Property I Outline

Property I

Professor Ortiz

Spring, 2010

1. Definition of Property

A. Property is a tangible or intangible resource that belongs to someone or something

1. At the legal level, property is the legal relationship b/w persons regarding resources

2. Prop is most often conceptualized as a bundle of rights protected by the gov’t

i. What is prop varies from context to context

3. Real Property = Land and its fixtures

4. Personal Property = everything else

B. Bundle of Rights

1. These rights are not absolute. They take fullest form in context of ownership, but they can also accompany less than full ownership

1. Right to Possession

i. Property owner has the right to possess the prop

ii. This right remains even if another person has a legal interest in the property (an easement)

iii. This right can also be given to another (LL-T)

2. Right to Use

i. If the property owner wishes, right can be held by, or shared w/someone who is not the owner

ii. Right to use is limited b/c an owner’s use cannot interfere with or injure the rights of another

3. Right to Disposition

i. Allows owner to dispose of prop as he desires

1. Unless limited by law, prop owner can dispose by:

§ Sale, gift, inheritance, bequest, devise

4. Right to Exclusion

i. Gives owner exclusive possession, but right is limited.

1. Ex – owner may exclude trespassers, but cannot prohibit access of persons offering gov’t services to migrant workers on his land (Jacque v. Steenberg Homes, Inc.)

C. Common Themes of Property

1. First in Time

i. “First in time is first in right”

1. First to acquire prop has greatest right to it

2. Efficient b/c creates clear winners and losers

3. Problem – easily manipulated b/c it does not designate What must be first in time. Usually ends up being decided by societal goals. Examples:

§ Rule of Discovery awarded land to 1st “civilized nation” to discover it, regardless of indigenous population that had it first. Johnson v. M’Intosh

§ Wild Animals – first to kill/capture a wild animal gains ownership of that animal (Rule of Capture), even though the custom of sportsmen (Rule of Sportsmen) was to give ownership to the first pursuer w/reasonable prospect of capture

2. Actual vs. Constructive Possession

i. Actual Possession = idea that a person must have something actually in hand to receive a right

ii. Constructive Possession = would grant a right based on something less than actual possession

1. Wild Animals and Rule of Capture-

§ Opinion in Pierson v. Post –

1. MAJORITY – actual possession necessary for person to acquire ownership of wild animal (Rule of Capture)

2. Minority – constructive possession would be sufficient to acquire ownership (Rule of Sportsmen)

2. Wild Animals and Custom

§ Whaling custom of 19th century New England awarded ownership based on constructive possession b/c of the difficulties in actually capturing a whale. Ghen v. Rich

3. Labor Theory

i. John Locke – person can acquire ownership of something if the person adds labor to it

Problem: Accession – when one mixes labor or adds materials to the property of someone else

A. Rules for Adding Labor or Materials to the Property of Another

1. Ownership depends on value of the thing created

2. Where only labor is added, the owner of the raw material is given title, unless fairness dictates otherwise

3. Where both labor and materials are added, ownership is placed in the person who owned the principal material.

4. If the laborer is a thief or not an innocent improver, then the laborer will never get title

D. Development of Advanced Rules

1. Competing interests create problems

i. If “first in time” were to govern IP issues, result would be a lack of creative competition – so they developed different rules for it

2. Protection of Designs at Common Law

i. A person who creates a chattel is protected only to extent of the chattel itself, not against copying and imitation of the chattel. Cheney Bros v. Doris Silk Corp.

3. Protection of News

i. News is QUASI-PROPERTY as to competitors, the first to disseminate news is protected; no protection against non competitors. Int’l News Serv. v. AP

4. Competitors’ Use of Trademarks

i. Competitors may use a rivals trademark in advertising and other channels of communication, if the use is not false or misleading

5. Intellectual Property – 3 kinds:

o Patents – protect inventions

o Copyrights – books, plays, etc

o Trademarks – names (brands)

Demsetz – Toward a Theory of Property Rights – WILL BE ON EXAM – MULT CH. NOT ESSAY

When there was only Common Property:

i. Externalities – consequences of one’s action that is borne by other people

§ Ex – 1000 trees owned in common by 100 members of an Indian Tribe

· The tribe owns ALL of the trees TOGETHER

· Does not split up into fractions

· So one person has the right to cut down all of the trees

· When a market for the trees develops, people will begin to cut them down

· As this occurs, members will begin to act increasingly out of their self-interest

· Tragedy of the Commons

overexploitation of resources

freerider problem

high transaction costs

holdout problem

· Example – Market at $2/tree

· Person X will cut down a tree and gain $2 while losing a 1/100th interest in THAT tree that he cut down

· This spurs everyone to begin cutting down the trees

· Even if the price is worth more in the future, members will continue to cut them down out of fear that they might miss out b/c someone else cuts that tree down and reaps the reward

2. Solution of Property Law is to take common property and turn it into private property

2. PERSONAL PROPERTY

A. Wild Animals (Ferae Naturae)

Problem : A tracks and corners a fox. Before A is able to kill it, B shoots fox. Who owns fox?

A. Rule of Capture (Majority) – ownership of a wild animal is given to the person who kills captures or mortally wounds it.

· Basic Concepts in Water Law

§ Surface Water –

· Jurisdictions w/lots of rainfall (especially in the east)

· Riparian Rights – if your land touches the water, you have rights to it. Otherwise (if it doesn’t touch), you have to acquire them

· Jurisdictions w/less rainfall (especially in the West – Texas)

· Prior Appropriation – whoever gets there first has first right

· Senior user of the water – got there first

· Junior-1 user of the water – got there second

· Junior-2 user of water – got there third

· Most junior user will lose their rights first in the event of a water shortage at that particular location

§ Ground Water

· Abs