES
 
FSA
 
Signal of FS = ‘and his heirs’
 
Cole v Steinlauf: By virtue of the sale, there is an implied obligation on the part of the seller to convey a marketable title to the buyer.
·        If terms of K specify lower quality title, it’s OK
·        Marketable means seller will convey full, intact bundle w/ no reasonable suspicion that it might not be the full bundle of rights, free and clear of any defects. Reasonable doubt sufficient to render title ‘unmarketable’.
 
To create an estate of inheritance in land by deed, word ‘heirs’ is necessary.
Where CL rule is in effect, a grant to grantee ‘and his assigns forever’ vests only a LE in grantee.
A deed can be reformed to vest a fee in grantee where word ‘heirs’ is omitted if it can be determined from the clearly expressed intent of the parties that a fee was intended.
 
LE
 
Lewis v Searles
A REMAINDER CAN NEVER FOLLOW A FEE SIMPLE.
A remainder can only wait till expiry (LE).
The first person identified receives a freehold in possession unless it is otherwise prescribed.
Each will must be construed as a whole, to arrive at the intent of the testator, which is the ultimate guiding principle.
 
Moore v Philips
A life tenant is a quasi-trustee – he has a fiduciary duty to remaindermen – he can use the property for his exclusive benefit but has a duty to maintain & preserve the property & to prevent waste.
Waste implies neglect resulting in damage to property – does not include ordinary depreciation.
Voluntary waste is a deliberate destructive act while permissive waste is failure to exercise ordinary care for preservation of estate.
For permissive waste S/L does not commence until the expiration of the tenancy. The action for waste may be lost by laches – a delay that works a disadvantage to another. Laches will not bar a recovery from mere lapse of time or where there’s a reasonable excuse why party did not assert their rights.
Waste occurs when someone who has lawful poss’n neglects property so that interest of persons having a subsequent rt to poss’n is prejudiced in some way or reduces value of land.
 
Defeasible Estates
 
Oldfield v Stoeco Homes
1.      City sold land to D by deed which provided that D fill that land & city’s land w/in one year. Deed says failure to do so wd “automatically cause title to revert to city.” The automatic forfeiture implies estate is FSD.
2.       However parties intent is the focus of the court’s inquiry & particular words are not determinative of the type of estate granted – the instrument must be considered as a whole.
3.      City reserved rt to change or modify “any restriction, condition or other req’ts” which implies FSSCS.
4.      Since intent is not clear from deed itself, extrinsic circumstances may be considered. The city stands to benefit from D filling land & deed contains flexibility needed for such a large scale project. Thus it’s FSSCS & city must take affirmative aftion to divest D of estate.
 
Roberts v Rhodes: A requirement can be construed as a:
Condition (“so long as prop used as school”)
Promise (“Smith conveys to X which promises to”): This is promissory language, not conditional so FSA. Smiths retain a benefit to enforce the pr & can get $ or injunction but cannot forfeit estate.
Wishful expression (“conveyed for school purposes”) leaves ct room to construe as not having legal effect. The mere stmt that the prop is to be used for a particular purpose will not in & of itself suffice to turn a FS into FSD.
 
To create FSD, deed must create an estate in FS & provide that the estate shall automatically expire upon occurrence of a stated event.
 
In the absence of intent to limit title shown in the conveyance, either expressly or by necessary implication, the grantors pass all the interest they own in the real estate.
Smith’s deeded land “for school purposes only,” it was so used for 60 yrs. Ct held it was FSA b/c the deed contains no provision for reversion or termination upon some event.
The law does not favor forfeitures.
 
Martin v City of Seattle: A taking occurs whenever property owned by an individual is damaged or destroyed by governmental interference.
The term property includes the unrestricted right to use, enjoy and dispose of the land.
The maintenance & use of a boathouse falls w/in this broad definition of property and the city, by refusing to allow boathouse construction, committed an unconstitutional taking.
In an action for inverse condemnation, proper measure of damages is full & fair
compensation for the loss of property right.
 
PROF: The condition would be broken when a request to build boathouse would not be honored. No request was made btw 1908 and 1983. Since request was not made, condition was not broken.
 
Johnson v City of Wheat Ridge: Judge conveys land w/ conditions; land to be used as public park, public water & toilet facilities to be installed w/in 2 yrs of date of conveyance. Last condition not met.
 
Breach of condition subsequent does not cause title to revert automatically to grantor or his heirs – use of judicial proceedings to enforce a resulting power to terminate is governed by a one-year S/L. S/L runs from date the condition was supposed to be met (2 yrs after conveyance); so P of T is barred by S/L in this case.
C/L: UNLIMITED LIFE OF POWER OF TERMINATION
Today the life of an interest in land runs for 30 to 40 yrs.
A FSD ripens to FSA when interest extinguishes.
S/L for cause of action is one year.
 
Leeco Gas v County of Nueces: Leeco deeded to city ‘so long as public park is maintained’ (FSD, Poss of R) County attempted to remove burden of Leeco’s reversionary interest via condemnation suit and payment of nominal charges.
 
When governmental unit is exercising its gov’l powers it is not subject to estoppel.
A mere Possibility of Reverter has no ascertainable value when the condition to be breached is not probable w/in a reasonably short period of time.
 
When a Govt’l entity is the grantee in a gift deed & condemns grantor’s reversionary interest, it must compensate the difference btw the unrestricted fee and restricted fee ($3 Mil land but $2K w/ restricted fee)
 
Fee Simple Conditional and Fee Tail
 
Caccamo v Banning: Potter devised LE to wife; to Anna in fee simple but if she dies w/out issue of her body then to William’s children. P argues it’s a vested remainder in fee tail to Anna.
 
D argues it’s a fee simple subject to being defeated, should Anna die w/out issue. D contends that “die w/out lawful issue” relates solely to time of death of P & is a definite rather than indefinite failure of issue.
 
Unless there is something in the will which evidences an intention to limit the dying w/out issue to the time of death of P, thus making the contingency a definite rather than indefinite failure of issue, P takes a fee tail under will.
 
 
 
 
Fee Simple Determinable FSD
Fee Simple Subject to Condition Subsequent
Fee Simple Subject to Executory Interest
Life Estate
 
 
 
 
Possibility of Reverter
Power of Termination
 
Reversion
 
 
 
 
Vested Remainder
Contingent Remainder
Fee Tail
 
All remainders that are not vested are contingent.
There cannot be a R after any kind of fee simple, including after a fee simple determinable. If an interest is created in a third person to follow a FSD, that interest is called an EI.
A remainder will be contingent if:
 
(1) it is subject to a condition p

which are not destructible. Hence whatever grantor conveyed in 2nd deed (either his reversion or nothing), it does not affect wife & kids EI.
 
Capitol Federal S & L: Owners of lots entered into agreement allowing automatic forfeiture should one be sold to a colored person. In Shelley v KraemerUS Sup Ct held that judicial enforcement of a racial covenant forbidding use of property by black persons was discriminatory state action forbidden by the Constitution.
 
D argues that this the agreement not a private racially restrictive covenant but an executory interest that vests or shifts automatically to the D’s upon happening of the events specified in the deed (characterized as a condition) and that the validity of the vesting did not depend upon judicial action by the courts.
 
Court refused to adopt such logic to circumvent the outcome under rationale of Shelley v Kramer. Plus, even if the title automatically shifts, as long as landowner remains in possession, he can only be dispossessed via a lawsuit. That would involve state action & be impermissible.
 
City of Klamath Falls: Corporation conveys land to city ‘so long as’ it uses it as a library, & thereafter to Fred & Floy, shareholders. These are the ‘magic’ words for a fee simple determinable or its time-honored interpretation, w/ automatic forfeiture. Can’t have FSD w/ P of R in 3rd person so what City actually has is FSSEI and F & F have EI.
 
The city could have maintained a library on the site for an indefinite time in the future or even forever. Thus the gift over to Fred & Floy is void under the Rule against Perpetuities.
 
However, when an EI is void under R/P, a possibility of reverter may exist if it is clear that the prior interest is to terminate whether the EI takes effect or not. In OR, a possibility of reverter cannot be alienated & an attempt to do so does not destroy it. The grantor corp attempted to alienate P of R w/ gift over to F & F. Since F & F received assets of corp after its dissolution, and P of R is descendible, they own all rights to the property. PROF doesn’t see alienation attempt b/c it’s same document.
 
(If library clause was a wishful expression then city had FSA. For the ct to grant the intent of the grantor, they must conclude that the EI was never created & that there was residue in the grantor, the P of R.)
 
So there is P of R. But is it still enforceable? Yes so long as not limited to any life. At CL there was no limit, in MI it’s 30 yrs. Once you conclude it’s enforceable, ascertain whether condition has been broken – has S/L run on cause of action.
 
CHAP 16: CONCURRENT OWNERSHIP
 
Intro
 
Four Unities (TTIP):
Interests vest at the same time (time), interests acquired by the same instrument (title), interests are of the same type & duration (interest) & interests give identical rights to enjoyment (possession).
 
The relationship btw co-tenants, irrespective of survivorship rts, is frequently described as fiduciary.
 
Marital Estates
 
Dower/curtesy = a woman/man’s rt to beneficial use of part of their dead spouse’s land. Abolished.
 
General Aspects
 
In re Estate of Michael: ‘To HM & BM, his wife, tenants by the entireties and FM & HM, his wife, as tenants by the entireties, with right of survivorship.’
 
At CL, if all 4 unities were present, the presumption was in favor of joint tenancy.
The statutory presumption now is tenancy in common unless a clear intention to the contrary is shown. To apply rts of survivorship, the intent to do so must be expressed w/ sufficient clarity to overcome the statutory presumption that survivorship is not intended.
Deed says ‘their heirs’ and not ‘his or her heirs’ implies inter couple
But ‘rt of survivorship’ occurs only once implying it’s for intra-couple
 
Given that there are 3 possible interpretations (qualifying within 2 couples, for second couple only or btw the 2 sets of couples); so it’s ambiguous & cannot create jt tenancy.
 
Laura v Christian: Only co-tenant Laura steps us to pay jgt to mortgagee after foreclosure action instituted. The general rule is that co-tenants have a fiduciary relationship. A co-tenant who pays more than his share of a common debt is entitled to reimbursement from the other co-tenants. A co-tenant who redeems property for which other co-tenants should contribute must allow the other co-tenants to contribute & hold their interest within a reasonable time.
 
Goergen v Maar: Anytime co-tenants are absent from property voluntarily, the other co-tenant who stays in poss’n (TIP) does not need to compensate absent party during that time & can use the whole property.
 
·        If TIP gains profit solely form his labor (farming land), generally speaking TIP can keep $
·        TIP needs to divide profits from 3rd party payment for use of land
(TIP can take off money for services in managing property first eg manager’s salary)
 
Action for partition plus T-in-common suing for rent collected by co-tenant D. D says S/L expired. Ct holds that no C/Action arose (no dishonoring of request that accounting take place – no request made or no prior agreement of when accounting would occur) therefore no S/L. No S/L until C/A arises. In