Property I: Outline

CAPTURE OF WILD ANIMALS
(ferae naturae)

A. The exercise of dominion and control over a wild animal constitutes possession of the animal and ownership is vested in the possessor.
1. Mortally wounding or trapping an animal or fish constitutes constructive possession, provided the hunter pursues the wounded animal and, in the case of trapping, capture is virtually complete.
2. Mere pursuit of a wild animal does not create a property right.
B. A trespasser's title to a killed or captured animal is inferior to that of the land's owner.
C. The owner of a captured animal loses title if the animal escapes and resumes its natural state.
D. If a captured wild animal escapes, the captor retains title only if the escaped animal has been tamed and forms a habit of periodically returning to the captor, or the animal is not indigenous to the area, so that a potential captor is put on notice that it belongs to someone else.


LOST, MISLAID, AND ABANDONED CHATTELS

A. When an owner of a chattel accidentally and involuntarily parts with it and does not know where to find it, the chattel is considered lost.
B. When an owner of a chattel intentionally puts the chattel in a certain place but forgets to retrieve it, it is considered mislaid.
C. When the owner of a chattel intentionally and voluntarily relinquishes both title and possession it is considered abandoned.
D. Title to a lost or mislaid chattel remains with the rightful owner. One who reduces a lost chattel to possession is its finder and only acquires a possessory right to the chattel.
E. A finder's rights to a lost chattel are generally superior to all except the rightful owner.
F. A finder's possessory right to a lost chattel found when the finder was on another's property with consent (express or implied) is generally superior to that of the property's owner.
1. If one finds a chattel on private premises open to the public (e.g. the public area of a shop), the finder's possessory rights are superior to all except the rightful owner.
2. If a chattel is found in a private portion of a landowner's premises, the landowner (not the finder) acquires a possessory right to the chattel.
G. Mislaid Chattel
The owner of the property where a mislaid chattel is found acquires a possessory right to the chattel that is superior to all but the rightful owner.
H. One who finds a chattel by virtue of a trespass generally does not acquire a possessory right superior to that of the owner of the property upon which the finder has trespassed.
1. One who wrongfully (i.e., by trespass) obtains possession of a lost chattel may sue to recover possession from a third party (i.e., persons other than the rightful owner or the owner of the property) interfering with his possession.
2. One who finds but then loses a chattel may sue to recover the chattel from a third person who subsequently finds the same.
I. A landowner, not a finder, acquires a possessory right, based on constructive possession, to objects (e.g., meteorites) embedded in soil located on his property.
J. Unclaimed gold, silver, currency, etc. intentionally concealed or buried by an unknown owner (i.e., a treasure trove) belongs either to the finder or to the landowner, depending on the jurisdiction.
K. Due Care
As a quasi-bailee, a possessor must exercise due care toward a lost or mislaid chattel in his custody.
1. If a possessor knows, or can reasonably ascertain, a rightful owner's identity, he has a duty to do so. A breach of this duty is grounds for a charge of larceny and an action for conversion.
2. A possessor's obligations persist until either sufficient time has passed to constitute abandonment, or the statute of limitations has run.
L. Gaining Title
1. A possessor gains title to lost or mislaid property when either the statute of limitations has run or the chattel is held to be abandoned.
2. Most jurisdictions have enacted estray statutes under which a lost or mislaid chattel is placed with proper authorities who register it. If the chattel is unclaimed after a certain amount of time, the possessor becomes the owner.
M. Statute of Limitations
Every jurisdiction has a statute of limitations prescribing the period during which the rightful owner must bring suit to recover possession of a lost or mislaid chattel. (See Adverse Possession of Real Property, below.) Modern courts tend to depart from the rule applying adverse possession to chattels and apply the discovery rule, which dictates that a rightful owner's cause of action accrues "when he first knew, or reasonably should have known through the exercise of due diligence, of the cause of action, including the identity of the possessor. . . .”

ACCESSION

A. Definition
Improving the value of another's chattel (usually with labor or added materials).
B. Ownership of the improved chattel is at issue when the added value cannot be separated from the original chattel or the original chattel has so changed as to constitute a different species (e.g., wheat is ground into flour).
1. The "different species test" (traditional rule).
When the original chattel is completely changed, the party who made the change, not the owner, will be awarded title to the new product.
2. The "disproportionate value test" (modern rule).
The party who made the change will be awarded title when the value added is wholly disproportionate to the original chattel's value.
3. The original owner may recover damages for conversion.
C. One who improves another's chattel must act in good faith. A willful trespasser will never be awarded title by accession. An original owner may elect to sue a willful trespasser for damages (conversion) or return of possession (replevin).
D. An improver who was denied title does not generally have a right to compensation.
1. Damages at law are usually denied even in good faith situations.
2. Equitable relief may be obtained.

CONFUSION

A. Definition
Confusion is the mingling of separately owned fungible goods so that they cannot be distinguished.
B. Regardless of the facts surrounding the event, the parties become tenants in common with an interest in the whole proportional to their respective share, if the contribution of each party is known.
C. When the contribution of each party is unknown, the parties share equally as tenants in common.
Exception: When the confusion is wrongfully occasioned and the wrongdoer fails to prove his share, the innocent party takes the whole.

BAILMENTS

A. Definition
A bailment is a temporary transfer of the right to possess property from the owner (bailor) to the bailee.
1. A contract is not essential to creating a bailment.
2. To constitute a bailment, the bailee must:
a. have physical control of the property;
b. intend to assume custody of the property; and
c. consent to the bailment.
3. Even if the bailee lacks an intent to assume custody of property, a constructive or involuntary bailment may arise.
Example: Someone finding an umbrella left behind at a restaurant is a bailee.
B. Bailee's Rights and Duties
1. A bailee has a right to possession superior to all, except the owner. The bailee can maintain a suit against third parties interfering with his possession.
2. Absent a contrary agreement, a bailee has no right to use the bailed goods. Any intentional unauthorized use resulting in loss makes the bailee absolutely liable. Incidental use essential to the performance of the bailee's duty is permitted.
3. The bailee must redeliver the property to the bailor at the termination of the bailment. A bailee is strictly liable for misdelivery of the bailed property. Constructive bailees are liable only for negligent misdelivery. If the bailee either refuses to return the property or departs without authorization from the terms of the bailment, strict liability attaches.
4. If a bailee's use of the bailed property harms a third party, the bailee (not the bailor) is liable due to his possession and control of the property.
5. Though not an insurer, the bailee owes a duty of care regarding the treatment of the bailed property. The standard of care turns on who is benefited by the bailment.
a. If the bailment solely benefits the bailor, the bailee is liable only if he is grossly negligent.
b. If the bailment is mutually beneficial, the bailee must exercise ordinary due care.
c. If the bailment solely benefits the bailee, the bailee must exercise extraordinary care.

ADVERSE POSSESSION

A. Generally
The doctrine of adverse possession obligates the title holder of land to eject, within a statutorily prescribed period, a wrongful possessor of the land. Provided certain other elements are satisfied, a title holder who fails this obligation will lose title to the land in question to the adverse possessor.
B. Elements of Adverse Possession
Possession must be open and notorious, continuous, hostile, and under a claim of right, for the statutory period.
1. Open and Notorious
Possession is "open and notorious" when the adverse possessor actually uses a reasonable percentage of the claimed land in a manner similar to that of typical owners of similar land, and this use is sufficient to put the true owner or the community on notice of his possession.
2. Continuous
The adverse possessor must "continuously" occupy the land throughout the statutory period, in a manner consistent with the normal uses of similar land. Although intermittent occupancy is insufficient, an adverse possessor need not occupy the land every day of every year during the statutory period, (e.g., if the land is normally used only in the summer, seasonal possession suffices to satisfy this requirement).
3. Hostile
Possession is "hostile" when the adverse possessor occupies land without the title holder's consent and in a manner inconsistent with his rights.
4. Claim of Right
Possession is under a "claim of right" when the adverse possessor indicates, by words or conduct, that he holds the land as against all others.
a. The majority view is that the "hostile" and "claim of right" elements are synonymous.
b. The minority view, however, is that the adverse possessor must have a bona fide belief that he has title to the land.
5. Statutory Period
An adverse possessor must remain in possession for a statutorily prescribed period, usually twenty years.
C. Constructive Possession Doctrine
One actually possessing under "color of title" (i.e., the possessor holds a defective conveyance document) a portion of a large, unitary tract of land may gain title by adverse possession to the whole tract as described in the defective document, even if never actually possessing or using the entire tract. The portion actually possessed must be in reasonable proportion to the whole, such that it is sufficient to put the true owner or community on notice.
D. Concurrently Held Land
To gain title by adverse possession to concurrently owned land, the adverse possessor must oust his cotenant.
E. Tacking
When possession is continuous, and the parties are in privity (i.e., a blood relation, oral or written transfer, will or intestacy), the time in possession of successive adverse possessors may be added together to fulfill the statutory period.
F. Tolling the Statute of Limitations
1. Disabilities
If at the time of an adverse possessor's entry onto the land the title owner is disabled, the statute of limitations is tolled for the duration of the disability.
a. Most jurisdictions recognize insanity, infancy, and imprisonment as disabilities.
b. Disabilities may not be tacked.
2. Future Interests
a. If at the time of the adverse possessor's entry onto the land another holds a future interest in the land, the statute of limitations is tolled until the future interest becomes possessory.
b. However, if the future interest is created after the adverse possessor enters the land, the statute of limitations runs against the future interest holder prior to such interest becoming possessory.
G. The adverse possession doctrine does not apply to government owned land and to land registered under the Torrens System.
H. Rights of an Adverse Possessor
1. An adverse possessor may convey his possessory right to property.
2. In conflicts between adverse possessors of the same land, a first possessor's right to the land is generally superior to the rights of subsequent possessors.
3. An adverse possessor may bring trespass and ejectment actions against third parties.

CHAPTER 2 POSSESSORY ESTATES

HISTORY

During the Middle Ages, land was transferred through a system of tenures. The central feature of feudalism was the relationship of lord and vassal. All land was owned in the first instance by the sovereign, who then "tenured" it to his chief lords. They were obligated to render services in return. The chief lords then granted parts of their estates to their vassals, in return for services. Through this process of subinfeudation, a pyramid was formed, with the king at the top and the peasants at the bottom. In between were successive layers of chiefs and mesne lords, who were vassals to those above them and lords to those below.
A. Tenure
The holding of the land by the vassal in exchange for the rendering of services to his lord was said to be "in tenure." Every time a vassal granted part of the land he possessed to another party (e.g., the vassal's vassal), a new tenure was created.
B. Feudal Tenures and Services
1. Free Tenures
These tenures involved services that were defined and fixed as to quantity and manner of performance. The tenant who held in free tenure could sue anyone who disturbed his possession in the King's court. There were four principal types of free tenures, differentiated by the nature of services the vassal had to render in return for possession of the land.
a. Military Tenure
Also called tenure by knight service. This was the most common type of tenure. The vassal was required to provide his lord with a previously agreed upon quota of knights for the king's host. As the art of war progressed, a monetary contribution (scutage) was given so that a professionally trained mercenary army could be hired.
b. Serjeanty Tenure
The serjeanty tenant had to perform a personal service which was definite as to time and often localized to a specific place. Types of services that were performed included working in the King's or lord's household (e.g., cook, chamberlain, butler, etc.), or supplying the lord with specific goods and military service by the tenant/vassal himself. As the practice of hiring servants became widespread, serjeanty tenants paid rent instead of performing services.
c. Religious Tenure (Frankalmoign)
These tenures were granted to churches or other religious bodies or officials in return for the performance of religious services.
d. Economic Tenure (Socage)
Tenants in socage tenure were required to perform specified agricultural work on the lord's land or to supply a fixed amount of agricultural produce. Sometimes the tenant had to pay a fixed monetary sum, either nominal or substantial, instead of giving crops.
2. Unfree Tenures: Villenage
Each lord kept possession of some of his land, apart from the land he "tenured out." The lord used villeins (serfs) who lived on manorial property in exchange for working it. The serf, unlike a slave, had the rights of a free man against all persons except his lord. A serf was held in unfree tenure. His home and plot of land could be arbitrarily taken by his lord. The amount of services that the serf had to render was not fixed and would vary according to his lord's wishes. The serf could only enforce his rights in his lord's court. The arbitrary nature of unfree tenures gradually disappeared as serfs were granted a greater degree of freedom. Eventually, the obligations of villein tenants were fixed by custom, and were no longer decided by whim.
C. Feudal Incidents
A lord was also entitled to the incidents of tenure. These obligations were created by the feudal relationship, (i.e., lord-vassal) and existed regardless of the specific terms of the tenure agreement. There were five principal incidents:
1. Homage and Fealty
Homage was a feudal ceremony in which an unarmed tenant knelt before his lord and pledged loyalty. Fealty was the oath which the tenant swore.
2. Aids
A tenant was obligated to financially assist his lord in some situations.
3. Liabilities at Death of Tenant
a. Relief and Primer Seisin
At the death of a tenant, his heir had to pay a relief for the right to take over the land. If the tenant was by socage tenure, relief was equal to one year's rent. At the death of a tenant in chief (i.e., one who was a direct tenant to the King), the King was entitled to primer seisin (i.e., first possession) of all of the tenant's lands and the accompanying reliefs.
b. Wardship and Marriage
If a military or grand serjeanty tenant died leaving a male heir under 21 or a female under 14, the lord was entitled to the rents and profits from the land until the male heir reached majority or the female heir either married or reached 16. The lord was entitled to arrange a marriage for the male heir and pocket the profit. Socage tenure was not subject to these incidents.
4. Escheat
If a tenant died without heirs the land returned to the lord.
D. Statute Quia Emptores (1290)
Two ways in which land was transferred during the Middle Ages were subinfeudation and substitution. Subinfeudation was the process by which a tenant transferred lands in his possession to others, who became his tenants. He was entitled to both services and incidents from his tenants. He could also modify the incidents (i.e., lower them). Substitution involved the transfer of all of a tenant's interests in the land to another party who took the place of the original tenant. Thus, the original tenant was removed from the chain of ownership and received neither services nor incidents. The new tenant was directly responsible to the former tenant's lord. The Statute Quia Emptores was enacted to permit free alienation of land by substitution only. It forbade subinfeudation and relieved tenants from a previously existing fine that was levied every time they transferred land. Thus, it permitted greater alienability of land and preserved valuable incidents for the lords.

THE SYSTEM OF ESTATES

Although tenure is of little practical value, common law estates have survived to this day. An estate in land is an interest which: (a) is possessory or may become possessory (unlike easements, covenants, rents, and other land interests); and (b) is ownership measured in terms of duration of possession. (Rest. § 9). A key factor in classifying the various types of estates is the length of time during which the grantee (i.e., one receiving possession) is entitled to possess the land. Duration can vary from a few years (i.e., a term for years), to infinity (i.e., fee simple absolute).

Estates also differ with regard to the time at which they become possessory. The holder of a presently possessory estate is entitled to immediate possession of the land. Future interests, discussed in the following chapter, become possessory only at the expiration of a prior estate or upon the happening of a required event.
A. Words of Purchase and Limitation
Because an estate has two components (i.e., possession and duration), every conveyance of an estate must indicate who is to receive possession and the length of time that possession will last. Thus, the words of every grant are divided into two groups.
1. Words of purchase designate the grantee.
2. Words of limitation designate the quantum of interest transferred.

Example: In the grant "To B for life," "To B" are words of purchase, indicating that B is the grantee. "For life" are words of limitation, defining the duration of B's possession.
B. Freehold Estates (present interests)
Another distinction between estates, though mainly historical, involved the concept of seisin, the highest level of ownership at common law. To be "seized" of land meant to occupy it under claim of having a freehold estate in it (non-freehold estates are discussed under Landlord-Tenant). The following are the various types of freehold estates.
1. Fee Simple Absolute
a. Creation
A grant "To A," "To A and his heirs," or "To A in fee simple." Today, there is a presumption in favor of fee simple conveyances. Thus, a vague or uncertain grant is construed as a fee simple absolute if possible.
b. Duration
A fee simple absolute can potentially last forever. It is the largest possible estate in terms of duration.
c. Alienability
A fee simple absolute is freely alienable. If no conveyance was made during the grantee's life, the estate passes to his devisees, then to his lineal heirs and even to collateral heirs if there is no one else to claim it. In the absence of other claimants the estate escheats (i.e., goes to the state).
d. Common Law
At common law a fee simple absolute could only be created by use of the specific words, "To A and his heirs." This is no longer the case today.
2. Fee Simple Determinable (defeasible fee)
a. Creation
A grant "To A and his heirs, so long as they use the land for specified purposes only" creates this estate. Critical words are "so long as," "until," and "while.”
b. Duration
A fee simple determinable is also of potentially infinite duration, as long as the condition is not violated. If the condition is broken, the estate automatically terminates and possession reverts to the grantor. The grantor's future interest is called "possibility of reverter.”
c. Alienability
A fee simple determinable is freely alienable. The new owner also holds subject to the condition, and possession may revert to the original grantor. Upon the death of the grantee the estate goes to his devisees, then to his heirs if no inter vivos transfer was made. There is a possibility of escheat.
d. Public Policy
Courts are hostile to the fee simple determinable because it often results in forfeitures. If the wording of the grant is not explicit or is open to other interpretations, courts will be reluctant to construe a clause as creating a fee simple determinable.
3. Fee Simple Subject to a Condition Subsequent (defeasible fee)
a. Creation
A grant "To A and his heirs, but if the land is used for other than specified purposes, G or his heirs shall have the right to enter and declare the estate forfeited" will create a fee simple subject to a condition subsequent.
b. Duration
The grantee keeps possession until the grantor enters and terminates the estate. Unlike a fee simple determinable, violation of the condition does not lead to automatic forfeiture of the property. The grantor must enter and terminate. If the condition is not broken, or if the grantor decides not to terminate, the estate can last forever. By keeping the right to enter and the power to terminate the estate, the grantor has not conveyed all of his interests in the land.
c. Alienability
The estate is freely alienable, but always subject to the condition. If no inter vivos transfer was made, then heirs are entitled to possession. Escheat is also possible.
d. Public policy
Courts are generally hostile to this type of estate and will construe the condition as a restrictive covenant, if possible, in order to avoid a forfeiture. The grantor must specifically and expressly retain his right of entry and power of termination (see future interests) because they will not be assumed absent clear language.
4. Fee Simple Subject To An Executory Interest (defeasible fee)
This type of fee simple is like an ordinary fee simple determinable or one subject to a condition subsequent, except that if the condition is broken the estate goes to a third party and not the grantor.

Example: G grants to "A and his heirs, but if the land is used to sell alcohol then to B and his heirs," or ". . . B and her heirs shall have the right to enter and declare the estate forfeited," or ". . ., but if A has no sons then to B and his heirs.”
5. Life Estate
a. Creation
A grant "To A for life" creates this estate.

Note: At common law, any grant that was intended to create a fee simple absolute but failed to use the specific words "To A and his heirs" was deemed to create a life estate.
b. Duration
i. Grantee's Lifetime
A life estate lasts until the death of the grantee, whereupon possession of the land reverts to the grantor or his heirs. Thus, the grantor has only transferred possession of his land for the grantee's life. The estate can terminate prior to the grantee's death if he renounces it.
ii. Per Autre Vie
Life estate whose duration is measured by the life of a third party. Sometimes a grant will state "To B, for A's life." A life estate "per autre vie" is created because the life that is used to measure the duration of possession is not that of the party actually in possession. Possession only terminates at the death of the measuring life. If the party in possession (i.e., B) dies first, the estate goes to his heirs, devisees, purchasers, or even by escheat, until the death of the measuring life.
c. Alienability
The grantee is free to make inter vivos transfers, but possession of the land by the third party terminates at the death of the original grantee. Obviously this type of estate is not inheritable by the grantee's heirs.
d. Defeasible Life Estate
As with a fee simple, a life estate can be conditioned upon a certain event, the occurrence of which will entitle the grantor either to automatic reversion or to enter and reclaim possession.
e. Duties and Powers of a Life Tenant
A life tenant has certain obligations to his remaindermen (i.e., those who will take possession after the tenant's death). These obligations include the following:

Mnemonic: If you only own a life estate, you better not WRITE on the walls.
i. no waste (i.e., unreasonable impairment of the future value of the property);
ii. reasonable repairs (does not include rebuilding structures destroyed by natural causes);
iii. interest charges on the mortgage (does not have to repay principal). Obligation is limited to value of income received from the land; and
iv. property taxes on estate.
The life tenant is entitled to all rents and profits from the estate.
6. Fee Tail
a. Creation
A grant "To A and the heirs of A's body" created this estate at common law. The purpose of this type of grant was to keep ownership of land within a family.

Note: This grant is different from "To A and his heirs.”
b. Duration
At common law, the grantee received an estate for his life which passed to his first heir at his death. The heir also held for life and then it passed to his heir, and so on.
c. Alienability
At common law, the grantee could not transfer an interest in the estate that exceeded his lifetime. At the grantee's death, the only persons who could take the estate were his lineal heirs. If he had no lineal heirs, the estate would revert to the grantor and his heirs.
d. Modern View
Most states have abolished the fee tail or greatly modified its effect. Some courts treat such a grant as creating an ordinary fee simple absolute. Others construe it as a fee simple conditional, so that a grantee has a fee simple conditioned upon having issue (i.e., children). Once the grantee has a child, he acquires a freely alienable fee simple. Still another approach has been to allow the fee tail to exist for one generation only.

CHAPTER 3 FUTURE INTERESTS

FUTURE INTERESTS IN THE TRANSFEROR

A transferor who conveys (or wills) his property to another can retain part of his interest. Remember that ownership is measured by the duration of possession. Thus, if a person holding a fee simple absolute (i.e., infinite duration) transfers an estate of shorter duration (e.g., fee simple determinable, life estate, etc.), possession reverts to the transferor at the expiration of that estate. There are three types of future interests that a transferor can have.
A. Reversion
A reversion in the transferor is automatically created if he transfers an estate of a shorter duration than the one he holds. At the expiration of the shorter estate, this future interest becomes possessory and the property reverts to the transferor.

Example: If B, who has a fee simple absolute, transfers a life estate to C, at C's death the life estate terminates and possession of the land reverts to B. A transferor does not have to expressly reserve this future interest.
1. Divestment
A reversion can be divested (i.e., extinguished). This occurs if the condition necessary for reversion cannot be met. For example, O grants "To B for life, then to C, if she outlives B" (B has a life estate). Two things can happen at B's death. If C is dead, then possession reverts to O, because there are no other takers; but if C is alive, she takes possession in fee simple absolute and the reversion is extinguished.
2. Alienability
A reversion is freely alienable (inter vivos), devisable or inheritable (there is also a possibility of escheat). However, the new holder of the reversion also runs the risk of divestment.
B. Possibility (Right) of Reverter
A possibility of reverter is the name of the residual future interest held by a transferor of a fee simple determinable only. Thus, a grant "To A for so long as no alcohol is sold on the property" creates a possibility of reverter in the grantor.
1. Duration
The possibility of reverter runs with the fee simple determinable that was conveyed. It is a future interest that only becomes possessory, if at all, when the condition is broken. It entitles the grantor to automatic repossession of the property.

Note: A grantee who stays in possession after the condition is broken is considered to be in adverse possession.
2. Alienability
This future interest is freely alienable and inheritable (majority rule).
3. Public Policy
Courts are generally hostile to possibilities of reverter because they cause forfeiture and encumber the free use and transfer of land. Unless the language is completely unambiguous, courts will construe the restrictions as only a suggestion or a covenant.
C. Right of Entry
A right of entry is the residual future interest in the transferor of a fee simple upon a condition subsequent, where the transferor expressly reserves the right to reenter the land and reclaim possession.

Example: "To A, but if the land is used to sell alcohol, G or his heirs shall have the right to enter and declare the estate forfeit.”
1. Duration
The right of entry runs with the land and can be asserted against any subsequent grantee of the original transferee. It only becomes possessory if the condition is broken. However, to take possession of the land, the transferor must actually enter it and declare the prior possessor's claim void. A grantor who fails to enter within a reasonable time is later barred by laches.
2. Alienability
This future interest is devisable and inheritable but cannot be transferred inter vivos (majority rule).
3. Public Policy
Rights of entry are not favored by courts, and unless expressly reserved will not be allowed. If at all possible, courts will try to construe the grant otherwise (i.e., restrictive covenant).
D. Legislation
Rights of entry and possibilities of reverter are presently limited by statute. States have taken the following approaches.
1. Some limit the permissible duration of these interests.
2. Some require the holders of these interests to rerecord them periodically.
3. Some only allow equitable remedies such as injunction, but do not permit forfeiture.
4. Some adopt the approach taken in (3) above, but hold that the restrictive covenant is unenforceable if neighborhood conditions sufficiently change.

FUTURE INTERESTS IN THE TRANSFEREE

A transferee can also receive a future interest. This occurs if the transfer is made to several sequential transferees or if the transferor places some condition to delay possession (e.g., "To A when he graduates"). There are two types of future interests that a transferee can have.
A. Remainders
A remainder is a future interest in one transferee which becomes possessory upon the natural expiration of a prior life estate held by another transferee.

Example: "To A for life, remainder to B," A has a life estate and B has a vested remainder in fee simple, which becomes possessory when A dies. Remember that a remainder always follows a life estate.
1. Vested vs. Contingent
There are two types of remainders.
a. Vested
A vested remainder is one that becomes possessory at the termination of the prior life estate and is subject to no other condition precedent.

Example: "To A for life, remainder to B." B has a vested remainder in fee simple, which becomes possessory at A's death. Once the transferee's interest has vested, he is entitled to possession when the prior estate ends. There is no requirement that B must outlive A. If B is dead, possession goes to his grantees, devisees, heirs, or even by escheat. A vested remainder can be lost only if it is subject to a condition subsequent (see executory interests).
b. Contingent
A contingent remainder is one that becomes possessory only at the termination of the prior life estate and the fulfillment of some other condition precedent.
i. Example: "To A for life, then to B's children" and B has no children, or "then to B if she outlives A." In both these cases it is not enough for A to die, (i.e., B must either have children or outlive A) for the estate to become possessory. A reversion in the grantor is automatically created by the conveyance of a contingent remainder because of the possibility that the contingency will not be met (e.g., B predeceases A). If the condition is not met, the remainder is extinguished. If the condition is met, the remainder vests and the grantor's reversion is extinguished.
ii. Example: More than one contingency.
"To A for life, then to the lineal heirs of B," and B has no children yet. (Lineal heirs are children, grandchildren, etc.) The children must be born, but they also must survive B to become his heirs. (Note that this contingent remainder vests and becomes possessory simultaneously, if at all).
c. Vested or Contingent?
Whether a remainder is vested or contingent is often a difficult question, and frequently depends on technical distinctions. A few rules do exist to facilitate this determination.
i. Grammatical construction.
If the condition is contained in the clause which creates the interest, then the interest will be interpreted as a contingent remainder. If the condition is stated in a clause separate from that which creates the interest, then it will be construed as a vested remainder subject to a condition subsequent.
ii. Reversion.
A contingent remainder creates a reversion in the grantor. A vested remainder creates an executory interest in a third party.

Example: "To A for life, remainder to B, but if B dies before A then to C." B has a vested remainder in fee simple subject to total divestment by a condition subsequent. "To A for life, remainder to B if B survives A." B has a contingent remainder. B's interest is subject to a condition precedent. The remainder is vested in the grantor until the condition is satisfied.
2. The Destructibility Rule
This rule only applies to contingent remainders. At common law, a contingent remainder was automatically extinguished at the time the prior estate expired if it was not vested by then.

Example: "To A for life, then to B's children," where B has no children. If at A's death (i.e., expiration of prior estate), B was still childless (i.e., remainder still contingent), the remainder was destroyed under the destructibility rule and possession reverted to the grantor.
a. Merger Doctrine
Another common law method of destroying contingent remainders was the merger doctrine. The doctrine provides that when successive vested estates are held by the same person the smaller of the two is absorbed by the larger.

Example: "To A for life, remainder to A and his heirs." (i.e., A has a life estate and a remainder in fee simple absolute). A's life estate is merged into his remainder and A has one estate in fee simple absolute. If another estate intervenes between the two estates, merger does not occur if the intervening estate is vested. But, if it is contingent, merger occurs and the intervening estate is destroyed. Contingent remainders were not viewed as an estate by common law standards. Example: C grants "To B for life, then to A if he marries." C then conveys his reversion to B before A gets married. B has a life estate and a reversion in fee simple; A has a contingent remainder in fee simple. B's interests merge into a fee simple, destroying A's contingent remainder.
b. Modern View
Most jurisdictions today have abolished the destructibility rule. Remainders which are still contingent are not destroyed at the expiration of the prior life estate. Instead, the original grantor is allowed to retake possession (i.e., reversion) subject to the remainder. Thus, the grantor can take the property back until B has children, at which time the remainder vests and becomes possessory and the grantor's reversion ends. If B dies without having children, the remainder is extinguished due to impossibility of vesting. The merger doctrine has also been abolished in most states.
3. Open
A remainder that is granted to a group of persons.

Example: "To A for life, then to the children of B" may be completely contingent, (e.g., B has no children yet), or it may be vested subject to open (e.g., some members of the class of grantees are living, but the class is still open to further additions if B has more children). The significance of "open" is that the living class members hold a vested remainder that is subject to partial divestment if members are added to the class.
a. Class Closing Rule
Existing members can move to close their class when their interest becomes presently possessory.

Example: "To A for life, then to B's children." B has two children. B later has another child, then A dies. At A's death, his life estate is terminated and the vested remainder of B's children becomes possessory. B's three children can move to close the class, so that if B has more children at a future date, they will not receive a share of the estate. But, if no class members are alive at the time the estate becomes possessory, the class must stay open and includes all children born after that time.
b. En Ventre Sa Mere
This is an exception to the class closing rule. Children "conceived before but born after" the estate becomes possessory are deemed to be alive at the time of possession. Generally, any child born within nine months of the time that an estate becomes possessory is considered to be a life in being at the time possession was taken.
4. Alternative Contingent Remainders
These are future interests created where occurrence or non-occurrence of the same condition lead to mirror image results.

Example: O grants "To A for life, remainder to B if B survives; if not to C" B has a contingent remainder in fee simple subject to the condition that he outlives A. C has an alternative contingent remainder in fee simple subject to the condition that B dies before A. (i.e., both remainders are contingent until either A or B dies).
5. Secondary Life Estate
A secondary life estate is a life estate granted in a remainder.

Example: "To A for life, then to B for life." A has a presently possessory life estate and B has a secondary life estate, also called a remainder in life estate. A secondary life estate is treated as vested despite the implied condition of surviving the previous owner. A secondary life estate can be contingent (e.g., "To A for life, then to B's children for life") where B has no children.
6. Alienability
Vested remainders are freely transferable by deed, will, inheritance, etc. Contingent remainders are also freely transferable in most states, although at common law, they could not be conveyed inter vivos.
B. Executory Interests
An executory interest is the second type of future interest that a transferee can hold. Unlike a remainder, an executory interest always follows and shortens a fee simple.

Example: "To A and his heirs, but if A has no issue, to B and his heirs." A has a present possessory fee simple subject to divestment by B's shifting executory interest. There are two types of executory interests, springing and shifting.
1. Springing Executory Interest
A springing executory interest is one that limits a fee simple in the grantor.

Example: G grants "to A and his heirs, when A is 25," A is 22. Or "To B for life, and one day later to C." In the first case, G has given a fee simple to A that will begin in the future. A has a springing executory interest in fee simple subject to a condition precedent (i.e., that he reaches 25). G has a present possessory fee simple subject to total divestment by A's springing executory interest. In the second example, B has a present possessory life estate. However, C does not take possession when it terminates (he must wait a day). The estate reverts to G for the one day gap, and then C takes possession, cutting short G's "fee simple subject to a springing executory interest in C.”
2. Shifting Executory Interest
A shifting executory interest is one that limits a fee simple held by a previous grantee.

Example: G grants "To A and his heirs, but if A has no issue, then to B and his heirs," A has a present possessory fee simple subject to total divestment by B's shifting executory interest. Notice that this time B's interest cuts short that of another grantee.
3. Duration
Executory interests last as long as they are applicable. If the condition precedent to their becoming possessory cannot be met, they are extinguished. In the example above, if A has children, B's shifting executory interest is extinguished. (Note that A's children receive nothing since "and his heirs" are only words of limitation; once A has a child, A acquires a fee simple absolute.) Note: Executory interests are not subject to destructibility or merger.
4. Alienability
Executory interests are freely transferable, devisable and inheritable. There is also a possibility of escheat.
5. Common Law
All executory interests were prohibited at common law, but this is not the case today.

RULES FURTHERING MARKETABILITY BY DESTROYING CONTINGENT FUTURE INTERSTS

A. The Rule in Shelley's Case
If a conveyance creates a life estate in a grantee and a remainder in fee simple in the heirs of the grantee, the words "heirs of . . ." are treated as words of limitation and the grantee is given a fee simple absolute.
1. Example: "To A for life, remainder to the heirs of A," or "to the children of A." In both cases the Rule in Shelley's Case will treat A as having a present possessory fee simple absolute and his children/heirs will not have any interest.
2. Modern View
This rule is abolished in most jurisdictions. In the example above, A gets a life estate and his heirs have a contingent remainder in fee simple absolute.
B. The Doctrine of Worthier Title
If a grantor creates a life estate in the grantee and then grants the remainder in fee simple to the grantor's heirs, the remainder is construed as a reversion in fee simple absolute in the grantor.
1. Example: G grants "to A for life, remainder to G's heirs." A has a presently possessory life estate and G has a reversion in fee simple absolute, G's heirs do not have any interest. This rule is only applied to inter vivos transfers.
2. Modern view
Most states treat "Worthier Title" as a presumption only, which is rebuttable by evidence of the grantor's actual intent. Some states have abolished the doctrine.
C. The Rule Against Perpetuities
The rule states that "no interest other than one in the grantor is good unless it must vest, or fails to vest if it is a remainder, or become possessory or fails to become possessory, if at all, no later than 21 years plus a gestation period after the death of all lives in being." The basic thrust of the rule is that the effect of every contingent or executory interest must be known with certainty no later than 21 years after the death of all "lives in being." The rule does not mean that a remainder has to vest or that an executory interest has to become possessory within the measuring period (21 years). They must either fail or succeed within that time, so that their effect will be known with certainty.
1. Interests subject to the rule:
a. springing and shifting executory interests;
b. contingent remainders;
c. vested remainders subject to open—as long as the class of grantees is still open, the rule applies.
2. Interests that are NOT subject to the rule:
a. reversions;
b. rights of entry;
c. possibilities of reverter; and
d. vested remainders.
3. Effect
The rule goes into effect at the time the interest is created. For a will, that means at the death of the grantor; for a deed it is the time of transfer. The rule operates as follows: If it is possible to create a scenario, no matter how improbable, under which one of the future interests subject to the rule will neither succeed nor fail within the measuring period, then that interest is invalid and eliminated from the grant. The analysis is done at the time of the grant.

Infectious invalidity—If cutting out a piece of the grant will defeat the purpose of the entire grant, the court will strike down the entire grant, not just the specific part.
4. Life in Being
A "life in being" is any party, living at the time the transfer was made, who has a causal effect on when and whether the future interests will vest or become possessory. Lives in being are usually named expressly in the grant, although they don't have to be. There is no requirement that they must receive an interest.
a. Example: O grants "To A for life, remainder to A's children for life, remainder to A's grandchildren living at death of A's last child." Lives in being are A, any of his children who are alive at the time of transfer, and any of his grandchildren who are alive at that time.

Rationale: A has a causal effect because he can have more children, which affects the vesting of the secondary life estate. His children have a causal effect because their very existence affects vesting and they affect the class of grandchildren. Finally, the very existence of the grandchildren affects the vesting of their future interest.
b. Example: O grants "To my children for life, remainder to their grandchildren." Lives in being are O, any of his children living at the time the grant was made, and any of O's grandchildren and his children's grandchildren living at the time of transfer.

Rationale: O has a causal effect because he can have more children. O's children have an effect both on the vesting of their life estate and on having more children of their own. Their children (O's grandchildren) have a direct effect on the size of the class of grandchildren. (Note that O's grandchildren are neither named nor have any interest). Finally, the children's grandchildren have an effect on the vesting of their future interest.
5. Time
The perpetuities period runs for 21 years after the death of the last life in being. Gestation periods (i.e., 9 months) are added.
6. Procedure
To determine whether a future interest violates the rule, go through the following steps:
a. Identify all interests created in the grant, will, etc.
b. Identify all "lives in being.”
c. Add 9 months to guard against gestation period.
d. Add a "nonlife in being" who is a potential taker or the source of a taker.
e. Kill off all "lives in being.”
f. Will the future interests definitely vest or fail to vest within 21 years?
g. If there is uncertainty, the void provision is struck and possession reverts to the preceding estate or to the grantor.
h. Example:
O grants "To A for life, remainder to A's children for life, remainder to his grandchildren at the death of A's last child," where A has two sons and a grandchild at the time of transfer.

Step 1
A has a present possessory life estate (not subject to the rule); A's sons have a vested remainder in a life estate, which is subject to open (and to the rule); A's grandchildren have a vested remainder subject to open (and to the rule).

Step 2
A, A's sons and grandchildren living at the time of transfer are all "lives in being.”

Step 3
If A has another child within nine months, that child will also be a life in being.

Step 4
A could have a son two years after the grant is made. Although the child affects the vesting of his life estate with his brothers and has a causal effect on the class of grandchildren, he was not alive at the time of transfer.

Step 5
A, his two sons, and his grandchild could all die in a plane crash a year later, so that only the third son remains alive. The perpetuities period starts.

Step 6
The surviving son's life estate becomes possessory upon the death of A, and the class is also closed by that event, so that his estate does not violate the rule. However, he could live for longer than 21 years, or he could die sooner. Thus there is no guarantee that the grandchildren's remainder in fee simple will close (remember that it is vested already) or not within 21 years. The remainder violates the rule and is struck out. Possession reverts to O, or his heirs, after the surviving son dies.
7. Charity to Charity Exception
Transfers from one charity to another are not subject to the rule, even if they violate it.
8. Statutory Remedies
The harsh effects of the Rule Against Perpetuities have led most jurisdictions to modify it in one of three ways:
a. "Wait and see" statutes
Instead of making an immediate decision as to whether or not a future interest violates the rule, "wait and see" if it ends up violating the rule. Thus, the court will only strike out an interest if, 21 years after the death of the last life in being, the interest actually did not succeed or fail.
b. Cy-pres (comme possible) statutes
Instead of striking out the invalid provision, courts try to reform the grant to achieve the grantor's intent as nearly as possible without violating the rule. The process, however, is done at the time the grant is made.
c. Cy-pres and "wait and see" statutes
Some jurisdictions have combined both, so that courts will "wait and see" until a problem actually arises and will then reform the grant if possible.

RULE AGAINST RESTRAINTS ON ALIENATION

Courts will invalidate some restrictions placed on the alienation of land in the grant as a matter of public policy.
A. Three Types of Restrictions
1. Disability
A grant states that any transfers made by the grantee are of no force or effect.
2. Forfeiture
A grant states that the grantee forfeits the land if he makes a transfer.
3. Promissory
A grant has a covenant forbidding alienation. Remedy is either injunction or damages for breach of contract.
B. Effect of Rule
The type of estate that was conveyed influences the effect of the rule.
1. Fee Simple
If a fee simple was conveyed, all restrictions are meaningless and unenforceable.
2. Life Estate
Disabling restraints will not be enforced, but others may be enforced.
3. Leaseholds
Forfeiture and promissory restraints are enforceable. Disabling restraints are also likely to be enforced by most courts.

CONCURRENT OWNERSHIP

Situations arise where two or more persons have simultaneous rights of present or future possession. There are three main types: the joint tenancy, the tenancy in common, and the tenancy by the entirety.
A. Joint Tenancy
Each joint tenant has an equal interest in the whole property.
1. Right of Survivorship is the outstanding characteristic of the joint tenancy. When one joint tenant dies, the decedent's interest is extinguished and the survivors continue to hold an undivided right in the property. The decedent's will has no impact on the property.
Note: A deceased joint tenant's creditor cannot reach the surviving joint tenant's interest.
2. Four Unities were essential to a joint tenancy at common law and in many states today.
Mnemonic: The Pig Is Tenant
a. Time
The interests of each joint tenant must be acquired at the same time.
b. Possession
Each joint tenant must have an equal right to possess the whole property.
c. Interest
All the joint tenants must have identical interests in the property, both as to duration and fractional share.
d. Title
All joint tenants must acquire title by the same instrument.
3. Creation of Joint Tenancies
At common law, there was a presumption that a cotenancy was a joint tenancy.
a. Modern statutes now presume that a cotenancy is a tenancy in common (see below) in the absence of language which clearly indicates an intention to create a joint tenancy.
b. Explicit language is required to create a joint tenancy (e.g., "to A and B as joint tenants with right of survivorship, and not as tenants in common").
c. A wants to convert his fee simple into a joint tenancy with B.
i. Common Law View
This could not be accomplished by conveying "from A to A and B" because the requirements of unity of time and unity of title would not be satisfied. Strawman transfers were the solution to this problem at common law. A transfers to X who then transfers to A and B jointly so that the unities of time and title are not broken.
ii. Modern statutes allow a property owner to create a joint tenancy in himself and another party without the use of a strawman.
4. Severance of a joint tenancy by destroying one of the unities leaves the parties as tenants in common. There are many ways to sever a joint tenancy.
a. Inter vivos conveyance by one of the joint tenants to a third party destroys unity of title and time because the third party received the interest by a different instrument and at a different time than the remaining original joint tenant. The joint tenancy is severed and the third party is a tenant in common with the remaining original joint tenant.
i. More Than Two Original Joint Tenants.
A conveyance by one of the joint tenants to an outsider will result in a tenancy in common between the outsider and the remaining joint tenants, but the joint tenancy will stay intact as between the remaining original joint tenants.
ii. Example: A, B, and C are joint tenants. C transfers his interest to X. X now holds an undivided one-third interest in the property as a tenant in common with A and B, A and B hold the remaining two-thirds as joint tenants with the right of survivorship. If A dies, his interest is shifted to B. If X dies, his devisees or heirs receive his interest.
b. Lease
Although unities of interest and possession are destroyed once a lease is granted to an outside party, some courts hold that a joint tenancy is not severed by a joint tenant's execution of a lease. There is disagreement over this issue.
c. Mortgage
There is disagreement over whether the granting of a mortgage by a joint tenant destroys the joint tenancy. It depends on the theory of mortgages to which the jurisdiction adheres.
i. Lien Theory (Majority Rule)
This principle views a mortgage as a lien to secure payment and, therefore, does not consider the execution of a mortgage as a transfer of title to the mortgagee. According to this majority rule, a mortgage does not sever a joint tenancy.
ii. Title Theory
This principle views the execution of a mortgage as a transfer of title from the mortgagor to the mortgagee. According to this minority rule, a mortgage does sever a joint tenancy.
d. Mutual Agreement
A joint tenancy may be terminated by mutual agreement of the owners, express or implied.
e. Judicial Sale
A creditor of a joint tenant can levy execution during the lifetime of the debtor and terminate the joint tenancy. If the debtor joint tenant dies before the creditor is able to secure a judicial sale, the surviving joint tenant is entitled to the property free from the claims of the creditor.
B. Tenancy in Common
Tenants in common have separate but undivided interests in the property.
1. No right of survivorship exists in a tenancy in common. A deceased tenant's interest will pass to his heirs or devisees.
2. Requires Only One Unity
A tenancy in common must only have unity of possession (i.e., each tenant is entitled to possess the whole property). Unities of interest, title, and time are not needed. Therefore, tenants in common can obtain unequal interests by different deeds at different times.
3. A statutory or common law presumption favoring tenancies in common over joint tenancies exists in most states.
4. Heirs taking an estate are classified as tenants in common.
C. Tenancy by the Entirety
A concurrent ownership which can only he created in a husband and wife who are legally married. This tenancy is recognized in less than half of the states.
1. The four unities (time, title, interest, and possession) are required just as they are for joint tenancies.
2. Presumption
In most states that recognize this tenancy, there is a presumption that a property grant to a husband and wife is intended to establish a tenancy by the entirety.

Note: A man or a woman cannot transfer a partial interest to his/her spouse and create a tenancy by the entirety because unities of time and interest are absent.
3. Right of Survivorship
The surviving spouse has a right of survivorship (just as the surviving joint tenant).
4. Not Subject to Severance
Neither spouse can terminate the tenancy and thereby defeat the other's right of survivorship by unilateral action (e.g., by inter vivos transfer or judicial partition).

Termination results when:
a. there is a mutual agreement to terminate.
b. one spouse dies.
c. judgment is executed against husband and wife by a joint creditor of both.
d. there is a divorce (which leaves the parties as tenants in common).
5. Management
At common law, the husband had exclusive right to manage marital property (see marital interest section below). Married Women's Acts gave the woman equal rights with her husband to manage the property.
a. Most states hold that neither husband nor wife may sell or burden the property without the consent of the other spouse.
b. Creditors in most states cannot encumber a debtor spouse's property while the other spouse is still living. If the debtor spouse dies first, the surviving spouse's interest supersedes the creditor's interest. Only if the debtor survives his spouse may the creditor's claim be satisfied.
6. Personal Property
The majority rule is that a tenancy by the entirety may exist with respect to personal property.

RIGHTS AND RESPONSIBILITIES OF COTENANTS

(Applicable To The Three Main Types Of Cotenancies)
A. Right of Possession
Each cotenant has the right to possess the entire property (i.e., unity of possession). No cotenant has the right to exclusive possession of the premises.
B. Possession by One Cotenant
Because there is unity of possession, the cotenant in sole possession does not ordinarily have a duty to account (i.e., to pay the other cotenant one-half the rental value of the property).
1. Duty to Account If an Ouster Occurs
If the cotenant in sole possession wrongfully excludes his cotenants from the property, an ouster occurs. The tenant in possession must pay the ousted cotenant his share of the rental value of the property.
2. Duty to Account If the Tenant in Sole Possession Depletes the Land
If the cotenant lessens the value of the land by taking away and selling resources such as coal, timber, etc., he will have to account to his cotenant for the fair share of the revenues he received.
3. Duty to Account for Lease to a Third Party
If one cotenant makes use of the property for his own benefit, he is not required to account for the reasonable rental value. However, if the cotenant rents the property to a third party, he must pay his cotenants their fair share of the rents collected.
C. Contribution
A cotenant may wish to receive contributions from the other cotenants for certain payments he has made to benefit the property. If the cotenant has a duty to account, he may deduct the contribution owed him before paying the other cotenants their fair share of the property's proceeds.
1. Real Estate Taxes and Mortgage Payments
Paid to benefit the entire property for both cotenants. Contribution will be enforced for such outlays.
2. Improvements
The cotenant who pays for improvements will almost never be compensated. However, the cotenant can receive the portion of land containing the improvements in a partition in kind or the value of the improvement in a partition by sale (see below).
3. Repairs
If one cotenant makes repairs without the consent of the other, most courts will not enforce contribution. However, there is a trend to allow contribution if the repairs were necessary, especially if possession is shared by the cotenants. Adjustments for uncompensated repairs may be made before a property is partitioned (see below).
D. Partition
Any cotenant, except a tenant by the entirety, may bring an action for the partition of property.
1. Partition in Kind is when the property is physically divided to reflect each cotenant's proportional interest.
2. Partition by Sale is executed when partition in kind is inequitable (e.g., when a family home is involved). The property is sold and the proceeds are divided to reflect the proportional interests of the cotenants.
3. The partition will be adjusted to account for uncompensated repairs, improvements, tax payments, and rents (see section C above).


MARITAL INTERESTS

How are a man and woman's property interests affected after they enter into a marriage? At common law, a married woman occupied a lowly legal position. This was reflected in the treatment of marital estates. Significant changes in a married woman's status did not take place until the nineteenth century.
A. Husband's Interest in Wife's Property
1. Jure Uxoris (i.e., estate by marital right) was a legal life estate whereby the husband was entitled to the use of all the lands his wife possessed before, or acquired during, the marriage.
a. The husband had a right to occupy and alienate his wife's land and to collect all its rents and profits.
b. Termination of jure uxoris occurred upon the death of the husband or wife or upon divorce.
2. Curtesy Initiate
Upon the birth of a live child (survival of the child was not necessary), jure uxoris was transformed into curtesy initiate. The effect of this was that the husband no longer lost his rights to his wife's property if she predeceased him (as he did in jure uxoris).
3. Curtesy Consummate
Upon his wife's death, the husband's curtesy was transformed into a curtesy consummate. There is little practical difference between the two types of curtesy.
4. Modern View
a. Jure Uxoris was effectively destroyed in the nineteenth century when the Married Women's Property Acts were passed, which allowed a woman to dispose of her property during the marriage.
b. Curtesy has been abolished by statute in most, but not all, states. Modern statutes give the husband an outright interest in a percentage of his wife's property (usually a one-third or one-half interest). In the jurisdictions which still have curtesy, the husband can choose between curtesy and the statutory share.
B. Rights of the Wife in Husband's Property
1. Dower
Originally, a wife was not her husband's heir and received nothing upon his death. To ensure that a widow was provided for, dower was developed which gave the woman a one-third life estate in her husband's property at his death.
a. Requirements.
i. The property must have been owned and possessed by the husband at some point during the marriage, not only at death.
ii. The property would have to be inheritable by issue of the marriage, if there were issue.
Note: there is no requirement that there actually be a child.
2. Dower Inchoate means that a wife will receive a one-third interest in her husband's property if he predeceases her.
a. Not Destructible
A wife's expectancy in the property which her husband owned at some point during the marriage cannot be destroyed even if the husband sold the property or has creditors who claim the property to settle debts he owes.
b. Termination of dower rights occurs upon divorce or the death of the wife.
3. Dower Consummate is the term used to describe the dower once the husband predeceases his wife. The widow then has the right to her one-third life estate in her husband's property.
4. Modern View of Dower
a. Abolished in Most States
In these states, if a husband dies intestate, his wife is considered an heir and receives a share of his property that is prescribed by statute. If there is a will, the wife may elect between the will's provisions and a statutory share (normally the intestate share).
b. Retained in a Few States
In these states, the wife may elect between dower and the statutory share. The principal benefit of choosing dower is that it passes free from the claims of the decedent's creditors.


THE COMMUNITY PROPERTY SYSTEM

Eight states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington) have a system of community property. The system's basic assumption is that the husband and wife contribute equally to the economic achievements of the marriage.
A. Effect
All property acquired during the marriage by either spouse is community property owned jointly by husband and wife. This has its greatest effect when a marriage is dissolved or when property is sold.
B. Strong Presumption That Property Acquired or Possessed During Marriage Is Community Property.
1. Community Property Includes:
a. Income from Community Property (even if the property is only listed in one spouse's name).
b. Earnings by both spouses during the marriage.
2. The presumption can be rebutted by a preponderance of the evidence proving that the property is separately owned.
C. Separate Property includes:
1. Property obtained by either spouse before marriage.
2. Property obtained by either spouse by gift, devise, or descent.
3. Five out of eight community property states also include income from all separate property in this category.
D. Separate Property Can Be Transformed Into Community Property by the Act of the Spouse Who Owns the Property. Neither spouse can change community property into separate property without the consent of the other.
E. Management
1. Prior to 1960
The husband had exclusive control over community property as a fiduciary. However, he could not convey real property without his wife's consent in most cases.
2. Present
Community property states give each spouse equal control over the property.
F. Comparison With the Common Law
1. None of the eight states uses the concepts of dower, curtesy, or tenancy by the entirety.
2. Tenancies in common and joint tenancies are recognized as separate property, but cannot be simultaneously held as community property.
G. Death
Community property is considered to be owned by each spouse in equal halves. As a result, each spouse has the power to devise half the property. If there is no will, some states grant the property to the surviving spouses; others pass the property onto the decedent's heirs.
H. Divorce
Some states evenly divide the property upon divorce. Others require the courts to make an equitable distribution.
I. Conflict of Laws Rule
Property acquires its character at the time of procurement.
1. Personal Property is classified in accordance with the law of the couple's domicile at the time of acquisition.
2. Real Estate is always classified in accordance with the laws of the state where it is situated.

THE SALE OF LAND

THE STATUTE OF FRAUDS

A contract for the sale or purchase of an interest in land must be in writing to be enforceable. When one says a contract "falls within" the statute, it will only be enforced if it is in writing. A contract that "falls outside the statute" will be enforced even if it is not in writing.
A. Contracts for an interest in land that require a writing

Mnemonic:
When parties convey land, They Must Leave Evidence.
1. Timber
Contracts for the sale of timber, minerals and oil must be written if the buyer will remove the same after title to the land passes to him.
2. Mortgages
A promise to give a mortgage as security for a loan must be in writing. Assigning rights to a mortgage may be oral.
3. Leases
Some states allow oral leases of less than one year.
4. Easements
B. A contract which by its terms is incapable of being performed within one year is unenforceable if not in writing.
1. The one year period begins to run from the signing of the contract, not from the beginning of performance.
2. The fact that performance within a year is very unlikely will not place a contract within the statute as long as the agreement may theoretically be performed within a year.
C. Requirement of a Writing
A contract or memorandum will satisfy the statute of frauds if the writing contains the following elements.

Mnemonic: The Statute Is Really Strict
1. Terms and conditions (essential terms) of the agreement are specified.
2. Subject matter identified.
3. Identity of the parties to the contract.
4. Recital of consideration.
5. Signature of the party to be charged.

Note: Under UCC § 2-201 the requirements of a writing are satisfied if a memorandum is "sufficient to indicate that a contract for sale has been made between the parties, and it is signed by the party against whom enforcement is sought.”
D. A party that has performed a contract that was later invalidated by the Statute of Frauds may be entitled to recover on the theories of unjust enrichment and promissory estoppel.


MARKETABLE TITLE

Unless otherwise specified, a contract for the sale of real property implies that the seller will deliver marketable title at the closing. Marketable title is "free from reasonable doubt" as to its validity as that which a prudent and experienced businessman would be willing to accept.

There are a number of common defects that may make a title unmarketable:
A. Defects in the Chain of Title
1. Wrong names
2. Improper description
3. Defective recording
4. Incompetent conveyor
5. Inability to establish a record
6. Adverse possessor
B. Encumbrances
1. Mortgage
2. Lien
3. Covenant
4. Easement
5. Encroachment

TIME

Time is not usually "of the essence" in contracts for the sale of real property. A party may enforce a contract even though he is not unreasonably late (usually a few weeks will be considered not unreasonably late) in tendering performance. Although time is not of the essence, a party that is late in tendering performance may be liable for damages.
A. Suits for damages (action in law) will assume that time was "of the essence.”
B. Suits for specific performance (action in equity) will not assume that time was "of the essence.”
C. Time may become "of the essence" if the parties expressly agree to that effect, or one party gives notice that time will be important, or circumstances show that time was important.

RISK OF LOSS-EQUITABLE CONVERSION

A. Majority Rule
The buyer bears the risk of loss between the time the contract was signed and the closing.
1. Note: This rule relies on the doctrine of equitable conversion that establishes equitable ownership in land at the time a contract is signed. Legal title remains with the seller who has a lien for the sale price. The reasoning of this rule is that a buyer has a right to specifically enforce the contract after the signing. "Equity regards as done, that which ought to be done.”
2. Exceptions
In the following two situations, risk of loss will not pass to the buyer even though the majority rule is followed.
a. Title was not marketable at the time the contract was signed.
b. The loss was caused by the seller's negligence.
B. Minority Rule
The risk of loss remains with the seller until legal title is conveyed regardless of who retains possession between signing and closing.
C. Uniform Vendor and Purchaser Risk Act (another minority view)
Seller bears the risk of loss until the possession or title shifts to the buyer.

INSTALLMENT CONTRACTS

Most sales of real property involve a small down payment by the purchaser, who borrows the balance of the purchase price from a lender, who will receive the property if the purchaser defaults. Under an installment contract the purchaser does not receive a deed to the property until he makes the final payment.
A. Default by Buyer
Judicial proceedings are not necessary, the seller retains the deed and all payments previously made by the buyer.
B. Some states have enacted statutes to soften the legal effects of a default by the buyer.
Examples:
1. Foreclosure safeguard
When a buyer has paid a substantial portion of the loan he has the rights of a mortgagor (see below).
2. Redemption
Buyer may pay off the loan balance and keep the land despite his default.
3. Reinstatement
Buyer pays the amount of his default and continues the contract as if the breach never occurred.
4. Restitution
Buyer recovers payments in excess of damages incurred by the lender as a result of the default.


MORTGAGES

A. Definitions
1. Mortgagor
Borrower who gives the mortgage.
2. Mortgagee
Lender who receives the mortgage.
3. Mortgage
A document giving a lender the right to claim real property if a borrower defaults on a loan.
B. The Mortgage
When a buyer finances a purchase of property by using a mortgage he receives a deed to the property. (Contrast with an installment sale.) The buyer gives a mortgage to a lender in exchange for a loan. The mortgage gives the lender the right to foreclose on the property in case the borrower defaults. The lender returns the mortgage to the borrower after all the payments have been made.


DEEDS

A. Definition of a Deed
A deed is a written document that effectuates a transfer of real property.
B. A deed will be effective if:
1. It is delivered by the grantor.
2. It is accepted by the grantee.
3. It is valid.
C. Delivery of a Deed
1. A deed need not be physically delivered to satisfy this requirement. Conduct or words of a grantor that indicate his present intent to make the deed operative will satisfy the requirement of delivery. Intent is the key.
2. Manual Delivery
a. If the deed was physically transferred to the grantee, a presumption in favor of delivery will be created.
b. If the grantor retains physical possession, a presumption against delivery will exist.
3. A grantor's attempts to revoke a delivery previously effectuated will be futile because title passes at the moment a deed is delivered.
4. Delivery of the deed to the county recorder's office will be a valid delivery.
5. Delivery will be effective even if the deed contained a condition.
Example: A deed specifies that the grantee must live until age 21. Delivery will be effective if the grantee is 18 years old and he will have a contingent estate.
6. Fine Line Distinction: Revocation of Deed vs. Revocation of Estate.
If a grantor delivers a deed that by its terms reserves a right of revocation in the grantor, the grantor retains a right to revoke the estate and he may do so, but he may not revoke the delivery after it was accomplished.
7. Escrow
A delivery in escrow is a delivery to an impartial third party who holds the deed until certain conditions are met. The delivery will be effective if the grantor relinquished all control. (Title will pass when the conditions of escrow are fulfilled, not when the deed physically passes from the third party to the grantee.)
D. Acceptance by the Grantee
The grantee must accept the deed. Such acceptance is presumed.
E. Validity of a Deed
Information Required on the Face of the Deed

Mnemonic: Old Deeds Never Survive
1. Operative words of conveyance
2. Description of the property
Methods of Description:
a. by metes and bounds: "calls and distances" in relation to a "monument" (a landmark).
b. by government survey.
c. by a particular map.
3. Names of grantee and grantor
4. Signature of the grantor (seals have not been required for a long time).
Notes:
a. some states require attestation (a disinterested witness) or acknowledgment (notarizing).
b. consideration is not required.


COVENANTS FOR TITLE

There are two classes of deeds.
A. Quitclaim Deed
Grantor conveys whatever title he owns without warranty as to his title.
B. Warranty Deed
Grantor makes representations concerning titles. There are six general classes of covenants.

Mnemonic:
Even Filthy Scoundrels Reject Questionable Warranties.
1. Encumbrances
Grantor warrants that his conveyance is free of encumbrances: liens, mortgages, easements, etc.
2. Further assurance
Grantor warrants that he will make any conveyance within his power in order to perfect grantee's title. This covenant is rarely used today.
3. Seisin
Same as the right to convey.
4. Right to convey
A personal covenant that the grantor has the right to convey.
5. Quiet enjoyment
Historical differences between this covenant and the covenant of "warranty" have been abolished so that they are identical.
6. Warranty
Grantor covenants that grantee's use or enjoyment of the property will not be disturbed by a third party.
a. This covenant is "real" and will run with the property.
b. This is the broadest covenant.
c. Damages for breach are limited to the value of the property.


APPLICABILITY OF COVNENANTS TO FUTURE GRANTEES

Covenants that "run with the land" may be enforced by a future grantee. Whether a covenant will run with the land depends on whether it is a "Present" or "Future" covenant.
A. Present Covenants
Covenants that are breached at the moment the conveyance is made. They generally do not run with the land.
1. Covenant of seisin.
2. Covenant of right to convey.
3. Covenant against encumbrances.
B. Future Covenants
Covenants that are only breached when a party is later evicted. Future covenants always run with the land.
1. Covenant of quiet enjoyment.
2. Covenant of warranty.
3. Covenant of further assurance.

RECORDING AND TITLE ASSURANCE

COMMON LAW

A. First in Time Rule
When two parties have conflicting valid claims to the same parcel of land, the first in time will prevail.

Example: A conveys his home to B. The next day A conveys the same home to C. B will prevail over C.
B. Exceptions
1. Conflicting claims are equitable and the first party is estopped from benefiting under the rule because of his actions.
2. Conflicting claims are equitable and the second purchaser later acquired "legal title" in good faith and for valuable consideration.
3. A holder of a legal interest will always prevail over one who holds an equitable interest if the legal interest was acquired first. The holder of the legal interest will prevail over the holder of the equitable interest even if the legal interest was acquired later in time if the legal holder acquired the title in good faith and for value.
4. A party who conveys land to another before obtaining title, and then obtains title and records first in an attempt to claim superior title, may be estopped from arguing that he did not hold title at the time of the conveyance.


RECORDING STATUTES

A. In General
Recording statutes were enacted to provide a buyer with more title assurance than the common law allowed. Recording acts establish how title to property is determined.
B. Effect of a Recording Act
A recording act will determine who obtains title to real property. The act will not affect a contractual or other relationship.

Example: A pays B $100,000 for title to land. A later discovers that he cannot receive title to the land because another purchaser has already recorded his interest. A may sue B for breach of contract.
C. Types of Recording Acts
1. Pure Notice Acts
A bona fide purchaser will prevail over an earlier purchaser regardless of who was the first to record.
2. Pure Race Acts
A subsequent purchaser, whether bona fide or not, will prevail against an earlier purchaser if he (the second purchaser) recorded first. The second purchaser may prevail even if he had notice of the first purchaser. (The winner of the "race" to record will receive title). This rule is only followed in two states.
3. Race-Notice Acts
A subsequent bona fide purchaser will prevail against a previous purchaser if the subsequent purchaser recorded first without notice of the earlier conveyance.


MECHANICS OF RECORDING

A. Deposit with County Recorder
The grantee brings the deed to the county recorder who stamps, copies and files the deed.
B. Indices
The deeds are indexed by grantor and grantee. Some jurisdictions require indexing by tract, the most accurate method to follow a title.


INTERESTS TO BE RECORDED

A. Interests That Must Be Recorded
1. Instruments that affect title to real property such as deeds, mortgages, powers of attorney, covenants, tax liens, etc.
2. Instruments that modify title to real property or any interest in the examples above.
B. Interests That Need Not Be Recorded
1. Adverse possession
a. An adverse possessor will prevail over a grantee if the adverse possessor's claim ripened before the grant. This rule is consistent with the rule that the earlier of two legal claims will prevail.
b. Abandonment of the property by the adverse possessor after his title ripens will not extinguish his priority over a subsequent grantee, because an adverse possessor's title is not extinguished by physical abandonment of his premises.
2. Short-term leases.
3. Executory contract of sale.
4. Easements by implication and necessity.
C. The Bona Fide Purchaser
A bona fide purchaser will be entitled to certain rights. The general requirements are:
1. Purchaser for value
Does not have to be fair market value but nominal consideration will not suffice.
2. Antecedent debt
a. Cancellation of a debt in return for a conveyance of property will constitute valid consideration.
b. Courts are split if a mortgagee maintains the same rights of collection.
3. Persons not considered purchasers for value:
a. Those who promise to pay at a future date given in exchange for the conveyance.
b. Donees, heirs, devisees.
c. Lien creditors (some states will consider lien creditors purchasers for value).
d. Unsecured creditors.


NOTICE

The purchaser must show he did not have notice. There are three kinds of notice: actual, record, and inquiry (good faith) notice.
A. Actual Notice
B. Record Notice
If a deed was recorded and appeared in the chain of title, the purchaser will be charged with notice. The mere fact that a deed was recorded will not confer notice if the recording was outside the chain of title.
1. Problems in the Chain of Title
A deed that is outside the chain of title is one that would not be discovered by due diligence and therefore would not provide "notice" to a purchaser. A deed may fall outside the chain of title for a number of reasons:
a. Link was not recorded.
b. "Wild" deed
A deed given by a grantor whose claim to title came from a source which was not recorded.
c. Error by county indexer
A deed misindexed by the recorders office will not remove the deed from the chain of title (majority rule).
d. Deed recorded late
Courts are split when a subsequent purchaser records before a previous purchaser of whom he had no notice.
e. Deed recorded early
A deed recorded before the title actually passed will not be in the chain of title and will not serve as notice. (Minority Rule: the recording in such cases becomes effective when the title actually passes).
f. Easements and servitudes on land that is eventually subdivided
Courts are split whether the purchaser of a subdivision is on notice of the easements and servitudes.
2. Defective Document
Will not serve as notice—Most states have passed "curative acts" allowing a defective writing to be valid notice if a technical defect is not challenged within a certain amount of time.
3. Requirements of a Proper Search:
a. Check grantor, grantee and other applicable indices maintained by the county.
b. Trace title for the statutorily required period (e.g., 60 years).
c. Trace mortgages, probate proceedings and other encumbrances discovered.
C. Inquiry (Good Faith) Notice
Notice imputed to a purchaser who had neither record notice nor actual notice, but had information that would cause a "reasonable person" to make further inquiries about the title. A purchaser's obligations include:
1. Investigate an unrecorded transaction referred to in a recorded document.
2. Physically examine the premises.
3. Quitclaim deed
In a majority of states a quitclaim deed in the chain of title will not place the purchaser on notice.


THE TORRENS SYSTEM

A title registration is merely evidence of title to real property. Under the Torrens System, the act of registration provides the title. This system is followed only in a minority of jurisdictions and is only optional in these jurisdictions.

TITLE ASSURANCE

A. Generally
A purchase of real property is usually accompanied by a covenant of title (see ‎Chapter 9). Very often a buyer may not be able to recover for breach of a covenant because the seller is insolvent, dead, or hiding in Paraguay. To protect himself, a buyer's lawyer will seek assurance of the validity of the title to be conveyed. Since tracing a title is cumbersome and time-consuming, lawyers usually purchase an abstract or title insurance from companies that specialize in these services.
B. Abstract
1. Definition
A summary of the conveyance history of real property.
2. Practical use
A lawyer will examine an abstract and then render an opinion as to the validity of title.
3. Liability
a. Lawyers are liable for results of their negligence but not for the negligence of the abstract company.
b. Abstract companies are liable for their negligence to the purchaser of the real property even though they never had actual dealings.
c. Third parties relying on an abstract may recover from a negligent abstract company.
C. Title Insurance
1. Definition
Insurance against any loss incurred by a buyer due to an imperfect title.
2. The insurance usually encompasses any covenant extended to a future buyer by the insured.
3. Coverage
May be limited by the policy but usually extends to all risks that would be disclosed by a competent examination of the public records.
4. Defects that an insurer will not be liable for if not discovered:
a. Public records relied upon that were incorrect.
b. Encroachment of the insured onto adjacent property and encroachment of adjacent property owners onto the insured's property.
c. Violation of setback rules.
d. Adverse possession claims.
e. Taxes, assessments and other charges that do not appear as liens.
5. Negligence
The insurer will be held liable for a negligent search even though the purchaser's loss would have been excluded from the policy.