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II. CONCEPTS OF PROPERTY A. The Bundle of Sticks i. Right to Exclude: Paramount Right
1. See Loretto: even small invasion, if permanent, violates the fundamental stick in the bundle
2. See Jacque v. Steenberg Homes: even a nonsensical refusal to waive this right will be vigorously protected by the courts through both legal/equitable relief. ii. Right to Alienate: Fundamental Right
1. Policy: Let property end up in hands of people who value it most
2. General prohibitions on alienation are never enforceable a. Read out of contracts, deeds, and wills as advisory language
3. Targeted Restraints on Alienation a. Do they frustrate the value of the property?
b. Is the prohibition limited to a small group of people, or to the general public?
i. The fewer people excluded, the more enforceable
4. Use Restrictions: Enforceable unless a backdoor to alienation restriction a. E.g. Mountain Brow Lodge v. Toscano: No-sale language unenforceable, but limitation to use as a fraternal lodge is valid because it could be sold to another fraternal organization.
5. Right of First Refusal: Generally valid so long as this person must pay FMV, and the property may be sold on the market after they decline. a. Especially valid if family/community concerns b. Less enforceable if no time limit on restraint iii. Right of Occupancy: Lesser Right
1. Does not necessarily carry the right to transfer, etc.
2. See Johnson v. McIntosh: Tribes retained this after Europeans took land. a. Right of Discovery: Europeans never had to possess land to exercise full rights over it and restrict Indians to occupancy rights alone. B. Complement of Tort/Contract Law C. Coase ACQUISTION OF PROPERTY A. First Possession i. Actual Possession: May encourage anti-social behavior; opportunism
1. Pierson v. Post: Fox case; no ownership of animal until actually possessed despite Post "stealing" the fox. ii. Close Possession: Does not reward ultimate success
1. Close Possession with But-For: success but for the adverse actions of a hostile party a. Distinguish true competition from antisocial behavior b. Keeble v. Hickeringill: Neighbor shot to send ducks away because he hated duck blind. i. Spite only allowed if done in honest competition ii. Would have been a nuisance case today c. See also: Nuisance
2. Other key element: Notice and Continuity of pursuit a. See: Pierson, Eads b. Notice (from Eads): Possession requires more than notice, but also due diligence in acting to achieve full dominion and control over the resource.
iii. Fleeting Possession Popov V. Hayashi (Barry Bonds Baseball)
1. Courts split baby between pre-possessory interest and post-possessory interest. iv. Effort Without Results: Never used v. Usage of Trade: May follow established area rules
1. Take all circumstances and policy goals (efficiency, social behavior, etc.) into account
2. Salvage Fees a. Ghen v. Rich: Whaling; iron holds the whale but man who called up to P'town gets a proportional fee. b. Eads v. Brazelton: Admiralty; shipwreck. Marking the ship is not enough; must be a continuous pursuits. i. New Rule: Abandoned Shipwrecks Act. Gives first possession to gov't to allow historic value to be ascertained. B. Creation i. General Principle: what you create is yours
1. Carveouts a. Fair Use b. Licensing c. Copyright ii. Quasi-Property Right
1. News (Temporary Right) a. INS v. AP: Court creates a limited right to exclude in the news, through time of distribution. i. Copyright not applicable---too long to develop. ii. Dissents: Not within powers of courts to create this additional property right iii. Right to Publicity and Persona: Exists in about half of states
1. Midler v. Ford Motor Co.: Person's distinctive identity incurs a property right to the extent that it allows them to make a living.
2. Vanna White Dissent: Judicial creation of this and other property rights stifles innovation and creativity
3. Possible synthesis: weigh social value of imitation vs. protection of original party's right to news/identity
4. Role of legislatures: Judges' willingness to create new property rights inversely proportional to faith in the political system. C. Purchase i. Nemo Dat: Seller may not transfer what he does not have
1. Johnson v. McIntosh: Predecessors of parties got same land from government and Indian tribe a. Right of occupancy is not the right to transfer b. Indians' right of occupancy does not trump government's sole right to transfer ii. Fixtures: Automatically ollow real property; distinct from personal property that requires separate contracting and consideration
1. General Rule: Buyer and seller specify what are and are not fixtures; if not specified, something that makes the house less of a "house" or makes an eyesore is a fixture a. See Strain v. Green b. Default rules encourage contracting c. Seller may classify more things as fixtures in exchange for a higher price d. Close to the line cases: Courts err on side of buyer
i. Sellers may recoup investment costs in purchase price e. Mortgage Cases: Lower assumption of fixtures; more leeway for foreclosed party to take back stuff. f. Tenant Cases: Broader right for tenants to take improvements they made even if they look like fixtures. i. No reasonable avenue for tenant to recoup investment cost ii. Tenants encouraged to contract around fixture law for additional security. iii. Four Steps
1. Negotiation and Agreement: Memorialize in writing to satisfy SOF a. Include essential terms, both parties sign
2. Executory Period: Financing, inspection, title search
3. Closing: Security interest granted
4. Post-Closing: Lawsuits D. Gift i. Test
2. Delivery: See Irons v. Smallpiece (colts promised to son but never delivered and son never assumed responsibility by paying for hay) a. May be constructive delivery: goods need not be actually delivered (more for big things)
3. Acceptance a. Presumed for positive value property b. Disclaimer presumed for negative value property ii. Inter Vivos Gift: Any gift made during the giver's lifetime iii. Gift Causa Mortis: Deathbed gift that supersedes will, but only enforceable if giver dies.
1. Test, see Foster v. Reiss a. In contemplation of death b. Death results from peril or disorder that sparked gift c. Delivery d. Competence of donor e. Intent f. Acceptance
2. Policy: Discouraged; courts incentivize will creation in accordance with SOF's writing requirement a. Foster v. Reiss: Court avoids finding gift causa mortis because wife did not hand husband letter or goods, negating delivery. E. Bequest i. Wills read to avoid creating defeasiable fees: instead find advisory language
1. FSA by default ii. Holographic Wills: Will in testator's own hand triggers closer look at intent and less obedience to language. F. Discovery i. General rule: All property claims are relative
1. Courts do not award property rights against the whole world, just against the other litigant. In personam.
2. First finder has title against all the world but the rightful owner, who has absolute title a. See Armory v. Delmirie and Clark v. Maloney: "Finder" of jewel/timber wins it back from later thief
b. Anderson v. Gouldberg: Courts do not balance which wrongful holder is less wrongful (efficiency concerns) c. Policy: Discourages further theft and keeps chain closest to true owner (at expense of allowing careless finders to recover) G. Accession i. Accession: Afford rights to owner of resource most prominently connected to property in question, to which ownership has already been established.
1. Hume theory: Let the small follow the large
2. Oil rights in North Sea: To country with nearest coastline a. Policy: clean, easily assigned, objective ii. Increase: Offspring follows the mother iii. Water Doctrines:
1. Gains and Losses Lie (Property lines change) a. Accretion: Gradual deposit by water of solid material. b. Reliction: Uncovered by recession of water c. Erosion: Wearing away of land by natural action of elements i. Riparian land: borders on any water ii. Littoral land: Ocean or major sea
2. Avulsion (Does not change property lines) a. Sudden abandonment of an old channel/creation of a new one, or washing away and depositing elsewhere of a bank
3. Iowa v. Nebraska: Oxbow; Missouri River breaks through and puts small part of IA on NE side of the river's new course. a. Court chooses avulsion over accretion; does not consider creating any new doctrine iv. Ad Coelum Adage: From the heavens to the depths
1. No longer applied in practice: replaced by nuisance and takings doctrines a. Hinman v. Pacific Air Transport: Airplanes flying over property do not trespass unless owner makes active use of air rights, and are not nuisance unless they actually interfere with use and enjoyment b. Causby v. United States: Overflights actionable (a taking) because they made the owner's chicken farm unprofitable.
2. Servitude Theory: each property owner gives up ad coelum rights in exchange for a servitude to fly over everyone else's property H. Adverse Possession i. Test
1. Actual Possession: Acting as a true owner would a. Generally requires use b. Always satisfied by improvement c. Must distinguish from a mere trespasser or squatter
2. Open and Notorious: "Communicate to the whole world, including the true owner" a. Standard of Notice: reasonable person i. True owner does not need actual notice ii. No one need know that the possession is adverse, only that the party is in possession of the property b. Marengo Cave Co v. Ross i. SOL does not begin running until a reasonable true owner would be put on notice.
3. Exclusive: Cannot act as if sharing property with owner or anyone else a. Standard: How a true owner would behave
ii. iii. iv. v. vi.
b. May be shown through improvements (fencing, etc.)
4. Adverse or Hostile: Without permission a. General Rule: State of mind irrelevant b. Modern Trend: Bad faith actors rarely win i. Some state statutes require a certain state of mind, either innocent or knowingly adverse ii. Carpenter v. Ruperto: Woman who met all elements of AP classified as a squatter because she acted in bad faith the entire time. iii. State statutes, including NY, may require a good-faith mindset c. Overstaying: Permissive use does not become adverse or hostile until a request to vacate or withdrawal of permission is made. d. Always defeated by a grant of permission, lease, or license.
5. Continuous: Without interruption in actual possession a. Need not be truly continuous if a true owner would not continuously possess the property i. Howard v. Kunto: Summer-only AP permissible for summer home, since TO's only use those properties during summer b. Tacking: Parties must be in privity i. One AP'er may transfer claim to another through gift or sale of (inaccurate) title ii. Informal "handoff" resets the clock iii. Works against true owners---transfer of true title does not reset clock
1. Incentivizes thorough inspection and title insurance
6. For Duration of SOL a. Does not begin to run until all other elements are met i. E.g. May begin running after possession established if notice, etc. not given b. Disabilities: underage, imprisonment, insanity, legal incompetence i. Tolls beginning of SOL clock until disability is removed ii. Does not toll SOL if AP clock already ticking at onset of disability
1. Policy: Protect persons who cannot file an action for ejectment at onset of AP Trend: Fewer overtly bad faith possessors are rewarded Government: Time doesn't run against the king
1. Possible exception/trend: Government has lost AP cases involving less valuable land (not national parks). Not Take And Pay: AP'er assumes title without compensating former TO
1. Property Rule Protection for both TO and then for AP Patents: Does not apply but Mahoney thinks it should Utility
1. Encourage land use
2. Encourage monitoring by true owners/punish neglect a. Encourage inspection/surveying of own land
3. Resolve clerical errors without inequitable ousting a. Color of Title: Shorter SOL for AP if a BFP can present a document that purports (per a reasonable person) to convey him the property
4. Fix major surveying errors
5. Resolve boundary disputes
a. Doctrine of Agreed Boundaries: Long-term acquiescence to boundaries will set property lines as such even if they differ from those on the official title. i. Must be in response to an uncertainty in boundaries. ii. May be oral, written, or implied iii. Reliance on an agreed boundary will estop assertion of the true boundary.
6. Limit lengthy title searches---only search to extent of AP statute vii. Personal Property
1. AP established by holding property beyond conversion and replevin SOLs a. Rules vary by state, see Songbyrd for NY (begins at time of conversion, not at time owner asks for property back) b. Discovery Rule (some states, not NY): SOL tolled until owner knows/with reasonable diligence could have known where the property is i. Statute aimed at owners who sit on their rights instead of owners who cannot find their taken property. PROPERTY TORTS AND CRIMES A. Real Property i. Trespass: Physical violation of the fundamental right to exclude
1. Punitive Damages: Awarded for trespass; in their absence, take-and-pay would exist a. Reflection of property owner's valuation of property above FMV
2. Compensatory Damages: Always awarded for actual damage done a. See Producers Lumber; court awards minor damages for trespass even in the midst of a much more complicated case. ii. Nuisance: A "thicket"
1. Private Nuisance: Affects only the plaintiff's use and enjoyment a. Locational Element i. Need not be unlawful ii. May be socially beneficial but simply in the wrong place b. Possible descriptors: reckless, negligent, abnormally dangerous
2. Public Nuisance: Affects the use and enjoyment of land for a broad segment of the general public
3. Test a. Unreasonable (in context of location) b. Substantial i. Significance of Interference ii. Magnitude of Actual Harm Done iii. Property Rights Violated iii. Ejection
1. Counter to Adverse Possession iv. Waste: governs relationship between present possessor and future interest holder
1. Limits power of holder of any interest besides the fee simple absolute to make material changes to the property. a. Old Rule: Only remainder and indefeasibly vested interest holders. Trend toward allowing all future interest holders to sue. b. Other uses i. Mistaken Improvers: Improver may not destroy property of value he discovers to be not on his land. See Producers Lumber. ii. Concurrent Tenants iii. Landlords
c. Open area: may holders of non-fully vested interests bring waste action?
2. Encourages holdout. Forces present possessor to contract with each future interest holder.
3. Types of Waste: a. Affirmative Waste: Actions of misfeasance that make the property less valuable i. Must distinguish from modifications within rights of present possessor ii. Test: Would holder of FSA behave this way?
1. Natural resources cases: Would holder of FSA deplete this quickly?
b. Permissive Waste: Inaction/nonfeasance that makes property less valuable i. E.g. failure to upkeep, pay taxes, eject AP'ers c. Ameliorative Waste: Actions without permission that enhance property value i. Traditional View: Not permitted if future interest holders object. Encourages bargaining between interest holders (future owners exchange consent for a cut of profits)
1. See Brokaw v. Fairchild ii. Modern View; Allowable under changed circumstances; more allow able when present interest dwarfs future interest in value. B. Personal Property i. Conversion (formerly Trover)
1. Liability Rule Protection: Get money damages for property taken ii. Replevin
1. Property Rule Protection: Get wrongfully held good returned
2. Taking itself need not be unlawful, only holding a. Holding leased personal property beyond agreement i. If it's real property, bring ejectment b. Lawful acquisition from a wrongful holder c. Collateral: use replevin to take it when debtor defaults.
3. SOL varies by state a. Demand Rule: Starts at time of demand b. Discovery Rule; Starts when owner knows/reasonably should have iii. Trespass to Chattels
1. Damages or injunction awarded for disruption in use without loss
2. Test a. Actual Damage i. See Intel v. Hamidi: No actual damage done to email servers, so no recovery. b. Actual or Constructive Dispossession c. Dispossession for Substantial Time d. Legally Protected Interest Harmed by Dispossession C. Criminal Law i. Larceny ii. Criminal Trespass
1. Low penalties, applies only when trespasser has refused orders to leave iii. Arson iv. Burglary OWNER SELF-HELP
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