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Interests in Land

Interests in Land. Possessory Interests. A. Freehold Estates 1. The Fee Simple Absolute 2. The Defeasible Fees (a) The Fee Simple Determinable (b) The Fee Simple Subject to a Condition Subsequent 3. The Fee Simple Conditional 4. The Fee Tail 5. The Life Estate.

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Interests in Land

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  1. Interests in Land Possessory Interests A. Freehold Estates 1. The Fee Simple Absolute 2. The Defeasible Fees (a) The Fee Simple Determinable (b) The Fee Simple Subject to a Condition Subsequent 3. The Fee Simple Conditional 4. The Fee Tail 5. The Life Estate • B. Non-Freehold Estates • 1. The Estate for Years • 2. The Tenancy at Will • The Periodic Tenancy • The Tenancy at Sufferance Non-Possessory Interests 1. Easement 2. Profit 3. License Donald J. Weidner

  2. NON-FREEHOLD ESTATES • Historically, leasehold estates have involved • aspects of real property and • aspects of personal property. • Leases are traditionally treated as conveyances of estates in land • While, on the other hand, being considered personal property – chattels real. • On the death of a tenant, the leasehold interest would pass as personal property rather than as real property Donald J. Weidner

  3. Non-Freehold Estates (cont’d) • Consider questions involving leaseholds • through the lens of conveyance and • through the lens of contract • When any of the leasehold estates is created, a future interest necessarily arises, either in the landlord or in a third party. • If the landlord retains the right to possession at the end of the lease term, the future interest is a reversion. • If a third party takes possession at the end of the lease term, the future interest is generally a remainder. Donald J. Weidner

  4. THE ESTATE FOR YEARS • An estate for years specifies a definite, ascertainable time for beginning and for termination • A “term for years” is created even if the fixed period is far less than a year. • Hypo: A leases to B from November 18, 2004 until January 30, 2005. • Fixed beginning and fixed ending. • An estate for years (term for years) is created. • So long as a gross period is stated, an estate for years is created even though it is subject to earlier termination. • Garner v. Gerrish states: “Leases providing for termination upon the occurrence of a specified event prior to the completion of an otherwise fixed term, are routinely enforced even when the event is within the control of the lessee.” Donald J. Weidner

  5. THE ESTATE FOR YEARS (CONT’D) • Term for years expires automatically upon the termination of the stated period • In the absence of a provision in the lease, no notice of any kind need be given, either by the landlord or by the tenant, to terminate the lease at the end of the term. • Statute of frauds: (typically) provides that a lease for a term in excess of one year must be in writing to be enforceable. • Unlike the typical conveyance of a fee, a term for years is a conveyance that involves a continuing relationship between the grantor (lessor) and the grantee (lessee). • Consider, at the extreme, a shopping center lease. Donald J. Weidner

  6. TENANCY AT WILL • The basic concept is that a tenancy at will is neither for a fixed period nor for a series of periods; in its purest form, it continues only so long as both lessor and lessee want it to. • If a “lease” provides that one party can terminate it at will, there is significant authority that says that, as a matter of law, it can also be terminated at the will of the other party (if a tenancy at will has been created). • For more, see Garner v. Gerrish • However, a unilateral power to terminate a lease can be grafted on to a term of years or a periodic tenancy without making it a tenancy at will. • Ex. L leases to T for 10 years or until L sooner terminates • creates a term of years determinable. Donald J. Weidner

  7. Tenancy At Will Into Periodic Tenancy • Usually, an estate at will is not created directly by conveyance • It tends to arise by implication whenever T takes possession of O’s land with O’s implied consent. • Modern statutes typically require a period of notice—say 30 days or a time period equal to the interval between rent payments—in order for one party or the other to terminate a tenancy at will. • “The effect of such statutes is to turn the estate at will into something very like the estate from period to period.” • It also ends at the death of one of the parties. • If, under a tenancy for no fixed period, rent is reserved or paid periodically, a periodic tenancy, rather than a tenancy at will—arises by implication in most jurisdictions . Donald J. Weidner

  8. PERIODIC TENANCY • A periodic tenancy is a lease for a period of some fixed duration that continues for succeeding periods until either the landlord or the tenant gives the requisite notice of termination. • Periodic tenancies can arise expressly or by implication. • Ex. LL “to T from month to month.” • If the proper notice to terminate is not given, the period is automatically extended for another period. • At common law, a tenancy from year to year required six months notice to terminate • Ex. If T is a year-to-year tenant beginning January 1, 2004, L must receive notice of termination before July 1, 2004 or be held over to another term—through December 31, 2005. • A tenancy for a lesser period required a notice equal to the length of the period, but not greater than six months. Donald J. Weidner

  9. PERIODIC TENANCY (Cont’d) • The notice had to be given so as to terminate the estate at the end of a period and not in the middle of it. • Thus, if a month-to-month tenant who began her tenancy on January 1st gave notice to terminate on March 20th, the earliest termination date would be April 30th. • In many states, statutes have shortened the length of notice required to terminate periodic tenancies and have permitted month-to month tenancies to be terminated at any time following 30 days notice. Donald J. Weidner

  10. Periodic Tenancy (cont’d) • Hypo: O leases to A for 18 months in a jurisdiction that has a Statute of Frauds requiring all leases in excess of one year to be in writing. • This lease is voidable for failure to comply with the statute of frauds. • If A enters under this voidable lease, A will not be a trespasser • So long as A pays no rent, A will probably be treated as a tenant at will. • If A tenders the first month’s rent, however, and O accepts it, this will probably convert the tenancy into one from month to month • In which event A can continue until either party elects to terminate by proper notice. Donald J. Weidner

  11. TENANT AT SUFFERANCE • “The tenant at sufferance does not have any estate in land, but because some writers have listed an estate at sufferance as one of the non-freeholds we should mention it here to complete the pattern. This wispy interest arises only in the case of a holdover tenant.” • More later. Donald J. Weidner

  12. PROBLEMS at 446 • On October 1, L leases Whiteacre “to T for one year beginning October 1.” • The following September 30, T moves out without giving L any notice. • What are L’s rights? • On October 1, L leases Whiteacre “to T from year to year, beginning October 1.” • The following September 30, T moves out without giving L any notice. • What are L’s rights? Donald J. Weidner

  13. PROBLEMS at 447 • On October 1, L leases Whiteacre “to T at an annual rental of $2,400, payable $200 per month on the first of each month.” • No fixed term is mentioned, so not a term for years. • Periodic tenancy and for what period? • Some rent reserved vs. others rent paid • If year-to-year • 6 months notice required to terminate at common law • Many states have statutes that shorten the length of time to terminate a periodic tenancy • If month-to-month • 1 month notice is required to end the tenancy at the final day of a period • Some statutes permit a month-to-month tenancy to be ended at any time after 30 days’ notice (even in the middle of a period) Donald J. Weidner

  14. PROBLEMS at 447 (Cont’d) • T, a month-to-month tenant, notifies L on Nov. 16, 1992, that she will vacate on Nov. 30, 1992. • T vacates on Nov. 30, 1992 and pays no further rent to L. • L, after reasonable efforts, relets beginning April 1, 1993. • What result if L sues T for rent from Dec.-March. Donald J. Weidner

  15. Ending a Tenancy at Will • Despite statutes requiring notice to end a tenancy at will, some states still say that a tenancy at will ends: • On the death of either party; • On a conveyance by the LL; or • On a purported assignment (but not a sublease) by a T. Donald J. Weidner

  16. Garner v. Gerrish • In 1977, Fee Owner (a natural person) owned a house. • Fee Owner executed a “Lease” on a printed form. • Fee Owner filled in the blanks on the form. • Specifying $100 per month rent. • The “term” was stated to begin on May 1, 1977 and • “[W]hich term will end –Lou Gerrish [T] has the privilege of termination [sic.] this agreement at a date of his own choice.” • To the standard reference to the LL’s right of reentry if the rent is not timely paid was added: “Lou has thirty days grace for payment.” • Fee Owner died in November, 1981. • Executor of Fee Owner’s estate (Garner) gave T (Gerrish) notice to quit • Which T ignored • Executor filed a summary eviction proceeding Donald J. Weidner

  17. Garner v. Gerrish (cont’d) • What interest was initially conveyed to T? • Was it a term for years? • Was it a tenancy at will? • Was it a periodic tenancy? • Was it a life estate? • Determinable at the will of the life tenant? • New York Court of Appeals states: “[T]he parties concede that the agreement creates a lease.” Donald J. Weidner

  18. Garner v. Gerrish (cont’d) • LL argues that this is a tenancy at will and that, at common law, the further rule was: • a lease at the will of the lessee must also be a lease at the will of the lessor. • Court criticizes the common law rule. • Does it comport with the language of the agreement? • Does it effect the intent of the parties? • What was the reason for the rule? • A life estate could not be created without livery of seisin. • To allow a mere writing to create a tenancy that would continue indefinitely at the sole will of the tenant would permit, in effect, the creation of a life estate without livery of seisin. Donald J. Weidner

  19. Garner v. Gerrish (cont’d) • Can you think of any other reason for the rule? • as a mandatory rule? • as a constructional preference? • What if T has transferred his interest to Developer? • Does Developer get a life estate pur autre vie? • Or, does Developer get something else (or nothing)? • Court refers to “a personal right to . . . terminate.” • Court also states: “The fact that it may be terminated at some earlier point, if the named tenant desires to quit the premises, does not render it indeterminate.” Donald J. Weidner

  20. GARNER v. GERRISH (cont’d) • Part of the question in Garner is whether the definitions of leaseholds embody mandatory rules. That is, must a leasehold fall into one of three categories: • Term for years, if not, then • Periodic tenancy, if not, then • Tenancy at will. • See also Philpot v. Field, enforcing a perpetual right to lease. • Garner saves the day, at least insofar as it enforces an objective manifestation of intent, • Does it say that this is an enforceable leasehold? • Does it say this is an enforceable life estate? Donald J. Weidner

  21. Problems • L leases Orangeacre “to T for as many years as L desires.” • What estate does T have? • Term for years? • Tenancy at will? • Some: could have a tenancy at the will of a T only [thus making it similar to a determinable life estate] • But virtually all said: A tenancy, stated to be at the will of the LL only, was necessarily also at the will of the T. • Would you abandon that rule? • Could it be unconscionable? • Does T have a life estate pur autre vie (LL’s)? • Does T have a determinable fee? • What if there is periodic rent paid? • Determinable term for years? • Determinable periodic tenancy? Donald J. Weidner

  22. Problems at 450 For rent payments of $500 a month, LL leases Greenacre “to T for the duration of the War.” • First Approach. Ask the following questions in order: • Is it a term for years? (if no, then) • Is it a periodic tenancy? (if no, then) • Is it a tenancy at will? • Kalis asked the questions in this order and concluded a tenancy at will had been created and allowed LL to evict T. • Second Approach: Asks the questions in the following order: • Is it a tenancy at will? • Is it at periodic? • Is it term for years? • Hawkins said term for years: the purpose of the requirement of a fixed ending date is satisfied when one can tell from an external factor when the term ends. Donald J. Weidner

  23. Problems at 450 (cont’d) • Note the problems with the Hawkins approach of finding a term for years: • As “term for years” is generally understood, the ending date can be determined ex ante • It proves too much to say that a definite end date can be determined ex post • For example, that would convert life estates into terms for years. • If A conveys to be until B dies, B will always eventually die. 3. Third Approach: Philpot v. Field • Involved a lease to T for a term of 20 years and so long thereafter as T used the premises for particular purposes. • When intent is clear, enforce the agreement as written. Donald J. Weidner

  24. The Tenancy at Sufferance: Holdovers • The so-called tenancy at sufferance arises when a T remains in possession (holds over) after termination of a tenancy. • Common law rules give the LL two basic options: • Evict the HO (and get damages); or • Consent (express or implied) to the creation of a new tenancy • Generally considered a periodic tenancy, either • the length of the original period, or • the way the rent was reserved, • But in either case not longer than one year. • Some states have changed these rules. • Crechale & Polles, Inc. v. Smith considers some of the complications that can arise. Donald J. Weidner

  25. Crechale & Polles, Inc. v. Smith T’s new bldg. is not ready. Dispute about who said what in negotiations between LL&T. 2/6/69 LL T Held: this letter was an effective election to terminate the lease and to treat the Ts as trespassers. • LL writes to T: You have no oral extension: • “quit and vacate” at midnight, per lease. • You are subject to payment of double rent for any holdover. * 5 year lease @ $1,250/month to end on 2/6/69 2/5/64 LL T Pays rent for 1 month by check, which LL deposits. 3/3/69 LL T Pays rent for next month by check, stating “final payment,” but LL refuses to cash this check. 4/6/69 LL T *GENERAL RULE: “a TY from year to year is created by the T’s holding over after the expiration of a term for years and the continued payment of the rent reserved…By remaining…a T gives the LL the option of treating him as a trespasser or as a tenant for another year.” (Some say rent payment period: month-to-month). MISS. STATUTE: Authorized double rent for the period of the holdover. Donald J. Weidner

  26. LL’s lawyer writes, electing to renew for a new 5-year term [2 ½ months after the expiration of the lease] [A Year Passes] Pay past due rent or vacate. Tendered the keys. 4/19/69 LL T 5/15/70 LL T 5/27/70 LL T Tendered the premises for purposes of LL’s inventory [presumably after vacating] 4/7/69 LL T Crechale (Cont’d) The LL in Crechale had an additional option, a statutory option, that the court did not mention but that was reflected in his letter: Mississippi statute gave the LL the option to sue the HO for double rent for the period of the holding over. Indeed, 10 years later the Mississippi Supreme Court held that the statutory remedy was intended to pre-empt the CL remedy. Note: there was no legal basis for the claim of a new 5-year term. Note: the CL MD is FRV of the leased premises, with the rent reserved in the original lease as good evidence of FRV. Donald J. Weidner

  27. Crechale & Polles, Inc. v. Smith (cont’d) • Consider the Court’s statement: • “We are of the opinion that once a landlord elects to treat a tenant as a trespasser and refuses to extend the lease on a month-to-month basis, but fails to pursue his remedy of ejecting the tenant, and accepts monthly checks for rent due, he in effect agrees to an extension of the lease on a month-to-month basis.” Donald J. Weidner

  28. BARN LOCKOUT CASE(Welk v. Bidwell) • The plaintiff owned a farm with a tobacco barn. • The defendant had a farm across the highway and also sold both new and used farm equipment. • On January 1st, the defendant rented plaintiff’s entire barn on a month-to-month basis for $10 per month and used it for storing farm machinery, tools, and other inventory. • Plaintiff, at the beginning of a month, more precisely, on May 1st, told the defendant that he should either remove his property from the barn or thereafter pay $125 per month rent. Donald J. Weidner

  29. Welk v. Bidwell (cont’d) • The tenant did not remove his property but stayed on, and kept tendering to the landlord $10 per month rent, which tenders of rent were refused. • The tenant had his locks on the barn, but then the landlord put his own locks on the barn. • The landlord strung a cable across the driveway so that vehicular access to the barn was cut off. • The tenant, nevertheless, kept coming in by crawling through an opening in the barn and getting needed smaller parts. Donald J. Weidner

  30. Welk v. Bidwell (cont’d) • Is the tenant is liable for the increase in rent? • It depends. • “On the question whether a landlord by giving notice to his tenant before the expiration of the term of the lease that if the latter continues in possession of the leased property after the expiration of this term he must pay an increased rent, may obligate the tenant to do so even though the tenant refuses to acquiesce in the increase, there is a sharp conflict in the authorities. (About half of the jurisdictions that have decided the question say yes, the other half say no.)” Donald J. Weidner

  31. Welk v. Bidwell (cont’d) “The crux of the matter lies in the fact that a lease is a contract. In the case of a rental on a month-to-month basis, the tenancy is not regarded as a continuous one. The tenancy for each month is one separate from that of every other month. For each month, therefore, there must be a new contract of leasing. Where there has been no meeting of the minds, there is no contract.” Connecticut statute provided: “No holding over by any lessee after the expiration of the term of his lease, shall be evidence of any agreement for a further lease….” Donald J. Weidner

  32. Welk v. Bidwell (cont’d) • Some say: “a tenant has no right to occupy the property except upon the terms fixed by the landlord and if those terms are not acceptable the tenant is free to vacate.” • Others respond: “where . . . provision is made for the ousting of a tenant by summary process on the expiration of a lease, the landlord is as free to oust the tenant as the tenant is to vacate, if the terms upon which the tenant proposes to hold over are not acceptable to the landlord.” Donald J. Weidner

  33. Welk v. Bidwell (cont’d) • The tenant claimed damage caused to the items he stored in the barn by a leaky roof. • Was there a duty to repair? • The court said the landlord had no duty to repair unless he agreed to repair. • The tenant also argued that he had been constructively evicted by the LL • Such that his obligation to pay rent ended as a matter of law Donald J. Weidner

  34. Welk v. Bidwell (cont’d) • The result: the tenant was held to be a tenant at sufferance and • was not obligated to pay $125 a month, • not obligated to pay $10 a month, but • was obligated to pay a reasonable rental value for the barn. • The next question became, was this obligation to pay reasonable rental value suspended by constructive eviction? • The Court held that there was no constructive eviction because the tenant did not abandon the property within a reasonable time. • May the tenant recover damages caused to the property stored in the barn because of the leaky roof? • Held, there was no covenant by the landlord to keep the shed in repair. • The Court also noted that, even if the blockage was wrongful, there was no cause or connection between that blockage and the damage to the goods. Donald J. Weidner

  35. Leases: Form versus Substance • What is in form a lease may be held, in substance, to be something other than a lease. • Conversely, something not in form a lease can be held to be, in substance, a lease. • Consider the following Examples: • T “rents” from B the right to erect a billboard on land owned by B • The Gladys Glover character in “It Should Happen to You”; • T contracts with B to install and operate a cosmetics concession in B’s department store; • T is allowed to farm B’s land, the consideration being that A will share the crops with B; • T rents a room for 2 months in B’s rustic country inn; • T works for B and is given a room in B’s house as partial compensation. Donald J. Weidner

  36. Relevant factors include: • Intention of the parties; • The number and nature of the restrictions on use; • The exclusivity of possession; • The degree of control retained by the granting party; and • The presence or absence of incidental services. Donald J. Weidner

  37. March 25, 1971 “Lease Agreement” For period of 10 years commencing on “the first day of the calendar month following the date of completion of [the renovations]” Lease was silent regarding completion date). Rent: 10% of gross, with $22,000 minimum. “LL” (LPP) “T” ARTHUR TREACHER’S FISH & CHIPS OF FAIRFAX v. CHILLUM TERRACE LLP T’s president, who signed the lease, was a lawyer who specialized in real estate. Donald J. Weidner

  38. Arthur Treacher’s (cont’d) • T breached. The question was not liability—the question was the appropriate measure of damages. • What is the measure of damages against a tenant who fails to take possession? • Consider the logic of a conveyance. • Price of the conveyance: unpaid rent. • Analogy: Purchase of the fee • Price is owed even if Buyer does not take possession • Consider the logic of a contract. • The difference between the rent reserved in the lease and the fair rental value is the contracts measure of damages. • Don’t specifically enforce the bargain, give only the benefit of the bargain. • Court said the concept of interesse termini applies in two situations: • when the term stated in the lease has commenced, but the lessee has not yet taken possession; and • when the lease is to take effect in the future. Donald J. Weidner

  39. COOK v. UNIVERSITY PLAZA Student “Residence Hall Contract Agreement” was held to be not a lease. Three basic possibilities: • License • A privilege to go upon land belonging to the licensor • Permission to do acts upon another’s land that otherwise would constitute trespass • With exceptions, license is revocable at the will of the licensor • Easement • A nonpossessory interest in the land of another • Entitles the holder of the easement to a limited use or enjoyment of land in the possession of another • Not terminable at the will of the possessor • Lease • A possessory interest in the land of another • Leasehold requires that the lessee’s possession be more than merely coextensive with the lessor. • However, there may be a reservation of a right to possession by the landlord for purposes not inconsistent with the privileges granted to the tenant. Donald J. Weidner

  40. Introduction to Race Discrimination in Property Law • As the text indicates, even a brief overview of antidiscrimination laws concerning real property requires some historical perspective. The history of antidiscrimination rules concerning property goes back to efforts to dismantle the institution of slavery. • The background is harsh. The materials are unpleasant and difficult to consider. Yet we must consider the extent to which property rights were allocated along racial lines, and gain some perspective on the long struggle to provide equality of opportunity. Donald J. Weidner

  41. Slave Codes in the United States • Provisions quoted in the next few slides are taken from the South Carolina Slave Code of 1740, which reflected provisions similar to those in effect in other states. The slave codes were extensive and frequently amended. • Slave Codes deemed slaves chattel and defined slavery in racial terms. For example, the South Carolina Code of 1740 declared that "all negroes...are hereby declared to be, and remain forever hereafter, absolute slaves, and shall follow the condition of the mother, and shall be deemed, held, taken, reputed and adjudged in law, to be chattels personal...." Donald J. Weidner

  42. Slave Codes (cont’d) Slave Codes denied slaves the right to own property limiting even the quality of the cloth they could wear. Slaves had no right to travel elaborate permit systems required written approval before travel anywhere. Slaves were prohibited from learning the English language Special procedures were provided for criminal proceedings against slaves. Donald J. Weidner

  43. Slave Codes (cont’d) • Slave Codes also dealt with "free Negroes“ • Free Negroes would be tried by the same procedure as slaves. • They would be subject to fines and thrown upon the auction block to satisfy payment. • F. Tannenbaum, Slave and Citizen (1946), was based on a seminar on the History of Slavery in the Western World given at Columbia University in 1938-39. Perhaps the most basic point of the book is that the term "slavery" embraces a range of institutions that vary in severity. See Id. at 65, no. 153: Donald J. Weidner

  44. Tannanbaum (cont’d) • There were, briefly speaking, three slave systems in the Western Hemisphere. The British, American, Dutch and Danish were at one extreme, and the Spanish and Portuguese at the other. In between these two fell the French. The first of these groups is characterized by the fact that they had no effective slave tradition, no slave law, and that their religious institutions were little concerned about the Negro. At the other extreme there were both a slave law and a belief that the spiritual personality of the slave transcended his slave status. In between them the French suffered from the lack of a slave tradition and slave law, but did have the same religious principles as the Spaniards and Portuguese. If one were forced to arrange these systems of slavery in order of severity, the Dutch would seem to stand as the hardest, the Portuguese as the mildest, and the French, in between, as having elements of both. Donald J. Weidner

  45. 1791 • The Fifth Amendment to the United States Constitution provides, in part: • No person shall...be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use without just compensation. Donald J. Weidner

  46. 1850 • Roberts v. City of Boston, 59 Mass. 198 (1850); suit to end mandatory segregation in the Boston public schools on the basis of Massachusetts Constitution that provides, in part, that "all men, without distinction of color or race, are equal before the law...." Unsuccessful. Mr. Chief Justice Shaw explained, in part, as follows: Donald J. Weidner

  47. Roberts v. City of Boston (cont’d) • It is urged, that this maintenance of separate schools tends to deepen and perpetuate the odious distinction of caste, founded in a deep-rooted prejudice in public opinion. This prejudice, if it exists, is not created by law, and probably cannot be changed by law. Whether this distinction and prejudice, existing in the opinion and feelings of the community, would not be as effectually fostered by compelling colored and white children to associate together in the same schools, may well be doubted; at all events, it is a fair and proper question for the [primary school] committee to consider and decide upon, having in view the best interests of both classes of children placed under their superintendence, and we cannot say, that their decision upon it is not founded on just grounds of reason and experience, and in the results of a discriminatory and honest judgment. Donald J. Weidner

  48. 1857 • Dred Scott v. Sanford, 60 U.S. 393 (1857): intent of constitution is that African Americans may not be citizens of the United States • even if they become citizens of a particular state. Donald J. Weidner

  49. Dred Scott (cont’d) • “The legislation of the States therefore shows, in a manner not to be mistaken, the inferior and subject condition of that race at the time the Constitution was adopted, and long afterwards, throughout the thirteen States by which that instrument was framed; and it is hardly consistent with the respect due to these States, to suppose that they regarded at that time, as fellow-citizens and members of the sovereignty, a class of beings whom they had thus stigmatized; whom, as we are bound, out of respect to the State sovereignties, to assume they had deemed it just and necessary thus to stigmatize, and upon whom they had impressed such deep and enduring marks of inferiority and degradation;” Donald J. Weidner

  50. Dred Scott (cont’d) “or, that when they met in convention to form the Constitution they looked upon them as a portion of their constituents, or designed to include them in the provisions so carefully inserted for the security and protection of the liberties and rights of their citizens. It cannot be supposed that they intended to secure to them rights, and privileges, and rank, in the new political body throughout the Union, which every one of them denied within the limits of its own dominion.” Donald J. Weidner

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