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Property I
University of Denver School of Law
Cheever, Federico

Property Outline
I.                   What is Property?
a.       Views of Property
                                                               i.      The Primacy of the Right to Exclude – views property ownership as the right to exclude others from use
                                                             ii.      Bundle of Rights (best definition of property)
1.      Examples:
1.      The right to use
2.      The right not to use
3.      The right to sell
4.      The right to give away
5.      The right of decent – the right to transfer property to a member of the family
6.      The right to leave it to someone
7.      The right to exclude (someone else from using it or benefiting from it)
2.      Different rights attach to different kinds of property – Not all property contains the same bundle of rights
1.      Alienation – transfer away from yourself
2.      Examples:
                                                                                                                                       i.      Inalienable Property – Property you cannot sell or give away (like prescription drugs)
                                                                                                                                     ii.      Market Inalienable Property – Property you can use or give away, but cannot sell (ie Elk Meat, Guns, Organs)
                                                                                                                                    iii.      Legal limitations and restrictions on Use of property (ie guns)
b.      Types of Property
                                                               i.      Private Property
                                                             ii.      Common Property (rule of capture applies)
                                                            iii.      Government Property – owned and regulated by the government (such as National Parks)
c.       Goals of Property Rights
                                                               i.      Wealth Maximization
                                                             ii.      Certainty
                                                            iii.      Fairness
d.      For property rules to be good, they have to apply to everyone
                                                               i.      Promotes all three goals
1.      Wealth Maximization – people are more likely to work the land and put effort into producing things if they know they will benefit from and own their own labors, thus it benefits the economy as a whole
2.      Certainty – if it applies to everyone, there is a level of certainty
3.      Fairness – the same rules apply to everyone and everyone is on notice of them, thus the system is more fair
                                                             ii.      Property is about the relationship b/t people
1.      if you are the only person in the world, property doesn’t matter
2.      Ownership is power over persons, not merely things, b/c the owner controls the assets and other’s access to them
                                                            iii.      Hence, the government protects and enforces property rights
e.       Problems and the Roots of Property
                                                               i.      Problems with Common Property
1.      Over-consumption
1.      Free-for-all
2.      It doesn’t benefit the society when the resource is consumed as quickly as possible
2.      Over-investment in capture technology
3.      High Transaction Costs and Externalities
1.      Externalities – cost imposed on other people through an individual’s act of self-interest
                                                                                                                                       i.      When one person takes from the land, that one person benefits, but it costs the community as a whole
2.      Transaction Costs – the cost of organizing the community to make an offer that will mitigate an externality
                                                                                                                                       i.      Because it’s common property, they all have to get together and decide unanimously on a group action that will benefit the whole
                                                                                                                                     ii.      There may be free-riders/hold-outs
                                                                                                                                    iii.      The cost may be prohibitive to each individual in comparison to the benefit they will gain individually
                                                             ii.      Demsetz – Theory on Property Rights
1.      Private property rights limit externalities and resulting transaction costs. Why?
1.      The owner has to bear the cost as well as reaping the benefits
                                                                                                                                       i.      Gives people an incentive to preserve the benefits of the land (ie crop rotation), not just use it up
                                                                                                                                     ii.      When the costs and benefits of consuming resources a

     i.      They argue the rule should be mortal wound +pursuit = possession
2.      Control based on Custom
1.      Rules of the Hunt
2.      Pierson v. Post – dissent says the goal of certainty may be furthered by ownership by possession, but the goal of Fairness is furthered by Custom
                                                                                                                                       i.      Everyone knows the “rules of the game,” thus it’s fair
3.      Ghent v. Rich – even where the finder isn’t on Notice (doesn’t know the “rules of the game”) the goal of Wealth Maximization is still furthered by Custom
                                                                                                                                       i.      It encourages the whaling industry b/c the whalers would not work so hard to shoot the whales w/o certainty that efforts would be rewarded
3.      Control based on Ownership of Land
1.      Constructive Possession
                                                                                                                                       i.      A constructive property right over wild animals may be granted to the owner of the land that the wild animal was found/captured on
                                                           vi.      A “Text”
1.      A world-view – The understanding that property works b/c we accept it as so
2.      Also the understanding that society gives preference to those who have the same world view and act w/in that understanding
3.      “A commonly understood and shared set of symbols that gives significance and form to” the concept of property rights
4.      Example: Implied Conquest
1.      The idea of acquisition by conquest only existed in the minds of Europeans
2.      The Native Americans didn’t have a concept of owning the land (land as property) so the “First in Time” doctrine didn’t apply to them, and the Europeans just took the land from them
3.      Johnson v. McIntosh – Indians were left with a right of possession, but no right to convey the land
they were subordinate sovereigns whose rights may be taken away by the federal government