Property I Outline

Property Law

Eppinger Spring 2016

I. Original (First) Acquisition

2 types of Property claims: (1) race system (first to claims) and (2) notice system (territorial marking, etc.).

John Locke’s theory of property: labor invested = justification for possession.

5 principles:

First possession

Possession = Occupancy. Actual occupancy ß capture
Claiming first possession
Custom

Discovery

Dominion ß discovery
Claiming dominion
Open access, commons, semi-commons, private, and anticommons

(3) Creation

(4) Accession

Increase
Accession
Ad coelum
Accretion
Fixtures

(5) Adverse possession

1. First Possession

(1) Wild Animals

Pierson v. Post (NY 1805) – winner is the first to deprive the wild animal of its natural liberty

Facts: Post was hunting a fox. Pierson killed the fox (res nullius) on a beach (terra nullus).

res nullius = thing that belongs to no one.

terra nullius = land that belongs to no one. (technically doesn’t exist)

This is a case of personalty = personal property (not realty)

Procedural: Hunter sued and won at trial. On appeal, reversed. Here, Pierson wins (original D).

Issue: Did Pierson’s act amount to occupancy w.r.t. acquiring rights to wild animals (ferae naturae)?

Holding: Yes.

Rule: Property in a wild animal (ferae naturae) is acquired by occupancy only (wounded/captured so as to deprive of natural liberty). First-in-time possession is the general rule for ferae naturae.

Rationale (Tompkins): Property in wild animals is only acquired by occupancy. Pursuit alone does not constitute occupancy or vest any right in the pursuer.

No legal cause of action for catching a wild animal someone else was chasing. Just calling dibs would be overbroad. Here, first to trap or ensnare so as to deprive of its natural liberty.

Puffendorf: Pursuit doesn’t create occupancy; possession requires actual corporeal possession.

Barbeyrac: bodily seizure is not always needed; capturing counts.

Ratione soli: if someone had been a landowner, it typically goes to the landowner. (English law) Wild predators were often an exception, since they posed a social danger.

Dissent (Livingston): adopts Barbeyrac. Belongs to hunter with hounds or hunter who wounds, not the chance occupant. So, if Post had a reasonable prospect of taking the fox, he should be the possessor (even though catching a fox is a good thing to do). (It was custom to give ownership to the hunter.) Lockian basis (labor put into chasing = possession). Law and econ guy; incentive behavior…we want people to hunt foxes, because they are bad.

Ghen v. Rich (Mass. 1881) – Custom as an exception to the general rule (hunter wins)

Facts: Ghen shot and killed a whale with a bomb lance. Custom was to let it wash to shore and identify ownership by weapon markings. But someone found it and sold it to Rich without giving notice. Ellis was the finder (custom = a salvage fee).

Procedural: Trial court found for Ghen.

Issue: Does the original hunter of the whale own it?

Holding: Yes.

Rule: Exception to the general first possession rule: defer to custom, which may award possession to the hunter.

Rationale: Deferred to custom as exception to general first possession rule. Applies just to finback whale hunting, a specific endeavor with specific customs. Bomb lance has a mark of appropriation.

5 qualities for custom:

Universality (custom practiced generally by people who do this)
Temporality (done for a long time)
Not contrary to “general maritime law” (a.k.a. can’t be contrary to generally accepted laws)
Particularity (applies to a particular subset, narrowly tailored group, e.g., just finback whales)
Custom only governs until normal legal rule can apply (another temporality rule; a limitation)

Additional notes: Most customary whaling rules are ‘first-in-time’. Vary by whale type.

General rule (w/out exception): If we applied the rule from the fox case, the whaler would lose.

Keeble v. Hickeringill (England 1809) – Tortious interference with future profits

Facts: Keeble had a duck decoy pond on his land, and it was his business to use it to catch and sell ducks. Hickeringill deliberately interfered twice using guns to scare away the fowl. Keebel brought personalty claim for damages of the wild ducks he wasn’t able to catch due to Hickeringill’s axns.

Procedural: Hickeringill lost at trial and on appeal.

Issue: Is there a valid cause of action when wild animals aren’t yet caught/owned?

Holding: Yes, if tortious interference to future profits.

Rationale: It’s really not recovery for loss of fowl but for the disturbance in his business. Trespass on the case, not regular trespass, because he wasn’t physically on Keeble’s land with the gun. Issues about competition. How do you make a property claim on something you never possessed? Is it an interference with a property right?

Rule: Tortious interference with future profits is a valid legal claim.

Activity on one’s own land must be lawful to be legally defensible.
Interference with one’s own use of one’s own property to reap a profit gives rise to tort liability.

Application: Activity was lawful and it was leading to reasonable expectation of profit.

Conclusion: Appeals court affirms finding for Keeble.

Sunken Vessels

Law of finds and law of salvage

Ship abandoned? Rights to first finder.
Ship not abandoned? First salvor can claim some value but not ownership/full value.

Sunken ship vs. salvageable ship.
Courts tend to favor law of salvage over law of finds, because the original owner loses rights if the ship gets declared abandoned, which could lead to unjust enrichment.
How to maintain possession of a wreck: (1) notice, and (2) diligence.

Eads v. Brazelton

Takeaway: law of salvage requires more than notice; it requires acting to achieve dominion and control.

Takeaway: notice but lack of diligence à no possession. Brazelton was trying to salvage two ships, and Eads moved in on one. Eads won.

Facts: The ship was found res nullius on a waterway that was terra nullius.

Rule: (1) Finder has superior rights over all the world except the true owner.

(2) Abandonment nullifies a property claim by true owner.

(3) Occupation by a finder = (a) actual “taking” + (b) intent to reduce it to possession.

Issue: Who owns the rights to the wreck of a steamboat and its cargo?

3 options: 1) Intended salvor, 2) Actual salvor, 3) Owner of the boat

Application. Eads and Brazelton both can win on abandonment by original owner. Brazelton claims occupancy by marking with a buoy, but court deems it insufficient because he didn’t do actual taking.

Conclusion: Cargo is deemed abandoned, Brazelton’s mark is insufficient to claim occupancy, so process of elimination à awarded to Eads.

Technological updates: taking pictures of deep lost ships can be claims to possession.
Law of treasure trove: catches of gold and silver (and sometimes other valuables) on land or sea. Falls under general law of finders.

Legislation emerged to protect historical artifacts.
Abandoned Shipwreck Act of 1987 (ASA)

Rejects traditional law of finders and salvors
States will better protect historic value.
Applies only to wrecks that are abandoned.

Salvors are often reluctant to share location due to (a) marauders and (b) the state taking it away.

Home Run Baseballs

Popov v. Hayashi (Cal. Super. 2002) – custom for flyout baseballs

Dispute over Barry Bonds’ record-setting 73rd homerun (San Fran Giants).
Ball landed in webbing of Popov’s glove, but he was mobbed, and ultimately it was picked up by Hayashi. Popov sued for first possession.
Popov had “pre-possessory interest”, and the mob interfered. Hayashi was also one of the mob and was first to unambiguously establish possession of the ball.
“Both men have a superior claim to the ball as against all the world.”
Judge decreed that the ball should be sold, with half of proceeds going to P and half to D. Got rationale for this (rare) assets split from R.H. Helmholz Equitable Division and the Law of Finders law review article.
Rule: custom is that if the ball leaves the playing field then the person who catches it gets to keep it. It’s an exception rule based on custom, like the finback whale rule.
“Qualified right to possession,” “legally cognizable pre-possessory interest” = exclusive right to pursue possession without interference.

Custom: Does it matter that baseball rules are that player has to catch and hold the ball?
Fan violence concerns: Marauders plague homerun baseball cat hers, fishers, salvors, and oil drillers.
When does first possession work best? Some way it’s when there is a clear winner that can be declared, particularly one who has a special skill, and the other competitors are not homogenous in their ability to compete.

Oil and Gas

Subject to the rule of capture, an application of first possession. And ad coelum doctrine.

Not owned by anyone until reduced to possession. (analogized to wild animals)
Problems with race to pump.
Should gas, once captured, remain property of the owner when reinjected into a storage basin? Or should reinjection cause the owner to lose the title to it?

Compulsory unitization of multiple owners.
Tragedy of the commons (open access à no one has the right to exclude anyone else)
Posner doesn’t like the rule of capture for oil and gas.

Hammonds v. Central Kentucky Natural Gas Co. (Ky. 1934)

Wild-animal analogy and rule of capture
Held that reinjection of gas into a gasless underground formation under a neighbor’s land was not trespass. Rationale: gas, like wild animal released, was now ownerless so would not give rise to trespass liability for he releasing party.

Implications: “wild” gas again eligible for capture by the first possessor, which could be any surface owner who lives above part of the underground storage reservoir.

Some states have recognized property in oil and gas beneath surface parcels in fleeting ownership contained ad coelum. Correlative rights.

Lone Star Gas Co. v. Murchison (Tex. Ct. Civ. App. 1962)

Court held gas company had a cause of action (conversion) against neighbor.
Claim that a neighboring surface owner had committed conversion by sinking a well to extract gas that had been reinjected into an underground reservoir by a gas company, and that had migrated under the neighbor’s land.
Court rejected the wild animal analogy, saying that produced natural gas is more like a domestic animal. E.g., a horse wandering onto your land doesn’t give you a right to it, just a right to trespass damages.
Likely the neighbor could have sued back for trespass (but not addressed by this court).

Commons, Anticommons, and Semicommons

Technically, there is no land that belongs to no one (terra nullius.)

Open access resource

No one holds right to exclude others or humans are physically incapable of excluding.

Examples: Forest Park; ocean; public domain in federal lands and in intellectual property; a big wave, high seas, outer atmosphere)

Governance: limited use v. unlimited use
After Law of Sea Treaty, we got governance with limited use even on high seas, acknowledging that the high seas are open-access and not controlled by anyone. But it allows countries to claim territorial waters out to 12 miles. Not a