OF POSSESSION WILD ANIMALS: ACQUIRING TITLE 1) Definitions: a) Wild Animals: does not include domestic or domesticated animals b) Possession: involves i) physical relationship and ii) some intention to appropriate (broad general sense) 2) General Rule: Gaining Title: The Rule of Capture for Wild Animals: a) Deprive of natural liberty; (1) Not Enough: (a) pursuit alone is not enough; Pierson v. Post (2) Enough: Ultimate Control, need not be absolute: (a) mortally wounding, render escape improbable (b) Industry custom: do all that is practical to assume possession based upon circumstances (i) iron hold the whale because whales are so big 2) Purpose/Policy: i) Competition goal to kill animals; conservation policies have altered this ii) Labor theory: encourage industrious; who did all the work; want to reward efforts esp when significant financial concerns ; However: must come to fruition; must be effective; e.g. never got around to patenting an idea, but it was still my idea; pursuit alone not enough iii) Economic theory: protect and develop industry iv) Gratifying reasonable expectations v) Ease of administration; categorical rules lead to certainty 3) Exceptions/Limitations to the Rule of Capture of Wild Animals: a) Ratione Soli: possessor of land has superior opportunity to appropriate things on the land; title to all animals captured on land; NOT deemed in possession (1) Policy: discourage trespassers ii) Malicious interference with another's livelihood; Keeble, D shot off gun and scared away interfering with duck decoy; (1) Policy: Unfair competition iii) Exception to Ratione Soli--Navigable waters: owners of navigable waterway cannot stop because of public right of fishery (1) Note Exception: Mussel case; not right of fishery because sedentary (2) But note state can grant exclusive fishing rights to rivers that are navigable in fact e.g. Douglas lodge 4) Losing Title/Rule of Escape: a) Basic idea: title can be lost because it is a qualified property interest, i) peculiar to wild animals ii) NOT applicable to domestic or domesticated animals e.g. Chester the parrot b) Definition: i) Must regain natural liberty in broad sense (1) Enough: (a) Fend for itself (b) Free from artificial restraint c) Policy i) Labor Theory and Reasonable expectation in favor of second appropriator (seal case) ii) Need not regain natural habitat (Pacific sea lions escape into Atlantic) iii) Practical: identity issues; litigable factual issues d) Oil and gas analogy; ability to move freely; might shift without will of landowner; e.g. ok to extract gas of another if shifted under property i) Policy: effort; reasonable expectation; identification; e) Exceptions to Rule of Escape i) Animus revertendi: habit of return ii) Hot pursuit proximity in time and space iii) Public Interest or Special nature of some activity unknown at common law; silver fox fur breeding (1) Zoos, breeding; Lion cub in NYC (a) Lowered expectation on part of second appropriator
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iv) Accession: property conversion; under certain circumstances chattel loses its former identity (1) Denies owner replevin; allows only for conversion: value of chattel at time of conversion; e.g. mussels processed into buttons; grapes into wine; canvas into Picasso (2) Not intended to protect conscious willful converters (3) Policy: (a) Labor (b) Windfall Analogy: Oil and Gas and Wild Animals Rule of Escape Reasons behind the rule and policies for wild animals similar to oil, water, natural gas Propensity to escape Policy reasons: competitionpromote extraction of oil and gas But what about a lot work argument?: B also drilled on his own land; a lot of work; reasonable expectation that oil will be his Expectation of fisherman with sea lion Maintain industry standard; (like whale case) best way possible to extract oil and gas Problems with analogy: Identification: how does one prove whose gas was whose? Downside: competition not concerned with conservation issues ACQUISITION BY DISCOVERY 1) Discovery Principle: recognized method by which nations become owners of land through discovery and conquest; international law; nations among themselves decided a) Native Americans had a limited right of occupancy, not possession b) Government can extinguish right by conquest and purchase 2) Johnson v. M'Intosh; Chief Justice Marshall; 1823; Dispute over conflicting titles from two different conveyors (U.S. government and Indian tribe) a) Native Americans argument: first in time took possession e.g. Pierson right of first possession b) Holding: U.S. has superior title based; not about first in time i) Philosophy: invokes natural law and positive law (principles own government has adopted) (1) Problems: U.S. government never paid for the land; usually needs to be some good reason for conquest (a) Apologetically Marshall refers to fierceness of Native Americans (b) Use of land left in wilderness Acquiring property rights in some thing Development of commerceOwnership of intangibles Bodies of law: Originally: unfair competition o Keeble duck decoy o Policy: favored free trade, but not malicious interference with livelihood Palming off: passing off your product as if it were somebody else's 20th Century: intellectual property and trademarks Trademarks: injury to property right in name infringement o Policy: confusion on the part of the public; potential injury to the public o Lost sales for business (injunction, plus accounting for profits) o Dilution: independent injury; association causes loss of value; weakens trademark; must be a strong trademark; prove pecuniary damage
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ACQUISITION BY CREATION 1) Property in Intangibles a) Creating something: first in time; proprietary right to commercial exploitation, different than from ownership of an entity b) International News v. AP; 1918 U.S; News among competitors is quasi property;.; can't own the news, it's a public right BUTquasi property i) labor theory: P should not be able to benefit from the fruit of P's labor precisely at the point when profit is to be reaped; should not neap what they do not sow (special advantage to D because no burden of gathering the news); unfair competition (1) Taking off bulletin boards (2) Taking from early editions (a) Still the practice must still credit the source for a limited period of time ii) Unique to news (1) Didn't fit into palming off: reverse: passing off someone else's goods as your own (2) Some free flow of ideas; no one owns: public domain (3) Protective interest in news gathering activities iii) International News did not legitimize authorizing common law patents for reasons of justice; news as a unique case; generally, property is limited to chattels which embody an invention iv) Public interest in imitationnot to set up monopoly (1) Cheney Bros v. Doris Silk Co. ; 1929 U.S. Court of App; Fabric manufacturer sought injunction to keep competitor from imitating designs only for a year (2) Better suited for Congress patent and copyright law; No patent possible, because it is timely, no patent yet for fashion designs? c) Balance: Congress grants limited monopoly (patents) to promote creative activity, but limited in order to advance competition i) Copyist unintentionally serves strong public interest; imitation as the lifeblood of competition; yields a fair price (1) Imitation improvement in quality lower price PUBLIC GOOD (as long as doesn't destroy incentive to invent ii) Granting exclusive rights to tangible goods promotes market economy iii) Granting exclusive rights to ideas does not necessarily promotes the economy (1) Smith v. Chanel; 1968; 9th Circuit; Unpatented perfume copied and sold at lower price d) Copyrights: protect expression of ideas; not ideas themselves 70 years; after death of creator fair use e) Trademarks: words and symbols indicating the source of a product or service; protecting against use of similar marks by others when such use would cause confusion i) Public good: aid consumers, trustworthy buying ii) Business good: advertising and reputation (1) Virtual Works v. Volkswagen; U.S. Court of App 4th Circuit; 2001 (a) Cybersquatting: bad faith intent to profit from mark; registering well-known brand names as Internet domain names in order to force the rightful owner of the mark to pay for the right to engage in electric commerce under their own brand name; (b) Policy: threatens commercial growth of Internet; chill internet entrepreneurship (c) Evidence of bad faith: circumstantial and direct evidence (i) Circumstantial: famousness, similarity, other options for domain names beyond vw.net (ii) Direct evidence: admitted potential of confusion and to make a lot of money; no safe harbor (reasonable belief not breaking law; 72)- at least in part unlawful intent; (d) Policy: courts likely to rescue innocent mark holder from cyberpredator; if no predatory intent, more stringent analysis (e) Plenty of people out there; some unscrupulous 2) Right to Privacy v. Right to Publicity a) Property in One's Persona: i) Right of publicity as property interest, assignable during life, descendible at death; alienability (1) Rooted in right to privacy (2) Technological advances; legitimate market for items such as name and likeness
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(3) SC likened to patent and copyright laws b) Right to Privacy: public figure: people have a right to know c) Publicity: a right to make money out of your own persona 3) Property in One's Own Person a) Can not sell body parts, therefore can not be deemed to own it; no property interest i) Moore v. Regents of the University; patient's spleen removed; cell line created; patented; big profits; cause of action: conversion; lack of informed consent, breach of fiduciary duty (1) Remedy: informed consent; breach of fiduciary duty ii) Legislature should handle solution; court has a very limited view solely based on the record; legislature can have detailed hearings iii) Fair balancing against policy issues; iv) POLICY: research concerns v) Dissent: no authority barring recovery (1) Common law question: need to face new questions; stating we have no authority, no precedent is not really sufficient (2) Accession: cell line so different from tissue; can't replevy new thing (3) Causal connection: between injuries and doctors lack of consent an if full knowledge would have rejected; can only sue doctor not necessary researchers; limited as to potential defendants (4) Unjust enrichment; quasi contractual right; restitution damages; person should not be able to profit at another's expense; no reaping the profit from wrongful action b) Hecht case came out of the same state: Surrogate mother; disputes about keeping the baby i) Surrogate contracts eventually deemed unenforceable after lengthy hearings ii) Sperm property that can be bequeathed under the will (1) BUT bigger problem child conceived after the death of ancestor deemed a child; shelf life of frozen sperm 100 years?! iii) Blood and sperm regenerate; kidneys do not; c) Pro/Con arguments: i) Don't want people selling their property rights in body parts; ii) Would prices be regulated? iii) Fallacy to say that because you can't sell, doesn't mean you can't own; kidney (able to donate; transfer by gift; can't sell wild game; can't sell life interest in trust ) (1) Bundle of rights: property interest in some things; right include and exclude (right to possess use, enjoy and to use it exclusively; right to transfer [sell, gift] or alienate); about legal relationships with other people; rights and duties; pg 90...footnotes 38-40; 93, footnote 42 (a) Ownership becomes important in relation to others d) What are the incidents of ownership with regards to the bundle of rights i) Jacque v. Steenberg: trespass to land; best/only route 7 ft of snow; despite protests of property owner, D trespassed; verdict for property owner; There was an alternative route, but it was more inconvenient (1) Ought to be able recover value of use and occupation even though no physical damage (2) Fundamental ownership is right to exclude (3) Breach of right to exclude (4) Nominal damages not inconsistent (5) Actual damages: a taking of the use of that property; e.g. cabin hypo fixed, kept neat and tidy; deprived owner of use and occupation 4) Property rights not absolute; serve human values a) State v. Shack; Migrant workers lived on the property; necessary to see them on the land; can not do whatever you want with your property (zoning laws, nuisance laws, etc.) b) Strong public need; government funds set aside for program to help migrant workers c) Power to exclude is fundamental and most courts would agree with Jacque 5) Law and Economics a) Bilateral monopoly: two persons in a monopoly situation: People should strike a deal; efficient; Jacque had problems with trespassers in the past;; People would say, go somewhere else and cut a deal with someone else
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FINDERS 1) Acquiring title without purchasing property a) Relativity of Title and Prior Possession i) Finder has absolute possession or ownership as against all, but true owner; finder has good title as against all subsequent possessors; relativity of title; prior possession ii) Finder: the one who first took possession; not the one who sees it first (1) POLICY: Law protects prior peaceable possessor: exercising unlawful dominion over someone's chattel in a relative sense (not absolute sense; only true owner); true owner not a party in the law suit, but could potentially intervene; otherwise one of the two parties has to win (2) POLICY: Not based on being a bad person or a good person; but rather prior possession; two innocent parties why don't we split it; court prefers a set principle (a) Hypo: true owner shows up and sues for conversion (chimney sweep); or replevin (master) no res judicata because true owner wasn't a party (b) Alienable: transferable (c) Value of property interest is speculative; if chimney sweep sells jewel that is appraised for $1,000; his property might actually be $0 against true owner (i) Don't pursue all problems 2) Common Law Exceptions: Finder doesn't always win (in absence of statute of limitations) a) Agency; while engaged in services for an employer; finder yields to owner of the land and employer b) Lost v. Mislaid distinction i) Mislaid: intentionally placed somewhere then forgottenlikely that the true owner will return to the premises; owner of the premises where the object was found wins; i.e. barber shop purse left on table (1) owner of the premises as bailee, regardless of whether private or private premises; rationalized as if the true owner entrusted it into the possession of the owner of the premises; prior possession based on prior possession of the store: regardless of owner's knowledge (2) Can establish possession; conceptually saying owner of shop had prior constructive possession; possession without knowledge not a complete obstacle (a) POLICY: law protects ownership and private property; in absence of a true owner; law wants to protect possessor; if two people claiming possession, who has prior possession (i) `E.g. P on RR saw package left behind by another passenger; P took package knowing it was not lost and refused to give it up; felonious attempt to deprive true owner of his possession; was arrested; property owner as bailee (superior title and duty to care for property; was in direct physical possession and asserted claim); public place BUT mislaid ii) Lost: inadvertently and unknowingly leaving your person; finder wins but true owner will probably retrace steps (1) Hannah brooch found in house owned by D who never occupied it; lost property iii) How do we know if something is lost or mislaid: where it was and the nature of the chattel c) Public v. private i) Finder wins if lost in a public place; ii) If private property owner of the premises (similar to ratione soli); premises; exercising power of possession; locking the door, exercising the power to exclude) people have to come in if you say so; finder has lesser expectation; e.g.. vacuum cleaner salesman finds ring under your couch d) Landlord v. tenant; if facts permit an inference that the chattel came on after the lease was executed tenant wins because landlord may have a difficult time proving prior possession (e.g. ring v. prehistoric boat) right to exclusive possession transferred in a lease i) Tenant has leasehold estate leasehold: posessory right and right to exclude; e) burglarizing/trespassing no right to prior possession; ratione soli f) Safe Deposit Room: Property found in safe deposit room; no way to tell if lost or mislaid; room as quasi-public; can't dismiss as a matter of law (trial level: upon submission of facts, judgment for safe deposit company)and give finder's right to property owner; no way to tell if lost or mislaid; drawing inferences; normally some means of limited access; later evidence suggested public place (soliciting customers, expanded access) right to the finder; bank may have private and public areas g) Abandonment: whoever takes possession is the owner
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Relinquishment of possession and intent to abandon; no presumption that one would abandon property of value (1) E.g. newspaper left behind on train v. a purse (2) A lot of unclaimed property that is worth a lot of money h) Treasure Trove: gold or silver secreted in the earth i) Rules in England belonged to the king; current rule not very clear often treated as lost property 3) NY LOST AND FOUND STATUTE ARTICLE 7-B a) Accepting common law categories: but cases are unusual on their facts present difficulties for courts and attorneys; not a great deal of precedential value (Hannah; home requisitioned by the government; safe deposit boxes, etc. ) b) common law evolved into conceptual approach-given principle is out there; should not be too critical of common law approach of lost v. mislaid distinction v. statute legal realism approach and evolved into comprehensive code (considers interests and values of true owner and promotion of those values) c) Primary Purposes of the statute: designed to promote the return of the property to the true owner i) Abolish lost and mislaid categories (no so scientific) enhance the rights of the finder, to encourage turning over to the police; nature of the public place has changed ii) Let the finder win more often; when returned to the finder after a period of time, title shall vest in the finder (as opposed to prior statutes) true owner's divesting of title after a period of time iii) Property v. instruments; finder never gains title to the instrument (check, promissory note, bond, stock certificate; document other than those payable to cash) d) 252 Found instruments to be deposited with the police; penalty for failure to deliver to the police; delivery to persons in possession of premises where found i) Within 10 days after finding or acquisition of property $20 or more turn over to police or owner of premises where found ii) Within 10 days if instrument is $10 value or moredeposit with person entitled to it or police iii) A person should not be subject to criminal prosecution for failure to report a finding if left with owner of premises provided he had no reason to believe that such person would not comply e) 253 Duties of the Police i) Property: accept and maintain custody, provide receipt; make entry in records; if found in a place other than street, the police must give notice of finding and deposit to owner of premises; must give notice to all persons whose name and address appear on the instrument; give notice of any person the police know has an interest in found property (and reason to know whereabouts); property sold must be reasonable under the circumstances; perishable property sold asap in a manner reasonable under the circumstances ii) Timeframes: given to owner upon demand otherwise: (1) Instruments remain in custody of the police until delivered to person entitled to it; never destroyed or sold (a) Policy: true owner usually identified by instrument; TO can usually enforce without the instrument; TO can and should prevail rather than the finder (2) Property (a) less than $100 3 months (b) $100-$4996 months (c) $500-$4,9991 year (d) $5,000+ 3 years (3) Three months before expirationnotice to owner (if known) and finder; if at the end of 3 months no action is pendingfinder f) Exceptions 256 i) for trespassers 256 (1)title goes to landowner ii) Agency 256, (2); (1) Public employees in the course of official duty; state deemed the finder; more broad standard, employer will have the rights of the finder more often; public employees always on the job? (2) Private employees if; under a duty to deliver not limited to contractual duty iii) Safe deposit vault premise exception 253 (3): (1) Limited potential owners; only renters; things of value; may not visit all that often (2) Police 6 months; owner of premises holds for 15 yearsthen goes to the state
i)
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iv) Transportation facility place where found; person operating transportation facility deemed person in possession of premises g) 257 Title to lost property i) Shall vest in the finder 4) Proposed amendment to include a Hurley exception (one who does not comply with statute but can benefit from it) NOT adopted to exceptions 256... a) Hurley v. City of Niagara Falls; Independent contractor not an employee under a duty to deliver found goods; (maids, maintenance); seems unjust that Hurley wins; declaratory or derivation of the common law? b) Explanations for legislature's refusal to amend: i) Can't necessarily use as evidence that the legislative intent; not necessarily an endorsement of Hurley; ii) Could have been buried in committee; could have not passed on technical grounds iii) Rules have a normative influence on behavior: can induce people to turn things in c) Hannah v. Peel revisted; brooch goes to the soldier; more complicated if the state was a party; case is unusual on his facts; doesn't fall under exceptions 256 no public employee exception Peel was not employer; Queen of England was not a party
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BAILMENTS: Rightful possession of goods by one who is not the owner; bailee owes duty; 1) Often a contract between bailor and bailee, but contract not essential to have a bailment relationship; arises from possession. 2) Possession as applied to subjects of bailment: implies relinquishment of control by bailor and assumption of control by bailee 3) Duties of bailee and various predicates for liability; legal obligations v. moral obligation a) Sometime liable as a converter and strict liability: i) Refusal to return upon proper demand ii) Willful departure from bailment contract iii) misdelivery giving it someone other than the owner (exercising care doesn't matter; liability not predicated on negligence) b) Sometimes liable only if negligent: i) For damage to bailed chattel; must show negligence ii) Not able to redeliver upon demand, but legal excuse; explain away any inference of negligence based on facts; e.g. theft c) Degrees of care based on different kinds of bailment: behavior corresponds to bailment i) majority of jurisdictions including NY still recognize them; some do not because difficult to decipher negligence in itself; overcomplicates matter for jury; jury will probably build it into their verdict anyway (1) Sole benefit of bailor; gratuitous bailment; slight careliable for gross negligence (2) Sole benefit of bailee; gratuitous bailment; high degree of careliable for slight negligence (3) Mutual benefit bailmentordinary care; liable for ordinary negligence; (a) no fee necessary (e.g. Peet ring owner and hotel service; restaurant owner and free valet parking) d) Involuntary Bailee: relates only to misdelivery; and whether we should relax common law rule of strict liability some situations that are bailments, strict liability seems to be relaxed i) E.g. finder: most expected is due care; someone voluntarily picks up a lost wallet gives it to someone who comes to claim it; if no negligence; because didn't deal face-to-face; don't know who true-owner-bailor is e) P has Burden of Proof for failure to redeliver: creates problems (e.g. parking garage; hard for P to prove negligence; wasn't there; no evidence) i) Res Ipsa Loquitor: presumption of negligence; something that wouldn't ordinarily occur in absence of negligence; requires D to have to show that there was no negligence; (1) in absence of excuse, res ipsa takes hold: no negligence Attendants was distracted watching Yankee game occasionally at bar across the street (a) excuse: i.e. Attendants are bounds, gagged, lying on the floor 4) Is there a bailment? a) based on possessionrelinquishment and assumption of control i) Safe deposit box: person retains key... ii) Parking garages: relinquishment of keys (1) No clear bailment: parking garage in apartment building; no guard, no fence license to rent space (2) Ellish: self-serve parking lot dissent: not allowed to leave until ticket is returned and fee is paid; (a) Inference of negligence if car owner retains ticket and car is stolen (b) Sometimes varies on venue 5) Receptacle Rule (limiting principle): when a receptacle is bailed in absence of disclosure, the bailee should be deemed a bailee but only be held liable for what bailee should reasonably have been expected to have known what was in the receptacle; no requirement that receptacle must be conventional (can be a pocket in a coat, etc.); a) POLICY: reasonable care commensurate with perceived risk; bailee would have been more careful; might have refused to take it; might have charged more for bailment i) E.g. Cashier in a hotel receives ring for third party; ring is left on counter; lost; worth $2100; drawing inferences as to what happened: stolen; adopted as a fact; no absolute moral certainty with respect to the facts; more about likelihoods (1) Hotel argues no bailment because no mutual assent; because P did not divulge the value of the ring; attempting to invoke receptacle rule; but cashier knew the identity of the ring (a) Safe deposit boxes typically have detailed contracts; rarely sole bailment law (b) POLICY: concern for fraud;
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ii) Hotel argues lessened duty of care because gratuitous bailee and cashier was merely negligent (vicariously negligent); lessened fault: vicarious liability: hotel liable for cashier's negligence; degree of care should not be lessened (1) Minority view: non-gratuitous bailee/mutual benefit bailments: degree of care should not be lessened; no distinctions remain (majority of jurisdictions maintain distinctions in degree of care) (a) Mutual benefit: service, no need to pay $; relinquishment of control by bailee; assumption of control by bailor 6) Limitations of Liability a) Assent: Did the Bailor assent to a limitation of liability? unless statutorily imposed (rare) i) E.g. Lease (signed formal contract-yes assent, can't argue I didn't read it) v. ticket at a garage (receipt for identification) ii) Sign in Studio 54 coat check difficult to prove assent (1) Is assent enforceable or against public policy? Will not let others to agree to release wanton or reckless behavior (2) No bailee can excuse himself from gross negligence or recklessness (3) What is the scope of the bailment? b) Strict Construction of limited liability clauses: Kodak: test case i) Courts look upon limits of liability for negligence with disfavor: construed strictly: limited liability dealt with sale alone (different transaction); must reach negligence ii) Language should include limited liability for negligence but General Obligations Law says against public policy for garages to limit liability; not strictly liable though (e.g. robbery) iii) P read the limited liability; D agreed negligence c) NY General Business Law 200, 201: Hotels: If safe is provided and notice given, liability is limited i) Purpose to limit liability of hotels, inns, motels (common law held absolutely liable-safe haven for travelers in dangerous times-no matter how much care they exercised); strict liability not justified today (insurance, inns not the sole place of refuge they once were) ii) 200: valuables; money, bank notes, jewels, etc. (1) Details: (a) Whenever D provides safe and post notice in a public and conspicuous place and manner in the office and public rooms, and in the public parlors of such hotel, motel... (b) If guest does not deposit goods no liability (c) If deposited in the safe: liable only up to $1,500 (d) But $1500 limit hotel does NOT have to accept anything over $1500 (e) If it does accept $1500 limit on liability unless written agreement (2) Exclusive predicate for complying with statute: almost complete 180 from common law if complies with statute little or no liability; (a) If statutory conditions are satisfied: no independent negligence cause of action; statute is the only avenue (b) Fulfill conditions of the statute, but some other act causes negligence: still limited liability (3) Fails to adhere with statute: no limited liability (common law-strict liability) (a) Even if signed agreement limiting liability (i) assuming no safeunenforceable for policy reasons; would encourage lesser protection than provided by the statute (b) Safe unavailable during certain hours could not invoke 200; E.g. Zaldin v. Concord Hotel safe (i) Trial Court: says hotel hours were reasonable; App Div dismissed reasonable hours but still allowed 200 because statute doesn't require any specific time for safe to be available (ii) Court of App invokes plain language because otherwise interpretation in derogation of common law 1. whenever safe is provided hotel can invoke 200; plain meaning rule; BUT if safe is not available at the time the theft occurs (and possibly Ps attempted deposit) no limited liabilitycommon law 2. Court suggests still issues of fact a. Circumstances surrounding the theft; credibility quintessential issue of fact
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3. Whether theft occurred during time when safe was not available; otherwise P would not have to comply with the statute after being denied access to the safe once; 4. Value of rings (4) What constitutes a safe within the meaning of the statute--NYGBL 200? (a) Question of law or fact? (even if question is arguable, still may be question of law for judges; matters typically concerning statutory construction for judges, BUT certain debatable words can go to jury) (i) Argument, not for the jury: consistency put the Ds on notice (ii) But Gonsalves remands as issue of material fact for the jury d) 201 Liability for loss clothing and other personal property limited (Valuables v. wearing apparel; e.g. Rolex) (1) Limits common law rule up to $500 unless negligence (2) Exception: checkroom of hotel, motel, or restaurant, where the issue a check or receipt, no fee, the proprietor not liable for more than $200 unless value in excess of $200 of apparel is disclosed$300, unless negligence (3) Examples: (a) Honig v. Riley; fur coat left in coat check; restaurant negligence; can not invoke statutory protection because value of coat was not disclosed even if negligence (i) Exacting fees tips don't count, must require a fee (b) Conboy v. Studio 54; not a restaurant, doesn't fit into statute and fee charged; under common lawbailments stolen predicated on negligence; P has burden of proof, but court permits an inference of negligence based on circumstances; disclaimer limitation of liability predicated upon assent; Kodak does not explicitly state no liability based on negligence; sign must be prominent
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ADVERSE POSSESSION 1) Intro: a) Statute of limitations: (statute of limitations: period of time to commence of time measured from the time a cause of action accrued); running for a cause of action in ejectment (action to recover possession) 2) Policy: a) sitting on rights too long, must bring any action within some reasonable time or both action and remedy is barred 3) Definition: someone not the true owner in adverse possessionthereby giving rise to a cause of action in ejectment after statute of limitations runs, adverse possessor acquires title; title of true owner is extinguished; a) Another way of obtaining title other than purchase or gift (more dramatic not talking about foxes!) 4) Requirements for AP a) All measured against the land; how would a reasonably prudent owner of similar land b) Possession must be: i) actual; mere assertions or claims are not enough; actual entry (Lutz) ii) adverse (no permission or consent from true owner); hostile gives rise to cause of action in ejectment iii) open and notorious; can't be secret or furtive ; true owner doesn't need to have actual knowledge if owner is neglectful and doesn't check, too bad; true owner must exercise reasonable diligence iv) reasonably continuous; can not be merely occasional trespasses, can not be sporadic v) exclusive; true owner can not be in possession at the same time (but exceptionfor large tracts of land) 5) Actual Possession a) Van Valkenburgh v. Lutz i) Lutz unusual on its facts (easement actionlater claims title; 4-3 decision, muddies up the waters); Perhaps influenced by policies of res judicata; non jury trial in NY, the App Div has all the powers of a trail judge; can overturn findings of fact and make new findings of fact; (federal court Circuit Court can not overturn findings of fact); Court of Appeals can only determine matters of law, unless clearly erroneous (waste of time reexamining facts in a case like that) ; ii) issue is actual possession: cultivation, improvement, substantial enclosure; (1) majority interprets absolute terms; cultivation and improvementnot a shack and junk (a) built shack on belief that it was not his own land; built garage knowing own land; majority determining subjective state of mind (b) Lutz also focuses on Lutz' suit easement: non posessory interest in another's landuse of land; Lutz (c) But then stresses not based on Lutz's admission alone (d) Oral disclaimer to the true owner before the statute of limitations has run will mark possession permissive (2) dissent: interprets in relative terms: cultivation depends upon the nature of the land (land was wild, overgrown); this was the prevailing view at the time; (a) prior precedent in NY established state of mind doesn't matter, Belotti, (b) Oral disclaimer after statute of limitations has runnot disseised; not automatic retransfer of title; may be evidence of former possession (c) Easement action was analogous to adverse possession suit (d) Bad attorney advice; little evidentiary value in judging; should have pleaded in the alternative and inconsistent defenses 6) No absolute test a) As to what is cultivation, improvement, continuousdepends on land i) Ray v. Beacon Hudson Mountain; issue: continuous; one month out of the year; continuous based on the nature of the land (one month may be OKvirtual ghost town, utilities, prevented against trespassers; 7) Color of Title: entry under a written instrument (deed, judgment); doesn't convey valid titleonly color of title; All measured against the land; how would a reasonably prudent owner of similar land a) Policy: i) Could have been a mistake, or a forgery ii) Subjective state of mindbelief of ownership b) Advantages: i) beyond two requirements enclosure and cultivation also used for fuel or fencing ii) Some states shorter period of statute of limitations 8) Constructive AP: entering under color of title and adversely possess some part of the premises, deemed in constructive AP in the whole of the property described in the instrument
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a) b) c) d) e)
Running of statute of limitations in cause of action in ejectment (action to recover possession) A's deed conveys both lot 1 and lot 2; if A never enters lot 2 Not a complete substitute for some actual adverse possession; must have some actual possession Must have open and notorious entry, otherwise Y has no cause of action in ejectment Enlarges actual AP beyond actual premises possessed x y
1 A
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9) Interpretations of AP from Common law 1066 until today/Reasons to keep AP of doctrine intact a) English courts emphasize neglect of true owner b) American courts emphasize affirmative acts of the possessor c) Interpretations of AP: i) Holmes: economic (AP is efficient, contributing to overall wealth), psychological (AP's attachment to the land), moral arguments ii) Ballantine: purpose to quiet all titles, provide proof of meritous titles, and correct errors is conveyancing (1) Title search all the way back to unimpeachable source of title: sovereign, e.g. Native American land conveyanceU.S. had superior title (2) Title company to insure; marketable title (3) Doctrine of APgives assurance makes titles marketable that are good in fact, but lacking technical proof 10) Subjective state of mind: a) Good Faith Standard: must believe that you own the property, but you don't; some courts: why award trespasses; encourage respect for private property b) Aggressive Trespasser Standard: Some courts interpreted adversity literally; hostile the only way to be adverse to the owner if you know that you know it's not your land and you intend to steal! Why reward bad faith adverse possessor? Most courts reject this view c) Objective Standard: majority view: subjective state of immaterial; not acknowledging that you're there by permission; acting objectively like the owner; point of view of punishing the owner, rather than rewarding the AP; force the owner to come forward within the SOL; so no stale claims; i) Advantages of Objective Standard: (1) regardless of state of mindcause of action in ejectment and statute is running regardless (2) productive efforts of APwhy should subjective state of mind matter (3) practical evidentiary difficulties; hard to prove what's in someone's mind many years before (original AP may even be dead e.g. West v. Tilley) (4) deeds and records are fallible; people start living a different reality, claim different boundaries, etc. AP says records are going to be made to match the reality rather than vice versa. (5) might encourage perjury (6) color of title rewards people who believe land is their own (a) e.g. West v. Tilley; subjective state of mind; pulling line out of Van Vulkenburgh; even if mistake, still adverse possession, subjective state of mind is immaterial 11) Judges troubled by doctrine of AP a) Aggressive trespassers not worthy of AP b) Mistake: boundary line cases; necessity for updated surveys; wanting to keep boundary lines intact 12) AP today a) Boundary disputes b) Quieting titles c) Squatters 13) Tacking: a) Adding on time of actual possession by prior AP to successive AP b) Requirement of privity: there must be some relationship between successive APs; voluntary transfer
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E.g. AP gives heir AP rights in will or in testate; deed; Oral transfers; intention to transfer; doesn't need to be in writing or formally, explicitly expressed; e.g. selling land over a boundary line that is fenced in; new AP assumes (1) Can't just walk on after previous AP leaves c) Once statute begins to run as against the fee owner (true owner), it continues to run not withstanding transfers on the fee owners side 14) Interruption (continuous requirement): a) What constitutes an interruption in the statute of limitations? i) Commencing action in ejectment provided prosecuted to a successful conclusion (if dismissed for improper servicewould not stop statute of limitations) (1) Awareness and threats in absence of acquiescedoes interrupt not ii) Retaking of possession; doesn't have to be for a very long time, but must constitute possession (mere entry of owner without more will not interrupt running of the statute of limitations) (1) But if AP concedes and asks to staypermissive (interrupts statute of limitations) iii) Abandonment; but upon reentry new cause of action, statute runs again 15) AP Life Estates and Future Interests: a) Intro and Terms: i) O conveys Aremainder to B; (1) A present interest, i.e. posessory; life estate; fee ownersole fee owner of present fee simple absolute (2) B future fee interest, i.e. nonpossessory interest; fee interest; after A dies ii) Future interests may not become posessory (1) Remainder in class of unborns (issue is B's descendants) (2) Remainder in class dies before life interest iii) Will takes affect as an instrument of transferat death of testator b) Both A and B own propertyA posessory interest, B non posessory i) If wish to purchasemust talk to both A and B, both owners or only buy B's life estate ii) If life estate and remainder bought outtwo estates merge into a fee simple absolute c) Reversion: future interest; own a nonpossessory interest; tenant has posessory interest d) Key: Ejectmentaction brought to recover possession i) Problem 2, 161 (1) A enters before will has been devised; statute running as against life tenant and future interest (2) C does not have a cause of action in ejectment (no possession) (3) BUT If B does nothingC can bring an action in ejectment; but C will not retain possession, will only eject A ii) Problem 3, 161 (1) A enters in 1987 after will diveses interest (2) 1997 A acquired B's life estate; 2001 B dies termination of life estate (3) C has a cause of action against A; statute of limitations began to run again (4) A can acquire land in 2011 if C takes no action 16) Disabilities: a) Examples: i) age of minority (infancy) , unsound mind, imprisoned b) Time action accrues: i) Must be under disability at the time the cause of action accrues when A first takes possession c) Removal of disability i) Minority: reaching the general age of majority; some situations retain 21 year requirement ii) Insanity: death, or lucidity d) Protecting interests of Disabled: i) Court appointed guardianfiduciary duty to protect interests of infant or insane person; can sue for breach of fiduciary duty... 17) AP as against the state proper (Government) a) NY statute of limitations: 20 years b) Governmental (e.g. can't acquire title to LIRR); v. proprietary distinctions (owned the way a private landowner would own it) i) NY applies 20 years as against the state proper for proprietary property i)
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(1) 10 year statute for state and political subdivisions (towns and cities) (2) Can't own governmental properties (e.g. Central Park) ii) Native American claims to land; federal Non-Intercourse act of 1790; protective of Indian nations and tribal lands; no conveyance valid unless approved by Congress (1) Land conveyed to Indians by state not sent to Congress (a) Indians made actions in ejectment (b) Supreme Court: no express statute of limitations that applies to 1790 statute; (c) but 15 years ago Supreme Court holds claims can be asserted today; Oneida nation 860 f2d 1145 iii) Squatters and East Side coalition v. City; city wanted to retake possession; preliminary injunction (show likelihood of success on the merits + balancing of hardships) granted for East Side to preserve status quo; 230 app div 2d 622; not continuous, different tenants possession not in privity no tacking; APs can lease possession (1) Issues: mere entry v. retaking possession (city sealing up doors) 18) NY Statutes: a) 212 action for ejectment must be brought within 10 years b) 211 action for ejectment 20 years for the state, not political subdivisions; counties and towns, BUT in all cases, property would have to be held in a proprietary capacity v. governmental cases in order for AP to have a cause of action c) 208 disability: infancy or insanity at the time the cause of action accrues (applies to all causes of action) i) Time will be extended no later than 3 years after disability ceases or individual dies, whichever occurs first, BUT 10 year maximum (really has no effect on 10 yr statute of limitations) ii) Exceptions: Infancy (if not a med mal action): infant has until 21 years old, three years after reaching age of majority; so infancy is the only material disability allowed for AP d) 512 entering under color of title (written instrument); land deemed to have been possessed if: i) Cultivated or improved ii) Protected by a substantial enclosure iii) Used for supply of fuel or fencing timber (rural lands) e) 511 AP under written instrument i) Premises included in the instrument deemed to have possessed constructive adverse possession; except if divided up by lots f) 522 what is enough (entering not under color of title); depends on nature of the land (except as applied in Van Vulkenburg) i) Cultivated or improved ii) Protected by a substantial enclosure g) 521 not under color of title: i) Gain title to presence actually occupied (no written instrument)
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REMEDIES OF A POSSESSOR 1) Relativity of title: even though a third person (true owner) may have better titleD can not defeat the claim of the possessor by raising a superior right in a 3rd person under whom the D is not claiming a) Each P has at least a posessory interest or a claim of possession; there is or may be a missing third person (true owner) have to think about possibilities when the 3rd person shows up b) After paying out damages true owner does not have action against D c) Policy Concerns: i) Causing D to pay twice v. ii) True owner barred by res judicata (even though not a party in original suit?) d) Bailments: i) Bailee can recover full damages; doesn't matter if not negligent; ii) E.g. The Winkfield; 1901 Collision between ships; postmaster general claims full damages as bailee for destroyed unknown letters to create a fund out of which people could come forward; if unusually large number of unknown claimantswill cause unknown claimants to lose out (will get a smaller piece of the pie) e) Reasoning: i) Wrongdoer to pay only one time; recovery by bailee will bar bailor; general rule in ordinary bailment situation; even if settlement; recovery to have res judicata effect against parties or persons in privity with parties ii) bailee in recovery deemed to be holding it for bailor; (even though wasn't liable in the first case); no recovery for bailor unless bailor sues also (bailor would have superior claim, basis for dismissing bailee's suit) (1) why not insist that bailor sue instead and dismiss bailee's suit? (a) to avoid multiple suits e.g. fed ex truck stolen with packages (many claims for packages as well as for truck); historically no joinder of parties; much less reason in modern law but still for convenience; still a cumbersome law suit under joinder f) Armory revisited: Finders i) Also the rule in the chimney sweep case? privity argument falters (no voluntary transfer); unfair if true owner is barred by res judicata and is deemed in privity with finder ii) Yet, seems more fair for finder to sue; wrongdoer could escape with impunity (no obvious true owner to sue) iii) Today: Armory still good law; finder can sue and recover full damages; no precedent for true owner showing up; whether or not true owner would barred; today mootmust turn in lost goods 2) Real Property a) Tapscott v. Cobbs, 1854; Lewis took possession with no evidence of deed left to heir Cobbs; possible 3rd party with superior claim; abandonment of possession (must still be continuity)...troublesome fact; heir presumed to be in possession (but usually from true owner); but fiduciaries never bothered Lewis; i) Superior claim first in time (prior peaceable possession); superior title relative to intruder ii) P in ejectment must recover on the strength of his/her own title, not on weakness of possessor's (1) Immaterial who is the P; protection on prior peaceable possession (2) Don't have to worry that true owner will pay twice (ejectment); true owner can bring action in ejectment b) Permanent injury to fee (v. trespass) i) Trespass: interference with posessory interest (1) Some acts tortious in nature against land can be characterized only as a trespass; e.g. Jaques didn't want mobile home dragged across land (even though no damage); fixing up cabin; deprivation of the value of use and occupancy; damage to possession (2) No damage to remainder; no possession ii) Permanent injury: permanent injury to land; injury to the fee in the form of a depreciation in value of the fee (1) Other extreme: negligently causing fire, house burns to the ground; not trespass pure and simple (interference with posessory interest) (2) Damage to life interest; damage to remainder (expected future interest) (a) Winchester; Could not prove good paper title (technical defects); can only prove possession (i) Must prove title on permanent injury to title; concurring judge: she proved enough, but not permanent injury (ii) Someone could theoretically show up; but in fact Winchester is true owner (lost on technicality) iii) Continuous trespasses or single acts causing permanent injury to the land: gray area: not as definitive or permanent damage (flood, encroachment); buildings don't last forever
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(1) Illinois RR; P continuously put up fence, RR tore it down, kept winning on continuous trespass; need only prove possession (need not prove title, as opposed to permanent injury) iv) Continuous trespass v. permanent injury: Material Differences (1) Proof: (a) Permanent injury: title (worried about possible true owner; e.g. Winchester lost on technicality but possession under color of title ought to be enough) (b) Continuous trespass: possession (2) Measure of damages: (a) Permanent injury: depreciation in fair market value; recovery should bar true owner (dicta only-not the issue before the court); recovering all damages, future damages etc. (b) Continuous trespass: Injury to posessory interest; but not all damagesonly those from the time suit commenced (3) Cause(s) of action (a) Permanent injury: one wrong, one loss suit, all damages recovered (b) Continuous trespass; every day is new cause of action; only recover damages up until day of law suitthen sue again; burden to sue many times (Cobb) (i) Cobb found it advantageouslocal juries kept giving verdicts (4) Statute of limitations: (a) Permanent injury: runs at time of original wrongful actbarred (b) Continuous trespass: (e.g. encroachments) one cause of action for every day; some original actions barred; 10 year limit in NY; title by AP based upon continuous trespass v) Examples: (1) 509 Sixth Avenue; transit authority's underground encroachment only discovered upon construction; Continuous trespass special damages sustained within last three years (increased construction costs) (a) Transit authority failed to sue for long enough for title by AP but still not open and notorious (b) Transit authoritycan sue for easement under power of eminent domain (taking-condemnation proceeding); to avoid endless litigation (2) Jensen v. GE (a) Applying statute of limitations would bar recovery for personal injury (DES cases) (b) Majority applies plain language: says controlled by statute limiting time, continuous trespass theory does not apply; shall be brought within three years from discovery did not allow continuous trespass, employment of 509 Sixth Avenue (c) Dissent looks to purpose of statute: to extend time for these types of cases; P relied on Sixth Ave (d) Only an application of the statute dealing with latent exposure to toxic torts; doesn't overrule continuous trespass theory Overview: 1) Winchester as owner; Cobbs not as owner; peaceful possessor ought to be able to recover; a) but prior wrongful possessor should be able to recover because even wrongful possession enough to support replevin in the absence of true owner (e.g. G.I. stole Hitler's clothes after WWII; his chauffeur stole to from him; chauffeur was a thief purchaser has no title) 2) Not applied to bank robber;
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BONA FIDE PURCHASERS 1) Protecting interests of original true owner of property v. interests of bona fide purchaser; Dealing with someone other than true ownermay not get title a) POLICY: Balancing interest of two relatively innocent parties i) sometimes TO went too far in inducing BFV ii) vs. state will not go too far in divesting property interests of TO i.e. stolen even if TO was careless (but can be affected by passage of time) 2) Transferee gets whatever title transferor had 3) When title is acquired: a) Someone who had good title; had capacity to transfer and transferee paid good value for property b) Buying from true owner in arms length transaction 4) Exceptions: Getting Better Title than Transferor: a) U.C.C. and common law 5) When title is NOT acquired: a) Thief doesn't get title (even if true owner was negligent in allowing theft; left doors open, etc.) i) Wrongdoernatural law ii) Interferes with property interests b) Purchaser from thief or subsequent purchaser (even if purchaser is nave); i) Deterrent for shopping in the alley c) Forged Instruments: e.g. deeds forgery passes no title d) Bailee can't transfer title; has no title, only has rightful possession; i) mere naked possession not enough to transfer title ii) Porter v. Wertz 6) Statutory Estoppel: U.C.C. 2-403 a) Purchaser of goods acquires all title which his transferor had b) Or had power to transfer c) Exception: Voidable title: fraudulently induced to transferor (deceived as to the identity of the purchaser, bad check, cash sale, fraud); original, apparent transfer; intention to transfer title; transferred title can be avoided; will protect BFV; i) If sold to good faith purchaser for value true owner can not replevy goods; (can transfer non voidable title) (1) v. lending (bailee)mere possession, can not transfer; if bailee could transfer titleinhibit commonplace bailment transactions (a) Policy: seller should investigate d) Entrustment (possession) to a merchant dealing in goods of that kind gives him power to transfer all rights of entruster to a buyer in the in the ordinary course of business (even if industry) (tips the scale in favor of BFV); merchant is enough no need for indicia of ownership (1) POLICY: Protect commercial transactions; good faith purchaser for value has expectation that that person has authority to sell; secure commercial transactions 7) Equitable Estoppel (common law) a) even though no express authority to sellmay be able to transfer title of the person who gave possession (not thief) b) if bailee clothed with authority or indicia of ownership when transferred to bona fide purchaser (good faith, paid value) i) Requires more than mere possession: possession + indicia of ownership + some additional acts sufficient to raise an estoppel (usually need reliance based on inducements of true owner...made bailee look like true owner; BFVmust relychange position(make a purchase for value); i.e. additional acts allowed rare book store; diamonds sent to Atlantic City; allowed to exhibit 8) Gray Areas: Two innocent parties + wrongful middle man a) Porter v. Wertz; NY, App Div; 1979 i) Could Wertz transfer Porter's (true owner) title
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ii) Von Maker (art merchant posing as Wertz, deli guy) as a mere naked bailee, Porter merely gave possession to display painting; Wertz (deli guy) then sold to Ds; Porter, true owner not a bad person; but could have been smarter; Faegen (D) not bad person; should have been smarter iii) D's argument: von Maker/Wertz was a merchant in goods of that kind and transferred rights of entruster in the ordinary course of business to Ds who purchased in good faith for value (1) Held: Wertz not a merchant who dealt in goods of that kind (deli worker); D not a good faith purchaser (didn't make an inquiry, if even called phone #, would have realized Wertz was not an art merchant) (2) D's argument: Wertz not as mere naked bailee; common law recognized that if bailee clothed with authority or indicia of ownership when transferred to bona fide purchaser (good faith, paid value) (3) Requires more than mere possession: possession + indicia of ownership + some additional acts sufficient to raise an estoppel (a) E.g. indicia of ownership: A asks B for help in selling rare book; gives certificate of ownership to B; but says call me before you sell it to approve price (not a duly authorized agent); B doesn't have authority to sell, but had indicia of ownership; C who pays value for it (misled part with money) might reasonable rely (b) E.g. additional acts: Zenman; true owner estopped from asserting claim; even though bailee had not authority to sell diamonds for particular transactionin the past had authority to exhibit and sell which constituted additional acts from past transactions (c) Porter neither gave authority to sell nor indicia of ownership; no additional acts (although allowed von Maker to hold painting for 90 days even after even after he found out about von Maker's criminal past) (d) usually need reliance based on inducements of true owner; e.g. even if D was induced to believe seller was a merchant by relying on representations made by other partiesnot enough (e) Court of App; never reached good faith question; amicus brief from Art Dealers requirements too much; NY attorney general: requirements good b) Times where it is more important to protect bona fide purchaser i) POLICY: protect commerce ii) True owner did more to facilitate transfer and transferee's reliance iii) Certain transactions ought to be more reliable (1) E.g. Land: necessary to have Bona Fide Purchser doctrine (a) A as true owner of Blackacre with unbroken good title all the way back to sovereign (fee simple absolute) (i) True owner A wants to buy Greenacre; gets loan from B in exchange for mortgage on Blackacre; but B did not record it; (A now has fee simple absolute encumbered by B's mortgage); A proceeds to sell Blackacre to C; C performs: 1. Title search; did not find B's title, because did not record it 2. Surveyed land vacant 3. gets mortgage from bank 4. gets title insurance (b) Both B and C are innocent parties: C wins because C did everything she could do ensure good title; B negligently didn't record deed (c) Bona fide purchaser doctrine: otherwise people could never buy land; lenders could never lend; must enforce routine transactions iv) If a negotiable instrument or money; special characteristic; will protect holder in due course (bona fide purchaser); want negotiable instrument to almost have characteristics of money to circulate freely (1) E.g. bonds: stolen even if true owner has proof (initials on money); must circulate freely; Protect rights of true owner_____________________________________________protect rights of purchaser
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AP POSSESSION OF CHATTELS 1) Intro: a) AP may get title through passage of time b) AP of land goes back hundreds of years; long been assumedAP of chattels is analogous, but law never developed to a highly crystallized degree 2) Difficulty with open and notorious requirement (with land allows true owner to know) a) Paintings: displayed in private residence; sometimes exhibited from time to timecontinuous i) U.C.C. does not applygallery no title because entrusted by thief b) Tacking with personal property i) Some courts: every transfer is new cause of action 3) Other Rules Developed: a) Demand and refusal rule + laches (NY leading authority, common law): not a converter until true owner makes demand and purchaser refuses, Guggenheim v. Lubell; NY(1991) i) No cause of action until after refusal: gives purchaser a chance to return it once convinced of true owner; NY specifically REJECTS due diligence requirement, DeWeerth ii) better protects true owner (no due diligence requirement); but TO's conduct not immaterial possessor can also raise laches to consider unreasonable delay that would cause undue prejudice (1) demand and refusal + laches focuses on conduct of both true owner and possessor (2) Guggenheim's explanation for behavior: reporting might drive painting underground; counter argument: didn't want negative publicity of their negligence might not get donations (3) Museum says not prejudicedcan implead third party (4) Both Guggenheim (full value-good for rep) v. Lubell (made out with painting); settlement legal expenses very high....third party galleries worry about Menzel v. List (being impleaded for breach of implied warranty) iii) Spills over to AP and statute of limitations? (1) True owner: no matter how long cause of action accrues at refusal (2) Thief: statute of limitations runs at time of theft; can only be sued within next three years; whereas good faith purchaser can be sued for 30 years; (3) Thief: gets title after 3 years? (a) arguably though statute of limitations NEVER runs against thiefrepose argument fails; also AP approach; thief stealscan never be open and notorious statute of limitations never runs against thief (b) Usually no action against thief; (c) Thief can't keep painting after 3 years; might apply something like AP of chattels (not open and notorious) iv) Good Faith Purchaser for Value: Action Against Gallery (1) Menzel v. List; gallery must pay price of painting at time of surrender to true owner (not price paid) b) Discovery rule: cause of action does not accrue until true owner knew or reasonably should have known through the exercise of due diligence of the cause of action including the identity of the possessor of the paintings (NJ rule) i) focus on true owner's behaviorbetter for possessor; Okeefe v. Snyder; NJ, 1980 ii) But arguably fairer: better balance between rights of bona fide purchaser and true owner; with qualification of due diligence (1) Economic and psychological interests of possessor (Holmes)
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ACQUISITION OF GIFTS 1) Possession; acquisition of title other than by purchase 2) Gifts and estates often fought out between family members; children v. W2 3) Requirements: a) Donative intent and delivery (possible third requirement-acceptance) i) Acceptance ordinarily presumed: significant in the law primarily because you can reject a gift you do not want (tax purposes) b) Two types of gifts i) Causa mortis: only be made by someone who is in apprehension of death because of some peril (usually serious illness); revocable; if donor lives automatically revoked (1) donor is ordinarily dead (2) typically time limit is short (3) remainder interest (future nonpossessory interest) ok and keep life estate (present posessory interest) ii) Inter vivos: absolute and unconditional; donor can't change mind even seconds later c) Problems: i) Sometimes physical nature of gift: delivery ii) Potential Fraud d) Relaxation of Delivery Requirement: Constructive Delivery i) If already in the possession of donee ii) It too big to manually transfer; iii) Delivery of keys: not purely symbolic, means of control (1) Some jurisdictions keys ok if can't pick up object and hand it over (2) Safe deposit box key may be OK; inconvenient to go down and get the stuff (3) Small box under the bedwhy didn't just hand over the box? Fraud? (a) Where was the box iv) Written instrumentsymbolic delivery (1) Must manifest donative intentintention to make a gift by way of the writing (a) E.g. writing promising to give a gift tomorrow night; donor dies before thenno gift (2) Writing itself must be delivered; deliver instrument in lieu of the gift (3) Informal writing OKe.g. letter (4) Gruen: letter of intent; problem: donee kept the paintingmaking gift of ownership/future interest; donor retained life estate; (a) If a willnot a transfer of interest v) Newman v. Bost; on deathbed, donor gives everything in the house; claimed entitled to all furniture; was given keys; cook, housekeeper, and hired servant; associate (1) Insurance policy: wasn't delivered (2) Rest of furniture: only if one of keys opened it (3) Furniture in her room: no need for redelivery if subject matter is already in the possession of the donee (a) Furniture: sustain gift; if insisted on redelivery: would frustrate intent (b) Insurance policy: maybe more concerned about intent: maybe didn't even know policy was in there e) Presumption of gift causa mortis can be rebutted if INTENT to give absolute, if intent to make an unconditional gift intent to make a gift inter vivos i) IF VERY STRICT ON DELIVERYMAY FRUSTRATE INTENT (Newman) ii) IF BELIEF THERE WAS INTENT COURTS WILL STRETCH INTENT (Newell) iii) Gift causa mortisfunctionally like a will; must comply with strictest requirements; ceremony witnesses (1) If timing is goodno need of a will causa mortis (2) Differences: (a) Willno transfer until deathcan revoke will (so no future interest) (b) Causa mortisthere is a transfer during lifetimea revocable transfer iv) Intent critical at time made the gift; evidence later used as evidence of prior intent; prior time was unequivocal or ambiguous (1) Why causa mortissomeone in apprehension of death will make a gift on condition of death
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(2) Newell v. National Punitive donee v. bank as executor of donee; Sounds like gift causa mortis was dying of pneumonia; one in apprehension of death can give inter vivos gift; On condition that it is his; I am nothing but a bailee (a) Court sustained gift (b) Gift causa mortis and donor recovers (i) If donee gives it backtoo options 1. donor accepts 2. donor insists donee keep it a. Manifestation of donative intentnew intervivos gift i. Vs. Newelldonor still wearing it f) Engagement gifts i) NYCRL 80-a Causes of Action for Alienation of Affection, Criminal Conversations, Seduction and Breach of Contract to Marry Abolished (1) Historically: would not ever specifically enforce promise; nominal damages; lurid personal testimony; P looking for some heart balm (2) No more causes of action for breaches of promise to marry ii) NYCRL 80-b Gifts Made in Contemplation of Marriage (1) After 80-a (a) Special kind of inter vivos giftnot absolute an unconditional gift (b) As soon as breach of promise to marry mentioned in complaintcase dismissed because promises to marry could not be enforced (2) 80-b: nothing in this article shall be construed to bar a right of action for the recovery of a chattel, when the sole consideration for the transfer of the chattel, money or securities or real property was a contemplated marriage which has not occurred, and the court may, if in its discretion justice so requires (a) Gaden; exes decided to remarry; before doing so, they bought a house; he put down all the money; deed said she signed the note and mortgage; fiance seeks partition sale; man says gift in contemplation of marriage-.rescission to get her name of the deed (b) no formal transfer necessary from P to D; no matter that deed transferred from former owner not directly from party (c) contemplation of marriage need not be sole consideration she had to sign note and mortgage; court looked at purpose: sole consideration; statute contemplated a case where P signed a lien (d) Fault is immaterial: engagement period is trial period; right back to preheart balm act situation (e) 27 ny2d 397 Lowe cases, 1971; man gave woman VERY expensive engagement ring; his divorce was pending; upon breakup of engagement (i) 80-b doesn't affirmatively create an action; right to return it must come from some other source; common law decision if donor under existing impediment to marriage (already married)could not recover ring; promise against public policy; precluded upon common law; still being applied by lower courts in NY (ii) Dissent: marriage was dead as a door nail, engaged a lawyerpending divorce 1. Then, 1979 divorce restricted in NY and around the country: only for adultery; today: no fault divorce
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CO-OWNERSHIP 1) Three types: typically tenancies in relation to land: a) Tenancy in Common b) Joint Tenancy c) Tenancy in The Entirety 2) Undivided posessory interests a) Concept each has possession of ENTIRE property: possession of every square inch b) Reality fiction doesn't work: c) Can not lease exclusive possession of a particular piece of property: i.e. b 3) Getting out of agreement: Partition a) Physical partition b) Partition sale: compulsory partition c) Can also make agreements 4) Differences: a) Tenancy in Common i) Upon death of tenant in commonheir b) Joint Tenancy i) Right of Survivorship (1) A's interest extinguishes; A's interest does not pass to B ii) Four Unities (1) Time: conveyed to both at the same time (2) Title: under same instrument (3) Interest: unity of interest unusualnot symmetrical seems to be still in tact; (4) Possession: right to possession as the whole iii) Severance: one can force severancetenancy in common (1) A and B J/T with right of survivorship; if A conveys C regardless of B's knowledge or consent A and C: tenants in common; If C diespasses to C's heirs (2) 342 problem 1: A,B,C J/T ROS; (a) IF A conveys to D; D as tenant in common for 1/3; maybe B and C still want to be J/T (b) If B dies C has 2/3 interests tenant in common (3) Although a joint tenant can unilaterally sever a JT; can not sever at death by a will If B attempts to transfer in willB can not devise anything; (a) A writes will; If B dies firstA will revoke will; if A dies first will seek to enforce (4) How did A and B become J/Ts? (a) Somebody conveyed to them (grantor) (i) An hour after conveyance they can convey to C; contrary to grantor's interest? 1. May lead to problems between (ii) If grantor wants to make sure 1. 342 , note 2Life estate: lasts only so long as both are alive; as soon as one dies remainder to survivor (5) Common law: land not to be broken up favored primogeniture; Presumption is JT (a) Changed married woman's property acts mid 1800s (b) Strong presumption of TIC (c) Must specifically state intent: to A and B as joint tenants with right of survivorship (d) If A is fee simple absolute; A wants to convey to herself and B as JT (i) can't convey anything to yourselffrustrates intent (ii) time and title unities not met (iii) had to convey to strawperson who would then convey to A and B (e) Modern: will create whatever type of estate was intendedstrawperson not necessary (i) Can sever JT by conveying to yourself ? 1. Riddle v. Harmon; joint tenants with right of severance; wife conveyed to herself 2. Different than fee owner conveying to herself and another 3. could have used a strawperson (ii) problems with fraud: wife could not write a will and put in the drawer but could write a deed and leave it in the drawer
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1. if she survives revoke it 2. if she dies first, her grantee will take deed and record it; deed is valid as between the party even without recording; could be recorded after the fact; one person can manipulate the situation; if you're the survivor tear up deed! (6) What will affect a severance: (a) conveyance: A and B J/T; A conveys to C; J/T severed (b) mere agreements: generally do NOT affect a severance (c) mortgage?: Riddle v. Harmon; brothers J/T; one brother mortgaged interest to the lender (i) today: mortgage mostly a security device; induce lender to lend, by giving not merely promise to pay, but also if defaultlender can sue in personam and in rem and get proceeds from foreclosure sale (ii) no controlling case in NY; courts generally split (iii) mortgager acquires only security interest as to A's interest only 1. if it severs before A dies becomes a tenancy in common before B 2. if it does not sever: if A diesno security interest; A's interest is extinguished 3. lien theory: intermediate position: survivorship intactif A dies first lender can still go after property of B 4. title theory: majority; NY states: it is a conveyance; what if lien? J liens don't sever, why should a mortgage lien sever? 5. No problem if A conveys to strawperson before mortgage; A no longer JT, but TIC 6. If it doesn't severnever going to be able to borrow against your interest (not unfair to mortgager) 7. Practical answer: lien or title: mortgage does severotherwise will never find a lender a. Why not so many cases on this? What usually happens? i. Must convey to straw first; will not take risk ii. Bank will lendbut will take mortgage signed by both; not just promissory note (personal liability) sign mortgageget property (security interest in property) iii. partition: typically sale not physical partition; e.g. can't split a house iv. c) Tenancy in The Entirety i) Survivorship ii) states: validly married at time of conveyance iii) No compulsory partition iv) No unilateral destruction of the right of survivorship 5) Creation of different types of co-tenancies: 6-2.1 a) Replaces common law preference for JT; presumption in favor for TIC i) Must spell out explicitly the incidence of JT: to A and B with JT with rights of survivorship (1) Only saying co-tenancy may not be enough b) 240(b) i) No straw man; JT with right of survivorship; no need to worry about unities of time and title c) 240-c JT severance i) Unilateral severance without consent (1) By executing a deed, conveying to a 3rd person (2) Written instrument that intent to sever must be recorded (avoids the sneaky aspect of putting deed in the drawer) 6) Undivided posessory interest: each cotenant entitled to ALL of property a) If one tenant not present can B compel A to pay rent (A is in exclusive possession) i) Co-tenant out of possession can NOT recover half rent unless an ouster: one was kept out; in the nature of ouster: if co-tenant defrauds co-tenant into conveying deed; or by agreement ii) Majority of jurisdictions: different rule if one co-tenant leases to a 3rd party in exclusive possession (1) A and B co-tenants; can't transfer more than you have; B has undivided posessory interest; B can not make a lease giving tenant (T) exclusive possession even against A; BUT A can collect a proportionate share of net rents against 3rd party
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b) Where one tenant leases common property to a third party, the other tenants in common cannot cancel the lease or recover exclusive possession of the entire property i) BUT Each is entitled to use every square inch; if wife sits in middle of boxing ring and wife doesn't want the rent from 3rd party; can't get along remedy is partition c) Right to Contribution i) Taxes: When one co-tenant pays more than taxes to protect own interests (to prevent foreclosure/violation of the law)right to contribution on things like real estate taxes; mortgage payments; which you can enforce in an action against co-tenant ii) Qualification in almost all states: not entitled to contribution if in exclusive possession to the extent that value of the possession exceeded those expenses. (a) A and B co-tenants; A moves into house; B not interested; if use exceeds costs iii) Necessary repairsright to contribution (direct action against co-tenant; no in ordinary case); (1) POLICY: why should one have to bear all costs of necessary repairs; BUT sticky litigable questions: repairs necessary v. cosmetic? iv) Improvements: capital improvements no direct action for value of improvements (1) B didn't consent; maybe can not afford; might make B a debtor beyond B's interest (2) Can also come up in an accounting action or in a partition action in courts attempt to do equity (a) accounting: equitable in nature (i) e.g. B suing A for rents collecting from 3 rd persons; court might take into account necessary repairs to offset rent collecting (balancing things on both sides of equation (b) physical partition: courts may decided side of prop with improvements may go to party who made the improvement 7) Tenancy by the Entirety: conveyance to 2 persons; must be validly married as of time of conveyance (can not buy before marriage) a) No compulsory partition b) No unilateral severance or destruction of the right of survivorship i) As compared to JT: A can convey his or her interest C; will sever JT; C can compel partition (usually a sale) c) When Tenants Are Exempt from Creditors: d) Sawada; Fraudulent conveyance: conveyance by insolvent or about to become insolvent to another for other than fair consideration; J creditor can levy? i) Group 3 Hawaii (Minority): One does not have an interest to transfer or convey acting aloneOne acting alone can not transfer encumber title; no transfer as against one can not even be a lien on the property; J creditor of one tenant of the entirety; tenant exempt from creditors; (1) different matter if J against both tenants in entirety (i.e. mortgage only if signed by both); (2) gives non-debtor spouse even more protection and protects debtor spouse too (3) T/E is exempt property (4) Even if wife dies first; husband still gets it all; lien can not attach after the fact (5) Even if husband has all kinds of Js on his own; H and W can convey together or take out new lien together ii) Group 2 NY: H and W; T/E (1) Not withstanding requirements of T/E: (a) one T/E can convey his interest voluntarily and a J creditor of one can levy upon interest of one and force an execution sale of that person's interest (b) J creditor DOES get a lien and can levy against property and can force execution sale BUT (i) gets what H hadright of survivorship remains in tact; does NOT sever tenancy by entirety 1. If one day before execution sale debtor dies J creditor gets: nothing (right of survivorship means W gets it all) 2. If one day after execution sale, W diesJ creditor gets it all (c) J creditor Can NOT compel partition sale; protection for other T/E (non-debtor): Can NOT force a execution sale on non-debtor's interest; protection of posessory and survivorship interests (no compulsory partition); no unilateral sev of right of survivorship (i) J creditor can NOT technically move in: has sheriff's deed transferring the interest: courts will technically not allow: issue protective order (ii) BUT if 3 family house; but might have a proportionate share of net rents collected
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(d) J creditor will usually want to reduce execution to money: (e) If H and W want to sell house: title search will reveal lien on property from J creditor e) 6.2.2(b) i) Disposition of property to H and W creates T/E unless declared expressly declared to be a JT or a TIC (to H and W as JTs with rights of survivorship and not as T/E or TIC) (1) continues common law presumption in case of conveyance to two married people is T/E; (a) but still to be safe should establish to John Doe and Mary Doe as H and W as T/E with rights of survivorship (2) NY not common property state: H and W if W is working gets check belongs to W (a) If divorced: T/E becomes TIC; can help J creditor can compel partition ii) Co-op: own shares of stock in coop corporation and pertinent propriety long term lease attached to those shares for your unit; mostly own personal property, NOT technically real property (1) v. Condos: own unit in fee; own as TIC of all common space (halls, elevator); issue of real property never a question iii) Current law can own shares of stock in co-op as tenants by entirety (co-op functionally like condo or owning house--tax purposes, personal purposes; 1996: former JTs did not transfer f) 6-2.2(c) Disposition of real property to persons who are not legally married, but who described in the disposition as H and W creates them as JT unless expressly declared to be a TIC
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