Property Law Cases

State v. Shack, Supreme Court of New Jersey, 1971, 58 N.J. 297, 277 A.2d 369

Plaintiff landowner Tedesco employed migrant workers who lived on the property. A statute allowed fines for being a "disorderly person" because of trespassing on property after being forbidden to do so by the owner. Tejeras, a field worker for SCOPE (Southwest Citizens Organization for Poverty Elimination—funded by an act of Congress) and Shack, an attorney for CRLS (Camden Regional Legal Services, Inc.—also funded by an act of Congress) attempted to come on plaintiff's land to give a worker medical treatment and to discuss a legal problem with a worker and, when denied entry by plaintiff they entered the land anyway. Was there tresspass? Held No, a person's right to property is not absolute, and must be balanced against human values. Owning property does not allow "dominion over the destiny of persons the owner permits to come upon the premises." Here the owner may not prevent a worker from partaking in health and legal rights, so entry by defendants did not invade a possessory right of the owner and there was no tresspass.

Jones v. Alfred H. Mayer Co., Supreme Court of the United States, 1968, 392 U.S. 409, 88 S.Ct. 2186, 20 L.Ed.2d 1189

Plaintiffs brought an action against defendants under 42 U.S.C.A. § 1982 because defendants refused to sell land to plaintiffs because plaintiffs were black. Section 1982 gives all US citizens the same rights to "inherit, purchase, lease, sell, hold, and convey real and personal property." Does this apply to private land transfers as well as those in which the state is involved? Held Stewart: Yes; this can be seen by the language of the statute and by the legislative history. Is this control of private use of property constitutional? Held Yes; the Thirteenth Amendment outlawed slavery and gave Congress the "power to enforce this article by appropriate legislation." Because preventing private sales of land that discriminate is a means of preventing slavery, it is within Congress' power under the Thirteenth Amendment.

Johnson v. McIntosh, Supreme Court of the United States, 1823, 21 U.S. (8 Wheat.) 543, 5 L.Ed. 681

Chiefs of the Indian Illinois and the Piankeshaw nations sold plaintiff land in 1773 and 1775. Do US courts uphold that conveyance? Held No, the Indians didn't that right to the land. Europeans early on adopted a principle that exclusive, absolute title of land was granted to the discoverer of new land, and "that discovery gave an exclusive right to extinguish the Indian title of occupancy, either by purchase or by conquest ..." Thus the British Crown originally had this exclusive right for most of the land of the United States, and afterwards this right went to the United States. Although we don't want "to engage in the defence of those principles which Europeans have applied to Indian title," they were justified because the Indians were not Christians and were savages and couldn't be ruled by the conquering people and if the conquerers wouldn't have taken the land it would have remained a jungle. Because this principle was established by the conquerers and accepted by the people, "it becomes the law of the land, and cannot be questioned." This absolute, exclusive right never rested with the Indians, so they don't have power to sell the land to whom they wish. [Indian occupancy, which might have been allowed at times, is therefore distinct from ownership.]

Moore v. Regents of the University of California, Supreme Court of California, 1990, 51 Cal.3d 120, 271 Cal.Rptr. 146, 793 P.2d 479

Held One doesn't have property rights to body parts, so there cannot be sale of body parts. Body parts are valuable, but not in commerce.

Hecht v. Superior Court, 16 Cal. App. 4th 836 (1999 or 2000)

Held The settlement between the mistress and family of a deceased man for dividing vials of sperm is not valid, because body parts are not consideration for an agreement.

Cryolfe, 2 Calif. Rep. 2d 296 (2003)

Plaintiff sued a tissue bank for a defective, infective tendon. Held No suit can be brought, because the tendon is not property—a service was paid for, not a product.

Hodel

Held Congress has a right to define the limitations of wills of Native Americans, and in some instances they cannot convey land via wills.

Shelley v. Kraemer, Supreme Court of the United States, 1948, 334 U.S. 1, 68 S.Ct. 836, 92 L.Ed. 1161

Petitioners Shelley bought a house in a neighborhood with a restrictive covenant against blacks, 30 of 39 people having signed the agreement. Respondent owners in the neighborhood sued to have the Shelleys' land taken away from them, but the trial court ruled that the restrictive covenant was invalid because it wasn't signed by all. The Missouri Supreme Court ruled the restrictive covenant valid. Do restrictive covenant in general violate Fourteenth Amendment equal protection? Held Vinson: No, the Fourteenth Amendment doesn't apply to private ability to contract. Does state enforcement here constitute state action to which the Fourteenth Amendment would apply? Held Yes, state enforcement of a restrictive covenant is a state action barred under the Fourteenth Amendment. As the state is standing by to enforce restrictive covenants against whites, is the action equally protective? Held No, the rights established by the Fourteenth Amendment are personal rights. "Equal protection of the laws is not achieved through indiscriminate imposition of inequalities."

Goddard

Meteorite lands in field leased to a tenant. Held Things that belong to the soil (and do not have a true owner) belong to the owner of the soil.

Eads v. Brazzleton

Barge sunk. Eads found the barge and went to get helpers, but when he came back Brazzleton had brought it up. Held When something has a true owner and the true owner doesn't want it, the new owner is not one who finds it but one who holds dominion over it.

Armory v. Delamirie, King's Bench, 1722, 1 Sess. Gas. K.B. 505

A chimney sweep finds a ring, shows it to a jeweler, and the jeweler tries to cheat the chimney sweep by exchanging stones. Held The finder of personal property that has been abandoned has the primary right.

Bridges v. Hawkesworth, Court of Queen's Bench, 1851, 21 L.J. Q.B. 75

South Staffordshire Water Co. v. Sharman, Court of Queen's Bench, 1896, [1896] 2 Q.B. 44.

Jewelry is found at the bottom of a pool. Held The owner, through the employees who are agents, is the owner.

Hannah v. Peel, King's Bench, 1945, [1945] K.B. 509

Defendant Peel owned Gwernhaylod House, but didn't occupy it because it was requisitioned. Plaintiff Hannah, a lance-corporal serving in a battery of the Royal Artillery, was stationed at the house while it was being used as a sick bay, and found a brooch in a crevice above a window frame. He reported it and gave it to the police, who gave it to the defendant when no one claimed it. Does one in control of property own a found item that is not attached to the property? Held Yes; the brooch was lost, the defendant had no knowledge of the item, the plaintiff found the item, and the defendant was never in physical possession of the house in which it was found.

Schley v. Couch, Supreme Court of Texas, 1955, 155 Tex. 195, 284 S.W.2d 333

The petitioner was having concrete laid in part of his garage, when a worker found old money that had been hidden in a jar and buried in the floor. Should the money be classified as treasure trove, the right of possession going to the finder? Held Griffin: Not in Texas. The ancient rule of treasure trove had to do with finding treasures hidden by Roman conquerers when fleeing (which originally went to the Crown), and does not apply to circumstances today; it should be merged with the general doctrine of lost goods. Is the money lost, giving ownership to the finder, or merely mislaid, giving right of possession to the owner of the property? Held The money is not lost—inadvertently misplaced—but was apparently purposefully hidden so the owner could return, so it is therefore classified as mislaid. The owner of the property get the right of possession, as only four years is not long enough to make the property lost. Concur Calvert: There should be yet another category for this item: "personal property found imbedded in the soil." Concur Wilson: Rather than have all these categories, it would be easier just to say that the landowner maintains continuity of possession until the true owner establishes title.

Allen v. Hyatt Regency-Nashville Hotel, Supreme Court of Tennessee, 1984, 668 S.W.2d 286

Appellee's husband parked a car in appellant's parking garage and recived a ticket. Entry and exit was guarded and the garage patrolled. The car was stolen. Should the relationship between the parties be considered bailment for hire? Held Harbison: Yes. Although parking situations vary, this garage was guarded, and a ticket was required upon exit. The New Jersey Supreme Court has ruled that the car owner is absent and would have difficult bringing proof of negligence, so in these situations there is a presumption of negligence on the garage owner, and that fits these facts here. Dissent Drowota: A bailment requires the defendant voluntarily assume control, custody, or possession of the vehicle. Here, however, the plaintiff parked the car. The ticket didn't identify the car, only the amount of time parked, and sometimes there was no cashier at all. This situation rather presents a license to park or a lease of a parking space, not a bailment for hire, and thus there should not be any presumption of the lot owner's negligence.

In re Cohn, Supreme Court of New York, Appellate Division, 1919, 187 App.Div. 392, 176 N.Y.S. 225

Leopold Cohn gave his wife, Sara, on her birthday a note saying, "I give [you] this day" 500 shares of a certain stock. At that time the stock was in the name of Cohn's partnership, and the certificates were in a safe deposit box in the name of the company, but Cohn was going through the legal steps to have it transferred to his name. Did Cohn give a gift to his wife, or did he give her a promise of a future transfer? Held Cohn gave a present gift. The wording of the note ("…this day…") and the fact that it was her birthday show that the intent was to give the gift immediately; his saying that he would give her the certificates after they were transferred to his name simply reflect that manual delivery was not possible and excused, making "symbolical delivery effective…. Dissent This was not a valid gift. The stock had already been distributed but Cohn was holding in the company to effect control over directors, so manual delivery was not excused.

Gruen v. Gruen, Court of Appeals of New York, 1986, 68 N.Y.2d 48, 505 N.Y.S.2d 849, 496 N.E.2d 869

The elder Gruen gave his son painting, but said he wanted to keep it in his house until he died. After his death, the younger Gruen's stepmother would not hand over the painting. Can there be a valid inter vivos gift of chattel if the donor reserves a life estate of the chattel? Held Yes, one may make a gift and a reservation of possession during one's lifetime will not defeat the gift.

Foster v. Reiss, Supreme Court of New Jersey, 1955, 18 N.J. 41, 112 A.2d 553, 48 A.L.R.2d 1391

Ethel and Adam Reiss were married, each with children from previous marriages, and Ethel had completed a will that gave Adam a dollar and the rest of her estate to her children and grandchildren. Before undergoing surgery, Ethel wrote a note telling Adam where to find money, a bank book, and a book representing shares in a building and loan association in the house in the event she did not survive, and put the note in a side table. Ethel never fully was coherent after surgery and died soon after. Did the note constitute a valid gift causa mortis and thereby override her will? Held No, a gift causa mortis is a gift given on condition of impending death, and if the death does not occur then the donor retains ownership. It differs from a legacy in New Jersey in that actual delivery must be made at the time of giving; Ethel didn't actually give the items to Adam, she just gave a note. Dissent Gifts causa mortis are emergency measures, and so the delivery requirement should be less strict than gifts inter vivos. Here Ethel did all she could to give the gift, and having her husband bring the items to the hospital just so she could give them back to him would have been unnatural and an unecessary "wholly ritualistic ceremony."

Scherer v. Hyland, Supreme Court of New Jersey, 1977, 75 N.J. 127, 380 A.2d 698

Catherine Wagner and plaintiff Robert Scherer had lived together approximately 15 years. Four years before Wagner's death, they were both in an automobile accident that gave Wagner facial wounds and a broken hip; Scherer cared for her and assumed financial responsibility. Wagner received a settlement check out of the accident for $17,400, and the same day she committed suicide, leaving the endorsed check and a note on the table giving the money to Scherer. Does leaving the endorsed check in Scherer's apartment with a note constitute sufficient delivery to uphold a gift causa mortis? Held Yes. The actual delivery requirement is to ascertain intent and prevent fraud. Here there is constructive delivery, because Wagner did all she "could do or thought necessary" to see that Scherer got the check, given the circumstances. She locked the door without intending to return, and the apartment is only accessible by Scherer. Is suicide a valid type of impending death for suicide, as one can always decide not to commit suicide? Held Yes. Although suicide may be against public policy, suicide is an imminent death, sometimes more imminent than other fatal diseases. Althought the idea that one can always decide not to commit suicide has a "certain augustinian appeal," contemporary psychology reveals that depression is more complicated that that. Besides, even with an imminent illness one can retract the gift before death and a gift causa mortis is automatically revoked if the donor recovers. Does the gift fail for lack of acceptance? Held No, if there is delivery acceptance will be implied if the gift is unconditional and beneficial to the donee. [Other cases and the UCC hold that a check is not an unconditional assignment because the donee might not withdraw the money or the donor might stop payment.]

Lindh v. Surman, Supreme Court of Pennsylvania, 1999, 560 Pa. 1, 742 A.2d 643

Roger Lindh and Janis Surmen got engaged, and Roger gave Janis a $17,400 ring that was worth more than he paid. Roger broke off the engagement and asked for the ring back, and she gave it to him. They got engaged again, and he again gave her the ring. Roger broke off the engagement and asked for the ring back, but she wouldn't return it. Is the conditional gift of an engagement ring conditional on acceptance of the engagement or the marriage itself? Held Case law says that vesting of an engagement gift is conditional on the wedding itself. Should the fault of the breakup be determined in deciding who gets the ring? Held No; although this has emotional appeal, determining the fault of a breakup in a complex relationship would be difficult, and would result in message arguments in court. A no-fault system of giving the ring back to the donor, regardless of who is at fault for the breakup, is more workable. Should the person who broke off the relationship give up the ring (a "modified no-fault" solution)? Held No, because this would create an injustice when the person breaking off the relationship is not at fault. The solution of returning the gift to the donee (a "strickt no-fault" solution) "is less flawed that a fault-based theory or modified no-fault position." Dissent This "simple case of who broke the engagement and why" would not be as messy as some of the other things the court deals with every day. Dissent The Restatement of Restitution § 58 comment c says that gifts made in the hope of marriage are not recoverable. [The Restatement quoted by the dissent speaks of gifts given in hopes that one will accept marriage, yet after which the donee turns down the marriage proposal.]

Brown v. Southall Realty Co., District of Columbia Court of Appeals, 1968, 237 A.2d 834

Appellee-landlord sued appellant-tenant Mrs. Brown for nonpayment of rent. The premises had been in violation of several Housing Codes even before the lease began, including an obstructed commode, a broken railing, and a low basement ceiling. Does violation of housing codes make a leasing agreement an illegal contract? Held Yes; just like any contract, if it is created in violation of statutes, it is void.

Jancik v. Department of Housing and Urban Development, United States Court of Appeals, Seventh Circuit, 1995, 44 F.3d 553

Stanley Jancik posted an ad for an apartment that included the words, "mature person preferred." The Leadership Council for Metropolitan Open Communities decided to test Jancik. Cindy Gunderson called Jancik, who said that he didn't want any teenagers. He asked about her name and, upon learning it was Norwegian, asked twice if it was white or black Norwegian, and confirmed that he was asking about her race. Marsha Allen called Jancik, who asked about her race, saying that he was screening applicants because the middle-aged residents did not want anyone loud, having children or pets. Did Jancik violate the Federal Housing Act, 42 U.S.C. § 3604(c) section 804(c) by indicating a a preference of family status? Held Yes, Jancik indicated he wanted a "mature person", did not want families with children, and did not want any teenagers. The test is whether an ordinary reader of a protected group would be discouraged from answering the ad. (This test does not take into account Jancik's subjective intent, although such evidence is relevant.) Did Jancik violate § 3604(c) by asking about race? Held Yes; in context, it is clear Jancik intended to discriminate based on race, as he asked several times during the middle of other questions indicating preferences of age and the presence of children, and expressed in that context that he was screening applicants. (One court has even stated in dicta that the mere inquiry into one's race is unlawful.)

Adrian v. Rabinowitz, Supreme Court of New Jersey, 1936, 116 N J.L. 586, 186 A. 29

Defendant Rachel Rabinowitz leased a store to Goodwin Adrian for the purpose of opening up a shoe business. The lease was to start on June 15 and go for six months, but the previous tenant didn't leave until July 9. Was there an implied covenant for quiet enjoyment? Held Not under the laws of New Jersey. Was there an express covenant for quiet enjoyment? Held Yes; it said so right in the lease. Does the express covenant of quiet enjoyment provide an obligation of the lessor to deliver possession against prior tenants as well as strangers on the day the lease starts? Held Yes. Although several American jurisdictions have held otherwise, the English cases which hold in favor of an obligation make sense. Both parties intended for possession to be given to the lessee, and it's not right to place the burden of gaining possession on the lessee, who expects to have possession. Rabinowitz' attempts to get the other tenant out shows that she understood this obligation. (This doesn't necessarily hold for a stranger who intrudes after possession has been granted to the lesses.) Should the plaintiff be reimbursed for loss profits from the shoe business because of lack of possession? Held No, the damages should be the difference between the actual rental value and the rent for the period of deprivation of possession, because these are the circumstances contemplated by the lease. (Even if both parties contemplated that the lessee would open up a shoe shop, the plaintiff never introduced adequate evidence of loss profits.)

Commonwealth Building Corp. v. Hirschfield, Appellate Court of Illinois, 1940, 307 Ill.App. 533, 30 N.E.2d 790

Plaintiff landlord and defendant tenant signed a lease that provided for double rent for any remaining time in which the tenant did not vacate upon expiration of the lease. The tenant gave notice of leaving and for several days packed up and removed breakables, furniture, and carpets. Apparently due to some problems getting use of the elevators, by midnight of the last day of the lease the tenant and his family were not yet completely moved out, so they spent the night there. Plaintiff charged them the next day for an entire year's rent, as the New York rule [the common law holdover tenant doctrine] allows the landlord, if a tenant is not out at the expiration of the lease, to either consider the tenant as a tresspasser or to consider the lease renewed for another period. Does the New York rule hold? Held No. The rule was either based upon a theory that not moving out shows an intention of the tenant to renew the lease, or upon a quasi-contract theory of contract in law. The tenant gave a good-faith effort to leave on time, so it wasn't his intention to stay, and merely staying past midnight doesn't provide for quasi-contractual remedies. The contract allowed for double rent during any possession past expiration, and that's sufficient. (The landlord could also have retaken the premises or negotiated a new agreement at the expiration of the lease, but he didn't do either.) Concur The landlord's claim for an entire year's rent "shocks the conscience of the court" and is "wholly without merit and ought not to be entertained by any court of justice." Courts should use some reason and not allow a cause of action for every little dereliction.

Richard Barton Enterprises, Inc. v. Tsern, Supreme Court of Utah, 1996, 928 P.2d 368

Plaintiff Barton rented commercial space from defendant Tsern in order to run an antiques dealership. Barton needed the second floor to store antiques, so the lease required Tsern to fix the leaky roof and to put the elevator in "good working order." Tsern had the elevator only partially fixed, and after a few months and several building inspections against the elevator, the elevator was put out of service altogether. Barton had not paid the rent in full because of this, and the trial court said that Barton was allowed to reduce the rent from $3000 to $2000. Was the court allowed to impose a modification of the lease? Held No. A modification of a contract requires an explicit showing of an agreement, and although the parties had agreed to the concept of a rent abatement, they had not agreed on an actual amount. Courts cannot impose their own decisions on a contract absent an agreement of the parties. Can the court impose a rent abatement as a remedy for failure to supply property that meets an implied warranty of suitability for commercial purposes? Held Yes. Originally leases were looked at as temporary conveyances of interest in the land, and contracts imposed independent obligations that one could not get out of except later through constructive evictions. As society evolved from an agrarian to an urban society, the state of the property became more important and leases came to be looked at as mutually dependant covenants. Under the new view, "the lessee's covenant to pay rent is dependent on the lessor's performance of covenants that were a significant inducement to the consummation of the lease or to the purpose for which the lessee entered into the lease." Barton wouldn't have signed the lease without assurances that the elevator would work, so he can "abate rent by an amount equal to the reduced value of the premises due to the lessor's breach."

Town of Telluride v. Lot Thirty-Four Venture, L.L.C., Supreme Court of Colorado, 2000, 3 P.3d 30

Colorado law section 38-12-301, 10 C.R.S. (1999) prohibited rent control. The Town of Telluride passed Ordinance 1011 which, in order to provide housing for new low-income workers, required developers to either (1) construct new units restricted to affordable housing, (2) restrict existing units, (3) pay fees to the Town, or (4) convey land to the town to be turned into affordable housing. Does Ordinance 1011 constitute rent control? Held Yes; rent control by its commonly-held meaning is a cap on rents with increases allowed only in relation to some index. Does Ordinance 1011 violate section 38-12-301, 10 C.R.S. (1999)? Held Yes, that law prohibited "any ordinance or resolution which would control rents."

City and County of San Francisco v. Remberto Sainez, Court of Appeal, First District, Division 2, California, 77 Cal.App.4th 1302, 2000

The Sainez' had flouted housing codes in their apartment on Van Ness for years: turning off heat for elderly tenants in the winter, leaving wiring exposed, not having fire alarms, and not fixing walls and ceilings that let the rain in. After inspections, the City issued a notice of violation (NOV) and after numerous postponements and after the Sainez' ignored the City, inspectors found even more violations and the City fined the Sainez' $1,000 per day for a total of $767,000. Was there a miscalculation? Held Yes, the City shouldn't have calclutated the fines to include several 30-day grace periods. Were the fines unconstitutionally disproportionate or excessive? Held No. These were repeated violations; the City gave the defendants plenty of time to comply; the tenants didn't receive a windfall; the amount was small in proportion to the entire rental property owned by defendants.

Piggly Wiggly Southern, Inc. v. Heard, Supreme Court of Georgia, 1991, 261 Ga. 503, 405 S.E.2d 478

Appellant Piggly Wiggly drafted and executed a lease with appellees' predecessor in which appellee would build and lease a store to appellant, paying a base of $29,053.60 and a percentage rent of annual gross sales over $2,000,000. After twice extending the lease, Piggly Wiggly was sold and the new owner moved to a nearby location but kept paying the base rent. The new owner refused to sublease the premises to other interested supermarkets. The lease included, in part, "LESSEE'S use of the leased building and the leased property shall not be limited nor restricted to such purposes …." Did appellant breach the lease by failing to continue operations? Held No, there was no express covenant of continuous operation, and the court can't supply such a covenant if it's not express. The substantial base rent and the fact that further rents were conditional on sales is further evidence of no covenant of continued operations. Dissent The lease also said, "Lessee is leasing the leased building for use as a supermarket and other parts of the leased property for parking and other uses incident to a supermarket business …," and one rule of contract construction is that ambiguous terms should be construed against the drafter—here, Piggly Wiggly. The lease also used the term "lawful business," and not "lawful manner." Rent based upon gross sales is further evidence of a covenant for continued operations. How did the majority know that the base rent was "substantial," anyway?

Handler v. Horns, Supreme Court of New Jersey, 1949, 2 N.J. 18, 65 A.2d 523

The Horns leased a bulding to their son, Fred Horns, which he turned into a meat plant, constructing an extensive system of refrigeration. The lease said that, after the parents died, Henry could purchase the building or let the lease expire, and he would deliver up the premises in the condition in which he found them, minus normal wear and tear.. After the parents died, Fred didn't exercise the option and the property went to Fred and his two sisters, and they leased it to Henry under a new lease that said that improvements would belong to the landlords, but that trade fixtures could be removed by the tenant if that wouldn't cause material damage. Fred died and the business went to his son, Henry. One of the sisters died and her daughter, Hazel Handler, sued Henry to leave the refrigeration equipment. Is the refrigeration system considered attached to the property and so cannot be removed? Held No. Although at one time anything fixed to the property was considered to become part of the property, nowadays the rule is that, in the absence of an agreement to the contrary, a tenant may remove trade fixtures (whatever the tenant has erected or installed for the purpose of carrying on trade) if they can be removed without materially injuring the property and this is done before yielding possession of the premises. Is the right to remove trade fixtures forfeited because the tenant didn't remove them before the end of the first lease and the end of the new one? Held No, it is commonly accepted today that the tenant can remove trade fixures as long as the tenant remains in possession of the leasehold.

Walls v. Oxford Management Co., Supreme Court of New Hampshire, 1993, 137 N.H. 653, 633 A.2d 103

Deanna Walls, plaintiff, was sexually assaulted in a car outside her apartment, Bay Ridge, which was managed by Oxford. At the complex there had been several crimes against property, but no sexual assaults. Walls sued Oxford negligence for breaching a duty to provide adequate security and for failing to warn of the lack of security. Do landlords owe a general duty of reasonable care to tenants? Held Yes. At one time landlords were given immunity except for (1) a hidden danger known to the landlord but not the tenant, (2) premises leased for public use, (3) premises under the landlord's control such as common stairways, and (4) premises negligently repaired by the landlord. As an agrarian culture has changed to an urban culture, landlord immunity has given way to principles of negligence. Do landlords have a general duty to protect tenants from actions of third parties? Held No, they shouldn't have the burden of insuring tenants from criminal harm. Has a special sitution arisent that would create a landlord duty to the tenant? Held No. (1) Landlord-tenant is not one of the traditional exception categories such as inkeeper-guest, common carrier-passenger. (2) No physical defect in the premises made the crime more foreseeable. (3) The crime was not reasonably foreseeable. (4) The landlord did not assume the duty by gratuitously providing security—any duty is limited by the extent of security provided. Does a warranty of implied habitability extend to safety against criminal attack? Held No, the terms "safe" and "safety" as defined by most statutes refer to structural integrity, fire hazards, and unsanitary conditions, not to safety from criminal acts of third parties. [Some jurisidtions have held otherwise.]

Foundation Development Corp. v. Loehmann's, Inc., Supreme Court of Arizona, 1990, 163 Ariz. 438, 788 P.2d 1189

Loehmann's became the anchor tenant in Lincoln View Plaza Shopping Center, of which Foundation came to have an interest. The lease didn't give any income percentages, but calculated the price at a base rate plus amount of common area used, which Loemann's estimated at the end of three quarters and then paid the difference at the end of the year. The lease Foundation the right to terminate the lease for failure to pay within 10 days, and stated that time was of the essence. Foundation sent Loehmann's a bill; Loehmann's said it was too much; Foundation explained that another tenant had moved out, increasing Loehmann's percentage of common area; and so Loehmann's paid, around three days later than the last letter requested (which was more than than altogether). Arizona A.R.S. § 33-361(A) allows for termination and repossession upon any breach. Should commercial landlords be allowed to repossess for any breach, no matter how trivial? Held No, based upon the history of landlord-tenant law, a lease is not only a contract but also a conveyance, with modern law viewing it more as a conveyance. Historically the common law sought to stabilize economic development by not allowing repossession for trivial breaches. The legislature surely didn't mean to allow repossession for any minor breach, as complicated modern transactions make it almost impossible not to make some minor breach along the way. The overwhelming majority or jurisdictions don't allow termination and repossession for minor breaches—what if this the payment was only three hours late instead of three days?

Edwards v. Habib, United States Court of Appeals, District of Columbia Circuit, 1968, 397 F.2d 687, cert, denied 393 U.S. 1016, 89 S.Ct. 618, 21 L.Ed.2d 560 (1969)

Mrs. Edwards complained to the Department of Licenses of sanitary code violations at her residence of a new month-to-month lease. After more than 40 violations were found, the landlord, Habib, gave Edwards a 30-day notice to vacate under 45 D.C.Code § 902 (1967), and when she didn't Habib obtained a default judgment for ejection under 45 D.C.Code § 910 (1967). Mrs. Edwards claimed this was retalitory, but the trial court didn't allow her to present this evidence, as the statutes allowed termination of a month-to-month lease for any reason. Should Mrs. Edwards be allowed to present evidence of retaliatory eviction? Held Yes. The statutes implicitly shift the relationship between landlord and tenant. Public policy does not allow retaliatory evictions, because this would punish and discourage tenants from filing complaints.

United States National Bank of Oregon v. Homeland, Inc., Supreme Court of Oregon, 1981, 291 Or. 374, 631 P.2d 761

Homeland leased property from Schlesinger for five years, for $1,415 per month for the last 48 months. Homeland abandonded the property with 32 months remaining, and Schlesinger the next year rented the space to Sebastian's International, Inc. for 10 months longer than Homeland's lease and for $1500 per month. Sebastian abandoned the property, so Schlesinger sued Homeland. Is a landlord required to mitigate damages by using reasonable efforts to find another tenant? Held Yes. When a lease was considered a conveyance of land, the landlord was to stand idly by if the tenant abandoned, because what did it matter to the lessor if the tenant abandoned property he or she effectively owned for that term? Now that a lease is considered more like a contract than a temporary conveyance, tenants have a duty to mitigate damages upon breach, just like with other contracts. Did Homeland's lease terminate when a replacement tenant was found for a higher rent and longer term? Held No, a tenant that abandons property forfeits his or her estate in the property but remains liable for damages for breach of contract, and mere acceptance and reletting of the surrendered property doesn't release the tenant from contractual liability for breach of contract. Does lessor breach the duty of reasonable efforts to mitigate damages if the rent is higher than the contract of the breaching tenant? Held No, the lessor is under no obligation to offer the property at less than market value. Besides, $1500 was only about six percent more than $1415, and there is no evidence that the higher price inhibited the reletting of the property.

Jaber v. Miller, Supreme Court of Arkansas, 1951, 219 Ark. 59, 239 S.W.2d 760

Jaber rented a building for a five-year term, and the lease had a provision for termination if the building was destroyed by fire. Jaber sold his rug business and transferred the least to Norber & Son, using an agreement entitled "Constract and Assignment" with $700 up front and five promisory notes of $700 apiece, coming due at four-month intervals. Norber & Son transferred the lease to Miller, who agreed with Jaber to divide the payments into monthly installments of $175 each. The building burned down, and Miller claimed that the original transfer to Norber & Son was a sublease, and that sublease accordingly terminated when the original lease terminated by the fire provision. Was the original transfer to Norber & Son an assignment or a sublease? Held The transfer was an assignment, because that was the obvious and express intention of the parties. Under the feudal system, all land was held directly or indirectly by the king, which warranted the common-law bright-line rule that transfers for the entire term were assignments, with obligations of the assignee to the original landlord; while anything less than the entire term constituted a sublease, with obligations of the sublessor to the original tenant. This created many unfair situations. Today many leases are crafted every day by people who have no idea that the common-law rule exists, and could not explain why it exists if they knew it existed. Even though "[a] decided majority of the American courts have adopted the English doctrine in its entirety," this court does away with the common law rule and decides whether a transfer is an assignment or a sublease based upon intent. Here the obvious intent was assignment. Should the court supply a provision for termination in the case of fire? Held No. Here it would be a hardship to either party whatever the decision, and Jaber might not have sold his business and transferred the property if there had been such a provision regarding fire. [There was also the issue that Jaber reserved the right of re-entry, making it technically a sublease not an assignment.]

Childs v. Warner Brothers Southern Theatres, Supreme Court of North Carolina, 1931, 200 N.C. 333, 156 S.E. 923

The Berkley Company leased land for a movie theater to R.D. Craver for five years, with a provision that there be no assigns without the permission of the lessor, and that if rent was not paid the lessor could re-enter the premises. Craver assigned the lease to Warner Brothers Southern Theatres, and Warner Brothers assigned the lease to Carolina Theatres, notifying Childs, the plaintiff. Childs said that it would be OK for Carolina Theatres to remit rent directly to Childs, but that payments should be made in accordance with the lease and Warner Brothers would still be responsible. Is Warner Brothers still responsible because the assignment provision prevents Warner Brothers from assigning the lease without permission, even though permission was given to Craver to assign from the original lessor? Held Yes; the permission to assign did not go to all assignees. Although the rule at one time was that, once permission was given, it effectively removed the stipulation (such as in the "Dumpor's Case"), the rule was changed to distinguish between single covenants that multiple covenants, the latter referring to covenants that operated on heirs and assigns. As this lease's provisions expressly extended to heirs and assigns, it was a multiple covenant and, although permission to assign was granted to the first lessee, permission is still needed by the assignee to re-assign the property.

21 Merchants Row Corp. v. Merchants Row, Inc., Supreme Judicial Court of Massachusetts, 1992, 412 Mass. 204, 587 N.E.2d 788

21 Merchants Row Corporation, plaintiff, leased commercial space from Merchants Row, Inc. The plaintiff later sold its business, subject to defendant granting permission to assign, which defendant finally did. The bank wanted defendant's permission to receive assignment as part of the financing, which would have allowed the bank to re-assign at will, but the defendant didn't want to lose control of the property and refused. If a lease has a provision against assignment without permission of the lessor, does the law impose an obligation on the lessor to act reasonably in withholding consent? Held No, the landlord may refuse arbitrarily or unreasonably in withholding permission to assign. Most other jurisdictions hold the same, and none can think of any reason why it should be any other way. (If this were to change, residential leases would be first in line, as there is a greater disparity in bargaining power in residential leases than in commercial leases.)

Cwynar v. City and County of San Francisco, Court of Appeal, First District, Division 2, California, 90 CalApp.4th 637 (2001) (supplement)

San Francisco enacted Proposition G, applying in most part only to rental property built after 1979, which only allowed (1) only one eviction and owner occupancy in a building by a landlord; (2) only one recovery of property for family and only for 36 months; and (3) a prohibition of recovery for disabled occupants and occupants over 60 years old who have lived there for 10 or more years. The Ellis Act allows a landlord to get around Proposition G by removing the entire property from the rental market. Cwynar and others, including a plaintiff who wanted to move an elderly mother into the premises; a plaintiff owner in common who wanted to occupy the premises when another owner in common had already done so; and plaintiffs who need to combine two or more units for living because they were two small, filed petitions for writ of mandate claiming that Propisition G violated the state and federal constitutional prohibitions against taking of property without just compensation, both on the face of Proposition G and as it was applied to them. The trial court sustained a demurrer by the City without leave to amend, determining that the plaintiffs could not prove that Proposition G is unconstitutional under any theory. Held The trial court should not have upheld the demurrer without leave to amend. Plaintiffs could show that Proposition G is a per-se physical taking because it is a direct, permanent government exclusion of physical occupancy by the landlord, and/or that Proposition G constitutes a regulatory taking without just compensation by forcing a landlord to bear more than his/her fair sure of public burdens which should be borne by the public as a whole. The latter requires applying a balancing test of ad-hoc factors, which the trial court did not do.

Saelzler v. Advanced Group 400, Supreme Court of California, 25 Cal.4th 763 (2001) (supplement)

Plaintiff Marianne Seelzler was a Federal Express delivery person who, when attempting delivery at the Sherwood Apartments on a clear, sunny day, was attacked by three men who attempted to rape her and seriously injured her. The assailants were never captured, but evidence was shown that there was a broken security gate, that there had been many attacks at the location, that a gang was operating out of one of the apartments, and that the apartment management had hired security guards at night but during the day. The plaintiff brought in a security expert who testified that the attacks would not have happened had security guards been on duty during the day. Held Chin: Summary judgment in favor of the defendant is appropriate because, even if defendant owed a duty to plaintiff and breached that duty, the plaintiff has failed to meet her burden of proof to show that there was any direct causal link between the defendant's actions and the attack—that the defendant's actions were a legal proximate cause of the attack. There is no way to know who the attackers were and if security during the day would have prevented the attack. "Put another way, she is unable to prove it was 'more probable than not' that additional security precautions would have prevented the attack." Dissent Kennard: A plaintiff need not show a causal connection with certainty, as most causal links are never 100% certain; the jury should decide. Furthemore, the majority got the test for summary judgment wrong: a plaintiff not need prove that a causal connection is "more likely than not" in order to defeat a summary judgment motion, but only provide enough evidence that would allow a rational trier of fact to conclude that the causal connection is more probable than not, and a reasonable jury member here could decide that the presence of security guards during the day could have made a difference. [But that's really what the majority says—that the plaintiff is "unable to prove," i.e. that a rational trier of fact could not reasonably decide that the plaintiff had met the burden. Kennard and the majority don't disagree on the test, but on the outcome when the test is applied.] Dissent Werdegar: That the assailants remain unknown should not result in a summary judgement, as additional security might have deterred criminal activity from tresspassers and residents alike. The majority also got the test of legal causation wrong: California only requires that the negligence be a "substantial factor" in the injury, not that the negligance "more likely than not" caused the injury. The majority says that imposing on landlords a high bar of security measures would be economically detrimental, but it says nothing about the economic detriment of victims such as the plaintiff.

Carma Developers (Cal.), Inc. v. Marathon Development California, Inc., 2 Cal.4th 342 (1992) (supplement)

Carma leased commercial space from Marathon with a contract that provided in 15(a) that the tenant should not sublease or assign without the permission of the lessor and that the lessor would not reasonably withhold permission; and in 15(b) that if tenant gives notice to sublease, the lessor may terminate the lease and even create a new lease with the to-be-sublessee, claiming those profits. Carma moved much of its operations to Houston, gave notice to sublease to another party, and Marathon terminated and tried to enter into a contract with the third party. Is the lease a prohibited restraint on alienation? Held No. California courts have employed a balancing test of the justification for enforcement of a restraint against the quantum of restraint, the effect of the enforcement upon alienation. Here the quantum of restraint is not large, as the lessee would only try to sublease in a rising market, and this provision would only hurt the lessee when the lessee tries to relocate and the benefits of such are outweighed by the risk of lost profits from the potential loss of space the lessee wants to retain. The justification is high, because a lessee might want to lock in a long-term low rate in a rising market by giving lessor the right to terminate on notice of subleasing, and lessor might not want to lease property for a long term without a guarantee of getting the profits should the lessee try to sublease. Is the termination on proposed transfer tantamount to a denial of consent? Held No, they differ in purpose and effect. A sublease leaves the lessee liable, but a termination releases the lessee from all obligations. Does the addition of California Civil Code § 1995.260, which says that a lease not giving a standard for withholding consent to transfer shall have a standard of reasonableness, prevent the clause from taking effect? Held No, the statute only applies to provisions that have no standard, and this one does. Besides, as we already said, a termination of the lease is distinct from withholding consent of transfer. Does this termination violate the duty of good faith? Held No, a breach of good faith can only apply to implied terms. Implied terms cannot override express terms, and the contract expressly allowed Marathon to terminate the lease on request to sublease.

Cole v. Steinlauf, Supreme Court of Errors of Connecticut, 1957, 144 Conn. 629, 136 A.2d 744

Plaintiffs contracted to buy property from defendants on the condition that the title be free and clear of any defects; of not, the plaintiffs would get back their deposit and defendants would pay plaintiffs reasonable fees of examination of title. Upon research, the plaintiffs found that the predecessor in title to the defendant had granted the land to the defendant "and assigns forever," with no mention of "heirs", as is customary in Connecticut for a fee simple absolute conveyance. The defendants sued for return of the $420 deposit aned a $50 title search fee. Is the title completely clear of defect as to prevent plaintiffs for backing out of the deal and getting their money back? Held No. While the rest of the deed seems to point to a fee simple conveyance, and while a court might very well hold that the deed is a valid fee simple conveyance, the issue is not whether the title is fee simple but whether the plaintiffs are justified in refusing to take title because of defects. The doubt raised by the lack of the words "heirs", however small, could cause plaintiffs to have further court cases to determine title validity, and a bank might be slow to give a loan using the property as collateral. [The court mentions "two words". One is "heirs"—what is the other?] Concur We're not determining the validity of the deed here, but its marketability. Until a court of equity, for example, determines that the deed is in fact fee simple absolute, the deed is sufficiently questionable as to be unmarketable.

Lewis v. Searles, Supreme Court of Missouri, 1970, 452 S.W.2d 153

Letitia G. Lewis died in 1926, leaving a will that left to plaintiff Hattie L. Lewis all "real and personal property … so long as she remains single and unmarried." If she remarried, the property was to be "divided equally" among Hattie, niece Letitia A. LaForge, and nephew James R. Lewis, to each an unidivided one third. Was the prohibition against marriage void as against public policy? Held No. Although this used to be the case, this prohibition has been "eaten out with exceptions," and now the basic rule is that a condition in a will against marriage is valid if it serves some legitimate purpose and is not for caprice. Here it seems the provision was to provide support for Hattie, which she wouldn't need if she were to marry. Does the will convey the property to Hattie in fee simple or simply as a life estate? Held They will conveys the property in fee simple. The entire will must be considered, and its author at no time seems to think in terms of the property interest changing at Hattie's death—everything under both marriage and non-marriage outcomes is expressed in terms of fee, and there is no express mention of a life estate. Missouri law § 474.480 says essentially that all devises are fee simple if (1) no intent is expressed to create a life estate only, and (2) no further devise is created to take effect after the death of the defisee.

Moore v. Phillips, Court of Appeals of Kansas, 1981, 6 Kan.App.2d 94, 627 P.2d 831

Leslie Brannan died and left a life estate of farmland and a farmhouse to Ada C. Brannan with remainder to Ada's estranged daughter, Dorothy Moore, and Kent Reinhardt. Over the years, especially the last two, Ada let the farmhouse deteriorate. Dorothy and Kent sued the executrix seven years after Ada's death on the theory of waste to recover for the deterioration of the farmhouse. Does the affirmative defense of laches prevent a suit seven years later for waste of the holder of a life estate? Held No. The holder of a life estate has a quasi-trustee position and has a duty to prevent voluntary or permissive waste through neglect or misconduct resulting in material damage or loss to the property. Laches is a special type of estoppel that results from a negative change in position through the passage of time that works to the disadvantage of another. Here it is not disputed that Ada let her house go to waste, and if Ada were here to testify she couldn't add anything more. Her estate was not disadvantaged by the delay, and Dorothy, although estranged, should not be expected to sue her mother while she was alive, especially when her mother was old and might need the money that would be used in a suit.

Oldfield v. Stoeco Homes, Inc., Supreme Court of New Jersey, 1958, 26 N.J. 246, 139 A.2d 291

The City of Ocean City sold a large tract of land in two parts to defednant Stoeco Homes. The eastern half was swamp land, and the lease proclaimed that Stoeco would fill and grade all the lots, even the 226 lots retained by the City, within a year or the property would revert back to the City. Stoeco ran into difficulties and the City twice extended the date. The City now says that the reversion provision made this a fee simple determinable conveyance, and that the land automatically reverted to the City when Stoeco didn't fulfill its obligations, regardless of whether the City purported to extend the time limit. Was the conveyance one of fee simple determinable, which automatically reverts if something occurs, or one of an estate subject to a condition subsequent, to which waiver and estoppel would apply, allowing the City to extend the conditions (i.e. reversion was not automatic and subject to the termination of the other party)? Held The conveyance was one of an estate subject to a condition subsequent. Even though the language of the deed talks about reversion, there is also a lot of language that talks about conditions, so the issue is ambiguous enough to look at extrinsic evidence. Nothing about the deal indicates that time was of such an essence that a day late in grading and filling would be a big problem, so the parties didn't intend an automatic reversion. There is a difference between waiving a condition and extending the time in which the condition may be fulfilled. The lease contained a condition subsequent without powers of termination, not a fee simple determinable with possibilities of reverter, and so the City was allowed to postpone the time in which the condition could be fulfilled.

Roberts v. Rhodes, Supreme Court of Kansas, 1982, 231 Kan. 74, 643 P.2d 116

Mr. and Mrs. Smith conveyed land to School District No. 35 of Montgomery County, Kansas in two deeds, one for $1 and another for $75. Both deeds said that it was understood that the land would be used only for school or cemetery use; and only for school and cemetary use, respectively. After the land had been used for 60 years as a school, plaintiff Roberts, heir of the Smiths, claimed that the land reverted to him because it wasn't being used as a school. Does the mere indication of purpose or intended use create a fee simple determinable conveyance? Held No. The law doesn't like forfeiture, and in the absence of explicit limitation of fee simple, such as words including "until", "so long as", and "during", a fee simple absolute interest is created. Restatement of Property § 44 states that a fee simple determinable interest is created when a conveyance (a) creates an estate in fee simple and (b) provides that the estate automatically expire on the occurrence of a stated event, but there is nothing in these deeds that provides for reversion in the event the land is no longer used for the stated purpose.

Martin v. City of Seattle, Court of Appeals of Washington, Division 1, 1986, 46 Wn.App. 1, 728 P.2d 1091

The C.B. Dodge company in 1908 made a quit-claim deed on a narrow strip of property bordering Lake Washington so that the City of Seattle could construct what is now Lake Washington Boulevard. The deed contained a condition subsequent that Dodge, its successors, and assigns would have the right to build and maintain a boathouse; if not, the grantor or successor could reenter the property and forfeit the grant. In 1983 the Martins and two other successors for the first time asked to build a boathouse, but the City refused. The City argued that state claimd land as a park and that the city can't give park land to the plaintiffs. Does failure to exercise an option from a condition within a reasonable amount of time waive the grantor's right to forfeiture? Held No (although some cases have held that failure of a grantor to declare a forfeiture from breached condition subsequent within a reasonable time waives the grantor's right to forfeiture). There was no prejudice (as would be required by laches, for example) from failing to build a boathouse—if passage of time wouldn't waive the right to maintain the boathouse, it does not waive the right to build a boathouse. Does impossibility excuse performance because of the state designating the land as a park? Held No, funds for the plan for the lowering of the lake were approved two years before the lease, so the event was not unforeseen. It has furthermore not been proven that the state wouldn't allow construction of the boathouse. Is the denial of the right of plaintiffs to build a boathouse an unconstitutional taking of land? Held Yes, a taking is whenever government interference damages or destroys an individual's property, including the unrestricted right to use, enjoy, and dispose of the land—including the maintenance and use of a boathouse. The plaintiffs are to be awarded the full value of the right to have a boathouse, plus attorney fees. [Why can't the Martins re-enter the property, as the deed said?]

Johnson v. City of Wheat Ridge, Court of Appeals of Colorado, 1975, 532 P.2d 985

The late Judge Samuel W. Johnson in 1955 and 1957 deeded two parcels of land to the Wheat Ridge Lions Foundation and to Jefferson County, both of which parcels were transferred to the City of Wheat Ridge. The lease contained conditions subsequent, valid on the grantor, heirs, and assigns, including that a public water supply and lavatory be installed in the larger of the two parcels within two years. All the conditions subsequent were fulfilled except that of the public water supply and lavatory. Paul Johnson sued to get the land back. Does the statute of limitations prevent the plaintiff from terminating the lease? Held Yes. The condition subsequent was breached in 1959 at the two-year mark mentioned in the lease. A condition subsequent does not result in an automatic reversion of property rights without someone acting on them, and the applicable statute of limitations at the time was only one year, meaning that after 1960 the right to termination could not be acted upon.

Leeco Gas & Oil Company v. County of Nueces, Supreme Court of Texas, 1987, 736 S.W.2d 629

In 1960 Leeco gift deeded property to Nueces County with reversionary interest so long as the property remained a park. In 1983, when the property was worth between $3 million and $5 million, the County condemned the reversionary interest, thinking that they might want to use the land for something else in the future, and gave Leeco $10,000. A trial court awarded Leeco $10 in nominal damages because the mere possibility of reverter has no ascertainable value because the fee simple defeasible is not probable to end within a relatively short period of time. Because the County knew of the reversionary interest when it accepted the deed, is the County estopped from condemning the reversionary interest? Held No, a government when exercising governmental powers is not subject to estoppel. If a governmental entity is a grantee of a reversionary interest and that same entity condemns the reversionary interest, must it pay the difference in value of the restricted and unrestricted fees? Held Yes; to hold otherwise would discourage gifts of real property to charities and governmental entities. Here reverter was not just some speculative event in the future, as the County was tossing around plans to give other uses to the land and wanted to be unencumbered with the possibility of reversion. Holding otherwise would allow government to get around obligations by preemptively condemning reversionary interests, which would discourage such gifts. Concur That's a good holding, but it would be better in the future if a political devision that has accepted a gift by grant of fee simple determinable interest begins condemnation proceedings, that act would count as a renunciation of the gift and cause the granted estate to terminate and revert back to the grantor in fee simple absolute.

Kost v. Foster, Supreme Court of Illinois, 1950, 406 111. 565, 94 N.E.2d 302

John and Catherine Kost conveyed in a warranty deed their land to their son Ross Kost to use as a life estate, with remainder to his lawful children—of which at the time he had five. Before he died, he had seven lawful children, and one of them, Oscar Durant Kost, was bankrupt and his portion went to Marshall C. Foster. The children sued Foster, saying that Oscar's remainder was not yet vested, as Ross was still alive, and therefore couldn't be transferred by bankruptcy. Held Oscar's portion was vested in quality—he would not have lost it by dying, although not in quantity—more children could have been born that would have reduced his interest. Contingent interests are created by specific language in the deed that create a condition precedent (e.g. "only to those children who survive him"). Otherwise, any conditions are conditions subsequent that make the vested remainder subject to divestment (e.g. "to his children, but if any die while he is alive the share goes to the rest of the children"). (Of course, all remainders are uncertain as to enjoyment, as the recipient of a vested or unvested remainder may die before the life estate is terminated.)

Abo Petroleum Corporation v. Amstutz, Supreme Court of New Mexico, 1979, 93 N.M. 332, 600 P.2d 278

James and Amanda Turknett conveyed to their daughters Beulah and Ruby in two deeds two parcels of land as a life estate, with contingent remainders in their children and alternate contingent remainders in the daughters' estates (i.e. two the daughters' children, if they had any, and otherwise to be divided up by law). Later the parents tried to deed "absolute title" to the daughters. Before they died, the daughters later tried to convey the property in fee simple to the predecessors of plaintiff Abo Petroleum, but the three children of Beulah and the four children of Ruby claim that their contingent remainders have now vested. Abo claims that the childrens' contingent remainder interests were destroyed when the parents deeded their reversionary interests. Can remainder interests be destroyed? Held No, because most modern jurisdictions have abolished destructability of remainders as a "relic of the feudal past" in which the common law could not stand an abeyance of seisin. The parents only retained a reversionary interest, so after the first set of deeds they couldn't convey a fee simple; the daughters' children retain their contingent remainders.

Sybert v. Sybert, Supreme Court of Texas, 1953, 152 Tex. 106, 254 S.W.2d 999

J.H. Sybert left a life estate to his wife, Cora R. Sybert, after the death of whom a part would go to his son Fred Sybert as a life estate, with the remainder to vest in fee simple "in the heirs of his body." When Cora died, she left a similar will with identical language. Fred died childless, and his two brothers contend that Fred only got a life estate; his wife says that the Rule in Shelley's Case operated to vest in him a fee simple estate. Does the Rule in Shelley's Case apply which says that if an instrument conveys a remainder to someone's heirs for generation to generation, the limitation to the heirs entitles the ancestor to the whole estate? Held Yes. (The Rule in Shelley's Case is a creature of statute.) The words "heirs of his body" were not qualified, so they are to be taken in their technical sense, meaning an indefinite succession of takers from generation to generation; in such cases, the Rule in Shelley's Case must always apply. Concur The court must follow the Rule in Shelley's Case, because it is the law, but the legislature should do away with the rule, as it almost always sets aside the clear intention of the conveyor. Here the parents had no intention of granting anything but a life estate in their son Fred. The Rule in Shelley's Case is a relic, "not of the horse and buggy days, but of the preceding stone cart and oxen days." Many states have done away with it, and even England, in which it originated, abolished it decades ago. The court cannot do away with it, and refusing to follow it would throw many conveyances into confusion. The legislature must create a procedure to abolish it at a prescribed future date.

Stoller v. Doyle, Supreme Court of Illinois, 1913, 257 111. 369, 100 N.E. 959

Mr. and Mrs. Lawrence Doyle executed a warranty deed to Frank Doyle of property with limitations: Frank could not mortgage the land or reconvey it, unless it was to the grantor. If Frank were to die before his wife and has surviving children, the wife and children get to use the land if the wife remains unmarried, and after her death the land goes to the children. If Frank dies with no surviving children, the land goes back to the grantor. After his wife died, Lawrence executed a second deed to Frank purporting to remove all the restrictions and give him absolute title. Frank and his wife later deeded the land to John Stoller, and John later tried to convey the land to Eilert Bauman in fee simple with marketable title. The court said John Stoller didn't have marketable title, so John sued Frank, saying that the first conveyance was a life estate with contingent remainders in the children, but that Lawrence's later conveyence of the reversion merged with the life estate to destruct the contingent remainder [as was allowed at the time under common law], giving Frank clear title in fee simple. Held The children's contingent interests could not be destructed because the interests weren't remainders, as Frank's interest was not a life estate. When Lawrence conveyed the property he did not use enough limiting words to keep the interest from defaulting to a conveyance in fee simple, albeit with limitations. The limitations were conditions subsequent that would contingently grant life estate to the wife and fee simple conveyance to the children, or fee simple conveyance back to the grantor. Limiting a fee simple conveyance by a condition subsequent does not create a contingent remainder and thus it cannot be destructed by merging. [The court does not discuss the fact that, had Frank died with wife and children, his wife would have had a life estate and the children would have had absolute remainders, so instead of the children absolutely having contingent remainders one could say that the children would contingently have absolute remainders.]

Capitol Federal Savings & Loan Association v. Smith, Supreme Court of Colorado, 1957, 136 Colo. 265, 316 P.2d 252

Defendant owners in Block 6 had created a restrictive covenant against selling land "to any colored person or persons", and provided a forfeiture of the land to all the other lot owners if this covenant was broken. Plaintiff African Americans brought an action to save their land. The defendants said that all those US Supreme Court cases about the Fourteen Amendment didn't apply to automatic forfeitures or future interests. The defendants claimed that this covenant created a fee simple subject to a condition subsequent, and that the forfeiture was an executory interest on the part of the other owners not requisite of court intervention. Held "High-sounding phrases or outmoded common-law terms" cannot change the fact that this "is still a racial restriction in violation of the Fourteenth Amendment to the Federal Constitution." The Fourteenth Amendment clearly says that "no discrimination shall be made against them by law because of their color." (Even though the US Supreme Court at one time said that racially restrictive covenants might not be invalid per se, the Court later held that the court cannot uphold damages against a grantor breaching such a covenant, "extract[ing] any teeth which such a covenant was supposed to have…")

The City of Klamath Falls v. Bell, Court of Appeals of Oregon, 1971, 7 Or.App. 330, 490 P.2d 515

In 1925 the Daggett-Schallock Investment Company conveyed land to the City of Klamath so long as it was used for a library, with executory interest in Fred Schallock and Floy R. Daggett, their heirs and assigns. In 1927, the corporation was voluntarily dissolved. In 1969, the city stopped using the land for a library. The city filed a complaint for a declaratory judgment against Constance Bell, sole heir of Fred Schallock; and Marijane Flitcraft and Caroline Crapo, the sole heirs of Floy Daggett, and their husbands. Does the rule against perpituities separate the descendants of Schallock and Daggett from their executory interests? Held Yes, because executory interests must vest, if at all, within 21 years "after some life in being at the creation of the interest", because the law favors alienability of land. Does the defeat of an executory interest because of the rule against perpetuities create in the first grantee an indefeasible fee simple interest? Held No, the original grantor still has a reverter interest. Even though Oregon holds a minority rule that a possibility of reverter cannot be alienated, an attempt to alienate a possibility of reverter as happened here does not desroy it. Does the dissolution of a corporation destroy its right of reverter? No, when a corporation dissolves its assets, including rights of reverter, go to its shareholders—here, the heirs of Daggett and Schallock. The possibility of reverter is descendable, and all descendants conveyed their interests to Marijane Flitcraft in 1970, so she gets the property.

Shaver v. Clanton, California Court of Appeals, 1994, 31 Cal.Rptr.2d 595, 26 CaLApp.4th 568

Robert and Helen Clanton entered into a 10-year lease with renewal options of shopping center space with Emerson Stanley, the "son they never had." They amended the lease in 1988 and 1989, the last amendment granting the Clantons options to extend the lease for five-year periods and the right of first refusal. Stanley's daughter and sole heir, Donna Shaver, sued. Is the transaction subject to the Rule against Perpetuities by going past the Rule's 21-year limit? Held Soneshine: No. In 1991 California adopted the Uniform Statutory Rule against Perpetuities, which excluded commercial transactions such as options to renew, right of first refusal, and commercial leases, as commercial transactions are not like the family-oriented donative transfers that the Rule against Perpetuities seeks to restrict—instead they are negotiated agreements between parties. Is this transaction similar enough to a family-oriented transfer to fall under the Rule against Perpetuities? Held No; just because they gave Stanley a good deal doesn't make this a donative transfer. Is the 1989 amendment invalid under the Rule against Perpetuities because it attempts to give renewal options into infinity? Held No, the Rule should be read along with Civil Code section 718, which limits lease renewals to 99 years. Together, these statutes essentially state that "commercial, nondonative transactions such as options to renew, rights of first refusal, and commercial leases are exempt from the provisions of the Uniform Act, but if they involve a lease or grant of a town or city lot, they are limited to 99 years." Concur Crosby: This is the correct result, but it's rare "hornbook law", and open-ended leases and options in perpetuity are "about as common as polar bear sightings in Death Valley" and probably won't be seen again for another 99 years.

In re Estate of Michael, Supreme Court of Pennsylvania, 1966, 421 Pa. 207, 218 A.2d 338

Joyce King deeded land to Harry and Bertha Michael, and to their son Ford Michael and his wife Helen Michael. The deed used the language, to "Harry L. Michael and Bertha M. Michael, his wife, tenants by the entireties and Ford W. Michael and Helen M. Michael, his wife, as tenants by the entireties, with right of survivorship…." Harry died, and Bertha tried to will her portion of the land to her other son Robert, but after her death the sons disputed what interest Bertha actually held in the property. Robert claimed that the original deed created a tenancy in common between the two couples (Harry and Bertha, and Ford and Helen), each couple holding a one-half interest as tenants of the entirety—thus Bertha had something to give. Ford conceded that each couple held an interest as tenants of the entirety, but claimed that the couples held a joint tenancy between them, and as Harry and Bertha both died, the right of survivorship gave Ford and Helen complete interest in the property. Held The original deed created a tenancy in common between the two couples, each couple holding one-half interest as tenants of the entirety. Although the common law at one point favored the creation of joint tenancies, the Act of 1812 in Pennsylvania prohibited joint tenancies with rights of survivorship unless there is a clear, unambiguous expresion of intent to create a joint tenancy. In this deed, the phrase "with right of survivorship" is ambiguous—it could mean a right of survivorship to the parties of each couple, or a right of survivorship between the couples, or even a right of survivorship among all involved. No similar language can be found in other deeds—choosing one would be arbitrary. Pennsylvania law now favors a tenancy in common, so without an unambiguous intent to create a specific joint tenancy the deed creates a tenancy in common.

Laura v. Christian, Supreme Court of New Mexico, 1975, 88 N.M. 127, 537 P.2d 1389

Laura and Christian were tenants in common, with Christian owning one-fourth. After a while the mortgage was not paid, and after a year or so in 1972, the day before the property was to be sold to pay creditors, Laura paid over $17,000, representing the amount of the judgment, interest and expenses owing to the mortgagee, to get the property back. It suddenly became apparent that the property was more valuable because it gave an option to buy adjoining property (which option Laura did take), and so Christian appealed for his one-fourth share. Is a tenant in common obligated to reimburse his/her fair share when another cotenant pays more than his/her share of a debt? Held Yes. Here Christian is obligated to reimburse Laura. Is a cotenant entitled to a share of property held in common after another has paid more than his/her share of debt? Held Yes, even though Christian shouldn't be praised for failing to pay until he realized the property might be worth a lot, his payment is still considered timely and he still gets his one-fourth share.

Jackson v. O'Connell, Supreme Court of Illinois, 1961, 23 I11.2d 52, 177 N.E.2d 194

Neil Duffy willed land to his three sisters, Nellie Duffy, Anna Duffy, and Katherine O'Connell, as joint tenants. A year before she died, Nellie Duffy quitclaim deeded her interest to Anna Duffy. Anna died, willing whatever interest in the land she had to her four nieces, Beatrice Jackson, Eileen O'Barski, Catherine Young and Margaret Miller. Plaintiffs nieces want to partition, and claim that Nellie intended to sever the joint tenancy altogether, giving Anna two-thirds of the property and Katherine one third as tenants in common, leaving the nieces with one-sixth each of the property. Defendant Katherine claims that Nellie's deed didn't destroy the joint tenancy of the remaining two thirds, and that Anna then held a third as a cotenant and a third as a joint tenant, the latter of which went to Katherine when Anna died and the nieces therefore received each one-twelfth of the land. Can evidence of Nellie's intent in the transfer be introduced? Held No, the deed itself is unambiguous and this legal decision on its manifest effects cannot refer to parol evidence. If one party in joint tenancy deeds to another joint tenant his/her share, does the deed destroy the entire joint tenancy? Held No, the grantee becomes owner of one portion as tenant in common, and the other portion is held as a joint tenancy by the other parties. Blackstone, Coke, and modern commentators are in agreement on this result, even though there aren't many cases on the subject. Here Anna become owner of a one-third interest in common and a one-third joint interest, the latter of which went to Katherine on Anna's death. Does such a result destroy the unity of interest, one of Blackstone's four interests of joint tenancy, because the one party's interest in the property is now unequal? Held No; the party's interest in the entire property may be unequal, but that party's joint tenancy interest (here one-third of the property) in the entire joint tenancy (here two-thirds of the property) is equal (Katherine also held one-third interest as a joint tenanct).

People v. Nogarr, District Court of Appeal of California, 1958, 164 CalApp.2d 591, 330 P.2d 858, 67 A.L.R.2d 992

While Calvert Wilson was married to appelant Elaine, they both received property as a joint tenancy. After they separated, he gave a promissory note to his parents, respondants Frank and Alice Wilson, and without Elaine's permission he took out a mortgage upon the property and delivered it to his parents. After Calvert died, the State of California tried to condemn the property to satisfy the mortgage, his parents claimed they should have the mortgage paid from the proceeds of the condemnation. Elaine claimed that the mortgage was on Calvert's interest in the proporty, and as his interest was gone after his death because of the joint tenancy, Elaine now owned the entire property and the mortage has no interest in the property. Is a mortgage executed on real property owned by one of the joint tenants enforceable after the death of the joint tenant? Held No, because in California a mortgage does not transfer any interest in a property, only a charge or a lien, and thereby does not destroy joint tenancy. A joint tenancy is analogous to a dual life estate in which each has a contingent remainder in the whole property. As with a judgment lien (which only differs from a mortgage lien in that it is upon all real property of the debtor rather than specific property), the mortgagee can immediately execute the mortgage or wait until one of the joint tenants die; if the other party survives, the mortgagee holds a lien on the entire property, but if the mortgager dies the mortgager has a lien on nothing. In other jurisdictions, a mortgage acts to convey legal title to the property and give the mortgagee immediate possession with a contingent reversion, and this would destroy joint tenancy by destroying unity of title.

Duncan v. Vassaur, Supreme Court of Oklahoma, 1976, 550 P.2d 929

Edgar Vassaur, Jr. after marriage conveyed property to himself and Betty E. Vassaur, his wife. Two years later, his wife shot and killed him. Betty then transferred the property to her father, William M. Duncan. Edgar's father, Edgar Vassaur, Sr., administer of his son's estate, claimed ownership of half the property. The Oklahoma "slayer statute", 84 O.S.1971 § 231, states that a murderer may not inherit or receive any interest in the land from the deceased. Did the murder destroy the joint tenancy? Held Yes, because the murder was inconsistent with the continued existence of the joint tenancy. Different states have different rules on what happens to joint tenancy after a murder (e.g. the murder gets a life estate for half the property; the murderer gets all the property; etc.), but the most equitable thing to do is to consider that the murder converted the joint tenancy to a tenancy in common, with one half here going to the heirs of the deceased and the other half going to the murderer and afterwards to her heirs. A murderer should not be able to profit from his/her crime. (Edgar's father also gets a lien on the remaining half in the amount of proceeds of a life insurance policy on the son, and another in the amount of a home improvement loan that had been repaid by the estate.)

Grothe v. Cortlandt Corp., 11 Cal.App.4th 1313 [Dec. 1992]

Plaintiff Laurene Grothe and David Daniel Rivis purchased real property as joint tenants in 1983. In 1987, Julio and Lucille Acosta obtained default judgment against both of them, but Grothe had the default judgment overturned. The Acostas assign their judgements to plaintiff Cortlandt in 1990, and plaintiff got a levy under writ of execution on the Rivis' property. Within the 120-day grace period before sale, Rivis died and Grothe obtained a preliminary injunction halting the sale, claiming that she now owned the property, having been a joint tenant. Did execution of the levy act to sever the joint tenancy? Held No, in California a levy creates an execution lien, just one more step on the road to actual sale, and triggers a 120-day grace period allowing the debtor to buy back the property. Liens do not destroy any of the four unities of joint tenancy—only actual sale severs the joint tenancy. As Rivis died before the ultimate sale, Grothe is now owner of the full property any interests the judgment creditors had are extinguished.

Mitchell v. Castellaw, Supreme Court of Texas, 1952, 151 Tex. 56, 246 S.W.2d 163

Mrs. Sallie Stapp owned three adjoining lots, one of which, lot 3, was leased to a filling station. The filling station driveway went across lot 2, and a shed jutted onto lot 1. Sallie deeded lot 2 to Malcolm Smith and wife, saying that the grantors, heirs, and assigns will not have anything built on a small portion corresponding to the driveway and that "grantor" shall have the right to use that portion as a driveway. Smith and wife later deeded the land to defendants Mitchell and Powers, changing the last "grantor" to "grantee". Sallie deeded lot 1 to a daughter, Mrs. Isabelle Anderson. Mrs. Castellaw, another daughter of Sallie, became owner of the filling station on lot 3, renewed the lease, and sued Mitchell and Powers for use of the driveway and the shed overhang, as Mitchell and Powers now owned lot 1 as well. Did the conveyance of lot 1 create a reservation or easement, even though it did not expressly create rights appurtenant to the filling station? Held Yes. "[N]either words of inheritance nor other words of art are essential to the valid reservation of an appurtenant easement of even unlimited duration…" When read as a whole, most people would understand that the deed was reserving the small section of land to be used for the specific purpose of a driveway for the filling station lot. Malcolm Smith had been using the driveway for that purpose for a while, and there's not much else one could use those dimensions of land for, so it's clear one should construe the restriction in the deed in reference to lot 3.

Willard v. First Church Of Christ, Scientist, Pacifica, Supreme Court of California, 1972, 7 Cal.Sd 473, 102 Cal.Rptr. 739, 498 P.2d 987

Genevieve McGuigan owned lots 19 and 20. She sold lot 19 to Peterson for his and allowed her church across the street, Frist Church of Christ, Scientist, to use lot 20 for a parking lot. Peterson wanted to sell both lots to Willard, a realtor, so Peterson bought lot 20 from McGuigan, who would only sell under the condition that it was "subject to an easement for automobile parking" for the church as long as the lot across the street was used for a church. Peterson then sold both lots to Willard, who found out about the easement several months later and filed an action to quiet title against the church. Does the old common law rule that one cannot reserve an interest in property to a stranger to the title defeat the easement? Held No. (The common law made a distinction between an exception, which held back an interest in the grantor, and a reservation, which created a new interest in the grantor. Exceptions could not be given to strangers, as they were rights that remained with the grantor.) The common law did not allow reservations to be granted to strangeres, even though this was theoretically possible. Modern courts do not feel restricted to such feudal traditions of land conveyance, and instead construe deeds as to determine the intention of the grantor as established from the four corners of the instrument, as is done with general contracts. To hold to feudal traditions would not only many times defeat the intent of the grantor, it might result in a windfall for the grantee, who probably paid less for the property because of the existence of the easement. Here McGuigan clearly intended the easement, and would not have sold the property without the easement, so her intention stands. Should the old rule nevertheless be applied because the grantee and title insurers have relied on it? Held No; Willard never read the deed, and no evidence was introduced that a policy of title insurance was actually issued. Because the conveyance only claimed to be "subject to" an easement and did not expressly create an easement, was the easement invalid? Held No, the trial court found enough evidence of intention that an easement be created.

Urbaitis v. Commonwealth Edison, Supreme Court of Illinois, 1991, 143 IU.2d 458, 159 Ill.Dec. 50, 575 N.E.2d 548

In 1909 Benjamin W. Dodson deeded to Chicago, Wheaton & Western Railway a strip of land 100 feet wide by 2713 feet long. The deed purported to "convey and warrant" the land, with the "express conditions", including that the grantee (1) construct and maintain a grade crossing where a certain road would "intersect said right-of-way," and (2) construct and maintain a culvert under the roadbed for cattle to cross under "near where its said right-of-way intersects" a certain street. Plaintiffs, who owned residential property on each side of the railway, contend that the railway was only given an easement for railroad purposes and that, now that the land is no longer used for a railway, the plaintiffs receive use of the land as adjoining landowners or, alternatively, that the land reverted to Dodson's heirs, the interests of which were deeded to the plaintiffs. Did the deed convey title in fee simple to the railroad or merely an easement? Held The deed conveyed land in fee simple. Its language, "convey and warrant," is legal terminology for a warranty deed and in the absence of language to the contrary, the deed will be deemed to have granted a fee simple estate. Does the term "right-of-way" indicate that only a right of way easement was being conveyed? Held No, that language was not used to create a right but merely to locate certain features of the land in relation to the land being conveyed. That language was not used in the actual conveyance clause, but in a separate section on conditions. It takes more than just a reference to "right of way" to turn a fee simple conveyance into a conveyance of a mere right-of-way easement. The phrase must be used in a context with sufficient clarity to indicate an intent of the grantor to convey something less than a fee simple estate.

Finn v. Williams, Supreme Court of Illinois, 1941, 376 111. 95, 33 N.E.2d 226, 133 A.L.R. 1390

Charles Williams in 1895 conveyed almost 40 acres to Thomas J. Bacon, which later went to plaintiffs Eugene E. Finn and Curtis Estallar Finn. Defendant Zilphia Jane Williams owns the remaining 100 acres of land. For most of the 40 years before the case plaintiffs have been able to go over roads through strangers' land to the south to access the highway. Permission to go through the strangers' land to the south has recently been denied, and plaintiffs contend that the only way to get in and out is to use a road to the north through defendants land. When the land was all one piece, the only way to get in and out was to the north. Since defendant has denied access through 100 acres to the north, the only way plaintiffs can get to town to sell produce is to walk about 3/4 of a mile to the highway carrying whatever produce they can. Do plaintiffs have right to an easement of necessity to an access through the defendant's land to the north? Held Yes. When land is parceled up and part of the land has no outlet to a highway except over the land of strangers, the grantee receives an appurtenant easement by necessity over the land of the dominant estate of which the land was originally a part. If strangers allow access across their lands, the easement of necessity lies dormant until such time as the strangers no longer allow such passage, at which time "subsequent grantees may avail themselves of the dormant easement implied in the deed severing the dominant and servient estates."

Granite Properties Limited Partnership v. Manns, Supreme Court of Illinois, 1987, 117 IU.2d 425, 111 Ill.Dec. 593, 512 N.E.2d 1230

Plaintiff Granite owned a single portion of land in basically sections placed horizontally in a row: an apartment complex, an unused parcel, and a shopping center. The apartment complex had a driveway that came from the street to the south over the middle parcel, and had been there since the apartment was built. Placing a driveway in other places would interfere with stairways. Another driveway came from the north over the middle parcel and wrapped around the grocery store to the east. Big trucks came in one or two times a day to deliver supplies to the back of the store, and used the driveway so they wouldn't have to turn around. Without the driveway, it would be very difficult to turn around. Unloading in the front of the store would interfere with business, and the doors were to small there. Both driveways were gravel. Plaintiff sold the middle section to defendant Manns in 1982, after about 20 years of all the land being held in common. The plaintiff sued for injunctive relieve to continue using the driveways. Were there easements on the driveways implied by prior use? Held Yes. Implied easements try to guess the parties' intentions of an easement when an easement wasn't express. (There are two types of implied easements: easement by necessity, and easement implied by pre-existing use. Easement by necessity arises when a land-locked portion of property is broken from a larger portion.) Easement implied by prior existing, or "quasi-easement," is when one portion of land "derives from another a benefit or advantage of an apparent, continuous, and permanent nature" and is conveyed without reference to an easement. Easement implied by prior use requires three things: (1) common ownership of the claimed dominant and servient parcels with a subsequent conveyance, (2) use by the owner prior to the conveyance, (3) easement is necessary and beneficial to the enjoyment of the parcel. Restatement of Property § 474 comment b (1944) lists eight "important circumstances" allowing inference of intention: "whether the claimant is the conveyor or the conveyee; the terms of the conveyance; the consideration given for it; whether the claim is made against a simultaneous conveyee; the extent of necessity of the easement to the claimant; whether reciprocal benefits result to the conveyor and the conveyee; the manner in which the land was used prior to its conveyance; and the extent to which the manner of prior use was or might have been known to the parties." Here the driveways had been used since the 1960s and the driveways were gravel, making defendants aware of them. Should implied easements by a conveyor of land only be allowed if the use is an absolute necessity, as they conveyor would otherwise be permitted to derogate from the grant? Held No, implication by prior use lowers the threshold for the "necessary" requirement to a "reasonable necessity" to the enjoyment or use of the land. The more clear and established is the prior use, the lower degree of necessity is required. (To distinguish this from an easement implied by necessity, the "necessity" component of prior use might better be phrased, "important to the enjoyment of the conveyed quasi-dominant [or quasi-servient] parcel.")

Beebe v. DeMarco, Oregon Court of Appeals, 1998, 157 Or App. 176, 968 P.2d 396

Plaintiff and her husband purchased lot 11 in the the River Crest Acres subdivision in 1957, and until 1993, when her husband died, they would take their boat out on weekends. A new subdivision, Hidden Acres, had been built in 1958 to the south of plaintiff, and the subdivision included a small alley connecting to 5th Aveneue. As the alley was too small for the boat, plaintiff and husband would drive over the land adjoining the alley, across the backs of lots 12, 13, and 14, the latter of which was owned by parents of Shirley and Ray Wolf. In 1994 the Wolfs divided lot 14 into three parcels, sold the front part with the house, and put a fence along the back and planned to have defendant DeMarco built a house for them there. Plaintiff sued to get access to the back of lot 14, claiming easement by prescription. The trial court agreed, preventing the Wolfs from putting a fence on a 12 feet wide segment, and allowing plaintiffs to "enter upon the easement areas and grade, level, drain, build, maintain, repair or rebuild the roadway." Is there a prescriptive easement? Held Yes. To establish a prescriptive easement, it must be shown by clear and convincing evidence "an open and notorious use of defendant's land adverse to the rights of defendants for a continuous and uninterrupted period often years." Was the use continuous? Held Yes. The use need not be constant—only continuous— and requires only that character of the use was one that was consistent with the user's needs. Was the use adverse? Held Yes. A period of 10 years creates a presumption of adverseness, and there was no existing road, permissive use, or use of the roadway by defendants that would rebut that presumption. Should the court have allowed the plaintiff to improve the easement? Held Yes; easement owners are required to keep their easements in repair, and grading and leveling are consistent with the plaintiff's use of the easement and obligation to repair it.

S.S. Kresge Co. v. Winkelman Realty Co., Supreme Court of Wisconsin, 1952, 260 Wis. 372, 50 N.W.2d 920

A block contained eight lots, lots 1-4 on the south, west to east, and lots 5-8 on the north, east to west. Plaintiff Kresge owned the south half of lots 5 and 6, and defendent Winkelman Realty Co. owned lots 2, east and west parts of lot 3, and a south part of lot 4. Kresge had an alleyway on the west of lot 6 that, throught a prescriptive easement, had allowed ingress and egress of the south property when it had been a barbershop and living quarters. Now defendant's land is used for a men's store and a department store. Are defendants restricted from using the easement to convey or transport merchandise to and from the men's store and department store? Held Yes. Even though the owner of land in general has the right to use it to its fullest economic benefit, this alleyway is owned by plaintiff, not defendants, and an easement can be used only in connection with the estate to which it is appurtenant. "A prescriptive right acquired by a particular use of the property cannot ordinarily justify an added use in connection with the dominant estate in a manner far different from that employed under the original use." Here defendants have greatly changed the use of the dominant estate in that it is now used as a retail outlet for appliances and as a storage warehouse for merchandise sold elsewhere.

Sakansky v. Wein, Supreme Court of New Hampshire, 1933, 86 N.H. 337, 169 A. 1

Plaintiff Sakansky owned land that came with an easement providing access over an 18-feet wide section of land of defendant. Sakansky conveyed the property, along with the right of way, to plaintiff J. J. Newberry Company and took back a mortgage on it. Defendants want to develop the land and put a building that will lower the access of the way to a height of eight feet, but promise to erect a new, unobstructed way for vehicles higher than eight feet. Does plantiff have an absolute right over the old right of way? Held Yes, the original easement contract marked out the specific dimensions of the way, so plaintiff has unlimited right to travel over that way. Vehicles over eight feet are a reasonable use of the way, and the defendant may not reasonably restrict the hight of the way to eight feet. The existence of a new way is irrelevant.

Lindsey v. Clark, Supreme Court of Appeals of Virginia, 1952, 193 Va. 522, 69 S.E.2d 342

The Clarks sold two lots to C.W. and Mable Six, the latter of whom was the daughter of the Clarks. The deed had a reservation that the south 10 feet would be used for access to the Clarks' place. The Six' later sold the property to the McGhees with the same reservation, and the McGhees sold the property to the Lindseys without any reservations. During this time apparently the Clarks thought that they had reserved the north part of the property, and used that part for a driveway. The Six' built a house that encroached by two feet the 10-foot alley on the south that was supposed to be the easement. The Clarks were happy to continue using the north part for a driveway, but the Lindseys didn't want the Clarks to use either the north or the south. Did the Clarks, by using the north part rather than the south part, abandon the easement? Held No. Mere nonuse of an easement does not constitute abandonment, because abandonment is a question of intention. Here the Clarks clearly intended to use the easement, even if they were incorrect about where it was located. Does the Clarks' knowledge of the Six' house being built estop the Clarks from claiming an easement on the south side? Held No. Estoppel requires that the party being estopped have some sort of superior knowledge. The Clarks didn't know any more than the Six' did—neither realized the easement was to the south rather than to the north. Must the Lindseys tear down part of their house to allow the Clarks to use the easement to the south? Held No. "He who seeks equity must do equity." The Lindseys brought this case to a court of equity, and the court can impose an equitable remedy. It would be wasteful to tear down the Lindseys' house when the Clarks are happy to use the north part of the property, so as long as the Lindseys provide access to the north, the don't have to provide access to the south.

Gallagher v. Bell, Court of Special Appeals of Maryland, 1986, 69 McLApp. 199, 516 A.2d 1028

The Sisters of Mercy of the Union in the United States of America, Incorporated owned a large section of land. In 1959 the Sisters sold part of it to appellees F. Meade Bell and David P. Bell for a development project, providing that the subsequent owners of the existing house and lot in Section 4 would dedicate have the street and pay half the cost for installing street utilities. The Sisters sold the Section 4 house and lot to the Gallaghers in 1960, and in the contract Mr. Gallagher agreed to dedicate the street and pay half the costs. In 1961, in exchange for a right of way out of their property, the Gallaghers made a contract with the Bells that they, "their heirs and assigns" would dedicate the street and pay half the costs. In 1979 the Gallaghers sold the property to Ms. Camalier and, when she became aware of the 1960 agreement, insisted on an indemnity from the Gallaghers. In 1983 the Bells finally got around to starting their development project, and asked Ms. Camalier for $18,000, which she refused to do. When Ms. Camalier brought up the indemnity agreement, the Bells sued the Gallaghers. Was the agreement between the Gallaghers and the Bells a covenant that ran with the land, imposing an obligation on later owners? Held Yes. For a covenant to run with the land, (1) it must "touch and concern" the land by affecting its quality, value, or mode of enjoyment, either bringing a benefit to one party or imposing a burden on the other; (2) the parties must intend for the covenant to run with the land,;and (3) there must be privity of estate between the parties to the covenant, with some states requiring mutual (both parties own the land), horizontal (conveying land from one party to the other), and/or vertical (successors and assigns) privity. Here the Gallaghers got a benefit of the right of way from the covenant [even though they may have had a right to an implied easement of necessity]. The fact that there was express language of the covenant's validity to heirs and assigns in agreement was in the original Sisters' deed, the Gallagher deed, and the later Gallagher contract shows that the parties intended the agreement to run with the land. Many courts have done away with a requirement of mutual or horizontal privity, especially because of difficulties of determining original relationships between covenantors, and this court adopts the need only for vertical privity, which was present here between the Gallaghers and Ms. Camalier. Does a covenant that runs with the land relieve the original party of the covenant's obligations when that party sells the land? Held Yes. It would be harsh to impose a liability on someone who has lost control of the land, as long as the other party was not relying on the credit of the first party. Here the record shows that the Bells did not intend to rely on the credit of the Gallaghers.

Neponsit Property Owners' Ass'n v. Emigrant, Industrial Sav. Bank, Court of Appeals of New York, 1938, 278 N.Y. 248, 15 N.E.2d 793, 118 A.L.R. 973

Neponsit Realty Company created a residential development and sold a tract of land. The tract of land was eventually sold to defendant through a judicial sale. Every deed in the chain of conveyances alluded to a restrictive covenant in the first deed: that that grantee, its heirs, successors, and assigns would be subject to a maintenance fee for streets and public places to the grantor or the grantors, its successors and assigns, which may include a Property Owners' Association. The covenant stated that if the fee was not payed, a lien would be placed on the property until the fee was paid. The Neponsit Owners' Association was formed, the fee was assessed and not paid, and the plaintiff Association sued defendant to forclose on the resulting lien. Is the covenant valid to support an action by the Association even though the Association, which owns no property itself, is technically not in privity with the defendant? Held Yes. The old rules of privity to support restrictive covenants did not know about modern inventions such as owners' associations. However, restrictive covenants were formed in the court of equity and the reasoning behind the rules of privity apply to an owners' association. Even without ignoring that the separate legal identity of the corporation, the function of the organization to represent the property interests of the owners is obvious. Is the covenant "touching the land," even though the fees do not affect the property owned in fee simple by the defendant? Held Yes. Besides the fee simple land, the defendant also received easements for the enjoyment of public roads and public places, those easements are attached to the lot owned by the defendant. To hold otherwise would place form over substance.

Tulk v. Moxhay, Court of Chancery, England, 1848, 2 Phillips 774

Plaintiff owned a vacant piece of land in Leicester Square, and sold it to Elms with the condition that a section of it be kept and maintained as a Square Garden and Pleasure Ground. The land eventually passed to defendant, who wanted to build on the parcel of land, so plaintiff, who still owned land around the garden with tenants, sued. The defendant's deed had no mention of the covenant, but the defendant had been made aware of it. Did the covenant between plaintiff and Elms run with the land? Held Whether the agreement is a covenant is irrelevant. The court of equity can prevent defendant from using the land a certain way. If one sells land at a lower price because of an agreement for the user of the land, it would be inequitable for the new owner to resell the land at a higher price and escape the agreement. Whether or not there was a covenant, a new owner with notice of the agreement cannot be allowed to violate the agreement; otherwise, one could not sell part of a tract of land without being guaranteed that retained land would not become worthless.

London County Council v. Allen, Court of Appeal, 1914, L.R. [1914] 3 K.B. 642, Ann.Cas.l916C 932

The London County Council entered into an agreement with Allen, a builder, that he, his heirs, and assigns would not build anything on part of the land, indicated in green on the map, as they would be later used for making roads. Later Allen built a wall on plot #2, and Mrs. Allen, who had been conveyed land by Allen, built three houses on plot #1. Is Mrs. Allen restricted from building on the land because of Allen's agreement with the London County Council, even though the Council did not own any part of the land or neighboring land? Held No. Originally, the rule in Tulk v. Moxhay only looked at the equitable prevention of breaking an agreement if a purchaser had been put on notice of the agreement. This rule has evolved now to the idea of an equitable interest analogous to a negative easement; as such, because the Council never owned any part of the land, there cannot be a dominant and subservient estate that would allow such an easement to come into effect. The agreement is therefore not binding on successors.

McMillan v. Iserman, Michigan Court of Appeals, 1982, 120 Mich.App. 785, 327 N.W.2d 559

Defendant Iserman bought land that in 1958 had a restrictive covenant that allowed three fourths of property owners to amend the restrictions at any time. Defendant contracted with Alternate Living Programs and Health Assistance, Inc. to build a facility for the mentally handicapped, so residents got together and created a restriction against state-licensed residential facilities for the mentally handicapped. Is a restrictive covenant amendment that creates a greater restriction invalid on its face? Held Cavanagh: No. Defendant was on notice that the restriction could be amendend, and nothing in the restriction indicated that amendment could only be less restrictive. Are plaintiffs estopped from enforcing the restriction because defendant relied on the absence of the restriction? Held Yes. If, prior to the amendment, a lot owner commits himself/herself to a use the amendment does not allow, the amendment doesn't apply if (1) the lot owner relied on the absence of the amendment (i.e. had no notice that the amendment was coming) and (2) the lot owner will be prejudiced if the amenendment is enforced as to the lot. Here Iserman did not have notice of an amendment when the contract was made to build the facility, and if the amendment is enforced defendant will have to breach the contract. Is the restrictive covenant unenforceable because of public policy concerns? Held Yes. The legislature has stated in several places that it wishes to promote facilities for the handicapped, so enforcing this restriction would be against public policy. Dissent MacKenzie: None of the elements of estoppel are found here. There's no evidence that the plaintiffs didn't act promptly when finding out about defendant's plans, or that plaintiffs amended the restrictions because of defendant's plans. There's no evidence that defendant will be adversely affected by the restrictions—frustration of purpose and impossibility of performance are well-established defenses to breach of contract. As to public policy, the legislation cited by the majority refers to state zoning. Here the restriction does not violate equal protection as it does not exclude a class of persons from ownership, but merely forbids a particular use of the property.

Joslin v. Pine River Development Corp., Supreme Court of New Hampshire, 1976, 116N.H. 814, 367 A.2d 599

The Scribners sold 48 beach-front lots, along with other back lots, all making up the Scribner Park Subdivision. The defendant corporation purchased lot beach-front lot #26, along with a large tract of back land. The defendant divided the large tract into smaller parts and sold them to various buyers who formed the defendent Pine River Association, Inc. The corporation conveyed lot #26 to the Association so that members could access the water for swimming, docking boats, etc. All the deeds to the frontage lots, including lot #26, include restrictions that limit the number of cottages; prohibit mobile homes; require permanent buildings, finished exteriors, and modern plumbing; and impose set-back requirements. Do the covenants restrict the use of lot #26 from common beach and boating purposes, even though this wasn't an express restriction? Held Yes. Although originally covenants were strictly construed to permit the free use of land, recently courts have recognized that restrictive covenants are valuable in land use planning, something particularly useful in lake communities. Even those courts who speak of strict construction give great weight to the intent of the parties, and take into consideration all the surrounding circumstances at the time of covenant creation to determine the intent of the parties, including the location and character of the entire tract of land; the purpose of the limitation; whether the limitation was imposed for the benefit of the grantor or grantee; and whether the restriction is part of a general building plan for the development of the property. Here the restrictions on lot #26 were obviously part of a general plan to restrict the lot to residential use, not for hundreds of boaters and sunbathers at all hours of the day.

Suttle v. Bailey, Supreme Court of New Mexico, 1961, 68 N.M. 283, 361 P.2d 325

Mr. Dickason and his wife in 1937 dedicated the Mesa Verde Addition to the City of Albuquerque. The Addition was divided into lots and restrictive covenants placed on them that allowed for alterations or annullments by the original party or successors before the restrictions were to expire on 1 January 1970. If the grantor reserves a general power to dispense with restrictions, is the agreement a personal covenant or one that runs with the land? Held Such an agreement is a personal covenant. Each grantee has no guarantee that the covenant will be enforced, so there is a lack of mutuality necessary to create a covenant that will run with the land and protect the interests of subsequent landowners.

Rhue v. Cheyenne Homes, Inc., Supreme Court of Colorado, 1969, 168 Colo. 6, 449 P.2d 361

Cheyenne Homes, Inc. developed a subdivision with restrictive covenants, one of which was that anyone building or moving in a home had to first get the permission of the architectural committee. Plaintiffs in error Leonard Rhue and Family Homes, Inc. moved in a thirty-year-old Spanish-style house without asking the committee. The subdivision contained only modern ranch style and split-level homes, so Cheyenne got an injunction against the plaintiffs in error. Is the restrictive covenant valid, even though it contains no specific standard other than a requirement that the architectural committee first be consulted? Held Yes, as long as the intention of the covenant is clear, such covenants are valuable in developing subdivisions by guaranteeing purchasers that the value of their land will be protected. (Equal protection and due process of law require that the committee make decisions reasonably and in good faith.)

Cowling v. Colligan, Supreme Court of Texas, 1958, 158 Tex. 458, 312 S.W.2d 943

R.E. Cowling and 17 other lot owners of Houston's Post Oak Gardens subdivision brought a suit against Mrs. R.M. Colligan as owner and J. Terry Falkenbury as tenant of Tract No., to secure an injunction against using the property for commercial purposes. The property had a restrictive covenant for residential use from the time that "Westheimer Road was a quiet country road," but there are several churches and many businesses, and the road has become "a heavily-traveled main thoroughfare". Removing the restriction would raise the value of the land from around $10,000 to $40,000 per acre. The trial court found the restrictive covenants were "valid, subsisting and enforceable" and had not been "waived, breached [or] abandoned." Has there been such a change in the conditions and uses of the land in the vicinity to make the restrictions unjust and inequitable to enforce? Held No. The equities in favor of a particular owner is only one part of the equation—the court must also look at the equities of the other lot owners. If those on the borders of a residential community were allowed to go beyond the restrictions of their restrictive covenants, it would simply move the residential/commercial border and force the same decision to be made with the next row of lots. Pretty soon, "all other lots would fall like ten-pins," changing the commercial character of the subdivision.

Waldrop v. Town of Brevard, Supreme Court of North Carolina, 1950, 233 N.C. 26, 62 S.E.2d 512

In 1938, I.F. Shipman and his wife sold the Town of Brevard a five-acre tract of land in the middle of a 120-acre tract of land. The deed contained a provision stating that the Town and its successors could use the land as a dumping ground, and that the grantor coud not sue because of any odors or vapors, etc. The agreement specified that it would be a covenant running to the successors of the grantor. In 1939 I.F. Shipman and his wife sold Van R. Tinsley and his wife a tract of land about 300 yards from the dump, built a house, and sold the land to the plaintiffs in 1940. May the plaintiffs sue the Town for nuisance? Held No. The grant and release or waiver in the deed to the Town created an easement in favor of the Town, creating a waiver of any future claim for damages on the part of the owners of the other land. The lease was essentially a covenant not to sue, binding on the grantors and their heirs and assigns.

Citizens for Covenant Compliance v. Anderson, 12 Cal.4th 345, 1995 (supplement)

Joseph and Claire Stadler recorded restrictions for Skywood Acres, a piece of land divided into 60 residential building lots. The restriction indicated a general plan for property development and restricted the lots to residential purposes and a few small pets. The Andersons purchased part of Skywood Acres through an intermediary, but none of the deeds contained references to the recorded restrictions. The Andersons also purchased part of the Friars subdivision in similar circumstances. The Andersons are raising llamas and operating a wine business, and the Citizens for Covenant Compliance sue the Andersons to restrict their activities. Do restrictive covenants, recorded before a sale but not present in a deed, ever come into force? Held Arabian: Yes. This is the only fair solution that will make sense of all the irrational outcomes that would occur if only express language in a deed were effective to create a restrictive covenant, such as the order in which deeds were made. The written, recorded restriction gets around the statute of fraud, and grantees are said to have constructive notice of the restriction upon conveyance. The restriction does not go into effect until the actual conveyance. Dissent Kennard: The Skywood subdivision cannot contain convenants running with the land, because in the 1950s § 1468 did not allow such covenants between grantor and grantee. The later § 1468 required references in a deed. Similarly equitable servitudes require reference in a deed. The majority's holding therefore unilaterally imposes covenants, conditions and restrictions (CC&Rs) by the intent of a grantor who has a common purpose, but California statutes for covenants that run with the land require reference in the deed. The court does not have the power to change the statutes, and making this change retroactive will alter rights of property that have been conveyed over 100 years ago.

Gerruth Realty Co. v. Pire, Supreme Court of Wisconsin, 1962, 17 Wis.2d 89, 115 N.W.2d 557

Defendants Walter and Emily Pire signed a contract to purchase plaintiff's property for $30,000 and a note for $5,000 down. The "Deposit Receipt and Purchase Agreement" was contingent on defendants' purchasing the Putterman property simultaneously for $40,000, and expressed, "This offer to purchase is further contingent upon the purchaser obtaining the proper amount of financing." It turned out that Walter's bank would only lend a total of $100,000 to any one person, and his other loans, along with the $75,000 he asked for, would in total exceed the maximum. The plaintiff and the Puttermans offered to the finance the properties to the extend of $40,000, but the defendant declined. Did the "subject to financing" clause express a condition precedent to the performance of the contract? Held No; the clause is ambiguous, making the contract void for indefiniteness. The contract is silent as to the terms and conditions of the loan, and there is no evidence that both parties had the same thing in mind when writing the contract.

Skendzel v. Marshall, Supreme Court of Indiana, 1973, 261 Ind. 226, 301 N.E.2d 641, cert, denied 415 U.S. 921, 94 S.Ct. 1421, 39 L.Ed.2d 476 (1974)

Mary Burkowski, whose estate is plaintiff, sold land to Charles and Agnes Marshall for $36,000 with a payment plan of $500 up front, $500 more, and then $2500 per month until paid. Vendees could pay more than the required amount, and if amounts were not paid earlier overpayments would be applied as prepayments. If vendees were in default for over 30 days, the contract allowed forfeiture, with the vendor keeping all payments up to that point. Mary died, and the executrix sued the vendees asking for forfeiture and the $21,000 they had paid as liquidated damages. Did the plaintiff waive the right to forfeiture by accepting late payments? Held No, the first late payments were covered by earlier overpayments, as allowed by the contract, so the vendor could not have asked for forfeiture; there was nothing for the vendor to waive. Should the vendor have a forfeiture of the property and keep the $21,000? Held No, a conditional land sale contract is analogous to a secured transaction. That is, a sale of land on a payment plan is similar to a mortgage. (Legal title does not vest in the vendee until the amount is paid, but equitable title vests immediately.) Immediate forfeiture is similar to strict forclosure with a mortgage, which has falled out of favor and replaced with an equitable proceeding to satisfy a lein. As a large amount was paid, a large portion of the value of the property has vested in the vendee, and allowing the vendor to keep the $21,000 would be a penalty, not liquidated damages. An equitable forclosure should begin, under the same rules as with a mortgage. Concur This opinion only applies to installment sales contracts in which much equity has been transferred. If little or no equity had been transferred, or the vendee had abandoned the property, forfeiture would have been appropriate. Furthermore, if the court finds forfeiture to be inequitable, it should give the vendor the highest relief available, such as increased interests, because presumably the parties would have put such terms in the contract had they known that the forfeiture provision would not be held to be valid.

Union Bond & Trust Co. v. Blue Creek Redwood Co., United States District Court, N.D.California, 1955, 128 F.Supp. 709, affirmed 243 F.2d 476 (9th Cir.1957)

The vendee contracted to buy land for $750,000 to be paid from the proceeds of timber cut on the land. The contract said that time is of the essence, and that if the vendee was in default for over 60 days, the vendee would forfeit and the vendor would get to keep the payments. After the vendee paid $585,000, the vendee willfully defaulted. The vendee sued for specific performance. Does California Civil Code § 1492, "Compensation after delay in performance," allow specific performance if the vendee pays the entire obligation? Held No, that statute explicitly does not apply when time is declared of the essence in the contract. Does § 3275, "Relief in case of forfeiture," allow the vendee to get out of forfeiture by paying the full amount? Held No, that statue expressly does not apply to willful breach. Does § 3369, which says, "Neither specific nor preventive relief can be granted to enforce a penalty or forfeiture in any case…", prevent the court from allowing the vendor to keep the payments? Held Yes. Allowing the vendor to keep the payments would be enforcing a penalty in violation of § 3369. May the court grant the vendee specific performance if the complete unpaid amount is paid? Held Yes; calculating damages would be very difficult if specific performance were not granted, and under § 3369 it would seem the court has the discretion to allow the vendee to complete the contract.

Easton v. Strassburger, 152 Cal.App.3d 90 (1984)

Plaintiff Leticia M. Easton bought property from the Strassburgers through Valley Realty agents Simkin and Mourning. Agents saw several "red flag" items that indicated shifting soil, such as uneven floors and netting to hold back previous slides, but did not investigate or inform the plaintiff. After the purchase, there was a massive earth movement that brought the worth of the $170,000 property down to around $20,000, with a $213,000 price tag for preventative repairs. Easton sued the Strassburgers, Valley Realty, and the builders, and the defendants cross-complainred for indemnity. Is a real estate agent under a duty to conduct a reasonable investigation and disclose to the purchaser what that investigation would reveal? Held Yes. The agent is in a much better position to find defects, and the buyer expects the broker to protect the buyer's interests. The position of trust is similar to that of an attorney and client. Is expert testimony required before a jury can determine whether a real estate broker has breached a duty of investigation? Held No, in California expert testimony is not required where a question is "resolvable by common knowledge." As Bob Dylan put it, "You don't need a weatherman to know which way the wind blows." Here the jury can figure out the relationship between uneven floors and shifting soil. Did the judge improperly deny partial indemnity to Valley Realty by making a distinction between active and passive negligence? Held Yes. After American Motorcycle Assn. v. Superior Court, Cal.3d 57, the active/passive distinction is no longer tenable for partial indemnity requests. However reversing the request for partial indemnity does not reverse the ruling in favor of the plaintiff.

Mountain States Telephone & Telegraph Co. v. Kelton, Supreme Court of Arizona, 1955, 79 Ariz. 126, 285 P.2d 168

Defendant contractor John C. Kelton and Son brought heavy digging equipment on the land and struck a buried telephone cable. The telephone company's easement was a matter of record. Was the record of the deed constructive notice to the contractor of the easement? Held No. The record of deed is constructive notice only to those who have a duty to search for it, and the contractor did not have a duty to search the records to look for such an easement. The contractor had no interest in the title of the land.

Stone v. French, Supreme Court of Kansas, 1887, 37 Kan. 145, 14 P. 530, 1 Am.St.Rep. 237

Francis French sent his brother, Dudley French, a letter saying that he would make a deed to Dudley of his land and, right before he died, mail it to him so that the land could pass to him with no problems. Thirty minutes before Francis died, his family found an envelope with a deed to Dudley containing the words, "Signed, sealed, and delivered in the presence of S. Michaels." The family gave the deed to Dudley, who later sold it to John Stone, a brother-in-law with which he lived. Luther French, another heir of Francis, sued Luther, John Stone, and even S. Michaels, saying that Stone had a right to one seventh of the property, as he was an heir of Francis, but that Stone did not own the whole property. Was the deed from Francis to Luther ever delivered as to make it valid? Held No. Whatever the deed said, it was not delivered. The law sometimes allows a delivery to a third party or the guardian of a child to be effective as a delivery, but none of those is the case here. Without delivery, the deed is not just voidable, but void—like a forged deed, it never came into effect, so Dudley had nothing to convey to Stone. The deed was never delivered, so it doesn't matter if it eventually wound up in the hands of Dudley.

Earle v. Fiske, Supreme Judicial Court of Massachusetts, 1870, 103 Mass. 491

Nancy Fiske conveyed by deed a life estate in land to her son Benjamin Fiske and his wife Elizabeth Fiske, with remainder to Mary Fiske. Nancy never recorded the deed. Nancy died in 1865, and the land went to Benjamin as her sole heir, who sold it to Earle. The deed was only recorded in 1867. Did Nancy have any interest in the land that would allow it to be transferred to Benjamin upon her death? Held Yes. Although a deed duly signed, sealed, and delivered are all that are needed to transfer land from grantor to grantee, a deed is ineffectual as to third parties unless there is notice, and recording a deed is considered constructive notice. Purchasers such as Earle can rely on the deed of record.

Mugaas v. Smith, Supreme Court of Washington, 1949, 33 Wn.2d 429, 206 P.2d 332, 9 A.L.R.2d 846

Dora Mugaas acquired a piece of land 135 feet by 3.5 feet by adverse possession, extending back to 1910. By the time Smith bought the adjoining property in 1941, a marking fence had fallen down and Dora had stopped using the strip of land. When Smith tried to build on the strip, Dora informed Smith that she owned the land. Does Smith own the property as a bona fide purchaser, as the strip of land was not recorded? Held No, that a bona fide purchaser can rely on the deed of record does not apply to adverse possession. Adverse possession by its nature is not something put into a deed in the first place, and when the title is matured under the statute of limitations the recording act does not apply. The adverse owner need not continue use of the property; otherwise, adverse use would be required forever, defeating the statute of limitations.

Mortensen v. Lingo, United States District Court, D .Alaska, 1951, 99 F.Supp. 585

In 1941 Henry G. McCain conveyed land to E.M. Anglin. The deed was recorded but not indexed. In 1947 McCain conveyed the same property to the defendant, who conveyed the property to the plaintiff in 1948. Anglin, claiming ownership of the property, tried to evict the plaintiff. Did the deed from McCain to Anglin, which was recorded but not indexed, constitute constructive notice to the defendant? Held No. With today's "tempo of life," it's unreasonable to require a grantee to search a seemingly endless volume of records page by page. Indexing is the only practical way for the public to locate records, and is a necessary part of recording; to hold otherwise would deny effect to the statutory requirement of indexing.

Simmons v. Stum, Supreme Court of Illinois, 1882, 101 Ill. 454

Isaiah McHenry purchased land from John W. Stum with seven promissory notes for mortgaged property. On 7 November 1878 McHenry conveyed the land to to William R. Cochran and Samuel Strong with notice of the mortgage. On 13 March 1879 Cochran and Strong conveyed the property to Isabelle Simmons supposedly without notice of the mortgage, although the circumstances suspiciously appear as though Isabelle might be helping to defraud Stum. Stum recorded the mortgage on 15 March 1879. Stum sues all four to secure the payment of the mortgage, but McHenry says he doesn't own the property anymore and Isabelle says she is a bona fide purchaser without notice of the mortgage. Is Isabelle liable for the mortgage, even though there is no evidence that she was given notice of the mortgage, which was not recorded when she purchased the land? Held Yes. Illinois Rev. Stat. 1874 says that mortgages go into effect against purchasers without notice after the mortgage is recorded. There is no evidence that Isabelle recorded the deed before 15 March 1879, when Stum recorded the mortgage. The mortgage stands, as it was recorded before Isabelle's deed was recorded.

Eastwood v. Shedd, Supreme Court of Colorado, 1968, 166 Colo. 136, 442 P.2d 423

Mrs. Alexander deeded property as a gift to the defendant on 2 December 1958, and then executed a warranty deed of the same property as a gift to the plaintiff, her daughter, on 15 October 1963. The plaintiff recorded the deed on 23 October 1963, and the defendant recorded the defendant's deed on 16 October 1964. The legislature in 1927 changed Section 118-6-9 from saying that recording "shall take effect as to subsequent bona fide purchasers and encumbrancers by mortgage, judgment or otherwise not having notice thereof" to saying that it "shall be valid as against any class of persons with any kind of rights." Does this mean that recording now protects donee property as well? Held Yes. Colorado is a race-notice state, but unlike all the other race-notice states, this unique legislature change allows not only grantees for value without notice but also donees without notice to race to the courthouse and, and allows such recording to trump all others. As the plaintiff was a donee without notice of the previous donation, and the plaintiff was first to record, the plaintiff gets the land.

Strong v. Whybark, Supreme Court of Missouri, 1907, 204 Mo. 341, 102 S.W. 968

Seth Hayden conveyed land to William Moore on 6 March 1861 for $640, and then on 26 August 1863 conveyed the same land to Josephine Hayden for a stated consideration of "natural love and affection and five dollars." Josephine recorded her deed on 11 April 1868, and Moore recorded his on 14 December 1874. Plaintiff's title derives from Josephine, and defendant's title derives from Moore. Does the prior filing of Josephine give her title to the property? Held Yes. Section 923 Rev.St.1899 states that a deed is not valid to those having paid good and valuable consideration of land without notice until it is recorded. The deed to Moore was not valid to Josephine, and Josephine recorded her deed first. Did Josephine pay good and valuable consideration for the land? Held Yes. Something is valuable if it is worth money, and $5 is worth money. The legislation does not say that a purchaser must pay a full and adequate consideration for the land. [Some consider this to be an erroneous holding, and that nominal consideration is not sufficient.] Did the use of a quitclaim deed rather than a warranty deed give notice of pre-existing equities in the property? Held No, a purchaser by quitclaim deed is just as much protected by the registry.

Gabel v. Drewrys Limited, U. S. A., Inc., Supreme Court of Florida, 1953, 68 So.2d 372, 39 A.L.R.2d 1083

James McCaffrey was a beer distributor who became indebted to plaintiff Drewrys Limited, U. S. A., Inc. for over $20,000 of beer. Drewry's met with McCaffrey and said they would forebear their right to sue for an indefinite amount of time in return for a couple of mortgages on McCaffrey's land. Drewrys promptly recorded the mortgage, but it turned out that Gabel already had an unrecorded mortgage on the property, and when he read that McCaffrey was in trouble, he went and registered his mortgage. Is a mortgagee considered a bona fide purchaser when determining the winner of a race-to-record? Held Yes, if something of value was exchanged for the mortgage agreement. Did this mortgage have sufficient consideration to make Drewrys a bona fide purchaser? Held No. A definite forebearance even for one day would be sufficient, but here Drewrys could foreclose at any time. As Drewrys didn't give up an existing right yet moreover received a mortgage, Drewrys did not have a detriment but a benefit. There was conversely no benefit but a detriment to McCaffreys. This transaction did not therefore have sufficient consideration.

Osin v. Johnson, United States Court of Appeals, District of Columbia Circuit, 1957, 243 F.2d 653

Plaintiff Mrs. Osin sold defendant Johnson property in return for a mortgage on the property. Johnson promised to record the mortgage, but only recorded the deed. Then Johnson borrowed money from appellee Perpetual Building Association, and then more money from appellee Glorius, each time executing deeds of trust against the property. Creditors of Johnson obtained judgments which became liens against the property. The trial court held that the creditors had superior claims against the property because the Otis mortgage was unrecorded. Did Johnson's fraudulent activity impose a constructive trust in the property? Held Maybe. When one is unfairly holds a title and is thereby unfairly enriched, a constructive trust can be imposed. The trial court should look into this. Would a constructive trust give Otis a superior claim than a bona fide purchaser? Held No. When two innocent parties both have an interest, the recording act says that the bona fide purchaser who relied on the state of the record has the superior interest. Are judgment creditors considered bona fide purchasers? Held Not usually, as judgment creditors usually don't rely on the record title in their extension of credit, giving equity under a trust or contract in rem superiority over a judgment lien. The DC recording act was altered, however, to give judgment creditors superior interest over unrecorded interests. Do the alterations apply to interests that could not have been recorded? Held No. (Other courts have passed on deciding this issue, and this holding squarely answers the question.) The legislation only applies to interests that could have been recorded, and a constructive trust because of fraud cannot be recorded. If there is a constructive trust because of fraud, Mrs. Otis has an interest in the property superior to that of the judgment creditors unless the creditors relied on the state of the record when extending credit.

Wineberg v. Moore, United States District Court, N. D. California, S. D., 1961, 194 F.Supp. 12, affirmed 349 F.2d 685 (9th Cir.1965)

Plaintiff Wineberg, a citizen of Washington, in May 1948 purchased 880 acres of timber land in Humboldt County in northern California. Winebeg posted "no trespassing" signs in his name, visited the land a few times, and let guests stay there, but he didn't record the deed until May 1951. Barker, from whom Wineberg bought the land, in the meantime sold timber there to defendant Construction Engineers, and sold the land itself to Natural Resources, Inc., both deeds of which were recorded before Wineberg recorded his deed. Does possession of the property provide later purchasers of actual notice, giving Wineberg title to the property? Held Yes. In California, "open, notorious, exclusive and visible [possession that is] not consistent with the record title," if proven by the person claiming possession, provides a presumption of actual notice to subsequent purchasers. Here Wineberg provides that proof in that the no-trespassing signs were in his name, chattel on the land were identifiable has his, and guests staying on the property would have identified Wineberg as owner. It will be imputed to a purchaser all information available to a purchaser by an actual visit to the premises. The recording system is meant to protect bona fide purchasers for value from secret liens, but purchasers may not "close [their] eyes to everything but the record title." Does the fact that Wineberg did not fence off the entire property prevent him from having possession? Held No. In California, when a party under the color of title has actual possession of part of a tract, that party has constructive possession of the whole. Besides, the main road for ingress and egress to the property had signs with Wineberg's name.

Village of Euclid v. Ambler Realty Co., Supreme Court of the United States, 1926, 272 U.S. 365, 47 S.Ct. 114, 71 L.Ed. 303

The village of Euclid, an Ohio municipal coporation, lay outside of Cleveland. The Euclid village council adopted an ordinance in 1922 that divided the village into six use districts, U-1 through U-6; into three height districts, H-1 through H-3; and into four area districts, A-1 through 1-4. The plaintiff sued for an injunction against the ordinance because the ordinance prevented part of plaintiff's land from being used commercially in any regard, thereby reducing its value by around 75%. Does the ordinance violate the Fourteenth Amendment provision against deprivation of property without due process of law because it reduces the value of the plaintiff's property? Held No. Such planning makes neighborhoods nicer, allows more efficient access by emergency services, cuts down on noise pollution, helps air solution; provides more sunlight, and makes neighborhood streets safer for children. The provisions as a whole are not clearly arbitrary or unreasonable, and they have a substantial relation to the public health, safety, morals, and/or general welfare.

Nectow v. City of Cambridge, Supreme Court of the United States, 1928, 277 U.S. 183, 48 S.Ct. 447, 72 L.Ed. 842

The plaintiff was getting ready to sell property for commercial use in Cambridge for $63,000 when the City of Cambridge passed an ordinance dividing the city up into business, residential, and unrestricted districts. The particular division restricted the western 29,000 square feet—a 100-foot tract—out of 140,000 square feet of plaintiff's property into residential-only land, even though surrounded by a Ford assembling factory and a soap factory. Because of the change, the purchaser backed out of the contract with plaintiff. The master assigned to the case found that the land could not practically be used for residential purposes and that districting that land as residential "would not promote the health, safety, convenience, and general welfare of the inhabitants of that part of the defendant city…." When applied to the plaintiff, does the ordinance violate the Fourteenth Amendment by depriving him of property without due process of law? Held Yes. Euclid v. Ambler held that a district scheme cannot be "a mere arbitrary or irrational exercise of power having no substantial relation to the public health, the public morals, the public safety or the public welfare in its proper sense." Extending the district 100 feet to allow commercial use of the property would be within the purpose of the ordinance, but more importantly, the master's finding showed that the health, safety, convenience, and general welfare of the residents would not be promoted by the districting. Here the districting harmed the plaintiff, and the necessary basis for the districting is lacking.

Hawaii Housing Authority v. Midkiff, Supreme Court of the United States, 1984, 467 U.S. 229, 104 S.Ct. 2321, 81 L.Ed.2d 186

In the Hawaiian Islands, all land was originally held by the high chief, the ali'i nui. By the mid 1960s, State and Federal Governments owned almost half the land, and almost all the other half was in the hands of only 72 private landowners. The Hawaiian Legislature enacted the Land Reform Act of 1967 in order to redistribute fee simple land. It required that, if a certain number of eligible tenants on a tract petition the Hawaii Housing Authority (HHA), the HHA can condemn the property and sell it to the tenants. Because the condemnations compulsorily transfer land from one private owner to another, does the Act violate the "public use" requirement of the Fifth and Fourteenth Amendments? Held No. The leglislature is in the best position to determine public interest, and only the end result is to be evaluated, not the means. Here the leglislature here has determined that redistributing fee simple land ownership is in the public interest, and as that purpose is legitimate and not irrational, the legislature may use its power of emminent domain to effect that purpose. "[I]t is only the taking's purpose, and not its mechanics, that must pass scrutiny under the Public Use Clause."

Sierra Club v. City of Hayward, 28 Cal.3d 840 (1981) (supplement)

California enacted the California Land Conservation Act of 1965 (Gov. Code, § 51200 et seq.) or "Williamson Act" to protect large open spaces of farmland from urban sprawl. It allowed ten-year agreements with landowners in which the landowner was guaranteed low taxes in exhange for a promise to use the land for agriculture. The normal method for termination was non-renewal. The Sodas own a 2,300-acre cattle ranch near Hayward, and in 1969 Hayward created a 600-acre agricultural preserve under the Williamson Act. In 1978 the Sodas petitioned the city to cancel 93 acres of the land so that Ponderosa could develop a residential subdivision there. Should the city have granted the termination? Held No. Cancellation of a Williamson Act agreement, as opposed to its non-renewal, is an emergency measure only and requires (a) that cancellation is not inconsistent with the purposes of the act, (b) that cancellation is in the public interest, which requires determination (c) that there is alternate land for the proposed purpose and (d) that there is no other reasonable agricultural use for the land. Here, the use of the land could have been predicted, and allowing the cancellation will defeat the purpose of the act, as it allows speculation by a landowner keeping property taxes low until the market value of the land goes up. The City didn't show that the public need for more housing substantially outweighed the need for open spaces. Similarly, the City didn't conclusively show that it investigated alternate land proximate to the land in question that could be used for residential housing. From the record it's also impossible to tell whether the land can still be used for agricultural purposes—whether the land is suddenly not fit for the ranching activities that have been going on there for years.

Version 20031207

Copyright © 2003 Garret Wilson