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Property I
University of Denver School of Law
Ziegler, Edward H.

PROPERTY

ZIEGLER

SPRING 2013

– Property = “any legally enforceable interest”

– Property law

o “A bag of sticks” – unlimited number of property interests

o Purpose of managed/regulated capitalism in 21st century:

§ 1. Need government to protect rights from others,

§ 2. Support private markets, regulate interferences with others rights, and

§ 3. The eminent domain power

· (government has right to take property for public use + duty to give fair market value for purchase)

– Basic characteristics of ownership

o 1. Right of exclusive possession

o 2. Right of exclusive use

o 3. Right of transferability / alienability

– Acquisition of property

o Gift

o Inheritance

o Purchase/exchange

o Government grant

o Find it

o Steal it

o Operation of law

– Benefits of private property rights

o 1. Wealth generation

§ Private property and free markets increase well being

o 2. Economic Efficiency

§ Results from internalizing incentives because the owner experiences both cost and benefit of decisions, which are guided by the market set value rather than government planned value of goods

o 3. Individual Liberty

§ Increases scope for personal choice

§ Protection from tyranny

o 4. Individual Dignity

o 5. Fairness and Social justice

§ Material wellbeing enhances intangible human values

o 6. Personal morality

§ Owning property effectuates civil activity and secures many civil rights

– Government’s role in private property rights

o 1. Taxing and spending power

o 2. Police power regulation

o 3. Eminent domain power

– Protection against government tyranny

o 1. Lack of legal authority

o 2. Due Process Claims – under the constitution

o 3. Equal Protection Claims – under the constitution

o 4. Eminent Domain Taking Claims – under law

o 5. Regulatory Taking Claims – under takings clause

– Real v. personal property

o Real property

§ Land

§ Fixtures = not readily removable / more or less permanently affixed to real property

§ Things on/under the land

o Personal property

§ Everything else à Tangible (external object) + Intangible

o Terminology

§ Greatest interest legal system recognizes

· Fee simple = for real property

· True ownership = personal property

§ Property can be transmuted to other type of property

· Affix = personal à real

· Severance = real à personal

§ Wills

· Real property is devised to a devisee

· Personal property is bequeathed to a legatee

– Wealth in Modern Nations

o 2% Natural Physical Resources

o 18% Physical Assets Infrastructure

o 80% Intangible Social Institutions (internalized benefits of owning property)

– Income disparity in America

o Top 1% of households: 21.2% of all income

o Top 50% of households: 87.2% of all income

o Bottom 50% of households: 12.8% of all income

– Justifying ownership

o Our system of private property is a mix of all these theories

– Theories

o Labor Theory (Locke):

§ If you work on something, you obtain rights to it

o Natural Law Theory (Rousseau): Argues that the identification of the owner is to be found in natural principles of human ordering

o Social Contract Theory: Argues that the owner is the one who received title thought the consent of humanity or society

o Utilitarian Theory: maximize well-being of the greatest majority

o Initial distribution problem

§ Fairness?

§ Individual merit v. group redistribution

§ Problem of redistribution – can we redistribute wealth to cure the unfairness of life? What are the chances the government’s redistribution will reflect more fairness?

– Redistributive justice

o Necessity to some extent – that is where the money is so naturally taxed more

o Fairness issue – top 50% income pay about 100% of taxes

Personal Property

Gifts

– Definition:

o The intervivos, voluntary and gratuitous transfer of a property interest from the owner (donor) to another (donee) that is irrevocable once complete

– Elements:

o Intent, Delivery, and Acceptance

§ 1. Intent to Transfer Title: to make a present gift / intent to transfer title

· Can make a present gift of future interest – it is real in the present

· Cannot make an executory gift to be given sometime in the future or subject to a condition precedent (even if the condition is later fulfilled) Example: “I will give you a ring next week”

– Example: “I will give you a piano when I die”

o Interest = donor retains lifetime ownership over the piano, but presently transfers a remainder in true ownership to donee

o Gift = donor may die in debt and bank may sell the piano

§ 2. Delivery of the Property: External manifestation of intent

· Purpose: to protect against fraudulent claims

· No power of revocation after delivery

– Even if condition precedent and donee fails to fulfill it

– Exception with engagement rings – most courts today find the gift conditional on marriage occurring and order return of the ring if the engagement falls through regardless of fault

· Types:

– Actual delivery – physical transfer of object itself

– Constructive delivery – donor gives donee some tangible item that provides means of accessing control; Example: donor gives key to a locked box

– Symbolic delivery – where delivery is intended to symbolize the transfer of ownership where manual delivery is impractical; Example: written deed or signed letter

· Delivery through an Agent

– Valid immediately if an independent agent or agent of the donee

– Valid upon delivery to donee if an agent of the donor

§ 3. Acceptance by the Donee: is presumed by delivery, do not need to say “yes”

– Types

o Testamentary gift – intended to be effective at owner’s death, must satisfy statute of wills; subject to law of trusts and estates

o Gift Causa Mortis

§ Valid present intervivos gift but made by the owner in contemplation of impending death due to present illness or injury

· Different from regular gift – regular gifts are irrevocable once executed while gift causa mortis is revocable under certain conditions

· Reasonable fear of death from present illness or injury; does not cover premonitions

· Does not apply to real property

§ Revocable by any of the following;

· 1. Donor recovers from present illness/injury

· 2. Any affirmative act by donor clearly indicating revocation

· 3. Donee dies before donor

· Examples:

– A catches some super serious sickness and gives his best friend B a watch – A starts to feel a lot better and decides to get a breath of fresh spring air, but then he trips and falls down a flight of stairs and dies, but doesn’t die from his present injury – can B keep the watch?

o à Yes

– A is hanging with his best friend B – A gets shot in a drive-by and gives B his watch as he is loaded into the ambulance – B rushes towards the hospital but gets in a car accident and dies – A hears about B’s tragic death and goes into shock, dying minutes later… who gets the watch?

o à A’s estate gets watch

§ Engagement rings – modern courts hold engagement gifts are conditional and thereby revocable (to give effect to the intent of parties)

Wrongful conversion

– General Rule:

o True owner does not lose title when property is stolen

o Bona Fide Purchaser:

§ Wrongful converter cannot convey title by selling property to a bona fide (good faith) purchaser

· Rationale: no person can transfer better title than he possesses

· BFP = acted in good faith and without notice that wrongdoer did not have good title

· WC and BFP do however acquire simple possessory interest – the right to continue possession a

tect hunters investment in acquiring the animal

§ Marking – branded as property

§ Habit of Return – (animus revertendi) belong to captor even when they roam at large when they develop a habit of return

§ Not Regained “Natural Habitat” – Example: zoo animals; people should be on notice that a lion wandering around town belongs to somebody

– Rule of Increase (Domestic Animals)

o Gives ownership right over offspring of domestic animals to the one who owns the mother

– Rule of custom

o When a hunter apprehends an animal in accordance with the custom of the trade, title is acquired; Limited to that location;

§ Example: person to harpoon a whale gains possession and ownership; there is a finder’s fee

Bailments

– Definition:

o Delivery of possession not title. Owner (bailor) temporarily transfers exclusive possession and control of chattel to another (bailee)

§ Two requirements:

· 1) Exclusive Possession = actual physical control

– Includes symbolic and constructive delivery (Example: giving keys to a car)

· 2) Acceptance by Bailee = insinuates implementation of a contract or agreement

– Constructive acceptance found where item is acquired and retained under circumstances in which recipient should keep it safely and return it to owner (Example: owner left or lost coat in hotel dining room)

§ Types:

· 1. Express: critical terms of bailment have been discussed

· 2. Implied by Failure to Discuss Terms: Example: friend asks to borrow car and you toss her keys

· 3. Implied by Operation of Law: Example: law of finders!!!

· 4. Implied by Constructive Possession: Example: waiter takes your hat and puts in on a coat rack in plain sight – implied invitation and still was within their constructive possession

§ Examples of Bailments:

· YES, bailment:

– Borrowed friend’s watch, Auto-repair shop, Valet parking

– Safe deposit box – usually found to be a bailment because box remains under bank’s control

· NO, bailment:

– Self-service parking lot – this would be a license

– Self-service storage shed – not transferring possession, they don’t have a key

– Renting space – this would be a lease

· Waiter shows you to your table and then takes off your coat (creates a bailment)…

– If waiter leaves it by your table that releases him from bailment

– If waiter leaves it within plain view where other customers are going to get their own coats, that releases him from bailment (implied custom

– Duty to Redeliver Property Undamaged

o Modern View – bailee must demonstrate exercise of due care

§ Plaintiff only needs to prove there was a bailment, not that bailee was negligent

§ Bailee has burden of proof: needs to prove they were NOT negligent

§ Reasonable care used under the circumstances

o Traditional CL view – depends on nature of the bailment

§ Bailment for the sole benefit of the bailee – Example: borrowing car à slight negligence

§ Bailment for the sole benefit of the bailor – Example: finder of lost property à gross negligence

§ Bailment for the mutual benefit of bailor and bailee – Example: customer test-drives dealer car à ordinary negligence