FINALS Flashcards
Possible Meanings of “DIBE” (Distinct Investment Backed Expectations)
- Reasonable return on investment;
- Reasonable expectations with respect to property; and
- Recouping of landowner’s capital investment
Bailment
the delivery of personal property to someone not the true owner, who has rightful possession to the exclusion of all others even to the true owner. Bailee has sole custody and control
Possession (bailment)
exercise of dominion and control and intent to exclude all others
Types of Delivery
(1) Delivery:
(a) Actual: physically handing over personal property;
(b) Constructive: Handling over of something because of size or weight;
(c) Symbolic: Delivery of a writing, or code
(2) To the exclusion of others including the true owner: when the person has dominion and control and owner cannot get it back without
Types of Bailments
(1) Voluntary Bailments:
(a) Lucrative: for hire, nature and amount of compensation are irrelevant;
(b) Mutual Benefit: both parties benefit in some way, does not have to be for money. Liability is the ordinary care of a prudent man.
(c) Sole Benefit of Bailor: standard of liability for bailee is gross negligence
(d) Sole benefit of Bailee: standard of liability for bailee is slight negligence
(2) Involuntary Bailments: finder of rare coin, relationship to the true owner is that finder is a bailee. No delivery = involuntary; **FINDER OF LOST PROPERTY IS BAILEE TO OWNER
Gift Inter Vivos Rule
The voluntary transfer of property without consideration and made absolute during the lifetime of the parties
Gift Inter Vivos (Elements)
- Intent to pass property immediately
- Delivery: actual, symbolic, or constructive
- Acceptance: typically implied; presumption is that it is accepted; is is for benefit to donee. Unless liability.
- Irrevocable: absolute
Symbolic Delivery (gift inter vivos/gift causa mortis)
A symbolic delivery arises when the grantor passes some writing evidencing ownership and a manual delivery is not possible.
Constructive Delivery (gift inter vivos/gift causa mortis)
Donor gives donee a key which provides access to the chattel, which is too big or bulky for a manual delivery (e.g. giving keys to car)
Modernly: a constructive delivery arises whenever the grantor does everything possible to effectuate a delivery and there is no issue of fraud or mistake
Gift Causa Mortis (same elements as gift inter vivos)
(1) A gift causa mortis requires that the donor have an imminent fear of death, intend to transfer property to the donee, make delivery, and die soon thereafter. (2) The delivery to the donee may be direct, or indirect.
Contemplation of imminent death (element of gift causa mortis)
Split in authority: suicide is not recognized as imminent death in some jdx; do not want to sanction suicides
Adverse Possession (Elements)
- Actual Entry
- Open and Notorious
- Exclusive
- Hostile
- Claim of Right
- Continuity of Posession
Exclusive (AP element)
**Could be joint adverse possession.
Note: where wrongdoer gets the benefit of constructive possession (does not have to occupy every square inch) but the true owner does not (no constructive possession of 15 inch).
Hostile (AP element)
Claim of Right (AP element) (split of authority)
a. Good faith: Adverse possessor must believe in good faith he owned the land. Mistake.
b. Bad faith: adverse possessor must know the land belongs to another, state sanctioned
stealing.
c. Objective Standard: Looks at the adverse possessors behavior to determine if they had a claim of right. (Claim of right no longer element in this jdx).
Continuity of Possession (AP element)
*Possession must be continuous for 5-30 years (depending on local statute).
There must be continuous possession for a statutory period, break in possession stops the clock. Continuity depends on nature and character of the property. Shall exercise the right more or less frequently according to the nature of the use. Only have to use it as the true owner would. Abandonment (voluntary relinquishment of known right w/out intent to return) ends continuity.
Tacking (sub issue of Continuous element of AP)
Color of Title (AP)
Is any writing that appears to transfer title but in reality does not, no matter how defective and imperfect. Helps to establish claim of right and hostility. Shortens SOL period.
JDX SPLIT REGARDING POSSESSOR’S INTENT:
In some jdx, if an adverse possessor knows that their deed is invalid he cannot come in under color of title.
In other jdx, good faith is not required. Even if grantee knows his title is invalid, he can still come in under color of title.
Joint Tenancy
(1) Each tenant owns a vested, undivided fractional share of the whole, AND each tenant owns the whole.
(2) Because each tenant owns the whole, a joint tenancy grants a right of survivorship. This means that, upon the death of one co-tenant, full ownership remains with the surviving tenant.
To alienate their share, the estate has to first be severed to a tenancy in common; cannot transfer interest via death or will.
Outside of probate; can’t pay off debts w/ what rightly belongs to B
You can terminate a joint tenancy by selling/conveying your interest to yourself, thereby creating a tenancy in common situation
INTENT is the key modernly to create and sever a joint tenancy
Creation of Joint Tenancy (Common Law Four unities: Creation)
1) Time: acquired ownership at the same time
2) Title: acquired in the same instrument
3) Interest: each tenant owns the same interest, proportional share
4) Possession: each has the right to possess the whole. Right to use and exclude
others, receive incomes etc.
The four unities are not required to create a joint tenancy; all that is required is the owner’s intent to create a joint tenancy.
Tenancy in Common
(1) Each tenant owns a separate, undivided interest in the whole (has right to possess the whole, but doesn’t own the whole); (2) grants no right of survivorship; (3) creation of a tenancy in common requires only unity of possession
Life Estate Pur Autre Vie
When a joint tenant or tenant in common conveys his undivided interest, the grantee owns the interest of his grantor; when the owner of a joint life estate conveys his interest, the grantee owns only a life estate pur autre vie (a life estate for the life of the original life tenant)
Tenancy by the Entirety
A & B own Blackacre as tenants by the entirety, only for spouses, 5 each owns the whole with right of survivorship, neither can transfer interest to anyone without the others’ consent. Only way to end is by divorce or death or voluntary agreement
Right of Contribution (rights and liabilities among co tenants)
When A pays more than B, right of reimbursement. Must be real property and owned by everyone. Not to chattel.
a) Premiums: mortgages, taxes, and insurance. entitled to 1/2
b) Necessary Repairs: right to receive 1/2
(distinguish between necessary repairs and unnecessary improvements. A tenant cannot compel his cotenants to contribute for expenditures for the latter)
c) Improvements: expenditure that doesn’t just maintain but increased its value or life span, no right of contribution bc otherwise A could improve B out of ownership
Rents and profits from Third persons (rights and liabilities among cotenants)
Can rent out property without knowledge of others because each has the right to possess the whole. BUT must account, becomes trustee, for rentals to other cotenants.
Exclusive possession by one cotenant (rights and liabilities among cotenants)
A occupies the whole to the exclusion of B.
When the tenant’s exclusive possession is friendly, the tenant is not liable for rent.
When the tenant’s exclusive possession is hostile, the tenant is liable for the market value of the ousted tenant’s share of the use and occupation of the land. (hostile = against the co-tenant’s will, tantamount to an ouster)
Partition (rights and liabilities among cotenants)
Joint tenants and tenants in common have a right to partition.
A partition by kind is a division of property into parts. Courts opt for partition by kind over sale if partition can be accomplished without manifest injury to the parties.
Disputes of partition occur when there is no agreement.
Waste (rights and liabilities among cotenants)
Cotenants are liable to one another for waste. Waste is the destruction of a premises in a way that decreases its value.
Ouster (rights and liabilities among cotenants)
Ouster is when one co-tenant asserts complete ownership of the land and denies the co-tenant relationship.
For cotenant to claim adverse possession, he must repudiate/discharge the cotenant’s interest in the property by act or declaration
Assertion of ownership may be accomplished by in various ways, including the transfer of the entire fee
Ouster satisfies all requirements of Adverse Possession.
Fee Simple Absolute
infinite duration
Common Law: “to A and his heirs”
Modernly: no magic words necessary; FSA is implied
No future interest ever follows FSA
Defeasible Fees
(1) fee simple determinable
(2) fee simple subject to condition subsequent
(3) fee simple subject to executory limitation
(4) fee simple determinable subject to an executory limitation
Fee Simple Determinable
ends automatically; possibility of reverter retained by O
rights to immediate possession reverts to the grantor
“so long as,” “while,” “until,” “during”
Fee Simple Determinable Subject to Executory Limitation
durational language (“until”; “so long as”)
goes to a 3rd person. automatic forfeiture when condition occurs. 3rd person has shifting executory interest in fee simple
Misc: Executory interest subject to the RAP. If there is a violation, strike the violating clause and A is left with fee simple determinable, B has a possibility of reverter.
Fee Simple on Condition Subsequent
a. Characteristics: Conditional, does not automatically end, requires holder of future interest to enter, right of reentry. Can be cut short.
b. Creation: “provided, upon condition, but if”, creation of future interest by clause is not necessary. O retains right of entry, not created.
c. Future Interests: Right of Entry/Power of Termination, does not automatically end upon condition, requires exercise of right by holder. Interest is retained, does not need to be stated.
d. Transferability: CL = not transferrable, only inherited; Modernly = can be transferred inter-vivos by deed or at death by will
e. Misc: direct restraints are invalid, reasonable restrictions are valid. Focus on whether restriction has so limited transferability that the restriction acts as a prohibition on sale.
Restraint on Alienation
A direct restraint on alienation, provision-prohibiting sale of property, is void and stricken.
Courts want property to have value and be freely transferrable. Alienation is inconsistent with a fee.
Disabling Restraint
Simply prohibits the grantee from selling or otherwise transferring the property
Forfeiture Restraint
Grantee loses or forfeits the property even if attempts to transfer property
Promissory Restraint
Deed provides that grantee promises or agrees not to transfer the property
Joint Life Estate
Indirect Restraint
(grantor does not intend to restrain alienation, but the effect is to restrain alienation)
O conveys “to the city for park purposes only” – that means that the city can’t sell b/c it’s for park purposes only, so it’s an indirect restraint
Shifting Executory Interest
O, to A on the condition that…then to B = 3 parties. A has fee simple subject to executory limitation, B has a shifting executory interest in fee simple. O has nothing.
Springing Executory Interest
O, to A on the condition that A marries a Jewish man. = 2 parties
Fee Tail
“to A and the heirs of his body”
Inheritable estate
reversion in O or a remainder in a 3rd person
Modernly: “To A and the heirs of his body” =
- A gets FSA
- A gets a life estate and heirs get the remainder in fee simple
- A gets a fee tail and O has a reversion
Life Estate
duration of grantee’s life, or if transferred, some other person. If transferred to B, B would have a life estate pur autre vie- life estate measured by A’s life
reversion or remainder always follows
“To A for life”, O has reversion;
“To A for life, then to B” - B has indefeasibly vested remainder in fee simple
Remainder
A remainder is a future interest created in a third person that may become possessory upon the natural termination of the preceding estate
whether vested or contingent transferrable by deed during grantor’s lifetime or by will
Contingent Remainder
Right to property which may or may not vest in possession at some future date; a remainder is contingent if it is given either to an unascertainable person or is subject to a condition precedent.
Incorporated into the gift, condition is in the same clause as the gift.
never accelerates into possession; subject to RAP
Alternative Contingent Remainders
O conveys to A for life (life estate), then to B if B is not convicted of a felony before obtaining age 30, but if B is so convicted of a felony, to C
B and C have alternative contingent remainders – if B’s remainder vests, C’s can’t, and if C’s remainder vests, B’s can’t
each is subject to condition precedent; either one or the other’s remainder will vest (not both)
Destructibility of Contingent Remainders
TRADITIONALLY:
A contingent remainder that does not vest in possession upon the termination of the preceding life estate, is destroyed; the owners of the reversion own the estate in fee simple.
MODERNLY:
Contingent remainder would be transformed into a springing executory interest and O’s reversion would be transformed into a fee simple subject to a springing executory interest.
Vested Remainder
A vested remainder is given to an ascertainable person and not subject to a condition precedent.
Grantee is ascertainable and no condition precedent.
Not subject to the RAP.
Vested Remainder Subject to Open
remainder may be cut down but never eliminated
To A for life, then to the children of B, B has one child. Can be cut down if B has more children, upon B’s death, class closes and B1 will have indefeasibly vested remainder in fee simple.
Vested Remainder Subject to Complete Divestment
To A for life, then to B, but if C returns to CA, to C. A has a life estate, B has a vested remainder in fee simple subject to complete defeasance, C has a shifting executory interest in fee simple. Only shifting executory interest can defease or cut off a prior estate or prior vested
Affirmative Waste
(1) Affirmative waste arises when the life tenant commits injurious acts on the property. (2) Injurious acts means acts that reduce the value of the property
Spendthrift Trust
A spendthrift trust is one in which the beneficiary cannot transfer his right to future income or principal and creditors cannot attach a beneficiary’s rights to future income or principal.
BUT/Exception: Someone that provided the “necessities of life” can attach future payments not withstanding the spendthrift provisions. Public policy consideration.
Rule in Shelley’s Case
The Rule in Shelley’s Case states that when O conveys “to A for life, then to A’s heirs,” A’s heirs take nothing; rather, A takes a remainder.
MODERNLY:
A’s heirs take a contingent remainder and O has a reversion in fee.
Doctrine of Merger (rule in shelley’s case)
If A owns the life estate and A owns the next vested estate, such as a vested remainder, the life estate merges into the vested estate
“To A for life, then to A’s heirs” (1) A has a vested (ascertainable and no
condition precedent) remainder in fee simple, heirs take nothing. (2) Merger, A
owns life estate and vested remainder, A owns fee simple absolute.
Doctrine of Worthier Title
If there is an inter vivos conveyance of land by O to A, with rest going to “O’s heirs” by remainder or executory interest, then no future interest in heirs is created rater a reversion is retained in grantor.
Doctrine of Worthier Title (Modernly)
O’s heirs take a contingent remainder in fee simple, O has a reversion (reversion always follows a contingent remainder)
No Later Than 21 Years after a life in being (RAP)
(1) A contingent interest violates the RAP if it is possible for the interest to vest more than 21 years after a life in being at the creation of the interest.
(2) In determining whether an interest could vest beyond the perpetuities period, we look to the legal possibilities, not factual possibilities.
(3) In determining legal possibilities, a person is deemed always capable of procreating.
Options to Purchase Property (RAP)
(1) In deciding what an “interest” is, there is a split of authority as to whether commercial options come within the RAP, as there is with respect to whether the RAP modernly even has any vitality at all.
(2) Where the RAP is recognized, the classical application is the “what might happen” test.
Amelioration: Construction (RAP)
(1) In construction, the court interprets the document in question in such a way that is consistent w/ grantor’s intent and thus avoid a RAP violation.
(2) The grantor’s intent may be learned from intrinsic (the terms of the instrument) and extrinsic evidence (parol evidence).
Amelioration: Cy Pres (RAP)
(1) Under cy pres, the court reforms the instrument as nearly as possible to the grantor’s intent so that there is no violation of the Rules Against Perpetuities.
(2) In determining grantor’s intent, we look to the wording of the instrument, as well as extrinsic evidence.
Amelioration: Presumption
i. Shall be presumed that creator intended estate to be valid
ii. Presumed reference is to a person in being on the effective date of instrument
iii. Where contingent on probate, shall be presumed that it will happen in 21 years
iv. male and female cannot have child over the age of 55
v. Adoption shall be disregarded
vi. CA comment: conclusive presumption of lifetime fertility is not unrealistic, possibility of having children by adoption
Wait and See Doctrine (Amelioration) (RAP)
(1) Under the Common Law, Wait and See is a hindsight approach that looks to see not what might happen, but what in fact did happen.
(2) In determining what did happen, if the contingent interest actually vested, or failed to vest, during a perpetuities-like period based on someone’s life who could affect vesting, then the contingent interest is not stricken.
Uniform Statutory Approach (RAP) (Wait and See)
(1) Under the Uniform Statutory Rule Against Perpetuities, the court waits the common law standard or 90 years.
(2) If it does the interest is valid, but if at the end of the period it does not vest or fail, the court can reform the instrument, cy pres.
Statute of Frauds Requirement (contract/sale of land)
Actions upon a contract or the sale of land shall be in (1) writing; (2) state all the material terms of the K; (3) signed by the party charged or some other person by him lawfully authorized (party trying to avoid the K) → Intent important.
Equitable Estoppel
Equitable estoppel precludes a party from raising a defense that would otherwise be allowed, but for his fraud, or fraud like conduct, if the innocent party would suffer consequential unconscionable injury.
Marketable Title
Marketable title to real estate is one that is free from reasonable doubt and is established when (1) seller owns what he purports to sell (2) the property is not in violation of any law and (3) there are no encumbrances on the property (except those expressly waived).
Time is of the Essence Clause
(1) A Time is of the Essence Clause states that each party must tender performance by the date specified and a failure to do so by one party discharges the other party. Rescission. (2) Whether a K is a time is of the essence K dependent on Language of the K and intent of the parties.
Risk of Loss (when something happens to property)
(1) In some jurisdictions, in the absence of a contrary provision in the contract for sale, when property is destroyed through the fault of no one, the risk is on the seller: the transaction does not go through. The buyer gets his deposit back and the seller gets his property back.
(2) In other jurisdictions, the risk of loss is on the buyer: the transaction goes through. The seller gets his money back and the buyer gets the property. This latter allocation of risk is referred to as equitable conversion.
Deeds (Elements)
must comply w/ SOF:
(1) Description of property: sufficiency is if property is described w/ sufficient certainty to identify it, and is signed by the grantor; Modernly emphasize intent of A & B
(2) Deed must be DELIVERED
- –handing over of deed is probative of delivery, but neither sufficient nor necessary
- –recordation of a deed creates a presumption of delivery, but recordation is not required to pass title
(3) Acceptance – acceptance is presumed
Oral Conditional Delivery
(1) Oral conditional deliveries generally are not recognized. (2) Oral conditional deliveries have been recognized however, under extreme circumstances, as where a soldier went off on a dangerous mission.
Chillemi case, where a conditional delivery to a wife was recognized before the soldier went off on a dangerous mission, society has an interest in not treating spouses/former spouses as strangers in arms-length business transactions
Warranty Deeds (General/Special)
Covenants that can either breached at the time escrow closes (present) or that can be breached at some time in the future (future).
General warranty = neither grantor nor any predecessors have breached;
Special = Grantor guarantees that only HE has not breached.
Covenants of Title (Warranty Deeds)
- Seisin—Present: grantor owns the property, grantor has the estate in quantity and quality that he purports to convey
- Right to Convey—Present: grantor has the right to convey
- Encumbrances—Present: defend title of grantee and his successors against lawful claims of all persons, there is no right in 3rd person that will diminish the fee except those expressly stated
- Quiet enjoyment—Future: There is no one with superior title
- Further Assurances—Future: will execute documents necessary to perfect grantees title
- Warranty—Future: will defend and indemnify grantee against those with superior title
Signature Rule (SOF)
In determining whether the signature requirement of the SOF has been satisfied, courts typically do not address the problem from a literal perspective, but focus on the intent of the parties.
Description of Property Rule (SOF)
(1) As a general rule, the land in title must be described with sufficient certainty to identify it and the deed must make reference to something tangible by which the land can be located. (2) A so-called Mother Hubbard clause satisfies the statute.
Merger Doctrine (Warranties)
(1) The common law merger doctrine states that any causes of action based upon the contract of sale are “merged” into the deed upon closing of escrow. (2) The modern trend is not to follow the doctrine and allow any causes of action based on contract law to survive the close of escrow.
Purchaser Rule (Recording Statutes)
Recording statutes protect only purchasers, not donees. The consideration paid by the purchaser must be substantial and not nominal consideration.
Notice Statute Rule
(1) Notice in a notice jurisdiction means that the subsequent purchaser is not given protection if she had record notice. (2) In some jurisdictions, a deed out from a common grantor is record notice, a type of constructive notice, although it does not impart notice in other jurisdictions. (3) The common law first in time is first in right can be trumped only if the subsequent purchaser is a BFP
Inquiry Notice Rule
Inquiry notice arises when one is apprised of facts that would lead a reasonable person to investigate further.
Idem Sonans Rule
(1) A deed w/ idem sonans problems nevertheless imparts notice. (2) A subsequent purchaser has duty bound to check all the spellings of a name that sounds like the name actually spelled.
Latent Defects Rule (w/ Deeds)
(1) In some jurisdictions a deed that has a latent defect gives record notice. (2) In other jurisdictions, such a deed does not impart notice.
Presence Rule (Deed Acknowledgment Issue)
“Presence” means that an individual is in the vicinity of or in the proximity to another person.
