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Two Conceptions of Property

1. Property as a right to a thing good against the worldRight to Exclude

2. Property as a collection (bundle) or rights, with content that varies according to context and policy

Trespass to Land
Jacque v. Steenberg Homes, Inc. Wisc. S.Ct. 1997 pg. 1
ran over s yard w/RV as intentional trespass. Sneaky & deceitful went across anyways after
repeatedly told him not to cross land w/RV.
Rule: Society & private landowners have much more than nominal interest in excluding ppl from private land
Intentional trespass to land causes actual harm to indv, regardless of whether harm can be measured in dollars.
A series of intentional trespasses can threaten indvs very ownership of the land.
Defs punishment of $31 is unlikely to deter defs from doing it again.
Any intentional intrusion that deprives another of possession of land, even if only temporary, is
considered a trespass. Restatement (2d) of Torts 158
Trespass to Chattles will result in liability only if it causes harm to the owner of the thing.
Restatement (2d) of Torts 218 cmt. e.
Property rights
Alienate (buy or sell)
Use/keep others from using or
allow to use
o Control
Right to destroy?

Limitations on rights
Disrupt neighbors
Disrupt public
Contract derivatives

Peril to Life

Mouses Case (Cargo)

Property: Rose Spring 2013

Why enforce the right to exclude?

1. To avoid potential violence; and
2. Protect privacy rights

No Opportunity to


Reciprocal Benefit of No
Property But Lives Saved

Nominal & Punitive Damages (helpful to get nominal damages)

Why nominal good?

Why lrg punitive

Why not have punitive
damages all the time?
Exclusion of party/
Large punitive
Dont want to frighten
Foundation for punitive damages
Threat to life
as a deterrent
Vindicating your claim that a wrong
Dignitary matter
Difficult to quantify
was done:
of use of land
a) Principle of thing
making home
b) Showing wrong was done
^^ None in the
owners land
c) Procedural aspecton appeal,
Jacque case
already have sub. determination
(Frees from having to prove L)
Prevent self-help
Why so adamant about the right to exclude? Thats just how property is.
J.E. Penner: Car Park extook the car you wanted and left you the fair market value, plus a bonus.
But, as a non-owner, you must keep off someone elses property.
Another positive approach to property:
o Liken property to a game of chicken
Why some get +10,-2? Reciprocity element
o Ill keep my stuff, and you keep yours, and later on, either of us might be better off.
Normative Answers
Should the Jacques be required to offer exceptions?
o I.E.: Allowing pedestrians vs. mobile home OR, just forcing them to let RV through
Purpose of the right to exclude:
o Economics: must keep others out for future investment
o Mary Radins Prop and Personhood
Hinman v. Pacific Air Transport 9th Cir. 1936 pg. 10
Facts: Defs flew plane less than 100 ft. above s surface after plaints repeatedly told them not to.
Rule: Plaints dont have property rights to the airspace above their house
1) Itd be ridiculous to have indvs owning airspace. Its so vast, like the ocean. And, like the ocean, nobody
has property rights to it unless one can actually use the ocean.
Landowner owns as much of space above him as he uses, but only so long as he uses it.
Nobody can acquire title or exclusive right to any space above him.
2) Unless there was evidence showing that defs actions caused damages, plaint entitled to no relief. Here,
plaints offered no evidence showing any damage nor a case for injunctive relief.

Property: Rose Spring 2013

Ad Coelum
Ad Coelum rule: followed in nearly all legal systems for purposes of defining right to exclude.
Owner of surface is also entitled to dig below (ex. For a basement) & above surface (ex. To build 2story house). W/o this understanding, bare right to surface would be pretty useless.
o Air Rights: rights to the column of space above the surface.
No court has ever concluded that operators of airplanes could be held liable in trespass for flying at
cruise altitudes over land below.
BUT4 different doctrinal moves have been suggested to accomplish how to carve out an exception for
over-flights from the ad coeolum rule w/o damaging rules general utility.
1) Action for trespass is available only to persons who are in possession of land (arguments for/against pg
2) Plane over-flights are actionable as trespasses only if they cause actual harm to the surface owner
(arguments for/against pg 14)
3) Plane over-flights are technically trespasses, but surface owner isnt entitled to any damages or other relief
cause she obtains implicit in kind compensation from being able to take advantage of the benefits that
airplane travel has to offerfrom being able to commit similar trespasses over other peoples property
(arguments for/against pg 14)
4) Airspace in which planes travel could be classified as a type of public propertypublic navigable
airspacein which no surface owner has any claim of private property rights (arguments for/against pg 15)
US S.Ct. used 4th theory in US v. Causby (1946), concluding that Congress had effectively asserted fed gov
control over navigable airspace.
o Ct also included that the legislative declaration of fed ownership wasnt a taking of property, unless
the flights come in so low over property to destroy the use and enjoyment of surface area and
EX: Google books infringing on the rights of authors. However, Google argued that the injury to each author
was so small or nonexistent, and the transaction costs of negotiating consents with each copyright owner
would be so large as to make the project of creating such a database infeasible.
Old rule of property: Ad Coleum
Even if not using itstill have value to you
o Argument: could still sale air to plane company
o High transaction cost
o Planes have unspecific route so would need license from all houses
Cost of owningpaying
Current rule of property: can use space above him as long as hes actually able to use & uses it

Property: Rose Spring 2013

Philosophical Perspectives/Conceptions of Property

2 types of scholars who seek to identify the meaning of property:
1. Essentialists: attempt to uncover single true definition of property as legal concept.
2. Skeptics: who believe that it is fruitless to try to come up with a single official conception of what
property means in a legal system.
Property is just a word that means nothing until we spell it out using different words.
J.E. Penner, The Idea of Property in Law (1997) pg. 17
Rights in rem: rights which bind all the world. Rights that must be respected by all subjects of the legal system;
everybody must refrain from trespassing on my land.
o Duty to large & indefinite class of others to respect the right of a thing [not person]
o In rem rights = simple, easy-to-understand duties of noninterference [no hitting/no trespassing]
Rights in personam: right in the behavior of some person, such as the right to the performance of a K. Rights in
personam bind only specific individuals.
o Duty to only a small and definitely ascertained number of others.
o Complicated rights imposing affirmative duties to take particular actions = in personam. Likely imposed
by K or regulation.
The right to use reflects our practical interest in exclusively using things, which correlates to duties in rem on
everyone else not to interfere with our uses of things.
Exclusion Thesis: prop right=right to exclude ppl from thingscomes from our interest in using them
Jacques v. Hinman Courts
Justified punitive damages award as a way of
Viewed property more as a collection of rights, and
vindicating their right to exclude others from the
to question whether that includes the right to
land, which is central to understanding that the land
exclude airplane over flights depends on
is their property
considering competing social interests, not any a
priori conception of what ownership entails.

Margaret Jane Radin, Property and Personhood (1982) pg. 282

Strength or sig of attachment to objects = greater as pain inc. from its loss [hierarchy of entitlements]
o EX: object is closely related to ones personhood if its loss causes pain that cant be relieved by
objects replacement.
Personal Property v. Fungible Property: theoretical opposites:
o Personal Property: prop bound up w/person (allowing you to project yourself into world.) EX: not
having a tongue.
o Fungible Property: property that is held purely instrumental
Expressing ones character through propertythings you own helps establish your identity
o Dogs resemble their owners; Cars and clothes can proclaim character traits of their owners
o If object you control is bound up in future plans of your future self, & these plans help you make
you a person, then your personhood depends realizing those expectations.
EX: a smaller size pair of jeans with the goal of losing weight?...
Fetish: crazy? Shoe EX (3,000 pairs) or Cats EXagainst social norms makes it weird.
Possibly draw the line [of what a fetish is] at harm to others.
Informal Property: mini project (EX: bus seat, class seat, library area)
PDF: Posner, Economic Analysis of Law (1998), The Economic Theory or Property Rights
Legal protection of property rights creates incentives to use resources efficiently.
W/o prop rights, no incentive to incur costs cause no reasonably assured reward for incurring them.
If every piece of land is owned by someoneif theres always someone who can exclude all others from access
to any given areathen indvs will try by to cultivate or make other improvements to max the value of land.

Property: Rose Spring 2013

Trespass/Nuisance Divide

Jacque and Hinman = intentional trespass to land by strangers.

Trespass v. Nuisance: invasions of land by large objects (like house trailers or airplanes) v. interferences
w/use & enjoyment of land caused by some activity on neighboring land, like pollution or excessive noise
Governed by law of nuisance (diff traits from law of trespass)

Cause of Action
Number of Parties
When does it apply?

Entered/Stepped over a line
Stop it. All or nothing. A or B wins
Protects the interest in possession of
When intrudes on land w/object
large and solid enough to physically
displace from portion of her land.
EX car/RV

Unreasonable Use
Not too much
Protects the use and enjoyment of land
With invasion. Invasion committed by small
objects like gas particles

Noninvasive interferences w/use &
enjoyment of land [like putting up a spite
fence] will be nuisance not trespass

1. Nuisance (EX: noise, smell, vibrations)

a. Legal nuisance covers some harms, but not all.
i. EX: ugly housects dont want to determine whose house is uglymatter of taste.
b. Noise: Can make noisebut reasonable amountcant interfere w/my normal use.
i. EX: 3 Neighbors: [which is the reasonable]
1. (1) Concert Pianist
2. (2) Andy Standard as a reasonable person
3. (3) Deaf persons
2. Reasonable Nuisance = like nuisance or like usage of neighbors
3. Residential Property
a. 2 reasons why the Hendricks case came out like it did
i. Normal Usereasonable use of property to dig a well
ii. No Malicejust a race to finish a well system first
b. ((Maybe a trespass case in disguise))
Hendricks v. Stalnaker W. Va. S.Ct. of Appeals 1989 pg. 23
Case of incompatible uses (both cant use land in way both want)
wants to install well & septic system. Waited for sanitation ppl to come out b4 started installation.
Sanitation department said no well/septic system w/in 100 ft of one another.
called right after s for well & was told proposed septic system. called well driller next day.
2 days after called sanitation dept, & 1 day after got permit to install well, depart told no septic system
could be issued cause absorption for system was w/in 100 feet of s well.
Def Argues: Because s well wasnt unreasonable use of his land, hes NL for effects on s property.
Plaints Filed Suit Requesting that:
(1) Water well be declared a private nuisance
(2) Nuisance be abated
(3) Damages
Issue(s): Was s well a private nuisance to in not allowing to build septic system on their prop?
Holding: No. Court agrees w/

Property: Rose Spring 2013

A Nuisance is:
Anything which annoys or distrurbs free use of ones property, or which renders its ordinary use of physical
occupation uncomfortable
Anything which interferes w/rights of a citizen, either in person, property, enjoyment of his property, or his comfort
A condition is a nuisance when it clearly appears that enjoyment of property is materially lessened, and physical
comfort of persons in their homes is materially interfered with.
Martin v. Williams (W.Va. 1956): defined nuisance including acts or conditions that affect either the general
public or a limited umber or persons.
Hark v. Mountain Fork Lumber Co. (W. Va. 1945): defined public nuisance = affects the general public,
and private nuisance = injures one person or a limited number of persons only.
Private Nuisance
Public Nuisance
Substantial and unreasonable interference w/private use
Examination of the reasonableness or unreasonableness
and enjoyment of anothers land
of the use of prop in relation to the particular locality
Includes conduct thats intentional & unreasonable,
Any determination of liability for a private
neg or reckless, or results in abnormally dangerous
nuisance must include an examination of the
conditions or activities in an inappropriate place
private use and enjoyment of the land seeking
protection and the nature of the interference.
Recovery for PN is limited to s who suffered sig
harm to their prop rights or privileges cause by the
No neg, reckless, or abnormally dangerous behavior. Can only look to intentional or unreasonable conduct.
When actor knows or should know that the conduct is
When gravity of the harm outweighs the social value of
causing a substantial & unreasonable interference
the activity alleged to cause the harm
Inability to operate septic system is clearly substantial interference with use & enjoyment of land.
BUTif installed septic system, then wouldnt have been able to operate a well.
Question = was it unreasonable for to have well on his property?
Cause of similar competing interests, balancing of their interests = or slightly in favor of well.
Thus, havent shown that balancing of interests favors their septic system.
Not private nuisance cause didnt show it was an unreasonable use of land.
Maybe favor the one thats more difficult to install?

Bright Line
o Trespass
o Right to Exclude

- Exclusion Strategies (one another gets it)
- EX: fridge and different shelves

Governance Strategies:
- Behavioral rules/geographical rules
- EX: using all food in fridge / Stephanies
roommate eating what she likes
- No doubles/Not taking space

- Losing advantage of different parts of fridge
(w/beer in fridge)
EX: playground
- Each kid gets certain play area
- Want kids paying with each other
- Governance advantage strategy

Property: Rose Spring 2013

o Not too much

Notes & Questions:

Other possible approaches to nuisance cases
1. Instead of balancing parties interests, simply ask whether committed some kind of invasion of s land
that causes significant harm above a certain threshold level.
2. Decide disputes by enforcing the general understanding in the relevant community of what constitutes
normal uses of land
a. Although its unclear from the facts, its unlikely that both water wells and septic tanks are common
uses of rural W.Va. land.
3. First come, first serve basis
4. Ask whether (or ) has been acting in the general norms of neighborliness
Under this strategy, decisions about resource use are
delegated to an owner who acts as manager or
gatekeeper of resource
Law of trespass, applied in Jaque, uses this

Strategy focuses on particular uses of resources, and
prescribes particular rules about permitted and
prohibited uses w/out regard to other attributes or
Law of nuisance, applied in Hendricks uses this

The Coase Theorem

Ronald H. Coase, The Problem of Social Cost 1960 pg. 31

If the increase in value of production through increasing the size is greater than the additional costs that
have to be incurred, the size will increase. Otherwise, it wont.
Ultimate result is independent of the legal position if pricing system is assumed to work w/o cost.
To discuss causation, both parties cause the damage. If one is to attain an optimum allocation of resources,
its therefore desirable that both parties should take the harmful effect (the nuisance) into account in
deciding on their course of action.




1. F has entitlement (R has responsibility to keep cows off)

2. R has entitlement (F has responsibility to keep cows off)
Situation #1A:

F Entitlement
R Responsibility

Fence $200
Damages $100

R pays (lets damage happen)

Situation #1B:

F Entitlement
R Responsibility

Fence $200
Damages $300

R builds fence

Situation #2A:

F Responsibility
R Entitlement

Fence $200
Damages $100

F takes damage

Situation #2B:

F Responsibility
R Entitlement

Fence $200
Damages $300

F builds fence

Property: Rose Spring 2013

Jacque case with Coase Theorem

o Why no coase theorem deal with Jacques and company?
(A) Uncertainty about rights
(B) Personal values (emotions can drive a bargain)
(C) Right breakers (would do anyways)
o Why no Hinman coase theorem?
(D) Impractical: Huge #s (Impediments to Bargaining)
(E) Strategic Bargaining (difficult also cause some people hold out)

Notes on Theorem
If K transaction costs = 0, then same # of cattle will be raised by R, whether or not R is L to farmFer for
cattle trespass. Basic idea is that if K-ing=0, the parties will keep K-ing to modify initial assignment of prop
rights til theyve exhausted all possible deals to their mutual advantage.
o If we ignore distributional impact, & focus only on question of how resources in society are used,
result would be same regardless of initial allocation of rights, if transaction costs = 0.
Two assumptions that Coase doesnt make explicit are:
o 1. Indvs are rational maximizes & all values are capable of being expressed in $$$ terms.
o 2. People are natural cooperators rather than ruthless exploiters.

Resolving Property Disputes by Contract

Coasean bargains: should be explored as an alternative to litigation. A contractual rearrangement of rights

may be cheaper and more satisfactory to all concerned.
Its important to be sensitive to the causes of high transaction costs in order to guide clients toward potential
Coasean bargains before those options are foreclosed and litigation is the only recourse
2 factors that loom large throughout property law: Assembly problems & Bilateral monopolies

Assembly Problems
Arises when someone wants to assemble prop rights from
large # of owners in order to undertake a project
High transaction costs from large #s of K-ing parties
EX: Hinmanif planes had to pay every landowners air
it passed through

Bilateral Monopoly
Localizedsituations where prop owner needs
something that can be provided by only one other
person or entity
Problem cause monopoly on each side: one seller and
one buyer for contested resource
Also high trans. costs, cause each party has nowhere
else for an equivalent transaction
Extremely prevalent in prop law
Important to look to the future to identify potential assembly problems and bilateral monopoly problems before
the client gets trapped in a situation that precludes any kind of Coasean bargaining.

Property: Rose Spring 2013

Building Encroachments
Pile v. Pedrick
S.Ct. Penn 1895 pg. 52
Facts: s built wall that projected onto s land by 1 3/8 inches. offered to make wall a party wall, but
declined. said had to remove parts of wall crossing prop line, but wouldn't let on his prop to do it. had
to remove entire wall and rebuild from s side.
2 possible remedies:
o (1) Treated, with plaints consent as perm trespass and compensated for in damages
o (2) Or, defs could remove offending ends of stone to other side of the line.
Plaints chose 2nd one and court below ordered it.
Richard Epstein: need to restore all property that you damaged
Court says Tough luck, def. Take it down. Costs of this appeal to be paid by appellants.
Pile v. Pedrick
S.Ct. Penn 1895 pg. 54
Facts: Appeal from previous case.
Defs had no right, at law or equity, to occupy land that doesnt belong to them.
Ct doesnt see how ct below couldve done otherwise than recognize & act upon this principle.
1 year to remove wall.
Golden Press, Inc. v. Rylands S.Ct. Colorado, 1951 pg. 55
caused s foundation (when constructing building) and footings to extend from 2-3.5 inches on s land.
seek an injunction requiring that remove all footings & foundations on their property.
Issue(s): Was the encroachment of land intentional which would determine whether to find L?
Holding: Reversed injunction.
When encroachment = deliberate and is willful & intentional taking of anothers land, equity may require
its restoration regardless of expense of removal compared w/damage suffered; but where encroachment was
in good faith, ct should weigh circumstances so its not oppressive.
If s encroachment = unintentional & slight, s use isnt affect & danger is small & compensable, &
removal is way much more expensive & causes grave hardship or making removal unconscionable,
mandatory injunction may be denied and will be compensated w/damages.
Ad coelom rule: owners own underground property.
The expense and hardship of such removal would be so great in comparison with any advantages of s to
be gained making it unconscionable to require.

Property: Rose Spring 2013

Property Rules, Liability Rules, and Remedies

Guido Calabresi & Douglas Melamed Property Rules, Liability Rules, and Inalienability: One View of the
Cathedral 1972, pg. 960
1st order legal decisions: decide which conflicting parties will be entitled to prevail.
2nd order legal decisions: go to manner in which entitlements are protected & to whether indv is allowed
to sell or trade entitlement.
3 Types of Entitlements
(1) Entitlements protected by property rules:
Involves a collective decision as to who is to be given an initial entitlement but not as to the value of the
(2) Entitlements protected by liability rules:
Whenever someone may destroy the initial entitlement if he is willing t pay an objectively determined
value for it, an entitlement is protected by a liability rule
(3) Inalienable Entitlements
Its transfer isnt permitted between willing buyer and willing seller
Rules of inalienability not only protect the entitlement; they may also be viewed as limiting or
regulating the grant of the entitlement itself.
Courts have a choice along two dimensions.
o (1) Can assign the entitlement to either the or .
o (2) Can choose to protect this entitlement with either a property rule or a liability rule.
o YIELDS FOUR RULES: Calabresi & Melamed box




Mode of Protection
Property Rule
Liability Rule
Rule 1: Award entitlement to and
Rule 2: Award entitlement to plaint, but protect
protect this by a prop rule.ex
entitlement with a liability rule.
injunction (stop factory from
polluting or force factory to move)
Damages for health, prop. Boomer Case
Rule 3: Award entitlement to def
Rule 4: Entitlement is awarded to , but can
protected by a property rule.
force to transfer entitlement to in return for
payment for money compensation. Fact wins,
Hinman, no injunction, no damages.
subject to buy for FMV. Eminent Domain.
Like pay moving costs.

Injunction: bigger rightcan force someone to do something vs.

Damages: Get $, but has option to continue doing what they want, just have to pay you.

Property: Rose Spring 2013


The Mistaken Improver

Producers Lumber & Supply Co. v. Olney Building Co.
TX Court of Appeals 1960 pg 65
Lot 8 was purchased by for $1428 for a home which was to be built.
had the lot graded and planted tress and grass on it.
constructed 9 dwellings, one of which was on s lot.
called secretary/treasurer, asked if lot 8 was sold, was told "no"
Later learned that lot 8 was sold to dwelling at that time was almost complete.
There was no settlement between the parties reached regarding buying lot from .
eventually broke off negotiations, sent a crew to destroy the building without 's permission.
Damages for house; return lot to condition before; exemplary damages
EX: K law and barbershop quartet on lawn (but wrong lawn), do you have to pay them?
o No, no bargain: more of an accidental gift
Holding: should pay $5,900.
Orts () resorted to self-help and took law into his own hands. Before a court of equity could determine
rights of parties, went on Lot 8 (knowing it belonged to ) and demolished dwelling worth $5,000
causing great destruction of prop.
Rule: Under no circumstances is an improver allowed to go on someone elses land, without his knowledge and
consent, and demolish the improvements that he has through mistake placed thereon, and if he does so, he
commits waste and can be required to pa the landowner for such waste.
Dissent (Justice Barrow):
Record shows that , having at its mercy attempted to drive an unconscionable bargain.
3 Remedial Options That a Court of Equity Might Adopt in a Case of a Good Faith Improver
1. Let true owner keep house & pay encroacher its value (an equitable award of restitution either
immediately or on sale, w/obligation secured in the meantime by a lien on the land)
2. Transfer lot to encroacher in return for payment of its fair market value (effected by a commonlaw award of damages and motivated by considerations of unjust enrichment)
3. Sell property to 3d party and apportion proceeds between true owner and encroacher in accordance
w/their respective entitlements (a judicial award of partition, again reflecting principles or restitution or
unjust enrichment)

wins, all or nothing or tear it down
(Exclusion Strategy)
Encourages care, will be more careful
Rules-based approach
Cheaper for courts (lowers admin. costs)
Encourages un-neighborly behavior

Golden Press
Distinguishes intentionalif this, then Pile
outcomevs. accidental encroachment (lesser
remedy, wins, but damages or injunction but
has to allow access) (Governance Strategy)
When do you draw the line? depends on what
jury says

Strategic Bargaining
---------------- No, give value of property
------------ Ill close windows

Property: Rose Spring 2013


First Possession: Wild Animals
Pierson v. Post NY 1805 pg. 82
Facts: Post pursing fox w/his hounds. Pierson killed & captured fox despite knowing Post was hunting it.
Neither owned land they were hunting on. Post brought trespass suit contending he acquired title to fox when he
began to hunt it. Pierson said Post didnt have control over fox; so, he didnt acquire any prop interest in it.
Issue: Does fact that person is pursuing wild animal grant that person right to the animal?
Holding: No. To obtain title to wild animal, person must take it. If Post mortally wounded animal, wouldve
been sufficient to show possession since wouldve deprived animal of its natural liberty. But, only showed
pursuit & so didnt acquire prop interest in animal.
Rule: First to kill and capture. AKA First come, first serve.
Negative externality: Banana Peel
Positive externality: Plaint in garden
Dissent (Livingston): Externalitiestake consequences of something, dont hurt you, but hurts someone else.
o EX: Banana peel on ground.
o Rule of capture
Public Policy ARGUMENT [Dissent]:
Death of fox is matter of public interest.
As a public policy matter, decision should offer greatest possible encouragement to destruction of this
animal. It was nearly certain that Post wouldve captured the fox.
Has to POSSESSIONhard to draw line on who and when determines when prop right begins.

Ghen v. Rich US District Ct: District of Mass 1881 pg. 90
Facts: killed finback whale, but had to wait 3-5 days until it rose to surfacecustomary cause couldnt take
whale then. Usually, finder of whale sends word to town of finding, and owner / shooter, comes to pick it up
and pays finder. Here,guy found it and sells it at auction. buys it. Neither knew killed it, but knew or might
have known if they wished, that it had been shot and killed by someone engaged in this type of business.
- Right Whale = Rule of Capture
- Leading us to Iron holds the whale? Why Gentlemans Agreement
o Danger and effort; Size of boats; Character of the lance; Capital expense and labor; Value
Holding: Belongs to shooter.
Damages = market value of oil obtained from the whale, less the cost of trying it out and preparing it for the
market, with interest on the amount so ascertained from the date of conversion.
- 2 major rules of customary whaling rules
o (1) Fast-Fish-Loose-Fish Rule: whale belonged to 1st harpooner as long as it was attached to his
boat, Then got to keep whole whale. Applied to slow-moving whales.
o (2) Iron-Holds-the-Whale (First-Iron Rule): 1st harpooner gets exclusive rights to whale as long
as he was in fresh pursuit. Applied to most valuable & most dangerous whales.
- ALSOCapture rule (whoever finds, gets it)

Property: Rose Spring 2013


Keeble v. Hickeringill
Queens Bench, 1707 pg. 93
Facts: had decoy pond. Bought materials to catch wildfowl. knew & intended to drive them all away.
shot at pond scaring away wildfowl.
Holding: NOT allowed to go shoot up wildfowl and keep ducks away from
- Nearness does establish claims
- Rule of Capture = not your duckBut if animal on your land, then duck is yours.
- Every man can use for his property what he wants; Everything did was lawful
RULE: Someone who hinders another in his trade or livelihood is L to an action for so hindering him.
Since it was done in a violent and malicious way, def is L. Had def just created his own pond which brought
waterfowl from plaints land, then that would be okay.

Tragedy of the Commons


The Problem of the Commons: Garret Hardin

THE THOUGHT: Positive action based on rational analysis (the tendency to assume that decisions
reached individually) will be the best decisions for an entire society.
Rational beings each seek to maximize his gain.
WE ASK: What is the utility to me of adding one more animal to my heard? This utility has one
negative and one positive component:
o The positive component is a function of the increment of one animal. (EX: herdsman). Since
the herdsman receives all proceeds from sale of additional animal, positive utility = nearly +1.
Easy for you to find owner if interestedimpossible for owner to find them.
o The negative component is a function of the additional overgrazing created by one more
animal. Since, however, the effects of overgrazing are shared by all the herdsmen, the negative
utility for any particular decision-making herdsman = only a fraction of -1.
Rule of Capture as long as not maliciousCustomary Practice
The rational herdsman concludes that the only sensible course for him to pursue is to add another
animal to her herd. And another; and another. Therein is the tragedy.
Each individual benefits as an individual from his ability to deny the trust even though society as a
whole (of which hes a part) suffers.

The tragedy of the commons describes problems associated w/an open-access resource where theres an
unrestricted privilege to capture some valued feature of the resource.
Examples of Tragedy of the Commons
Hunting (prob why tags)
Financial-Housing Market
Water usage
Gas usage

Rainforest usage
trying to occupy)
Each person would be better off it could get together & agree

Potential tragedy in the use of natural resources:

Depletion of resourcesHunters realized all of the deer are going away, tag limitsAlso, you find out
the depletion and voice concerns, then theyll intervene.
Grazing commons in trad ag societies such as those of early modern Europe werent open access.
Solutions to the problem of the commons require some form of coercion or cooperation.
o Another possible solution to overuse of an open access resource create new type of property,
individual transferable quotas (ITQs), which restrict overall level of access to resource (but are
transferable) so indvs can exit & enter new industry.

Property: Rose Spring 2013


What would help?

Imminence of threat and info
Closed system (hunters license)
Small group
Non necessity
Long term interest

What would hurt/detract?

Ignorance of problem
Open access (no licenses?...)
Large #s

Hardin on Population
As people grow economically, birth rates decline
o Hard in Chinasister
o Bringing women out of poverty
o Allocation of resources not same
o Rural people?
Hague v. Wheeler, 1893 PDF
Both neighbors taking out gasone is destroying and other is piping it out to use. Gas is being depleted
for the one whos taking it out.
o Minerals moving around (oil& gas)who owns this?
Not really extortion (create situation of duress by expending resources in order to expend someone
elses) cause they can only purchase and sell it to each othermore like strategic bargaining.
Does the right to taking gas out mean a right to destroy it too?
o will get less gas because is flaring it off. ** Seeking injunction
o Big difference in value of gas between and
(1) Leave as are what happened
(2) When cant bargain, courts should be able to give to party whod pay most
(wants it most)
Home Run Baseballs (pg. 109)
Popov v. Hayashi 2002 (Cal. Super 2002)
- Like other abandoned property, they can be claimed by 1st person to take possession of them.
- Facts: originally caught Barry Bonds ball, but unclear whether he had full control of it.
o ended up w/it. sued claiming that he was 1st possessor and so was entitled to ball.
- Held: ball should be sold. Half proceeds given to each cause although couldnt prove he established
possession of ball, once it landed in his mitt, he had an exclusive pre-possessory interest in being
allowed to complete the catch w/o interference.
- First in time rules work best when potential appropriators have heterogeneous knowledge and
o Homogeneity of appropriators conduces to well-functioning governance regimes.

Property: Rose Spring 2013


Misappropriation and the Quasi-Property Right in Hot News

International News Service v. Associated Press US S.Ct. 1918 pg. 131
Facts: Rewriting what you wrote and no cite; News value is fresh; AP cant copyright news
[R]: There is a quasi property interest in news collected by an agency against other news collection agencies. It
is unfair business competition for a news collection agency to distribute the news collected by another news
collection agency.
- The parties are competitors in this field; and on fundamental principles, applicable here as elsewhere,
when the rights of privileges of the one are liable to conflict with those of the other, each party is under
a duty so to conduct its own business as not unnecessarily or unfairly to injure that of the other.
- Quasi Property
- When an uncopyrighted combination of words is published there is no general right to forbid other
people repeating themtheres no property in the combination or in the thoughts or facts that the words
- Property doesnt arise from value.
- Property depends on exclusion by law from interference.
Brandesis DISSENT:
- The fact that a product of the mind has cost its producer money and labor, and has a value for which
others are willing to pay, isnt sufficient to ensure to it this legal attribute of property.
- That competition isnt unfair in a legal sense, merely because the profits gained are unearned, even if
made at the expense of a rival, is shown by many cases besides those referred to.
In order to sustain an injunction (according to the court), it need not affirm any general and absolute
property in the news as such.
International News is leading judicial statement of the idea that property rights should be based on
desert, that one shouldnt be allowed to reap where another has sown.
Frida Kahlo
Value of news vs. writing

Property: Rose Spring 2013


Midler v. Ford Motor Company

9th Cir. 1988 pg. 143
Facts: Company wanted to use Midlers voice (herself) in their commercial. Called her manager and he said she
wont do commercials. Company got copyright to her song and had one of her old backup singers sing her song
and imitate her. Many people thought it was actually Midler singing on the commercial. Theyre trying to
control her persona and stage performance
[R]: Court holds that only that when a distinctive voice of a professional singer is widely known and is
deliberately imitated in order to sell a product, the sellers have appropriated what is not theirs and have
committed a tort in CA.
Copyright protects original words of authorship fixed in any tangible medium of expression. A voice is
not copyrightable (others can sound like each other). The sounds are not fixed.
No unfair competition found here. One-minute commercials like this wouldnt have saturated Midlers
audience and curtailed her marketMider didnt do TV commercials so defs werent in competition
with her.
Vanna White EX: Instead of having an exclusive right in her name, likeness, signature or voice, every
famous person now has an exclusive right to anything that reminds the view of her.
o The panel is giving White an exclusive right not in what she looks like or who she is, but in
what she does for a living.
Intellectual property law assures authors the right to their original expression, but encourages others to
build freely on the ideas that underlie it.
Web address domain names
o Goes to one who values the mostbut how do you know who values the most?
o EX: (People Eat Tasty Animals got it first)
People for Ethical Treatment Of Animals
o ** Cybersquatting statute
Mockery included?
o Rule of Capture vs. Calder Hicks (who wants it more gets it)
Why protect IP?
o If protecting, may not grow technologically
o Writings & copyright
o Musiciansconcerts to make money
o Moviesmake toys/figuresmovies, Netflix, Redbox
Appearancesmaybe like Comicon Star WarsSpecial Features on DVD
Makes DVDs more desirable than downloading
CNN news ex: cite/acknowledge and pay
IP-like claims: Titaniccorset on Kate Winslett
Colorizing movies--Casablanca

Property: Rose Spring 2013



Principle of Accession vs. Doctrine of Accession
Someone making good faith improvements on something thinking that doesnt belong to anyone.
o Stone (ex) then goes to one who made it better
Reward to laborer who does the work
(1) Transformation of something
(2) In good faith
Principle of Accession
First Possession: kid first at front of line
o Firstness and Continually
Prominent but also higher value for those in first arbitrary
Sugdens argument: Nearness defines prominence
o What about 3 seats with middle seat unoccupied?
o Nearness allows for patrol/control of area
Closeness suggests:
o (1) Highest value
o (2) Control
Principle of accession:
Alternative principle of acquisition, distinct from 1st possession.
Like 1st possession, accession assigns property rights in unowned things, but instead of picking out
someone who has expended labor at bringing the thing under her control (as in 1st possession), the
principle of accession assigns the unowned thing to the owner of some prominent other thing.
One advantage of accession is that it typically identifies this winner without her having to do anything,
and it doesnt encourage the wasteful racing behavior often associated with first possession, discovery,
or creation.
Accession also enhances the incentives to improve property, insofar as new increments in value are
automatically assigned to the existing owner of the prominently connected asset.
Accession gives rise to unearned windfalls, and makes the rich get richer, as it were.
Humes theory of property:
Generally rests on convention, and the accession principle, like possession, rests on a preference for
conforming to a widespread pattern of behaviorlike respecting each others possessionthat could
have been otherwise.
Assign portions of the seabed for purposes of hydrocarbon development to the country.
Argument: Sugden argues that not only the simplicity but also the very arbitrariness of a closeness
relationship recommended it as the basis for the division:
o Unlike some of the other criteria and procedures (like equal division), the accession-style
solution based on closeness of coastline was not open to special pleading and extended
argument or, one might add, manipulation.
Tacit Cooperation:
Focal solutions to situations that can be modeled as cooperative games draw on common knowledge,
but some have argued that these solutions can arise from hard-wired aspects of mind as well.
Accession can be seen as defining the scope of property claims.

Property: Rose Spring 2013



To whomever the soil belongs, he owns also to the sky and to the depths
Also applies to resources discovered beneath the surface, like minerals, oil, gas deposits, or caves.
Edwards v. Sims KY Ct. Appeals 1929 pg. 171
[F]: Edwards found cave under his property. He advertised cave and built hotel by it. Lee stated that part of the
cave was under his land and he wanted an injunction against people from going into his part.
Keep survey from being done
o Vs. Hinmanno assembly problem here like Hinman (low transactions costs b/c only 2 parties)
Prohibition denied (E loses). Survey can be conducted to determine if Es property is being used to the
detriment of contiguous propertycourt doesnt want a law that makes Lee do something wasteful like
drill another entrance.
o Edwards should have gotten his ducks in a rowdo the survey himself and pay the fee would
have resolved issue before E had expended effort.
Ad Coelum Ruleexceptions:
o Limitations on the right of enjoyment of possession of all property, such as its use to the
detriment or interference with a neighbor and burdens which it must bear in common with
property of a like kind.
Deprives Edwards of rights which are valuable, and destroys value of his property, on the motion of one
who may have no interest in that which its taking away, and who couldnt subject it to his dominion or
make any use of it, if he should establish that which he seeks to establish in the new suit wherein the
survey is sought.
Ad Coelum rule has never been true and shouldnt be used now.
Rule should be: he who owns the surface is the owner of everything that may be taken from the earth
and used for his profit or happiness. Anything which he may take is thereby subjected to his dominion,
and it may be well said that it belongs to him.
Cave should belong absolutely to him who owns its entrance, and ownership should extend even to its
utmost reaches if he has explored or connected these reaches with the entrance.
Cave is Edwards because he had made it what it was, and without what he had done it was nothing of
value.what he owns is intangible and indefinable.
S. Asiaproperty goes to oldest son
o Males are valued more
o Anticommons-creates assembly problems
o CustomaryResponsibilities

Property: Rose Spring 2013


Johnson v. MIntosh US S.Ct. 1823 pg. 113
Facts: From time immemorial, the Illinois and Piankeshaw tribes held and inhabited lands in controversy
Issue: Did Natives do enough to claim the land? (for 1st possession). NO.
: Deed-1773
o Native Am 1773 s
: US-Deed
o US (1803?)
[R]: Native Americans do not have title to land on which they live; they only have possession (occupancy).
Since they do not have title, they cannot convey title to others. Indians do not have a concept of individual
property rights and thus cannot have title. The United States has exclusive title to land because of the discovery
and conquest of America by Europeans.
Chief justice draws distinctions between sovereign title (dominion) based on discovery, and Indian
title (occupancy) based on possession.
Court used a practice of, when faced with conflict, recreating the chains of title underlying competing
claims in order to determine what party has the stronger claim.
The court bases its decision on property factors as understood by Euro society, and found that the US
has sole title, which it inherited from England after the Revolutionary War.
o But the tribes were nomadic people, so problematic to act in a way to disclose ownership per
European settlers standardsall the Euro settlers recognized was agriculture.
Cultural preference of prominence (agriculture)
However extravagant the pretension of converting the discovery of an inhabited country into conquest
may appear; if the principle has been asserted in the first instance, and afterwards sustained; if a country
has been acquired and held under it; if the property of the great mass of the community originates in it,
it becomes the law of the land, and cannot be questioned.
Other ways of utilizing land that the Europeans recognized:
o Signals of land use (other ways of establishing property to claim property rights to land)
o Continuation of a soverign state of the tribe
Cant have territorial monopolies.
Mashalls Argument:
o England States (VA., etx.) US
o claim is voidnobody can extinguish claims except for US
o Alternatives
o NA have full property New Zealand
o Marshall: NA have undefined claims
o NA have nothing Australia
The policy of only allowing non-Indians purchase land from Indians with the permission of the US gov
was disadvantageous to the Indians.
o Indians could theoretically remain on the land but could not force potential buyers to compete
with each other, thus depressing prices.
o They recreate the chains of title underlying the competing claims, in order to determine
which of the parties has the stronger claim.
CJ Marshall draws a distinction between sovereign title (dominion) based on discovery and Indian
title (occupancy) based on possession.
Tee-Hit-Ton Indians v. US US S.Ct. 1955: Congress could take Indian land w/o compensation.

Property: Rose Spring 2013


Method where someone, w/o the owners permission, acquires a new root of title to property already owned.

If own things, cant just buy, must take care & keep watch over it.
How hard person to control property VS. How likely its to be confused as nobodys there

Marengo Cave Co. v. Ross S.Ct. of Indiana 1937 pg. 190

The then-owner of the real estate where entrance was took complete possession of entire cave and used
for exhibition purposes, and began to charge an admission fee
Quiet Title: In rem action claim to world at largeClaim of property Is yours
DiscoveryPathways / DevelopmentSelling Tickets (controlling access) [signals ownership claim]
*** Visibilitynot fair to claim possession over secret acts. would owner think something is going on?
Problems w/AP law:
Probably the most touchy issue in AP law is what it means to say that the APs possession must be
adverse under a claim of right.
1. Adverse under a claim of right means that the AP subjectively (but mistakenly) believes he is
legally entitled to possession of the property, i.e. the AP is acting in good faith.
2. Adverse under a claim of right means that the AP subjectively believes he is not legally entitled to
possession of the property, i.e., the AP is acting in bad faith
3. The APs subjective state of mind is irrelevant; all that matters is that the AP has not been given
permission by the to use the property
In nearly all states one who actually possesses part of a parcel of land under an instrument giving color
of title to the whole parcel is deemed to constructively possess the whole.
So actual adverse possession of part of the parcel described in a defective deed may give rise to constructive
adverse possession of the whole parcel.
Elements of Adverse PossessionPossession must be:
(1) Actual
(2) Visible
(3) Open & Notorious
(4) Continuous & Uninterrupted [how owner would usually use property]
(5) Exclusive
Reliance interests developed through long-standing possession of the property.
Losing something one already has is more painful than not getting something one doesnt yet have.
If the AP is the person who has the property, then taking it from the AP may be more demoralizing to
the AP than denying it to the TO would be demoralizing to the TO.
Adverse possession is a penalty designed to discourage TOs from sleeping on their rights.
3rd rationale: AP reduces transaction costs of determining title to assets that last for long time (like land)
AP enhances the efficiency of property markets.
At common law one could not obtain title by AP against the crown
US v. Thompson US S.Ct.1878; US v. Hoar (C.C. Mass 1821):
o In a representative gov, where people dont and cant act in a body, where their power is
delegated to others, and must of necessity be exercised by them, if at all, the reason for
applying these principles is equally cogent.

Property: Rose Spring 2013


Carpenter v. Ruperto

S.Ct. of Iowa 1982 pg. 203

[F]: Plaintiff used some of defs property by planting garden, adding a propane tank to the property where defs
only used to store junk and debris on it. Plaint knew she was on defs property when planting.
[R]: Good faith is an essential component of claim of right. When knowledge of lack of title is accompanied by
knowledge of no basis for claiming an interest in the property, a good faith claim of right cannot be established.
cant claim AP over strip of prop if she knew she was planting on s yard.
Notes: In a survey of Am case law, courts generally grant AP only to possessors who act in good faith.
Howard v. Kunto Ct. Appeals Washington, 1970 pg. 208
Many different properties purchased with the belief that its owners owned the land, was wrong. The
initial surveyer who surveyed the lands at purchase for each owner was off by 50 feet.
Thus, each owner s land was his next door neighbors and each owner was on someone elses property.
Oft-quoted rule:
To constitute AP, here must be actual possession, which is uninterrupted, open and notorious, hostile
and exclusive, and under a claim of right made in good faith for the statutory period.
(1) Rejects conclusion that summary occupancy only of a summer home destroys continuity of
possession required by statute.
(2) Occupancy of tract B during summer months for more than the 10-year period by def and his
predecessors, together with the continued existence of the improvements on the land and beach area,
constituted uninterrupted possession within this rule.
For KuntoCourt just gave deeds to correctly drawn lines.
Comes out in favor of the Adverse Possessor.
Its been firmly established that the requisite possession requires such possession and dominion as
ordinarily marks the conduct of owners in general in holding, managing, and caring for property of like
nature and condition.
It is not necessary that the occupancy should be actually on premises continually.
If land is occupied during period of time during the year its capable of use, there is sufficient
Buchana v. Cassell Wash. 1959: purchaser may tack the adverse use of its predecessor in interest to that
of his own where the and was intended to be included in the deed between them, but was mistakenly
omitted from the description.
Faubion v. Elder Wash. 1956: the general statement which appears in many of the cases is that tacking
of AP is permitted if the successive occupants are in privity.
o The technical requirement of privity shouldnt be used to upset long periods of occupancy of
those who in good faith received an erroneous deed description.
o Their claim of right is no less persuasive than the purchaser who believes he is purchasing
more land than his deed described.
o The requirement of privity is no more than judicial recognition of the need for some
reasonable connection between successive occupants of real property so as to raise their claim
of right above the status of the wrongdoer or the trespasser.
There is sufficient privity of estate to permit tacking and thus establish AP as a matter of law.

Willful improver gets noting

Mistaken improver gets compensated
Juries dont like will

Property: Rose Spring 2013


AP & Tacking
The AP can eject trespassers before the statute of limitations runs, as long as the AP entered the property first.
The AP can also sell or give his interest to a third party.
Tacking: adding of time the first AP used the property to the time the second AP used the property.
Tacking of adverse possessions is permitted if the successive occupants are in privity, which occurs by
contract of sale, will, or other inheritance.
A series of successive trespassers not in privity cannot tack.
***Adverse possession protects the innocent 3rd party who acquires property from the adverse possessor.
Typically, state statutes provide that the statute of limitations is tolled for owners suffering from certain
narrow classes of disabilities, including being under age, insane, legally incompetent, or (sometimes) in
prison, at the time the AP entered.
Disabilities arising later usually do not affect the running of the statute, and disabilities in the same or
successive owners cant be tacked.
Also, other hardships that might hinder TO from bringing suit, ex poverty, dont affect running of statute
True Owners circumstances stops the clock for statute of limitations
o (1) Statute of limitations doesnt run against AP
o (2) Those in prison/jail
o (3) Poor personcant defend property, but can gain an asset
o (4) Public ownershipNo AP against public
EX: state park on Howard in Howard v. Kunto
Theory of Corruption (gov taking from people whos electing them) public official
AP on Chattles:
AP on personal property
o May discourage people from being friendly
o EX: A asks B for a book to borrow
A takes book from B without knowing
o EX: ArtworkMuseums
Family low price x y [. . . ] Austrian St. Gallery
Does this sale establish a claim of right?
o Theres a chain of titles and sale occurs, so belongs to gallery.
o Maybe toll statute of limitations as similar to a disability
Family Seizure (lawful under Nazi reign x y [. . .] Austrian gallery
Voluntary Transactionswill, purchases, gift (much more and more precise than involuntary
o At margins, lots of problems/similar to involuntary transfers
Once a written offer is accepted by the sellerits a Kgoverns dealings until closing.
Marketable title is title thats free from defects and encumbrances but need not be perfect title; rather
some notion of reasonableness animates this standard, such that marketable title is sometimes said to be
title that is free from reasonable doubt or title that a reasonable person would accept.
A general warranty deed contains a covenant by the seller that he is able to, and does, convey good
title to the buy.
A quitclaim deed contains no covenant of title; such a deed conveys to the buyer whatever the seller
had but contains no assurance as to what that is.
A special warranty deed gives a covenant against title defects stemming from acts of the grantor and
related parties, but not other defects.

Property: Rose Spring 2013



A security interest is a special type of property right in an asset called collateral.
o Purpose: secure a loan; makes an asset, the collateral, available as a source of value if the
debtor defaults on the loan.
Land continues to be a convenient asset against which to borrow.
Very features that make land a good candidate for centralized recordsits value, fixed location, and
permanencemake good candidate for asset to use to secure loans, particularly long-term loans, and
even loans whose proceeds will be used to finance projects other than the acquisition of the real estate.
The mortgage document represents the security interest and the note contains the terms of and
evidences the loan itself.
Equity of redemption:
One protection as borrower is the right to redeem property even after default
Strict foreclosure:
Mortgagee would have the right to be declared the owner of the premises w/o any sale of theMpremises
Can also refer as a shorthand to foreclosure by sale.
Can refer to the equitable period of redemption (equity of redemption) developed by courts of equity,
and foreclosure originally meant foreclosure of the equity of redemption.
Before the current mortgage crisis, the most recent episode of wholesale legislative intervention on behalf of
mortgagors took place during the Great Depression, which led a number of states to pass mortgage moratoria.

The US S.Ct. upheld the Minnesota moratorium in the face of Ks Clause and Due Process challenges in
Home Building and Loan Assn. v. Blaisdell 1934 (pg 825)
o Minnesota law said that during the declared emergency period, mortgagors could obtain relief
from foreclosure and execution sales through authorized judicial proceedings and that period of
redemption could be extended.
o Court said: the economic interests of the State may justify the exercise of its continuing and
dominant protective power notwithstanding interference with Ks and likened mass
foreclosures stemming from the Depression to natural disasters.

Real Estate:
(1) Title Theory of (a loan) the mortgage
a. Meet conditions of loan or lose everything
b. K for deed
i. Pay elevated rent and down payment
1. Then refinance and get payment down
c. Just take it and thats itno further claim
d. EX: buy car from dealer.
i. Title and possession to car; bank has mortgage to car
1. Lien Theory
(2) Lien Theory
a. Lien: claim against property/security interest of at least amount of outstanding debt
b. If cant pay, bank will go through process to get title and repossess car, then sell car, and take
whats owedrest back to owners
c. Borrower gets excess money
(3) Trust Deed
a. Variation of lien theoryget interest out of hands from certain indvs.

Property: Rose Spring 2013


Courts of Equity:
o Buyer gets an equity of redemption
Foreclosing equity of redemption
o Strict Foreclosure in Title Theory
Lenders take it all and do w/e they want
o Lien Theory Foreclosure
Sell property and pay lender/rest/excess goes to borrower
(1) Judicial Foreclosure
(2) Lender has power of sale
(3) Trust deedwho conducts sale?

Lien: Conditional claim on property till amount is paid back.

Mortgage: Lien for unpaid debtvoluntary
Why agree?
o Low interest rates
o Living in a house/owning a house
o Enforceable only by foreclosure
o Lender has power of saleMurphy
House: Fair Market Value = $60,000
Owner mortgaged and still owes = $15,000
Foreclosure saleonly highest bid = $20,000 Bidder A
Homeowner gets = $5,000 and debt released
Bank gets = $15,000
A gets house and $40,000 better
House: 60k
Owes: 15K
Sale = 15K Bidder A
Owner = gets $0 and debt released
Bank = 15K
Bidder gets house and 45K better
House: 60K
Owes 15K
Sale 5K Bidder A
Owner = -10K (deficiency judgment for 10K, still owes it)
Bank = 5K
Bidder gets house for 55K better
House: 60K
Owes: 15K
Sale 15K Bidder A could be anyone, most likely bank itself (like in Murphy)
Wipes out debt & keeps house.

Problems with foreclosure sales:

No bids/few
Low bids
Why so low turn out?
(1) Marketed limited/limited info (ct. house)
(2) Question of financewhere does money come from?
a. [What do you offer as a loan at an auction?]

Property: Rose Spring 2013


(1) Limited Info.

(2) Finances
(3) Limited Opportunities to


Commercial Transaction
- they knew where to go to find ad
- if buying in volume, not a problem

Reform ideas for consumers:

(1) Dont let lender bid (lenders in favorable position)
o Problem: shoving out person most fav to bid
(2) Letting lendee buy back property for sale price within certain time
o Problem: whod bid knowing in 2 years will sell back
(3) Make lender pay at least whats owed
o Problem: under waterowe more than what any sale would bring
(4) Lender bids at fair market value
o 1. Risk on bankno default judgmenthigher down payments interest rates
o 2. Default Judgment
Why dont homeowners sell before foreclosure?
Thought he could sell it before somehow?
o Over optimistic
Murphy cant sell if owed mortgage, or if under water, wont find buyers to purchase for outstanding
Short Sales
Bank accepts whatever get in sale to wipe out debt
o For owner: no debt, but no house
o Bank: no longer dealing with property and no foreclosure
Types of Mortgages
(1) Conventional mortgage (fixed rate mortgage)
(2) Adjustable Rate Mortgage (ARM)
(3) Second mortgage part of payment
(4) *ARM with teaser (low interest rate at beginning and later payments
(5) Balloon mortgage
(6) No down payment
(7) No asking personal credit history
o With the thinking of: the housing market is always going up, so
youll be fine!!!

#s 4-7 are loans to risky persons [worst kind of loans]

Things Slowing Down Foreclosures:

Judicial foreclosures (FL & NJ examples)
Buying a house ex:
How do you show its yours?
o Title it
o Actual possession (take care of it)
o Fence it
o Brand it

Property: Rose Spring 2013


Murphy v. Financial Development Corporation Supreme Ct NH 1985 pg. 825

FORECLOSURELender can bidbut must act as FIDUCIARY
[F]: Plaintiff bought a house with a mortgage. He fell behind on payments when he lost his job. The house was
auctioned at a foreclosure sale for $27,000 and later resold for $38,000 by the lender.
Holding: When selling the house, the lender needed to act in good faith and with due diligence to exert
reasonable efforts to obtain a fair and reasonable price.
Damages: Where a mortgagee fails to exercise due diligence, the proper assessment of damages is the
difference between the fair price and the price obtained at foreclosure sale. Not the difference between market
value and the sale price.
Justice Brock DISSENT:
No support for masters finding that the lenders failed to exercise due diligence
Mortgagees fiduciary duty extends only to its role as a seller.
Low price in itself isnt sufficient to invalidate a foreclosure sale, unless the price was so long that it
shocked the judicial conscious.
Duty of the mortgagee to obtain a fair price extends to the defaulting mortgagor.
Even if a court sides with the mortgagor in a case like Murphy, mortgagors with substantial equity
would be well-advised to try to sell the property themselves, if possible. WHY?
o Mortgagor is likely to get a much better price than lender.
o Murphys shouldve sold house themselveslender gets money back w/o incurring costs of
foreclosure, and Murphys get to pocket full amount of their equity in house w/o having to
spend time and money suing lender.
Why use land sale K instead?
o Restrictions from mortgages add to costs and risks of using mortgages.
o Provides credit to persons who have high risk of default.
Mortgages and the Financial Crisis of 2008: pg. 846-849
Broad agreement that management of financial institutions ignored reasonable estimations of risk and
their compensation packages promoted decisions in favor of taking on these underestimated risks.
Lots of factors contributing to mortgage crisis:
o (1) Govalways been pro-house owning. Offering tax deductionsresponse to housing
market failure, lots of agencies popped up to extend more loans.
o Gov forced banks to give out loans to people who couldnt afford it.
Collateralized debt obligation (CDO): A CDO combines property forms like the trust and mortgages.
theory was that the underlying loans might be risky but the highest tranche would be very safe, and
so eligible for the highest credit rating, and the credit rating agencies obliged with high ratings for
higher tranches of very dubious collections of loans.
o Problem: risk of underlying loans was more correlated than were being treated, and possibility
of general downturn in housing (leading to correlated default) was also underestimated.
Credit Default Swap (CDS) is like an insurance policy and began insuring CDPs.
o Its a derivative b/c its value depends on value of a referent asset, here, the CDOs themselves.
o CDOs remove the need for lenders or issuers of the securities to retain any interest in the loans,
even indirectly, and CDs allow one to dispense with the underlying assets altogether. CDSs
could be used to create synthetic CDOs, which are like CDOs without the ownership of the
underlying components of a regular CDO.
o Have to buy this: well pay you off it default on your payments if your $ doesnt come through.
Regulatory failure is a large part of the economic/housing market crash.
Also, faulty corporate governance regulation also contributed to lack of shareholder oversight over
banks activities in bubble period.

Property: Rose Spring 2013


Its important for environmentalists to have a recording system:
Passve usage/ownership
High value things
o Land
o Animalslivestock
o Cars
Why records?
Divided interest
Not a lot of transactions
can standardize, easier to show than personal property.
Title Records: by investigating the state of title through the title records, a potential purchaser can gain
assurance at reasonable cost that he or she is acquiring what the seller claims to have for transfer.
NEMO DAT pg. 885
Baseline principle of system of property regarding transfers of ownership: Nemo dat quod non
habetone cannot give that which one does not have.
o Usual rule on property transactions nemo dat
Derivation Principle: the transferees rights derive from those of the transferor.
o If someone owns something because someone transferred it to them, by sale, gift, bequest,
etc.hell normally have only that which the previous owner had and nothing more.
Also related to the principle of prior in time is prior in right.
Nemo Dat EX: A has rights and sells to B, but by mistake, A sells to C too.
But, according to Nemo dat, B would have the rights when A mistakenly sells to C, so by nemo dat, C
gets nothing.
Chain of transactions
o Current owners must be able to trace their ownership back in time through series of legitimate
transfers to an act of legitimate original acquisition
Good faith purchaser doctrine = important exception to nemo dat
EX: A sells goods to B but flawed transaction because Bs check bounced. B sells same goods to C.
o As long as C bought in good faith and didnt know of the flawed transaction from AB, then
law generally gives C title to goods as good faith purchaser.
o UCC recognizes nemo dat and good faith purchaser exception in 2-403:
Ppl w/voidable title has power to transfer a good title to good faith purchaser for value.
What constitutes notice and how does one provide notice in a way that is fairly cost-effective?
Consent is rarely a sufficient showing of an accurate chain of title.
Taking physical possession of real or tangible personal property was necessary before a person could be
relatively certain that his claim was, and would remain, superior to that of others
Legal rule: to obtain priority in an asset over third-party claimants, an individual needed, in addition to
the consent of the prior owner, to take physical possession of the asset.
**Rules of transfer that require public recordation can reduce risks that a subsequent purchaser wont
acquire good title w/o increasing risk that a present owner will lose his property by theft.

Property: Rose Spring 2013


Why are filing systems comparatively better than possessory systems?

1. Better when property is valuable, when property not transferred often, and when its important to share
ownership of property among several individuals (like when creating future interest or security interest)
2. Better when props physical use is imp or when underlying property right is abstract and unembodied.
3. Filing systems more easily accommodate title claims to an asset, not just security claims.

The recording system has the effect of reducing uncertainty surrounding a transfer of real
property w/o undermining consensual nature of those transfers.
Money is best example of property that is not suitable for a filing system.
Piece of personal property is often less valuable than a piece of real property and is likely to be
more frequently transferred.


2 categories of land demarcation:
1. (1) Metes and bounds system: land boundaries are marked using monuments like rocks, trees, and other
structures as well as compass directions, distances, and angles.
o Easy to make mistakes in this system
Difficult in rural areas of long-lost monuments; easier in urban life
2. (2) Rectangular survey: defines rectangular plots of any size, employing a systematic survey with
references to latitude and longitude.
o Many advs because of shape, in terms of how they come together, and their easy divisibility.
o Nearly all land in fed public domain was eventually surveyed & disposed of using this system.
3. Both systems
o Rectangular survey is more expensive to set up but leads to more certain descriptions and is
easier to use on an ongoing basis.
o Metes and bounds can be tailored to rugged terrain.
o Rectangular survey is associated with fewer disputes, more roads, 50% more land transactions,
and substantially greater land values persisting over more than a century.
o Metes and bounds gave settlers more choices about which land to claimcould claim around
rocky or marshy patches, often leaving lower valued lands isolated and unclaimed.
o Rec system forced settlers to take quarter sections of land on all-or-nothing basis, so claimants
took bad along with good.
o Accuracy of rec system can be replicated in metes and bounds using GPS.
Every recording office as at least 2 indexes:
o (1) Grantee Index: includes, by name, all grantees referenced in documents that have been
submitted for recordation
o (2) Grantor Index: includes, by name, all grantors referenced in the documents that have been
submitted for recordation.
Some keep tract index: where all documents submitted for recordation are listed by legal description of
the property under the surveying system established by the Land Ordinance of 1785.
Performing title searches involves tracing series of transactions from ones would-be transferor back to
a root of title and then tracing forward. Anything outside = outside the chain of title
o If something is outside the chain of title (outside the legally defined reasonable search), the
good faith purchaser exception to nemo dat applies.
o The recorded deed are not always legitimate.
1. Racethe winner of the race to record prevails
a. Race statutes create an exception to the nemo dat principle and a partial exception to the
good faith purchaser doctrine, insofar as the first party to record wins even if she has actual
notice of prior conveyance.

Property: Rose Spring 2013


2. Noticesubsequent bona fide purchaser wins unless he has notice (actual, constructive, or inquiry),
and a recorded interest gives constructive, or record, notice.
a. Incentive to record immediately in order to be protected from subsequent good faith
3. Race-NoticeA subsequent good faith purchaser wins only if he has no notice and records before
the prior instrument is recorded.
a. Like race statute but solves problem of dishonest buyer under race approach.
4. Mixed RegimesSome states apply a race regime to mortgages but another type of recording act
to conveyances in general.
The recording acts in conjunction with the notion of chain of title define a legally required search for
one who wishes to take advantage of the protection afforded good faith purchasers under the act.
The Wild Deed.
o If a grantee records before her grantor, the grantees deed is a wild deed because its not
connected up to the common grantor by a continuous chain of recording.
o Called a stranger to the title if thinks has a deed but doesnt because nobody recorded it
o Searches of traditional records wont find the wild deed in a conventional chain of title search,
because the name of the grantee would be unknown to searches.
o Majority of courts believe that one cant benefit from the recording acts exception to nemo dat
if one traces ones ownership to a wild deed.
Mugaas v. Smith S.Ct. Washington 1949
Mugaas brought action to quiet title to a strip of land she claims via AP against Smith who purchased the same
land with record title. Court holds that a conveyance of record title to a bona fide purchaser does not extinguish
a title established by AP. Court finds that the recording act does not apply to AP and that where title has been
vested by AP, it cannot be divested by any other act short of a deed- Policy- if the act were applied to AP then
the AP would have to keep his flag flying forever.
AP can be an exception to the nemo dat principle, since it allows shifts in title other than by a chain of
voluntary transfers.
o The forced transfer from present title owner doesnt transfer rights greater than the owner
hadAP and nemo dat similarity.
Marketable Title Acts: legislation reflecting something of a compromise between reliance on recording
acts and allowing claims of title outside the record based on AP.
o Idea = allow ppl to stop title searches at point & not have to go all way back to the sovereign.
Prohibit a range of discriminatory behaviors against members of enumerated protected classes in the
housing field, with certain exceptions.
FHS, 42 U.S.C. 3601-3619
o 3604. Discrimination in the sale or rental of housing and other prohibited practices
(a) No discrimination based on race, color, religion, sex, familial status, or national
origin. (cant refuse to sell or rent based on those)
(b) Unlawful to discriminate based on those things
(c) No printing or publishing anything indicating a preference for any of those groups
(d) Cant say something isnt available when it is to those groups
(e) For profit, to induce or attempt to induce a sale to anyone from those groups
(f) No discrimination for the handicap

Property: Rose Spring 2013


Frimberger v. Anzellotti

Conn. App. 1991 PDF

Tidal Marshland. Ds brother transferred land to him via quitclaim deed. D conveyed land to P by
warranty deedfree & clear of all encumbrances, but subject to building & zoning restrictions of
record. P discovers part of prop in violation of st statute. St agency advised P to come into compliance,
but wasnt threatening litigation. P instead sued for breach of warranty against encumbrances.
Issue: Whether a latent violation of a land use statute, existing at the time of conveyance constitutes
an encumbrance such that conveyance breaches grantors covenant against encumbrances?
No: To render a title unmarketable, the defect must present a real and substantial probability of
litigation or loss at the time of conveyance. Latent violation of land use regulations, that are unknown to
the seller, as to which the agency charged with enforcement has taken no official action to compel
compliance at the time the deed was executed, and that have not ripened into an interest that can be
recorded on the land records do not constitute an encumbrance for the purpose of the deed warranty
Prevention: parties can protect themselves from latent conditions violating statutes by requiring
warranties of condition.
Swinton v. Whitinsville Savings Bank S.Ct. Mass. PDF 1942

D sold P a house. At time of sale, house was infested with termites, the seller knew about this and, the
termites were not readily observable on inspection, and seller did not warn him.
Held: Caveat emptor. Seller is not liable for cost of termite damages. Seller did not make any false
statements and did not keep the plaintiff from inspecting property, so no fraud.
Sellers not required to disclose all latent defects which materially affect the value of the property when
the defect is obvious upon reasonable inspection
Policy for caveat emptor: Judicial economy; shifts the burden on the buyer to make sure they are
responsible in making contracts

What makes something latent? [anything a home inspection could catch isnt latent?]
o Obviousness vs. non-obviousness or patent
Theis v. Heuer Ind. Appellate Court? 1972 PDF

Plaintiffs bought house from defendant builders. Defect at time of sale/construction that rain water and
sewage would collect in the first floor. Ps had no reasonable means of inspecting this.
Held- The builder of a new house is liable for major defects which render the house inhabitable
Reasoning for new implied warranty of habitability: Caveat emptor does not satisfy demands of justiceespecially given unequal bargaining power and the fact that builder will have more information-analogy
to products liability; caveat emptor here encourages shoddy work and a warranty will make
construction better (think L. Hand: B<P*L)Over time shift from default rule of no warranty to implied warranty unless builder makes agreement to
get out of it: reasons- shift in expectations over time; advent of track housing & dec in quality housing
Implied warranty does not impose a duty to deliver a perfect house, but major defects that render it
unfit for habitation (and are not readily remediable) entitle the buyer to rescission and restitution.
Stambovsky v. Ackley NY App Div 1991 PDF
Pre-closing case; disclosure

D sold P a home she knew to be possessed by poltergeists. She had advertised the ghosts in readers
digest and in local press. Ps were not locals and did not know about propertys reputation; upon finding
out, plaintiffs sought rescission of the contract.
Court held that rescission was allowed because the Seller had duty to disclose possession by poltergeist

Property: Rose Spring 2013


Poltergeists are a latent defect which could not have been contemplated or discovered by the plaintiffs.
House was not vacant as promised.
Where a condition which has been created by the seller materially impairs the value of the
contract and is peculiarly within the knowledge of the seller, or unlikely to be discovered by a
prudent purchaser exercising due car- nondisclosure constitutes a basis for rescission.
Smith Dissent absent fraud or fiduciary relationship, caveat emptor rules and no rescission.

Contract Buyers League (buyer) v. F & F Investment USDC ND Ill. 1969 PDF
[F] BLOCKBUSTING: The practice of illegally frightening homeowners by telling them that people who are
members of a particular race, religion, or national origin are moving into their neighborhood and that they
should expect a decline in the value of their property. The purpose of this scheme is to get the homeowners to
sell out at a deflated price. They bought with the old title system of mortgage.
An real estate agent will then sell the vacated homes to minority group members at an inflated price, thereby
obtaining a large profit. Fair access to housing is defeated by blockbusting.

Claimed misrepresentation, civil rights, and unconscionablity...only civil rights claim survives
o Some of the misrepresentations were physical and patent, buyers just have to expect puffery
and its understandable for sellers to sell it for higher values then the property is really worth
o Unconscionability one element is you can get it somewhere else so it is a bad deal plus
unequal bargaining power, fraud, coercion, duress
In this case high price alone doesnt make something unconscionable
It is self correcting sellers and buyers would not sell into an inflated market and the
market would not adjust
o Civil rights claims sellers are selling at a higher market price to African Americans
The two separate markets could be segregation or to due to the higher demand for
property by minorities
The case turns into an arbitrage case

Elements of Unconscionable
o Unequal bargaining power
o Must be a bad deal

Disclosuremust disclose anything health-related

o EX: oil tank undergroundyes
o Lead paintyes
o Asbestos in insulator but taped upyes
o **Must be reasonable to person to know.
Latent Patent exception
ILanything physical must be discussed
CAanything material must be disclosed

Steps for white sellers: Blockbusting

(1) Scare buyers
(2) Buy cheaply
(3) Sell to min family for high price
(4) Count prices and laugh
(5) Prices go down eventually
Ban on Blockbusting:
Cynicalprotecting whites
Inflaming racial actions

Property: Rose Spring 2013


Property and the Human Body:

Moore v. Regents of the U of California

S.Ct. CA 1990 pg. 243

[F]: P was being treated for leukemia at Ds hospital. Physicians removes cells from spleen and used cells to
develop a new cell line, without informing P. New cell line had valuable commercial applications. Moore sues
for conversion (property interest). Use of body parts is repugnant based on slavery...BUT...
[H]: P has no action for conversion because he did not have any property interests in his spleen. However he
does have a claim for breaching fiduciary duty and failing to obtain consent.
***Although P had no property rights, the court assumed that D did.
***Court was worried about imposing unexpected liability on downstream medical researchers who
had previously used body tissue for research without inquiring about their right to do so
***Court thought it was best to await legislative action before treating body cells as property.
*** This case is an example of the cases which arise when new technologies force courts to re-examine
historical principles.
Informed Consent vs. Conversion:
Informed consent was a big outcome of Moore, as opposed to conversion of property rights. Informed consent
assumes the right to say no, which is functionally the right to exclude drs from getting their hands on the cells.
Reasons IC is preferred over Conversion:
o IC would not impose a duty on downstream researchers, only to Moores treating physician
o IC would apply to everyone, conversion only to those whos parts were later utilized
o Remedy is the big dealbut there is a limited remedy for IC breach; greater remedy if court
had found conversion.
Moore is asking Court to impose a tort duty on scientists to investigate the consensual pedigree of each
human cell sample used in research.
o To impose such a duty, which would affect medical research of importance to all society,
implicates policy concerns far removed from the tradition, two-party ownership disputes in
which the law of conversion arose.
o Moore claims ownership of the genetic code for chemicals that regulate the functions of every
human beings immune system.
To establish a conversion, plaint must establish an actual interference with his ownership or right of
possession. Where plaint neither has title to the property alleged to have been converted, nor possession
thereof, he cannot maintain an action for conversion.
o He must show he retained an ownership interest in his cells (which he did not) cause:
(1) No reported judicial opinion supports his claim
(2) CA statutory law limits any continuing interest of a patient in excised cells
(3) Subject matters of the Regents patent cant be his property.
His cells arent uniqueeveryone has the same ones.
3 reasons why its inappropriate to impose liability for conversion based on allegations from Moores
o (1) Fair balancing of relevant policy considerations counsels against extending the tort
o (2) Problems in this area are better suited to legislative resolution
o (3) Tort of conversion isnt necessary to protect patients rights
2 important policy considerations
o (1) Protection of a competent patients right to make autonomous medical decisions.
o (2) Is that we not threaten with disabling civil liability innocent parties who are engaged in
socially useful activities, like researchers who have no reason to believe that their use of a
particular cell sample is, or may be, against a donors wishes.
o MIDDLE GROUND: Liability based on existing disclosure obligations, rather than an
unprecedented extension of the conversion theory, protects patients rights of privacy and
autonomy without unnecessarily hindering research.

Property: Rose Spring 2013


Justice Arabian CONCURRING:

Plaint is asking Court to recognize and enforce a right to sell ones own body tissue for profit.
No justification for barring plaint from bringing a conversion action against a party who doesnt obtain
organs or cells from a cell bank but who directly interferes with or misappropriates a patients right to
control the use of his organs or cells.
Even if there were compelling policy reasons to limit the potential liability of innocent researchers who
use cells obtained from an existing cell bank, those policy considerations wouldnt justify the majoritys
broad repeal of all conversion liability for the unauthorized use of body parts.
Justice Mosk DISSENTING:
The concept of property is often said to refer to a bundle of rights that may be exercised with respect
to that objectprincipally the rights to possess the property, to use the property, to exclude others from
the property, and to dispose of the property by sale or by gift.
o Above all, at the time of its excision he at least had the right to do with his own tissue whatever
the defs did with it.
Diamond v. Chakrabarty US S.Ct. 1980:
o Held that patentable subject matter includes everything under the sun thats made by man.
Bilski v. Kappos US S.Ct. 2010
o Ideas and laws of nature are still not patentable subject matter
To be patentable, a living organism should be altered from any naturally existing form or at least
distilled in a way not occurring in nature.
Restraints on Alienability
(1) Mistakes about self (not knowing importance of kidney)
(2) 2nd Party ProblemsHais and wife, he says, you must sell your kidney (coercsion)
(3) 3rd Patypeople not involved in transaction but affected
Perspectives on Property
(1) First Party: Might hurt person involved in transfer
(2) Second Party: Someone else coercive/tricks you to buy something you didnt want
(3) Third Party: Harm to someone not involved in transaction
US v. Corrow Ct. Appeals 10th Cir. 1997 pg. 267
When he died, he left no provision for this disposition of his Yei BChei (ceremonial adornments), and
no family or clan member requested them.
Mr. Corrow, contacted widow and offered to by the Yei BChei. He suggested to her that he planned to
deliver them to a Navajo chanter in Utah to keep them safe.
IN 1994, FBI found out about his ownership (and national park ranger) by pics of eagle feathers. Faked
a sale, Corrow traveled with all of the items to sell.
FBI got him and charged with two counts: 1 for trafficking in N.Am. cultural items and 1 for selling
Eagle, Owl, and Hawk feathers.
said good faith purchaser
HELD: Conviction upheld.
Common pool problem: because no single person in the tribe owns the item, the seller does not have a
right to sell the artifact
Protects other peoples interest in the tribe.
Congress enacted NAGPRA in 1990 to achieve 2 objections:
o (1) Protect Native American human remains, funerary objects, sacred objects, and objects of
cultural patrimony presently on Federal or tribal lands; and

Property: Rose Spring 2013


(2) To repatriate N.Am. human remains, associated funerary objects, sacred objects, and objects
of cultural patrimony currently held or controlled by Fed agencies and museums.
To be judged cultural patrimony (from the NAGPRA statute), the object must have:
o (1) ongoing historical, cultural or traditional importance; and
o (2) be considered inalienable by the tribe virtue of the objects centrality in tribal culture
Mr. Corrow is knowledgeable about Navajo traditions and culture and would have been aware that
various tribal members viewed ownership of property differently.
Due process doesnt require that citizens be provided actual notice of all criminal rules and their
o Constitution is satisfied if the necessary info is reasonably obtainable by the public.

There is no separate prohibition, in the operative sections of the Act, of alienation, appropriation, or
conveyance of cultural patrimony in NAGPRA.
Federal law appears to require, (1) a determination that items cant be subject to private ownership or
sale as a matter of tribal law or tradition, and then, (2) a determination that someone has attempted to
acquire such an item in a manner prohibited by trial law or tradition.
Kennewick Man foundInteior Dept. ordered remains be repatriated to area tribes under NAGPRA
o Bonnichsen v. US D.Ct. Oregn and 9th Affirmed
Courts held NAGPA applies only to remains affiliated with presently existing tribes,
peoples, or cultures, and held that there was no evidence that any presently existing
tribe could trace its ancestry back 9,000 years.
S.Ct. been unsympathetic to claims seeking protection for culturally significant property as a matter of
constitutional law.
o Lyng v. Northwest Indian Cemetery Prtective Assn US S.Ct. 1988
Court rejected claim that building road through an Indian burial ground would violate
the Free Exercise rights of N.Americans.
o Navajo Nation v. US Forest Serv. 9th Cir. 2008
Rejected a challenge under NAGPRA to the practice of using recycled water containing
minute quantitites of human remains for snowmaking in ski areas.
Although NAGPRA is unusual in prohibiting any attempt to treat cultural patrimony as private
property, restrictions on the use and development of culturally significant properties are more common.
Museum Claims:
o (1) Adverse Possession
o (2) We took care what you didnt
o (3) More valuable to us than you
^ But may not be the best for itemlike Navajo-adopted kidsbut hard to quantity
Define inability rules: rules that prohibit the transfer of an entitlement
An alternative characterization of the rulings in many of the cases isnt that they deny the existence of
property in particular resources, but rather they conclude that the entitlements in question should be
protected by an inalienability rule.
Why does it make sense to recognize property in certain things but make them inalienable?
o (1) Might reduce externalities in some contexts
o (2) Might be justified by moralisms
o (3) May be justified by paternalism, if we conclude that a person may be better off if he is
prohibited from bargaining.
Restraints on alienation can be one tool for minimizing these dangers and can be used to influence
decisions to acquire a resource in the first place.

Property: Rose Spring 2013


Margaret Jane Radin, Market-Inalienability 1987 pg. 288

Can transfer by gift, not by sale
3 possible methods of justifying market-inalienability based on personhood:
o (1) A prophylactic argument;
o (2) Assimilation to prohibition; and
o (3) Domino theory
Prophylactic Argument
o Aims to ensure free choicenegative libertyby the best possible coercion-avoidance
mechanism under conditions of uncertainty.
Assimilation to Prohibition
o If we accept that the commodified object is different from the same thing noncommodified
and embedded in personal relationships, then market-inalienability is a prohibition of the
commodified version, resting on some moral requirement that it not exist.
Domino Theory
o Envisions a slippery slope leading to market domination.
o Assumes that for some things, the noncommodified version is morally preferable; also assumes
that the commodified and noncommoedified versions of some interactions cant coexist.
o EX: under this theory, the existence of some commodified sexual interactions will contaminate
or infiltrate everyones sexuality so that all sexual relationships will become commodified.
o Opposite of prohibition: There is assumed to exist some moral requirement that a certain
good be socially available.
Prohibition and Domino Theories can be Connected
o The PT focuses on the importance of excluding from social life commodified versions of
certain goods (like love, friendship, sexuality)whereas the domino theory focuses on the
importance for social life of maintaining the noncommodified versions.
o The PT stresses the wrongness of commodification (its alienation and degradation of the
person)and the domino theory stresses the rightness of noncommodification in creating the
social context for the proper expression and fostering of personhood.
o ***If one adopts both prongs of the commitment to personhood, the prohibition and domino
theories merge.
Conflicting arguments show problems with prophylactic argument for market-inalienability.
o If allow commodification, exacerbate oppression of women (the suppliers).
o If disallow, force women to remain in circumstances that they believe worse than becoming
sexual commodity-suppliers
o The alternatives seem subsumed by a need for social progress, yet must choose some regime
now in order to make that progressthis transition is the double bnd.
Double bind has 2 main consequences
o (1) If cant respect personhood either by permitting sales or by banning sales, justice requires
that we consider changing the circumstances that create the dilemma.
Must consider wealth and power redistribution.
o (2) Must choose a regime for the meantime, the transition, in non-ideal circumstances.
To resolve the double bind, have to investigate particular problems separately;
decisions must be made (and remade) for each thing that some people desire to sell.
Minimum welfare rights are necessary to prevent people from being treated like commodities.
Harmful effects of selling sexchildren for moneyintimacy$$$--Body Parts
If buy and sell, do it cause theres a market for them
Buy/Sell kidneysmonitor? Directly from hospitals?
o [EX: Greys Anatomy and killing of person for organ]
o Record keepingexpensive; willing to pay
Argument: why give kidneys if can sell it?

Property: Rose Spring 2013


Divisions by Time
An estate is a type of property right and measures a persons interest in the land in terms of duration.
An interest may be either a present possessory estate or one that doesnt take possession until the
happening of some future eventa future interest.
Estate for definite term: LEASE/estate for years
o Definite
o Landlord, tenant law
Estate for indefinite time: FREEHOLD estate
o No definite time
o If ends at all, must be by something like death
EX: wills
Freehold interests tend to be recorded in land registries, but short-term leases are not.
Present Possessory Estates
1. Fee simple absolute
2. Life estate
3. Defeasible fees
4. Lease
Note that the holders of a freehold interest as well as leaseholders are still sometimes called tenants.
(1) Fee Simple Absolute = Propertylargest estate in time
Largest package of ownership rightsno natural end.
No owner will live forever, but the owner can designate a successor owner, by gift, sale, or will.
o Posses indefinitely from ownerowners heirs
If the owner dies intestatewithout a willa state intestacy statute will designate certain others who
will then take the property in fee simple.
Example 1:
o O grants Blackacre to Marge and her heirs or to Marge in fee simple, or to Marge.
In a transfer, a grantor is presumed to give all that she has, unless she indicates
A person doesnt have heirs until after her death (while alive, someone has at most
heirs apparent).
If Owner grants to Marge and her heirs, Homer and her children receive nothing.
And her heirs are words of limitation as opposed to to Marge, which are words of
Only words of purchase designate someone who is to receive an interest.
(2) Life Estate
Life estates come to a natural end with the death of the named person, usually the holder of the estate.
Example 2:
o Current Uses
France PDF
Elderly relative

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Park service
AB for life then to C + his heirs
o Remainder
AB for life of X
o O grants Blackacre to Marge for life, and then to Lisa.
The life estate is alienable by gift or sale.
If Marge sells, the purchaser will receive a life estate pur autre viea life estate
according to Marges, not the new owners, lifespan.
So the new owner will lose the property to Lisa when Marge dies.
Problems with life estates:
o (1) Waste
o (2) Tax evasion
o (3) State claims
(3) Defeasible Fees
These are like fee simple absolute except they may end on the happening of a named contingency
o (a) Fee Simple Determinable
Ends automatically upon the occurrence of a named event, whereupon the grantor or
the grantors successor takes the property.
Example 3:
o O grants Blackacre to Springfield Law School as long as it is used for
instruction in the law, then to O.
The fee simple determinable is created using language of
duration, such as as long as, so long as, while, during,
and until.
o (b) Fee Simple Subject to Condition Subsequent
Continues indefinitely except that, upon happening of the named eventthe
conditionthe interest does not automatically end but can be ended by action (selfhelp or lawsuit) by the grantor or the grantors successor.
Example 4: O grants Blackacre to Springfield Law School, but if it is not
used for instruction in the law, then O has the right to reenter and take the
o School has fee simple subject to condition subsequent and O has a
right of entry (also called a power of terminiation)
o The fee simple subject to condition subsequent usually employs
language like but if, on condition that, provided that, provided
however, and if, (as opposed to lang of duration in the determinable
fee, e.g., as long as in Example 3), and condition subsequent is often
separated from description of the interest by a comma.
(c) Fee Simple Subject to Executory Limitation
If the defeasible fee is followed by an interest not reserved to the grantori.e.,
granted to some third party at the time of conveyance of the present possessory
estatethe defeasible fee is called a fee simple subject to executor limitation.
o Example 5A: O grants Black to Law School as long as its used for
instruction in the law, then to Springfield Animal Hospital.
o Example 5B: O grants Black to Law School, but if it is not used for
instruction in the law, then to Springfield Animal Hospital.
The fee simple subject to executor limitation fonclates the
nature of the two defeasible fees followed by an interest
reserved in the grantor (the fee simple determinable and the fee
simple subject to condition subsequent).
One can use as long as or but if style language

Property: Rose Spring 2013


Although seldom used, the system of estates allows interest other than the fee
simple to be determinable and subject to condition subsequent.
The fee tail: acquired the feature of long-term alienability by the 15th century.
o It has been abolished in most states and has at most a theoretical
existence in others.
o To create a fee tail, one would use the language to A and the heirs
of his/her body or to A and his/her issue.
o Only when As bloodline endswhen A dies without issue, which
can happen hundreds of years after As deathdoes the fee tail end.
o The fee tail is a lesser estate than the fee simple absolute; the
difference is a reversion in the grantor, even if its not terribly likely
that this reversion will ever become possessory.
Changes hand on a natural event.

Compared with the fee simple absolute, theres something left, and that is a future interest.
A basic division is between interests retained by the grantor and interests created in a third party.
Interests retained by the grantor are now generally alienable.
o If they are alienated, they dont change their name or character.
Future Interests Retained by Grantors
1. Reversion
2. Possibility of reverter
3. Right of entry (power of termination)
If a person has a future interest, one also has to ask what present possessory interest one would have if
the interest becomes possessory, or in other words what estate is in waiting.
EX: If O grants to A for life, and then to B, A has a present possessory interest in life estate and B
has a remainder in fee simple.
Future interests retained by the grantor are sometimes called reversionary interests.
(a) Reversion
o Follows natural end of life estate & in contexts when an owner hasnt disposed of entire fee
Example 6:
O grants Black to Marge for life, then to O.
o O here retains a reversion.
o O had a fee simple and carved out a life estate, retaining the rest of the
original fee simple.
o The rest retained is a reversion.
(b) Possibility of Reverter
o Interest reserved to the grantor that follows a fee simple determinable.
o O will automatically get property back if limitation built into fee simple determinable occurs.
Example 3:
O grants Black to Law School as long as it is used for the instruction in the
law, then to O.
o If O has died, then Os successor will take. The possibility of reverter
can also be implicit:
Example 7: O grants Black to Law School as long as it is
used for instruction of law.
Here O isnt mentioned, but because O owned the entire fee
simple absolute and granted a fee simple determinable, O must
retain a possibility of reverter, here implicitly.

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In either case, O need not do anything to regain ownership.

If holder of the fee simple determinable (law school) doesnt
quit possession, it can start a period of adverse possession.
(c) Right of Entry/Power of Termination
o This is an interest retained by the grantor that follows a defeasible fee, but here the preceding
defeasible fee must be a fee simple subject to condition subsequent.
Example 4: O grants Black to Law School, but if its not used for instruction in the
law, then O has the right to reenter and take the premises.
O has a right of entry. The condition is a condition subsequent for the
preceding interest and a condition precedent for future interestright of entry.
o If enough time passes, right of entry may no longer be exercisable, through doctrine of lashes.
Under this, right to entry must be exercised w/in a reasonable time, which some cts
take to be the period in statute of limitations for bringing an action in ejectment.


Holder of life estate will tend to favor current consumption and investments that produce a quick return.
In contrast, holders of remainders are likely to prefer conservation of asset and longer-term investments.
o No interest is good unless it must vest, if at all, not later than 21 years after some life in
being at the creation of the interest.
A key difference among these mechanisms concerns the participants ability of willingness to commit
their own assets to the enterprise.
Leases are attractive to those who cant or do not want to invest their own resources in the larger
enterprise; condominiums and cooperatives are more attractive to those who do want to make such an
investment (either for tax or other reasons)
In it for LL?
o Gets money (more than his own use)
o Some as a career
In it for Tenant?
o Risk in buyinggo bad
o May not have money
o Wont be there long term
o Location choosing/testing area
o Invest in other markets even if have capital
LL Risks:
o Damage fof building
o Theft
o People not able to pay/tenant
o If bad location, stuck with it
Dividing land between the two is specialization
o Both specialized in certain parts
Actual business

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Common Law Leases:

When lease under common law, it was like you owned it
o Sale of property for time period
Lease Types:
Term of Years
o Opt in syste,
o Month to month
o Opt out system
Tenancy at Will
o Either LL or T can opt out at any time
Tenancy at Suffrance
o Not really a lease
o Giving T category from adding up adverse possession
Sale of property for a time
o During time, tenant in control
At end, tenant must give back
Rent is due at very end
Generalizing broadly, the 3 forms of legal ownership of greatest continuing importance are the fee simple, the
lease, and the trust.
1) Leases are a type of de facto financing device.
o Leases allow persons to leverage their limited resources in roughly the same way that
borrowing allows persons to leverage limited resources.
2), Leases operate as a risk-spreading device.
o Renting is a way of minimizing the risks of investing most of your savings in an asset that you
may want to unload in fairly short order.
3) Leases operate as a mechanism for integrating and managing complexes of assets, and in that sense
function as a kind of entity property.
o Leases allow these complexes of assets to be managed using a governance strategy,
characterized by a specialization of functions.
o Leasing is also very commonly used to acquire personal property like airplanes and
o One problem in the real property context is that it doesnt differentiate between leases in terms
of the underlying functional reasons the parties have for entering into a lease.
o The same law generally applies to long-term (or routinely renewed) leases of agricultural land
and to short-term rentals of furnished apartments.
Terms of years
o Lease that has a fixed time at which it terminates or ends
o The unique legal aspect of the term of years is that neither the landlord nor the tenant is
required to give notice to the other before terminating the relationship.
o On the stated day of termination, the lease simply ends.
Periodic tenancy
o Lease that automatically rolls over for a stated period of time, usually a year or a month.
o Requires that each of the parties give notice to the other if they desire to terminate the lease.
Tenancy at will
o Tenancy that lasts only so long as both parties wish it to continue.
o Either party can terminate at any time for any reason.
o At common law, no notice was required for termination of a tenancy at will.

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This has been changed in many jurisdictions to require notice equal to the period of time at
which rent payments are made.
Tenancy at sufferance
o Indv, who are once in rightful possession of property, holds over after this right has ended.
o Differs from a trespasser cause tenants original entry wasnt wrongful.
o LL free to evict tenant at sufferance using forcible entry & detainer statutes, or by bringing an
action in ejectment.
Early leases functioned almost entirely as financing and risk-spreading devices.
Courts developed certain assumptions about the nature of the reciprocal obligations between landlord
and tenant.
A central assumption was that the lease was a conveyance of a possessory interest in property.
The possessory rightincluding the right to exclude others from the assetwas transferred from the
landlord to the tenant for the prescribed term of the lease.


Law recognizes two types of transfers of tenant interests:
o Sublease and
o Assignment
A sublease: LL starts w/a fee simple; then the subtenant carves out a sub-sublease for the sub-subtenant
from the sublease, and so on.
o Each of the carving outs creates an interest of somewhat lesser extent than the interest from
which its taken.
As assignment, in contrast, operates very much like alienation: The landlord starts with a fee simple
then the prime tenant alienates the prime lease to a first assignee; then the first assignee alienates the
prime lease to a second assignee, and so forth.
o Theres no carving out; rather prime leas as a whole is transferred to successive assignees.
Default Rules:
Posner: what would parties have wanted? (guess)
Ayers: makes someone uncomfortable/forces info
o Wants a rule forcing LL what hes looking for
Common law approach of LL/T responsibility: Tenants duty to keep upkeep.

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SUBLEASE: The original landlord would deal with the prime tenant, and the prime tenant with the
subtenant. But the original landlord wouldnt deal with the subtentant.
ASSIGNMENT: Assignee steps into the shoes of the prime tenant, and as such enters into direct
relations with the original landlord.
2 sources of landlord-tenant obligation: privity of estate and privity of contract.
o Privity of K:
Obligations deriving from here are simply the obligations that come from being a party
to a binding bilateral K.
If original LL and the prime tenant enter into lease, theyre both bound by privity of K.
o Privity of Estate:
Two conditions must be met for privity of estate to apply
(1) Parties to be bound must have interests such that one is directly carved out
of the interest of the other
(2) One of the parties must be in actual possession of prop or have a reversion.
If these conditions are satisfied, then the parties are bound by privity of estate in
addition to privity of K.
EX: if youre a landlord, and your prime tenant wants to exit from the relationship before the end of the
lease, which is better, a sublease or an assignment?
o Depends on how active youre in the management of the property.
If youre inactive, sublease b/c now the prime tenant will serve as the landlord to the
subtenant, collecting rents, answering complaints about broken plumbing, and so forth.
With assignment, tenant in possession owes a duty to pay rent and perform other
obligations that run with the land directly to you under privity of estate.
Two other concepts that are also relevant in the assignment context:
assumption and novation
o Assumption: occurs if the first assignee expressly agrees as part of an
assignment agreement to be bound by the terms of the original lease.
o Novation: occurs when the parties agree to erase any privity of K
liability on the part of the prime tenant.
Can have assumption w/o novation, or novation w/o assumption, or both or neither.

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Paradine v. Jane

Kings Bench 1647 pg. 653

P leased property to D and sued because D did not pay rent for 3 years. D claimed he shouldnt have to pay rent
b/c he was unable to use it b/c there was an army camped out on it. Court held: even though covenant of quiet
enjoyment was breached, the tenants obligation to pay rent continues. If the lessee is to make profits off
the property, also must be allocated the risk of losses and not require lessor to bear the risks of losses
Principle that tenant is the residual claimant with respect to economic gains and losses associated
with the property during term of lease continues to be sound.
Rule: No duty on LL for up-keepUP TO TENANT
The lease in Paradine specified the amount of rent, but didnt expressly include a promise by the tenant
to pay rent. But court holds that such a covenant is implied as a matter of law in all leases. LL cant
evict tenant
This case is the leading example of whats been called the independent covenants model of the
landlord-tenant relationship.
When the property thats the subject of the lease is destroyed or damaged, the tenants obligation to pay
rent continues uninterrupted.
Whatever rule is followed, the allocation of risk of casualty loss is generally understood to be a default
rule subject to modification by the parties in the lease.
Hanna v. Dusch

Va. 1930 PDF

P alleges that D leased him property but never evicted prior tenants. D argues that absent an express covenant
as to delivery of possession, he has no duty to oust trespassers or wrongdoers.
Two rules at this time: 1) American Rule (landlords duty is to give legal right of possession to tenant,
but NOT to put tenant in actual possession); and 2) English Rule (theres an implied covenant requiring
the landlord to put tenant in possession on day lease begins)
Holding: Court goes with American rule b/c 1) landlord didnt covenant against others wrongdoing; 2)
tenant is basically owner of property during term of lease, so up to him to protect against trespassers; 3)
VA statute allowing summary remedy for unlawful entry or detainer is Ps proper venue for getting rid
of trespasser/old tenant
Concurrence: points out that under common law, English rule is the law. However, b/c of VA statute
that leaves LL w/o power to evict tenant under expiring lease, necessary to apply American rule.
Landlord hasnt covenanted against the wrongful acts of another and shouldnt be held responsible for
such a tort unless hes expressly so Ked.
Conceded by those favoring English Rule that should the possession of the tenant be wrongfully
disturbed the second day of term, or after he has once taken possession, theres no implied covenant on
landlords party to protect tenant from tort of another, though he has entered into no such covenant.
Virginia statute giving summary remedy for unlawful entry or detainer: The adequate, simply and
summary remedy for the correction of such a wrong provided by statute was clearly available to this .
o It specifically provides that it shall lie for one entitled to possession in any case in which a
tenant shall detain the possession of land after his right has expired without the consent of him
who is entitled to possession.
English Rule: LL respons. for clearing out squatters or holdover tenants at beg of lease. Coe v. Clay
Am Rule: tenant is responsible for getting rid of any squatters or holdover tenants. Hannan v. Dusch
Best default rule?
o Assuming both parties are fully informed about the relevant variables, the rule theyd adopt would
plausibly be the one that assigns duty to party who is best able to detect the presence of squatters or
holdover tenants and to bring actions to have them evicted before the lease starts.
In context of urban apartments, that party is almost surely the landlord.

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SELF-HELP pg. 387

EXs: fences, locks on doors, security guards, dogs, burglar alarms, and video cameras are examples in real
property context.
EX: ignition locks, safes, indelible serial numbers, and Lojack tracking system are examples in personal property
Right v. Privilege
o Right: claim that one person has against one or more others, which corresponds to a duty that these
others have toward the one with the right.
If A owns Black, A has right to exclude B, C, D, etc. from it, and B, C, D, etc., have a
corresponding duty to keep off Black without As permission.
o Privilege: freedom to act in certain ways w/o interference from others, which corresponds to a no-right
in others to interfere w/one exercising privilege. Privilege associated w/ ownership.
If A owns Black, then A has a privilege to engage in a variety of defensive measures to protect
Black from invasions or other harms by others, like B, C, D, etc.
The others, B, C, D, etc. have no-right to interfere or try to stop A from deploying
these defensive measures.
Permits but doesnt compel people to do certain things.

Berg v. Wiley S.Ct. Minnesota 1978 pg. 388

Wiley leased building to Berg for 5 years. Lease allowed Wiley to retake possession if lessee failed to notify
landlord of any changes to the property or if the restaurant was not operated in a lawful or prudent manner.
Landlord sent demand letter warning they would retake the premises if changes werent made within two
weeks. Wiley eventually locked out premises and re-let.
Held: 1) Berg did not abandon or surrender the premises; 2) Landlord (Wiley) cannot resort to selfhelp. The only lawful means to dispossess a tenant who has not abandoned nor voluntarily
surrendered but who claims possession adversely to a landlords claim of breach of a written
lease is by resort to judicial process.
Reasoning: Minnesota rule re self-help to retake leased premises requires 1) landlord is legally entitled
to posses (like when tenant is hold-over or tenant breaches lease clause containing reentry clause), and
2) the landlords means of entry are peaceable. Second requirement is founded on the recognition that
the potential for violent breach of peace inheres in any situation where a landlord attempts to remove a
tenant. There is no cause to sanction such potentially disruptive self-help where adequate and speedy
means are provided for removing a tenant peacefully through judicial process.
o Court finds that here, only reason actual violence didnt erupt when Wiley changed locks was
b/c Berg was absent (*ehhh, not sure if true)
Wileys Argument:
Bergs duty of quiet enjoyment breached
Bergs remedies if actual abandonment;
(1) Stand/Accept
(2) Pursue lease
Forcible entry and detainer (FED) statutes used most often in landlord-tenant disputes.
o Most common type of action, like in Berg, is one brought by landlord seeking to regain
possession of leased premises from a tenant.
o In order to bring such an action, the landlord must show that he or she has the right to
possession of the premises, which in turn typically requires that the lease contain a clause
providing that the tenant forfeits the right of possession or that the landlord has the right to
reenter and retake possession on the happening of certain conditions (such as nonpayment of
rent or holding over after a lease has expired.)
Forcible Entry Detainer Statutes (FED):
o (1) Rightful
o (2) No Violence

Property: Rose Spring 2013


Reste Realty v. Cooper New Jersey S.Ct. 1969 PDF

Here the flaw was serious, she couldnt run the business, but there was nothing in the lease about the landlords
duty, which would have made it a better case. It wasnt really permanent either. However it was likely the
landlords fault because they could fix it, it is in the LLs control and it is in the LLs interest to fix driveway
The last component was that she must actually leave, which she did, showing that it was bad enough to
cause her to be constructively evicted BUT between March and December it flooded and she didnt
leave plus there was a new purchaser to the building after she had already left
Held: LL breached covenant.
Whenever a tenants right to vacate leased premises comes into existence because he is deprived of
their beneficial enjoyment and use on account of acts chargeable to the landlord, its immaterial whether
the right is expressed in terms of breach of covenant of quiet enjoyment, or material failure of
consideration, or material breach of an implied warranty against latent defects.
9 months of waiting for landlord to fix water problem/damage was sufficiently a reasonable amount of
time to wait, thus landlord liable.
Also, landlord in better position of knowing what is wrong with structure and is in better position to fix
Constructive Eviction Requirement
1. Serious
2. Permanent
3. LLs fault
4. Tenant has to leave
Blackett v. Olanoff

S.Judicial Court of Mass 1977 pg. 666

For tenants: The landlords had a right to control the objectionable noise coming from the lounge.
LLs had it w/in their control to correct the condition which caused tenants to vacate their apartments.
The lease for the lounge expressly provided that entertainment in the lounge had to be conducted so
that it couldnt be heard outside the building and wouldnt disturb the residents of the leased apartments.
The decibel level for the entertainment at the lounge was intolerable for the residential tenants.
Landlords shouldnt be able to collect rent for residential premises which werent reasonable habitable.
Courts concluded that landlord misfeasance sufficiently serious to cause a reasonable tenant to vacate
was a constructive eviction, and excused the tenant from further payment of rent.
One theory for holding a landlord responsible for constructive eviction based on nonfeasance turns on
whether the landlords inaction violates some specific clause in the tenants lease.
Like in Reste Realty Corp., LLs failure to act was the breach of a specific duty outlined in the lease.
Theory is designed to single out landlord breaches that deprives the tenant of the enjoyment and
occupation of the whole or part of the leased premises.
The general standard is that a tenant must move out in a reasonable time.
Failure to act was the breach of a specific duty outlined in the lease.
Third Party Beneficiaries
o A K says pay C B [now A owes C]

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Contractual aspect of LL tenant law moved away from model of indp covenants to model of dept covenants.
Javins v. First National Realty Corp.

Ct Appeals DC Cir. 1970 pg. 685

[F]: Busted sewer line, broken lock, trash, broken window, toilet backed up, falling plaster and bad wiring. The
court holds that the landlord is responsible for fixing the problems regardless of if they happen before or after
they are warranting to make it habitable for the entire period of the lease
o Latent/patent defects you may not know about when you look at an apartment
o Older buildings need to be kept up as well depends on tenant expectations, plus the cost of the
LL had duty. A warrant of habitability [during entire time of lease], measured by the standards set out
in the Housing Regulations for DC, is implied by operating of law into leases of urban dwelling units
covered by those regs and that breach of this warrant gives rise to the usual remedies for breach of K.
Itd be unreasonable to hold, under such circumstances, that the landlord doesnt impliedly agree that
what hes letting is a house suitable for occupation in its condition at the time.
Its up to the LL to make the necessary fixings because it is in a better position to do so.
Also, since the appellants continued to pay the same rent, they were entitled to expect that the LL would
continue to keep the premises in their beginning condition during the lease term.
The illegal lease doctrine: if LL leases property that is subject to one or more code violations, such that
the premises are rendered unsafe and unsanitary, then the lease is void and of no legal effect.
The doctrine of retaliatory eviction has been widely adopted to protect tenants who engage in
protected activity, such as reporting housing code violations or attempting to organize a tenants union.
The illegal lease doctrine suffers from the fact that if the lease is illegal, then itd seem that the tenant
isnt only released from the burdens of the lease but cant claim the benefit of the lease either (such as
the covenant of quiet enjoyment)
Constructive eviction may also be relevant under residential leases since the jurisdiction relies on its
housing code to define IWH content.
Remedies for violating IWH:
1. Recession of lease by tenant, allowing tenant to vacate without further obligation to pay rent
2. An order directing specific performance of IWH
3. An action for damages for breach of the IWH
4. If the LL had sued the tenant for unpaid rent, a set-off against rent liability reflecting the LLs
violation of the IWH
5. In some jurisdiction, withholding of all or a portion of the rent until the LL corrects the
violation of the IWH or permits the tenant to arrange for repair of the violation
Common-law baseline: we see that risk of casualty losses under a lease is originally placed on tenant.
o So, any tort liability for injuries incurred on the premises would lie with the tenant.
o LL has general legal obligation to maintain the premises in a manner consistent w/the housing
code, and otherwise to insure that it meets minimal standards of public safety and health.
o This legally-imposed duty can provide the foundation for a broad LL duty in tort to the tenant
and the tenants guests, including a duty to protect these persons against assaults by intruders
that couldve been kept at bay with proper security cameras and locks.
Theories of LL/Ten Waiver of Warranty:
1. Unconscionability >Determines Illegal Lease
2. Social Issues > Determines Illegal Lease
Could also be preventing crime in addition to public health concerns Neg. Externalities
Standard measure: FMV of apartment as warranted FMV as it = damages

Property: Rose Spring 2013


Chicago Bd. Of Realtors v. City of Chicago

Cit. Ct. 1987 PDF

Chicago ordinance requires security deposits to be held in Illinois banks and requires payment of
interest on security deposits; it also allows a tenant to withhold rent in an amount reflecting the cost to
him of the landlords violating a term in the lease; and allows a tenant to make repairs and subtract the
cost of repair from the rent; and forbids landlords from charging a tenant more than $10/month in late
Posner finds that this ordinance will hurt poor people and will only benefit the affluent; landlords will
screen potential tenants more thoroughly and supply less housing.
The market for rental housing behaves as economic theory predicts: if price is artificially depressed, or
costs of landlords artificially increased, supply falls and many tenants, usually the poorer and the new
tenants, are hurt. So Tougher codes = higher rent = lower supply
Kramarsky v. Stalh Management NY S.Ct. 1977 PDF

Theres nothing illegal in a LL discriminating against lawyers as a group, or trying to keep out of his
building intelligent persons, aware of their rights, who may give him trouble in the future.
Sommer v. Kridel NJ S.Ct. 1977 pg. 702

March 10, 1972def entered into lease with plaint. Def couldnt pay because marriage fell through,
discharged from army, and became student. Def wrote LL letter asking to notify at earliest convenience,
LL never replied. Someone interested in renting, but LL said already rented out to def. But plaint never
stepped foot inside apartment nor showed it to anyone until over a year later.
LL does have obligation to make reasonable effort to mitigate damages in a situation.
LL shouldve treated apartment as vacantantiquated real property concepts which servd as the basis
for the pre-existing rule shall no longer be controlling where theres a claim for damages under a
residential lease.
Sommer waited 15 months & allowed $4,658.50 in damages accrue b4 attempting to re-let apartment.
LL needlessly increased damages by turning prospective tenant away.
Riverview Realty Co. v. Perosio NY Super. Ct. 1976
o Ct held LL still have duty to mitigate to all residential leases, whether tenant abandoned
apartment in middle of lease term w/no effort to communicate with LL w/frivolous defenses.
Sommer v. Kridel
Lease #1
1) No possession
2) LL sued for 2 full years
3) T.Ct. for tenant

Lease #2
1. Took possession
2. LL sued for a couple months
3. T.Ct. for LL


Old Property Rules

LL no duty to sell it or do anything

Standing on the lease (paying K part)
Tenant owes
Accepts breach and allows for new tenants
would owe no rent to LL
Tenant Responsible (AM Rules) vs. LL Responsible (British)

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When is a LL picky?
Short time period
Interactive property (apartment vs. ranch)
Filtering Theory:
No matter where build housing, will always start at low end
o Apartment2 fam housesingle fam housemansionmansion
Under a lease, possession of the property (land, apartment, car) shifts from lessor to lessee.
So, during term of lease, the lessee acts as the general gatekeeper of property and can exercise the in
rem rights of exclusion that we associate with possession of property.
General rule is that when LL transfers the reversion, the transferee takes subject to the tenants
leasehold interest, just as someone acquiring property in which another has a life estate would acquire
subject to the life estate.
Doctrine of surrender, like the doctrine of constructive eviction, is pro-tenant.
When court finds that the LL has accepted a surrender, tenant is L for full amount of rent owed up to
moment of acceptance, but is off the hook thereafter.
LL and tenant could create a mutual release by implied K:
o Would happen if tenant vacated the premises with intention never to return, in effect making an
offer to surrender leasehold estate, and LL responded by taking action inconsistent with the
tenants continuing right to the leasehold interest, in effect, accepting the surrender of the
leasehold estate.
Doc. Surrender
o Requires cts characterize both actions of tenant and LL as evidencing a particular state of mind.
Tenants state of mind must be to abandon leasehold.
LLs state of mind must be to accept abandonment and reclaim leasehold interest as
an entitlement belonging to the LL.
o Under NY law, LL has 3 options when tenant abandons
(1) Do nothing and sue for accrued rent;
(2) Relet as the agent of the tenant; or
(3) Accept tenants surrender and relet for LLs benefit.
Another lease clause LLs sometimes use to protect them in event tenant defaults: rent acceleration clause:
Purports to make all of the rent owing under the lease immediately due.
Fair Housing Act pg. 435-439
Communications Decency Act: includes a provision granting immunity from liability to online
publishers for content of user-generated material appearing on their sites. could be sued under FHA cause site helped develop the content by asking users to
create profile based on sex and sexual orientation that was used to match user with others having
similar characteristics.
US v. Starrett City Associattes 2d Cir. 1988
o Court held that racial ceiling quotas (even to balance whites, Latinos, and blacks) violated FHS
despite owners claim that they were being used to maintain integration and prevent white

Property: Rose Spring 2013


Doctrines allowing parties enter into Ks that run w/the land, meaning terms & conditions of the agreement
are binding not only on original owners but on all future owners of both benefited & burdened parcels.




Hiking Trail

Cutting timber

Ks that bind successors in ownership are general called servitudes

2 principal types:
o Functionally like a K in which an owner agrees to waive his or her right to exclude certain
kinds of intrusions by another and give the other a right to use
o Appears that easements have an in rem effect, since third parties may not interfere with the
performance of rights under an easement
o K where owner agrees to abide by certain restrictions on use of his land for benefit of one or
more others
o Even when run with the land, less often described as type of property; rather, usually spoken of
as promises respecting the use of land.
o Generally dont give rise to any rights against third parties, so more accurately thought to be in

Kind of a permanent right.
(1) Easements in Implication [Quasi Easements]
Even if not in deed
Easement goes to back owner even if doesnt ask for it
(2) Easements by Necessity
Arguing that gets an easement by necessity
Possible argument EX: Schwab v. Timmons [Wisconsin, bluffs, cliffs, public and private roads]

Property: Rose Spring 2013


Easments in Gross PDF

Easements appurtenant: easements attached to the land that they serve.
o EX: Anns driveway across Barts propertythe driveway goes right up to edge of Anns lot
(the dormant tenant [Kristy]). Barts property, across which the easement runs, is called the
servient tenement [neighbor].
EX: Kristys well/neighbor
Easements in gross: not attached to any other particular piece of land
o Recreational easements are frequently easements in gross
o EX: Hunters might have a hunting easement on someone elses farm; they dont own any
property to which the easement is attached. They may not own any property at all.
No dominant tenant
Issues of transferability.
o Easements appurtenant are normally transferred along with the dominant tenement; the
easement will be implied even if its not explicitly granted in the deed.
Creation of Easements pg. 989
Although easements are regarded as property rights, at common law they couldnt be created by the
quaint ceremony of livery of seisin, only by grant.
To create property by grant, including an easement, the grantor must deliver to grantee a deed to prop.
Easement could be created by grant, of the direct A-to-B variety.
o Easement by Reservation:
If A granted Black to B, A could in the deed granting Black reserve himself an
easement over Black, perhaps to access other land retained by grantor.
o No granting a third party an easement.
EX: If A granted Black to B, A couldnt in the deed to B reserve an easement in Black
running to C.
Holbrook v. Taylor

KY S.Ct. 1976 pg. 997

Facts: 1942 appellants purchased the subject property. In 1944, they gave permission for a haul road to be cut
for the purpose of moving coal from a newly opened mine. No evidence of any probative value which would
indicate that the use of the haul road during that period or time was either adverse, continuous, or uninterrupted.
(1) Use of this easement wasnt established by prescription. like Adverse Possession
(2) License to use the subject roadway may not be recoveredright to the use of roadway had been
established bye estoppel.
A right to the use of a roadway over the lands of another may be established by estoppel.
AP involves the transfer of full possessory rights of ownership from the original true owner (TO) to the
adverse possessor (AP), after the statute of limitations runs.
An easement by proscription involves the transfer of an easement over the land of the TO to the
adverse user (AU), after the statute of limitations runs.
Under these statutes, the landlocked owner can force the servient owner(s) to convey an easement, but
must pay just compensation (fair market value) for the rights so obtained.
1. Most approved method is by deed, releasing or extinguishing easement.
2. As a matter of law when the dominant and servient tract come under common [could buy entire
property back and takes possession of easement] ownership
3. Adverse Possession or Reverse Prescription
i. If owner of servient tract blocks easement, and the owner of the dominant tract fails to object
before statute of limitations runs, then easement will be extinguished
4. If prolonged nonuse makes appear that its been abandoned.

Property: Rose Spring 2013


Penn Bowling Recreation Center, Inc. v. Hot Shoppes, Inc. Ct. Appeals DC Cir. 1949 pg. 1021
[F]: Penn Bowling acquired dominant tenement with easement through Hot Shoppes property for ingress and
egress. Hot Shoppes erected barrier claiming that Penn Bowling doesnt have right to use easement because it
was used improperly for parking and loading and unloading supplies for both dominant tenement and another
property for which easement was not created. Court find that the easement isnt forfeited for misuse and that
Penn Bowling can continue to use the easement so long as it separates its use so that the easement is only used
by the dominant tenement and not by their second property.
Appellants parking of vehicles on right of way at a time when appellee needs its use would constitute
an unlawful interference with the latters right.
Appellant may not use easement to serve both the dominant and non-dominant property, even though
the area thereof is less than the original area of the dominant tenement.
The right to an easement isnt lost by using it in an unauthorized manner or to an unauthorized extent,
unless its impossible to sever the increased burden so as to preserve to the owner of the dominant
tenement that to which hes entitled, and impose on the servient tenement only that burden which was
originally imposed upon it.
Appellant is entitled to a reasonable use and enjoyment of the easement for purposes of ingress and
egressmust determine what is reasonable.
Bright-Lined Rule:
Can only use easement for dominant property for which use was designed for
Regular Easements
Positive: one party
uses property of
Attached to
another property

Negative: not using your property, but
telling you how to use someone elses
In grossnot attached to another
o Problem with easement in
gross: comes in transfer

Problems w/weird easements

What is it?
Who owns it?
o FIX: record or
no transfers

Fontainebleau Hotel Corp. v. Forty-Five Twenty-Five, Inc. FL. Ct. Appeals 3d District 1959 pg. 1013
[R]: P, Eden Roc Hotel, sought injunction against D to prevent D from building 8-story tower which would
block sunlight over the Eden Rocs pool and sunbathing area. P claims that he has an implied easement (by
prescription) of light and air for more than 20 years.
[H]: While there is a rule that one must use his prop so as not to injure lawful rights of another, there is no legal
right to access of light and air. If P wants to change this rule, must amend the zoning ordinance.
One must use his property so as to not injure the lawful rights of another.
Cant deprive adjoining landowner of any right of enjoyment of his property which is recognized and
protected by law, and so long as his use isnt such a one as the law will pronounce a nuisance.
Court doesnt want to change the universal ruleif the public wants to, they can by amendment.
No statutory basis for the right sought to be enforced by plaintiff exists.
The court said that it doesnt matter whether the addition to the Fontainebleau may have been
constructed partly out of spite. [But, pure spite can sometimes lead to greater intervention.]
o Particularly where one landowner erects a fence solely to block light and air from a neighbor,
many courts have been willing to find a nuisance and issue an injunction.
o Mixed motives will usually lead to no liability.

Property: Rose Spring 2013


Closely related to easements
Covenants or promises respecting use of land
Less property like than easements
Lie closer to K end of property-K spectrum
Impose no duties of forbearance on third parties
Cant acquire a covenant by prescription,
implication, necessity, or estoppel.
Right to insist on the use or nonuse of land
Prescribe elaborate system of governance rules
Either affirmative or negative

Statute of Fraud applies

All covenants must be in writing
Function like add ons to basic package of
rights and liabilities that landowners normally
have, specific modifications that originate in
written contractual undertakings that relate to
particular parcels of land
Right to go onto land
Repealing servient owners right to exclude
Nearly always affirmative

2 Theories Allowing Promises Respecting Use of Land to Run With Land:

1. Asks whether promise is enforceable against successors as an equitable servitude
2. Asks whether promise is enforceable against successors as a real covenant
Determining which theory to use: nature of relief plaintiff seeks
If injunction sought, matter lies in equity, and courts generally apply equitable servitude theory
If damages matter falls on common-law side of old division; ct generally apply real covenant theory.
Equitable servitudes and real covenants are same thingpromises respecting use of land
In deciding whether these promises run with the land is determined by theory for enforcing the promise
against successors, not by any thing intrinsic in nature of promise itself.
Servitudes of the Civil Law
Common Law
language heirs
& assigns

1. Notice
2. Negotiability
3. Notice

Pos. Easement
A does X on Bs

Neg. Easement/
A doesnt do Y on Bs
property for As benefit

Limits on easement
in grossdoesnt
go to everyone
after first.

EX: #2e on PDFuse of

premises: commercial
vehicles cant parkno
clothesline, etc.

EX: driveway
No limits/
Who do I go to
fix it?

EX: no antenna
Notice problems:
o What are the limits?
o Value to some,
maybe not to all

B does Z on
Bs property for
As benefit
EX: will cut
Must do
more to
make stick
with the

Question for all three: Do they survive change of ownership or do they not?

Reasons for successive running with land covenants

Same problem will be there later expectations

Notice to burdened party buying property
Value (to land)
o Not personal deals
Bargaining away propertybuying into
with these limits.
Can buy an easement but cant get one by prescription

Property: Rose Spring 2013



Major issue with covenants is whether the benefits and burdens of the deal between original parties will
extend to successors of those partieswhether the benefits and burdens run with the land.
For the burden of a promise to run, one would have to establish:
1. Intent for the burden to run.
a. EX: If A covenants with B, who is allergic to peanuts, that A will not eat peanuts in the
backyard, the benefit probably wont run to Bs successor unless the context indicates
otherwise (for ex, B is running an allergy clinic and sells to another allergy clinic)
2. Horizontal privity lease or sale *** Notice to burden party
a. EX: Two neighbors sign agreement where they both agree to restrict their use of their parcels to
residential use and they record.
b. Because theyre not in a grantor-grantee relationship, theres no horizontal privity and so
traditionally the burden doesnt run.
i. Under the new Restatement, which doesnt require horizontal privity, burden would run.
3. Vertical privity. Relationship between one owner of property & successive owner of property.
Arent/subleaseZ [A has obligations on property]
a. For burden to run at law, successor in interest to the person who covenanted for the burden
must hold the entire durational interest held by the covenantor at the time she made covenant.
4. Touch and concern.
a. The covenant must touch and concern the land.
b. No court has yet followed this proposed approach clearly.
For the benefit of a promise to run, few requirements:
1. Intent for benefit to run
2. Vertical privity.
a. For the benefit to run, the successor need only succeed to some estate, not necessarily an estate
of the same duration as the covenantors (so less stringent requirement than in the case of the
vertical privity required for burden to run)
3. Touch and concern.
Concern for Limits

Negotiability & Value

Remedy--$ common law

deals with limits
Horizontal privity
Vertical privity
(Sucessory privity)
Touch & Concern

Remedy in Equity
Spec. Perform?
Notice (real &
Sufficient interest to
be or be sued?
Value package?


Notice (real &

Is it reasonable?

Dont need horizontal privity unless successor knows.

For the burden of a promise to run at equity, there must be:
1. Intent.
2. Notice.
a. This characteristic of equity.
b. If covenant is in deed given to the grantee, theres no problem enforcing it against the grantee.
c. If not in the deed, then actual or inquiry notice must be present.
d. Inquiry notice is given by facts thatd make a reasonable person inquire further & find covenant.
3. Touch and concern.
For the benefit of a promise to run at equity, there must be:
1. Intent.
2. Touch and concern.

Property: Rose Spring 2013


Eagle Enterprises, Inc. v. Gross NY Ct. Appeals 1976 pg. 1042

[F]: Realty Co. conveyed property to P1 with a covenant in the deed that they would provide water for
several months of the year for a fee. Realty Co was succeeded by EE and P1 was succeeded by P2. P2
got a well and no longer needed water from EE and did not pay fee. EE sued.
[H]: The provision does not run with the land because it does not touch and concern the land. P2 does
not need the water and thus the covenant provided no benefit to the land for P2, unlike P1.
Since the covenant was not in a lien (a security interest granted to secure payment), money
damages cases had to be resolved in common law court, not equity court.
Changed Circumstances Doctrine: Covenant became obsolete when the circumstances changed.
Therefore, covenant was terminated.
It is advisable to structure a covenant as a lien so there can be an equitable claim against an
asset to collect a just debt, instead of against an individual.

Notes: Personal Property Servitudes:

Running of servitudes is more an issue in land cases b/c it lasts much longer than typical personal prop
Unlike land, where servitudes address spillovers that affect identifiable neighbors, personal property
servitudes often restrict use or the terms of resale of an item of personal property.
Mostly the law has regulated these in terms of antitrust.
o Should holders of IP rights be able to contract for servitudes that will run with some property,
tangible or intangible?
o An alternative to such servitudes would be to license the IP rights themselves and include the
restrictions in the terms of the license.
EQUITABLE SERVITUDES pg. 1026Only get equity damages if remedy isnt good enough
English common law recognized only one circumstance when covenants regarding land use would run
to successors in interest: When either LL or tenant transferred his interest in property subject to a lease.
The common law courts refused to enforce covenants between neighboring landowners as interests
running with the land.
Proved to be a major inconvenience. Hence, Court of Equity.
Judge is the trier of fact
Tulk v. Moxhay

England Court of Chancery 1848 pg. 1026

[F]: Invented the equitable servitude test. T owned Leicester Square and surrounding houses. T sold the square
to E by a deed that promised that E and his successors would maintain the square and let residents use it. The
square was eventually conveyed to M, whose deed said nothing about the promise, although he knew about it.
M wanted to build on the square. T sued for an injunction and won.
Tulk UpkeepElmsXYdef Moxhay
Although covenants usually only run when the promise is in the lease, M had notice of the promise.
Thus there is no requirement for privity, which then encourages negotiability about who the benefits
and burdens apply to, based on peoples interest in the property.

Property: Rose Spring 2013


American invention. Covenant attached to fee simple property that, under certain circumstances analogous to
the LL-Tenant doctrine of running covenants, will bind successors in an action at law.
Neponsit Property Owners Association, Inc. v. Emigrant Industrial Savings Bank NY Ct. Ap. 1938 pg. 1031
[F]: P had a homeowners fee covenant in a lien on the prop conveyed to D. The fee was to be used for general
upkeep of the development. D refused to pay the fee arguing that it did not touch or concern his land. P sued.
[H]: judgment for P. This created the Real Covenant test. All requirements of the test were met.
Promise to pay certain fees can no be considered to touch and concern the land
This case is the reason why homeowners fees are structured as liens today, so they issues can be
resolved in equity courts.
It merges the common law courts and equity courts.
Real Covenant Test:
1. Must appear that grantor and grantee intended that the covenant should run with the land;
2. Must appear that the covenant is one touching or concerning the land with which it runs;
3. Must appear that theres privity of estate between the promise or party claiming the benefit of
the covenant and the right to enforce it, and the promisor or party who rests under the burden of
the covenant.
Trick to get around: put alien on the propclaim against property to enforce debt (equitable remedy)
A covenant must touch or concern the land. Privity exists in substance if not in form for an
association that is comprised of property owners to advance their common interests.
Covenants in leases run to successors of the original LL or tenant if:
o (1) The LL and Tenant intend that they will run; and
o (2) The covenant is one that touches and concerns the land
o This court adds (3) That there be privity of estate between the party claiming the benefit of
the covenant and the paty subject to the burden of the covenant.
Advocates abolishing the traditional property law requirements for the running of servitudes, such as
the touch and concern doctrine and the privity requirements.
The restatement makes enforceability the default, subject to limitations based on requirements of
writing or violation of public policy.
Provides for a baseline for the creation of servitudes that is grounded in contract and party intent:
A servitude is created (1) If the owner of the property to be burdened (a) enters into a contract
or makes a conveyance intended to create a servitude that complies with Statute of Frauds.
A servitude is valid unless it is illegal or unconstitutional or violates public policy:

Servitude that is arbitrary, capricious, or spiteful

Servitude that burdens a constitutional right

Servitude that imposes an unreasonable restraint on alienation

Servitude that imposes an unreasonable restraint on trade or competition

Servitude that is unconscionable

No court had adopted this approach

Property: Rose Spring 2013


CONSERVATION EASEMENTS pg. 1050 [more covenant, not easement]

Servitudes that restrict the future development of land.
Most common type of restriction prohibits subdivision and commercial development but permits
existing agricultural and residential uses.
Ranges from prohibitions on cutting timber to requiring the preservation of historic facades.
Negative Covenants In Gross
o Negative: prohibit the servient landowner from engaging in certain kinds of activities
o Covenants: dont fit any of the 4 categories of negative easements
o In Gross: power to enforce the restriction is typically given not to another landowner but to a
unit of local government or a charitable land trust like the Nature Conservancy.
o Probably wouldnt run with the land at common law.
o Couldnt be enforced as a real covenant, since the privity requirements wouldnt be met
Perpetual conservation easement designed to give peace-of-mind to current landowners worried about
the future of a beloved property, whether forest or ranch, stretch of river or family farm.
Huge tax benefits to donating a conversation easement to local unit of gov or a charitable land trust.
o Donation must provide that land is being restricted for one of several general purposes: outdoor
recreation, wildlife habitation, scenic enjoyment, agricultural use, or historical importance.
Conservation easements as potentially powerful tool in combating new commercial development.
o Conservation easements are the product of a voluntary agreement between a landowner and a
unit of local government or a land trust, and encounter little or no opposition.
Public Policy: Some traditional environmentalists have objected to conservation easements on the
ground that they deprive the public of any input into the development of conservation policy.
o Since public is paying for the conservation, both directly through tax subsidies and indirectly
through foregone development opportunities, public should have some say into the process.
o Instead, conservation easements are created through private negotiations between landowners
and land trusts, typically with no notice to the public even after theyve been created.
Evanglical Lutheran Church of the Ascension, of Snyder, NY v. Sahlem Court Appeals NY 1930 PDF
[F]: Church in a neighborhood w/ single-family home restriction; church wants to do build more but a covenant restricted
them; They received consent from all neighbors except one. They went against the covenant and started building anyways,
then eventually used the courts to try to get holdout neighbors to comply.
[I]: Termination of a covenant
[H]: The court said there was no good reason for the church to go against covenant. Restrictive covenants will be enforced
by preventive remedies while the violation is still in prospect, unless the attitude of the complaining owner in standing on
his covenant is unconscionable or oppressive.

Eminent Domain: public government wanting to put in a street is okay

Liability Rule vs. Property Rule
Bolotin v. Rindge

District Court Appeal, 2d District, CA 1964 pg. 1054

[F]: Covenant for single-family homes; P wants to build an office; restrictions end in 1970.
[I]: Doctrine of Changed Circumstances
[H]: Restriction is still enforceable b/c a benefit still accrues to other neighbors; circumstances havent changed so much as
to burden party w/o benefit to adjoining owners; Property rule for neighbors
Rule: Covenants are unenforceable under changed conditions doctrine when: 1) Purpose of restrictions are obsolete. 2)
Enforcement of the covenant no longer benefits adjoining owners.

Homeowner value trumps other like Jacque case.

Court will declare restrictions unenforceable if enforcing restrictions would be inequitable and
oppressive and would harass plaint without benefiting adjoining owners. Wolff v. Fallon 1955.

Property: Rose Spring 2013


Marra v. Aetna Construction Co. RULE 1940:

o A building restriction in the nature of a servitude wont be enforced where changed conditions
in the neighborhood have rendered the purpose of the restrictions obsolete. BUT, if the original
purpose of the covenant can still be realized, itll be enforced even though the unrestricted use
of the property would be more profitable to its owner.
Present case, no finding that the purposes of the restrictions on have become obsolete, or that the
enforcement of the restrictions on the plaints property will no longer benefit defs.
Purpose of the deed restrictions was to preserve tract as a fine residential area by excluding offensive
activities to residents creating noise, traffic, congestions, etc. which would lesson comfort and
enjoyment of residents.
o Office building may increase market values even though it offended senses of residents and
destroyed te physical conditions which made their neighborhood desirable for them.
Miles v. Clark 1919:
o Even if land becomes more valuable doesnt entitle defs to be relieved of restrictions theyve
o Just because the property becomes more valuable for businesses is immaterialCourts arent
controlled by money value, but may protect the home.
(a) Unclean Hands:
o Cant tell me I cant do something if youre doing it
(b) Expectation

Property: Rose Spring 2013



Alternative forms of entity property where multiple persons enjoy individual possessory interests while
common areas subject to specialized management, namely condos, cooperatives, and other commoninterest communities like gated private residential subdivisions.
Differ from leases:
o Persons who obtain individual possessory rights in these complexes have ownership interests
that can be described as equivalence to a fee simple.
o These property forms arent used as financing or risk spreading devices like leases.
o Make sense only as a mechanism for separating management functions of common areas from
individual possessory unitsonly encounter where this specialization of functions is desired.
Shared feature of all common interest communities:
o Multiple persons have an undivided interest in certain common assets.
3 Types:
Cooperative Apartment Building: Oldest of these alternative property forms
o No indv mortgages
o Cooperatives are corporations.Corporation holds fee simple title to entire complex.
o Individual units and common facilities owned by corp.
o Indvs must purchase stock in corporation to be able to live theremust have great credit score
because essentially, shareholders are paying the mortgage that the corp took out to pay.
If miss a payment, the burden is on the rest of the shareholders.
Some banks lend money to individuals secured by their shares in corporation
Condominiums: much newer form of property
o Differ from cooperatives:
Individual units owned within walls by individuals in fee simple (instead of being
leased like with cooperative)
Common areas owned by unit owners as tenants in common.
Regulated by master deed or declaration binding on all unit owners.
Master deed calls for HOA managing common facilities and charges assessments to
unit owners to pay for upkeep, operating expenses, taxes associated with common
Association Subdivision:
o Stand alone units (usually single family homes) that enjoy certain facilities in common w/others
o Can be created using servitudes running with land.
o Early forms were private streets, squares, or gardens accessible only by surrounding
homeowners paying for upkeep (like Tulk & Neponsit)
o Commonly built around golf courses, lakes, marinas, but one increasingly encounters gated
residential communities where streets and sidewalks owned in common and access is limited by
private security guards.
Problems in terms of management and control of facilities shared by indv unit holders:
Leases seen as dictatorship.
o Landlord rules as master.
Cooperatives, Condominiums, and common-interest communities represent like a democracy
o Owners must determine some way to organize themselves collectively to manage common
areas and shared facilities.
o Basic organizing document and an ongoing elected governing body.
o Kind of private government.
Why own vs. rent?
Conditioned response/brainwashing

Property: Rose Spring 2013


Notes: pg. 748

Collective governance housing is a hassleHOA
Common interest communities impose costs above and beyond rental communities
Preference for common interest communities is attributable to tax breaks?
o After the Tax Reform Act, the benefits of owning become relatively greater.
LLs can deduct taxes and interest payments too (as business expenses) and can deduct depreciation,
something owners cant do.
o Tax policies always changing.
o Presumably, persons who purchase freestanding homes in a gated community obtain no more
tax benefits than do persons who purchase freestanding homes in an ordinary subdivision.
Many people have unrealistic expectations that housing prices would always rise faster than inflation.
o This belief encouraged many people who otherwise wouldve preferred to rent, to buy.
Demand driven? Or, supply driven?
o Local govs faced with budget restraints prefer association subdivision to ordinary subdivisions
because more local expendituresnew school buildings, streets, parkscan be off-loaded to
developers who agree to pay for these things as part of the price of being allowed to develop.
Tax benefits, housing bubbles, local gov budget constraints as explanations for why persons may prefer
to own rather than rent personal living space?
o Discretionary control over how to remodel
Individual ownership of living units combined with collective governance of common facilities.
Condos command a higher price than cooperative apartments for otherwise similar units.
2 factors accounting for greater condo appeal:
1. Financing
o Financing for coops were limited to each shareholders portion of unpaid balance on blanket
o Today, purchasers can obtain separate financing for their unit, secured by their shares in the
2. All residents bear a portion of the risk of default by any single shareholder means that
cooperative boards typically impose severe financial restrictions on who can buy into a coop.
o Potential purchasers had to show they had lots of money, limiting number of potential
purchasers, driving down price.
LL s dictatorship for facilities like high-rise apartments or shopping centers is constrained by market
forces and by the specific promises she makes in leases with tenants.
o Subject to these constraints, LL can make decisions about management of the common areas
and shared facilities unilaterally.
When multi-unit facilities are organized as coops or condos, governance questions are more difficult
o Unit owners are collectively the body responsible for management of common areas & shared
o 2 principal mechanisms used in coops and condos to solve ongoing governance problems
1. Contractual
Articles of incorporation or the master deed establishing coop or condo will contain
a # of rules and regs that run with the ownership of the indv interests, and can be
said to bind any person who acquires an ownership interest in one of the indv units
2. Establish Board of Directors
Or other HOA or governing body charged with the authority to establish rules and
regs and bring enforcement actions against indv unit owners.

Property: Rose Spring 2013


Hidden Harbour Estates, Inc. v. Norman Ct. App. Florida, 4th Dist. 1975 PDF
Issue over whether the board of directors could adopt a rule prohibiting use of alcoholic beverages in certain
common areas of the condo.
[H]: Court finds that this rule is ok. Notes that the association could not adopt arbitrary and capricious rules
bearing no relationship to health, happiness, and enjoyment of the life of various owners. The test for this is
reasonableness. The court finds that this rule is reasonable, and that a lot of other condos (and government)
have similar rules- so they should be on notice that this may be expected
Court rejects trial courts reasoning that reasonableness is something that would halt a nuisance, and
notes that it is not necessary that conduct be so offensive as to constitute a nuisance to justify regulation
Reasonable is something within the range of things an owner was expecting when they moved in.
Reasonable = halting a nuisance
Justice Court Mutual Housing Cooperative, Inc. v. Sandow S.Ct. Queens County NY 1966
[F]: Sandow moves into coop with agreement that her kids could practice their instruments, and for first 6 years
everyones happy. Coop then adopts regulations limiting the amount of hours they could practice to 1 and
hour a day b/w hours of 10 am and 8 pm.
[H]: Test is whether the rule is reasonable - Court finds that its arbitrary and capricious; attempts to
regulate the occupants mode of living rather than their use of the land. 1 and hour rule arbitrary and
unreasonable (so each member of family played 1.5 hours at different parts of day (total of 6 hours) but the kids
cant play 6 hours?); 8 pm cut-off also arbitrary and unreasonable (occupants not allowed to have parties and
play music?)
Again: what do owners expect to have rules about about when they move in?
Twin Elm Management Corp. v. Banks: Playing piano for 12 hours a day wasnt unreasonable as to
constitute a nuisance and that mere annoyance to other tenants in and of itself didnt create a nuisance
or make the tenancy of the occupant undesirable.
o But flute and piano are VERY VERY different
This regulation is different from those prohibiting animals or machines (electronic equipment, etc) since
it attempts to regulate the mode of living of the occupants of the building.
But whether the music is the most subline noise that has ever penetrated into the ear isnt for the
judiciary to determine.

Nahrstedt v. Lakeside Villege Condominim Association, Inc. CA S.Ct. 1994 pg. 752
[F]: Homeowner sued to prevent enforcement of a restriction against keeping cats, dogs, and other animals in
the condo development. Owner asserted that the restriction was unreasonable as applied to her because her cats
were noiseless and created no nuisance.
[H]: Reasonableness or unreasonableness of a condo use restriction is to be determined not by reference to facts
of the objecting homeowner, but by reference to common interest development as a whole
As a matter of law, the recorded pet restriction isnt arbitrary but is rationally related to health,
sanitation and noise concerns.
Two categories of use restrictions: those set forth in declaration or master deed of the condo; and rules
promulgated by governing board.
o Rules promulgated by governing board are subject to reasonableness test
o Rules in the deed are presumed reasonable and will be enforced uniformly unless they are
arbitrary, or impose burdens on the use of land it affects that substantially outweigh the
restrictions benefits to the developments residents, or violate some constitutional right,
or violates public policy.

Property: Rose Spring 2013


Why presumption of reasonableness?

o Protects expectations of condo owners
o Encourages development of shared ownership housing by encouraging stability.
o Reduces litigation costs on owners
Arabian DISSENT major benefits of pet ownership; burden of pet restriction greatly outweighs any
negligible benefit (especially if animal kept in condo & bother no-one); tied to importance of owning home &
freedom to do what wants; statute doesnt specify a presumption of validity for restrictions in master deed
Hidden Harbour Estates v. Basso Fla. Dist. Ct. App. 1981
o Florida court distinguished 2 categories of use restrictions:
(1) Use restrictions set forth in declaration or master deed of condo project itself, and
[should be subject to a reasonableness test]
(2) Rules promulgated by the governing board of the condo owners association or the
boards interpretation of a rule
[should NOT be evaluated under a reasonableness standard. Instead, these
restrictions are clothed with a very strong presumption of validity and should
be upheld even if they exhibit some degree of unreasonableness]
When courts accord a presumption of validity to all such recorded use restrictions and measure them
against deferential standards of equitable servitude law, it discourages lawsuits by owners of individual
units seeking personal exceptions from the restrictions.
Social fabric is best preserved if courts uphold and enforce solemn written instruments that embody the
expectations of the parties rather than treat them as worthless paper as the dissent would.
Notes: If in CC&R, give up presumption of reasonableness. If its a rule change, then its okay.
Bernardo Villas Management Corp. v. Black Cal. Ct. App. 1987
Held a restriction prohibiting residents from keeping any truck, camper, trailer, boat or other form of
recreational vehicle in a carport couldnt be applied to prevent a unit owner from keeping in the carport
a clean new pickup truck with a camper shell that he used for personal transportation.
Portola Hills Community Assn. v. James Cal. Ct. App. 1992
Refused to enforce planned communitys restriction banning satellite dishes against a homeowner who
had installed a satellite dish in his backyard that wasnt visible to other project residents or the public.

Standards of Review
1. CC&Rs/Initial Deeds [highest standard of review]
2. Amended & Recorded CC&Rs [next highest standard of review]
3. Association (HOA/POA) Rule Changes [lowest standard of review]

Property: Rose Spring 2013



Plessy v. Ferguson US S.Ct. 1896
Held that the Equal Protection Clause wasnt violated if a state required common carriers to fulfill the
antidiscrimination requirement by providing separate but equal facilities for persons of different races.
Brown v. Board of Education US S.Ct. 1954
Overruled Plessyseparate but equal was dismantled in the realm of public accommodations, most
decisively under Title II of the Civil Rights Act of 1964
Theres no legal principle that prohibits a homeowner or tenant from announcing that persons of a particular
race or other protected category will be systematically excluded from her home or apartment.
Shelley v. Kraemer US S.Ct. 1948 pg. 424
[F]: Blacks were sold property, but neighboring landowners sued to enforce a covenant attached to the property
from being occupied by any person not of the Caucasian race. Also, there were interlocking covenants, which
attempted to monopolize a whole area. State court had initially upheld the covenants because they were private
and thus the 14th did not apply.
[I]: How drop racial covenants without fringing on ability of private actors to do what they want?
[H]: Overruled. Judicial enforcement of the covenant was state action and would violate the 14th Amendment.
Unenforceable. Provisions violated Constitution.
Further, the blacks were not in horizontal privity with the neighboring landowners, and thus did not
have proper notice of the covenant, and thus not enforceable.
[Reasons]: The difference between judicial enforcement and nonenforcement of the restrictive covenants is the
difference to petitioners between being denied rights of property available to other members of the community
and being accorded full enjoyment of those rights on an equal footing.
In granting judicial enforcement of the restrictive agreements, the States have denied petitioners the
equal protection of the laws and that, therefore, the action of the state courts cant stand.
State action doctrine
o A mere voluntary agreement among neighbors not to sell to blacks wouldnt be state action,
and is a permissible incidence of owner sovereignty.
But, if someone calls on the court powers to enforce the agreement, any resulting
judicial judgment is state action, and is subject to the limitations of the Constitution,
including the EPC.
One related but distinct approach to the specter of racially restrictive covenants is to invalidate them
on grounds of public policy.
The S.Ct. held, immediately after the decision in Shelley, that judicial enforcement of racial covenants
in Washing, D.C. would violate public policy. Hurd v. Hodge US S.Ct. 1948

Property: Rose Spring 2013



Does Shelley require that any state enforcement of private property rights is state action subject to constitutional
Ex. civil rights sit-ins at lunch counters, white owners would call police to have demonstrators arrested.
o If state where segregation required by law, SCOTUS held prosecutions for trespass were state action
regardless of whether owners reason for calling police was motivated by prejudice or simply to comply
with the law.
o Where no state statute requiring segregation? Bell v. MD (1964). US S.Ct. ducked issue b.c before
deciding, Maryland enacted statute making segregation in public accommodations illegal. Some justices
argued that trespass law necessary to maintain social order (so doesnt matter if prosecution based on
racism); other justices argued that trespass convictions based on race violate 14th amendment NOT b/c
state action but b/c Framers intended to constitutionalize equal access to public accommodations.

Civil Rights Act of 1864 resolved this issue: prohibited racial discrimination in any public
accommodation affected by interstate commerce.
o But what about racially-based trespass claims in private property? Does judicial enforcement of these
claims constitute state actionseems like no, discriminatory exclusion on private property allowed.
Charlotte Park and Recreation Commission v. Barringer NC S.Ct. 1955 PDF
[F]: B conveyed properties to P with the clause that the park was not to be used by back people, and if so, it was to be
reverted back to B. White only golf course that was created by people (including the city) to give away plots of land with
the reverter that it had to be a white only golf course. The Barringer deed is the only one left with a reverter so when it
became an integrated golf course it reverted to Barringer.
[H]: Private covenant is valid and not subject to public enforcement. (No plus factor).
Barringers get the land back and now have a bargaining chip against the golf course.
Developers didnt use reversionary clauses to continue discrimination due to enforcement costs.
Ruling didnt have a large impact on segregation.
Reverter clauses give an out to people who have very strong, maybe objectionable, preferencesthe
remedy is hard b/c you have to take it ALL back.

No body is a nuisance
Must do something
Goes through air (dust, vibrations, noise, smell)
Unreasonable use of own property

Trespass [exclusion

Cause of Action
Invasion of
Subnormal use of
our property

Stepping/interfering on someone elses

Transactional Costs
Low #s, clear rights
High #s, not all same nuisance level
EX: frat noise

Judge Involvement
Did cross line or not?
More discussion &

Deafening -----[unreasonable]-------- Ordinance Usage ------[reasonable]------- Silence

1. Less litigation
2. Expectations
3. Higher value in ordinary usage
4. Flexibility (if usage changes, standard changes too)
Administrative Costs
More facts to present case but
fewer case law
Parties Expectations: plaint and def both expected usage (for Middlesex)

Property: Rose Spring 2013


Higher cause more cases to make

Middlesex Company v. Dennis McCue Mass S.Ct. 1889 PDF

P (a mill corporation) requests an injunction to stop D from filling their millpond. D owns land up the
hill, uses it for cultivation purposes (and manures it), but it washes into Ps pond. P claims interfering
with Ps right of flowage. Def didnt put up fence or wall to prevent filling of plaints pond or to
prevent raising of his own land, which plaint had right to flow, or to bank against further flowage.
Plaint argues:
Def changed character of soil by cultivating it and caused filling up of mill pond
Could def use the land as he did despite the harmful effects on plaints land?
Defs use of land was legally made and def could thus cultivate as he needed.
If def was found liable, then his right to surface drainage would be limiteda man has a right to
cultivate his land in the usual and reasonable way.
Plaintiff can build his own wall if defs actions interfere with his property.
Fact that damage is foreseeable or even intended isnt decisive apart from statute.
Liability depends on nature of act, kind and degree of harm done, considered in light of expediency and
As a nuisance, plaint should build walllow transaction costs
o But looks more like a trespass cause of the water spillover
o Court looks at it as a nuisance instead:
Defs lack of intentional actions may make it a nuisance
Defs use of land wasnt out of the ordinary.
Sher v. Leiderman Cal. App. 1986 PDF
Plaints home designed and built to take advantage of winter sun for heat and light. Plaints paid for tree
work. Plaints house cast in shadow between 10am-2pm during winter making it dark and dismal
Plaint sue on private nuisance, public nuisance, and NIED
Does an owner of a residence designed to make use of solar energy state a cause of action for private
nuisance when trees on his neighbors property interfere with his solar access?
CA nuisance law doesnt provide remedy for blockage of sun and court declines to extend existing law.
Private Nuisance:
o Landowner has no easement for light and air over adjoining land, in absence of express grant or
o Blockage of light to neighbors property, except in cases of malice as overriding motive,
doesnt constitute actionable nuisance, regardless of impact on injured partys property or
person. Only Wash S.Ct. has departed from this.
o General Rule: In determining whether any interference with the use and enjoyment of land is
unreasonable, a court must balance the gravity of the harm against the utility of the conduct.
Solar Shade Control Act wasnt intended to apply to provide protection from shading to exclusively
passive solar homes.
o In the absence of any unlawful act or any special relationship creating a duty, no cause of action
for NIED exists here.

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Older law would say: no, not a nuisance
o Should shade be a nuisance in modern law though?
Plaint couldnt gotten an easement for the view in the first place.
Should nuisance law change?
Remedy?? EX: lose nuisance suit, but still have the right to cut down the trees [like Calabraisa Rule 4]
o California has no prescriptive easement.
View Wars & Problems [trees growing on hillcant see San Fran bay bridge]
#s issue/Assembly
Opportunity for hold out
Benefits of trees to hill
Free rider issues
SELF-HELP implications/issues
o Legal community doesnt think self-help is a good idea
o If SH being used and being abused, is there something wrong with the SH rules?
What can be done?
Turn into a public view by regulations
Drachonianno trees
No trees over X height [maybe this one plus prescription?]
No tress blocking someone elses view
Remove trees on request
Remove trees if neighbor pays for it
Tree arbitration board
Challenges to Regulations:
Takings Clause
o Which events are compensable and which are not? [what is a taking of property?]
EX: Raising speed limit from 25 30
Compensation? By gov?
Gov took some value of property?
Attacks on Regulations:
(1) This legislation is stupid and no reason for it (loser!)
(2) Its not stupid, the government cant do it because its not for a public purpose
o Keelo (not for public purpose)
Economic development is a public purpose to use eminent domain
^^ Neither is the usual takings argument
(3) Public at large is getting the benefit, not me, so the public should be the ones paying for it.
Takings Causes of Actions/Potential Claims:
(1) If gov takes title, then thats a taking & must be compensated
(2) Trespass/Physical Invasion (damages?)
(3) Lost value (maybe ALL/maybe SOME?) (reciprocal benefits) major regulatory takings issue
Defenses to COA Claims:
(1) Just preventing a nuisancenot taking anything
(2) Reciprocal benefits (Quid Pro Quo)
(3) Quit whining! Didnt lose anythingnot all, doubtful took much

Property: Rose Spring 2013


Pumpelly v. Green Bay Company US S.Ct. 1871 PDF

Plaint brought trespass case against def for overflowing 640 acres of his land by a dam erects across
Fox Riverwaters rose forcibly and with violence overflow all his landtore up his trees and gross,
and washed them away with his hay.
Takings Jurisprudence
Issue: Is injury to plaints property within the States right to exercise eminent domain?
Defs werent protected by the March 10th act because they exceeded the authority conferred by itas to
plaints rights, the subsequent statutes were void because they contained no provision for compensation.
When the US sells land by treaty or otherwise, it retains no right to take that land for public use
without just compensation, nor does it confer such a right on the State within which it lies; and that
the absolute ownership and right of private property in such land isnt varied by the fact that it borders
on a navigable stream
Def asserts the right, under legislative authority, to build and continue the dam without legal
responsibility for those injuries.
It remains true that where real estate is actually invaded by super-induced additions of water, earth,
sand, or other material, or by having any artificial structure placed on it, so as to effectually destroy or
impair its usefulness, it is a taking
If the plea was intended as a plea of prescription for an easement, the time isnt long enough
that requires 20 years.
Penn Central Transportation Company v. City of NY
Takings Case

US S.Ct. 1978 pg. 1285

Facts: Penn Central wants to erect a 50 story building atop Penn Central, after being refused by the
Commission to construct anything on it. COA = Loss of Value
Issue: Can a city, as part of a comprehensive program to preserve historic landmarks and historic districts,
place restrictions on the development of individual historic landmarksin addition to those imposed by
applicable zoning ordinanceswithout effecting a taking requiring the payment of just compensation?
Application of NY Citys landmarks Law HAS NOT effected a taking of appellants property.
The restrictions imposed are substantially related to the promotion of the general welfare and not
only permit reasonable beneficial use of the landmark site but also afford appellants opportunities
further to enhance not only the Terminal site proper but also other properties.
Rehnquist, CJ, & Stevens DISSENT:
Landmark designation imposes on him a substantial cost, with little or no offsetting benefit except for
honor of the designation. Actions violated the 5th A nor shall private property by taken for public use,
w/o just compensation.
Public Policy Argument:
Freezing the exterior design of notable buildings, without providing any compensation for lost
development rights, may have 2 unintended consequences:
1) Persons who own buildings that are potential targets for historic preservation designation may
rush to demolish them before theyre protected; and
2) Persons who are contemplating commissioning the construction of new buildings may turn down
dramatic or innovative designs out of fear theyll be rewarded with a historic preservation
designation, and hence will be locked into the building for all of time.
Providing compensation for lost development rights would presumable eliminate these incentive effects.
But itd also mean thered probably be fewer historic designations, because of the expense to the
community of paying for lost development rights.

Property: Rose Spring 2013


Why save historical buildings?

1. Beauty/architecture
2. Homogeneity culture
3. Remembrance/Memoralization
4. Historical significance
5. Tourism
6. Education/Cultural conservation
7. Orientation/Identity
Public Benefit LL owner? OR paid for by everybody?

In Penn, plaint argues: Lost 100% of air rights and Transferable Development Rights (TDR).
o Youre making us pay much more for a public benefit
S.Ct. said: NO, cant compare air rights with zoning parcels
NY Argued: Compare air rights & property

Cant compensate every piece of regulationjust not feasible

Property: Rose Spring 2013