Property I Essay Questions Fall 1998
Question 1 (70 minutes suggested). Owen Page owned a small two-suite office building in the state of Anxiety. When he died in 1980, his valid will left the building "to my two granddaughters, Amy and Katie, with joint rights, and to the survivior, provided that the property shall never be used for religious purposes." Owen's will left all of his other property to the University of Anxiety. Amy was an accountant, and immediately moved her professional office into the building. Katie was an actress in Hollywood and had no interest in using or managing the building. She raised no objection when Amy moved in.
Amy's office occupied only one-half of the building. Amy rented the other half to Larry, who was a lawyer, giving him a 5-year lease. Larry paid rent to Amy of $1,500 per month (which was and continues to be a fair rent for the space Larry occupied), and Amy's expenses (taxes, utilities, insurance, and maintenance) on the entire building have always averaged about $1,000 per month. No money was ever exchanged between Amy and Katie.
In 1985 Amy became a member of a "new age" group called "THE END," which believed that a vast computer network breakdown would cause the end of life as we know it in the year 2000. The group's goal was to create a computer-free survival settlement in the Ozark Mountains in preparation for the apocalypse. Amy did not renew Larry's lease when it expired in 1985, but instead turned over the space Larry had been renting to THE END, which used it rent free as their world headquarters. Amy continued to pay all of the operating expenses of the building, and she continued her accounting practice in the other office suite.
When Katie learned of Amy's affiliation with THE END in 1985, she told Amy by telephone that she thought the group was "bunch of crackpots." Amy was deeply offended by this statement, and replied, "If that's the way you feel, you are no longer welcome here. I never want to see you again." Indeed, the two sisters never had any further communication.
Amy continued to allow THE END to use the office suite formerly rented to Larry until June, 1998, when Amy quit her accounting practice. At that time, she executed and delivered a deed describing the entire parcel of real estate and purporting to convey it to THE END. Shortly thereafter, while leading an exploration trip in the Ozarks to search for a settlement site, Amy fell into a deep ravine and was killed. Her will (not surprisingly) left all of her property to THE END. Amy had substantial other assets, and her estate is solvent. THE END continues to occupy the building, but both Katie and the University of Anxiety (which recently learned of all of the above events) claim to own it. The University has sent a letter to Katie and THE END, demanding that the building be turned over to it.
Please discuss and analyze the following questions:
1. Who is now the owner of the office building, as among Katie, THE END, and the University of Anxiety?
2. Is any money owed by Amy's estate to Katie, or vice versa?
The statute of limitations for adverse possession in Anxiety is ten years, and the state's adverse possession doctrine is otherwise conventional.
Question 2 (30 minutes suggested). George Giver was a wealthy merchant in the State of Anxiety. He wanted to be remembered in his community for his charitable works, so in 1975 he deeded a valuable urban lot to his local hospital, using the following words:
To the Anxiety Memorial Hospital in fee simple, but if the Hospital should ever transfer this land to any person or organization that is not a recognized charity, it shall immediately revert back to me.
The hospital immediately constructed a clinic building on the land, and operated it until 1997. The hospital then concluded that its clinic operation needed a larger space, and it constructed a new building a mile away from the land in question. It then advertised the old clinic building for lease, and entered into a 20-year lease with Joe Makkins, a local auto dealer, at an annual rent of $200,000.
When George (who was elderly but still alive) heard about the lease, he was outraged. He wrote a letter to the hospital, denouncing its actions and claiming that he was taking the land back. He was about to have his lawyer file a suit to establish George's title to the land, when he learned that the State of Anxiety had filed an action in eminent domain (or condemnation) to take the clinic property for a new state office building.
The state has offered $2 million for the land and building, and you may assume that this is a reasonable estimate of its value. Who is entitled to the money? Please discuss all legal issues fully.