Property Outline Burkhard, Fall 2001 Kris Hines I.

First Possession: Acquisition of Property by Discovery, Capture, and Creation Proof - In regard to the parties to a property claim, generally speaking whoever can prove first possession will prove ownership. "First in time" is a very important concept in property law. It is helpful to think of interests as a "bundle of sticks". Generally, whoever holds the most "sticks" owns the property. A. Acquisition by Capture 1. Capture of Wild Animals: Rule of Capture: Wild animals are the property of no one unless they are reduced to possession. a. Pierson v. Post ---- 1.1 Pierson v. Post.doc (Property rights in a fox.) RULE: Property in wild animals in acquired by occupancy only. Pursuit alone on unowned land is not enough to get occupancy without mortally wounding the animal. Court was not asked to define occupancy. Court only says that Posts actions, of mere pursuit, were not enough to establish occupancy. They suggest that mortally wounding or depriving them of their natural liberty might be enough. Motivation of the Majority: - For the sake of certainty * - Preserving the peace Motivation of Dissent: - Encouraging the destruction of the animal b. Ghen v. Rich 1.2 Ghen v. Rich.doc (Libel to recover value of whale) Usage/Custom can decide property rights. Rule: Pursuit coupled with mortally wounding and well-known custom is enough to establish occupancy. Public policy: If law established contrary to custom it would hurt whaling industry. Rule: It requires the first taker the only act of appropriation possible under the circumstances to establish occupancy. c. Keeble v. Hickeringill 1.3 Keeble v. Hickeringill.doc (Duck Pond) The true reason of this action is for interference with trade not the loss of wild animals. Rule: Unfair competition is actionable.

Basis of decision is not rationale soli but malicious intent to interfere with business. Constructive Possession: Legal fiction used to recognize possession even though actual possession has not occurred. - Rationale Soli by reason of the soil landowner interest Landowner has constructive possession of the animals on their land. Trespasser should not benefit from illegal entry to the land and has not rights in capture on private property. 2. Rule of Capture of other Fugitive Resources a. Oil and Natural Gas - Due to the fugitive nature just b/c you own the land, does not mean you own the oil or gas. Oil and gas belong to person who first extracts them from the land. - Barnard v. Monongahela Natural Gas Co - Landowner has a right to drill an oil well on any part of his land without regard to the effect of adjoining land. Adjoining landowner can do the same. - Union Gas and Oil Co. v. Fyffe - Adjoining landowner may be able to get injunction against excessive drilling and unproportionate extraction. - Imposed reasonable restraints and promoted conservation - Angle Drilling not allowed b. Water Supplies 1. Prior Appropriation Doctrine: First to take it and put it to good use has superior rights over later takers (WEST) 2. Riparian Rights Doctrine: Landowner along the water source has right to use water (EAST) B. Acquisition by Creation General rule: If you create something first in time, then that something is yours to exploit are entitled to it foundation of property rights: you own the fruits of your labor 1. Intellectual Property a. Cheney Brothers v. Doris Silk Corp 1.4 Cheney v. Doris.doc (Silk manufacturers pattern was copied) RULE: Possession is limited to the objects that embody the invention. Others are free to copy it unless there are ownership rights (ei. Copyright protection) - Copyright/patent laws are a question for the legislature - Competition is good public policy. - Competition depends on imitation b. International News Service v. Associated Press (attempt to copy news) Rule: One news service could limit the use of their work (limited to news) - AP has quasi-property interest in the news it gathers and can stop competitors from using it until its commercial value as news has died

Misappropriation: taking and use of anothers property for the sole purpose of capitalizing unfairly on the good will and reputation of the property owner. c. Smith v. Chanel. Inc (Perfume advertised to be imitation of chanel #5) - Holding: Perfume co. could advertise their product as an imitation by identifying trademark or trade name. - The copyist serves public interest by offering comparable goods at lower prices. Legislation: The absence of property rights can dampen production, but recognition of them can create only monopoly power Trade-offs have to and are made by Congress the approach in each case is to grant a limited monopoly: a monopoly to encourage productive incentives, but a limited one in order to promote competition (i.e. patents and their duration) d. Right of Publicity Celebrities have a property interest in their persona, which is assignable during life and descendible at death. 2. Property Rights in Bodies a. Moore v. Regents 1.5 Moore v. Regents.doc (Dr. used patients cells for valuable research after splenectomy) Body Parts, once wrongfully excised, are no longer the property of the person, but are owned by the exciser Right to Include the right to give or sell to another (needs to be coupled with the right to exclude in order to have full effective power to transfer) Conversion: the unauthorized exercise of dominion or control over someone elses property a. [The tort of conversion protects an individual not only against improper interference with the right of possession of his property, but also against unauthorized use of his property or improper interference with his right to control the use of his property.] b. To establish conversion, must prove actual interference with his right of ownership Panelli Majority: - Here, no conversion b/c patient does not have the right to transfer - Another applicable remedy - Shouldnt hold innocents to strict liability standard Mosk dissent: Property is bundle of rights - Right to possess, right to use, right to exclude, right to transfer. - Relationship of people to property - Limits can be placed on some rights - Uniform Anatomical Gift Act - He feels that one has the right to sell or give away their tissue or body parts that are removed Note - Different definitions of conversion led different judges to different opinions.

3. The Right to Exclude a. Jacque v. Steenberg Homes, Inc. 1.6 Jacque v. Steenberg.doc (Crossed land to deliver trailer) Rule - In order for property to be transferable, it must have right to exclude. Public policy interest in punishing an intentional trespasser and give landowner faith in the system so they dont take the law into their own hands. b. State v. Shack 1.7 State v. Shack.doc (Attorney trespassed to help migrant workers) Rule: One cannot use property rights to injure the rights of others. Problem: Could be used by both parties of the argument. Maxim applies to both. a. Title to real property doesnt include dominion over the destiny of person the owner permits to come onto the premises. b. Mans right in his real property if not absolute. Certain people cannot be excluded from property. Necessity (either public or private) may justify entry upon the lands of another c. Employer/landowner may require visitor to identify himself and state his general purpose if he is unexpected. d. An employer may not deny the workers on his property the right to privacy and may not interfere with his access to governmental programs set up to help migrant workers. Reliance Interest: When owners grant rights of access to their property to others, they are not unconditionally free to revoke such access. Non-owners who have relied on a relationship with the owner that made access to land possible in the past may be granted partial or total immunity from having such access revoked when it is necessary to achieve justice. (On basis of need or other important public policy)

II. Subsequent Possession: Acquisition of Property by Find, Adverse Possession, and Gift A. Acquisition by Find 1. Armory v. Delamirie 2.1 Armory v. Delamirie.doc (Boy found jewel. Goldsmith took it) Rule: A finder has good title against all the world but the true owner. Rule - Prior possessor prevails over subsequent possessor. - Title or ownership is relative to who the other claimants are. - Any subsequent possessors may expose themselves to double liability resulting from the possession of found or stolen property. Why do we protect true owners?

Ownership is self-evident Security

Fairness Encourage productive investment Economic efficiency

To some extent the law provides some protection to possession. Why do we protect prior possessors?

Protection of rights of the true owner Increase likelihood of recovery (The "Winkfield Doctrine") Avoids might makes right (Peace) Mirrors commercial necessity Reward labor Expectations Indicia of ownership Easy to administer

Trover common-law action to recover damages for conversion. (Compare trespass) Replevin return of actual property specific performance (Compare ejectment) You cannot give what you don't have. A finder (or thief) cannot convey full ownership rights to property. The claim of the true owner is always paramount (except in cases of adverse possession). Bailment: The rightful possession of goods by a person (the bailee) who is not the owner (the bailor). It may be voluntary if the owner gave it or involuntary if the item was found. a. Voluntary Bailment bailor gives possession to bailee (Ex. Laundry, Valet) b. Involuntary Bailment found goods - Voluntary for finder b/c he chose to take possession - Finder assumes obligations of bailee c. The Winkfield Case voluntary bailment The wrongdoer, having once paid full damages to the bailee, has an answer to any action by the bailor. d. Bailee is under strict liability Bailee has duty to care for the goods and deliver them to the owner as agreed 2. Hannah v. Peel 2.2 Hannah v. Peel.doc (Soldier found brooch in estate house) Landowner never resided in house. Therefore, he never had the brooch in the protection of his house. Reward honesty. Finder wins. Rule: A person possesses everything, which is attached to or under his land, but a person doesnt necessarily possess a think, which is lying unattached on the surface of his land even though someone else does not possess the thing.

*Bridges v. Hawkesworth (customer found money bag on store floor, turned it into storeowner) - Place of finding is irrelevant - Lost/mislaid distinction Lost: the true owner involuntarily left something and forgot it Mislaid: true owner voluntarily placed somewhere and forgot it - Higher chance that true owner will return to claim it - Creates involuntary bailment in landowner Rule: Prefer finder to all but the true owner * South Staffordshire (Rings found at bottom of pool by employee. Landowner wins) - The possessor of land is generally entitled, as against the finder, to chattels found on the land - If finder working for the landlord, landlord has superior claim (agency) *Elwes Boat embedded in ground is property of landowner as against finder - Items embedded in the ground belong to landowner. 3. McAvoy v. Medina 2.3 McAvoy v. Medina.doc (Pocketbook found left behind in barbershop) - Not viewed as lost property. It is mislaid property. Rule - Finder of property acquires no rights in mislaid property, is entitled to possession of lost property against all but true owner, and is entitled to keep abandoned property. Treasure trove usually awarded to the finder, not the state. Exceptions to preferring finder 1. Finder is trespasser owner of premises will always prevail discourages trespass and unauthorized entry on property (trespasser has no claim to possession) 2. Finder finds during course of employment employee has a contractual duty to report found object to employer 3. Location of a find is a highly private locus objects found inside a private home are usually awarded to the owner of the home 4. Finder is on the premises for a limited purpose constructive possession of owner is superior to finders possession 5. Objects under the soil a. Cases favoring finder: i. Bridges ii. Hannah iii. Armory b. Cases favoring owner of property: i. South Staffordshire ii. Elwes iii. McAvoy Goal is always to get property back to true owner Reasons not to protect real owner 1. No one owns

2. Abandoned 3. No likely owner deserves protection 4. Gone (lost) 5. Pirate (treasure trove) 6. Extensive search Why Landowner should get it? - Finder is agent - Location is private - Finder is wrongdoer - Landlord implied possessory interest - Finder is only there for limited purpose Why Finder should get it? - Deserves reward - Found at public place - Reward honesty - Finder on land for a long time B. Acquisition by Adverse Possession 1. Elements of Adverse Possession a. Possession throughout the entire statutory period must be: - Actual - Open and Notorious (so as to give reasonable notice to the owner) - Exclusive - Continuous for statutory period - Requires only the degree of occupancy a true owner would make of property - Adverse (hostile) and under claim of right - Different doctrines focusing on the intent of the adverse possessor - State of mind irrelevant (Objective) - Intentionally took it (Aggressive Trespass) - Mistakenly thought he owned it (Good Faith) b. The title acquired by adverse possession relates back to when the possession began. c. The adverse possessor can acquire no greater title than the person who had the cause of action had. - If true owner had a mere life estate, the possessor only acquires property for life of that person d. Burden of proof is on the adverse possessor to show that all 5 criteria have been met 2. Theory and Elements of Adverse Possession a. Richard R. Powell, The Law of Real Property (punishes sleeper) - Discourages the idea of aging claims - Focuses on the inactivity of the true owner - Losing Theory - If you sleep on your rights for so long, you give them up - Not socially useful to have land neglected for long time b. Henry W. Ballentine, Title by Adverse Possession (quiet title) - Must have rule to resolve mistakes and errors in recording deeds

- If survey is wrong, deed is forged - Quieting titles c. Oliver Wendell Holmes, The Path of the Law (reward productivity) - Earning Theory - Land is better off in the hands of someone who will use it fruitfully - Reward the productive use of the land d. Van Valkenburgh v. Lutz 2.4 Van Valkenburgh v. Lutz.doc (Lutz used adjoining land as farm for 35 years. Van V. bought the land at foreclosure sale & kicked Lutz off) What does claim of right mean? 1. Hostile 2. Claim of ownership 3. Claim of rights of possession Land deemed to have been possessed and occupied: 1. Where it has been protected by a substantial enclosure 2. Where is has been usually cultivated or improved State of Mind in Adverse Possession 1. State of mind irrelevant (Objective Standard) 2. Intentionally took it (Aggressive trespass standard) 3. Thought he owned it (Mistaken) (Good faith standard) Constant elements of adverse possession (may have different meaning) 1. An actual entry giving exclusive possession that is 2. Open and notorious 3. Adverse and under claim of right and 4. Continuous for the statutory period Adverse possessors absence from the property is different from abandonment. IF the adverse possessor abandons the property (leaves with no intention to return) before the statute has run, the statute stops, a new entry is required, and the whole process must begin anew. * The owner of a surface parcel also owns part of a common cave underlying the parcel. *Property Rule When property is protected by property rule, the interest cannot be taken away without the owners consent. Transfers are voluntary. *Liability Rule the interest can be taken without the owners consent but only upon payment of judicially determined damages. Transfers are forced. e. Color of Title and Constructive Adverse Possession Color of Title a claim founded on a written instrument (a deed or will) or a judgment or decree that is defective or invalid (as where the grantor does not own the land conveyed or is incompetent to convey or deed is improperly executed) Advantage Actual possession under color of title of only part of the land covered by the defective writing is constructive possession of all that the writing describes. (Doctrine of constructive adverse possession under color of title) Limitations If A is in actual possession of a portion and the true owner is in actual possession of the rest, the adverse possessor cannot evict the true owner. Actual possession trumps constructive possession.

f. Mannillo v. Gorski 2.5 Mannillo v. Gorski.doc (Steps build on neighbors property) Court motive is irrelevant. Underlying policy: Any other method would reward the intentional wrongdoer and punish the honest person. This rule promotes justice. If you look at adverse possession in terms of the inactivity of the owner, you get the same result because the true owner does not rely on the motives of the possessor in deciding whether or not to assert his rights. Every time property changes hands in SC, a survey will be made. Forced sell if the adverse possessor has constructed something that cannot be removed easily or without hardship, the true owner may be forced to sell the adverse possessor the land provided that it would not work undue hardship on the true owner. Why was court wrong to change the rule? If you change the rule, it might affect prior cases. There are titles that are based on that rule. If you change the rule will it affect other property owners who rely on the rule (Theory of Reliance) However, true owners and adverse possessors dont rely on the rule in this case, because they dont rely on the motives of the adverse possessor. 3. The Mechanics of Adverse Possession a. Howard v. Kunto 2.6 Howard v. Kunto.doc (Neighbors houses built on wrong lots) Rule: Action for recovery must commence within 10 years of when property is seized Rule: Requisite possession requires possessor to use the property as ordinarily marks conduct of owners in general of like property. b. Tacking - Tacking by successive possessors: An adverse possessor can establish continuous possession by tacking onto his own period of possession and period of adverse possession by predecessors if there is privity of estate - Privity Connection or relationship between 2 parties having a legally recognized interest in the same subject matter 1. 1987 A enters Blackacre. 1994 B threatens A and takes over. In 1997, who owns Blackacre? - O. There was no privity between A & B What if 6 months later A regains Blackacre? A would own Blackacre 10 years and 6 months later. Give O the benefit of the 6 months because O had no cause of action against A during that time. What if A abandons in 1994 and B takes over? O, because no privity between A & B. 1. O owns property. A enters adversely against O in 1981. O dies in 1982 devising property to B for life and the remainder to C. B dies in 1997. Who owns the land? - A owns a FSA in 1991, because he entered adversely against O when O owned a FSA. The statute of limitations began running then and was uninterrupted by Os death.

- C has no right of possession and therefore no cause of action against A, but C may have a cause of action for waste against B to force him to take action to remove A. 2. O dies 1982 devising life estate for B and remainder to C. A enters adversely in 1983. B dies in 1997. Who owns the property? - When A entered the property, he did not enter against all the bundle of sticks. He entered against a life estate of B. He cannot enter against Cs future interest because C cannot sue A to recover. In 1997, when B dies, the clock starts running over again. What about in 1993? - A can claim the land from B, but he will only claim a life estate for the life of B. RULE: Adverse possessor can acquire no greater title than the person who has cause of action against him. c. Improvements and Encroachments: Improvements: Modern tendency is: - To grant innocent improvers compensation equal to the market value of the improvement OR - To permit removal of the improvements. - Some give landowner the choice to pay for the improvement or convey the land at market value to the improver. Encroachments: - If mistake, courts tend to look at relative hardships of the parties. - If removal is difficult or expensive compared to the inconvenience of the owner, injunctive relief is denied and damages awarded. - If encroachment is intentional, most courts issue injunction requiring removal regardless of hardships. A party who intentionally encroaches does so at his own peril. In SC, 27-27-10 27-27-30 Betterment Statute - Allows improver who has lost it, to bring action to get owner of land to pay for improvements- There is a statute of limitations - Have to bring the claim within 48 hours of having lost the property. d. Disabilities - Running or the statute of limitations is tolled if the true owner has a disability - Statute of limitations doesnt begin running until the disability is removed. - Three common disabilities 1. Age minority 2. Mental incompetency 3. Imprisonment - Disability immaterial unless it existed at the time when the cause of action accrued. - Disabilities of successor are ignored. - Action can be taken by guardian e. Adverse Possession against the Government - Nullum tempus occurrit regi (no time rums against the king) - One cannot acquire state land by adverse possession

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- In some states, this is not true is the land is held for private purpose 3. Adverse Possession in South Carolina a. Haithcock v. Haithcock 2.7 Haithcock v. Haithcock.doc ( brother has deed. brother says grandma gave it to me.) Statute of Limitations: If a landowner does not assert his rights of possession of land for more than 10 years, he loses right to the land. Adverse Possession: Actual, open, hostile, continuous, and notorious possession of the land in dispute for 10 years. Lost Grant Theory: If person has been in open, notorious, and adverse possession for 20 years, it is presumed that everything that was necessary to give him good title was done and he has a presumption of a grant from the state of SC must depend on the strength of his title and not the weakness of the s claim. In SC, 4 ways to gain title: 1. Show land was a grant from the state to someone and then show successive deeds. 2. Trace title back to a common source 3. Lost grant theory (actual hostile, exclusive and continuous possession for 20 years - Tacking allowed 4. Adverse possession actual, hostile, open and notorious possession for 10 years - May only tack through inheritance - If not under color of title, only get what was actually possessed If one establishes legal title to land, it is assumed that he was in possession. (Possession follows title) Color of title If one has hold land under color of title and only possesses part of it, possession extends to the whole. If man holds land not under color of title, he is only entitled to what he is in actual possession of (what has been protected by a substantial enclosure or has been usually cultivated or improved.) Gift by word of mouth is not color of title. Color of title requires a writing. No possession, however long it may be, will ripen into title if it is permissive. b. Knox v. Bogan 2.8 Knox v. Bogan.doc (Boundary dispute) Several ways to disputed boundary limes can be judicially determined 1. By action of ejectment where is out of possession 2. Trespass to try title where is in possession and believes has trespassed on his land (On strength of s title) 3. Actions to quiet title 4. Actions for injunctions 5. Declaratory judgment 6. Action in equity to fix boundary

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Acquiescence Theory Where there is recognition of a clearly defined boundary lime for a long period of time, the parties have acquiesced and the is not required to show n active dispute Claim of Right on boundary dispute, claim of right test is whether the claim is hostile (AP must know it is not his and have the intention of taking it) If it is not a boundary dispute, state of mind of the possessor is irrelevant. c. Statutes 15-3-340 Recovery of land barred if or his predecessor has been out of possession for 10 years. 15-67-201 Perfect legal title implies possession Taken together? 15-3-360 Owner must enter land within 10 years of gaining right of entry and must file claim within 1 year of entering land. 15-3-370 Disability If person under disability when possession begins (1) Under age 18 (2) Insane (3) Imprisoned Statute of limitations does not run until disability is removed. 15-67-220 Claim under color of title refers to all property described in the title, unless land divided unto lots. Possession of one lot is not possession of other lot on same tract. 15-67-230 Adverse possession under color of title Land deemed to be possessed and occupied if: (1) It has been usually cultivated or improved (2) It has been protected by a substantial enclosure (3) It has been used to supply fuel, or fencing timber for ordinary use of occupant (4) In case of farm, used as normally would be used (not all of a farm will be cultivated) 15-67-240 When not under color of title, adverse possession is actual, continuous occupation of premises under claim of title, exclusive to any other right. 15-67-250 When not under color of title, land must be (1) Protected by substantial enclosure (2) Usually cultivated or improved 15-67-260 Tenant cannot adversely possess against landlord 4. Adverse Possession of Chattels a. OKeefe v. Snyder 2.6 O'keeffe v. Snyder.doc (Painter brings suit to quiet title to paintings she claims were stolen. claims adverse possession) Rule: If property is stolen, the thief has no title and cannot transfer good title to others. The UCC does permit a person with voidable title to transfer to a good faith purchaser for value. Voidable title - Title that may be voided by the true owner. Voidable title is good title until the true owner acts to void the title. Void title is never good title.

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A thief has void title to anything he steals. A person who obtains a good by fraudulent means, as particularized by one of the four conditions listed in UCC 2-403, obtains voidable title in that good. If a good is stolen, the true owner retains the right to bring an action of replevin against anyone who is in possession of the good, subject to the statute of limitations. However, if the good was obtained fraudulently as described in UCC 2-403, a bona fide purchaser obtains good title to the good, even though the seller originally had voidable title to the good. The discovery rule requires the true owner to show that she exercised due diligence in finding that which has been stolen. The statutory period is tolled as long as due diligence is exercised. A cause of action will not begin to accrue until the discovers or should discover the facts of the case. The purpose of a statute of limitations is to stimulate to activity and punish negligence and promote repose by giving security and stability to human affairs. C. Acquisition by Gift 1. Newman v. Bost 2.9 Newman v. Bost.doc (Julia given keys to desk with insurance policy inside and told everything inside and everything in the house is hers, then man dies) A gift inter vivos is made in life. A gift causa mortis is a gift made in contemplation of immediate and imminently approaching death. Revocable. Substitutes for a will. a. If donee is already in possession of a gift causa mortis, there must be a return and redelivery to make the gift effective. This is not true of a gift intervivos. b. The plaintiff must show that the intestate intended to make the gift and delivered the thing to show it was a gift causa mortis. c. There must be a present intent to give the gift, the gift must be witnessed, and the donor's death must be imminent for a gift causa mortis to be valid. Otherwise, the gift will be subject to the state's statute of wills. d. If the donor survives the malady that threatened to kill him, the gift is automatically rendered invalid. By contrast, a gift inter vivos is irrevocable once it is made and no witnesses are required. e. The court finds that constructive delivery is enough to satisfy the test if the item being given is not present or cannot, due to size and practicality, be manually delivered to the plaintiff. f. If more weight is given to gift causa mortis, the statute of wills will prove to be of little value. 2. Gruen v. Gruen 2.91 Gruen v. Gruen.doc (Father sent letter to giving him Klimt painting, but retaining possession for life. Step mom tried to keep it) An inter vivos gift must meet 3 criteria: a. Intent on the part of the donor

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b. Delivery of the gift (evidence of the gift.) -An actual, manual delivery; -A constructive delivery, defined as the granting of access to the item given; or -A symbolic delivery, such as a written instrument of gift. c. Acceptance - The court assumes acceptance, with any valuable object. *If property is capable of actual delivery, it must be actually delivered. *Symbolic deliveries of gifts are insufficient to satisfy the element of delivery if actual or constructive delivery is possible. *If delivery is possible and easy, saying that you make a present gift without delivery is probably not a valid gift. *If there is a proper way to transfer something such as a bank account and it is not done, there is no gift even if there is delivery of bankbook. *The test as to whether the donor made an inter vivos gift or a testamentary promise is whether the maker intended to transfer some present interest or not. If the intention is to make a testamentary disposition effective after death, the gift is invalid unless made in a will. I now give you all my future earnings Gift, present intent I will give you this widget tomorrow No gift, future intent *Generally, if the intention of gift is very clear, courts will not require a great amount of proof of delivery. Conversely, if the act of delivery is clear, they will not require a great amount of proof of intent. III. Possessory Estates A. The Fee Simple Absolute absolute ownership that may endure forever. If A has a fee estate, then A has rights for life and theoretically even after death. How is it Created: to a and his heirs and assigns forever 1) Words of Purchase to A are words of purchase, which identify who owns the interest in the land. 2) Words of Limitation and his heirs are words of limitation, which defines the quantum of the estate. FSA can be created in: - Will - Deed

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- Adverse possession - By judge in legal proceedings In SC: - Before Dec. 31, 1993 conveyance must say to his heirs Otherwise, it is just a life estate. - After Dec. 31, 1993, 27-5-130 subsection B to his heirs not needed to create FSA Escheat The reversion of land ownership back to the lord when the immediate tenant dies without heirs. Now, land will escheat (to state) if current tenant dies without heirs. FSA can be conveyed by deed, will or intestate succession. Creditors may reach fee simple and sell it to pay debts. The fee simple is absolute ownership. Estate bundle of rights legal relations between persons with respect to a thing. At common law, words indicating land is inheritable were necessary to create a fee simple. Inheritance of a Fee Simple a. Heirs People who inherit by intestacy. - If O dies intestate, his heirs inherit the estate. - A living person has no heirs (yet) - A spouse was not an heir at common law. Spouse is only given a dower or courtesy in land. Today, almost all states recognize the spouse as heir. - Classes of kindred usually preferred as heirs in following order 1. Issue 2. Ancestors 3. Collaterals 4. Escheat b. Issue - Descendants (Children, Grandchildren, Great Grandchildren, etc.) - If decedent leaves issue, they take to the exclusion of all others - Rule of Primogeniture - Eldest son inherits land - Only if no sons, would daughters inherit - Abolished in the US children now share equally - Children born out of wedlock inherit from mother and if paternity established, from father - Issue in Stirpes If child of decedent dies prior to the decedent and leaves children, such childs share goes to his/her children by right of representation. c. Ancestors - If no issue, parents inherit. d. Collaterals - All persons related by blood who are not descendants or ancestors If no issue and no parents, siblings inherit

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e. Escheat - If person dies intestate with no heirs, property is escheated back to lord/state - Bona vacantia goods without an owner goes to state B. The Fee Simple Conditional to A an the heirs of his body Definition Estate is conditional upon having children. If issue are born to A, A can transfer a FSA to new transferee, cutting the inheritance rights of his issue. Created: Grant says, to A and the heirs of his body, to A and his issue or to A and his children and at the time of the grant A has not issue. Transferability: Once issue is born, A can convey a FSA and cut off his issues inheritance rights. Even after the birth of issue, the land cannot be devised, but descends to the issue. Future Interest: If A has no issue or no surviving issue at death, then property reverts back to O. Therefore, O has a possibility of reverter while A is alive. Release: O can transfer his possibility of reverter to A and convert FSC to FSA by deed of release. (In SC, Os heirs can convey deed of release) * A cant convey back to O. Straw transaction: A can convey to lawyer creating FSA. Then lawyer conveys FSA back to A. If A has several children, it follows rules of intestacy. Os conveyance of FSC to A can be by deed or will. Examples: 1) O conveys to A and the heirs of his body B is born. A conveys FSA to X. A dies. Transfer is good b/c the condition is met. It doesnt matter when B dies as long as A conveys after B is born. B has no interest in property after X is given FSA. 2) O conveys to A and the heirs of his body A conveys FSA to X. B is born. B dies. A dies. X has life estate for life of A. When A dies, property goes back to O. 3) O conveys to A and the heirs of his body: A conveys FSA to X B is born. A dies. B dies. If B outlives A, the conveyance to X is good. X has FSA. 4) O conveys to A and the heirs of his body B is born. A dies.

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B conveys FSA to X. B has no issue. Conveyance is good. Once the condition is met in the family, B has the power to convey FSA during his lifetime by deed (not will). C. The Fee Tail Limitation that purports to limit inheritance to a particular class of heirs - Descends to As lineal descendants and expires when A and all descendants are dead when it reverts back to grantor or his descendants. - Abolished in most states - Replaced by life estate as a device for controlling inheritance D. The Life Estate to A for life Every life estate is followed by a future interest (either reversion or remainder). A can transfer his life estate to B, but it is measured by As life, not Bs. 1. White v. Brown 3.11 White v. Brown.doc (Jessie Lide devised to Mrs. White, her home to live in. Closest relatives quitclaimed. Nieces and nephew say life estate. Mrs. White says FSA. Court says FSA.) Rule: A will shall convey all interest owned by testator, unless contrary intention is expressed or implied. Rule: If there is a choice, we prefer people not to die intestate either whole or in part. If there may be 2 interpretations of a will, the court follows the interpretation that provides for the disposal of the entire estate as opposed to the one that requires partial intestacy. If a will only leaves a life estate, the remainder has to follow intestacy. Rule: Restraint on alienation on a FSA is void. On a life estate, a disabling restraint is void, but a forfeiture restraint is valid. - Objections to Restraints on Alienation: 1. Makes property unmarketable 2. Tends to perpetuate the concentration of wealth 3. Discourages improvements on land 4. Prevents the owners creditors from reaching the property - Kinds of Restraints 1. Disabling Restraint withholds from grantee the power of transferring his interest 2. Forfeiture Restraint If grantee attempts to transfer his interest, it is forfeited to another person 3. Promissory Restraint the grantee promises not to transfer his interest. 2. Baker v. Weedon 3.12 Baker v. Weedon.doc (Mr. Weedon granted life estate to wife and remainder to her children, if any. If not to his grandchildren) Rule: Sale of land should be ordered only when it is in the best interest of all parties who have an interest in the land. Note: Lawyer should not set up life estate. He should set up a trust so that if the property value declines, land will be alienable. Doctrine of Waste A should not be able to use property in a manner that unreasonably interferes with the expectations of B.

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- Affirmative waste liability results from injurious act that have more than a trivial effect - Permissive waste negligence failure to take reasonable care of the property In SC, a life tenant cannot waste. Life tenant is responsible for minor repairs, realty tax, and must keep liability but not fire insurance. Life tenant is responsible for actuarial cost. Life tenant has to pay interest on mortgage and possibly actuary fees. 3. Seisin Outdated concept where actual clod of dirt must be handed over to make a land transfer effective. E. Defeasible Estates Defeasible fee simple may last forever, or come to an end at the happening of an event in the future 1. Fee simple determinable fee simple so limited that it will end automatically when a stated event happens - Only until an event happens (ex. So long as, while used for, during continuance of, until no longer used for) - Future interest Possibility of Reverter - Automatic termination 2. Fee simple subject to a condition subsequent fee simple that does not automatically terminate but may be cut short or divested at the transferees election when a stated event happens - Terms of express condition provided that, but if - Future interest Right to Re-enter - Termination not automatic, grantor must take action 3. Fee simple subject to a condition (covenant) grant something to someone on condition (but it does not revert) - Ex: I give you this land for a school, For use only as - Remedy damages or an injunction - No future interest 4. Fee simple conditional - To A and the heirs of his body - Possibility of Reverter - Automatically transfers back to the grantor 5. Fee Simple + Motive/Purpose - For school purposes - No future interest - No remedy *. Mahrenholz v. County Board of School Trustees 3.13 Mahrenholz v. County.doc (Huttons gave deed to school. Land transferred several times. Stopped being school. New owners try to reclaim) - Right of re-entry cannot be transferred by will or deed, only intestate succession - Holder of a future interest can make a release of the future interest to the owner of the present interest. - Possibility of Reverter cannot be transferred by will or deed, only intestate succession.

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- If there is ambiguity in the construction, a FSSCS is preferred over a FSD because forfeiture is optional not mandatory. There is more certainty of title. Adverse Possession of defeasible estates FSSCS Adverse possession clock does not start to run until the grantor tries to reclaim. FSD When the condition is breached, the adverse possession clock starts to run. SC 15-3-360 Puts statute of limitations on right of entry. Must start cause for ejectment within 1 year of entry. Must enter within 10 years of condition breached. - If forfeiture interest is not retained by the transferor but is created in a transferee (and called an executory interest), it is subject to the Rule against Perpetuities. Example: O grants to A so long as liquor is not sold O dies intestate survived by D &S D & S die S dies intestate survived by wife D survived by child and wills everything to heart fund Condition broken Who owns the property? O transferred a FSD to A and retained a possibility of reverter. Possibility of reverter is only transferable through intestate succession. At Os death, Poss. Of reverter passed to D & S. In SC, a wife is not an heir, so Ss wife could not inherit. Child of D owns the property. According to SC Supreme Court, D & S can execute a release even though the condition has not been broken and they have no interest (if they have not inherited it yet) SC follows rules in this case. * Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano 3.14 Mountain v. Toscano.doc (Gift deed from Toscano to lodge) Habendum Clause part of deed that defines the extent of the interest being granted and any conditions affecting the grant Restraints on alienation are not valid. Why are restrictions on alienation bad? 1. Unmarketability 2. Perpetuate the concentration of wealth 3. Discourage improvements to land 4. Creditors cannot attach to the property Use restrictions are valid. * Ink v. City of Canton 3.15 Ink v. Canton.doc (Ink gives land for Ink Park. State takes land to build highway) Eminent Domain Award is to be divided between owner of fee determinable and owner of right of reverter. The value of the land with the restriction should go to the grantee and the difference between that and the value without a restriction should go to the grantor. The usual rule is that the grantee takes all because it is hard to value the possibility of

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reverter, the grantor would get a windfall otherwise, and it is impossible to perform the condition. Restatement Approach would only divide the award if the condition would be broken soon anyway. IV. Future Interests A. Future Interests in the Transferor 1. Reversion The interest left in an owner when he carves out a lesser estate from the one he has and does not provide for who is to take the property when the lesser estate expires. (FT and LE and Leasehold) Greater estate to lesser estate: FSA > FT > LE > LH Rule: If a remainder is contingent, there is a reversion. Rule: A reversion is transferable during life and descendible and devisable at death. A reversion may not necessarily become possessory. 2. Possibility of Reverter The interest when an owner carves out of his estate a determinable estate of the same quantum. (FSD and FSC) - Cannot be transferred by will or deed, only intestate succession - Automatic 3. Right of Entry When an owner transfers an estate subject to condition subsequent and retains the power to cut short or terminate the estate. (FSSCS) - Cannot be transferred by will or deed, only intestate succession - Grantor must exercise B. Future Interests in Transferees 1. Remainders a future interest capable of becoming possessory at the termination of the prior estate. A. Vested Remainder 1 Given to an ascertained person AND 2 Not subject to a condition precedent - Indefeasibly vested (not subject to divestment) - Vested remainder subject to divestment (If later-born children are entitled to share) A shifting interest in the transferee can divest a vested remainder before it becomes possessory. - You may classify interests in sequence as they are written. If the conditional element is incorporated into the description of, or into the gift to, the remainderman, then the remainder is contingent. If, after words giving a vested interest, a clause is added divesting is, the remainder is vested. B. Contingent Remainder 1 Unascertained person OR 2 Subject to condition precedent - Alternative Contingent Remainders If B vests, C cannot. - If the first future interest created is a contingent remainder in FS, then the second FI is also a CR in FSA

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- If the first future interest created is a vested remainder in FS, then the second FI will be a divesting executory interest. - Condition precedent Contingent remainder - Condition subsequent Divest property interest - Owner of remainder may transfer during life, devise, or it will descend through intestate succession - Vested remainders are preferred. - A remainder cannot follow a vested fee simple. Differences between vested and contingent remainders: 1. Vested remainder accelerates into possession when preceding estate ends. Contingent remainder cannot be possessed as long as it is contingent. 2. Contingent remainder is not assignable during life and unreachable by creditors. (Today in most states, CR is transferable in life) 3. Contingent remainders were destroyed if they did not vest upon termination of preceding life estate. 4. Contingent remainders (and executory interests) are subject to the Rule against Perpetuities, vested remainders are not. 2. Executory Interests A future interest that can take effect only by divesting another interest. - Fee simple subject to an executory limitation FS that, on the happening of some event, is automatically divested by an executory interest in a transferee. - In order to become possessory an executory interest must: 1 Divest or cut short some interest in another transferee (Shifting EI) OR 2 Divest the transferor in the future (Springing) 3 Future interest in transferee after defeasible fee (Possibility of reverter and right of entry can only be created in transferor. An executory interest can only be created in transferee.) C. The Trust The trustee manages the property for the benefit of the beneficiaries. The trustee has FSA for use to benefit the beneficiaries. - To X in trust for A for life, and then for As children who survive A. - The trustee is a fiduciary and held to a high standard of conduct. - Trustee is under duty to administer the trust solely for the beneficiaries. - Trustee must preserve the property, make it productive, and dispose of the income in the manner specified in the trust. The trustee must also keep the property separate form his own, keep accurate accounts, invest prudently, and act impartially. - Trusts split ownership between legal title and equitable title. - Problem owners try to create trusts to avoid legal restrictions. - 2 kinds of interests 1- Life estate 2- Remainder or executive interest - If someone wants to buy the property, they must buy each interest. 1. Broadway National Bank v. Adams Testator devises trust to brother with a provision that the brothers creditors cannot reach the trust.)

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Rule: The trust is alienable at any time, because the trustee has whole legal title with the power of alienation. Rule: Creditors should not rely on money in trust to grant credit. Rules of debt that subject the debtors property to payment of his debts do not subject the property of the donor to the debts of his beneficiary. Reasons to enforce: - Look to intent - Does not violate any public policy - Property is alienable by the trustee - Similar kinds of trusts have been approved 2. John C. Gray, Restraints on Alienation of Property - Supposedly creditors can find out about trusts because they are a matter of public record, but what if they are in another state or country. - Inalienable rights of property are opposed to fundamental principles of common law and against public policy - Outdated concept that perpetuates concentration of wealth D. Rules Furthering Marketability by Destroying Contingent Future Interests Contingent remainders made land inalienable. 1. The Rule in Shelleys Case If: 1. One instrument 2. Creates a life estate in land in A, and 3. Purports to create a remainder in persons describes as As heirs (or the heirs of As body), and 4. The life estate and remainder are both legal or both equitable, The remainder becomes a remainder in fee simple (or fee tail) in A. - Applies only to remainders and not executory interests. - In SC, rule in Shelleys case abolished Oct. 1, 1924. For wills or deeds executed prior to that, it still applies. For wills signed after that date, it does not apply. - NC abolished the rule in 1987, still a big problem in NC. 2. The Doctrine of Worthier Title - Where there is an inter vivos conveyance of land by grantor to a person, with a limitation over to the grantors own heirs either by way of remainder or executory interest, no future interest in the heirs is created but the grantor retains a reversion. Example: O conveys Blackacre to A for life, then to Os heirs. The remainder to Os heirs is void and O has a reversion. - Cardozo extended the application to personal property as well as real property. - Rule of construction (Not rule of law) - In SC, unclear if this would still apply. 3. Destructibility of Contingent Remainders - A remainder in land is destroyed if it does not vest at or before the termination of the preceding freehold estate. - Contingent remainders were destroyed if they did not vest upon the natural termination of the life estate - Contingent remainders could also be destroyed if they did not vest upon the artificial termination of the life estate.

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Merger If the life estate and the next vested remainder in fee simple come into the hands of one person, the lesser estate is merged into the larger. Exception: If the life estate and the next vested estate are created simultaneously in the same person they do not merge at that time. However, if the life estate and next vested estate are thereafter conveyed to another person, they will merge and destroy intervening contingent remainders. - Does not apply to executory interest. - Probably not alive in the US. Last reported case was in 1906 4. The Rule against Perpetuities No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest. a. Applies to contingent remainders and executory interests b. Judged in advance the validity of the interest is to be judged at the time it is created, not at the time when it actually vests. If it is possible that the interest will vest more than 21 years after the expiration of the validating life, the interest is invalid from the start. c. Validating or measuring life person who will enable you to show that the contingent interest will vest or fail within their life, at their death, or within 21 years after their death. d. If there is no person who can affect vesting, the interest is void unless it will vest within 21 years (Validating lives do not have to be persons mentioned in the instrument, but they do have to be persons who can affect vesting.) e. An interest does not violate the rule if it is vested upon creation - Future interests retained by the transferor are not subject to the Rule b/c they vest upon creation. 1) No interest is good 2) Unless it must vest 3) If at all [fail to vest] 4) Not later than 21 years after 5) Life in being at creation of interest * Brown v. Independent Baptist Church of Woburn 4.2 Brown v. Woburn.doc Rule: Rule against perpetuities does not apply to reversionary interests, such as possibility of reverter. * Central Delaware County Authority v. Greyhound Corp. 4.3 Central v. Greyhound.doc Rule: When a conveyance can be read to create an option to purchase or a fee simple subject to condition subsequent, the option to purchase is preferred. An option to repurchase is subject to the rule against perpetuities, where a possibility of reverter or a right of entry is not. When there are 2 possible constructions, the one that allows application of the rule against perpetuities is preferred. * Jee v. Audley 4.4 Jee v. Audley.doc Rule: What might happen test - The conveyance must be examined at the time it was made. If it is any possible was to violate the rule against perpetuities, the executory interests are invalid. Rule: There is a presumption that people can have children until they die. There is no age limit on fertility under the rule against perpetuities.

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* Gift to Classes a gift to a class is invalid if it might vest in one member of the class too remotely. A gift to a class in not vested in any member until it is vested in all members. - For a class gift to vest under the RAP 1) The class must be closed. 2) All conditions precedent for each and every member of the class must have been satisfied within the perpetuities period. * Saving Clause in the Trust - A perpetuities saving clause in a clause designed to terminate the trust, and distribute the assets, at the expiration of specified measuring lives plus 21 years, if the trust has not terminated earlier. * The Wait-and-See Doctrine The wait and see doctrine says that if within the wait and see period, all conditions are met, the interests could be validated or invalidated at that point. We should wait and see if the contingent interest actually vests within the perpetuities period; if it does, it should be valid. * South Carolina Rule against Perpetuities Statute 27-6-20 A A nonvested property interest is invalid unless 1 It meets the common-law rule against perpetuities OR 2 The interest either vests or terminates within ninety years after its creation (90 year wait and see) 27-6-40 If interest will become invalid under 27-6-20 or a class gift may become invalid and one members interest has vested, an interested person may go to court and ask the court to reform the grant to approximate the grantors original intentions. 27-6-50 Exceptions: 1 Nondonative transfer 2 nonvested interest held by charity preceded by an interest held by another charity. (Very limited) 3 Interests coming under other statutes (pension plans, cemeteries, burial grounds, etc.) * The Dynasty Trust Major limitation factor on future interests is not the RAP. It is the federal governments imposition of estate and generation skipping taxes. - Loophole in the generation skipping tax is the Dynasty Trust. Less that $1 million is exempt from the tax. Invest that in an insurance policy and it will grow on death. - Some states have eliminated the RAP in the hope that trusts will be moved to their states. V. Co-ownership and Marital Interests

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A. Common-Law Concurrent Interests 1. Types, Characteristics, Creation 1. Tenants In Common (Separate, but undivided interests) - No requirement as to proportionate ownership - No survivorship rights - Can convey or devise - Unity of possession is required 2. Joint Tenancy - Joint tenants are regarded as one owner. Each tenant is seised of the whole and owns 100% of the property with the others. - Survivorship rights (When one joint tenant dies, he drops out. Nothing passes to the others. - 4 unities required for joint tenancy 1. Time The interest of each must be acquired or vest at the same time 2. Title All must acquired title by the same instrument or by joint adverse possession (cannot arise out of intestate succession or other act of law) 3. Interest all must have equal undivided shares and identical interests measured by duration 4. Possession Each must have a right to possession of the whole. - If one of 4 unities is severed, the joint tenancy turns into a tenancy in common - Joint tenants can convey, but not devise. Conveyance severs the joint tenancy as between 3rd party and cotenants. - Joint tenants can bring action for judicial partition. 3. Tenancy by the Entirety - Husband and wife only - Neither can terminate the relationship alone. They must terminate is together. - Required 4 unities + 5th unity of marriage. - Rights of survivorship * Presumptions - Tenancy in common is preferred. * Avoidance of Probate Joint tenancies are a way to avoid probate. - Joint tenant cannot pass her interest in a joint tenancy by will. 2. Severance of Joint Tenancies a. Riddle v. Harmon 5.11 Riddle v. Harmon.doc (Wife attempts to sever joint tenancy by a conveyance to herself) Rule: 4 unities are essential to the creation and existence of an estate in joint tenancy: Interest, time, title and possession. Rule: Each joint tenant has the power to convey his separate estate without the knowledge or consent of the other joint tenant Rule: If a joint tenant conveys to a stranger and that person reconveys to the tenant, the unities are destroyed. (Strawman)

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Rule: A joint tenant should be able to do directly what she can do indirectly with the use of a strawman. Therefore, a joint tenant can end a joint tenancy by conveying the land to herself. Rule: A joint tenancy can be created by a direct conveyance to the transferor. b. Harms v. Sprague 5.12 Harms v. Sprague.doc (Brother executes mortgage on land held in joint tenancy, then dies) There are 2 theories of mortgages. 1. Title Theory - the title is conveyed. This conveyance might sever a joint tenancy. 2. Lien Theory - mortgage imposes a lien on the property. Under this theory, until the lien has caused the land to be sold, the joint tenancy is not severed. SC is a lien state. Rule: A mortgage executed by only one joint tenant on land held in joint tenancy does not survive the death of the joint tenant who executed it. Van Antwerp v. Horan The voluntary or involuntary destruction of any of the unities by one of the joint tenants will sever the joint tenancy. Law in SC: 27-7-40 Creation of joint tenancy by deed of conveyance (a) In addition to other methods (what are other methods), joint tenancy can be created when deed contains names of grantees followed by the words as joint tenants with rights of survivorship and not as tenants in common (i) Rights of survivorship (ii)If joint tenant dies survived by more than 1 joint tenant, the entire interest of the deceased vests equally in the surviving joint tenants. (iii) Fee held in joint tenancy cannot be encumbered by a joint tenant acting alone (1 joint tenant cannot get mortgage) (iv) If all joint tenants join in encumbrance or deed, the interest is effectively encumbered or conveyed. (All joint tenants can mortgage or sell) (v) If JT owned by only 2 JT, conveyance by one to the other gives other a FSA. (vi) JT owned by more than 2, conveyance by one to the others conveys his interest equally among them. (vii)JT held by husband and wife and no others, JT Is severed upon separation or divorce and both are tenants in common thereafter. (viii) If sale of 1 JTs interest ordered by court, JT is severed. (ix)All JT can convey to themselves as tenants in common to sever JT (c) Severed JT becomes a tenancy in common Implications of SC Statute: - Allows joint tenancy to survive conveyance to a 3rd party. If 1 joint tenant conveys to a 3rd party, it does not sever. - Statute may not allow for severance b/c of the limitation. There a re 2 or 3 ways to sever set forth in the statute and other ways may not be allowed. 3. Joint Tenancy Bank Accounts 1. True Joint Tenancy O intends to make present gift to A for the sum deposited in addition to survivorship rights in the whole sum

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2. Payable on Death O intends to make a gift to A only of survivorship rights 3. Convenience O intends that A only have power to draw on account to pay Os bills and not have survivorship rights. - Many jurisdictions hold that the surviving joint tenant takes the sum unless there is clear and convincing evidence that a convenience account was intended. - Presumption that the joint account belongs to both parties in proportion to the net contribution of each party. In SC: 62-6-103 A joint account belongs to all parties in proportion to the net contributions by each, unless there is clear and convincing evidence of a different intent 62-6-104 Sum remaining at death of 1 party belong to the surviving party as against the estate of the decedent unless there is a writing filed with the bank at the time the account is created which indicates a different intention OR such change may be effected by will if the will contains clear and convincing evidence of his intent to do so. 62-6-107 Joint tenant cannot pay creditor out of money in joint account after the death of other party. 62-6-108 Either party can take money out of account with 1 signature 4. Relations among Concurrent Owners a. Partition The privilege of each co-owner to transform a concurrent estate into estates held in severalty - If cotenants cannot work out differences, court may order division of interests. 1. Partition by sale sell land and divide proceeds among cotenants 2. Partition in kind divide land among cotenants * Delfino v. Vealancis 5.13 Delfino v. Vealencis.doc ( requested partition by sale to kick garbage lady off land) Rule: The court favors partition in kind over partition by sale. Partition by sale should be ordered when 2 conditions are satisfied: (1) The physical attributes of the land are such that a partition in kind is impractical or inequitable; and (2) The interests of the owners would be better promoted by partition by sale. The burden of proof is on the party requesting the partition by sale to show that it is in the interest of the parties. - How is partition in kind done? Court appoints a committee. In SC, Committee is 5 people (laymen) - Difficult to equalize partition in kind because 1 acre may not be fungible with other acre different acres have different qualities. - wants partition by sale his lawyer should have proved that the land is worth more as a whole, that it would be hard to determine the value *Johnson v. Hendrickson Dont have to give the home to the person living in it. - Court will order sale if the land is more valuable as a whole - Division in kind is preferred, but sale is more common Partition is a serious problem in the lower part of the state disadvantage of poor black farmers major cause of the decrease of black ownership of farmland in the south. b. Sharing the Benefits and Burdens of Co-ownership

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* Spiller v. Mackereth 5.14 Spiller v. Mackereth.doc (Tenants in common. 1 using building a warehouse. The other send letter demanding he vacate building or pay half rent.) Majority Rule: One co-tenant cannot get rent from another co-tenant unless there is a prior agreement or an ouster. - Majority rule encourages productive use of the property, but also encourages lawsuits Ouster: 2 kinds: 1. Beginning of the running of the statute of limitations for adverse possession - Claim of absolute ownership and denial of the cotenancy relationship by the occupying tenant 2. Liability of an occupying cotenant for rent to other cotenants - Occupying cotenant refuses a demand of the other cotenants to be allowed to use and enjoyment of the land Minority Rule: In possession tenant has obligation to pay rent to out of possession tenant. SC: Historically minority rule state. However, recent Court of Appeals case applied majority rule. - Minority Rule encourages partition actions and settlement between parties. SC 29-1-20 One cotenant can buy at any type of sale other than a tax sale and cut out the other cotenants. * Swartzbaugh v. Sampson 5.15 Swartzbaugh v. Sampson.doc (H & W joint tenants. H rents to for boxing ring) Rule: Lease does not sever joint tenancy. - 1 joint tenant can lease his share of property to a 3rd party. - The cotenant may compel the tenant who executed the lease to account for rents collected from 3rd party. - The cotenant can try to enter the land. If the lessee refuses, she would have an action for ouster requiring the lessee to give her the reasonable value for use of the land (regardless of the amount agreed on in the rent agreement) - The lessee takes the risk that the tenant he is leasing from will die. In that case, the other tenants could kick him out. - Partition by sale of the lease Court would sell the right to lease for the term in lease. Bad idea b/c may be able to buy that for low amount if no one else were in the market, then lessee would have absolute control for the period of the lease. c. Accounting for Benefits, Recovering Costs 1. Rents and profits a cotenant that collects from 3rd party rents & other payments arising from the co-owned land must account to cotenants for the amounts received. 2. Taxes, mortgage payments, and other carrying charges Cotenant paying more than his share has a right to contribution from other cotenants (Cotenant paying more than his share receives credit in partition action. (In some states, if cotenant paying more than his share has been in exclusive possession, he may have no right of contribution.) 4. Repairs and improvements

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- Necessary repairs no affirmative right to contribution in absence of prior agreement. Credit given in partition actions. (May be recoverable with a demand. Typically recoverable at partition) - Improvements No right to contribution, no credit in partition action The interests of the improver are to be protected if this can be accomplished without detriment to the interests of the others. Improver gets value (not costs) of improvements. B. Marital Interests 1. Common Law Marital Property System Husband and Wife have separate property. Ownership is given to the spouse who acquires the property. - Sawada v. Endo ( caused accident. Couple conveyed tenancy by the entireties to sons to avoid losing property in lawsuit that followed.) Groups of States Group I H W II H W III H W IV H W Manage Y N Y Y Y Y Y Y Possess Convey L/E Y N Y Y Y Y Y Y Y N Y Y N N N N Convey Survivo r Y N Y Y N N Levy N N Y Y N N Y Y
Except Mass subject to Hs creditors Interest may be reached subject to Ws survivorship Creditor cant reach unless both join Creditor only gets future Interest

Rule: (Group III) Creditors have other options to reach property, before they extend credit, they could insist property attachable. If debt arose prior to creation of estate, the property was not a basis of credit. South Carolina does not have tenancy by the entireties. Rule: Creation of tenancy by the entirety may not be used to defraud creditors. Policy: Protect family home. - United States v. 1500 Lincoln Avenue (Husband pharmacist sold drugs. Feds want to take pharmacy.) -Innocent Owner Defense Exception to forfeiture under statute. Potential for claim against innocent spouse. Here statue lets wife keep interest Rule: In ordering forfeiture of property held in tenancy by the entireties, the property interest of the innocent party is preserved during her life, her protection against conveyance and levy of her husbands creditors is maintained and she retains her right of survivorship. What effect on her property rights? 29

- She cant sell or lease. Lis Pendens court here does not like this theory. Very common theory that allows government to keep its right, lien against Hs future rights. Document that lets any buyers know that there is a claim on the property.

b. Termination of Marriage by Death of One Spouse 1. Common Law - Dower Protection wife had with respect to husbands property - Surviving wife had dower in all property of which her husband was seized during the marriage and which was inheritable by the issue of husband and wife In SC, allowed wife to convert that into cash amount that was 1/6 of property value - Dower could be waived - Dower has been abolished - Curtesy equivalent available to husband - No residual impact SC did away with this in 1985. No practical effect. 2. The Modern Elective Share - Surviving spouse can choose either the will or elective share - Forced share is usually 1/2 - In SC, forced share is 1/3 62-2-201 Surviving Spouse has a right to take an elective share of 1/3 of the decedents probate estate 62-2-202 Probate estate = property passing under will and property passing through intestacy If you can avoid having probate property, you can avoid statute. - Trust is not subject to probate Note: The Uniform Marital Property Act - Gave married women the right to control their own property. 2. The Community Property System a. Introduction - The earnings of each spouse during marriage should be owned equally in undivided shares by both spouses. - Community property includes: - Earnings during marriage - Rents, profits and fruits of earnings - Separate Property includes: - Property acquired before marriage

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- Property acquired during marriage by gift, devise or descent - In some states, earnings on separate property b. Community Property Compared with Common Law Concurrent Interests - Tenancy in common and joint tenancy may be created between H and W in a community property state. They are separate interests. Property cannot be held in tenancy by the entireties. Community Property Between H and W only Cannot convey undivided share alone No survivorship (devise ) Stepped-up tax basis (advantage) Joint Tenancy & Tenancy in Common Between any 2 or more persons Can convey undivided share to 3rd party Right of Survivorship (w/ Joint Tenancy) Only decedents is stepped up (Significant income tax incentive for community property)

c. Management of Community Property - H and W have equal management powers - A bona fide purchaser from spouse w/ management power is protected. - Serious problem (in Arizona and some others) a creditor of 1 spouse can get to interest of the other spouse. - Can deal with personal property Basic Features - Neither can convey separate 1/2 interest in community property - Manager can convey entire interest in community Transfer of real property - In theory, manager can transfer. As a practical matter, both must sign - Gifts by 1, probably prohibited - Can convert community property into separate property by contract and can convert separate into community - Community Property retains its nature when parties move to common-law state d. Mixing of Community Property with Separate Property (Property obtained before marriage and paid for after) 1. Inception of the Right Rule - Character determined at time property acquired - Community entitled to return of community payments + interest 2. Time of Vesting Rule - Title does not pass until all payments are paid (community property) 3. Pro Rata Sharing Rule - Community payments are buy in of pro rata share of title e. Migrating Couples - Depends on the place of the domicile when the property is acquired - Upon death, - Personal property based on law of decedents domicile at death - Real property governed by law where land is located

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- IF moving from common law state to community property state, before they move they need to have an agreement to give property to W or set up a trust. Problem as lawyer, who is your client, W & Hs interests are al odds. Conflict of interest. - IF moving from community property state to common law state: - If they convert to joint tenancy, they lose tax advantage. And one can no longer devise interest to others - If they want to keep it community property, common law state will respect that. They have a choice. (Couple from Texas can own community property in SC; substituted property in SC can continue to be community property) VI. Leaseholds: Tradition, Tension, and Change in Landlord-Tenant Law A. Leasehold Estates 1. The Term of Years lasts for some fixed period of time or computable by formula, which results in fixing some beginning and end (doesnt have to be years) - No notice must be given prior to termination of lease 2. The Periodic Tenancy lease for a period of some fixed duration that continues for succeeding periods until either the landlord or the tenant gives notice of termination. If notice is not given the period is automatically extended for another period. - Common law a years notice is required to terminate a year-to-year tenancy. - Month-to month must give 1-month notice 3. The Tenancy at Will Tenancy for no fixed period that endures so long as both landlord and tenant desire. - Ends when one of the parties terminates it. * Garner v. Gerrish - Preexisting rule A lease for so long as the lessee shall please, is said to be a lease at will. Common law, a lease at will of tenant is also at will of landlord. - Holding A lease, which expressly grants the tenant the right to terminate, and does not grant that right to the landlord, creates a life tenancy determinable and not a tenancy at will. Difference Termination procedures differ - Life estate/tenancy determinable cannot be ended by reversionary holder (landlord) - In SC month-to-month b/c no definite term is fixed. (27-40-310(d)) IS SC, Commercial side is a lot cleaner enforce lease according to its terms 4. The Tenancy at Sufferance: Holdovers Tenant remains in possession after termination of the tenancy Landlord has 2 options Eviction Consent *Crechale & Polles, Inc. v. Smith

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General rule If tenant holds over, the landlord has the option of treating him as a trespasser or as a tenant for another year. In SC: The holdover would be a tenancy at will and the tenant would be liable for the reasonable value of use and occupation. It is possible that that would be less than the original value of the rent. In SC: If landlord doesnt consent, (770(c)). If landlord does consent (310(d)). B. The Lease When is an arrangement a lease? Considerations: -Intention of parties - Number of restrictions on use - Exclusivity of possession - Degree of control retained by granting party - Presence or absence of incidental services - ETC License, Easement or Lease? Courts ask: - How exclusive is the possession - Does document provide for payment of rent or something else (% of sales)? - Does it look like a lease? - What is the term? - What is the intent of the parties? - It matters primarily whether or not an arrangement amounts to a lease, b/c leases give rise to the landlord-tenant relationship, which carries with it certain incidents - Conveyance or contract? Both Lease transfers possessory interest in land, so it is conveyance Lease contains promises, so it is contract. - Statute of Frauds leases for more than 1 year must be in writing - Form leases and the question of bargaining power - Typically form leases are used and there is no negotiation over terms - Solution landlord-tenant act C. Selection of Tenants (Herein of Unlawful Discrimination) 1. Fair Housing Act of 1968: This act makes it unlawful to refuse to rent or sell a dwelling to any person on basis of race, religion, color, national origin, sex, handicap, or familial status. - Discriminatory advertising is illegal - Exemptions Single-family dwelling rented by the owner 4 units or less, where owner occupies one of the units Private clubs Religious organizations

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2. Civil Rights Act of 1866: All citizens have right to inherit, purchase, lease, sell, hold and convey real and personal property. a. Bars racial or ethnic discrimination only b. Applies to all property transfers * Soules v. U.S. Department of Housing and Development (Is your child noisy) - The court employed a burden shifting procedure to analyze al claim under 3604(a). 1st the must show that he is a member of a protected class who applied for and was qualified to rent or purchase and was rejected although the housing remained available (Dont have to show motive. If you show these factors, you make out a prima facie case) 2nd The explains whether his actions were motivated by impermissible considerations (established nondiscriminatory motives for actions) 3rd The has a chance to show that the s stated reason is pretextual - In analyzing violation of 3604(c) (Discriminatory ad), the court employed an ordinary reader/listener standard. - Familial status 3602 1 or more individuals, who have not attained the age of 18, being domiciled with a parent of guardian *Bronk v. Ineichen (Deaf tenants wanted dog) Statute forbidding discrimination against handicap requires reasonable and necessary accommodations be made. Reasonable compare cost to landlord against benefit to tenant Necessary The accommodation will enhance the s quality of life. FHA proof of discriminatory effect is sufficient. Do not have to prove discriminatory motive CRA requires proof of intent/motive D. Delivery of Possession 1. Hannan v. Dusch 6.31 Hannan v. Dusch.doc (New tenant ready to move in, but old tenant doesnt leave. New tenant sues landlord) Rule: There is an implied covenant on the part of the landlord to insure the tenant has the legal right of possession. Rule: If the tenant is already in actual possession, it is the tenants responsibility to protect himself and the landlord has no obligation to protect him against wrongdoers and intruders. Does landlord have duty to make sure the premises are free of holdover tenants at the beginning of the lease? (2 schools of thought.) 1. The English Rule implies a covenant requiring the lessor to put the lessee in possession. Remedy: Sue landlord for damages and terminate the lease, not obligated to pay rent until in possession.

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2. The American Rule recognizes the lessees legal right to possession, but implies no such duty upon the lessor as against wrongdoers. Remedy: Sue wrongdoer for damages and possession. Tenant may have right as legal possessor to eviction action. Landlord may not. 3. In SC: Residential follows English rule (27-40-430) Landlord to deliver possession of dwelling unit Commercial, lease doesnt start until tenant is in possession (suggests LL would have eviction action) Note: Problem does not come up, if there is an express provision in the lease specifying who has obligation, landlord or tenant. Covenant of Quiet Enjoyment: landlord assures the tenant quiet possession as against all who rightfully claim possession through or under the landlord. Tenant has legal right of possession. Legally the landlord has the right to give the tenant possession. E. Subleases and Assignments 1. Ernst v. Conditt 6.32 Ernst v. Conditt.doc Privity of Estate: - Sublease no privity of estate between landlord and subtenant. Privity of estate stays between LL and original tenant. Separate privity of estate between tenant and subtenant (Sublease creates a new lesser estate) - Assignment privity of estate between landlord and assignee. Privity of estate moves with the estate. Privity of Contract: - Sublease Privity of contract between tenant and landlord remains. Privity of contract between tenant and subtenant. No privity of contract between landlord and subtenant - Assignment no privity of contract between assignee and landlord. Privity of contract between original tenant and landlord remains - If assignee/subtenant agrees to take on contract obligations of head lease, there is privity of contract between LL and ST Formalistic Approach: - The difference between an assignment and a sublease is that an assignment conveys the whole term, leaving no interest or reversionary interest in the assignor. A sublease may be defined as a transaction where a tenant grants an interest in the leased premises less than his own, or reserves to himself a reversionary interest in the term. Sublease Tenant retains reversionary interest (lesser estate) Assignment Tenant assigns whole interest Jaber v. Miller If the instrument transfers the lessees estate for the entire remainder of the term it is an assignment, regardless of its form or the parties intention. If the instrument transfers a lesser estate than the lessee has it is a sublease. Less Common Approach: Look to the parties intention. Actual words used are not conclusive, although they can be persuasive.

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2. Kendall v. Ernest Pestana, Inc. Approval Clause: Lessor must pre-approve any assignment or sublease. Majority Rule: Where a lease has an approval clause, the lessor can arbitrarily refuse approval of assignee. Minority Rule: Lessor can withhold consent only where the lessor has a commercially reasonable objection to the assignment. Rule: Without approval clause in lease, landlord has no right to control transfer by tenant. Implied term of Good Faith and Fair Dealing Mitigation of Damages Landlord has contractual obligation to mitigate their damages In SC: 27-40-220 Good Faith is defined term (210(5)) with limited definition Case: SC Supreme Court refused to read implied reasonableness term into contract F. The Tenant who Defaults 1. The Tenant in Possession *Berg v. Wiley Rule: A landlord may rightfully use self-help to retake leased premises from a tenant in possession without incurring liability for wrongful eviction provided that 1. The landlord is legally entitled to possession AND 2. The landlords means of reentry are peaceable. Modern Rule: If a judicial remedy is available, the landlord cant use self-help. Rule: Covenants run with the estate In SC: 720 LL can go in 710 (c) suggests LL should go to court 730 (c)(d) If abandons, LL may go in 530 Self help out except in very narrow circumstances (Policy suggested) 760 LL may not retake possession unless abandonment, surrender or termination. If LL terminates lease, self-help may be available 710 If rent unpaid within 5 days (notice can be printed in the lease), LL may terminate lease. (Very easy for LL to terminate lease, in which case he may use self-help) In practice, use of self-help it not wise. Summary Proceedings (Forcible entry or detainer statutes) quick and efficient means by which to recover possession after termination of a tenancy. (In reality not quick or efficient) 2. The Tenant who has Abandoned Possession *Sommer v. Kridel Historically, LL had no obligation to mitigate damages when a tenant defaulted. Rule: LL must make reasonable effort to mitigate damages when tenant defaults or abandons possession. In SC: 730(b) LL has duty to mitigate (also suggests other remedies)

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750 If rental agreement is terminated, the LL has a right to possession, rent, and a separate claim for actual damages for breach of rental agreement and attorneys fees. LL has duty to mitigate, but burden of proof on tenant to show LL did not mitigate Surrender terminates LLs property remedies, but not contract remedies. In SC: Still have contract remedies and that probably includes rent. G. Duties, Rights, and Remedies (Especially Regarding the Condition of the Leased Premises) a. Quiet Enjoyment and Constructive Eviction *Reste Realty Corp. v. Cooper (Water flooding basement from driveway) Expanded Covenant of Quiet Enjoyment- Any act or omission of the landlord, which renders the premises substantially unsuitable for the purpose for which they are leases, or which seriously interferes with the beneficial enjoyment of the premises is a breach of the covenant of quiet enjoyment. Constructive Eviction If one could characterize a shortcoming in the leased premises as an unlawful disturbance by the landlord as a breach of the covenant of quiet enjoyment implied in all leases and if the disturbance was so substantial as to amount to eviction, and, if the tenant thereafter abandoned the premises, then it is as though the tenant were evicted and therefore relieved of the obligation to pay rent. Mutually dependent covenants T has obligation to state and pay rent. LL has obligation to perform covenant of quiet enjoyment - Tenant is not relieved of obligation to pay rent when there is a constructive partial ejectment. The Illegal Lease * Brown v. Southall Realty Co. (LL sued to evict for nonpayment of rent) - Court found that no rent was due under lease b/c unsafe and unsanitary conditions violated housing code. Rule: Lease in violation of statutory prohibitions is illegal contract and therefore unenforceable. - Does not apply if code violations develop after the making of the lease. - Minor technical violations so not render lease illegal, nor do violations the landlord had neither actual nor constructive knowledge of. - Tenant under an illegal lease is a tenant at sufferance and the landlord is entitled to the reasonable rental value of the premises given their condition b. The Implied Warranty of Habitability * Hilder v. St. Peter Warranty of Habitability

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In SC: 440 fit AND habitable 440(c) In single family home, LL can shift duties for repairs in good faith and not for purpose of evading obligations of LL 440(d) In apartment, LL can shift duties for repairs 440(d)(1) maybe the only thing that cannot be shifted are (a)(1) obligations 510(5) and 510(6) Obligate T to use apartment in a reasonable manner 610(2) not for defects attributable to T 610(b) - damages 610(a) T can terminate lease (On notice) Warning: In SC 610 (a) and (b) may be either or, not both. 630 T may be able to withhold rent 640(a) A lot of requirements, but maybe able to withhold rent 790(a) T required to pay LL all rent once battle has started 630(c) If something doesnt work, T cannot make repairs and deduct form the rent 630(a)(1) T can deduct essential services (ex. Space heater if no heat)

THE END

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