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Property I
University of California, Hastings School of Law
Leshy, John D.

PROPERTY OUTLINE
LESHY-SPRING 2005

I. ACQUISITION BY DISCOVERY AND CAPTURE
A. GENERAL COMMENTS ON PROPERTY:
1. Property rights are judged between persons.
2. Bundle of Sticks: Use, possession, and disposition. Property rights consist of pieces of right that can be stripped away. Right to exclude, right to sell, right to use, right to possess, right to devise it, right to alienate.
3. Social policies underlie court decisions- Balance between fairness and efficiency.

B. ACQUISITION BY DISCOVERY
1. Rule: First in time to discover land in new world gets exclusive property rights even against Indians (either by purchase or conquest.)
2. Johnson v. M’Intosh, p. 3
a. Facts: Dispute over title to land; Johnson gets property by Indians through a series of conveyances. M’Intosh has possession through a grant by US gov. Johnson brings action of ejectment.
b. Analysis: European countries recognized the principle that first discoverer gained exclusive title to lands. Indians have a right of occupancy (right to live on the land, possess it), but no right to title. Only U.S. government can extinguish right to occupy by purchase or by conquest.
c. Policy: Possession does not count, title does. Realist view that the courts make up rules to try to reflect social ordering. If ruled the other way, would undermine all claims to land from US government (chaos).

C. ACQUISITION BY CAPTURE
1. Rule: Property is acquired by actual capture (also by mortally wounding/limiting natural freedom).
a. Elements:
1) Intent to possess,
2) Capacity to acquire dominion and control,
3) Actual Possession.
b. Pierson v. Post, p. 19: If wild animals (ferae naturae) are captured, they belong to the captor. Capture is required, merely chasing the animal is not enough.
1) Facts: Post chases fox with dogs; Pierson intervenes, kills fox, and takes it away.
2) Rule: Mere pursuit is not enough unless you mortally wound the animal so as to limit its natural liberty (Continuum of pursuit, mortal wounding, and actual capture).
3) Policy: Society’s object to capture foxes, to foster competition, rewarding capture is easier to administer.
4) Dissent (Livingston): Better to adopt the local customs of sportsmen to determine ownership; try to kill as many foxes as possible.
a) Doctrinal debate: Agree that killing more foxes is good result, but disagree on how best to effectuate that result.
2. Policies:
a. Ratione soli (by reason of the soil)
1) Owner of land has constructive possession of land (legal fiction that extends actual possession).
2) Owner has better claim to wild animal found on land than finder.
3) Policy: Otherwise would encourage trespassing onto land; Economic efficiency: If people can trespass, owners have no incentive to make most productive use of land.
b. Locke’s Labor

will be low and the value-maximizing use of the cave would be achieved.
6) Bilateral Monopoly: Arises when 2 parties bargain with each other. Gives rise to high transaction costs b/c there’s no competitive pressure from outsiders.

5. Oil, gas, and groundwater
1) Rule of capture- Texas- if a surface owner drills a hole and “captures” the oil, he owns it even though the oil is underneath everyone else’s property. (Sipriano v. Great Spring Waters of America)
2) Overlying owners of property owned resources if they captured it.
3) Bad policy: Property owners overworked resources.

6. Escapees and domesticated animals
1) When wild animal escapes it’s unowned and belongs to the next first possessor.
2) Domesticated animal still belong to their prior possessor when they wander off.
3) Wild animal is domesticated when it demonstrates a propensity to return “home.”

II. ACQUISTION BY CREATION
General Rule: Creator has exclusive rights to tangible property (chattels). (An expenditure of mental or physical effort, as a result of which there is created an entity, whether tangible or intangible, vests in the