Shepard-Property Law-Fall 2013
Property, Possession and Ownership
1. The concept of property
A. Property Consists of a bundle of rights or expectations in a tangible or intangible thing that are enforceable against third parties, including the government
B. Rights
1. Possession
2. Use
3. Exclude
4. Alienate (transfer)
5. Decent
§ It can also consist of the right to divide these attributes e.g. sublet
§ The more numerous the rights one possesses with respect to this “thing” the more significant is one’s ownership interest in it.
Types of Property
1. Real Property/Real estate/Realty = property in land (and things attached thereto like buildings) ; immovable property
2. Personal Property
· Chattels – tangible or physical things (automobiles, furniture, clothing)
· Intangibles – bank accts, promissory notes, corporate and government bonds
D. 5 Theories that justify Private Property
1. Occupation theory – that the simple fact of occupation or possession of a thing justifies legal protection of the occupier’s or possessor’s claim to the thing
2. Labor theory – that a person has a moral right to the ownership and control of things she produces or acquires through her labor
3. Contract theory – that private property is the result of contract between individuals and the community
4. Natural Rights theory – that the natural law dictates the recognition of private property
5. Social Utility theory – that the law should promote the maximum fulfillment of human needs and aspirations, and that legal protection of private property does, in fact, promote those goals
§ Justice and Economic efficiency; the lawgivers want to be fair, but at the same time they want the system to maximize wealth.
· Efficiency argues: x is good thing to do b/c x maximizes y
· Justice argues: x is the right way to own b/c x is good or evil thing or x will create y; y is a good or evil thing
Property Big Wigs
1. Posner: legal protection of property rights creates incentives to use resources efficiently; without property rights there is no incentive to incur these costs because there is no reasonably assured reward of incurring them. Maximum wealth aggregation – efficiency
2. Radin: a traditional critical response to universal commodification has been a global rejection of commodification – why does it matter if someone conceptualizes the entire human universe as one giant bundle of scarce goods – risk of error. Efficiency creeps in – market will pull out, not value of commodity. Unjust to have commodification – justice argument
3. Sunstein: a system of private property creates the kind of stability and protection of expectations that are preconditions for investment and initiative. Integrated market noncommodification happened in Eastern Europe. Insure that people have a minimum amount of stuff – welfare and employment programs are a necessary part of any system of property rights
4. Ellickson: an unconditional shelter right could be counterproductive – argues against this level of welfare because societies have done better without welfare. The market, through dispersed knowledge, is the invisible hand – how many will sell, how many should be made, who establishes value? It won’t happen – when there is no established market, a black market will form.
2. Possession and ownership
A. Judicial Remedies for Protection of Property:
§ Goal of legal processes now is to use the court system as a remedy; when others have your stuff, what are the legal processes to get it back: generally
§ These remedies were mainly designed to protect those in possession of land or chattels from unauthorized interference with their possession.
§ Actions to recover land in specie: plaintiff recovered the property itself (ejectment) (harder to enforce);
· “in specie” = in it’s actual form; the plaintiff recovered the property itself
§ Actions to recover money damages for injury to land or goods: money damages rather than for restitution in specie;
· case – damages for indirect injury resulting from wrongful act
· trover – damage when defendant converted by wrongful seizure, withholding, or disposition
§ Actions to recover goods in specie: recover possession of chattels by means of “replevin” or “detinue”
· replevin – ejectment for movable things, used when the good is unique
§ Other notes
§ Ejectment = legal action to recover real property; suit to get real property back
§ Repleven = same thing as ejectment but with personal prop
§ Trover = synonym for conversion
§ Nuisance = others interfering with your enjoyment of your property
§ Injunctions = equitable orders to act or refrain from acting
§ Trespass = difference between someone illegally using/invading your land but not taking away your possession
Property Rights based on Possession
Times when Possession can Transmute into Ownership
§ Abandonment = when someone relinquishes ownership of something; you come along and take it, possession becomes ownership
§ Adverse possession
§ Rent to own
Rule of capture – any person who first captures otherwise unowned resources is entitled to the resources
· Popov v. Hayashi – California 2002
1. Bonds’s historic home run ball was hit into the stands and was almost caught by P when it was knocked out of his hands and picked up by D who took no part in the unruly mob that caused P to miss the catch.
2. A case of abandoned property, multiple finders, and the rule of equitable division
3. Issue: whether an action for conversion can proceed where the p has failed to establish possession or title. Rule: It can. An action for conversion may be brought where the p has title, possession or the right to possession
4. The ball was abandoned by MLB, and thus belonged to the first person to possess it. P had not gotten complete control, but was held to have a pre-possessory interest (resulting from the crowd’s prevention of perfecting possession). D, who had picked up the ball thereafter took the ball subject to P’s pre-possessory interest.
5. New Rule: where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned personal property and the effort is interrupted by the unlawful acts of others, the actor has a legally cognizable pre-possessory interest in the property. That pre-possessory interest constitutes a qualified right to possession which can support a cause of action for conversion.
6. The ball itself is encumbered by the qualified pre-possessory interest of Popov, at the time Hayashi came into possession of the ball, it had, in effect, a cloud on its title.
7. Gray’s Rule -p. 38E-39A “a person who catches a baseball that enters the stands is its owner. a ball is caught if the person has achieved complete control of the ball at the point in time that the momentum of the ball and the momentum of the fan while attempting to catch the ball ceases. a baseball which is dislodged by incidental contact with an inanimate object or another person before momentum has ceased is not possessed.”; the actor must retain control of the ball after incidental contact with people and things; otherwise, actor did not achieve full possession (like completed pass rule in football: must have full possession to be completed pass; momentum of ball stops AND it comes to rest in your control)
8. The Fox (Bernhardt and Finkelman) Rule p. 38-39- there must be intent to possess and substantial action taken towards the goal of possessing the object; possession occurs when an individual intends to take control of a ball and manifests that intent by stopping the forward momentum of the ball whether or not complete control is achieved.
· Hunter analogy: a hunter stops the forward motion of an animal, but does not have physical possession of it immediately – similarly, the ∏ stopped the forward motion of the ball
9. Holding: the judge decided that it would be unfair to award the ball solely to P or D b/c they each had an equal and undivided interest in the ball, and applied the rule of equitable division – ordering the property sold and dividing the proceeds equally between the claimants
§ Acquisition by Find – an owner does not lose title by losing the property. The owner’s rights persist even though the article has been lost or mislaid
· A finder has rights superior to everyone but the true owner (with exceptions)
· Possession- finder must acquire physical control over the object and have an intent to assume domain
· Ganter v. Kapiloff
1. P found an ad for his valuable stamps in a printed circulation. He demanded stamps back from D who said he found them in a dresser. D’s defense was essentially “finders keepers, losers weepers.”
(a) P had reasonable proof of possession, and D’s theories were speculative and unfounded
2. “the finder of lost property, while not acquiring an absolute ownership in it, does, nonetheless, hold the property against all but the rightful owner.” Ganter’s claim to the property is secondary to Kapiloff’s
3. Rule: (p. 46) in the case of lost property, the finder of lost property has an interest against the whole world except to the true owner; if the true owner appears, finder must relinquish the property.
4. Generally it may be said that the finder of lost property holds it as a bailee for the true owner. As to all others, the finder’s rights are tantamount to ownership, giving him the right to possess and hold the found goods.
5. Finder v. true owner: (p. 48) if a finder knows or has reasonable means of discovering the identity of the “true owner” (or one with a better legal right to possession) but nevertheless appropriates the “lost” goods to his own use; he is guilty both of the tort of conversion and the crime of larceny.
6. Successive finders: preference for prior possessors; finder’s
islaid but abandoned intentionally b/c it was owned by drug dealers, the currency then reverted into a “state of nature” where the first finder becomes the owner. The mechanic working on the car acted as agent for the purchaser; possession by agent = possession by principal as long as the agent is acting within the scope of his agency.
· An exception to the agency rule – the “frolicking detour,” if not acting in his official capacity, the employee has a better claim for possession – e.g. had the mechanic been going to a movie rather than working on the car
3. The court rejects the fed’s argument that public policy should not allow anyone to profit from illegal drug trafficking finding that it is not a matter of if someone profits by it, but who – gov’t or the purchaser – the gov’t, had it conducted a thorough inspection, could easily have found the money. Gov’t intended to sell the car and its contents so it gov’t is s.o.l.
4. Innocent Owner’s Defense (p. 61): protects “innocent owners” of property from forfeitures, even if the property is ultimately traceable to drug trafficking. Parties seeking to bring this defense must prove their “innocent owners” defense by the preponderance of the evidence.
· The fact that something is the fruit of illegal activity does not mean that you don’t own it; it just means that it’s the fruit of illegal activity
g. Payne v. TK Auto Wholesalers
1. P stole his cousin’s identity to purchase a car, and paid $1,300.00 down. After P left the premises, D called the cousin and found out about what had happened. while in prison, P brought an action to recover the $1,300.
2. Although a thief certainly has no ownership interest in a stolen item, the law recognizes his possessory interest: the well-settled common law rule is that a thief in possession of stolen goods has an ownership interest superior to the world at large, save one with a better claim to the property” (in this case the bank or the actual Paul Payne) p. 71, 72
3. A possessory interest (even if illegal) sufficiently establishes standing to pursue a conversion action in courts
4. Policy: sets up bad system of “domino effect of incentives to misdeeds”
5. Anderson rationale: (p. 73) rule allowing a mere wrongdoer who is a stranger to the prop to prove that a 3rd party (not the plaintiff) is the owner would lead to an endless series of unlawful seizures and reprisals in every case where property had once passed out of the possession of the rightful owner
6. Bona fide purchase immunity: if dealer had given p the car — bona fide purchase– it immunizes the purchaser; 3rd party buys something that is stolen and does not know it’s stolen, they are immune and get to keep it b/c it was a bona fide purchase for value.
A. The duties of Possessors: a Look at Bailment
1.Bailment – Is a delivery of personal property by one person to another in trust for a specific purpose, with an expressed or implied contract that the property will be returned or accounted for when the specific purpose has been accomplished or when the bailor reclaims the property.
Bailor = person giving their property
Bailee = person who looks over the bailor’s property
Impact of bailment
1. Possession Change
2. Creates a duty – the bailee has the duty to care for the goods and return them to the bailor as agreed or, in the case of involuntary bailments, as determined by common law or statutory rules
To create a bailment, the alleged bailee must
1. Assume actual physical control with
2. The intent to possess.
· because a bailee has duties and liabilities, courts define “physical control” and “intent” in such a way as to carry out the expectations of the parties and to be fair.
· If a court thinks that liability would be unexpected or unfair, it can usually find that the D did not have physical control or intent to possess
