Tangible (touchable)	Intangible	
Real (real estate: land and structures permanently affixed to it	real estate		
Personal	all property that isn’t real property: cars, Moore’s blood cells	stocks, bonds, copyright, Ks (you can’t touch it, certificate only evidences it)	

What is property?
Layman view - vertical relationship of people w/r/t things(owner can do anything)
Lawyers think of property as set of rights and relationships - horizontal relationship
What this shift has accomplished:
1. 	rights that ind’l owner has represent a zero-sum game: owner v. non-owner
2. 	facilitated revolution in what people consider property: new property emerged
Now, ownership is not a unitary thing: rights can be subdivided, fragmented
Property is a bundle of sticks
1. 	right to possess property
2. 	right to use it
3. 	right to exclude others from using it
4. 	right to transfer it through gift, bequest or sale in a market exchange
These rights can be further subdivided by private agreement
Right to a bundle of sticks is never absolute: there are burdens

Moore v. Regents of the University of California
no property right in diseased cells removed from the body
suit for conversion—civil form of theft
Coversion - intersection of tort and property, invasion of property rights
	doctors took smth that was Moore’s property w/o his consent
Doctor used Moore's cells to develop profitable cell line
Moore’s cells - unique in quantity
Did Moore own those cells?
•	Moore's argument:  Lockean privacy right: we own our bodies, we invest in our bodies, maintain them, since we own ourselves, we own fruits of our labor
but there are limits on how you can use your body
•	Moore also uses Lockean personality theory; body cells are key to personality, genetically unique
Court acts on concern over doctors' conflicts of interest, not on property theory
questions over what the measure of damages would be
doctors also mixed their labor with the cells
Court uses utilitarian approach; don't want to inhibit research
Majority holds: Moore wins on lack of informed consent, but no property right (no conversion)
informed consent implies certain property rights, though
Majority says that fiduciary duty and informed consent theories protect Moore’s interests direcly by requiring full disclosure
Mosk dissents:  bundle of rights, agrees that personality theory should give person property interest in his cells; body is a temple, you can’t infringe upon it, so it’s conversion - should uphold property right; unjust enrichment here (it’s inequitable that Ds get all the profits);
right to inform consent won’t do Moore any good, it’s not a substitute for conversion claim, bec it nails these particular doctors, but not others, more rich ones
Arabian concurrence: starts with body as a temple, so we can’t permit Moore to sell parts of his body, so that they become a commodity (if doctors sell Moore’s cells - ok, but Moore can’t)
Damages: suppose Moore won, what would he get?
•	Conversion (tort) - reliance measure of damages - put you in a position you would have been had the tort never been committed
•	Moore: compensation, value of cells before they were made into cell line was nothing, they were worth nothing
•	If a lot of Moore’s cells - market price is zero, if his cells are unique and scarce - value is much higher (here, not clear)
•	If Moore wins on informed consent, but not on conversion - reliance damages

Johnson v. M’Intosh		how do people get property interest in the first instance; gives jsutification why US has title to land rather than Indians
Although Indians had possession of the land, they did not have title to it, and thus, could not convey title.  Therefore, title derived from the fed g’nt, or from one of the states or colonies, has priority over an earlier purported grant from an Indian tribe.
P is suing to eject Ds from portion f land Ds occupy
Ejectment - equitable remedy in trespass: P is asking court to remove Ds from land.  P claim sot get title from the Indians through direct chain of title.  Ds purchased land from US in patent.
Who had the right to convey the right to land - the Indians or King James: King James
US law comes from the British.
2 possible bases for US title
1. 	first discovery (requires only symbolic possession, like laying eyes on the property and putting a flag)
Justifications:
1) 	Lockean labor theory (labor that goes into possession)
2) 	incentive/utilitarian theory (linked to Lockean labor theory: what rules will be best for society as a whole, first discovery entails significant labor- has to be incentive for people to do it)
3) 	might makes right (collective good for several European nations, exclusion of others)
4) 	certainty (a certain rule is a good rule)
5) 	no harm done of the Lockean proviso is met (that you’re leaving enough good for others)
6) 	will theory (the first person who willed smth to be his)
Indians - their being on the land doesn’t constitute possession
They don’t own the land in any sense we recognize
a) 	they are not us: we are Chrisian, they are heathens
b) 	they didn’t use the land to establish good title, so they lost title

2. 	conquest
Land was in possession of Indians - occupancy, but possession is irrelevant - you must establish possession to ascertain your title
Europeans agreed to it
For those people who can be assimilated - incorporate them
Indians - cannot be assimilated
Moral basis for Marshall’s arg’nt: it was the only thing we could do, bec Indians made it impossible for us to live with them

D in M’Intosh purchased land from US.  Over time, US policy shifted away from sales to homesteading.
Homesteading Act: put state land for private appropriation
What is justification for letting individuals to appropriate land for private use (out of the commons)
•	Will theory: the act of taking possession is an expression of will (in Pierson v. Post, pursuer’s intent to pursue the fox)
•	Opportunity cost arg’nt (w/r/t Moore’s cells): once you do it, no one else can
•	First in time - first in right
•	Lockean Labor theory: since we own ourselves, we own our labor, we must own what we mix our labor with, as long as there is enough left for others
•	essentialist view of property and person: by laboring over smth, I have fused my labor with it, it became part of my essential self
•	Sacrifice theory of labor: it’s hard to work, it’s our sweat and sacrifice that justifies our ownership of land
•	Arg’nt: you get compensation in the value that you added to that thing (but product is not just of labor, also raw materials)
•	Lockean proviso: only when the land is not scarce, when “is enough, and as good, left in common for others” (our obligations to our generations and future generations)
•	Scarcity of resources
•	Utilitarian (it’s good for everyone)
•	Certainty
•	Personality theory/justification of property rights

Application of first possession rule to wild animals

Pierson v. Post		The mere fact that one has spotted and chased a wild animal is not sufficient to constitute possession (mere pursuit is not enough)
P found and chased a fox as part of a hunt; D then stepped in, killed the fox and carried it away.
Issue: whether mere pursuit should give P at least an option to reduce chase to possession.
Held, mere pursuit gave P no legal right to the fox, and that D had the right to interfere.
But one who mortally wounds an animal, so that capture is almost certain, is deemed to have possession.
Dissent: should be possession when in active pursuit, w/n reach or w/reasonable prospect of taking (large hounds); want to encourage killing foxes.

Ghen v. Rich		Whoever kills the whale, owns it.  Finder gets fee for value of labor added to enterprise.  Custom to notify killer (whale tagged).  Otherwise no one would hunt whales.
Court says should follow industry custom to see who owns whale
Custom promotes certainty
Assumes industry does things efficiently, and that people know industry custom
So killer owns whale, instead of finder
Finder gets some compensation for the labor he put into it
Court uses Lockean theory of labor: killer invested labor in the whale, finder also put their labor in it - gets some compensation
Preponderance of labor: labor of killing is greater than any other labor
Also utilitarian theory: for the good of society, want to give people an incentive to do what is useful to society, i.e. kill whales

2 questions
1. 	how do we assign ownership of previously unknown things
2. 	what should be the extent of their ownership rights
Why create private property at all (Demsetz and Harding - strongest just’ns for priv prop)
Hardin: overpopulation, tragedy of the commons - freedom to graze will lead to overgrazing - pollution, etc (at least w/r/t nat resources, priv prop is the optimal devise)
Demsetz: priv prop is the best solution for 3 problems that arise
1. 	Hardin’s sets: optimal use of property w/n one’s own generation, incentive for owner to use land optimally (costs/benefits)
2. 	optimal use over generations: incentive to use resources in a fashion that’s sustainable over generations; value includes future exchange value - you own right to sell your property, if you overexploit land - less value of land
3. 	externalities that priv prop owner imposes on others - optimal use of all property (including one that’s not your own); neighbors will negotiate only with you so that you stop polluting - reduce costs
Demsetz - utilitarian aim to encourage maximum sustainable exploitation of resources

Intellectual property

What’s different about it from real or tangible property?
Lockean arg’nt for giving the creator property rights
Pro - Utilitarian arg’nt:
1. 	incentive (good for society to invent light bulbs, incentive for author to write a book)
2. 	non-conclusive use (what’s unique about IP): land enjoyed by 1 person cannot be enjoyed by another; IP doesn’t preclude simultaneous use by others (2 people can read a book and then make a musical on it)
Con - giving the creator property rights will restrict dissiminatory use
1. 	writer is a monopolist w/r/t his book, can ask for price that is higher than just value of paper
2. 	transaction costs
3. 	protecting artistic integrity
4. 	difficulty of policing property regime (person can steal book, and author won’t notice)
From utilitarian view, once book is written, it’s better for society if author doesn’t have property rights to it.
Property rights are mostly governed by statutes (copyright) - give owners of IP property rights, but limited ones
Copyright + patent are regulated by fed statutes - preempt state com law or state statutes

INS v. AP		AP had a quasi-property interest in the news it had gathered and could stop competitors from using it until its commercial value as news had passed away
INS copied news from AP, transmitted them to West-coast newspapers and sold them.  AP had no technological way to restrict news from dissimination.
Once AP lets out information to the world, it can't retain rights to it
Copyrighting isn't practical
Court says AP doesn't have any property rights against the public, but has quasi-property rights against competitors.
Court uses Lockean labor theory: protect the party who is doing all the work
Also utilitarian argument: encourage people to collect the news: AP needs incentive to gather news

You cannot copyright pure information
Congress doesn’t protect underlying facts, only forms of expression
Hot news exception: when facts constitute hot news, they were gathered by effort - we’ll protect the exclusive right of dissimination for some period of time until hot news loses its hot part

NBA v. Motorola		
Motorola sells pagers with latest scores.  Events themselves (athletic competitions) are not copyrightable.  But you can copyright the expression of even - broadcast.  NBA wants exclusive right to transmit the facts until the game is over (just like what AP got).
Court allows narrow exception for hot news, but looks at 3 extra elements:
1. 	time-sensitive (yes)
2. 	free-riding by D (no, Ds are not free-riding, they have their own reporters: both org’ns have to put their own labor into dissimination of this info)
3. 	the threat to existence of product or service provided by P (neither of NBA’s 2 business - live broadcast and attending the event - are infringed upon by Motorola)
Held, Motorola didn’t engage in unlawful misappropriation of hot news.

Acquisition by Find

Means of transfer of property
•	voluntary transfer: gift, bequest, sale
•	involuntary transfer: how can one acquire rights w/o consent by original owner, what is the extent of these rights w/r/t previous owner and others (all later comers)
Find: somebody owned it, but lost it

Armory v. Delamirie		“finders keepers” rule
1st finder of property has property rights as against all later comers, except for the original owner (like 1st discovery rule)
•	creates an incentive
•	helps protect the thing for the true owner by restricting all others
•	otherwise everybody will be taking things from the others
•	the rule helps protect true ownership - good title
•	does it matter if 1st finder is innocent person or thief: it doesn’t matter - he stil has superior title as ag subsequent finders except the original owner, but in practice courts will take innocence into account

Hannah v. Peel		
Held, the brooch was lost and found by P, that its true owner has never been found, that D was the owner of the premises and had his notice drawn to this matter by P, who found the brooch.  J’nt for P/finder of the brooch.
Brooch was lost.  Man possesses everything that is attached to or under his land - owner possessed it, but here it was just lying unattached on the surface of his land.
D never himself occupied the house.  P was stationed in his house, found the brooch on the tope of a window-frame.  Does the fact that it was first fond on his real property give him superior right to it.  If the owner of the land knows that the brooch is on his property, he generally wins (consistent with 1st finder rule).  But here, owner of real property doesn’t know that brooch was on his property until it was found by someone else.

McAvoy v. Medina		lost v. mislaid property
P/customer of barbershop finds pocket-book lying on the table.
D/owner of barbershop.  Court finds for D.
It matters whether property was mislaid or lost:
•	if lost - for the first finder: original owner didn’t mean to put it there
•	if mislaid - for the owner of the place where it’s found: original owner meant to put it down there, but didn’t mean to leave it there
(In Hannah, looks like brooch was mislaid - how could it get on top of the window-frame, somebody must have put it there)
Why distinction: at least in business establishments, customers entrusted the owner of the business with their property; but arg’nt ag giving the owner of business rights to mislaid property- no incentive for the finder to turn the property in the police or the owner of the business (like Ghen v. Rich, the whale case)

Adverse Possession

•	People can obtain good title to property involuntarily as ag the true owner just by staying there long enough.  Your possession can oust the true owner w/o the owner’s consent.
•	Justification for AP: owners didn’t utilize the property, we want to see the land in the hands of those who would maximize its wealth
•	Personality theory: we become attached to the land
•	We could require possessors to give compensation to original owner
•	Property v. liability rules for compensation
•	property rule of damages: if you own smth that I don’t, I can persuade you to sell it to me; the owner has right not to relinquish that property at all - usu injunctive relief
•	liability rule of damages (compensatory damages): if I want that property, and you won’t give/sell it to me, I can take it away from you, but give you comp’n in the fair market value of that property - don’t attempt to restore property to original condition, just attempt to make the owner whole by paying fair market value of the loss in value of his property (not a fair remedy, if the owner’s subjective value of property is higher)
•	If you establish a claim to property by AP, you get title to that property w/o giving any compensation

Requirements of AP:
1. 	actual entry: technical, physical entry upon land (e.g. possessor encloses a parcel with a fence; defined through the remaining requirements)
2. 	exclusive possession: must use in a manner expected of true owner, must exclude title owner and the rest of the world; must convey to the world your intent to be the exclusive owner of the land
3. 	continuous possession for requisite statute of limitations period (usu 10, 15, 20 years) in a form that is customary for the owners of that sort of property (e.g. summer homes need only be occupied in the summer)
Tacking: the act of adding together one’s own period of land possession to that of a prior possessor to establish continuous adverse possession for the statutory period you can count prior possession with your own to meet st/lim requirements, but only if there is privity: you have acquired property by voluntary transfer
2 categories when you don’t count previous possessions and st/lim starts anew- you cannot tack:
1) ouster (applies only to adverse possessors, not owners) - you adversely possess property and someone frightens you or makes you leave the property
2) abandonment - you leave and someone else gets the land
•	Tacking usu when: you bought the land or it was given to you; and there was no lapse between your possession and the prior possession
•	Must be consecutive years, but don’t have to be the years immediately prior to the suit; title automatically vests in adverse possessors when the period is up, and ceasing to use the land at that point doesn’t take away the title.
•	If the owner reenters property - even brief entry (but has to be open and notorious) - adverse possessor starts again
•	Tacking applies on the owner’s side as well
•	If owner is under disability (underage, insane, imprisoned) - st/lim doesn’t begin running until disability is lifted, it’s extended; but disability is immaterial unless it existed at the time when the cause of action accrued; also, it applies to anyone claiming from, by, or under such person
1. 	open and notorious: sufficient to put reasonable owner on notice that someone else is asserting ownership; the manner of possession is apparent to the true owner; reasonably vigilant owner had reason to know that someone was on the land (enclosing land, putting a permanent structure there, using land for storage, planting)
2. 	adverse and hostile: possessing land in a fashion that’s inconsistent with your not being a true owner; has to be explicitly or implicitly non-consensual
3. 	claim of right: state of mind of adverse possessor
3 different interpretations
1) 	possessor’s subjective state of mind is irrelevant, should behave as true owner
2) 	requires subjective good faith: possessor has to believe honestly that he owns property (but he doesn’t)
3) 	bad faith: possessor does know that he is not the owner
7. 	color of title (minority states): there is some defect in the title, you have a deed or court decree saying that you own property, but you don’t, as it turns out

Suit for ejectment : title owner tries to remove adverse possessor
Suit for declaratory j’nt, suit to quite the title: adverse possessor seeks to quite the title, make it marketable

Extent - what you get by AP
If you claim under color of title: you get everything described in the deed
If no color of title: you get only what you actually possess (if your shack is fenced - you actually possessing fencing also, if shack is not fenced - you get only shack territory).

Van Valkenburgh v. Lutz		
VVs bought the parcel, Lutzes possessed them.  Lutzes won the arg’nt that they had prescriptive easements.  New VVs want Lutzes to get their junk of their property.  Lutzes for the first time assert AP.  Problem - state of mind of Lutz: court is adopting good faith requirement w/r/t shack, but bad faith requirement w/r/t garage.
Cultivation/improvements - were they substantial enough - no.
Held, the proof fails to establish actual occupation for such a time and in such a manner as to establish title by AP.
Dissent: yes, there were improvements; claim of right - state of mind - is irrelevant.

Howard v. Kunto		extent necessary to establish AP; tacking; privity
Everybody is living one slot off their parcel.  Suit to quite the title is brought by the party who first discovered it and wants to get good title.
Ds defend by AP.  Held, for Ds - yes, AP.
2 problems for Ds:
1. the continuous possession requirement: they occupy the house during summer only
	held, this is enough - it’s a summer beach house, nature of house and community show that it’s enough
2. the tacking problem: Ds lived there for only a year after they purchased it; can Ds count the time that their predecessors lived there? - yes
If Ds win - adverse possession - they get property for free
If Ds loose - they get to keep it but pay compensation in market value.
Suppose the court held that Ds were not adverse possessors.  Their house would then be on land adjudged to be the Ps’.  What relief would be granted Ds?
Common law rule: buildings or fixtures erected w/o right, whether in good faith or not, became the property of the landowner (Ps) - if house is on land none of which D owns, bad luck, everything affixed to land goes to true owners; if house is only partially on the land, keep it where it is, but pay true owners damages for trespass.
Modern tendency: soften the impact of this rule on innocent improvers, either y granting them compensation equal to the market value of the improvements or permitting removal of the improvements (if possible), even if house is completely on the wrong lot.

O’Keeffe v. Snyder		the discovery rule
O’Keeffe sues for replevin (an action for repossession of personal property wrongfully taken by D)
Chattels - movable tangible personal property (here, painting)
The discovery rule: a cause of action will not accrue until the injured party discovers, or by exercise of reasonable diligence should have discovered, facts which form the basis of a cause of action.
The rule is a principle of equity, the purpose of which is to mitigate unjust results that otherwise might flow from strict adherence to a rule of law.
Held, discovery rule applies to an action for replevin of a painting.  O’Keeffe’s cause of action accrued when she first knew or reasonably should have known through the exercise of due diligence, of the cause of action, including the identity of the possessor of the paintings.
Inherent problem with adverse possession of personal property (esp. works of art) - they are not open, visible, and notorious.

VOLUNTARY TRANSFERS
by gift, sale, bequest

Gratuitous Transfers

1. 	Inter vivos - lifetime gifts (between the living)
In order to make an irrevocable gift
1) the donor must intend to make current transfer of property
2) there must be current delivery (unlike K-tual promises, we enforce gratuitous promises only if delivery is made)
•	manual delivery: if an object can be handed over, it must be
•	constructive delivery: of the means that allow you to get to the thing; handling over a key or some object that will open up access to the subject matter of the gift (if manual delivery is not practicable because of the size or weights of the object, or its inaccessibility)
•	symbolic delivery: handing over smth symbolic of the property given (like a written instrument declaring a gift of the subject matter) (courts are hostile)
2.  Causa mortis - in contemplation/expectation of impending death (but if donor does not die, he is free to change your mind - gift is revocable)
3.  At death - gifts that become effective at death
1) 	will
2) 	intestacy statutes

Newman v. Bost		when you can manually deliver - you should do it.
P got the bureau and other furniture in her bedroom as inter vivos gift - gift made during donor’s life (delivery of keys was constructive deliver, because manual delivery could not be made), but not life insurance policy that was inside the bureau: problem with intent and delivery.  The court is not clear as to whether donor intended to give her the policy.  Court required actual delivery of the insurance policy bec it could be made.  As to piano, if P shows some sort of delivery (actual or constructive), she’ll get it.

	Suppose donor had typed and signed a letter to donee: “I give you the painting when I die”.  Would this be a valid lifetime gift?  No, this is a will.  The instrument shows no intention to give him any rights now, but only when donor dies.  As a will, the instrument is not valid unless property executed as a will, with witnesses.

Gruen v. Gruen	
Delivery of title.  Father expresses current intent to deliver title by virtue of letters: title to remainder interest, but he wants to enjoin possession of the painting during his lifetime.  Intent to transfer title currently, but not necessarily to transfer ownership currently.  Making oral statements probably wouldn’t have been enough, but letters from the father - fine.  Actual delivery is not required, delivery of title is enough.
	Many courts would require actual delivery at least w/n reas time.
	Distinction: ownership v. possession/enjoyment - here, donee received title or the right of ownership immediately upon the making of a gift, but possession or enjoyment of the subject of the gift was postponed to some future time (till his father’s death).
	If the father had wanted to give his son the complete ownership of the painting and not reserve a life estate, could he have done so by a letter sent to his son?  No, for many courts.

THE SYSTEM OF ESTATES AND FUTURE INTERESTS

Estates - current possessory interests
Future interest - in the future
Policy issue: variety of devices that landowner can use to control future disposition of his land/property + underlying distribution of wealth
Freehold
1. 	fee simple - fee simple absolute
2. 	fee tail
3. 	life estate	Possessory (you have current possession)	Nonpossessory (future interest): future interest that will ripen into fee simple or life estate, you don’t have it yet	
Nonfreehold	tenant	lease to be a tenant in 2 years from now: future lease	

An owner of property may transfer property
	in life: inter vivos (gift or sale)
	at death
1. 	by will - devise (an act of giving property by will): will governs
testator - party who wrote the will
legatee - party to whom property is left
2. 	by intestacy statute (only if person died w/o will)
			heirs - people who inherit
1) 	first, to spouse and children: 1/3 to spouse, 2/3 to children as a group; if no these (no spouse, no children)
2) 	to grandchildren; if no these
3) 	to grand-grandchildren; if no lineal descendants
4) 	to parents; if no these
5) 	to siblings; if no living relatives
6) 	escheats to state

Per stripes rule: proportionally divided between beneficiaries according to their deceased ancestor’s share (estate divided equally along the branches, each generation splits its share equally; living children get equal shares, and descendants of dead children get the share the other child would have gotten to split equally among themselves).
	If O dies, his Son already dead (but 3 kids) and Daughter is still alive.  Split: ½ goes to D, ½ split among Son’s kids (as tenants in common)

Primogeniture: goes through 1st born male line; when generation has only girls, property is shared equally between them

Fee simple absolute - the largest estate you can have in land: you own all rights to that property that are ownable (subject to certain restrictions)
What does O have to say to transfer entire FSA:
	“to A and her heirs”
A’s heirs have no rights to A’s property
A’s heirs are not determinable until A dies
	intent of O to give fee simple to A
	“and her heirs” - words of limitation (define the nature of estate, limit the extent)
	“to A” - words of purchase (indicate who is getting the land)

2 groups of future interests
1. 	reversionary interest or reversion (if retained by grantor)
2. 	remainder interest (if retained by any 3rd party other than grantor)

Temporary limited estate
Fee tail: an estate that is inheritable only by specified descendants of the original grantee, and that endures until its current holder dies w/o issue (descends to A’s lineal descendants generation after generation, and it expires when the original tenant in fee tale, A, and all of A’s descendants are dead) (abolished in almost all states).
	conveyance “to A and the heirs of his body”
Every fee tail has a reversion or a remainder after it.
In England - fee tail mail: was limited to male, and further limited to first born male (primogeniture - first born son)
When the line of descendants dies out, and original grantor did not specify what happens, we would imply reversion in the grantor.
Fee tail male
	“to A and her heirs male” or “to An and heirs of her body male”

Life estates
	an interest in property that expires upon your death
usually through trust: leave right to property through trust, but beneficiaries will be split between life tenants and remaindermen
unless grantor places restrictions, life estate is transferable: but grantee can only transfer life estate, not remainder interest
life estate per autre vie - life estate measured by somebody else’s life (someone other than the life tenant)
	“O gives to A for life, remainder to B”
if “to A for life” - we imply reversion in O (if A dies, estate goes back to O)

White v. Brown	restraints on alienation
Suit for construction of will - constructing ambiguous language in a grant.
“I wish X to have my home to live in and not to be sold”: restraint on alienation is void (grantor violated the rule of alw by attempting to restrict the power of the donee to dispose of the real estate).
•	Under common law, unless grantor used words of limitation (“to A and her heirs”), creating FSA, it was construed as life estate
•	Modern law reverses the presumption: to create smth less than FSA, the grantor had to restrict that.  When ambiguous language of the will, many courts would construe to mean FSA.
•	Restraint on alienation - preventing the current possessor from selling or giving away her interest.
•	Restraint on alienation is invalid if grantee’s interest it FSA.  You cannot impose restraint on alienation on FSA.
•	Here - disabling restraint on alienation, doesn’t say what happens if grantee tries to sell it, invalid in most states.

Restraints on alienation
1. Absolute restraints: absolute bar on transferring, selling property (“my house is not to be sold”)
	w/r/t FSA, it’s not allowed - none are good
	w/r/t life estate - some are good, some are not
a) 	disabling restraint - prohibits the sale of property w/o stating what happens next -
not permitted
b) 	forfeiture restraint - prohibits the sale of property and specifies what happens next - law permits in many states

2. Partial restraints: some courts allow them provided that these are reasonable restrictions, if serve socially useful purpose and have reasonable effect; in many other j’ns even these are void with exceptions
	what is allowed: rights of condominium boards, coops, power of approval

Doctrine of Waste

If more than one person has interest in land, each party has the obligation not to unfairly infringe on the others' rights by wasting resources; both when interests are presently divided and when they are temporally divided

2 uses of word waste: legal waste and economic waste
Legal waste: when life tenant or party in current possession acts in a manner unfavorable to remainder person - unfair diminution of value of interest of property for remainder person
1) 	character (physical attributes of land) remainder person has right to get real property intact, to have land unchanged (unique land)
2) 	economic value: remainder person has right to have unimpaired economic value of land

2 types of legal waste:

1)  affirmative waste (voluntary):
	life tenant takes affirmative actions which decrease economic value of remainder interest
	e.g. cuts down 100-year old tree, extracts all the gold, overgrazes, overfarms, or overcuts timber
	can be - changes the character of land
	objective or subjective value to the life tenant is improved

ameliorative waste:
	actually increases economic value of remainder interest, but changes its character
	life tenant wants to change the physical characteristics of the estate, which will improve the market value, but remainder person doesn't want the changes made
	court will protect the interests of the remainder person if the life tenant tries to keep all the benefits for himself, so value of the remainder really went down
	e.g.  life tenant extracts all the gold to take advantage of a one-time high selling price; court will probably give remainder person some of the profits
	court wants to allow land to go to its best use, but general rule is that life tenant should give the remainder person the same estate the grantor left to them
	courts generally weigh everyone's interests and also the intent of the grantor and the economic efficiency of the proposed change

2) 	permissive waste (involuntary):
	negligence, letting the property to get ruined
life tenant allows things to go to waste by not taking action to preserve it
	e.g. doesn't repair roof leaks and old woodwork damaged
	value to the life tenant may or may not be improved
	but market value of the remainder interest went down

remedies:  injunction (which leaves room for parties to negotiate) or damages
problem is always determining what is unreasonable use of the property

waste doctrine is default; used after specifications in the grant

there are set definitions for what's unreasonable use of farmland, timberland, etc.
for natural resources, hard to say what rate of extraction is unreasonable
court won't let life tenant extract all the gold from a gold mine, but this might not be 	the case if the grant was of farmland that just happens to have some gold on it

remainderman may get some relief if subjective value, but not market value, goes 	down, but not much case law on this

courts allow reasonable wear and tear by the life tenant, even if there is some 	diminution in value

Baker v. Weedon		
Held, court should not order to sell the property no matter how much it would benefit the present tenant, if it would cause substantial loss of value to the holders of the future interest.
Life tenant wants court to make remainder people agree to sell their interest on theory 	that if he can't sell, their estate is being wasted
Grandchildren wouldn't sell because they thought value of land was going to go up more than market value reflected
(they should have bought out the life tenant, if they valued it more than he did)
(or court could force the sale and they could invest their profits elsewhere)
Court forces the parties to mortgage the property to get enough money for the life tenant not to have to sell
difference between this and having them buy out the life tenant is that life tenant retains her interest
Usually remainder people want to prevent change for subjective reasons, not because they think the value will go up later
No hierarchy between life tenant and remainder people; court gives the interests equal weight

Defeasible Estates
fee simple, life estate
Defeasible estate - a fee simple can be created that is defeasible upon the happening of some event.  Defeasible fee simple estates have the potential, though not the certainty of infinite duration.
3 categories of difeasible estates:
1. 	Fee simple determinable: a fee simple estate so limited that it will automatically end
•	O conveys Blackacre “to School Board so long as the premises are used for school purposes” School Board has a fee simple determinable that will automatically end when Blackacre ceases to be used for school purposes.  When that event happens, the fee simple automatically reverts to O.  O has possibility of reverter.
•	to A so long as, to A until, to A while (or language providing that on the happening of a stated event the land is to revert to the grantor.  Mahrenholz.)

1. 	Fee simple on condition subsequent: a fee simple that does not automatically terminate but may be cut short (divested) at the grantor’s election when a stated condition happens (grantee does not automatically lose his fee, but grantor has to come and get the fee)
•	O conveys Blackacre “to A, but if liquor is ever sold on the premises, the grantor has a right to reenter the premises.”  A has fee simple subject to condition subsequent.  O has a right of entry.  If O does not choose to exercise her right of entry when liquor is sold, the fee simple continues in A.
•	to A, (;) but if X event happens (A should ever use the property for…)
•	to A, upon condition that if X event happens
•	to A, provided, however, that if X even happens, the grantor retains a right of entry
•	if ambiguous language, majority modern tendency is to construct it in favor of fs on condition subsequent (to A, so long as it’s used for church purposes (determ), provided that shall it ever cease to be used for church purposes (on cond subseq), - both)

1. 	fee simple subject to executory limitation: fee simple that, upon the happening of a stated event, is automatically divested by an executory interest in favor of a 3rd person (not the grantor) “to school, but if within the next 20 years Blackacre is not used for school purposes, then to A.”  School has fs subject to executory limitation.  A’s future interest is called an executory interest.)

2. 	fee simple with covenant not to do X: no limitations on the estate itself, but holder of estate has to behave in a certain way.  A covenant is a promise by the grantee that a specified act will or will not be performed.  If a covenant is breached, the promisee may sue for injunction or damages.  O conveys Blackacre to A, who promises on behalf of himself, his heirs, and assigns that Blackacre will be used only for residential purposes.

Mahrenholz		
deed: “this land to be used for school purposes only; otherwise to revert to Grantors”
	this is fee simple determinable
Court holds that this is fee simple determinable
1. 	limited language appears in the grant “for school purposes only” - typical for fs determinable
2. 	the rest of the grant “otherwise to revert to Grantors” - possibility of reverter
Court assumed that condition “for school purposes only” was violated by school district, because classes were no longer held there, and the district has used the property since then for storage purposes only.  Is there a violation of condition here?
Statute of limitations problem:
If this is fee simple on condition subsequent, grantor has to worry about adverse possession, if he doesn’t re-enter.  School - open, notorious, adverse possession.  School district can quite the title if they’ve been adversely possessing the property for requisite period.
Difference between fs determinable and fs on condition subsequent:
	when fs determinable, grantor can wait until 1 day left of st/lim to get to court and assert re-entry

Mountain Brow Lodge v. Toscano		
Grant of property from Toscano to the Lodge.  Issues in this grant:
•	restriction on transferring property - clearly invalid as restraint on alienation
•	restriction on use - is it a valid restriction on a way estate can be used - defeasible estate, or is it a restriction so severe that it amounts to invalid absolute restraint on alienation
Held, fs on condition subsequent
deed: “said property is restricted for the use and benefit of the second party only; and in the event the same fails to be used by the second party or in the event of sale or transfer by the second party of all or any part of said lot, the same is to revert to the first parties”
Restraint that the property can be used only the grantee is upheld.

But: severe restrictions on use - invalid as restraints on alienation
(O conveyed land to RR co so long as the land was used as a site for the RR co’s divisional headquarters, and in case it should be abandoned for such use the land was to revert to the city - the reverter provision was invalid as restraint on alienation, and RR had a fee simple absolute)

FUTURE INTERESTS
A future interest is a nonpossessory interest capable of becoming possessory in the future (it is not presently possessory interest)

Future interest retained by the grantor
1.	reversion: a future interest left in the grantor after the grantor conveys a vested estate of a lesser quantum than he has (O, owning Blackacre in fee simple, conveys Blackacre “to A for life”.  Life estate is a lesseer estate than a fee simple, so O has reversion.  When A dies, Blackacre will revert to O.)
2.	possibility of reverter: follows fs determinable. (O conveys Blackacre “to Board of Education so longa s it is used for school purposes”.  Board has fs determinable, O has possibility of reverter.)
3.	right of entry: grantor creates an estate subject to condition subsequent and retains the power to cut short the estate (O conveys Blackacre “to Board, but if Board ceases to use it for school purposes, O retains a right to reenter.”  Board ahs fs subject to condition subsequent, O has a right of entry).

Future interests created in a grantee

1. Remainder: a future interest in a grantee that has the capacity of becoming possessory when the previous estate expires in its own terms, and it cannot divest the prior estates (patiently sits and waits)

a) vested
(1) 	created in an ascertainable person AND
(2) 	certain to become possessory when A’s interest ends (is not subject to any condition precedent)
•	O conveys “to A for life, then to B in fee simple.”  B (an ascertained person) has a remainder not subject to a condition precedent.
•	Condition precedent - an express condition attached to the remainder, such as, “to B if B reaches age 30” or “to B if B survives A.”

(3) 	indefeasible (there is nothing that can happen to take away your vested remainder: the holder of this interest is certain to acquire possession in the future and will be entitled to retain permanently the estate); if not indefeasible, then
•	Vested remainder subject to defeasance
•	Vested remainder subject to divestment (not subject to RAP): this remainder can be completely divested by a condition subsequent or by an inherent limitation of the remainder estate.  A remainder can be both vested subject to open and vested subject to complete divestment (“to a for life, then to children of A, but if no child survives A, to B).
•	Vested remainder subject to condition subsequent

(4) 	indivisible (there is nobody else thrown into your class with you to dilute your interest); if not indivisible, then
	Vested remainder subject to open: this remainder is vested in a class of persons, at least one of whom is qualified to take possession, but the class members’ shares are not yet fixed because more persons can subsequently become members of the class  (class is closed if others can no longer enter the class).

b) contingent remainders (subject to RAP)
(1) 	either created in an unascertained person OR
(2) 	subject to a condition precedent
		Unborn children: O conveys “to A for life, then to A’s children.”  A has no children.  The remainder is contigent bec the takers are not ascertained at the time of the conveyance.  If a child is born, the remainder vests in that child subject to open and let in other children born later.
		Condition precedent (expressly stated in the instrument.  O conveys “to A for life, then to B if B marries C.”  B has a remainder subject to an express condition precedent (of marrying C).  If B marries C during A’s life, the remainder vests indefeasibly in B.

2. Executory interest: a future interest in a grantee that, in order to become possessory, must divest or cut short the prior estate

a) shifting executory interest: a future interest in a grantee that divests a preceding estate in another grantee prior to its natural termination; divests estate in another grantee/3rd party (not grantor) - from one grantee to another
	O conveys “to A and his heirs, but if B returns from Rome, to B and his heirs.”  A has fs subject to an executory interest.  B has an executory interest.  B has an executory interest (B’s interest cannot be a remainder, bec it is a divesting interest, and remainders never divest)

b) springing executory interest: divests the grantor - from grantor to grantee
	O conveys “to A and her heirs if A quits smoking.”  A has a springing executory interest.  It will divest the fee simple in O, the grantor, if it becomes possessory.

RULE AGAINST PERPETUITIES
“No interest is good unless it must vest, if at all, not later than 21 years after some life in being at the creation of the interest.”
	Future interest is void at the time of creation of there is any possibility judged as of time when it was created, that it will vest more than 21 years after the end of any life in being at the time the interest was created.  Look for the possibility of remote vesting.  Ask at the moment the grant is created: is there a remote possibility that we won’t know if the interest will vest or fail in the perpetuities period (21 years) from the death of the measuring life.

RAP covers only:
•	executory interests
•	contingent remainders
•	vested remainders subject to open or partial defeasance
•	options to repurchase

Not covered:
•	vested remainder subject to complete divestment
•	reversions
•	possibility of reverter
•	right of entry

Vest or fail:
	Look at the interest at the time of creation and determine if the interest will necessarily vest or fail within 21 years - remote possibility.
	Traditional strict rule: you do not wait and see - cross out invalid grant, until you get smth that is a recognizable grant.
	Modern tendency: rewrite the grant as to grantor’s intent (if it’s invalid under RAP)

Creation of interest:
	We measure whether grant is valid at the moment property is transferred (not when the grant is drafted)
1. 	transfer as inter vivos gift (during life) (effective when gift becomes irrevocable)
2. 	sale (during life)
3. 	leave it by will (at death) (when grantor is dead)

Perpetuities period: Counting life
•	any named person in the conveyance who is alive at the time of the transfer
•	anyone who is not named in the conveyance, but whose existence is essential to whether the grant is made - can affect vesting of the interest.

The validating life must be a person alive at the creation of the contingent interest.
If the interest is created by will, the validating life must be a person alive at the testator’s death.
If the interest is created by an irrevocable inter vivos transfer, the validating life must be a person alive at the date of the transfer.

If 1 member of the class flunks, they all flunk
	“A, to my grandchildren.”  Even if one grandchild is born, others could be born more than 21 years after death of A’s children then alive.  All flunk.

Must vest in interest, not in possession
“A to B for life, then to B’s oldest child then living for life, then to first child born to A’s daughter C.”  Passes RAP.  Even though C’s child might not vest in possession until 21 years after everyone’s death, will vest in interest.

Parties with no interest in grant
“A to B, but if liquor sold on premises within 21 years after death of Newt, then to C.”  Passes RAP, even though Newt has no interest.
“within 21 years after death of NYULS class won’t pass, bec too big.

Modern reforms of RAP
1. Wait and see doctrine
The interests are judged by actual events, not by possible events.  We what and see if all the parties who can conceivably take the interest really do that within the perpetuities period.  (Downside: it leaves the grant open for a long time - uncertainty)
The common law perpetuities period is measured by the lives that can affect vesting plus 21 years.
2. Uniform Statutory Rule Against Perpetuities (not in NY)
Waiting period should be 90 years.
Wait if an interest vests within the common law period - valid
Wait if an interest vests within 90 years - valid
3.  To get rid of absurd mechanical result of crossing out the failed part of the grant, the court rewrites the grant to make it valid.

CO-OWNERSHIP
1. 	Joint tenancy 
•	unity of possession (each of co-tenants holds undivided interest in the property; they cannot exclude other co-tenants from use) (fiction)
•	interests are transferable inter vivos by 1 co-tenant w/o consent or knowledge of the other co-tenant - unrestricted right
•	yes, right of survivorship: the decedent’s part automatically goes to surviving co-tenant; any attempt to leave it by will is void

Creation of joint tenancy
O to A and B as joint tenants.
Give to A, B, C as joint tenants with right of survivorship and not as tenants in common.
Only if 4 unities are met
1) 	unity of possession: equal right to possess the whole property
2) 	time: created at the same time (remain in force in most j’nts)
3) 	title: created by the same instrument (remain in force in most j’ns)
4) 	interest: the same interest
a) 	same fractional interest (today can be different fractional interests - 1/3 and 2/3)
b) 	their interest should last for the same duration

Problem 1 - creation of joint tenancy by using a strawperson
•	Common law rule: one person cannot convey to himself
•	A conveyance from H “to H and W as joint tenants” violates the unities of time and title.  Where H wants to convey “to H and W as joint tenants”, he can accomplish his wishes by conveying the property to a strawperson (usu a lawyer or lawyer’s secretary).  After H conveys to the strawperson, the strawperson conveys “to H and W as joint tenants” - satisfies 4 unities.
•	Some recent cases have permitted a joint tenant to unilaterally sever the tenancy by conveying her interest to herself without using an intermediary (Riddle v. Harmon)

Problem 2 - severance of joint tenancy
•	Any joint tenant can at any time destroy the right of survivorship by severing the joint tenancy.  Upon severance, the joint tenancy becomes tenancy in common, and the right of survivorship is destroyed.  A conveyance of the tenant’s entire interest or share severs the joint tenancy with respect to that share.
•	At common law, severance occurred automatically when one or more of the 4 unities were severed.
•	Very easy to destroy joint tenancy by transferring joint tenant’s interest to the 3rd party: inter vivos conveyance w/o the other joint tenant’s consent and knowledge; it automatically coverts joint tenancy into tenancy in common.
•	By severing joint tenancy, you don’t change relationship between other joint tenants.

2.  Tenancy in common
•	unity of possession
•	interests are transferable inter vivos
•	no right of survivorship: at death of 1 of co-tenants, he can dispose of her part by will or intestacy

Where language is ambiguous, most j’ns will presume tenancy in common

3.  Tenancy by the entireties (joint tenancy between husband and wife w/certain req’nts)
•	unity of possession
•	cannot be severed by unilateral action of one spouse

Riddle v. Harmon	One joint tenant may unilaterally sever the joint tenancy w/o using the intermediary
Mrs. Riddle conveyed her interest from herself as joint tenant to herself as tenant in common - severed joint tenancy prior to her death.  If she could do it through strawperson, she could do it w/o him.
Fraud issue - potential for fraud.
Very easy to sever joint tenancy by unilateral act.  If you want to secure joint tenancy: joint tenancy with contingent remainder in FSA to go to survivor.

Harms v. Sprague	Rule here: mortgage is ruined with death of 1 joint tenant.
Held, mortgage given by 1 joint tenant of his interest in property does not sever joint tenancy: P owned property in its entirety unencumbered by the mortgage lien.
P’s right of survivorship became operative upon death of his brother; P is now the sole owner of estate.  Mortgage executed by P’s brother does not survive as a lien on P’s property.
2 joint tenants - brothers; one brother mortgaged his half of property.
2 q’ns:
1. by mortgaging his half, did brother severed joint tenancy?  If yes, he destroyed the other brother’s right of survivorship: is mortgage more like conveyance which would sever joint tenancy, or is it more like a lien.  Held, more like a lien, doesn’t sever joint tenancy.  The other brother is sole owner.
2. whether mortgage obligation survives brother’s death.  Held, obligation doesn’t survive brother’s death, the other brother is the sole owner w no encumbrances.
Title theory states: mortgage by a joint tenant conveys the legal title of the joint tenant, and so the mortgage destroys the unity of interest and severs the joint tenancy.
Lien theory states (most states): mortgagee does not have legal title, but rather a security interest called a lien.  Legal title remains in the mortgagor (debtor).  Mortgage does not sever the joint tenancy.

What to do when relations between existing co-tenants go bad - remedies for mediating disputes
•	partition (most extreme) - when there are irreconcilable differences
•	physical partition - divide property and give each tenant sole title
•	partition by forced sale
Presumption in favor of physical partition

Delfino v. Vealencis		physical partition is favored over partition by sale
Ps and D are co-tenant.  D was the only one occupying the land - running garbage business + she lived there.  Ps want partition by forced sale - to subdivide the land and develop residential building lots + they don’t want D’s business to be there.  D wants
in kind partition - physical partition.  Court finds for D.
Partition by sale - when 2 conditions
1. 	the physical attributes of the land are such that a partition in kind is impracticable or inequitable
2. 	the interests of the owners would better be promoted by a partition by sale
Partition by sale - usu by auction; nothing can preclude D or P from bidding
Arg’nts from policy perspective:
•	fairness to co-tenants
•	efficiency - promoting the most efficient use of the parcel

Accounting: opportunities, rights + liabilities
(a) 	implicit rental value - ouster - accounting or partition
(b) 	explicit rent from 3rd party
(c) 	maintenance expenses
(d) 	improvements

(a)
•	Each co-tenant owes the other tenant nothing - each co-tenant has right to possess the whole.  Exception - ouster.  In some cir’ces, possessing co-tenant may have obligations to other co-tenant.
•	Ouster - an act by one co-tenant that deprives another co-tenant of the right to possession.
•	Must a co-tenant in possession pay a reasonable rental value to the co-tenant out of possession?  Majority rule: if non-possessing co-tenant is not ousted by possessing co-tenant, possessing co-tenant is entitled to use and occupy every part of the property without paying any amount to non-possessing co-tenant.  Non-possessing co-tenant cannot recover a share of the rental value of the land unless he has been ousted by possessing co-tenant, or possessing co-tenant agreed to pay non-possessing co-tenant, or possessing co-tenant stands in a fiduciary relationship to non-possessing co-tenant.
•	Rationale: this rule promotes the productive use of property.

Spiller v. Mackereth		Held, unity of possession means that any co-tenant can occupy the whole, so he has no obligation to pay unless there was ouster
2 possible ways that P could show ouster:
1. 	adverse possession: harder to prove than simple a/p, bec D has right to be there; so smth more is required - activities, open and notorious
2. 	liability of an occupying co-tenant for rent to other co-tenants: Ps have to show that they demanded possession and were denied it, Ps had to to demand equal use and enjoyment of property

Doctrine of constructive ouster
Some courts require the possessing tenant to pay rent if property is too small to be physically occupied by all co-owners.  Or if render use impracticable, unvaluable.  Can be physical or psychological (irreconcilable differences between co-tenants).  Minority of jurisdictions: when non-occupant wants to rent and occupant refuses.

Remedies for ouster
1. accounting: suit to collect his share of the reasonable rental value
2. partition: suit to partition the property

(b) explicit rent from 3rd party
•	Any rents or other income collected by a co-tenant from 3rd party must be shared equally with the other co-tenants if the income exceeds the collecting co-tenant’s proportionate share.  The collecting co-tenant must account to the others for their proportionate shares.  The collecting co-tenant must account for the net amount actually received, not for the reasonable rental value of the land.  ???
•	If co-tenant leases only his interest, which he can do with co-tenant’s consent, he doesn’t have to pay rent, but the remaining co-tenant has to be able to coexist with leasee.

(c) maintenance expenses
Co-tenants are liable in proportion of their respective interests.

(d) improvements to property (investments in the property that generate long-term benefits)
If co-tenant did it with other co-tenants’ approval, he can’t demand contribution.  Excetion: he can demand contribution for enhanced rental value.  In partition, he can demand disproportionately greater % of preceeds.

Marital property.  Tenancy by the entirety.
•	Only between husband and wife, holding as one person.  Like joint tenancy in that 4 unities + 5th - the unity of marriage - are required for its creation, and the surviving spouse has the right of survivorship.
•	Unlike joint tenancy, severance by one tenant is not possible.  Neither tenant acting alone can sever the 4 unities and destroy the right of survivorship.  Interest cannot be partitioned either physically or by sale w/o both tenants’ consent.
•	At common law, if husband and wife - all property was held as tenancy by the entirety.
•	Modern law permits husband and wife to take as tenants in common or as joint tenants.
•	Where it’s ambiguous - presumption that it is tenancy by the entirety.
•	Tenancy by the entirety can be created only between married couple (if conveyance is made to two unmarried persons to hold as tenants by the entirety, it does not create a tenancy by the entirety, but a joint tenancy or tenancy in common)
•	At common law, husband had exclusive right to property and all income, could alienate right to present interest, property subject to his debtors, his right of survivorship, but he could not alienate his wife’s right of survivorship - creditors couldn't get her interest.  Wife couldn't alienate anything, she couldn’t enter into voluntary transaction.  Then Married Women's Property Acts to protect women's interests in pre-marriage property, courts extended to cover tenancy by the entirety.  Some courts kept same, others equalized rights by wife gaining rights or husband losing rights.

Like joint tenancy except:
a. Co-owners must be legally married.
b. Property can't be partitioned.  Only way to split: 1 party yields interest to other; both parties give to someone else (unify), death, divorce.  
c. (most states) individual interest can't be sold, transferred, encumbered by lease without consent other spouse.  No doctrine of severance (attempt to convey to 3rd party = void except can transfer life interest usually).
d. most states creditors can't attach property to satisfy one spouse's debts. (doctrine animated by desire to protect innocent spouse; arises when judgment proof).

Sawada v. Endo	Creditors of one spouse cannot reach the property because neither husband nor wife acting alone can transfer his or her interest.
Auto accident.  Then Endos conveyed their property to their sons.  Mr. Endo owes tort damages to Sawadas.  Mrs. Endo dies, and Mr. Endo has no money, because he conveyed to sons.  Sawadas say it was fraudulent conveyance to avoid paying damages.  Court: conveyance could only be fraudulent if Sawadas could have gotten Mr. Endo’s interest in the property.  Sawadas could not have attached Mr. Endos’ property interest (of course, if Endos had kept the property, and he survived his wife, he would have had a total interest that could have been attached, so it was fraudulent in a way).  Court joins Group III.

5 different possibilities:
does Husband have an individual:
			Life interest				Right of survivorship
			(present possessory)

group I		H: yes (only H’s interest)		H: yes
(MA/common law;	W: no					W: no
no states now)
the estate in its entirety is subject to levy by the husband’s creditors

group I		no					H: yes
(Mich, NCar)							W: no
the husband may convey the entire estate subject only to the possibility that the wife may become entitled to the whole estate upon surviving him; the use and income from the estate is not subject to levy during the marriage for the separate debts of either spouse

group II		yes					yes
(Alaska, NJ, NY)
the interest of the debtor spouse in the estate may be sold or levied upon for his or her separate debts, subject to the other spouse’s contingent right of survivorship

*group III		no					no
(majority, Hawaii court chooses here)
an attempted conveyance by either spouse is wholly void, and the estate my not be subjected to the separate debts of one spouse only

group IV		no					yes
(KY, TN)
contingent right of survivorship of either spouse is separately alienable by him and attachable by his creditors during the marriage; the use and profits, however, may neither be alienated nor attached during the marriage

Common law regime
During marriage the right of respective spouses were determined by the title.  If title was held separately by one of the spouses, husband had sole authority over his and his wife’s rights, his wife’s earnings.
The Marital Women’s Property Act changed that to give wife sole control over separate assets.
Upon divorce, the ownership of spouses followed title.  Same for joint tenancy or tenancy in common.  Exception: tenancy by the entirety was converted into tenancy in common.
Separate property went to whoever held title, subject to husband’s paying alimony to wife.

Statutory reform
1.  Community property regime (minority)
a) during marriage
•	9 states have community property between married couples.  Community property consists of earnings of either spouse during marriage and property acquired through earnings (unless prenup).
•	Whatever isn’t community property, is separate property: property owned by either spouse before marriage or acquired after marriage by gift, descent, or devise is separate property, also any earnings on gift of inheritance.
•	Transmutation: any spouse can donate his separate property to community property and so make it community property.  Problem - intent.  In most j’ns, if spouse holds title - that’s determinable.  If title is in joint tenancy - held to be community property.
•	Another problem: commingling bank accounts.  Spouses contribute their prior earnings - in most j’ns, it’s transmuted into community property unless said not to.  You can reverse transmutation by prenuptial or postnuptial agreement.
•	Husband buys wife jewelry - it’s community property, unless husband explicitly says that it’s hers.
•	Community property - all property acquired during marriage through labor of either spouse, unless title to that property by consent of both spouses is held in some form of co-tenancy: earnings from labor, property acquired by those earnings and earnings on that property.
•	Each spouse may unilaterally control the property, subject to limitations in real property and fiduciary obligation of each spouse to each other.
•	In order to transfer property unilaterally, spouse needs consent of the other spouse.
•	The rights of creditors to reach community property: if creditor of both spouses, can reach community property; if creditor of only one spouse - j’ns differ: some prohibit creditor, some permit to get all, some permit to get some.
•	Community property does not include property that spouses hold in co-tenancy (what’s in co-tenancy is governed by co-tenancy law).

b) upon divorce
•	Anything that is’ community property is split between the spouses.
•	In minority states, 50/50 split is requried.
•	In majority states, equitable distribution.
•	Separate property is retained by the spouse who holds it.
•	One spouse may be supported by alimony - separate consideration from property.

c) upon death
Community Property: surviving spouse takes his 1/2 interest in community property.  Decedent spouse can leave his 1/2 share by will.

2.  Non-community property states (majority)
a) during marriage
•	Presumption in favor of separate property unless spouse contributed it to co-tenancy (like commingling bank accounts)
•	General mutual obligation of support, subject that you do not defraud your spouse.
•	Some states require sharing of property earned during marriage.

b) upon divorce
•	Upon divorce, property is divided equitably
•	Factors: duration of marriage, contribution of labor or resources, custody of children, need (including alimony or child support), status (lifestyle during marriage), future prospects for employment (get marketable skills), economic contribution to marriage, sometimes fault.
•	Majority: all property owned by either spouse at the time of divorce is marital property subject to equitable division
•	2 minority rules:
(1) 	Uniform Dissolution of Marital Property Act: same distribution as in community property states (earnings during marriage)
(2) 	marital property includes all property and all assets acquired by gift or devise

c) upon death
•	Some version of forced share statutes: require that spouse leave at a minimum specified portion to surviving spouse (1/3 or 1/2).  Spouse can leave more, but not less.  You can override the forced share by prenuptial agreement, but there are strict requirements.
•	No distinction is made between separate and community property: all is subject to division by forced share rule.

Issue: what constitutes property.
How to treat the enhanced earning capacity of one spouse
Majority view: enhanced earning capacity acquired during marriage is not form of property subject to division.

In re Marriage of Graham	Increased earning power from a professional degree is not “property,” and therefore it is not divisible on divorce.
Whether MBA constitutes marital property?  Court: no.
(“An educational degree is not property.  It does not have an exchange value or any objective transferable value on an open market.  It is personal to the holder.  It terminates on death of the holder and is not inheritable.  It cannot be assigned, sold, transferred, conveyed, or pledged.  An advanced degree is a cumulative product of many years of previous education, combined with diligence and hard work.  It may not be acquired by the mere expenditure of money.  It is simply an intellectual achievement that may potentially assist in the future acquisition of property.”)
But we can calculate how much typical MBA grad will earn.  As in Moore, cells are not property because you don’t call them property.

NY state - reflects minority view: recognizes enhanced earning capacity as property asset.
Earning power increased during the marriage by acquiring a professional degree (O’Brien v. O’Brien) or celebrity status (Elkus v. Elkus) is property subject to equitable division.  Thus, the supporting spouse is awarded a share in the value of her investment in human capital.

Elkus v. Elkus		Career and celebrity status is marital property subject to equitable distribution.  Husband’s contributions and effort led to an increase in the value of wife’s career s an opera singer; this appreciation was a product of the marital partnership, and therefore, marital property subject to equitable distribution.

Broad policy issues
1. 50/50 split of human capital acquired during marriage or some other equitable split (this is remedy that wife is seeking in Graham and husband gets in Elkus); arg’nt that Mrs. Graham and Mr. Elkus forewent opportunity to earn their own human capital (like to go to school herself)
2. require comparable investment in P’s human capital (now D gets to invest in P’s education).  Wife didn’t seek alimony in Graham, but she could have gotten it.  Arg’nt: but what if one spouse isn’t as intelligent as the other - value of this money is different (can’t go to school, so we should equalize talents.  Remedy should take into account the talent of the parties.

Domestic partnership (not spouses)
•	Common law marriage (now abolished in most states): where common law marriage is recognized, an unmarried man and woman who hold themselves out to the public as married and conduct their affairs as a married couple are treated as if they were lawfully married (e.g. by clergy).
•	Where common law marriage is not recognized, courts have taken different views about the rights of unmarried cohabitants on dissolution of their relationship: express or implied contract, partnership, restitutionary measure of damages for the value of services rendered (to prevent unjust enrichment).  If parties say nothing to the contrary, we say they assumed financial obligations.

NONPOSSESSORY INTERESTS IN LAND:
EASEMENTS, COVENANTS, AND EQUITALBLE SERVITUDES
(permit you to use them, but not possess them - fiction)

1.	A is given the right to enter upon B’s land (easement)
2.	A is given the right to enter upon B’s land and remove smth attached to the land (profit)
3.	A is given the right to enforce a restriction on the use of B’s land (promise/covenant not to do smth on your land - negative easement)
4.	A is given the right to require B to perform some act on B’s land (affirmative right to aid)
5.	A is given the right to require B to pay money for the upkeep of specified facilities (affirmative promise to pay money)

Easement - grant of an interest in land that entitles a person to use land possessed by another.
Profits a prendre - easement to come onto someone’s land and extract interest (natural resources - minerals, water - take smth out of another’s land)
Covenants - all other promises w/r/t land that are not easements or profits a prendre.
If a party who’s benefited by the covenant can enforce it by seeking damages - real covenant; if through injunction or other equitable remedy - equitable servitude.

EASEMENTS

Affirmative/Negative

Affirmative e. (most): the owner of an affirmative e. has the right to go onto the land of another (the servient land) and do some act on the land.
O, owner of Blackacre, grants to A a right of way across Blackacre.

Negative e.: the owner of a negative e. can prevent the owner of the servient land from doing some act on the servient land.

Appurtenant/In gross

E. appurtenant (most): benefits of e. are attached to a parcel of land, rather than to land owner
•	Benefits its owner in the use of another tract of land.  The land benefited is the dominant tenement; the land burdened is the servient tenement.
•	An e. appurtenant is attached to the dominant tenement and passes with the tenement to any subsequent owner of tenement.
•	Cannot be turned into e. in gross, except by new agreement of both parties.
	Whiteacre is located between Blackacre and a public road.  O, owner of Whiteacre, coveys to A, owner of Blackacre, a right to cross Whiteacre to reach the public road.  The e. over Whiteacre is appurtenant to Blackacre (the dominant tenement).  The benefit of e. across Whiteacre will pass to any subsequent owner of Blackacre.

E. 	in gross: benefits of e. are attached to particular person rather than to land
Benefits a person personally and not as an owner of land; does not benefit its owner in the use and enjoyment of his land, but merely gives him the right to use the servient land.

In cases of ambiguity, e’s appurtenant are favored over e’s in gross.

Benefit/Burden - every non-possessory interest creates both benefits and burdens.
Benefit: the right to use the other’s land in a certain way or restrict him from using his land in a certain way - dominant estate (benefited estate)
Burden: corresponding restriction on landowner’s right - servient estate (estate burdened with the e.)
•	If e. in gross, there is no dominant estate (because there is no parcel of land that’s benefited by e.), owner personally benefits by e.
•	We always have servient estate, but we don’t always have dominant estate (only when rights attach to land)
•	We only have dominant estate if rights to e. run with the land

Creation of easements

An e., being an interest in land, must be in a writing to satisfy the Statute of Frauds.
May be created by express grant or reservation, by estoppel, by implication, or by prescription.
Most e’s are created expressly either by grant or by reservation.

E. created by grant: the owner of what is about to become the servient estate grants an e. over his land to another party; owner retains ownership of that parcel, but simply grants an e. (burdening his own retaining interest).

E. created by reservation: the owner of what is about to become a servient estate reserves e. to themselves over the parcel simultaneously transferring all other rights to the other party; gives up all rights but the e. (retaining an e. to himself)
	At common law, it was impossible to create the grant of e. to a 3rd party

Willard v. First Church	Abandon common law rule that one cannot reserve an interest in property to a stranger to the title.  Frustrates grantor’s intent + inequitable be. The grantee has paid a reduced price for title to the burdened property.
P brings suit to quite title, that lot is not burdened with any e.  Here, appurtenant e., goes with the land: the conveyance was “subject to an e. for automobile parking during church hours for the benefit of the church… such e. to run with the land only so long as the property for whose benefit the e. is given is used for church purposes” (ambiguous language, when ambiguous - court will construe it as appurtenant e.)  Here, [appurtenant] e. in FSA determinable (determinable e.)

License - permission given by the occupant of land allowing the licensee to do some act that otherwise would be a trespass.  Resembles an e., but a license is revocable whereas an e. is not.
E. created by estoppel: under certain cir’ces license will become irrevocable.
1. 	Where access to property is necessary to some other interest in land (like profit a prendre), courts will imply irrevocable license (extract minerals - but have to get there); it’s irrevocable so long as you need it
2. 	Party that’s been using the property under permission invests in that use, and owner induced that reliance by standing by and saying nothing and encouraging such investment.

Holbrook v. Taylor		e. by estoppel
An action to establish a right to the use of a roadway.  Holbrooks owned the land, Taylors purchased adjoining land and used road through Hs’ land to highway.  Not the only way to highway, but they invested into improving the road.  Held, for Taylors - e. by estoppel.
Suppose Taylors’ house burns down.  Can they build a new house using the right of way across Hs’ land?  Fairness arg’nt.  Say to Taylors: if you can build your house in another location, so that you don’t have to go through Hs’ land, then do it (if it’s feasible).  (But why shouldn’t Taylors give to Hs compensation for it?)

E. by implication: created by operation of law.
1. 	implied from prior use: if, before a tract of land is divided, a use exists on the servient part that is reasonably necessary for the enjoyment of the dominant part and a court finds the parties intended the use to continue after separation, an e. may be implied (dominant and servient estate were at one time held in common, and owner used one portion to benefit the other portion)
•	The existing use if often described as a quasi-e.
•	Quasi-easement: an e.-like right occurring when both tracts of land are owned by the same person; a quasi-e. may become a true e. if the landowner sells one of the tracts.
•	Implied in favor of grantee: implied grant
•	Implied in favor of grantor: implied reservation to grantor
•	Necessity is not construed as strictly as in e’s by necessity.  It has to be relatively costly for owner of e. to make other arrangements.
•	But a lot of courts will require a stricter showing of necessity when e. by reservation, because construe ambiguity against drafter: grantor could do it expressly.
2. 	implied by necessity: usu. involves a way of access and involves strict necessity, nor merely convenience.  It terminates when necessity ends.  (Implied only when a tract is divided; no prior existing use is required)
	Problem of landlocked parcels: people have no other means except through someone’s land to highway or road.
•	Arg’nt: owner of landlocked parcel can always persuade other owners to sell him the right to pass through their property , but owners can ask for excessive price - monopoly holdout power
•	If E subdivides his land to F - only E has an obligation to give F access to the road, because E owned the land (last clear chance)
•	What if parcel is landlocked, but not by the party who severed it: state can condemn an e., but pay compensation - force owner to sell it (as opposed to sit’n when parcel was previously united); if parcel has never been united, arg’nt for compensation is very strong.
•	If owner of landlocked parcel buys another parcel and no necessity to pass through the other owner’s parcel, necessity disappears

Van Sandt v. Royster		implied e. by reservation
O builds 2 houses on his property and installs a sewer line to service these houses; the sewer lines runs from the street to house 1 and then to house 2.  O sells house 1 to A.  Although the sewer running under house 1 is not visible, A could discover that it services house 2 as well as house 1 by calling a plumber in for an inspection.  Held, an implied sewer e. has been reserved to house 2 because the sewer is apparent.

Prescriptive e’s: an e. may be created by a period of adverse possession (prescription)
Identical requirements as for adverse possession
1. open and notorious use: the use must be made w/o any attempt of concealment (underground sewers and drains: if the sewer could be reasonably discovered on inspection, e.g., surface connections are visible, this req’nt is satisfied.)
2. adverse and under a claim of right, and not with permission of the owner of land
	Owner of servient estate can defeat the about to be owner of e. by making the use permissive, but permission has to be explicit.
	Take action that actually interrupt the use of e. (simply sending letter or posting “no trespass” signs is not enough); put up fence, gate - bar entry physically or bring suit
	Burden on the owner to make sure fence is not torn down, lock is not broken
3. continuous and uninterrupted use for st/lim period (tacking is allowed): but his doesn’t mean constant.  The use of an e. ordinarily involves only periodic use.  Continuity requires a continuous claim of right and periodic acts which give notice to the owner that an e. is being claimed (driving and walking across another’s land, whenever headed in that direction, is sufficient to establish a prescriptive e., even though this is not done every day.)
	One prescriptive user can tack on to his period of use the prescriptive use of a predecessor in interest.  Transfer of the dominant tenement establishes the necessary privity if the grantor intends to transfer with it the use which is ripening into an e.
4. exclusivity requirement: nobody can claim prescriptive e. if somebody else is also using it; majority j’ns rejected it - you have to assert prescriptive e. as an individual, rather than a group; the whole group may get public prescriptive e., but ind’l member of a group can’t.

Public prescriptive e’s: the majority of j’ns permit the public at large to acquire a public e. if the public uses private land in a manner that fulfills prescription requirements (e.g., roadway); public at large can acquire right to use land by continuously using it.
	In some cir’ces, courts will enfoce public’s right to access even when public prescriptive e. req’nts are not satisfied.

Matthews v. Bay Head Improvement Ass’n		The public has a quasi-e., or right of access, through private property to get to public ocean-front property
Rule: beach area below high water mark is publicly owned, but beach area above it can be privately owned.  So how do we get to beach area below high water mark.  Sate is coming in and asserting public’s right of access (public trust doctrine, customary rights, implied dedication).  Why?
	Arg’nt: there are some lands where value is enhanced by common use; benefits to whole community - creating opp’ty to socialize justifies state stepping in.
	Why not leave it to private market? - problem of organizing large group of people to buy their right + free rider problem.

Most disputes - scope of e’s: what use the e. owner can make of the e. or about what interference by the servient owner is permissible (problem of K-tual interpretation)
1. 	Scope of time: whether burdens and benefits run to successors
1) Burdens
•	In order for burden of e. to run to servient parcel, both intent and notice req’nts have to be met.
•	If the burdens run with the land, all successors of servient estate assume burden of e; if not - servient estate becomes FSA unburdened with an e; this is true whether e. is appurtenant (benefit. runs with the land) or in gross (benefit is held personally).
a) 	intent: parties intended the burden to run to servient estate.  In ascertaining this intent, a court may examine whether the e. was created expressly or by prescription, what changes in use might reasonably be foreseeable by the parties, and what changes in use are required to achieve the purpose of the e. under modern conditions and preserve the usefulness of the e. to the dominant tenement.  Also, whether, the increase in the burden is unreasonable.
•	If an e. was expressly created, a court will look to the instrument’s language and surrounding cir’ces.
•	A use existing at the time a tract is divided into 2 parcels has the same scope as an express e.  Changes that are necessary to preserve the use or hat might have been reasonably foreseen are allowed.
•	For an e. by necessity, the extent of necessity determines the scope.
•	In case of prescriptive e’s, courts imply intent as a matter of law.
•	Where grant is ambiguous, burden is presumed to run with the land.
b) 	notice: later takers of servient estate have to have notice of e.
(1) 	actual notice
(2) 	constructive/record notice (e. was recorded in the deed; parties would have found out about e. if they did proper search)
(3) 	inquiry notice (if there was some visible sign of e., parties will be held to have notice of e.)
	2) Benefits
•	If A sells the land to D - does D have the benefit of e.?
•	If appurtenant e. - benefit runs with the land: attaches to ownership of dominant estate, automatically runs to successors in land
•	If e. in gross - benefits run personally to D
•	Notice is irrelevant
•	Only intent matters: very strong presumption in favor of appurtenant e.
•	Traditionally, e’s in gross were non-transferable at all; no longer true: now they are transferable by holder of the benefit, if the parties so intended (most e’s in gross are commercial e’s, like billboards)
2.  Scope of use: 

Brown v. Voss		technical misuse of the e., but no injunction
•	An e. has long existed across parcel A for the benefit of parcel B (but not parcel C).  P now builds a house located partly on parcel B and partly on parcel C.
•	An e. appurtenant is, by definition, used for the benefit of a particular dominant estate.  The holder of that dominant estate will normally not be allowed to extend his use of the e. so that add’l property owned by him (or by others) is benefited; even if the use for the benefit of the add’l property does not increase the burden on the servient estate.
•	If an e. is appurtenant to a particular parcel of land, any extention thereof to other parcels is a misuse of the e.; this amounted to trespass, for which the owner of the servient parcel can recover damages. ($1).  This is true even though the burden on parcel A was not increased.  However, Ds may not be given an injunction ag. Ps’ continued use of the e., bec. the court will respect the finding that there was no actual and substantive injury to Ds, one of the req’nts for an injuncion.

Where owner of dominant estate wants to redevelop it - to intensify the burden on the servient estate
•	If the dominant estate is subdivided, each subdivided lot has a right to use e’s appurtenant to the dominant estate
•	owner of app. e. can subdivide the dominant estate
•	owner of e. in gross can assign or transfer it, but can’t subdivide it
•	if sudden change - bad
•	if more gradual change - good, keeping with evolving character of the neighborhood
•	court will sometimes impose reasonable restrictions on the extent of use

Preseault v. United States	Although neither oral release nor nonuse alone is sufficient to terminate an e., if the owner of an e. acts in such a way as to indicate an unequivocal intent to abandon the e., the e. is abandoned.  (Such acts can included an oral release or nonuse coupled with failure to maintain an e., or permitting the e. to be blocked by others, or establishing a substitute e. elsewhere.)
Court asks 3 questions:
1. 	e. or fee simple estate - RR has the e.
2. 	scope of the e. - RR purposes only - g’nt has no right to broaden e. to hiking and biking trails; original e. did not contemplate broader use (whether original grant should be rewritten by the court: fairness + intent of the parties)
3. 	assuming this e. was permissible, it was still abandoned (RR extracted the tracks - did more than mere non-use)

Termination of e’s

1. 	abandonment: conduct of owner of e. shows intent to abandon; requires affirmative action (erect structure blocking his own access to e.; developing a new route that you use constantly)
2. 	written consent (agreement in writing, release)
3. 	merger: when dominant and servient estate come into the same hands (e. will not be automatically revived if this estate subsequently severs)
4. 	adverse possession or prescription by the owner of the servient parcel or 3rd party for the prescription period
5. 	by statute: Marketable Title Acts - e’s, covenants, servitudes terminate unless parties act to renew them (require e’s rerecorded periodically (every 30-50 years))
6. 	sale of servient estate to somebody w/o any formal notice of the e. (actual, constructive, inquiry notice) - then new purchaser of servient estate takes it unburdened with an e.  In most j’ns, if e. was recorded, that’s automatic notice.
7. 	misuse: using e. outside the scope of permissible use.  When owner of e. misuses it, courts enjoin those misuses; in extreme cases, courts sometimes terminate e’s entirely
8. 	useless: when e. becomes useless, courts will terminate it (purpose ended: lake dries up)
9. 	by its own terms: can expire at some point(?)

Negative e’s: prohibits the burdened estate from doing smth on their own land.
Common law England - 4 types of negative e’s: the right to stop your neighbor from
1. 	blocking your windows - light
2. 	interfering with air flowing to your land in a defined channel
3. 	removing the subjacent or lateral support of your building (usu by excavating or removing a supporting wall)
4. 	interfering with the flow of water in a natural and artificial stream
Modern trend in the US - expand the list of negative e’s
1. 	conservation e.: owner of servient estate agrees not to do anything on the land (e. is held in gross?)
2. 	historic preservation e.
3. 	solar e.: you agree not to build your house so to block your neighbor’s solar collector
4. 	e’s for view

COVENANTS
E. - grant of an interest in land
Covenant - promise to do or not to do smth
Real covenant - promise relating to the use of land
Distinction as to remedies:
	where monetary damages - covenant or real covenant
	where injunction - equitable servitude (when there is no remedy in court of law, party would go to court of equity to seek equitable remedy - injunction)
Obligations are higher w/r/t covenants, than equitable servitudes
Aff. e’s: give the holder of e. the benefit to got on another’s land in a fashion, that otherwise would be prohibited as physical invasion (trespass or nuisance)
Aff. cov’s: give the holder the benefit of other person’s obligation to do smth on their land
Neg. cov’s v. neg. e’s: much harder to distinguish (both obligate not to do smth on the land); but if it doesn’t fall w/n the limited class of neg. e’s - then it’s a neg. covenant or equitable servitude depending on the remedy.

If eq. serv. - promises are generally held to run with the land
If covenants - whether benefits and burdens run with the land

Tulk v. Moxhay	
It’s true that burden doesn’t run with the land at law, but it does run with the land at equity.  “The question is whether a party shall be permitted to use the land in a manner inconsistent with the K entered into by his vendor, and with notice of which he purchased.  The price would be affected by the covenant, and nothing could be more inequitable than the original purchaser should able to sell the property the next day for a greater price, in consideration of the assignee being allowed to escape from the liability which he had himself undertaken.  For if an equity is attached to the property by the owner, no one purchasing with notice of that equity can stand in a different situation from the party from whom he purchased.”

Covenants: when do benefits and burdens run with the land
Burdens	Benefits	
writing (S/F + exceptions apply)	writing	
intent	intent	
notice
     actual
     constructive (through records)
     inquiry	not required	
horizontal privity (relationship between the original covenantors when they enter into original agr’nt)
3 tests to satisfy hor. privity req’nt
1.  tenurial privity: 2 parties to the covenant and all subsequent covenantors in a landlord-tenant relationship
2.  subsituted/mutual privity: covenant must be coupled with an easement running in favor of one of the parties and burdening the owner of another parcel
3.  instantaneous/simultaneous privity: covenant created at the moment that parties enter into covenant, they transfer some other independent interest in land that is either benefited or burdened by covenant:
(1) 	parties have to be grantor/grantee
(2) 	grant must be simultaneous with creation of covenant
Parties can use a strawperson (transfer land to strawperson who’ll reconvey it back to them with covenant, creating instantaneous privity	not required	
vertical privity (the interest transferred to assignee)
Traditional rule: succession to an estate of the same duration - identical estate, and voluntary transfer	generally no, except for AP (but see Neponsit: the only case where court adheres to vertical privity req’nt on the benefit side)	
touch & concern
Traditional rule: whether the covenant burdens a party in the physical use or enjoyment of particular land (changes the physical use of the burdened parcel itself)
Modern tendency: any restrictions that affect the economic value of the servient estate
Burdens won’t run with the land when benefits are held in gross
Can be that burdens T&C the land, but benefits don’t and vice versa - usu. in conservation/preservation area: negative equitable servitude that owner will leave his land underdeveloped
	benefit side - held in gross
	courts hold that burdens don’t run
To avoid this problem, some j’ns created new category of negative easements (easements don’t have T&C requirement); other j’ns passed statutes that waived this req’nt in conservation/preservation context.	touch & concern (minority rule: T&C only burdened parcel)
Traditional rule: whether the covenant changes the physical use of the benefited parcel itself
Modern tendency: any restrictions that enhance the economic value of the benefited estate	

Equitable servitudes: when do benefits and burdens run with the land
Burdens	Benefits	
		
touch & concern
	not required	

Neponsit	yes, vertical privity on the benefit side; yes burden T&C the land
Vertical privity
A homeowners’ association may sue to enforce the benefit of a covenant even though the ass’n succeeds to no land owned by the original promisee.  The homeowners’ ass’n is regarded as the agent of the real parties in interest who own the land.
The court held that there is a privity of estate bet. The ass’n (which did not own any of the land in the subdivision) and the ind’l landowner.  The covenant expressly provided that the right to collect the annual fee could be assigned to property owners’ ass’n that might thereafter be formed.
Benefit side		Burden side
Developer---------------original purchaser
the Ass’n		D
no vertical privty	yes, vertical privity (voluntary transfer of the same interest)
The court implicitly accepts the arg’nt that there has to be vertical privity on the benefit side (not the rule in most j’ns).
Arg’nt in favor of privity: Ass’n sues on behalf of other property owners, who are in vertical privty with D.
Touch and Concern
Here, covenant to pay money.  Held, the burden of a promise to pay dues touched and concerned the land, because the dues were necessary to maintain the roads, beaches, parks and other common areas.

Sanborn v. McLean	implied restrictive negative covenant(servitude, easement)
Where residential subdivision is created, and there is some reciprocal covenant or equitable servitude, courts will imply that burden on every subdivision, even if restriction was omitted from a particular deed.
Original owners platted property for residential purposes (plat - a map which lays out the expected use of land.  Then they conveyed part of the lots with restrictions, and another part w/o restrictions.  D got his parcel by deed w/o any restriction, says that burden on his parcel has to be in writing.  P says that D had constructive notice of restriction.  Court: we’ll imply restriction on D’s lot and other unrestricted lots
Requirements: prerequisite to implying restrictive covenant
1. 	all these lots came from common owner
2. 	common scheme from the start (before the parcel in question is sold): developed under common plan - created a set of reciprocal obligations on all the parcels, imposed reciprocal covenants on all the lots
3. 	the parcel in q’n must benefit from reciprocal burdens placed on other parcels
Notice: D had inquiry notice of restriction
What D saw should have raised in his mind reasonable suspicion - obligation to inquire beyond the party who sold the lot to him; he should search his neighbors’ deeds in the subdivision; majority of them have restrictive cov’s, so his deed would be implied to have it; alert him to the fact that the court may imply reciprocal negative covenant (not to build gas station in a residential subdivision)
Reason for doctrine of implied reciprocal negative covenant: concern for position of landowners whose land is restricted (balance of equities).

Suppose that, in the coveyance of a lot or in a recorded declaration of restrictions, the developer retains a right to modify the restrictions imposed upon subsequently sold lots.  Does this provision negate the existence of a scheme?
The answer is No in most j’ns.  Developer may retain the right to modify the restrictions, but courts will imply an obligation to exercise the discretion in reasonable manner.

Easements, Covenants, Servitudes - private use of land: private agr’nts to alter boundaries between landowners; network of private landowner agr’nts; form of private land zoning

Shelley v. Kraemer		racially restrictive covenants
Judicial enforcement of a restrictive covenant prohibiting conveying to a nonwhite by granting of an injunction constituted state action, and was therefore violative of the equal protection clause of the 14th Am’nt.
The equal protection clause in 14th Am’nt prohibits states from passing any law that discriminates against any people (says nothing about private parties’ discrimination).
Here, homeowners subject to restrictive covenant sought to enjoin Negroes from purchasing the house.  Court held that it constituted state action: the moment these homeowners came to court, and state court issued injunction - it’s state action.  Court struck down judicial enforcement of racially restrictive covenants.
Barrows v. Jackson	held, court cannot give money damages against a seller who breaches a covenant not to convey to a nonwhite; such action is a state action.
Civil Rights Act of 1964 precludes racial discrimination.

Termination of covenants and equitable servitudes
1. 	Written release of all parties (all must agree)
2. 	By its own terms: time-limited
3. 	By merger: dominant and servient parcels come into the same hands
4. 	Acquiescence (equitable doctrine): party that benefits from covenant tolerates violations of covenant by owner of servient estate (there is no set time period for acquiescence)
5. 	Abandonment (equitable doctrine - the court will look at all circumstances): holder of benefit of covenant waives right to enforce the covenant if he has tolerated violations of covenant by surrounding parcels, but not by his neighbor; state of mind
6. 	By statute: Marketable Title Acts (like easements) - clear away clutters on title that lost value to people; people have to reassert (re-record) covenants periodically
7. 	Sale of servient estate without notice: if no notice to purchaser, purchaser takes land w/o any burdens; but can be record notices
8. 	Changed conditions: where an easement becomes useless for the purpose for which it was created, it automatically terminates; as to covenants and equitable servitudes - usefulness is more debatable; courts are strict as to lifting covenants because of changed conditions - only where covenant has no value to the benefited parcel

Western Land v. Truskolaski		
Developer wants to build shopping center.  Homeowners sue to enjoin him.  Developer says: changed conditions.  Court says: as long as the original purpose of the covenant is possible - it’s possible to limit the subdivision for residential use - covenant will be enforceable: there is still value to residents in keeping it residential, even if it would have more value with the shopping center.  The whole purpose of the covenant is to restrict landowners from defections, to bind people, to prevent them from breaking the common agreement in their own interest.  If conditions really changed and covenant is of no use to anyone, then covenant can be lifted.

Rick v. West		holdout
D - the only one remaining in the area, everyone is moving out.  Ps want to sell land to a hospital, they want negative covenant (single family dwellings) lifted - want release from D.  Ps say: changed conditions.  D doesn’t want the release.  D’s land is more valuable without negative covenant.  But her subjective standard: she doesn’t agree with that.  Court: subjective self-interest governs.  The fact that the market doesn’t agree is not a sufficient argument.
But maybe D simply wants to drive the price up.

Damages
In Western (landowner sues) and Rick v. West (landowner defends) - remedies were equitable relief.
Another alternative (by statute in Massachusetts): when value of enforcing the covenant is significantly decreased, the court will release the covenant, but will give damages to the landowner - measured in market value or subjective value?  In theory, it will have to be subjective value, because market value can be zero with covenant - value is greater without the covenant.
	Courts are not sympathetic to people who want covenant released bec of diminished value, but if they show no value at all, courts will be sympathetic
	Rest 3rd - smth in between: when there is a change since the creation of a servitude that makes it impossible as a practical matter to accomplish the purpose for which the servitude was created, a court may modify the servitude to permit the purpose to be accomplished.  If modification is not practicable, the court may terminate the servitude.
	Problem: general transaction costs of negotiating the release by private agreement: when there are a lot of people, this often is offered as justification for the courts to come in and enforce the release even w/o unanimous agreement of everybody

PUBLIC CONTROLS ON PRIVATE LAND USE
Public and quasi-public regulations that limit landowners’ use.
Regulations: Judicial, Statutory, Private - through entities like Homeowners’ Ass’n
Horizontal relationships between owners and non-owners
In the world of scarcity, how do we adjudicate between these conflicting desires as a matter of regulation: who wins in these horizontal disputes
Traditional common law maxim: “A man’s right in his real property is not absolute; one should so sue his property as not to injure the rights of others.”
But the owner inflicts injury on others whenever he exercises his property rights, so this maxim doesn’t get us anywhere.

The right to exclude and limits on the right to exclude.
Shopping Center cases.
Owner has rights to exclude others from coming on to his property or using it; but these rights are limited by free speech rights.
Asserted right of people to come into shopping centers for picketing and not to be precluded - 1st Am’nt, 5th Am’nt, 14th Am’nt.
Shopping centers argue that they have right to exclude.  People argue that they have constitutional right to speak.
Problem of state action.
1st Am’nt: Congress shall pass no law which abridges freedom of speech.  14Th Am’nt: states shall pass no law that abridges the freedom of speech.
Generally free speech doesn’t apply to private entities.  Arg’nt of the speakers has force only if shopping centers are functioning in the same way as the state (state-like attributes for purposes of 1st Am’nt).

Marsh v. Alabama		company town
All characteristics of town, freely used by public, full spectrum of municipal powers.  Functional equivalent of municipal town.  Held, where private interests perform customary functions of gov’nt, 1st Am’nt could not be denied.

Logan Valley Plaza		Where privately owned business district is a functional equivalent of public business district, then it will be treated as public for 1st Am’nt purposes.
Protestors were picketing a particular store in the mall, there was no other place for them to be, no reasonable alternative.

Lloyd v. Tanner	Held, no 1st Am’nt rights on private property, except for speech related to shopping center’s operations.
Majority in Lloyd says the court in Logan Valley had limited its holding to situations where speech was site-specific, related to shopping center, but in fact, Logan Valley court did not limit its holding to these situations, so Lloyd effectively overruled Logan Valley - limited it to its facts.
	Here, shopping center wanted to prohibit distribution of handbills.  Issue: the right of a privately owned shopping center to prohibit the distribution of handbills on its property when the handbilling is unrelated to the shopping center’s operations.  Only narrow 1st Am’nt rights - speech related to shopping center activities.
	Marshall/dissent: all people go to privately owned shopping malls - the only place where you can reach large numbers of people.  Arg’nt: right of people not to hear, but do balancing test as Marshall proposes, and 1st Am’nt rights outweigh.

Pruneyard v. Robins		Held, a state in the exercise of its police power may adopt reasonable restrictions on private property so long as the restrictions do not amount to a taking without just compensation or contravene any other federal constitutional provision.
Ps were distributing pamphlets and gathering signatures in shopping center; sue to enjoin Ds from denying them access.  California Supreme Court held for Ps: can conduct their activity on Ds’ property.  Supreme Court affirms:  “Our reasoning in Lloyd doesn’t limit the authority of the state to exercise its police power or its sovereign right to adopt its own constitution individual liberties more expansive than those conferred by Fed. Constitution.”
Marshall/concurrence: arg’nt about the scope of protected rights: in balancing free speech rights w/r/t private owners, the state automatically reconfigures the boundaries of private ownership.  State itself redefined what FSA ownership is.  State built free speech rights into definition of property rights.  California already did the balancing test.  California doesn’t take property away from the owner w/o compensation, but it redefines what the owner had in the first place.  State has the right to change the boundaries of FS ownership.  There are limits to this, but I know it when I see it.

State v. Shack		Held, the owner of a farm may not use trespass statutes to keep out private citizens who are trying to furnish medical or legal services to migrant workers living on the farm.
Court rejects the 1st Am’nt arg’nt that’s at the heart of shopping center cases, bec. owner of property here has never opened his property to the public; he is not acting as the state.  Court decides the case on different ground: migrant workers are very isolated, if we enforce the owner’s right to exclude, we’ll restrict them from saying what they want to say; the only place you can find them is on this property; this piece of property is really functioning as a company town w/r/t these workers.

Discriminatory exclusion
Grounds that make exclusion impermissible: race, religion, national origin, disability, sex
•	1964 Civil Rights Act outlawed racial discrimination in places of public accommodation (restaurants, trains, etc.): owner cannot exclude people on the basis of race
•	1866 Civil Rights Act provides: “All citizens of the US shall have the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, and convey real and personal property” (USC 1982).  This Act was long thought to bar only racial discrimination by states, but Supreme Court in Jones v. Mayer held that the Act barred “all racial discrimination, private as well as public, in the sale or rental of property.”
•	1968 Fair Housing Act (Title VIII of the Civil Rights Act of 1968): makes it unlawful to refuse to sell or rent a dwelling to any person because of race, color, religion, or national origin.  In 1974 the Act was amended to prohibit discrimination  on the basis of sex.  In 1988, the act was further amended to prohibit discrimination against persons with children except in senior citizen housing and against handicapped persons.
In addition to prohibiting discrimination in renting or selling, the Act prohibits advertising or making any public statement that indicates any discriminatory preference.
Exemptions: private clubs, dwellings for religious organizations, and certain specified persons are exempt from the Act - to protect some types of close personal relationships from what is thought to be an invasion of privacy.
A person leasing or selling a dwelling she owns is exempt if she: 1. Does not own more than 3 such dwellings, 2. Does not use a broker, and 3. Does not advertise in a manner that indicates her intent to discriminate.
A person is exempt if she is offering to lease a room or an apt in her building of 4 units or less, one unit of which she occupies, and she does not advertise in a discriminatory manner.  The Civil Rights act of 1866 section 1982 does not have such exemptions for single-family dwelling or the latter one.
•	How to know that owner excludes someone on the basis of race: pattern of behavior, explicit statements, intent
•	Society has important role in changing private preferences
•	Mrs. Murphy has an apt to rent in her home.  She puts in ad in local newspaper: “For rent: Furnished basement apt in private white home.”  A black couple applies and is rejected by Mrs. Murphy bec of race.  Are there any violations of section 1982 or section 3604 of Fair Housing Act?  Section 1982 doesn’t have the exception for owner-occupied home, so yes, violates.  Section 3604: rejection itself - refusal to rent- is not violation; but ad does violate.  If only white models advertise - yes, violates.
•	If on the basis of language - doesn’t violate Fair Housing Act, usu. taken as violation of national origin; 1982 covers only race, but court held that discr’n ag German people does violate 1982.
•	Americans with Disabilities Act (ADA): prohibits discrimination on the basis of physical or mental handicap
1st part: you can’t refuse to hire someone bec of handicap
2nd party: imposes affirmative duty to accommodate someone with handicap - where handicapped person could work on the same level as not handicapped, employer has to hire them and accommodate them (hire reader if can’t read) + make buildings wheelchair accessible; obligations to reconstruct older buildings to make them wheelchair accessible
Is this the same notion of equality or anti-discrimination as in Fair Housing act?
In traditional anti-discrimination case - personal animos (race, religion) - notion of equality, equal opportunity; when physical disability - relatively high cost of accommodating those people, smth beyond equal opp’ty - ADA imposes affirmative obligation to absorb the cost of accommodation
Who ultimately bears the cost?  All people in society if imposed in same amount on all business; if only on some business - then only those ind’l businesses.

NUISANCE
Private nuisance: unreasonable interference with use and enjoyment of land
•	Kinds of interference: air and water pollution, noise, odors, vibrations, flooding, excessive or inadequate light that continues over time and is known by D to result from his activities
•	Nuisance liability arises only if the resulting interference is substantial and unreasonable
Public nuisance: invasion of public rights
Trespass v. nuisance
•	Trespass: physical invasion f land with tangible object or self - closer to s/l tort
•	Nuisance: any other conduct that is not trespass - balancing test
•	Both - forms of tort: compensatory damages, punitive damages, injunction
•	Trespass - if intentional - held to be unreasonable - almost any trespass is held to be unreasonable - close to s/l standard

P who came to the nuisance is less likely to win the lawsuit

Private nuisance is a substantial interference that is either intentional and unreasonable or unintentional but negligent, reckless, or abnormally dangerous.
Intentional: the unreasonableness of the interference determines whether nuisance is intentional.  Conduct is unreasonable if the gravity of the harm outweighs the utility of the actor’s conduct
(1) 	Gravity of the harm: extent and character of the harm, the social value of the use invaded, the suitability of the use invaded to the locality, and the burden to P in avoiding the harm
(2) 	Utility of conduct: social value of the purpose of the invader’s conduct, the suitability of the conduct to the locality, and the impracticability of preventing the harm
(3) 	Fault: D’s failure to use reasonable avoidance is not controlling, but important
Unintentional: unreasonableness refers to the actor’s conduct as well as the gravity of the harm.  Utility of conduct is seldom a defense.
To determine whether there is a nuisance courts consider: the character of the harm, the character of the neighborhood, the social value of the conflicting uses, and priority - whether P has come to the nuisance

Nuisance - 2 categories of activities:
1. 	nuisance per se: held unreasonable as long as anyone is harmed by it (if anybody’s life is made worse - held per se unreasonable) - ultrahazardous activities
Some courts would take into account who was there first: if plant was there and then people moved in - they came to the nuisance
2. 	all other nuisance: most conduct that parties seek relief from: air, water, noise pollution, building activities that block or throw light, excavation (undermining support): held unreasonable only under certain circumstances

Coase Theorem: joint cost of conflicting desires - someone is always injured; anything that lessens your enjoyment is an injury to you but if you stop them from doing it, it’s an injury to them.
The market determines whether the activity (smoke emission) will continue, not the initial allocation of rights by the courts.  The initial allocation only makes one party richer and will not stop pollution.  Market will move the right to the highest valued use.  The Coase Theorem depends on the assumption that transaction costs are zero or low.  It assumes that A and B can easily transfer rights to each other at little or no cost.  This may be an unrealistic assumption.  Transaction costs include costs of obtaining info about persons with whom one must deal, conducting negotiations, coming to terms with the other party, and enforcing any bargains made.  The more parties involved, the higher the transaction costs: the holdout problem, the free rider problem, the strategic behavior problem.  In these cases, the right will likely stay where it was initially allocated.

Calabrezzi: least cost avoider arg’nt - we should put cost on the party to whom it’s less costly to remedy the problem

Traditional common law: threshold injury test - if injury to P is significant enough, it constitutes a nuisance.  This test ignores the burden we put on D, looks only on what’s happening to P.  Modern tendency: move nuisance law closer to negligence law requiring that courts balance the equities.

2 tests
1. 	threshold injury test: whether activity in question generated sufficient harm to P (all 3 cases below go with traditional test) - incoherent from Causean perspective
2. 	balancing test of the Restatement: look at relative costs and benefits of activity in question (like negligence in torts)

To determine unreasonableness in a case of intentional nuisance, the court is to consider whether the gravity of the harm outweighs the utility of the actor’s conduct
Factors relevant to gravity of the harm
	the extent and character of the harm
	the social value of the P’s use
	its suitability to the locality in question
	the burden on the P of avoiding the harm
Factors relevant to utility of the actor’s conduct
	its social value
	its suitability to the locality in question
	the impracticality of the D preventing the harm

Morgan v. High Penn Oil	damages and injunction to prevent D from continuing nuisance (nauseating gases and odors from oil refinery): court is just looking at injury to P
Ps say: operation of oil refinery substantially impaired the use and enjoyment of thir land by Ps and renters.  Court - yes, nuisance.
Court says: Penn Oil is a bad guy; Morgan is a good guy, sitting there making trouble for no one
Coase would say: this is a joint cause, conflicting uses of land; homeowner injures Penn Oil, bec requiring Penn Oil to stop nauseating odors or move out is to injure Penn Oil.

Estancias v. Schultz		permanent injunction against D; noise from air conditioning unit - nuisance
D will be permanently enjoined from operating air conditioning unit.  P then has the right.  P and D can then bargain, and, according to the Coase theorem, transfer the right to D.  P is made richer by the entitlement and is also in a strong position to get most of the gains from trade.

Boomer v. Atlantic Cement		balancing the equities; temporary injunction will be issued, to be suspended if D makes payment of permanent damages to Ps; an absolute injunction ag D should not issue, bec of the great disparity bet the economic consequences to D and its employees in closing down the plant, and the consequences to Ps in allowing it to continue.
D operates a large cement plant; Ps/neighboring landowners sue for nuisance, bec of dirt, smoke and vibrations from the plant.
Here, the court refused an injunction but gave P damages.  This has the effect of giving the right to P, but forcing a sale of it to D (damages).  Since the forced sale is at the price of P’s damage, P gets his damages but D gets all the possible gains from trade.

Remedies
Estancias case
Suppose P wins: court finds air-conditioning unit to be a nuisance
1. Injunction (to stop the noise) - possibility of private bargaining - bargaining out by side payment from D to P
Injunction is a right given to P; P can sell it to D (D asks P to buy it out); D offers $25,000, P wants $150,000 - they’ll negotiate smth in between; D bribes P not to enforce the injunction
	property rule of damages

2. Damages (monetary payment to P)
	retroactive
	prospective - which can be liquidated by lump sum payment, measured in Estancias case in decline of the market value
		can be annual sum (every year)
		can be lump sum payment - at a minimum decline in fair market value, costs of moving and any additional subjective value (P can argue that they are unusually attached to the house)
	liability rule of damages: damages liquidated by the court

Suppose D wins: no liability
3. Absolute right to D to continue the “nuisance” (which is found not to be a nuisance) - possibility of private bargaining.  P could bribe D to waive their right with side payment from P to D.
	property rule of damages

4. Damages from P to D for costs of remedying the problem.  D wins on the liability issue, but P gets an injunction compelling D to move the air conditioner, but P must pay for the costs of moving.  The court fixes the damages amount.
	liability rule of damages

•	Under 2 and 4, court allocates surplus value to P or D
•	Under 1 and 3, it’s indeterminable
If you think that parties wouldn’t bargain, negotiate, then the form of remedy will affect the outcome.  Where bargaining is costly, the remedy may well affect the outcome.

Rule of Inalienability
•	If the 3rd alternative - absolute right to D, there are some situations, where we don’t want to leave P free to bargain (the Moore case)
•	We give right to somebody, but declare it inalienable (we won’t let P sell out that right - to sell organs for cash)

All these efficiency arg’nts take as given the background distribution of wealth, but the poor will sell at lower price because they are poor.
Arg’nt for rule of inalienability: paternalism - people misassess the real value of certain rights, we’ll decide for them

Choice between injunction and damages
Assuming P wins
•	if injunction - court doesn’t have to figure out what P’s rights are worth
•	to avoid the problem of undercompensation (when court is trying to give $ value to non-monetary value)
•	but arg’nt: injunctions are much harder to police
•	most serious problem: if bargaining is costly, parties won’t talk to each other after court determined liability, and there ‘s utility to air conditioning unit
•	When lots of victims, like in Boomer - lots of parties to the suit - will push in the direction of injunction
•	If socially useful conduct, like in Boomer, court will look more favorably on damages.

Private regulation: Homeowners’ Associations
Homeowners’ Ass’ns take on functions traditionally performed by gov’nt, become sort of quasi-public entities.

•	Each unit or interior space in a condominium is owned separately in fee simple by an ind’l owner.  The exterior walls, the land beneath, the hallways, and other common areas are owned by the unit owners as tenants in common.  Each owner obtains mortgage financing by a separate mortgage on his ind’l unit.
•	The declaration of condominium or master deed, filed before the first sale is made, will provide for an ass’n of unit owners to make and enforce rules, to manage the common areas, and to set maintenance charges levied against unit owners.  Usu. has to be recorded.
•	Each purchaser, by accepting a deed, becomes an ass’n member and must abide by its laws.  Each condo unit owner is liable for a monthly charge to maintain common facilities and insure ag casualty and liability.
•	The originating doc’nt - declaration - may provide for certain rules of conduct.  Or the promulgation of rules may be left to subsequent action by the Board.
•	Restrictions appearing in the originating doc’nt have a very strong presumption of validity.  They are struck down only if they are arbitrary or violative of public policy or a const’nal right.  Buyers voluntarily agree to be governed by these terms when they buy in and are entitled to rely on the enforceability of restrictions.
•	Courts impose higher standard of reasonableness w/r/t regulations created by the Board.

Nahrstedt v. Lakeside Village Condominium		pet restriction enforced
Why would anybody care if noiseless cat lives in a condo.  Developers obviously thought that restrictions would enhance the market value of this property.
P has 3 noiseless cats.  Held, ag. P.  A restriction is contained in the declaration of the common interest dev’nt and is recorded, so it’s presumed to be reasonable and will be enforced uniformly ag. all residents unless it’s arbitrary, imposes burdens on the use of lands it affects that sub’ly outweigh the restriction’s benefits to the dev’nt’s residents or violates a fund’l public policy.  Here - health, sanitation and noise concerns.

ZONING
Most important form of public regulation usu. exercised by locality under grant of authority by the state - under police powers
2 sources of g’nt power to zone property:
1. 	police powers: give fed and state gov’nts the right to regulate public conduct for public safety and welfare; zoning is one of trad’l exercises of g’nt police powers.
2. 	eminent domain: gives g’nt the right to take private property for public purpose, but g’nt is required to pay just compensation to the owner in the fair value of property, under 5th Am’nt w/r/t fed acts and 14th Am’nt w/r/t state acts

•	Zoning Enabling Acts - give the power to zone - under police power
•	Private agr’nts v. Zoning
•	If people buy property after zoning ordinance was enacted - no difference
•	The difference is w/r/t people who had this property before zoning ordinance was adopted; their land’s value is diminished bec of zoning w/o any compensation; so owners argue that zoning is a taking w/o just compensation.
•	In zoning, we force parties to bear the cost themselves.
•	Why does the g’nt have to step in: it’s cheaper if g’nt is doing it - impossible to do it by private agr’nt (you have to get unanimous agr’nt of all the landowners)
•	Classic example of generating Causean joint costs
•	By dividing up a city into use zones from which harmful uses are excluded, zoning prevents one landowner from harming his neighbor by bringing in an incompatible use.
•	Zoning is like nuisance law made predictable by declaring in advance what uses are harmful and prohibited in the various zones.

Euclid v. Ambler		
Court defends the regulation as justified under broad police powers to advance health and welfare: zoning reduced traffic and noise in residential areas, facilitated fire prevention.  Analogizes to nuisance law: use your property so as not to hurt somebody else’s.  Purpose of zoning ordinances is to control noxious behavior.
Zoning - nuisance prevention (forbidding people from using land in ways that would create nuisance).
Here, P wants to develop his land for ind’l use, but it’s in a district that was zoned solely for residential use.  P wants injunction restraining enforcement of the ordinance, says value of its land was reduced bec of the regulation, says it’s uncon’l violation of due process.
Held, zoning would be struck down as unconst’l only if it was clearly arbitrary and unreasonable, having no subst’l relation to the public health, safety, morals, or general welfare.

Cumulative use: each successive district (starting from single-family residential and going through heavy industrial) permitted all the uses allowed in the previous ditsricts, and added some new ones (thus, single-family residential use was allowed in every district, even heavy industrial).

TAKINGS

5th Am’nt: “nor shall private property be taken for public use, without just compensation.”  Applicable to the states under due process clause of 14th Am’nt.
3 questions:
1.	What is a taking: how to distinguish g’nt action under police powers (like taxation, zoning) from a regulatory taking
2.	What is public use: general health and welfare
3.	What is just compensation: fair market value of real property taken (land and any structures on it)

Ps/landowners think that they are worse off under eminent domain
•	Why would anybody fight a taking if they would get just compensation
•	Why would g’nt take it from you rather than buy it from you
(1) 	the market value is fixed by the court in a condemnation proceeding; can fix it too low - undercompensatory
(2) 	market value may not reflect subjective value to the owner - when subjective value is higher than market value: this house/land is uniquely valuable to owner, attachment to home v. what ordinary purchaser is willing to pay you
(3) 	measure of damages includes the value of real property, it doesn’t include other economic values, value of a business - customers it can lose, 20-year reputation
(4) 	property (opp’ty to negotiate) v. liability rule of damages (damages fixed, no opp’ty to negotiate): just compensation is liability rule of damages - owner’s rights are determined by the court (so owner can’t negotiate the price with the g’nt)

Public Use

Narrow reading: the public must have the right to use the condemned property.
Modern times: public use means the condemnation must benefit the public.
Public purpose may be served by transferring ownership from one private person to another.  For example, urban renewal, where the g’nt condemns blighted land and resells it to a developer under a redevelopment scheme (Berman v. Parker)
When the g’nt pays the landowner, the role of courts in determining what is a public purpose is a limited one; great deference is paid to the legislature

Hawaii Housing Authority v. Midkiff	what is public purpose; G’nt condemns land to break up a land ownership oligopoly and reestablish a free market
Issue: whether the public use clause of the 5th Am’nt, made applicable to the states through 14th Am’nt, prohibits the state of Hawaii from taking, with just compensation, title in real property from lessors and transferring it to lessees in order to reduce the concentration of ownership of fees simple in the state.  Held, it does not: Hawaii Act is const’nal.  Where the exercise of eminent domain power is rationally related to a conceivable public purpose - it is const’nal.  Regulating oligopoly is a classic exercise of a state’s police powers (reduce the social an economic evils of a land oligopoly).
	Hawaii Housing Authority acts as intermediary to transfer ownership form existing owners to the tenants.  Tenants will ultimately pay for it: HHA lends them money, they will ultimately have to repay the loans.  A group of landowners challenge the statute as uncon’l, and say that it flunks public purpose test.  Court: it’s not enacted to benefit just some private ind’ls, but for the public good: get rid of undesirable oligopoly.

Poletown v. City of Detroit		G’nt condemns land to resell to a private corporation for building an industrial plant providing jobs
GM said it’s gonna leave if Detroit wouldn’t let them build a new plant.  Detroit condemned neighborhood to build General Motors plant (jobs).  Party immediately benefited from the act - GM.  Michigan Legislature enacted the Act to assit local industries through powers of eminent domain.  Poletown says: the Act is unconst’l.  The court: taking is for public use, for public benefit - more jobs.  It’s a benefit to GM, but GM is benefiting us.
Dissent: Detroit gave GM everything it wanted.  But does that matter?
Here, burden of bearing the disproportionate cost in on residents of Poletown, bec. compensation would be less than how they value their community (they probably wouldn’t sell it voluntarily) - problem of undercompensation
Detroit City Council thought that Detroit would benefit; so q’n: whether the court wants to substitute its own j’nt for j’nt of elected leg’re
Possibility: maybe GM is indifferent as to where it has its plan, so it doesn’t benefit; or maybe GM is benefiting, but Detroit is also benefiting

	Tax breaks for GM	Poletown	Urban renewal project (g’nt comes in acting on its own behalf and gets land through em dom, and then sells off units to ind’l residents; public has title for a long time	
Burden	widely disseminated among all residents of Michigan	concentrated on Poletown	concentrated on Poletown	
Benefit	private and public	private and public	just public intitially; in the long run, title can go to private ind’ls, or it may not, g’nt can hold it forever	

Takings
legitimate exercise of police powers (taxation, zoning) v. unjustified taking

Holmes (Penn Coal)
“G’nt hardly could go on if to some extent values incident to property could not be diminished w/o paying for every such change in the general law.”
“The general rule is that while property may be regulated to a certain extent, if regulation goes too far, it will be recognized as a taking.”

(1) Physical invasion (permanent or temporary): per se taking (Loretto)
•	whenever g’nt invades your property physically in any fashion, it constitutes a per se taking
•	G’nt has come and taken your house displacing you physically by itself or an agent like GM
•	no inquiry of burden on landowner: regardless of how little economic impact invasion can have on the owner