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Property Law Cases Spring 2021
Terms in this set (89)
Jacque v. Steenberg Homes Inc. (Supreme Court of Wisconsin, 1997, CB pg. 1)
i) Rule: Punitive damages can be awarded for intentional trespass, even if there is no actual harm.
ii) Facts: Steenberg Homes was delivering mobile home by intentionally trespassing in cutting across Jacques land.
iii) Issue/Holding: Are punitive damages applicable for intentional trusts, even if there is no harm? Yes, nominal damages (ex. $1) can support award for punitive damages for an intentional trespass when there is no harm.
(1) Supported by the recognition by the US Supreme Court and Wisconsin Supreme Court that private landowner's right to exclude others from land is one of the most essential rights and that there is actual harm in every trespass, whether or not compensatory damages are awarded (if repeated could ripen into prescription easement or adverse possession)
(2) Society has interest in protecting private property from intentional trespasser (preserves integrity of legal landowners, will prevent people from resulting to self-help remedies if people expect wrongdoers to be punished)
Hinman v. Pacific Air Transport (US Court of Appeals, Ninth Circuit, 1936, CB pg. 10)
i) Rule 3 (no nuisance and injunction): Property rules are preferred when transaction costs are low because property will end up in hands of the one who values it the most.
i) Rule: Flying in airspace above someone's land is not itself a trespass unless it will cause injury to the land.
ii) Facts: Pacific Air Transport owns commercial airline. Plaintiff contends that they are repeatedly trespassing over his land by operating aircrafts "in, across, and through said airspace at altitudes less than 100 feet above the surface."
iii) Issue/Holding: How much airspace above one's property does one own? Only as much as they use. In this case, there were insufficient facts to infer that the plane operating at this airspace interfered with plaintiff's full enjoyment of land.
(1) Illustrates the Bundle of Sticks approach because the court is effectively rejecting plaintiff's ad coelom argument - they have claim against the whole world.
Pierson v. Post (Supreme Court of New York, 1805, CB pg. 58)
(1) Rule: Property of wild animals is secured through mortally wounding or capturing the animal (net etc.). Pursuit is not possession, must have actual possession or very imminent possession.
(2) Facts: Post was hunting a fox with his dogs on wild and uninhabited land, but Pierson, knowing that Post was hunting the fox, killed the fox. Post sued claiming he had legal possession of the fox.
(a) Whether by pursuing the fox, Post acquired a right to the fox that is sufficient for sustaining an action against Pierson? No, because he did not deprive the fox of his natural liberty by mortally wounding the beast or securing him in a net or the like.
(b) What acts amount to occupancy in order to acquire right to wild animals? Mortally wounding an animal or securing an animal in a net or the like the unequivocal intention of individual use of the animal so as to deny the animal of their natural liberty.
Keeble v. Hickeringill (Queen's Bench, 1707, CB pg. 69)
(1) Rule: Where a violent or malicious act is done to man's occupation, profession, or way of making a livelihood, there is always an action.
(2) Facts: Keeble owned decoy pond that he used to attract ducks to make a living. From his neighboring Hickeringill seeking to prevent him from making a profit, shoots gun to scare of ducks.
(3) Issue/Holding: Is there an action against Hickeringill for scaring away the ducks? Yes, interfering with the ducks was unlawful competition.
(a) Foundational case for unfair competition - can build your own dock
(b) In tension with Pierson v. Post because Pierson held that almost securing the fox to not be sufficient possession, but Keeble didn't have possession of the ducks either and it was ruled sufficient in this case.
(c) Plaintiff didn't have possession of ducks to count them, so what is his injury?
(d) How is this first possession if he didn't have possession
Eads v. Brazelton (Supreme Court of Arkansas, 1861, CB pg. 83)
(a) Rule: In order to maintain possession over a shipwreck, one must provide: 1) notice, and 2) due diligence to achieve full dominion and control over resources.
(b) Facts: Brazelton put blazed on trees that aligned with shipwreck and floated buoy over shipwreck in the Mississippi river, but then left to find another wreck. When he returned, Eads had commenced salvage operations. Brazelton sought an injunction.
(c) Issue/Holding: What Brazelton in possession of the shipwreck because the blazes and buoy? No, Brazelton must have started pursuit of claiming ownership in order to be awarded possession.
Popov v. Hayashi (California Superior Court, 2002, CB pg. 85)
(a) Rule: When a person completes a significant portion of the steps to achieve possession of an item but is thwarted due to the unlawful conduct of another, that person is entitled to a pre-possessory interest of the item.
(b) Facts: Popov was the original catcher, but Hayashi was the one who emerged from the mob with the ball.
(c) Issue: Who owns the ball? Judge orders ball sold and for profits to be split between Popov and Hayashi.
(i) This is against norms of property law to have a split ruling, but court doesn't want to incentivize unpeaceful behavior.
(ii) Similar to Keeble in that both are unlawful interferences with other
Johnson v. M'Intosh (Supreme Court, 1823, CB pg. 90)
i) Rule: Land title transfers are only valid when made under the rule of the currently prevailing government. "Conquest gives a title which the courts of the conqueror cannot deny."
ii) Facts: Johnson's father was granted a tract of land by the Piankeshaw Indians. After the Revolutionary war, Congress conveyed land to US government, and 35 years later, US Sold land to M'Intosh.
iii) Issue/Holding: Are land transfers from Indian tribes to private individuals prior to the American Revolution recognized in US court? No, transfer occurred under English, not American law.
(1) Native Americans have occupation rights, not full property rights because couldn't alienate this. Court justified this by saying Native Americans were incapable of assimilating to America, which normally happens in a conquest.
International News Service v. Associated Press (Supreme Court, 1918, CB Pg. 108):
i) Rule: A quasi-property right exists in published news such that appropriating the published news gathered by another for further commercial purposes constitutes unfair competition in trade.
ii) Facts: The British government had barred INS from sending cables about news to US, so INS was at a massive disadvantage. INS decided to take the news that Associated Press was gathering and printing in early additions of papers published on East Cost and republish it on the West Cost without giving Associated Press credit.
iii) Issue/Holding: What property rights are in news? If there are any, do they survive past the first publication? Is misappropriating others news unfair competition in trade? News has quasi property rights. The rights do not end at the moment of initial distribution but extend past the first publication (but not indefinite), such that misappropriating published news gathered by another is unfair competition.
(c) Justice Holmes Dissenting:
(i) General Rule: No right to forbid other people from repeating words once they have been published.
(ii) Property doesn't arise from value, doesn't mean that they the thing created property rights. The only ground that the complaint has is the implied misstatement that INS gathered the news they are publishing and failed to give express credit. If INS is willing to give credit, then there cannot be an injunction because AP doesn't have a property right; they only have right to be recognized for their work.
(d) Justice Brandies Dissenting:
(i) General Rule: "The noblest of human products became after voluntary communications to others, free as the air to common use."
(ii) If there is going to be a shift in property rights, it should come from the legislature (institutional competencies argument). He believes the legislature is better able to balance the various societal interests and reach reasoned conclusions because have more sources of information, while courts are ill-quipped to make the investigations which should precede the determination of the limitations of property rights in news or the circumstances under which news gathered by private agency should be deemed affected with public interests.
(iii) Also worried that the rule that the plaintiff is contending for is an important extension of property rights
Armory v. Delamirie (King's Bench, 1722, CB pg. 125)
i) Rule: "First [finder] in time is first in right." Finder has superior right to all other, except for rightful owner
ii) Facts: Boy chimney sweep found a jewel. Takes it to be evaluated by famous goldsmith - jeweler refuses to give it back.
iii) Issue/Holding: Must the jeweler give the jewel back to the boy? Yes, because out of the two parties, the finder has the superior claim.
(1) Not court's duty to find the best owner but superior owner between the two parties
a) Clark v. Maloney (Supreme Court of Delaware, 1840, CB pg. 127)
i) Rule: The rights of a first finder are superior to the rights of a second finder. Once a party has established possession, that party has stronger claim to judicial protection of its property rights than any subsequent possessor.
ii) Facts: Clark (finder 1) finds logs floating in a river and ties them up. Mahoney (finder 2) later claims to have found the same logs. Clark sues Mahoney for damages of price of logs.
iii) Issue: Who has superior rights finder 1 or 2? The first finder
(1) If our law were to award the second finder superior rights than the first, this would create negative incentives. Any other rule would lead to series of lawless seizures.
(2) Virtues of this rule: clear, transparent, simple enough for parties to apply on their own reduces judicial resources
a) Anderson v. Gouldberg (Supreme Court of Minnesota, 1892, CB pg. 129)
i) Rule: One who has acquired possession of property, even through conversion, has a right to retain that possession against a stranger to the property.
ii) Facts: Plaintiff cut logs from section 22, a stranger's property. This is conversion (The intentional assertion of dominion over the property of another, to the exclusion of the property owner's rights - Anderson has taken property where he had no right to do so). Gouldberg claims that the logs were cut from Section 26, of which they were the owners and took the logs.
iii) Issue/Holding: Is possession of property, though wrongfully obtained, sufficient title to enable party to maintain a suit against a stranger who subsequently takes property from him? Who has better claim converter 1 or converter 2?
(1) Importance of this case: shows that but for some specific circumstances (good faith purchasers), the law does not draw a distinction between converters and finders.
(2) To have any other rule, would be to invite a series of dispositions: "any other rule would lead to an endless series of unlawful seizures and reprisals in every other case where property had once passed out of the possession of the rightful owner."
Carruth v. Easterling (Supreme Court of Mississippi, 1963)
i) Rule: the offspring or increase of a domestic animal belongs to the owner of the mother - partus sequitur ventrem - the offspring follows the mother
ii) Easterling's cows trespassed onto Carruth's land and had a calf. Mississippi Supreme Court held that the calf belonged to Easterling, even though it had likely been conceived while on Carruth's land.
Wetherbee v. Green (Supreme Court of Michigan, 1871, CB pg. 133)
a) Rule: When one takes wrongful possession of personal property while acting in good faith and subsequently adds exponential value to that property, then the title of the property vests with the wrongful possessor and he may pay the rightful owner of the materials monetary damages.
b) Facts: Wetherbee cut down timber from Green's land, thinking that he had proper authority to do so. Wetherbee then made the timber into hoops, which made it immensely more valuable.
c) Issue/Holding: Under Michigan law, when one takes wrongful possession of personal property in good faith and adds value to that property, does title vest in the wrongful possessor? Yes, that title vests in him if he meets the three factors.
i) Potential Outcomes:
(1) Replevin: give me the materials back
(2) Trover: give me money (requested when the original object cannot be given back)
Nebraska v. Iowa (Supreme Court, 1892, CB Pg. 150)
i) Rule: When the change of water boundary is gradual, the law of accretion applies, and the boundary shall change. When change of water is rapid, the law of avulsion shall apply, and boundary shall be old water way.
i) Facts: Border between Iowa and Nebraska was the middle of the Missouri River. Between 1851 and 1877, the river changed courses, so that it "occupied a very different bed".
ii) Issue/Holding: What is the boundary between Iowa and Nebraska when it used to be the middle of the Missouri River, but the River has since changed course? Where the river was affected by accretion, the boundary line is the new course of the river. When the river was affected by avulsion (near Omaha - see CB pg. 153), then the boundary is the original river.
(1) Diagram on pg. 153 is not a good way to do things because leads to logistical trouble, but the law of accretion/ avulsion is a very old and stable regime; this court case isn't changing anything, it is merely applying a rule
Strain v. Green (Supreme Court of Washington, 1946, CB pg. 155)
(a) Rule: The presumption that an owner of a house intends to enrich the buyer with the property that is within the house at the time of sale is not overcome by secret intensions of seller to take that property with them. Instead, courts will consider (1) whether the item is annexed to the realty, (2) whether the annexation is for the use or purpose of that part of the realty, and (3) the intent of the annexing party.
(b) Facts: Strain purchased a house from Green. After sale, Green took 1) hot water heater, 2) Venetian blinds from the window, 3) certain light fixtures, and 4) three mirrors (two of which were firmly attached to the windows). Trial court held hot water heater and blinds were fixtures and must be returned, but that light fixtures and mirrors were personal property and can be taken. Only plaintiff appealed about light fixtures and mirrors.
(c) Issue/Holding: Are the light fixtures and mirrors fixtures or personal property? Mirror which was hung by wire is personal property and able to be taken, but the light fixture and the other two mirrors, which were attached by plywood backing, are fixtures and must remain with the house.
Scott v. Anderson-Tully Co. (Court of Appeals of Mississippi, 2015, CB pg. 162)
(1) Rule: For land to be acquired under adverse possession in Mississippi, possession must be 1) under claim of ownership, 2) hostile possession, 3) open, notorious, and visible, 4) continuous and uninterrupted for statutory period (10 years), 5) exclusive possession, and 6) peaceful.
(2) Facts: Scott brothers own 500 acres as tenants in common. Anderson Tully Co. claiming to have acquired 20 acres of their land through adverse possession because of their continual use from 1969 to 2010. Mess of surveyorship/titles in the records office.
(3) Issue/Holding: Who owns the land? Anderson Tully owns the land because they satisfy all 6 adverse possession requirements (note peaceful isn't normally on the list).
(a) The way that the law is set up incentivizes people to behave in unflattering/ unneighborly ways, but justification is that clarity of property trumps the need for kindness
(b) The view of the community in how the land was used was hugely important in this decision
Carpenter v. Ruperto (Supreme Court of Iowa, 1982, CB pg. 175):
1. Rule: Adverse possession claim requires good faith as a condition for granting title (minority approach).
2. Facts: Plaintiff had land that bordered corn field. When corn wasn't grown as far as her lot, she has planted grass on her neighbor's land and used it as an extension of land. New owner of adjoining land lead to dispute over ownership of land.
3. Issue/Holding: Is good faith required for adverse possession? - Yes, Ms. Carpenter is not entitled to the adjacent lot by way of adverse possession under claim of right due to the fact that her use of the land was not in good faith as she knew that another person held title to it.
Howard v. Kunto (Court of Appeals of Washington, 1970, CB pg. 181):
i) Rule: Seasonal occupancy is sufficient for adverse possession. Tacking with adverse possession is permissible if there is privity between previous and current owners.
ii) Facts: Everyone is occupying the wrong plot of land compared to the land described in deed.
(1) Is summer occupancy sufficient for adverse possession? Yes, to hold otherwise ignores the nature and condition of the land
(2) Can a person who receives record title to tract A under the mistaken belief that they have received record title to tract B and who subsequently occupies tract B, use the period of possession of tract B occupation by his immediate predecessors (also mistaken) for purposes of adverse possession? - I.e., can you tack on possession times for adverse possession claims. Yes, you can tack on for purposes of adverse possession if there is privity between previous and current owners.
Pile v. Pedrick (Supreme Court of Pennsylvania, 1895, CB pg. 43):
(i) Rule: Injunction can be awarded for an encroachment even if encroachment is minor/unintentional.
(ii) Facts: Due to surveyor mistake, defendant built wall on plaintiffs land that encroached 1 and 3/8 inches.
(iii) Issue/Holding: Can the plaintiff receive injunction requiring defendant to move encroaching wall, even though the encroachment is minor and was unintentional? Yes, landowner has a right to obtain an injunction to remove a portion of neighbor's encroaching building regardless of whether the encroachment is minor or unintentional. Court gives defendant a year to take down the wall and splits the cost between the two parties.
eBay Inc. v. MercExchange (Supreme Court, 2006, CB pg. 50):
(i) Rule: In order to issue a permanent injunction under the Patent Act, a plaintiff must satisfy a four-factor test and demonstrate that he/she (the plaintiff):
1. Has suffered an irreparable injury
2. That remedies available at law (such as monetary damages) are inadequate to compensate for that injury
3. Considering the balance of hardships between plaintiff and defendant, remedy in equity is warranted
4. Public interest would not be diserved by a permanent injunction
(ii) Chief Justice Roberts: equitable test usually results in an injunction because the right to exclude is generally protected by an injunction and transfer or property is not the norm
(iii) Justice Kennedy: concerned about extraction issues and patent trolls - i.e. is concerned that people will hold valuable rights and use them to receive windfalls (like in Pile)
(iv) Note, that although this is talking about patents, it has been extended far beyond patent realm
Golden Press Inc. v. Rylands (Supreme Court of Colorado, 1951, CB pg. 45)
(i) Rule: Absent proof otherwise, the presumption is that men act in good faith and do what they intended/ had the right to do. When encroachment is made in good faith (i.e. unintentional), courts will follow the maxims of equity and issue an injunction only if weighting the interests between the parties favors giving the plaintiff the "extraordinary" relief of an injunction rather than damages. If court determines that there is disproportionate hardship on defendant during removal compared to benefit received by plaintiff, it will deny injunction and plaintiff will be limited to damages
(ii) Facts: Golden Press constructs a one-story cinder block building that is 2 to 3.5 inches on defendant's property. Plaintiff seeks injunction.
(iii) Issue/Holding: Should an injunction be awarded requiring the building be taken down? No, the encroachment was unintentional and was very slight in comparison with the expense and hardship or removal, so it would be unconscionable to require defendant to remove it.
Intel Corporation v. Hamidi (Supreme Court of California, 2003, CB pg. 341)
(1) Rule: There is no legal remedy other than self-help for an intentional trespass to personal property that does no physical injury to the property - "in the absence of any actual damage, the action will not lie."
(a) For trespass to chattels to be actionable, the intermeddling must be harmful to the possessor's materially valuable interest in the physical condition, quality, or value of the chattel or the possessor must be deprived of the use of the chattel, or some other legally protected interest, for a substantial use of time.
(2) Facts: After being fired from Intel, Hamidi and several others formed a FACE-Intel, Former and Current Employees of Intel. Hamidi then sent emails to Intel's employees, approximately 35,000 recipients at a time, criticizing Intel's employment practices and suggesting that the employees leave Intel. Intel made attempts to
(a) Were the emails sent by Hamidi trespass to chattels in that the unfairly imposed on the time and attention of the employees, even though they did not damage or impair the recipient computer system? No, objection to content is not sufficient to satisfy the requirement for trespass to chattels of injury to personal property or legal interest.
(i) Connecting to internet opens one up to unwanted communication. Unwanted communication may only cause a legally cognizable injury and be actionable if there is an "1) interference with contractual relations, 2) intentional infliction of emotional distress, or 3) publication of private rights"
(b) Should California law for trespass to chattels be extended to encompass electronic communication that neither damages nor impairs the recipient's computer system? No, there is unresolved controversy to whether computer systems should be afforded property rights and enacting a rule that resolves this dispute prematurely would be acting rashly.
(i) This decision was prompted by the concern of the California Supreme Court that changing trespass to chattels to embrace chattels like internet servers would 1) lead to less freedom and less communication, 2) is better done by legislature
Breg v. Wiley (Supreme Court of Minnesota, 1978, CB pg. 355)
i) Rule: There is no reasonable self-help method to dispose of a tenant who has not abandoned nor voluntarily surrendered the property, but whose claims of possession are adversely to the landlord's claim or breach a written lease. The only appropriate method to dispose of a tenant is judicial process.
(1) This is a departure from the common law rule, which holds that a landlord can resort to self-help if 1) landlord has a lawful claim and 2) the self-help means of repossession were peaceable.
(2) However, the emerging trend in this case is no longer the trend, particularly in the context of commercial leases. With commercial leases, it is more likely that reasonable self-help is available than residential leases.
ii) Facts: Wiley leased out commercial space to Breg's predecessor for five-years. Lease specified that 1) tenant was not permitted to change building structure without written authorization, 2) tenant would operate restaurant in lawful and peaceful manner, and 3) Wiley reserved the right to retake possession of premises should lessee fail to meet the conditions set forth in the lease. Plaintiff continually remodeled space and there were numerous health code violations with restaurant. After demanding remodeling changes and health code changes, Wiley accompanied by policeman reentered space and changed the locks.
iii) Issue/Holding: Was Wiley's conduct reasonable self-help? No, because the conduct would have resulted in violence but for Berg's being gone and subsequent self-restraint.
Williams v. Ford Motor Credit Company (United States Court of Appeals, Eighth Circuit, 1982, CB pg. 361)
i) Rule: Conversion claim is not viable when breach of peace did not occur because although debtor did not give permission for his items to be repossessed, he did not object.
ii) Facts: Williams' husband bought a car and financed it through Ford Motor Credit Company. When couple got divorced, Williams got the car, but the husband defaulted on car payments. Company tried to repose the car at 4:30 am. Williams awoke and tried to stop them but was unsuccessful. No violence occurred.
iii) Issue/Holding: Did the repossession constitute a conversion because it was a breach of peace because it was carried out in a way that risked invoking violence? No, Williams didn't make any strenuous objection and both parties were courteous and behaved as well as possible under the circumstances.
iv) Dissent: We should listen to jury and find that there was potential for breach of peace. The majority's opinion favors those who though a tantrum over those who are calm and peaceful and behave like adults.
Ploof v. Putnam (Supreme Court of Vermont, 1908, CB pg. 367)
i) Rule: Necessity is an excuse to trespass, and the excuse applies with special force to human life.
ii) Facts: Ploof was sailing with wife and two children. Violent storm broke out and greatly endangered the plaintiff's boat, property, and family. As a result, Ploof tied boat to Putnam's dock. Defendant's servant untied the ship; it drifted into the ocean and the boat, property and family were all injured.
iii) Issue/Holding: Was Ploof's tying his boat to Putnam's dock justified as a necessity? Yes, necessity justifies otherwise unlawful entry upon the land.
(1) Although in Vincent v. Lake Erie, the individual had to pay (i.e. take and pay system), this court seems to imply that plaintiff is not required to pay and that Vincent was the exception.
McConico v. Singleton (Constitutional Court of Appeals of South Carolina, 1818, CB pg. 370)
i) Rule: The law of trespass does not prevent a hunter from engaging in the custom of hunting on unenclosed land without the landowner's permission.
ii) Facts: Plaintiff had warned defendant repeatedly not to hunt on his unenclosed and unimproved land, but the defendant did so anyway.
iii) Issue/Holding: Can plaintiff exclude defendant from hunting on his enclosed land? No, it is the customary right for inhabitants to be able to hunt on unenclosed and uninhabited land.
(1) Social benefits: train militia, gives people access to food, would likely cause popular revolt if court ruled the other way
Williams v. Estate of Williams (Supreme Court of Tennessee, 1993, CB pg. 523)
a) Rule: Courts' duty is to rule in line with the predominant purpose of the testator when expressed.
b) Facts: In payment for staying home to take care of their mother until her death, G.A. Williams left his farm to three daughters "until their death or until they married" in holographic will (self-written). If one died or married, that daughter's interest would vest with the other two. When one daughter died or married, that daughter's interest would vest with the other daughters. Descendants of G.A. Williams other children are suing Ethel (92 years old, last living daughter).
c) Issue/Holding: Did the daughters hold a fee-simple or a life estate? Daughters held a life estate.
i) Note, court blatantly ignores language that restricts alienation ("to not be sold during lifetime")
ii) Illustrates the need to think decades ahead. His predicament was to continue to provide for the daughters until their death, but this is foreseeable consequence of granting the daughters a life estate. As the daughters age, the value of the estate falls and the value of the reversion increases. She doesn't have option to sell it to care for herself. G.A. Williams should have conveyed a fee simple.
Gruen v. Gruen (1986)
(a) Importance: Shows it is possible to create future interests in non-real property outside of trusts.
(b) Facts: Gruen sent a letter to his son on his 21st birthday purporting to give him a valuable painting upon Victor's death. Victor's stepmom tried to argue that this was a promise, and as such, it was not enforceable. The son agued that although it was unprecedent, it was the father transferring a remainder interest in the painting while retaining the life estate for himself.
(c) Holding: Court held that Victor had split a fee simple absolute into a remainder and life estate
(i) This is unusual to do and counsel will argue against it so that their clients are not the "test case"
Brokaw v. Fairchild (Supreme Court of New York, 1929, CB Pg. 548)
(a) Rule: The holders in future interests and those who are co-owners are entitled to the property in its current form. "Life tenant shall enjoy land in reasonable manner that land shall pass ... as nearly as practicable unimpaired in nature, character, and improvements." (CB pg. 550).
(i) Exceptions to Rule: When life state holder mistakenly believes they have fee simple freehold estate, significant change to the property that have already been made are permissible (Melms v. Pabst Brewing Co., 1899)
(b) Facts: Isaac Brokaw erected four mansions near Central Park in NYC. He left one of the mansions in a life estate to his son, George, followed by a contingent remainder in the three children of George's siblings. George wants to remove the house and build an apartment building. Holders of remainder suing George.
(c) Issue/Holding: Would tearing down the mansion and building an apartment building change the estate so much as to be injury to the residence and constitute as waste? Yes, because it will cause permeant damage to the property.
Mountain Brow Lodge No. 82, Independent Order of Odd Fellows v. Toscano (Court of Appeals of the Fifth District, 1967, CB pg. 560)
i) Rule: One can convey land with restrictions on land use, but not with restrictions on alienability.
ii) Facts: Toscanos conveyed property to Mountain Brow Lodge with the condition that the property was to be used for a lodge for fraternal organizations, the purpose for which the nonprofit was founded. If Mountain Brow ever sold or transferred part of said lot, the land would revert back to the Toscanos' heirs.
iii) Issue/Holdings: Is the restriction on use valid? Is the restriction on alienability valid? The restrict on use is valid, but the restrict on alienation is invalid. The two are severable, so the restriction on use is valid and enforceable.
iv) Dissent: arguing that the restraint on use is a runaround on a restriction on alienation, and thus, should be treated as such: "if we are to have realism in law, the effect to language must be judged according to what it does. When two different terms generate the same legal result, they should be treated alike in relation to that result."
Delfino v. Valencis (Supreme Court of Connecticut, 1980, CB pg. 601):
(a) Rule: A partition by sale should be ordered only where a partition in kind is impracticable or inequitable, and when the interests of the parties would be better suited by sale.
(i) To determine if one should order a partition in kind or by sale, look at a number of factors:
1. Practicability of physically partitioning the property in question
a. Ex. in this case, partition was practicable because: 1) there were only two parties, 2) the property was a rectangular shape, 3) Valencis residence was on the far west side of the property
2. Balance the interest of the parties and determine partition in kind promotes the best interest of the parties
a. Ex. in this case, the Supreme Court of Connecticut ruled partition in kind did promote interest of parties because: 1) There is no reasonable probability that zoning commission would reject proposed subdivision plans; 2) Business did not store actual trash on property, so unlikely to present obstacle to a partition in kind; 3) Furthermore, forced sale would force Valencis from her home and impact her income stream.
(b) Facts: Delfinos and Valencis are co-tenants of ~20 acres. Delfinos want to develop residential property, but Valencis live on land and operates a garbage disposal business and stores their garbage trucks on land.
(c) Issue/Holding: Are the Delfinos entitled to a partition by sale, or only partition by kind. They are entitled to partition by kind because it is not impractical or inequitable.
Gillmor v. Gillmor (Supreme Court of Utah, 1984, CB pg. 608)
(1) Rule: When a cotenant out of possession makes a clear, unequivocal demand to use land that is in the exclusive possession of another cotenant and that cotenant refuses to accommodate the other tenants' right to use the land, the tenant out of possession has a claim for relief. It is not necessary that the out-of-possession cotenant resort to force or to means that would damage the property as means to provide legal redress.
(a) Footnote 2: "The burden to establish ouster in a suit to recover rents and profits is less stringent than the burden to establish ouster in an adverse possession action."
(2) Rule: Usually, when a cotenant in sole possession makes repairs/improvements to common property without consent of cotenants, he has no right of contribution, except in this case when the expenditures were reasonable and made for necessary repairs and maintenance.
(3) Facts: Frank and Edward Lincoln Gillmor owned a ranch. When Frank died, he passes his ½ interest in the ranch to his sons (Edward and Frank). When Edward died, he passes his ½ interest to his daughter (Florence). All off-springs are co-tenants but Florence is claiming that Edward is using the land to his exclusion and that she has been ousted from her property and as a result, is owed ½ of rental value of the property. Edward appealed ruling from lower court arguing that the award was excessive and that he should be compensated for building a fence and digging a ditch.
(a) If ousted can a cotenant recover fair share of rents and profits from land held jointly or in common? Yes, if cotenant makes clear and unequivocal demand to use and is refused, she is entitled to fair share of rents and profits.
(b) Is a cotenant not in possession liable for necessary repairs and maintenance costs? No, if not in possession, cotenant is not liable for a share of repairs/maintenance costs.
Harms v. Sprague (Supreme Court of Illinois, 1984, CB pg. 613)
i) Rule: Voluntary or involuntary destruction on any of the unities will sever a joint tenancy, but a lien on joint tenant's interest in property will not effectuate a severance of the joint tenancy, absent the conveyance by a deed following the expiration of a redemption period.
(a) Shows the practical difference between title theory and lien is not that great in normal practice, but the distinction matters in Sprague because under a lien theory of mortgage, taking out a mortgage on the property would not sever the joint tenancy (because there is no transfer, just a security interest), while under a title theory there is a better argument that there was a transfer of legal title from mortgagor to mortgagee, thus severing the joint tenancy
(i) Title Theory of Mortgage: When you take out the mortgage, you transfer legal title to the lender and mortgagor retains equitable title
(ii) Lien Theory of Mortgage: When you take out mortgage, you don't transfer legal title, but lender just has secured interest in property
(b) Shows the modern trend that transfer of mortgage interest does not sever joint interests and will not in effect survive the death of a joint tenant but that the property interest that recipient is given will cease on the life of the tenant
ii) Facts: John and William Harms co-own as joint tenants a piece of property. Charles Sprague wishes to buy property, but he is short $7,000 and doesn't own any property to use as security interest. He asks John Harms to guarantee the $7,000 balance by cosigning the promissory note, and in doing so, John Harm transfers a security interest of his ½ undivided interest on the property he owns with his brother. This severs joint tenancy and turns the brothers into tenants in common, but William, John's brother, had no knowledge of this. John Harms died and left everything in his estate to Charles. Charles is arguing that his estate included ½ interest in property and that know Charles and William are co-tenants. However, William is arguing that the brothers remained joint tenants, so when he died, his interest died with him and there are no surveyorship rights.
(1) Is joint tenancy severed when less than all joint tenants mortgage a property? No, joint tenant is not severed.
(2) Does mortgage survive death of mortgagor? No, mortgages are treated as lien on interest in the property, not transfers of title. Therefore, John's mortgage was merely a lien on his ½ interest of property and did not destroy the joint tenancy. Therefore, upon John's death, he had nothing to transfer because joint tenants are characterized by the right of survivorship, so William assumed title in the entire property.
(3) Simmons did not raise Section 20-19 of the Illinois Probate Act, but it appears to state that property will not pass from one joint tenant to another if there is an encumbrance on it, like a mortgage. Court implies that they would rule against this section of the act because it is misunderstands joint tenancy.
(4) This fact pattern, where not all joint tenants signed on to the mortgage, appeared post 2009 financial crisis with Bank of America. Mortgage was transferred by joint tenants without all the tenants singing on to Bank of America, BOA arguing that they should still get right to the property that survive joint tenant. NY Court was not sympathetic reasoning that it is Bank of America's responsibility to understand their security interests. Again, illustrates modern trend.
United States v. Craft (Supreme Court, 2002, Supplement Materials Volume 1):
i) Rule: Tenants by the entirety have property rights, which allow the tenants to encumber the property with things like tax liens. Therefore, the federal government can attach a lien to one member of the married couple's interest in the property.
ii) Facts: Sandra and Don craft owned property together as tenants in the entirety. Mr. Craft failed to pay his income tax for several years, and as a result, IRS attached a federal tax lien to the property. In response, the Crafts executed a quitclaim deed to transfer ½ interest from Mr. to Mrs. Craft for $1. A few years later, they tried to sell the property and found that the lien still existed on the residence. Mrs. Craft brought suit against United States government to quiet title to the sale proceeds, which were being held in escrow.
iii) Issue/Holding: Whether tenants in the entirety, possess "property" or "rights to property" to which a federal tax lien may attach? "State law determines only which sticks are in a person's bundle. Whether those sticks qualify as "property" for purposes of the federal tax line statute is a question of federal law." Under Michigan Law, tenancy by the entirety creates a single property right held by the married couple, but each tenant has the right, among other things, to encumber his property with the other tenant's consent. United states tax law permits tax liens to be levied on a broad array of property interests, including tenants by the entirety. Allowing tenancies by the entirety to escape tax liens would create negative incentives for tax evasion because many married people hold property as tenants by the entirety.
iv) Justice Thomas Dissenting: Under English law and Michigan law, a property held by a tenancy by the entirety does not belong to either spouse, so Mr. Craft did not have any rights in the property in question. The tax lien should be held invalid.
v) Justice Scalia Dissenting: Tenancies by the entirety assist stay-at-home mothers who are incapable of removing tax liens left on their property by their husbands, and this court's ruling reverses that protection.
vi) Contrast with Drye v. United States (1999) where Rohn Dryer disclaimed his inheritance to shield it from federal tax lien attaching pursuant to a state disclaimer statute, which then passed to his daughter without a tax lien. Supreme Court held that where an heir disclaims his or her inheritance from a decedent's interstate estate, that interest is subject to federal tax lien on the disclaiming heir's property or rights to property.
Smith v. McEnany (Supreme Judicial Court of Massachusetts, 1897):
(i) Rule: A landlord's physical intrusion that interferes with the tenant's quiet use and enjoyment of a portion of the property amounts to an eviction from the entire property such that rent obligations are suspended.
(ii) Facts: P leased property to D. P built a wall for an adjacent building that encroached onto leased property between 9-13 inches for 34 feet. P sued for tenant's non-payment of rent and breach of covenant to repair. P argued that the encroaching wall was sufficient reason to withhold the payment of rent; D countered that it didn't materially impact the plaintiff's enjoyment of land.
(iii) Issue/Holding: Does a partial objection by the landlord completely absolve the tenant from performing the covenant to pay rent or does it merely justify a partial abetment in the payment of rent? Partial ejectment amounts to total ejectment, so it doesn't matter that the encroachment did not make the premises uninhabitable nor change the nature of its use.
(iv) Note, the tenant's promise
to repair has not been removed because of the independent covenant model.
Blackett v. Olanoff (Supreme Judicial Court of Massachusetts, 1977, CB pg. 661)
1. Rule: A landlord may be responsible for violating a tenant's right to quiet enjoyment, even in the absence of an overt act by the landlord, in situations in which the landlord has the ability to control the condition causing the breach of quiet enjoyment and fails to take corrective action. This is nonfeasance, failure to act where action is required.
2. Facts: Landlord owns and operates an apartment building and a lounge/ night club right next to each other. Tenants of apartment building refused to pay rent because of the noise from lounge.
3. Issue/Holding: Is the landlord responsible for violating the tenant's right to quiet enjoyment, even in the absence of an overt act by landlord, if the landlord has the ability to control the condition causing the breach of quiet enjoyment and yet, fails to take corrective action? Yes, landlord breached the covenant of quiet enjoyment, despite lack of physical breach.
Paradine v. Jane (King's Bench, 1646, CB pg. 648)
(1) Rule: A party to a contract is required to perform as agreed under the contract even if he experiences a frustration of purpose by something other than landlord's disruption of their covenant of quiet enjoyment.
(2) Facts: Jane leased land from Paradine for period of years. During the lease, Prince of Germany seized the land and expelled Jane for a period of 3 years, during which Jane stopped paying rent. Paradine sued.
(3) Issue/Holding: If tenant's purpose for renting must they still pay for rent? Yes, court ruled that a party to a contract is required to perform as agreed under contract, even if he experiences a frustration of purpose.
(4) Importance: shows leases are both a conveyance of land and a contract.
Gotlieb v. Taco Bell Corporation (US District Court, EDNY, 1994, CB pg. 665)
1. Rule: A landlord accepts its tenant's repudiation of a lease when the landlord sends a new tenant a proposed lease. More generally, if the landlord's actions are inconsistent with respecting the tenant's right to ongoing possession, then they often will be found to have accepted the surrender of the lease.
2. Facts: Plaintiff created a 20-year lease with Taco Bell, which required Taco-Bell to exercise diligence to obtain necessary permits and approvals to construct and operate restaurant. Taco Bell was permitted to cancel the lease if they were unable to obtain such permits. There was tremendous community opposition to Taco Bell, who waited until 1 day prior to the 6-month period to file a permit application. On the same day, they sent letter to plaintiff repudiating on the lease. Plaintiff refused to accept the repudiation, but later began discussions with Rite-Aid.
3. Issue/Holding: Does a landlord accept its tenant's repudiation of a lease when the landlord sends a new tenant a proposed lease? Yes, plaintiff's affirmative conduct shows that they accepted defendant's repudiation and surrender of lease. Plaintiff is only entitled to the 16-month period before plaintiff contracted with Rite Aid.
Sommer v. Kridel (New Jersey Supreme Court, 1977, CB pg. 698):
a. Rule: Landlords have a duty to make reasonable effort to mitigate damages in the case of residential leases. This requires treating the vacated apartment like any existing vacancy. Landlord carries the burden of proving that he used reasonable diligence in attempting to relet the premises.
b. Facts: Kridel entered into agreement to lease an apartment from Sommer. Kridel's plans changed, and he wrote a letter to Sommer forfeiting the apartment, but Sommer never answered. A new potential tenant inquired about the apartment, but the landlord did not rent them the apartment. Sommer sued Kridel demanding rent for the full two-year term.
c. Issue/Holding: Doe a landlord seeking damages from a defaulting tenant have a duty to mitigate damages by making a reasonable effort to relet the apartment that was wrongly vacated by the tenant? Yes, landlord must make effort to mitigate damages.
i. Makes sense because the landlord is in better position to relet and if he did not, his actions would be wasteful
d. Note: this is not applicable to commercial settings!
Medico-Dental Building v. Horton and Converse (Supreme Court of California, 1942, CB pg. 673):
i) Rule: For a covenant to be considered dependent, it must go to the heart of consideration - i.e. it must negate the entire purpose of the bargain.
ii) Rule: A tenant's obligation to pay rent is dependent on the landlord's compliance with a restrictive covenant in the lease, if the landlord's breach of the covenant will defeat the purpose of the lease.
iii) Facts: Horton and Converse had a 16-year lease on the ground floor of Medico-Dental Building to operate their drug store. The terms of their lease said that the landlord agreed to not lease or sublease any portion of the Dental Building to another drug store. 3 years later, plaintiff leased the entire ninth floor of the building to Dr. Boonshaft, who proceeded to open a drug room for his patients. Horton and Converse left the premises.
iv) Issue/Holding: Is a tenant's obligation to pay rent dependent on the landlord's compliance with a restrictive covenant in the lease, if the landlord's breach of the covenant will defeat the purpose of the lease? Yes, here the covenants were dependent on each other because they run to the entire consideration of the contract. Therefore, when the restrictive covenant was breached by the Medico Dental and the breach was so egregious that went to Horton and Converse's reason for contracting, Horton and Converse are relieved from paying rent.
Javins v. First National Realty Corp. (US Court of Appeals, DC Circuit, CB pg. 680):
i) Rule: An implied warranty of habitability is read into residential leases and breach of that warranty frees tenants from the obligation to pay rent.
ii) Facts: Tenants withholding rent from First National Realty because of numerous violations of housing code. FNR sought to eject plaintiffs because of failure to pay rent.
iii) Issue/Holding: Is tenant's obligation to pay rent extinguished due to housing code violations that arise during the term of lease? Yes, because of the change in today's tenant / landlord, a warranty of habitability is implied in residential leases. If the landlord does not maintain premises subject to applicable regulations, then the tenant is deprived of the value he contacted for. Therefore, violations of implied warranty of habitability negates tenant's duty to pay rent.
(1) Change in modern landlord/ tenant relationships:
(a) When leases were primarily used for agricultural purposes, the default rule was that the tenant had a right to repair.
(i) Because the tenant, not the landlord, took on the risk, the price of the lease would have been reflected to show that.
(b) In modern day, 1) owners of apartments are more likely to have expertise and connections with repair personnel, 2) the landlord is better agent for repairs, problems may not be accessible to tenant
iv) Importance: Judge Skelly Wright is updating leasing law
Mullendore Theaters Inc. v. Growth Realty Investors Co. (1984):
i) Rule: A covenant in a lease that requires a landlord to return a tenant's security deposit does not run with the land. To run with a land, a covenant must be so related to the land that the covenant enhances the land's value or confers a benefit on the land; otherwise, it is only the original lessor's collateral and personal obligation.
ii) Facts: Conner Theaters entered 10-year lease that required a $22,500 security deposit to the landlord. Lease provided that: 1) landlord could keep the security deposit as damages if Conner defaulted; 2) If Conner did not default, the landlord would return the lease in 1979; 3) all convents in the lease ran with the land. Conner assigned the lease to Mullendore (plaintiff) and security deposit was reduced to $6,000. Property was eventually acquired by Growth Realty Investors, who then sold it to the city. Mullendore sued GRIC for the return of the security deposit.
iii) Issue/Holding: Does a covenant in a lease that requires a landlord to return a tenant's security deposit run with the land? No, a covenant only runs with the land if it touches and concerns the land.
iv) Importance: Shows that small differences in words are important. Most people think that all provisions of lease are applicable to the new tenant, but that is not true. Not all promises go with assignments and sub-leases. One must distinguish between privity of contract and privity of estate.
(1) If you were advising the defendants on how to make it touch and concern the land, claim that the money is going to be used for repairs.
Kendall v. Ernest Pestana Inc. (Supreme Court of California, 1985, CB pg. 718):
(1) Rule: When lease provides for assignment of tenant interest only with consent of the lessor, then such consent can only be withheld where lessor has commercially reasonable objection to assignment. (This rule is now the modern trend Landlord consent may be required, but may not be unreasonably withheld.)
(2) Facts: Hanger space at San Jose Airport was rented out to Perlitch couple, who signed a 25-year sub-lease with Bixler, and then, in turn assigned landholder interest to Ernest Pestana Inc. Because the value of the land had increased, Bixler sought to assign his right to Kendall and the O'Hara couple. Bixler requested consent from Ernest, and they refused.
(3) Issue/Holding: Whether, in the absence of a provision that such consent will not be unreasonably withheld, a lessor may unreasonably and arbitrarily withhold his or her consent to assignment/subleases? when lease provides for assignment of tenant interest only with consent of the lessor, then such consent can only be withheld where lessor has commercially reasonable objection to assignment.
(4) Importance: This changes California's default rule and makes it align with the minority rule, but parties can contract around this.
(a) Justifications for adopting minority rule:
(i) Modern times call for reasonable alienation of commercial spaces
1. Leases are not just contract law, but they are also conveyances. Leases as conveyances justifies the adoption of the minority rule because there is general disfavor at common law for restraint on alienations.
(ii) In every contract, there is implied good faith and fair dealing
Allen v. Hyatt Regency Nashville Hotel (Supreme Court of Tennessee, 1984, CB pg. 465)
i) Rule: In Tennessee, parking in an enclosed, modern garage with attendant creates bailment for hire.
ii) Facts: Allen parked his car in the Hyatt parking lot, despite not staying there. To get into and leave the garage one must get and subsequently present a ticket. There is only one entry/exit. His car is stolen while attending is gone and gate is left open.
iii) Issue/Holding: What is the nature and extent of the liability of the operator of a commercial parking garage for theft of a vehicle during the absence of the owner? Bailor/Bailee relationship was created when owner parked and locked his vehicle in the parking lot. This is because: 1) P expected the hotel to provide attendants and protection. 2) Operator assumes control and vehicles parked in the garage by limiting access and requiring the presentation of a ticket. 3) Record show that improper tampering with the vehicle was reported, but nothing was done.
iv) Dissent: The dissent argues that in this situation, a license is created because 1) there was never a transfer of property to an employee of the hotel, 2) only duty cashier has was collecting money - he wasn't performing the traditional bailee duty of returning object later, 3) he doesn't know whose car it is so he can't enforce it.
License: when owner permits a non
Broadway National Bank v. Adams (Supreme Judicial Court of Massachusetts, 1882, CB pg. 772)
i) Rule: Trusts created as life estates are not subject to the common law rule that property cannot be granted passed along with a condition that it not be alienated. Trusts can secure the income by preventing alienation and preventing the trust be taken by creditors.
ii) Facts: Adams created a trust for his brother, Charles, that forbid him from alienating the income or from it being taken by creditors.
iii) Issue/Holding: Can the founder of a trust secure the income of a trust to beneficiary by providing that it shall not be alienable by him or subject to be taken by his creditors? Yes, the founder of a trust can prevent alienation and can prevent the trust being taken by his creditors.
(1) This is not invalid because of it being an unreasonable restraint on alienation because arguments against alienation don't apply against property held by a trust, because trustee is free to invest and use as they see fit.
(2) Aligns with the intention of the settlers - Adams made periodic gifts to Charles while he was alive, and the creditors were not able to get this money because Charles couldn't have anticipated the money he was going to get, so he couldn't have pledged expected distribution to get new money from creditors. Therefore, this allows him continue doing what he was doing during his life, after his death.
Wilber v. Owens (Supreme Court of New Jersey, 1949, CB pg. 786):
i) Rule: If 1) the trustee had a general charitable purpose and 2) the trust's specific purpose cannot be met because it is impossible to fill, in violation or public policy, or the circumstances have changed such that it is highly problematic to carry out the specific charitable intent, then the trustee may use doctrine of cy pres to redirect funds to a similar charitable purpose.
ii) Facts: Bamford left "Random Scientific Notes" to Princeton University via a trust for Princeton to continue work on the scientific notes.
iii) Issue/Holding: May a trustee use the doctrine of cy pres to redirect trust funds for charitable purposes, if 1) the settler of the trust had a general charitable purpose and 2) the trust's specific purpose cannot be met? In this case, the 1) settler had a general charitable intent ("dominant purpose was the devotion of his property to uses which are charitable.") and 2) the charitable intent is impossible to be met because it wasn't depend on any specific charitable project, so that if the specific charitable purpose wasn't possible, then cy pres is involved.
Timmer v. Gray (Minnesota Court of Appeals, 1986, CB pg. 811):
(1) Rule: An equitable lien is enforceable against any person who subsequently acquires encumbered property that is a bona fide purchaser for value without notice.
(a) Bona Fide Purchaser: One who purchases property for valuable consideration without notice of prior claims in the property or defects in the seller's title.
(2) Facts: Heaton borrowed money from the Farmers Home Association (FHA), and in return, gives the agency a security interest in his personal property, including discs which are being stored on Glowack's land. When Heaton defaulted, FHA was entitled to reposes and sell the disks. But actual possession of the discs had been transferred to Gray, and then to Maggert for repair. Maggert performed $857 worth of repair but received no compensation. Timmers bought the disks from FHA for $75 without knowledge of the repair work, but only received one. Sued Maggert for replevin and conversion. Maggert counterclaimed to get recovery for the cost of his repair work.
(3) Issue/Holding: Is Maggert entitled to equitable lien based on the theory of unjust enrichment? Yes, this case requires equitable lien because 1) The Timmers are not bona fide purchasers because they paid a lack of value; 2) They weren't sufficiently without notice because they could have easily discovered that the discs had been repaired by examining the property.
US Bank National Association v. Ibanez (Supreme Judicial Court of Massachusetts, 2011, CB pg. 846):
(1) Rule: A party has the authority to exercise a power of sale contained in a mortgage only if the party holds the mortgage at the time of the notice of sale and at the subsequent foreclosure sale.
(a) This is an outliner case from the traditional holding that the mortgage follows the note.
(2) Facts: Ibanez takes out a mortgage to buy a home. He defaults on the mortgage. The mortgage had initially been with Rose Mortgage, but though a long strong series of assignments, it ended up being assigned pooled with 1,2000 other mortgages to US bank as a trustee.
(3) Context: In the run up to the 2007-2008 financial crisis, a lot of markets were getting overheated because the required down payment was decreasing, so more people were able to buy houses and more expensive houses. This can be a really good thing, but how can someone who only has so little to put up as an initial down payment ever repay the payment on a very expensive house? If prices are rising, you can flip the house and make a profit, but if prices are falling, then you can become underwater, when you own more on your loan than the property is worth.
(4) Issue/Holding: Can a party claim title to a property sold pursuant to a power of sale contained in a mortgage if the party is unable to prove that it held the mortgage at the time of the notice of sale and at the subsequent foreclosure sale? Although publication in the Boston Globe was sufficient notice of foreclosure, US Bank did not have right to foreclose because they did not, at that moment in time, have right to mortgage.
Irons v. Smallpiece (King's Bench, 1819):
(a) Rule: In order to transfer property by gift, there must be delivery of deed of gift or actual gift. Verbal donation mortis causa (gift in contemplation of death) doesn't transfer the property without actual delivery.
(b) Facts: Father made verbal gift of colts to his son months before he died, but the father retained possession of the cults. A few days before his death, the father and son agreed that the son would pay his father a reduced price for the hay that was needed for the colts.
(c) Issue/Holding: Does the son have a right to the colts? No, because this was a gift, but the gift was never delivered. The fact that the father continued to have possession and pay for the colts after more than 6 months makes it look like the father never intended to give these colts.
Foster v. Reiss (Supreme Court of New Jersey, 1955, CB pg. 863):
(a) Rule: Gifts causa mortis require actual, unequivocal, and complete delivery during the life of the donor wholly divesting her of possession, dominion, and control of the property
(b) Facts: Wife, before undergoing surgery, writes a note to her husband describing where various amounts of money were and giving him access to her bank accounts. Left note in bedside table and told her friend to make sure her husband found it. In the will, the husband only received $1 and everything else was divided among the children.
(c) Issue/Holding: Are gifts causa mortis (gifts in contemplation of death) without delivery by donor? No, here the Supreme Court of New Jersey fails to find that there has been delivery because wife left the letter in a drawer and told a friend about it, rather than executing the delivery or mailing the letter.
Gilbert v. McSpadden (Court of Appeals of Texas, 1936, CB pg. 869):
(a) Rule: A deed does not become effective until it is delivered, and to constitute delivery of a deed, facts and circumstances, whether by word or deed, must show unequivocal intention on the part of grantor to surrender the instrument so as to deprive the grantor of all authority over it of the right of recalling it. If he does not evidence such an intention, there is no delivery.
(b) Facts: Gilbert and his wife execute deeds conveying land to their daughter and son, but never delivered them. Four years later, Gilbert is visiting his daughter purportedly to deliver the deeds, but he dies in his sleep before he delivers them.
(c) Issue/Holding: Who does the land belong to? The land belongs to the estate because there was never effective delivery. While there was possibly an intention to deliver the deed at some date in the future, grantor retained possession and control of the deed until his death without any evidence that intention should presently become effective.
(d) Importance: this case shows just how importantly the delivery requirement is
Murphy v. Financial Development Corporation (Supreme Court of New Hampshire, 1985, CB pg. 820):
(1) Rule: When undertaking a foreclosure sale, the mortgagee has a duty to exercise good faith and due diligence to protect the interests of the mortgagor.
(2) Facts: The Murphys took out mortgage to secure the loan to buy a house. They then refinanced their mortgage. The lender assigned the mortgage to Colonial Deposit. Murphy lost his job. Lender gave notice of foreclosure but agreed to postpone. Plaintiff paid mortgage back, but not the late fees that had accrued. Defendants foreclosed but didn't advertise the foreclosure sale. Lender was only bidder at foreclosure sale and paid $27,000 for the house (not fair market value). Two days later, sold it for $38,000.
(3) Issue/Holding: Does a mortgagee have a duty to the mortgagor to exercise good faith and due diligence when conducting a foreclosure sale? Yes, mortgagees have a duty to protect the mortgagor via good faith and fair dealing. Although low price isn't sufficient evidence of bad faith, the low cost of purchase and quick flip is sufficient evidence for court to rule that the seller breached their duty of good faith
(4) Dissent: The seller has a duty when they are acting in their capacity as seller, but not when they are acting as a bidder.
(5) Case's Importance: This case illustrates that it is not enough to jump through the requirements of a statue, mortgagees have an overall obligation of good faith and due diligence.
Skendzel v. Marshall (Supreme Court of Indiana, 1973, CB pg. 828):
(1) Rule: Under Indiana law, judicial foreclosure is the preferred remedy for enforcement of a vendor's rights under a land contract unless the vendee has acquired so little equitable interest in the subject property that forfeiture would not be unfair.
(2) Facts: Contract entered into for sale of real estate for $36,000. Clear payment schedule is laid out, but contract has 1) prepayment provision (prepayments can be accepted in lieu of further principal payments), and 2) forfeiture clause (if payment lapse, then all money previously paid is terminated and contract is terminated). When defendant defaulted, plaintiff tried to enforce forfeiture provision and keep the land and the $21,000 that has been paid on the property.
(3) Issue/Holding: What is the appropriate remedy for default on installment land contract? Judicial foreclosure because 1) Skendzel waived the right to strictly enforce contract terms by acquiescing to non-compliance in the past, 2) the amount of loss resulting from breach may be determined with specificity, so the law disfavors liquidated damages, 3) liquidated damages will only be enforced when forfeiture will not represent unreasonable measure of damages and greatly exceed the actual loss suffered, as is the case here, 4) buyer does not acquire legal title, but they do require an equitable interest on the property proportional to the measure of their previous performance under the contract, here that is a significant equitable interest
(4) Concurrence: Vendor does have important contractual rights and under certain circumstances, forfeiture will be an appropriate remedy. Remedies should be crafted with consideration of the fact that land contract vendors would most likely have utilized other provisions for the protection of their interests had they realized that forfeiture provisions would not be consistently enforced.
(5) Importance: To what extent should party be able to bargain around typical mortgage terms
Wood v. Donahue (Court of Appeals of Ohio, First District, 1999, CB pg. 874):
(1) Rule: The purchaser under a land installment contract is the equitable owner of the land upon the contract's execution and is entitled to both benefits and loss that might occur with property.
(2) Facts: Donahue bought house from Wood for $87,900 through a land installment contract. He successfully finished paying for the house in 1990, but in 1985, there was a class action against a nearby processing plant. Wood, not Donahue, was awarded the $9,478 benefit. Donahue argued that he was owed owner 65.41% of the $9,478 benefit (the amount ownership he had at the time).
(3) Issue/Holding: Is Donahue entitled to the settlement? Yes, the installment land contract effectively transferred the ownership and equitable title of property to Donahue, and as equitable owner, Donahue bore all loses, but is also entitled to all benefits that might accrue.
Hauk v. Crawford (Supreme Court of South Dakota, 1953, CB pg. 895):
1. Rule: When a person is fraudulently induced to sign a paper holding that it is something other than it really is (fraud in the inducement), then "the contractual know was never tied" and such paper or instrument is void.
2. Facts: Crawford offered Farmer Hauk (plaintiff) deal to lease plaintiff's land for oil and gas. However, without reading it, Hauck also signed a deed conveying ½ minerals in his land to Crawford. Crawford then conveyed the mineral rights to White and Duncan.
3. Issue/Holding: Were mineral rights properly conveyed to Crawford, who in turn conveyed it to White and Duncan? No, the deed was void, so it was incapable of conveying anything to Crawford, who then had nothing to convey to White and Duncan.
a. Plaintiff's negligence in not reading the contract does not neutralize the fraud or give validity to the deed
b. However, if plaintiff created acts sufficient to create an estoppel, then he should bear the brunt of such negligence, rather than the bonafide purchaser.
i. Estoppel: arises when 1) by his conduct or acts, a party intentionally or through culpable neglect, induces another to believe certain facts exist, 2) such other party rightfully relies and acts on such belief, 3) the party that relied on such facts did so to the point where they will be prejudiced if the former is permitted to deny the existence of such facts
Kotis v. Nowlin (Court of Appeals of Texas, 1992, CB pg. 889):
(a) Rule: Willful disregard of suspicious facts that would lead a reasonable person to believe the transaction was unlawful is sufficient evidence to prevent an individual from obtaining the status as good faith purchaser.
(b) Facts: Sitton purchased Rolex from Nowlin jewelry for $9,438 with a forged check. He then sold the watch to Kotis for $3,500.
(c) Issue/Holding: Is Nowlin the sole owner of the watch, or was Kotis a good faith purchaser such that he should retain possession of the watch? No, Kotis lacked standing as a good faith purchaser because there is evidence that he believed that the transaction was unlawful at the time.
(i) In particular, when Kotis spoke with the Nowlins, 1) he refused to identify himself, 2) he said he did not have the watch, 3) he said that he did not want the watch, 4) he refused to talk with Mr. Nowlin when he called back, 5) advised Nowlin got contact an attorney, 6) evidence that he was familiar with the price of Rolexs and knew that this was an unreasonably low price - which sis evidence that the goods were stolen
(ii) If Kotis paid a higher price for the Rolex, he might have a better chance of being protected as a good faith purchaser.
(iii) Turns in part, on what kind of Notice Kotis had of the flaw in Sitton's title - actual, inquiry, or record - see below for definitions.
Miller v. Green (Supreme Court of Wisconsin, 1953, Supplement, Volume 2):
(a) Rule: Possession of land is notice to the world of whatever rights the possessor may have in the premises. The possession of real estate is generally considered constructive notice of rights of possessor if the possession is open, visible, exclusive, and unambiguous.
(b) Facts: Miller has 63-acre farmland. He leased land to Green for the cop season. Miller then entered into contract to buy land. Miller did not record his purchase of the land. Miller worked the land throughout November - had 60 loads of manure delivered and plowed 2 acres of the land. Hines, defendant, subsequently purchased the property from Green. Millers used Hines and Green, asserting he had title.
(c) Issue/Holding: Is Hines a good faith purchaser or is Miller's possession of land sufficient to put a subsequent purchaser on inquiry notice that the possessor may have title to the land? Hines is not a good faith purchaser because the possession by Miller throughout month of November constitute constructive notice to all the world. Thus, subsequent purchasers are required to make inquiry as to what rights if any, the Millers have in the premises. Subsequent purchasers could not safely assume, without inquiry, that because Miller had rights for a season there had been no subsequent change in rights.
Hendricks v. Stalnaker (Supreme Court of Appeals of West Virginia, 1989, CB pg. 24)
(1) Rule: An interference will be considered a private nuisance when it interferes with the use and enjoyment of another's land and is either (a) intentional and unreasonable or (b) unintentional and otherwise actionable under the rules controlling liability for negligent or reckless conduct, or for abnormally dangerous conditions or activities (Restatement 2d Torts §822). Here the water well is substantial interference, btu not unreasonable, so it is not a private nuisance.
(a) Intentional: interference is considered intentional if "actor knew or should know that the conduct is causing a substantial and unreasonable inference."
(b) Unreasonable: interference is unreasonable when the gravity of harm outweighs the social harm considering: 1) extent of harm involved, 2) character of harm involved, 3) social value that the law attaches to the type of use or enjoyment invaded, 4) suitability of a particular use or enjoyment invaded to the character of the locality, and 5) burden on person harmed by avoiding the harm.
(2) Facts: Hendricks moves in adjacent to Stalnaker and immediately makes plans to get a septic system installed, but before he can do so, Stalnaker receives a permit for a water well to be installed, which then prevents the country from approving his septic system.
(3) Issue/Holding: Is the water well a private nuisance? No, water well is not a private nuisance because Hendricks have failed to show that the balancing of interests favors their septic system. Furthermore, inability to operate a septic system was intentional, but is not an unreasonable harm to land.
Adams v. Cleveland-Cliffs Iron Company (Court of Appeals of Michigan, 1999, CB pg. 938)
(1) Rule: A possessor of land in Michigan proving a direct or immediate intrusion of a physical, tangible object onto his land is presumptively entitled to recover at least nominal damages in trespass, however, noise, vibrations, and dust are intangible objects and therefore do not give rise to an action in trespass.
(2) Facts: Plaintiff brought suit seeking damages in both trespass and nuisance complaining of dust, noise, and vibrations from Empire Mine, owned and operated by Cleveland-Cliffs Iron Company. Mining operation that is going 24 hours/day, but in the local day it provides 2,200 jobs.
(3) Issue/Holding: Is this case covered by trespass or nuisance law? This is covered by nuisance because it interferes with the private use and enjoyment of one's land, and not with the sole possession of their land.
(a) This case shows the difference between nuisance and trespass. However, it is hard to draw a bright line rule, but courts don't admit the difficult. Options;
(i) Trespass could be considered direct injury to land vs. nuisance is indirect injury
(ii) Trespass could be direct interference of visible object (that you can see with naked eye) vs. nuisance is interference of invisible object
(5) This has substantial effects because trespassers are strictly liable. There is no weighing the benefit to the trespassers vs. the loss of value to the person they trespassed against. In contrast, in nuisance law, there are few absolutes, and courts invariable way the social benefits vs. social costs ,even if they don't say that they're doing that explicitly.
Campbell v. Seaman Court of Appeals of New York, 1876, CB pg. 951):
i) Rule 1 (nuisance and injunction): Property rules are preferred when transaction costs are low because property will end up in hands of the one who values it the most.
(a) Rule: Nuisance prohibits unreasonable use of land, especially if land use is unreasonable in light of the locality and the damage to the one complaining of the nuisance is substantially larger than the benefit to the one causing the nuisance
(b) Facts: Plaintiff bought 40 acres on the Hudson River and built a mansion and elaborate garden. Defendant has been using the enjoining land as a brickyard for the last 20 years. Upon change in the wind pattern, the gas coming from defendant's brickyard started killing plaintiff's trees and injured their vines, causing them an estimated $500 in damage.
(c) Issue/Holding: Was defendant's brickyard a nuisance? If so, should the remedy be an injunction or damages? Yes, defendant's brickyard was a nuisance and an injunction should be ordered.
(i) Why nuisance?
1. Killing of the trees / vines
(ii) Why injunction?
1. Trees and vines cannot be replaced
2. Injunction prevents the multiplicity of suits as this is a reoccurring injury
3. Damages endured by plaintiff are large and substantial and brickyard can move to another location
(iii) If the plaintiff "came to nuisance," that does not prevent a claim in totality, rather the courts will consider it as one of many factors also including timing, good faith, absence of spite, public interest in defendant's activities, and estoppel like notions.
Boomer v. Atlantic Cement Company Inc. (Court of Appeals of New York, 1970, CB pg. 965):
i) Rule 2 (nuisance and damages): Conventional wisdom is that Rule 2 is used in cases with high transaction costs.
(a) Rule: Permanent damages, rather than an injunction, are appropriate when the damages resulting from a nuisance are significantly less than the economic benefit derived from the party causing the harm.
(b) Facts: Plaintiff were neighboring landowners to defendant, who operated a large cement plant in Albany. Plaintiff used for injunction and damages alleging nuisance in form of dirt, smoke, and vibrations. Trial court found a nuisance, but ordered permanent damages, instead of an injunction.
(c) Issue/Holding: Are permanent damages appropriate in a situation where the harm caused by a nuisance is significantly less than the benefit to the party causing the nuisance? Yes, permanent damages are appropriate in this case because the benefit gained by the plaintiffs through issuing an injunction is out weighted by the social cost of shutting down the plant.
(i) Allowing for permanent damages is effectively setting a price for Atlantic City to pay, and if they don't pay, then an injunction will be ordered.
(i) Court should adhere to a standard remedy of granting of injunctions.
1. Moral element: when someone is a nuisance, what they are doing is morally wrong and we shouldn't allow people to pay in advance to create moral wrongs
2. Misuse of Imminent Domain: this is effectively the government allowing an individual's right to not be subject to pollution to be taken so long as they are reimbursed for it. This Is private use of imminent domain, but there is no public benefit.
a. While government does have imminent domain power that can be designated to private use, it must be for public use.
3. Negative Incentives: if damages are paid up front than there is no incentive for the defender to attempt to reduce their pollution
Spur Industries Inc. v. Del E. Webb Development Co. (Supreme Court of Arizona, 1972, CB pg. 975):
i) Rule 4 (no nuisance and damages): Almost never awarded
(a) Rule: In extremely rare circumstances (this is an outlier case), the court might issue a compensated injunction - an injunction against the nuisance but where the offending party is compensated for the cost of relocating.
(b) Facts: Spur's predecessors at interest owned a cattle feedlot 15 miles west of Phoenix. In 1959, the lot was feeding 8,000 cattle in 35 acres. In 1959, Del Webb bought 20,000 acres of land to build a retirement community. In 1962, Spur purchased property in question and began expanding his cattle lot from 35 114 acres.
(c) Issue/Holding: Can Webb enjoin the feedlot, even though it used to be a lawful business? If so, should Spur be required to indemnify Spur? Yes, the feedlot can be enjoined as a public nuisance, even though it was lawful before the development of Sun City, because public nuisances are dangerous to public health. But Webb must indemnify Spur for the cost of moving or shutting down.
(i) Justification for finding public nuisance: Del Webb has shown special injury to the residents of Sun City, not just to himself. It was smart on his part in waiting to sue until after Sun City was built and people had moved in because it made an injunction necessary.
(ii) Justification for requiring Del Webb compensate Spur: It was foreseeable that the cattle lot would expand
Baker v. Howard County Hunt (Court of Appeals of Maryland, 1936, CB pg. 417):
(i) Rule: A property owner is entitled to the equitable remedy of an injunction to prevent repeated trespasses, even if the owner has harmed one of the trespassers and damages are recoverable at law.
(ii) Facts: Bakers move to the country. Dr. Baker using the land to conduct experiments on rabbits, but also are raising crops, have a chicken yard, and are creating a refuge for birds/animals. Fox hunters trespass on their land four out of five times.
(iii) Issue/Holding: Whether an injunction relief may be awarded? Yes, injunctive relief may be awarded because damages in this case are intangible, incapable of measurement, and inadequate to compensate for their injury
1. "For the actual physical injuries there may have been an adequate legal remedy, but for the interference with appellants' enjoyment of their property as affect ed by the threat of continued recurrences of such incidents the law affords no relief" (CB pg. 422).
1. Notice how much has changed from McConico v. Singleton, where one was not allowed to exclude hunting on unenclosed and uninhabited land.
(v) Arguing for the Howard County Hunt:
1. Equity requires clean hands
i) Baseball Publishing Co. v. Burton (Supreme Court of Massachusetts, 1938, CB pg. 983):
(1) Rule: A contract that allows a party to engage in a particular use of land creates an easement in gross.
(2) Facts: Defendant owned a wall that Baseball Publishing Company (BPC) was advertising on. Contract was titled a lease, but gave BPC exclusive right and privilege to advertise on Burton's building for one year. BPC accepted the contract by sending $25/year and continued to do so for multiple years, although the checks were always returned.
(3) Issue/ Holding: What does this contract create? Easement in gross because the contract allows the party to engage in a particular use of land.
(a) Not lease because did not transfer possessory interest
(b) Not licenses because it is irrevocable
Schwab v. Timmons (Supreme Court of Wisconsin, 1999, CB pg. 991):
(a) Rule: The owner of landlocked property cannot claim an easement by necessity or implication if the owner has conveyed away public-road access.
(b) Facts: Petitioners' property is bordered by water on one side and a bluff on one side, so that the land is only accessible by the respondent's land.
(c) Issue/Holding: May the owner of landlocked property claim an easement by necessity or implication if the owner has conveyed away public-road access? No, petitioners are not entitled to either an easement by necessity or an easement by implication because the requirements are not met for either. Here, there is no easement by implication, because the private road never extended to the owners' properties, and the landowners did not allege that any use by the government was so continuous, obvious, or manifest as to show permanence.
Hollbrook v. Taylor (Supreme Court of Kentucky, 1976, CB pg. 999)
(a) Rule: Where the owner of land has granted a license to another to use and make improvements upon the land, and the licensee, relying on this permission, does use and make improvements to the land at considerable cost, that license is irrevocable.
(b) Facts: The Taylors and Hollbrooks have neighboring property and the Taylors ask to use the Hollbrooks' private road because it will be cheaper for them than to use the public roadway. The Hollbrooks allowed it. The Taylors build the house and during the building of the house and afterward they continue to use the Hollbrooks' road. Eventually, the Hollbrooks stop allowing the Taylors to use the land.
(c) Issue/Holding: Is there a right to use the roadway either by prescription or by estoppel? There is not right to use the land by prescription because there is no evidence that the use of the haul road was adverse, continuous, or uninterrupted. However, there is easement by estoppel because The Taylors reasonably changed their position in reasonable reliance of the Hollbrooks. The Hollbrooks gave them permission as a set up because in reasonable reliance on the words and deeds of Hollbrooks, they 1) spent money constructing residence, 2) spent money fixing road, 3) didn't pursue negotiation with other neighbors.
Warsaw v. Chicago Metallic Ceilings (Supreme Court of California, 1984, CB pg. 1003)
(a) Rule: If a person acquires a prescriptive easement, the landowner may be required to remove a structure that encroaches on the easement and will not be compensated for the structure's removal.
(b) Facts: Warsaw and CMC owned adjoining properties. Warsaw's driveway wasn't large enough for tricks to turn around in. From 1972 to 1979, Warsaw's trucks used CMC's strip of land to turn around in. In 1979, CMC started building a warehouse on its land, which blocked Warsaw's use of the stip.
(c) Issue/Holding: Does Warsaw have a prescriptive easement? Yes, all elements of prescriptive easement have been met (use of property must be open, notorious, continuous, and adverse for an uninterrupted period of five years), so the court order an injunction to make CMC remove the portion of the building that interfered with the easement and there is no requirement for CMC to compensate.
(i) Why no compensation? There is no basis in law or equity requiring plaintiff to compensate defendant for fair market value of easement acquired - to do so would defeat doctrine underlying adverse possession and prescription ("land use has historically been favored over disuse, and that therefore he who uses land is preferred in law to he who does not, even though the latter is the rightful owner
(d) Importance: Shows the mistake that CMC made in not excluding Warsaw from using their land.
Tulk v. Moxhay (Court of Chancery, England, 1948, CB pg. 1028)
i) Rule: One who purchases property with knowledge of restrictive covenants burdening the land must honor the covenant.
ii) Facts: Tulk sold property in Leicester Square to Elms with the stipulation that the square garden must be maintained and that no houses were to be built on the ground. This covenant purported to bind Elm, his heirs, executors, and administrators Land was eventually conveyed to Moxhay whose deed did not contain he same covenant, but he took the land with knowledge of it. Plaintiff sued for injunction preventing Moxhay from disturbing the square garden
iii) Issue/Holding: Whether a covenant restricting use of a piece of land may be enforced against a subsequent purchaser of land? Yes, because it would render the original covenant meaningless and it would be inequitable to let the seller to purchase restricted land and sell and get compensation for unrestricted land.
Eagle Enterprises Inc, v. Gross (Court of Appeals of New York, 1976, CB pg. 1046)
i) Rule: In order to determine if convent touch and concerns the land with which it runs, must determine whether is "whether the covenant in purpose and effect substantially alters" the land.
ii) Facts: Orchard Hill Realties conveyed property in subdivision to Baums. In the conveyance, there was a provision that the Baums would pay $35/year for water and that the covenant would run with land. After series of transfers, Gross ends up with the property held by Baums. The Deed that Gross has does not contain covenant to purchase water. He constructs his own well and refuses to pay the $35/year.
iii) Issue/Holding: Whether the promise of the original grantees to accept and make payment for a seasonal water supply from the well of their grantor is enforceable against subsequent grantees and may be said to "run with land"? No, although there are elements of intent and notice, there is no evidence that the promise touched and concerned the land. The promise didn't touch and concern the land because "the covenant in purpose and effect" did not substantially affect the land itself, shown by the fact that the new owners were able to build their own well.
Sanborn v. McLean (Supreme Court of Michigan, 1925, CB pg. 1050):
i) Rule: Where the owner of two or more related lots conveys one with restrictions for the benefit of the retained lot(s), the restrictions are deemed to apply also to the retained lot(s).
ii) Facts: McLean bought a lot in a subdivision and are trying to erect a filing station on their lot. Defendant sued to enjoin them from doing so based on the fact that gas station would be a nuisance per se and that the lots were subject to restrictions to be used for residence purposes only.
iii) Issue/Holding: Is defendant's lot subject to a reciprocal negative easement? Yes, because 1) land started with common owner which burdened the lots with reciprocal restrictions, 2) when the lots were sold to separate parties, they remained burdened with restriction to each purchaser with notice, and 3) Defendant had constructive notice because he could not have helped but notice the lots were only residential purposes, which should have led him to inquire about restrictions
Pocono Springs Civic Association Inc. v. MacKenzie (Superior Court of Pennsylvania, 1995, CB pg. 487)
(i) Rule: In order to legally abandon real property, the owner must successfully divest himself of all right, title, claim, or possession of the land.
(ii) Facts: The MacKenzies purchased vacant real property in the Pocono Springs Development. The lot was a negative value property - property that costs more than it was worth - because it unusable because it didn't have proper soil for percolation for a sewar system and MacKenzies were still required to pay Homeowners Association dues. They tried to sell their land, but no one would buy it. They tried to gift it back to association, but they wouldn't take it. MacKenzies stopped paying real estate taxes on the property, which resulted in a sheriff's sale on the property. There were no buyers on the sale. The Association sued the MacKenzies in an effort to collect association dues
(iii) Issue/Holding: Has an owner of real property successfully abandoned his interest in the property where no new owner has taken title to the property? No, despite the MacKenzies' efforts, they retained the recorded deed in fee simple perfect title. The person who has the record title is presumed to be in possession of the property. Pennsylvania law, as set forth in O'Dwyer v. Ream, 390 Pa. 474 (1957), holds that perfect title cannot be abandoned.
Peckham v. Milroy (Court of Appeals of Washington, 2001, CB pg. 1063):
(i) Rule: Violations of a restrictive covenant that are not habitual or substantial do not constitute abandonment
(ii) Facts: Milroys move to the neighborhood of Spokane Terrace. The neighborhood had a restrictive covenant which prevented the operation of home businesses. After remodeling their home and moving in, Mrs. Milroy began to operate a daycare. Peckham informed the Milroys that they were violating the covenant, and later brought suit to enjoin daycare's operations.
(iii) Issue: Should the daycare be enjoined or has the covenant been abandoned because of 1) violations by other home businesses, 2) the defense of laches, 3) the defense of estoppel, and 3) because it violates public policy? Yes, the daycare should be enjoined because 1) covenant has not been abandoned because only a few violations don't constitute abandonment; 2) defenses of laches is not applicable because a) Peckham didn't know or couldn't have known that they were doing construction for day care, b) there was no unreasonable delay c) he's been complaining for the whole time; 3) the defense of estoppel is not permissible because none of the necessary elements have been met - he didn't make a statement that he reneged on; and 4) public policy defense is not applicable because restrictive convents are permitted in residential areas.
1. Abandonment: only applicable when the covenant has been "habitually and substantially violated"
2. Laches: A defense in equity under which a party claims that the opposing party has failed to assert its rights within a timely manner and that the rights thus cannot be enforced.
a. Elements of Laches Defense:
i. Knowledge or reasonable opportunity to discover on part of potential plaintiff that he has a cause of action against defendant
ii. Unreasonable delay by the plaintiff
iii. Damage to defendant resulting from unreasonable delay
Slaughterhouse Cases (1873)
Local government's stator regulation of where certain things should go (especially breweries, pool halls, etc.) tended to be held to be constitutional
Buchanan v. Warley (1917)
Supreme Court held that a zoning ordinance that prohibited the sale of real property to blacks in white-majority neighborhoods or buildings and vice versa violated the Fourteenth Amendment's protections for freedom of contract.
Pennsylvania Coal v. Mahon (1922)
While the use of property may be regulated, overregulation (ex. preventing coal mining that could possibly affect the integrity of any surface land) will be considered a taking.
Village of Euclid v. Ambler Realty Co. (Supreme Court, 1926, CB pg. 1069)
this is a due process case, not a takings case
(a) Rule: Municipal zoning regulations are constitutional, unless they are clearly arbitrary and unreasonable, having no substantial relation to the public health, safety, morals, or general welfare.
(b) Facts: Amber Realty Co. owned 68 acres of land in the Village of Euclid (suburb of Cleveland, Ohio). 1922 Euclid enacted comprehensive zoning plan - had restrictions based on use, class, height, and area. Amber Realty Co. sues on grounds that the value of the land will decrease if the land restrictions are imposed, and that potential buyers will be deterred.
(c) Issue/Holding: May cities and municipalities constitutionally pass zoning regulations, or is the zoning regulation unconstitutional, such that Ambler should be awarded injunctive relief? The zoning regulation is not by itself unconstitutional, but there is still the potential that the regulation could be unconstitutional as applied to plaintiff (see Nectow v. City of Cambridge, 1928).
(i) Zoning regulations that may be constitutional in certain circumstances, may not be constitutional in other circumstances (ex. city v. rural). Even if zoning is Constitutional on its face, it may be unconstitutional when applied to a specific plaintiff (see Nectow v. City of Cambridge, 1928).
(ii) The line between legitimate and illegitimate assertions of power with regard to zoning is "not capable of precise delineation. It varies with circumstances and conditions." One factor to consider is nuisance.
(iii) Zoning and Apartment Buildings:
1. Coming of apartment buildings retards the development of detached family dwellings (""apartment house is a mere parasite, constructed in order to take advantage of the open spaces and attractive surroundings created by the residential character of the district.") and coming of one apartment building is often followed by others.
a. Arguments For:
i. Apartments block sunlight (pro-property rights of single-family dwelling)
ii. Preventing the coming of apartments prevents the influx of industries and people
b. Arguments Against:
i. Class segregation because apartment houses are normally for less wealthy
United States v. Causby (Supreme Court, 1946):
The federal government has ample authority to assure navigable airspace remains a public resource. The only time when airspace constitutes the taking of airspace is when there is a direct injury. "When flights are made within the navigable airspace without any physical invasion or property of the landowners, there has been no taking of property."
(1) This opinion has both language of trespass and nuisance - may also be an example of blurry line between trespass/nuisance
Kelo v. City of New London (Supreme Court, 2005, CB pg. 1175)
(a) Rule: A state's use of eminent domain to condemn property from private individuals and redistribute it to other private individuals constitutes a "public use" under the Fifth Amendment if it is rationally related to a conceivable public purpose.
(b) Facts: City of New London, Connecticut (defendant) approved a new development project that involved using its eminent-domain authority to seize private property to sell to private developers. The city stated that the purpose of this exercise of eminent domain was to create new jobs and increase tax revenues from the sale of property. Susette Kelo (plaintiff) had lived in a home in the New London area since 1997. Wilhelmina Dery (plaintiff) was born in her New London home in 1918 and had lived in the home with her husband Charles (plaintiff) for roughly sixty years. The property owned by Kelo and the Derys was in one of the areas scheduled to be condemned by the city's development project. Nine private property owners, including Kelo and the Derys (plaintiffs), brought suit in Connecticut state court to challenge the project on the grounds that it violated the "public use" requirement of the Fifth Amendment.
(c) Issue/Holding: Whether a city's decision to take property for the purpose of economic development satisfies the public use requirement of the Fifth Amendment? Yes, it does satisfy the 5th Amendment public use requirement because 1) follows precedent of Berman v. Parker (1954) and Hawaii Housing Authority v. Midkiff (1984), 2) state legislative judgements are entitled to great deference, and 3) economic benefit conferred on the general public can still constitute a viable public purpose.
(i) Writing for the majority, Justice Stevens largely relies on precedent to show that there is broad deference afforded to legislatures "in deterring what public needs justify the use of the takings power."
a. Berman v. Parker (Supreme Court, 1954):
i. Justice Stevens quotes from Berman v. Parker to emphasize the wide breadth of needs that can be used to justify the use of the takings power: "The concept of public welfare is very broad and inclusive... The values it represents are spiritual as well as physical, aesthetic as well as monetary. It is within the power of the legislature to determine that the community should be beautiful as well as health, spacious, as well as clean, well-balanced, as well as carefully patrolled."
ii. Rule: Seizing title to real estate for the public purpose of preventing or eliminating slums is within Congress's power of eminent domain if reasonably necessary to eliminate or prevent slums provided the owners receive just compensation because nothing in the 5th Amendment will stand in the way if the government believes "community should be beautiful as well as healthy, spacious, as well as clean, well-balanced as well as carefully patrolled."
iii. Facts: challenge to a 1945 DC urban-renewal plan that allowed seizure of title to about 15 city blocks within slums or blighted areas.
2. Hawaii Housing Authority v. Midkiff (Supreme Court, 1984):
a. Rule: A state may use the eminent domain process to take property that is heavily concentrated in the hands of a few private landowners and redistribute it among the general population of private individuals.
i. Legislatures are entitled great deference when trying to improve social and economic life. The mere fact that state served as facilitator from transfer of one property to another doesn't mean that this is not for public use.
b. Facts: Challenge to a Hawaii statute that permitted land title to be taken from lessors lessees in order to reduce concentration of land ownership
(d) Justice Kennedy Concurring:
(i) Under the Public Use Clause, it is required to do a meaningful rational basis review to determine if the benefit to the city is the primary or incidental benefit, which requires taking plausible allegations of favoritism when determining if taking is for public use seriously. Kennedy leaves open possibility that there is a subset of cases that merit a more stringent standard of review than rational basis scrutiny
(e) Justice O'Connor Dissenting:
(i) O'Connor argues that the taking of property from one private individual and giving it to another is a violation of basic principles such that "the specter of condemnation will haunt property owners."
(ii) Distinguishes this case from Berman v. Parker and Hawaii Housing Authority v. Midkiff by arguing that in Berman and Midkiff there was pre-condemnation harm to properties, so taking property was necessary to remedy property as a whole. In this case, there is no argument that plaintiff's homes are inherently harmful to society and thus in the need to condemn
1. Takings in Berman v. Parker was to remedy "a blighted neighborhood"
2. Takings in Hawaii Housing Authority v. Midkiff was to remedy oligopoly that resulted from extreme wealth
3. Very few commentators find this persuasive
(f) Justice Thomas Dissenting:
(i) Focuses on the individuals effected by eminent domain and argues that the consequences do not fall equally on the people of the United States: "Allowing government to take property solely for public purposes is bad enough, but extending the concept of public purpose to encompass any economic goal guarantees that these losses will fall disproportionately on poor communities"
(ii) Argues that the government should return to the original understanding of the 5th Amendment
(iii) Note 11 on pg. 1197 of our casebook explains that the understanding of the original meaning for "public use" may center on "whether one thinks the Framers were more influenced by Blackstone or Locke (who would require the consent of the legislature) or by continental thinkers like Grotius (who would require a public use or a purpose."
United States v. Miller (US Supreme Court, 1943, CB pg. 1198)
(a) Rule: Fair market value for takings is to be ascertained at the date of taking and does not include any value increase from the announcement of the government's project, if the land was within the project's scope when the government committed to the project or after-condemnation value of the land.
(b) Rule: If plaintiff receives compensation in excess of fair market value, they are not allowed to keep overcompensation.
(c) Facts: US government condemned a strip of land of various landowners in order to relocate railroad tracks. The potential negative aspects for individual property owners are crime, noise, and decreased property owner. The government committed to the relocation project on August 26, 1937. On December 14, 1938, the government filed an eminent-domain action against the landowners and a declaration of taking in the United States District Court for the District of Northern California. As part of the statutory requirement for filing the declaration, the government submitted a $2,550 deposit, which was the estimated amount of compensation due to three co-tenant landowners. The court paid each landowner $850 from the deposit. Issue went to trial and jury awarded less than $850 for three plaintiffs.
(i) Can an owner benefit from an incremental increase in the value of property taken by the action of the public authority in condemning nearby lands? No, the fair market value for the land taken by eminent domain does not include any value increase from the announcement of the government's project. Disadvantage or benefit of past taking may increase/offset the awards of damage buy only with regard to that owner's specific property.
(ii) Are plaintiffs entitled to retain overcompensation initially awarded by the government? No, plaintiffs are not entitled to because holding otherwise would 10 defeat the policy of the statute and work injustice, 2) would encourage federal officials to underestimate the value of property, and 3) would deny the owner of immediate use of cash gained from approximating the value of his land
Board of Regents v. Roth (1972)
The Supreme Court determined that whether something should be considered private property for regulatory taking purposes is determined by looking at independent sources of state law. In doing so, the court has concluded that leases, trade secretes, and flowage easements are private property, btu that the head of water in a river, delegated power of eminent domain, and right to receive future social security benefits are not.
Phillips v. Washington (Supreme Court, 1998)
Does Texas' public use of interest accrued on principal client funds, deposited by mandate into federally funded accounts, violate the Fifth Amendment's Takings Clause? Yes. In a 5-to-4 decision, the Court held that TEAJF's used of IOLTA interest funds violated the Takings Clause which prohibits the taking of "private property for public use, without just compensation." The Court noted that since the principal client fees deposited into the IOLTA account are private property, any accrued interest on such fees attaches as a property right incident to ownership of the underlying principal. Thus, since they may not redistribute the principal deposits, TEAJF is also prohibited from assigning any interest accumulated thereon.
Eastern Enterprise v. Apfel (Supreme Court, 1998)
Does a statute that imposes a general liability on employers in the coal mining industry to find health are benefits for retirees justify a taking? Yes, in a 4-4-1 decision, the Supreme Court held that Coal Industry Retiree Health Benefit Act (act coal companies to pay for health care benefits for retirees) constituted an unconstitutional regulatory taking of property which required the Act to be invalidated
College Savings Bank v. Florida Prepaid Postsecondary Education (Supreme Court, 1999)
"The hallmark of a protected property interest is the right to exclude others. That is 'one of the most essential sticks in the bundle of rights that are commonly characterized as public.'"
Pennsylvania Coal Co. v. Mahon (Supreme Court, 1922, CB pg. 1219):
(1) Rule: "Property may be regulated to a certain extent, if the regulation goes too far it will be recognized as a taking." In short, government should balance the public interest served by the regulation against the interference with the individual's investment back expectations. Factors to be considered are 1) diminution in value, 2) nature of public interest served by legislation - if legislation is designed to protect the public safety / stop a public nuisance, and 3) the reciprocity of advantage received, if any.
Note, this is no longer good law. It was effectively repudiated in Keystone Bituminous Coal Association v. DeBenedicts (Supreme Court, 1987)
(2) Facts: Pennsylvania Coal conveyed land it owned to Mahon, but Pennsylvania Coal retained the right to mine underneath the property. Deed stated that Mahone was taking the land subject to risks associated with any mining beneath the land. Almost 30 years later, Pennsylvania enacted the Kohl Act which prevented coal mining that could possibly affect the integrity of any surface land. Mahon then sued Pennsylvania Coal arguing that the new statute bared Pennsylvania Coal from mining under the property.
(3) Issue/Holding: Can a statute that promotes overregulation of property be considered a taking? Yes, while the use of property can be regulated, overregulation will be considered a taking because it is the functional equivalent of eminent domain.
(a) Justice Holmes' Majority:
(i) Argues that whether something is a regulation or taking is a question of degree. Holmes argues that not every regulation should be considered a taking because then, the "government hardly could go on if some extent values incident to property could not be diminished without paying for every such change in the general law." If the government had to pay for every change in government regulation, then there would be a tremendous amount of transaction costs and the government would cease to pass new regulation.
(ii) Focuses on three factors to distinguish this case from Plymouth Coal v. Pennsylvania (held that it was permissible for legislature to require barriers of coal be left between mines). While Plymouth Coal v. Pennsylvania was for the safety of the employees and secured an average reciprocity of advantage, Holmes argued that the case at issue did not.
(iii) Reduction in Value:
1. Holmes sees a lot of reduction in value to the value of the coal because increased transaction costs might prove prohibitive and the savings from this statue are to health/safety and likely can't be taxed/wouldn't be paid
(iv) Public Safety/ Public Nuisance Requirement:
1. This is not a case of public safety because Mahon was fully aware of the mining operation under the land he was purchasing and he agreed to bear the risks associated with mining.
2. This is not a case of public nuisance because only one home is involved.
3. Coal company has the right to use the property and to the extent that their use is harmful, we can solve this problem using notice
i. Doesn't necessarily mean that no one will be there - someone may not have somewhere else to go, or refuse to clear out, or there might be language barriers, or children
(v) Reciprocity of Advantage: the idea that each party should receive equal burden and/or benefit from regulation
1. In this case, there is no reciprocity of advantage, takin is a huge burden on Mohan:
a. "In general, it is not plain that a man's misfortunes or necessities will justify his shifting the damages to his neighbor's shoulders. ... A strong public desire to improve the condition is not entitled to warrant achieving the desire by a shorter cut than constitutional way of paying for change."
(b) Justice Brandeis Dissent:
(i) Three issues:
1. Reduction in Value:
a. Denominator Issue:
i. What denominator should we compare when looking at the reduction in value?
ii. Do we look at surface estate? Coal estate? Both?
iii. Brandeis argued that the diminution in value should be calculated by looking at the property rights as a whole
2. Public Safety/ Public Nuisance Requirement:
a. This is a public nuisance case
i. "The restriction here in question is merely the prohibition of a noxious use." State does not appropriate it or make use of it, but merely prevents owners from making a use "which interferes with the paramount rights of the public"
3. Reciprocity of Advantage:
a. If you are a public nuisance and are doing something that harms others, you should expect to be disadvantaged
1. Right of a landowner to use his land is not absolute:
a. "[T]he right of the owner to use his land is not absolute. He may not so use It as to create a public nuisance, and uses, once harmless, may, owing to changed conditions seriously threaten the public welfare. Whenever they do, the Legislature has power to prohibit such uses without paying compensation; and the power to prohibit extends alike to the manner, the character, and the purpose of use."
2. "Every restriction imposed to protect public health, safety, or morals from dangers threatened is not a taking. The restriction here in question is merely the prohibition of a noxious use."
a. Property remained in hands of owner
b. State does not appropriate it or make use of it, but merely prevents owners from making a use "which interferes with the paramount rights of the public"
3. Restriction is only lawful if it is for a public use, but merely because the private person receive benefits from the restriction, does not mean that the restriction ceases to be public
(c) Comparing Justice Holmes and Justice Brandeis:
(i) How do the justices agree?
(ii) How do the justices disagree?
1. Weight to public safety / public nuisance
a. Holms believes that this is going too far because only involves one house which owner waived his risk
2. Holmes focuses a lot on the deed which " waived all claim for damages that may have been giving for coal" the parties had agreed that the surface estate holder would not have a right to sue if there were damages
Penn Central Transportation Company v. City of New York (Supreme Court, 1878, CB pg. 1237)
(1) Rule: In determining whether a state regulation constitutes a taking under the Fifth and Fourteenth Amendments, courts should consider: 1) the economic impact of the regulation on the owner, 2) the extent to which the regulation has interfered with the owner's reasonable investment-backed expectations, and 3) the character of the government action involved in the regulation.
(a) Factor 1: The economic impact of the regulation on the owner - requires determining what the denominator should be
(b) Factor 2: Reasonable Investment-Backed Expectations - did government's taking interfere with what was reasonable for plaintiff to expect from his land
(i) Influenced by your view of market efficiency - do you think that the chance that government might take property is reflected in prices? If so, then your reasonable investment-backed expectations have not really been effected
(c) Factor 3: The character of the government action involved in the regulation.
(2) Facts: NYC designated Grand Central Terminal in New York (owned by Penn Central) as a historical landmark. Planning to lease out the space, Penn Central submitted two proposals to build office space atop of Grand Central. Both proposals were rejected. Penn Central sued NYC alleging that 1) It had been deprived of its air rights over the terminal, 2) which it would have profitably developed, and 3) that it had been singled out to pay for a program designed to benefit the public. Effectively, they were arguing the law which denied Penn Central's right to build an office building and receive revenue from leasing the space constituted a taking of the company's property without just compensation as was required by the 5th Amendment.
(3) Issue/Holding: Can a city place restriction on development of historical landmarks, in addition to normal zoning ordinances, without effecting a taking requiring payment of just compensation? Yes, designation of historic landmark is not considered a taking, and NYC has not interfered with appellants' property in such a way that there must be an exercise of eminent domain and just compensation to sustain it.
(a) Justice Brennan's Majority: Denied that this was a taking.
(i) Takings clause was "designed to bar Government from forcing some people alone to bear public burdens which, in all fairness and justice should be borne by the public as a whole." (Armstrong v. United States)
(ii) Ad Hoc Inquiry Test: Brennan admitted that determining what constituted a taking had been of "considerable difficulty" for the Court, so instead of a clear rule, he argued that the court is to engage in ad hoc inquiries of the particular circumstances of a case, in which the factors are: 1) the economic impact of the regulation on the owner, 2) the extent to which the regulation has interfered with the owner's reasonable investment-backed expectations, and 3) the character of the government action involved in the regulation.
(iii) In this case, the court in a 6-3 vote fund that there was no taking because:
1. The economic impact of the regulation was significant but not unfair
a. Penn Central already have a profitable use for their land and the takings clause does not guarantee that owners will be able to use their property for its post profitable purpose
b. Diminution in value also doesn't establish a taking (see Euclid)
c. Loss to Penn Central was a mere opportunity loss - an inability to change the use of the property rather than a prohibition of a prior existing use
d. The impact on the land was not unduly harsh and it was substantially related to the goals of preserving historic nature of buildings
e. Air rights above Penn Central are not distinct bundle or property rights independently protected by Constitution
f. The owners were also given transfer development rights, which potentially offset the diminution in value
2. The extent to which the regulation has interfered with the owner's reasonable investment-backed expectations
a. Penn Central is still entitled to continue the current use of its property, so its reasonable investment-backed expectations have not been disturbed
3. The character of the government action involved in the regulation.
a. Law did not wrongfully single out Penn Central, but was a general regulatory scheme to protect historic structures
(b) Justice Rehnquist's Dissent: He would remand for determination of whether the transfer of development rights are just compensation
(i) Unlike nuisance cases, Rehnquist argues that there is no reciprocity if advantage here, the law merely prohibited "a legal and essential use, an attribute of its ownership."
(ii) Rehnquist also considers the economic impact of the regulation with regard to the air space and not the property as a whole. He argues that Grand Central is only attempting to build something similar to those in the neighborhood and they haven't been allowed to. That is an essence a taking.
(iii) The owners have transferable development rights, but they have an "uncertain and contingent" market value. This is not what the Supreme Court should be spending their time on. It is extremely careful about staying in its in institutional competency.
Loretto v. Teleprompter Manhattan CATV Corp (Supreme Court, 1982, CB pg. 1254)
(i) Rule: Permanent physical occupation of property is taking. In such a case, the property owner entertains a historically rooted expectation of compensation, and the character of the invasion is qualitatively more intrusive than perhaps any other category of property regulation
(ii) Facts: Teleprompter Manhattan CATV Corp had installed a cable on portions of the side and roof of a five-story apartment building in New York City that Loretto later purchased. In 1973, New York passed a law which prohibited interference by a landlord in the installation of cable and the acceptance of payment from a cable company. Loretto brought suit in New York state court alleging that the installation of cable facilities on her building by Teleprompter was an unconstitutional taking of her property.
(iii) Issue/Holding: Whether a minor but permanent physical occupation of an owner's property authorized by government constitutes a "taking" of property for which just compensation is due under the Fifth and Fourteenth Amendment? Yes, both precedent and historical circumstances support the rule that a minor but permanent, physical occupation of an owner's property, authorized by government constitutes a taking.
1. Permanent physical invasion is more serious and intrusive than either a temporary intrusion or an intrusion that merely restricts the use of property. These only require using a balancing test.
2. Permanent taking requires just compensation because with a permanent taking, the government does not simply take a strand from the bundle of property rights "it chops through the bundle taking a slice of every right: 1) the owner may no longer fully possess the property or exclude others from possessing it; (2) the owner can no longer exclude others from using his or her property, and cannot make any personal non-possessory uses of it; and (3) the owner cannot properly dispose of the property because a permanent physical occupation typically strips the property of most or all of its economic value.
(iv) Justice Blackmun's Dissent:
1. Blackman argues that the majority provides no guidance as to when a permissible state regulation ends and an unconstitutional taking begins and totally abandons ad hoc test that had been laid out in prior precent
a. Counterargument; multifactor review could undue a settled area of law (ex. utility easements)
Horne v. Department of Agriculture (Supreme Court of the United States, 2015, CB pg. 1267)
(i) Rule: A governmental mandate to relinquish specific, identifiable, and safe personal property as a condition to engage in commerce is a per se taking requiring just compensation.
(ii) Facts: US Department of Agriculture required that a portion of raisin farmers' raisin crops be set aside for government use. The government then sold the raisins where appropriate to promote and maintain a healthy raisin market. The government kept the proceeds of these sales. The Hornes (plaintiffs) were raisin growers subject to the USDA order. In 2002, the Hornes refused to give any raisins to the government. The Hornes were fined for their refusal. The Hornes brought suit, claiming that the USDA order constituted an unconstitutional taking of property under the Fifth Amendment.
(iii) Issue/Holding: Whether the Takings Clause of the Fifth Amendment bars the Government from requiring a portion of raisin farmers' raisin crops be set aside for government use without just compensation? Yes, the Takings Clause of the Fifth Amendment bars the Government from requiring a portion of raisin farmers' raisin crops be set aside for government use without just compensation because 1) just compensation applies to real and non-real property, 2) The raisin requirement is a clear physical taking and the contingent interest in the portion of the value of raisins set at the government's discretion does not allow the government to avoid categorical duty to pay just compensation, and 3) The governmental mandate to relinquish specific, identifiable property as a condition on permission to engage in commerce does effect a per se taking
1. Majority Opinion:
a. Just compensation applies to real and non-real property
i. Court says Nothing in historical practice or text of precedent to suggests that there is a distinction - this is overstatement
b. The raisin requirement is a clear physical taking and the contingent interest in the portion of the value of raisins set at the government's discretion does not allow the government to avoid categorical duty to pay just compensation
i. "The Government and dissent again confuse our inquiry concerning per se takings with our analysis for regulatory taking. A regulatory restriction on use that does not entirely deprive an owner of property rights may not be a taking under Penn Central. But once there is a taking, as in the case of physical appropriation, any payment from the Government in connection with that action goes, at most, to the question of just compensation."
c. The governmental mandate to relinquish specific, identifiable property as a condition on permission to engage in commerce does effect a per se taking
i. Court distinguishes other regulation implemented on commerce rather quickly Selling produce in interstate commerce is not as a governmental benefit like disclosing pesticides in Ruckelshaus v. Monsanto
2. Part III:
a. Government wants remand to determine fair market value of property, but the majority reasons that the fair market value is the fines posed on the Hornes by the government
b. This portion is not majority because not joined by Breyer, Kagan, and Ginsberg
3. Justice Thomas' Concurrence: Thomas argues that There could be public use problem here - if public use has limited meeting (see Thomas' dissent in Kelo), to the extent that they are not taking this for true public use, then cannot take.
4. Justice Breyer Concurring in Part and Dissenting in Part: (Joined by Ginsberg and Kagan):
a. Breyer Emphasizes that although the raisin reserve requirement is a taking, it has not been established that there has not been just compensation. As established in Burman v. Ross, ehen there is a partial property taking, then the individual is entitled to just compensation of property taken, which is equal to the fair market value, offset by any benefit they received to the rest of their property. Here, the Hornes' benefited from the general regulatory scheme. Their raisin prices are likely higher due to the government's maintenance of the market. Thus, the case should be remanded to determine whether the benefit the Hornes receive from the reserve requirement regulation amounts to just compensation.
Lucas v. South Carolina Costal Council (Supreme Court, 1992, CB pg. 1279)
(a) Rule: When land-use regulation denies an owner economically viable use of his land so long as the use the plaintiff is seeking is permissible under relevant state and nuisance doctrine AND there is no pre-existing limitation in the title that implies "that the state may subsequently eliminate all economically valuable use."
(b) Facts: In 1986, David Lucas purchased two lots fronting on the ocean for $975,000 intending to build single family homes on them. Other homes had been built next to the undeveloped property he purchased, and at the time of purchase, he was not legally obligated to obtain a permit from the Council in advance of any development activity. However, in 1988, before he began construction, South Carolina passed a regulatory law that had the effect of prohibiting development on his land. Lucas filed suit claiming that this was a taking of his property without just compensation. He did not contend that the legislative act was an unlawful use of the police power's exercise, but he contended that regardless of whether the legislature had acted in furtherance of legitimate police power objectives, he was entitled to just compensation.
(c) Issue/Holding: May a state enact a regulation that results in the complete destruction of economic value of private property without paying just compensation to the owner? No, if the state regulates the land so as to deprive it of all beneficial use, then the regulation constitutes a taking and the owner must be paid just compensation, so long as the use the plaintiff is seeking is not previously regulated in their title and is legal according to all state property and nuisance laws.
(d) Justice Scalia's Majority:
(i) In his majority, Scalia announces a second categorical rule, where regulation denies all economically beneficial or productive use of land, then this is a taking per se and deserves just compensation so long as the proscribed use interests were not part of his title to begin with.
1. Scalia argued that "total deprivation of beneficial use is, from the landowner's point of view, the equivalent of physical appropriation," and that should be treated like a categorical taking "without case-specific inquiry into the public interest advanced in support of the restraint." However, the language is amorphous, subject to more than one meaning.
a. Two ways to read the majority:
i. Regulation has deprived the owner of the all economic value of property denominator looms large
ii. Regulation has deprived owner of right to engage in total productive use of property denominator not as large
iii. In Murr v. Wisconsin (Supreme Court, 2017) the Supreme Court announced another list of factors that must be considered in order to determine the correct denominator
2. How to determine if something inheres in title?
a. Nuisance Law: State nuisance law is the first factor to determine if something inheres in title
i. Note, Can South Carolina just add provision saying beachfront development is a nuisance? Likely no, he seems to think that it is mainly a matter for courts.
b. Incentives: If this is not considered a taking might encourage ppl to develop more quickly
i. "Seems unlikely that these common law principles would've prevented the erection of any habitable or productive improvements on petitioners land", but this is a question for the state of SC. Sends it back to determine if the right to build was within his title or nuisance-like
(e) Justice Kennedy's Concurring:
(i) Kennedy argues that common law of nuisance is too narrow to rely on for exercise of regulatory power in a complex and interdependent society, and that there are other things besides nuisance that would not necessarily exist in owner's title.
(f) Justice Blackmun's Dissent: "Today the court launches a missile to a mouse."
(i) Blackman agrees that a taking which totally deprives one of any economic value is a substantial burden on private interest, but that it is still possible for it to be offset because of the public benefits: "A prohibition simply upon the use of property for purposes that are declared, by valid legislation, to be injurious to the health morals or safety of the community, cannot, in any just sense, be deemed a taking or an appropriation of property.
(ii) Blackmun relies heavily on original understanding of taking and argues that state courts have historically been less likely to find a taking when land is undeveloped. Furthermore, he points out that there was no common law limit on regulation of harmful uses even when there is a total wipeout of value. This is a harmful use.
(iii) Blackmun argues that majority is picking and choosing precedent and is not mindful of the fact that land use regulations change over time.
(g) Justice Stevens Dissent:
(i) Stevens argues that the total deprivation rule is arbitrary because someone whose property value is diminished 95% will not recovery anything, while owner whose property value is decreased 100% recovers the land's full value.
(ii) This runs into the denominator problem - of what are we determining whether or not there is a total wipeout?
(iii) This creates incentivizes for owners to divide states in a way that take advantage of this rule by making the denominator smaller so that the entire economic value of the property has been seemingly wiped out.
(iv) The just compensation clause was designed to bar single individuals from bearing public burdens, and this was not borne by just Lucas but by all property owners. Stevens engages in Penn Central ad hoc inquiry and finds that "even assuming that petitioner's property was rendered valueless, the risk inherent in investments of the sort made by petitioner, the generality of the Act, and the compelling purpose motivating the South Carolina Legislature persuade me that the Act did not effect a taking of petitioner's property.
Bennis v. Michigan (United States Supreme Court, 1996, Supplemental Materials):
i) Rule: An owner's interest in property may be forfeited due to an unlawful use of the property even if the owner had no knowledge of such use.
ii) Facts: Mr. Bennis was arrested for engaging in a sexual act with a prostitute in a car that he co-owned with his wife, Mrs. Bennis (defendant). The State of Michigan (plaintiff) sued the Bennises to have the car declared a public nuisance and confiscated under Michigan law. Mrs. Bennis claimed that she had no knowledge of Mr. Bennis's activities in the car so her ownership interest in the car should not be taken. The Wayne County Circuit Court ruled in favor of Michigan and the Michigan Supreme Court affirmed. Mrs. Bennis appealed.
iii) Issue/Holding: Does a forfeiture of a property interest due to unlawful use of the property of which the owner has no knowledge constitute a taking in violation of the Takings Clause? No. A forfeiture of property to the government because of an unlawful use of the property is not an unconstitutional taking even when the owner had no knowledge of the unlawful use. On the contrary, forfeiture is a valid governmental act to prevent certain uses of property that "may be regarded as so undesirable that the owner surrenders his control at his peril."
iv) Chief Justice Rehnquist Majority:
(1) Rehnquist relies heavily on precedent to argue that this possession of Mrs. Bennis' ownership was constitutional: "A long and unbroken line of cases holds that an owner's interest in property may be forfeited by reason of the use to which the property is put even though the owner did not know that it was to be put to such use."
(2) Rehnquist ended by saying "[w]e conclude today, as we concluded 75 years ago, that the cases authorizing actions of the kind at issue are "too firmly fixed in the punitive and remedial jurisprudence of the country to be now displaced."
(a) Why did the court refuse to overrule precedent here?
(i) Law enforcement makes a ton of money off of civil forfeitures, but this can be viewed both ways.
1. On one hand, our society is built on the assumption of a functioning law enforcement and we should not overrule something that helps finance it.
2. On the other hand, the overwhelming amount of money that law enforcement makes off of this can be viewed as a negative incentive for law enforcement that would lead them to cease property for the sake of making money, instead of protecting the public.
v) Justice Ginsberg Concurring: Although it is questionable as to whether Mrs. Bennis is entitled to a share of the sale proceeds of the car, the Court is correct in noting that the car is so old that the value of Mrs. Bennis's share would have been "practically nothing" after the subtraction of costs.
vi) Justice Thomas Concurring: This case serves as a reminder that the Constitution does not protect against every undesirable or unfair result. Forfeiture of innocent parties' property interests as is the case here has been permitted for over 200 years.
vii) Justice Stevens Dissenting:
(1) There are three permissible categories which are subject to seizure: pure contraband, proceeds of criminal activity, and tools of criminal trade. While this case falls into the third category, it differs from historical cases in two important ways: 1) car wasn't used to carry forbidden or smuggled goods, and 2) the vehicle/property did not facilitate the criminal activity. It could have occurred in numerous locations. This brings up distinction between fundamental between suits in rem v. suits in personam.
(a) In Rem: A term meaning "against a thing," used to describe actions or proceedings concerning property rather than people. The term is typically used in cases to determine title to or interests in property within the court's territorial jurisdiction that are brought against the property itself, not against the people who own it.
(b) In Personam: A term meaning "against a person," referring to the power of a court to exercise jurisdiction over a person.
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