Chapter 12 1 D11 When Creditor Has Legally protected Interest Real

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CHAPTER TWELVE. PROPERTY

LEARNING OBJECTIVES

• To understand the antecedents and basic principles of property ownership

• To understand the various ownership interests

• To understand indicia of ownership of property such as deeds and liens

CHAPTER SUMMARY

Ownership of property—real, personal, or intellectual—is an integral part of American

culture and generates a great deal of debate and tension. For instance, people both embrace and

reject governmental regulation of the use of private property, and the perspective often depends

on whether the regulation is deemed to enhance or deplete the property’s value.

The chapter begins with tracing the origins of property interests, and the characteristics

and boundaries of each type of interest are explained. Various estates such as freehold,

nonfreehold, concurrent, and their characteristics are introduced along with limitations on

ownership such as zoning, historic preservation, liens, and aesthetic aspects.

trade secrets are featured along with some of the problems of international protection.

CHAPTER OUTLINE

I. Introduction

II. Estates

A. Feudalism

B. Freehold Estates

III. Inception of Title and Liens

A. Adverse Possession

B. Deeds

C. Liens

IV. Probate and Succession

A. Intestate Succession

B. Testate Succession

C. Probate

V. Trusts and Gifts

VI. Intellectual Property

TERMS/CONCEPTS/PEOPLE

Tangible property Intangible property

Realty Personalty

Fee simple estate Feudalism

Tenure Statute Quai Emptores

Fee simple determinable Estate in fee simple

Entailment Grantee

Grantor Primogeniture

Fee tail male Fee tail female

Intestate succession Testator

Heirs Beneficiaries

Probate Trust

Trustee Trustor

Rule against Perpetuities Corpus/principal

Inter vivos trust Testamentary trust

Gift Donor

Donee Patent

CHAPTER TEST QUESTIONS

Multiple Choice Questions.

1. Community property is property acquired:

A. By inheritance;

B. During marriage through earnings of either spouse;

C. Before marriage;

D. By gift;

E. By divorce.

2. Which of the following most needs a will?

A. A 25-year-old single parent who is attending college;

B. A 40-year-old executive with no family who earns $40,000 a year;

C. A 65-year-old retiree whose only asset is a $1,000,000 life insurance policy;

D. A 14-year-old who has no assets but plans to set a record by sailing around the world

alone;

E. None of the above.

3. Internationally-renowned artist, Georgia O’Keefe, taught at West Texas A&M University.

Efforts to prevent the owner of the building where she resided from altering or destroying

the property:

A. Will fail because of the owner’s absolute property interests;

B. Will primarily focus on the economic benefit to the landowner;

C. May be successful because the state may use its police power to

provide a public benefit;

D. Will be successful because of the theory of easement;

E. None of the above.

4. Which of the following is not correct about a life estate?

A. The life tenant can sell the property without consulting anyone;

B. Is created by such language as “To Sue for her lifetime, then to my nieces and nephews;”

C. The life tenant is entitled to the income and profits;

D. The life tenancy may also be created in surviving spouses by statute;

E. None of the above.

5. Jessica and Jennifer have been neighbors for ten years. Five years ago, Jessica built a

swimming pool on her lot. The lots have been surveyed again, and it now appears that the

swimming pool is actually on Jennifer’s land. Jessica may claim the pool under the doctrine of:

A. Eminent domain;

B. License;

C. Easement;

D. Adverse possession;

E. None of the above.

6. The origin of the legal protection of intellectual property is often attributed to which craft?

A. The Goldsmiths Guild of London;

B. The Pepperers Guild of York;

C. The Glassmakers of Venice;

D. The Weavers of Amsterdam;

E. The Card makers of Paris.

7. A written declaration of a person’s wishes regarding the distribution of her property after death

is:

A. Will;

B. Codicil;

C. Trust;

D. Power of attorney;

E. Agency agreement.

8. Carl Perkins composed and recorded “Blue Suede Shoes” in 1956, the same year that The King

(Elvis Presley) released the song. Unless someone is paying royalties, you are violating

___________ when you download the music.

A. Patent law;

B. Trademark law;

C. Copyright law

D. Promissory estoppels

E. Napster Act

9. According to the textbook, which cartoon character prompted the extension of copyright

protections in the United States?

A. SpongeBob Square Pants;

B. Mickey Mouse;

C. Marmaduke;

D. Dagwood;

E. Daffy Duck.

10. Which of the following usually is not part of a sale of a residence?

A. Promissory note to the bank;

B. Deed of trust recording the creditor’s interest;

C. Warranty deed;

D. Reservation of riparian rights;

E. None of the above.

11. When a creditor has a legally-protected interest in real or tangible property, this is called a:

A. Promissory note;

B. Lien;

C. Fee simple estate;

D. Leasehold estate;

E. Corpus.

12. Which of the following is not a method of acquiring title to property?

A. By foreclosure of judgment or for nonpayment of debt;

B. By deed;

C. By gift;

D. By adverse possession;

E. None of the above.

13. Norma decides that the title to her ranch should pass only in the female line. Her conveyance

would be:

A. A fee simple absolute;

B. “To my daughter, Sherri, her heirs and assigns;”

C. An example of primogeniture;

D. “To my daughter, Sherri, and the female heirs of her body;”

E. None of the above.

14. The terminology for the right to use another’s land is:

A. Easement;

B. Covenant;

C. Fee simple;

D. Eminent domain;

E. None of the above.

15. Charlotte opted not to attend class and failed all her courses. Her parents are

understandably upset and have decided to alter the provisions relating to her in their wills

while keeping the remainder of the provisions the same. These amendments are known as a:

A. Codicil;

B. Holographic will;

C. Nuncupative will;

D. Trust;

E. None of the above.

16. Grandpa voluntarily transfers title to his 2011 flaming red Corvette to you. This is known as:

A. Trust;

B. Seisin;

C. Testamentary transfer;

D. Gift;

E. Intestate transfer.

17. To recoup their costs in the development of plants such as lupinus texensis, a/k/a the “maroon

bluebonnet” and Beta Sweet carrots, a/k/a the “maroon carrot,” scientists and their sponsors

usually file:

A. Patents;

B. Trademarks;

C. Copyrights;

D. Restrictive covenants;

E. None of the above.

18. Keisha’s grandfather has created a trust for the benefit of the grandchildren:

A. He may limit access to the funds by requiring that the money only be expended for their

education;

B. He may extend the terms of the trust into perpetuity;

C. He may not protect the money from her creditors since Keisha is a known spendthrift;

D. He may not act as co-trustee of the funds himself;

E. All of the above.

19. You wish to open a daycare center in your home. This is an area of single-family dwellings,

not a commercial area. You must obtain permission from the City because of:

A. Sector planning;

B. Zoning;

C. Eminent domain;

D. Covenants;

E. All of the above.

20. Jorge, who is very wealthy, wishes to provide financial protection for his elderly mother

and his children in the event of his death. His will is likely to:

A. Contain a clause giving his mother a life estate in his property and naming

the children as remaindermen;

B. Contain a clause setting up a trust from which both his mother and the children could

draw for support and maintenance;

C. Contain a clause transferring his property to his brother, in trust, with his mother to

receive the income

from the property during her lifetime and with his children receiving the corpus following her

death;

D. Any of the above;

E. None of the above.

21. Creighton wishes to give the family cemetery to his son, Buchanan, with the strongest title

possible. Which type of instrument will he use?

A. Quitclaim deed;

B. Warranty deed;

C. Special warranty deed;

D. Contract for deed;

E. None of the above.

22. Santa Fe is noted for the uniformity of its architectural style. This uniformity could be the

result of:

A. Easements;

B. Restrictive covenants among private parties;

C. Zoning by the government;

D. A and B;

E. B and C.

23. Which of the following is categorized correctly?

A. Stocks and certificates of deposit—tangible property;

B. Property owned jointly by siblings—community property;

C. Timber grown as a crop—realty;

D. Right to a certain percentage of profits from the sales of oil and gas—mineral royalty

interest.

E. Right to protect the design of the better mousetrap from production by someone else—

trademark.

Essay Questions

1. Distinguish between a freehold and leasehold estate and discuss the attributes of each.

2. The system of feudalism is the source of much of today’s property law. Discuss feudalism

and its remnants in our current jurisprudence.

3. Identify various freehold estates and the attributes of each.

4. Identify and discuss types of concurrent ownership including, but not limited to, marital

estates.

5. Define and discuss easements, licenses, profits, and covenants. Give examples.

6. Discuss limitations on ownership interests including, but not limited to, historic preservation,

zoning, and eminent domain.

7. Identify and discuss various methods of inception of titles and liens as well as the

characteristics of different types of deeds.

8. Discuss the requisites for a valid will and the effect if one procrastinates and does not

actually execute some type of will.

9. Describe the formation of a trust and contrast its effect with that of a gift.

10. Trace the historical development of intellectual property.

11. Define and distinguish among patents, copyrights, and trademarks and the legal interests

protected by each.