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

Property Outline – FALL 2008 – MOGK

PART ONE: PROPERTY AS AN INSTITUTION – OVERVIEW OF PROPERTY LAW

I. WHAT IS PROPERTY?
A. Definition: Tangible (Movable = Personal, Immovable = Real) v. Intangible (Intellectual Prop. Rights)
In a Legal Sense: Legal relationship among people to a “thing”
i. Interest in right to a thing and the thing itself
ii. Right must be backed up by the power of the state
Bundle of Rights: Person who holds the bundle has all right, title and interest

THREE CRITERIA OF EFFICIENT SYSTEM OF PROP RIGHTS:
1. Universality – All resources should be owned, or ownable by someone.
2. Exclusivity – Right to exclude others from your property (exceptions).
3. Transferability – Must be able to transfer that property right (policy issue – shift resource from a less productive to a more productive use through voluntary exchange).

B. Nontraditional Types of Property
Body Cells – Moore v. Regents of the University of California (pg. 27)
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. ATTRIBUTES OF PROPERTY
A. Prop has 3 basic attributes
i. Right to exclude others
ii. Right to transfer to others
iii. Right to use

B. The Right to Exclude

Limitation on Absolute Rights of the Landowner
State v. Shack (pg. 37)
Landowners rights are not absolute and so in this limited sphere – social service workers addressing problems at the federal and state level – operating with the support of public funding – entering on land for a limited purpose – we are going to conclude that the possessory right of the farmer – the law of NJ will not back up. It was a maxim of the common law that one should so use his property as not to injure the rights of others.

C. The Right of Disposition

Property Rights vs. Individual Rights
Jones v. Alfred H. Mayer Co. (pg. 57)
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.
– Statutory/Congress changed common law – no public enforcement of private discrimination
III. OBJECTS AND CLASSIFICATIONS OF PROPERTY
A. Traditional objects of property: Chattels; intangibles, such as shares of stock; land surfaces; minerals and land sub surfaces; water, and air space.

Edwards v. Sims (pg. 68)
At common law, an ownership in property extends from the center of the earth to the heavens.
Edwards 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. Edwards, on appeal is trying to prevent the judge [Sims], 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.

IV. ROLE OF PROPERTY IN SOCIETY

Conquest and Dominion – American Indian Claims
Johnson v. McIntosh (pg. 85)
P claimed land through deeds given by natural 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. A person only has the property ownership that state recognizes them having.

A. 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. 91) LANDMARK CIVIL RIGHTS CASE
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 (SELLERS 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.” Does purely private racial discrimination in the form of a racial restrictive covenant violate the 14th Amendment? Private discrimination is going to violate the 14th Amendment b/c requisite state action comes from the necessary enforcement and recognition of that covenant by the state

PART TWO – THE ACQUISITION OF PROPERTY (PRIMARILY, PERSONAL PROP)

I. FINDING
a. Addresses how society distributes property rights when a person acquires possession of an item of personal property through a finding.
b. Balances rights of many interest holders – the finder, the true owner, the owner of the real estate where item found, subsequent finders, and society in general.

Objects Placed on the Land by Nature’s Forces
Goddard v. Winchell (pg. 103)
When something falls from the sky and lands in the ground – it belongs to the person owning the property (meteorite reference)
Presuming very simple situation – if someone has fee simple to given piece of land and something falls onto that land – it belongs to “true owner” property owner.
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. MI has Found Property Act.

Right of Possession of Personal Property
Armory v. Delamirie (pg. 124)
P, a chimney sweeps’ 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 knew 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. Finder may recover full value from one who deprives him of possession.
When the sweep found the jewel he had a possessory right only second to the true owner –This is called involuntary bailment. True owner only has title and title is superior to possession.

PART THREE – PRIVATE INTERESTS IN LAND
I. HISTORICAL DEVELOPMENT OF ESTATES DOCTRINE

In re O’Connor’s Estate (pg. 248)
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. Escheat is incidental to state sovereignty. State is first and last taker of all real property.
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.
II. FREEHOLD ESTATES (Real property)
Freehold Estates: (commonly referred to as title in “bundle of rights”)
3 Basic types of freehold estates:
® Under common law estate assumed to be life estate unless otherwise expressed
® Modern reform suggests preference for a fee simple estate unless otherwise expressed
® The owner in possession of a freehold estate was said to have seisin

FREEHOLD ESTATES CANNOT BE ABANDONED UNDER ANY CIRCUMSTANCE UNDER COMMON LAW.
o Property cannot be taken without due process of law – constitutional protection.
o Quiet title – “in rem” on parcel of land for those who claim interest in the land must appear and assert that right otherwise “quiet title” action cleans up adverse possession.

FEE SIMPLE – always inheritable

Fee Simple Absolute: Potentially infinite duration. It is created by O, the owner granting the land “to A and his heirs.” “To his heirs” are words of limitation/definition. A retains interest, heirs have no interests in the transaction.

Omission of Words as Title Defect
Col

he conveyances in our present case contained none of these words limiting the period or term for which the grant was made.”

Johnson v. City of Wheat Ridge (pg. 294)
P (executor/heir of Johnson’s estate) brought action – Johnson conveyed land as gift for use as public park – subject to condition subsequent. P did not bring action within allowable timeframe. The holder of the enforcing interest should be constantly on surveillance. Affirmative action necessary to vest the interest, did not occur within statute of limitations necessary to do so.

Leeco Gas & Oil Co. v. County of Nueces (pg. 297)
Economic Value of the Possibility of Reverter
Upon conveyance – Used “so long as” – created a fee simple determinable – Leeco (P) wanted the land used as a park. Leeco holds a possibility of reverter. The county commissioners decided 50 acres should be developed. The condition affects the land use so the county cannot develop without losing land. Constitutional taking – Govt. was grantee – acquired certain amount of property; grantor kept possibility of reverter – Govt. wanted to condemn grantor’s remaining interest in the land.
Can govt. pay a very nominal sum for the condemnation of the interest? Compensation must be the amount by which the value that the unrestricted fee exceeds the value of the restricted fee. What is the value of the interest being condemned? Public policy – negative effect on gifts of real property.

[[WILL NOT BE ON EXAM!!!]] Fee Tail (and fee simple conditional): Successor to fee simple conditional (always inheritable) 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’t convey, but when B died the heirs take the interest.
“Docking the tail.” A grants to B a fee tail, B has property with restriction, B sells property for minimal amount to C and C sells back to B a fee simple absolute. This is a legal fiction – in doing this fee tail is cancelled.

WILL NOT BE ON EXAM!!! Disentailing by deed – Caccamo v. Banning (pg. 302)
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.

Life Estate: (Not an estate of inheritance)
A life estate is an estate that will end necessarily at the death of a person. Under common law this was presumed – this has been changed by statute. It is created by granting the property “to B for life.” A holds reversion and B holds for life. If B transfers to C then C is a special occupant (per autre vie) – retains possession for the life of B. If it is the remainder to C – when B dies, C holding this vested remainder has a fee simple absolute. Life estate is right to use, control and possess the land for the period of their lifetime.