Property Fall 2007

Law of Capture
A. Vocabulary: 1. Ferrae nature wild animals 2. Ratione soli according to the soil The justification to assign property rights to resources found on an owners property B. Theories of property: 1. Natural Rights: a. Roman (Grotius, War and Peace): It is an implied assent of all mankind that the first to occupy acquires property in a thing. b. English (Locke, Second Treatise of Government, 1690): Property rights come from intermingling labor with some object/property, does not require the rest of societys permission, but applies only to what the person can use before it spoils/wastes. 2. Efficient Allocation: a. Bentham (1748-1832): Property is a construction of man-made (not natural) law, and should do the greatest good for the greatest number of people. C. Hohfelds jural correlatives: 1. Right/duty; privilege/no-right 2. Examples: Aesthetic nuisances are not recoverable. If a neighbor has a junk car in his lawn, he has a privilege to leave it there, and I have a no-right to have it removed. i. AP has a right to publish news on the west coast and INS has a duty not to publish it for a period of time. D. Law and Economics 1. Pareto-optimality is when no one can be made better off without making someone else worse off (economically). 2. Market Failures: a. Information asymmetry when one party has much more expertise about a product b. Collective goods when you cant exclude others from receiving the benefits of a good (A) Quasi-collective goods when you cant exclude everyone, but you can exclude those outside of a group (e.g., landowners over an oil field) c. Negative externalities d. Addressed by govt by imposing subsidies, taxes, command and control, or government ownership and management 3. The Coase Theorem dictates that, when there is a market for externalities, the parties will bargain for the pareto-optimal solution. E. Cases: 1. PIERSON v. POST (S.C.N.Y. 1805) a. Pierson killed and carried off, in plain sight, a fox being chased by Post on 1 of 25

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common land. (Landowners generally own wild animals under ratione soli) b. Set forth the test for the acquisition of property rights in a wild animal (Tompkins Test) (A) Manifest an unequivocal intention of appropriating the animal to his individual use (i.e. not just chasing) (B) Deprive the animal of his natural liberty (C) Bring the animal within the pursuers certain control c. Dissents (Livingstons Standard): Property is obtained when the hunter is within reach or has a reasonable prospectof taking and an intention of converting to his own use (Reasonable prospect standard) d. Policy of majority was to avoid quarrels and litigation, while dissent argued for an incentive to kill foxes BUSTER v. NEWKIRK (N.Y. 1822) a. Newkirk shot a deer, followed blood, and found Buster with the dead deer (on Busters land), after it had been shot at by a third party. b. Court applied Tompkins Test and found that, although wounded (deprived of natural liberty), Newkirk abandoned the pursuit for the day, thus was no longer under the control of Newkirk. (Had he maintained pursuit, he would have had property rights). c. Hot pursuit exemption: ratione soli does not apply when a hunter follows game onto anothers property in hot pursuit. HAMMONDS v. CENTRAL KENTUCKY GAS CO. (1934) a. A gas company stored gas under Mrs. Hammonds land without her permission, and she sued for trespass. The court ruled for Central Kentucky under the principle that gas is like wild animals: wild and fugacious. The court said the gas was abandoned, even though there was no intent to abandon. TEXAS AMERICAN v. CITIZENS FIDELITY (1987) a. The court held that storing gas in underground reservoirs was not like releasing the wild and fugacious res back into the wild because Texan American had full control over all land overlying the storage (unlike Mrs. Hammonds leak). Also, because the gas was from a distant area, it was treated as a chattel. HASLEM v. LOCKWOOD (1871) a. Haslem raked manure into piles, then left to go get a cart. Lockwood took the manure while he was gone (brought it into his certain control), but the court ruled for Haslem under Lockes labor theory and because manure is not wild. INS v. AP (1918) a. The court found that one could acquire quasi-property rights in news because of the value and expenditure required to collect it (Blackstones question of who would till fruits if no owned them: Locke-ian). Majority based decision on trade secret precedents (ticker-tape, closed performances, etc.) EXCEPTION: The property right only exists between the two papers, not between a paper and the public.

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7. Ostrom: LA Water Basin (1990) a. A collective goods problem wherein it was not possible to exclude others from taking water from the LA water basin, but the major beneficiaries, with the help of the political regime, self-limited. (It was an incremental, sequential, and self-transforming institutional change in a facilitative political regime.) b. Contributing factors to the enablement of self-rectification: i. Clearly defined geographical boundaries ii. A forum exists for collective policymaking iii. A monitor exists to assess the state of the resource iv. A system of sanctions are available (fines, shame) v. An effective forum exists for conflict resolution vi. Government officials recognize or tolerate the users institutions F. Law of capture problem solving: 1. Acquiring property a. Is the res a wild and fugacious thing? b. If yes, is the res in an original state, belonging to no one in particular, and the quasi-property of the entire human race? c. If yes, it was acquired if met by the Tompkins Test? (A) Manifest an unequivocal intention of appropriating (B) Deprive the res of its natural liberty (C) Bring the res within his certain control (D) EXAMPLES: manucaption, moral wounding and not abandoning pursuit, nets and snares. d. Exemptions: (A) Ratione soli owner of the land owns the thing if someone comes onto land without permission and takes it (B) EXCEPTION: Unless in hot pursuit 2. Losing property a. Returning the res to its original wild and natural status (Hammonds), regardless of whether you intended to abandon the property. (A) EXEMPTION: Hasem, wherein the res was not wild and fugacious (B) EXEMPTION: INS, the res is a collective good that is difficult/impossible to keep others from using/having.

Nuisance
G. Doctrine 1. A violation of rights incidental to the ownership of land

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2. Sic utere so use your own as to not injure others. a. Blackstone: So great is the regard of the law for private property, that it will not authorize the least violation of it; no, not even for the general good of the whole community. H. Cases: 1. WILLIAM ALDREDS CASE (1611) a. Court found that a hogsty should be relocated because it interfered with neighbors private use and enjoyment of his land (sic utere). 2. JOST v. DAIRYLAND POWER COOPERATIVE (1969) a. The court decided this case considering only substantial harm to the plaintiff, without balancing the utilities. Damages of $145 were found to be substantial. 3. MORGAN v. HIGH PENN OIL CO. (1953) a. The court found that an oil company was liable for emitting noxious odors over a campground owners land. The court awarded temporary damages and an injunction against the refinery based on the substantial (Jost) standard. 4. HOLMAN (Ga. 1919) a. The court found that soot pouring into an office building from a laundry boiler was a price of progress of society and is reasonable. 5. ESTANCIAS DALLAS CORP. v. SCHULTZ (1973) a. Homeowners sued an apartment complex owner for nuisance because of a loud air-conditioning unit. The court balanced the equities and found that an injunction was in order because there was not a benefit to the public based on the stern rule of necessity. 6. BOOMER v. ATLANTIC CEMENT CO. (1970) a. A homeowner sued for dust and noise coming from a cement plant. The court found nuisance, balanced the equities and found that a servitude on the land would be paid (one-time damages) because the cost of the homeowners loss was small compared to the cost of an injunction. 7. SPUR INDUSTRIES v. DEL WEBB (1972) a. A developer sued a feedlot owner for the nuisance of flies and smell. The court ruled that the feedlot is enjoined from operating, but the developer must pay the costs of the injunction because they came to the nuisance. 8. AMPHITHEATERS, INC. v. PORTLAND MEADOWS (1948) a. The court found no nuisance against an amusement park whose lights interfered with a drive-in theatre because the theatre is hypersensitive. EXCEPTION: Malicious interference. I. Nuisance problem solving: 1. Is it a nuisance? a. Public or private? i. Is there a non-tresspassory invasion of ones right to privately use and enjoy their land? Private ii. Does it interfere with the general public and is plaintiff under special injury? - Public

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b. If yes, is the invasion substantial (same for Jost and Restatement)? i. Factors: (A) Significant financial loss (B) Physical change in the plaintiffs property (C) Harm is continuous and repeated ii. Examples: (A) Estancias Nuisance found (B) Jost - $145 (C) Restatement significant financial loss, physical change in the plaintiffs property, the harm is continuous and repeated. c. Is it intentional (malicious or doing it knowingly) and unreasonable (Jost and balancing of the utilities)? i. Unreasonableness (A) Jost neighborliness standard should be located where it will not deprive neighbors of the use/enjoyment of their property. 1. Very deferential to plaintiff 2. Residential -> Agricultural -> Commercial/Industrial (B) Restatement 826: Balance of utilities - (utility of actors conduct vs. gravity of the harm) (PM 75) 1. Gravity of the harm factors 827 a. Extent of harm involved b. Character of the harm involved c. Social value attached to the type of enjoyment invaded (residential->agricultural->industrial) d. The suitability of the plaintiffs particular use or enjoyment invaded to the character of the locality e. The burden of the person harmed of avoiding the harm 2. Utility of the conduct factors 828 a. Social value attached to the purpose of the defendants conduct b. Suitability of the conduct to the locality c. Impracticability of preventing or avoiding the invasion ii. EXCEPTION: OR unintentional and otherwise negligent, reckless, or ultrahazardous? d. EXCEPTIONS: If yes, then its a nuisance UNLESS i. Coming to the nuisance (Spur) ii. Hypersensitive (Amphitheaters) (A) Exception: Malice iii. Aesthetic (not nuisances) 2. If the action is a nuisance, whats the remedy? a. Balance of the equities i. Need to balance the harm to the defendant and public at large caused by granting the remedy versus the harm to the plaintiff from not granting the remedy. ii. If the injury is slight or activity is under the stern rule of [public] necessity, (Estancias) provide only damages to the plaintiff

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(Boomer, Bowling). iii. Provide injunction if the nuisance is dangerous to the public health (Spur) or damages would not be required by the public (Estancias). b. Who is the least cost avoider? Entitle the other party, consistent with societal values of justice (first in time, etc.)

Law and Economics

J. Doctrine 1. Coase Theorem: When transaction are costless and individuals act cooperatively, any assignment of legal rights will lead to an efficient outcome a. Transaction costs (large numbers problems) i. Free riders (not chipping in for filter for smoke stack or attorney for

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class-action suit because theyll receive the benefits anyway) ii. Hold-outs (not agreeing to damages until it approaches the cost of an injunction) iii. Opportunists (hanging out more laundry) b. Costs should be placed on the party who can most cheaply avoid them (least cost avoider). 2. Box of Four:

a. K. The rows are who has the entitlement (the party getting money has the entitlement.) 1. If court would find nuisance, top row 2. If court would find no nuisance, bottom row L. The columns are the choice of remedy 1. Property entitlement must be bought and sold in a voluntary transaction at a price agreed upon by the seller a. If property has a subjective value not captured by market value b. Lower administrative costs 2. Liability someone may destroy the entitlement if they are willing to pay a price set by the state a. If true value if entitlement may not be known 3. EXEPTION: Inalienability is not shown in the box of four. 4. *Chosen based on societys values of how wealth should be distributed (noneconomic, first in time, etc.), and to motivate the least cost avoider into action to solve the problem by entitling the other group. M. Examples: 1. Box 1 There is a nuisance and the remedy is injunction (the balance of equities favors the plaintiff) (Morgan, Schultz) 2. Box 2 There is a nuisance and the remedy is damages (the balance of equities favors the defendant) (Boomer) 3. Box 3 There is no nuisance and the remedy is buying the nuisance from the creator (the balance of equities favors the creator) (aesthetic nuisance, coming to the nuisance, hypersensitivity) 4. Box 4 4th option from Spur. Nuisance receiver pays the creator a price set by the state to stop. 5. *Boxes 2 and 4 comprise forced exchanges, and 1 and 3 comprise possible holdout/free rider problems. 7 of 25

Landlord/Tenant
N. Cases: 1. GARNER v. GARRISH (1984) a. Garrish (tenant) has the privilege of terminating a lease agreement at the date of his own choice, with not such privilege granted to the landlord. The plaintiff contended that this was a tenancy at will because the lease did not specify a term.

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b. The court found that the agreement established a determinable life estate that expires at either the death of Garrish or at Garrishs will. (Garrishs lifetime is a fixed term). NATIONAL BELLAS HESS, INC. v. KALIS (1951) a. A lease was stated to be $500 a month until the end of the war. The court found the lease to be a tenancy at will because the term was not discernable at the start of the lease, and could not be implicitly a periodic tenancy because there was explicit controlling language. TOWNSHIP OF SANDYSTON v. ANGERMAN (1975) a. A resident and township were disputing whether the residents agreement was a lease or license for the purposes of municipal taxes. b. The court held that, because the Angermans had exclusive use of the land, the agreement was a lease (tenancy for years), even though the Natl Park Service could terminate at will because of the ascertainable ending date (9/15/71). STATE v. SHACK (1971) a. Shack (a public-service representative) entered the land of a migrantworker employer (Tedesco), who sued for trespass, to discuss their rights and provide medical care. b. The court held that the ownership of real property does not include the right to exclude access to government services available to migrant workers under the doctrine of necessity. The court also found that control of land is not control of the destiny of those on their land, under the representation reinforcement principle. The law denies workers the right to contract away their health, welfare, and dignity. RUMICHE v. EISENREICH (1976) a. The court found no waste using the Pross factors for a tenant that installed sheetrock that was not up to code, installed a light fixture and switch, attached a wooden closet to the wall, and put a frame around a window. GREENFIELD v. KOLEA (1977) a. A tenant leased a lot and adjoining building for the repair and storage of automobiles. When the building burned down, the court found that the lessee was not responsible for the remainder of the lease because the original intent of the parties included the leasing of the building and the contract doctrine of impossibility of performance. BERG v. WILEY (1978) a. Berg sued Wiley for wrongful entry after he re-entered using self-help after a history of dispute and animosity, and the premises were not abandoned by the tenant. Court found that the only lawful means to dispossess a tenant who has not abandoned or voluntarily surrendered is by resort to judicial process, but generally a per se ban on self-help. SERREZE v. YWCA (1991) a. Several women were evicted from a womens shelter by self-help for failing to attend meetings. Although the court agreed that the agreement was a license, not a lease, but the YWCA was a landlord, thus subject to a statute prohibiting self-help evictions for occupants of residential

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premises. 9. SOMMER v KRIDEL / RIVERVIEW REALTY v. PEROSIO (1977) a. A case and companion case wherein a tenant abandoned a lease and the lessor made no attempt to re-let the apartments. Court ruled using the mitigation of damages doctrine of contract law that the lessor should have minimized the damages to the lessees because the case must be governed by modern concepts of fairness and equity. The court further found that the landlord has the burden of showing due diligence: offered or showed the apartment, advertised, and did not reject someone who was ready, willing, and able to rent the apartment, but the tenant needs to bear these costs. 10. HANNAN v. DUSCH (1930) a. Sets forth the English Rule of delivery of possession wherein the landlord is responsible for delivering property to a lessor, or has the responsibility to remove any holdovers. 11. RESTE REALTY v. COOPER (1969) a. A landlord sued a tenant for back rent after tenant vacated due to repeated flooding of the premises after notification of the flooding was given to the landlord based on a promise to repair and the implied covenant of quiet enjoyment. Set forth the rule that constructive eviction occurs when the premises are substantially unsuitable for the purpose for which they were leased, or which seriously interferes with the beneficial enjoyment of the premises. 12. HUNTER (1991) a. A tenant sued a landlord for allowing neighbors to continue noisy latenight parties. The landlord was held liable for violating the quiet enjoyment of the tenant. 13. BROWN v. SOUTHALL REALTY CO. (1968) a. Illegal lease case that indicated that a lease for a premises that is not up to code is unenforceable as long as the defect didnt arise after the lease started. Tenant can withhold rent, while still staving off eviction. 14. EDWARDS v. HABIB (1968) a. Court established the practice of prohibiting retaliatory evictions. 15. JAVINS v. FIRST NATIONAL REALTY CORP. (1970) a. Tenant refused to pay rent for various violations to the housing code. Set forth the implied warrantee of habitability based on the duress that the tenant had in the form of unbalanced bargaining power (under contract law). 16. HILDER v. ST. PETER (1984) a. Affirmed the implied warranty of habitability, when a leased premises had overflowing sewage, no heat, and other problems. The doctrine warrants that the premises are safe, clean, and fit for human habitation, and covers all latent and patent defects in the essential facilities. This warranty is mandatory and a tenant can withhold rent if notice is given and the defect existed during the time of withholding. 17. CHICAGO BOARD OF REALTORS, INC. v. CITY OF CHICAGO (1987)

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a. A group of property owners sued the city for codifying the implied warrantee of habitability under economic inefficiency grounds. The court upheld the citys legislation. O. Landlord/Tenant Problem-solving 1. Is this a lease or license? a. What was the original parties intent? i. Language: words of demise (A) A lease is implied if the following language is used: lease, landlord, tenant, rent, quiet use and enjoyment, sublet ii. Extent of restrictions of use: (A) Fewer restraints: lease, more restraints: license. (Serreze) iii. Who can you exclude from entering? (A) Many restrictions license. (Serreze) iv. How much control is retained by the grantor? (A) Much control license. (Sereze) v. What incidental services are present? (leaving the premises to use restroom or take meals) vi. EXCEPTION: A license incidental to employment? (E.g., superintendent of a building) (Cf. Angerman lease found) (A) Is there a separate charge for rent? 1. If yes, more like lease. (B) Is the term before or beyond the period of employment? 1. If yes, more like lease. (C) Is residence necessary to carry out the lessees duties? (such as for lockouts or boiler going out in the middle of the night) 1. If yes, more like license. (D) Is the lessee free to come and go as he/she pleases? 1. If yes, more like lease. vii. If its a license, then (A) License: a personal privilege to use the land of another in some specific way or for some particular purpose or act. 1. Permission to perform an act that would otherwise be trespass. 2. Licenses are revocable, whereas easements are not. a. EXCEPTION: A license coupled to an interest is not revocable. 2. If its a lease, what type? (CB 110) a. What was the original parties intent? (NOTE: Parties cannot invent their own type of leaseholdif a lease does not fit into one of the pigeonholes, it is an invalid lease/tenancy at will.) i. Life estate? (A) A dies, and leaves to spouse B for the rest of her life. A can leave the land to C after she dies. (C is a remainderman) (B) See Garner ii. Term (or tenancy) of years? (A) Term of any fixed duration that is definitely stated or capable of

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definite ascertainment at time of creation (even if terminable at some earlier event). (B) Terminates automatically at end of term, and there is no need for notice to terminate at the end of the lease term. (C) May be unilaterally terminable as long as there is a fixed term. (D) Does not terminate on death of either party. iii. Periodic tenancy? (A) Endure for a period and successive period of equal length until terminated by either party. (B) Automatically renews (C) Notice is required to terminate: 1. Year-to-year: six months notice is required a. Anything shorter, one full period of notice is required, effective from the start of the next term b. Not to exceed 6 months notice in any case c. CAN be contracted around (Default rule) d. Must terminate the tenancy on the final day of the period (D) Explicit: to continue from month-to-month (E) Implicit: rent paid in fixed intervals AS LONG AS YOU DONT HAVE TO OVERRIDE EXPLICIT LANGUAGE such as at will with monthly payments this would be tenancy at will. (F) Does not terminate on death of either party. iv. Tenancy at will? (A) Residual category (B) No fixed period and continues as long as BOTH parties agree to continue. (C) No notice required to terminate (some jurisdictions require one interval between rent payments notice). (D) If a T.A.W. was created, and the lease can be terminated at will by one party, it is necessarily terminable at will by both parties. 1. See Garner, which created a life estate. 2. E.g., to T as long as L desires would establish a T.A.W. terminable by either party, as long as no fixed period also present (thus establishing a periodic tenancy). (E) Terminates on death or incapacitation of either party. v. Tenancy at sufferance? (A) Holdover tenant who remains after the lease terminates. (B) Tenant enjoys protections of eviction laws. (C) If a landlord accepts a rent payment from a tenant at sufferance, the lease reverts to a periodic tenancy. 3. What are the tenant duties/landlord rights? a. Tenant duties: i. To not commit waste (Pross factors/Restatement) (A) If no lease provision, turn to Pross factors 1. Affect a vital and substantial portion of the premises 2. Change its characteristic appearance

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Change the fundamental purpose of the erection Change that would affect the very realty itself Extraordinary in scope or affect or is unusual in expenditure EXAMPLES: replacing defective ceiling not up to code, installing light fixture/switch, closet and frame around window was NOT WASTE (Rumiche). (B) Restatement: 1. Unless agreed otherwise, the tenant can make reasonable changes a. If unreasonable or the lease says otherwise, the tenant is in breach if i. The property cannot be restored to its former condition ii. Or is not restored to its former condition promptly after a request from the landlord. ii. Duty to repair (A) If no lease provision, turn to common law 1. Tenant has a modest duty to repair (URLTA, PM 126, 145) a. Comply with building code b. Keep place clean and safe c. Dispose of garbage d. Keep plumbing, etc. in good order e. Do not destroy anything f. EXCEPTION: If repairs require special skills. (B) EXCEPTION: Implied warranty of habitability applies if noncommercial and multiple-apartment structure (eliminates duty to repair). iii. Duty to pay rent (A) Exceptions: 1. Destruction of premises (Greenfield) 2. Constructive eviction 3. IWH b. Landlord rights/remedies: i. Was there a material breach? (A) Obligations are independent unless the breach is material. 1. Non-payment of rent 2. Significant waste 3. Using premises for unlawful purposes ii. Remedies: (A) NOT re-enter by self-help (Berg) 1. May be allowed if landlord is legally entitled to premises (like a holdover) or lease contains a reentry clause AND the landlords means of entry are peaceable. 2. EXCEPTION: The tenant has abandoned or voluntarily surrendered. (B) NOT evict in retaliation for reporting a defect (Edwards) (C) CAN evict by judicial process (court or summary proceedings) and

3. 4. 5. 6.

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tenant is responsible for: 1. Reasonable rental value market value of premises. 2. Tenant is responsible for damages 3. Tenant is responsible for security deposit c. Was there surrender or abandonment? i. Surrender (A) Offer and acceptance? (see Sommer, wherein failure to respond to an abandonment was an implicit acceptance). (B) Abandonment (an implicit offer of surrender) 1. Vacating without justification, 2. Vacating without present intention of returning, 3. OR Default on rent 4. AND Implicit acceptance a. Acting in a way repugnant to the original lease i. Renting to another ii. Changing locks iii. Remodeling ii. If yes, Landlord must mitigate damages by showing due diligence (Sommer) (A) Offered or showed the apartment (treat it as one of vacant stock) (B) Advertised (C) Did not reject someone who was ready, willing, and able to rent the apartment (D) The tenant needs to bear these costs 4. What are the landlord duties/tenant rights? a. Tenant rights i. Was there delivery of possession? (A) Landlords responsibility (not Hannan) ii. Is the right to quiet enjoyment being fulfilled? (A) Implied right to quiet enjoyment/constructive eviction (Reste Realty, Hunter) 1. Did landlord have a duty (act or omission to overcome caveat lessee)? a. EXCEPTIONS: i. Short-term/furnished dwellings ii. Common areas maintained by landlord iii. Latent defects (that were known to LL at time of leasing) iv. Fraudulent misrepresentations v. Defects that arise out of failure to perform PROMISED repairs. vi. Immoral conduct (brothel cases) vii. Premises are not up to code 2. Was there substantial interference? 3. Did tenant vacate reasonably (if withholding rent)? 4. Did tenant give notice and opportunity to correct?

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iii. Is it an illegal lease? (A) If the premises are not up to code before the lease begins, it is void and rent is not due (Brown). iv. Is the Implied Warranty of Habitability being fulfilled? (A) No need to consider parties intent if residential and multipleunit (10+) apartments (mandatory rule). (B) Are the premises safe, clean, and fit for human habitation? (C) Are there latent or patent defects in the essential facilities? (D) Tenant remedies: 1. Withhold rent if: a. Notice and reasonable time to repair is given b. AND the defect existed during the time of withholding c. Tenant gets the difference between the value as warranted (as if without defects) minus the value in its defective state (Hilder test). d. Tenant need not move out to withhold rent e. Can also sue for tort-like suffering damages. f. Can also repair and deduct from rent v. Retaliatory eviction? (URLTA 5.101, PM 148) (A) Evidence of a complaint 1 year before an act of retaliation creates a presumption of retaliation. (B) Landlord must have a reason to evict.

Servitudes
P. Cases: 1. COX v. GLENBROOK (1962) a. Cox owned land that benefited from an easement on Glenbrooks land to allow in/egress from a land-locked parcel. Cox wanted to subdivide property, allowing new residents to also use road and widen the road. Court found that the original intent of the parties was for the road access of the land (therefore the easement is appurtenant). Cox could maintain/improve the road and allow use by multiple families, but could not widen it. b. When the language of an easement is unclear, it should be read as broadly

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as necessary to meet the intentions of the original parties, but cannot place an undue burden on the parties. SHELLEY v. KRAEMER (1948) a. The constitutionality of racially restrictive covenants was challenged to US SC. The court found that these restrictions were unconstitutional state action because the courts enforced the servitudes. Effects arguments were presented wherein infant mortality and housing shortages were show to be the consequences (as if the state had codified the restrictions). SPENCERS CASE (1583) a. Established the concept of horizontal privity the need that there be some sort of property relationship between original burdened and benefited parties; in this case landlord/tenant. TULK v. MOXHAY (1848) a. A seller had a covenant in a deed to maintain a portion of the transferred property as a park. The court ruled to affirm the concept of equitable servitudes that apply from all to all in a non-landlord-tenant case. The US applies his concept to both negative and affirmative covenants. SANBORN v. MCLEAN (1925) a. Some lots of a development had a negative easement preventing anything but residential use. An owner of one of the properties without the easement attempted to build a gas station. The court found that the inclusion of the easement in some of the properties by the developer made the easement mutual to all properties. b. It is the responsibility of the buyer to find notice by tracing sales back to original developer and inspect deeds from the other properties that he sold. MCQUADE v. WILCOX (1921) a. A developer sold lots for residential use except for her own. She later sold it, and the buyer built a restaurant. The court held that the recordation of the other deeds with the restriction was constructive notice. NEPONSIT v. EMIGRANT BANK (1938) a. A plaintiff moved to foreclose on a landowner for neglecting HOA fees. The court used the touch and concern test to determine that the affirmative covenant of HOA fees rests upon the land benefited from the servitude, and the servitude is with the HOA as a beneficiary. Established the ability to enforce HOA fees. EAGLE ENTERPRISES v. GROSS (1976) a. A deed included a provision requiring a fee for water delivery. An owner later dug a well, and stopped paying the fee. The court found that the covenant did not touch ad concern because the owner no longer needed water, this did not threaten the ability of the developer to deliver water to other owners, and the covenant had no expiration. CAULETT v. STANLEY STILWELL & SONS, INC. (1961) a. A developer sold a lot (allegedly at a discount) with a covenant that the buyer would use the developer as the contractor for any future house construction. The court found that this did not touch and concern the land because of the ambiguity of the clause, and personal nature of the

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arrangement. b. When the benefit is in gross and not directed toward the improvement of neighboring properties, the burden does not run. NOT THE RULE IN WEST CAROLINA. 10. CRANE NECK ASSOCN INC. v. NEW YORK CITY (1984) a. A housing development had included restrictive covenants for single family dwellings. New York rented a house and used it as a house for the care of mentally retarded adults. Court found that NY should be able to continue use as the group home because enforcing the covenant would be contrary to public policy. 11. OCEANSIDE COMM. ASSN. v. OCEANSIDE LAND CO. (1983) a. Court found that an affirmative covenant to maintain a golf course touched and concerned the land, thus ran. 12. STREAM SPORTS CLUB v. RICHMOND (1983) a. The court found that the burden of an affirmative covenant to maintain a membership at a sports club touches and concerns. 13. WESTERN LAND CO. v. TRUSKOLAWSKI (1972) a. Commercial activity and traffic around a subdivision greatly increased from the time that the covenants establishing the community to the present. The court found that the covenants could still be enforced because the objects and purposes had not been thwarted, and they remain of substantial value to the homeowners. b. Although a residence was being used as a daycare, this was an ancillary use. c. Private restrictions override zoning ordinances. 14. RICK v. WEST (1962) a. West owned a parcel in a development having a covenant restricting to residential use. The development was later zoned to industrial use, but West refused to release the covenant, and plaintiff claimed change of conditions. The court found that a hospital could not be built there because the covenant is not unconscionable or oppressive, and no balance of equities needs to take place. Q. Servitudes problem solving: 1. What type of servitude? a. Easement/covenant i. Words of grant? Easement (A) Affirmative/negative? 1. Affirmative: Permits the holder to use anothers land in a way that would otherwise be trespass? a. E.g., right of way, right to lay drainage pipe. 2. Negative: Prohibits an otherwise lawful use of ones land a. E.g., prohibits the blocking of light, air, support, or stream from another. ii. Words of promise? Covenant (A) Affirmative/negative? 1. If the burdened property owner does nothing is he liable?

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a. Yes affirmative i. E.g., maintain an easement, pay HOA fees. b. No negative i. E.g., use land for residential purposes only, racial convenants. 2. Benefit/burden? a. Who has the right to use the land possessed by another? Benefit b. Other party? Burden c. Servient/dominant i. Which estate bears the burden? Servient Estate ii. Is the servitude of the benefited estate appurtenant? Dominant Estate d. Appurtenant/in gross? i. Appurtenant: pertains to the land the benefit/burden of the servitude goes to whoever holds a parcel of land, and passes to the next holder when transferred. ii. In Gross: the benefit/burden of the servitude goes to an individual and passes to the successor of the individual. iii. *If the language is unclear, courts assume the benefit is appurtenant. 3. Does the benefit/burden run? (EASEMENTS) a. Whats the scope that the original parties intended? b. Is there intent for the burden/benefit to run? i. Presume the burden does not run, unless shown otherwise. ii. Heirs and assigns forever yes c. Is there notice? (ONLY NEEDED FOR BURDEN TO RUN) i. Via a recording statute? ii. Implied reciprocal servitude (Sanborn, see below)/prior purchaser problem? (Benefit on left and burden on right). (A) It is assumed that all of Developers land is benefited and burdened when selling the first lot to First. Implied Reciprocal Servitude

D -- S | | F T

Becomes

F -- D | S | T

d. Is there a common neighborhood plan for the specific covenant/easement? i. Provided in the plat. ii. Oral representation iii. Brochures iv. Individual deed 4. IF AN EASEMENT, STOP HERE! R. Does the benefit/burden run? (COVENANTS)

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1. 2.

Whats the scope of the original parties? Original parties intent (benefit and burden) a. Heirs and assigns forever b. May infer a purpose of the original parties to support a policy reason. i. See Cox to provide for single family or to provide an asset? c. EXCEPTION: The servitude cannot place an undue burden on the present parties (Cox) 3. Notice? (ONLY needed for burden to run) a. Does the purchaser of the burdened estate have notice (see above)? b. Is there a common neighborhood plan when the selling of the lots began? (see above) 4. Touch and concern/3.1 public policy? (COVENANTS ONLY) a. Touch and concern/Gordley formulation: Which is more likely, that if the arrangement does not run with the land our successors will want to remake it? Or that if it does they will want to undo it? i. Negative covenants always touch and concern. ii. EXAMPLES of affirmative covenants: (A) Spencers case: building a fence touched and concerned (B) Neponsit: HOA dues to maintain easements and common areas touched and concerned (C) Oceanside: the benefit of an affirmative covenant to maintain a golf course touches and concerns (D) Stream Sports: the burden of an affirmative covenant to maintain a health club membership touches and concerns (E) Eagle Enterprises: water delivery did not touch and concern when the owner dug a well; contradicts 3.1 public policy doctrine (F) Caulett: promise to use developer for general contractor did not touch and concern; contrary to W. Carolina law and 3.1 b. 3.1 Public Policy (PM 203) i. Based on the idea of freedom of contracts. ii. Uphold covenants unless it is illegal, unconstitutional, or violates public policy, such as one that is: (A) Arbitrary, spiteful, or capricious (B) Burdens a fundamental constitutional right (C) Imposes an unreasonable restraint on alienation (D) Imposes an unreasonable restraint on trade or competition iii. EXAMPLES: (A) Oceanside: 3.1 would uphold (B) Eagle Enterprises: 3.1 would uphold, until it becomes burdensome in the future (C) Caulett: 3.1 would uphold because it is a commercial calculation 5. 5.2 Privity (COVENANTS ONLY)

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a. Applies to transfers of property other than sales of fee simple. b. Tenants i. Negative covenants (A) Benefits and burdens ALWAYS run to tenants (B) Tenants can enforce against negative externalities (Like Noise Case) ii. Affirmative covenants (A) Assumption is that they dont run 1. Default rule, can be contracted around 2. E.g., HOA fees, voting, maintaining faade of historic building (B) Exceptions 1. To repair and maintain tenants premises 2. If activity can be enjoyed by lessee without diminishing value to lessor 3. E.g., putting out recycling c. Life tenants i. If appurtenant, burdens and benefits run to the life tenant. ii. Burdens are limited to the value of the life estate. 6. EXAMPLES (assume rentals) Would the covenant run? a. Sanborn Yes, lesse could not build gas station. b. Neponsit No, tenant would not have to pay HOA fees. c. Oceanside Yes, tenant could enforce maintenance of gold course. d. Caullett Yes, tenant would have to use developer as contractor. S. Termination (EASEMENTS AND COVENANTS)? 1. Expiration? a. Set time limit in servitude in deed? 2. Release a. Is there a rule to vote to dissolve the servitude? 3. Condemnation? 4. Waiver and Abandonment? a. Have a substantial number of owners substantially abandoned the provisions? (Truskalowski) i. Is it just an ancillary use (like taking work home)? 5. Merger? 6. Changed conditions? (APPLIES ONLY TO COVENANTS) a. objects and purposes have not been thwarted, and they remain of substantial value to the homeowner? (Western Land) b. Is the covenant unconscionable or oppressive? (Rick) c. Compensation may be awarded for the dissolution.

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Eminent Domain
T. Early Basis 1. Grist mill acts that were expanded to textile mills. 2. Irrigation and mining easements for private mining and irrigation activities. 3. Land was taken for the creation of private roads. U. Cases: 1. BERMAN v. PARKER (1954) a. defer to the legislatures determination of a public use, until it is shown to involve an impossibility. b. DC urban renewal case of blighted neighborhood.

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2. MIDKIFF (1984) a. Involved takings of land from landlords in Hawaii and giving the land to lessees to correct an imbalance in property ownership. b. Court said OK as long as the policy is rationally related to a conceivable public purpose. 3. SOUTHWESTERN ILLINOIS (2002) a. A court found that taking land for a racetrack parking lot is not a justifiable exercise of E.D. 4. COUNTY OF WAYNE v. HATCHCOCK (2004) a. A court found that taking land for economic development around an airport is not a justifiable exercise of E.D. 5. KELO (2005) a. Land was taken from several homeowners under eminent domain for the creation of a private business/recreational area. b. Justified by creating jobs, generating taxes, building momentum for revitalization, more attractive city, and recreational activities for the publicplus quasi-public River Walk, Coast Guard Museum, and Marina c. The planning process for the development was shared by many state groups (bond issue, city and state intervention in the planning) V. Eminent domain problem solving: 1. Is it a use rationally related to a conceivable public use? (Midkiffs Standard) a. Public ownership (schools, prisons, etc.) b. Use by the public (railroads, public utilities, other uses where the public has a formal right to use the product) i. Based on mill acts to flood upstream for gristmillslater expanded to private textile mills. c. Public benefit i. Creating jobs, generating taxes, building momentum for revitalization, more attractive city, recreational activities (see Kelo) d. Ending affirmative public harm 2. Is it just compensation? a. Economic costs b. Sentimental costs c. Moving costs d. Autonomy diminishment costs (the forced exchange denies the trade aspect of the transaction)

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Regulatory takings (police power)

W. Cases: 1. HADACHECK v. SEBASTIAN (1915) a. An L.A. ordinance made it illegal t operate a brick kiln in a residential area. The court found no taking even though over 90% diminution of value in the plaintiffs land. b. 3 part test with an interpretive element i. legitimate public purpose ii. means fit the ends (promoting public health) iii. not arbitrary, etc. iv. a great deal of deference is given to the legislature 2. EUCLID v. AMBER REALTY CO. (1926)

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a. Court reasoned that apartment buildings are not nuisances per se, but may be per accidens. Court defers to the legislature because of the assumption of constitutionality and the law is not clearly arbitrary. 3. PENNSYLVANIA COAL a. A local government outlawed any mining that would compromise the integrity of the surface. The court found that this law was a taking because the city failed to purchase the estate of support (costs more). b. To differentiate from a precedent that allowed a similar law requiring pillars of coal to be left, the court invented the term average reciprocity of advantage Plymouth Coals law provided an advantage to both parties. 4. ANDRUS EAGLE FEATHER a. A court found no taking under taking analysis for a law that prohibited the sale of eagle parts (but the feathers could still be donated or saved). 5. WEBBS FABULOUS PHARMACY a. A taking was found when interest ($) was taken from interpleader accounts. 6. EASTERN ENTERPRISES v. APFEL (1998) a. No taking was found when a statute required a mine operator to pay benefits to retired miners (only an imposition of liability). 7. PENN CENTRAL v. CITY OF NEW YORK (1978) a. The city prohibited Penn. Central from building a tower over their train station to preserve the historical character of the building. The court found no taking and set forth a multi-factor balancing test to determine whether a taking has taken place. 8. PUMPELLY (1872) a. Flooding of anothers land after dam construction worked a taking die to PPO. 9. CAUSBY (1946) a. Frequent flights over a persons land was determined to be a takingbut not if the flights were not directly over the land. 10. LORETTO v. TELEPROMPTER MANHATTAN CATV CORP. (1982) a. A taking was found when an apartment owner was forced to allow a cable company to install cable in her building. Established PPO as a per se taking. 11. LUCAS v. SOUTH CAROLINA COASTAL COUNCIL (1992) a. A taking was found when a landowner was prohibiting from developing on his land due to an environmental ordinance. The trial court determined that the value of the property without development was zero. 12. TAHOE-SIERRA PRESERVATION COUNCIL v. TAHOE REGIONAL PLANNING AGENCY (2002) a. Landowners were denied the right to develop due to a moratorium for about 3 years. This was found to not be a taking and the court indicated that it would back off of per se rules and splitting. X. Regulatory takings problem solving

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1. Armstrong Principle public burdens should be borne by the public as a whole, not just some. 2. Core property defined for takings a. Interests in land are given much protection compared to personal property (Andrus Eagle Feather, Cf. Webbs Fab. Pharm.) b. Discrete assets more likely to be protected that fungible wealth. (Eastern Enterprises) 3. Ways of severing/splitting property (Tahoe-Sierra CB 1035) a. Physical dimension (Penn. Coal only considered the pillars that were left) b. Functional dimension (Eagle Feathers cant sell, Lucas cant develop) c. Temporal (Tahoe-Sierra cant develop for a period of time) 4. Per se rules: a. Is there Permanent Physical Occupation (PPO)? i. Per se taking (Loretto, Pumpelly (flooding)) ii. Only applies if 3rd party occupies (not being forced to put out fire extinguishers, etc.). b. Is there no economically beneficial use? i. Per se taking unless theres a nuisance (Lucas) ii. Consider the slitting problem. iii. Nuisance is more narrow than noxious use iv. EXCEPTION: restrictions inhere in the title c. Is there a noxious use? i. (Maybe) per se no taking (see Tahoe-Sierras backing away from per se rules and Hadacheck) (A) Takings can avoid public harm, but CANNOT ACQUIRE PUBLIC BENEFIT. 5. Penn Central balancing test: a. Essentially ad hoc, factual inquiries b. Character of the governmental activity i. Physical occupation cuts towards a taking (A) Kaiser Aetna ii. Denying right to pass on property to heirs is a taking (Hodel v. Irving) c. Diminution of value i. Prone to the denominator problem of severance d. Distinct investment-backed expectations i. Was there a sharp and unanticipated change in the permissible use of property? ii. The right of support (Penn. Coal) iii. Cf. Kaiser Aetna Taking found e. Noxious Use? i. can avoid public harm, but CANNOT ACQUIRE PUBLIC BENEFIT f. Average reciprocity of advantage (Penn. Coal) i. Is the landholder receiving a reciprocal advantage?

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