EXHIBIT 1022
`
`
`
`TO PETITIONER GOOGLE INC.’S
`PETITION FOR COVERED BUSINESS
`METHOD REVIEW OF
`U.S. PATENT NO. 8,794,516
`
`
`
`
`
`
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`

`
`THE LAW OF
`PROPERTY
`Second Edition
`
`By
`
`Roger A. Cunningham
`James V. Campbell Professor of Law, Emeritus,
`University of Michigan School of Law
`
`William B. Stoebuck
`Professor of Law, University of Washington
`School of Law
`
`Dale A. Whitman
`Guy Anderson Professor of Law, Brigham Young University
`School of Law
`
`HORNBOOK SERIES
`
`WEST PUBLISHING CO.
`ST. PAUL, MINN., 1993
`
`Google Exhibit 1022 Page 00001
`
`

`
`Hombook Series, WESTLAW, the West Publishing Co. Logo and the
`key symbol appearing on the front cover are registered trademarks of
`West Publishing Co. Registered in U.S. Patent and Trademark Office.
`
`COPYRIGHT 0 1984 WEST PUBUSHING CO.
`COPYRIGHT 1993 By WEST PUBUSHING CO.
`610 Opperman Drive
`P.O. Box 64526
`St. Paul, MN 55164-0526
`1-800-328-9352
`
`All rights reserved
`Printed in the United States of America
`
`Ubrary of Congress Cataloging-In-Publication Data
`
`Cunningham, Roger A.
`The law of property / by Roger A. Cunningham, William B. Stoebuck,
`and Dale A. Whitman. — 2nd ed.
`p. (cid:9)
`cm. — (Hombook series)
`Includes index.
`ISBN 0-314-01389-X
`1. Real property—United States. I. Stoebuck, William B.
`II. Whitman, Dale A. III. Title. IV. Series.
`KF570.C86 1993
`346.7304'3—dc20
`[347.30643]
`
`ISBN 0-314-01389-X
`
`(C., SAW.) Prop.2d H13
`2nd Reprint-1998
`
`92-38188
`CIP
`
`Page 00002
`
`

`
`§ 2.16
`
`LIFE INTERESTS IN PERSONALTY (cid:9)
`
`79
`
`estate pur autre vie may devise the residue of his estates if the measuring
`life is still in existence.' If the tenant of an estate pur autre vie does not
`dispose of the residue of his estate, such residue will generally pass under
`the intestate succession law of the jurisdiction. In most states the residue of
`an estate pur autre vie need not be classified as either real or personal
`property, since both kinds of property pass to the same persons, and in the
`same shares, when the owner dies intestate. In those states where the
`intestate succession laws treat real and personal property differently, the
`residue of an estate pur autre 'vie will usually pass as personal property to
`the decedent's next-of-kin!' In some of these states, however, it will pass as
`real property to the decedent's heirs, as "special occupants," if the instru-
`ment creating the estate expressly gave it to the named grantee "and his
`heirs." "
`It is implicit in the prior discussion of the validity of "forfeiture"
`restraints on the alienation of life estates that a life estate may be made
`defeasible by means of a special limitation, a condition subsequent, or an
`executory limitation." In general, the rules for determining what types of
`special limitations, conditions subsequent, and executory limitations are
`invalid because they are contrary to public policy or "illegal" are substan-
`tially the same when such limitations or conditions are attached to life
`estates as when they are attached to fee simple estates!'
`
`§ 2.16 Life Interests in Personalty
`At the present time, most life interests are beneficial interests under
`trusts, the corpus of which consists mainly of personal rather than real
`property. The primary purpose of the trust device is to permit the creation
`of one or more beneficial life interests which entitle the life tenants to the
`income produced by the corpus, to preserve the corpus of the trust for
`distribution to one or more reMaindermen after termination of all the life
`interests, and to permit professional management of the trust corpus for the
`benefit of both life tenants and remaindermen. The corpus of the trust may
`include real property, but typically consists mainly of "intangible" forms of
`personal property such as stocks and bonds!
`
`(1910) (power to use and dispose and to distrib-
`ute to children by gift or by will).
`12. The Statute of Frauds, 29 Car. II, c. 3
`(1677) first authorized such devise.
`13. This is true, e.g., in Alabama, Ken-
`tucky, Michigan, Minnesota, New Jersey, New
`York, West Virginia, and Wisconsin.
`14. This was the rule established in Eng-
`land by the Statute of Frauds (1677), and has
`been adopted in several American jurisdic-
`tions. Rest.Prop. § 151, Special Note, states
`that this is the American common law rule in
`the absence of an inconsistent statute, because
`the English statutes "merely declare a result
`which would have been reached in due time if
`the problem had been allowed to be litigated
`under an evolving common law."
`15. See Rest.Prop. § 112, and the Illustra-
`t!ons thereof. Id. § 113 provides that when a
`limitation in a deed or will "contains language
`
`specifically describing the estate as to dura-
`tion in terms of the life or lives of one or more
`designated human beings, * * * then such
`limitation is effective to create an estate for
`life although it is accompanied by further
`language effective to create a special limita-
`tion, a condition subsequent or an executory
`limitation under such estate is terminable at
`the will of the conveyor."
`16. See ante Section 2.3 at notes 15-22.
`
`§ 2.16
`,1. Treatment of the law of trusts is gener-
`ally beyond the scope of this book, although
`the peculiar characteristics of "equitable" fu-
`ture interests subject to a trust are to some
`extent considered in Chapter 4.
`
`Page 00003
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`(cid:9)
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`80
`
`PRESENT ESTATES
`
`Ch. 2
`
`Where personal property is given directly to a life tenant, with remain-
`der to another (or others), or where a trust terminates because of merger or
`for other reasons before the life tenant's death, it is often said that the life
`tenant is a "trustee" or "quasi-trustee" of the personal property for remain-
`derman (or remaindermen). 2 Such a characterization of the life tenant
`results from the gpecial problems arising from creation of a legal life interest
`in personalty—e.g., the fact that the law of waste does not adequately
`protect the interests of remaindermen because personalty is easily transport-
`able, often perishable, and may require expert management to avoid diminu-
`tion of the value of the personalty when it consists of stocks and/or bonds.
`These special problems, and the statutory and judicial efforts to deal with
`them, are discussed in more detail post in Section 4.13.
`
`§ 2.17 Non -freehold (or Leasehold) Estates
`Even in the heyday of English feudalism, it became common practice for
`tenants of freehold estates (i.e., in fee simple, fee tail, or for life) to "lease"
`land to another for a definite period of time, thus creating a "term of years"
`in the lessee.' Such leases seem originally to have been designed to avoid
`the ecclesiastical prohibition against usury in connection with loans.' The
`tenant of a freehold estate who borrowed money would give the lender a
`term of years of sufficient duration to enable him to recover the principal
`amount of the loan together with a substantial profit (in lieu of interest) out
`of the revenues from the land. But leases creating terms of years were not
`used only as a means of avoiding the prohibition against usury. By the late
`12th century leases were made for a fixed term, at an agreed rent, to tenants
`who farmed the land. Such agricultural leases became increasingly common
`in the centuries that followed.
`
`For reasons that are not entirely clear, a tenant for years was not
`considered to have a "free tenement" (freehold estate) and therefore could
`not use the assize of novel disseisin to recover possession from one who
`wrongfully dispossessed him. Although other actions were developed in the
`thirteenth century to give the tenant for years a means to recover possession
`from the lessor or one claiming by feoffment from the lessor, prior to 1499
`the tenant for years was limited to a damage remedy against a "stranger"
`
`2. See, e.g., Farmers' Mutual Fire and
`Lightning Insurance Co. v. Crowley, 354 Mo.
`649, 190 S.W.2d 250 (1945); Note, 137 A.L.R.
`1054 (1942).
`
`§ 2.17
`1. Generally, see 1 Am.L.Prop. § 3.1; T.
`Plucknett, Concise History of the Common
`Law 570-574 (5th ed. 1956); F. Pollock & F.
`Maitland, History of English Law 106-117 (2d
`ed. 1898). Rest.Prop. § 19 defines a tenancy
`for years as one "the duration of which is
`fixed in units of a year or multiples or divi-
`sions thereof." Though there may have been
`an early notion that the duration of a tenancy
`for years was subject to some outer limit, it
`has long been settled that there is no limit in
`the absence of statute. Terms as long as 2,000
`years, or of 99 years renewable forever, have
`
`been held valid, in which case the tenant, as a
`practical matter, has an estate equivalent to a
`fee simple. See 1 Am.L.Prop. § 3.15.
`2. In medieval times, the taking of any
`interest on a loan was considered to be "usu-
`ry."
`
`3. It has sometimes been asserted that the
`refusal to treat the term of years as a freehold
`estate was a result of its unsavory reputation
`as a stratagem to evade the prohibition
`against usury. Another explanation is that
`the English judges were under the influence of
`a Roman law concept that, had it been fully
`developed, would have resulted in classifica-
`tion of the term of years as a mere "servi-
`tude."
`
`Page 00004
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`(cid:9)
`(cid:9)
`

`
`§ 2.17 (cid:9)
`
`NON-FREEHOLD ESTATES (cid:9)
`
`81
`
`who wrong-Tully dispossessed him.' In 1499, however, in response to the
`obvious need for a possessory remedy against "strangers," the courts finally
`allowed the tenant for years to recover the leased land from a "stranger" in
`the action of trespass de ejectione firmae, later called ejectment.'
`The action of ejectment, which was available to the tenant for years as
`against anyone who wrongfully dispossessed him, was obviously superior to
`the real actions available to the tenant of a freehold estate—a fact that soon
`led freeholders to seek and obtain the right to use ejectment in lieu of the
`real actions.' But the interest of the tenant for years had already been
`classified as "personal" rather than "real" property in the fourteenth centu-
`ry.' Since the term of years was clearly an interest in land and there was a
`"tenure" relationship between landlord and tenant, the eventual solution
`was to call the interest of the tenant for years a "chattel real," thus
`recognizing its anomalous nature.
`The term of years, subject to payment of an annual rent, filled a
`fundamental need for a means to secure to a tenant the possession and use of
`land for a fixed period for agriculture, trade, or residence without the capital
`outlay required for purchase of a freehold estate. Although land could be
`"leased" to a tenant for life at an annual rent, the term of years had obvious
`advantages over a life estate from the tenant's viewpoint: it had a definite
`duration, which could be fixed by agreement of the parties; it could be
`created so as to commence in futuro, unlike a freehold estate, which could
`not be so created prior to 1536; 8 it could be transferred by will (since it was
`personal rather than real property), unlike a freehold estate, which could not
`be so transferred prior to 1540; 9 it would pass upon the tenant's death
`intestate according to the more rational rules governing succession to
`personal property rather than the canons of descent applicable to real
`property; 10 and prior to the enactment of the Statute of Frauds in 1677 it
`could be created by a parol agreement followed by the tenant's entry into
`possession, without either livery of seisin or a written deed of conveyance.'
`The last advantage was, of course, substantially eliminated by the Statute of
`Frauds,' which provided that parol leases, except those "not exceeding the
`term of three years from the making thereof," should create only an "estate
`at will."
`The term of years, despite its anomalous classification as a "chattel
`real," has the essential characteristics of an estate in land. The tenant for
`
`4. 1 Am.L.Prop. § 3.1 at nn. 3-5 and au-
`thorities cited.
`5. Id. at n. 6 and authorities cited.
`6. See ante Section 1.3 for development of
`the ejectment action as an all-purpose remedy
`for persons wrongfully dispossessed.
`7. It is often said that this resulted from
`the fact that trespass, and its offspring, eject-
`ment, were classified as "personal actions." 1
`Am.L.Prop. § 3.1 at n. 10 suggests, however,
`that it was more a result of the fact that
`leases creating a term of years were frequent-
`ly used as security for loans.
`8. See ante Section 2.8 note 3 as to the
`reason for the rule prohibiting creation of
`
`freehold estates to commence in futuro. En-
`actment of the Statute of Uses in 1536 abro-
`gated this rule.
`9. The Statute of Wills, 32 Hen. VIII, c. 1
`(1540) authorized devise of freehold estates by
`will.
`10. 1 Am.L.Prop. § 3.1 at p. 177.
`, 11.
`Ibid.
`12. 29 Car. II, c. 3 (1677). American ver-
`sions of the Statute of Frauds generally con-
`tain similar provisions. For a more detailed
`consideration of the American Statutes of
`Frauds as they apply to the creation of lease-
`hold estates, see post Section 6.15.
`
`Page 00005
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`

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`82 (cid:9)
`
`PRESENT ESTATES (cid:9)
`
`Ch. 2
`
`years has the exclusive right of possession during the term as against the
`whole world. Like the freehold estates we have already considered, a term
`of years may be made defeasible by means of an express power of termi-
`nation (right of entry for breach of condition), special limitation, or executo-
`ry limitation. And a term of years is freely transferable (assignable")
`except to the extent that transfer is expressly subjected to a "forfeiture" or
`"promissory" restraint.
`The term of years (or estate for years) is not the only non-freehold (or
`leasehold) estate recognized in Anglo-American law. Littleton, writing near
`the end of the fifteenth century, stated that a tenancy at will would arise
`whenever one person, with the consent of the freehold tenant, occupied land
`as tenant (not merely as servant or agent) under an express or implied
`agreement that the tenancy might be terminated at the will of either party!'
`And another type of non-freehold estate came to be recognized in the
`sixteenth century—the tenancy from year to year, which would continue
`indefinitely unless terminated by proper notice from one party to the other,
`effective at the end of some yearly period!' This became a common form of
`agricultural tenancy because it had substantial advantages, compared to a
`tenancy at will, from the standpoint of both landlord and tenant. It entitled
`the landlord to the agreed rent for at least one year, and it assured to the
`tenant the right of possession and use of the land for at least one year!' A
`tenant from year to year had a much more substantial interest than a
`tenant at will.
`Other periodic tenancies were later recognized, such as tenancies from
`quarter to quarter, from month to month, and from week to week!' The
`distinguishing feature of these periodic tenancies is that, like a tenancy from
`year to year, they will continue indefinitely unless terminated by proper
`notice as of the end of some period.
`Like tenancies for years, tenancies at will and periodic tenancies of all
`types are now considered to be non-freehold "estates in land," although they
`are also "chattels real"—i.e., personal rather than real property.
`In England, prior to 1926, many persons held land by "copyhold" tenure.
`"Copyhold" was derived from the medieval "villein" tenure of the English
`peasantry. It was classified as a non-freehold tenure but, in its essential
`characteristics, the estate of the copyhold tenant was more like a fee simple
`estate than a leasehold estate. Copyhold tenure was converted to freehold
`tenure by the English Law of Property Act of 1922.' It never existed in the
`United States.
`Many writers also recognize a non-freehold estate called a "tenancy at
`sufferance." But the so-called "tenancy at sufferance" is really not an estate
`
`13. See post Sections 6.18, 6.19. For a
`more detailed discussion, see 1 Am.L.Prop.
`§§ 3.28 through 3.31.
`14. See post Sections 6.16, 6.17. For a
`more detailed discussion, see 1 Am.L.Prop.
`§§ 3.23 through 3.27.
`15. In addition, neither the landlord nor
`the tenant could terminate a tenancy from
`year to year except by giving notice at least
`six months prior to the end of a yearly period.
`
`Thus both parties had ample time to arrange
`for a new tenancy if they desired.
`16. See post Sections 6.16, 6.17. For a
`more detailed discussion, see 1 Am.L.Prop.
`§§ 3.23 through 3.27.
`17. A brief discussion of the evolution and
`nature of copyhold tenure may be found in
`Moynihan, Intro. to Real Prop. 15-17 (1962).
`
`Page 00006
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`

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`§ 2.17
`
`NON—FREEHOLD ESTATES (cid:9)
`
`83
`
`at all; it is simply a term used to describe the status of a tenant who has
`"held over" wrongfully after the termination or expiration of his leasehold
`estate. The possessory rights of the so-called "tenant at sufferance," as
`against any person other than the owner of the land, are no greater than the
`rights of any other wrongful possessor of land. As against the owner of the
`land, the so-called "tenant at sufferance" has no right to possession. But the
`owner may elect to treat the "tenant at sufferance" as a tenant for an
`additional period, at least where there was originally a periodic tenancy.'
`The tenant of any non-freehold (leasehold) estate has, in general, the
`same right to exclusive possession and the same privileges of use as a life
`tenant. The rights and duties of landlords and tenants of non-freehold
`estates are largely governed by express covenants in the lease, where a
`written lease is executed by the parties. Other duties peculiar to landlords
`and tenants of non-freehold estates are imposed by law, often in the form of
`so-called "implied covenants." The law which imposes these duties may be
`either judicially or legislatively created. Whatever their source, the duties
`of landlords and tenants of non-freehold (or leasehold) estates usually in-
`clude both affirmative and negative obligations.
`The characteristics of the non-freehold (or leasehold) estates, and the
`legal obligations of landlords and tenants, respectively, will be considered in
`some detail in Chapter 6 of this book.
`
`18. See post Section 6.20.
`
`Page 00007
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`(cid:9)