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Property I
University of Denver School of Law
Cai, Phoenix X.F.

Spring 2015
Theories of Property Law
– Ways to acquire property
1.      Discovery
2.      Conquest/Capture
3.      Treaty
4.      Sale
5.      Papal Decree
6.      Labor
7.      First in Time, First in Right
– Things that can be done with property
1.      Give it away/transferability
2.      Use it
3.      Throw it away
4.      Exclusion
– Law and Economics
1.      The Coase Theorem
a.                   In the absence of transaction costs,
b.                  parties will achieve an efficient result
c.                   regardless of how the law assigns rights and liabilities
2.      Externality: any decision that doesn’t take into account the effects of that decision on others
a.       tend to hamper transferability by increasing transaction costs and creating uncertainty
i.         e.g. – purchasing an SUV without considering the impact on the environment
ii.                   e.g. – smokers create externalities via second hand smoke
1)     offer $5 to not smoke around me
2)     creation of transaction cost in addressing externality
b.      externalities can be positive and/or negative; e.g. – fixing up an abandoned house can raise surrounding property values, but also lead to gentrification
c.       Demsetz: communally owned property leads to more externalities
i.         more freeriders
ii.       no single person is affected enough to internalize externalities
– Policy Considerations
1.      Fairness – We want to achieve the fairest end in property disputes for all parties
2.      Legal Certainty – we want to know who for sure is entitled to property
3.      Economic Efficiency – solves disputes by meeting social expectations
4.      Wealth Maximization – most beneficial use allows property to be used for the greatest good for the greatest number; incentive to promote efficient behavior
5.      Lock Labor Theory – Time, labor, expenditure, expense turns land into property; increasing value of property creates interest in/connection to property
Acquisition By Find
–          General rule on finders – a finder has rights superior to everyone except the true owner (TO) and prior possessors
–          Rule on lost items – an owner of property doesn’t lose title by losing the property
–          misplaced items: owner of site where property was mislaid has effective ownership against all but TO
–          Prior possessors prevail due to first in time first in right (FITFIR)
–          2 elements of possession
1.      finder must acquire physical control over the property
2.      finder must have intent to exercise dominion over the property
       – Vocabulary
1.                  Trover – claim for conversion with $ damages as remedy, because item can’t be restored; forced sale
2.                  Replevin – suit for restoration of the actual property in dispute
3.                  Constructive Possession – a person is in constructive possession when the law treats him/her as if he/she is in possession, regardless of knowledge
4.                  Bailment – rightful possession of personal property by one who is not the TO
5.                  Bailor – the rightful owner of the property in a bailment
6.                  Bailee – the permitted possessor of property in a bailment
–          Policy Rationale for Protecting Finders’ Rights
1.                  promotes bailments
2.                  helps to restore lost items to TO
3.                  promotes efficiency and certainty, thus helping to resolve disputes
a.       intuitively fits social expectations of FITFIR
b.      makes it easier to identify first finder
4.                  wealth maximization by placing lost items back in the stream of commerce
5.                   increases honesty
–          Cases
1.      Armory v. Delamirie: The π, a chimney sweep found a jewel and took it to the ∆, a goldsmith, who offered the π 3 halfpence for it.  The π refused and asked for the jewel back.  The ∆ gave the setting back to the π without the jewels in it.
2.      important distinction between voluntary/involuntary bailment
a.       Armory = involuntary bailee vis a vis TO; TO didn’t choose him
b.      Armory = voluntary bailor and Delamirie = voluntary bailee v

of whether lot was actually improved via cultivation
Law of Gifts
–          Elements
1.      Intent: to affect a present transfer
2.      Delivery
a.       Actual physical delivery: if something is capable of being physically handed over, then that is what must occur; now, we look more to intent
b.      Constructive delivery: give something that gives access to the gift (EG – key/passoword)
c.       Symbolic delivery: give something that represents the gift (EG – written instrument, deed, map)
3.      Acceptance
–          Types of Gifts
1.      Inter Vivos: irrevocable gift made during life
2.      Causa Mortis: made in contemplation of death; revocable if giftor recovers
a.       Intent to pass possession and present title
b.      Absent a deed of the gift, intent can be shown via  circumstantial evidence (Newman v. Bost)
–          Policy Considerations
1.      Avoid misunderstanding
2.      Prevent fraud
–          Cases
1.      Gruen v. Gruen: dispute over ownership of painting
a.       A valid gift may be made reserving a life estate in the giftor
b.      The test is to determine whether the donor intended the gift to have no effect until after the maker’s death, or whether he intended it to transfer some present interest.
c.       Once the gift is made, it is irrevocable and the donor is limited to rights of a life tenant and not an owner.
2.      Newman v. Bost: intestate left a life insurance policy to his maid, that was kept in a bureau drawer
a.       Constructive delivery of immovable items stands, but actual/manual delivery is required for any movable items.  
b.      Policy Considerations: Fulfilling expectations – family shouldn’t be blindsided