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{\listoverride\listid1464230866\listoverridecount0\ls107}}{\*\revtbl {Unknown;}}{\info{\title Property Outline}{\author Neal A. Davis}{\operator Prescott M. Caballero}{\creatim\yr1996\mo3\dy27}{\revtim\yr1997\mo5\dy7\hr2\min10}{\printim\yr1996\mo4\dy3\hr1\min35}{\version11}
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\nowidctlpar\widctlpar\pvpara\phmrg\posxc\posy0\adjustright \fs20 {\field{\*\fldinst {PAGE }}{\fldrslt {\lang1024 67}}}{
\par }\pard \nowidctlpar\widctlpar\adjustright {\tab \tab \tab \tab \tab Neal Davis
\par }}{\*\pnseclvl1\pnucrm\pnstart1\pnindent720\pnhang{\pntxta .}}{\*\pnseclvl2\pnucltr\pnstart1\pnindent720\pnhang{\pntxta .}}{\*\pnseclvl3\pndec\pnstart1\pnindent720\pnhang{\pntxta .}}{\*\pnseclvl4\pnlcltr\pnstart1\pnindent720\pnhang{\pntxta )}}
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\tx0\tx720\tx1440\tx2160\tx2880\tx3600\tx4320\tx5040\tx5760\tx6480\tx7200\tx7920\tx8640\tx9360\adjustright \fs20 {\b Internet Legal Resource Guide
\par ILRG Law School Course Outlines Archive
\par LawRunner: A Legal Research Tool
\par
\par
\par Author: \tab }{\b\f19 Mr. Neal A. Davis (ndavis@mail.utexas.edu)
\par }{\b School:\tab \tab University of Texas School of Law
\par Course:\tab \tab Property
\par Year:\tab \tab Fall 1995 and Spring 1996
\par Professor:\tab Ernest E. Smith
\par }\pard \nowidctlpar\widctlpar\adjustright {\b Book:\tab \tab }{\b\i Cases and Materials on Property, }{\b 6}{\b\super th}{\b Edition, by Cribbet, Johnson, Findley, Smith}{\b\f1\fs22\ul
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24 \page }{\b Message from the Author:}{
\par
\par Thank you for downloading this outline. I hope it is as helpful to you as it was to me. If you use this outline, please send $1 cash to help cover my time and effort in making this and future outlines available. My address is:
\par
\par Neal A. Davis
\par 1071 Clayton Lane #1403
\par Austin, TX 78723
\par
\par If you have any questions, feel free to e-mail me at: ndavis@mail.utexas.edu
\par
\par Your support will be greatly appreciated. Good luck!
\par
\par Sincerely,
\par Neal A. Davis}{\b\fs24
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24 \page }{\b\fs24\ul
\par
\par }{\b\fs32 Property Outline
\par
\par 1995-96}{\b\fs28
\par
\par Prof. Ernest Smith III
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs28
\par
\par }{\b\fs24 Books used in Smith\rquote s class: }{\fs24 Cribett and Smith on Property
\par
\par }{\b\fs24 Recommended study aids: }{\fs24 The }{\i\fs24 Gilbert\rquote s on Property}{\fs24 is good, and I highly recommend purchasing it. The }{\i\fs24 Emmanuel\rquote s on Property}{\fs24 is better than }{\i\fs24 Gilbert\rquote s }{\fs24
in only one respect\emdash it has a great section on land-use regulation.
\par
\par }{\b\fs24 A few other comments}{\fs24 : This outline covers the first semester, and only portions of the second semester (for example, it does not cover \ldblquote another\rquote s land interests\rdblquote or \ldblquote land-use
\par regulation\rdblquote ).}{\b\fs24\ul
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul
\par }{\b\fs24
\par }{\b\fs24\ul Exam Tips from Smith Himself
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24 1. Smith says that the topics on his exam are proportionate to the amount of time he spent on them in class (i.e., since we spent a great deal of time on classifying the dif
ferent estates, expect numerous questions on the exam dealing with estates).
\par
\par 2. It is generally known that the more you write on Smith\rquote s exams, the more credit you get.
\par
\par 3. Finally, Smith wants you to write about the policy issues just as much as you apply the black letter law to a certain problem. This is really important not to forget.
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\fs24 \page
\par }{\b\fs24\ul Property and its Attributes
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs24 I. What is property?
\par
\par \tab }{\fs24 A. General views
\par
\par \tab \tab 1. According to }{\i\fs24 Black's Law Dictionary}{\fs24 , }{\b\fs24 property}{\fs24 is defined as:
\par \tab \tab "That which is peculiar or proper to any person; that which
\par \tab \tab belongs exclusively to one. An aggregate of rights which are
\par \tab \tab guaranteed and protected by the government. Property extends
\par \tab \tab to every species of valuable right and interest...the right to
\par \tab \tab posses it, use it, and to exclude every one else from interfering
\par \tab \tab with it."
\par
\par \tab \tab 2. The function of property law is to determine }{\b\fs24 who}{\fs24 among \tab the competing \tab \tab \tab claimants gets }{\b\fs24 what when}{\fs24 and under }{\b\fs24 what conditions.}{\fs24
\par
\par \tab \tab 3. In legal discourse, property is what the law defines as \tab \tab \tab \tab \tab property--it denotes the legal relationship among people in
\par \tab \tab regard to a thing. What claims should the courts and legislatures
\par \tab \tab recognize as property? Two considerations are especially
\par \tab \tab important in property law and run through most of it: }{\b\fs24 fairness
\par \tab \tab and economic efficiency}{\fs24 . The lawgivers want to be fair, but at
\par \tab \tab the same time, they want the system to generate more wealth.
\par
\par \tab \tab 4. All property can be divided into two types, }{\b\fs24 real}{\fs24 and }{\b\fs24 personal}{\fs24 :
\par \tab \tab \tab
\par \tab \tab \tab a. Generally speaking, }{\b\fs24 real property}{\fs24 is land and any\tab
\par \tab \tab \tab structures built on it.
\par
\par \tab \tab \tab b. }{\b\fs24 Personal property}{\fs24 , which is everything else, consists
\par \tab \tab \tab of tangible items (things that can be seen or felt, such as
\par \tab \tab \tab a watch or book) and intangible items (property that
\par \tab \tab \tab cannot be seen, such as a bank account or a right not
\par \tab \tab \tab to be unfairly kicked out of law school).\tab
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Property is not limited just to what we can see or \tab \tab \tab \tab \tab feel. Property can include a copyright, a promise, airspace, \tab \tab \tab \tab \tab a right to fish, and so on.
\par \tab \tab
\par
\par
\par
\par
\par }{\b\fs24
\par \tab \tab }{\fs24 5. Smith points out some general characteristics of property:
\par
\par \tab \tab \tab a. Cash value
\par
\par \tab \tab \tab b. Transferability
\par
\par \tab \tab \tab c. Separable from person/personality
\par
\par \tab \tab \tab d. Terminable upon death.
\par
\par \tab \tab \tab }{\fs24\ul Mnemonic}{\fs24 : CaT ShiT
\par }{\b\fs24
\par \tab \tab }{\fs24 EX: In }{\fs24\ul Graham v. Graham}{\fs24 , the ex-wife, following a divorce,
\par \tab \tab asked that the court divide her husband's MBA with her, since
\par \tab \tab she paid for most of it. The ct. ruled that the MBA is not
\par \tab \tab "marital property" because: 1) it cannot be exchanged, assigned
\par \tab \tab or sold and 2) because it is an "intellectual achievement"--the
\par \tab \tab product of many years of education, combined with hard work,
\par \tab \tab and thus was not acquired merely by the wife's money.
\par
\par \tab \tab 6. Smith also points out that property is an elastic word; its \tab \tab \tab \tab \tab meaning varies with the context involved and the purposes in \tab \tab \tab \tab view. As the different theories briefly outlined below illustrate,
\par \tab \tab there is no unequivocal, absolutely correct definition of \tab \tab \tab \tab \tab "property."
\par
\par \tab B. Theoretical views of property
\par \tab
\par \tab \tab 1. }{\b\fs24 Bentham}{\fs24
\par
\par \tab \tab \tab a. }{\b\fs24 Property}{\fs24 is entirely }{\b\fs24 a function of law}{\fs24 -- that they }{\b\fs24 live together \tab \tab \tab \tab and die together}{\fs24 . Thus, there cannot be property rights unless the \tab \tab \tab \tab
law recognizes these rights.
\par
\par }\pard \fi720\li1440\nowidctlpar\widctlpar\adjustright {\fs24 b. The }{\b\fs24 function of property}{\fs24 is to }{\b\fs24 protect people's benefits}{\fs24 \tab \tab and }{\b\fs24 expectations}{\fs24 .. According to Bentham, property
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 is a legal construct designed to protect the expectations and enjoyment of the property owner.
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24
\par \tab \tab 2. }{\b\fs24 Posner and "Law and Economics"}{\fs24
\par \tab \tab
\par \tab \tab \tab a. There are }{\b\fs24 three characteristics property must exhibit}{\fs24 :
\par
\par \tab \tab \tab \tab (1) }{\b\fs24 Exclusivity}{\fs24 - Other people can be excluded from,
\par \tab \tab \tab \tab and making decisions regarding, what you own.
\par \tab \tab \tab \tab You decide the most efficient way to handle your
\par \tab \tab \tab \tab property.
\par
\par \tab \tab \tab \tab (2) }{\b\fs24 Universality}{\fs24 - If a resource is limited, it should be
\par \tab \tab \tab \tab owned. If it is universal, like sunlight or air, it
\par \tab \tab \tab \tab cannot be owned.
\par
\par \tab \tab \tab \tab (3) }{\b\fs24 Transferability}{\fs24 - You can sell or give your land
\par \tab \tab \tab \tab to someone else.
\par
\par
\par \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Posner believes that the absence of these give rise \tab \tab \tab \tab \tab to inefficient property.
\par
\par \tab \tab \tab b. }{\b\fs24 If something has economic value}{\fs24 , and people treat it
\par \tab \tab \tab as value, than that thing }{\b\fs24 should be considered property}{\fs24 .
\par \tab \tab \tab This view is different from Bentham's, since Posner
\par \tab \tab \tab believes that property does not only depend on a system
\par \tab \tab \tab of laws. A good example of Posner's theory of economic
\par \tab \tab \tab value of property is the black market, which is not subject \tab \tab \tab \tab \tab to a system of laws.
\par
\par \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Posner believes that regulations that do not follow \tab \tab \tab \tab \tab the market are inefficient.
\par
\par \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith points out that Posner really cannot get \tab \tab \tab \tab \tab away from Bentham, since ultimately property must be \tab \tab \tab \tab \tab governed by laws.
\par
\par \tab \tab \tab c. The }{\b\fs24 function of property}{\fs24 is the }{\b\fs24 efficiency of transfers}{\fs24 .
\par \tab \tab \tab Posner would argue that the black market, such as drugs,
\par \tab \tab \tab should be legalized so that the property can be more
\par \tab \tab \tab efficiently transferred.
\par
\par \tab \tab \tab d. Smith on the advantage and disadvantage of Posner:
\par
\par \tab \tab \tab \tab (1) }{\fs24\ul Advantage}{\fs24 -- It tells you the economic consequences of \tab \tab \tab \tab \tab your actions, and if you have a goal, it tells you the most \tab \tab \tab \tab \tab efficient way to analyze it.
\par
\par \tab \tab \tab \tab (2) }{\fs24\ul Disadvantage}{\fs24 -- Economic efficiency overrides
\par \tab \tab \tab \tab the importance of moral, ethical, and social issues, such as \tab \tab \tab \tab \tab the legalization of drugs.
\par
\par \tab \tab 3. }{\b\fs24 Locke's "labor theory of property"
\par }{\fs24
\par \tab \tab \tab a. }{\b\fs24 Property}{\fs24 arises when }{\b\fs24 people mix their labor with a
\par \tab \tab \tab particular thing.
\par }{\fs24
\par \tab \tab \tab EX: A picks berries. Since A's labor went into berries,
\par \tab \tab \tab he owns them.
\par
\par \tab \tab 4.}{\b\fs24 Hardin and "The Tragedy of the Commons"
\par }{\fs24
\par \tab \tab \tab a. "Tragedy" refers to the inevitable working out of
\par \tab \tab \tab a particular situation, which ultimately leads to the
\par \tab \tab \tab destruction of the "commons." The "commons" refers
\par \tab \tab \tab to the common property that everyone has access to.
\par \tab \tab \tab
\par \tab \tab \tab b. }{\b\fs24 Self-interest of the individual}{\fs24 ultimately }{\b\fs24 degrades
\par \tab \tab \tab the interest of the commons}{\fs24 . What the individual
\par \tab \tab \tab gains, through exploiting the resources and property,
\par \tab \tab \tab is less than the benefit received by the general public.
\par
\par \tab \tab \tab \tab (1) }{\fs24\ul Example}{\fs24 : Y owns cows that graze on the commons. He
\par \tab \tab \tab \tab allows cows to rampantly reproduce and graze, so that
\par \tab \tab \tab \tab he can earn more money off his cattle. The grazing\tab \tab \tab \tab \tab \tab results in severe damage of the commons, and will
\par \tab \tab \tab \tab ultimately lead to its destruction. Thus, while Y has
\par \tab \tab \tab \tab personally benefited from the grazing and the cattle
\par \tab \tab \tab \tab overpopulation of the commons, the general public
\par \tab \tab \tab \tab suffers.
\par
\par \tab \tab \tab \tab (2) }{\fs24\ul Holdout Problem}{\fs24 : It is always the best strategy to be \tab \tab \tab \tab \tab the last one to agree to any collective situation designed to \tab \tab \tab \tab \tab
combat the tragedy of the commons -- your asking price to \tab \tab \tab \tab \tab agree is increased (since everyone else has already joined).
\par
\par \tab \tab \tab \tab (3) }{\fs24\ul Prisoner\rquote s Dilemma}{\fs24 : No matter what anyone else does \tab \tab \tab \tab \tab (whether they graze extra or graze less), it is always in each \tab \tab \tab \tab individual\rquote
s best interest to graze extra.
\par \tab \tab \tab
\par \tab \tab \tab c. Hardin proposes }{\b\fs24 two alternative strategies}{\fs24 to solve
\par \tab \tab \tab the problem of the commons:
\par
\par \tab \tab \tab \tab (1) }{\b\fs24 Massive government regulation}{\fs24 , like in
\par \tab \tab \tab \tab the oil and gas industry.
\par
\par \tab \tab \tab \tab (2) }{\b\fs24 A system of property rights}{\fs24 . If resources are
\par \tab \tab \tab \tab owned by specific people, then those people have\tab \tab \tab \tab \tab \tab a vested interest in maintaining their respective
\par \tab \tab \tab \tab resource.
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs24 II. Trespass to Property (or the Argument against Posner)
\par
\par \tab }{\fs24 A. Generally, }{\b\fs24 trespass}{\fs24 is an unlawful interference with one's person, property
\par \tab or rights.
\par
\par \tab B. }{\b\fs24 Criminal trespass }{\fs24 specifically is the entering or remaining upon or in any
\par \tab land, structure, vehicle, aircraft or watercraft by one who knows
\par \tab he is not authorized or privileged to do so. The purpose of criminal \tab
\par \tab trespass is to protect a person's right or land from unauthorized
\par \tab use or existence.
\par
\par \tab C. In the past, courts have occasionally argued that property rights
\par \tab are not created necessarily to serve economic efficiency, but to
\par \tab serve human values. Notice how this contradicts Posner's argument.
\par
\par \tab D. Human values, if they come into conflict with a person's right
\par \tab to use land and if they serve human rights, trump a property owner's
\par \tab "absolute" property rights. }{\fs24\ul State v. Shack}{\fs24 . This contradicts traditional view of \tab property, as it was developed throughout the centuries and in case law such as \tab \tab }{\fs24\ul Graham v. Graham}{\fs24 and }{\fs24\ul
Moore v. Regents of UC}{\fs24 .
\par \tab
\par \tab
\par \tab EX: In }{\fs24\ul Shack}{\fs24 , P, a migrant farm owner, argued that he had the right
\par \tab to keep other people off of his property, and charged D with trespass. \tab
\par \tab D, a government legal-aid worker who wanted to assist the \tab migrant workers, \tab argued that a list of constitutional clauses allowed him to be on land. Ct. ruled \tab
that constitutional issues were irrelevant, since the legal conflict here could be \tab dealt with through state property law. The New Jersey Court held that property \tab should serve human values, not necessarily economic values or an "absolute" \tab
right, and therefore D \tab was justified in entering P's property.
\par }{\b\fs24\ul
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs24 III. Conversion
\par }{\b\fs24\ul
\par }{\fs24 \tab A. }{\b\fs24 Conversion is the unauthorized use, destruction or disposition of
\par \tab another one\rquote s personal property (chattels). }{\fs24 Conversion is a strict liability
\par \tab tort.
\par
\par \tab EX: B sells A a Picasso that A reasonably thinks belongs to B. However, it
\par \tab turns out that B stole the painting from C. A is liable to C for conversion,
\par \tab even though there was no intent to dispossess C of his personal property.
\par
\par
\par
\par \tab \tab }{\b\fs24
\par }{\b\fs24\ul
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul The Importance of Possession in Establishing
\par Rights in Property}{\b\fs24
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs24 I. What is, and what Constitutes, Possession?
\par
\par \tab }{\fs24 A. }{\fs24\ul Parameters}{\fs24 : Possession is difficult to define. A person is in possession of \tab object he physically controls (such as an apple held in his hand). But he
\par \tab may be in possession of objects not in his presence, such as the chair
\par \tab in his backyard when he left for work. A person may even be in
\par \tab possession of objects in his house, or under the soil of his house
\par \tab (i.e. minerals or oil), of which he is unaware. Thus, like property, \tab
\par \tab possession is an elastic word; its meaning varies with the context \tab
\par \tab involved and the purposes in view.
\par
\par \tab B. }{\fs24\ul Different than ownership}{\fs24 : Possession is not the same as ownership. Ownership \tab is "title," and is usually proved by showing documents signed by the previous
\par \tab owner of first possessor transferring title to the present titleholder.
\par \tab Possession is proved by showing physical control and the intent to
\par \tab exclude others.
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Possession is easier to prove than ownership.
\par
\par \tab EX:A buys a watch from a jeweler, who bought it from the manufacturer. B steals \tab the watch from A. To recover the watch, A must prove ownership }{\fs24\ul or}{\fs24 prior \tab possession of the watch. To prove
ownership, one must produce the sales slip\tab \tab from the jeweler or other proof of title, which A has probably lost. To prove prior \tab possession, though, A has only to prove that the watch was in A's physical \tab possession before theft.
\par
\par \tab C. }{\fs24\ul Constructive possession}{\fs24 : A person is in "}{\b\fs24 constructive possession}{\fs24 " }{\b\fs24 when the \tab law treats him as if he is in possession although, in fact, he is unaware of it}{\fs24 . \tab Constructive means "}{
\b\fs24 in the eyes of the law}{\fs24 ." A court can still find the find has \tab better claim than the private property owner.
\par
\par \tab EX: In }{\fs24\ul South Staffordshire Water Co. v. Sharman}{\fs24 , P allowed D to
\par \tab enter his property to clean the pool. D found some rings, and claimed
\par \tab he should own them. Ct. ruled that D was allowed on premises for
\par \tab the limited purpose of cleaning, under the direction of P, and that
\par \tab P is entitled to objects found, even if he is unaware they exist, since he \tab
\par \tab is the owner of the property.
\par
\par
\par
\par
\par
\par }{\b\fs24 II. Acquiring Possession by Finding Articles}{\fs24
\par
\par \tab A. "First-in-time" rule
\par
\par \tab \tab 1. The general rule of possession is that the first person to take a
\par \tab \tab possession of a thing owns it. A corollary to this rule is that a \tab \tab \tab \tab prior possessor prevails over a subsequent possessor. Thus,
\par \tab \tab a finder has rights superior to everyone but the true owner. \tab \tab \tab \tab \tab }{\fs24\ul Armory v. Delamarie}{\fs24 . However, there are important exceptions \tab \tab \tab \tab to this rule.
\par
\par \tab \tab EX: In }{\fs24\ul Armory}{\fs24 , A finds a jewel and takes it to a jeweler to have
\par \tab \tab it appraised. The jeweler refuses to give the jewel back to A,
\par \tab \tab saying that A does not own it. A is entitled to recover from
\par \tab \tab the jeweler either the jewel or the full money value of the jewel.
\par \tab \tab As between A and the jeweler, the prior possessor has superior
\par \tab \tab right.
\par \tab \tab
\par \tab \tab 2. The "}{\b\fs24 prior possessor wins}{\fs24 " rule also applies to objects acquired
\par \tab \tab through theft or trespass.
\par
\par \tab \tab EX: If A steals a jewel and hands it to B, who refuses to return it, \tab \tab \tab \tab B is liable to A. B cannot question A's title or rightful prior \tab \tab \tab \tab \tab possession if B is merely the subsequent possessor.
\par \tab \tab
\par \tab \tab The rationale for this is that to rule in favor of B would most
\par \tab \tab likely not deter crime, but it would likely immerse owners and
\par \tab \tab prior possessors in costly litigation with subsequent possessors
\par \tab \tab to prove they are not thieves.
\par
\par \tab \tab 3. For the finder to become a prior possessor, the finder must:
\par \tab \tab
\par \tab \tab \tab a. }{\b\fs24 Intend to possess}{\fs24 object; }{\fs24\ul AND}{\fs24
\par \tab \tab
\par \tab \tab \tab b. }{\b\fs24 Take steps toward possessing}{\fs24 object
\par \tab \tab
\par \tab \tab Thus, }{\b\fs24 mere discovery is not enough for possession.}{\fs24
\par
\par \tab \tab \tab }{\fs24\ul Rationale}{\fs24 -- The rationale for this is twofold:\tab
\par
\par \tab \tab \tab \tab (1) }{\fs24\ul Economic efficiency}{\fs24 : We want to encourage people to \tab \tab \tab \tab \tab possess and help society (though in practice this is not \tab \tab \tab \tab \tab
always the case, especially if one keeps something rare \tab \tab \tab \tab \tab from society -- i.e., a painting), which would be stifled if \tab \tab \tab \tab \tab we equated discovery with possession
\par
\par \tab \tab \tab \tab (2) }{\fs24\ul Judicial efficiency}{\fs24 : We want to curb disputes of the \ldblquote I \tab \tab \tab \tab \tab saw it first\rdblquote vs. \ldblquote I saw it first\rdblquote variety
\par
\par \tab \tab \tab \tab }{\fs24\ul Mnemonic}{\fs24 : E.J. dionne\tab
\par
\par \tab \tab \tab }{\fs24\ul Example}{\fs24 : Y discovers a shipwreck at the bottom of the Mississippi \tab \tab \tab River. The ship sank some 27 years before and was abandoned
\par \tab \tab \tab by the owners. Y attaches a temporary buoy to the wreck,
\par \tab \tab \tab intending to return the next day, buy Y does not return. Nine
\par \tab \tab \tab months later, Z finds the wreck and salvages it. Z prevails over
\par \tab \tab \tab Y because Y has shown only an intent to possess object and has
\par \tab \tab \tab not shown sufficient acts of physical control. Y must place
\par \tab \tab \tab his boat over the wreck, }{\b\fs24 with the means to raise it}{\fs24 , to give
\par \tab \tab \tab notice to subsequent searchers of his prior possession. }{\fs24\ul Eads v.
\par }{\fs24 \tab \tab \tab }{\fs24\ul Brazelton}{\fs24 .
\par
\par \tab \tab 4. To establish abandonment of property, property must be:
\par
\par \tab \tab \tab a. out of the true owner's possession for "an unreasonable
\par \tab \tab \tab amount of time;" }{\fs24\ul AND}{\fs24
\par
\par \tab \tab \tab b. there must not be any intent by the true owner to reclaim the \tab \tab \tab \tab property. }{\fs24\ul Eads}{\fs24 .
\par
\par \tab B. Finder versus the owner of premises }{\b\fs24
\par
\par \tab \tab }{\fs24 1. Often the finder will claim an object; so will the owner of the \tab \tab \tab \tab premises where the object is found. (This assumes the owner
\par \tab \tab of the premises does not own the object; if he did, he would
\par \tab \tab actually prevail over the finder). The owner of the premises
\par \tab \tab claims to be in either actual or, more usually, constructive
\par \tab \tab possession.
\par
\par \tab \tab \tab a. Objects found inside a private home are usually
\par \tab \tab \tab awarded to the owner of the home.
\par \tab \tab \tab
\par \tab \tab \tab EX: A, a guest at a party in B's home, finds a Rolex
\par \tab \tab \tab watch under the sofa which no one claims to own. B
\par \tab \tab \tab is in constructive possession of the watch and can
\par \tab \tab \tab keep it until the true owner reclaims it.
\par
\par \tab \tab }{\b\fs24 \tab }{\fs24 b. If the owner of a house has not moved into the
\par \tab \tab \tab house (has not made it his "personal space"), it has
\par \tab \tab \tab been held that the owner is not in constructive
\par \tab \tab \tab possession of the articles in the house of which he is
\par \tab \tab \tab unaware.
\par
\par \tab \tab \tab EX: Y owns a large house requisitioned by the government
\par \tab \tab \tab to quarter soldiers. Y bought the house two years earlier
\par \tab \tab \tab and never moved in. A soldier finds in the house a
\par \tab \tab \tab brooch hidden on a window ledge. The soldier prevails
\par \tab \tab \tab over Y because Y never moved into the house and took
\par \tab \tab \tab physical possession of it. }{\fs24\ul Hannah v. Peel}{\fs24 .
\par
\par \tab \tab
\par \tab \tab \tab c. In dealing with objects found in a public place, the
\par \tab \tab \tab courts have generally resolved the issue by resorting to
\par \tab \tab \tab the "lost-mislaid" distinction. (Smith notes that this is almost \tab \tab \tab \tab always a factual issue.)
\par
\par \tab \tab \tab \tab (1) }{\b\fs24 Lost property}{\fs24 is property the owner }{\b\fs24 accidentally
\par \tab \tab \tab \tab and casually lost}{\fs24 (i.e. your wallet slips through a hole
\par \tab \tab \tab \tab in your pocket). }{\b\fs24 Lost property goes to the finder
\par \tab \tab \tab \tab rather than the owner of the premises.}{\fs24
\par \tab \tab \tab \tab
\par \tab \tab \tab \tab (2) }{\b\fs24 Mislaid property}{\fs24 is property }{\b\fs24 intentionally
\par \tab \tab \tab \tab placed somewhere and then forgotten}{\fs24 (i.e. a purse
\par \tab \tab \tab \tab placed on a table and forgotten). }{\b\fs24 Mislaid property
\par \tab \tab \tab \tab goes to the owner of the premises.}{\fs24\ul
\par
\par }{\fs24 \tab \tab \tab EX: A finds a wallet on the floor of a beauty shop and a
\par \tab \tab \tab ring on the counter in the same shop. The wallet is\tab
\par \tab \tab \tab lost property because it is assumed it was not
\par \tab \tab \tab intentionally placed on the floor. A, the finder, prevails
\par \tab \tab \tab over the shop owner, and can take the wallet home
\par \tab \tab \tab and keep it until the true owner shows up. }{\fs24\ul Bridges
\par }{\fs24 \tab \tab \tab }{\fs24\ul v. Hawkesworth}{\fs24 . The ring is mislaid property because,
\par \tab \tab \tab from its position, it is assumed it was intentionally
\par \tab \tab \tab placed on the counter and forgotten. The ring goes to the
\par \tab \tab \tab shop owner to keep until the true owner claims it.
\par \tab \tab \tab }{\fs24\ul McAvoy v. Medina}{\fs24 .
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith says that, }{\b\fs24 generally speaking, the less
\par \tab \tab \tab dominion the owner has over his property, the less
\par \tab \tab \tab chance he has of ownership if lost property is found}{\fs24 .
\par \tab \tab \tab For example, if A finds a piece of lost property, such as a \tab \tab \tab \tab \tab wallet, in B's house, then B would most likely have
\par \tab \tab \tab possession. But if A finds that wallet in a remote field,
\par \tab \tab \tab owned by B, that is located behind B's house, then A
\par \tab \tab \tab would probably have possession since B has less
\par \tab \tab \tab dominion over the field than his house.
\par
\par \tab \tab \tab
\par }{\b\fs24 III. Adverse Possession of Property and Chattels
\par
\par }{\fs24 \tab A. Adverse Possession of Property
\par \tab \tab
\par \tab \tab 1. All states allow a person to acquire title to land by }{\b\fs24 adverse
\par \tab \tab possession}{\fs24 . Although the exact requirements for acquiring land
\par \tab \tab in this manner depend upon the specific statute of limitation
\par \tab \tab involved, }{\b\fs24 generally four things are necessary}{\fs24 under statutes:
\par \tab \tab
\par \tab \tab \tab a.}{\b\fs24 There must be a cause of action}{\fs24 . The possessor must be
\par \tab \tab \tab asserting an interest in the land inconsistent with the \tab \tab \tab \tab \tab owner's claim (i.e., he cannot be a lessee).
\par \tab \tab
\par \tab \tab \tab b. }{\b\fs24 There must be possession}{\fs24 . The claimant must be \tab \tab \tab \tab \tab actually using the land or some part of it, and the use
\par \tab \tab \tab must be one which is suitable for the type of land \tab \tab \tab \tab \tab \tab involved.
\par
\par \tab \tab \tab c. }{\b\fs24 The possession must be open and hostile}{\fs24 . The true
\par \tab \tab \tab owner must be able to know that someone else is in
\par \tab \tab \tab hostile possession.
\par
\par \tab \tab \tab d. }{\b\fs24 The possession must be continuous for a statutory
\par \tab \tab \tab period.}{\fs24 If the statue requires possession for 10 years, the
\par \tab \tab \tab 10 years must be successive. There can be no interruptions. (The \tab \tab \tab \tab purpose of this is that we want the action to be brought when we \tab \tab \tab \tab can round up witnesses, memories are still fresh, etc.)
\par
\par \tab \tab 2. }{\b\fs24 Adverse possession is a means of acquiring title to property
\par \tab \tab by long, uninterrupted possession that is open and notorious}{\fs24 .
\par \tab \tab The running of the statue of limitations on the owner's action
\par \tab \tab in ejectment not only bars the owner's claim to possession,
\par \tab \tab it also strips the owner of title and creates a new title in the
\par \tab \tab adverse possessor.
\par
\par \tab B. Adverse Possession of Chattels
\par
\par \tab \tab 1. A person can acquire title to chattels by adverse possession
\par \tab \tab just as he can acquire title to land. Generally, the requirements
\par \tab \tab for adverse possession of chattels are the same as for land,
\par \tab \tab except the period of limitations is shorter.
\par
\par \tab \tab 2. There is one major difference between adversely possessing
\par \tab \tab land and adversely possessing chattels: }{\b\fs24 Adverse possession of
\par \tab \tab land is open and notorious whereas adverse possession to
\par \tab \tab chattels seldom is.}{\fs24\ul
\par
\par }{\fs24 \tab \tab 3. When statue of limitations can begin running
\par
\par \tab \tab \tab a. As soon as property is stolen (favors good faith purchaser)
\par
\par \tab \tab \tab b. Doesn\rquote t begin until good is found (favors owner)
\par
\par \tab \tab \tab c. Possessor must make claim of adverse possession -- like for land \tab \tab \tab (favors owner)
\par
\par \tab \tab \tab d. The modern trend in dealing with adverse possession of
\par }\pard \li2160\nowidctlpar\widctlpar\tx0\adjustright {\fs24 chattels is the "}{\b\fs24 discovery rule}{\fs24
," which favors the good faith purchaser. Under the discovery rule, the conduct of the owner, not the possessor, is controlling. The cause of action for adverse possession accrues when the owner first knows, or reasonably should know through
the exercise of reasonable diligence, of the cause of action, including the identity of the possessor. }{\b\fs24 The owner, then, has the burden of showing due diligence}{\fs24 if he wants to toll the statue of limitations. }{\fs24\ul
O'Keeffe v. Snyder}{\fs24 .
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24
\par \tab \tab \tab }{\b\fs24 [check with Smith on these]
\par }{\fs24
\par \tab \tab \tab EX: A steals a valuable painting belonging to O. A hangs it \tab \tab \tab \tab in his home, and occasionally lends it to a local charitable \tab \tab \tab \tab \tab show. Under }{\fs24\ul O'Keeffe}{\fs24
, adverse possession runs from the \tab \tab \tab \tab \tab time of the theft unless O can show that she used due \tab \tab \tab \tab \tab diligence and failed to locate the painting; if O can show \tab \tab \tab \tab \tab
due diligence, adverse possession begins to run when O \tab \tab \tab \tab \tab locates the painting.
\par
\par \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Under the discovery rule, }{\b\fs24 the key is whether the \tab \tab \tab \tab \tab owner used due diligence in locating the missing chattel.
\par
\par }\pard \li2880\nowidctlpar\widctlpar\tx0\adjustright {\fs24\ul NOTE}{\fs24 : What is considered reasonable under the discovery rule, according to Smith, probably does not change along with the value of what is stolen. }{\fs24\ul
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24
\par \tab \tab 4. In crafting a statutory rule, one must weigh:
\par
\par \tab \tab \tab a. }{\b\fs24 stability in title}{\fs24 (favors owner) vs.
\par
\par \tab \tab \tab b. }{\b\fs24 commerce}{\fs24 (favors good faith purchaser)
\par
\par
\par
\par }{\b\fs24 IV. Conquest of Land
\par
\par }{\fs24 \tab A. The right to title by discovery usurps the right to title of previous
\par \tab possession when "civilized" and "uncivilized" groups contest who
\par \tab possesses the land. }{\fs24\ul Johnson v. McIntosh}{\fs24 . }{\b\fs24 }{\fs24 Thus, if a civilized country, like \tab England, discovers "uncivilized" countries, like North America (which was \tab
populated by Indians), then England can claim land title based on discovery.
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : To have any title to land, one must show a }{\b\fs24 grant from a \tab \tab \tab \tab sovereign}{\fs24 .
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : According to Smith, the easiest way to deal with competing land \tab \tab \tab claims is through short adverse possession statutes.
\par
\par \tab B. The inhabitants of a country do not possess land unless they mix their labor \tab with land. This is known as }{\b\fs24 Locke's }{\fs24 "}{\b\fs24 labor theory of property}{\fs24 ." Indians just \tab
lived off of the land and did not improve it, while the settlers mixed their labor \tab with the land and greatly improved it. }{\fs24\ul Johnson}{\fs24 .
\par
\par \tab C. }{\fs24\ul Critical Legal Studies Group}{\fs24 : According to this school, property only existed \tab by the strong taking from the weak, and the legal system serves to perpetuate this.
\par }{\b\fs24
\par
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul
\par The Anglo-American System of Estates in Land
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs24
\par I. Introduction to Estates in Land
\par }{\fs24 \tab
\par \tab A. Any interest in land which has received recognition either by the
\par \tab courts or by statute can be the subject of a real estate contract. Most
\par \tab often, this interest is a fee simple, but there are other types of interests.
\par \tab Traditionally, the common law has recognized six estates--three \tab
\par \tab of them were freehold estates, while the other three were non-
\par \tab freehold, or leasehold estates. In addition to these, there were
\par \tab non-possessory interests, such as easements, which were not
\par \tab called estates.
\par
\par
\par }{\b\fs24 II. The Freehold Estates}{\fs24
\par \tab
\par \tab A. The fee simple, fee tail, and life estate are "freehold" estates.
\par \tab Freehold was the highest form of holding under the feudal
\par \tab system. An important difference between freehold and non-
\par \tab freehold (or leasehold) estates is that }{\b\fs24 a freeholder in possession}{\fs24 -- having a fee \tab simple absolute, a fee-tail, or a life estate --}{\b\fs24 had}{\fs24 "}{\b\fs24 seisin}{\fs24 ," a concept which is \tab almost \tab
impossible to define.
\par
\par \tab \tab 1. "Seisin" was an important concept in feudal times, and
\par \tab \tab remains important in understanding how the estate
\par \tab \tab system developed. A person is "seised" if he hold an }{\b\fs24 estate
\par \tab \tab of freehold}{\fs24 and either has }{\b\fs24 possession of the land}{\fs24 or a }{\b\fs24 tenant
\par \tab \tab holds possession}{\fs24 from him. Except where the land is leased
\par \tab \tab and the landlord holds the seisin, "}{\b\fs24 possession by a freeholder}{\fs24 "
\par \tab \tab embodies the fundamental idea of seisin.
\par
\par \tab \tab EX: O, fee simple owner of Blackacre, grants Blackacre to A for
\par \tab \tab life. By this grant, O conveys seisin (possession) to A. A is now
\par \tab \tab "seised." If O had conveyed Blackacre for ten years, O would
\par \tab \tab retain seisin. A, a "termor" holding a term of years (a \tab \tab \tab \tab \tab nonfreehold estate), could not be given seisin. Instead, A,
\par \tab \tab a termor, was given possession. This illustrates the essential
\par \tab \tab difference between freehold and non-freehold (or leasehold)
\par \tab \tab estates. A termor could not hold seisin because seisin was
\par \tab \tab considered too important a thing to be entrusted to a termor,
\par \tab \tab who was looked upon by the early judges as a rascally fellow.
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Although the concept of seisin long ago fell into disuse \tab \tab \tab \tab and was never recognized in Texas, it played an important part
\par \tab \tab of the evolution of the law of freehold estates.
\par
\par \tab B. The three freehold estates recognized by common law are:\tab
\par \tab \tab
\par \tab \tab 1. A }{\b\fs24 fee simple}{\fs24 was the closest thing to complete ownership \tab \tab \tab \tab which the English law recognized. It is an estate that has the \tab \tab \tab \tab potential of enduring forever.
\par \tab
\par \tab \tab \tab a. Originally, the fee simple was created by use of the
\par \tab \tab \tab formula, "to A and his heirs." A's heirs received nothing
\par \tab \tab \tab by this conveyance; it was merely the formula which had
\par \tab \tab \tab to be used to create a fee simple absolute (FSA). If the \tab \tab \tab \tab \tab words "and his heirs" were missing, A only received a life
\par \tab \tab \tab estate. }{\fs24\ul Cole v. Steinlauf}{\fs24
\par
\par \tab \tab \tab b. }{\fs24\ul Presumption of fee simple}{\fs24 : This \ldblquote And his heirs\rdblquote requirement is \tab \tab \tab \tab not in effect in the vast majority of states, however. Virtually every \tab \tab \tab
state now has a statute which provides that every grant, \tab \tab \tab \tab \tab conveyance and devise of land "shall be deemed a fee simple" \tab \tab \tab \tab unless the wording of the transfer indicates that a lesser estate was \tab \tab \tab \tab
created or unless the lesser estate is created by operation of law. \tab \tab \tab \tab Thus, if land is conveyed simply "}{\b\fs24 to A}{\fs24 ," "}{\b\fs24 to A in fee simple}{\fs24 ,"
\par \tab \tab \tab "}{\b\fs24 to A in fee}{\fs24 ," or, in the old common law formula, "}{\b\fs24 to
\par \tab \tab \tab A and his heirs}{\fs24 ," then A would receive a fee simple
\par \tab \tab \tab absolute.
\par \tab \tab \tab
\par \tab \tab \tab c. Inheritance in a fee simple absolute cannot be restricted \tab \tab \tab \tab \tab under any conditions.
\par
\par \tab \tab \tab EX: If O conveys to Blackacre "to A and his heirs on his
\par \tab \tab \tab father's side," A receives an FSA which he can devise
\par \tab \tab \tab or convey; and if he dies intestate, all of his heirs, and
\par \tab \tab \tab not just those on his father's side, will inherit Blackacre.
\par
\par \tab \tab 2. A }{\b\fs24 fee tail}{\fs24 was an estate that passed from the grantee to his
\par \tab \tab descendants. Unlike the fee simple, it could not be sold, devised, \tab \tab \tab \tab or given away; but instead descended in the grantee's lineal
\par \tab \tab descendants (or "issue"). These estates are almost never created \tab \tab \tab \tab nowadays -- it only exists in about six states, including Maine, Rhode \tab \tab \tab Island, and South Carolina. (It is primogenitor.)
\par
\par \tab \tab \tab a. A fee tail is created by O granting the property
\par \tab \tab \tab "}{\b\fs24 to A and}{\fs24 }{\b\fs24 the heirs of his body}{\fs24 ." The term "heirs
\par \tab \tab \tab of the body" refers to the grantee's issue.
\par
\par \tab \tab 3. The}{\b\fs24 life estate}{\fs24 entitles the grantee to live on the land for his \tab \tab \tab \tab lifetime or for the life of some other person.
\par
\par \tab \tab \tab a. A life estate is created by O conveying the property
\par \tab \tab \tab "}{\b\fs24 to A for life}{\fs24 ." On the death of A, the land reverts to
\par \tab \tab \tab O, the grantor, assuming he is still alive.
\par
\par \tab \tab \tab b. The life tenant is ordinarily free to transfer, lease,
\par \tab \tab \tab encumber, or otherwise alienate her estate inter
\par \tab \tab \tab vivos. Of course, the transferee gets no more than the
\par \tab \tab \tab life tenant had--an estate that ends at the expiration of
\par \tab \tab \tab the measuring life.
\par
\par \tab \tab \tab c. The life tenant has certain duties to the remainderman
\par \tab \tab \tab which require that he use and maintain the estate,
\par \tab \tab \tab without damage and waste, and deliver it to the
\par \tab \tab \tab remainderman in the condition in which he found it.
\par \tab \tab \tab The life tenant is entitled to all the ordinary uses and
\par \tab \tab \tab profits of the land.
\par \tab
\par \tab \tab \tab d. The life tenant must pay current taxes, interest on
\par \tab \tab \tab the mortgage, and current betterment assessments,
\par \tab \tab \tab but he is not under an obligation to carry insurance on
\par \tab \tab \tab the land of structures.
\par
\par \tab \tab \tab e. Three different types of waste are recognized:
\par \tab \tab \tab
\par \tab \tab \tab \tab (1) }{\b\fs24 Affirmative (voluntary) waste}{\fs24 - Occurs when
\par \tab \tab \tab \tab the life tenant actively causes permanent injury
\par \tab \tab \tab \tab by, for example, destroying building or ornamental
\par \tab \tab \tab \tab trees on the land, or removing natural resources
\par \tab \tab \tab \tab (minerals, timber, etc.).
\par \tab \tab \tab
\par \tab \tab \tab \tab (2) }{\b\fs24 Permissive (involuntary) waste}{\fs24 - Occurs when
\par \tab \tab \tab \tab the life tenant allows the land to fall into disrepair,
\par \tab \tab \tab \tab or the tenant fails to make reasonable measures to
\par \tab \tab \tab \tab protect the land from the elements. Failing to pay
\par \tab \tab \tab \tab taxes and allowing the property to be sold at tax
\par \tab \tab \tab \tab sale is treated as permissive waste.
\par \tab \tab \tab
\par \tab \tab \tab \tab (3) }{\b\fs24 Ameliorating waste}{\fs24 - Occurs when the principal
\par \tab \tab \tab \tab use of the land is substantially changed--usually
\par \tab \tab \tab \tab by tearing down a building--but the change
\par \tab \tab \tab \tab increases the value of the land. Ameliorating
\par \tab \tab \tab \tab waste is actionable if the court finds that:
\par \tab \tab \tab
\par \tab \tab \tab \tab \tab (1) the grantor intended to pass the land with
\par \tab \tab \tab \tab \tab the specific buildings on it to the holder of
\par \tab \tab \tab \tab \tab the remainder }{\fs24\ul AND}{\fs24
\par \tab \tab \tab
\par \tab \tab \tab \tab \tab (2) the building can reasonably be used for
\par \tab \tab \tab \tab \tab the purposes built.
\par
\par \tab \tab \tab \tab \tab }{\fs24\ul Rationale}{\fs24 : The rationale for this is that actions that \tab \tab \tab \tab \tab \tab increase the value of land today may not increase \tab \tab \tab \tab \tab \tab
the value of the land at the time the life estate \tab \tab \tab \tab \tab \tab terminates. (Smith rejects the idea of the grantor\rquote s \tab \tab \tab \tab \tab \tab sentimental wishes as a rationale for ameliorating \tab \tab \tab \tab \tab \tab
waste.)
\par
\par \tab \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Feminists find this sexist because women \tab \tab \tab \tab \tab \tab must pay for maintenance and taxes, but cannot \tab \tab \tab \tab \tab \tab improve the land on which they live (this puts the \tab
\tab \tab \tab \tab \tab remainderman in an ideal bargaining position). \tab \tab \tab \tab \tab \tab This argument is based on the premise that men are \tab \tab \tab \tab \tab \tab more likely to create life estates than woman -- \tab \tab \tab \tab
\tab \tab women also live longer than men, on the whole.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : A life estate can terminate either: 1) upon the
\par \tab \tab \tab death of the life tenant }{\fs24\ul OR }{\fs24 2) if the life tenant decides
\par \tab \tab \tab not to accept the life estate, in which case the estate
\par \tab \tab \tab reverts back to the grantor.
\par
\par \tab C. The Defeasible Fees Simple
\par
\par \tab \tab 1. A fee simple can be created so that it is defeasible on the
\par \tab \tab happening of some event, and the owner of the fee simple then
\par \tab \tab loses, or may lose, the property. If the fee simple is defeasible,
\par \tab \tab it is of course not absolute. The three different kinds of
\par \tab \tab defeasible fees simple are:
\par
\par \tab \tab \tab a. fee simple determinable
\par
\par \tab \tab \tab b. fee simple subject to condition subsequent; }{\fs24\ul AND
\par
\par }{\fs24 \tab \tab \tab c. fee simple subject to an executory limitation.
\par
\par \tab \tab 2. A }{\b\fs24 fee simple determinable}{\fs24 (FSD) is a fee simple estate so \tab \tab \tab \tab limited that will automatically end and revert to the grantor \tab \tab
\par \tab \tab when some specified event happens.
\par
\par \tab \tab \tab a. The usual language in creating an FSD is "}{\b\fs24 so long as}{\fs24 , "}{\b\fs24 to \tab \tab \tab \tab A until}{\fs24 ," "}{\b\fs24 to A while}{\fs24 ," or language providing that upon \tab \tab \tab \tab \tab
the happening of a stated event the land is to revert to the \tab \tab \tab \tab \tab grantor. If a deed merely states the purpose for which
\par \tab \tab \tab the land is conveyed, such as "for school purposes," an
\par \tab \tab \tab FSD has not been created.
\par
\par \tab \tab \tab EX: O conveys Blackacre "to School Board for so long as the
\par \tab \tab \tab premises are used for school purposes." The words "so\tab \tab \tab \tab \tab long as" are words of limitation, limiting the duration of \tab \tab \tab \tab \tab the fee simple given. The school board has a fee simple \tab \tab \tab \tab
\tab determinable that will automatically end when Blackacre \tab \tab \tab \tab \tab ceases to be used for school purposes. When that even \tab \tab \tab \tab \tab happens, the fee simple automatically reverts to O, the \tab \tab \tab \tab \tab
grantor.
\par
\par \tab \tab \tab b. A fee simple determinable is a fee simple because it
\par \tab \tab \tab may endure forever. But, if the contingency occurs
\par \tab \tab \tab (Blackacre is used of other than school purposes, as
\par \tab \tab \tab above), the estate automatically ends. }{\b\fs24 The estate
\par \tab \tab \tab terminates immediately upon the occurrence of the
\par \tab \tab \tab event--nothing further is required--and the fee simple
\par \tab \tab \tab automatically reverts to the grantor}{\fs24 . This is the
\par \tab \tab \tab distinguishing characteristic of the FSD.
\par
\par \tab \tab \tab c. Words in an instrument that state the motive or
\par \tab \tab \tab purpose of the grantor do not create an FSD. Rather, it
\par \tab \tab \tab is necessary to use words }{\b\fs24 limiting the duration}{\fs24 of the
\par \tab \tab \tab estate.
\par
\par \tab \tab \tab EX: O conveys Blackacre "to Board of Education upon
\par \tab \tab \tab understanding that the land is conveyed solely for the
\par \tab \tab \tab purpose of being used for the erection and maintenance of
\par \tab \tab \tab a public school." The Board erects a school, but thirty
\par \tab \tab \tab years later the Board ceases to use Blackacre for a school.
\par \tab \tab \tab The Board has a fee simple absolute, not an FSD, and can
\par \tab \tab \tab do with Blackacre as it wishes. The words in quotation
\par \tab \tab \tab marks merely state the grantor's motive. The grantor has
\par \tab \tab \tab retained no rights in Blackacre. }{\fs24\ul Roberts v. Rhodes}{\fs24
\par
\par \tab \tab \tab d. An FSD may be transferred or inherited in the same
\par \tab \tab \tab manner as any other fee simple, as long as the stated
\par \tab \tab \tab event has not happened. But the fee simple remains
\par \tab \tab \tab subject to the limitation no matter who holds it.
\par
\par \tab \tab \tab e. Since there is a possibility that a grantee's determinable
\par \tab \tab \tab fee may come to an end upon the happening of the
\par \tab \tab \tab stated event, the grantor has a future interest called a
\par \tab \tab \tab possibility of reverter.
\par
\par \tab \tab 3. }{\b\fs24 A fee simple subject to condition subsequent}{\fs24 (FSSCS) is a
\par \tab \tab fee simple that may be terminated by the grantor when a
\par \tab \tab stated condition happens. Unlike an FSD, an FSSCS does not
\par \tab \tab terminate automatically upon the happening of the named
\par \tab \tab event--}{\b\fs24 the grantor must either bring suit or make entry (what
\par \tab \tab the case law refers to as taking "affirmative action") in order
\par \tab \tab to regain the land}{\fs24 .
\par
\par \tab \tab \tab a. An FSSCS is created by first giving the grantee an
\par \tab \tab \tab unconditional fee simple and then providing that
\par \tab \tab \tab the fee simple may be divested by the grantor or
\par \tab \tab \tab his heirs if a specified condition happens. Traditional\tab
\par \tab \tab \tab language to create such an estate includes: "To A, }{\b\fs24 but}{\fs24\ul
\par }{\fs24 \tab \tab \tab }{\b\fs24 if}{\fs24 X event happens....," or "to A, }{\b\fs24 upon condition}{\fs24 that if
\par \tab \tab \tab X event happens...," or "to A, }{\b\fs24 provided}{\fs24 , }{\b\fs24 however}{\fs24 , that
\par \tab \tab \tab if X event happens...," }{\b\fs24 followed by a provision for re-
\par \tab \tab \tab entry upon the happening of the named event}{\fs24 .
\par
\par \tab \tab \tab EX: O conveys Blackacre "to A, but if liquor is ever sold
\par \tab \tab \tab on the premises, the grantor has a right to reenter the
\par \tab \tab \tab premises." The words "but if...premises" are }{\b\fs24 words of
\par \tab \tab \tab condition}{\fs24 setting forth the condition upon which the
\par \tab \tab \tab grantor can exercise her right of entry. They are not
\par \tab \tab \tab words limiting the fee simple granted A. A has an FSSCS.
\par \tab \tab \tab O has a right of entry. If O does not choose to exercise
\par \tab \tab \tab his right of entry when liquor is sold, the fee simple
\par \tab \tab \tab continues in A.
\par \tab \tab \tab
\par \tab \tab \tab b. An FSSCS may be transferred or inherited in the same
\par \tab \tab \tab manner as any other fee simple until the transferor is
\par \tab \tab \tab entitled and does exercise the right of entry.
\par
\par \tab \tab 4. A}{\b\fs24 fee simple subject to an executory limitation}{\fs24 (FSSEL) is a fee
\par \tab \tab simple that, upon the happening of a stated event, is \tab \tab \tab \tab \tab \tab automatically divested in favor of a third person.
\par
\par \tab \tab EX: O conveys Blackacre "to School Board, but if within the next \tab \tab \tab \tab 20 years Blackacre is not used for school purposes, then to A." \tab \tab \tab \tab Observe that the forfeiture interest is in another grantee, A, and \tab
\tab \tab \tab not in the grantor, O. A's future interest is called an executory \tab \tab \tab \tab interest.
\par
\par \tab D. The Defeasible Life Estates
\par
\par \tab \tab a. Just as there are defeasible fees simple, there are also defeasible
\par \tab \tab life estates. Thus, a life estate can be created so as to be
\par \tab \tab determinable, subject to condition subsequent, or subject to
\par \tab \tab an executory limitation.
\par
\par \tab \tab EX: If O devises Blackacre "to my wife for life unless she \tab \tab \tab \tab \tab remarries," the life estate will terminate upon either the
\par \tab \tab wife's death or her remarriage. This is an example of a life
\par \tab \tab estate determinable.
\par
\par \tab \tab EX: O, who owns Blackacre in fee simple absolute, conveys
\par \tab \tab the land \ldblquote to Rosa, the widow of my son John, for so long as
\par \tab \tab she remains unmarried.\rdblquote This conveyance should be construed
\par \tab \tab as a defeasible life estate. The language suggests a restraint
\par \tab \tab on marriage, and the traditional argument for enforcing the
\par \tab \tab language is that the grantor really intends to provide support
\par \tab \tab to Rosa, rather than to create a financial disincentive to
\par \tab \tab marriage. Since Rosa will need support only during her lifetime,
\par \tab \tab there is some logic in treating the deed as conveying a life estate.
\par \tab \tab The principal argument against the life estate construction is
\par \tab \tab the presumption that a fee simple is created, unless express
\par \tab \tab language indicates an intent to create a lesser estate.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : These types of ambiguous conveyances are common
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab \tab \tab on Smith\rquote s exams.
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24
\par
\par }{\b\fs24 III. Interpreting Wills and Estates
\par
\par \tab }{\fs24 A. Sometimes it is not clear what estate is created by the language used.
\par \tab Courts must then construe the instrument to determine whether the
\par \tab estate conveyed is a fee simple, life estate, or leasehold estate. Each case
\par \tab depends on its own facts and }{\b\fs24 the probable intent of the grantor}{\fs24 . The
\par \tab following are common examples of ambiguous language raising
\par \tab construction problems:
\par
\par \tab \tab 1. "To my wife, W, so long as she remains unmarried." Does this
\par \tab \tab create a fee simple determinable or a life estate determinable
\par \tab \tab (on theory that the condition--marriage--could only happened
\par \tab \tab during W's life)? Majority view: A fee simple determinable is
\par \tab \tab created, even though the fee simple cannot be forfeited after W's
\par \tab \tab death.
\par
\par \tab \tab 2. "To my wife, W, to be used as she shall see fit, for her
\par \tab \tab maintenance and support." Does this give W a fee simple or a
\par \tab \tab life estate with power to consume the principal? Majority view:
\par \tab \tab A fee simple is created; words "for her maintenance and
\par \tab \tab support" merely state the reason for the gift.
\par
\par \tab B. There are two reasons for the majority view in the above two
\par \tab examples:
\par
\par \tab \tab 1. First, where the language of a deed is so ambiguous as to be \tab \tab \tab \tab susceptible to different constructions, that interpretation will \tab \tab \tab \tab be adopted which is most favorable to the grantee. (This is because the
\tab \tab \tab law does not favor forfeiture.)
\par
\par \tab \tab 2. Second, that a conveyance will be construed to avoid a
\par \tab \tab forfeiture wherever possible. Thus, a fee simple on a condition
\par \tab \tab subsequent is preferred over a fee simple determinable, and a
\par \tab \tab fee simple absolute is preferred over both. }{\fs24\ul Oldfield v. Stucco
\par }{\fs24 \tab \tab }{\fs24\ul Homes, Inc.}{\fs24
\par \tab
\par \tab C. In the case of future estates, one can usually distinguish between
\par \tab a condition precedent from a condition subsequent. Occasionally,
\par \tab though, the distinction is a judgment call, like an umpire calling
\par \tab borderline balls and strikes.
\par
\par
\par }{\b\fs24 IV. Future Interests}{\fs24
\par
\par \tab A. A future interest is an estate which }{\fs24\ul may}{\fs24 become possessory in the
\par \tab future. A future interest is a }{\b\fs24 present}{\fs24 interest in the sense that it is
\par \tab a presently }{\b\fs24 existing}{\fs24 interest. But it is }{\b\fs24 not}{\fs24 a presently }{\b\fs24 possessory}{\fs24 interest,
\par \tab and that is why it is called a future interest. Just as possessory estates
\par \tab are limited in number (fee simple, fee tail, life estate, leaseholds), so
\par \tab are future interests. There are five categories of future interests:
\par \tab }{\b\fs24 reversion, possibility of reverter, right of entry, executory interest,
\par \tab and remainders}{\fs24 . Remainders can further be divided into vested and
\par \tab contingent remainders.
\par
\par \tab EX: O conveys Blackacre "to A for life, and on A's death to B." A has
\par \tab a possessory life estate. B has a future interest called a remainder. It
\par \tab will become possessory on A's death. Before A's death, the remainder
\par \tab exists as a property interest in Blackacre. As with other property
\par \tab interests, B can transfer the remainder to C, and B's creditors can
\par \tab reach the remainder. It is an existing property interest, which will
\par \tab become possessory in the future.
\par
\par \tab B. Future interests are divided into two basic groups: future interests
\par \tab retained by the grantor and future interests created in a grantee. If
\par \tab the future interest is retained by the grantor (or, if retained by a will,
\par \tab by the testator's heirs), the future interest }{\b\fs24 must be }{\fs24 either a }{\b\fs24 reversion,
\par \tab possibility of reverter,}{\fs24 or}{\b\fs24 right of entry}{\fs24 .
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Future interests in the grantor are }{\b\fs24 always vested}{\fs24 (grantor keeps \tab \tab \tab back some of his conveyance).
\par
\par \tab \tab 1. A }{\b\fs24 reversion}{\fs24 is whatever is left when less than a fee simple is
\par \tab \tab conveyed away. Thus, whenever the last vested estate is less
\par \tab \tab than a fee simple, there is a reversion in the grantor. It may be
\par \tab \tab certain to come into possession, as for example, if O conveys
\par \tab \tab "to A for life"; or it }{\fs24\ul may}{\fs24 possibly never come into possession,
\par \tab \tab as for example, if O conveys "to A for life, then to B if B marries \tab \tab \tab \tab C."
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Traditional property view has been that if O owns
\par \tab \tab merely a life estate in Blackacre when he conveys it "to
\par \tab \tab Marie for Marie\rquote s life," O }{\fs24\ul has}{\fs24 retained a reversion.
\par \tab \tab Also note that since defeasible fees simple are of potentially \tab \tab
\par \tab \tab infinite duration, they are not lesser estates than the fee simple
\par \tab \tab absolute. Hence, the transferor of an FSD }{\fs24\ul has not}{\fs24 retained a
\par \tab \tab reversion.
\par
\par \tab \tab 2. A }{\b\fs24 possibility of reverter }{\fs24 is the future interest retained by a
\par \tab \tab grantor when he conveys a fee simple determinable (FSD).
\par
\par \tab \tab EX: If O conveys "to the First Baptist Church for }{\fs24\ul so long as}{\fs24 the
\par \tab \tab premises shall be used for church purposes," O has a possibility
\par \tab \tab of reverter. He will automatically own the premises if the land is \tab \tab \tab \tab no longer used for church purposes.
\par
\par \tab \tab 3. A }{\b\fs24 right of entry}{\fs24 for condition broken (or power of\tab \tab \tab \tab \tab termination) is the interest following a fee simple upon a
\par \tab \tab condition subsequent (FSSCS). The grantor must take \tab \tab \tab \tab \tab affirmative action to regain the land upon the occurrence of \tab \tab
\par \tab \tab some event.
\par \tab \tab
\par \tab \tab EX: O, who owns Blackacre in fee simple absolute, conveys "to the First \tab \tab \tab Baptist Church upon condition that church services be conducted thereon \tab \tab \tab weekly, and if such servi
ces cease to be held, O or his heirs may re-enter \tab \tab \tab the premises."
\par \tab \tab
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : There is a crucial difference between a possibility of reverter \tab \tab \tab (FSD) and a right of entry (an FSCS). The FSD automatically
\par \tab \tab terminates upon failure to comply with the condition and the
\par \tab \tab land automatically reverts to the grant. But in an FSCS, the
\par \tab \tab grantor must take affirmative action, such as asserting his
\par \tab \tab right of entry, before he can regain the land upon the occurrence
\par \tab \tab of some event.
\par
\par \tab \tab 4. From the explanations above of the three different future
\par \tab \tab interests retained by the grantor, it is easy to see that
\par \tab \tab possessory estates have correlative future interests in the
\par \tab \tab grantor:
\par \tab
\par
\par \tab \tab \tab a. A life estate--}{\b\fs24 reversion}{\fs24
\par \tab \tab
\par \tab \tab \tab b. Fee simple determinable--}{\b\fs24 possibility of reverter}{\fs24
\par \tab \tab
\par \tab \tab \tab c. Fee simple on condition subsequent--}{\b\fs24 right of entry}{\fs24 .
\par
\par \tab C. The two future interests created in a grantee must either be an }{\b\fs24 executory \tab interest}{\fs24 or a }{\b\fs24 remainder.}{\fs24
\par
\par \tab \tab 1. Generally speaking, an }{\b\fs24 executory interest}{\fs24 is a future interest
\par \tab \tab in a grantee that, in order to become possessory, }{\b\fs24 must divest}{\fs24
\par \tab \tab or cut short the prior estate, }{\fs24\ul OR}{\fs24 }{\b\fs24 spring out}{\fs24 of the grantor at
\par \tab \tab a future date. The basic difference between a remainder and
\par \tab \tab an executory interest is that a }{\b\fs24 remainder never divests}{\fs24 (or cuts short) the
\par \tab \tab prior estate, whereas an executory interest almost }{\b\fs24 always does.
\par }{\fs24
\par \tab \tab Executory interests were authorized by the }{\b\fs24 Statute of Uses}{\fs24 in
\par \tab \tab 1536, the purpose of which was to abolish uses, turning them
\par \tab \tab into legal estates that would be subject to all the usual feudal
\par \tab \tab incidents upon death of the legal owner. With the passage of the
\par \tab \tab Statute, springing and shifting interests became possible at
\par \tab \tab law, and they became known as executory interests.
\par
\par \tab \tab EX: }{\b\fs24 Springing executory interest}{\fs24 . O grants Blackacre "to A for life,
\par \tab \tab and one year after A's death, to C and his heirs." A springing
\par \tab \tab interest is created in C. Since C's interest is created }{\i\fs24 in futuro}{\fs24 and
\par \tab \tab there is a gap of one year in seisin, it would have been void
\par \tab \tab in old English common law, but under the Statute of Uses, it
\par \tab \tab is valid. On A's death, the estate reverts to the grantor O for
\par \tab \tab one year, then springs out to C.
\par
\par \tab \tab EX: }{\b\fs24 Shifting executory interest}{\fs24 . O grants Blackacre "to A and \tab \tab \tab \tab his heirs, but if A dies without having had children, then to C \tab \tab \tab \tab
and his heirs." A retains the fee simple while an executory shifting interest \tab \tab is created in C. In old English common law, this interest would have been \tab \tab \tab void as a fee on a fee, but under the Statue of Uses, th
e interest shifts to C.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Watch for violations of Rule Against Perpetuities in these \tab \tab \tab \tab sorts of conveyances.
\par \tab \tab
\par \tab \tab 2. A }{\b\fs24 remainder}{\fs24 is a future interest created in a }{\b\fs24 grantee}{\fs24 that is
\par \tab \tab }{\b\fs24 capable of becoming a present possessory estate upon the
\par \tab \tab expiration of a prior possessory estate }{\fs24 created in the same
\par \tab \tab conveyance in which the remainder is created. It is called a
\par \tab \tab "remainder" because upon the expiration of the preceding
\par \tab \tab estate the land "remains away" instead of reverting to the
\par \tab \tab grantor. Unlike an executory interest, a remainder never divests \tab \tab \tab \tab or cuts short the preceding estate but always }{\b\fs24 waits patiently}{\fs24 until \tab \tab \tab \tab
the preceding estate expires. Remainders are classified either as \tab \tab \tab \tab }{\b\fs24 vested}{\fs24 or }{\b\fs24 contingent}{\fs24 .
\par
\par \tab \tab EX: O conveys Blackacre "to A for life, then to B if B is then
\par \tab \tab living." B has a remainder because B's interest is capable of
\par \tab \tab becoming possessory upon the termination of the life estate.
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith points out an important difference between vested
\par \tab \tab and contingent remainders in regard to alienating land. }{\b\fs24 A vested
\par \tab \tab remainder can sell his property, and a value can be put on that
\par \tab \tab property. With a contingent remainder, the title is clouded, and
\par \tab \tab the value of the property is much less certain}{\fs24 than that of a
\par \tab \tab vested remainder. Investors obviously prefer to buy vested \tab \tab \tab \tab \tab interests.
\par
\par \tab \tab \tab a. A }{\b\fs24 vested remainder}{\fs24 is a remainder that is both }{\b\fs24 created \tab \tab \tab \tab \tab in an ascertained person}{\fs24 }{\fs24\ul and}{\fs24 }{\b\fs24 is not subject to any \tab \tab \tab \tab \tab
condition precedent.
\par
\par \tab \tab \tab }{\fs24 EX: O conveys "to A for life, then to B in fee simple." B
\par \tab \tab \tab (an ascertained person) has a remainder not subject to
\par \tab \tab \tab a condition precedent. The word "then" following a life
\par \tab \tab \tab estate is a word of art meaning "on the expiration of the
\par \tab \tab \tab life estate." Whenever or however the life estate
\par \tab \tab \tab terminates, B (or her representative) will be entitled to
\par \tab \tab \tab possession. B's remainder is vested.
\par
\par \tab \tab \tab There are }{\b\fs24 three types of vested remainders}{\fs24 :
\par
\par \tab \tab \tab \tab (1) An }{\b\fs24 indefeasibly (or absolutely) vested remainder}{\fs24 \tab \tab \tab \tab \tab is when the holder of the remainder is }{\b\fs24 certain to \tab \tab \tab \tab \tab \tab acquire}{\fs24
a possessory estate at some time in the \tab \tab \tab \tab \tab \tab future, and is also certain to be entitled to }{\b\fs24 retain \tab \tab \tab \tab \tab \tab permanently}{\fs24 thereafter the possessory estate so \tab \tab \tab \tab \tab \tab
acquired.
\par
\par \tab \tab \tab \tab EX: If O devises Blackacre "to A for life, then to
\par \tab \tab \tab \tab B and her heirs." B (or her representative) is
\par \tab \tab \tab \tab certain to take possession on A's death. If B dies
\par \tab \tab \tab \tab before A, B's heirs or devisees are entitled to
\par \tab \tab \tab \tab possession when A finally dies. Thus, B's remainder is \tab \tab \tab \tab \tab indefeasibly vested. (If B dies intestate and without heir \tab \tab \tab \tab \tab during A's life, B's remainder escheats to the state. At A's
\par \tab \tab \tab \tab death, the state takes the property. The reason that
\par \tab \tab \tab \tab the state, instead of O, takes the property upon the
\par \tab \tab \tab \tab death of A and B in this parenthetical example is
\par \tab \tab \tab \tab that the state will wait for an heir of B to materialize, no \tab \tab \tab \tab \tab matter how distant that heir is, and then give that heir the \tab \tab \tab \tab \tab property).
\par
\par \tab \tab \tab \tab (2) A }{\b\fs24 vested remainder subject to open}{\fs24 is when a
\par \tab \tab \tab \tab remainder is subject to open, it is vested in a }{\b\fs24 class
\par \tab \tab \tab \tab of persons}{\fs24 , at least one of whom is qualified to take
\par \tab \tab \tab \tab possession, but the shares of the class members
\par \tab \tab \tab \tab are not yet fixed because more persons can
\par \tab \tab \tab \tab subsequently become members of the class.
\par \tab \tab
\par \tab \tab \tab \tab EX: O conveys "to A for life, then to A's children."
\par \tab \tab \tab \tab If A has no children, the remainder is contingent,
\par \tab \tab \tab \tab because no person qualifies (or can be ascertained)
\par \tab \tab \tab \tab as a child. If A has a child, B, the remainder is
\par \tab \tab \tab \tab vested in B subject to "open up" and let in other
\par \tab \tab \tab \tab children. B's remainder is sometimes called "}{\b\fs24 vested
\par \tab \tab \tab \tab subject to partial divestment}{\fs24 ." (Once the remainder
\par \tab \tab \tab \tab has vested in B, the interests of the unborn children
\par \tab \tab \tab \tab are called executory interests because they may
\par \tab \tab \tab \tab partially divest B.)
\par
\par \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : In a vested remainder subject to open, }{\b\fs24 the
\par \tab \tab \tab \tab class closes when the life estate terminates.}{\fs24 Thus, in
\par \tab \tab \tab \tab the above example, the class would close upon A's
\par \tab \tab \tab \tab death and only those children already born could
\par \tab \tab \tab \tab receive their interest.
\par
\par \tab \tab \tab \tab Smith explains, however, that }{\b\fs24 a trust can keep a class
\par \tab \tab \tab \tab gift from closing upon the death of a life tenant}{\fs24 .
\par \tab \tab \tab \tab \ldblquote In trust, to the benefit of A for life, then to the benefit
\par \tab \tab \tab \tab of any child of B\rdblquote is a way to keep the class open to
\par \tab \tab \tab \tab B\rquote s children after A dies.
\par
\par \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : A vested remainder subject to open }{\b\fs24 is the
\par \tab \tab \tab \tab only vested remainder that might be subject to
\par \tab \tab \tab \tab RAP. }{\fs24 One must look at the class gift to see if it
\par \tab \tab \tab \tab violates RAP.
\par
\par \tab \tab \tab \tab (3) A }{\b\fs24 vested remainder subject to total divestment}{\fs24
\par \tab \tab \tab \tab is when a remainder is either subject to being
\par \tab \tab \tab \tab totally divested by the operation of a }{\b\fs24 condition \tab \tab \tab \tab \tab \tab subsequent}{\fs24 or vested subject to divestment by an \tab \tab \tab \tab \tab \tab }{\b\fs24 inherent limitation}{\fs24
of the estate in remainder.
\par
\par \tab \tab \tab \tab EX: }{\b\fs24 condition subsequent}{\fs24 . O conveys "to A for life,
\par \tab \tab \tab \tab then to B, but if B does not survive A, to C." The
\par \tab \tab \tab \tab vested remainder in B is subject to total divestment
\par \tab \tab \tab \tab upon the occurrence of a }{\b\fs24 condition subsequent}{\fs24 (B
\par \tab \tab \tab \tab dying, leaving A surviving). C's executory interest
\par \tab \tab \tab \tab will divest B if the condition subsequent happens.
\par
\par \tab \tab \tab \tab EX: }{\b\fs24 inherent limitation}{\fs24 . O conveys "to A for life,
\par \tab \tab \tab \tab then to B for life, then to C and his heirs." B has a
\par \tab \tab \tab \tab vested remainder for life subject to total divestment
\par \tab \tab \tab \tab if B fails to survive A. The divestment occurs
\par \tab \tab \tab \tab because of the }{\b\fs24 inherent limitation }{\fs24 in a remainder
\par \tab \tab \tab \tab for life: It fails if it does not become possessory
\par \tab \tab \tab \tab within the life tenant's life. C has an indefeasibly
\par \tab \tab \tab \tab (or absolutely) vested remainder in fee simple.
\par
\par \tab \tab \tab b. A }{\b\fs24 contingent remainder}{\fs24 is if it is either limited to an
\par \tab \tab \tab }{\b\fs24 unascertained person}{\fs24 }{\fs24\ul or}{\fs24 subject to a }{\b\fs24 condition precedent}{\fs24 .}{\b\fs24
\par \tab \tab \tab }{\fs24 The difference between a vested and contingent
\par \tab \tab \tab remainder is not whether the remainder is certain to
\par \tab \tab \tab become possessory, but whether the remainder is limited
\par \tab \tab \tab to an unascertained person }{\fs24\ul or}{\fs24 is subject to a condition}{\b\fs24
\par \tab \tab \tab }{\fs24 precedent.
\par
\par \tab \tab \tab EX: }{\b\fs24 unascertained person}{\fs24 . O devises Blackacre "to my
\par \tab \tab \tab daughter Mary for life, then to the children of Mary" at
\par \tab \tab \tab a time when Mary is childless. Since Mary is childless,
\par \tab \tab \tab the remainder is contingent because the takers (the
\par \tab \tab \tab children) are not ascertained at the time of the
\par \tab \tab \tab conveyance. If a child is born, the remainder vests in that
\par \tab \tab \tab child subject to open and lets in other children born later.
\par \tab
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : A remainder in an "unascertained" person means
\par \tab \tab \tab the person is }{\b\fs24 not yet born}{\fs24 or }{\b\fs24 cannot be determined}{\fs24 until
\par \tab \tab \tab the happening of an event. Such a remainder is, of course,
\par \tab \tab \tab contingent.
\par
\par \tab \tab \tab EX: }{\b\fs24 subject to condition precedent. }{\fs24 O devises "to my
\par \tab \tab \tab widow for life, and then to my daughter Cecilia and her
\par \tab \tab \tab heirs if she survives my widow." In this case, a condition
\par \tab \tab \tab precedent must be met--Cecilia must survive the widow--}{\b\fs24
\par \tab \tab \tab }{\fs24 before she can be entitled to the property.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : A condition precedent is an }{\b\fs24 express condition}{\fs24 set
\par \tab \tab \tab forth in the instrument (other than the termination of
\par \tab \tab \tab the preceding estate), which must occur before the
\par \tab \tab \tab remainder becomes possessory.
\par
\par \tab \tab \tab EX: }{\b\fs24 alternative contingent remainders}{\fs24 . O devises "to J
\par \tab \tab \tab for life, then to J's children. If J has no children, then to
\par \tab \tab \tab cousin Vinny. If Vinny does not survive J, then to
\par \tab \tab \tab Vinny's children." Vinny and his children are alternative
\par \tab \tab \tab contingent remainders, since they stand to attain the
\par \tab \tab \tab estate should J have no children.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith says alternative contingent remainders
\par \tab \tab \tab are very common.
\par \tab
\par \tab }{\fs24\ul NOTE}{\fs24 : Smith points out an important difference between vested
\par \tab and contingent remainders in regard to alienating land. }{\b\fs24 A vested
\par \tab remainder can sell his property, and a value can be put on that
\par \tab property. With a contingent remainder, the title is clouded, and
\par \tab the value of the property is much less certain}{\fs24 than that of a
\par \tab vested remainder. Investors obviously prefer to buy vested interests.
\par
\par }{\b\fs24 \tab }{\fs24 D. Sometimes }{\b\fs24 it is difficult to distinguish between a vested remainder}{\fs24
\par \tab subject to total divestment (i.e. }{\b\fs24 subject to a condition subsequent}{\fs24 ) and
\par \tab a }{\b\fs24 remainder subject to a condition precedent}{\fs24 . Whether a condition is
\par \tab precedent or subsequent depends upon the words of the instrument.
\par \tab The words must be read }{\b\fs24 in sequence}{\fs24 and the interests classified }{\b\fs24 in
\par \tab sequence}{\fs24 . Whether a remainder is vested or contingent depends on the
\par \tab language employed. If the conditional element is incorporated into the
\par \tab description of, or into the gift to the person taking the remainder, then
\par \tab the remainder is contingent; but if, }{\b\fs24 after words giving a vested interest,
\par \tab a clause is added divesting it}{\fs24 , the remainder is vested. As explained
\par \tab above under FSSCS in defeasible estates, there are certain words--"}{\b\fs24 But if}{\fs24 ," \tab "}{\b\fs24 Provided that}{\fs24 ," "}{\b\fs24 On condition that}{\fs24 "--that establish a condition subsequent \tab
(a vested remainder subject to total divestment). Just the word \ldblquote if\rdblquote always
\par \tab refers to a condition precedent (a contingent remainder).
\par
\par \tab Thus, where \ldblquote A devises to B for life, then, if C (a bachelor) marries before
\par \tab B dies, to C and his heirs on B\rquote s death,\rdblquote C\rquote s remainder is contingent (because
\par \tab \ldblquote if\rdblquote is used). But if A devises \ldblquote to B for life, then C (a bachelor) and his heirs
\par \tab but if C does not marry before B dies then to D and his heirs,\rdblquote C has
\par \tab a remainder subject to total divestment (because \ldblquote but if\rdblquote is used).
\par \tab Note how in this example the difference between the two types of interests
\par \tab is principally one of form, since C will not take in either case unless he marries
\par \tab during B\rquote s lifetime, yet the distinctions is usually adhered to by the courts.
\par
\par \tab EX: }{\b\fs24 condition precedent (or contingent remainder)}{\fs24 . O conveys "to A
\par \tab for life, then to B and his heirs if B survives A." It is reasonably clear
\par \tab that the contingency--the survival of B--is a }{\b\fs24 condition precedent}{\fs24 to B
\par \tab receiving an interest in Blackacre. Thus, this is a contingent remainder.
\par
\par \tab EX: }{\b\fs24 condition subsequent (or vested remainder subject to total
\par \tab divestment).}{\fs24 If O conveys "to A for life, then to B and his heirs, but if
\par \tab B ever smokes pot, O has a right to reclaim the land." It is reasonably
\par \tab clear that the condition--not smoking pot--is intended to operate as a
\par \tab condition subsequent. Thus, this is a vested remainder subject to
\par \tab total divestment.
\par \tab \tab
\par \tab }{\fs24\ul NOTE}{\fs24 : If the }{\b\fs24 language is so ambiguous}{\fs24 that the interest cannot be
\par \tab determined, the law favors a }{\b\fs24 vested interest over a contingent one}{\fs24 . The reason \tab \tab for this, as mentioned below, is alienability.\tab
\par
\par \tab }{\fs24\ul NOTE}{\fs24 : Smith says that the most common condition is one of survivorship--
\par \tab \ldblquote A for life, then to B upon A\rquote s death\rdblquote --which almost always is a condition
\par \tab precedent. The next most common condition precedent is reaching an age:
\par \tab \ldblquote To A for life, then to B\rquote s first child that reaches 21.\rdblquote
\par
\par \tab E.}{\b\fs24 There are four rules restricting remainders}{\fs24 , briefly discussed below and
\par \tab then at much greater length afterwards}{\b\fs24 :
\par
\par \tab \tab }{\fs24 a.}{\b\fs24 Destructibility of Contingent Remainders: }{\fs24 This rule applies only to
\par \tab \tab }{\b\fs24 legal contingent remainders }{\fs24 in }{\b\fs24 land.}{\fs24 It does not apply to equitable
\par \tab \tab interests, to interests in trust,nor to personal property. }{\b\fs24 It is a rule of
\par \tab \tab law, }{\fs24 not a rule designed to carry out the grantor\rquote s intent. }{\b\fs24
\par
\par \tab \tab }{\fs24 b. }{\b\fs24 Destructability by Merger:}{\fs24 This rule applies only to
\par \tab \tab }{\b\fs24 legal contingent remainders }{\fs24 in }{\b\fs24 land.}{\fs24 It does not apply to equitable
\par \tab \tab interests, to interests in trust,nor to personal property. }{\b\fs24 It is a rule of
\par \tab \tab law, }{\fs24 not a rule designed to carry out the grantor\rquote s intent. The
\par \tab \tab discussion of this rule is incorporated under Destructibility of Contingent
\par \tab \tab Remainders.
\par
\par \tab \tab c. }{\b\fs24 Shelley\rquote s Rule}{\fs24 : This rule applies to }{\b\fs24 legal and equitable remainders
\par \tab \tab in land.}{\fs24 It does not apply to personal property. It is a }{\b\fs24 rule of law,}{\fs24 not
\par \tab \tab a rule designed to carry out the grantor\rquote s intent.
\par
\par \tab \tab d. }{\b\fs24 Doctrine of Worthier Title: }{\fs24 This Doctrine applies to }{\b\fs24 legal and
\par \tab \tab equitable remainders and executory interests in real or personal
\par \tab \tab property.}{\fs24 It is a }{\b\fs24 rule of construction }{\fs24 designed to carry out the
\par \tab \tab grantor\rquote s intent, and can be overcome by contrary evidence of intent.\tab
\par
\par }{\b\fs24 \tab }{\fs24 F. }{\b\fs24 Destructibility of Contingent Remainders: }{\fs24 A contingent remainder in \tab \tab }{\b\fs24 land}{\fs24 is }{\b\fs24 destroyed if it does not vest prior to or at the time of the \tab \tab \tab
termination of the preceding possessory estate.}{\fs24 If the preceding freehold \tab terminates before the \tab remainder vests, the remainder is struck down and can \tab \tab never take effect. }{\b\fs24
The destructibility rule only applies to contingent \tab remainders}{\fs24 , not vested remainders, executory interests, personal (as opposed to \tab real) property, or interests in trust (i.e. equitable estates).
\par
\par \tab EX: O conveys Blackacre "to A for life, remainder to A's children who
\par \tab reach age 21." At A's death, his children are all under age 21. The
\par \tab remainder is destroyed. Blackacre reverts to the reversioner, O, who \tab
\par \tab owns it in fee simple absolute.
\par
\par \tab Smith explains that the way to get around this problem is to create a trust.
\par \tab \ldblquote In trust to A for life, then in trust to any child of A who reaches 21.\rdblquote }{\b\fs24 A
\par \tab trust allows one to circumvent the desctructability rule}{\fs24 .
\par
\par \tab \tab 1. A "preceding freehold" refers fee tail or life estates, both of
\par \tab \tab which have seisin. Since fee tails are largely obsolete, we will
\par \tab \tab only discuss life estates below. }{\b\fs24 The destructibility rule does not \tab \tab \tab \tab apply if the preceding estate is a leasehold}{\fs24 , because the termor \tab \tab \tab \tab does not have seisin.
\par \tab \tab
\par \tab \tab 2. The life estate or fee tail can terminate either upon the death
\par \tab \tab of the life tenant }{\b\fs24 or before the life tenant's death}{\fs24 . It is this latter
\par \tab \tab proposition that makes the rule more difficult than it appears.
\par
\par \tab \tab \tab a. A contingent remainder that does not vest upon the
\par \tab \tab \tab }{\b\fs24 natural}{\fs24 termination of the life estate (i.e. at the life \tab \tab \tab \tab \tab \tab tenant's death) is destroyed.
\par
\par \tab \tab \tab EX: O conveys "to A for life, remainder to the heirs of B."
\par \tab \tab \tab B is alive. This conveyance creates a life estate in A,
\par \tab \tab \tab contingent remainder in the heirs of B, reversion in
\par \tab \tab \tab O. Subsequently A dies, survived by B. At A's death, B
\par \tab \tab \tab has no heirs, because }{\b\fs24 no one can be an heir of the living}{\fs24 .
\par \tab \tab \tab The contingent remainder in the heirs of B is destroyed,
\par \tab \tab \tab and O owns the land.
\par
\par \tab \tab \tab b. A contingent remainder that does not vest upon the
\par \tab \tab \tab }{\b\fs24 artificial termination}{\fs24 of the life estate is destroyed. \tab \tab \tab \tab \tab This "artificial termination" can be due to forfeiture or
\par \tab \tab \tab due to the }{\b\fs24 Doctrine of Destructibility by Merger}{\fs24 :
\par
\par \tab \tab \tab \tab (1) Under the }{\b\fs24 Doctrine of Destructibility by
\par \tab \tab \tab \tab Merger}{\fs24 ,}{\b\fs24 }{\fs24 a life estate in A and a remainder in
\par \tab \tab \tab \tab A will merge unless:
\par \tab \tab \tab \tab
\par \tab \tab \tab \tab \tab (a) There is an intervening estate (must be vested); \tab \tab \tab \tab \tab \tab }{\fs24\ul OR
\par }{\fs24
\par \tab \tab \tab \tab \tab (b) The remainder in A is subject to a
\par \tab \tab \tab \tab \tab condition precedent to which his life estate
\par \tab \tab \tab \tab \tab is not subject.
\par
\par \tab \tab \tab \tab The lesser estate (life estate) is merged into the larger (fee\tab \tab \tab \tab \tab simple) and ceases to exist as a separate estate. Thus, a life
\par \tab \tab \tab \tab tenant and reversioner can conspire to destroy
\par \tab \tab \tab \tab contingent remainders. This is called the }{\b\fs24 Doctrine
\par \tab \tab \tab \tab of Destructibility by Merger}{\fs24 or simply the Doctrine
\par \tab \tab \tab \tab of Destructibility -- this allows you to clear up messy land \tab \tab \tab \tab \tab titles.
\par
\par \tab \tab \tab \tab EX: O conveys "to A for life, remainder to B if B
\par \tab \tab \tab \tab survives A." While B is alive, A conveys her life
\par \tab \tab \tab \tab estate to O. The life estate merges into the
\par \tab \tab \tab \tab reversion, and B's contingent remainder is
\par \tab \tab \tab \tab destroyed. O has a fee simple absolute.
\par
\par \tab \tab \tab \tab EX: O, who owns Blackacre in FSA, conveys
\par \tab \tab \tab \tab Blackacre \ldblquote to B for life, then to C for life, remainder
\par \tab \tab \tab \tab to V and his heirs.\rdblquote V conveys his interest to B.
\par \tab \tab \tab \tab B\rquote s present and future estates }{\b\fs24 do not merge}{\fs24 . The
\par \tab \tab \tab \tab Doctrine of Merger only applies where one has a
\par \tab \tab \tab \tab present possessory estate and a vested future interest
\par \tab \tab \tab \tab in }{\b\fs24 succession.}{\fs24 Here, a vested future interest in someone
\par \tab \tab \tab \tab else -- a life estate in C -- intervenes.
\par
\par \tab \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : This Doctrine of Destructibility by Merger
\par \tab \tab \tab \tab has been overturned in the large majority of
\par \tab \tab \tab \tab states by statute or by judicial decision (as it
\par \tab \tab \tab \tab was by the New Mexico Supreme Court in
\par \tab \tab \tab \tab }{\fs24\ul Abo Petroleum Corp. v. Amstutz}{\fs24 )
\par
\par \tab G. There are}{\b\fs24 two other peculiar rules }{\fs24 that apply }{\b\fs24 to remainders}{\fs24 : the }{\b\fs24 Rule in \tab Shelley's Case}{\fs24 and the}{\b\fs24 Doctrine of Worthier Title
\par
\par \tab \tab }{\fs24 1. The }{\b\fs24 Rule in Shelley's Case}{\fs24 , one of the great traps of common
\par \tab \tab law conveyencing, goes as follows:
\par \tab \tab \tab
\par \tab \tab \tab (a) one instrument
\par
\par \tab \tab \tab (b) creates a freehold in land in A,
\par
\par \tab \tab \tab (c) purports to create a remainder in A's heirs (or the heirs of A's \tab \tab \tab \tab body), }{\fs24\ul AND
\par }{\fs24
\par \tab \tab \tab (d) the estates are both legal or both equitable, then the remainder
\par \tab \tab \tab becomes a remainder in fee simple (or fee tail) in A.
\par
\par \tab \tab EX: }{\b\fs24 remainder to A's heirs}{\fs24 . O conveys "to A for life, then to
\par \tab \tab A's heirs." The Rule in Shelley's Case converts the remainder
\par \tab \tab limited to A's heirs into a remainder in fee simple in A.
\par \tab \tab Then }{\b\fs24 Doctrine of Destructibility by Merger}{\fs24 steps in, and A's life
\par \tab \tab estate and vested remainder merge, giving A a fee simple in
\par \tab \tab possession.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Modern law treats interest in A\rquote s heirs here like a fee \tab \tab \tab \tab simple absolute.
\par
\par \tab \tab EX: }{\b\fs24 remainder to heirs of A's body}{\fs24 . O conveys "to A for life, then
\par \tab \tab to the heirs of A's body." The Rule in Shelley's Case converts
\par \tab \tab the remainder limited to "the heirs of A's body" into a
\par \tab \tab remainder in fee tail in A. The fee tail is then changed into
\par \tab \tab whatever estate is substituted for a fee tail under state law,
\par \tab \tab probably a fee simple. Then the remainder in A merges with A's
\par \tab \tab life estate.
\par
\par \tab \tab EX: O to "A for life, then to B for life, then to the heirs of B." The
\par \tab \tab rule here operates to change the contingent remainder in fee
\par \tab \tab simple in B's heirs to a vested remainder in B. Because B would
\par \tab \tab then have both the life estate and the remainder in fee, the
\par \tab \tab Doctrine of Destructibility by Merger causes coalescence so that
\par \tab \tab B would have a present estate in fee simple.
\par \tab \tab
\par \tab \tab O to "A for life, then to B for life, then to the heirs of A." Under
\par \tab \tab Shelley's Rule, A becomes the remainder in fee simple; \tab \tab \tab \tab \tab however, there is no merger because of intervening vested \tab \tab \tab \tab \tab remainder in B.
\par \tab \tab
\par \tab \tab O to "A for life then one day after A's death to the heirs of A."
\par \tab \tab The Rule doesn't apply here because A's heir's interest is not
\par \tab \tab a remainder but a springing executory interest (since a day passes before
\par \tab \tab he can obtain the property).
\par \tab \tab
\par \tab \tab O to "A for life, then to A's issue." The Rule does not apply here
\par \tab \tab because the Rule requires the use of technical words of \tab \tab \tab \tab \tab inheritance, "heirs" or "heirs of the body."
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : The doctrine of merger is an entirely
\par \tab \tab separate doctrine from the Rule in Shelley's Case. The doctrine
\par \tab \tab of merger is that a life estate in A and a remainder in A will
\par \tab \tab merge unless (i) there is an intervening estate }{\fs24\ul or}{\fs24 (ii) the
\par \tab \tab remainder in A is subject to a condition precedent to which his
\par \tab \tab life estate is not subject. The doctrine of merger may or may not
\par \tab \tab apply after the Rule in Shelley's Case has applied.
\par
\par \tab \tab In order to better understand the Rule in Shelley's Case, it is
\par \tab \tab necessary to briefly explain each of its four elements:
\par
\par \tab \tab \tab a. "If one instrument creates a freehold estate in A":
\par \tab \tab \tab All American cases applying the Rule have involved
\par \tab \tab \tab a }{\b\fs24 life estate}{\fs24 . The life estate can be measured by A's life
\par \tab \tab \tab or it can be a life estate }{\i\fs24 por autre vie}{\fs24 (measured by another \tab \tab \tab \tab \tab person's life).
\par
\par \tab \tab \tab b. "And purports to create a remainder": The Rule applies
\par \tab \tab \tab to a remainder to the heirs of A, the life tenant, even
\par \tab \tab \tab though there is an intervening estate between the life
\par \tab \tab \tab estate and remainder. For example, the Rule applies to a
\par \tab \tab \tab conveyance "to A for life, then to B for life, then to A's
\par \tab \tab \tab heirs." A has a remainder in fee simple by the operation
\par \tab \tab \tab of the Rule. A's remainder does not, however, merge
\par \tab \tab \tab with his life estate: B's intervening remainder for life
\par \tab \tab \tab prevents merger (this is covered in one of the examples
\par \tab \tab \tab immediately above).
\par
\par \tab \tab \tab c. "In A's heirs (or the heirs of A's body)": The remainder
\par \tab \tab \tab must be given to A's heirs or heirs of the body.
\par
\par \tab \tab \tab d. "And the estates are both legal or both equitable": The
\par \tab \tab \tab life estate and remainder must be either both legal or
\par \tab \tab \tab both equitable. If one is legal and the other is equitable,
\par \tab \tab \tab Shelley's Rule does not apply.
\par
\par \tab \tab \tab EX: O conveys Blackacre "to X in trust for the life of A to
\par \tab \tab \tab pay A the income and profits, remainder to the heirs of
\par \tab \tab \tab A." X has a legal life estate pur autre vie. A has an
\par \tab \tab \tab equitable life estate and A's heirs have a legal remainder
\par \tab \tab \tab in fee simple. Since A's life estate is equitable and the
\par \tab \tab \tab remainder to A's heirs is legal, Shelley's Rule does not
\par \tab \tab \tab apply.
\par
\par \tab \tab 2. The }{\b\fs24 Doctrine of Worthier Title}{\fs24 (applies to grantor\rquote s heirs as opposed \tab \tab \tab to grantee\rquote s heirs, like in Shelley\rquote s Rule) holds that a grantor cannot
\par \tab \tab create a remainder in his own heirs if the heirs would have taken
\par \tab \tab the same estate by descent.
\par
\par \tab \tab EX: If O conveys Blackacre "to A for life, remainder to O's heirs," O has
\par \tab \tab a reversion following A's life estate, and O's heirs have nothing.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : If O gives the rest of his property to the Texas Law School \tab \tab \tab Foundation, then TLSF gets Blackacre.
\par
\par \tab \tab The Doctrine changes the remainder in the grantor's heirs to a \tab \tab \tab \tab reversion in the grantor. The original reason for the Doctrine
\par \tab \tab of Worthier Title is probably the same as for Shelley's Rule.
\par \tab \tab Feudal instances were paid upon descent of land. In the above
\par \tab \tab example, feudal dues would have to be paid upon O's death if
\par \tab \tab he had a reversion passing to his heirs, but not if his heirs
\par \tab \tab took by way of a remainder created during O's life (such as A).
\par \tab \tab Hence the Doctrine prevented O from depriving his lord of
\par \tab \tab feudal dues by an inter vivos conveyance of this kind.
\par \tab \tab
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith thinks that the Doctrine of Worthier Title is intent-\tab \tab \tab \tab defeating, and that it leaves property very taxable (this is why it\rquote s such a \tab \tab \tab bad idea, he says).
\par \tab
\par \tab H. }{\b\fs24 Rule Against Perpetuities (RAP)}{\fs24
\par
\par \tab \tab 1. The classic formulation of the Rule Against Perpetuities (RAP): \tab \tab \tab \tab }{\b\fs24 No interest is good unless it must vest, if it ever vests, not later than 21 \tab \tab
years after some life in being at the creation of the interest. }{\fs24 Smith and \tab \tab \tab others simply refer to the formula of the Rule as }{\b\fs24 "Lives in being + 21 \tab \tab \tab years." }{\fs24
\par
\par \tab \tab 2. RAP applies to }{\b\fs24 contingent remainders}{\fs24 and }{\b\fs24 executory interests}{\fs24 . \tab \tab \tab It does }{\b\fs24 not}{\fs24 apply to vested remainders nor to future interests in \tab \tab \tab \tab
the grantor (reversion, possibility of reverter, and right of entry), \tab \tab \tab \tab which are treated as vested upon creation. The exception to this
\par \tab \tab is the class gift (see below). As with the Doctrine of Destructibility by \tab \tab \tab Merger, Shelley's Rule, and the Doctrine of Worthier Title, one of the \tab \tab \tab purposes of the Rule Against Perpetuities is to curtail contingent
\tab \tab \tab \tab remainders.
\par \tab
\par \tab \tab EX: O conveys "to A for life, then to A's children for their lives,
\par \tab \tab then to B and his heirs." A has no children. The conveyance is
\par \tab \tab entirely valid, and not subject to RAP. The remainder for life
\par \tab \tab given to A's children will vest, if at all, at A's death. The
\par \tab \tab remainder in fee simple in B is a vested remainder when
\par \tab \tab created (the language "and his heirs" creates an FSA).
\par
\par \tab \tab \tab a. }{\b\fs24 The class gift is the one major exception}{\fs24 to applying the
\par \tab \tab \tab learning about vested and contingent remainders under
\par \tab \tab \tab RAP. A gift to a class is not vested }{\b\fs24 in any member of the
\par \tab \tab \tab class until the interests of all members are vested}{\fs24 . Or to
\par \tab \tab \tab put it differently, A class gift is not vested under RAP
\par \tab \tab \tab until the }{\b\fs24 class has closed}{\fs24 and }{\b\fs24 all conditions precedent
\par \tab \tab \tab have been satisfied}{\fs24 for every member of the class. If the
\par \tab \tab \tab gift to }{\b\fs24 one member}{\fs24 of the class might vest too remotely,
\par \tab \tab \tab the }{\b\fs24 whole class gift is void}{\fs24 . This is known as the }{\b\fs24 "all-
\par \tab \tab \tab or-nothing rule."}{\fs24
\par
\par \tab \tab \tab EX: In 1991, O conveys "to A for life, then to A's children
\par \tab \tab \tab for life, then to A's grandchildren in fee simple." A is
\par \tab \tab \tab the measuring life. The gift to A's children will vest, if at \tab \tab \tab \tab \tab all, at A's death. The only problem is with the remainder \tab \tab \tab \tab \tab to A's grandchildren. If A has a grandchild (B) alive at the \tab
\tab \tab \tab \tab time of the conveyance, the remainder is vested in B \tab \tab \tab \tab \tab subject to open, }{\b\fs24 but it is not vested under RAP}{\fs24 . The \tab \tab \tab \tab \tab remainder is a class gift and will not vest until all takers
\tab \tab \tab \tab \tab are identified. They will not necessarily be identified until \tab \tab \tab \tab \tab the death of all A's children, and all A's children are not \tab \tab \tab \tab \tab
necessarily in being. RAP would void the class gift in this \tab \tab \tab \tab \tab case.
\par \tab \tab \tab
\par \tab \tab 3. RAP is directed at the creation of }{\b\fs24 contingent interests}{\fs24 }{\b\fs24
\par \tab \tab }{\fs24 that }{\b\fs24 might vest}{\fs24 in the distant future (the distant future being
\par \tab \tab defined as more than 21 years after the expiration of the
\par \tab \tab relevant lives in being at the creation of the interest). If there is
\par \tab \tab }{\b\fs24 any possibility}{\fs24 that a contingent interest will vest too remotely,
\par \tab \tab the contingent interest is }{\b\fs24 void}{\fs24 from the outset. The thing to
\par \tab \tab look for is the possibility of remote vesting. Courts do not wait
\par \tab \tab to see what happens, but look at the interest at the time of
\par \tab \tab creation and determine then if the interest will necessarily
\par \tab \tab }{\b\fs24 vest or fail}{\fs24 within the perpetuities period set by the Rule. If
\par \tab \tab it will not necessarily vest or fail within the period--if there is
\par \tab \tab any possibility that it may vest beyond the period--it is void.
\par \tab \tab As Smith points out, "the difficulty comes, of course, in
\par \tab \tab attempting to apply the Rule to specific fact situations." Below
\par \tab \tab are a list of situations involving RAP:
\par
\par \tab \tab EX: Suppose that T bequeaths property "to A and his heirs; but if
\par \tab \tab liquor should ever be consumed on the premises, then over to
\par \tab \tab B and his heirs." Here, there is the attempted creation of a fee
\par \tab \tab simple subject to a condition, with a shifting executory interest
\par \tab \tab (i.e. it would operate to cut short A's fee simple estate) in B.
\par \tab \tab The gift over to B violates RAP. It is possible that liquor
\par \tab \tab might be consumed on the premises several hundred years from
\par \tab \tab now, a time well beyond the period of perpetuities. The
\par \tab \tab requirement of "vesting," as to executory interests, is when
\par \tab \tab liquor is consumed on the premises. This vesting event might
\par \tab \tab take place beyond the period of the rule. Since the attempted
\par \tab \tab creation of an interest in B is invalid, it is stricken from the will.
\par \tab \tab A has an FSA.
\par
\par \tab \tab EX: Suppose the limitation above read, "then over to B" instead
\par \tab \tab of "to B and his heirs"? Same result. For words of inheritance
\par \tab \tab are not necessary to the grant of a fee simple estate.
\par \tab \tab
\par \tab \tab EX: Suppose that two years after the will takes effect, liquor is
\par \tab \tab consumed on the premises. B is still alive at this time. Does the
\par \tab \tab fact that the divesting event occurred in B's lifetime save the
\par \tab \tab limitation over to B? No. We look at the situation at the time
\par \tab \tab the interests are created, here at the death of T, to see if RAP
\par \tab \tab applies. At the time of T's death, what might happen? It is
\par \tab \tab possible the divesting event may take place decades from now.
\par \tab \tab What actually happens after T's death does not matter if, at the
\par \tab \tab time of T's death, there is any possibility that a contingent
\par \tab \tab interest will vest too remotely.
\par
\par \tab \tab EX: A different result would follow, though, if the divesting
\par \tab \tab contingency were the consumption of liquor during B's lifetime.
\par \tab \tab Now the shifting executory interest in B in fee simple is valid,
\par \tab \tab since the divesting event that will give possession to B must
\par \tab \tab take place, if it\rquote s going to take place, in B's lifetime. B is our life
\par \tab \tab in being.
\par
\par \tab \tab EX: Let's look at a totally different scenario. T bequeths property
\par \tab \tab "to A for life, then to such of A's children as shall attain the age
\par \tab \tab of 21." A has a life estate, and there is a contingent remainder in
\par \tab \tab A's children that reach 21. This does not violate the rule, because
\par \tab \tab all of A's children will be born (or will be in gestation) at A's
\par \tab \tab death. This means that the gift to any one of A's children will
\par \tab \tab vest--if at all--within A's lifetime plus 21 years. A is the life in
\par \tab \tab being that saves the gift.
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : As has already been explained, }{\b\fs24 when there are}{\fs24 }{\b\fs24 vested \tab \tab \tab \tab remainders subject to open}{\fs24 , }{\b\fs24 the class closes at the termination of the \tab \tab \tab life estate.}{
\fs24 Thus, in the above example, the class would close \tab \tab \tab \tab upon A's death and only those children already born could
\par \tab \tab receive their interest once they turned 21.
\par
\par \tab \tab 4. The statement of RAP provides that the contingent remainder
\par \tab \tab must vest, if it ever vests, within some life in being at the time \tab \tab \tab \tab of the creation of the interest plus 21 years thereafter. It is not
\par \tab \tab necessary, however, that one specific person alive at the time of
\par \tab \tab the creation be singled out as the measuring life, as long as it
\par \tab \tab can be demonstrated that the interest must vest within the life
\par \tab \tab of one person, that is, the survivor, among a definable group of
\par \tab \tab persons reasonable in number, plus 21 years thereafter.
\par \tab \tab The group of persons is frequently called the }{\b\fs24 "measuring lives."
\par \tab \tab }{\fs24 A }{\b\fs24 measuring life}{\fs24 has to have been alive--"in being"--at the time \tab \tab \tab \tab the interest was created. This rule has some general guidelines:
\par
\par \tab \tab \tab a. Usually, the people of the generation just before the
\par \tab \tab \tab interest was created are the measuring lives.
\par \tab
\par \tab \tab \tab b. Usually, these people are named in the instrument\tab \tab \tab \tab \tab \tab (i.e. a will or trust).
\par
\par \tab \tab \tab c. Often times, these people are entitled to the benefits
\par \tab \tab \tab of interest just before the interest was created.
\par
\par \tab \tab \tab d. Finally, 90% of the time, the measuring lives are
\par \tab \tab \tab the parents (or parent) of the contingent remainders.
\par
\par \tab \tab EX: A bequeaths "$100,000 to his grandchildren as are alive
\par \tab \tab 21 years following the death of the last survivor of A's sons,
\par \tab \tab X, Y, and Z." X, Y, and Z are alive at A's death. The future
\par \tab \tab interests of the grandchildren are contingent because of the
\par \tab \tab condition of survivorship to the time of distribution. One
\par \tab \tab "measuring life" cannot be singled out from X, Y, and Z, but
\par \tab \tab RAP does not require this; it is clear that it is one of those
\par \tab \tab three sons, X, Y, and Z, that is the last to die who will
\par \tab \tab constitute that "life," and this is sufficient to satisfy the rule.
\par \tab \tab Those three sons are the measuring lives. Of course, the
\par \tab \tab estate may not vest at all if there are no grandchildren at
\par \tab \tab the deaths of X, Y and Z.
\par
\par \tab \tab 5. If }{\b\fs24 for-profit corporations}{\fs24 , instead of humans, are used in a
\par \tab \tab conveyance, then the }{\b\fs24 gross period of 21 years is commonly used}{\fs24 \tab \tab \tab \tab to determine if the future interest violates RAP. Because a \tab \tab \tab \tab \tab
corporation is a "legal entity," as opposed to a human being, it \tab \tab \tab \tab has a potentially infinite duration and cannot technically be a \tab \tab \tab \tab "measuring life." Thus, the law simply applies the gross period \tab \tab \tab \tab
of 21 years to corporations. Often times, corporations violate \tab \tab \tab \tab RAP.
\par
\par \tab \tab EX: O devises Blackacre "to Chevron so long as it is used for
\par \tab \tab mining purposes, and if Blackacre is no longer used for
\par \tab \tab mining purposes, then to Exxon." It is very possible that \tab \tab \tab \tab \tab Exxon's interest will vest more than 21 years after it was created. \tab \tab \tab \tab We don't know for sure how long Chevron will use the land. It \tab \tab
\tab \tab may be 2 years; it may be 200 years. Hence, Exxon's executory
\par \tab \tab interest violates RAP.
\par
\par \tab \tab EX: Smith likes to use the example: "O devises Blackacre to the \tab \tab \tab \tab First Baptist Church for so long as Blackacre is used for church
\par \tab \tab purposes, and if the land is no longer used for church purposes,
\par \tab \tab to the Exxon corporation." The same rule in the above example
\par \tab \tab applies here. It is very possible that Exxon's interest will vest
\par \tab \tab more than 21 years after it is created, since we have no idea
\par \tab \tab how long the church will use Blackacre. Thus, Exxon's
\par \tab \tab executory interest violates RAP.
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : This example of Smith's can be a bit confusing since
\par \tab \tab it involves a non-profit corporation and a for-profit
\par \tab \tab corporation. As explained below, RAP does not apply only if
\par \tab \tab two non-profit corporations (or charities) are involved--
\par \tab \tab there is a gift to Charity A followed by a divesting gift to
\par \tab \tab Charity B if a specified event happens.
\par
\par \tab \tab 6. }{\b\fs24 An exception to RAP is non-profit corporations}{\fs24 --the gift from
\par \tab \tab one charity to another. If there is a gift to Charity A followed
\par \tab \tab by a divesting gift to Charity B if a specified event happens, the
\par \tab \tab executory interest in Charity B is }{\b\fs24 exempt from RAP}{\fs24 . The reason
\par \tab \tab for this exception is that }{\b\fs24 charities are favorites of the law}{\fs24 . Like
\par \tab \tab a corporation, a charity can last potentially forever. There is
\par \tab \tab no objection to shifting enjoyment from charity to charity
\par \tab \tab through time.
\par
\par \tab \tab EX: O conveys "to the First Baptist Church (FBC) so long as \tab \tab \tab \tab the property is used for school purposes, and if the property
\par \tab \tab is no longer used for school purposes, to the Red Cross." Since
\par \tab \tab there is a gift to FBC followed by a divesting gift to the Red
\par \tab \tab Cross upon the occurrence of a specified event, the executory
\par \tab \tab interest in Red Cross is exempt from RAP.
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : This exception applies }{\b\fs24 only}{\fs24 if }{\b\fs24 both}{\fs24 the possessory estate
\par \tab \tab and future interest are in non-profit corporations or charitable \tab \tab \tab \tab organizations. }{\b\fs24 Smith says that government entities, such as
\par \tab \tab Austin School District (ASD) would fall under charitable
\par \tab \tab organizations/non-profits and be exempt from RAP}{\fs24 .
\par
\par }{\b\fs24 \tab \tab }{\fs24 7. Remember that an interest is void under RAP if by }{\b\fs24 any
\par \tab \tab possibility}{\fs24 --however remote--the interest might vest
\par \tab \tab beyond the perpetuities period. If a situation can be }{\b\fs24 imagined
\par \tab \tab }{\fs24 in which the interest might not vest or fail within the
\par \tab \tab relevant lives in being plus 21 years, the interest is void.
\par \tab \tab The following two cases of }{\b\fs24 the fertile octogenarian}{\fs24 and
\par \tab \tab }{\b\fs24 the unborn widow}{\fs24 illustrate the harsh and sometimes
\par \tab \tab surprising consequences of a vivid judicial imagination.
\par \tab \tab These two cases are classic pitfalls that lawyers and law students \tab \tab \tab \tab alike fall into when dealing with RAP.
\par \tab
\par \tab \tab \tab a. }{\b\fs24 The fertile octogenarian}{\fs24 : The law conclusively
\par \tab \tab \tab presumes that a person can have children so long
\par \tab \tab \tab as the person is alive. Evidence that a person is 80
\par \tab \tab \tab years of age or has had a hysterectomy or vasectomy
\par \tab \tab \tab is irrelevant. After all, a person of any age can adopt
\par \tab \tab \tab a child. This principle is frequently overlooked by
\par \tab \tab \tab lawyers who naturally assume that 80-year-old
\par \tab \tab \tab persons will not have any more children, and proceed
\par \tab \tab \tab to draw instruments in violation of RAP.
\par
\par \tab \tab \tab b. }{\b\fs24 The unborn widow:}{\fs24 The law assumes that a person's\tab \tab \tab \tab \tab surviving spouse might turn out to be a person not now
\par \tab \tab \tab alive. For example, a man's present wife may die or be
\par \tab \tab \tab divorced, and the man may in the future marry a woman
\par \tab \tab \tab not now alive. This assumption leads to the unborn
\par \tab \tab \tab widow case.
\par
\par \tab \tab \tab EX: O devises property "to A for life, then to A's widow
\par \tab \tab \tab for life, then to A's children as are then living." A is the
\par \tab \tab \tab life in being. The gift of the remainder is contingent upon \tab \tab \tab \tab \tab A's children surviving the two life tenants: A and A's \tab \tab \tab \tab \tab "widow." Here is what might happen. A's present wife \tab \tab \tab \tab
\tab might die. Then A might remarry a woman who was not \tab \tab \tab \tab \tab living at the time O died. (Hence this second wife might \tab \tab \tab \tab \tab not be a life in being.) then A might have a child by this \tab \tab \tab \tab \tab after
born widow. Then A and everyone now on the scene \tab \tab \tab \tab \tab (except of course the second wife and the afterborn child) \tab \tab \tab \tab \tab might die. Then the widow might live for more than 21 \tab \tab \tab \tab \tab
years, and then die, survived by that afterborn child. The \tab \tab \tab \tab \tab gift would not vest, as to this hypothetical child, within \tab \tab \tab \tab \tab lives in being plus 21 years. Since all of this might \tab \tab \tab \tab \tab \tab
happen, the gift of the remainder is invalid.
\par \tab
\par \tab \tab \tab A constructional out, however, is possible. You could \tab \tab \tab \tab \tab argue that although O said A's "widow," he really meant \tab \tab \tab \tab \tab A's present wife, if she survived A. If a judge finds this
\par \tab \tab \tab argument persuasive, then the gift is valid.
\par \tab \tab \tab \tab
\par \tab \tab \tab NOTE: The "unborn widow" scenario is not as far-fetched
\par \tab \tab \tab nowadays as it seemed when it was first thought up in
\par \tab \tab \tab the 1950s. Smith points out that today it is very common
\par \tab \tab \tab for older men to marry much younger women (or
\par \tab \tab \tab "Lolitas" as he calls them).
\par
\par \tab \tab 8. Under the common law RAP, any possibility of remote
\par \tab \tab vesting voids the interest. The what-might-happen test has
\par \tab \tab come under fire in the last half-century for defeating
\par \tab \tab reasonable dispositions upon the assumption of possible
\par \tab \tab events that, in fact, rarely occur. }{\b\fs24 Most states, according to Emanuel\rquote s, \tab \tab \tab have reformed RAP by adopting the}{\fs24 }{\b\fs24 wait-and-see doctrine}{\fs24 . Under
\par \tab \tab the wait-and-see doctrine, the validity of the interests is judged
\par \tab \tab by }{\b\fs24 actual events}{\fs24 as they happen, and not by possible events
\par \tab \tab that might happen. The validity of the interest is not determined
\par \tab \tab at the time the interest is created. It is necessary to wait and see
\par \tab \tab what happens. }{\b\fs24 The states that have adopted the wait-and-see
\par \tab \tab doctrine wait out the common law perpetuities period--lives
\par \tab \tab in being + 21 years--before declaring the contingent interest
\par \tab \tab void.
\par
\par \tab \tab }{\fs24 EX: O conveys Blackacre "to A for life, remainder to A's
\par \tab \tab children who reach 25." The remainder is void under the what-
\par \tab \tab might-happen test. However, under the wait-and-see approach,
\par \tab \tab we wait and see what happens during the perpetuities period
\par \tab \tab (the lives of A and all A's children alive at the time of the
\par \tab \tab conveyance plus 21 years). If all A's children reach 25 within
\par \tab \tab this period, the gift is good. If they do not, the gift is bad as to
\par \tab \tab all of A's children--even those who have reached age 25--under
\par \tab \tab the class gifts rule. It may then be reformed under a cy pres
\par \tab \tab power to reduce the age contingency to the age \tab \tab \tab \tab \tab \tab necessary to save the gift (see the explanation of Cy Pres
\par \tab \tab Doctrine below).}{\b\fs24
\par }{\fs24
\par \tab \tab \tab a. The wait-and-see doctrine has been criticized on primarily two \tab \tab \tab \tab grounds:
\par
\par \tab \tab \tab \tab (1) Not knowing whether an interest is valid or void may \tab \tab \tab \tab \tab prove inconvenient; and
\par
\par \tab \tab \tab \tab (2) The doctrine results in the extension of the dead hand \tab \tab \tab \tab \tab and of more wealth being tied up in trust (which RAP is \tab \tab \tab \tab \tab supposed to prevent).
\par
\par \tab \tab 9. The second reform of RAP, adopted in a handful of states,
\par \tab \tab is }{\b\fs24 the cy pres doctrine}{\fs24 . Under this doctrine, an invalid
\par \tab \tab interest is reformed, within the limits of the Rule, to
\par \tab \tab approximate most closely the intention of the creator of the
\par \tab \tab interest. Exercising the reformation power, a court can reduce
\par \tab \tab age contingencies to 21 years or make some other appropriate
\par \tab \tab change to reform the invalid interest.
\par \tab \tab
\par \tab \tab EX: O conveys "to A for life, remainder to A's children who
\par \tab \tab reach age 25." The remainder to A's children is void under
\par \tab \tab RAP since it is a class gift that might vest too remotely. \tab \tab \tab \tab \tab Exercising the cy pres doctrine, a court may reduce the age \tab \tab \tab \tab \tab contingency to 21 years, thus saving the gift.
\par
\par \tab I. }{\b\fs24 Trusts: }{\fs24 A trust is a fiduciary relationship with respect to property in which one \tab person, the trustee, holds the legal title of property subject to equitable rights in \tab beneficiaries. Thus, as Smith says}{\b\fs24
, there is a split in a trust between legal
\par \tab and equity rights}{\fs24 . A trust is basically a device whereby one person manages \tab property for the benefit of others. The person who creates a trust is called the \tab \tab settlor (or trustor).
\par
\par \tab \tab 1. }{\b\fs24 Reasons for trusts: }{\fs24 There are a number of reasons to set up a trust:
\par
\par \tab \tab \tab a. For tax reasons (i.e. receive tax breaks)
\par
\par \tab \tab \tab b. Paternalistic attitude of property owner, who wants to
\par \tab \tab \tab control who gets what, and when.
\par
\par \tab \tab \tab c. It allows for special instructions -- how the trust will
\par \tab \tab \tab be distributed.
\par
\par \tab \tab \tab d. If it is a charitable trust, it is exempt from RAP
\par
\par \tab \tab \tab e. Finally, it avoids the common law doctrine
\par \tab \tab \tab of RAP (i.e. it can prevent RAP from voiding class gifts).
\par \tab \tab \tab
\par \tab \tab 2. }{\b\fs24 Establishing a trust can prevent RAP from voiding a
\par \tab \tab class gift.}{\fs24
\par \tab \tab
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : To some degree, RAP applies to trusts. At some point
\par \tab \tab \tab in the next three or four generations of family, the trust
\par \tab \tab \tab has to terminate and legal title will be given back to the family.
\par \tab \tab \tab This is how RAP prevents wealthy families, like the Kennedys
\par \tab \tab \tab or Vanderbilts, from retaining trusts that last forever and tying
\par \tab \tab \tab up wealth.
\par
\par \tab \tab 3. }{\b\fs24 A trust can prevent a class from closing in a vested remainder
\par \tab \tab subject to open: }{\fs24 Smith explains that a trust can keep a class gift from \tab \tab \tab closing upon the death of a life tenant. \ldblquote In trust, to the benefit of A for life, \tab \tab then to the benefit of any child of B\rdblquote
is a way to keep the class open to B\rquote s \tab \tab children after A dies. If B\rquote s children have not reached 21, then the trustee
\par \tab \tab holds onto the property until they turn 21, at which time it goes to them.
\par
\par \tab \tab 4. }{\b\fs24 A trust can circumvent the destructibility rule: }{\fs24 A trust can prevent
\par \tab \tab a the destructability rule from taking effect. \ldblquote In trust to A for life, then in \tab \tab \tab trust to any child of A who reaches 21.\rdblquote
\par
\par \tab J. }{\b\fs24 An appropriate--and easy--way to classify remainders}{\fs24 is as follows.
\par \tab Take each interest }{\b\fs24 in sequence}{\fs24 as it appears. Determine whether it is
\par \tab given to an ascertained person or is subject to a condition precedent.
\par \tab Classify it. Move on to the next interest and do the same thing.
\par \tab Classification of each interest }{\b\fs24 in sequence}{\fs24 is the key to correct
\par \tab classification.
\par
\par \tab EX: O conveys "to A for life, then to B and his heirs if B survives A,
\par \tab and if B does not survive A, to B's children and their heirs." Take each
\par \tab interest in sequence. First, "to A for life." This gives A a life estate.
\par \tab Second, "then to B and his heirs if B survives A." Stop at the comma,
\par \tab which ends B's interest, and classify it: B has a }{\b\fs24 remainder}{\fs24 because it
\par \tab is capable of becoming possessory upon the termination of the life
\par \tab estate, and will not cut the life estate short. It is a remainder }{\b\fs24 in fee
\par \tab simple}{\fs24 ("B and his heirs"). It is a }{\b\fs24 contingent}{\fs24 remainder because it is
\par \tab subject to the express condition precedent, "if B survives A." Third,
\par \tab move on to the next interest, "and if B does not survive A, to B's
\par \tab children and their heirs." Classify it: The interest is a }{\b\fs24 remainder}{\fs24
\par \tab because it is capable of becoming possessory upon the termination
\par \tab of the life estate, and cannot cut the life estate short. It is a remainder
\par \tab to a class, B's children, }{\b\fs24 in fee simple}{\fs24 . It is a }{\b\fs24 contingent}{\fs24 remainder
\par \tab because it is subject to the express condition precedent, "and if B
\par \tab does not survive A." If the words of an instrument are classified
\par \tab }{\b\fs24 in sequence}{\fs24 , as in this example, the classification of remainder
\par \tab is not too difficult a task.
\par
\par \tab Why is it important to distinguish between vested and contingent
\par \tab remainders? Because the common law drew -- and still draws -- a sharp \tab distinction. Vested remainders were favored and contingent remainders \tab disfavored. The }{\b\fs24 judges thought contingent remainders were objectionable \tab
because they made land inalienable}{\fs24 . Therefore, they laid down several rules \tab designed to curtail contingent remainders: (i) the Doctrine of Destructibility by \tab Merger; (ii) the Rule in Shelley's Case; (iii) the Doctrine of Wort
hier Title; and \tab (iv) the Rule Against Perpetuities. In addition, }{\b\fs24 contingent remainders were not \tab alienable, whereas vested remainders were}{\fs24 . Thus several legal consequences \tab \tab
turn upon whether a remainder is vested or contingent.
\par
\par \tab K.}{\b\fs24 Summary of Future Interests}{\fs24 -- See p. 122-25 in Gilbert's
\par
\par
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul Concurrent Ownership
\par
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs24 I.}{\fs24 }{\b\fs24\ul Concurrent Ownership}{\b\fs24 : Tenancy in Common, Joint Tenancy, and Tenancy by Entirety
\par
\par \tab }{\fs24 A. The preceding section of the outline dealt with }{\b\fs24 successive ownership }{\fs24 (i.e. a \tab life estate in A, followed by a remainder in B). Property can also be owned by two \tab or more persons }{\b\fs24 concurrently}{\fs24
. For example, A and B can be }{\b\fs24 concurrent}{\fs24 owners \tab of a possessory fee simple, a life estate, or even a remainder. There are three types \tab forms of concurrent ownership with distinguishing features:
\par
\par \tab \tab 1. A }{\b\fs24 tenancy in common}{\fs24 -- two or more persons own
\par \tab \tab undivided shares in the property, with }{\b\fs24 no right of survivorship}{\fs24 \tab \tab \tab \tab between them. This means that when one tenant in common \tab \tab \tab \tab dies, his interest
will pass to his heirs or devisees. Each person \tab \tab \tab \tab can sell or convey away his own interest, without the consent of \tab \tab \tab \tab the other person(s). The interests can be different -- one tenant
\par \tab \tab might own an undivided, one-fourth, another an undivided
\par \tab \tab three-fourths.
\par
\par \tab \tab 2. A }{\b\fs24 joint tenancy }{\fs24 -- Here, two or more persons own }{\b\fs24 with a right of
\par \tab \tab survivorship}{\fs24 . Thus, when one joint tenant dies, the survivor(s)
\par \tab \tab takes all. A joint tenancy can be created in real or personal
\par \tab \tab property. Remember that the common law required }{\b\fs24 four}{\fs24
\par \tab \tab }{\b\fs24 unities}{\fs24 (}{\b\fs24 time, title, interest and possession}{\fs24 ) for a joint tenancy.
\par \tab \tab The }{\b\fs24 survivorship provision can be destroyed}{\fs24 by severance
\par \tab \tab of the joint tenancy, which automatically transforms it into
\par \tab \tab tenancy in common. This occurs if one joint tenant }{\b\fs24 transfers
\par \tab \tab away his interest}{\fs24 in the estate, either voluntarily (i.e., giving it
\par \tab \tab to his heirs) or involuntarily (i.e., by execution by his creditors).}{\b\fs24
\par
\par \tab \tab }{\fs24 3. A }{\b\fs24 tenancy by entirety }{\fs24 -- exists only between husband and
\par \tab \tab wife, }{\b\fs24 with a right of survivorship}{\fs24 that }{\b\fs24 cannot be severed}{\fs24 \tab
\par \tab \tab without the }{\b\fs24 consent of both spouses}{\fs24 .
\par
\par \tab }{\fs24\ul NOTE}{\fs24 : Smith began his lecture on concurrent ownership by
\par \tab immediately pointing out that he was in no way responsible for
\par \tab writing the discussion of concurrent ownership in our casebook.
\par \tab He says it is very poorly written, making rather simple concepts
\par \tab much more difficult than they really are.
\par }\pard \nowidctlpar\widctlpar\tx0\tx2420\adjustright {\fs24
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24 \tab B. A }{\b\fs24 tenancy in common}{\fs24 is a form of concurrent ownership wherein
\par \tab each co-tenant is the owner of a }{\b\fs24 separate and distinct share}{\fs24 of the
\par \tab property, which has not been divided among the co-tenants. Each
\par \tab owner has a separate }{\b\fs24 undivided interest}{\fs24 in the whole. Tenancies in
\par \tab common can arise by an express conveyance or devise to persons as
\par \tab tenants in common or when persons inherit property from a
\par \tab decedent. Today, a grant only from A to B creates a tenancy in common, unless \tab specific language in the instrument makes it a joint tenancy (on this specific \tab \tab point, see "joint tenancy" below).
\par }{\b\fs24
\par \tab \tab }{\fs24 1. Each tenant in common has the right to possess and enjoy the
\par \tab \tab }{\b\fs24 entire}{\fs24 }{\b\fs24 property}{\fs24 , subject to the same right in each co-tenant. One
\par \tab \tab co-tenant can go into possession of the whole unless another
\par \tab \tab co-tenant objects.
\par
\par \tab \tab EX: O dies, leaving a son S and a daughter D as her heirs. D has
\par \tab \tab the right to, and does, move into the house. Unless S objects,
\par \tab \tab there is no problem with respect to the right of possession.
\par
\par \tab \tab 2. When a tenant in common dies, his interest passes to his
\par \tab \tab devisees or heirs. It does }{\b\fs24 not}{\fs24 go to the surviving tenant in
\par \tab \tab common. }{\b\fs24 Unlike a joint tenancy or a tenancy by the entirety,\tab \tab \tab \tab a tenancy in common does not have a right of survivorship.}{\fs24
\par
\par \tab \tab 3. }{\b\fs24 Equal shares are not necessary}{\fs24 }{\b\fs24 for a tenancy in common}{\fs24 .
\par \tab \tab A and B can be tenants in common, with A holding a
\par \tab \tab four-fifths interest and B holding a one-fifth interest. }{\b\fs24 It is
\par \tab \tab presumed that the shares of tenants in common are equal}{\fs24 ,
\par \tab \tab but this presumption can be overcome by evidence that
\par \tab \tab unequal shares were intended.
\par \tab \tab
\par \tab \tab EX: A and B, who are not related to each other, purchase
\par \tab \tab property as tenants in common. If A puts up three-quarters of\tab
\par \tab \tab the purchase price and B one-quarter, it will likely be held
\par \tab \tab that A did not intend to make a gift to B, and that the parties
\par \tab \tab have undivided interests proportionate to the amount each
\par \tab \tab paid.
\par
\par \tab \tab 4, Tenants in common }{\b\fs24 can have different types of estates}{\fs24 .
\par \tab \tab Suppose that A and B are tenants in common, and that A dies,
\par \tab \tab devising his half-interest to C for life, remainder to D. C now
\par \tab \tab owns a life estate and D a remainder in a one-half interest held
\par \tab \tab in a tenancy in common with B.
\par
\par \tab \tab 5. A tenant in common can sell, give, devise or otherwise
\par \tab \tab dispose of his undivided share in the same manner as if he
\par \tab \tab were the sole owner of the property. In other words,}{\b\fs24 a tenant
\par \tab \tab in common can do as he wishes with his property without the \tab \tab \tab \tab consent of the other tenants}{\fs24 .
\par
\par \tab \tab EX: A and B are tenants in common. Subsequently A conveys
\par \tab \tab his one-half interest to C, D, and E as tenants in common.
\par \tab \tab Thereafter B, C, D and E are tenants in common, B owning
\par \tab \tab a one-half undivided interest and C, D, and E each owning
\par \tab \tab a one-sixth undivided interest.
\par
\par \tab \tab 6. In a tenancy in common, }{\b\fs24 a creditor can only reach the interest
\par \tab \tab of the tenant with the bad credit}{\fs24 .
\par
\par \tab \tab 7. If a husband and wife have a tenancy in common and
\par \tab \tab get a divorce wherein each one contests the other's
\par \tab \tab property interest, then a judge decides how to split the
\par \tab \tab property interest.
\par
\par \tab \tab 8. Under modern law, }{\b\fs24 whenever a conveyance is made to two
\par \tab \tab or more persons}{\fs24 who are }{\b\fs24 not husband and wife, they are
\par \tab \tab presumed to take as tenants in common}{\fs24 and not as joint
\par \tab \tab tenants, unless there is evidence that a joint tenancy is intended.
\par
\par \tab C. A }{\b\fs24 joint tenancy }{\fs24 is a form of concurrent ownership wherein each co-
\par \tab tenant owns an undivided share of property (as in a tenancy in common), and the \tab \tab surviving co-tenant(s) has the right to the whole estate. The }{\b\fs24 right of survivorship}{\fs24 \tab
is the distinctive feature of the joint tenancy. There is no limit on the number of \tab persons who can hold together as joint tenants. On the death of each joint tenant, \tab the property belongs to the surviving joint tenants, until only one is left.
}{\b\fs24 The \tab tenant(s) who lives longest takes the property by himself}{\fs24 .
\par
\par \tab \tab 1. A joint tenancy can be created by the deed or by will, or by
\par \tab \tab a joint adverse possession. Joint tenancy does }{\b\fs24 not}{\fs24 arise where
\par \tab \tab persons inherit property by intestate succession. }{\b\fs24 Heirs always
\par \tab \tab take as tenants in common.}{\fs24 The presumption today is that
\par \tab \tab a conveyance to two or more persons creates a }{\b\fs24 tenancy in
\par \tab \tab common}{\fs24 , but there are exceptions.
\par
\par \tab \tab \tab a. In some states, a husband and wife are presumed to
\par \tab \tab \tab take as joint tenants or tenants by the entirety.
\par
\par \tab \tab \tab b. Executors and trustees are presumed to hold as
\par \tab \tab \tab joint tenants. Thus, upon the death of one fiduciary,
\par \tab \tab \tab the surviving fiduciary continues to manage the estate
\par \tab \tab \tab or the property, since it would be very inconvenient to
\par \tab \tab \tab have the heirs of the dead fiduciary come in and claim
\par \tab \tab \tab to be co-executors or co-trustees.
\par
\par \tab \tab 2. A joint tenancy can be }{\b\fs24 created in either real or personal
\par \tab \tab property.
\par
\par \tab \tab }{\fs24 3. Since the joint tenants are regarded, by a common law fiction,
\par \tab \tab as composing one entity, the common law requires their
\par \tab \tab interests be }{\b\fs24 equal}{\fs24 in all respects. They must take their
\par \tab \tab interests:
\par \tab \tab \tab
\par \tab \tab \tab (i) at the }{\b\fs24 same time
\par \tab \tab \tab }{\fs24 (ii) }{\b\fs24 by the same instrument,
\par \tab }{\fs24 \tab \tab (iii) with }{\b\fs24 identical interests}{\fs24 , }{\fs24\ul AND}{\fs24
\par \tab \tab \tab (iv) with an equal }{\b\fs24 right to possess }{\fs24 the whole property. These}{\b\fs24 four \tab \tab \tab \tab unities are }{\fs24 commonly known as }{\b\fs24 time, title, interest and \tab \tab \tab \tab \tab possession.}{\fs24
\par \tab \tab
\par \tab \tab }{\b\fs24 When a grantor failed to create a tenancy because one of these \tab \tab \tab \tab four entities was not present, a tenancy in common was created}{\fs24 .
\par
\par \tab \tab \tab a. }{\b\fs24 Unity of time}{\fs24 - The interest of each joint tenant must
\par \tab \tab \tab vest at the same time. For example, O conveys "to A for
\par \tab \tab \tab life, then to the heirs of A and the heirs of B as joint
\par \tab \tab \tab tenants." The heirs of A are ascertained at A's death,
\par \tab \tab \tab and the heirs of B are ascertained at B's death. Since the
\par \tab \tab \tab holders of the remainder are ascertained at different
\par \tab \tab \tab times, the heirs of A cannot take as joint tenants with
\par \tab \tab \tab the heirs of B. Since a unity does not exist, they take as
\par \tab \tab \tab tenants in common.
\par
\par \tab \tab \tab b. }{\b\fs24 Unity of title}{\fs24 - All joint tenants must acquire title by
\par \tab \tab \tab the same deed or will, or by a joint adverse possession.
\par \tab \tab \tab The unity of title requirement prevents conveyances
\par \tab \tab \tab by a sole owner to himself and another as joint
\par \tab \tab \tab tenants (i.e., in a conveyance by a husband to himself and
\par \tab \tab \tab his wife as joint tenants).
\par
\par \tab \tab \tab EX: A conveyance by H to "H and W as joint tenants,"
\par \tab \tab \tab violates the unities of time and title. Because of the
\par \tab \tab \tab common law rule that one person cannot convey to
\par \tab \tab \tab himself, the conveyance by H to "H and W as joint
\par \tab \tab \tab tenants" is viewed as in reality only a conveyance of
\par \tab \tab \tab a half-interest by H to W. Since the unities of time
\par \tab \tab \tab and title are lacking, at common law H and W held as
\par \tab \tab \tab tenants in common.
\par
\par \tab \tab \tab But the exception to this example is the }{\b\fs24 strawperson}{\fs24
\par \tab \tab \tab (a strawperson is a person not intended to have any
\par \tab \tab \tab beneficial interest in the property, who must convey as
\par \tab \tab \tab directed by the beneficially interested parties. A
\par \tab \tab \tab strawperson is usually a lawyer or the lawyer's secretary.)
\par \tab \tab \tab Thus, where H wants to convey "to H and W as joint \tab \tab \tab \tab \tab tenants," he can accomplish his wishes by conveying
\par \tab \tab \tab the property to a "strawperson." After H conveys to the
\par \tab \tab \tab strawperson, the strawperson conveys to "H and W as
\par \tab \tab \tab joint tenants." The second deed complies with the four
\par \tab \tab \tab unities rule.
\par
\par \tab \tab 3. }{\b\fs24 Unity of interest}{\fs24 - Since in theory joint tenants hold
\par \tab \tab but one estate as a single entity, the interest of each joint
\par \tab \tab tenant must be }{\b\fs24 equal in an estate of one duration}{\fs24 . It
\par \tab \tab is not possible, for example, for O to create a joint tenancy
\par \tab \tab by conveying "one-half to A and his heirs, and one-half
\par \tab \tab to B for life, A and B to hold as joint tenants." A and B
\par \tab \tab would hold as tenants in common, which does not
\par \tab \tab require unity of interest.
\par
\par \tab \tab \tab a. To create a joint tenancy, the shares of
\par \tab \tab \tab each joint tenant must be equal. One joint tenant \tab \tab \tab \tab \tab \tab cannot be given a one-third share and the other
\par \tab \tab \tab a two-thirds share at the time of the creations
\par \tab \tab \tab of the joint tenancy. However, after the
\par \tab \tab \tab joint tenancy is created, any joint tenant can
\par \tab \tab \tab petition a court to terminate the joint tenancy\tab \tab \tab \tab \tab \tab by partition sale. Upon the sale of the property,
\par \tab \tab \tab the court may divide the sale proceeds in
\par \tab \tab \tab accordance with the proportionate considerations
\par \tab \tab \tab paid.
\par
\par \tab \tab \tab b. Property can be divided into fractional shares,
\par \tab \tab \tab one of which is owned by persons as joint tenants
\par \tab \tab \tab and the other owned by persons as tenants in
\par \tab \tab \tab common.
\par \tab
\par \tab \tab \tab EX: O conveys Blackacre as follows: "a one-half
\par \tab \tab \tab undivided interest to H and W as joint tenants,
\par \tab \tab \tab and a one-half interest to A." As between
\par \tab \tab \tab themselves, H and W are joint tenants, and if
\par \tab \tab \tab H dies first, W will own the entire one-half
\par \tab \tab \tab interest relieved of H's participation. As \tab \tab \tab \tab \tab \tab \tab between H and W on the one and A on the other,
\par \tab \tab \tab the parties are tenants in common. There are
\par \tab \tab \tab no survivorship rights between A and the joint
\par \tab \tab \tab tenants H and W.
\par
\par \tab \tab 5. }{\b\fs24 Unity of possession - }{\fs24 Unity of possession requires that
\par \tab \tab each joint tenant have the right to possession of the
\par \tab \tab whole. After a joint tenancy is created, the joint tenants
\par \tab \tab can agree that one joint tenant has the exclusive right
\par \tab \tab of possession. Such an agreement }{\b\fs24 does not break the
\par \tab \tab unity of possession}{\fs24 ; the joint tenant out of possession
\par \tab \tab is merely waiving his right to possession.
\par \tab \tab \tab \tab
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith says that two of the unities--time and title--
\par \tab \tab are not very important today. But he explains that states do \tab \tab
\par \tab \tab generally require the other two unities--interest and possession--to
\par \tab \tab exist in order for there to be a joint tenancy. In some states,
\par \tab \tab a joint tenancy can be created "if the grantor intends it"--a
\par \tab \tab position that may lessen the importance of the four unities
\par \tab \tab requirement.}{\b\fs24
\par
\par \tab \tab }{\fs24 6. A joint tenancy can be created only by }{\b\fs24 express words}{\fs24 in an
\par \tab \tab instrument indicating an intent to create a joint tenancy. The
\par \tab \tab clearest way to create a joint tenancy is to convey "to A and B as
\par \tab \tab joint tenants with the right of survivorship, and not as tenants
\par \tab \tab in common." These words will create a joint tenancy, but
\par \tab \tab anything else--such as "to A and B as joint tenants" or "to A and
\par \tab \tab B jointly"--might not create a joint tenancy. In some states, a
\par \tab \tab joint tenancy can be created }{\b\fs24 only if survivorship is expressly
\par \tab \tab provided for}{\fs24 .
\par
\par \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith says a well-drawn up deed with a joint tenancy
\par \tab \tab should explicitly include the right of survivorship, such as:
\par \tab \tab "to A and B as joint tenants with the right of survivorship, and \tab \tab \tab \tab not as tenants in common."
\par
\par \tab \tab 7. The }{\b\fs24 joint tenancy}{\fs24 is a useful estate, particularly since it }{\b\fs24 avoids
\par \tab \tab probate}{\fs24 . When a person dies either intestate or testate, probate
\par \tab \tab proceedings have to be opened in a local court in order to,
\par \tab \tab among other things, change the title from the decedent to the
\par \tab \tab new owner. Probate is expensive and time-consuming. With a \tab \tab \tab \tab joint tenancy, there is no need to change title at a joint tenant's \tab \tab \tab \tab death, since the surviving joint tenant owns the whole by virtue \tab \tab
\tab \tab of the right of survivorship.
\par
\par \tab \tab 8. }{\b\fs24 Any joint tenant can at any time destroy the right of
\par \tab \tab survivorship by severing the joint tenancy}{\fs24 . Upon severance,
\par \tab \tab the joint tenancy becomes a tenancy in common, and the
\par \tab \tab right of survivorship is destroyed. Modern law generally
\par \tab \tab follows the old common law view that severance of one of the
\par \tab \tab four unities severs the joint tenancy. There are other ways to
\par \tab \tab sever the joint tenancy:
\par
\par \tab \tab \tab a. Each joint tenant has the right to convey his interest.
\par \tab \tab \tab A conveyance of the tenant's entire interest or share
\par \tab \tab \tab severs the joint tenancy with respect to that share.
\par \tab \tab \tab Either a conveyance to }{\b\fs24 a third person}{\fs24 or to }{\b\fs24 another
\par \tab \tab \tab joint tenant}{\fs24 severs the share conveyed from the joint
\par \tab \tab \tab tenancy.
\par
\par \tab \tab \tab EX: A, B and C are joint tenants. On his death bed, A
\par \tab \tab \tab conveys his share to D, thus destroying the unities
\par \tab \tab \tab of time and title between B and C and their new co-
\par \tab \tab \tab tenant, D. B and C remain joint tenants between
\par \tab \tab \tab themselves, but D holds his share as a tenant in
\par \tab \tab \tab common with them. When B subsequently dies,
\par \tab \tab \tab C attains B's interest through right of survivorship.
\par \tab \tab \tab C will then own a two-third interest and D a one-third
\par \tab \tab \tab interest as tenants in common.
\par
\par \tab \tab \tab }{\fs24\ul NOTE}{\fs24 : Smith says that the ease of conveying away a
\par \tab \tab \tab share in a joint tenancy illustrates just how easily
\par \tab \tab \tab a joint tenancy can be severed.
\par
\par \tab \tab \tab b. Smith says that a partition can destroy a joint
\par \tab \tab \tab tenancy.
\par
\par \tab \tab \tab c. Smith explains that under old common law
\par \tab \tab \tab a joint tenant who wished to convert the
\par \tab \tab \tab tenancy to a tenancy in common had to
\par \tab \tab \tab convey to a strawperson, who conveyed back to the
\par \tab \tab \tab joint tenant. The common law required that, in order
\par \tab \tab \tab to have a legal transfer, one person must convey to
\par \tab \tab \tab }{\b\fs24 another}{\fs24 person, and not to himself; hence the joint
\par \tab \tab \tab tenant could not convey directly to himself, or the
\par \tab \tab \tab joint tenancy would be destroyed. See above on how
\par \tab \tab \tab the joint tenant nowadays can successfully transfer an \tab \tab \tab \tab \tab interest to himself through a straw person.}{\b\fs24
\par
\par \tab }{\fs24 D. A }{\b\fs24 tenancy by entirety}{\fs24 is a form of concurrent ownership that can
\par \tab be created }{\b\fs24 only between husband and wife}{\fs24 , holding as }{\b\fs24 one person}{\fs24 .
\par \tab The tenancy by the entirety is like the joint tenancy in that}{\b\fs24 the
\par \tab four unities (plus a fifth--the unity of marriage) are required for
\par \tab its creation,}{\fs24 and the surviving spouse has the }{\b\fs24 right of survivorship}{\fs24 .
\par
\par \tab \tab 1. It is of the essence of tenancy by the entirety that }{\b\fs24 husband
\par \tab \tab and wife are considered in law to be one person.}{\fs24 The fiction
\par \tab \tab that husband and wife are one person reflected the realities
\par \tab \tab of English common law, where a married woman was not
\par \tab \tab a legal person and her husband controlled her interests.
\par \tab \tab This peculiar legal fiction of unity of husband and wife still
\par \tab \tab underlies the tenancy by the entirety and causes trouble.
\par
\par \tab \tab 2. Although the tenancy by the entirety resembles the joint
\par \tab \tab tenancy in that the same four unities are required for its
\par \tab \tab creation, it is unlike the joint tenancy in that }{\b\fs24 severance of
\par \tab \tab the tenancy by one tenant is not possible}{\fs24 . Neither tenant
\par \tab \tab acting alone can sever the four unities and destroy the right
\par \tab \tab of survivorship. This is the chief difference between a
\par \tab \tab tenancy by entirety and a joint tenancy.
\par
\par \tab \tab 3. Modern law permits husband and wife to take as tenants in
\par \tab \tab common or as joint tenants. Where the conveyance is unclear,
\par \tab \tab }{\b\fs24 most states that}{\fs24 }{\b\fs24 retain the tenancy by the entirety presume a
\par \tab \tab conveyance to husband and wife creates a tenancy by entirety. }{\fs24
\par \tab \tab In some states, when the conveyance is ambiguous, husband and \tab \tab \tab \tab wife take as tenants in common, while in other states, they take \tab \tab \tab \tab as joint tenants.
\par
\par \tab \tab 4. In the nineteenth century, each state passed the }{\b\fs24 Married
\par \tab \tab Women's Property Act}{\fs24 , which removed the common law \tab \tab \tab \tab \tab disability of married women to control and dispose of their \tab \tab \tab \tab \tab property. This Act provided, generally, that a married woman \tab \tab \tab
\tab was able to receive, hold, manage, and dispose of real and \tab \tab \tab \tab \tab personal property as if she were a single woman.
\par
\par \tab \tab 5. Like a joint tenancy, a tenancy by entirety can be }{\b\fs24 created in \tab \tab \tab \tab either real or personal property.
\par \tab
\par \tab \tab }{\fs24 6. The courts in the majority of states hold that }{\b\fs24 creditors of
\par \tab \tab one spouse cannot reach the property}{\fs24 because neither the
\par \tab \tab husband nor the wife acting along can transfer his interest.
\par \tab \tab Smith points out that creditors have tried to abolish the
\par \tab \tab tenancy by entirety for this reason, while debtor protection
\par \tab \tab groups have tried to preserve it.
\par
\par \tab \tab 7. In most states, }{\b\fs24 a divorce }{\fs24 terminates the unity of husband
\par \tab \tab and wife and therefore the tenancy by the entirety. In some
\par \tab \tab states, the tenancy by the entirety is converted into a joint
\par \tab \tab tenancy, but in most it is converted into a tenancy in common
\par \tab \tab on the theory that the spouses do not want survivorship
\par \tab \tab rights after divorce.
\par }{\b\fs24
\par
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul Marital Property}{\b\fs24
\par }\pard \nowidctlpar\widctlpar\adjustright {\b\fs24
\par I. Community Property: }{\fs24
Eight states, including Texas and California, have community property between married couples. The system of community property (CP) is traceable to French and Spanish influence in the South and West. The summary below sketches the
general idea of community property. Many variations exist in each of the eight states.
\par
\par \tab 1. }{\b\fs24 Basic theory of community property: }{\fs24 Community property was the
\par \tab civil law marital estate. CP rests upon a notion that husband and wife are a
\par \tab marital partnership (a \ldblquote community\rdblquote ), that both contribute to the material
\par \tab success of the marriage, and that both should share equally in material
\par \tab acquisitions. CP is owned in equal undivided shares by the spouses.
\par \tab }{\b\fs24 One spouse cannot, without the other\rquote s consent, change community
\par \tab property into separate property.
\par }{\fs24
\par \tab 2. }{\b\fs24 What is community property: }{\fs24 CP consists of }{\b\fs24 earnings}{\fs24 of either spouse
\par \tab }{\b\fs24 during marriage}{\fs24 and property acquired through earnings. Property owned
\par \tab by either spouse }{\b\fs24 before marriage }{\fs24 or acquired after marriage by }{\b\fs24 gift, descent,
\par \tab or devise }{\fs24 is }{\b\fs24 separate property.}{\fs24 This decision of property follows the basic
\par \tab theory that husband and wife should share equally material acquisitions resulting
\par \tab from the labor of either during marriage. Upon death or divorce, all property
\par \tab is in community (see below).
\par
\par \tab EX: A and B marry December 20, 1995. Before this marriage date, the
\par \tab property A has earned is his own, and the same goes for B. But after A and
\par \tab B marry, any property earned during their marriage is shared.
\par
\par \tab But beware: any property owned by A and B before marriage that is brought into \tab the marriage might be considered CP. For example, if A inherits $20,000 and
\par \tab then marries B, he will have a \ldblquote hell of a time\rdblquote proving to a court what part of his
\par \tab property (i.e. $20,000) was acquired before marriage and what was acquired
\par \tab during marriage.
\par
\par \tab \tab a. }{\b\fs24 Income from CP: }{\fs24 Once property is characterized as community
\par \tab \tab property, all income and proceeds of sale of the property are
\par \tab \tab community property. This is what Hamilton calls \ldblquote the correct theory,\rdblquote
\par \tab \tab based on Spanish as opposed to French law, in CP.
\par
\par \tab \tab EX: H earns $1,000 from his job at GE. H uses the $1,000 to buy ten\rquote
\par \tab \tab shares of Beta stock in his own name. The Beta stock is CP, even
\par \tab \tab though held in H\rquote s own name. H cannot change this stock to separate
\par \tab \tab property without W\rquote s consent. Thus, title in CP is not necessarily
\par \tab \tab controlling (that is, it does not indicate who owns the property).
\par
\par \tab \tab b. }{\b\fs24 Income from separate property: }{\fs24 In Texas and some other
\par \tab \tab states, }{\b\fs24 the income from separate property is community property}{\fs24
\par \tab \tab (this is what Smith calls \ldblquote the correct theory,\rdblquote for lack of a better term);
\par \tab \tab in other states, like California, it retains its separate character.
\par \tab \tab \tab \tab
\par \tab \tab EX: In Texas, under \ldblquote the correct theory,\rdblquote what if H bought the stock \tab \tab \tab before he got married, but still owned the property when he married? If he \tab \tab \tab
could show a court that he did indeed own the stock before he got married, \tab \tab then he will be the owner of the property and it will not be considered CP. \tab \tab \tab But the income from the stock, after the marriage, will be community
\par \tab \tab property.
\par
\par \tab 3. }{\b\fs24 Commingling of Community and Separate Property: }{\fs24 If community and
\par \tab separate property have been commingled in such a manner that it is impossible
\par \tab to ascertain and identify each source, }{\b\fs24 the commingled whole will be presumed
\par \tab to be community property.
\par }{\fs24 \tab \tab
\par \tab EX: H and W maintain a bank account in which they deposit both earnings and
\par \tab income received from separate property. If no records are kept as to which
\par \tab deposits are separate property and which community, the commingled whole will
\par \tab be treated as community. The same result occurs when H and W buy a parcel
\par \tab of land using both separate and community funds to pay for it and they keep
\par \tab no records.
\par
\par \tab 4. }{\b\fs24 Conveyance of Share: }{\fs24 Neither spouse acting alone can convey }{\b\fs24 his or her
\par \tab share}{\fs24 of CP, except to the other spouse. However, }{\b\fs24 by agreement of the parties,
\par \tab }{\fs24 CP may be converted into the separate property of either spouse, or conversely,
\par \tab separate property may be converted in CP.
\par
\par \tab 5. }{\b\fs24 Management of CP: }{\fs24 Each husband or wife, acting alone, can manage CP;
\par \tab either can sell it, lease it, invest it, etc. Thus, technically, H has the right to
\par \tab manage W\rquote s earnings as well as his own, and W has the right to manage\tab
\par \tab H\rquote s earnings as well as her own. Each must use}{\b\fs24 good faith}{\fs24 in exercising
\par \tab authority and each }{\b\fs24 may be held liable}{\fs24 by the other spouse for breach of
\par \tab fiduciary duty. However, }{\b\fs24 real property is an important exception}{\fs24 to this rule.
\par
\par \tab EX: H and W own 100 shares of GM stock as CP. W decides the stock should
\par \tab be sold, and she sells it for its market price. She reinvests the proceeds in GE
\par \tab stock. Sale and reinvestment is within W\rquote s power.
\par
\par \tab \tab a. }{\b\fs24 Real property: }{\fs24 Usually, land held as CP }{\b\fs24 cannot be sold except with
\par \tab \tab the consent of both husband and wife.
\par
\par \tab }{\fs24 6. }{\b\fs24 Rights at Dissolution of Marriage: }{\fs24 When a marriage dissolves, either by
\par \tab death or divorce, then all property is in community. Death and divorce each
\par \tab has its own ramifications:
\par
\par \tab \tab a. }{\b\fs24 Marriage dissolved by divorce: }{\fs24 When the marriage is dissolved by
\par \tab \tab divorce, CP is usually divided equally.
\par
\par \tab \tab b. }{\b\fs24 Death of a spouse: }{\fs24 When the marriage is terminated by the death of
\par \tab \tab one spouse, the decedent spouse has the right to transfer his or her
\par \tab \tab one-half interest of CP by will to anyone. }{\b\fs24 \tab
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24
\par \tab EX: Marguerite (M) and Valery (V) want to co-own property with a right of
\par \tab survivorship, but because they are lesbian lovers, they cannot use the system
\par \tab of community property, since it only applies to traditional (or heterosexual)
\par \tab marriages. What types of common law remedies are available to them for
\par \tab this dilemma.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab
\par \tab V and M can clearly use the joint tenancy, which almost seems designed for this \tab situation. Two mildly tricky things to remember about a joint tenancy: there is a \tab presumption against its creation and, in a few states (unless they\rquote
re buying \tab property together), there\rquote s the problem of the \ldblquote four unities.\rdblquote The drawback is that, \tab if M puts in substantially more money than V, then once the joint tenancy breaks \tab
up, the property is split 50/50 and M loses money on the property.
\par
\par \tab Can Valery sell property in a join tenancy if there is a right of survivorship? Yes, \tab she does not need Marguerite\rquote s permission to partition her interest and sell it. Can \tab
there be a joint tenancy be set up where the property cannot be partitioned? Yes, \tab there can be a non-partition agreement, which is legally valid only if it is for a \tab \ldblquote reasonable time\rdblquote (this \ldblquote reasonable time
\rdblquote requirement is influenced by the RAP). \tab Courts generally don\rquote t like non-partition agreements. They\rquote ll recognize their \tab validity, but only begrudgingly, }{\fs24\ul unless}{\fs24 there is an agreement for a business deal.
\par
\par \tab Can you set up agreement to maintain survivorship and no partition, without using \tab a joint tenancy? Setting up a trust may ultimately be the best solution. Also, one \tab could establish
a joint life estate in M and V, contingent remainder to the \tab \tab survivor. In the case of simultaneous death, property is split 50/50 between heirs.
\par
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 In some respects, the most perfect device for M and V is the trus
t. The problem with the trust, though, is money. The other problem is the discretion exercised by trustee (i.e. if in a relationship M and V cannot get along, will trustee make a good \tab decision on how to divide property).
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par \page }{\b\fs24 II. Rights and Obligations of Fair Housing Act (FHA)
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\b\fs24
\par \tab }{\fs24 A. The purpose of the Fair Housing Act (FHA) is to }{\b\fs24 prevent leasors from
\par \tab discriminating against certain groups of people}{\fs24 . FHA controls the owner\rquote s \tab right to exclude, since it dictates to him whom he can and cannot rent to (in
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab this sense, it disagrees with Posner and Bentham, who say that exclusivity should \tab be a central characteristic of an owner\rquote s possession). \tab
\par
\par \tab B. Two observations about the FHA:
\par
\par \tab \tab 1. It creates a policy of free access to housing; }{\fs24\ul and}{\fs24 it is
\par
\par \tab \tab 2. A legal document to enforce this policy. \ldblquote It is a legal mechanism
\par \tab \tab to vindicate policy established by act.\rdblquote
\par
\par \tab C. Many people have the misconception that the FHA applies to all groups of
\par \tab people (i.e. law students, short people, well-hung guys, etc.). However, FHA
\par \tab applies }{\fs24\ul only}{\fs24 to the following seven categories of people:
\par
\par \tab \tab 1. }{\b\fs24 National origin
\par
\par \tab \tab }{\fs24 2. }{\b\fs24 Familial status (one or more children, under 18, living with the
\par \tab \tab rental applicant)
\par
\par \tab \tab }{\fs24 3. }{\b\fs24 Handicapped people
\par
\par \tab \tab }{\fs24 4. }{\b\fs24 Color
\par
\par \tab \tab }{\fs24 5. }{\b\fs24 Race
\par
\par \tab \tab }{\fs24 6. }{\b\fs24 Religion
\par
\par \tab \tab }{\fs24 7. }{\b\fs24 Gender
\par }{\fs24
\par
\par \tab EX: Maxwell, a freshlaw, looks for an apartment near the law school. Landlord \tab \tab tells him that he will not rent to him because law students are very anal and
\par \tab always threaten him with lawsuits. Landlord has not violated the FHA because
\par \tab law students are not a protected class. However, if Maxwell were Mexican, and
\par \tab landlord would not rent to him because of his race, Landlord could be sued for
\par \tab violating the FHA.
\par
\par \tab D. The FHA }{\b\fs24 does not apply to owner-occupied buildings with no more than
\par \tab four rental units }{\fs24 (i.e., a duplex).
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24
\par \tab E. Under 3604(c) of the FHA, a leasor can be charged with a}{\b\fs24 preference to
\par \tab discriminate. }{\fs24 It is easier to charge someone with preference to discriminate,
\par \tab under 3604(c), than it is with discrimination, which would explain why this
\par \tab provision is the most commonly used of those in the FHA.}{\b\fs24
\par }{\fs24
\par \tab EX: Landlord asks a prospective tenant, over the phone, what race she is.
\par \tab Although this is not flat out discrimination, the landlord, under 3604(c), can
\par \tab be charged preference to discriminate.
\par
\par \tab EX: In New York, a luxury apartment complex ran ads that used only white
\par \tab models. In one ad, there were seventy-five white men and women. The court
\par \tab found that \ldblquote an ordinary reader would find that the defendant\rquote s ads expressed
\par \tab a racial preference.\rdblquote
\par
\par \tab NOTE: The \ldblquote ordinary reader\rdblquote test was applied in the New York case.
\par
\par
\par \tab F. There are }{\b\fs24 two parts to the FHA:
\par
\par \tab \tab }{\fs24 1. A lessor }{\b\fs24 cannot express a preference}{\fs24 , }{\fs24\ul AND}{\fs24
\par
\par \tab \tab 2. He }{\b\fs24 cannot discriminate}{\fs24 .
\par
\par }\pard \qc\nowidctlpar\widctlpar\tx0\adjustright {\b\fs24\ul
\par Leasehold Estates}{\fs24
\par
\par }\pard \nowidctlpar\widctlpar\tx0\adjustright {\fs24 I. A leasehold estate is an estate in real property of a lessee, created by a lease
\par
\par II. Three types of leasehold estates: tenancy for years, tenancy at will, and a periodic tenancy
\par
\par \tab A. }{\fs24\ul Tenancy for years}{\fs24 -- This has a stated, definite maximum duration. It cannot \tab \tab last longer than this specified period, unless it is renewed. (No notice to terminate \tab
for lessee is necessary; lessor cannot terminate.)
\par
\par \tab B. Tenancy at will
\par
\par \tab \tab 1. A tenancy for an indefinite, uncertain period of time
\par
\par \tab \tab 2. Either party can terminate the lease with }{\b\fs24 reasonable warning}{\fs24
\par
\par \tab \tab 3. Any unclear, ambiguous tenancy }{\b\fs24 defaults}{\fs24 to a tenancy at will
\par
\par \tab \tab 4. There is no right to renewal
\par
\par \tab C. }{\fs24\ul Periodic tenancy}{\fs24 -- This is a tenancy which is renewed automatically at the end \tab of each \ldblquote period.\rdblquote
\par
\par \tab \tab 1. Continues from month to month, or year to year, unless lease is \tab \tab \tab \tab terminated by proper notice.
\par
\par \tab \tab 2. Proper notice
\par
\par \tab \tab \tab a. }{\fs24\ul Common law}{\fs24 : The amount of notice must be the same as the \tab \tab \tab \tab period (i.e., for a month tenancy, 30 days is required).
\par
\par \tab \tab \tab b. }{\fs24\ul Modern rule}{\fs24 : By statute, many states require only 30 days \tab \tab \tab \tab notice, regardless of the period involved.
\par
\par \tab \tab 3. }{\fs24\ul Renewal}{\fs24 : The lease automatically renews unless a party gives notice.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par
\par }\pard \qc\nowidctlpar\widctlpar\adjustright {\b\fs24\ul Leasehold Estates (or Landlord-Tenant Law)
\par
\par {\pntext\pard\plain\b \hich\af0\dbch\af0\loch\f0 I. \tab}}\pard \fi-360\li360\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls1\pnrnot0\pnucrm\pnb1\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls1\adjustright {\b\fs24 Landlord\rquote s Duty to De
liver Possession
\par }\pard \nowidctlpar\widctlpar\adjustright {\b\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 A. \tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls2\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls2\adjustright {\fs24
At the beginning of the tenancy, the landlord has the }{\b\fs24 duty}{\fs24 of transferring the
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\b\fs24 legal right to possession}{\fs24 to the tenant.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 B. \tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls3\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls3\adjustright {\fs24 Two views of actual possession:
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 1. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls4\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls4\adjustright {\b\fs24 \ldblquote English rule
\rdblquote (majority view}{\fs24 ): }{\b\fs24 The landlord has the duty to
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\b\fs24 deliver actual possession, as well as the right to possession, at the beginning of the term.}{\fs24
There should be a period of time between the end of the first lease and the beginning of the second one, so lessor has time to evict any carry-over tenants. If t
he tenants do carry-over, then the landlord is in default. The lessor has many remedies available to him\emdash
sure to evict the hold-over and recover damages, or treat the hold-over tenant as tenant for another term with rent payable to the incoming tenant.
\par
\par Rationale: It is more efficient for the landlord to evict because 1) he has
\par implicitly given the move-in tenant the legal right to possession, and he
\par should enforce that right, 2) as a result, he is closer at fault for the
\par hold-over tenant, and 3) he knows of the hold-over\rquote s agreement and is
\par in a better position to evict the squatter.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 2. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls5\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls5\adjustright {\fs24 \ldblquote }{\b\fs24 American rule
\rdblquote (minority view): The landlord has no duty to
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\b\fs24 deliver actual possession at the commencement of the term}{\fs24 . The
\par lessee is responsible for evicting hold-over tenants, and has the same
\par available remedies as the landlord under the \ldblquote English rule.\rdblquote
\par
\par Rationale: The lessee should evict carry-over tenants because 1) the
\par lease conveys a leasehold to the tenant, and it is up to him to take
\par possession of the property AND 2) the landlord should not be held liable
\par for the tortious act of the hold-over tenant.
\par
\par NOTE: The \ldblquote American rule\rdblquote is arguably less efficient than the \ldblquote English
\par rule.\rdblquote
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\b \hich\af0\dbch\af0\loch\f0 II. \tab}}\pard \fi-360\li360\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls6\pnrnot0\pnucrm\pnb1\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls6\adjustright {\b\fs24 Landlord\rquote
s Duty not to Interfere with Tenant\rquote s Quiet Enjoyment}{\fs24
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 A. \tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls7\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls7\adjustright {\b\fs24 Covenant of Quiet Enjoyment}{
\fs24 : The covenant of quiet enjoyment, if not
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 expressly provided for in a lease, is always implied. \ldblquote Quiet\rdblquote means }{\b\fs24 secure}{\fs24 , not necessarily free from noise or loudness. This covenant refers to the lessor
\rquote s }{\b\fs24 use
\par and enjoyment}{\fs24 of the property.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 B. \tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls8\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls8\adjustright {\fs24
The covenant of quiet enjoyment can be breached by interfering with
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 title, and by actual and constructive eviction.
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24
\par }{\b\fs24 1. Title - }{\fs24 The tenant has the legal right to possession, and any
\par interference with this right to title violates the covenant of quiet enjoyment.
\par
\par EX: If A has an apartment lease until January 15, 1996, and lessor leases the same apartment to B beginning on January 1, 1996, then B\rquote s covenant of quiet enjoyment has been violated.
\par
\par If A dies before his lease ends\emdash and A lives with B\emdash then A\rquote s lease ends, and B can sue A\rquote s estate for the remainder of the lease.
\par
\par }{\b\fs24 2. Actual eviction}{\fs24 - If the tenant is }{\b\fs24 physically evicted}{\fs24 from the leased
\par premises, then the tenant can treat the lease as terminated and he has no
\par obligation to pay further rent.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 3. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls9\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart3\pnindent360\pnhang{\pntxta . }}\ls9\adjustright {\b\fs24 Constructive eviction - }{\fs24
Where}{\b\fs24 , through the fault of the landlord}{\fs24
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\b\fs24 (}{\fs24 not because of another tenant), there occurs a }{\b\fs24 substantial interference with}{\fs24 the tenant\rquote s }{\b\fs24 use and enjoyment}{\fs24
of the premises, so that the tenant can no longer enjoy the premises as the parties contemplated, the tenant may terminate the lease, vacate the premises, and be excused from further rent. The lessor must have }{\b\fs24 reasonably}{\fs24
known, or should have known, of interference.
\par
\par EX: There is no central heat in an Alaskan apartment, and tenants cannot
\par live there any longer. Lessor did or did not do something that he should
\par have reasonably known, or did know, would cause tenants to move out.
\par
\par EX: B moves into apartment next door. There are undergrads that blast their music, and interfere with B\rquote s studying. There is no constructive eviction, if B leaves, because lessor is not directly responsible for the undergrads\rquote behavior.
\par
\par
\par NOTE: In constructive eviction, the lessor interferes with the tenant\rquote s enjoyment of his property, while in actual eviction (i.e. changing locks on the door) the lessor physically excludes the tenant.
\par
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 a. Constructive eviction }{\b\fs24 must be tied to lessor}{\fs24 either because lessor:
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par }\pard \fi720\li2160\nowidctlpar\widctlpar\adjustright {\fs24 (1) caused the problem OR
\par (2) can control the problem
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 As a general rule, the landlord is }{\b\fs24 not responsible}{\fs24 for one tenant causing annoyance to the other tenant, even though the annoying
\par conduct would be constructive eviction if done by the landlord
\par himself, and even though the landlord can legally control the other tenant\rquote s conduct.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 b. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls10\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls10\adjustright {\fs24
A tenant cannot claim constructive }{\b\fs24 eviction unless he vacates
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\b\fs24 the premises}{\fs24 . This action}{\b\fs24 terminates the lease}{\fs24 and the}{\b\fs24 tenant
\par cannot generally seek monetary damages}{\fs24 .
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 c. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls11\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart3\pnindent360\pnhang{\pntxta . }}\ls11\adjustright {\fs24
If a tenant claims constructive eviction, does not move out,
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 and refuses to pay rent, a lessor can:
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (1) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls12\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls12\adjustright {\fs24 seek back rent
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (2) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls12\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls12\adjustright {\fs24 try to evict }{
\fs24\ul OR}{\b\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (3) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls12\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls12\adjustright {\fs24
argue that the fact that the tenant has not left is evidence}{\b\fs24 }{\fs24 that there is no constructive eviction.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab \tab \tab
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 d. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls13\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart4\pnindent360\pnhang{\pntxta . }}\ls13\adjustright {\fs24 If there is a loud ne
ighbor interfering with the use and
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 enjoyment of the tenant, the tenant has two options before or after claiming constructive eviction:
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (1) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls14\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls14\adjustright {\fs24
Look to see if there are lease provisions that prevent
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 the neighbor from playing loud music }{\fs24\ul OR
\par }{\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (2) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls15\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls15\adjustright {\fs24
If there are no such provisions, could make the
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 difficult argument that there is an implied covenant
\par between tenants to act reasonably.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par \tab \tab \tab EX: L leases an apartment to T, and also rents a cocktail lounge
\par \tab \tab \tab next door to X. The lease to X provides that L can terminate
\par \tab \tab \tab the lease if the noise disturbs the neighboring tenants. T
\par \tab \tab \tab complains to L of the loud noise of X. L does nothing. Since
\par \tab \tab \tab L has the legal ability to control the noise of X by terminating
\par \tab \tab \tab the lease, the noise is a constructive eviction. }{\fs24\ul Blackett v. Olanoff}{\fs24
\par
\par \tab \tab \tab
\par }\pard \fi720\li1440\nowidctlpar\widctlpar\adjustright {\fs24 But what if in the lease there is a clause stating that the lessor
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab \tab \tab cannot be held liable for negligence of other tenants, and the clause
\par \tab \tab \tab is bargained for? This clause is not suitable to prevent
\par \tab \tab \tab constructive eviction. A tenant can say, \ldblquote This is intolerable, the
\par \tab \tab \tab landlord is at fault,\rdblquote and leave.
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\b\fs24
\par }\pard \nowidctlpar\widctlpar\adjustright {\b\fs24 III. Lease-as-a-Deed v. Lease-as-a-Contract
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 A. \tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls16\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls16\adjustright {\fs24 Two views of a lease:
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 1. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls17\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls17\adjustright {\b\fs24 Lease as deed (minority view)}{
\fs24 : Traditionally, a lease was viewed as
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\b\fs24 deed}{\fs24 (or a conveyance) and promises in the lease were }{\b\fs24 independent}{\fs24 of the party\rquote
s performance. The tenant was entitled to possession of the estate, which he had the duty to maintain}{\b\fs24 . There was no implied covenant of habitability, but there was a covenant of quiet enjoyment}{\fs24 (i.e., good title)}{\b\fs24 . }{\fs24
Thus, }{\b\fs24 when the lessor took possession of the estate, he assumed the risks of caring for it.}{\fs24 The landlord }{\b\fs24 only}{\fs24 has the right to re-enter and repossess the land}{\b\fs24
upon breach of the covenant by the tenant (usually the covenant to pay rent). }{\fs24 The lease was independent in that T\rquote s (tenant\rquote s) promise to pay rent is not dependent upon the performance of L\rquote s (lessor\rquote
s) promise to paint. T cannot break the lease upon L\rquote s failure to perform, but has to sue for damages.
\par
\par EX: There is a leak in the roof, and lessor will not repair it. The tenant\rquote s obligation to pay rent in the old common law was independent of this
\par leak. He must pay rent, but he can seek damages (value of estate with
\par no leak in the roof - value without the leak = dams).
\par
\par EX: T agrees to rent all of Blackacre. Before moving in, L rents a part of that Blackacre to U. T can claim that his covenant of quiet enjoyment was violated, since the rental of Blakckacre to U interfered with T\rquote s use and enjoyment, and th
at consequently T should owe no rent.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 2. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls18\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls18\adjustright {\b\fs24
Lease as contract (majority view): }{\fs24 The more modern view, which is
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 established in }{\fs24\ul Brown}{\fs24 and }{\fs24\ul Javins}{\fs24 (two case names we should know), is that leases are }{\b\fs24 contracts}{\fs24 and are }{\b\fs24 mutually dependent}{\fs24
. The lease can contain numerous covenants\emdash to pay rent, taxes, or insurance, to repair, and so on. }{\b\fs24 There is always an implied covenant of habitability (a package of \ldblquote goods and services.\rdblquote }{\fs24
The lease is dependent in that if L does not do what L promises to do, T can refuse to do what T promises to do. Thus, if L does not deliver habitable premises and maintain them in habitable shape, T can refuse to pay rent.
\par
\par EX: Southall Realty (P) leased premises to Brown (D) despite the fact
\par that when P moved in there were already a numbe
r of code violations (i.e. broken commode, broken railing, etc.) rendering the premises uninhabitable. D withheld rent because of these conditions, and wanted to void her lease. P sued to regain possession. The court ruled that the lease was void, sinc
e it was created in violation of the D.C. housing regulations, and that D did not have to pay back rent. }{\fs24\ul Brown v. Southall Realty Co.}{\fs24 (1968)
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24
\par \tab EX: Javins (D) refused to pay his April rent to First National Realty Corp.
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (P) \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls19\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart16\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls19\adjustright {\fs24
because of the approximately 1,500 violations of the D.C. housing
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 code. The court held that the housing tenant \ldblquote seeks a well-known package
\par of goods and services,\rdblquote and that modern housing regulations imply into
\par every lease a warranty of habitability. If this warranty is breached, then the tenant can suspend paying rent. The Javins court establishes that:
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 1) \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls20\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta ) }}\ls20\adjustright {\fs24
there is an implied covenant of habitability (which must be compliant
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 with D.C. housing code AND 2) the lease is a contract\emdash promises are dependent upon each other.
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 \tab \tab
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 a. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls21\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls21\adjustright {\fs24 Problems with }{\fs24\ul Javins
}{\fs24
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (1) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls22\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls22\adjustright {\fs24
Standards of habitability are not consistent from city
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 to city. Judicial or legislative statements must establish these standards. AND
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (2) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls23\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls23\adjustright {\fs24
Some courts say problems with habitability can have
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab \tab \tab \tab existed before lessee moved in, while others say that they
\par \tab \tab \tab \tab must occur after tenant moves in.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 b. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls24\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls24\adjustright {\fs24 Posner and Smith on }{\fs24\ul
Brown}{\fs24 and }{\fs24\ul Javins}{\fs24
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (1) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls25\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls25\adjustright {\fs24
Posner and the Law and Economics crowd argue that
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 forcing lessors to follow the implied covenant of
\par habitability will raise rent and squeeze poor people, like
\par Brown, out of the housing market. A lessor could just
\par as well covert the apartment into a more profitable use, or
\par abandon it, so as to avoid expenses of compliance with housing regs, and poor people would thus suffer.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (2) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls26\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls26\adjustright {\fs24
Smith says that a problem with implying a covenant is
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 that, in many cases, a tenant knew, or should have known,
\par of the poor housing conditions, and should have bargained
\par to improve them. But, as we know, a poor tenant does not
\par have a lot of bargaining power (i.e., he is not a commercial tenant).
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24
\par NOTE: In commercial leases, the courts generally adopt the traditional view of the lease-as-deed. However, covenants of habitability in a few cases have been
\par implied when it appears that the commercial tenant bargained for continuing maintenance by the landlord. }{\fs24\ul Davidow v. Inwood North Professional Corp.
\par }{\fs24 The rationale for the majority view is that: 1) residential tenants are in an inferior bargaining position AND 2) a residential tenant must shoulder the cost of the
\par housing defect, while a commercial tenant can pass these costs onto the clients.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par
\par {\pntext\pard\plain\b \hich\af0\dbch\af0\loch\f0 IV. \tab}}\pard \fi-360\li360\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls27\pnrnot0\pnucrm\pnb1\pni0\pnfs24\pnstart4\pnindent360\pnhang{\pntxta . }}\ls27\adjustright {\b\fs24 Landlord\rquote
s Tortious Liability
\par }\pard \nowidctlpar\widctlpar\adjustright {\b\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 A. \tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls28\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls28\adjustright {\b\fs24 The majority view}{\fs24
: Landlord will be}{\b\fs24 liable for any unreasonably }{\fs24
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\b\fs24 dangerous conditions\emdash high degree of risk}{\fs24 --which he permits to remain on leased property, even after control over it has been relinquished. }{\b\fs24
The test is whether the landlord acted reasonably}{\fs24 under the circumstances. If a high degree of risk was permitted to exist, then the landlord should be held liable.
\par
\par EX: Ross (D) constructed stairs leading up to an apartment which D leased to
\par her daughter-in-law. Sargent (P) used the daughter-in-law as a baby sitter. The
\par stairs were very steep and the guardrail was insufficient to prevent the child from falling down the stairs. Court held D liable for negligent construction of the stairway, and rejected D\rquote
s argument that she had no standard of care since the stairs were in a common area. }{\fs24\ul Sargent v. Ross}{\fs24 (we did not read this case, but Smith discussed it). Here, there was a violation of an implied covenant of habitability.
\par
\par A lessor can be held liable for negligence if he }{\b\fs24 fails to correct a situation within a reasonable times}{\fs24 that }{\b\fs24 creates an unreasonable risk of harm. }{\fs24 There are }{\b\fs24 only}{\fs24
four situations where the lessor is held liable:
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 1. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls29\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls29\adjustright {\b\fs24 Special relationship - }{\fs24
the innkeeper/guest and common carrier
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 situations, where there is a higher standard of care.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 2. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls30\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls30\adjustright {\b\fs24 Criminal opportunity }{\fs24
- Where there is an opportunity for criminal
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 conduct created by lessor\rquote s conduct (i.e., not repairing locks on the door).
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 3. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls31\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart3\pnindent360\pnhang{\pntxta . }}\ls31\adjustright {\b\fs24 Extreme foreseeability}{\fs24
- Lessor foresees, or should foresee,
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 dangerous situations (i.e. very dramatic increase in crime in the apartment parking lot) that result in harming the le
ssee. The lessor has the duty to provide, say, security, to avoid these dangerous situations.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 4. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls32\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart4\pnindent360\pnhang{\pntxta . }}\ls32\adjustright {\b\fs24
Lessor contracts or voluntarily undertakes a task }{\fs24 - Lessor
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 voluntarily offers, say, to protect a tenant or put a guard in the parking lot, but fails to do so.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 Generally, the risk of harm versus the burden of avoiding the harm (the Learned Hand formula\emdash }{\b\fs24 B=PxL}{\fs24 ) plays into the court\rquote
s decision as to whether lessor should be held liable for negligence.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 B. }{\b\fs24 The minority view:}{\fs24 The lessor should }{\b\fs24 not be held liable}{\fs24 for criminal activity, even if it foreseeable, since it is out of lessor\rquote
s control and he did not directly case T\rquote s harm (just as a loud neighbor is out of the lessor\rquote s control and is not due to the lessor\rquote s own actions).
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 EX: T (P) is sexu
ally assaulted in the parking lot of her apartment complex. There were previous reports of crimes against property, but not for crimes of sexual assault. T sues L (D), arguing that he was negligent and violated her covenant of habitability. She claime
d this covenant should extend to protecting her physical safety. The court held that L was not liable, because he was not a high foreseeability that T would be sexually assaulted (there was only a high
\par foreseeability of crimes against property). Also, co
urt rejected the covenant argument, saying that the covenant only provides safety in the sense that, say, floors or stairs should not be unstable. Finally, court says that lessor should not be held liable for criminal activity, even if it foreseeable, si
nce it is out of lessor\rquote s control and he did not directly cause T\rquote s harm. This is the }{\b\fs24 minority view}{\fs24 .
\par }{\fs24\ul Wall v. Platt
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24\ul
\par }{\b\fs24 V. Lessor\rquote s Remedies
\par }\pard \qc\nowidctlpar\widctlpar\adjustright {\b\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 A. \tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls33\pnrnot0\pnucltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls33\adjustright {\fs24
Just as there are two different ways to view leases\emdash as a deed or as a }{\b\fs24
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 contract\emdash there are similarly two ways to view lessor\rquote s remedies.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 1. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls34\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls34\adjustright {\fs24
If the lease is viewed as a deed (or conveyance), then the lessor
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 has the following remedies:
\par
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\b\fs24 a. Sue periodically for back rent.}{\fs24
\par
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 (i). If lessee refuses to pay rent, lessor can turn him into the creditors.
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24
\par b. }{\b\fs24 Terminate the lease }{\b\fs24\ul if the tenant moves out}{\b\fs24 , and allow
\par the new lessee to move in. }{\b\fs24\ul OR}{\b\fs24
\par
\par c. Re-let on the account of defaulting tenant, and apply the
\par new tenant\rquote s rent as credit to defaulting tenant\rquote s rent:
\par }{\fs24 This is }{\b\fs24 optional}{\fs24 (as opposed to the lease-as-contract, when the lessor has a duty to mitigate damages). If lessor does re-let, he
\par acts, at least conceptually, as if the defaulting tenant\rquote s lease is still in existence. Of course, there could be a problem if the defaulting
\par tenant returns\emdash he could claim trespass.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 EX: T leases an apartment for a year. Six months into lease, T moves out. L can attempt to lease premises to someone else, but T could claim that L trespassed since T\rquote
s lease was still running. But L could respond that T\rquote s abandonment implies that T has surrendered and abandoned his lease.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par \tab \tab EX: After Edwards (D) complained to authorities about housing code
\par \tab \tab violations on the property she rented from Habib (P), P gave her a
\par \tab \tab 30-day notice to vacate and obtained a judgment for possession of the
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 property. The court decided that a landlord cannot evict a tenant in retaliation for a tenant reporting violations, and such a retaliatory
\par motive constitutes a defense to an action of eviction. }{\fs24\ul Edwards v. Habib}{\fs24 .
\par Most courts also have held that a lessor cannot increase rent in retaliation.
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 2. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls35\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls35\adjustright {\fs24 If the lease is viewed as a }{
\b\fs24 contract}{\fs24 , then the lessor:
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 a. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls36\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls36\adjustright {\fs24
Has a duty to mitigate damages as in cases with Ks in general
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 (see \ldblquote c\rdblquote above).
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par \tab \tab RATIONALE: A lessor is like a vendor selling goods. If lessee
\par \tab \tab breaches the contract, then the lessor, like a vendor, has a duty to
\par \tab \tab mitigate.
\par
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 NOTE: There are many arguments against the view that the lessor has a duty to mitigate damages: 1) it }{\b\fs24 places an undue burden on the lessor}{\fs24 and
\par 2) }{\b\fs24 property is \ldblquote unique,\rdblquote }{\fs24 in that it requires a special person, interested in that particular property, to replace lessee. }{\b\fs24 Smith does not buy this.}{\fs24
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\b\fs24
\par
\par
\par {\pntext\pard\plain\s1 \b \hich\af0\dbch\af0\loch\f0 V. \tab}}\pard\plain \s1\fi-360\li360\keepn\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls27\pnrnot0\pnucrm\pnb1\pni0\pnfs24\pnstart4\pnindent360\pnhang{\pntxta . }}\ls27\outlinelevel0\adjustright {\b
Land Uses
\par }\pard\plain \nowidctlpar\widctlpar\adjustright \fs20 {\fs24
\par {\pntext\pard\plain\b \hich\af0\dbch\af0\loch\f0 A.\tab}}\pard \fi-360\li1080\nowidctlpar\widctlpar\jclisttab\tx1080{\*\pn \pnlvlbody\ilvl0\ls107\pnrnot0\pnucltr\pnb1\pnstart1\pnindent1080\pnhang{\pntxta .}}\ls107\adjustright {\b\fs24 Nuisance: }{\fs24
A \ldblquote nuisance\rdblquote is an }{\b\fs24 unprivileged, unreasonable interference}{\fs24 with
\par }\pard \li720\nowidctlpar\widctlpar\adjustright {\fs24 a person\rquote s }{\b\fs24 use and enjoyment}{\fs24 of his land. A }{\b\fs24 \ldblquote private nuisance\rdblquote }{\fs24
interferes with the private use and enjoyment of one or a number of nearby properties. A }{\b\fs24 \ldblquote public nuisance\rdblquote }{\fs24 interferes with a right common to the general public. The essence of a nuisance is that it is }{\b\fs24
the right thing in the wrong place }{\fs24 (i.e., a pig in the parlor instead of on the farm).
\par
\par NOTE: Knowing nuisances is very important for zoning/taking situations.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 1. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls86\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls86\adjustright {\b\fs24
Basis of nuisance law (Bentham): }{\fs24 The basis for nuisance law is
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 Jeremy Bentham\rquote s theory of property. According to Bentham, property
\par is a legal construct designed to protect the expectations and enjoyment
\par of the property owner. The person who is causing the nuisance
\par unreasonably interferes with his neighbor\rquote s, or the public\rquote s in general,
\par expectations and enjoyment. The }{\b\fs24 remedies}{\fs24 for a nuisance are basically
\par }{\b\fs24 monetary damages}{\fs24 (for harm suffered by P) }{\b\fs24 or an}{\fs24 }{\b\fs24 injuntion }{\fs24 against D}{\b\fs24 .}{\fs24
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 2. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls87\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls87\adjustright {\b\fs24
Traditionally establishing nuisance : }{\fs24 One must establish the
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 following elements:
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 a. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls88\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls88\adjustright {\b\fs24
Expectation interest and first-in-time: }{\fs24 P bought his property
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 with certain expectations and so that he could enjoy it (i.e., he bought his house near a beach, so he could hear the ocean, lay out on his deck, etc.). P was owned the property }{\b\fs24 before}{
\fs24 the nuisance began (the }{\b\fs24 \ldblquote first-in-time}{\fs24 \rdblquote }{\b\fs24 rule}{\fs24 ).
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 b. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls89\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls89\adjustright {\b\fs24
Nuisance is unreasonable and inappropriate: }{\fs24 D\rquote s
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 nuisance is unreasonable and inappropriate, and is substantially
\par interfering with P. It helps P if he can show either:
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (1) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls90\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls90\adjustright {\fs24 The nuisance is }{
\b\fs24 inappropriate}{\fs24 and there is }{\b\fs24 nothing
\par }\pard \nowidctlpar\widctlpar\adjustright {\b\fs24 \tab \tab \tab \tab like nuisance-causing object in the area.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (2) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls91\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls91\adjustright {\fs24 There are }{\b\fs24
zoning regs or statutes}{\fs24 on the books that
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 would prevent such usage of the nuisance-causing object.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 c. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls92\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart3\pnindent360\pnhang{\pntxta . }}\ls92\adjustright {\b\fs24 Actual harm: }{\fs24
P suffered actual harm as a result of the
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 nuisance. There was serious discomfort or inconvenience\emdash lack of sleep, high stress, inability to use the house as they had before, offensive odors or noise, etc., are some examples.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par \tab \tab
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 3. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls93\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart3\pnindent360\pnhang{\pntxta . }}\ls93\adjustright {\b\fs24
Three other ways to establish nuisance (}{\b\fs24\ul Boomer}{\b\fs24 , }{\b\fs24\ul Schack}{\fs24 approach}{\b\fs24 , }{\fs24
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\b\fs24 and Law and}{\fs24 }{\b\fs24 Economics approaches): }{\fs24 Courts can use other ways to approach nuisance:
\par
\par {\pntext\pard\plain\ul \hich\af0\dbch\af0\loch\f0 a. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls94\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls94\adjustright {\b\fs24\ul Boomer}{\b\fs24
test (AKA economic proportionality test): }{\fs24 If there
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 is a marked disparity shown in }{\b\fs24 economic consequences}{\fs24 between the effect of the injunction and the effect of the nuisance, then an inj
unction should not be granted. Rather, damages to P for P\rquote s harm should be awarded. This the most economically efficient test.
\par
\par NOTE: The problem with this test is that it is sometimes difficult
\par to put a monetary value on harm suffered (i.e., increased stress or lost sleep).
\par
\par {\pntext\pard\plain\ul \hich\af0\dbch\af0\loch\f0 b. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls95\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls95\adjustright {\b\fs24\ul Schack}{\fs24 }{
\b\fs24 approach (AKA social utility proportionality test)}{\fs24 :
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 Drawing from the }{\fs24\ul State v. Schack}{\fs24 approach, the court could lump all of the factors of the nuisance together and determine whether
\par the social utility of the particular nuisance-causing object is outweighed by the harm it causes (i.e., a power plant that is erected
\par near a small, inexpensive house would probably not be nuisance
\par under this theory). The court could either not give any remedy
\par or it could force D to pay for actual harm to P.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 c. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls96\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart3\pnindent360\pnhang{\pntxta . }}\ls96\adjustright {\b\fs24 Law and Eco. approach: }{
\fs24 This approach is becoming
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 increasingly used by the courts today. Suppose that landowner
\par A has a factory on his land belching smoke into the air, which
\par flows across to landowner B, who has an amusement park
\par on his land. The smoke interferes with the patrons\rquote enjoyment of
\par the park.
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (1) \tab}}\pard \fi-360\li3240\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls97\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls97\adjustright {\b\fs24 Who is at fault: }
{\fs24 Neither A nor B is solely the cause
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24 of the harm. Both are responsible, because of the conflicting uses A and B make of their respective property.
\par The economic problem is to avoid the more serious harm,
\par though other factors, particularly fairness, may be important
\par in a judicial determination of the appropriate solution.
\par
\par }\pard \li3600\nowidctlpar\widctlpar\adjustright {\fs24 (a) }{\b\fs24 Neither party alone causes conflict or is at fault: }{\fs24
The party emitting the smoke is no more the cause of the conflict than the party sensitive to the smoke. The conflict requires the presence of both parties. If the factory has a greater market value than the homes around it, then society values the fac
tory higher; it is worth more to society.
\par }\pard \li2880\nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 (b) \tab}}\pard \fi-360\li3960\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls98\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxtb (}{\pntxta ) }}\ls98\adjustright {\b\fs24 Externalities: }
{\fs24 An externality is a cost (or
\par }\pard \li3600\nowidctlpar\widctlpar\adjustright {\fs24 benefit) of any given action that is not taken into
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab \tab \tab \tab \tab consideration by the actor in determining the level
\par \tab \tab \tab \tab \tab of that activity that is optimal from the actor\rquote s point
\par \tab \tab \tab \tab \tab of view. Economic theory suggests that resources
\par \tab \tab \tab \tab \tab will generally be allocated more efficiently if }{\b\fs24 the
\par \tab \tab \tab \tab \tab costs (and benefits) of different actions are
\par \tab \tab \tab \tab \tab internalized}{\fs24 , i.e. taken into account by economic
\par }\pard \li3600\nowidctlpar\widctlpar\adjustright {\fs24
actors in determining the optimal level of their activities. It is economically inefficient for a business to impose a cost of doing business upon others and not internalize it. In the above example, an external cost of the factory, which A imposed on B,
is that B\rquote s land is made unsuitable for uses sensitive to smoke. An external cost of B\rquote s use of land as an amusement park is that A\rquote s land is made unsuitable for activities that conflict with an amusement park. The }{\b\fs24
economic problem }{\fs24 in all
\par \ldblquote nuisance\rdblquote cases is how to }{\b\fs24 maximize the social value of production by putting land to its most valuable use while internalizing costs.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 4. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls99\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart4\pnindent360\pnhang{\pntxta . }}\ls99\adjustright {\b\fs24 Defenses to nuisance: }{\fs24
A D can claim numerous defenses:
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 a. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls100\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart1\pnindent360\pnhang{\pntxta . }}\ls100\adjustright {\fs24
Benefits to D of nuisance-causing object are greater than
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 injuries to P (this is more of a \ldblquote Law and Economics\rdblquote argument),
\par and thus D should not be liable for damages.
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 b. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls101\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart2\pnindent360\pnhang{\pntxta . }}\ls101\adjustright {\fs24
Benefit to the public at large outweigh P\rquote s harm (i.e., source of
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24 \tab \tab \tab nuisance was an electrical plant built by P\rquote s house).
\par
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 c. \tab}}\pard \fi-360\li2520\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls102\pnrnot0\pnlcltr\pnb0\pni0\pnfs24\pnstart3\pnindent360\pnhang{\pntxta . }}\ls102\adjustright {\fs24 D is willing to p
ay an amount for P\rquote s harm (i.e., in order to
\par }\pard \li2160\nowidctlpar\widctlpar\adjustright {\fs24 keep the windmill).
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par {\pntext\pard\plain\hich\af0\dbch\af0\loch\f0 4. \tab}}\pard \fi-360\li1800\nowidctlpar\widctlpar{\*\pn \pnlvlbody\ilvl0\ls103\pnrnot0\pndec\pnb0\pni0\pnfs24\pnstart4\pnindent360\pnhang{\pntxta . }}\ls103\adjustright {\b\fs24 Sunlight: }{\fs24
Because rights in sunlight are not recognized in American
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\fs24 law under the doctrine of covenants, they are sometimes recognized under
\par the doctrine of nuisance. The minority view is that blocking a neighbor\rquote s
\par solar collectors on his roof can be enjoined as a nuisance. It helped that P argued that his solar-powered house was good for public policy\emdash it conserved energy\emdash and that D had notice from being able to see the solar panels.
This, though, is the minority view. The majority view in the U.S. is that there are no rights in sunlight (or for enforcing an injunction to keep a fence or trees low), since most of the time these injunctions prevent economic development\emdash
preventing buildings. If a property owner uses
\par solar power, then most states have statutes requiring him to fill out and
\par file various forms and docs.
\par
\par }\pard \nowidctlpar\widctlpar\adjustright {\fs24
\par }\pard \li1440\nowidctlpar\widctlpar\adjustright {\b\fs24
\par }}