Property Through Week 12

NOTES
Thursday, February 17, 2011 2:24 PM
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Week 2
Friday, March 25, 2011 12:54 AM
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Week Three, Jan 19, 2011

Thursday, January 20, 2011 3:00 PM
Look at finders law summary on twen page.
week3 slid...
COMMON LAW FINDERS status of the finder (who is it that is doing the finding) Status of the location of where the object is found . Hannah made the argument that Peel had never lived in the property. Why did they make the argument? Peel can never claim true ownership of the object. Peel would not lose anything by not getting the object.. But that argument goes both ways. Court makes a big deal of the issue because if he had lived in the home than that would have changed the outcome. Private versus Public, can change the rules in the Finders Law. Status of the found object. McAvoy v. Medina, clarifying the object as lost, mislaid or abandoned. Twen has a summary that will give us a somewhat hierarchical factor chart that can be used to help classify who gets the object in a finders case. For example if the object is deemed mislaid the property owner gets the object, if it is found the finder gets possession. Primary goal of the finders law is to help the True owner keep the possessions. They try to reward the finder for the honestly in bringing the object out and attempting to notify the owner. Also gives a finder incentive to be honest. McAvoy V. Medina (supreme court of Massachusetts, 1886) facts: the plaintiff was a customer of the defendants barber shop. He found a wallet and he brings it the shopkeeper. The court makes a determination clarifying the status of the object. The wallet was found on the table and was placed there by the person who lost it. Making it mislaid property. The distinction- Lost property is an unintentional parting of the property. Mislaid - the owner intentionally put the property down and forgets to pick it back up. Court is saying that they must treat the two types differently. If the property is mislaid leave it with the shop-owner where it was mislaid. IF it was lost then it goes to the finder. Lost or Mislaid is a factual question: it leads to the true owners state of mind. How do we sort out the differenceLook at the facts and make a reasonable judgment. Difference between being on the floor and sitting on a table. Factors can play into the arguments on both sides. Look at the object. It can be a mess to sort out. Essay question- when it is here make sure you consider all of the possibilities. Make sure you answer the question completely. Look at all sides. Consider the complexity when you are dealing with this type of an issue. The thing to do with mislaid property if giving it to the shop owner, the place where it was found. Was it a good idea or bad idea? - Court says that the shop owner has a duty to return to return to/ or find the correct owner Not a great line of reasoning Hypo - Customer lost wallet, and the finder walks off with it. The customer came back and demands the shop
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Hypo - Customer lost wallet, and the finder walks off with it. The customer came back and demands the shop owner compensate because he has a duty. That does not make a lot of sense its more of a duty once the shop owner becomes aware of it. Court looks at this as the better rule to get the property back to the true owner. To evaluate rule we have to look at it in terms of the policy. Courts ruling is not just for this case but to set a precedent for future properties. It can go either way. Mislaid you go back to the place you mislaid it if you lose something you retrace your steps. Not as clear or convinces as the court lays it out to be. This rule takes the incentive away to come forward with the property, because the person would have to be honest, nothing economical. I think some of it is the idea o communal areas , whoever placed it in the shop is more likely to come back to the shop. *Think about the opinions* * Challenge it* *Do not just buy it and move on* Practice coming up with arguments. Note 2. Pg 106- Abandoned property- take something out and giving up the right too. (trashing it) True owner has intentionally relinquished the right to the property. In this case it becomes first in time is first is right. Note 4 - Treasure trove- U.S. treats it like lost mislaid or abandoned. The editor of rolling stone example- they were employees the land owner got the coins.. These help with the arguments on how to classify the property. Dont get into shipwreck law, and maritime law.. (not being held responsible for that) For maritime there is a finders fee:
ADVERSE POSSESSION:
It takes property away from the owners and basically gives property to the people who are trying to steal it from them. How do we give it to the thief? How does that make any sense? Concept is increasing productivity. Florida Title tax law- if someone doesnt pay taxes they are going to loose the property. Government can take it away, in some states to gain adverse possession you have to pay the taxes for a number of years. One rationale: if a person is not using their property and another person is being production we favor the productivity.. We dont own it but we will give it to you anyway. Abandonment requires an intent to relinquish, it does not bring on adverse possession. You cannot abandon real property you have to take specific steps to relinquish title. The other theory is that it created a quiet title. Acting like you own it, etc. Historically- the legal issues could be unraveled through this theory. * expectation of Holmes- owner of property is so detached from the property that they dont use it or think about it, than the person who has taken over the property and does expect to continue using it let them keep doing it that way. (a rationale not unlike the earnings theory) The most solid approach is the sleeper theory. Goes into the statute of limitations. (pg. 114 end of first partial paragraph) Sometimes it is said that if a man neglects to enforce his rights, he cannot complain if, after a while, the law follows by example." (bring claim within time limit) Your right to kick someone off your land is just like any other right, you either use it or lose it. If you snooze your lose. (most defensible rationale.) We are talking about a forced/ involuntary transfer of title. When an adverse possession claim is fulfilled than the person can no longer kick out the adverse possessor. Basically at that point they are the de facto owner.. They now will hold title to the property. Title is a legal concept- as a matter of law you are deemed to be the owner as a matter of public record the original owner still holds title. As an adverse possessor action you must get a quiet title action.. This will make you the owner in the fact of public record, making it so you can use the property as a true owner.
The Elements of an adverse possession claim. - Barring a claim of ejectment.. - A combination of common law and civil law It tends to be looked at in the common law theory. Acronym OCEAN
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Acronym OCEAN Open and notorious occupancy-- occupancy must be public in the sense of not being surreptitious. Live there like the true owner would. (Not sneaking around at night, its as a whole not a parcel. It has to be public) Are you doing things on the property that you would be doing if you were the true owner of the property. The area of where the land is , makes a difference. Why do we have this point 1. You have to put the owner on notice. Its only fair to say that you should have brought an ejectment claim if the owner knows that they have the right to eject Should you have known.. Not did you know.. Should you have known. The fact that you dont look does not get you off the hook. If someone never goes to land too bad, Could they have figured it out? This proves the sleeper theory. (Earnings theory- another person is being productive). Continuous Occupancy-- For the statutory period: Why do we have this element? - if the adverse possessor leaves they are not using the land. Continuous requirement- because if the true owner is reasonably checking and the adverse possessor is not there at the time then the true owner is put on notice. Exclusive of the rights of others just like an owner- act like you own it. Basically let some not all. (earnings theory more solid on this claim than the sleeper theory) You dont make investments to let others reap where you have sown. As a practical matter who do we reward title? Actual Entry is required in order to start the SOL on a cause of action for ejectment and to give notice by your presence. This is the first element.. You cannot fulfill anything else unless you actually enter. No permission- This is traditionally stated as: Hostile or Adverse and under a claim of right. But be aware there are three views on this element. - You must be on the property without the owners permission. You cannot say the owner let me stay here but now I want title. The jurisdictions vary. 1. No permission is the majority rule. -under earning theory we hope for improvement, you dont have necessarily have to improve on the property. Most adverse possession cases are boundary disputes.. Small slices of land. Relation Back- Once the statue of limitations runs on a landowner's ejectment claim, it not only bars the former owner's claim but also vests title in the adverse possessor that relates back to the date the claim arose. - Thus, title by AP is retroactive. The law treats the new owner as if she had held title since she entered the land adversely. - basically new owner is not responsible to pay old owner for things before they acquired adverse possession. Van Valkenburg v. Lutz ( New york ct. of appeals, 1952) The Valkenburgs are trying to eject the Lutz's from the land they had occupied and used for several years. Lutz's had cut across the top of lot 19 to get to lots 14 and 15. They turned it into a farm. They build a one rom house they build for Charlie on lot 19. In 1928 Mr. Lutz lost his job and became a fulltime lot 19 farmer. That was his livelihood. In 1937 Van Valkenburg by a lot across the street. Van Valkenburg buy lot 19 out from under Lutz, after Lutz threatened kids who were in his garden. They wanted to kick the Lutz's out. In the original suit Lutz agreed that he would move his stuff but he still had the right to use the path. - He argued that he had cleared the path, made the path and used the path for many years and it should his. This is called a prescriptive right/ prescriptive easement. TO gain the prescriptive right/ easement you prove you've been using the property. You do not get title but you do get the right to use the land . By adverse possession you get title, by prescriptive use you do not get title. - 1950 brought case to get everything off land. This is the second case. Court has to decide should be eject Lutz from lot 19 or should we let him stay. In the trial court and the court of appeals they granted adverse possession. - The court now disagrees. Court argues that he did not improve the enter area New york law says that you have to substantially improve it. Statutory law is where the court starts. Case does not discuss ocean elements
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have to substantially improve it. Statutory law is where the court starts. Case does not discuss ocean elements but we look at it in both ways. - Statute- (pg. 118) sections 38 -40 they deal with the issues found in the case. (pg. 119) 38 talks about having a written instrument and 39 and 40 do "not" have the written instrument. - 38 title founded upon a written instrument, 39 is not founded upon a written instrument. (this is called color of title, then you have three ways to prove.) Lutz had to use 40 making it more difficult to prove. Color of Title- the "color of title" doctrine refers to a claim founded on a written instrument that is for some reason defective. (Think about a document you could color) v. Claim of title which is abstract not physical. A physical deed, will, decree, something that reports title to property but has some legal defect. If you are making a claim based on a document that claims to give you title the proof is a little easier. This case shows a good example of how color of title can benefit the adverse possessor.
Hypo- If you go farm on the 20 acres of the statutory period you are going to get that 20 acres. IF you go out on the deed that gives you the 100 acres, and farm the front 20 acres, after statutory period, you get the full 100 because you get what is described in the document. -- Today this is mostly border disputes but it can still happen. Usually you cannot claim adverse possession against a government. (dont worry about this yet) What did the court do with the analysis. The substantial enclosure requirement shows the court that you are claiming to won the land. When it comes to awarding title to land the courts are picky about what land. They want to know what is being claimed. Proof. Identify the land- (goes to earnings theory , and gives notice). The court was interpret the legislatures intent when it says usual cultivation and improvement. This court says that this proof fails to show that the cultivation fails to use the whole of the premises. Court is reading concept very strictly.. We are not going to guess we can only approximate for you. (Poor opinion) They mention that the area has to be defined by clear and positive proof. They do not think he met the cultivation because he didnt do the whole thing.. (not in statute) - Statute requires that occupation be under a claim of title. 1. The small shed or shack was about 14 feet from lutzes property he knew at the time it was not on his land. The Garage was a few inches over but they thought it was on their property they did not have the state of mind the adversity was not there. What else could they have shown the court? They could not have done anything else to prove to the court this is a flaw in the courts reasoning . Most agree that they are wrong. estoppel: if you say or do something and someone relies on it they rely on it to your detriment. You cant take it back. Judicial estoppel- you cant come back after making a statement to the court you cannot come back in and change you mind. - How did the dissent look at he argument about the easement? 1. though he said it wasn't his it was already after he would have gained title through adverse possession. Verbal conveyances' are not recognized. They are also pointing out that they misinterpreted the law.. Problems pg. 130 1. O owns and possesses a 100 acre far. A enters the back 40 acres under an invalid deed from Z ( who had no interest) for the whole 100 acres. A works the back 40 for the statutory period. Can A evict O? We have to assume that O is in possession of the front part of the 100 acres.. The general rule of constructive possession does not trump the possession of actual possession. Basically no, A cannot eject o from the from 60. He would hold the back 40 they would basically be splitting the parcel. 2. X owns lot 1 and y owns lot 2 next door. Neither is in possession. Z conveys both lots 1 and 2 to A under an invalid deed. A enters lot 1 and hold for the statutory period. A sues to evict X and Y. Who wins? Claim for ejectment means someone must enter you land. Because A never entered the 2nd lot then A cannot claim adverse possession. (Change Hats) Under adverse possession period, you must meet ocean elements, under color of title may extend the land you get unless the limitations are in affect. We protect the color of title (Good FAITH) The document is treated like a fence. 3. What if X had conveyed lots 1 and 2 to A and A had entered only lot 1 ? X is conveying the legitimate title to lot 1. But he cannot convey the title to lot 2 because he is not the legit. Owner. 4. What if x had conveyed lots 1 and 2 to A and A had entered lot 2? A gets lot 1 because he would legitimately owns it and A would become the adverse possessor and gain title,
A gets lot 1 because he would legitimately owns it and A would become the adverse possessor and gain title, because he entered the lot and was not ejected by y. Mannillo v. Gorski What constitutes adversity is a mistake, innocent improvement. Did not know that it was on the neighbors property. State of law in New Jersey was the Maine Doctrine prevailed. Not enough to be there without the owners permission, you have to want to want to take it. It is a very aggressive standard. Reward people who want to steal something the court moves away from maine and decides yes if you are there without the owners permission , even in good faith than yes it was adverse. Was it notorious enough , They say when you have a minor boundary encroachment, we do not consider that notorious enough to support claim. How do you know its on your property, since the only way to recognize is with a survey, that is unreasonable. That should not be burdened with a survey. It is only if the owner actually knows. *GOOD RULE* Most courts have not agreed with it yet.
Week Four, Jan 27th 2011

Thursday, January 27, 2011 3:02 PM
Continuation of Adverse possession Case: Howard V. Kunto - Parcels on hood canal in washington-- slot lots water front property. Bad news the surveyor messed up the lots. Kunto's lot is lot D, they believed the deed described the deed they have . Found that it was for the deed to the lot next to them. They thought they bought lot c Fine for a long time, and then when people started resurveying the land and it caused a problem. Howard figured it out, went to the moors gave them there deed and took the deed they had for lot c. He then tried to kick off the kuntos. They have the defense of adverse possession. IT came down to two issues 1. Because it was used a vacation property could it be considered continuous.. They were only there a few months a year the homes were vacation home.. Was the summer occupancy enough? In terms of use it must be the use appropriate to the property.. The question we have to ask is how continuous would a real owner be in the use of this property? Court says that it is reasonably continuous under the circumstances.. USE IT LIKE THE OWNER WOULD. 2. The kunto's were only there for about a year the second question is tacking.. The statute of limitation must run out in Washington.. They argued tacking from the previous owner Tacking is the concept of adding so that they are large enough time wise. The court will allow taking if there is privity.
Privity of contract: is the relationship between parties to a contract. Generally, only the parties can sue one another on the contract. Privity of Estate: is the relationship between parties with the concurrent or successive rights in the same property. If you are in this type of privity you can tack on the time together. Privity of Possession: is the relationship between parties in a voluntary transfer of possession of property. Court questions should be allow tacking if there is no privity of estate because technically the prior owner did not have the estate what is the concern here. They do not want to reward the last squatter in a series of trespasses. Kuntos are not the last squatters they in good faith paid value and took title to the property they were planning to use. The to basic theories of adverse possession Under the earnings theory- you would not think that the last squatter could have earned the possession. Why not award when they could have been ejected?? The rational is there We do not have the problem of squatters here.. We do not have to apply a rule to solve a problem that does not exist. We are going to include the new term.. Privity of possession.. Basically a voluntary transfer.. You can tack your claim on to theirs. Together you have gained title by Adverse possession.. The problem with adverse possession is the document of title you can go without it. There are dangers ALWAYS GET IT IN WRITING. The questions after the case are not extremely important they get into most of the privity situations.. Disability Statute: we are talking about ejectment.. The law can say you cannot bring a claim.. We will not let you bring a claim. If you are too young, deemed mentally incompetent, or in prison. The disability statute just tells us that you can not always begin the statute due to outside circumstances.
ONE EXAMPLE : Typical statute An action to recover the title to or possession of real property shall be brought within twenty -one years after the claim accrued. But if a person entitled to bring such action, at the time the claim accrues is disabled then after the expiration of the twenty-one years, she may bring such action within ten years after such disability is removed. What qualifies as a disability When a landowner is 1. Within the age of minority, 2. Of unsound mind or 3. Imprisoned. The key to using the statute is you must focus on the point of time when claim accrues.. And the owner of the property. If it is not the owner that is disabled then you cant used the statute or if the owner becomes disabled after the claim accrues then you cant use the statute. A enters 5/1/80/84 +21-2001/05 o-------------------+------------------------+----------> Whatever time o has his heir has as well. - O is the owner in 1980 and A enters adversely 5/1/80 or 84 - The age of majority is 18 - 21 year statute of limitations
O is instance in 1980. o dies insane and intestate in 2003 b) O's heir H is six year old in 2003 The fact the H is disabled does not matter. ONLY THE DISABILITY OF THE OWNER. Disability ends at death, plus 10 years statute then runs 2013/2017 get the longer of the regular statute or the disability extension. O has no disability in 1980. O dies intestate in 1998. O's heir. H. is two years old at that time? O is not disabled then you go by the original statute, no disability. H's disability doesn't count because he was not the true owner. Entitled to sue to eject A. in 1980 when the trespass began. O didnt have a disability in 1980 so the statute runs in 2001. 3. O is 5 old in 1980. In 1990 O becomes mentally ill, and o dies intestate in 2005. o's heir H, is under no disability. Does the adverse possessor here acquire title in 2001, 2003 or some later date? What is the normal statue result? - Always go to the original claim.. And the original disability. Always to options 1. The end of the original statute 2. The end of the disability + 10 years. Must infer only what you can from the language. Acquisition by gift: GIFTS OF PERSONAL PROPERTY Area where possession is a big deal. WE know have gotten a gift usually after someone has transferred possession to you. Inter Vivos Gifts (Between the Living) 1. Manifest intent to immediately transfer an interest in property 2. Delivery, and 3. Acceptance
3. Acceptance Gifts Causa Mortis All of the above pluse 4. Donor's anticipation of imminent death. Acceptance is usually the easiest to prove. WE normally focus on the first two pieces. -best way to show intent is giving it we also call that delivery. We want evidence of intent.. Need some clear indication that the donor mean to part with title. The less clear the evidence of intent the more we will say show the deliver. You can deliver something without intending to pass an interest in property. Example ( valet.. But you have no intent to transfer title) Problem 1 ) The intent is clear..
week 4.1 post slides We have to have some intent to not get it back put it in someone else's control. -handing it over constitutes delivery. The point is that you can theoretically have delivery before intent. So yes, it can be a gift its the intent is there. if so- can o change her mind the next day? An Inter Vivos gift is irrevocable. The mother cannot take the ring back because the ring is not hers anymore it is the daughters.
B. The mother transferred over title and possession, the ring belongs to A. When A hands the ring back to O, there is no intent she was just transferring possession no title. When o died , she was a bailee for A. She only had possession for a limited time and purpose. C. There is no gift, because there was no intent to make an immediate transfer.. There was an intent to have it pass in the future. This is just a promise. DO NOT WORRY TO MUCH ABOUT THE DETAILS 2. The check.. Is a maybe or maybe not.. You would have to use article 3 of the uniform commercial code a check is just a piece of paper and is actually worthless. Gifts Causa Mortis - Because of death. Courts are allowing people to make gifts with the donor anticipates imminent death. IF the donor changes mind they can take the gift back. IF the donor fails to die the gift is automatically revoked This is looked as a conditional gift. CASE : Newman V. BOST Circumstances of writing a will were not always available. Newman points out that there are the formalities of a written will to prevent fraud. Claims tend to be fraudulent so they usually say show us in writings. Prove It. Gift Causa Mortis is a will substitute. The supreme court north Carolina 1898 the court says they do not like the gifts Causa mortis.
FactsNewman - is the plaintiff she was a hired servant who alleges that the decedent gave her all of the furniture in the house. The big dollar idea was the 3000 dollar insurance policy is part of the alleged gift van pelt is on his death bed. He says call in miss Julie, takes all of his keys points all over the house and says I want you to have everything in the house. Was there a manifest intent to transfer title ?
Was there a manifest intent to transfer title ? Counsel for Newman because he gave her the key that opened the bureau, than he intended to give her the bureau and the contents. Counsel for Bost- he did not physically give her the insurance policy. What was The true intent of Mr. Pelt.. The law requires that physical delivery is required.. If the item is small enough. Courts are saying we do allow constructive delivery if you give access or control to something that is to big to hand over. Symbolic third option- the court would not allow this type.. The case law did not allow for symbolic delivery, if manual or constructive delivery is not possible.. Bost's Argument: what was the lack of intent the insurance company they talked about the function of the bureau that it was the furniture and it was not his intent to give her the contents.. When he handed the key to unlock the bureau store cloths not a typical place to keep important papers. The house is real property and you cannot transfer real property by giving the keys.. You must use a deed. Not the way a modern court would handle it but it was a bad job of delivery. Other furniture in the house that there was no key.. She does not receive excluding the items in her living area. The piano falls into a somewhat different category everyone referred to it as her piano.. The piano was never replaced the promise to get a new piano was just a promise Intent on the piano not so bad The delivery bad.. The piano would not be in her dominion.. REMEMBER IN NEWMAN THEORY WHAT CAN BE MANUALLY DELIVERED MUST BE MANUALLY DELIVERED. Case: Gruen V. Gruen Ct. Of Appeals of New York, 1986 When the son was 21 the father sent a note telling him that the was going give him the painting but he was going to hold on to it till after he was dead. (PROF LIKES THE CASE) This is an organized opinion.. 2 issues: Son says he was given the paintings and he was to get it when the father dies. The step mother raises to issues. She basically saying that since the gift was effective upon death, he should have used a will. The second argument says that a donor says that cannot make an inter vivos gift of chattel and retain possession. The court goes through the analysis of donative intent? WHAT IS THE GIFT? IF we look at the gift as the painting that changes it but.. The gift is title minus possession.. He conveyed title subject to his right to keep possession.. Similar to a lease. We have to think as a property as an abstract legal concept.. And there are many sticks in the bundle. The court phrases it as a remainder interest in the painting. When someone hold a life estate in property (real) and someone else has the right to get the property when they day that person has a remainder interest. The son received the interest as soon as he was given the gift. Future interests is about laying the sticks out from the bundle. Dad kept the life estate but he did give him the remainder interest.
What about delivery? Court points out that it makes no sense for him to hand the painting over.. This is not tangible property it is intangible property. WE are dealing with an abstract legal concept.. A remainder interest cannot be manually delivered so the only way to do delivery was symbolically. If the other letters had not written then it might make a stronger argument to it having to a be a manual delivery. Seen courts allow thing that could be manually delivered and couldnt' be practically delivered then it might happen there is a problem if the symbolic delivery of title was not acceptable. _______________________________________________________________________________________________ ______ ESTATES AND FUTURE INTERESTS Edwards tells us that there is a lot of history surrounding the rules.. You do not need to know the history.. Do not have to get into the feudal system
have to get into the feudal system Feudal system was basically a way of controlling the land, providing for the people, and the king would grant use to barons, who would grant to knights and they would grant to villeins it would all climb the latter to support for the kings. it was a pyramid structure. Very similar to landlords Initially the conveyances for strictly temporary .. But after time it would be passed to heir.. The custom of inheritance developed into a right. The land holders eventually gained more rights and power Fee simple: to A and his heirs. Inheritance issues Two ways to inherit -By will- the testator leaves property to her devisees or Beneficiaries. These can be anybody - friends and relations, charitable or political organizations. Pets etc.
- By intestate succession Ie by not having a will, in which case the governing state statute will determine who gets the deceased's property. Those who take by intestate succession are called Heirs there are slight variations but very similar those people who take you things can be called your heirs.
Until you die you do not have any heirs. A living person has no heirs.. Issue- your lineal descendants.. Heirs blood relatives and spouse
Week 5 notes
Week 6 Notes
Schedule Review session for next week.. Wed 12-1
Week 6 - 2
Audio recording started: 3:04 PM Thursday, February 10, 2011
State the title I, Virginia Belson, hereinafter known as the party of the first part, do convey the premises located at 10 knoll road to my daughter Katherine, herinafter known as the party of the second part, on condition that she never maries lance Harrison. Katheryn has the possessory fee simple subject to condition subsequent. Virginia has Right of entry in Fee simple absolute. Maude conveys to Harold: however if charlie ever recants his belief in predestination, then to charlie.: Eight years later, charlie dies without recanting. Harold- present possessory estate in fee simple subject to executory limitation. Charlie : before death has a executory interest in fee simple absolute
After Charlie's death Harold holds possessory estate in fee simple absolute. ________________________________________________________________________________
Maude conveys to Harold for life, then to Charlie for life, then to Charlie's children." the next day, charlie dies, leaving one child, mary. Harold holds a possessory life estate, Charlie has a vest remainder in a life estate Charlies children have a contingent remainder in fee simple (has to vest in one member of the class and the fact that other members is what makes it open. ) DO NOT DO WHAT THE BOOKS DOES>>>> THE CLASS IS OPEN BUT NOT PUTTING IT INTO THE ACTUAL EXAMPLE. After charlie dies.. Harold holds a possessory interest in a life estate Mary has a vested estate in fee simple absolute.
WEEK 7 Notes
WEEK 8
BLACK = POWERPOINT GREEN- ADDED IN NOTES RAP Defeasibility Dilemmas O to Cooley as long as it uses the property for school purposes, then to A and her heirs. What if As interest violates the RAP? We void it, giving O an implied POR in FSA.
O to Cooley, but if it ceases to use the property for school purposes, to A and her heirs. What if As interest violates the RAP? We void it, giving Cooley a FSA.
Working around the RAP One way is to convey the fee to the person you want to hold the FI A in the examples above then have that person, as grantor, convey the defeasible fee to Cooley. How could you effectuate Os intent without violating the RAP? Another way that works in most jurisdictions is to convey the defeasible fee to Cooley, then, as grantor, assign the POR or ROE to A. --- thinking like a lawyer. WRAP Up Options Note that some jurisdictions apply the RAP to options to purchase real estate. In this context, the life in being part of the rule may be dropped (corporations arent lives in being); and if the option may be exercised more than 21 years after its effective date, it is void under the RAP. The Charitable Exemption If both the present and future interests are held by charities, the future interest is exempt from the RAP. O to the Easter Seals, but if the land is ever leased to another grantee, then to A. Void O to the Easter Seals, but if the land is ever leased to another grantee, then to Planned Parenthood. Valid
Revisions Continued Cy pres: French for as near as possible. This involves the reformation of invalid interests so as to carry out the transferors intent within the perpetuities period. It may be applied in conjunction with the Wait and See doctrine. Revisions to the RAP
Wait and See Doctrine: This approach renders an interest valid if it will certainly vest (prospectively), or actually does vest, during the perpetuities period (retrospectively), regardless of what might have happened. A majority of the states have adopted one of two broad classes of wait and see rules: wait and see for the common law perpetuities period, and wait and see for 90 years: Wait and See for the common law period: Most of the states that have adopted W&S also authorize reformation of interests that would otherwise be invalid. Wait and See for 90 years: Adopted in various forms in 26 states in statutory form as The Uniform Statutory Rule Against Perpetuities (USRAP). A statutory fix which is adopted by many jurisdictions. Revisions Continued Explanation of the Wait and See for 90 years rule: If, at the time of its creation, a contingent interest will necessarily vest, if at all, within 90 years, it is valid. BUT, If the contingent interest is not certain to vest or fail within such a period, we still wait and see for 90 years. If it vests, it is valid; and If it does not vest, the contingent interest might be reformed by a court at the end of the 90 years so as to most closely approximate the plan of the donor and vest within 90 years. USRAP According to the Uniform Statutory Rule Against Perpetuities, the interest is valid if
According to the Uniform Statutory Rule Against Perpetuities, the interest is valid if at least one of the following is true:

It complies with the common law RAP; It is certain to either fully vest or fail to do so within 90 years; It actually vests and closes or fails within 90 years (a wait and see approach).
Trusts - Not tested on but good to know. It is usually advisable to create FIs in trust. This means the grantor conveys legal title to a Trustee for the benefit of the grantees she wants to give property to. The beneficiaries thus hold equitable title. The trustee manages and distributes the trust property, in a fiduciary capacity, according to the trust instrument. This method of creating equitable interests gives considerably greater flexibility in administering the property to fulfill the grantors wishes than the creation of legal interests. RAP Savings Clauses When drafting a trust creating future interests, it is prudent to add a perpetuities savings clause. A savings clause terminates the trust, and distributes the assets, at the expiration of specified measuring lives plus 21 years, if the trust has not earlier terminated. Waste Life tenants may use property as a reasonable owner would. They may not commit waste. This means they typically have a duty to repair the property, pay property taxes, and maintain insurance. Traditionally they could not cause any substantial change to the property. Nowadays, change might be ok if it doesnt diminish the propertys value. LIFE TENANTS HAVE A DUTY TO THE ESTATE .. Do not deplete the property. Very fine points are in the rule but we do not get into them . The remainder man are protected. Be aware of the general concepts.
Concurrent Interests / Cotenancies Holding the land together where more than one person have a present possessory fee simple absolute. Any conveyance to a class where the class has more than one member a co tenancy is created. Focusing on three types 1.
Cotenancy -- Context We can slice and dice property interests in time and space.

Consecutive interests Possessory Estates and FIs Concurrent interests -- Cotenancies
Cotenancy -- Context Present estates may be held by more than one person. Deed: I convey my residence at 555 Hollywood Blvd. to Mr. and Ms. Smith. The same is true of future interests. Will: I leave my Hawaii vacation home to my grandchildren. 3 Types Tenants in common -- TICs - The default estate - now
Joint tenants -- JTs - The default at common law. Tenancy by the entirety -- TBEs
Tenants in Common May be conveyed by Deed or Will - If we do not have the aspects of the joint tenancy or the tenanacy by the entirety than we have this tenants in common. Do not get to caught up in sorting this out. There are oxymorons.. How do you wrap your head around this.. But do not get to caught up. Just figure out what they allow you to do or not do. What are the rights involved.
The tenants in common - one unity that is the unity of possession. Each separate tenant in common has the right to property as a whole.. And it does raise problems. There are no survivorship rights
Separate, undivided interest
No survivorship rights Joint Tenants In contrast to tenants in common, joint tenants have a right of survivorship (ROS). -- if one of them dies the other still holds interest in the tenancy and that other owner will own in fee simple absolute.. The law doesnt view b if b dies as b's share as going to A. The law looks at the right of survivorship.. As A is still entitled to the use of the property but the share that belonged to b are not seen as going to A. There is no need for probate it simplifies the process of transfer of property.
This means that if a joint tenant dies, that interest disappears, and the other joint tenant interest(s) continue without regard to the interest of the deceased JT. ROS Examples TICs (No ROS): O devises Blackacre to A and B (as TICs). If A dies intestate, her share of Blackacre will go to her heirs, not to B.
JTs & TBEs: O devises to A & B as JTs or TBEs. If A dies intestate, B owns Blackacre
outright.
The four unities required to create and maintain a Joint Tenancy

If at any time you do not have one of these four you do not have a joint tenancy and your estate falls into an estate in common. If you create a joint tenancy and later events sever one of the unities then that defaults back to the tenancy in common.
Time
Each joint tenant must take an interest in the property at the same time.
Title
The interest must be created by the same document. All joint tenants must have equal interests. Each joint tenant has the right to possess the whole property.
Interest
Possession
Joint Tenants (continued) If any of the 4 unities is ever destroyed, the joint tenancy is severed and is magically replaced by a tenancy If any of the 4 unities are not present, a JT cannot be created. in common. Joint Tenancy Miscellany Joint tenancies can operate somewhat like a will, in that they control who receives property after a death; but they avoid probate (and the associated costs).
Some states have abolished the JT.

Some states have abandoned the 4 unities for a JT.
Many states have abandoned the requirement that joint tenants must hold equal shares.
Tenants by the Entireties - Fifth unity of marriage is required typically for this tenancy to exist. When they talk about the individual rights and private rights this is by the whole and not buy the share. Cotenants neither has an individual share .. Must be between husband and wife*

Plus, requires the same 4 unities as the joint tenancy
Husband and wife share as one person, so neither can unilaterally destroy the tenancy by grant to a 3rd party.
*Hawaii allows a tenancy by the entirety between same sex partners who cannot legally marry.
Three cycles-- listed below. Creation, operation, and destruction
Creation-- TICs TICs may be created by conveying to two or more people without specifying the type of estate. If the type of concurrent interest isnt specified, a TIC is generally presumed. TICs can be created by devise, intestacy, inter vivos conveyance, or severance of a JT or TBE. Creation -- JTs JTs can only be created by specific language. Eg, to A and B as joint tenants with rights of survivorship and not as tenants in common; or to A and B as joint tenants with rights of survivorship.
Note, however, that in a few states, the latter language may (bizarrely) be construed to create a TIC life estate with a CR in fee in the survivor.
JTs can be created by devise, inter vivos conveyance, or joint AP. Not by inheritance.
- Text has a side note for michigan(full rights of survivorship) Not received in a regular JT Creation -- TBEs TBEs can only be created in husband and wife (except in Hawaii).
About half the states recognize this type of cotenancy. If there is a conveyance to husband and wife, most TBE states presume the conveyance creates a TBE.
Operation Shared Expenses Generally, responsibilities are proportionate to rights. Ie, each of two COTs owes .
Every COT ultimately has the responsibility to preserve the estate. Carrying Costs: Taxes Mortgage payments Some states exempt (at least in part) COTs not in possession when a COT is in possession. Repairs and Improvements are a separate category.
Operation Shared Use Generally, parties may agree how to use property. Absent an agreement, the law will decide.

TIC each owns an undivided share of whole JT each owns the undivided whole TBE each owns the whole and not a share
Bottom Line: Each COT has the right to use all of the property.
PROBLEMS THAT CAN ARISE BELOW Operation Right to Use/Let Others Use
Any COT can make full use of the property, as long as they dont interfere with another COTs right to make full use of the property. A COT in possession generally neednt pay rent, absent ouster. However, COTs in possession are liable for carrying costs and repairs up to the value of their share of the rent. COTs can rent out their interest in the property. What if just one COT rents out the property?
Most COTs can use their interest in the property as collateral. What if just one COT does so?
Operation Right to Convey/Encumber

A TIC is free to convey or encumber her interest. A JT who conveys her interest thereby converts that interest, and only that interest , into a TIC interest. A JT can generally unilaterally encumber her interest, though states differ on the effect of doing so.
Operation Right to Convey/Encumber

A TBE cannot unilaterally convey her interest.

There are basically two possible effects of a TBEs attempted unilateral encumbrance: The majority rule is that creditors cannot attach the separate interest of one spouse. The minority rules are that the creditor can attach one spouses ROS or attach the debtor spouses interest subject to the non-debtors ROS.
Operation Right of Devise/Descent

TICs can leave their interests to devisees or heirs.
JTs have no rights to leave to devisees or heirs. The survivor has the ROS as to the whole. TBEs have no separate rights to leave to devisees or heirs. The survivor has the ROS as to the whole.
Destruction TICs and JTs
TICs or JTs can agree on partition.
Any TIC or JT can seek partition in court. Either way, partition can be by sale or in kind.
Death of a JT destroys that JTs interest.
Murder of a JT severs that JT relationship. JTs who convey title to their interests destroy the JT as to that interest only .
JT Severance Prob 1, p. 278 O to A, B, + C as joint tenants. This is a statement of fact if we are told this just take it do not fight it. 1) A conveys her interest to D. 2) Then B dies intestate, leaving H as his heir. -Intial state of title is simple ABC joint in fee simple absolute 1. BC Retain Joint tenancy D - Tenancy in common with B and C (if D had acquired his conveyance at the same time to get the joint tenancy) 2. C and D have a Tenancy in Common and H has nothing because the interest held by B dies in B. C gets 2/3 because his rights of survivorship kicks in.
Destruction -- TBEs TBEs can agree on partition.
Partition can be by sale or in kind.
No one TBE can seek partition in court.

Divorce, which destroys the unity of marriage, destroys the TBE (usually becomes TIC)
Problem 2, Page 278 O devises Blackacre to A and B as joint tenants for their joint lives, remainder to the survivor.
What interests are created? A and B have a joint life estate, with a contingent remainder in a fee simple absolute in whom ever survives. How does this differ from a JT? - One tenant cannot sever rights of survivorship to someone by conveying to someone else. Niether one can take away the other ones property.
Case 1
Riddle v. Harmon
Brief Fact Summary: Joint tenant conveyed property to herself as tenant in common without telling joint tenant. Synopsis of Rule of Law: A joint tenant can unilaterally sever the joint tenancy and create a tenancy in common by conveying the property to herself as a tenant in common.
Facts: Mr. and Mrs. Riddle purchased property taking the title as joint tenants. Several months before Mrs. Riddles death, she went to her attorney to prepare a grant deed in which Mrs. Riddle conveyed the property to herself as a tenant in common. Next, she disposed of her 1/2 undivided interest in the property through her will. Her husband initiated suit to quiet title to the property. The trial court refused to sanction her plan and ruled that the property remained in joint tenancy, thus vesting sole ownership with her husband. The executrix of Mrs. Riddles will appealed. Issue: Can a joint tenant unilaterally sever the joint tenancy with a conveyance of the property to herself as a tenant in common?
Held. Yes, reversed. An indisputable right of each joint tenant is the power to convey his or her separate estate by way of gift or otherwise without the knowledge or consent of the other and thereby terminate the joint tenancy. The rule that an intermediary be used is archaic. We find that one joint tenant may unilaterally sever the joint tenancy without use of an intermediary device. Discussion. The court discussed the old rule of requiring an intermediary straw man to sever a joint tenancy as archaic and cumbersome. The court ruled that a universal right of each joint tenant is the power to destroy the right of survivorship by conveyance of his or her joint tenancy interest to another person. If that other person is the joint tenant himself, so be it. Mrs. Riddle basically wanted to dispose of her interest by will. She consulted with her attorney.. DID SHE ACTUALLY DO WHAT SHE INTENDED TO DO? Tc said you need a straw man conveyance - one who will get a conveyance and they will convey the property back to the owner.
Unilateral creation of JT: Problem here is that O already holds the interest.. O to O & A as JTs
Creation of JT using strawman:

O to B; B to O to A as JTs
Strawman Destruction of JT Unilateral severance of JT:

Os JT interest O (TIC interest)
Severance of JT using strawman: Os JT interest B; B O (TIC interest)
Here they say for a conveyance to occur you need a grantor and a grantee.. You need two to have a transaction if you want to unilaterally destruct a conveyance convey it to b and b will convey it back to you.. And that would destroy the joint tenancy and create a tenant and common. No longer in common law however so now they say cut out the middle man.. Law in california may not have reached majority status yet.
Case 2
Harms v. Sprague
Brief Fact Summary. Surviving joint tenant brought action to determine title and ownership of survivorship property against mortgage holder and executor of decedents estate.
Synopsis of Rule of Law. A mortgage on the joint tenancy property was not a lien after the death of the joint tenant and did not sever the four unities of joint tenancy, thus the surviving tenant became the sole owner of the property.
Facts. Two brothers, John and William owned a property in joint tenancy. John used the property to secure a promissory note for a close friends purchase of a separate piece of land. John died, leaving William unaware of the existence of the mortgage. William brought suit against the mortgage note holders and the executor of Johns estate. The trial court held that the mortgage severed the joint tenancy and survived as a lien against the undivided one half interest that passed to the estate of John. The appellate court reversed holding that the joint tenancy was not severed and that William owned the property without the mortgage note surviving. The defendant mortgage note holders appealed. Issue. Does a mortgage note: (1) sever the joint tenancy when less than all joint tenants mortgage their interest in the property? (2) Does this mortgage survive the death of the mortgagor (John) as a lien on the property? Held. No, the property remains a joint tenancy property because the four unities are not severed and the mortgage does not survive the death of the mortgagor and become a lien on the property. Affirmed. The four unities (time, title, possession and interest) if severed, destroy a joint tenancy. A mortgage does not transfer title, because the unity of title is preserved, title is not transferred, the joint tenancy is not destroyed by the mortgage. The property right of a joint tenant is extinguished upon death, which activates the right of survivorship and allows the surviving joint tenant to become the sole owner of the property. Because the mortgage was not recorded as a lien on the property, it ceased to exist because when the mortgaging joint tenant died, his property interest which the mortgage attached ceased to exist. Discussion. The Illinois Supreme Court in this case adopted the lien theory of mortgages. This theory rests on the premise that a mortgage, unrecorded is similar to a judgment lien or another type of lien, which merely establishes an interest but not a transfer of the title. Therefore, if the mortgage is treated as a lien, it does not sever any of the four unities, which need to be present to hold property in joint tenancy. - There are several problems.. Does the creation of a mortgage sever the joint tenancy.. Either way did john's mortgage survive when john died?
Some jurisdictions still adhere to the title state of mortgages because if you examine the nature of that title. It is really just a lean and the mortgagor lives in it and acts like they own it. And the Mortgagee can do nothing with it unless there is a problem and they do not receive payment.. Than it is not a conveyance of title. (the modern view) Now the court has decided no severance John and William remains joint tenants How do we treat it once john dies do we say that the mortgage survives and owns the whole property with the attached interest.. Or do we say that williams owns the property and there is no attached mortgage. Basically the simmons are SOL.. They lost their interest. The lean theory is the majority rule.
HOW the court got to this.. If it had been a tenancy in common what would charles get.. Charles would get the same the share subject to the mortgage. He would get what that person had.. With the string attached. IF your mortgage dies with a person what kind of security does that leave. William did not get his share of property from succeeding john william received his right from the original conveyance and johns interest is gone.. That is how that works under the courts analysis. This is not the majority rule it seems that the majority will allow the mortgage created by a joint tenant to survive.. This case was a rarity on the second issue.
Discussion about rather a lean severs a joint tenancy: generally no.. There are several types of leans.. Voluntary and involuntary. They analyzed under the involuntary lean..
Case Three
Delfino v. Vealencis Brief Fact Summary. Cotenants of property filed complaint to force partition of land held as tenants in common. Synopsis of Rule of Law. The court must analyze the best interests of all parties to determine whether to partition land in kind or partition via sale. Facts. The plaintiffs, Angelo and Willima Delfino and the defendant Helen Vealencis owned as tenants in common 20.5 acres of land. On a portion of the land, was the defendants house as well as a business she operated. The plaintiffs owned an undivided 99/144 interest and the defendant owned a 45/144 interest in the land. The plaintiffs brought suit to partition the property by sale. The defendant moved for an in kind partition. The trial court ruled for a partition via an auction sale and the defendant appealed.
Issue. Does a partition by sale promote the best interests of the parties when there is a statutory preference for partitions in kind?
Held. There is an error and the judgment is set aside and the case is remanded for further proceedings. To determine whether a partition in kind or partition by sale is in the best interests of the parties, the court must look to the interests of all the parties, not just the economic gain to one tenant. The trial court failed to account for the fact that one of the tenants has been in exclusive possession of the property, resides on the property and derives her livelihood from use of the property. These factors must be given due weight. The court must look to whether the property can be practically and physically divided.
and physically divided. Discussion. The court remanded the case for further proceedings consistent with the opinion. In the opinion the court weighed economic and practical considerations to determine whether the property should be partitioned or sold. Where does the court start? The burden of proof is important in this instance. First recognize that there is a presumption in favor of partition in kind they must prove that 1 easy to separate and 2. and it is in the best interest of the parties to split. Looking at the parcel it is practical to split it up. Supreme court does not agree in this case that there was a problem. Go back to the two part test. A partition by sale should be ordered only when .. Read it and be able to prove that both elements are met. Why is there more discussion. The supreme court does not spell it out they might cover the waterfront.. Possible explanation because it states that it is inequitable they seem to be moving to the second part of the test. Not the best example of a court walking through the analysis.. They also go back and do something else that is unusual.. The TC has listed several reasons about why it is not going to work for the vealencis to keep her garbage business. The court goes back into the facts they do not typically do this.. They say that the factual findings are not factual findings at all. The tc was just guessing and that is not what should be used as the basis for the case. The court was right in this case that the lower court called a lot of the opinions as factual they also did not take the best interest of both parties. She has been living there she has an established business and all of these things count. Her interests have to be looked at.. There is not way to say for sure that they are going to be hurt.
Spiller V. Mackereth
Brief Fact Summary. Cotenants of property held as tenants in common filed complaint seeking sale for division among tenants in common. Synopsis of Rule of Law. Ouster necessitating the payment of rent to non-occupying tenants requires that the occupying tenant take action that prevents the use and enjoyment of the property by the non-occupying cotenants. Facts. In 1973, Spiller purchased an undivided one half interest in a lot. Spillers cotenants were Mackereth and others. At the time Spiller purchased his interest, the lot was being rented to a company. Three months later, Spiller offered to buy out the other tenants, who refused and Spiller then filed an action to force the sale for division. A few months after his suit, the company vacated the lot and Spiller began to use the building on the lot as a warehouse. Mackereth brought a counterclaim to collect rent from Spiller for use of the warehouse. The trial court found that Spiller had ousted Mackereth and awarded rent. In a separate proceeding, the trial court ordered sale of the lot. Spiller appealed. Issue. Was the plaintiffs conduct sufficient to constitute ouster and thus necessitate the payment of rent to cotenants? Held. No, judgment affirmed in part, reversed in part, and remanded. Absent an agreement to pay rent or an ouster of a cotenant, a cotenant in possession is not liable to his cotenants for the value of his use and occupation of the property. Absent an agreement, for a party to prove ouster and obligate the cotenant occupying the property to pay rent, the nonoccupying tenants must demonstrate that the non-occupying cotenants were refused use and enjoyment of the land after a demand on the occupying cotenant. In the instant case, we find that a mere letter requesting rent or to vacate is an insufficient showing of ouster because each cotenant has a right to occupy the entire property and requesting rent is not asserting their right to use and enjoy the land. Discussion. The court affirmed the award of attorneys fees, noting that allowance of attorneys fees for division is statutory. The discussion of ouster focused on whether the occupying
The discussion of ouster focused on whether the occupying cotenant had actively taken measures to prevent the nonoccupying cotenants from asserting their right to use and enjoy the property.
COURT SAYS that he never tried to enter and the letter was an attempt to make one leave is not the same as a refusal to let him in. technically this holding is correct.
( GO THROUGH BEGINNING OF RECORDING
WEEK 9
RED TYPE IS NOTES .. BLACK IS FROM SLIDES.. GREEN IS FROM BRIEFS REMAINDER OF WEEK 8 Case 4
Swartzbaugh v. Sampson Brief Fact Summary. Joint tenant leased property held in joint tenancy without the consent of other joint tenant who initiated suit to cancel the lease.
Synopsis of Rule of Law. A joint tenant can lease or license anything less or equal to his rights in the joint tenancy property.
Facts. The Plaintiff, Mr. Swartzbaugh and plaintiff, Mrs. Swartzbaugh, are married and owned as joint tenants, 60 acres of land. In 1933, defendant Sampson negotiated with the Swartzbaughs to lease a portion of the land for a boxing pavilion. Mrs. Swartzbaugh objected to the lease and Sampson knew she would not agree. Mr. Swartzbaugh and Sampson signed a lease and Sampson proceeded to take exclusive possession of the leased property by erecting and operating a boxing pavilion. Mrs. Swartzbaugh initiated this action to cancel the lease. The trial court granted a nonsuit to the defendant and the plaintiff appealed. Issue. Can one joint tenant who has not joined in the leases executed by her cotenant and another maintain an action to cancel the leases where the lessee is in exclusive possession of the leased property? Held. No, affirmed. An estate in joint tenancy can be severed by destroying one or more of the necessary unities (time, title, possession and interest) by operation of law, death, omissions, voluntary or involuntary acts of the joint tenants. Ordinarily, one joint tenant out of possession cannot recover exclusive possession of joint property from his cotenant, but can recover the right to be let into joint possession. Ordinarily one joint tenant cannot maintain an action against his cotenant for rent for occupancy of the property or for profits derived from his own labor. He may compel the tenant in possession to account for rents collected from third parties. The act of one joint tenant without express or implied authority from or the consent of his cotenant cannot bind or prejudicially affect the rights of the latter. However, a joint tenant may be lease or license confer upon another the right to occupy and use the property of the cotenancy as fully as the lessor/licensor might have done.
lessor/licensor might have done.

She sues what does she say the court should do? She wanted to cancel the lease all together. What should the judge do with a claim like that. Does she like one joint tenant owner of that parcel cancel the other joint tenant have the right to cancel out the other joint tenants parcel. She is entitled to rent..but can not sever. She still has the right to occupy the entire premise. She could bring a partition action..(a partition in kind or a partition of sale. This creates some problem with the rules and what the court decides to do
Swartzbaugh v. Sampson Calif. Ct. of Appeals (1936) Remedies Issues Partition- How would the court divide these property rights? Ouster- If Sampson ousted Mrs. Swartzbaugh he would owe her one half of the market rent for the property, but the court probably would have to account for the value his improvements added to the property. Sampson would still have to pay Mr. S something, but what? Depends on parties agreement about what Sampson was leasing (which JTs rights) and on unjust enrichment arguments. Accounting- Mrs. Swartzbaugh can sue Mr. Swartzbaugh for the actual rent he is receiving from Sampson. Can she sue for accounting and for ouster? If she has to choose one or the other, which is preferable? Can she get both half the reasonable rent and half the actual rent? If she gets herself ousted can she get the 1/2 of the actual rent and half of the reasonable rent. Who pays what.. If she had to choose one what should be picked. Obviously you would pick whatever was the larger amount.
Marital Interests
Phocus tenancy by the entirety issue. There is the document departure that the husband takes over property.. And the husband holds the rights to control the property and rights to dispose of the property. Each state has passed a Married Women's Property rights. This is what the Sawada V. Endo.. And the use of the statue. Case 5 Sawada v. Endo Brief Fact Summary. The Plaintiffs, Mr. & Mrs. Sawada (Plaintiffs), sue to recover on a money judgment against the Defendants, members of the Endo family (Defendants), who granted property to their sons.
(Defendants), who granted property to their sons. Synopsis of Rule of Law. Tenancy by the entirety, for reasons of public policy, is not subject to attachment or levy by their respective individual creditors. Facts. Mrs. Sawada was injured after being hit by a car driven by Mr. Endo, one of the Defendants. Mr. Endo had no liability insurance. By deed dated prior to the accident, but recorded after the accident, the Defendants conveyed real property to their sons for no consideration. The Plaintiff sued to set aside the conveyance of the Defendants property. The trial court refused to set aside the conveyance and the Plaintiff appealed. Issue. Whether the interest of one spouse in real property, held in tenancy by the entirety, can be reached by his or her individual creditors. Held. Affirmed. The tenancy by the entirety is not subject to the claims of his or her creditors. The conveyance was not fraudulent and cannot be set aside. The interest of a husband or a wife in an estate by the entireties is not subject to the claims of his or her individual creditors during the joint lives of the spouses. Creditors are not entitled to special consideration, if the debt arose after the creation of the tenancy by the entireties, the creditor presumably had notice of the characteristics of the estate The public policy interest furthered is one of family solidarity and allowing for convenient administration of the decedents estate without worrying about decedents debts. Dissent. The dissent focused on an interpretation of the Married Womens Act meant to equalize the positions of husband and wife and therefore, each may subject their rights to levy or creditors. Discussion. The court discussed the four separate approaches to tenancy by the entirety by the 19 states that at the time still recognized the estate and their respective approaches after the passing Married Womens Property Acts. The discussion focused on what approach Hawaii would take. -- Basically Mr. Endo hit the Sawada's and he lost a in court against them and he is not paying the judgment. They are attempting to seize and sell his home. What is the fraudulent transfer claim? It is the transfer of the property to his sons so that they cannot come after his homes. The Sawada to transfer the property back so that the debtors can get back. Is this a valid claim? Should they get the property? Basically the courts have to sort out the tenancy by the entirety if he was unilaterally able to alienate his interest then the debtors come .. But if it takes two members to alienate then the debtors could not take it. If he could then this was a fraudulent transfer. . The court is saying that they creditors could not get the property to begin with.
the property to begin with. They go through an analyze how different jurisdictions view tenancy by entirety. Listed on pg. 314 of text. Four ways to equal out the rights to property in marriage. (SEE BELOW HIGHLIGHTED YELLOW) The court mentions that these cases are the family home and they do not want the children and family to be punished because of the spouses actions. (protecting the homestead and the innocent) what is the critique- its weak on grounds where it may not be the family home. Involuntary creditors have harder time .. Voluntary creditors can forsee that they need to get two signatures on the papers.
Summary of TBE-MWPA Issues: Majority Rule: H & W have equal rights to possession during marriage, and neither can convey her or his interest. Therefore, creditors cannot reach individual interests.
Primary Minority Rule: W now has same rts H had at CL. Therefore, either can convey their present possessory rights and their own ROS, but neither can affect the others ROS.
Concurrent Estates Quiz (SKIPPED OVER IN CLASS) 1. O --> A& B as JTs A mtgs her interest. What is the state of title? 2. A dies. What is the state of title? 3. O --> A& B as JTs
A leases her interest to C.
What is the state of title? 4. A dies.

What is the state of title?
1.
If O conveys to A and B as TBEs, but A and B arent married, what is the state of title? 6. If H & W hold as JTs and they divorce, what is the state of title?
7. What if one JT files an action for partition, what is state of title?
REALESTATE TRANSACTIONS
- REALESTATE TRANSACTIONS
- What we have to establish is the marketing and the arrangements between
buyer and seller. Start of with the land sale contract.. The entail contract the land sale/purchase agreement begins the contractual agreement. It is the beginning of the relationship the starting point not the typical sign it and done contract. - That period is the executory period. Buying a home is the biggest investment anyone makes. There is a lot to be invested before buying real estate. Each local board of realtors will have a standard board contract.. But they can vary somewhat in jurisdictions. - The Land Sale Contract (elements of a contract)
- Identify the parties - Identify the property
- State the price/deposit - Address contingencies/conditions: Financing etc.

- Set dates: inspection, financing, closing, possession : you are going to want a professional to inspect the home etc. Executory period.. Where these dates will be set for when theses things will happen. - Attorney review (paragraph 12 gives the buyers right to make reasonable modifications based on attorney review.
- Survey- similar to the inspection.. Make sure you are getting the land you think you are getting.
- Title - Take title to the property and what kind of title.. You want the fee simple absolute.. You need to make sure that you can trust the documentation. Have it verified first they own it and can convey it too you and that you are getting fee simple without other strings attached. (we will learn how to search the public record and find the fee) (this will be a typical condition)
- Risk of loss: A period were both parties are deemed to have a right equitable interest What happens when the property is distroyed who bares the risk of loss. Common law has an answer you might not have that answer
- Time is of the essence clause: When we set up dates they must be stuck too.. If dates are missed then there will be a breach.
- Prorations : Account for things that have been paid for or need to be paid. Tax's etc. - The Executory Period: Look at the timeline in slides from land sale agreement to the closing.
- The Brokers Role Typically, the Broker works for the Seller.
Brokers duties to the Seller include:
- Good faith & fair dealing - ListingMLS - Showing - Administrative assistance - Helping negotiate/maximize price - Communicating helpful information - Limited/unlimited closing duties - Disclose defects to Buyers in some states - All of these duties are listed in an agreement between the broker and the seller. Most states require that to be in writing most brokers require it to be in writing. - Listings - Open Anyone can sell, and only the actual seller has a shot at the commission. Under this agreement the listing agent is able to sell it and get a commission but if they don't sell it they do not get a commission if another agent sells it. It is a pretty uncommon at his point. - Exclusive agency Listing Broker is exclusive agent. If another agent sells, he has to share commission with Listing Broker. But, owner can sell and not pay. (if the owner sells it then they don't get their commission. ) - Exclusive Right to Sell (most common by far) If anyone buys within the specified timeframe, the Listing Agent gets paid. It is the contract that is the right to commission if anyone sells the home. Gives the most protection to the agent. Why do you think this is the most popular? Because this gives the most incentive to the broker to sell the house.. So it is better for the buyer. Under the exclusive right to sell the person who signs this is called the listing agent. The potential buyers can go to anyone my using MLS They have agreed to split the commission with any buyer's agent who brings them a deal. - The Two Broker Dilemma : The listing broker and the buyer's broker. The problem is the buyer has gone out and finds this selling broker thinking that the broker works for him, when the selling broker is a subagent of the seller. The selling broker does not work for the buyer. - Buyers Brokers
- Any broker can be this still entitled to commission just working for the seller. Buyers Brokers duties include:
- Good faith and fair dealing
- Helping negotiate/minimize price

- Administrative--help with inspection/survey
- Administrative--Closing?
- Communication
- Disclose material defects? - The Two-Principal Dilemma Dual Agents: Duties can be in conflict. (is an opportunity but should not be done) One agent may work for both Buyer and Seller. That agent owes the Buyer and Seller the same duties of good faith, loyalty, etc. This presents an obvious conflict of interest. Many states permit this on the condition that there is full disclosure up front to both parties. - Commission Issues The traditional rule: Brokers earn commission by producing ready, willing, and able buyer. Didnt matter whether seller or buyer backed out of the deal. Minority rule: No commission if buyer backs out, but commission generally ok if seller improperly backs out. Listing Agreement can, and generally does, change the majority rule.
Nowadays, by custom (and by law in some jurisdictions) :
The Brokers commission typically is payable only at closing. - Again the theory is that the broker has agreed to do certain things for the seller and they are earning there money by doing those things. As long as they do what they are in a duty to do they have earned there money. What if the buy tries and fails.. That gets into more litigation then we are going to cover. In some jurisdictions the brokers commissions will come out of the sales price that is becoming the trend. Sometimes it can come out of a deposit.. Be aware of the traditional majority rule .. Brokers do not want to enforce the rule because
the traditional majority rule .. Brokers do not want to enforce the rule because they want to have a good appearance in the community. Licari V. Blackwelder Procedural History: Property sellers (plaintiffs) sue broker (defendant) for withholding information and not acting in their best interests in the sale of their home. Plaintiffs win in trial court. Broker appeals decision. Facts: Property sellers with little knowledge of property values employ a broker to help them sell their property Broker contracts with another broker to help them sell the property Other broker buys the property themselves then resells it in six days, making a substantial profit First broker got 24-hr exclusive r-t-s listing at $125K.
Second broker (subagent) offered $115K, which Plaintiffs accepted.
Six days later, buying brokers flipped to previously identified buyer for $160K. Issue: Whether a real estate broker has a duty to act in the best interests of the property seller and whether or not it matters whether the broker is the primary broker or an agent of the primary broker. Holding: Yes, any broker employed by a seller has a duty to act in the best interests of the party they have contracted with. Reasoning: The defendants withheld information about other potential buyers and intentionally misrepresented the identities of the serious prospective buyers (themselves) in order to get the property at a lower price. The contract imposed upon the defendants a duty to find a buyer at the best price possible for the plaintiffs based on their expert knowledge. A real estate agent is a fiduciary and is required to act in good faith in the sellers best interest and disclose any material facts. The policy is true for agents as well as subagents. Subagents have the same fiduciary duty to the seller as the original broker. In this case, the broker failed to disclose an offer and misrepresented the saleability of the property and acted with the interests of more than one party without disclosing that. RULES: As you know from tort law this is kind of a duty/breach. What is the duty that is owed here it is called a fidiary duty. - Rule: a real estate broker is a fiduciary. They owe their clients duties of good faith, fair dealing , loyalty, and discloser. - A broker's subagent owns the same duties to the principal. If brokers breach any of these duties they are liable for any resulting loss to the
If brokers breach any of these duties they are liable for any resulting loss to the principal they lose their commission, and they may be subject to the licensing action. Did they have any argument where they should have been allowed to do this? That the plaintiffs knew about the other offer and they had already told the realtor not to deal with that person.. Be familiar with the notes after the case. DO not worry about the unauthorized practice of Law.
The Statute of Frauds To enforce the conveyance of an interest in land, you generally need a writing signed by the adverse party that indicates an intent to convey and adequately describes the property and the price.
Some states require all material terms to be in writing. - Has different parts.. For instance this.. If you say someone agreed to convey property to you and all they did was say then you do not have a statute of frauds You must have it in writing. It is evidence that that person agreed to get rid of there property.. - Breaking Down the SoF To enforce the conveyance of an interest in land For now, we are focusing on land sale contracts, although the SoF applies more broadly. Without a writing, such contracts arent enforceable, except for leases of less than one or three years, depending on the jurisdiction. These can be verbal. You need a writing - A proper contract or deed will obviously do. - So will a less formal document if it meets all the requirements.
- Even separate documents that collectively meet the requirements will do if the court believes they should be read together.
- Emails are iffy.

- Under appropriate circumstances you can have different writings put together that satisfies the agreement. (specific agreements) The note in the text regarding the electronic documents acts.. Some courts allow them to satisfy but you can't count on it. That is an iffy venture.
Signed by the adverse party

Signed by the adverse party If the owner of the interest hasnt signed a writing, the buyer is out of luck. The courts usually wont enforce the alleged transaction. Generally, any sign or symbol adequately identifying the owner or signifying her assent is sufficient. Some states allow electronic signatures, others dont.
A land sale contract can only be enforced against one who has signed it.
- Some states will require both parties. Depends on the jurisdiction. Any Mark on paper.. That identifies there assent. Adequately describes the property A legal description is preferred. This means a metes and bounds or plat reference or survey description. A street address may or may not suffice. Some more generic descriptions (eg, my property in Cook County) may also work, but dont count on it. - Courts are all over the board about how they take the statute of frauds. The general principle is that you need to know what land you are talking about. The surveyor language is the preferable method.. It depends on the courts and what they except the farther you move away from a legal description the harder it will be. Adequately describes the price If a price was agreed to, it must be included. If no price was agreed to, some courts may infer a reasonable price. If the Seller is financing the sale, those terms generally must be spelled out in detail. - Parties will often time refer to the appraiser. If the seller is doing the financing some jurisdictions will require that to be spelled out. Interest rates etc. that can be an important expect of the price. - Exceptions to the SoF
The Part Performance Doctrine
This is one substitute for the writing requirement of the SoF. If: 1) the buyer has paid some or all of the price, 2) the buyer has taken possession, and 3) the buyer has made improvements, most jurisdictions
possession, and 3) the buyer has made improvements, most jurisdictions will enforce a contract proven by clear and convincing evidence even if it is not in writing. Some jurisdictions may accept only two, or even one, of these acts as sufficient evidence that a contract was made.
Courts commonly require that the acts listed above be performed in reference to the alleged contract, but this requirement is waived when the adverse party admits the existence of the contract. Some courts will only apply the doctrine if necessary to prevent injustice to the plaintiff. Generally, the exception applies only in equity ie, the court will award specific performance but not damages. If one party refuses to go through with the deal they say we will not just limit the party to the legal damages we will grant an equitable remedy because that is the only way to make that person whole. The law typically does not do this.. Land is unique, because the benefit of your bargain is only able to be reached in the equitable remedy. It may only be available if the person seeking to assert the remedy is seeking the equitable outcome. Estoppel If a plaintiff takes any material, detrimental action in reasonable reliance on the defendants oral promise to sell, and it would be inequitable not to enforce the sale, a court will enforce it even absent a writing. Note that as to both exceptions, courts tend to be very imprecise in delineating the exception they are employing. They often mix and match the terms and the elements.
Hickey v. Green
Brief Fact Summary. The Plaintiffs, Mr. and Mrs. Hickey (Plaintiffs), bring an action for enforcement of an oral contract for the sale of real property. Synopsis of Rule of Law. The Statute of Frauds (SOF) requires a contract for the sale of real property to be in writing. An exception to the requirement is when a party to the oral contract partially performed in reliance on the oral contract. Part performance allows the specific enforcement of an oral contract when particular acts, such as paying part of the purchase price or making improvements on the property, have been performed by one of the parties to the agreement.
Facts. The Plaintiffs entered an oral contract to purchase the Defendant, Greens (Defendant) lot, for 15,000 dollars. The Plaintiffs gave the Defendant a deposit of 500 dollars that was accepted. On the back of the deposit check, the Plaintiffs had written a clause which stipulated the check was a deposit for the lot subject to a condition that a zoning variance was approved by the town. A few days after writing this check, the Plaintiffs learned they would not need a zoning variance to build on the lot. The payee line of the check was left blank, as the Plaintiffs were not certain whether the Defendant or her brother was to receive the check with the understanding that the Defendant would fill in the appropriate name on the check. In reliance on their arrangements, the Plaintiffs sold their house. A few days later, the Defendant told the Plaintiffs that she no longer intended to sell her property to them and she was selling her property to another buyer for 16,000 dollars. The Plai ntiffs told the Defendant that they had already sold their house and offered 16,000, but the offer was refused. The Plaintiffs filed suit for specific performance and the trial court granted relief. The Defendant appealed the decision. Issue. Whether a partys part performance in reliance on an oral contract to purchase real property makes the contract enforceable? Held. Remanded. The reliance of the Plaintiffs on their oral contract with the Defendant created an enforceable contract for the sale of real property. The case is remanded back to the trial court to amend the judgment to require conveyance of the property only on payment to her of the agreed price of 15,000 dollars.
Discussion. The SOF requires an action for the sale of real property to be in writing and signed by the purchaser. If an action for the sale of real property is not in writing and signed by the purchaser the sale if void. An exception to this rule is part performance by one of the parties to the contract. If one of the parties to the contract has substantially performed in reliance on the contract, such to make it unjust to void the contract because of lack of writing, the contract will be upheld.
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Specific performance to convey the property. .. Why should she be forced and why shouldnt she? How does this work. Specific Performance is only available under the Statute of Frauds
- Mrs Hicky never signed it had she put her signature on it.. There is a description of the property but there is no price of the land on the check . Can the hicky's tell their buyer to go away? No because they deposited a check of 500 which means they signed it .. And it has all of the elements.
They're argument is that they are at a detrimate.. Due to reasonable reliance. Don't think they know anything about the statue and it is the lawyers throwing it in afterward. Look at the comments in foot note three and footnote 4..
WHY IT IS IMPORTANT IS THAT the actions in a part performance doctrine have to be revocable.. When the defendant admits that the contract existed there does not have to be the other parts. The last bit is that it appears that the Hicky's are bound to convey.. Two years had passed since that agreement.. If they had to go through with it then it is unjuste to not let them have the other home.
Week 10
Thursday, March 17, 2011 3:02 PM
Hickey v. Green
Appeals Court of Massachusetts, 1982
Hickey v. Green
Facts: Mrs. Green orally agreed to sell her lot to the Hickeys. She accepted but didnt endorse a deposit check. The Hickeys then sold their home, intending to build on the Green lot. Despite knowing this, Mrs. Green backed out of the deal. The Hickeys seek specific performance.
Issue: Can the Hickeys enforce an oral agreement to convey the Green lot? Hickey v. Green Rule (Estoppel): When one party reasonably relies on the others oral promise to convey and has changed his position such that injustice can only be avoided by enforcing the promise, a court will enforce it despite the lack of a writing. (Note that the court discusses the part performance doctrines elements as part of its estoppel analysis.) Identify each element of the estoppel. Hickey v. Green Reason: Obviously, to avoid injustice, as the estoppel doctrine states. But also because the evidentiary function of the SoF is less critical, whether because the parties acts fulfill it to some extent or, as here, the adverse party admits the contracts existence. Marketable Title Every land sale contract should state the quality of title the Seller is to provide the Buyer.
If the contract is silent on the issue, the law implies an obligation to convey marketable title.
Marketable title is a fluid term, but is generally described as title free from encumbrances and any serious risk of litigation. If the Seller cannot deliver marketable title, the Buyer can rescind.
Title Defects
Lots of problems can be said to render title unmarketable ie, to make it one a reasonable buyer would not be willing to accept.
a reasonable buyer would not be willing to accept. There are three basic categories: 1) Encumbrances, such as liens (including mortgages) and leases 2) Chain of title problems 3)Possible adverse possession/encroachments Encumbrances
A right in some third party to use or affect the use of the property in some substantial way will encumber the title.
An easement allows others to physically use some aspect of the property.

A covenant, contract, marital right, option or preemptive right may restrict the propertys use or alienability.
A lien allows a third party to use the property as security for a debt, and, if there is a default, to foreclose on the property. Chain of Title Problems The chain of title is the historical conveyancing of ownership from an original or root title holder. It establishes the present owners rights by demonstrating a series of valid conveyances that result in the present owner holding legal title. If there are breaks in the chain, such as a defective deed (eg, a forged or ineffective deed, or one created in a defective judicial proceeding), title may be unmarketable. Some courts equate marketable title with record title. Encumbrances continued Certain factors might negate an encumbrance. If what would otherwise be an encumbrance that renders title unmarketable is: 1) known to the Buyer; 2) readily apparent; or 3) beneficial to the property;
a court may hold that it does not render title unmarketable.
Encumbrances continued
Ordinances do not constitute encumbrances.
They are generally considered to affect use, not title. The violation of an ordinance, however, may constitute an encumbrance. This is almost always true of zoning ordinances but might not be true of
This is almost always true of zoning ordinances but might not be true of building or housing codes. Adverse Possession & Marketable Title If the Seller claims to have title by AP, and does not have record title, cases vary on whether title is marketable. If the Seller can convincingly demonstrate that her title is good or almost certainly will not be challenged, some courts may hold title to be marketable. Otherwise, not.
If a third party has obtained title to some or all of the Sellers land by AP, title is generally unmarketable.
Specific Performance Specific performance is an equitable remedy that is especially suited to realty transactions because realty is presumed to be unique. If there is an enforceable contract for the sale of realty, a court will usually force the parties to complete the transaction at one partys request.
This means the Seller must convey title and the Buyer must pay the sale price.
Equitable Conversion
If a contract is specifically enforceable, equity deems it to have been

performed for certain purposes.
That is, the Seller is deemed to have a claim to the Buyers money, and the Buyer is deemed to have received the Sellers title. The Seller now owns personal property (the right to be paid), and the Buyer is the equitable owner of the realty.
Equitable Conversion continued Three areas where equitable conversion can be important:
1) Death of a party
2) Risk of loss 3) Creditors claims Lohmeyer v. Bower Supreme Court of Kansas, 1951 Lohmeyer v. Bower Facts: Dr. L agreed to buy the Bowers house and said hed take it subject to all restrictions and easements of record. (Not smart.) He also agreed to
all restrictions and easements of record. (Not smart.) He also agreed to accept insurable title. (Ditto.) When he found out the house violated a restrictive covenant and a zoning ordinance, he sought to rescind. Issue: Was the contract enforceable or was title unmarketable and uninsurable, such that Dr. L could rescind? Lohmeyer v. Bower Rule: The mere existence of the private restriction (covenant) is an encumbrance; but, it is one that he waived. The violation of that covenant, however, is a separate problem that renders title unmarketable, and he didnt waive that.
The mere existence of the zoning ordinance is not an encumbrance.
The violation of that ordinance, however, is a separate problem that renders title unmarketable. Lohmeyer v. Bower
Reason: Both violations expose the Buyer to a material risk of litigation. A reasonable Buyer wants to buy title, not a lawsuit. Doubtful title ie, title not free from reasonable doubt about its being free and clear of all material encumbrances -- is unmarketable.
Duty to Disclose
The Common Law rule was caveat emptor, which means let the buyer beware. Seller had no duty to disclose defects but could not make inaccurate statements.
Silence was generally safe. Duty to Disclose

The predominant modern trend is to hold that the Seller must disclose known latent defects to the Buyer.
Latent means hidden or non-obvious. They are those defects a Buyer could not discover by reasonable inspection of the property. They are contrasted to patent defects those the Buyer is deemed to have notice of because they could be discovered by reasonable inspection. Duty to Disclose Note that many states now have statutes requiring Sellers to disclose vast quantities of information about their property to Buyers.
quantities of information about their property to Buyers. Most of these statutes apply only to smaller residential transactions. Stambovsky v. Ackley
New York Supreme Court, Appellate Division, 1991
Facts- Stambovsky bought a haunted house from Ackley. Stambovsky wanted to rescind the contract of sale. Law- This case establishes the duty to disclose latent defects in New York. This rule is becoming more and more popular. Basically, a seller has a duty to disclose defects he/she has knowledge of that the buyer could not discover through a reasonable inspection. Where a condition which has been created by the seller
materially impairs the value of the contract

and is peculiarly within the knowledge of the seller or unlikely to be discovered by a prudent purchaser exercising due care with respect to the subject transaction,
nondisclosure constitutes a basis for rescission as a matter of equity.

Johnson v. Davis Supreme Court of Florida, 1985
Facts- Davis entered K to buy house from Johnson.

Johnson misrepresented the fact that the roof leaked.
Davis sued to rescind the K.

Rules- Seller cannot misrepresent or fraudulently conceal defects from the buyer.
Further, the Seller must disclose material latent defects.

As Is Clauses They will generally be upheld in LSCs if:
The defects are reasonably discoverable;

The Seller does not know of a latent, material defect; and
There is no fraud. The Merger Doctrine

Under the traditional doctrine, agreements in the land sale contract merged into the deed and disappeared. After closing, the Buyer could only sue on
into the deed and disappeared. After closing, the Buyer could only sue on promises contained in the deed, not any contained in the LSC. Under the modern trend, courts tend to hold that agreements in the LSC that are not related to title do not merge into the deed -- ie, they survive closing. This a rule of construction, not law.
The parties should specifically provide in the LSC which agreements will survive closing.
Implied Warranty of Quality Builders impliedly warrant the quality of their construction work for a reasonable time.
Subsequent purchasers can sue the builder under this warranty.
Note, however, that this warranty is limited to those in the business of selling new homes, like builders and developers. Lempke v. Dagenais
Supreme Court of New Hampshire, 1988
Facts- Original owner of house constructed by Dagenais sold it to Lempke.

The roof trusses in the garage were bowing out.
Lempke sued Dagenais for breach of the implied warranty of workmanlike quality. Issues- Can a subsequent purchaser: (1) sue a builder on an implied warranty and (2) recover economic damages? Rules- Privity is not required to maintain an action under the implied warranty of workmanlike quality.
The defect must be latent.
The warranty claim must be asserted within a reasonable time.

It is usually limited to residential construction.
Rationale- Court wants to protect homeowners from poor construction. Also, court wants to prevent fraud by not allowing a contractor to sell to an intermediary and shield himself from suits by subsequent purchasers. Economic Loss is that loss resulting from the failure of the product to perform to the level expected by the buyer [which] is commonly measured by the cost of repairing or replacing the product. P. 499. Tort law generally protects against and compensates for personal injury, not loss from defective goods.
loss from defective goods. Contract remedies generally protect against and compensate for defects in goods or workmanship, but they depend on privity of contract.
Lempke held economic loss is recoverable under IWWQ.
Remedies
If Seller refuses to perform, Buyer who is ready willing and able to perform* at closing can: (1) seek legal damages;
(2) seek specific performance; or

(3) rescind and get restitution (Buyers), or retain the deposit (Sellers).
*Why this qualification (in italics)?

If Buyer cannot perform, why penalize Seller for not being able to perform? No harm, no foul.
Monetary Damages One Remedy the aggrieved party can elect as a remedy at law is money damages. Consequential (special) damages are those reasonably foreseeable (i) expenses incurred in reliance on the agreement or (ii) as profits lost because the contract was not honored. Lost profits are particularly difficult to prove convincingly. Expectation damages give the benefit of the bargain, ie, the difference between the contract price and FMV on closing date. Note the variations on page 510. For example, if the Seller backs out because the market value goes above the agreed sale price, B can get the difference. This is the American Rule majority rule. (What if the Seller backs out for a good reason?) Damage Limitations Limits on Buyers damages: English Rule: Many states (almost half) say if the Sellers failure to close is in good faith, the Buyer only gets back her deposit and expenses (title search, etc) -- no benefit of the bargain damages. Also, if the Buyer gets expectation damages, she might not get compensated for her expenses (which she would have incurred if she had gone through with the bargain).
Sellers Remedies
Sellers Remedies Sellers typically have the same legal and equitable remedies as Buyers, plus, they can generally elect to keep the deposit if the Buyer breaches.
Kutzins rule that a Seller can only keep that part of the deposit that reflects her actual losses -- is a minority view.
The majority rule is that unless the Buyer can prove the liquidated damages were a penalty, the Seller can keep them. Courts generally presume a 10% deposit is reasonable as liquidated damages.
Damage Limitations
Limits on Sellers damages: Note that the good faith limitation on a Buyers expectations damages does not apply to a Sellers expectation damages. Contractual language may limit the Seller to liquidated damages. Specific Performance Traditionally, this equitable remedy is available only when damages are inadequate to make the complaining party whole. This requirement is presumed to be met in land transactions. Either party can generally compel the other to perform an enforceable land sale contract.
Equitable defenses and considerations apply in determining if this equitable remedy is appropriate.
Rescission/Restitution
To rescind basically means to cancel the contract and put the parties back in the status quo ante.
A Buyer who lawfully rescinds can recover her deposit (restitution), and she may get reasonably foreseeable expenses. The Buyer also gets lien on the property to secure repayment.
A Seller who lawfully rescinds can generally keep the deposit and may be compensated for reasonably foreseeable net expenses.
Jones v. Lee Court of Appeals of New Mexico, 1998 Jones P. 502 Facts: Buyers (Lees) agreed to purchase (Jones) home for $610K. Paid $6K
Facts: Buyers (Lees) agreed to purchase (Jones) home for $610K. Paid $6K down. Buyers backed out (said couldnt afford it) and offered to forfeit deposit.
Sellers sold for $540K and sued.
Issue: What remedies are available to Sellers?

Jones v Lee
Rule: When Buyer defaults on LSC, Seller can elect: 1) rescission,

2) specific performance, or
3) damages.
Jones v Lee
General or Expectation damages compensate the Seller for the loss of the bargain. The measure of such damages is the difference between the agreed price and fair market value at the time of breach. Obviously, the Buyer is credited with any deposit paid. For Buyers (but remember the English Rule):
(FMV @ Breach - Contract Price) + Deposit =
Damages For Sellers: (Contract Price - FMV @ Breach) - Deposit = Damages Jones v Lee Special damages may be awarded if they were reasonably foreseeable by the breaching party at the time of the contract.
They can include things like inspection, survey, or legal fees, as well as interest (or interest differentials).
Punitive damages are very difficult to obtain, but if the breaching party is particularly egregious (wanton, utterly reckless, etc), the court may punish them monetarily.
Week 11
Thursday, March 17, 2011 3:02 PM
Jones v. Lee: Court of Appeals of New Mexico, 1998
Jones P. 502
Facts: Buyers (Lees) agreed to purchase (Jones) home for $610K. Paid $6K down. Buyers backed out (said couldnt afford it) and offered to forfeit deposit. Sellers sold for $540K and sued. Issue: What remedies are available to Sellers?
Jones v Lee
General or Expectation damages compensate the Seller for the loss of the bargain. The measure of such damages is the difference between the agreed price and fair market value at the time of breach. Obviously, the Buyer is credited with any deposit paid. This opinion is how you should write your analysis. They are intended to give the party who isnt in breach the benefit of the bargain that was promised to them. It looked like a very good deal for the buyers.. They realized that this was not good. The court says to use common sense. The contract price minus the fair market value at the time of the breach. IT would work both ways.. In this case there were a few wrinkles you do need to pay attention. You must figure out the FMV .. You must figure the value as of the specific date. The court sent this back to figure out what the FMV was on the date of the breach.. So they wanted to know the date of the breach. How do we know what the fare market value was on that date? You have an appraisel done and look at the specific conditions of the property and like properties. These parties at the time of the agreement decided that it was 610.. The seller is going ot argue that it was really only worth 540 .. There are two competing arguments ..
There are two competing arguments .. The parties stipulated that the FMV was 610 thousand dollars Who does that benefit? IT benefits the breacher because it lowers the amount of damages that the breacher would be liable for. The stipulation then favors the buyers. The measure of damages is the Contract price - the Fair Market Value at the time of the breach.
Why would the sellers attorney stipulate this? There is no reason it was a mistake there is no reason why you would stipulate that your party has no damages . You must think it through a little better than that.
For the foreseeable expenses question if these could be used again for the next buyer.. (good argument) Look at the time frame and question it. Do not just breeze over these questions. The also said it is foreseeable that interest being paid on the mortgage, The lower court offset the payments they made vs. the benefit from the unexpected occupancy. (again look at both sides) Punitive Damages: Based on the conduct.. The standard is that you must no only breach your contract you must also be pretty abusive to be punished with punitive damages. For Buyers (but remember the English Rule): (FMV @ Breach - Contract Price) + Deposit = Damages For Sellers: (Contract Price - FMV @ Breach) - Deposit = Damages _____________________________________________________________ _________ Kutzin v. Pirnie Facts: Buyers (Pirnies) signed contract on Kutzins house for $365K and paid $36K down.
LSC didnt have liquidated damages clause. Buyers backed out and Sellers sued for damages. Trial court found $17,325 in damages and ordered Sellers to return balance of deposit. Both parties appealed. They have a discussion talking about not penalizing the buyer for backing out of the contract. They over ruled there prior cases. The emphasized that the contract did not have a liquidated damages clause, Minority Rule: at common law yes regardless of a forfeiture clause). But his court believed the seller should not be unjustly enriched, but the Buyer must prove the Sellers' loss is less than the deposit. Liquidated Damages/Forfeiture If a LSC does have an express provision allowing the Seller to keep the deposit if the Buyer defaults, courts will usually enforce it unless there is no reasonable relationship between the Sellers actual damages and the liquidated amount as a prediction of damages (which is often hard to prove). (10 is pretty standard but there can be a higher percentage.) if the buyer can prove that the damages were excessive and actually a penalty they can limit the damages but it is pretty hard to prove. Even without such a clause, most courts follow the same approach. Courts may limit forfeitures to 10% of the purchase price if there isnt a liquidated damages clause. If there is such a clause, they more readily allow even greater forfeitures. Closing Time LSCs commonly include a time is of the essence clause. This means the parties agree timely performance of the contracts promises is essential to the contract, and untimely performance can constitute a breach. Without such a clause, performance within a reasonable time of any stated deadlines is generally allowed, and either party can extend deadlines by giving reasonable notice to the other. Time is always of the essence at law. In contracts especially the residential.. If someone doesnt close on the specified date it does not usually cost the party a lot of money .. So you want to put a time is of the essence clause because if it is not in the contract the court will infer a reasonable time to act.
court will infer a reasonable time to act. A good contract will state that if there is no financing there is no breach. The flip side is that if the buyer does not have enough money to close good luck suing them. Always make sure that the contract is always complete and fulfills the needs. Three Kinds of Deeds As a buyer you typically want a general warranty Deed. IT is a document that we use to embody title. You cannot give someone title but you can give a deed. It satisfies the statute of frauds. You then have to deliver the deed to transfer title. Below are the different types. General Warranty Deed - most common. Warrants against all existing title defects, whether they arose before or after Grantor took title to the property. IT promises that the title being passed is good. It basically says that at the time of title transfer the seller does in fact own it. It is also fee simple absolute.. There are no problems with the property at this time. Special Warranty Deed - not universal. Warrants only against existing problems caused/permitted by Grantor -not his predecessors. Another name is the limited warranty deed. Not all jurisdictions allow these to be used This warrants only in problems that arose while the grantor owned it. Basically I didn't create any problems with the title. It only has half the promises be aware that you may have to do more digging. We are going to treat it as one that contains the same warranties but limits the scope. Quit Claim Deed gives no protection to buyer. There is no promise.. Whatever claim I have is now yours. The catch is I might have had a bad claim to it it is not a guaranteeing I have good title. If that is nothing ...thats fine too. Warranty Deed Covenants The first convenant of seisin is simple.. Basically I own it. The right to convey is practically synonymous but not quite. Present Covenants: Seisin: I own the interest Im conveying.
Seisin: I own the interest Im conveying. Right to convey: I have the right to convey this interest. Some may not have the power to convey the property. They might have legal title but they do not have the power. The typically residential will be the same thing. Against encumbrances: There are no encumbrances on the property as
of the date of the transfer.
All of those above are good as of the date of the transfer. If you are promising someone something and you deliver a deed to them you either did or did not have the right to convey. That is the significant thing about the right of encumbrance. You as the grantee right now have a claim for breach of covenant. As soon as you have a claim the statue of limitations begins to run at the closing. Present Covenants These first three "present covenants" are covenants, or promises, about the present state of title. They must be true at the time of the conveyance. If they are not true then, there is an immediate breach of warranty, which means the statute of limitations on a claim for breach of this warranty begins to run. Covenant of Seisin The covenant of seisin promises the Grantee that the Grantor owns the estate he purports to convey. Covenant of Right to Convey The grantor pledges that at the moment he sells the property and conveys the deed, he has the right to do so. Usually, this is no different than promising you own the property (covenant of seisin), but some owners may be restricted from conveying, eg, a Trustee. Covenant Against Encumbrances
This is a promise that there are no outstanding encumbrances on the property (other than those the deed may list).
Encumbrances may be defined more restrictively in this context than in
Encumbrances may be defined more restrictively in this context than in the executory contract context. Covenant Against Encumbrances EXAMPLE O conveys to A by GWD. A fails to record the deed, and O gives a lender a mortgage on the property. Has O breached the covenant against encumbrances? No, the mortgage did not encumber title at the time of conveyance. Just in terms of what the encumbrance it is at the time of closing. Future Covenants General Warranty: I will defend against lawful claims and pay damages if you lose. Basically when it says selling you this property and you will have the right to use and possess without others interfering. You will not in the future have your use or enjoyment interfered with. That is the general claim.. It is limited. You will not have your use, enjoyment.. Inferred with by those who have a lawful claim. But there is no problem now that will make you lose your right to use it. Contrast this with the concept of title insurance because it says if you have any title problems even if they are basis it will defend you. Quiet Enjoyment: No one will assert better title than you in a way that interferes with your use and enjoyment of the property. Further Assurances: I will sign any other documents needed to perfect title. The two above are about the same. They deal with interference or even constructive possession. Future Covenants These last three future covenants" are covenants, or promises, about the present state of title as it affects the Grantees future use of the property. The covenants of general warranty and quiet enjoyment are only breached if, at some time in the future, someone asserts a claim to claim that: (1) is based on events when the Grantor held title or earlier, and (2) interferes with the Grantees possession. Only when there has been such an eviction (or constructive eviction) does a claim on these covenants accrue and the SoL begin to run. They are future because they can be breached in the future.. They
They are future because they can be breached in the future.. They run with the land. Whoever has the ownership of the land can enforce these. They are not broken or kept at closing. They can keep going forever The covenant of general warranty promises that the grantor will defend against lawful claims and will compensate the grantee for any loss he sustains because someone successfully asserts a superior title based on pre-conveyance events. It is a promise to do something in the future -- to defend and to compensate -- should the need arise. The covenant of quiet enjoyment makes almost the same pledge -- that the grantee will not be disturbed in possession and enjoyment of the property by someone asserting superior title, based on a claim arising before the conveyance. Because it is essentially the same as the covenant of general warranty, it is often omitted. The covenant of further assurances is a promise by the grantor that he will cooperate with the grantee by executing any other documents required to perfect the title conveyed. This type of commitment is common in many types of transactions. If you are conveying good title it has to be good title. There is no reasonable time limit. Forged Deeds General Rule: A forged deed is void. Even a subsequent good faith purchaser doesnt get good title from a forgery. Reason: If it was good, how could the true owner protect herself? She couldnt. A forged deed is no good. It cannot convey property. This is one that the true owner does not sign. Fraudulently Procured Deeds Rule: A fraudulently procured deed is voidable. That means the true owner can void the deed until a good faith purchaser gives value for it. Reason: True owner let himself be cheated, so he is less sympathetic than the later innocent purchaser. This is one where the owner does sign but they were tricked In some way. They are basically getting duped. Someone defrauds them but gets them to sign it.
them but gets them to sign it. This conveys voidable title.. The title is good until a good faith purchaser pays value for it. Why do we allow this? What is the difference we are going to feel less sympathetic
Brown v. Lober Brief Fact Summary. Plaintiffs brought suit for breach of the covenant of quiet enjoyment after discovering they were not in possession of all of the mineral rights to the property they purchased. Synopsis of Rule of Law. Until one holding a paramount title interferes with Plaintiffs right of possession, there can be no constructive eviction and no breach of the covenant of quiet enjoyment. Facts. In 1947, the owner of 80 acres conveyed it to the Bosts, but reserved 2/3 interest in the mineral rights on the land. In 1957, the Bosts conveyed the land by general warranty deed to the Browns, the Plaintiffs (Plaintiffs). In 1974, the Plaintiffs attempted to sell the mineral rights to the land and learned they were only in possession of 1/3 of the mineral rights. Plaintiffs sued the Defendant, the executor of the owners estate, Lober (Defendant), for breach of the covenant of quiet enjoyment. The trial court ruled in favor of the Defendant. The appellate court reversed, and the Plaintiffs appealed. Issue. Whether the plaintiffs have alleged sufficient facts to constitute a constructive eviction? Held. Reversed. To have a breach of the covenant of quiet enjoyment, Plaintiffs would have to demonstrate that someone holding a paramount title interfered with Plaintiffs right to possession. Possession of the surface area does not carry possession of mineral rights. To possess the mineral estate, one must undertake the actual removal thereof from the ground or do such other act that will apprise the community that such interest is in the exclusive use and enjoyment of the claiming party. Until one holding a paramount title interferes with Plaintiffs right of possession, there can be no constructive eviction and no breach of the covenant of quiet enjoyment. Discussion. The court focused on the premise that even if an individual is aware that there is a person holding paramount title to his own, that person must actively interfere with their right to possession before the covenant of quiet enjoyment can be breached. The Plaintiffs in this case have been in no way hindered as of yet in their enjoyment of their land. They merely were put on notice that there existed another individual with rights in their property.
Brown v. Lober Supreme Court of Illinois, 1979 Facts- Owner sells land to Bosts, reserving 2/3 of the mineral rights for
Facts- Owner sells land to Bosts, reserving 2/3 of the mineral rights for himself. Bosts sell to Browns by GWD, without mentioning the mineral rights. Browns sue Bost under the future covenant of quiet enjoyment (the present covenants had expired).
Issue Is the covenant of quiet enjoyment breached when one discovers a title problem that prevents a sale?
Notice of Covenant Violations
It usually does not matter that the buyer knew of the defect at the time of sale.
The majority rule is that knowledge of an encumbrance does not waive the right. However, if a visible (especially public) encumbrance affects the physical condition of the property, some courts deem it waived. Why did they choose to sue on the quiet of covenant enjoyment? The general warranty deed matters because they breached there promise. You do not need reliance where you have a promise in this case. The promise was breached at the closing in 1957 but this is a 1979 case. If they had done this in time they could have won real easily. They slept on there right and they lost there rights The statute doesnt begin to run on a claim of the future covenants until your use of enjoyment is interfered with. Is that inability to sell the mineral rights an eviction or constructive eviction. The court did not buy the argument. They basically said you have to be in possession of the land for your possession to be interfered with. They took that principle and applied that with the minerals below. In this case it is a good argument because they could have prevented the bad deal. They cut corners and slept on there rights. The court said they were not going to stretch the argument. Basically you are too late on the first claim and to late on the other. They are not a sympathetic victim.. This could easily been argued the other way. When your analyzing a legal issue you must determine the difference between liability and damages. IS there a claim.. What theory what are you saying the other person did wrong and then
He can still sue on the deed covenants.
theory what are you saying the other person did wrong and then how much is it worth .What other remedy could you use. Needless cost is not reimbursable. Frimberger v. Anzelloti Appellate Court of Connecticut, 1991 Frimberger v. Anzelloti Facts: Frimberger (plaintiff) bought land by GWD from Anzelloti (defendant). Anzelloti had purchased the property from her brother by QCD. When Frimberger wanted to repair a retaining wall, the DEP told him he was in violation of a wetlands ordinance and he had to file an application to correct it. Frimberger sued Anzelloti instead, citing the covenant against encumbrances. Frimberger v. Anzelloti Issue: Is a latent violation of a land use statute or regulation an encumbrance that violates the covenant? Rule (p. 521): No. An encumbrance is: A. a pecuniary charge against the premises, such as a mortgage, judgment lien, tax lien, or assessment: B. estates or interests in the property less than the fee, like leases, life estates or dower rights; or C. easements or servitudes on the land, such as rights of way, restrictive covenants and profits. Do not worry about note three taking environmental problems off of the table. If you say that you are conveying all of the property to you the damages are what are the 2/3 of the property you did not convey for. That is straight forward. The measure of damages against encumbrances is different. IF the encumbrance cannot be paid off then the buyer is entitled to the money back.. They are entitled to the difference to the value of the property w/o the encumbrance and the value of the property with the encumbrance. IF the encumbrance cannot be removed how much value does it subtract. Middle of note four in all cases damages are limited to all of those received
Middle of note four in all cases damages are limited to all of those received by the warrantor. Frimberger v. Anzellotti Brief Fact Summary. Plaintiffs purchased land that encroached upon state tidal wetlands. Upon discovery of this, Plaintiff sued for breach of the warranty against encumbrances. Synopsis of Rule of Law. Latent violations of land use regulations that are not on land records, unknown to the seller and which no enforcement action has been taken against, do not constitute a breach of the warranty against encumbrances. Facts. Plaintiffs purchased from the Defendant property adjacent to tidal wetlands. The Plaintiffs employed an engineering firm to repair a portion of the structure that rested on a filled in area of the wetland. Upon examination, it was discovered that the Plaintiffs structure encroached upon the tidal wetlands boundary and was in violation of state statute. Plaintiff filed suit for damages for breach of the warranty against encumbrances and innocent misrepresentation. The trial court ruled that the area had been filled without obtaining the necessary permits and found the Defendant liable for damages for breach of the above warranty. Issue. Whether an alleged latent violation of a land use statute or regulation, existing on the land at the time title is conveyed, constitutes an encumbrance such that the conveyance breaches the warranty against encumbrances. Held. Reversed, the warranty against encumbrances has not been breached and the Plaintiff failed to prove innocent misrepresentation. An encumbrance is defined as every right to or interest in the land, which may subsist in third persons, to the diminution of the value of the land, but consistent with the passing of the fee for conveyance. Latent violations of land use regulations not on land records, are unknown to the seller and to which the state enforcement agency has taken no action to compel compliance at the time the deed was executed, do not constitute an encumbrance for the purpose of this warranty. The Plaintiff has not met the burden of proving innocent misrepresentation since the Defendant had made no
misrepresentation since the Defendant had made no representation to the Plaintiff regarding the tidal wetlands. Discussion. The court noted that as of yet, any damages the Plaintiff may suffer are speculative since the state agency in charge of enforcing the regulation was not taking any action against the Plaintiff. Further, the agency had directed the Plaintiff to seek an application asking for a waiver of violation, which the Plaintiff had not done. The court also ruled that the proper way for a party to be protected is to include protective language in the land purchase contract and insist on appropriate provisions in the deed. We have owners past creating problems for the litigants. How did the court handle this issue? Look at the conditions on page 524.. It is a pretty narrow rule. The speculative nature of the damages. The agency has not charged him with a violation yet.. They just asked him to throw in an application and see if it goes away. There is no real loss.. Think back to the loymeyer case the set back ordinance but that was different that was a zoning ordinance. This was not a zoning code.. Almost every building has a building code violation typically are not encumbrances. Now we have a wetland ordinance. Is it a building code or a zoning. Municipal land use regulations. Given all of the other violations they are going to say this doesnt count. The lack of enforcement is a big issue here. There is not searching of the record. There are many factors if... If... If... If... if then.. And he may have no damages to speak of if he gets approved. Plaintiff had special knowledge .. He was an attorney familiar with the wetland statutes.
Same facts different courts.

Rockafellor v. Gray Brief Fact Summary. The Plaintiff, Gray (Plaintiff), sued to void a foreclosure sale on property he purchased. The Defendants, Hansen and Gregerson (Defendants), claim was brought on appeal to determine if a grantee who paid for the land from the foreclosure sale purchaser, could recover damages from him. Synopsis of Rule of Law. The covenant of seisin runs with the land and an action based on this covenant can be maintained by a remote grantee.
remote grantee. Facts. In 1907, the Plaintiff bought by warranty deed, 80 acres of land that had a $500.00 mortgage attached to it. The Plaintiff agreed to assume responsibility and pay the mortgage. Foreclosure was later instituted on the mortgage and the deed through Mr. Connolly was sold to the Defendants. Plaintiff brought suit to set aside the foreclosure sale. The trial court found in favor of the plaintiff, determining the foreclosure was void. Mr. Connolly appealed the courts finding against him concerning the breach of the covenant of seisin. Issue. Whether or not the covenant of seisin runs with the land so that an action on it may be maintained by a remote grantee. Held. Affirmed, the remote grantee is entitled to the amount of consideration paid with interest. The covenant of seisin runs with the land to a remote grantee because the rights of the remote grantee are acquired by conveyance and not by virtue of actual possession of the land. If at the time of conveyance, the grantor does not own the land, the covenant of seisin is broken immediately and the measure of damages for breach of this is the consideration money and interest, unless the grantee can be shown to have lost less. Discussion. The court ruled that it was bound by past precedent regarding this case. The court was careful to note that the reason Defendants could sue on the covenant of seisin was because the right of action was assigned to them and did not run with the title of the land because the court found that they never did possess title. This is a promise that is not just personal there is no privity limitation here. This is similar to the builders warranty where later people can enforce it. You need to contrast that with the presence covenants which do not run with the land. These promises cannot be said to run with the land because with the closing they are either breach or they are useless. They are not going to be breached anytime in the future. Rockafellor v. Gray Supreme Court of Iowa, 1922
10/14/07 Doffing sold to Rockafellor, who mortgage (agreed to pay it). 2/23/11 4/20/11 6/26/11 Gray foreclosed; sheriff's deed to Connelly sold to Dixon by GWD for Dixon sold to Hansen & Gregerson by
assumed Grays Connelly. $4,000. SWD for $7,000. sale because the
8/15/18 Rockafellor set aside the foreclosure court lacked jurisdiction. A to B for $20,000 by GWD B to C for $15,000 QCD O, the true owner, ousts C (a) What can B recover from A? A to B for $20,000 by GWD B to C for $15,000 by GWD O, the true owner, ousts C
(b) C has not sued B nor settled with him. How much, if anything, can B recover from A? A to B for $20,000 by GWD B to C for $15,000 by GWD O, the true owner, ousts C (c) C sues B and recovers $15,000. How much, if anything, can B recover from A? A to B for $20,000 by GWD B to C for $15,000
O, the true owner, ousts C

(d) Would your answers be different if we allowed the assignment of choses in action? A to B for $20,000 by GWD B to C for $15,000 O, the true owner, ousts C
Why dont they sue dixon? Usually you want to start with the party closest to them. He gave them a special warranty.. Meaning he was not assuming any risk. He did not breach any problems. HE did not get rid of any title. His warranty only covered the period in which he owned it. They cannot sue the seller.. Can they sue connelly on the general warranty deed.. He made the promise to dixon. What covenant are you going to select? As a result you owe me some amount of money? It would be the covenant of seisin.. You could also argue the use and enjoyment but as an intellectual matter you bought something and did not get anything.. They are both breached. Why didn't they sue as remote grantees.. They did not have any land they had neither title nor possession. For title to fun with the land there has to be some land for it to run with. They cannot say that the covenant ran with the land to us. This is a very unique case. Typically a remote grantee could sue on the future covenants. If they want to sue on the present covenants.. The court is inferring a package deal. Most jurisdiction will not infer this.. Because he did not assign it to someone else. IF you have a right to sue someone you can typically assign that to someone else. The court is imposing the liablity.. But what about the damages. They were held at the 4000 that was originally paid for the title. Because it would not be fair to hold him to the promise made by another. Taking it a step further.. If we said connelly you made the promise to dixon and you could be held liable to future grantees and your liability is not going to held at the original value there would be no one willing to make a warranty. The deed would have accepted the original mortgage.. He assumed the mortgage .. Including the price to account for the fact that there was a mortgage on the property. There is no breach of promise there. There was one other wrinkle in the case. What else was argued. He argued that he got no consideration.. Although my deed to dixon said he paid me 4000 he really paid me nothing. Connelly then is claiming nothing. The problem here is estoppel. How does it estop connelly?? Once you make a statement on which someone reasonably relies you are estopped from denying a later grantee who reasonably relied to there detriment. As between dixon and connelly there would be no such estoppel. Because dixon could not reasonably rely on a statement that 4000 dollars was handed over. Once you place the statement in public record you cannot argue the statement with the remote grantee. Minority Rule- a claim on covenant of seisin is impliedly assigned when the land is sold Subrules- damages on a covenant of seisin are limited to the amount paid
Subrules- damages on a covenant of seisin are limited to the amount paid to the grantor issuing the covenant. A grantor is estopped from disputing the consideration stated in the deed when a remote Grantee sues on the covenant. A to B for 20,000 by Gwd B to C for 15000 O the true owner , ousts C a. B's deed to C is a QCD. What can B recover from A. B has no claim because c isn't going to be getting anything from b. C can't get anything from B because B did not breach a promise.
b. The deed from B to C is a general warranty deed. C has not sued B nor settled him. How much if anything can B recover from A ? Estoppel by Deed (p. 532)
A is negotiating with O to buy Blackacre. He needs it for a package of properties he wants to sell to B. Everything else is set, so he gives a deed to several parcels, including Blackacre, to B, although he doesnt own them yet. Later, when he does get the deed to Blackacre, the doctrine of estoppel by deed runs the title directly through A to B, and B becomes the owner, not A.
Why it matters: A deed is not effective to transfer title until it is delivered with the intent to immediately convey an interest. What it means: Delivery means a manifestation of the grantors intent to be bound by the transfer. Manual delivery is the usual way to do this, but it not always proof of such intent; nor is it always necessary in order for a court to find a delivery has occurred. Delivery is rarely an issue in commercial transactions. The issue usually arises in donative transfers. Deed Delivery A Grantor generally cannot use the deed as a will. If the Grantor intends the deed to take effect only at her death, it is usually void for lack of delivery. Courts sometimes save conveyances that might be seen as violating this principle by finding an intent to immediately transfer a remainder but retain a life estate. Sweeney v. Sweeney Supreme Court of Errors of Conn., 1940
Supreme Court of Errors of Conn., 1940 Facts- Maurice deeded his land to brother John. This deed was recorded. John deeded the property back to Maurice. This deed was unrecorded and destroyed by fire. Both deeds were manually delivered. The idea was for John to keep the 2nd deed in case Maurice died before him, so he could then own the land without Maurices wife getting it.
Deed Delivery Rebuttable Presumptions A deed that is handed to the grantee, acknowledged, or recorded is presumed to be delivered. A deed in the Grantors possession is presumed to be undelivered. Conditional Deed Delivery
Oral conditions on a deed delivered to a grantee are usually not enforced,

and the deed is deemed to convey unconditioned title. Some courts will enforce the condition and give title only if the condition has been fulfilled. If the conditions are written, they are generally enforced. Conditional delivery to a third party escrow is generally enforceable if it is irrevocable. Deed Revocability In some cases, like Rosengrant, delivery into a revocable escrow does not constitute delivery. Yet, if the Grantor reserves a life estate and retains a power of revocation, this may be upheld as conveying a present interest subject to divestment. There are many variations on these themes in different jurisdictions. Rosengrant v. Rosengrant Court of Appeals of Oklahoma, 1981 Facts- Harold Rosengrant had a deed drawn up for his nephew Jay. This deed was left in an envelope in a bank office for Jay for when something happened to Harold and his wife. The envelope was retrievable by either Harold or Jay.
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Thursday, February 17, 2011 2:24 PM

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Week Three, Jan 19, 2011

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Consecutive interests Possessory Estates and FIs Concurrent interests -- Cotenancies