PROPERTY, 1

 INTRODUCTION
 Property – legal relationship among people with regard to a thing.
 Ownership – the right to decide what to do with the property that you own. Ownership is not
absolute; the government can take property (i.e.- eminent domain, condemnation, foreclosure,
writ of execution, etc).
 Universality – property should be owned by someone (i.e. coal, oil, etc).
 Exclusivity – if a person owns or possesses property they have the exclusive right to exclude, but
it is not absolute; government, can still take property (i.e. – protect landowners against deterring
trespassers).
 Transferability – generally, you have the right to voluntarily transfer property because you can
1.) Will it, 2.) Sell it, 3.) Give it as a gift, 4.) Lease it
o Possession – two types:
 Actual Possession – exercise of physical control or dominion over property.
 Constructive Possession – control or dominion over property without actual possession over the
true owner.

 ACQUISITION BY DISCOVERY
o Sighting or finding of an uncharted territory.
o We don’t see acquisition by discovery as much today because most of the land that’s “discoverable” has
already been “acquired” or “claimed” by someone
o RULE – the “first in time” to discover land in a new world has exclusive property rights, even over the
native people. Agreed upon by European power. The title must then be perfected by occupation and
improvement.
 Idea of “First In Time”/Occupancy Theory – the first person to take, occupy, or possess it, owns
it. The theory goes even further to contend that taking possession of an un-owned thing is the
only possible way to acquire ownership of it (“original possession”).
 Europeans took the assumption that land goes to whoever “discovered” it first – thus, in
this case, being them.
 Indians thus had the right to “occupy” not to “own”; therefore, they were not able to
“sell”.

 ACQUISITION BY CONQUEST
o The taking of possession of enemy territory through sword or by force. This has come to be denounced by
contemporary international law as a method of territorial acquisition.
o Taking possession of the people, wealth, and land in the name of the King or Queen of the country the
discoverer lived in (i.e. - Johnson v. M’Intosh).

 ACQUISITION BY CAPTURE
o RULE by Capture/ Occupancy Theory – take possession of real property or thing which has no known
owner, with the intention of gaining ownership.
 In order for the law to protect hunter’s possessory interest in a wild animal, the hunter must have
possession or occupancy of the animal. To take control or possession/ occupancy of the animal
one must: mortally wound it, capture it, or kill it
 i.e. – Pierson v. Post
 Policy – to preserve peace and order in society
o Relativity of Title – you look at the order of possession. The prior possessor will have better rights over
the subsequent possessor, and the true owner will have better rights over the prior possessor (TO>PP>SP)
o RULE of Ratione Soli – “according to the soil”
 Justification for assigning property rights to landowners over resources found on their land
 Landowners have constructive possession of animals on their land until the animal takes
off and (returns to the wild).
o Constructive Possession – when a person does not have physical possession,
but has the right to control an asset (i.e.- credit card example)
 EXCEPTION:
 RULE of Animus Revertendi – “with the intention to return”
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o If the wild animal is in the habit of returning to the possessor’s land, then the
possessor doesn’t lose interest simply because the animal wanders off his land
o Type of ownership
o Typically when captured, if an animal is not indigenous to the area, the
hunter/capturer has a reasonable duty to inquire where it came from
 i.e.- animals that have been tamed or domesticated
 Typically, such animals are branded or marked so the hunter knows.
 Policy – Society values the domestication of wild animals
 i.e.-kangaroo hopping down 1-55 example (kangaroos are completely
indigenous to this area)
o RULE of Increase- absent any agreement to the contrary, the offspring (increase) of a tamed/ domesticated
animal belongs to the owner of the mother animal.
 Rule of “constructive possession” does not apply here!
 i.e.- if domesticated female animal goes onto the neighbor’s property, takes up with the
neighbor’s animal, the baby belongs to the female animal owner.
o RULE of Self Help – under Common Law, an individual’s implementation of their rights without resorting
to legal writ or consultation of a higher authority if they do it in a peaceful manner
 Chances are however, the confrontation will not be peaceful, invariably end up in a fight

 ACQUISITION BY FIND
o RULE – although a finder does not acquire absolute property or ownership over something he finds, the finding
of such will enable him to keep it against all but the rightful owner.
o RULE – prior possessor prevails over a subsequent possessor (applies to cases involving personal property and
land).
o Armory Rule (Finders Rule) – Finder has superior title over whole world EXCEPT the True Owner and the Prior
Possessor.
o Bailment – the rightful possession of goods by a person (the bailee) who is not the owner.
 It involves the transfer of possession, not the ownership
 There are generally time limits on bailment’s depending on the jurisdiction (not an indefinite amount
of time – eventually ownership rights will transfer over)
 Bailor – true owner
 Bailee – person currently in possession
 Finders are looked at as involuntary bailee’s holding; found goods for/of the bailor
o Voluntary Bailment – When bailor gives possession to bailee
o Involuntary Bailment – When the goods are “found”
 Three standards of care for COMMON LAW:
o Sole benefit of Bailor – doing a service for an owner without compensation
 i.e.- bailee feeding bailor’s dog while bailor is on vacation
 Slight/ Minimal Care
o Sole benefit of Bailee – not a gift; constructive possession
 Bailor isn’t getting any benefit from it
 i.e. – lending a classmate a book
 Extraordinary Care
o Mutual Benefit – both parties are going to benefit from bailment relationship
 i.e. – service jobs: hat check, cleaners, etc
 Reasonable Care
 Standard of care for MODERN VIEW:
o Reasonable standard or ordinary standard of care used for both parties
 Rule of Unjust Enrichment – TO or PP is entitled to the fair market value or any additional money
obtained by the subsequent possessor (whichever is higher)
o Winkfield Jurisdiction/ Majority RULE –
 The true owner can’t file suit against a subsequent possessor who has purchased an item from a prior
possessor. They have to find the first person that had it.
 Must be a three-party tier to follow Winkfield
 i.e.- TO, Prior Possessor, and Subsequent Possessor
o even if PP was a thief, he still have rights over SP
 Policy – the subsequent possessor does not have to pay twice
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o Non-Winkfield Jurisdiction/ Minority RULE –

 The true owner can bring suit against a prior possessor. Even if they already paid. Prior possessor
would have to go back to the person they paid to get their money back
 Have to pay twice
 i.e. – insurance company pays to fix car they go after the person who hits the car
o Idea of subrogation – even if you paid twice, you can go back to the person you
paid and you can still recover
o Jus Tertii – a subsequent possessor can’t argue the rights of the true owner.
 The rights of a third party
o Classification of Found Property:

 Owner/ Locus in Quo Finder



LOST  Private  Public

 p  Employer (British)  Employee (American)
r  Trespasser


MISLAID
o
p
e
ABANDONED  Private  Public
r  Employer
t  Trespasser
y
TREASURE  Private v. Public (British)  Public (American)
TROVE  Employer v. Employee (British)
–
L  Private (American)
 Lost Property - property that an individual accidently and involuntarily parted with.
 Unintentionally left; unintentionally placed
 i.e. – “O” does not notice that his watch has slipped off his wrist and landed on the street
 General Rule: Goes to the Finder
 EXCEPTIONS:
 Public v. Private –
o If found in a public place the finder prevails.
o If found in a private place, the owner of the property would have
“constructive possession” of the lost property.
 EXCEPTION –
 If the finder finds something in a home and the
owner of the house “occupies” it the owner gets it;
but if the house was never occupied, it goes to the
finder. If the owner of the house has not moved
into the house (has not made it his personal space)
it has been held that the owner of the house is not
in constructive possession of the articles found
therein in that he is not aware.
 Private constitutes in an office building, in a home, not a
public bathroom as stated in hypo
o i.e. – owner of the land gets possession because he/she owns
everything attached, under or over the land (Hannah v. Peel)
 Employee v. Employer –
o English Rule – if the servant finds, it goes to the master/ employer
o Majority Rule (general rule applies) Goes to the finder
 Majority rule rejects the English rule.
 Trespassers have rights against the subsequent possessors but the not the
true owner
 Mislaid Property – property that an individual voluntarily placed and inadvertently left
 Intentionally placed, unintentionally left
 Property neglected to be moved
 General Rule: Public/private goes to the owner of the locus in quo
 Duty to keep property because the true owner may return for it
 i.e. – “O” leaves his watch in a hotel room and forgets to pick it up
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 Abandoned Property – property that is voluntarily placed and voluntarily relinquished.

 Intentionally left with no intentions to reclaim
 i.e. – “O” throws his watch in the trash because it was old and he wanted a new one
 General Rule - Finder prevails
 No true owner; they have given up their rights
 EXCEPTIONS:
 Trespassing (would go to the owner of the locus in quo)
o Policy: courts want to discourage trespassing
 Public v. Private –
o If private property, it may go to the OLIQ
 Idea of “constructive possession” (not necessarily applicable
to the public)
 Employee v. Employer – generally goes to the finder (in public locations) and
the owner of the locus in quo in private ones
 Treasure Trove – a property that is concealed by someone for a long time (enough time not to
have a true owner) who intends to return for it
 Typically something of value
 Intentionally left with intent to reclaim
 Modern Rule (American) – any property of value that is concealed/hidden by someone
who intends to return for it goes to the finder not the owner or state
 EXCEPTION:
o Unless it is private property, it goes to the owner
 British Rule – gold, silver, bullion, and coins buried in the ground. It goes to the crown/
state.

 ADVERSE POSSESSION
o Definition – an unconventional means of acquiring title to land which occurs when a person(s) occupies and
possesses another’s land under claim of right or color of title. (DO NOT USE ON ESSAY)
 Purposes Behind Adverse Possession
 To clear title to the land
 To reward land use
o Courts want to encourage the best possible, economic use of the land
 To protect expectations of ownership
o If someone uses the land for 40 years and makes productive use of it, they and the
community expect that the land is theirs
 To bar claims and discourage laziness
o This bars someone from sitting on their rights and watching someone else produce
on the land and then stepping in to reap the benefits
 Sleeping Theory – punishes the landowner for not paying attention to
the land
 Earning Theory – rewards the AP for taking care of the land
 Claim of Right – claim land by treating the land as if it were your own
o There is not a written instrument (no paper trail)
o One will only get the property they are occupying
 Color of Title/ Clouded Title – a written instrument that purports to transfer title but for
some reason fails to do so
o The instrument may be defective or the grantor may not have title to purportedly
convey – (not signed, not in compliance with formalities, not an accurate
description of the land)

o Has two important legal consequences for an AP:

 COT may shorten the time (i.e. SOL) required to acquire title by AP
(depends on jurisdiction and whether or not it is an individual or state)
 i.e. – Amana can’t sell Will the law school because she doesn’t
have title to it
 Allows possessor to claim all the land in their deed under “constructive
possession”
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 You will not only get the land that is flawed in the title, but
eventually you will get the other land too (give you possession
of property in actual deed to!)
o Common Law Elements:
 Look at Statute of Limitations (SOL):

CLAIM OF RIGHT COLOR OF TITLE

INDIVIDUAL V. STATE 30 21

INDIVIDUAL V. 20 7
INDIVIDUAL

 Are the common law elements satisfied?

 Specific things you must do while on the property: these requirements are supposed to
be given to alert owner that someone is taking adverse possession over their land. An
owner must take action before the give statute runs out (years!)
 In order to “interrupt” the adverse possessor the owner can:
o Eject them –take them to court for a trespassing action
o Quiet title – the issue is taken to the courts for the courts to decide who has
“good title” of the property in dispute:
 True owner or trespasser?

 Rule of Law – in order to gain title by adverse possession, an adverse possessor must satisfy the
elements of “Aye Its 3 Hoes ON Every Corner” for the requisite statutory period (or Hi Ocean).
The AP will acquire the same title that the True Owner has when the adverse possessor entered
onto the land.
o ACTUAL – the adverse possessor must have real, physical occupancy and
control over the property that is consistent with the nature and character of the
land
 Building on or improving the property will help establish this element
 Similar to “continuous”: literally on the property for requisite period
of time but has to be consistent with the nature of the property (beach
house)
o HOSTILITY - possession asserted against the claim of all others without
consent or permission from the true owner.
o The possessor is treating the land belonging to someone else as his or her own
o If you have permission to be on the property, you can never have hostile
possession
 INTENT –the question then becomes, what kind of intent needs to be
shown to fulfill the “hostile” element (above) (two jurisdictional
approaches):
 Three jurisdictions:
o Objective Intent Standard Jurisdiction – under
this approach, no knowledge is required by the
adverse possessor.
 looks at what reasonable person would
conclude: person should be treats it like
your own.
 Doesn’t matter if they know/ don’t know
that the property is theirs.
 State of mind is irrelevant
 Firmly held view in England
 Majority View: Most jurisdiction fall
under this category; including NC
o Subjective Intent Standard Jurisdiction – under this
approach, the focus is on the intent/mindset of the
adverse possessor. There are two approaches:
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 Good Faith Approach – person

possesses the property under the belief
that the property is theirs; has a good
faith belief that he/she has actual
possession of the land
 i.e. - “didn’t know it was not mine”:
mistake
 Bad Faith/ Aggressive/ Larcenous
Trespass Approach – person knows the
property belongs to someone else but
intends to adversely possess it
 Protects third parties who rely on the
“appearance” of ownership
 (Valkenburgh case)
 OPEN – possession and control over the property that is visible to others.
o Adverse possessor that is visible
o “out in the open”
 EXCEPTION:
 A minor boundary dispute
o i.e. - 3-5 inches
 (couple “O”-open with “N”-notorious)
 you can have an occupation however that is “open” and not
“notorious”
 NOTORIOUS – possession and control over the property (by adverse possessor that is
evident and visible to public and anyone else who might have interest to property)that is
evident and visible to the public or anyone else who might have an interest in the
property. Element serves to put true owner on notice. Notice has to be given by one of
the three types of trespass:
 ACTUAL – true owner sees adverse possessor on his land
 CONSTRUCTIVE – the court will treat the true owner as having notice
because if he/she were paying attention to the land he would have
known.
 You don’t have to “see” the person in possession of your
land, but the law will view it as it was seen and disregard
 Typically happens when an adverse possessor is using land
and if the true owner would have paid attention they would
have saw the person on their land
 The law will treat this as if the person had “actual” notice
 INQUIRY – True owner is given some indication that someone is
making use of the land. A reasonable person should follow up
 (not seen very often)
o Encroachments and minor disputes – (only talk about the one that applies)
 EXCLUSIVE – exercise of dominion over the property so that no one, especially the true
owner, interferes with adverse possessor’s use of the land; using the land in such a way
that excludes others.
o If others are using the land, it must be with adverse possessor’s permission.
 Third party use is permissive
o Landlord/tenant relationship
 CONTINUOUS – possession that is regular, unbroken, and uninterrupted to satisfy the
statutory period and is consistent with the nature and character of the land.
o Requires one to pay close attention to the type of property occupied by the
adverse possessor: Summer or Winter Home.
o The adverse possessor has to hold the property continuously to give fair notice
that the land is being adversely possessed and that they are claiming the land as
theirs.
 Literally stay on the property or rent it out for the specified amount of
time.
o Tacking – an adding together of consecutive times of occupation or possession
by different persons, and treating those periods as a single continuous one,
especially the uniting of consecutive terms of land possession by persons other
 PROPERTY, 7

than its owner in order to establish a continuous period of adverse possession

for the required statutory period, so as to establish ownership
o RULE: time runs against the TO from the time when adverse possession began,
and so long as adverse possession continues unbroken, it makes no difference
who continues it
o Does not require a written instrument…can be an oral transfer
o In order to “tack” the statutory period between multiple parties for purposes of
adverse possession, you must first establish privity.
o Voluntary transfer: consent or agreement with adverse possessor
 Tacking EXCEPTIONS:
 Force –subsequent possessor forced or ousts a prior possessor, or
 Abandonment – prior adverse possessor abandons; leaves with
intent to relinquish claim
Bottom Line: in tacking, there must be a mutual relationship
 Privity – adverse possessor must show that the prior possessor
voluntarily transferred possession of property, but need not be based on a
written instrument
 Privity can be based on an oral agreement
 Relationship between two parties having a legally recognized interest in
property.
 A consent or agreement between adverse possessors; a voluntary transfer
that shows some mutual relationship to the property.
 Courts will find privity in four situations:
o Grantor/ Grantee relationship - between prior possessor and
subsequent possessor
o Seller/buyer
o Devisor/ Devisee relationship - (in a will) applies when
someone dies testate (having a legally valuable will) that
purported to devise property to someone or devise
o Testate decedent/ beneficiary
o Ancestor/ Heir relationship – died interstate (without a will)
and heir is someone who will inherit property under NC Intestate
Succession Act
o Intestate decedent/ heir
o Any other kind of agreement, oral or written by which the prior
adverse possessor intended to transfer title or possession
o RULE: Once adverse possession has begun, the statute of limitations begins to
run against the true owner and subsequent transfers of the land by the true
owner do not interrupt the adverse possessor.
o Life Estates and Remainders (FSA) are EXCEPTIONS!!!
 Adverse possessor can only take what the true owner has right
to…but in a life estate/remainder situation, both parties have rights to
land. Until adverse possession is established against a remainder,
adverse possessor is not official because it doesn’t meet the statute of
limitations against remainders.
 Life estate and remainder are separate interest to the same property,
entitling first the life estate to the possession and then after his death
the remainder.
 The remainder has an interest in the property but cannot come into
possession until the life estate interest terminates (life estate dies).
Immediately then, the interest transfers to the Remainder and the
Remainder can have possession. The Adverse Possessor must meet
the statute of limitations against the remainder starting that date.
Thus statute of limitations restarts against the remainder.
 Policy – protects the true owner (remainder) who was unable to
enforce interest until life estate died.
 Fee Simple Absolute – (remainder of the property). There
will never be a future interest that follows it.
 Absolute title to land, free of any other claims against the
title, which one can sell or pass to another by will or
inheritance.
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 Used in deeds, transferring title

o If one of the elements, outlaid above, is not satisfied, it is NOT adverse

possession
o More on Color of Title:
 Constructive Possession -
 Common Mistake: this is not a separate element from adverse possession – it’s more of a
type of COT
 If all of the elements (outlaid below) of constructive possession are not satisfied, the
adverse possessor gets the land that he actually possessed (5 elements – SCANS)
o Single Ownership
 The parcel of land must be owned by one person
o Color of Title
 If the title was acquired by Claim of Right, constructive possession
does not apply
o Actual Possession
 Adverse Possessor must be in actual possession of some part of the
land
o No one else on property
 There cannot be actual possession by another
o Single tract or parcel of land
 There can be more than one lot that constitutes a single parcel – look
to ownership
 Subdivision does not account as a single parcel

 Lappage – when an owner of a tract has transferred ownership to two different people by deed.
The possession of the overlap in the property thus becomes in question:
 Three Rules of Lappage
 If no one is on lappage, the person who has the superior title (usually the first one or the
one with the oldest deed) will gain ownership
o No one on – goes to the one with the superior deed
 If only one person is on the lappage, then the person who is in actual possession will
receive it
o One on – goes to one on land (not necessarily the superior title)
 If both are one it, then we must look at the superior title. Once again, the superior title
takes all except land occupied by the other claimant
o Both on – all goes to one with the superior title EXCEPT part that second party is
on
 Prescriptive Easements – gives rise to rights of use of property but not title to land.
 i.e. – right of way, rite of passage, etc

 Prescriptive Title/ Squatter’s Rights – allows a person to take legal possession of a piece of land
by occupying it for a set period of time. The specific rights vary by state and must fulfill adverse
possession requirements.

 Squatters – a trespasser that enters land without any honest claim of right to do so
o They use property but do not recognize ownership

 Improvements v. Encroachments –
 Improvements – something that is built entirely on another tract of land, particularly
someone else’s tract of land.
o i.e. – a house
o Common Law -
 Improvements made on someone else’s property, the improvement
goes to the owner of the land in which the improvement was made.
o Betterment Statute –
 The land owner is given a choice, either he can buy the improvement
or he can sell the land in which the improvement was built on.
 Encroachments – something that the land owner builds that is partly on his land and
partly on his neighbor’s land.
 PROPERTY, 9

o Intentional Encroachments – if the encroachment is intentional, it will be

required to be removed regardless of the costs ensued.
o Unintentional Encroachments – if the encroachment is unintentional, the
courts look at:
 Whether or not it is a large cost to remove; if so, the owner of the
encroachments will have to compensate the neighbors.
 If it is not a big cost to remove, then removal will be required.
o Minor Encroachments – true owner must have actual notice of the
encroachment for the SOL to run to satisfy open and notorious
o Other Encroachment Doctrines:
o Doctrine of Agreed Boundaries – provides that if there is
uncertainty between neighbors as to the true boundary line, an
oral agreement to settle the matter is enforceable if the neighbors
sub sequentially accepts the line for a long period of time.
o Doctrine of Acquiescence – provides that long (knowing stands
by without objecting) - though perhaps for a period of time
shorter than the statute of limitations - is evidence of an
agreement between the parties fixing the boundary line.
o Doctrine of Estoppels – comes into play when one neighbor’s
conduct tends to indicate the location of a common boundary,
and the other neighbor then changes her position in reliance on
the conduct. The first neighbor is then estopped to deny the
validity of his acts. Estoppel has also been applied when one
neighbor remains silent in the face of expenditures by another
that suggest the latter’s notion of the boundary’s location.

 Disabilities –
 The disability MUST be PRESENT WHEN THE ACTION ACCURES
 If the disability occurs to true owner after adverse possessor has entered his land,
then the regular statute of limitations applies
 If TO has disability, time starts, but title may not ripen until after disability ends.
(may extend)
 If disability, someone can bring action on behalf of person to get AP off land, must do
so before SOL is up.
 NC Disabilities = minor, insane, incompetent
 Once the disability is removed, you either:
A. Add 3 years grace period to the removal of the disability before the
statutory period can fully run
o Additional period of time/ grace period: once the disability is removed,
the true owner has the additional period of time to bring a cause of action
against the adverse possessor if the statute has expired or the time until
the statute expires is shorter than the additional time period
B. Use the normal statutory period
o Tolling: (majority view) stator limitations ceases during disability and
starts after disability is removed
Apply either A or B, which ever date is latest in order to protect the true owner that
has the disability
 Never disadvantage to true owner’s time
 No tacking of disabilities
 There are four types of disabilities:
o Existing: (NC)
 TO has one disability, at the time of adverse possession
starts
 You must wait until the disability is removed before you
add the three year grace period
o Co-existing: (NC)
 TO has two or more disabilities at the time adverse
possession occurs
 You must wait until the removal of both disabilities
before you add the additional three year grace period
 PROPERTY, 10

 3 year grace period does not start running

until the second disability is removed
o Supervening: (NC)
 TO has a disability at the time adverse possession starts,
and before its removal, a second disability arises
 You must wait until the removal of both disabilities
before you add the additional three year grace period
 3 year grace period does not start until the last
disability is removed
o Intervening: DOES NOT COUNT IN ANY JURISDICTION
 Also known as Subsequent disability
 At the time AP begins/ comes on land, TO has NO
disability, but during SOL time TO gets a disability.
 NC does not recognize
 No grace period, SOL starts running
immediately when AP comes onto land.
 The original period of time stands;
any subsequent disabilities will not
affect the statutory element
 Only a disability of the true owner existing at the time of the cause of action arose is
considered!!! Disabilities of successors or a subsequent additional disability of the true
owner has no effect
 If a disability remains until the true owner’s death, then the additional period of
time will start at the owner’s death. The executor of the estate, parent/guardian of
the disabled, or the heir has until the additional period of time or the statute expires
to bring a cause of action, whichever is longer

 Governmental Immunity: cannot adversely possess land against the US government because:
 They hold land in trust for the people
 EXCEPTION: if the land is being used in a proprietary fashion (for profit), you can
adversely possess it
 In NC can only adversely possess against state governments, not federal
 Hard to keep track of the land
 Most of the time, land belongs to third parties

 Other EXCEPTIONS:
 Landlord/ Lessee Situation (Section 1-43):
 When lessee is holding property for a landlord (renting), the landlord will ultimately
own the property.
 If the tenant decided that they wanted to adversely possess it, they would have to:
 Wait until the leased ended, or
 Wait until they make their last payment (at that point, the 20 year statute
would then begin [after the 20 year SOL had already been completed] 40
years total)
o Basically asserts that a tenant would not be able to take
advantage of living there (adversely) until the lease ran out
 Co-tenants:
 Property that is owned jointly by more than one person: joint ownership
 Termed “co-tenants” not in the sense that they are necessarily renting together, but
more so in regards to them owning property together.
 This makes it hard for co-tenants to adversely possess land that they both
own.
 If one is trying to AP against other owners, you have to “ouster” them (or act in a
way that other owners know you were trying to adversely possess)
 Once co-tenants are “ousted”, then the adverse possession statute begins
to run
o Has to be extreme: traps, shotguns, fences, not giving other
owners keys to locked property, etc
 PROPERTY, 11

o They would then have to meet the SOL and stay on the property
for an additional 20 years after they have done the affirmative
ouster.

 ACQUISITION BY GIFT
 Gift – a voluntary, gratuitous transfer, as opposed to a contract that is supported by consideration.
 Types of Gifts:
 Gifts Inter Vivos - a gift of a present or future interest made and delivered in the
donor’s lifetime
 Gifts made during one’s lifetime
 Gifts Causa Mortis – a future gift made in expectation of the donor’s imminent
death. A gift causa mortis is not effective unless the donor actually dies of the
impending period that he or she had contemplated when making the gift. These
gifts can only be made when the donor is in a terminable condition.
 Contemplating imminent death
 Requires a specific delivery
 Testamentary Gifts – a will outlines how the deceased’s property gets distributed
by indicating what property goes to which people.
 Must specifically outlay person in the will
 Elements of Gifts:
 Donative Intent – the donor of the gift must have a present intent to make
a gift of the property to the donee. A promise to make a gift in the future is
unenforceable, and legally meaningless, even if the promise is
accompanied by a present transfer of the physical property in question.
o Present intent by the donor to make a gift
o Requires the transfer of title, not simply possession
o i.e. – if a man gives a woman a ring and tells her that it is for her
next birthday and to hold on to it until them, the man has not
made a gift, and could legally demand the ring back on the day
before the woman’s birthday. However, if the man gives a
woman a deed and tells her it will be in the best interest if the
deed stays in his safe-deposit box. The man has made a gift and
would be unable to legally reclaim it.
 Deliver – the gift must be delivered to the donee either actually,
constructively, or symbolically (the latter is generally a question of law –
NOT recognized in NC). We look at what makes sense: best method to give
delivery and control:
o Actual – manual delivery; giving the person real, and immediate
possession
 Physically transferring from the donor to the donee
 Best kind of delivery
 Most recognized by the court
o Constructive – occurs when the donor hands over a key (or
something like it) to give the donee access to the property
 Usually occurs when item cannot be delivered in a
conventional sense or is too big for actual delivery
 Actual delivery may be impractical or
impossible (due to weight and size) otherwise
courts will require it to be actually delivered.
 i.e. – a house or a bank account – where a
tangible item will give access to the gift
o Symbolic – occurs when the donor gives the donee a written
statement of intent
 The words act as symbols
 If it can be actually delivered it must be
 i.e. – a paper handed over stating “I give my grand piano
to you”
 NC does NOT recognize
 PROPERTY, 12

 Under the Common Law pointing to an item in question is not sufficient to constitute delivery
 Acceptance – the donee must accept the gift in order for the property transfer to
take place. However, because people generally accept gifts, acceptance will be
presumed, so long as the donee does not expressly reject the gift.
 Acceptance is assumed, unless the donee actually refuses acceptance
o Irrevocability: Once a gift is complete (elements satisfied) it
cannot be revoked.
 EXCEPTION: In most states of the United States,
engagement rings are considered “conditional gifts”
under the legal rules of property: thus being an
exception to the general rule that gifts cannot be
revoked once properly given.
 Modern Trend holds that because an
engagement ring is inherently a conditional
gift, once the engagement has been broken, the
ring should be returned to the donor. Thus
the question of who broke the engagement
and why, or who was “at fault” is irrelevant.
 Minority Trend holds that although
engagement rings are considered conditional
gifts, the courts can look at who broke the
engagement and why as a measure of
determining who has rights the ring. Issues
such as inability to have kids, extramarital
affair, didn’t know the person was in jail,
incurable disease, etc will weigh in on the
court’s decision (not pesky issues like
annoying habits, not getting along with the
other’s family, etc)
 NC FOLLOWS

 Adverse Possession of Chattel

 Elements: same as AP except there is a problem with the open and notorious element
 Discovery Rule:
 Common Law – the SOL starts to run immediately
 NC – the 3 year SOL will not begin to run as long as you are using some good faith and due
diligence to locate the chattel

 POSSESSORY ESTATES
 Estate – an interest in land which is or may become possessory and in which ownership is measured in
terms of duration (includes both present and future estates)
 Present (possessory) interest/estate – when a person has the legal right to occupy the land
immediately the person has present right to possession;
 Future interest/ estate – when a person does NOT have the present interest BUT has the
right (sometimes only a possibility) to possess the land sometime in the future
 Two kinds:
 Reversion – goes back to the grantor
o O -> A for life: O has a reversion in FSA
 Remainder – goes to a third party
o O -> A for life, then to B: B has the remainder
 Grantor – owner; the person who is conveying (granting) an interest in the land to someone else; sole
owner of the possible interests in the land
 Grantee – the person receiving the grant from the grantor
 Bequeath – to pass personal property by will.
 A decedent who dies testate “bequeaths” his or her personal property to those named in the
will.
 The property itself is called a “bequest”
 Devise – to pass real property by will
 PROPERTY, 13

 Devisee – the person receiving the property

 Not the same as heirs
 Beneficiaries under a will
 Free-Hold Estate – the exclusive right to the use and possession of real property for an indefinite
period of time.
 There are two kinds of modern free-hold estates: fee simple and life estates
 Non-Free-Hold Estate – person has possession but not ownership of the land
 Pre-determined period of time
 Conveyance – transfer of property from one person to another
 Heirs - individuals who inherit property from a decedent who dies intestate (in absence of a will);
 Individuals identified under the Intestate Succession Act
 Issue – (look downward) children, grandchildren, etc
 Ancestors – (look upward) parents, grandparents, etc
 Collateral – (look sideways) other blood relatives: siblings, aunts, uncles, cousins,
etc
 Escheat – (government) no other heirs; goes to the state
 Testate – person dies with a will
 Just because someone is named in a will, doesn’t mean they have an interest in the property.
They won’t have an interest in the property till the person dies.
 Intestate – dies without a will

 The four possessory estates:

 (Non-DE) Fee Simple Absolute (FSA)
 (DE)Fee Simple Determinable (FSD)
 (DE) Fee Simple Subject to Condition Subsequent (FSCS)
 (DE) Fee Simple Subject to Executory Limitation (FSSEL)
 (Non-DE) Life Estate (LE)
 (Non-DE) Fee Tail (FT)
 (Non-DE) Term of Years (TOY)

 Other:
 Words of Purchase – tells you who is receiving the interest (i.e. identification of the grantee)
 “O to A and the heirs of his body.”
 “to A” = words of purchase
 Words of Limitation – tell you what type of estate the grantee is receiving
 “And the heirs of his body” – words of limitation
 Tells you what type of limitation if any is present
 Will also help you identify the duration of the estate
 “O to A for two years.” (TOY for 2 years)
 Contingent Remainder – don’t know who is going to get it

 Non-Defeasible Estates –
 Natural expirations:
 Death
 Period Ends
 Blood Line Ends
 i.e. – FSA, FT, LE/ LEPAV, TOY
 Defeasible Estates – tt
 A future interest always follows
 Fee simples that may last forever or come to an end if an event occurs in the future
 Can be divested (can be taken away for some reason)
 i.e. – FSD, FSSCS, FSSEL (in executory interest, we say “FS” instead of “FSA”)

 Fee Simple Absolute (FSA)

 Largest type of estate
 No future interest or condition attached
 PROPERTY, 14

 No inherent ending: can keep, sell, or give it to someone else

 If the owner dies intestate, the owner’s heirs will inherit
 Fully divisible/transferable
 Can be conveyed by deed or devised by will
o Cannot have a restraint on transferability in fee simple because it
restricts the rights of the possessor, and a possessor in fee simple
has all the rights
 Absolute inheritability through wills or intestate succession
 Potentially endless duration
 Common Law – required to use “magic language” – “and his heirs”
 If the instrument created by the grantor did not contain the magic
language (“and his heirs”), the transferor gave the grantee a life estate (LE)
only
 “O to A and his heirs”
 Modern Law – the magic language (“and his heirs”) is NOT required to create a fee simple
absolute (FSA)
 The strong presumption is that the grantor conveys his entire estate unless the grant
is to the contrary (specifies)
 If the transferor/grantor owned a FSA, the presumption is he transferred a FSA
 “O to A”

 Life Estate – a LE is a possessory estate that expires upon the death of a specified person
 Examples:
o “O to A for life”
o “O to A for so long as she lives”
o “O to A till she dies”
 A LE will ALWAYS be followed by some future interest – either a reversion back to
the grantor or a remainder in a 3rd party
 LE’s are not inheritable at the death of the transferee (LE holder): there is
either a reversion back to the grantor or a remainder to a third party
 A LE is freely transferable during life, but the transferee only receives the
transferor’s LE
 i.e. – “O to A for life.”
o O would have a reversion in FSA
 i.e. – “O to A for life, then to B.”
o O would have nothing.
o A would have a LE
o B would have a remainder in FSA
 Life estate pur autre vie – “for the life of another”
 i.e. – “A conveys her life estate to B”
o In this instance, B’s life estate will be measured by the life of A.
When A dies, B’s interest in the land ends.
 If B dies before A does, B has died owning an interest in
property, and interest that will continue until A dies.
 Therefore, B’s heirs can inherit the life estate
pur autre vie, or it can pass by will to B’s
devisees. Then , when A dies, the interest of
B’s heirs or devisees will automatically end.
 The owner of an interest in land can convey a lesser estate as well.
 i.e. – “If A, the owner of a life estate, conveys to B a term of years for ten
years, what would B have?”
o B would have a term of years for ten years, but that term will end
immediately upon A’s death, even if the ten year lease period has
not expired. This is so because A cannot convey more than A has,
and A has only a life estate.

 Fee Tail – an estate that is inheritable only by descendants of a grantee, and endures until the current
holder dies without issue. Only recognized in four states (MA/ME/RI/DE)

 PROPERTY, 15

 Inter-vivo transfer ONLY – limited because it has been determined that the next lineal
descendant will receive the FT interest.
 Future interest can be either a reversion or a remainder
 (Inter-vivo – gifts made during one’s lifetime)
 A transfer by a tenant holding the present (possessory) interest to a third party will
only create a LE PAV
 (in fee tail, it’s not called a remainder, it’s called a “le pav”)
 NC – automatically converts FT in FSA by statute
 The magic words necessary to create a fee tail are: “to A and the heirs of his body”
– meaning his lineal decedents
 In the Common Law if the magic words are missing, the
presumption is that a LE is/was created
 Other Examples:
 “O to A and the male heirs of his body”
o This is a FT male
 “O to A and the heirs of his body by his wife Wanda”
o This is a FT special
 “O to A and the female heirs of his body”
o This is a FT female
 “O to A and the male heirs of his body by his wife Wanda”
o This is a FT special male
 “O to A and the heirs of the body.”
o A has a fee tail, so A has the right to possess the land during A’s
life. A can convey what A has. If A conveys to B, then B has the
right to possess the land during A’s life. Immeditately upon A’s
death, the right to possess the land passes to A’s lineal
descendants. If B should die before A dies, B’s interest (the right
to possess the land during A’s life) can pass to B’s heirs or
devisees. But at the moment A dies, the possessory estate passes
to A’s lineal descendanats

 Term of Years (TOY)

 The only non-freehold estate
 Commonly seen as a lease
 A TOY is created when the present possessory tenant (LE, FT, etc) or owner of an estate in
FSA, grants a person use of the land for a set period of time
 When the period of time expires, the TOY holder’s right to use the land ends
 Will last for the period of time stated in the transferring instrument and depend on
the language in such
 i.e. – “O to A and her heirs for 10 years.”
– In this case if A dies in 5 years, the interest would transfer to A’s
heirs for the duration of the 10 years

 Doctrine of Waste
 Conduct that unreasonably interferes and substantially injures/devalues the property
interest of another person
 Rule (Majority) (NC) – statutes authorize the owner of future interest (or co-tenant)
to sue the person in possession for a remedy
 Public Policy – reconcile the competing interest of life tenants and remainder men (third
parties)
 Designed to avoid waste of the land that failed to maximize the property value
 i.e. – A, who has a present possessory life estate, should not be able to use
the property in a manner that unreasonably interferes with B’s
expectations, who has the future interest in the land
 The degree of protection that a court will give the owner of the future interest is influenced
by the likelihood that he will eventually receive possession of the land in question
 The more certain that future interest is to become possessory, the more likely the
court will be to grant relief ecstatic
 PROPERTY, 16

 Example: “O to A so long as A never marries J, but if she does, to B.”

 A’s interest: more likely to possess for longer time
period (depending on facts)
 B’s interest: not very certain (depending on facts)
 Court is less likely to grant relief to B unless facts
change
o “O to A so long as NC State never loses a b-ball game”
 A’s interest: pretty certain it will end
 B’s interest: pretty certain to become possessory
 Court will be more likely to grant relief to B
 Types of Waste:
 Affirmative Waste – occurs when someone in possession voluntarily does
something that substantially decreases the value of the property or
substantially changes the nature of the property
o i.e. – cut down timber, strip mining, tear down building
 EXCEPTION – Open Mines Doctrine – affirmative
waste only results when clearing or cutting of land
occurs by the life tenant and it did not occur before.
Alternatively, if the prior owner had already “opened
the mines” and cleared the land, it is not waste. Allows
the present estate holder to use the land just like the
grantor even if it devalues the land.
 “O to A for life, then to B”
 If the mines were open, and A kept
mining, B would have no cause of
action
 If the mines however, were not open,
A cannot open them without being
liable to B
 Permissive Waste – occurs when the party in possession fails to perform
some act which he is legally obligated to perform
o NC – owner of LE has a duty to pay property taxes and make
necessary repairs
o Example: allowing the water heater to leak and cause major
damages
 There was a duty and you failed to act (breached duty).
 Duty and breach are understood where taxes
and repairs are at issue
 Ameliorating – increases value; waste that lead to improvements of
property (as by clearing the way for rebuilding something)
o CL – can still sue…?
o Modern – cant sue …?

 Damages –
o Payment of money
 Most readily available
o Injunctive relief
 Stops a person from doing whatever it was that was
wasteful through a court order
o Forfeiture of present interest
 Least readily available
 Restraints
 Courts limit the use of restraints because we want free alienation (transferability) of property
 Some restraints are okay, but others aren’t. If you have FSA, you shouldn’t impose any
restraints on transfer or use.
 Types:
 Use Restraints – enforceable; determinable estates which restricts the way one can
use land
 Race Restraints – not enforceable; grantee will get FSA
 PROPERTY, 17

 Marital Restraints –
 C/L – favors marriage
o Conditional language that prevents marriage altogether
 Unenforceable
 Grantee will get FSA instead
o Conditional language – that specifies who grantee must marry
 Enforceable
 i.e. – “O to A on condition that A marries X”
 Disabling – prevents a grantee from transferring his interest
 Never allowed on a FSA
o i.e. – “O conveys Blackacre to A ‘and his heirs’ but any transfer
hereafter in any manner of an interest in Blackacre shall be null
and void”
 Forfeiture – if the grantee tries to transfer his interest, then it is forfeited
(surrendered) to another person
o Enforceable in FSA
o i.e. – “O conveys Blackacre ‘to A and his heirs, but if A attempts to
transfer the property by any means whatsoever, then to B and her
heirs’.”
 Promissory – the grantee promises not to transfer his interest.
 Courts favor this restraint the most for FSA
o i.e. – “O conveys Blackacre ‘to A and his heirs, and A promises for
himself, his heirs and successors in interest that Blackacre will not
be transferred by any means’.”
 Partial Restraint – the Restatements provide that it is valid if, under all the
circumstances of the case, the restraint is found to be reasonable in purpose, effect,
and duration.
 Limiting conveyance to certain persons or putting a time limit on the
restraint
 Generally disfavored
 When looking at restraints, we must distinguish between a ‘restraint on use’ and a ‘restraint
on alienability’. A ‘restraint on use’ is permissible, whereas a ‘restraint on alienability’ isn’t.
 There are four problems with restraints:
 Makes property unmarketable
 Perpetuates the concentration of wealth
 Discourages improvements on land
 Prevents creditors from reaching the property

 Defeasible Estates:
 An estate made defeasible means it will terminate, prior to its natural end point, upon the
occurrence of some specified future event.
 Fee Simple Determinable (FSD)/ Fee Simple on a Special Limitation
 A fee simple that is so limited that it will end AUTOMATICALLY terminate
when a stated event occurs:
o i.e. – “O conveys Blackacre ‘to the Hartford School Board, its
successors and assigns, so long as the premises are used for school
purposes’.”
 In this case, the fee simple may continue forever, but if
the land ceases to be used for school purposes, the fee
simple will come to an end, or be reverted back to the
grantor.
o Durational language will be used
o If the limitation is attached to a person, upon their death the FSD
turns into a FSA
 i.e. – “O to A while she doesn’t smoke”. A never smokes.
 Upon A’s death, her heirs or devisees will have
FSA.
o Every fee simple determinable is accompanied by a future
interest. In the ordinary case, the future interest is retained by
 PROPERTY, 18

the transferor, “O”, in the above example, or his heirs, and called a
possibility of reverter.
 The possibility of reverter may be expressly retained or,
as in the above example, arise by operation of law.
 It arises by operation of law because “O” has
transferred less than his entire interest in
Blackacre when he creates a determinable fee
in the school board.
o Can be transferred by will because there is a possibility of infinite
duration
 Language used:
o “So long as”
o “Until”
o “During”
o “While”

 Fee Simple Subject To Condition Subsequent (FSSCS)

 A fee simple that does not automatically terminate but may be cut short or
divested at the transferor’s election when a stated condition or breach of
the condition occurs
o Conditional language is required
o A future interest will always follow a FSSCS, and it will always be
a ROE/ POT (Right of entry or power of termination) Future
interest can only go to GRANTOR
 ROE/ POT may be expressly retained or it may be
implied in the words of the instrument which are
reasonably susceptible to the interpretation that this
type of forfeiture estate was contemplated by the
parties
o The duration of a FSSCS is potentially infinite until breach occurs
 i.e. “O to A on the condition that the premises is used for
residential purposes only, and if it ever ceases to be used
for residential purposes, O will have the right to re-enter
and take possession.”
 note that upon breach, title will not vest to O,
until he exercises his right of entry
 in order for “O” to terminate “A’s” title through
ROE/ POT, he may eject or quiet title “A”.
However, it must be done in a timely manner if
not, rise may be given to an adverse possessor.
 Defense of laches can be argued if “O”
takes too long to exercise his right
 In the Common Law it is non-transferable
 Modernly, freely transferable, indefeasibly vested, or at
death, but limitation will remain
 Language used:
o “Provided that”
o “But if”
o “On condition that”
o “However”
 Fee Simple Subject to Executory Limitation (FSSEL)
 Created anytime a grantor transfers a defeasible fee simple (FSSCS or FSD)
and in the same instrument creates a future interest in a third party rather
than to himself
 Conditional language required
 The future interest in a third party is called an executory interest
o Future interest will always follow a FSSEL; either right of entry or
power of termination (ROE/ POT) but is retained by ONLY 3rd
party to divest a fee simple
 Potentially infinite or upon breach
 PROPERTY, 19

o i.e. – “O to A provided that a bowling alley is never built on the

property and if a bowling alley is ever built on the premises, to C”.
 If a bowling alley is built on the property, C will
immediately gain possession and A’s interest will
terminate.
 Common Law – non transferable
 Modernly, freely transferable IV or at death and condition will remain
 Language used:
 “Provided that”
 “But if”
 “On condition that”
 “However”

 Modern Preference for FSA

 If a defeasible estate is improperly created and mixes FSD and FSSCS language, the
FSSCS will likely be used because it is more like a FSA
 i.e. – “O to A on the condition that the property is used for residential
purposes, otherwise title will automatically terminate in A and revert to O.”
o The courts will likely deem this a FSSCS
 If precatory language is used instead of durational or conditional language, the
courts will likely deem the conveyance to be one of FSA
 i.e. “O to A for the purpose of keeping the property in the family, otherwise O
will regain the property”.
o If A conveys to NCCU, this will not revert to O because O
conveyed a FSA

 There are three possible future interests that can be created in the grantor:
 Reversion
 Follows a LE, TOY, and FT
 Possibility of Reverter (POR)
 Follows a FSD
 Right of Entry (ROE)
 Follows a FSSCS

 First step in classifying future estates:

 Identify the PRESENT ESTATE first
 There can ONLY be ONE present estate
o i.e. – if you determine the present estate is a life estate, the next
classification should be a future interest (i.e. – remainder OR a
reversion)
o i.e. - if present estate is a fee simple subject to executory
limitation (FSSEL), the next interest should be an executory
interest

 Reversion
 A future interest that the transferor retains when he/she conveys an interest with a lesser
duration than what he/she has
 Estates that are of lesser duration than a FSA:
 Fee Tail (FT)
 Life Estate (LE)
 Term Of Years (TOY)
 A reversion will NOT interrupt a transferee’s possessory estate causing it to end
earlier than it would
 Think: O’s reversion will wait patiently until the transferee’s possessory
estate ends naturally
o i.e. “O to A for life”
 PROPERTY, 20

 In this case, O’s interest (reversion) will not become

possessory until A dies (A’s estate ends naturally – with
A’s death)
o i.e. – “O to A for 3 years”
 In this case, O interest (reversion) will not become
possessory until A’s estate ends naturally (the
expiration of three years)

 Possibility Of Revereter (POR) and Right Of Entry (ROE):

 Remember that a determinable estate (i.e. FSD) can be infinite duration BUT has a
limitation that might cause it to end early
 The POR follows a FSD and the ROE follows a FSCS
 Like the reversion, the POR/ROE does not interrupt the determinable
estate
 When the stated limitation occurs title EITHER automatically terminates
(FSD) OR title will remain with the present holder until the grantor
exercises the ROE (FSSCS); so again O would wait patiently to see if the
event will occur
 (Don’t confuse a reversion with a POR or a ROE!)
 A reversion is not speculative – we know that the possessory estate (FT,
LE, TOY) will definitely end – and the reversion will become possessory
 However, a POR and ROE are speculative – the event that forms the
limitation on the possessory estate may or may not occur
o Therefore, we say that O has only a possibility of a revereter or
MAY have the right of entry

 **Note**
 A grantor can have BOTH a reversion (because she had a fee simple but conveyed a
lesser estate like a LE) and a POR (because she placed an added limitation on the life
estate that might cause it to end early).
 i.e. - O to A for life so long as A does not build a lodge on the property, if so,
the land shall revert back to O.
o In such a case, the grantor has TWO future interests – a reversion
in FSA and a POR in FSA
 The same is true if the grantor has both a reversion and a ROE
o i.e. – O to A for life, but if A uses the property for residential
purpose, O has the right to reenter and take possession”

 Future Interests in the Transferee

 There are two main future interests that can be created in the transferee:
 Executory interest
 Remainder
 However, these interests can be further classified:
o Springing EI or Shifting EI
o Vested Remainder
 Indefeasibly vested
 Vested Subject to Total Divestment
 Vested Subject to Open
o Contingent Remainder

 Remainder
 [REMEMBER: a “remainder” may NEVER follow any fee simple (FSD, FSA, or FSSCS)]
 A remainder becomes possessory at the expiration of a naturally ending estate.
 A remainder is a grantee’s future interest that “waits patiently” for the
possessory estate to “end naturally” (LE, FT, TOY)
 The difference between the reversion and the remainder is who holds it
 PROPERTY, 21

 Reversion (grantor)
 Remainder (grantee)

 Remainder v. Reversion
 Remainder – a future interest created when a grantor conveys an inherently
limited possessory estate and, in the same conveyance, conveys an inherently
limited possessory estate and RETAINS the future interest rather than conveying it
to a second grantee
 Reversion – a future interest created when a grantor conveys an inherently limited
possessory estate and RETAINS the future interest rather than conveying it to a
second grantee

 Vested v. Contingent Remainder -

 Once you determine that you have a remainder, you then have to determine whether
the remainder is vested or contingent
 Main difference:
 A vested remainder is certain to become possessory
 A contingent remainder is not
o There is either a condition precedent that must be met before the
interest becomes possessory OR
o An unascertained person that must be identified

 Vested Remainder in more detail

 The remainder is vested if it will one day ripen into a possessory estate. It’s just a
matter of waiting until the prior possessory estate ends.
 The possessor of the future interest does not have to do anything to ensure the
future possession.
 A remainder is vested if:
 It is given to an ascertained (definite) person; AND
 It is NOT subject to a condition precedent (other than the natural
termination of the preceding estate)
 A person is ascertained if he or she has been born and is
identified
 If the remainder is given to a person who is alive and
who can be indentified now, that person is ascertained.
 A vested remainder can ONLY be followed by
an executory interest
 A contingent remainder can NEVER follow a
vested remainder in FEE SIMPLE
 Types of Vested Remainders:
 Indefeasibly Vested Remainder – the future interest is certain to become
possessory in the future and cannot be divested
o “O to A for life, then to B and her heirs”
 A = life estate (LE)
 B = indefeasibly vested remainder in FSA (ID VR in FSA)
 The estate will become possessory when A
dies
 Vested Remainder Subject to Open (Partial Divestment) – the future
interest is in a class of persons
o Class of Persons – the future interest is in a group of people, most
common class is children, heirs, etc…
 i.e. – “O to A for life, then to A’s children and the
heirs…A has one child B”
 If A has children, then the class gift is
ascertained – the gift is to a class and a person
of the class is ASCERTAINED!
 A has a life estate and B has a Vested
Remainder Subject to Open
 PROPERTY, 22

 If A does not have children, the class gift is

unascertained and A’s children would have a
Contingent Remainder
 Vested Remainder Subject to Total Divestment – this future interest is
created when the condition subsequent – (the condition) comes after the
future estate interest
o i.e. – O to A for life, then to B and his heirs, but if B does not
survive A, then to C and her heirs
 The condition subsequent is underlined. The condition
is not on B estates but is on C’s estate
 You can tell there is a condition subsequent because the
condition comes AFTER the first future interest – the
first future interest is inside the commas WITHOUT a
condition

 Contingent Remainders in more detail

 A remainder is contingent IF:
 It is given to an unascertained person; OR
o i.e. – “O to A for life, then to B’s children. B does not have any
children.”
 B’s children have a contingent remainder because B
does not have any children, if B has a child, then the
future interest would be an indefeasibly vested
remainder because B’s children are ascertained.
o i.e. – “O to A for life, then to the heirs of B. B is alive.”
 B has a contingent remainder because B cannot have
heirs until she is dead, so while B is still alive the future
estate is a contingent remainder. If B were to die, B’s
heirs would be ascertained and B’s heirs would have an
indefeasibly vested remainder.
 It is subject to a condition precedent (other than the natural termination of
the preceding estate) if it is a condition that:
1. Is set out within the description of a particular estate and
2. Must be satisfied BEFORE the estate can become possessory
 Recognizing a condition precedent:
 i.e. – “O to A for life, then to B if B survives A.”
 B: contingent remainder.
…the condition is within B’s
estate
 i.e. - “O to A for life, then to B, but if B builds a
lodge house, then to C.”
 B: has a vested remainder subject to
total divestment
 A: condition subsequent
(…the condition is not in B’s
estate – the condition
outside of the commas!)
 Something has to happen before the remainder-holder
can take possession
 In the FIRST example above, B’s remainder
depends upon him surviving A
 A contingent remainder is ALWAYS followed by a contingent remainder and a
reversion in the grantor
 Note: A contingent remainder can ALSO be followed by alternate
contingent remainders in a grantee. The same rules will apply. If you end
with a contingent remainder or an alternate contingent remainder, this
will ALWAYS leaves a reversion in the grantor.

o Alternate Contingent Remainders – when one interest vests,

the other is destroyed. In other words, when the first grantee’s
 PROPERTY, 23

interest is vested, the next interest that is in another grantee is

destroyed.
 i.e. – “O to A for life, then to B if B builds a lodge on
Whiteacres, otherwise to C.”
 B has a contingent remainder in FSA.
 Why? There is a condition precedent
 Once B builds a lodge, his interest is vested
and C’s interest is destroyed. Therefore, C has
an alternative contingent remainder.
 Why? When’s B’s interest vest (upon
the satisfaction of the condition), C’s
interest is destroyed
 O still has a reversion in FSA
 If the remainder is contingent ONLY because there are no ascertained takers,
USUALLY this will mean that the remainder is not alternate because once we have
an ascertained remainderman, the next interest in the grantee (executory interest)
is not destroyed but rather waits until the condition has been breached/ met.
 i.e. – “O to A for life, then to the children of B, but if the children do not
reach 21, then to C. At the time of the conveyance, B has no children.”
o In this conveyance, we have a contingent remainder ONLY
because the remaindermen are not ascertained (B’s children).
We do not have a condition precedent, BUT rather a condition
subsequent.
o B’s unborn children have a contingent remainder in FSA, and C
also has a contingent remainder.
 Once B has a child, the interest will vest and become a
vested remainder subject to total divestment AND we
still have to wait until his children reach the age of 21.
Therefore, C’s interest (which would then be an
executory interest) will not be destroyed UNTIL the
condition is met. As such, in the original conveyance, C
does not have an ACR

 Executory Interest
 Held by a transferee ONLY
 Follows FSD or FSSEL
 ALSO follows a vested remainder (EI divests so there must be something to actually
divest)
 May or may not ever become possessory
 Two types: shifting v. springing
 Springing – divestes the grantor (rarely seen)
o Essentially the grantor gives away the future interest and keeps
the present interest for himself
 i.e. – “O transfers Blackacre to B to take effect if and
when B agrees to farm Blackacre.”
 O has a FSSEL
 B has a springing EI
 Shifting – divests the grantee
o A third party holds the future interest which may divest the
grantee of his interest if a condition is not met
 i.e. – “O transfers Blacacre to A for life, then to B, but if B
builds a lodge house, then to C.”
 B has a vested remainder subject to total
divestment in FSA.
 C has a shifting EI in FSA.
 PROPERTY, 24

 Merger –
 If,
 A possessory or vested life estate and the next vested estate in fee simple
subsequently* come into the hands of the same person and
 These two estates are not separated by another vested estate,
 Then –
 The life estate merges into the next vested estate held by the same person,
and
 If there is a contingent remainder between them, the contingent remainder
will be destroyed
If there estates were created in the same document an intervening contingent estate
is safe

 Rule in Shelley’s Case –

 If,
 The same document
 Conveys a life estate to a grantee and
 A remainder to that grantee’s heirs
 Then,
 The conveyance to the grantee’s heirs immediately becomes conveyance to
the grantee
 i.e. – “O to A for life, then to A’s heirs A.

 Rule in Shelley’s Case and Merger

 i.e. – “O to A for life, then to A’s heirs.”
 The Rule in Shelley’s Case reads the contingent remainder in A’s heirs as a
remainder in A.
 The remainder is not still contingent because now the holder of the
remainder is ascertained, so the remainder is vested.
 The merger does apply, because the remainder is now vested. The merger
doctrine merges the life estate into the vested remainder.
 i.e. – “O to A for life, remainder to A’s heirs if A survives B.”
 The Rule in Shelley’s Case converts the contingent remainder in A.
 The remainder in A is still contingent. The holder is now ascertained, but
the condition precedent remains.
 The merger does not apply because the remainder is contingent
 i.e. – “O to A for life, then to B for life, then to A’s heirs.”
 The Rule in Shelley’s Case converts the contingent remainder in A’s heirs
into a remainder in A.
 The remainder in A is no longer contingent. Now the holder in A is
ascertained and the remainder is now vested.
 The merger does not apply because there is an intervening vested estate
(B’s life estate).
 PROPERTY, 25

 Doctrine of Destruction of Contingent Remainder

 A contingent remainder is destroyed if it is still contingent when the prior estate
ends.
 A remainder is destroyed if it does not vest at or before the termination of
the preceding estate. The doctrine does not apply to executory interest.

 Doctrine of Worthier Title

 If,
 The same intervivos conveyance
 Conveys an inherently limited estate to a grantee and
 A remainder or an executory interest to the grantor’s heirs
 Then,
 The conveyance to the grantor’s heirs is read as a conveyance to the
grantor

 CONCURRENT ESTATES
 Tenants in Common
 Most common
 The only unity required is the unity of possession
 You can transfer it during life, by will, or through intestate succession: look to see what type
of
 No right of survivorship
 Don’t have to have the same amount as far as the quality of the estates (can have 1/3 and
2/3)
 Joint Tenants
 Similar to tendency in common
 Unites required: time, title, interest, and possession
 Get your conveyance at the same time
 In the same instrument
 Have to have the same interest
 Have to have the same right of possession
 Right of survivorship - not going to transfer by will or intestate succession
 You have to have the same amount in interest: could not have a joint tenant where you have a
1/6 interest and 2/3 interest…equal interest in all
 Tenants by Entirety
 Always created between husband and wife
 Have to make sure the couple is married (if you try to do it in a couple that is not married
then you have a joint tenancy)

 Common Law - structural preference - any ambiguity in any of this is joint tenancy
 North Carolina – must be clear:
 “…to A, B, C as joint tenants, not tenants in common, with rights of survivorship."
 Modernly – opposite of common law; any ambiguity in it will be interpreted as creating a tendency in
common…very specific language to do so