The landowner and the co-worker have not entered into any agreement under which the co-worker acquired the right to collect rents and profits upon default. When the mortgagor's (the landowner's) right to receive rents and profits is not expressly included in the mortgage agreement and there are no provisions to the contrary, the mortgagor's right to receive rents and profits until default is implied.
Upon default, the mortgagee (the co-worker) does not automatically succeed to that right. If the mortgage agreement had expressly provided that rents and profits were assigned to the co-worker in the event of default, then the co-worker could notify the tenants and collect rents. However, because the agreement between the landowner and the co-worker is silent as to the co-worker's right to receive rents in the event of default, the co-worker cannot demand rental payments from the tenants.
The facts state that all the tenants in the apartment complex took residence after the landowner and the co-worker entered the mortgage agreement. When the co-worker takes possession of the apartment complex from the landowner, he can evict such tenants, because their possessory rights are inferior to his, but he cannot demand rental payments.
Note, however, that if any tenants had taken up residence prior to the recording of the mortgage, those tenants would be required to pay rent to the co-worker, who could not evict them due to their superior right to possession, but who could collect rents on the leaseholds upon proper notification of the tenants.
Adverse possession requires proof of possession that is: (1) open, visible, and notorious; (2) actual; (3) exclusive; and (4) hostile, under a claim of title or right, for the statutory period.
This is a typical example where a building on one parcel of land encroaches on the adjoining parcel without the knowledge of the owners of the adjoining parcels. Two standards have been developed to judge those cases. Under the objective majority ("Maine") view of mistaken boundaries, possession is hostile so long as the possessor intends to claim the land as her own, even if she is unsure as to the location of the boundary.
Under the subjective minority ("Connecticut") view of mistaken boundaries, the possessor must actually know that she has crossed over the boundary. Since Grace did not know she had crossed the boundary, under the minority rule, she cannot acquire by adverse possession. Hence, Joel should prevail.
Under the Statute of Frauds, an oral contract for the sale of land is not enforceable, unless it meets the requirements of the part performance exception to the Statute of Frauds. Under that exception, the oral agreement is enforceable against the buyer if the buyer has made payment for and made improvements on the property, or has made payment for and taken possession of the property.
The buyer's partial payment of the purchase price, by itself, did not take the oral agreement out of the Statute of Frauds. Therefore, these two parties did not have an enforceable purchase contract.
Furthermore, the seller had not conveyed title by deed. To convey land by deed, there must be a donative intent on the part of the grantor, meaning an immediate intention to transfer. But there must also be delivery and acceptance, neither of which existed here. The buyer refused to take the deed at the time it was offered and there is no further evidence of delivery, such as recordation or an attestation clause. Title never transferred and the buyer should be able to get her money back from the landowner.
A person may acquire title to property through adverse possession if, for the statutory period, his possession is (1) open, visible and notorious, (2) actual, (3) exclusive, (4) continuous, and (5) hostile under a claim of right.
If an adverse possessor has not been in possession of the piece of land at issue for the full statutory period, he may still meet the time period by tacking his possession onto possession by a previous possessor, if the subsequent possessor is in privity with the prior possessor by deed, devise, or descent.
The doctrine of constructive adverse possession comes into play when the deed is defective, as here, and satisfies the actual possession element. The doctrine requires color of title (e.g., a defective deed) and actual possession of at least a significant portion of the property.
Subject to exceptions inapplicable here, when one possesses a portion of a disputed tract of land, his adverse possession is sufficient to give him title to the entire tract of land, so long as there is a significant relationship between the portion of the tract actually possessed and the remainder of.
The young man, as well as the previous owner, Excavator, openly claimed title to the northern portion of Redacre based on their operation of a quarry on that land. The presence of the quarry meets each of the requisite elements of adverse possession. Both Excavator and the young man's continued presence on the land meets the 20 year statutory requirement. Since the young man meets all of the requirements for adverse possession and may tack his holding period onto Excavator's, the young man will prevail as to the whole of Redacre under the doctrine of constructive adverse possession.
A life tenant cannot lease, mortgage, or otherwise encumber a property to an extent greater than his interest in the property. As a life tenant of the airport, the son could not legally lease the airport for a period extending longer than his lifetime.
Therefore, even though the son could legitimately enter a lease with the pilot, his ability to lease the property terminated automatically upon his death. Upon the death of the life tenant (son), ownership of the airport immediately passed to the remainderman (daughter). At that point, the daughter became the fee simple owner of the airport.
As fee simple owner, the daughter's ownership interest supersedes the interests of all others in the property, and she may therefore properly demand that the pilot quit the premises. If the pilot refuses to leave, the daughter will prevail in an action to eject her.
Thus, the son's estate may be liable to the pilot for damages relating to the son's effective breach of the lease agreement. However, because there is no lease or contract between the daughter and the pilot, the daughter would not be liable to the pilot for costs related to the pilot's expulsion from the property.
The attempted gift to the niece and her successors is void under the Rule Against Perpetuities (RAP), which holds that certain contingent interests are void if they will not vest or fail within a life in being plus 21 years.
If the nephew and his heirs preserve the parcel in its natural state for 200 years, every life in being at the time of the gift will have ended much more than 21 years earlier. Yet, if the owners of the parcel then decide to build a bowling alley thereon, the terms of the conveyance would require that their interest be defeased and pass to an heir of the niece. Because the gift to the niece violates the RAP, it is excised.
The remaining language, "so long as," is language of duration, resulting in characterization of the conveyance to the nephew as a fee simple determinable (rather than a fee simple subject to condition subsequent). If the nephew or his heirs violate the restriction, the parcel will automatically revert to the widow or her successors. This future interest (following a fee simple determinable) is called a possibility of reverter.
The common law RAP does not apply to reversionary interests of the grantor, so it is immaterial that this defeasing event may occur after the perpetuities period has passed.
The presenting question is whether the language of the deed created a defeasible fee, that is, a determinable fee limited by conditional language (e.g., "provided that") or a fee subject to condition.
If the fee owned by the nonprofit is defeasible, then it terminated automatically when the acreage was used for non-recreational purposes. The woman's deed conveyed the land "to the nonprofit for the life of my daughter, then to my grandchildren and their heirs and assigns in equal shares, provided that the land is to be used for recreational purposes only."
Because the deed's language does not appear sufficient to create a defeasible fee, the nonprofit's right to use the land during the daughter's life did not terminate automatically. However, the grandchildren can sue the life tenant to enjoin the logging, which may injure or diminish the value of the property. They are also entitled to recover damages.
If damages are appropriate, then injunctive relief is appropriate as well. Awarding damages without providing injunctive relief will compensate the plaintiffs for injury to the land but will not prevent further affirmative waste.
Anne's life estate is presently possessory, and therefore is not subject to the Rule Against Perpetuities. The remainder for life in Anne's widower is contingent because there cannot be a widower of a living person, and therefore is subject to the Rule Against Perpetuities. The remainder in Anne's children living at the death of A's widow is contingent because there is a condition precedent to vesting, and therefore is subject to the Rule Against Perpetuities.
Oliver and Anne are express lives in being. Anne's widower is not a life in being because he has not yet been identified. Anne's children, even if some are already born, may not be lives in being because their class is open. Therefore, Oliver and Anne are the only possible measuring lives. Anne's widower will take (or not take) at Anne's death; hence, her interest is valid.
However, Anne's children may well take more than 21 years after Oliver and Anne die; hence, their interest violates the Rule Against Perpetuities. Anne retains a life estate. Anne's widower will take for life after Anne dies if he survives Anne. Because the interest in Anne's children is void, Oliver retains a reversion, which will vest when Anne's widower dies.
Where the parties have agreed that timely performance is required, a party who performs late will not be entitled to specific performance. In this case, the contract specifically called for performance by June 1. The businessman would be entitled to specific performance only if he completed his contractual obligations by that date.
Escrow agents are frequently used in commercial transactions; however, in instances where a grantor gives a deed to his own agent, most courts will find that the grantor had no present intent to transfer title, and that, as such, there is no delivery. (This general rule is based on the premise that the grantor could potentially request the deed back from the escrow agent, who would be compelled to comply.)
Thus, in leaving the deed with his lawyer, who is essentially his agent, the businessman failed to deliver the deed by June 1. As such, the businessman was in breach of the "time is of the essence" clause and is not entitled to specific performance.
A purchaser is charged with inquiry notice of any prior claims to the property if he is aware of facts or circumstances that would lead a reasonable person to inquire further. In this case, the financier was on notice that the investor had just met with the owner, and his suspicions were raised; as such, the financier was obligated to make further inquiries regarding prior claims to the property.
Furthermore, because the financier never had title to the property, he could not pass title to his wife. As such, the investor, not the financier's wife, owns the property.
Nevertheless, the financier's wife is entitled to damages, because the owner breached the covenant of quiet enjoyment when he purported to sell the property to the financier. The covenant of quiet enjoyment runs with the property, permitting remote grantees to sue for its breach.
In land sale contracts, where the performance is to pay money rather than render services, the court's first reaction to a breaching purchaser was to allow the seller to retain any down payment, even if the amount so paid exceeded what the seller might have obtained in damages. There has been a movement to permit a defaulting buyer to obtain restitution of any payments made in advance to the extent that they exceed the actual damages suffered by the aggrieved seller.
Even under circumstances where restitution was readily allowed, as in building construction contracts, restitution would be denied if the breach was willful, or for the convenience or financial advantage of the breaching party. In any case, the courts do not uniformly grant restitution to breaching buyers in land-sale contracts.
In this question, the purchaser went into possession of the real property and without the knowledge of the landowner made improvements thereon. The purchaser then breached, for his own convenience (to pursue a business opportunity in another city), and now seeks to compel the landowner to pay for something the landowner never bargained for. Under these circumstances, the case for restitution to the purchaser is very weak.
A transferee, taking a negotiable mortgage lien, may qualify as a holder in due course, who takes the interest free and clear of certain "personal" defenses, such as lack of consideration, duress by non-physical threat, and fraud in the inducement.
However, the transferee would still take the interest subject to "real" defenses, such as infancy, duress by physical threat, and fraud in the factum. Here, the second bank took the mortgage lien free and clear of the homebuyer's personal defense of fraud in the inducement. The mortgage lien is, thus, valid between the second bank and the homebuyer, despite the first bank's alleged fraudulent statement.
When the accountant and his wife executed the mortgage, they became personally liable on the loan, which was secured by their home. Mortgage notes typically provide that if the proceeds of a foreclosure sale fall short, the mortgagors are personally liable for the balance. Generally speaking, junior interests, such as the second mortgage in the property here, would be destroyed by a foreclosure sale.
However, a junior mortgage is not extinguished if the junior mortgagee is not made a defendant in the judicial proceeding culminating in a foreclosure sale and does not get notice of the foreclosure sale. Here, since the second mortgagee was not notified of the foreclosure proceedings, the second mortgagee's interest could not have been extinguished by the sale. In fact, the second mortgagee should have been made a party to the foreclosure proceedings. Therefore, this is the best answer choice.
When a mortgagee forecloses on property, the general rule is that proceeds are distributed first to costs of the sale, then to the security interest foreclosed, then to junior lien holders terminated by the sale, and finally to the mortgagor, if there are sufficient proceeds.
However, when a junior lien holder forecloses on property, the senior interests retain their priority. Thus, in this case, Bank No. 1 would take priority above Bank No. 2 in the distribution of proceeds from the sale. Because the home is not worth the combined amount of both mortgages, a foreclosure sale will not ensure that Bank No. 2 receives payment in full on its mortgage.
The right of survivorship in a joint tenancy means that when one joint tenant dies, his interest in the property passes automatically to the surviving joint tenant(s), not to the heirs or legatees of the decedent. This question addresses the issue of how such a right of survivorship may be "severed," or canceled, and the interest converted to a tenancy in common.
A joint tenancy may be severed by a voluntary inter vivos transfer, as via the quitclaim deed to Larry, as well as by involuntary inter vivos transfer (creditor-forced sale), contract of sale, and in some jurisdictions, by mortgaging or leasing the joint tenancy interest. When Wanda quitclaimed her interest in the joint tenancy to Larry, the right of survivorship was severed, and Larry became a tenant in common with Harvey.
A joint tenant may in fact unilaterally destroy the joint tenancy by transferring his or her interest in the property. Once that interest is transferred, the joint tenancy is terminated, and the transferee and former joint tenant become tenants in common.
A joint tenancy may be severed by a voluntary inter vivos transfer, by involuntary inter vivos transfer (creditor-forced sale), contract of sale, and, in some jurisdictions, by mortgaging or leasing the joint tenancy interest. The quitclaim deed from the wife to her husband severed the joint tenancy between the two women. At that point, the wife had no interest in the property to pass via her will.
However, the quitclaim did not give the husband the exact same rights in the property as the wife had. Once the joint tenancy is severed by the transfer of the interest of one of the joint tenants, the remaining owners of the property become tenants in common. The right of survivorship does not survive the severance of the joint tenancy.
As a general rule, the statutory period for adverse possession begins to run at the time of the claimant's hostile entry. Here, the businessman's possession was immediately hostile because the daughter, a minor, did not have the legal capacity to execute a valid deed. However, the statutory period for adverse possession is "tolled" when the true owner has not reached the age of majority, which the daughter had not at the time the deed was executed.
In this case, the "tolling" period is ten years or until the owner reaches the age of majority, whichever comes first. Given that the daughter turned 18 in 1994, the businessman's period of adverse possession began in that year. The ten-year alternative provision was not met because the daughter's action to quiet title to herself in 1997 effectively ended the statutory period of adverse possession. As such, the businessman has not satisfied the requirements for title by adverse possession of Blackacre.
A tenancy by the entirety is a form of concurrent ownership reserved for married couples, which gives each spouse an undivided interest in the whole of the property and a right of survivorship. An attempted conveyance by either spouse is wholly void. Mr. Smith's conveyance of the cottage was therefore void. The terms of Mrs. Smith's will govern, since she died last.
Since the property was devised by Mrs. Smith as joint tenants, after Betty's death the property was owned by her three siblings, and Betty's children take nothing. Alvin's mortgaging of the property severed the joint tenancy and created a tenancy in common. Thus, the cottage was held as follows: 1/3 Alvin, subject to the mortgage, 1/3 Charlotte, and 1/9 each Gary, Herb and Irvin as tenants in common. Thus, this answer is correct.
The language in the deed conveying the forest property "to my brother, until such time as the land is used for the mining of marble or other stone" created a fee simple subject to an executory interest, where the durational language "until" provided that the present fee simple estate would terminate automatically upon the occurrence of a specified event (the mining of marble or other stone) and title would pass to a third party ("my sister and her heirs"). Executory interests are subject to the Rule Against Perpetuities.
In this case, it was possible that more than 21 years would pass before the interest vested; that is, mining might not occur within 21 years after some life in being at the creation of the interest. Thus, the executory interest in favor of the sister and her heirs violates the Rule Against Perpetuities and is void. With the executory interest stricken from the conveyance, the remaining language creates a fee simple determinable--a present fee simple estate limited by durational language ("until") so that the estate terminates automatically if the property is used for mining. The property reverts back to the grantor or his successor.
In this case, the cousin is the successor and takes the forest property. As to the beach property, the language in the deed conveying it "to my daughter, on condition that the property is not used for commercial purposes" created a fee simple subject to an executory interest, where the conditional language ("on condition that") provided that the present fee simple estate would terminate if the property was used for commercial purposes and title would pass to a third party ("my son and his heirs").
This executory interest, like the one in the forest property conveyance, violates the Rule Against Perpetuities, because it is possible that the beach property could be used for purely non-commercial purposes for more than 21 years after a life in being at the creation of the interest. Voiding the executory interest in the conveyance of the beach property, the remaining language creates a fee simple absolute in the daughter.
The language does not create a fee simple subject to condition subsequent because, while the conveyance contains conditional language ("on condition that"), it does not contain an express statement that the grantor reserves the right of re-entry upon the occurrence of the designated event. A right of re-entry cannot be implied. Thus, the beach property vested in the daughter in fee simple absolute.
A breach of a deed covenant can only give rise to an action for damages, and recovery is almost always limited to the amount the grantor received for the property. The presence of an encumbrance that the grantee did not agree to take subject to is a breach of the "present" covenant against encumbrances (assertable only by the immediate grantee), and may be a breach of the "future" covenant of quiet enjoyment (also assertable by remote grantees).
The covenant of quiet enjoyment, like the other "future" covenants of warranty and further assurances, is breached only when the grantee is actually disturbed by the holder of the encumbrance. Since the question gives a choice of only the covenant of right to convey, which is not breached by an encumbrance, and the covenant of quiet enjoyment, this choice must be the best answer, since it identifies the correct covenant and mentions both the fact that the sister must have begun using her easement, and that the neighbor must have paid consideration for the deed in order for the neighbor to recover damages.
The covenant of quiet enjoyment can be breached by an encumbrance such as an easement, but the easement must be in use, so that the grantee is actually disturbed, and the grantor must have received consideration for the deed, since the damages for breach are measured by how much value the grantor received (thus, a donee grantee can prove no damages).
Given that the property was granted to the nephew for only as long as he fulfilled the conditions set forth by the will, the nephew received a fee simple determinable. When a grantor conveys a fee simple determinable, the grantor retains a possibility of reverter.
Here, since the florist did not specify who was to inherit his possibility of reverter, it passed to the nonmarital daughter. Therefore, as soon as the nephew violated the conditions of his gift, title automatically reverted back to the daughter, as the owner of the florist's interest.
It is true that she inherited a reversionary interest. However, reversionary interests are a general category including reversions, possibilities of reverter, and right of reentry.
To be valid, a contract for the sale of land must be in writing, signed by the party to be charged, and contain essential terms, including an adequate description of the property to be sold. Here, the description written on the napkin ("half of my lot fronting County Lake") is an insufficient description of the land to satisfy the statute of frauds.
Likewise, the buyer's oral agreement to sell his friend the south half of the land is unenforceable. As such, the buyer will be able to bar specific performance of this agreement by raising the statute of frauds as a defense.
Under the facts presented, the friend has not undertaken sufficient part performance for the part performance exception to apply to take the parties' agreement out of the realm of the statute of frauds. The friend has not taken possession of the land, nor has she made any improvements on the land. Merely contracting to make such improvements is not sufficient. Neither has the buyer undertaken any actions that would constitute part performance, other than accepting the purchase price. As such, the parties' agreement is unenforceable as violative of the statute of frauds.
Under the traditional rule, when a buyer breaches a contract for the sale of real property, the seller is entitled to expectation damages, measured by the difference between the contract price and the market price at the time of breach.
Note that some courts now measure expectation damages based on the difference between the contract price and the resale price in order to compensate the seller in a falling market; however, this is not the traditional rule so this rule is inapplicable in this case.
Moreover, the seller can also recover foreseeable consequential damages, such as mortgage interest payments the seller must make due to the buyer's breach. Here, the market value for the property was $20,000 less than the contract price when the buyer breached the contract. Under the traditional rule, the homeowner can recover this $20,000, plus additional interest payments that he had to make due to the buyer's breach.
The focal points of this question are the homesteader's adverse possession of the land and the legal effect of the document purporting to transfer the homesteader's interests in the corral to the welder. To acquire title to land by adverse possession, the claimant must meet the mental, physical, and time elements.
The physical element requires that the claimant's possession be "actual, open, and notorious," meaning that the true owner, acting reasonably, would become aware of the claim and could bring an action to eject the claimant. The mental element requires that the claimant's possession be "hostile" -- she must assert a claim to the property which is in derogation of the true owner's rights. It is the "hostility" toward the true owner's title that is important. The time element is statutory -- the claimant's qualifying possession must be continuous for the statutory period.
The facts state that the homesteader entered the land and began farming and raising alpacas, constructing a corral of stone in the process, all unknown to the landowner (the holder of title). This appears sufficiently actual, open, and notorious to satisfy the physical element of adverse possession. The homesteader's occupation and use of the land was also hostile -- she behaved as though she were the owner and paid no rent to the landowner -- so she satisfied the mental element. Finally, the homesteader's possession and use of the land from 2045 to 2051 -- at least five years -- satisfied the time element. Thus, when the homesteader gave possession of the land to the welder, she was the holder of title to the land by adverse possession.
To voluntarily transfer title to real property inter vivos, the grantor must deliver a valid deed to the subject property to the grantee, who must accept it. A valid deed must contain the grantor's signature, must evidence a present intent to transfer an interest in land, and must adequately describe the property being transferred. The document by which the homesteader purported to transfer her interest in the corral, alpacas, and sunflower crop to the welder did not meet these requirements because it did not describe the land. Therefore, the land was not conveyed to the welder.
The welder then occupied the land for less than five years from when the landowner executed his deed in favor of the pharmacist, so there is no possibility of his having acquired the land through adverse possession. Because the landowner had already lost his interest to the homesteader (and therefore could not have conveyed it to the pharmacist), and the welder obtained no ownership rights from the homesteader, title to the land remained with the homesteader.
Tom has an easement by necessity. An easement by necessity is an affirmative easement, as it gives the holder the right to do something on the land of another. An affirmative easement may be created by implication where an owner subdivides his land and use of land is necessary for use and enjoyment of land. In order to establish an implied easement by necessity, the property must have been owned by one person as one parcel, the property is subsequently divided and, where there was previous use, there must be reasonable necessity. If there is no prior use, there must be strict necessity.
Here, the property was held by a common grantor, Leonard, who subdivided it by deed to Tom and Frank. An easement by necessity for Tom to use the stairway can be implied, even if the deed does not specifically mention it, because that use of the stairway is necessary for Tom to have access to his property on the third floor. This should be analyzed as analogous to Tom's purchase of a landlocked piece of land.
When a landowner owns a large parcel of land and subsequently divides it into smaller parcels for purposes of development (e.g., a subdivision), that landowner may place restrictions in the deed of the parcels. Occasionally, the landowner will place the restrictions in the deed of some parcels, but not in all.
However, where the developer intends a common scheme for the entire parcel of land, including all of the plots, a landowner whose deed does not contain the restriction may be bound by the restriction if the other deeds of the adjacent properties contain the restriction.
Here, the development corporation intended a common scheme, as manifested by the newspaper advertisement shown to all of the prospective buyers, including the businesswoman. Thus, the businesswoman had constructive notice of the single-family residence requirement, and the court will likely enjoin her from opening the store.