Involuntary Transfers

Question 1

What are the types of involuntary transfers we discussed in class?

Answer 1

Abandonment
Adverse Possession
Mortgage Foreclosure (Lien Enforcement)
Eminent Domain
Inverse Condemnation
Public Trust Doctrine

Question 2

Losing property is sufficient to show that it has been abandoned. (T/F)

Answer 2

False

Question 3

What must a party show to demonstrate abandonment?

Answer 3

Abandonment must be proven by a clear affirmative act that indicates intent to repudiate ownership, shown by clear and convincing evidence.

Question 4

Why do courts prefer law of salvage over the law of finds?

Answer 4

Professor Papke emphasized the policy considerations behind courts preferring the law of salvage over the law of finds. The law of salvage deters criminal conduct and has a greater appreciation between nuanced parties like the shipping company and insurance company in Columbus America Discovery Group v. Atlantic Mutual Insurance (finding no abandonment when gold was found aboard a sunken ship after over 100 years because mere loss does not constitute abandonment, and clear and convincing evidence of abandonment was not presented).

Question 5

Law of Salvage

Answer 5

any person who helps recover another person’s ship or cargo in peril at sea is entitled to a reward commensurate with the value of the property saved.

Question 6

Law of Finds

Answer 6

gives ownership of an abandoned shipwreck or property to the person who discovers it.

Question 7

What are the requirements for an adverse possession claim?

Answer 7

SHOE-VAC

Actual – Some degree of physical occupation of the property.

Visible – Something that someone could see.

Open and Notorious – Something substantial is provided to demonstrate notice of the adverse possessor’s occupation of the property.

Exclusive – The adverse possessor has sole possession of the land (i.e., only one person is adversely possessing the land).

Continuous – There can be no interruptions or breaks in possession.

Hostile – Against the interests of the person who owns the land (i.e., “permission defeats hostility).

Stipulated Period of Time – States require that the adverse possession be for a certain period of time, dictated by statute.

Question 8

What is “tacking?” Which requirement of adverse possession does “tacking” relate to?

Answer 8

Tacking – A longer chain of possession is “tacked” together to establish the length of time stipulated in the possession. For example, the adverse possessor sells the property to someone else, who gifts it to someone else, who bequeaths it to yet another person.

Tacking relates to the continuity requirement of adverse possession.

Question 9

Occupation of a summer home for only three months out of the year meets the continuity requirement for adverse possession. (T/F)

Answer 9

True: In Howard v. Kunto, the court decided that the continuity requirement was met regarding the adverse possession of a seasonal home because such was common in the area and the home was regularly used over the summer months. Further, if parties are in privity, then the courts will see it as continuous.

Question 10

What is a lien?

Answer 10

Lien – A legal encumbrance on property that allows the holder to obtain access to the property if debts are not paid.

Question 11

What are the three types of liens? Give examples

Answer 11

Statutory Lien – Liens provided by statute. eg, repairman’s lien whereby a repairman can hold on to the property until the owner pays for the repairs.

Judicial Lien – The court formally recognizes a debt resulting from adjudication. eg, Wage garnishment

Consensual Lien – Liens based on contractual agreements that arise from security agreements. (Security Agreements are agreements by which a party uses collateral to put up a loan.) eg, mortgages. With a mortgage a homebuyer puts up their home as collateral on the loan and a mortgage foreclosure is when collateral is claimed.

Question 12

Mortgage foreclosure is a common yet unconstitutional form of involuntary transfer. (T/F)

Answer 12

False. Mortgage foreclosure is common and acceptable! As explained in Dieffenbach v. A.G. of Vermont, mortgage foreclosures, even strict foreclosures, are “rationally related to a legitimate state purpose” and are therefore permissible under the Equal Protection Clause.

Question 13

How do foreclosure laws further a legitimate state interest?

Answer 13

Lurking behind the Dieffenbach decision is consideration of economic policy. Although mortgage foreclosures can be seen as bad, banks still need an incentive to lend money with the assurance that it can still make money on a loan even if someone forecloses.

Question 14

What is eminent domain and where does the government get this authority?

Answer 14

Eminent domain – The involuntary transfer of property from a private party to the state.

The government gets this authority from the Takings Clause in the 5th Amendment.

Question 15

What is the takings clause?

Answer 15

The Takings Clause provides that “[n]or shall private property be taken for public use, without just compensation.” The Takings Clause implicitly recognizes that property can be taken, but the government must pay fair market value for the property.

Question 16

What is the general structure for an eminent domain proceeding? Explain each step.

Answer 16

Step 1 – Condemnation: The government designates the property they intend to take.

Step 2 – The government then states the amount they are willing to pay. The amount is theoretically calculated using the “fair market value” of the property.

Step 3 – The person whose property is condemned can either (a) go to court and challenge or (b) accept the offer for sale. Owners can challenge the taking or the amount the government offered.

Question 17

Who are the two parties in an eminent domain case? Which party usually succeeds?

Answer 17

The government and the owner of the condemned land.
The government almost always wins.

Question 18

How do courts interpret the “public use” requirement of eminent domain?

Answer 18

After Berman and Kelo, the public use requirement is interpreted very broadly. Rather than having to be something the public actually uses, the property can instead serve a “public interest” and still constitute public use.
Court’s give great deference to legislatures to make public use determinations.

Question 19

How can eminent domain disadvantage people?

Answer 19

People can become uprooted for their homes and lose their property.

Fair market value compensation for property doesn’t always reflect personal value of the property.

Communities may have limited housing options that can force property owners to relocate.

Because public use does not necessarily require the public to actually use the property, eminent domain can serve corporate interests.

Question 20

What is inverse condemnation and how does it differ from eminent domain?

Answer 20

Inverse Condemnation – Government action diminishes property value which constitutes a taking.

Inverse condemnation does not involve actual condemnation by the government and the government does not claim ownership over the property.

Question 21

What is the public trust doctrine? How can it cause an involuntary transfer?

Answer 21

Public Trust Doctrine – (1) Navigable water, and lands affected by the tide, are subject to public control; (2) the public owns the lands under the waters, which are held in trust by the state on behalf of the public; and (3) the public can take the land back from third parties that take over the land.

Question 22

What problems can arise with the Public Trust Doctrine (think of states sharing public trust land)?

Answer 22

Different states can have different understandings of what is included within the public trust. For example, Michigan, Wisconsin, Illinois, and Indiana all border Lake Michigan and each state has a different definition for what is included in the public trust. Relating to that point, states can use the land for different purposes. Some can use it for conservation and environmental purposes, whereas others can use it for commercial or industrial purposes.