Property Outline
Acquisition of Property
I. Scope of coverage
Different ways of acquiring property:
A. No Prior Ownership
1. Discovery
2. Capture
B. Prior Ownership
1. Finding
2. Gifts
3. Inheritance
4. Adverse possession
II. Acquisition of property by discovery
A. Doctrine of first possession – property belongs to discoverer. Finders keepers. First come first served.
1. Why? Simplicity of administration.
B. Departure from the doctrine of first possession to suit the needs of conqueror: Johnson v. M’Intosh (page 3, Johnson obtained title from Indian Tribe chief, M’Intosh obtained title from US government. Indian Tribes did not have title to land in America despite first possession)
III. Acquisition of property by capture
Applies to wild animals and natural resources
A. General principle: the first capturer gets the property. Pierson v. Post (page 17, fox hunter v. fox killer).
1. Note: if the first capturer is trespasser, the land owner prevails.
B. In absence of actual physical possession, consider the following factors:
1. Trapped or fatally wounded? If yes, there is constructive possession.
2. Reasonable prospect of capturing the wild animal? If yes, some courts will find constructive possession exist (Dissent in Pierson v. Post, page 17)
3. Some courts will adhere to trade custom (example: Ghen v. Rich, page 23, whale killer v. whale finder). In determining whether to follow the trade custom, courts look at:
a. Whether the custom is universally followed in the industry;
b. Whether the custom affects only people in the trade;
c. Whether there are competing customs involved in the case;
d. Whether the underlying activity is a trade or sport.
4. Whether the possession process was interrupted by malicious intervention of the defendant. If yes, there is an argument for unfair competition. However, no cause of action exists if defendant was using lawful means of competition (example: Keeble v. Hickeringill, page 27, decoy duck pond and defendants’ firing of shot guns).
5. Whether possession was interrupted by wrongful conduct of a 3rd party. If yes, argue for pre-possessive interest (example: Popov v. Hayashi, page 110, baseball).
C. Escaped animals
1. Return to natural habitat – a common property again.
2. Tenancy to come back – animals that exhibit tenancy to return has not returned to natural habitat and thus owner does not lose right (example: Note 2, page 32, two foxes imported from Canada, the male fox escaped and killed a short distance away).
D. Natural resources
Rule of first possession applies. Example: There is oil in the underground of A and B. B drilled a well on his property and started extracting the oil. Can A sue to stop B from doing this? Answer: courts generally hold that the natural resources are like wild animals and thus the rule of first possession prevails.
1. Re-injected natural resource – not deemed to have returned to natural habitat.
IV. Acquisition of property by finding
A. General principle: Finder’s title is good against everyone except true owner, prior finders, and sometimes land owner. This is based on the doctrine of first possession.
1. Example: Armory v. Delamirie (page 96, chimney sweeper boy v. goldsmith for a jewel. Chimney boy prevails).
2. Example: Anderson v. Gouldberg, (Note 4, page 97, the plaintiff trespassed on a timberland of a 3rd party, cut logs, and hauled them to a mill, where the defendant took them. Plaintiff sued to repossess the logs. The court ruled for the plaintiff).
3. Example: A stole a watch from O, B stole the watch from A. In a dispute between A and B, A prevails. In first possessor v. subsequent possessor who is not true owner, how first possessor obtained possession is irrelevant. Rationale: to discourage a chain of wrongdoing.
4. What constitutes possession by finder? Example: Oklahoma cash (Note 3, page 106).
B. Finder v. landowner
Different courts have focused on different factors which may lead to different results:
1. Factor 1: The position of the property
If the found property is attached to the land or underneath the land, courts are more likely to find that the title goes to the landowner who is deemed to have constructive possession of everything that is attached to or underneath his land. Example: Staffordshire Water Co. v. Sharman (cited in Hannah v. Peel on page 102, rings embedded in the mud at the bottom of the swimming pool the defendant was hired to clean). Contrast Bridges v. Hawkesworth (cited in Hannah v. Peel on page 100, British government notes lying loose on the shop floor).
2. Factor 2: Owner’s possession of the land
The owner of the land is deemed to have “constructive possession” of the found property by virtue of his possession of the land. However, if the owner never took possession of the property, courts are more reluctant to find in favor of the landowner. Example: Hannah v. Peel (page 99, broach found in house which true owner never occupied).
3. Factor 3: the relation between finder and landowner
a. If finder is an employee or a hired worker, then court may find that the finder is an agent of owner and give title to owner. Some courts have looked a step further at whether the finder is under any contractual obligation to report (example: Note 4, page 107, two laborers hired to build driveway but dug out a jar of gold coins. Court found in for landowner because the two laborers were his agents).
b. Trespassing finder loses to landowner as a result of strong policy against trespass (example, Note 3, page 104, Peel found the broach while trespassing on Hannah’s property).
4. Factor 4: whether the property is abandoned, lost or mislaid
a. If property is abandoned, then first finder gets it unless he is deemed an agent of the landowner.
b. If the property is misplaced (i.e., the true owner intends to retrieve it), the court will likely give title to the landowner, because he has a better chance of returning the property to the true owner. Example: McAvoy v. Medina (page 105, wallet found lying on counter of barber shop).
c. If the property is lost, there have been cases in which the court held that the finder gets title unless he is deemed agent of the landowner (example: Bridges v. Hawkesworth, cited in Hannah v. Peel on page 100, British government notes lying on shop floor).
C. Finder of abandoned property
1. General rule: Finder gets title.
2. Intent to abandon is key: finder’s reasonable belief under the circumstances.
3. Example: A was moving into an apartment in New York City. A unloaded his truck and his personally belongings were scattered around the entrance of the apartment building and on the side walk. A few paintings were actually close to a public rubbish bin. While A was moving his stuff into his apartment, B was passing by and saw the paintings. He took the paintings to a nearby gallery and said: “These paintings were abandoned but I think they may still be of some value”. The owner of the gallery inquired about the circumstances in which he found the paintings and afterwards took the painting and paid B $200. Upon discovery, A sues the gallery for the return of the paintings. Question: Can the gallery argue that it was a good faith purchaser of an abandoned property? Answer: Likely no, because a reasonably person would have guesses that someone was in the process of moving into the apartment and the paintings were placed there to be taken inside later.
4. Mere lapse of time is not enough to show abandonment (example: Columbus-America Discovery Group v. Atlantic Mutual Insurance Co., 974 F. 2d 450 (4th Circuit, 1992). In 1857 the steamship Central America sank in a storm off Cape Hatteras, carrying large cargo of California gold to the bottom. The insurers paid off, and thus acquired ownership of the insured cargo. In 1988 the wreck of the Central America was discovered and part of the cargo recovered. Can the insurance company that paid off years ago claim title to the recovered cargo? Answer: Though 131 years had elapsed the 4th Circuit ruled that the mere elapse of time was not enough to prove abandonment.
V. Acquisition of property by adverse possession
A. Ratio
e of possession. Rationale for privity requirement: discourage acquisition of property by unlawful means.
ii. Example: A had been an adverse possessor for 19 years and 11 months and spent the following month in Ireland for a family reunion. B, upon learning the nature of A’s possession and while A was away, took possession of the house. Can B tack on A’s 19 years of possession for purpose of adverse possession against the true owner? Answer: No. To hold otherwise would encourage trespassing and unlawful taking of property.
iii. Example: Suppose A had been occupying the premises for 8 years when he was ousted by B at gunpoint. B was not the true owner. A had all the intention of coming back to the property when circumstances would permit. 3 years later, while B was still in possession of the property, the true owner showed up and B fled. The statute of limitation is 10 years. Can A still claim adverse possession? Answer: prevailing view in the US says the statute of limitation is suspended. Is this view consistent with the rationale for awarding adverse possession? No, if the rationale is “sleeping theory”; but Yes if the rationale is “earning theory” (since A has not paid enough dues by occupying property for the required amount of time.
C. Effects of oral relinquishment
Once title is established by adverse possession, it is not lost by divestment or oral relinquishment (example: Note 3, page 134, A and B own adjacent lots. A erects a fence on what she mistakenly believes to be the true boundary line. In fact the fence is on B’s lot 3 feet beyond. A thereafter lived there throughout the entire statutory period. After the statute has run, a survey by B revealed the mistake. A, to avoid a hassel, tears down her fence and erects a new fence on the original true boundary. 3 years later, A talks to a lawyer, changes her mind, and sues to eject B from the 3 feet. What result? Answer: A wins, absent some sort of estoppel arguments (e.g., that might arise if B subsequently improved the land) because she had already obtained title by adverse possession when she torn down the fence).
D. Title acquired by adverse possessor
1. Gets only what the true owner has.
2. Example: Note 3, Page 142: O, owner of Blackacre, dies in 1991 leaving a will that devises Blackacre to B for life, remainder to C. In 1992 A enters adversely upon the land. In 2006 B dies. Who owns Blackacre? Answer: C, because A can only acquire the interest of B, which is a life estate.
E. Extent of title acquired by adverse possession
1. Entry without color of title: only the area actually possessed.
2. Entry with color of title (defective deed): all land described in the defective deed if it is a single parcel of land and a significant portion of the parcel occupied. Constructive possession exists for the unoccupied portion.
3. Constructive possession yields to actual possession (example: A granted a deed to B for 100 acres of land. The deed turned out to be defective. A has been occupying 50 acres of the land, but unbeknown to B, C has been occupying 10 acres of the remaining 50 acres of land throughout the limitation period. B can claim title to only 90 acres of land. B’s constructive possession with regard to the 10 acres occupied by C is inferior to C’s actual possession).
