Laws that do not embody public opinion can never be enforced. -- Elbert Hubbard
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Contributed by Roger Martin, 2L Student by night at Univ. of San Diego, Patent Agent by day at firstname.lastname@example.org
**Edwards v. Sims (1929).
Facts: P. owns land that is directly above a sub-terrainian cave. D. is a judge who ordered the cave entered to determine the facts of another case (Edwards v. Lee), as to whether the cave travels under Lee's land as well, and therefore P. would be trespassing on Lee's property while exploiting the cave. P. seeks a writ of prohibition to prevent D. from enforcing his order.
Issue(s): Is the D. proceeding erroneously within its jurisdiction in entering and enforcing the order directing the survey of the cave under P.'s land in order to resolve the issues in Edwards v. Lee?
Holding(s): A court of equity has the transcendent power to invade the property of a private citizen for the purpose of ascertaining the facts of a separate matter before the court.
Reasoning: The right to enjoyment and possession of property is limited in so far as the state has a right to infringe upon those rights when it believes that those rights are being used to the detriment of other private citizens. Court cited a similar decision involving the determination of trespass in a sub-terrainian mine.
Dissent(s): You only have rights to underground property which you can exploit, and since the cave opening was on Edward's land, there was no way that Sims could exploit the cave, and so he should have no rights. This is based on the social utility theory.
**Johnson v. McIntosh (1823)
Facts: P. claims the land granted to him under two separate grants, one in 1773 and the other in 1775, made by two separate Native American Indian chiefs. The chiefs were acting under proper authority of the tribes they represented, and had possession of the land which they sold under the grant. P. wished to have these grants recognized by U.S. courts.
Issue(s): Can a title given by an American Indian and received by a private citizen be recognized in U.S. courts?
Holding(s): No. The United States holds the ultimate title to the land of the country, and has the exclusive right to acquire the right of possession from the American Indians.
Reasoning: The nature of the U.S. right derived from the unquestioned European right of possession by discovery, and when the U.S. obtained independence, the treaty with England to end the war explicitly conveyed the "proprietary and territorial rights of the United States" to the new U.S. government. By conquest, the U.S. has exercised it's exclusive right to acquire the right of possession from the Native Americans occupying the territory.
**Goddard v. Winchell (1892)
Facts: P.. owns a pasture which he leases to another. A meteorite fell to earth and buried itself 3 feet into the soil of P.'s pasture. A separate person, Hoagland, found the meteorite while in the presence of the lessee of the pasture, and dug it up. Hoagland then sold the meteorite to D. for $105. P.. claims ownership of the meteorite because it fell into his land.
Issue(s): Did the meteorite become "part of the soil", and therefore the property of P., or was it something that belonged to nobody, and therefore the property of the D. who bought it from the finder?
Holding: Yes. When meteorites fall to earth, they become part of the soil, and thus belong to the owner of the soil.
Reasoning: By the doctrine of accretion, soil may be moved by natural causes from one person's field, and deposited into that of another. The court reasoned that this meteoric event was accretion on a planetary scale, and thus the meteorite which was previously unowned, became the property of the P. by virtue of becoming part of his soil.
Notes: 6. It has been held that if A pumps out oil or gas from a natural reservoir located under the land of both A and B, that A has not taken from B. One rationale is that the resource only becomes property after it has been extracted, another is that the resource is owned, but the owner loses property rights when that resource migrates into the land of another.
**Eads v. Brazelton (1861)
Facts: P. Brazelton found the wrecked steamboat America sunken in the Mississippi, and placed a bouy over it, and to marked a fix on some nearby trees, intending to return the next morning to recover the large amount of lead abandoned therein. However, P. was unable to return during the next several months and D. was able to find the wreck on his own, and commence lifting the lead from it. P.. sued for recovery of his property in the wreck, and to obtain compensation for the lead that D. removed.
Issue: Were P.'s efforts (marking the fix, placing the bouy) sufficient to vest in him property rights for the abandoned wreck?
Holding: No. "The occupation or possession of property lost, abandoned, or without an owner must depend on an actual taking of the property with an intent to reduce it to possession".
Reasoning: The court reasoned that P.'s actions were not sufficient to warn away intruders, and so he had not effectively taken possession of the wreck. Placing a boat there, and making persistent efforts to raise the lead, would have been acts of possession.
Notes: 4. "the law does not clothe mere discovery with the exclusive right to the discovered property because such a rule would provide little encouragement to the discoverer to pursue the often strenuous task of actually retrieving the property...". 6. A person who hinders another in his trade is liable, however if a person does damage by engaging in the same trade, he is not liable. In Keeble v. Hickerson, one who frightened ducks away from another's pond was liable, but would not have been if he had coaxed them to his own pond by use of a decoy.
**Armory v. Delamirie (1722)
Facts: P. found a jewel and took it to D.'s goldsmith shop where D.'s apprentice removed the jewel under the pretense of weighing it, and informed D. of its weight. Then D. offered the P. money for it, but the P. refused and insisted upon the return of the jewel, at which time the apprentice returned the empty setting without the jewel in it to the P. .
Issue: Does P. , in finding the jewel, have sufficient property right in it to keep it from the D.?
Holding: Yes. A finder obtains exclusive property rights of his find against all others except the rightful owner.
Reasoning: Although unstated, I believe the reasoning to be that if the finder was not protected by the right to exclude others from taking his find, simply because it was previously unowned, that there would be no incentive to the discoverer to bring the found item to a socially useful purpose.
Note: The court awarded the P. damages amounting to the value of the finest jewel that could possibly be mounted in such an arrangement, because D. was unable to produce the actual jewel for return to the P.
** Bridges v. Hawkesworth (1851)
Facts: P. , while leaving D.'s shop, found a parcel which had been lying on the D.'s shop floor. When opened, it was found that the parcel contained a stack of bank notes. P. then requested that the D. retain the notes and return them to the owner. After 3 years had passed, the owner had not claimed the notes, and so P. requested that the D. turn over the notes to P. . D. refused, and P. brought action to recover the notes from D.
Issue: Does the fact that the notes were found inside the D.'s shop give the D. the right to keep them from P. , who is the finder?
Holding: No. The finder of a lost article is entitled to it as against all parties except the real owner, even if the discovery occurred on another's property.
Reasoning: The court cited Armory v. Delamirie as authority for their holding. The court further reasoned that since the notes were never in the custody of the D., nor under the protection of his house before they were found, he had no responsibility for them and therefore could not have accrued property in them before the finding by P. .
Notes: Armory v. Delamirie may have been interpreted too broadly in this case, because Armory did not consider the rights of the person in which the jewel was found.
**South Stratforshire Water Co. v. Sharman(1896) (England)
Facts: P.'s owned a fee simple property on which was a pool that they contracted with D. to clean. While cleaning the pool, D. found 2 gold rings. P. demanded said rings from D., who instead turned them over to police to find the original owner. When the owner was not found, police returned the rings to D., and P. sues to recover rings.
Issue: Did P. exercise compete control of the property and everything in it and thus have the general right to demand anything found in the pool by his employee?
Holding: Owners of non-public property obtain presumed possession of items abandoned on their property when they are found by persons acting on his behalf if the owners actively control use of their property, and the things which are on it or in it, by excluding unauthorized interference.
Reasoning: The court distinguished this case from Bridges, where a parcel of bank notes was found on the floor of a shop open to the public, by noting that the money in Bridges was found in a walkway open to the public, and that the rings were on non-public use property over which the owner intended strict control of all things on or in his property. It was also reasoned that to hold otherwise would encourage people to pocket what they find on another's property.
Notes: In Pyle v. Springfield Marine Bank, a safe deposit vault was deemed to be a private area, and so valuables found on the floor belonged to the bank and not the finder. In a similar case Parker v. British Airways, the opposite resulted when a passenger found a bracelet in first class because, although the airline executed a limited control over who came and went, and what they could bring in, their control was not construed to include controlling all articles on or in the plane.
**Hannah v. Peel (1945) English
Facts: P. was a corporal working in a gov't requisitioned house owned by D., when he found a brooch that was covered in cobwebs. D. offered P. a reward for the brooch, but P. turned brooch over to police and obtained a receipt. When the owner was not found after 2 yrs, the police returned to brooch to the D. instead of the P., and the D. sold it.
Issue: Did the D. own the brooch simply because he owned the house, or should it belong to P., the finder?
Holding: Possession becomes vested in the finder against all but the rightful owner when the item is found by a person who is not the agent of the owner of the property where the item was found, and the owner does not actually physically possess the property where the item was found.
Reasoning: The court likened this to Bridges and decided that the owner of the house never physically possessed the house, and never had knowledge of the brooch before it was found. Thus, the owner did not necessarily have possession of everything lying unattached on his property, specifically this brooch.
Notes: 4. Bridges was also cited in Durfee v. Jones where the owner of a safe had no knowledge or real possession of money that was found by a person he had entrusted the safe to for display. 5. In determining who "found" the money in a lost sock, the court held that the "finding" did not occur until the sock was broken open, and so all of the boys present were joint finders.
**McAvoy v. Medina (1866)
Facts: P. was a customer of a barber shop owned by D.. P. found a wallet with money in it laying on the table of the D.. D.. retained the money in hopes of finding the true owner. P. claimed that as finder, he should be allowed possession, since the owner was not found.
Issue: Was the wallet "lost" under the general meaning in Bridges, allowing the finder to claim possession against all but the true owner?
Holding: When an item of property is deliberately placed by the owner on the premises of a shop owner and then forgotten, it is not "lost" in the ordinary meaning of the word, it is mislaid, and the shop owner retains possession against all but the true owner, even if the shop owner is not the finder.
Reasoning: The wallet was not dropped, and it did not appear to be "lost" by negligence, but rather it appeared that the true owner had intended to pick it back up again but had forgotten. Placing the wallet on the table would be an ordinary thing to do in a barber shop, and so the barbershop owner should keep it until the customer that left it returned.
**Schley v. Couch (1955)
Facts: Petitioner is he owner of a tract of land on which stood a garage with a floor that was partially concrete, and partially dirt. Petitioner hired respondent to lay concrete over the dirt part of the garage floor. While digging in the dirt part, the respondent found a jar of buried money that was placed there 4 yrs prior by the previous owner. Both parties claim possession against all but the true owner.
Issue: Was the jar of buried money "lost", or a "treasure trove" (therefore entitling the finder to possess it) or was it "mislaid" (therefore entitling the property owner to possess it).
Holding: The owner of the property on which buried money which is found embedded in the soil under circumstances that do not support the idea that the money was lost due to neglect, carelessness or inadvertence, but rather which circumstances suggest that the original owner intended to return to claim the money, has the presumed right to possess the found money against all but the original owner.
Reasoning: The Texas court rejected the British notion of "treasure trove" (where the finder retains possession), and instead limited its analysis to whether the money was lost or mislaid. They reasoned that the original owner simply forgot where he had buried the money, and so judged the landowner to be the presumed possessor.
**Parking Management, Inc. v. Gilder, (1975)
Facts: P. parked his car in a pay lot owned and operated by D.. After parking, he opened the trunk in plain view of some employees and placed his lady friend's cosmetic bag inside, and locked it. The rear of the car was exposed to the aisle. When he returned, he found his car damaged by being pried open. A non-jury trial awarded him damages, the appellate court reversed, and this court decided to hear en banc.
Issue: Was the parking garage liable for the damage under an implied contract of the circumstances?
Holding: Yes. The operator of a commercial "park-and-lock" parking garage is required to exercise reasonable care to avoid damage to vehicle parked in his lot if the circumstances create a reasonable expectation in the mind of the car owner that such care will be undertaken.
Reasoning: The court distinguished this case from previous park-and-lock cases based on the facts that there were several garage employees around, who by admission of their supervisor, were supposed to be watching the area and acting as a "kind of security". This admission, that security was a major concern, led the court to believe that it was reasonable for the P. to conclude that his car would receive some protection from the presence of these employees.
**Shamrock Hilton Hotel v. Caranas (1972)
Facts: Wife P. left her purse at the table in the dining room at the Hilton. Upon discovering the purse, the bus boy took it to the cashier according to hotel instructions. Thereafter, the cashier handed the purse over to a man claiming to be the husband P.. The next morning, P.'s notified the hotel of the loss and claimed the purse contained $13,000 worth of jewels. P.'s filed suit for negligence, and won $11,000 plus interests and costs at the trial court. D. appealed.
Issue: Was there a bailment created by the cashier although she may have had no intention of establishing one?
Holding: Yes. If a commercial enterprise which caters to the public holds "lost-and-found" items as a normal course of business, then they create an implied bailment for any items that they recover on their property which were misplaced by their owners.
Reasoning: The court reasoned that there was a constructive bailment because the P., if she knew that she had misplaced the purse, she would have reasonably expected the finder to hold and protect it for her until she could reclaim it. Further, they said that the bailment was for mutual benefit of both parties. The hotel derives a benefit of return business for those who they return lost property to.
Dissent: The dissent argued that no bailment was created because there was no intention to create a bailment (bad argument). He further said that even if there were a bailment for the purse and the normal expected contents of a purse, there was no bailment for the jewels, which he doubted were there in the first place.
Notes: 1. In Ampco Auto Parks, Inc. v. Williams, a commercial auto park was held not to be a bailee of the contents of a car trunk, concededly bailed, if those contents were not reasonably to be found in a trunk (e.g. a Pre-Columbian Bell from 1,000 BC.). In Samples v. Geary, a coat check at a dancing school was found not to be a bailee for a fur piece wrapped inside a checked coat, because there was no knowledge of the fur, therefore no contract (Bull-oney). In Peet v. Roth Hotel Co., a person who accepted possession of a ring for delivery to another was a bailee, even though he did not know the ring was valuable. 2. In Cowen v. Pressprich, a securities broker became an involuntary bailee when a bond was delivered to his office by mistake. He gave it to a person he thought was the messenger of the true owner. He was found not to be liable for conversion because he was trying lawfully to return it to the owner, and divest himself of any implied bailment. Had he retained it to try to protect it for the owner, he would then have been a voluntary bailee and absolutely liable for protecting it.
**SHERIDAN SUZUKI, INC. V. CARUSO AUTO SALES (1981).
Facts: P., a Suzuki dealer, "sold" a motorcycle to a guy who wrote a bad check. However, before the P. found out that the check was bad, the guy sold the motorcycle to D., a used car dealer, who called P. to verify that the motorcycle had been sold to this guy. D. completed the sale upon the promise that the guy would forward the Title as soon as he received it. P. confirmed the "sale". P. then found out that the check was bad, and stopped the New York Certificate of Title from issuing. P. then sued for possession of the motorcycle, claiming that no title had ever passed from them.
Issue: Who has better title, P. or D.?
Holding: When state law requires additional requirements over common law or the UCC for central registration of title, and that title is not issued due to fraud, the owner retains legal title against subsequent good faith purchasers.
Reasoning: The court reasoned that although the UCC specifically contemplates a dishonored check creating a voidable title that can be later transferred to a bona fide purchaser as a good title, they also had an obligation to decide the case in harmony with state statutes. The Uniform Vehicle Certificate of Title states that the voidable title would not be perfected until the state reviewed the title application and granted title.
**CHAPIN V. FREELAND (1886)
Facts: P. bought a property that contained counters (nailed to the floor) which had been installed there more than 6 yrs ago, and which D. had owned but not claimed until after the sale. D. peaceable took possession of the counters from P. after the sale. The trial court ruled that the D. retained good title even though the 6 yr. statute of limitations for bringing an action of replevin had expired.
Issue: Does P. have good title by virtue of buying the property from someone who had retained it against D. for longer than the 6 yr. statute of limitations?
Holding: Yes. Long-continued and unopposed possession of chattel or land by someone against the original owner may result in the acquisition of a good title against the original owner.
Reasoning: The majority reasoned that good title had transferred from D. to the owner of the property where the counters were nailed when the 6 yr. statute of limitations for bringing actions for replevin had expired. Thus, when the property was sold to P., that good title was transferred to P.
Dissent: The dissent reasoned that the statute of limitations only applied to bringing actions in court, and did not create a good title in the adverse party. They further stated that the original owner retained good title and could peaceably recover her counters at any time.
** Howard v. Kunto (1970)
Facts: P.-appellee sought to sell half of his waterfront land to another party, and so had a survey performed to determine the exact lay of his property. When the survey was performed, however, it was found that the previous surveys, which were used for determining the deeds that were recorded for each plot in the neighborhood, were in error by 50ft. Thus, each lot that was occupied actually belonged in deed to the person's next-door neighbor. D.-appellant occupied a house on property that was described in the deed acquired by P.-appellee, who sued for recovery of the land described by the deed. D. contended that a long string of previous occupiers of the house adverse to P. constituted a new title in D. P. argued that D. could not tack his adverse possession time onto that of his predecessors because it was only a summer house, and therefore not "continuously" occupied, and that the chain of possessors was not in "privity" because the deed was to the wrong tract of land. Trial court ruled for P., D. appealed.
Issue: 1. Is a claim of adverse possession defeated because the house was only used as a summer property? 2. Can a person who has recorded title to a tract of land adjacent to his, but thinking that he has correct title to the land which he possesses, tack his adverse possession onto the previous periods of occupancy which went before his?
Holding: 1. No. To establish continuity of possession, a person must only occupy the property for periods of time which are consistent with the nature of the property. 2. Yes. Where there are several successive bona fide purchases and recordings of a deed to a tract of land adjacent to the tract of land occupied, and the cumulative possessions are longer than the statute of limitations for actions to recover property, there is sufficient privity to permit tacking and thus establish adverse possession.
Reasoning: 1. The court reasoned that the rule of continuity was not one requiring absolute mathematical continuity, but rather if the land is occupied during the period of the year when it is capable of use, that is sufficient. 2. The requirement of "privity" is intended to keep chains of unrelated squatters from voiding the title of the original owner, and clearly those are not the facts in this case. Each possessor was a bona fide purchaser from the previous one. Furthermore, where a person claims more than his deed describes, the question of privity is not defeated, so it should be the same for where the deed describes an adjacent parcel of land.
Notes: 1. The privity requirement can be fulfilled by a relation between disseisors of grantee/grantor, ancestor/heir, or devisee/devisor. Possession need not be directly by the disseisin, but may be by someone authorized by him. 2. A possessor can claim title to a land which he occupied for the statutory period under the mistaken belief that it was his own, even though he may not have muniment of title. 6. Most statutes have disability clauses that extend the period required for adverse possession if the owner is a child, insane, incompetent, etc. However, there can be no tacking of disabilities, the statute runs with any change in ownership. 7. There has been opinion recently that the disability clauses should be removed because they prevent some cases from being settled in a reasonable time when there is clearly no opposition from the disabled land owner. The theory is that the disabled persons relatives/friends will look out for him, and the occasional loss will be offset be the increased security against latent claims by disabled persons suddenly being brought forward.
**O'Keeffe v. Snyder (1980)
Facts: O'Keeffe is the painter who painted several paintings that she claims were stolen from her studio in 1946. She did not advertise that they were missing until 1972 when she registered them as stolen with an Art Dealers Association. Snyder bought the paintings in question in 1975 from a dealer who claims that they were in his family since perhaps as early as 1941-1943 (before the claimed theft). O'Keeffe discovered the paintings in Snyder's gallery in 1976 and instituted an action of replevin to recover them. Snyder claims both that the statute of limitations for replevin of chattels had run, and that he had held the paintings in adverse possession, through tacking with the dealer's family, for over 30 years. Trial court issued summary judgment for Snyder, holding that the statute of limitations had commenced running on the date of the original theft. Appellate court reversed and entered judgment for O'Keeffe holding that Snyder had not proven the elements of adverse possession.
Issue: Who has best title to the paintings?
Holding: 1. Unlike in real estate adverse possessions, in cases involving personal chattels, a cause of action will not accrue, and thus the statute of limitations will not begin to run, until the injured party discovers, or by reasonable diligence should have discovered, facts which form the basis of the action. (Discovery Rule).
Dicta: 2. The expiration of the statute of limitations bars the remedy to recover, and also vests good title in the possessor. 3. In establishing adverse possession of personal chattels, tacking of periods of possession between parties in privity with each other is permitted in the same way as with real estate.
Reasoning: 1. The literal language of the statute of limitations results in harsh holdings when the property in question is one which is easily concealed, or its display is not visible broadly enough to put the owner on sufficient notice of the identity of the possessor (analogy to jewelry worn). It would encourage larceny to hold that the strict letter of the statute would prevent the owner from recovering an item of which he never knew the identity of the possessor. 2. Before the statute runs out, the possessor has a voidable title against all others but the true owner. To leave the title in the original owner after adverse possession would not put issues to rest that were deserving of resolution because of their age and action of the owner. 3. Not to permit tacking would enable the original owner to have rights much longer than the statute of limitations, and put a subsequent buyer in a worse position than the person who took it wrongfully in the first place.
**Wetherbee v. Green (1871)
Facts: D. is the owner of land upon which stood a tree that P. cut down and fashioned into several expensive wooden hoops. P. cut down the tree in good faith on the mistaken belief that he had received permission from a person authorized to grant it. D., however, did not authorize the taking of the tree and so replevied the hoops, which were hundreds of times more valuable due to the labor than the trees before they were cut. P. sued to get the hoops back, but trial court found for D., and refused testimony that would establish the value of the hoops being much greater than the trees.
Issue: If a person, acting in good faith, takes the property of another and transforms it into something immensely more valuable, does he obtain good title to the resultant product even though it was made with the materials belonging to the owner?
Holding: Yes. When a person, acting in good faith, takes the property of another and adds substantial value to it, he obtains good title to the improved object, but nevertheless is liable to the original owner for the value of the original materials.
Reasoning: The court reasoned that the policy of the rule is to afford proper compensation for loss to the original owner, without unduly penalizing the possessor, and without conferring a giant windfall on the original owner.
**Isle Royale Mining Co. v. Hertin (1877)
Facts: P. mistakenly entered upon D.'s land and cut down several trees as cord wood, placing them by the banks of a river. D. repossessed the cord wood, and P. brought this action to recover the value of the labor they had put into the wood by chopping it down. Trial court found for P.. D. appealed to this court.
Issue: Is the person who, in good faith, misappropriates the property of another and adds value to it by labor entitled to compensation from the owner for the value added to the extent that benefit was conferred upon the true owner?
Holding: When a person misappropriates the property of another and adds value to it, then the original owner retains title to the property and is not be liable to pay the value of the labor to the trespasser, unless it would be grossly unjust to award the benefit of that labor to the original owner.
Reasoning: The court distinguished this case from Wetherbee on the basis that the value added in cutting down the wood was not so disproportionate as to make it a substantially transformed item because of its increased value. Furthermore, to hold otherwise in this case would discourage careful vigilance of other's property, because the mistaken party would know that in either case, he could received the value of his labor. Thus, the only person who could be protected from this kind of trespass would be one who owned nothing, because it may be that the property would have been eventually more valuable if it had been left alone.
**Hardy v. Burroughs (1930)
Facts: P. mistakenly constructed a house on the land belonging to D., without the D.'s knowledge. Thereafter, the Tanhersley's occupied the house and took possession of it. D. refused to pay for the value of the house, determined to be $1,250.
Issue: Does P. have a cause of action to recover the cost of the house from D. who is enjoying it?
Holding: Yes. "Where an occupant in good faith has made improvements and has been evicted by the true owner, he may sue in equity for the value of his improvements without reference to any fraud or misconduct on the part of the true owner."
Reasoning: In this case it would be inequitable to grant the house to the D.'s without pay because it was such a large improvement, even though the D. was unaware that the house was being built. An equitable settlement was to allow the D.'s to keep the house after paying for it, because in fairness, they never had a real title to it except that it was on their land. Another possibility would be to allow the P. to buy the land under the house.
I. Donative Transfers (transfers without consideration, gifts)
A. Irrevocable, except those made in contemplation of pending death.
B. Law surrounding gifts protects 3 interests:
1. Protecting would-be donors against their own folly.
a. spur-of-the-moment gifts
b. donor would subsequently regret
2. Protecting owners and heirs against false claims of donations.
a. alleged donor is dead, executor contesting validity of gift.
3. Protecting against whims of juries.
a. eliminates some claims that jury might find valid.
b. allows judges to retain control of marginal cases.
**In Re Cohn (1919)
Facts: Leopold Cohn, before he died, wrote a paper to his wife expressly giving her 500 shares of stock for her birthday. The paper was signed and handed to his wife in the presence of the entire family. Leopold stated that he could not actually physically deliver the stock on that day because it was in a bank deposit box in the name of his company. He would, he stated, deliver the shares when they became available. However, Leopold kept exerting dominion over the shares over the next week until his death.
Issue: Is the gift of shares valid even though there was not a delivery, and the donor continued to use them for the week until he died?
Holding: Yes. "The delivery necessary to consummate a gift must be as perfect as the nature of the property and circumstances and surroundings of the parties reasonably permit."
Reasoning: The majority reasoned that the fact that the shares were tied up in the bank in the name of the company was sufficient excuse to avoid delivery in this case. They further reasoned that the language of the letter implied that it was not a future gift, but a present gift. Under the circumstances, the letter itself was an instrument, or symbol, of the gift, and actual delivery was therefore not required.
Dissent: The dissent stated that the actions of the donor in this case negated the express language of the letter. The fact that he continued to use the stock for leverage in his business dealings meant that he retained possession, title, and dominion over the stock regardless of the language of the letter. The dissent added that the donor had the opportunity to transfer possession of the stock to himself, but decided to leave it with the company for convenience and leverage power. They reasoned that a symbolic gift must divest the owner of title, dominion, and right of possession for it to be valid.
**Gruen v. Gruen (1986)
Facts: P. claims that his father gave him title to a painting which the father wished to retain possession of until he died. D. is the P.'s stepmother who refuses to give the painting to P. now that his father is dead, contending that the gift was invalid because there was no transfer of possession.
Issue: Is the gift of the painting valid where the donor has reserved a life estate in the painting, and possession did not transfer until the donor's death?
Holding: Yes. Where one's actions indicate an irrevocable and immediate transfer of title to another, while the donor reserves possession until death, the donor's rights are thereafter limited to possession, but not ownership.
Reasoning: The court reasoned that the gift was not all of the property rights associated with the painting, but only those of title with no right of possession until the father's death. Therefore, the requirement of transfer of possession of the entire painting was not required for the purposes of this case. The court distinguished this case from that of a testament, because in the case of a will, no rights of title vest until the death of the donor.
**Foster v. Reiss (1955)
Facts: D. is the husband of a deceased woman who's estate and will are being settled by P.. Right before submitting to an operation, the woman wrote a letter to her husband stating the location of several stashes of money and passbooks around the house, and her desire for him to have them in the event of her death. This note was contrary to her will. The D. read the note, found the money, and took possession. The woman then underwent the surgery. After the surgery, she fell into a coma, and never recovered before her death. Trial court found for P., Court of Appeals reversed.
Issue: Were the circumstances sufficient to create a valid gift, even though there was no proper delivery (D. had to find the money himself)?
Holding: No. The delivery of a gift causa mortis must be actual, unequivocal, and complete and made while the donor is still alive for it to be a valid gift.
Reasoning: The majority reasoned that the woman did not actually deliver the money to the D., but rather he had to seek it out based on the instructions in the letter. They further stated the strict requirement for a ceremonial, formal delivery is the only thing that separates a gift causa mortis from a testamentary will. To eliminate the delivery requirement would be to negate the bite of the will statutes.
Dissent: The dissent reasoned that the gift causa mortis was, by its nature, an emergency measure because the normal routes of testament were not available under the circumstances. Although the requirement for delivery in gift causa mortis can not be dispensed with totally, it would be silly to require the D. to gather up the monies and bring them to the woman, solely so that she could ceremoniously give them back to D..
Notes: 3. If the donee has previously acquired possession of the subject matter with the donor's consent, the donor's oral manifestation of donative intent, without more, is sufficient. 4. The failure to revoke a gift causa mortis within a reasonable time following recovery of health of the donor eliminates the right of revocation.
**Scherer v. Hyland (1977)
Facts: D. is the administrator of the estate of Wagner. P. lived with Wagner for 15 years. Wagner was severely depressed and suicidal. In preparation for her death, Wagner endorsed a $17,000 check and placed it, along with a note "bequeathing" it to P., on the table in their apartment. Wagner then committed suicide. D. claims that there was no delivery to sustain a gift causa mortis, since the check was found on the table. Furthermore, D. contends that there was no imminence of death, since Wagner decided on her own to commit suicide, and therefore could have changed her mind.
Issue: Whether a gift causa mortis is valid in light of these facts.
Holding: Yes. Where there is concrete evidence of intent to make a present transfer, and the donor takes all steps that they deem to be sufficient to pass their interest in the subject matter to the donee, a constructive delivery is thereby created sufficient to support a gift causa mortis.
Reasoning: The act of endorsing the check made it negotiable to P., who was the only person who had access to the apartment. As evidenced by the note, Wagner wanted P. to have the money. Wagner also knew that P. would be coming home soon and would find the money and note. A person committing suicide is no less put in imminent apprehension of death than a person with a fatal disease.
**In Re O'Connor's Estate (1934)
Facts: Adams county, Nebraska, sued the state of Nebraska for payment of an inheritance tax when the state obtained lands by escheat because the previous owner died without leaving heirs. Adams county claimed that the statutes concerning inheritance taxes were meant to cover escheat as well as standard inheritance. The state of Nebraska refused to pay . Trial court found for Adams county, and the state appealed to this court.
Issue: Is escheat of lands a form of inheritance that is subject to an inheritance tax?
Holding: No. Escheat of land by the state is not subject to taxes of inheritance.
Reasoning: The court stated that the inheritance tax only covered property that was transferred by proper inheritance, testamentary will, or transfer in contemplation of death (causa mortis). It was therefore distinguishable from reversion (escheat) where there is no will or transfer causa mortis. Furthermore, it would be contrary to the absolute right of the state to be the original and ultimate owner of all lands.
Notes: In In Re Estate of O'Brine , the court held that personal property was subject to estate taxes under escheat.
**Cole v. Steinlauf, (1957)
Facts: The P. entered into a contract to buy land from the D.. The contract stated that the P. could withdraw if there was any question of title to D.'s land that would make determination of actual title questionable. P.'s attorney found one of the grant deeds to be technically flawed in that it stated that the land was granted to the grantee and "his assigns forever" instead of "and his heirs" as was the custom in Connecticut. P. therefore demanded his deposit back from D., who refused. P. sued.
Issue: Was the fact that the earlier grant said "his assigns forever" (which normally indicates a life estate) sufficient to cast enough doubt on the title to allow P. to exit the contract?
Holding: Yes. A grant in Connecticut that does not state "and his heirs" is uncertain enough to require an external showing of intent to grant a fee simple.
Reasoning: Because the custom was to put "and his heirs" in the grant, there was sufficient doubt as to whether a bank would accept the title as collateral for a loan. The title could be cleared by a court of equity presenting evidence of intent, but it was not the responsibility of the P. to take that gamble.
Notes: The modern result of the language "and his heirs" would create a fee simple absolute, but probably is no longer required. The grant would be judged on other language expressing intent to grant a fee simple absolute.
**Moore v. Phillips, (1981)
Facts: L. Brennan died and left a life estate to his farmland to his wife, and remainder interests to his daughter (P.) and her son. The daughter and mother were not close during the latter part of the mother's life. The mother allowed the farmhouse to deteriorate during her lifetime, thus wasting it for the P. P. sued her mother's executrix for waste. Lower court refused the D.'s defenses of laches and estoppel, and D. appealed to this court.
Issue: Whether the P., by waiting 11 years until her mother's death to institute this lawsuit, was barred by laches or estoppel from recovering damages for waste of the farmhouse.
Holding: No. Laches is not mere delay, but must be delay to the detriment of another.
Reasoning: The court stated that the doctrine of laches did not apply because the D. was not disadvantaged by the P.'s waiting until after death of her mother to institute the lawsuit. If the lawsuit had been brought during her life, she still would have been found liable for waste. A life tenant has a fiduciary duty to remaindermen to maintain the property in good condition. The mother was negligent in allowing permissive waste (vice voluntary waste) to occur to the property. The statute of limitations against an action by remaindermen for waste does not begin to run until the expiration of the tenancy (in this case, the death of the mother).
I. Fee simple determinable (FSD)
A. Upon default, land instantly and automatically reverts to grantor as a matter of law without further action required.
B. Typical language: "so long as", "until", "during".
C. Interest remaining in grantor is possibility of reverter.
II. Fee simple subject to conditions subsequent (FSSCS).
A. Upon default, grantor must take some affirmative action to divest the grantee of the estate.
B. Typical language: "upon condition that", "provided that".
C. Interest remaining in grantor is:
1. Right of re-entry.
2. Power of termination.
** Oldfield v. Stoeco Homes, Inc., (1958)
Facts: P. desires to have a grant of land to D. revert back to the city because of failure to meet a condition of the grant. The D. bought land from the city under the conditions that he fill the land within 1 year. The language of the contract stated that the land would automatically revert if the conditions were not met. It turned out to be very difficult to fill the land, and so the city amended the contract to extend the period.
Issue: Does the language stating "automatically revert" make the grant a fee simple determinable, even though there is other language that could make it interpretable as a fee simple subject to conditions subsequent?
Holding: No. Where there is confusion between whether a grant is in fee simple determinable and fee simple subject to conditions subsequent, the grant must be viewed as a whole, with specific language only being evidence of the nature of the transaction, and not determinative of the transaction.
Reasoning: The court reasoned that the fact that the city left itself the power to amend the conditions of the grant was indication that the grant was a fee simple subject to conditions subsequent (FSSCS). Furthermore, they reasoned that the city, when it made the grant, was not trying to limit the time period to year exactly, but wished it to be done in some reasonable time. Thus, the time factor was not crucial.
Notes: 2. If the grantor had a possibility of reverter (FSD), he or his heirs become the owner of the property as soon as the condition is broken. If the grantor had a right of re-entry, he or his heirs become the owner of the property only after they act to retake the property. 3. A third person may be designated as the person entitled to possession upon termination of a defeasible fee. 4. Most states allow a transfer of the interest of possibility of reverter (in FSD), but not the right of re-entry (in FSSCS), although both are possible in some states. Both interests are inheritable.
**Roberts v. Rhodes, (1982).
Facts: The P. seeks judgment for title to a portion of land which had been formally the subject of a grant for the purposes of a school. The land was used as a school for 60 years, then for something else. The grant deed to the land had the language that the grant was to the grantee's "heirs and assigns", and "it being understood that this grant is made for school and cemetery purposes only." There were no specific provisions made for disposition of the land upon a subsequent failure of use as intended. District court found the grant to be fee simple determinable, and so reverted to P., Court of Appeals reversed.
Issue: Is the language in the grant deed specific enough to make it a defeasible fee?
Holding: No. 1. In the absence of an intent to limit the title to a defeasible, either expressly or by necessary implication, the grantors pass a fee simple absolute (all rights). 2. The mere expression that a land is to be used for a particular use is not of itself sufficient to turn a fee simple absolute into a determinable fee.
Reasoning: The court stood upon the precedents and the restatement of property in stating that the language was not sufficient to grant a defeasible fee.
**Johnson v. City of Wheat Ridge, (1975)
Facts: P. seeks to obtain quiet title to a parcel of land granted by his ancestor to the city for use as a public park. The grant stated conditions subsequent that gave a right of entry and power of termination to the grantor and his heirs upon failure to meet the subsequent conditions. The city failed to meet the condition to put in public water supply for the park, but the statute of limitations for the state had run (1 yr.) for initiating actions concerning the enforcement of any terms of any restriction of real property.
Issue: Did the P. obtain title when the condition was not met, even though the statute of limitations had run?
Reasoning: Barred by statute of limitations.
**Caccamo v. Banning, (1950)
Facts: P. inherited some land from her grandfather. In the grandfather's will, he stated that the grant was "in fee simple and absolutely and forever; but in case the said...should die without leaving lawful issue of her body then...[he would give it to someone else]." P. then purported to grant a fee simple absolute of the land to another, thus barring any fee tail granted, under common recovery pursuant to a local statute, and transforming the fee tail to a fee simple absolute. P. then sold the land at auction to D. who gave a down payment and promised to pay the rest upon conveyance of a deed of good title. D. wants the down payment back, claiming that the P. cannot convey good title because the language of the grandfather's grant was a fee simple conditional and not a fee tail that could be transformed to a fee simple absolute.
Issue: Was the wording of the will a grant of a fee tail (which was barred under common recovery), or of a fee simple conditional that would revert if P. died without children?
Holding: Language that grants a fee simple absolute, except if the grantee die without children, conveys a fee tail.
Reasoning: The court reasoned that they could find no language that evidenced any intent other than to convey a fee tail.
**Kost v. Foster, (1950)
Facts: P.'s are the children of a man who was granted a life estate with remainder to his children. One of the children went bankrupt, and his interest was sold to D. as part of settlement of his estate. The original grant stated that it was to "their son...for and during his natural life only, at his death to his lawful children...[and then over to others if no children survived]." P. sued claiming that the future interest granted to the children was a contingent interest, and D. countersued claiming that the future interest was a vested interest.
Issue: Did the language grant a vested interest (thus sellable upon bankruptcy), or a contingent interest (thus, not passing to a trustee in a bankruptcy)?
Holding: Vested. If a conditional element is incorporated into the description of or into the gift to the remaindermen then the remainder is contingent, but if, after words giving a vested interest, a clause is added making it subject to being divested, the remainder is vested.
Reasoning: The court reasoned that the conditional language occurred after the grant of the interest, and thus it was a vested interest. If the language had been reversed, granting the interest to "the surviving children" then it would have been contingent. But in this case, there was no condition that had to occur before the vesting of the interest.
**Abo Petroleum Corp. v. Amstutz, (1979)
Facts: P.'s are the grandchildren of a couple who owned an estate in fee simple. The grandparents wrote several deeds to their children conveying land first as a life estate with a contingent remainder in the children, then as fee simple absolute. The life tenants attempted to convey a fee simple to P. based on the second deed. The grandchildren claim that the life tenants could not grant more than what they had. The P. contends that the contingent remainder in the grandchildren was destroyed when the grandparents made the second deeds.
Issue: Does a conveyance that purports to grant a fee simple absolute destroy a previously conveyed life estate with contingent remainder?
Reasoning: The court reasoned that the parents retained a reversionary interest in the property when they granted the contingent remainders. But the parents could not destroy the contingent remainder by purporting to later grant a fee simple. The daughters acquired no more interest in the property by way of the second deeds than they had originally by the first deeds.
**Sybert v. Sybert, (1953)
Facts: In his will J granted to C (his wife) a life estate in a piece of property, and after her death a life estate to F (his son), and after his death to the "heirs of his body". F died without children. His brothers are suing his wife claiming that when J died without children, his share of the property reverted to them. J's wife claims that the Rule in Shelley's Case made the grant to J in fee simple.
Issue: Does a grant of an life estate to a person with a grant of a fee tail to his children in the same document serve to vest a fee simple interest in the first taker?
Holding: Yes. The rule in Shelley's case applies.
Reasoning: The court reasoned that the wording of the grant made it fall squarely under the Rule in Shelley's Case. The words "heirs of his body" meant a fee tail - an indefinite succession to a class of persons from generation to generation.
**Braswell v. Braswell, (1954)
Facts: A deed granted a life estate to the P.'s husband, a contingent remainder to his children, and a reversionary interest to the grantor's own heirs. The grant was made during the lifetime of both parties. The life tenant died without children, but left his interest (from the reversion to his father) to his wife, P.. The D.'s are the two other sons of the grantor who claim that the grant gave them, as specifically identified individuals, a contingent remainder in the land which vested when the life tenant died without children. The P. claims that the grant to the other brothers was void by the doctrine of worthier title, and that they took possession by inheritance and not by purchase.
Issue: Is the grant of a remainder to the heirs of the grantor valid as a remainder, and therefore words of purchase which grant a contingent remainder?
Holding: No. An attempt by a grantor to grant a remainder to his own "heirs" in the technical sense of the word, is ineffective and results in a reversion being retained in the grantor which will pass by inheritance at his death.
Reasoning: The court reasoned that the doctrine of worthier title, which operated to make land pass by inheritance rather than by purchase among heirs, created a presumption that the grant was ineffective, and resulted in a reversion. The D. attempted to rebut that presumption by stating providing evidence in the document that the intent was to grant a remainder to the heirs of the grantor to be determined at the death of the life tenant, as opposed to the heirs of the grantor at the time of death of the grantor.
Significance of Statute of Uses Problems, pg. 305,
What would be the result in the following problems both before and after the statute of uses? Explain your reasoning.
1. O enfeoffed B and his heirs to the use of C and his heirs. Before SofU: B held legal title, and C held equitable title. After SofU: B held nothing, the use was executed and C had fee simple (legal).
2. O enfeoffed B and his heirs. (No consideration paid; no use stated.) Resulting use in O. Before SofU: O was presumed to have equitable title (resulting use), and B held legal fee simple for the use of O. After SofU: O held nothing, and B received both the legal and equitable title.
3. O enfeoffed B and his heirs for the use of C for life. Resulting use in O. Before SofU: B has legal title, C has equitable title for life, and O retains the reversion of a future equitable title after the death of C. After SofU: B has nothing, C has a life estate in fee simple, O has a reversion.
4. O bargained and sold to B and his heirs (consideration paid). Before SofU: O retains legal title, B obtains equitable title (the use) because there was no conveyance. After SofU: O has nothing, B gains legal and equitable title because the statute would execute the use.
5. O covenanted to stand seised to the use of B and his heirs. (B is a relative by blood or marriage to O.) Before SofU: The legal title remained in O, but the equitable title was assumed to belong to B because of B is O's relative. After SofU: O has nothing, B has legal and equitable title, even though there had been no conveyance.
6. O bargained and sold to B for life and one year after B's death to C and his heirs. Springing interest in C. Before SofU: O retains present legal title, B equitable title, C has nothing due to the gap in seisin, O has the reversion of equitable title after B's death. After SofU: B obtains a legal life estate, O has a reversion for one year, and C has a vested remainder which is a springing interest.
7. O bargained and sold to B and his heirs but if B dies without having children then to C and his heirs. Shifting interest in C. Before SofU: O retains legal title because there was no conveyance, B would have equitable title, and C would have nothing because common law prohibited limiting a remainder. After SofU: O has power of termination, B has fee simple subject to an executory limitation, C has a shifting use or interest.
8. O enfeoffed B and his heirs to the use of C and his heirs to the use of D and his heirs. Use on a use. Before SofU: B has legal title, C has equitable title, D has nothing because O exhausted his estate in the first grant. After SofU: B has nothing, C has legal title, and D has equitable title because the SofU only operates on the first use, then disappears for good.
9. O bargained and sold to B and his heirs to the use of C and his heirs. Another example of a use on a use. Before SofU: O retains legal title, B has equitable title, C has nothing because the estate was exhausted. After the SofU: O retains nothing, B obtains legal title, and C obtains equitable title because the SofU only operates once on the bargain and sale to B, and the use to C remains.
10. O enfeoffed B and his heirs to the use of C for life and on C's death to the use of D and his heirs. Before SofU: O has nothing, B has legal title, C has equitable title for life, and D has an equitable vested remainder. After SofU: B has nothing, C has a legal life estate, D has a legal vested remainder.
**Stoller v. Doyle, (1913)
Facts: Lawrence granted land to Frank subject to the condition that if Frank dies before his wife dies, then Frank's wife and children would have use for the life of Frank's wife, and at her death, to the surviving children, otherwise to revert to Lawrence. Later, Lawrence regranted the land to Frank, removing the conditions, and claiming to give Frank fee simple. Frank sold the land to Stoller, who tried to sell it to someone else, but the court judged that his title was unmarketable because of the "contingent remainder" in Frank's children. Stoller claims that Frank was granted a life estate, which was later merged by the second grant with the reversion, thus destroying the contingent remainder of Frank's children which was supported by Frank's life estate.
Issue: Is the grant to Frank a life estate or a fee simple subject to a condition subsequent?
Holding: "[W]here the fee in the first taker created by a deed is made determinable, as upon the happening of a valid condition subsequent, followed by a limitation over of the fee or use to another upon the happening of a prescribed event, the fee or use shifts from the first to the second taker, whereby the deed is a conveyance under the statute of uses..."
Reasoning: The court reasoned that the wording of the deed was made under the conveyance act, which was a bargain and sale outside of common law and falling under the statute of uses. It was not language which granted a life estate to Frank, but it granted a fee simple subject to a condition subsequent. Therefore Frank's children's interest was not a contingent remainder based on a life estate, and was not destructible by conveyance of the reversion.
**Capitol Federal Savings & Loan Assn. v. Smith, (1957).
Facts: D.s, along with other owners of a development of land, entered into an agreement among themselves that the lots owned by them should not be sold or leased to black persons. The agreement provided for forfeiture or any lots or parts of lots sold to colored persons to any of the owners who might place notice of their claims on record. The P.s were black persons who bought a parcel of the land. They sought quiet title to the land to free the title from the cloud of the previous agreement. The D.s argued that the agreement created an executory interest in the other owners, and that the title automatically vested in them at the time the sale was made. Trial court found for P.s stating that the agreement was not enforceable because it was contrary to the 14th amendment clause prohibiting discrimination based on color.
Issue: Was the agreement a restrictive convenant or executory interest that could be enforced by law?
Holding: No. A grant of land in conflict with public policy is not valid.
Reasoning: The court reasoned that even if the agreement amounted to vesting a fee simple subject to an executory limitation in the former owners, and an executory interest in the remaining owners, the agreement was still invalid because it was in direct opposition to the 14th amendment. They relied on a Supreme Court decision that stated that a primary objective of the framers of the 14th amendment was to provide freedom from discrimination in property rights.
**The City of Klamath Falls v. Bell, (1971).
Facts: In 1925, a corporation, now dissolved, granted a parcel of land to Klamath Falls "so long as" it was used for a library, and to vest in the lawful heirs of the two shareholders of the corporation if the city ever stopped using the land for library purposes. In 1969, the city stopped using the land as a library, and brought this action to quiet title to the land.
Issue: Is the attempt to create an executory interest after the fee simple determinable valid? If not, then do the D.s take under inheritance of the possibility of reverter?
Holding: No. "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." Gray, The Rule Against Perpetuities. Yes. An attempt by a grantor to transfer his possibility of reverter does not destroy it.
Reasoning: The court reasoned that the grant of land for the library could have extended indefinitely, thus the executory interest was in violation of the rule against perpetuities because it didn't have to vest within 21 years because the condition that would defease the grant could have not ever happened. By operation of the rule against perpetuities, the city received a fee simple determinable, and the corporation retained the possibility of reverter, which was granted over to the heirs of the shareholders because it was neither subject to the rule against perpetuities (although it may be subject to some statutory limitations), nor was it destroyable because the language of the grant was such that it was clear that the determinable fee was to end regardless of whether the executory interest would be enforced.
**In Re Estate of Michael, (1966).
Facts: In 1947, Joyce granted "King Farm" to two sets of married couples: Harry and Bertha, and Ford and Helen. Ford was Harry and Bertha's son. The grant contained the words that the married couples were each to be "tenants in the entireties, with rights of survivorship." Harry then died, and left Bertha and Ford to survive, but not before they had another son Robert. Bertha died, and in her will she left all her interest in "King Farm" to Robert, and $1,000 to Ford. The two sons sought to determine what, if any, was Bertha's interest in "King Farm". Trial court found that the original grant was a joint tenancy as between all 4 grantees.
Issue: Was the original grant a joint tenancy or tenancy in common? If a joint tenancy, then Bertha had no interest at her death, because it all passed by the rule of survivorship to Ford (thus Robert gets nothing and Ford gets the land and the money). If it was a tenancy in common, with each couple as a single entity, the Bertha had a 1/2 undivided interest which would go to Robert.
Holding: Tenancy in Common. Where a grant to two or more persons does not clearly establish that the intent was to create a joint tenancy, a tenancy in common is created.
Reasoning: The court looked to a statute of 1812 which established the rule of construction to favor tenancy in common. In examining the grant, the court determined that the language, "with rights of survivorship", although it normally indicates joint tenancy, was ambiguous due to the phrasing of the grant. It was not clear whether the intent was to grant joint tenancy as between all of the parties, or whether the right of survivorship applied only to the husbands and wives, internally.
**Laura v. Christian, (1975)
Facts: 4 tenants, including P. and D., each owned a 1/4 undivided interest in "Fireside Lodge". The property had a mortgage, which was allowed to go into default by the tenants. However, right before the property was about to be sold in foreclosure, it became apparent that the value of the property was going up considerably. Thus, P. paid the balance of the mortgage alone. The other tenants, realizing the value of the property, attempted to reimburse Laura for their share and reassert their individual interests. The trial court found that Laura effectively "bought out" the other interests by paying the mortgage alone, and the other tenants waited to long to act. This D. appealed.
Issue: Can a tenant in common obtain sole title to property by paying the balance of the mortgage, and refusing to accept contribution in the form of a lien on the remaining co-tenants interests?
Holding: No. "The redemption or prevention from loss by one co-tenant of common property by payment of an obligation or the purchase of an outstanding interest, which should be discharged or purchased proportionately by co-tenants, inures to the benefit of the co-tenants at their option, subject to the right of contribution."
Reasoning: The court reasoned that although the D. waited until the land appeared to be profitable before offering to pay his share, he did not wait an unreasonable amount of time. Therefore, he was entitled to his undivided 1/4 interest, subject to a lien to ensure his contribution to the mortgage.
Notes: 2. Some facts in a tenancy in common tend to indicate that the tenants have a fiduciary duty to one another. If the tenants acquire their interests at the same time, by the same conveyance, or if a common debt is owed, a fiduciary relationship is assumed. However, when one grants away his interest, the relationship does not follow. Likewise, if the land is foreclosed, one of the tenants may purchase the whole title, because each tenant would be assumed to have had an equal chance to bid on the property. However, the cases are very fact driven. Much depends on how much time has passed before the other tenants assert their interest by offering contribution. 3. A tenant who receives more than his fair share of rent from a third person is accountable to the other tenants, however he may retain fair value of his labor in collecting the rent. However, one tenant may not be accountable in rent to the others for his own enjoyment or occupancy of the property, unless there is something more than forbearance on by the other tenants. For instance, if one tries to exclude the others.
**Goergen v. Maar, (1956).
Facts: The P. was the 4/16th owner of a piece of property of which the D. was a 3/16th owner. The D. was in sole possession of the property, and had collected rents, and paid taxes on the property from 1943-1954. The P. wished to have her share of the proceeds from the rents. The D. claimed the action was barred by the statute of limitations. The trial court found for P., and entered a personal judgment against the D. for any amount that she could not produce in paying P. her fair share.
Issue: Does the statute of limitations bar the P.'s action to recover rents from the other tenant on a commonly owned property?
Holding: No. "In a partition action, the court may adjust all the equities of the parties in determining the distribution of the proceeds of the sale." "The court may take into account the moneys received and the moneys expended by any of the co-tenants throughout the whole period of the co-ownership of the property."
Reasoning: The court reasoned that the statute of limitations did not apply, because a separate action for accounting of the rents was not required. The excess rents collected became a lien against the interest of the co-tenant who collected them. Thus, when the P. asked for payment of her share of the back rents, the action was one of partition. Furthermore, the statute of limitations did not apply to the personal action against the D. for any balance she could not produce because the statute did not start to run until the partition of the property. This is because until the property were partitioned, there existed between the parties "mutual, open, and current accounts" since the D. had been paying the taxes on the property, which were a common debt owed by all of the co-tenants together.
**Palmer v. Flint, (1960)
Facts: The bank made a grant to husband and wife Nathan and Alice, "as joint tenants, and not as tenants in common, to them and their assigns, and to the survivor, and the heirs and assigns of the survivor ." Later, Alice divorced Nathan, and executed a quitclaim deed to convey her interest to Nathan. Nathan then conveyed to a strawman who reconveyed the land to Nathan and his sister, Roxa, as joint tenants. The ex-wife, Alice Flint, sued to get declaratory judgment as to the state of the title. The trial court found that the original grant conveyed only a joint life estate to Nathan and Alice because the words of the first grant did not put "and their heirs" after the initial grant to signify fee simple. The trial judge further said that the survivor language granted a contingent remainder in fee simple to the survivor of Nathan and Alice. Thus, the trial judge found that the quitclaim deed did not transfer any of Alice's interest to Nathan, because all she had was a contingent remainder after the life estate with the condition precedent that she survived Nathan.
Issue: Is the original grant one of joint tenancy in fee simple?
Holding: Yes. Where a deed clearly expresses intent to grant a joint tenancy, it shall be effective to create a joint tenancy. A fee simple title is presumed to be granted unless it appears from that grant that a lesser estate was intended.
Reasoning: The court reasoned that it was clear that the grant intended a joint tenancy in fee simple. The creation of a joint life estate with contingent remainder to the survivor was presumed not to be the intention of the parties because the grant did not mention a reversion or remainder or a life estate. Therefore, when Alice executed the quitclaim deed, she vested fee simple in Nathan.
**People v. Nogaar, (1958).
Facts: Elaine and Calvert were a married couple who were granted an estate as joint tenants in fee simple. Later the two separated, and Calvert, without the permission or notice of Elaine, executed a mortgage to his parents of his interest in the land for $6,440. Calvert died. The state later commenced an action to condemn the property, and it became apparent that Calvert's parents might be able to get money for 50% of the sale price of the land. The trial court found that the parents, as the mortgagee, were entitled to 50% of the balance of the value of the property.
Issue: Is a mortgage upon real property executed by one of two joint tenants enforceable after the death of that joint tenant? In other words, does a mortgage executed by one of the tenants transfer that joint tenant's title to the mortgagee, thus breaking the joint tenancy, and making the mortgagee a tenant in common with the remaining joint tenant, subject to being defeased by payment of the mortgage?
Holding: No. In California, a mortgage does not make a change in title or possession, but only puts a lien against the property.
Reasoning: The court reasoned that the mortgagee's note was payable upon demand. Thus the mortgagee could have foreclosed during the life of the mortgagor. However, they held the note, risking that the mortgagor might die first, but if his wife died first, the whole property would go to Calvert, and so they could foreclose on the entire property. The court reasoned that to hold otherwise would be to defeat the right of survivorship of a joint tenancy because if the mortgagor died, the cotenant would not get the full title by survivorship that they were granted. The mortgage simply ceased to exist at Calvert's death, because Calvert's interest ceased to exist.
I. Tenancy by the Entireties
A. Neither husband nor wife is recognized as an individual owning an undivided interest.
1. Neither can effect a severance of the interest by conveying unilaterally to a third party.
2. Neither can compel a partition.
B. Terminated when:
1. The spouses jointly convey to a third party.
2. The spouses divorce (becomes tenancy in common).
C. Creditors may only collect against the land if the debt is the legal obligation of both spouses.
1. A debt incurred by one spouse is not collectible against the other.
2. Protects the surviving spouse from other's debts.
**D'ercole v. D'ercole, (1976)
Facts: The P. is the separated wife of D.. Her claim states that the common-law tenancy by the entireties is unconstitutional because it is inherently pro-male, giving the husband exclusive and total control of the property during his lifetime. The P. is seeking an enjoinder of the D. from using the property exclusively while they are still married, and she does not want divorce (which would put an end to the tenancy by entireties anyway).
Issue: Is the tenancy by the entireties sexual discrimination because the husband is given unilateral control of the property during his own life?
Holding: No. Tenancy by the entirety, being but one option open to married persons seeking to take title in real estate, is constitutionally permissible.
Reasoning: The court reasoned that the P. knew the bargain she was entering into at the time the tenancy by the entireties was created. By giving away her right to exercise control of the property during her husband's life, she gained the security of knowing that the estate could not be taken from her by her husband's creditors. She gained an indefeasible survivorship. Furthermore, the court stated that the tenancy did not discriminate against women because partition was equally unavailable to the husband. Thus, absent a showing of coercion, she was held to the bargain.
** Cook v. University Plaza, (1981)
2. Facts: The P. is a member of a class of students who resided at the D.'s dormitory house at Northern Illinois University. The P. is suing for interest on a security deposit in accordance with a local landlord- tenant statute. The P. signed a written document provided by the D. which gave the P. certain rights to board, room, parking, etc., but did not claim to give right of occupancy of a definite space. It stated that the P.'s rights were that of use, and that the P. could be moved from room to room according to the judgment of the D.
3. Procedural Posture: The lower court sustained the D.'s demurrer, claiming that the P. did not state a cause of action because a landlord- tenant relationship did not exist; it was a contractual one for services.
4. Issue: Is the dormitory document a lease even though it does not contain a provision passing a possessory interest in a specific property?
5. Holding: No. For a document to be sufficient to be a lease it must contain a definite provision as to the extent and bounds of the property to be used.
6. Reasoning: Although the document stated that it was not creating a landlord-tenant relationship, the court stated that the effect of the document was to be determined by the legal effect of its provisions. It did not define a particular bound for possession by the P., it merely stated that the P. was entitled to remain in the room assigned, and that he may be moved. The court found this to be the determinative factor that the parties did not intend to enter into a landlord-tenant relationship.
7. Notes: 1. If the document would have passed a possessory interest in a definite property, subject to the provision that the possession might be changed to a different room, then the P. would have had a better case for landlord-tenant relationship. 2. Additionally, leases for greater than one year must be in writing in most states or they violate the statute of frauds and are terminable at any time by either party. Delivery of the actual property may also be a requirement to create a lease estate so that the interest in the property is not conveyed until the parties manifest their intent. A simple signing of a document by parties not in the presence of one another might not be sufficient. 3. Although there is a contractual relationship between the lessor and the lessee as soon as they sign the lease, the estate may not take effect until the tenant actually takes possession. Thus, a tenant might be liable for breach, but not rents, if he breaks the lease before moving in. At the time the lease is signed, the tenant obtains a right of entry (a future interest) which becomes possessory when the term commences and the tenant enters the premises.
** Womack v. Hyche, (1987)
2. Facts: The P. is the owner of "Camp Waxahatchee", which she rented to the D. in a written document combined with some oral additions. The written document claimed that the lease was for $300/yr. "with the option to renew the lease as long as the camp is run as a business for profit." The parties began to have differences of opinion after a few years as to the exact meaning of the lease, so the P. brought action for a declaratory judgment to remove the D., claiming that the lease was void as a lease for years because it was indefinite.
3. Procedural Posture: The trial court found for the D., finding the lease to be for a term of 1 year, with the option to renew. The P. appealed to this court.
4. Issue: Is the language of the lease document definite enough to create a tenancy for years?
5. Holding: No. A tenancy for years must have a definite beginning and ending to be valid. It is not the certainty of the happening of the event, but the certainty of the date on which the lease will terminate that is the determinative factor.
6. Reasoning: The court reasoned that the date upon which the camp would stop making money, or stop being operated for profit, was unknown to the parties. Therefore, the document was ineffective to create a lease for years because of indefiniteness, but rather created a tenancy at will, which could be terminated by the P.. The court stated that a year to year renewal will not create a perpetual tenancy for years unless that is the clear intent of the parties. They found that under these facts, it was not the clear intent of the parties at the time of the signing.
7. Notes: 1. A periodic tenancy continues year to year or month to month, or other specified period, until proper notice of termination is given. Most states have statutes that determine the amount of advanced warning required to terminate a lease absent some specific term in the lease. 2. Leases which appear to create a perpetuity are universally disfavored, and presumed to create an option for a single renewal.
** Adrain v. Rabinowitz, (1936)
2. Facts: The P. is a tenant of the D. in a store. The P. and D. signed a document stating that the P. would lease the premises beginning on a specified date. In preparation for that date, the D. made purchases of merchandise he intended to resell. However, when the date came, the previous tenant failed to vacate the premises, and the D. was forced to take legal action to remove him. Thus, the P. was unable to take actual possession until some time later. The P. is suing for back rent and lost profits.
3. Procedural Posture: The trial court found for P., and awarded damages based on lost profits, as well as a refund of back rent.
4. Issue: Is a tenant entitled to actual possession as well as a legal possession on the date of the beginning of the lease term?
5. Holding: Yes. Where a lease term is to begin in the future, there is an implied undertaking by the lessor that the premises shall be open for the lessee's entry, legally and actually, when the time for possession under the lease arrives.
6. Reasoning: The court reasoned that the D. realized her legal obligation to make the premises available to the P. by taking legal action to remove the holdover tenant. They reasoned that the lease did not just create the right to sue, but the right to take actual possession. However, they failed [rightly] to award damages based on lost profits during the meantime because these were risks to which the tenant was already subject.
7. Notes: 1. Many states have statutes requiring delivery on the first day of the lease term only in residential leases, not commercial leases. 2. An argument in favor of the landlord not being responsible for the holdover tenant is that on the first day of the term, the tenant becomes the legal possessor, and the landlord no longer has the right of possession. Therefore, the holdover is a wrong against the tenant, not the landlord. Furthermore, it can be viewed as one of the risks contemplated by both parties at the time of contract formation, so unless otherwise specified, it falls where it may. 3. It is generally accepted that a tenant is no longer required to pay rent at all when the landlord wrongfully evicts him from a portion of the property, for instance by erecting a wall. This is based on the fact that the rent obligation is based on the enjoyment of the entire property, and cannot be reduced unilaterally by the landlord. 4.
** Commonwealth Building Corp. v. Hirschfield, (1940)
2. Facts: The D. was a tenant of the P. under a lease that expired on Sep. 30th. The lease also stipulated that if the tenant heldover, that he would be liable for double the rent. The D., acting in good faith, was unable to get all of his furniture out of the apartment before midnight on the 30th, and so removed the last pieces in the morning. The P. then brought this action for an entire second year's rent under the common law rule that a holdover tenant may be held as a trespasser or as a tenant for another similar term.
3. Procedural Posture: The trial court jury found for the P. for $1,100, which was either 4 months of regular rent or 2 months of double rent. Both parties moved for judgement not withstanding the verdict. The judge refused to grant the motion, and the D. appealed.
4. Issue: Is a landlord entitled to hold a holdover tenant as a tenant for another term if the tenant has made good faith efforts to move out on time, but was delayed slightly due to forces beyond his control?
5. Holding: No. Where a lease provides for the contingency of a holdover tenant, and the clause is held to be valid, the parties are bound to follow it notwithstanding common law rules to the contrary.
6. Reasoning: The court stated that the common law rule for holdover tenants was applicable in two cases: 1) where the tenant's actions are such that they reasonably create a reliance in the mind of the landlord that he intends to holdover for the second term, and 2) as a matter of law in quasi-contract necessary to prevent unjust enrichment of the tenant and loss to the landlord. However, the facts of this case do not show an intent on the part of the tenant, nor a situation demanding quasi-contractual justice. In fact, the facts are quite the opposite. Furthermore, since the lease itself provided for exactly this kind of contingency, the landlord could certainly not claim any more than that.
7. Notes: 2. During the interim, the holdover tenant is referred to as a "tenant at sufferance" and a wrongful possessor. He is distinguishable from a trespasser only in that the entry into possession was a lawful one.
** United States National Bank of Oregon v. Homeland, Inc., (1981)
2. Facts: The P. is the owner of a commercial office building in which he rented a space to the D. for a term of 5 years. The D. abandoned the premises some time later, and the P. eventually re-let the property to another tenant for a longer term and a higher price. The second tenant also defaulted. The P. then could not rent the premises until some time after the original 5 year lease to the D. had already expired. The P. brought an action to recover damages equalling the difference between the monthly rent rate of the P. until such time as the premises were finally rented for good, and the amount that they actually did collect from the second tenant before it defaulted. The P. made good faith efforts to mitigate the damages by trying to re-let the premises.
3. Procedural Posture: The trial court found for the P., for an amount equal to the difference between the amount the D. still owed on its lease and the amount that the P. recovered from the second tenant. D. appealed.
4. Issue: When a tenant of commercial premises abandons the premises before the end of his lease, and the landlord re-lets to another tenant for a period of time longer than, and for money than the original lease, is the original tenant's obligation destroyed as a matter of law?
5. Holding: No. The tenant, by abandoning the property before the expiration of the term of the lease, forfeits his estate in the real property, but remains liable for damages for breach of contract. In determination of the remedy for breach, the landlord is entitled to the difference between the market price, and any rents collected by subsequent tenants during the term of the original lease, with the requirement that the landlord mitigate the damages in good faith.
6. Reasoning: The court reasoned that the landlord did not destroy the contractual obligation of the original tenant by re-letting the premises under different terms. To do so would be to limit the marketability of the premises. However, the landlord was required to mitigate damages, and in any case, could not claim more than the rent due on the original lease, regardless of when the premises was actually re-let.
7. Notes: 1. To say that an re-letting of the premises after abandonment does not affect the obligation of the tenant to pay rent is to say that the former estate continues. It could be conceived that the landlord is acting as an agent of the tenant in re-letting the premises, but this would not work because then the landlord would be accountable to the tenant for excess rents. A better way to handle it is to say the landlord is exercising a power conferred by law to deal with the abandoned estate. If the landlord combines the premises with other land, and then re-lets the whole, it is not possible to say that the former estate continues because it conflicts with the new estate. 2. If a lease has a clause which provides that the tenant must pay damages upon abandonment or eveiction, the landlord may not be able to recover until the end of the term of the lease unless the lease is carefully drafted otherwise. This is because the tenant is no longer under obligation to pay rent, only to pay damages. Damages are not known until near to the end of the term. 3. One court placed the ability to determine future damages at 10 years.
** Blackett v. Olanoff, (1977)
2. Facts: The D. is the former tenant of the P. landlord. The D. rented an apartment from the P. adjacent to another property owned by the P. which was used as a bar. The music in the bar was so loud that it prevented the D. from using his apartment. It prevented sleep and conversation. On several occasions, the D. complained to the landlord about the noise, and it would subside for a while. The lease to the bar expressly stated that the noise level should be kept to a level low enough that it would not bother the surrounding tenants. The D., claiming constructive eviction, moved out before the expiration of his term, and the P. brought this action to recover the remaining rent.
3. Procedural Posture: The trial court found for the tenants, and the P. appealed.
4. Issue: Is the landlord barred from recovery because of constructive eviction, even though the noise was not made by the landlord himself, but rather by another tenant over which the landlord had control, but failed to control?
5. Holding: Yes. When a landlord fails to take action to prevent an impedance to his tenants' right of quiet enjoyment, and it is within the power of the landlord to control the potential impedance, and the landlord knows that if he does not take action that the tenants' right of quiet enjoyment will probably be impeded, the tenant is released from the obligation to pay rent under the lease due to constructive eviction.
6. Reasoning: The court reasoned that because the bar's lease specifically provided against noise, and because the past attempts to control the noise had temporarily worked, the landlord could control the noise. Since he did not control the nnoise, and it was a natural and probable consequence of not controlling the noise that it would interfere with the quiet enjoyment of the other tenants, the landlord could not recover because there was a constructive eviction.
7. Notes: 2. A tenant who is constructively evicted may recover damages if they can show that the landlord's intrusion, or lack of repair, caused the tenant to lose profits. This is true even if the tenant elects to remain. The tenant can continue to recover damages as long as the condition exists and their leasehold estate exists.
** Brown v. Southall Realty Co., (1968).
2. Facts: Brown is a former tenant of Southall. The room she rented was a basement in a complex which did not meet the local building codes. Southall knew of the code violations, and the owner of the building did as well. The owner even signed a document stating that he would fix the code violations before renting out the premises. Because of these violations Brown moved out, and Southall brought suit to recover possession because of nonpayment of rent.
3. Procedural Posture: Brown contended that the lease was invalid as a contract because it was against the local statutes to lease a property which was not "clean, safe, and sanitary." The trial court, however, found for the P.. appealed.
4. Issue: Is the lease valid even though it violates a statute enacted for public policy purposes?
5. Holding: No. Where statutes exist to prohibit the leasing of premises that do not meet building codes, a lease for a premises which does not meet the local building codes is invalid and illegal.
6. Reasoning: The court reasoned that the legislative intent in providing the building codes was to promote the health of the occupants of the neighborhood. Thus, the public policy outweighed the freedom of the parties to enter into a contract which waived those laws. To hold otherwise would be to undercut the very reason that the statutes were enacted.
7. Notes: In D.C., a tenant under a lease which is invalid due to violation of housing codes is a tenant at sufferance rather than a trespasser. Thus, a landlord could bring an action under quasi-contract to collect rents if the tenant remained. However, in other jurisdictions, generally the landlord cannot recover rents when the tenant remains. [In fact, to do so would be to undercut the code. It would make sense that the landlord would be required to remove the tenant as a trespasser.]
** Javins, Saunders, and Gross v. First National Realty Corp., (1970)
2. Facts: The Appellants are tenants in the building owned by the Realty corp. The buildings were rented for a term, but at some point during the term, they became constructively uninhabitable due to needing several repairs to correct housing code violations. The Appellants refused to pay rent for April, and the Realty corp. is suing to recover possession. The Appellants did not include a counterclaim for damages, but simply contend that the housing code violations are an equitable defense which entitle them to a set off equal to the amount of the rent.
3. Procedural Posture: The lower court ruled that evidence of housing code violations was inadmissible when offered as a defense to an eviction action for nonpayment of rent. This court reverses.
4. Issue: Are housing code violations a breach of implied warranty entitling the tenants to withhold rent?
5. Holding: Yes.
6. Reasoning: The court reasoned that the ancient property-oriented rules surrounding leases were outdated, and had no bearing on the present housing situation in the inner city. They reasoned that today people rent apartments, not for an interest in the land, but for a package of goods and services which includes adequate heat, lighting, and ventilation, etc. Low income tenants, even if they wanted to initiate repairs themselves, would be unable to raise the money necessary because they could not borrow against the property. Furthermore, there is a bargaining inequality between the landlord and the tenant which is protected by the housing codes. The duties imposed by the housing regulations cannot be waived or bargained out of. However, the court required the tenants to pay rent into the court registry in anticipation of retrial to be divvied up according to the retrial verdict.
7. Notes: 1. Kentucky doesn't follow the rule above. Rather, they follow the common law traditional rule that unless repairs are covenanted in the lease, they are not implied. 2. Most other states follow the rule in Javins, and there are statutory warranties of habitability encoded in the Uniform Residential Landlord and Tenant Act (URLTA). 3. The tenant probably must pay rent into the court registry, and if he does not do so, the court might award possession to the landlord on the assumption that the tenant did not have a good faith claim of right. 5. Public housing projects provided by the government do not involve an implied warranty of habitability because they are not commercial, and they are assumed to represent the national standard for habitability. [self- defining?]. 6. Implied warranty may be contracted out of unless it is unconscionable or contrary to public policy.
Meyers, The Covenant of Habitability and the American Law Institute, (1975).
I. The mandatory repair requirement put on landlords by the Restatement of Property may not have the result of imroving the balance of power because the rich landlord might simply avoid the less profitable housing complexes. A. The resulting economic consequences are likely to be: 1. Some proportion of the substandard housing will be upgraded, and the landlord will pass the cost onto the tenant. Thus, some tenants will be unable to afford the increase, and be forced out, increasing the demand for low income housing. 2. Some of the housing will be upgraded without passing on the cost to the tenant, but low income tenants as a class would not be benfitted. 3. Some of the housing will be abandoned by the landlord in cases where it would be more economical to abandon the property than to make the required repairs. B. Housing codes are more preferable to the Restatement because: 1. The enforcement of the codes is discretionary, and in the hands of public officials, and 2. The housing codes to not provide remedies such as rent abatement or withholding which preven the landlord from using the rent money for improvements.
** Edwards v. Habib, (1969)
2. Facts: Edwards rented an apartment on a month-to-month basis from Habib. Shortly after moving in, Edwards reported several code violations, which resulted in the gov't forcing Habib to correct them. Apparently upset for her squealing on him, Habib gave Edwards the 30-day statutory eviction notice required for her month-to-month tenancy. Edwards remained in the property, claiming that she could not be evicted in retaliation, and Habib sued to regain possession.
3. Procedural Posture: The lower court found for Habib, holding that a private landlord was not required to give a reason for evicting a tenant, and was free to do so for any reason at all.
4. Issue: May a landlord evict a tenant in retaliation for reporting Housing Code violations?
5. Holding: No.
6. Reasoning: The court reasoned that to allow this action would severely cut into the effectiveness of the housing codes because a large portion of the violations were reported by tenants themseves. The tenants would be motivated not to report the violations because if they did, they would lose their shelter, and substandard shelter is better than no shelter. The court made an exception to the general "for no reason" rule in this case because it would be contrary to public policy.
7. Notes: 1. In Robinson v. Diamond Housing Corp., the landlord attempted to evict a tenant for no-payment of rent. The tenant successfully defended on the grounds of housing code violations similar to Brown. The landlord then brought a second action claiming that if there were housing code violations at the time of the lease, then the lease was void. The tenant forwarded the defense that she was being evicted in retaliation. The landlord complained that he would not ever be able to regain possession because he was unwilling to repair the premises, and instead wanted to take the premises off the market permanently. The court held that to allow this would provide a means around the anti-retaliation law. The court stated that the landlord could regain possession if he made the repairs and then evicted for an unrelated reason, or if he could show that there was unfeasible to make repairs. 3. To allow tenants to raise the issue of retaliatory defense in the summary eviction proceeding makes it a longer process, thereby defeating its purpose. It leads landlords to want to write self-help clauses into their leases. However, these clauses are normally held to be void because they would undermine the anti-self-help statutes.
** Orange County Taxpayers Council, Inc. v. City of Orange, (1980)
2. Facts: The P.s are a landlord group. The City enacted a rent control statute that provides for small rent increases each year, only if the landlord can make a showing that his building is in substantial compliance with housing codes. The P.s claim that this clause in the statute is unduly restrictive of their property rights.
3. Procedural Posture: The trial court found for the D.s, stating that the landlords could not make the necessary repairs unless they raised the rents, but they could not raise the rents unless they made the repairs. The Court of Appeal reversed.
4. Issue: Is a rent control ordinance which requires the units to be in substantial compliance with the housing codes before raising rent valid?
5. Holding: Yes.
6. Reasoning: The court reasoned that the rent control ordinance was enacted as a local police measure to enable tenants to find safe and affordable housing. They stated that the rent control ordinance would only be invalid if it prevented the landlord from making a "just and reasonable return" on his property, which this one did not. The rent control ordinance would have no bite if the landlord could allow the units to deteriorate and still raise the rent. The purpose of requiring substantial compliance before issuing permission to raise rent is to insure that the tenants do not have to pay for the repairs that they were already entitled to.
7. Notes: 2. In Pennell v. City of San Jose, a U.S. Supreme Court case, Justice Scalia stated that the a City rent control ordinance can not include a term which requires consideration of the hardship of the tenant. This is because the once a landlord has minimized his profits such that he is only receiving a reasonable return, he is no longer the cause of the problem of the housing shortage any more than the grocer or department store owner is. In this case, he continued, the city was not regulating rents in the relevant sense of preventing rents that are excessive, but rather using rent control to establish a private welfare program at the expense of the landlord who is no longer blameworthy. President Reagan's commission on housing claimed rent control was a severe disincentive to investment and mortgage lending which would ultimately result in the deterioration of the existing housing. Moreover, it was an income redistribution from the landlords to the tenants by implicitly taxing the landlord for the benefit of the tenant.
** Marina Point, Ltd. v. Wolfson, (1982)
2. Facts: The P. is the landlord of an apartment complex where the D. resides. When the D. moved in, the lease stated that the complex did not rent to families with minor children, however, there were several families living there. After a while, the complex decided to rent exclusively to childless families, and notified the D. that they would not be renewing their lease. The D. continued to stay at the complex, and the P. brought an eviction action.
3. Procedural Posture: The trial court found for the P., stating that the Unruh act did not apply to families with children as a class, and that the landlord was reasonable in his decision not to rent to children because the property did not have any facilities expressly for children, and there was evidence that children reduced the value of the property.
4. Issue: Is the landlord's policy of discriminating against children a violation of the Unruh Act, and therefore illegal?
5. Holding: Yes.
6. Reasoning: The court reasoned that the Unruh Act was meant to prevent arbitrary discrimination against any class of persons at any business establishment. The landlord's decision to exclude children as a class was not allowed because, although they could evict specific trouble families, they could not exclude all children simply because "as a whole" they were more likely to commit misconduct than some other class of persons. Furthermore, the complex did not fit in with the description of a business that could harm children (like adult bookstores or bars). To allow this to succeed would be to allow a landlord to successfully get around the Unruh Act by simply adding some incidental facility which posed a special danger to an undesired group of potential tenants.
7. Notes: 1. The Fair Housing Act of 1989 prohibits discrimination based on "familial status", meaning one or more persons under the age of 18 living with the tenant as a parent or legal guardian. 2. Discrimination includes prohibiting the handicapped from paying for improvements to the property which would help their enjoyment of the premises, as long as they agree to restore the premises to their original condition at the end of the tenancy. 3. The Fair Housing Act was held to not specifically forbid the practice of only renting to tenants whose net weekly income is more than 90% of the rent, even though in practice that resulted in screening out more blacks than whites, unless a racially discriminatory motive can be established.
** Sargent v. Ross, (1973)
2. Facts: The P.'s daughter died when she fell from a stairwell at the D.'s building. The D. constructed the stairwell so that it was apparently excessively steep, and the rails were too low, so that a person could easily lose balance and fall over the railings to the ground. The P. brought a negligence action.
3. Procedural Posture: The D. relied on the common law exception of landlords for tort damages except under special circumstances, including exclusive control, and negligent maintenance. The trial court found for the P.
4. Issue: Is a landlord immune from liability for tort damages due to the traditional doctrine of caveat emptor?
5. Holding: No. A landlord, like other persons, must act as a reasonable person under all the circumstances.
6. Reasoning: Rather than try to fit the P.'s action into one of the traditional exceptions of exclusive control or negligent maintenance, the court did away with the general landlord immunity because it was born out of the dark ages and no longer applied to the landlord-tenant relationship.
7. Notes: Although at least one court has imposed strict liability for landlords, most courts do not, holding the rationales behind strict liability do not apply.
** Jaber v. Miller, (1951)
2. Facts: Jaber leased a commercial property from its owner. The lease contained a provision that stated that the rent would not be due if the premises burned down. Jaber went out of business, and transferred his lease to the person from which Miller obtained it. The transfer purported to be an assignment, with the original rent to be owed directly to the owner, and 4 installment payments of $700 each to be due to Jaber. Miller was unable to pay the 4 payments of $700, and so split the payments into monthly installments. The property burned down, and Miller tried to cancel the installment payments.
3. Procedural Posture: Miller claimed that the payments were rent owed from a sublease, and thus they vanished with the original lease. Jaber claimed that the payments were installments on a contractual assignment, not rent under a sublease. Thus, since the assignment contract did not contain a provision in case the property burned down, the installment payments were still due. The lower court found that the nature of the estate created by the transfer was a sublease, not an assignment.
4. Issue: How should the significance of a transfer of a lease be determined?
5. Holding: The intention of the parties at the time of the lease formation is the determining factor in whether a transfer of a lease is a sublease or an assignment.
6. Reasoning: The court reasoned that the common law distinction calling all transfers of the entire interest for the entire remainder of the term assignments, and those for less than the entire term (even one hour less) subleases, was an arbitrary distinction based on feudal property rights which was no longer applicable to modern times. The intent of the parties was a better measure, resulting in fewer injustices. The court reasoned that the transfer in the instant case was an assignment, because all of the circumstances indicated that was the intention of the parties at the time of the transfer.
** A.D. Julliard & Co. v. American Woolen Co., (1943)
2. Facts: American Woolen obtained title to a property by means of assignment of a lease. American Woolen then re-assigned the property to the Reo Realty Company, who became insolvent and could no longer pay rent. The plaintiff claims that American Woolen is liable for the unpaid rent of the dissolved Reo Realty corporation as a matter of law. The American Woolen company claims that they transferred all rights of possession and title to the Reo Realty corporation, and no longer enjoyed any benefit from it, therefore they are not liable for rent.
3. Procedural Posture: The trial judge found for the defendant, holding that an assignee of a lease does not, as a matter of law, become bound to pay rent for the remainder of the lease term.
4. Issue: Does an assignee of a lease become bound as a matter or law to pay rent for the remainder of the lease term, even if he re-assigns it to another?
5. Holding: No.
6. Reasoning: The court reasoned that the original tenant is the only party liable to the original owner for the rent for the entire period of the lease. If the original tenant assigns the lease to another, then the assignee becomes primarily liable for the rent, and the original tenant becomes secondarily liable. However, the assignee can end his obligation completely by re-assigning the property to another. The original tenant, however, remains secondarily liable. The assignment between the original tenant and the assignee is a new contract that does not take on the obligations of the original lease. In order for an assignee to become liable for rent for the remainder of the term (as the tenant is) such a term must be in the new contract. The law does not impose the obligation automatically.
** Childs v. Warner Brothers Southern Theaters, Inc. (1931)
2. Facts: Berkeley owned a movie theater which it leased to Craver. The lease stated that the lessee and his assigns covenanted to pay rent, and that it could not be reassigned without the consent of the owner. Craver then assigned his lease to the defendant, Warner Bros. with the consent of Berkeley. Berkeley then sold the property to the plaintiff, Childs. Warner Bros. then re-assigned the theater to Carolina without the previous consent of the new owner, Childs. Warner Bros. notified Childs of the re-assignment, and Childs responded by stating that they still considered Warner Bros. the lessee of the property because they did not give prior consent. Carolina then went out of business, and Warner Bros. refused to pay, claiming that they no longer had any interest in the property.
3. Procedural Posture: The trial court found for the plaintiffs, and the defendant appeals.
4. Issue: When a lease contains a provision that it should not be re- assigned without the express permission of the owner, does a subsequent grant of permission to re-assign constitute a complete waiver of that condition for the future assignees?
5. Holding: No. Where an original lease states that the terms are binding upon the tenant and his assigns, the lessor does not waive the conditions of the lease, and does not consent that thereafter any subsequent assignee may escape the conditions of original lease merely by allowing the original tenant to make an assignment of the lease.
6. Reasoning: The court reasoned that the condition of requiring express permission for reassignment was not a single condition applying only to the first tenant. Furthermore, the plaintiff specifically notified the defendant that they would continue to consider them the lessee.
7. Notes: 1. The court's reasoning was not thorough, but it may have reached the appropriate result. A better theory might be that the assignment was valid, but that it violated the condition of requiring express permission. Thus, the defendant should be liable for breach of contract, and the damages would be equal to the unpaid rent. 2. A lessor who requires express permission to be obtained before assignment may have to provide a good faith reasonable justification for withholding information in the case of a residential lease, where the bargaining power is lopsided. However, in the case of the commercial lease, the same reasoning may not be applicable because the parties are on a more even ground.
** Mitchell v. Castellaw, (1952)
2. Facts: There are 3 lots of land adjoining eachother. One is used for a filling station, and has a driveway which extends onto the lot directly next to it. The original owner of all 3 lots, Mrs. Stapp, granted the adjoining lot to Smith and his wife. The grant contained a provision that the grantee, "their heirs or assigns, shall not build or permit any one else to construct any type of building or anything else on the portion of lot [where the driveway was] and that the [grantee] shall have the right to use this part of said lot as a driveway." This lot was eventually sold to Mitchell.
3. Procedural Posture: Castellaw brought suit to compel Mitchell to continue to allow him the easement for the driveway into the filling station. Both lower courts found for Castellaw and let the easement stand.
4. Issue: Is the wording of the grant sufficient to grant an easement to all future owners of the filling station?
5. Holding: Yes. Where the language of a grant of easement is technically flawed, it shall nonetheless be granted unless there is a clear indication that the grantor could not have intended it.
6. Reasoning: The court reasoned that although the language was flawed because the grant appeared on its face to be repugnant to the conveyance because it simultaneously provided for conflicting uses of the same physical property, the fact that the conveyance was general, and the easement exception was specific, led the court to believe that it was intended. Thus, even though the easement clause did not say "notwithstanding any other provisions of this document", it was still valid. Examining the surrounding circumstances, such as the driveway being adjacent to the land, and that it had always been used for a driveway, the court found that it should remain as intended.
** Midland Valley Ry. Co. v. Arrow Industrial Mfg. Co., (1956)
2. Facts: Arrow acquired a property that is adjoined by Midland's railroad. The previous owner executed a "Right of way deed" to Midland which purported to "convey...a strip of land for a right of way over" a specific plot detailed in the instrument. The deed was not in statutory form for the granting of easements or fee simple properties.
3. Procedural Posture: Midland claims that it owns the land of the grant in fee simple. Arrow contends that the grant is only an easement, and upon abandonment, reverts back to Arrow. The lower court found that it was an easement.
4. Issue: Is a grant which conveys a strip of land which is well defined, rather than a right of way over a strip of land a conveyance of a fee simple estate rather than an easement?
5. Holding: Yes.
6. Reasoning: The court reasoned that a previous case, Higgins v. Oklahoma was controlling. In Higgins, the deed words were "grant, bargain, quitclaim, and relinquish" which indicated a fee simple grant. The court reasoned that since the object of the verb "convey" in the specific grant was "a strip of land" (and not a "right of way over a strip of land") that the grant was therefore in fee simple. [This apparently ignores intent of the grantor, who probably did not wish to grant a fee simple.]
7. Notes: 1. Other cases have found the opposite result on substantially the same facts. One practical reason was that railroads customarily were only given power to obtain easements. Furthermore, the railroad should not be able to re-grant the land for some other purpose. 2. In some states, it matters whether the grant was an easement, or a fee simple determinable, because there may be a statute of limitations on the FSD which bar the condition after a certain time which does not apply to easements.
** Baseball Publishing Co. v. Bruton, (1938)
2. Facts: Baseball contracted with Bruton to place an advertisement sign on the wall of his building for $25/year. The contract stated that Baseball had "the exclusive right and privilege to maintain an advertising sign...on the wall of" Bruton's building. Bruton returned every check payment, and later had the sign taken down.
3. Procedural Posture: Baseball sued for specific performance.
4. Issue: Is the grant a license, which would not be enforceable by specific performance because a license by its nature is revocable at any time by the licensor as long as he pays damages?
5. Holding: No.
6. Reasoning: The court reasoned that since the document granted an exclusive right to post and maintain the sign, it granted more than a license. It granted an easement which could be enforced by specific performance because it was a land interest. It was an easement in gross.
** Stone v. Zucker, (1906);
2. Facts: The P. granted a parol (verbal) license to the D. to use a right of way on his land to construct an irrigation aqueduct. After the D. had spent considerable time and money erecting the aqueduct, the P. decided to revoke the license.
3. Procedural Posture: The P. is suing to have the D. declared a trespasser, claiming that the D. may have been unwise in expending such effort in reliance on a revocable license, but that there should be no equitable recovery for his reliance because the rule should be unflexible. The lower court found for the D.. The P. appeals to this court.
4. Issue: Is a license revocable before the nature of the use is complete when the licensee has expended large resources in reliance upon its continuation?
5. Holding: No. "[W]here a licensee has entered under a parol license and has expended money, or its equivalent in labor, in the execution of the license, the license becomes irrevocable, the licensee will have a right of entry upon the lands of the licensor for the purpose of maintaining his structures or, in general, his rights under his license, and the license will continue for so long a time as the nature of it calls for."
6. Reasoning: The court reasoned that although the general rule is that a license is revocable at any time by the grantor, it would be unjust to allow revocation in the case where the licensee has expended a large amount of money in reliance on the continuance of the license. The court treated this case much like a contract case, where there had been performance by one side. Thus, the license became, for all practical purposes, an easement for the length of time that the use was continuous. [This was necessary in order to prevent violation of the reliance principle, as long as the licensee's reliance was reasonable.]
7. Notes: 1. The opposite result was reached in Nelson v. AT&T, where the grant of a right of use to AT&T for telephone poles was not under seal, and therefore formally insufficient to grant an easement at the time. Even though it cost $4,000 to move the poles, the court found that it was a revocable license. 2. The Restatement states this rule that a licensee "who has made expenditures of capital or labor in the exercise of his license in reasonable reliance upon the representations by the licensor as to the duration of the license, is privileged to continue the use permitted by the license to the extent reasonably necessary to realize upon his own expenditures."
** Marrone v. Washington Jockey Club, (1912)
2. Facts: The P. bought a ticket to the horse races at the D.'s track. However, the D. forcibly prevented him from entering the gate. The next day they threw him out after he had already put his ticket into the box.
3. Procedural Posture: The P. is suing for trespass for preventing his entry into the track. [This implies that the P. had a property right upon buying the ticket.]
4. Issue: Does the buyer of a ticket for a horse track have a right of property in the track?
5. Holding: No. The ticket binds the seller in contract, but it does not create a property interest in the holder.
6. Reasoning: [Holmes] reasoned that the ticket was simply a contract of license, which wsa subject to revocation. Thus, the P. did not have an action in trespass, only a contract action for breach [he could get his money back]. The common understanding was that tickets to horse races are not a conveyance of a property interest in the land. For there to be an irrevocable right of entry, the P. must have had a interest in the property or some goods on the property. [A license coupled with an interest might be irrevocable.]
7. Notes: 1. In Hurst v. Picture Theaters, Ltd., the english court found for a P. who was ejected from a theater after paying for his ticket. They held that the ticket was a contract to view the whole show, so his license was irrevocable because it was coupled with the contractual interest to view the whole show. 4. The general rule is that a licensee does not have rights to protection against interference by a third party. Thus, a person who has a license from one party to cut ice on his pond may not recover damages from a third party owner of a dam if he lowers the water maliciously to destroy the licensees benefit from the license.
** Finn v. Williams, (1941)
2. Facts: Williams used to own a large farm estate. In 1895, he granted the north 40 to a person who then sold it to Finn. The north 40 did not have access to a public highway, except over the remaining estate of Williams. At some point, Williams denied Finn from using a right of way over her property.
3. Procedural Posture: Finn claims that he has an implied easement created by necessity because he is surrounded on all other sides by strangers, so his only route to the highway is over Williams land. The trial court found for Finn, and Williams appeals.
4. Issue: Does Finn have a right of way by necessity?
5. Holding: Yes. "Where an owner of land conveys a parcel thereof which has no outlet to a highway except over the remaining lands of the grantor or over the land of strangers, a way by necessity exists over the remaining lands of the grantor."
6. Reasoning: The court reasoned that the rule was well settled. Furthermore, the easement is appurtenant to the property, meaning that it can lay dormant through several conveyances of the property to strangers, and still be exercised at any time by the title holder.
7. Notes: 1. The implication of an easement by necessity has been argued to be based on a policy of bringing land to its highest value use. However, the public would probably be best served if the easement were paid for according to an eminent domain-like mechanism. In this way, the easement would not be bought unless the value of the use outweighed the value of the condemned property.
** Granite Properties Ltd. Part. v. Manns, (1987)
2. Facts: Granite owned a large parcel of land on which stood a grocery store and an apartment complex. Granite conveyed a large empty lot between the grocery store and the apartment complex to Manns. However, the grant covered areas which Granite had been using as driveways, and did not contain any reservation of an easement. Because of the location of the driveways, it was very convenient that they remain where they were even though they were on Manns property.
3. Procedural Posture: Granite seeks to permanently enjoin Manns from excluding their use of the pre-existing driveways by granting an implied easement, because they were apparent obvious and in continuous use before the conveyance, as well as being very important and convenient. Manns claims that the driveways are not necessary, and therefore there should be no implied easement. The trial court refused to grant the injunctions, and the circuit court granted the injunction for the apartment complex, but not the shopping center. The court of appeal granted both injunctions, and this court granted a review.
4. Issue: May an implied easement be granted where the use is not absolutely necessary if was apparent, obvious and in continuous use before the grant to the new owner?
5. Holding: Yes. An easement implied from a preexisting use is established by proof of three elements: first, common ownership of the preexisting parcel and a subsequent conveyance of the part containing the easement; second, before the conveyance, the use was apparent, obvious and continuous, and permanent; and third, the claimed easement is necessary and beneficial to the parcel conveyed or retained by the grantor.
6. Reasoning: The court reasoned that the implied easement was created by inference from the circumstances surrounding the conveyance. It is an attempt to ascribe an intention to parties who had not bothered to write the easement down, or perhaps had not thought of it. The easement was not absolutely necessary, but "the more pronounced a continuous and apparent use is, the less the degree of convenience of use necessary to the creation of an easement by implication." In this case, the preexisting use was of such a continuous, permanent and convenient nature that it must have been the intention of the parties that it continue after the grant.
7. Notes: 1. If a necessary easement is created by the division of a parcel of land, and later a public road obviates the absolute necessity, the implied easement may be held to remain intact under the preexisting use theory. 2. Some courts disagree with Granite, requiring a showing of strict necessity. 3. Traditionally, implied easements for recreational purposes, to walk around on, or fish on, another's property have been held to be void as contrary to the doctrine of jus spatiandi. Some courts have upheld such easements in small, well defined areas. However, in Drye v. Eagle Rock Ranch, Inc., the court refused to allow an implied recreation easement for neighboring residents on the D.s 1,000 acre ranch, even though it was promised by the housing developers on marketing brochures, holding that "to impose indefinite servitudes for pleasure and recreation on so large an area would tend to fetter estates, retard building and improvements thereon, and hinder the use of the land." 5. However, some courts have held such representations by developers as binding "implied restrictive covenants."
** Lunt v. Kitchens, (1953)
2. Facts: Lunt and Kitchens are next-door neighbors. Lunt owns a driveway that runs between them. The owner previous to Lunt was friends with the Kitchens, and freely allowed them to use the driveway. After granting the property to her children, the previous owner even attempted to execute a quitclaim deed to the driveway to the Kitchens. The Kitchens treated the driveway as their own for 25 years. However, Lunt does not want them to use it.
3. Procedural Posture: Lunt brings an action to enjoin Kitchen from using the driveway. The trial court finds that Kitchen gained an easement by prescription based on adverse use. Lunt appeals claiming that the use was not adverse, but rather permissive under a license.
4. Issue: Is there sufficient evidence of adverse use for a period of 20 years to sustain the finding of a prescriptive easement?
5. Holding: No. A use cannot be adverse when it rests upon license or mere neighborly accommodation.
6. Reasoning: The court reasoned that the Kitchens did not use the driveway adversely. They had the implied consent of their neighbors, not simple aquiescence. The Kitchenses did not attempt to exclude the other neighbors, nor did they attempt to make any changes to it other than inexpensive repairs. The court reasoned that the presumption was that it was permissive, and the Kitchenses failed to overcome the burden of proof. They did not show actual or constructive knowledge by the neighbors of their claim. Since the quitclaim deed failed to grant any property interest, there was not an easement.
7. Notes: Whether adverse possession has been established for an easement should be treated according to a weighing of the facts of the case, and not by presumptions either way. There are some uses that are adverse by nature.
** Dartnell v. Bidwell, (1916)
2. Facts: Dartnell owns some land over which Bidwell travels to take a cart to and from his property. Bidwell plowed a road across the land where he had been using the right ow way for his cart, and Dartnell sent him a letter telling him tha he had no right to the land. Apparently no further action was taken, and Bidwell continued to use the property for 20 years.
3. Procedural Posture: Dartnell sued for trespass, claiming that a prescriptive easement was not created because his letter interrupted the use, making it un-continuous. Bidwell claimed adverse possession in spite of the letter. The trial court issued instructions that the owner's acquiescence was not required to establish adverse use, and thus found for D..
4. Issue: Is knowledge and acquiescence needed to establish easement by prescription?
5. Holding: Yes.
6. Reasoning: The court distinguished the creation of a prescriptive easement from the acquisition of title to real estate by adverse possession. They held that actual knowledge and acquiescence was required for prescriptive easement, though not required for title by adverse possession.
7. Notes: The modern view is that acquiescence is not required. The same requirements for title by adverse possession are required for a prescriptive easement.
** S.S. Kresge Co. v. Winkleman Realty Co., (1952)
2. Facts: Kresge owns a parcel of land adjoining the parcel owned by Winkleman. Winkleman operates three businesses on his property, one of which is a Men's store. Winkleman has an easement for use of an alleyway over Kresge's property for ingress and egress to an from the Men's store which was appurtenant to the property and acquired by the previous owner. Winkleman is now using the easement to supply all of his businesses, not just the Men's store.
3. Procedural Posture: Kresge brought an action to enjoin Winkleman from using the alleyway for any other purpose than supplying the Men's store. The trial court found that the expanded use was an added burden upon the Kresge's land, and not within the contemplation of the owners of the premises at the time the easement was granted.
4. Issue: May an easement be used for the support of an estate to which it is not appurtenant?
5. Holding: No. A prescriptive right acquired by a particular use of the property can not ordinarily justify an added use in connection with the dominant estate in a manner far different from that employed under the original use.
6. Reasoning: The court reasoned that the easement was only for ingress and egress to and from the single building that contained the Men's store. Winkleman's use for supplying his other stores was an added burden upon Kresges land which was not envisioned at the creation of the easement.
7. Notes: 1. Under similar facts, the court in Brown v. Voss refused to grant the injuction preventing the holder of the easement from expanding it to supply his other businesses, even though it was a misuse of the easement, because injunction is an equitable remedy, and the landowner did not have any actual damages from the increased use.
** Sakansky v. Wein, (1933)
2. Facts: Sakansky owns a parcel of land which has a right of way appurtenant over Wein's parcel of land. The right of way was created by grant in 1849, and was given a definite location. Wein wanted to erect a new building over the right of way, but leaving an opening of 8 ft. Wein offered to grant Sakansky a right of way around the outside of the building for any trucks that could not go under the 8 ft opening. Sakansky objected.
3. Procedural Posture: The case was originally tried by a master who stated that neither party had definite and exclusive rights to the property, and so the rule of reasonableness applied. The master then found that although it was unreasonable to limit the right of way to 8 ft, it was reasonable to provide an alternate right of way.
4. Issue: Does the rule of reason override any previous contractual obligation between the parties to an easement?
5. Holding: No. The rule of reason does not prevent the parties from making any contract regarding their respective rights which they may wish, regardless of the reasonableness of their wishes on the subject.
6. Reasoning: The court reasoned that the appurtenant right of way had a well defined location on the ground. Therefore, Sakansky had an exclusive right to use it. Since it was unreasonable to limit the opening to 8 ft, more headroom would be needed. Exactly how much would be a question of fact. However, since the right of way did exist in a well defined location, Wein had no right to require a detour from that right of way, no matter how reasonable it might have been.
** Lindsey v. Clark, (1952)
2. Facts: Clark owned a lot which he granted to Lindsey's predecessors in title. Clark reserved an easement in the grant to the southern 10 ft of the lot to be used as a driveway for a rental property he constructed in the rear. However, Clark and the grantee both mistakenly assumed that the easement was actually on the north side of the lot. The grantee built a house on the property which extended 2 ft into the right of way. Clark has been using the north driveway continuously since then. Lindsey owns the property now, and seeks to have Clark enjoined from using the easement because it is in the wrong spot, and has not been used, and has therefore been abandoned.
3. Procedural Posture: The trial court constructed an equitable remedy whereby the Clarks relinquish their claim to the southern easement, which would require reconstruction of the house, in return for use of the northern easement.
4. Issue: Where there is a mistake as to the location of an easement, is the non-use of the easement for a period of time sufficient to terminate the easement by abandonment?
5. Holding: No. The mere non-user of an easement created by a deed will not result in abandonment unless there is clear evidence of intent to abandon.
6. Reasoning: The court reasoned that since the driveway on the north had been used mistakenly, that there was not an intent to abandon. They assumed that if the parties knew where the actual location of the easement was in the grant, that they would have taken step accordingly. They refused the argument that Clark was estopped from claiming the right of way still existed because he knew that the house was being built.
7. Notes: 2. Where a person owns an easement over property, and then acquires fee title to that property, the easement is merged with the fee and is destroyed. Thus, the user no longer must follow the restrictions of the use. 3. An easement created by implication or prescription is generally not recorded. However, it may still be valid against a subsequent bona fide purchaser of the servient estate.
** Gallagher v. Bell, (1986)
2. Facts: The Sister's sold all but 1/2 acre of a 34 acre lot to Bell for eventual subdivision. The remaining 1/2 acre and house upon it was sold to Gallagher. In Gallagher's grant was a covenant stating that he would pay for a share of the cost of installing the streets and utilities in the subdivision. Gallagher then sold the house to Camalier, who required that the Gallaghers indemnify her for the covenant. When the land was eventually developed, Bell went to Camalier to collect for developments. Camalier refused to pay, and so Bell brought this action against Gallagher.
3. Procedural Posture: The trial court found for Bell for $7,000.
4. Issue: Does this covenant run with the land, thus ending Gallagher's liability when he sold to Camalier?
5. Holding: Yes. For a covenant to run with the land: 1) it must "touch and concern" the land; 2) the original parties must have intended it to run with the land; 3) there must be privity of estate.
6. Reasoning: The court reasoned that since the covenant made the Gallagher's interest in their land less valuable, and made the Bell's interest in their land more valuable, it touched and concerned the land. Since the time that the subdivisions was to be erected was foreseen to be perhaps beyond the time that the Gallaghers owned the house, the covenant was to his heirs and assigns. Thus, it was intended to run with the land. Furthermore, Camalier acquired title by privity with Gallagher. Thus, all three conditions were met. Any liability Gallagher had under his indemnity agreement was strictly between Camalier and Gallagher. Bell could not collect directly from Gallagher.
7. Notes: 1. The rule in Spencer's Case required that the covenantor expressly bind his heirs and assigns for the covenant to run with the land. This rule is not followed frequently today, but lack of the "heirs and assigns" language may be evidence that it does not run with the land.
** Neponsit Property Owner's Ass'n v. Emigrant Industrial Sav. Bank, (1938)
2. Facts: Emigrant owns a parcel of land in a residential subdivision. The original grant to the land contained a covenant for the payment of homeowner's fees to the Neponsit Company, or that a Property Owner's Ass'n, a corporation that existed solely as a conduit for collecting the homeowner's fees and spending them as it saw fit for the benefit of the collective homeowners, would be created. The original grant stated that the covenant was binding upon the grantee, his heirs and assigns, and that it would run with the land. If the fees were not paid, they would become a lien against the individual homeowner's property until paid.
3. Procedural Posture: Neponsit is suing to foreclose the lien on Emigrant's property for liquidation of the back homeowner's fees in default. Emigrant claims that the covenant is not binding upon them because Neponsit Property Owner's Ass'n is not in privity of estate with them (has no direct interest in the land itself), being only a corporation acting on behalf of the parties that are in privity of estate.
4. Issue: Is a covenant to pay homeowner's fees to a corporation acting as an agent of the parties in privity of estate binding, when the corporation is acting for the benefit of the homeowners (a homeowner's association), even though the association has no legal interest in the property (no privity of estate)?
5. Holding: Yes.
6. Reasoning: The court reasoned that normally the requirements for a covenant to run with the land are 1) that the parties intended that the covenant run with the land; 2) the covenant "touches" or "concerns" the land; and 3) there is privity of estate between the party claiming the benefit of the covenant, and the right to enforce it and the promisor who is under the burden of the covenant. However, since the enforcement of such covenants rests in equity, that blind adherence to the rule requiring actual privity would deprive the plaintiff in this case of what is equitable. The association existed only for the benefit of the property owners. Thus, it was a technicality that they did not actually hold any interest in the land as a corporation.
7. Notes: 2. Traditionally, a covenant would not run unless it benefited land as well as burdening land. In other words, the covenant would not run with the land if it was "in gross". This seems to be inconsistent with the rule allowing easements to run with the land against a subsequent purchaser, even though they were only for the benefit of one party. This may be explained by the fact that most easements are positive and limited in scope (like the laying or sewer lines), rather than negative (enjoining another property owner from doing something). 3. The defendant in the above case argued that the covenant did not "touch and concern" his land because the payment of the fee was to be used for maintenance of the neighborhood areas and not his land specifically. However, the court reasoned that the improvement of the surrounding lands did increase the value of the defendant's land to some degree. Thus, although it did not technically touch the land, the purpose for the touch and concern rule was satisfied in that the covenant provided for the maintenance of common areas which increased the enjoyment of the defendant's own land.
** Eagle Enterprises, Inc. v. Gross, (1976)
2. Facts: Eagle is the successor in title to a grantor who granted a subdivision of land to Gross' predecessor in title. The original grant contained a covenant that stated that the grantor would supply water to the grantee for use on the land each summer and fall, and that the grantee would buy the water. The covenant stated that it would run with the land. However, Gross built his own well, and lived there year-around and refused to pay for the water. None of the deeds in the chain of title restate the covenant, and Gross'' deed does not state that it is subject to any previous covenants.
3. Procedural Posture: Eagle brings suit to compel Gross to pay for the water, claiming that the covenant runs with the land. The lower trial courts found for Eagle, but the Appellate Court found for Gross.
4. Issue: Is a covenant for the supply of water for personal use of the landowner binding against subsequent purchasers without notice?
5. Holding: No.
6. Reasoning: The court reasoned that the covenant did not affect the rights of the landowners in the subdivision. The lands would not be waterless if Gross did not pay for water (he had dug his own well, even). There was no claim that the other property owners would suffer any loss if Gross did not buy water from Eagle. The covenant therefore resembled a personal, contractual promise rather than a significant interest that attached itself to the land as it did in Neponsit (where the failure of an individual owner to pay homeowner's dues did affect the rights of the other owners because the dues were used for maintenance of the common areas.) Thus, the covenant to supply water did not "touch and concern" the land itself. Additionally, these personal covenants are disfavored in law because they impose an "undue restriction on alienation or an onerous burden in perpetuity." As opposed to the Neponsit covenant, which expressly dissolved itself in 1940, the water covenant did not have a limit, and thus would be a burden in perpetuity.
** Tulk v. Moxhay, (1848)
2. Facts: Tulk owned a large residential development, which included an ornamental garden. The plaintiff sold the garden to Elms, with a covenant attached that Elms would maintain the garden for the pleasure of the remaining residents, and would not build upon it. Elms later sold to Moxhay, who had notice of the covenant, but whose deed did not contain the covenant. Moxhay wanted to build on the land.
3. Procedural Posture: Tulk got an injunction against Moxhay to prevent him from building, and Moxhay appeals.
4. Issue: May a covenant on land be enforced against a subsequent purchaser who has notice of the covenant, but who has no mention of the covenant in his deed?
5. Holding: Yes. "The question does not depend on whether the covenant runs with the land...for if an equity is attached to the property by the owner, no one purchasing with notice of that equity can stand in a different situation from the party from whom he purchased."
6. Reasoning: The court reasoned that the covenant was a contract between the plaintiff and whoever purchased the land. If the court were to hold otherwise, then the owner of the land would have no protection from the buyer selling to another the next day to someone who would not be subject to the liability. Thus, the covenant would be worthless to protect the value of the owner's property.
7. Notes: The above case dealt mostly with negative covenants (not to build) instead of positive covenants. In Petersen v. Beekmere, the court held that an affirmative covenant in equity is enforceable against a subsequent grantee with notice.
** London County Council v. Allen, (1914)
2. Facts: The Council sold a plot of land for subdivision to a Mr. Allen who covenanted on behalf of himself and his heirs and assigns, that he would not construct any buildings on the areas that the Council had set aside for roads. Mrs. Allen obtained title and built houses over the area intended for roads, but claimed that she had no notice of the covenant.
3. Procedural Posture: The lower court issued an injunction to bring the houses down, holding that the covenant could not run in equity if the plaintiff did not have an interest in the land that the covenant benefited.
4. Issue: May an equitable servitude be enforced against a subsequent purchaser who does not have notice of the covenant if the party seeking to enforce the equitable servitude does not own an interest in the land for the benefit of which the covenant was created?
5. Holding: No.
6. Reasoning: The court reasoned that the holding of Tulk v. Moxhay required that the party seeking to enforce the equitable servitude had to have an interest in the land that received the benefit. However, the court stated that the inflexibility of that rule was regrettable since it meant that a public body could not enforce a covenant for the benefit of the public.
7. Notes: 1. In the U.S., the courts are split on whether a burden can run in equity when there is no benefit to other land.
** Sprague v. Kimball, (1913)
2. Facts: Kimball owns a lot in a subdivision which was originally owned by the developer, and which was the last lot in the subdivision sold. All other lots except this one were subject to a covenant in writing in their conveyance that they were not to be used for anything that would conflict with residential use of the land. However, being the last lot sold, this one was retained by the developer until it was sold to Kimball, with no restrictions on it.
3. Procedural Posture: Sprague petitioned the lower court for an injunction against Kimball to prevent him from violating the terms of the "implied covenant" that went with his grant, arguing that since the other homeowners had bought their lots in reliance on it remaining a neighborhood, such a term should be implied in the grant, even though it was not explicit in writing. The lower court refused to grant the injunction, stating that it violated the statute of frauds.
4. Issue: Whether under the statute of frauds, an equitable servitude must be in writing in order to be enforced against a subsequent purchaser.
5. Holding: Yes.
6. Reasoning: The court reasoned that the homeowners, although restricted in the use of their own land, did not gain a corresponding right as against their common grantor in the remaining lot unless that burden was part of a contemporaneous enforceable contract. Since it was not in writing, it was not enforceable, even though there had been reliance on it. There was also no language in the homeowner's own deeds which indicated that the remaining lot was to be subject to the same restrictions. Thus, the court held that the reliance of the homeowners was insufficient to create an equitable interest in the remaining lot due to the statute of frauds.
** Sanborn v. McLean, (1925)
2. Facts: The McLeans own a portion of a subdivision lot. The developer granted the lot subject to the restriction that it be used for residential purposes only. The McLean's grant did not contain the covenant (it was to less than the entire lot), and some of the other grants to the lots in the neighborhood did not contain the restriction. The McLeans wish to erect a gasoline station on their lot. The Sanborns are their neighbors.
3. Procedural Posture: The Sanborns successfully got an injunction against the McLeans in the lower court because the lot was subject to a reciprocal negative easement. The McLeans appealed claiming that they did not have notice of the covenant because their title searcher did not tell them about it.
4. Issue: May a reciprocal negative easement runs with the land against a subsequent purchaser with notice.
5. Holding: Yes. If the owner of two or more related lots conveys one of the lots subject to a restriction which benefits the land retained, the servitude becomes mutual, and during the period of restraint, the owner of the lot retained can do nothing forbidden to the owner of the lot sold. [Reciprocal negative easement]
6. Reasoning: The court reasoned that a reciprocal negative easement runs with the land and is not personal to the owners. It must arise out of common ownership, it can not simply be implied by the rest of a neighborhood conforming to a mutual plan. It can not be created retroactively. The subsequent purchaser with notice is bound by the negative easement. The court stated that since the rest of the buildings were openly being used as expensive residences, he had constructive notice that there was a restrictive covenant, even if his search of his own title did not reveal one. He should have been more diligent in his search.
7. Notes: 1. The idea of a reciprocal negative easement normally arises when a developer sells a bunch of lots to persons subject to a restrictive covenant, and then decides to sell the rest of the lots without the restriction. Thus, the existence and geographic extent of a common plan for development can be established from such things as sales brochures and advertisements. This protects the reliance of the previous buyers. A single grant, the first given, may be the only grant which has the covenant written into it. However, if it is written broad enough to encompass the remaining lots, then it may be sufficient to bind each purchaser, even if it is not in their own grants.
** Snow v. Van Dam, (1935)
2. Facts: Snow is one of several residential homeowners in a subdivision. Van Dam owns a lot which is at the entrance to the subdivision, and was commonly owned by the subdivider. In 1907, the lots of land owned by the P.s were sold individually, with most containing a provision that they were to be restricted for residential use. The lot owned by Van Dam was finally granted to one Clark in 1923, subject to the same restriction. Van Dam now wants to build an ice-cream shop on the land.
3. Procedural Posture: P.s sued to enjoin Van Dam from erecting the ice cream shop, claiming that it would be in violation of the covenant in his predecessor's deed. However, Van Dam claims that under Sprague v. Kimball, he is not bound because the covenant did not expressly provide that it would run with the land to a subsequent purchaser.
4. Issue: Will a covenant to use land that is part of a residential subdivision for residential purposes only attach itself to the land if such a common scheme for the subdivision can be shown?
5. Holding: Yes. A common scheme of development of a subdivision, as evidenced by a substantial number of the grants to the lots containing substantially the same restrictions, is sufficient to show that a burden on one lot with a corresponding benefit to the remaining lots was intended to be appurtenant to the remaining lots, thus becoming enforceable against a subsequent purchaser of any lot in that subdivision.
6. Reasoning: The court reasoned that although the statute of frauds prevented a restriction on land from being enforceable against the grantor if not in writing, the existence of a scheme could still be used to show intent to make a covenant run with the land. Thus, the real question was whether the land belonging to Van Dam was intended to be part of the overall scheme of the development. Since it was at the entrance to the development, and anyone passing to other parts of the subdivision would have to pass it, it would have a substantial impact on the perception of the subdivision as a whole. So the restriction to Clark (Van Dam's predecessor in title) was part of that scheme, making the covenant run with his land. Furthermore, it was to be limited by statute to 30 years after the date of his grant.
7. Notes: 1. If A grants a lot to B with a covenant which is expressly stated to be for the benefit of C, then C may bring an action to enforce that covenant against a subsequent purchaser from B, even though they are not part of a common scheme for development. This is because the covenant was explicit in stating that the benefit was for C, and thus appurtenant to C's land; it did not have to be implied into the grant. Vogeler v. Alwyn Improvement Corp. 2. If A grants a parcel to B with a covenant to use it only for residential purposes, but A owns no other land in the area, if B then subdivides the land and sells it off to individual purchasers with no restrictions in the deeds, can one of the subsequent purchasers enforce the covenant against another who wishes to convert his lot to commercial use? [Probably not. When B sudivided the land, he became the common grantor, and there was no evidence of such a scheme because none of the deeds contained the restriction. However, A might be able to enforce the restriction if he could prove that it ran with the land.] 3. Where a common grantor includes restrictions on land which he denotes "covenants and conditions", and reserves a right of re- entry to enforce them the courts have construed the language to be covenants only, enforceable by injunction, and not conditions subsequent which would cause forfeiture.
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