Property I
Possession, Property—real property, personal property, tangible or intangible property. Fixtures can be personal or real property that are attached to real property.(ordering relationship between people and property)
Limitation on absolute ownership: government police power, regulatory power, and
I. Fist Possession: Acquisition of Property by Discovery, Capture, and Creation
A. Acquisition by Discovery.
èJohnson v. M’Intosh
U.S.S.C. 1823
Johnson v. M’Intosh
Facts Plaintiff Johnson bought certain land from the Piankeshaw and Illinois Indians and sought to eject defendant Macintosh from that land.
Macintosh is the defendant, and he claimed title under a later grant of the same land from the United States Government.
Johnson v. M’Intosh
Issue Whether the United States Supreme Court would recognize Johnson’s title to the land in dispute.
Was the underlying issue here whether the Indian Chiefs were authorized to convey the land to Johnson?
Yes and no. They had the authority of their tribes and they had rightful possession of the land. The question is: What does that mean to the US S Ct?
Rule: First in time, first in right.
Was the underlying issue who was first in time?
Johnson was first in time between himself and MacIntosh; and the Indian Tribes were also first in time regarding their possession of the land.
nRule: Discovery gives title to Europeans, subject to natives’ right of occupancy.
nReason: To avoid conflict among “superpowers.”
. Title should not be obtained in the broken chain of good title.
Key Concepts:
1) First in time rule is inherently flexible.
2) Tracing title is often critical.
3) Title and possession are not the same.
As the right of society, to prescribe those rules by which property may be acquired and preserved is not, and cannot be drawn into question;
as the title to lands, especially, is and must be admitted to depend entirely on the law of the nation in which they lie; it will be necessary, in pursuing this inquiry, to examine,
not singly those principles of abstract justice, which the Creator of all things has impressed on the mind of his creature man, and which are admitted to regulate, in a great degree, the rights of civilized nations, whose perfect independence is acknowledged;
but those principles also which our own government has adopted in the particular case, and given us as the rule for our decision.
“The rights of the original inhabitants were, in no instance, entirely disregarded; but were necessarily, to a considerable extent, impaired. They were admitted to be rightful occupants of the soil, with a legal as well as just claim to retain possession of it, and to use it according to their own discretion, but their rights to complete sovereignty, as independent nations, were necessarily diminished, and their power to dispose of the soil at their own will, to whomsoever thy pleased, was denied by the original fundamental principal, that discovery gave exclusive title to those who made it.
“However extravagant the pretension of converting the discovery of an inhabited country into conquest may appear; if the principle has been asserted in the first instance, and afterwards sustained; if a country has been acquired and held under it; if the property of the great mass of the community originates in it, it becomes the law of the land, and cannot be questioned.”
B. Acquisition by Capture
èPierson v. Post
S.C. of N.Y. 1805
Pierson v. Post
Facts: Post chased fox on wasteland, Pierson intervened at last second.
Issue: What constitutes “occupancy” of a wild animal?
Pierson v. Post
Rule: 1) “Occupier” must intend to appropriate.
2) Must deprive of liberty.
3) Bring under certain control.
Reason: Follow precedent; promote certainty and the prevention of disputes.
Dissent (Livingston) Rule: Property rights may be acquired in wild animals by one who has a reasonable prospect of capture.
Reason: Follow precedent/uphold custom and (supposedly) rid the countryside of foxes.
èGhen v. Rich
U.S.D.C. of Mass. 1881
Ghen v. Rich
Facts: Whaler (Ghen) harpooned and left whale. Finder of whale sold it to Defendant (Rich).
Issue: Should custom determine title or should …?
Ghen v. Rich
Rule: Custom rules.
Reason: 1) Why not?
2) Whaling industry would otherwise fail.
èKeeble v. Hickeringill—decoy duck case.
Queen’s Bench 1707
Keeble v. Hickeringill
Facts: Defendant maliciously frightened ducks from Plaintiff’s decoy (pond).
Issue:
Not: Did Plaintiff own the ducks?
Rather: Was Defendant’s interference with Plaintiff’s enterprise/endeavors wrongful?
■ “Ratione soli” refers to the conventional view that an owner of land has possession—constructive possession, that is—of wild animals on the owner’s land; in other words, landowners are regarded as the prior possessors of any animals ferae nature on their land, until the animals take off.
Rule: One cannot wrongfully interfere with another’s rightful (business) activity.
Reason: The harm of malicious “competition,” unlike the harm of fair competition, outweighs its benefits.
–> Review Bridege:
Object found is a (public) shop, on the floor, by a cumstomer.
Rule: Where locus owner never has custody/control, no right of possession.
2> Staffordshire
Object found in a (private) pond, in the muck, by an agent/servant of locus owner.
Rule: Locus owner possess all things attached to or under (not necessarily “on”) the land, even if not aware of their resence.
3> Elwes
Object found on leased (private) property, in a riverbed, by lesses.
Rule: Things in the soil belong to the landowner.
Hanna V. Peel
Rule: Finders keepers.
Reasons: Bridges v. Hawkesworth
Hannah was honest.
Peel never had possession of the realty.
Peel presumably wouldn’t have gotten the brooch but for Hannah (and vice versa).
èMcAvoy v. Medina
Supreme Court of Massachusetts, 1866
Facts: Plaintiff, customer in defendant’s shop, found a wallet on a table and turned it over to defendant. Defendant decided to keep it when the owner couldn’t be found.
Issue: Who has a superior right to found goods, the customer or the shop owner?
Rule: “The finder of lost property has a valid claim to the same against the whole world except the true owner, and generally the place in which it is found creates no exception to this rule.” See p. 105 (emphasis added).
It is the duty of the shop owner to reasonably care for mislaid property until the owner claims it. Id. (emphasis added).
Reason: Reward honest finders and return to T.O.
B. Acquisition by Adverse Possession
1.The Theory and Elements of Adverse Possession
only look at the owner,
2. The Mechanics of Adverse Possession
3. Adverse Possession of Chattels.
C. Acquisition by Gift
Elements: Manifest intent, delivery, and acceptance(presumed by law)
Case: Newman v. Bost.
The dying man who employed the P for 10 years at his house gave keys to P which can unlocked bureau, in which the insurance policy was, and other furniture. Can P keep the insurance policy? Other furniture other than ones that can be unlocked by the keys given to P? Piano?
Case: Gruen v. Gruen.
Before P’s father died, he gave P the painting for P’s 21 birthday gift by sending a letter showing his intention to give the painting.
Week 3
Finders Revisited
Lost Property
The general rule is that if a person finds lost personal property on the open land or area of another, the finder is generally entitled to the personal property. (If it’s in the land, then not.)
Finding in the private area of a home or business usually means the landowner wins.
Trespassers lose to landowners, though it is possible a court will find a trespass was de minimus or that the landowner’s acquiescence vitiates a trespass claim.
Finders also might not prevail against their employers.
Misplaced Property
The finder of misplaced property generally is not entitled to retain the possession of the property as against the owner of the land on which the property was found.
Rather, the owner of the “locus in quo” is deemed to be the bailee of the goods for the true owner.
Abandoned Property
The finder of abandoned property generally is entitled not only to possession but also to ownership as against all others.
If the former owner has intentionally relinquished title, the first finder generally gets title.
Statutory Solutions
Many states have statutes giving the finder greater rights to found property than the common law.
There statutes differ widely but generally eliminate the distinction between lost, misplaced, and abandoned property and treasure trove and award the found property to the finder.
Frequently, they require the finder to deposit the found property with local authorities, provide for notice, and award ownership to the finder after some period of time.
Adverse Possession
You need to show an “OCEAN” to prevail
Open and notorious occupancy — occupancy must be “public” in the sense of not being surreptitious. Live there like the true owner would.
Continuous occupancy — for the statutory period.
Exclusive of the rights of others, just like an owner.
Actual entry is required in order to start the SoL on a cause of action for ejectment and to give notice by your presence.
No permission – this is traditionally stated as: “Hostile” or “Adverse and under a claim of right.” But, be aware there are three views on this element.
“Adverse and Under Claim Of Right”*
The “state of mind” different States require to satisfy the adversity element varies:
Majority/Objective Rule: State of mind is generally irrelevant. As long as the owner has not permitted occupancy, it is adverse.
Good Faith Rule: State of mind is: “I thought I owned it. My bad.”
Bad Faith Rule: State of mind is: “I knew I didn’t own it.” This one makes little sense and is rare, at best.
*NB: “Claim of title,” “claim of right,” and “hostile” are synonyms. Do not confuse them with “color of title.”
Color of Title
The “color of title” doctrine refers to a claim founded on a written instrument that is for some reason defective.
Think of a document you could color.
Color of Title Issues
•In all states, an adverse possessor’s actual possession of some part of another’s real property “under color of” a document of title that covers all of the property gives the claimant constructive possession of the described property she hasn’t actually occupied.
•In some states, a claimant under color of title may have a shorter statutory period or receive other benefits in her adverse possession claim.
•In most states, color of title is not an element of AP. But, “claim of title” (or “claim of right” or “hostility”) always is.
RELATION BACK
Once the statute of limitations runs on a landowner’s ejectment claim, it not only bars the former owner’s claim but also vests title in the adverse possessor that relates back to the date the claim arose.
Thus, title by AP is retroactive. The law treats the new owner as if she had held title since she entered the land adversely.
Van Valkenburgh v. Lutz
New York Ct. of Appeals, 1952
Problems – Page 130
•O owns and possesses a 100 acre farm. A enters the back 40 acres under an invalid deed from Z (who had no interest) for the whole 100 acres. A works the back 40 for the statutory period. Can A evict O?
Not from the front 60. Color of Title does not defeat actual possession. Nor does it replace the exclusivity requirement.
A does get the back 40, but doesn’t need COT to do it.
If O was not in possession of the front 60. This is the benefit of color of title’s constructive possession feature.
P. 130
•X owns lot 1 and Y owns lot 2 next door. Z conveys both lots 1 and 2 to A under an invalid deed. A enters lot 1 and holds for the statutory period. A sues to evict X and Y. Who wins?
A defeats X – without needing the color of tile doctrine if A actually occupied all of lot 1.
Y defeats A because Y never had an ejectment claim against A. A color of title claim still requires actual entry against the owner.
P. 130, prob. 2 cont’d
What if X had executed the deed of Lots 1 & 2 to A?
As to Lot 1:
A owns Lot 1 by virtue of the deed, not by AP.
As to Lot 2:
A still has no rights, because she never entered against Y.
P. 130, prob. 2 cont’d
What if X had executed the deed of Lots 1 & 2 to A and A had entered Lot 2?
As to Lot 1:
A owns Lot 1 by virtue of the deed, not by AP.
As to Lot 2:
A now has title against Y by AP. If A did not actually occupy all of Lot 2, COT gives constructive possession.
Mannillo v. Gorski
Supreme Court of New Jersey, 1969
Howard v. Kunto
Court of Appeals of Washington, 1970
Tacking and Privity
TACKING: “The joining of consecutive periods of possession by different persons to treat the periods as one continuous period; esp., the adding of one’s own period of land possession to that of a prior possessor to establish continuous adverse possession for the statutory period.” Black’s Law Dictionary (7th ed.).
NB: In order to “tack” one period of adverse possession on to another, there must be privity between the two adverse possessors.
Privity:
Think of “privacy” as a reminder—there is a special relationship between these parties compared to the public at large.
•Privity of Contract is the relationship between parties to a contract. Generally, only the parties can sue one another on the contract.
•Privity of Estate is the relationship between parties with concurrent or successive rights in the same property. It involves a voluntary transfer of possession of property.
Disability Statutes
One Example:
“An action to recover the title to or possession of real property shall be brought within twenty-one years after the [claim] accrued, but if a person entitled to bring such action, at the time the [claim] accrues, is [disabled], then after the expiration of the twenty-one years, [she, or someone claiming under her] may bring such action within ten years after such disability is removed.” ~Text, p. 142.
Disabilities and the SoL
WHAT QUALIFIES AS A DISABILITY?
When the landowner is:
1.Within the age of minority,
2. Of unsound mind, or
3. Imprisoned.
NB: In some states, other disabilities, such as serving in the military, may count. Check your statute!
Disabilities and the SoL
There are two keys to applying the disability statute to a SoL:
1. A disability is immaterial unless it existed when the cause of action accrued.
2. Only the disabilities of the landowner at the time of adverse entry count, not the disabilities of later owners.
Disability Problem 1(a) –Page 143
A enters 5/1/80 +21 = 2001
O——————–+——————————-+————>
Sol ordinarily would run in 2001
•O is the owner in 1980 and A enters adversely 5/1/80.
•The age of majority is 18.
•21 year statute of limitations.
• O is insane in 1980. O dies insane and intestate in 2003.
a) O’s heir, H, is under no disability in 2003.
•Time disability ends=death: 2003
•Plus 10 years: + 10
•Statute runs: 2013
•O gets longer of regular statute – 2001 — or disability extension — 2013.
Disability Problem 1(a) –Page 143
b) O’s heir H is six years old in 2003.
Her disability is disregarded. Only O’s disability at the time of entry counts.
She gets 10 years past the end of O’s disability, or the year 2013, same as in problem (a).
Disability Problem 2 –Page 143
O has no disability in 1980. O dies intestate in 1998. O’s heir, H, is two years old in 1998.
1980 + 21 = 2001.
•H’s disability doesn’t count because he was not the true owner, entitled to sue to eject A, in 1980 when the trespass began.
•O didn’t have a disability in 1980, so the statute runs in 2001.
3. O is 5 years old in 1980. In 1990, O becomes mentally ill, and O dies intestate in 2005. O’s heir, H, is under no disability. Does the adverse possessor here acquire title in 2001, 2003, or some later date?
What is normal statute result?
1980 + 21 = 2001.
What disability existed for O in 1980?
Minority–age 5. 18 – 5 = 13.
Disability ends when he turns 18 (1980 + 13 = 1993).
He gets 10 years beyond that: 1993 + 10 = 2003.
If the answer is 2001 or 2003, how are O’s interests to be protected?
O needs a guardian.
Week 4
Problem 1, p. 143:
A enters 5/1/80 +21 = 2001
O——————–+——————————-+————>
Ordinarily would run in2001
nO is the owner in 1980 and A enters adversely 5/1/80.
nThe age of majority is 18.
n21 year statute of limitations.
n O is insane in 1980. O dies insane and intestate in 2003.
a) O’s heir, H, is under no disability in 2003.
nTime disability ends: death: 2003
nPlus 10 years: 10
nStatute runs: 2013
nO gets longer of regular statute – 2001 — or disability extension — 2013.
nO is the owner in 1980 and A enters adversely 5/1/80.
nThe age of majority is 18.
n21 year statute of limitations.
n O is insane in 1980. O dies insane and intestate in 2003.
b) O’s heir H is six years old in 2003.
Her disability is disregarded. Only O’s disability at the time of entry counts.
She gets 10 years past the end of O’s disability, or the year 2013, same as in problem (a).
nO is the owner in 1980 and A enters adversely 5/1/80.
nThe age of majority is 18.
n21 year statute of limitations.
n O is insane in 1980. O dies insane and intestate in 2003.
2. O has no disability in 1980. O dies intestate in 1998. O’s heir, H, is two years old in 1998.
1980+ 21 = 2001.
H’s disability doesn’t count because he was not the true owner, entitled to sue to eject A, in 1980 when the trespass began.
O didn’t have a disability in 1980, so the statute runs in 2001.
3. O is 5 years old in 1980. In 1990, O becomes mentally ill, and O dies intestate in 2005. O’s heir, H, is under no disability. Does the adverse possessor here acquire title in 2001, 2003, or some later date? What is normal statute result?
1980 + 21 =2001.
What disability existed for O in 1980?
Minority–age 5. 18 – 5 = 13.
Disability ends when he turns 18 (1980 + 13 = 1993).
He gets 10 years beyond that: 1993 + 10 = 2003.
If the answer is 2001 or 2003, how are O’s interests to be protected.?
GIFTS of Personal Property
“Sorry I missed your birthday, I want you to have this present.”
nManifest intent to immediately transfer an interest in property;
nDelivery; and
nAcceptance.
“Never mind, I need that, give it back.”
“Uh, no.”
A legally enforceable inter vivos gift is irrevocable.
“I will give this to you as a present on your next birthday.” “Never mind, I need that, give it back.”
1. Delivery?
2. Acceptance?
3. Manifest intent to immediately transfer an interest in property?
“I will give this to you as a present on your next birthday.” “Never mind, I need that, give it back.”
Two transactions:
1. Unenforceable gratuitous promise and
2. Voluntary Bailment
Both are inherently revocable.
“I’m about to die of a brain tumor and I want you to have this.”“Never mind, I need that to write my will, give it back.”
Gifts Causa Mortis
1. Donor’s anticipation of imminent death;
2. Manifest intent to immediately transfer an interest in property;
3. Delivery; and
4. Acceptance.
“I’m about to die of a brain tumor and I want you to have this.”“Never mind, I need that to write my will, give it back.”
Gifts causa mortis are revocable:
1.At any time if the donor so indicates; and
2. Automatically if the donor recovers from the illness or injury that lead to the gift.
Newman v. Bost
Supreme Ct. of North Carolina, 1898
Newman
nManual delivery is required whenever it is possible and practical.
nConstructive delivery is permitted when manual delivery is impossible or impractical. Constructive delivery means giving something that gives access to or control over the gift.
nSymbolic delivery is the giving of a symbol of the gift when the gift is not capable of manual or constructive delivery.
The Modern Trend
Courts today may still invoke Newmanesque principles, but tend to be more lenient.
Generally, the stronger the evidence of donative intent, the more relaxed the delivery requirements are.
Still, the more convincing the delivery, the stronger the evidence of intent tends to be.
Gruen v. Gruen
Ct. of Appeals of New York, 1986
Gruen
Main Issue: Did the alleged donor manifest his intent to immediately transfer an interest in property?
“The 21st birthday, being an important event in life, should be celebrated accordingly. I therefore wish to give you as a present the oil painting by Gustav Klimt of Schloss Kammer which now hangs in the New York living room. … Happy birthday again.”
Gruen—the Question of Intent.
What is the gift?
“Title”, but not possession. P. 168
A “remainder interest.” Id.
Gruen
What about Delivery?
Must be “sufficient to divest the donor of dominion and control over the property.” P. 170.
Symbolic – birthday letter
What is the Reason?
Gift was intangible
Donor’s intent was to retain possession
Estates and Future Interests
Copyrighted material of Laura Edwards, John Brennan, and John S. Kane used by permission.
INHERITANCE ISSUES
Two Ways To Inherit
nBy Will — In which case the Testator leaves property to her Devisees or Beneficiaries. These can be anybody – friends and relations, charitable or political organizations, pets, etc.
nBy Intestate Succession (i.e., by not having a will) — In which case the governing state statute will determine who gets the deceased’s property. Those who take by intestate succession are called “Heirs”.
Which of the following terms are not synonymous?
A. Issue and Heirs
B. Heirs and Children
C. Issue and Children
nA 2) B 3)C 4) All 5) None
4 — None of these are synonymous.
Who Are All These People?
nHeirs are those designated by statute to take the property of a deceased person who died without a will. They typically include spouses and blood relatives.
nThey are not ascertainable until the deceased is a deceased. “A living person has no heirs.” That’s because until a person dies, we can’t know which of the people designated in the intestate succession statute will be around to take as heirs.
n Therefore: an heir is a person who: (1) fits the statutory classification and (2) is alive at the time of the decedent’s death.
nIssue are direct or lineal descendants, i.e., your children and their children and so on ad infinitum. Therefore,“issue”is not a synonym for “children”. “Issue” and “descendants” are synonymous and constitute a subset of the term “heirs”.
O conveys Blackacre “to A and her heirs.” If A dies intestate without issue, will Blackacre escheat to the state?
“Issue” is not the same as “heirs”. Only if one dies intestate and without heirs will property escheat.
Seisin
Seisin is the freeholder’s right of possession and enjoyment of the estate. It carries with it the duties of providing services and incidents to the land lord.
Rule: there are no gaps in seisin.
Someone always has the present right to possess. The kind of estate tells you for how long.
P. 8 version of chart
Possessory Estates & Future Interests
___________________|_____________
———->
Possessory Estate Future Interest
What is a future interest?
nPerhaps one of the most confusing things about the term is that it doesn’t quite mean what you might think.
nA future interest is a present interest in future possession or “seisin”.
nSimilar to a ticket to an upcoming concert, you can’t “use” it now, but it has real value now.
Who can hold a future interest?
nTransferors can reserve a future interest while transferring possession to someone else.
nTransferees can receive a future interest instead of a possessory interest. (Michael Gruen, for example)
Words of Purchase & Limitation
“O to A and her heirs
Fee Simple
“O to A
Modern Fee Simple
“Q to A”
Fee Tail
“O to A and the heirs of her body”
Life Estate
“O to A for life”
Term of Years
“O to A for 10 years”
Conveying Less Than You Own
n“O to A for life.”
Conveying Less Than You Own
n “O to A for life.”
P. 14 version of chart
Possessory Estate
Future Interest
1 Nature
2 Added Limitation
Fee Simple
Fee Tail
Life Estate
Term of Yrs
Practice Questions
What is the name for the part of the conveyance that tells you WHO is receiving the conveyed interest? Words of purchase.
What is the name for the part of the conveyance that tells you WHAT KIND of interest that person is receiving?==>Words of limitation.
What does A have?
O to A and her heirs.
FSA
O to A for 2 years.
TOY
O to A for life.
LE
O to A for the life of B.
LEPAV
O to A. (Assume modern law.)
FSA
What is the duration of B’s estate (if any)?
O conveys to A and her heirs. (B is A’s only child.)
B has no estate.
O conveys to A for life. Then A conveys to B.
B’s estate ends when A dies.
O conveys to A for 10 years. Then A immediately conveys to B.
Ten years.
O conveys to A for life. Then A conveys to B for 2 years. One month later A dies.
B’s estate ends when A dies.
What is the duration of B’s estate (if any)?
O conveys to A for life. In 1993, A conveys to B for 2 years. A dies in 2001.
B’s estate ended in 1995.
O conveys to A for life. Then A dies, devising her entire estate to B.
B has no estate.
For each person other than O mentioned in the following questions, state whether that person has an interest in the property:
O to A and her heirs. A has a husband (B) and one child (C).
Only A has an interest. (FSA).
O to A for the life of B.
Only A. (LEPAV, for the life of B).
O to A for life. Then A conveys to B. B dies intestate with one heir, C.
Only C. (LEPAV, for the life of A)
After each conveyance, state what interest A has and whether someone other than A has an interest in the property and why.
O to A for 2 years.
A has a TOY, O has a reversion to account for the balance.
O to A for life.
A has a LE, O has a reversion.
O to A and her heirs.
A has a FSA. Nothing left for O.
O to A for the life of B.
A has a LEPAV, O has a reversion.
O to A. (Assume modern law.)
A has a FSA. Nothing left for O.
Week 5
Signals of Determinable Interests
èUntil, So long as, While, During
Signals of Conditions Subsequent
èBut if, Provided that, On condition that, However
Marking the End of an Interest
n“O to A until A’s youngest child reaches 25, | and then back to O”
n“O to A, | but if A sells liquor on the property, then back to O”
Words Distinguishing Added Limitations
Determinable
Subject to Condition Subsequent
Until
So long as
While
During
But if
Provided that
On condition that
However
Punctuation Distinguishing Added Limitations
Determinable
Subject to Condition Subsequent
The limitation is placed before the punctuation mark signaling the end of the description of A’s estate
“O to A until B marries, then to B.”
The limitation is placed after the punctuation mark signaling the end of the description of A’s estate.
“O to A, but if B marries, then to B.”
P. 32 version of chart
Possessory Estate
Future Interest
1 Nature
2 Added Limitation
Fee Simple
Fee Tail
Life Estate
Term of Yrs
No limitation:
Absolute
_______________
Will end naturally:
XXXX
May end early by its own terms:
determinable
May be interrupted by the next estate:
subject to condition
subsequent
Conveying Less Than You Own
“O to A for life.”
Conveying Less Than You Own
“O to A for life.”
the title?
•“O to A & her heirs; however, if B reaches 25, then to B.”
•A: possessory estate in fee simple subject to an executory limitation
•B: executory interest in fee simple absolute
►Study Question 6-27
•What is the state of the title?
•“O to A for life or until B reaches 25, then to B.”
•A: possessory estate in life estate determinable
•B: vested remainder (and an EI) in fee simple absolute
►Study Question 6-29
•What is the state of the title?
•“O to A, provided that the city does not change the property’s zoning classification, otherwise to B.”
•A: possessory estate in fee simple subject to an executory limitation
•B: executory interest in fee simple absolute
►Executory Interests
•Executory interests have these properties in common:
–They ALWAYS cut short, destroy or dilute another’s possessory interest OR vested remainder – they must be paired with one of these!
–They ALWAYS operate on a pre-condition that, from the standpoint of the interest they “attack”, is a condition subsequent.
–They “execute” immediately and automatically upon the occurrence of the condition.
►How do Executory Interests operate? They divest.
O conveys “to A for life, then to B, but if B is convicted of a felony, then to C if C survives A.”
B has a vested remainder!
-It is a vested remainder subject to complete divestment.
-Why? The conditions that follow are subsequent to B’s taking.
KEY: Because this vested remainder in fee is followed by an interest, that interest must be able to divest!
(Note that C’s executory interest has not one, but two conditions for execution: B must be a convict, and C must survive A.)
►O conveys “to A for life, then to B, but if the property shall be used to sell alcohol, then to C.”
B has a vested remainder in fee simple — the condition is not a pre-condition for B. But C will cut B’s interest short if it occurs.
B thus has “a vested remainder in fee simple, subject to complete divestment.”
This pairs it up with C’s executory interest in fee simple, which is what can do the aforementioned divesting.
►Summary: Future Interests in Transferees
•Remainders
–Only follow a life estate or term of years.
–They wait patiently for estates to end. They never divest.
►Summary: Future Interests in Transferees
A. Executory Interests
–Can never exist alone because they must have something to divest. Must be paired up with either:
•A possessory interest, or
•A vested remainder
–They don’t wait for estates to end; they wait for conditions to occur and then execute automatically.
►Two (Meaningless) Types of EIs
•Springing executory interests divest grantors. They spring out of the grantor’s interest.
Eg: “To C if C graduates.”
•Shifting executory interests divest grantees. They shift the interest from one grnatee to another.
Eg: “To A for life, then to B; but if B fails to graduate, to C.”
►Cross-examining an interest
1) Does the interest holder get possession in the present or future?
2) Is the future interest in a grantor or grantee?
If in Grantor: 3A) Does the FI follow a LE or TOY? Reversion
3B) Does the FI follow a FSD? POR
3C) Does the FI follow a FSSCS? ROE
3) Does the FI follow a LE or TOY and await its natural end? Remainder. Otherwise, it’s an EI and you’re done.
4) Is the taker ascertainable and can she take without satisfying a precondition? Vested. Otherwise, contingent.
5) Is there nothing that can defeat or diminish the interest? Vested.
6) Can other class members share in the interest in the future? Open. And
7) Can the interest be divested somehow? STCD.
Class Exercise 9-1
►State the title:
“Alice conveys to Dennis and Kimberly, but if they should divorce, then the property shall go to Anita.”
Dennis & Kimberly: FSSEL
Anita: (shifting) EI in FSA
Class Exercise 9-2
State the title.
“John Barton Carlisle hereby grants to John Philip Carlisle all his ownership interest in 447 Hill Terrace upon the day that John Philip Carlisle is sworn in to the Bar.”
•John B: FSSEL
•John P: (springing) executory interest in FSA
►Class Exercise 9-4
State the title.
“Ben conveys to Alison and her heirs for as long as Alison has not failed a bar examination.”
Alison: FSD
O: POR in FSA
►Class Exercise 9-5
State the title.
“Laura conveys to Gunther for his lifetime the warehouse on Tenth St. Then one year after Gunther’s death, the property shall pass to Gunther’s surviving children.”
Gunther: LE
Laura: Reversion in FSSEL
G’s surviving children: (springing) EI in FSA
►Class Exercise 9-7
State the title:
“I, Deryl Gere, hereby grant and convey all my interest in my property at 8670 Coleman Ave. to Richard Alayansa, but if he should ever use the property to sell or store cigarette products, then the property shall pass to Sidney Jones.”
Richard: FSSEL
Sidney: (shifting) EI in FSA
►Class Exercise 9-9
State the title.
“Carol grants all her real property to
Bernadette, but if Bernadette fails to graduate
from law school within fifteen years, then to Alan.”
Bernadette: FSSEL
Alan: (shifting) EI in FSA
►Class Exercise 9-8
State the title.
“I, Virginia Belson, hereinafter known as the Party of the First Part, do convey the premises located at 10 Knoll Road to my daughter Katherine, hereinafter known as the Party of the Second Part, on condition that she never marries Lance Harrison.”
Katherine: FSSCS
Virginia: ROE in FSA
►SQ9-16
O to A for life, then to B if B adopts A’s surviving children.
A: LE
O: Reversion in FSSEL
B: EI in FSA
►Class Gifts
A conveyance may give an interest to a “class” of persons, rather than to an individual.
Examples include: “To my children”
“To A’s children”
“To my grandchildren who become lawyers”
“To the class of 2009”
►Nomenclature of Partial Divesting – Class Gifts
•When a class is capable of adding more members (e.g., a gift to children, where more can be born), we say that it is open.
•When a class member has a vested remainder and more members can be added, we say it is “subject to partial divestment” or “subject to open.” Why?
•These interests are always paired with an executory interest, which is the only grantee’s interest that can do any divesting.
►Executory interests that only partially divest
O conveys “to A for life, then to the children of A.”
“To children of A” is a class gift.
But what if there is only one child, yet more could be born?
Answer: the living child has a vested remainder in fee simple subject to partial divestment and the unborn children have an executory interest in fee simple.
►O conveys to A for life, then to A’s children if A pays $10,000 to O.
A pays O $10,000 and has 3 children. State of title?
A: LE
A’s 3 children: VR in FSA Subject to Open
A’s unborn children: EI in FSA
Then all 3 children die intestate during A’s lifetime.
A: LE
Heirs of A’s 3 children: VR in FSA Subject to Open
A’s unborn children: EI in FSA
Later O makes a further conveyance of all his “right, title and interest” in the land to B.
No effect
►Distinguishing EIs and CRs
•Why is this a problem?
•Some CRs and all EIs have pre-conditions.
•So what’s a law student to do?
►There are a variety of ways to handle this issue. Do the Remainder test first, but here are two handy rules:
1) If the first FI in a grantee is a CR in FSA, the second FI in a grantee is also a CR. It has to be. Why?
It can’t be an EI, because EIs only take by divesting. A CR isn’t vested. Therefore, it can’t be divested by a subsequent grantee.
2)If the first FI in a grantee is a VR – a VRSEL, a VRSTO or a VRSTCD – in Fee Simple, then the second FI in a grantee must be an EI. Why?
Because in order for the second grantee to take anything after the first grantee has gotten a vested FSA, the second grantee will have to divest the first. Only an EI could possibly do that.
►Problem: Alternative contingent remainder, or executory interest?
Compare:
1) O conveys to A for life, then to B if B survives A, then to C.
With:
2) O conveys to A for life, then to B; but if B does not survive A, then to C.
►Solution: Determine if the condition is (a) subsequent to, or (b) a precondition to, the first grantee’s gift. That is, is the first grantee’s interest vested or contingent?
1) O conveys to A for life, then to B if B survives A, then to C.
Note that “if B survives A” is a clause within the grant to B. B takes if, and only if B survives A. The clause can’t stand alone, it is part of B’s grant. It is a pre-condition. Therefore, B’s grant is a contingent remainder.
Therefore, so is C’s.
One very useful, though not necessarily foolproof, approach: “read comma to comma.”
►Stand-alone grants usually signal a condition subsequent, such that the first gift may be vested.
2) O conveys to A for life, then to B; but if B does not survive A, then (or otherwise) to C.
Notice that the grant to B “stands alone.” What follows begins a new clause.
The condition that follows is subsequent to B’s taking, and is a pre-condition to C’s executory interest.
Because B has a vested interest in a fee, C must divest to take. Therefore, C has an EI.
►Examples of Executory Interest Pairings
‘Attacking’ a possessory estate:
O conveys “to A upon her marriage.”
A has nothing yet, she must marry first.
It’s NOT a remainder! She’s not waiting for some prior estate (LE or TOY) to end; if she marries, she takes.
Thus, O has fee simple subject to an executory limitation, and A has an executory interest (springing) in fee simple absolute.
►“Attacking” a vested remainder (not by class membership):
O conveys “to A for life, then to B, but if C shall graduate from law school before B, then to C”
A has a life estate.
B has a vested remainder in fee simple subject to complete divestment.
C has an executory interest in fee simple.
►“Attacking” a (class gift) vested remainder subject to open:
O conveys “to A for life then to B’s children who reach the age of 21.” B has two children, ages 18 and 25.
A has a life estate.
B’s 25-yr old has a vested remainder in fee simple subject to open (or partial divestment).
B’s 18-yr old, and B’s unborn children, have an executory interest in fee simple.
►Events in time will change interests
•If an event occurs that satisfies or violates a condition in a grant, the state of title will change.
•Using the language of the conveyance with the changed facts in mind, you must re-evaluate the state of title.
•Contingent remainders may fail, may vest, or may convert to executory interests.
►O conveys “to A for life, then to the children of B.” B has no children at the time of conveyance.
A has a LE.
The (unborn) children of B have a contingent remainder in fee simple absolute.
O has a reversion in fee simple.
B dies without ever having children.
The children’s contingent remainder fails.
Because O has a reversion, the estate reverts to O in fee simple once A’s LE ends.
►In 1978, O conveys to A for life, then to the children of A and their heirs. A has no children.
A: LE
A’s children: CR in FSA
O: Reversion in FSA
In 1985, A has 3 children.
A: LE
A’s 3 children: VR in FS subject to partial divestment (open)
A’s (unborn) children: Executory Interest in FSA
►In 1998, A’s grown children are killed in a plane crash, then A dies of a broken heart.
Heirs of A’s 3 children: FSA
In 1990, O conveys “to A for life, then to such of A’s children as attain 21.”
A: LE
