Select Page

Property I
University of Dayton School of Law
Durham, James Geoffrey

I. Theories of Property
A. Labor Theory – he who does the work should own.
1. Ex: Person who enters a mine and exploits it should own the title to the mine.
2. Ex: Person who expends labor pumping oil out of the ground should own it.
B. Social Utility Theory – the person who can make the best use of the property should own.
1. Ex: Person who has a mine entrance on his land should own the mine because he is the only one who can access it.
2. Ex: Person who has the ability to pump oil out of the ground should own the oil because he is the only one who can access it.
C. Economic Theory – market forces will determine who should own.
1. Perfect property system has 3 attributes:
a. Universality – all property should be ownable or exploitable by someone.
b. Exclusivity – the right to exclude persons give the owner a greater incentive to invest money in it.
i. exclusivity is not absolute because you can’t use your property in ways contrary to public policy (destroy it, harm others with it, etc.)
c. Transferability – so that resources can be shifted to where they are best allocated.
II. Ways to acquire property.
A. Finding (occupancy) – taking what was previously unowned.
1. Abandoned or undiscovered property – possessor has exclusive rights against the world.
a. Policy: reward the person who brings the property to social use.
b. Ex: Meteorite falling to earth should belong to person who discovers it and reduces it to possession.
i. Policy: meteorite does not become the property of the owner of the land because he never knew it existed. Create incentive for persons to discover.
c. Requires Intent to possess and Actual taking (but not physical touching).
i. expressing intent to possess (warn others away).
ii. have the means to possess (equip. necessary).
iii. persistent effort to possess (diligence).
iv. Policy: Reward the person who reduced to possession because that is most of the battle. To reward the discoverer over the possessor would be to create a disincentive to reduce to possession unless you were the finder. Those things found by a person who doesn’t have means to possess would remain unused.
v. Policy: don’t require physical touching because it would promote physical fighting between two competing finders.
vi. Ex: Person who locates sunken wreck in river.
2. Lost Property – “treasure troves”
a. “Public Areas” (or unknown)- Finder has exclusive rights against all but original owner.
i. Ex: (Public area) Customer finds money in “public area” of store.
ii. Ex: (Unknown area) Chimney sweep finds a jewel.
iii. Policy: Reward the person who returned it to social use over the owner of the premises because the owner had no knowledge it was there and would never have brought it to social use.
iv. Policy: Prevent a “string of thefts” so that the original owner would more likely find it.
b. “Private Areas” – Owner of the land has rights because he intends to exert “positive control” over the property.
i. Ex: Pond cleaners find ring in pond, owner takes.
ii. Policy: Weigh the exclusive property rights of the premises owner over the rights of the finder because it would create a perverse incentive to rummage through the property of the owner looking for things to which the owner may not have a solid claim.
iii. Policy: Owner might more easily be reunited with the lost property because he is relying on the good faith of a host towards his guests, especially if they have a lost and found policy.
5. Mislaid Property – Owner of area where property was mislaid has exclusive rights against all but the original owner.
a. Ex: Wallet left in barbershop belongs to barber as bailee.
b. DOES NOT apply when the item is mislaid in a moveable chattel such as a guitar or car, because it defeats the policy that the owner would more likely be able to find it.
c. Policy: Owner is more likely to come back for the property once he remembers, so weigh the rights of the true owner over the rights of the finder.
II. Bailments
A. Three types of bailments
1. Gratuitous bailment – lowest standard of care (holding someone’s wallet as a favor).
2. Bailment for mutual benefit – standard of reasonable care (lost and found at a hotel).
3. Bailment for benefit of bailee – highest standard of care (borrowing a car).
B. Can be voluntary or involuntary, but once it becomes voluntary, bailee has a duty to deliver the chattel to the right person.
C. Can be actual or constructive – a court might deem that a b

ii. deed (sale or transfer by legal document).
iii. devise (splitting the land into parts).
b. Policy – to prevent successive squatters from taking land when they have made no investment in it, and to promote repose.
3. Open and Notorious (not secretive).
a. The owner is imputed to have constructive notice, even if he doesn’t visit the property, if the action should have been known if the owner was paying attention to the property.
4. Hostile and Exclusive (not a lease, not permissive).
5. (Optional) Good faith claim of right (you must think it really is yours).
6. Statute of limitations must have run.
a. “Discovery Rule” – Statute of limitations does not begin to run until owner knows, or should know, the identity and intentions of the adverse possessor.
i. Only works with chattels and not land because land is more important to the social good to make exceptions, and chattels are sometimes hard to find even if publicly displayed.
V. Improving another’s property by mistake (Accession).
A. Improver obtains title when:
1. Nature of the property has been changed drastically in substance or value.
a. Ex: Grapes become wine.
b. Ex: Wood at $5 becomes barrel hoops worth $750.
c. Ex: (Counter-example) Trees at become cut/stacked cord wood – original owner retains title, improver gets nothing.
2. It would be unjust to award title to the original owner (Equitable relief).
a. Ex: Contractor mistakenly builds house on wrong property.
b. Owner still has a right to reimbursement for raw materials, otherwise there is no incentive not to be a mistaken improver.
c. Unless it is unjust, give title back to owner in order to motivate the mistaken improver to be more careful.
d. Policy: must weigh the exclusivity of the property rights of the owner to the lab