Property I OutlineFall 2006 – Professor Brashier

Jonathan Nelson

I. Property can be classified into one of two categories: A. Personal Property or PersonaltyB. Real Property or Realty

II. 3 ways to acquire possession of unowned property1. Acquisition by Discovery2. Acquisition by Capture3. Acquisition by Creation

III. Acquisition by Discovery: gaining possession over property by “sighting” or “finding” unowned property. a. Principle of First in Time: This idea is extremely important because it is the starting

principle when it comes to possession and ownership of property.i. Idea is whoever sees it or possesses a thing or land first, then they gain ownership

over it. b. Locke’s Labor Theory: Mix labor with natural possession or a thing or land, it excludes

others from gaining a right to the property. i. Idea is that seeing something first is not enough to take possession, you have to

take some degree of control of the property by putting labor into it.ii. Accession: if you increase the value of property, you gain possession over it and

maybe even ownership.

IV. Acquisition by Capturea. Wild Animals

i. Possession Rule: Generally, if we take possession of a wild animal, then we gain ownership or it because wild animals in the state of nature are owned by no one.

1. Excludes Statutes and Regulations: Various statutes on certain species limit the ownership of certain wild animals.

a. Endangered Speciesb. Requirement of Hunting Licenses

2. Excludes any situations where policy would trump Possession Rule. a. Deter Trespasser: Possession of a wild animal while trespassing.

Pursuer forfeits title in favor of the landowner.b. Promote Public Good: Pierson v. Post – rid of pernicious beasts.c. Promote Peace and Certaintyd. Promote Universal expectations of private landowners

b. What is possession? (Not limited to wild animal cases)i. Elements of Possession: Intent and Control. Mere pursuit of an animal does not

exercise the proper level of control to give the pursuer a right in the animal.1. Intent: the person who acquires a thing must have the intent to assert

ownership over it.2. Control: the person who acquires a thing must exercise dominion and

control over a thing. Dominion and control trumps first in time.a. Control of an animal is normally established when the animal’s

natural liberty was taken away. i. Mortally wounding the animal

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ii. Entrapping the animal where it could not escape.

ii. Constructive possession – intent might not be as important as there may be a presumed notion of intent.

1. Exception: Chattel within Chattel – Must have knowledge of chattel within chattel or the owner of the property cannot constructively possess.

iii. Custom: sometimes possession is determined by custom. This only becomes problematic if there are competing customs involved.

1. Example: Whaling Case; Ghen v. Rich.

c. Other Rules involving Wild Animalsi. Rule of Increase: If domesticated animals mate with animals possessed by

another, who gets to keep the newborn? The owner of the mother or the owner of the father? The rule of increase says that the newborn belongs to the mother, because in the wild, we can know exactly who the mother is.

ii. Animus Revertendi: Wild animals that establish habits of domestication such as a habit of return. Most courts would no longer consider the animal wild.

iii. Escape: If a wild animal has no habit of return, then if that animal escapes and is then found by another, the finder gains possession.

1. Exception: Most courts will allow the original owner to regain possession from a finder if the animal is marked (such as a branding) and the owner exercises reasonable effort to recapture.

iv. All of these are subject to change according to state statute or regulationv. Successive Trespassers: Courts will rule for the prior possessor

d. Fugitive Resources (Oil, Gas, and Water): Courts viewed the fugitive nature of oil, gas, and water to that of animals, thus determining ownership by the rule of capture.

V. Acquisition of Property by Creation: General assertion is that if you create something, you are first in time and that thing is most certainly yours. Of course, this is not always the case.a. Property in One’s ideas and expressions: Intellectual Property

i. Common-Law Rule: Man’s property is limited to the chattels which embody his invention. Others may imitate at their pleasure.

1. Policy: Prohibits monopolies over a creation and promotes competition and fair prices.

ii. Legislative Protection of Intellectual Property1. Patents: Protects inventions or non-obvious ideas2. Copyrights: the right to own the reproduction of an expression of ideas.3. Trademarks: Words and symbols indicating the source of a product or

service. b. Property in One’s Person: one’s body

i. Moore v. Regents of Univ. of CA 1. Majority held that once cells were removed, they no longer belonged to

the defendant.2. Dissent: Cells were still Moore’s

ii. Uniform Anatomical Gift Act: allows for transfer or sale of body parts for medical or dental education or research.

VI. Right to Include and Exclude: Property owner has the right to include or exclude others from their property.a. Jacques v. Steenburg

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b. State v. Shack c. Right to Exclude can be restricted by common law or statute.

VII. Subsequent Possession: a. Acquisition of Property by Findb. Acquisition of Property by Adverse Possessionc. Acquisition of Property by Gift

VIII. Acquisition of Property by Find: various rules apply to found property depending upon the state of the property.a. General Rule is that the title of the finder of any article is good against the whole world

except the true owner. Idea of First in Time!b. Different forms of Found property characterized by METAL

i. Mislaid Property: original owner placed an item somewhere and then forgot it. Difference b/t lost and mislaid is the intentional placement. Ex.: went to barber shop and placed purse on the counter. Mislaid and not lost. (McAvoy v. Medina)

1. Mislaid property typically goes to the landowner (locus in quo) who then gains title against the whole world but the true owner. Courts have ruled that the landowner receives property is because he is the person that the true owner is most likely able to retrieve his property.

2. Technically, in situations of mislaid property, the landowner becomes an involuntary bailee and gains no ownership or possessory rights. Bailee only has a slight duty of care so basically the bailee is liable only if he is grossly negligent.

3. Important to remember that finder of mislaid property has no rights, either in ownership or possessory, to the property.

ii. Embedded in the Soil: property that is found underneath the ground.1. Almost always goes to the landowner as it is considered part of the land

rather than a separate thing. Emulates the principles behind constructive possession.

2. In TN, property that has been embedded in the soil, it will be considered mislaid, thus most courts would award to landowner.

3. Not limited to natural resources. Ex. Ancient Boat.iii. Treasure Trove: not very important today as it would be governed by statute.

1. Usually includes hidden money, gold, silver etc. whether or not buried underground.

2. Tendency is to treat is like any other found property; therefore it depends on the facts and how it is found.

3. Shipwrecks: today, property found in shipwrecks is governed by the Abandoned Shipwreck Act.

iv. Abandoned Property: voluntary and intentional relinquishment of property and rights to property. Ex.: Putting an old sofa in or by a dumpster.

1. Person who finds and possesses (intent + control) abandoned property becomes its owner with all rights to property, even against original owner.

2. Real property cannot be abandoned.3. Burden of proof is on person claiming abandonment.

v. Lost Property: original owner did not intentionally place property somewhere, it was unintentionally lost such as falling out of a pocket.

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1. With lost property, the title of the finder is good against the entire world except against the true owner.

c. Constructive Possession: Idea that one constructively possesses anything that is on, in, under, or over one’s real property, whether there is knowledge of the chattel or not. There is a reasonable expectation of control to everything in one’s home or property.

i. Hannah v. Peel : Homeowner would have constructively possessed the Brooch if he actually lived in the house.

ii. Exception: Chattel within Chattel. Knowledge of the Chattel within the Chattel is required to possess.

d. Place of Finding: Public v. Privatei. If lost property is found in a public place or a public part of a private business,

item is often awarded to the finder.ii. If lost property is found in a private place or a private part of a business, it is

often awarded to the locus in quo.e. Relation of Parties

i. Employee Relationship1. Employment Contract: First look to an employee’s contract to see if

there is a contractual obligation to turn in lost or mislaid property.2. Common Practice: Look to what is customary in the scope of

employment. a. Employees rights to an item are stronger if the item is found in a

public place rather than a private place. Ex. Hotel Lobby v. Hotel Room.

b. Employees rights are stronger if employee is technically not on the job, such as after he clocks out or on a day when he is off.

c. Independent contractors have more rights to found property because they have fewer restrictions on the job.

ii. Joint Finds1. General Rule is that if control of found property is taken jointly, then

each finder has an equal share to the property.IX. Bailments: Rightful possession of goods by one who is not the owner

a. Personal Property is the subject of bailments only, no real property!b. Make sure to distinguish bailments, licenses, and leases: think of car parked in public

garage hypo.i. Bailment: stronger argument if there is a transfer of keys, such as with valets.

ii. Licenses and Leases: If there is no attendant and you pay X dollars to park, this might be a license or lease.

c. Two types of bailments: Voluntary or Involuntary

Type of Bailment Duty of Care Duty of Re-DeliveryVoluntary / Benefit to Bailor Slight Strict Liability for failure to

redeliverVoluntary / Mutual Benefit Ordinary or Reasonable Strict Liability for failure to

redeliverVoluntary / Benefit to Bailee Extraordinary Strict Liability for failure to

redeliverInvoluntary or Constructive Probably Slight Liable only if grossly negligent

d. Damages: Ability to sue a 3rd party for damage done to property under bailment:

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i. Voluntary bailments: 3rd party can only be sued once under , either by Bailor, Bailee, or both at same time, but not two separate times.

1. If Bailee sues and recovers, then Bailor can sue the Bailee under duty of care or duty or re-delivery.

ii. Involuntary or Constructive bailments: 3rd party can be sued twice, by both Bailee and then bailor.

1. If 3rd party is sued twice, and both parties recover, then the 3rd party can sue the Bailee and recover from him under duty of care.

e. Acts of Godi. Bailee’s are not considered liable across the board for acts of God, and the Bailor

must bear the loss.f. Mistakes: 2 Kinds of Mistakes

i. Mistake as to value of item: If there is a mistake as to the value of what’s being placed in bailment it does not effect that outcome as the Bailee is still responsible for whatever duty of care and duty of redelivery depending on the type of Bailment it is.

1. Bailee is still responsible for the full value or the item.ii. Mistake as to what is being bailed: If there is a mistake as to what is actually

being placed in the possession of the bailee, then there is probably no bailment. If Jeans lends me his car for the weekend and forgets to tell me that there are valuables in the trunk, I am only responsible for the car and what a reasonable person would have in a trunk such as a spare tire.

g. Exculpatory Clauses: Parties try to limit or excuse themselves from liability prior to any wrongful occurrence.

i. Sign saying “Not responsible for Damages to Your vehicle” in a parking lot is an exculpatory clause.

ii. Reasonable clauses can be enforced1. Bailee must show that the Bailor read it or knew about it: becomes

factual2. Bailee would argue that a reasonable person should read it.

X. Subsequent Possession: Acquisition of Property by Adverse Possessiona. Adverse Possession: Method of acquiring title to real or personal property by openly

occupying or displaying property as though it was your own and the owner fails to reclaim the property.

i. Does not apply in Landlord/Tenant situationsii. Make sure to distinguish between adverse possession and prescriptive easement!

1. Prescriptive Easement: b. Each State Has its own Statute of Limitations whereby the owner of the property has a

certain period of time to bring the action to recover his property. c. Statute of Limitations begins to run once all the elements of AP are met: TOUCH EVAN

(T) – Time Period – Statute of Limitations(O) (N) – Open and notorious. Requires that Adverse Possessor is not secretly possessing or concealing the property. Basically, this is possessing as a normal landowner would.(U) and (C) – Uninterrupted and Continuous. Adverse Possessor has to possess the land as a normal landowner would for the entire time period. Continuity requirement is one based on purpose of possession rather than mathematical continuity – Howard v. Kunto. (H) – Hostility. State of Mind. Most courts say that state of mind is irrelevant and that all that matters is that you are claiming the property as your own against the adverse possessor.

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(V) – Visible. Ties in with open and notorious. Allows true owner to bring ejectment action.(E) – Exclusive. You and you alone are using the property as the true owner. Two people can’t do it together.(A) – Actual. Must actually be adversely possessing some part of the property.

d. Adverse Possession of Real Propertyi. Common Law Statute of Limitations is 20 years.

ii. TN – there are 4 methods of Adverse Possession of Realty

Three Statutory Methods and One Common Law Method: All Require TOUCH EVAN requirements!Statutory Method #1(Requires Privity to tack)

Adverse Possession Under Properly Recorded Color of Title (Deeds and Conveyances)

If the Adverse Possessor has a properly recorded Color of Title, then the AP will gain full legal title in 7 Years!

Statutory Method #2(Requires Privity to tack)

Adverse Possession without Properly Recorded Color of Title

If the AP does not have a properly recorded color of title, but has possessed the property for 7 years or more, then AP gains possessory or defensive title rather than legal title. Defensive title simply prevents the true owner from kicking AP off the property. Once AP breaks TOUCH EVAN element, true owner can prevent re-enter.

Statutory Method #3(Requires Privity tack)

Adverse Possession under properly recorded color of title but unaffected by disabilities

If AP possessor has properly recorded color of title that has been in the books for 30 years or more and AP couples this with 7 years of possession, then disabilities of true owner don’t matter and AP gets full legal title.

Common Law Method(Does not require Privity to tack)

Common Law Presumption of a Grant

If AP has possessed the land for 20 years, AP gains full legal title. But, disabilities of the True Owner toll the SOL.

iii. Disabilities: Statute of Limitations is extended if true owner has disability

(includes minors and those of unsound mind).1. TN Statutory Methods

a. Under statutory methods, disability is immaterial unless it existed at the time of AP begins.

b. SOL is extended for the duration that the owner has the disability plus a grace period of 3 years.

c. Periods of disability do not toll the SOL!i. Use end of disability plus 3 years OR 7 yrs from the

beginning of Adverse possession, whichever is longer.d. Privity is required to Tack under the statutory methods.

2. TN Common Law Methoda. Under Common Law, any period of disability tolls the running

of the SOL – multiple intervals of disability are allowed.b. Periods of disabilities toll the statute of limitations!c. There is not grace period under the Common Law Method.d. Privity is not required to tack under the Common Law Method.

e. Adverse Possession of Chattelsi. Traditionally under the rules of Adverse Possession, the SOL began to run the

minute the AP gained possession of the chattel.ii. Several Courts viewed this rule as unjust and adopted the Discovery Rule.

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iii. Discovery Rule: If the facts are approprtiate, a cause of action will not begin to accrue until the injured party discovers, or by exercise of reasonable diligence should have discovered, facts which form the basis of a cause of action.

iv. TN has not officially adopted the Discovery Rule but it would not be surprising if it did.

v. SOL for Adverse Possession of Chattel in TN is 3 years.

XI. Bona Fide Purchasers: Good faith purchaser.

Scenario:First Possessor (Usually True Owner)…….………Middle Man……………….Bona Fide Purchaser

How did Middle Man Acquire Title?

By Theft By Sale (Gone Wrong) By Bailment

Title or Power of Middle Man

Void TitleVoidable if UCC 2-403(1)

Applies

Power to transfer First Possessor’s rights if

Middle Man is a Merchant Who Deals in

goods of that Kind

Title of Buyer if Buyer is a Bona Fide Purchaser

Void Title Good Under UCC 2-403(1)

Same as First Possessor had if Middle Man is a Merchant Who Deals in Goods of that Kind and Bona Fide Purchaser is Buyer in the Ordinary

Course of Business under UCC 2-403(2)

(Where Middle Man obtains item by Bailment,

ALWAYS check for common law estoppel if 2-403(2) won’t work for

buyer.

XII. Subsequent Possession: Acquisition of Property by Gifta. Three elements to a gift

i. Intent: Donor must have the intent to pass title presently. You can convey a future interest, such as a remainder, but you cannot make a promise to give a gift in the future. Donee has to get some present rights!

1. Intent to give a gift may be shown by oral evidence.ii. Delivery

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1. Actual: Manual hand delivery. Preferred Method.a. Actual delivery is normally required unless manual delivery is

impractical or impossible to accomplish.2. Constructive: handing over of the means of obtaining possession and

control of the gift. a. Ex. Handing over a key to a car or house.

3. Symbolic: handing over something symbolic of the gift.a. Ex. Written instrument describing the gift or other object

symbolic of the gift.iii. Acceptance: Law presumes acceptance when the gift is beneficial to the donee.

b. Two type of giftsi. Inter Vivos Gifts: These are gifts that are made in the lifetime of the donor.

ii. Gifts Causa Mortis: Gift that is made in contemplation of imminent death – Death must be imminent.

1. Donor can revoke at any time.2. If the donor recovers from the illness or cause of death, then the gift is

automatically revoked.3. If the donee predeceases the donor, then the gift is automatically

revoked. c. Gifts causa mortis are valid will substitutes in certain circumstances. Goal is to enforce

decedent’s intent!i. Gifts causa mortis for a specific item will always trump will when the will does

not have a specific provision for the item.ii. Later executed will with specific provision conflicting the Gift causa mortis

revokes the gift and the item transfers through will.iii. Wills written previous to the Gift Causa mortis are overridden by the gift as long

as there is clear and convincing evidence of the donor’s intent.d. Gifts made in confidential relationship (Lawyer – Client, Doctor – Patient, Priest –

Congregant).i. Law maintains rebuttable presumption that a gift from a weaker party to a

dominant party is invalid! Dominant Party has two main rebuttals:1. Proof that the weaker party received independent meaningful advice

from a third party, such as another attorney.2. Dominant party must show that the weaker party is a person that is not

susceptible of undue influence. Prove that weaker party knew exactly what she wanted to do and nobody influenced her.

e. Gifts made through delivery accomplished through an agent can be accomplished in the following circumstances:

i. Gift through agent is appropriate if it is impractical or impossible for the two parties to meet. The agent must be an independent agent or an agent of the donee.

ii. Gift through agent of the donor can only be accomplished if agent actually and manually delivers the gift.

XIII. Estates in Landa. Present Possessory Estates

i. Freehold Estates (Thinking Ownership)1. Fee Simple2. Fee Tail3. Life Estate

XIV. Freehold Estatesa. Fee Simple Absolute (FSA)

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i. FSA is the most complete type of ownership. It can potentially last forever. ii. There is no future interest in the transferor.

iii. There is no future interest in the transferee.iv. Ex. [O -> A and his heirs] or [O -> A]. A gets FSA, O has no FI. v. “and his heirs” is no longer necessary at Common Laaw to convey FSA.

b. Fee Simple Defeasible: Three kinds of defeasible fees:i. Fee Simple Determinable (FEESID): Fee Simple but there is a condition

involved in order for the Fee Simple to be valid.1. Look for DUWAS language. During, Until, While, As long as, So long

as. These are time limitations!2. Transferor maintains a future interest of possibility of reverter (P/R).

a. Possibility of Reverter: Once the condition is failed to be met, the land automatically reverts back to the transferor.

3. Ex. O -> A so long as A farms the land.a. A gets FEESID. O maintains possibility of reverter which

reverts automatically back to O when A stops farming.ii. Fee Simple Subject to Condition Subsequent (FEECOS): Fee simple that does

not automatically terminate but may be cut short or divested at the transferor’s election when a stated condition happens.

1. Look for condition that is in separate clause from the grant. Normally deals with a specific event and not a duration of time.

2. Ex. O -> A, on condition that A farms the land; but if A stops farming the land, then O can reenter and retake premises.

3. Ex. O -> A; however, if A does so and so, then O may enter and retake premises.

4. The transferee gets a FEECOS and the transferor has a right of re-entry (R/R).

5. Right of Re-entry is different from P/R because Right of Re-entry does not kick in automatically, the transferor has to go to court to kick off the transferee.

6. many courts require that the Right of Re-entry must be expressly stated; if it is not, many courts will view the condition as non-binding.

iii. Fee Simple Subject to Executory Limitation (FEESEL)1. Look to see who future interest goes to. Executory Interest cuts into

another’s interest. Springing (Cuts short interest in the transferor) v. Shifting (Cuts shorts interest in transferee).

2. Ex. O -> A, but if B graduates from college, then to B. A has FEESEL and B has shifting executory interest.

3. Ex. O -> A if and when he graduates from college. O has FEESEL and A has springing executory interest.

c. Fee Taili. Created by the conveyance [O -> A and the heirs of his body]

ii. Grantor maintains a reversion if and when A’s bloodline runs out unless O conveys remainder to third party.

iii. There are several variations of the Fee Tail:1. O -> A and the heirs female of his body.

a. Fee Tail Female2. O -> A and the heirs male of his body.

a. Fee Tail Male.3. O -> A and the heirs of his body by his wife Mary.

a. Fee Tail Special.

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4. You can mix Fee Tails male or female with fee tale special to create a Fee Tail Male Special or Fee Tail Male Special.

iv. There are three modern approaches to the Fee Tail1. DE, ME, MA, and RI still recognize the fee tail.

a. But, it can be disentailed by a conveyance to a third party in FSA.

2. Second modern approach does not recognize the fee tail. a. TN uses this approach. b. O -> A and the heirs of his body.c. Courts will view this Fee Tail Language as O simply conveying

a FSA to A.d. Any remainders in the Fee tail language are void.

3. Third modern approach imagines other language in the document.a. O -> A and the heirs of his body then to B.b. Courts will imagine that this reads: O -> A and his heirs, but if A

has no surviving issue at death, then to B. i. So that A has a FEESEL and B has an executory interest.

d. Life Estate (LE)i. Present possessory estate that is not an estate of inheritance.

ii. Ex. O -> A for life.iii. A has a life estate, O has a reversion which kicks in at A’s death.iv. Life Estate is always followed by a reversion in the grantor or a remainder in a

third party. e. Life Estate Per Autre Vie (LE PAV)

i. Life estate that is measured by the life of another.ii. Ex. O -> A for B’s life.

iii. A gets the estate for the duration of B’s life. Once B dies, O gets estate back from reversion.

f. Life Estate Defeasiblei. Life Estates can be defeasible just as fee simples and they follow the same rules.

ii. Remember that in O -> A for life so long as A farms the land.1. A gets Life Estate Determinable and O has both a reversion and a

possibility of reverter.XV. Future Interests

a. Future Retained in the Grantor (Reversion, P/R, and R/R are freely alienable and can be transferred inter vivos, devised in a will, or through intestate succession).

i. Reversion: grantor’s future interest that follows the natural end of a conveyed estate.

1. Rule of Reversion: Grantor will retain a reversion unless he conveys a present possesory fee simple (either FSA or a defeasible Fee Simple) or a vested remainder in fee simple.

2. Reversion automatically transfers title back to the Grantor when the possessory estate ends naturally.

ii. Possibility of Reverter (P/R): Grantor will retain a possibility of reverter after a conveyance of a Fee Simple Determinable only.

1. Don’t confuse with Reversion! – Possibility is speculative while reversion is not.

2. Possibilty of Reverter – title automatically transfers title back to the Grantor when the condition is failed to be met.

iii. Right of Re-entry (R/R): Grantor will retain a right of re-entry after a conveyance of a Fee Simple Subject to a condition Subsequent only.

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1. Right of re-entry – title does not automatically transfer back to grantor when condition is failed to be met. Grantor must take action to eject present possessor or he can stay on land forever.

b. Future Interests in a Grantee. i. Remainders: Future Interest created when a grantor conveys an inherently limited

possessory estate and, in the same conveyance, conveys a future interest to a second grantee (third person).

1. Vested Remainders: A remainder is vested if it satisfies the ABC vesting rule. Ascertainable, In-Being, and Not subject to Condition Precedent.

a. Fully Vested Remainder (FVR)i. No one can take interest away from holder

ii. O -> A for life, then to B. B gets FVR.iii. Strongest kind of vested remainder.

b. Vested Remainder Subject to Open (VRSO)i. Vested remainder that somebody else may be able to cut

into his or her interest. Normally followed by an executory interest.

ii. O -> A for life, then then to B’s children. B is living and has one child C. C has VRSO because other kids could cut into his interest. Unborn kids have executory interest.

iii. VRSO is subject to RAP!c. Vested Remainder Subject to Complete Divestment (VRSCD)

i. Vested remainder with a condition subsequent, not a condition precedent.

ii. Make sure to distinguish VRSCD with CR. VRSCD, the grant and the condition will be in separate clauses:O -> A for life, then to B; but if B divorces W, then to C.B has VRSCD, C has executory interest because it cuts into B’s interest.

2. Contingent Remainders: any remainder that violates one of the ABC vesting rules.

a. Contingent Remainders are subject to RAP!ii. Executory Interests: future interests in the grantee that divest the interest of the

grantee or grantor.1. Shifting Executory Interest – divests the interest in a grantee

O -> A for life, then to B’s children. B is living and has one kid. B has VRSO and unborn kids have shifting executory interest.

2. Springing Executory Interest – divests the interest in the grantor.O -> A if A graduates from college. O maintains FEESEL and A gets Springing executory interest.

XVI. Destruction of Contingent Remainders (DCR)a. DCR: A contingent remainder is destroyed if it is still contingent when the prior estate

ends.b. Ex. O -> A for life, then to B if he reaches the age of 25.

i. A gets LE, B has CR.ii. If A dies before B reaches the age of 25, then his CR is destroyed under DCR.

c. Rule of MergerEx. O -> A for life, then to B for life if B has reached 21, then to C.

i. A gets LE, B gets CR, and C gets FVR.

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ii. If A conveys his LE to C, then C would have a LE per autre vie and a FVR: these would merge and destroy B’s CR.

iii. Exception: If the possesory LE and vested remainder or reversion are created in the same document, any contingent remainders in between are not destroyed!

Ex. O -> A for life, then to B and his heirs if B survives A.iv. A gets LE, B gets CR, and O has reversion.v. If A then Conveys his LE to O, then O would have a LE per autre vie and a

reversion: these would merge and destroy B’s CR.d. Forfeiture:

i.e. DCR only applies to Contingent Remainders and not Vested Remainder and Executory

interests.f. In TN, DCR is not necessarily abolished so if Exam doesn’t specifically state that DCR is

abolished in TN, assume that DCR applies in TN!g. DCR is a Rule of Law!

XVII. Rule in Shelley’s Casea. RISC: Effort to further alienability that prevents grantor from using the same document

to convey a life estate to a grantee and a remainder to that grantee’s heirs.b. Ex. O -> A for life, then to A’s heirs (or A’s heirs of his body)

Normally, A gets life estate, A’s heirs would have CR.Under RISC, Remainder in heirs is destroyed and A would get the FVR, so A’s LE and FVR would merge into FSA.

c. RISC and Rule of MergerEx. O -> A for life, then to B if he graduates law school, then to A’s heirs.Under RISC, conveyance to A’s heirs is destroyed and goes to A so that A has LE and FVR destroying B’s contingent remainder.

d. NOTE: RISC does not apply if there are any adverbs or adjectives describing the grantee’s heirs! Has to say “to A’s heirs” or “to A’s heirs of his body” only!

e. RISC only applies to Contingent Remainders in the grantee’s heirs or heirs of his body, not Vested Remainders and Executory Interests!

f. RISC is abolished in TN!g. RISC is a Rule of Law!

XVIII. Doctrine of Worthier Titlea. DOWT: Effort to further alienability that prevents a grantor from conveying a possessory

estate to a to a grantee and a future interest to that grantee’s heirs.b. Ex. O -> A for Life, then to O’s heirs.

Under DOWT, conveyance to O’s heirs is stricken and substituted with O so that A has the present possessory LE and O has a reversion in FSA.

XIX. Rule Against Perpetuitiesa. RAP: A future interest is void the moment it is created if:

1. It is in a grantee2. It is either contingent, subject to open, or executory interest; and3. It might still exist and still be contingent or subject to open longer than

21 years after the death of the last person alive at the time of the conveyance.

b. Applies only to Contingent Remainders, VRSOs, and Executory Interestsc. Ex. d. Gestation Rule: A child is considered in being from the time the child is conceived if the

child is born alive.

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e. Fertile Octogenarian Rule: Any person who is alive is considered capable or having more children, no matter the age or physical condition of the person.

f. Rule of Class Gifts: In future interests of classes of people, such as VRSO or executory interest, if any of the class members violates RAP, then the entire class gift is void.

XX. Concurrent Ownershipa. Concurrent Ownership: Refers to situations when two or more persons have concurrent

rights of present or future interest in land.b. We are responsible for knowing three of the five types of co-ownership

i. Tenancy in Common: ii. Joint Tenancy

iii. Tenancy by the EntiretyTenancy in Common (TIC) Joint Tenancy (JT) Tenancy by the Entirety (TBE)

O -> A and B O -> A and B as Joint Tenants with the right of survivorship

O -> H and W (H and W are married)

Tenants in Common have separate but undivided interests in the property.

TIC is recognized in all states and the presumption is that a conveyance to one or more persons is a tenancy in common unless specifically stated otherwise.O -> A and B= TICO -> A and B jointly = TICO -> A and B as joint tenants = Most states, JT

Interest in TIC is devisable by will, conveyable by deed, and descendible through intestate succession.

Each TIC gets a right to possession of the whole.

Joint Tenants hold a right of survivorship.

Presumption is for creation of a TIC so if a JT is desired, specific language is normally required such as:O -> A and B as JTs with the right of survivorship.; orO -> A and B as JTs but not as TIC.

Most states under Common law require the Four Unities unless a statute has abolished the requirement:Time: The interest of each joint tenant must be acquired or vest at the same time.Title: All joint tenants must acquire title by the same instrument or by a joint adverse possession. (Never under intestate succession)Interest: All must have equal undivided shares and identical interests. (Today, some courts allow Joint Tenancies with unequal shares)Possession: Each must have a right to possession of the whole.

TBE is a type of concurrent interest that can only be held between a husband and a wife.

Most states no longer recognize the TBE – TN still does for both real and personal property!

The Four unities are required in addition to the marriage requirement (must actually be married, not engaged or life partners, etc.)

In TN, it is presumed that a conveyance to a married couple is held in TBE, unless specified otherwise.

O -> H and W = TBE if H and W are married.

O -> A and H and W. (H and W are married)Most courts hold that A would hold with H and W as single unit in TIC. H and W would hold their 1/2 interest in TBE.

Not every conveyance to a married person is a TBE – as long as it is specified otherwise, then they can hold as TIC or JTs.

TIC – NO RIGHT OF SURVIVORSHIP Joint Tenants hold a right of survivorship which trumps any will provisions!

Joint Tenants can sever the Right of Survivorship by conveying one’s interest to a third party during the life of the transferee – Result is a tenancy in common!

Notice of Severance is not required to the other party!

Common Law used to require use of “Straw Party” to sever JT or create a JT in himself and another person. Today, most courts wil focus on the intent of the grantor than on the unities so direct conveyances are allowed without use of straw party.

Tenants by the Entirety also hold a right of survivorship like Joint Tenants.

Difference is that TBE cannot be severed unilaterally – Both parties must agree or divorce must occur to sever the TBE.

Tenants by the Entirety can convey away their right of survivorship to a third party.

At divorce, Tenants by the Entirety typically become TIC unless the divorce decree calls for some other provision.

O -> A and BIf A dies, his interest goes to his will beneficiaries or to his heirs through intestacy.

O -> A and B as Joint Tenants.If A dies, B receives A’s interest through Right of survivorship. A’s will provision are irrelevant.

O -> H and W. ( H and W are married)If H dies, W receives H’s interest through ROS. H’s will provisions are irrelevant.

c. Other Rules Involving Joint Tenancies

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i. Uniform Simultaneous Death Act: If A and b are joint tenants and die on a common accident, A’s estate gets half of the interest and B’s estate get half of the interest, to be held in TIC.

1. Traditional Approach: The tenant who has the last breath, his or her estates gets 100% of the interest. TN still adheres to this approach.

2. Modern Approach: If one Joint Tenant survives the other by 120 hours, then that tenant’s estate gets 100% of the interest.

ii. Slayer’s Statute: Person who feloniously and intentionally kills another, should not benefit from that killing.

1. Virtually all states, including TN, have a Slayer’s Statute.2. Ex.: If A and B are Joint Tenants, and A kills B, A does not get B’s

interest through right of survivorship. Under the Slayer’s Statute, the Law converts the joint tenancy into a TIC and 1/2 of the interest will got to B’s estate. A still gets to keep his half in jail.

3. Must be both felonious and intentional, but Slayer does not have to be convicted.

iii. Effect of Mortgages on Joint Tenancies: A and B hold as Joint Tenants, B mortgages the property to C. What Happens?

1. Primary Lien Theorya. Mortgage acts a simple lien and does not sever the Joint

Tenancy, thus it has no overall effect on the right of survivorship.

2. Secondary Lien Theorya. Mortgage is still viewed as a lien and does not sever the Joint

Tenancy.b. Difference b/t Primary and Secondary is that in Secondary, the

mortgage debt does not go away so remaining Joint Tenant would have to pay mortgage debt.

3. Title Theorya. Mortgage is viewed as conveying title so the moment that the

mortgage is conveyed, the Joint Tenancy is severed.b. In TN, Courts traditionally held to this theory but today they may

or may not adhere to Title Theory.4. Intermediate Theory

a. Mortgage is initially treated as a lien until there is a default. Once default occurs, it is considered a transfer of title and thus the Joint Tenancy is severed.

b. Once B goes into default, the JT is severed.iv. Joint Bank Accounts: Occurs when one person puts all the money into an account

and names a joint account holder. There are three possibilities to infer from the following situation: O deposits $5,000 in a joint and survivor bank account with O and A as joint tenants.

1. True joint Tenancya. This is the presumed possibility in which O makes a present gift

to A of 1/2 of the sum deposited in addition to the right of survivorship of the sum deposited.

2. Payable-on-Death Accounta. O’s intent was purely so that A may intend to make a gift to A

only of the right of survivorship to the funds in the account.b. This is basically a will substitute.c. Banks usually have specialized POD forms to use.

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3. Convenience Accounts or Agency Accountsa. O’s intent is to give A the power to draw on the account merely

for O’s benefit and convenience: pay bills, buy groceries, etc. Usually seen with the elderly.

b. No right of survivorship is intended.c. Must be clear and convincing evidence that a convenience

account was intended; is so, then the surviving joint tenant does not take the sum at the death of account creating joint tenant.

d. Partition: Occurs when cotenants decide to terminate a co-tenancy, but cannot agree on a division of the property or the proceeds from a sale.

i. If parties decide partition outside of court, each co-tenant can exchange cross-deeds so that property ends up as two separate plots of land.

1. “Strawman” could be used to accomplish this same goal.ii. Partition Action in court is available to any Joint Tenant or Tenant in Common.

Partition is not available to Tenants by the Entirety.1. Partition-in-kind: split of the actual land.2. Partition by sale: sell the property and spilt the proceeds.

iii. Courts are usually driven by economic factors but may consider emotional attachment when deciding to partition land.

iv. Owelty: If Partition in kind results in unequal shares of the property, a money award can be made from one tenant to another to equalize the shares

v. Agreement never to bring partition against co-tenant1. Courts generally uphold such agreements as long as they are reasonable.2. Length of Time is also a factor: normally cannot exceed perpetuities

period of 21 years.e. Sharing the benefits and burdens of Co-ownership

i. General Rule: in the absence of an agreement or “ouster,” a co-tenant in possession is not liable to other co-tenants for the value of the his use or occupation of the property.

ii. Ouster: Occurs when one co-tenants intentional excludes another co-tenant(s) from using the land.

1. Ex.: Placing locks on a building owned in co-tenancy with the intent of prohibiting other co-tenants from use.

2. If a co-tenant is found to have committed Ouster, then he is liable to the other co-tenant(s) proportionate share of the rental value.

iii. Leases: In all states, a co-tenant who collects from third parties rents or other payments arising from the co-owned land must account to co-tenants for the amounts received.

1. Absent ouster, co-tenant is only required to pay portion according to actual funds received and not fair Market value.

XXI. Marital Interestsa. Common Law Martial Property System: fundamental principle is that husband and wife

have separate property going into marriage, but become one under a legal fiction after married and thus have equal possession of property solely during marriage.

i. Technically, the wife ceased to be recognized as a legal person during the duration of the marriage, thus all personal property became property of husband. Real property of wife remained under wife’s title but husband possession to wife’s property during and after marriage.

ii. TN is a Common law Property Stateb. Community Property System

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i. Rests on the idea that marriage is an equal partnership and husband and wife should share community property equally, even after the marriage is finished.

1. Community Property: Everything that is earned during marriage.2. Separate Property: What is brought into the marriage or acquired by gift

or inheritance.c. Termination of Marriage by Divorce

i. Common Law1. Traditionally property remained the property of the spouse holding title.2. Modern Courts have begun to recognize “Rule of Equitable Division” in

which the court uses it discretion to divide martial property on equitable principles. Three main approaches:

a. Statutory authorization to divide all property owned by spouses together regardless of time and manner of aquistition.

b. Statutory authorization to divide all property that was acquired only during the marriage including earnings, gifts, and inheritances.

c. Based on Community Property approach: divide only proper that was acquired during marriage from earnings; does not include gifts and inheritances.

ii. Community Property1. Community Property (property acquired through earnings) is split

between spouses, separate property remains under the spouse who holds title.

d. Termination of Marriage by Death

Community Property States

Common Law States Commonwealth Countries

Community Property is viewed distinct from Separate Property.

Community Property: All property that is acquired during marriage through earnings is shared equally during and after marriage.Separate Property: All property that is brought into marriage or acquired during marriage through gift or inheritance.

There is no special protection for surviving spouses because it is not needed – all property that was acquired through earnings will become the property of the surviving spouse.

Dower Traditional Elective Share

Modern Elective Share

Georgia Testator’s Family Maintenance.

Court’s make decision on an equitable basis – what is “reasonable.”

Surviving Spouse gains a life estate in 1/3 of each parcel of inheritable realty owned by the other spouse during marriage. (Does not include pieces of realty held in JT!)

Gender Neutral

Surviving Spouse gains a fixed fractional portion of decedent spouse’s probate estate. (Personal and Real Property)

Gender Neutral

1/3 is the typical fractional amount, 1/2 in some states.

Surviving Spouse doesn’t have any right to non-probate property such as Joint Tenancies, Insurance Proceeds, or Trusts.

Marriage is an economic partnership increasing over time!

Looks at the total martial wealth (probate and non-probate)

After X amount of years, 15 under the Probate Code, spouses would get 1/2 of martial property at death of the spouse.

NO protection for surviving Spouse!

TN is somewhere in between the Traditional Elective Share and Modern Elective Share: After 9 years, the surviving spouse get 40% of all martial property (probate and non-probate)

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