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Property I
University of Illinois School of Law
Reynolds, Laurie Jo

Property

Reynolds

Fall 2014

Introductory Materials

What is property? It is a bundle of sticks, the legal relationships among persons in a relationship to a thing.

There are three specific special rights:

Right to use

Right to transfer

Right to exclude

None are or ever have been absolute; they’re changing.

In all cases, the role of property rights is:

To protect the owner vis-à-vis the world

To protect non-owners (i.e. property owner puts a chemical plant in a neighborhood)

Moore v. Regents of the University of California, Supreme Court of CA, 1990

This is a frontier of law case where court makes the rule (common law). Issue is can an old common law apply to a new frontier? Yes.

Moore went to UCLA Med. Center after learning he had hairy cell leukemia for treatment. He was treated and unbeknownst to him, his doctor (Golde) established a cell line from Moore’s T lymphocytes, got a patent on it, and sold it to make quite a bit of money. Moore argues Golde converted his property.

Conversion: improper exercise of ownership rights over someone else’s property.

Court says conversion doesn’t apply here because

There is no precedent that supports this (cop out)

CA statutory law drastically limits any continuing interest of a patient in excised cells from their body (they look at a general health safety statute that implies patients don’t have control or ownership over their excise cells. Court looks to this as part of finding legislative intent.

The subject matter of Regent’s patent cannot be Moore’s property (Reynolds says this is a conclusion not a reason!). Court says Golde added all the value to the cell line.

Court also said finding this was conversion would hurt medical research

Court says a cause of action could be breach of fiduciary duty or lack of informed consent, but not conversion.

Posner’s three criteria of an efficient system of property rights:

Universality – all resources should be owned or ownable

Exclusivity

Transferability

Right to exclude:

The Supreme Court of the US has recognized that the private landowner’s right to exclude others from his or her land is ‘one of the most essential sticks in the bundle of rights that are commonly characterized as property.’ Blackstone said you have absolute control over your dominion. Rose says not absolute, have to balance.

State v. Shack, Supreme Court of New Jersey, 1971

Trespass is the unauthorized entry into another’s land. Tedesco emplyed migrant workers on his farm and banned nonprofit workers from coming to check and serve the migrants, one of whom needed medical attention. Tedesco kicked them out and charged them with trespassing.

There are a few ways to not be guilty of trespassing:

Owner gives consent

Court can limit the right to exclude of the owner (they do this here)

Court can also rule the individual trespass statute is unconstitutional (didn’t go there because they didn’t want their whole trespass statute reviewed and possibly overturned by SCOTUS)

Court limited Tedesco’s right because it said property rights are not absolute and they can’t be used to trample the rights of others on the land – the migrants are the main focus of this case. This case is decided on societal justification reasons. So Shack didn’t trespass because Tedesco didn’t have the right to exclude them.

Court could have said they had rights like tenants, but didn’t want to open that can of worms.

Right to Disposition/Transfer

Jones v. Alfred Mayer, Supreme Court of the US, 1968

Jones tried to buy a house and was rejected because he was black. SCOTUS only deals with racial discrimination in this case.

Court looks at CFR § 1982, which regulates public discrimination and has to decide if it applies to private discrimination. ∆ argues it only applies to government action.

Court looks to legislative intent of § 1982 and says it is intended to protect individuals from private and public discrimination

∆ also argues the federal government lacks the power to implement this and court says the 13th Amendment gives them the power to do so (preventing slavery)

Take-away: this is a case where an individual tries to sell his property how he wants and the government stepped in and limited his power.

government can still limit transferability under certain circumstances

Objects and Classifications of Property

The traditional objects of property are chattels, intangibles, land surfaces, land sub surfaces and minerals, water, and air space.

The difference between real and personal (land and chattels) property is key.

Freeholds – those interests that endure for the life of the holder or longer

Nonfreeholds – interests that endure for a term of years and those that endure at the will of the parties

Fixture – something moveable that’s regarded as part of the land anyways

Edwards v. Simms, Court of Appeals of Kentucky, 1929

Lee owns property adjacent to Edwards, who runs a cave as a tourist attraction and suspects some of the cave is on his land. He sues to have inspectors enter into the cave and do a survey to find out. Edwards argues the survey will damage him and that they will be trespassing; Edwards wants to exclude the surveyors.

Same issue as Shack – can Edwards exclude the surveyors? Court says no. Court says if you own the surface, then you own to the sky and to the bowels of the earth underneath.

Court looks to previous mine case precedents where they forced property owners to let inspectors in, limiting the right of the owners to exclude. (you could argue mines and caves are different because caves have natural entrances and Edwards added the value)

Dissent says Lee is greedy and that you own what you can make use of

This case is all about the line between competing property owner’s rights and how it is okay to infringe on one’s in favor of the other’s

Role of Property in Society

Some argue property was the original source of freedom. The majority seem to say that there are two sides to private property: the individual side and the social side and that an absolute right of property would result in the dissolution of society.

Johnson v. McIntosh, Supreme Court of the United States, 1823

This is a case of competing titles for the same land. McIntosh got his title from the US government and Johnson got his directly from the Native Americans who lived there. The question is who actually owns it and did the Indians who resided there have the right of possession and ability to sell it.

Court looks to law of discovery, which says if you discover it, it is yours (this is a rule from European sovereigns, so it doesn’t apply directly here but Court says we adopted it with Louisiana Purchase)

Court says there is general rule to respect the occupancy of the conquered and not oppress them but not here because the Indians are fierce savages, so they rule for the US chain of title. They have to find this result as the courts of the conqueror or it delegitimizes all the courts and the US itself and court says this is the way of the world.

Only recourse for the Indians is through the legislature who has tried to pay them off

Shelley v. Kramer, Supreme Court of the United States, 1948

There is a racially restrictive private covenant signed by 30 of 39 landowners. Shelley bought property in the area and Kramer (white owner) sues to enforce the covenant and get them out of there.

Trial court rules for Shelley because not all of the landowners signed

MO Supreme Court says it was binding, which makes this a federal issue because it leaves open the question of whether the equal protection clause of the 14th Amendment inhibits judicial enforcement by state courts of private restrictive covenants

This case is about state action because that is what the Constitution forbids – so this restriction can only be overruled if state action is found. Court goes through three steps:

Does judicial action count as state action? Yes.

Is this judicial action here state action? Yes, because if we didn’t have it, Shelleys would be allowed to live there because we had willingness to buy and willingne

Lack of knowledge is important too – owner didn’t know the notes were there.

South Staffordshire Water Co. v. Sherman, Court of Queen’s Bench, 1896

PL owned pool that they employed ∆ to clean. ∆ found gold rings and gave them to police to find the true owners. Police couldn’t find the true owners and gave them back to ∆. PL demanded them back, ∆ refused, and PL sued.

New facts/situation: owner of the property involved again, and now we have an employer/employee relationship too. The pool is more private than the store and also the place the object is found is different (underwater by drain under muck)

Court says the employer relationship has nothing to do with the case, rather court focuses on possession and says, Rule: it doesn’t matter if the owner knows if a thing exists, what matters is that if you are the owner, you get de facto rights if you have the right and intent to exclude So if you’re the owner, you have control and ownership over everything on your property even if you don’t know about it. Court also says ruling for the finder would promote dishonesty.

Promoting dishonesty is bad; court doesn’t want to do that

Hannah v. Peel, King’s Bench, 1945

Peel owned a house that was requisitioned during the war. Hannah was stationed there during the war and found a brooch, which he gave to police to find rightful owner. Police couldn’t locate them so gave it back to Peel, who sold it. Hannah sued saying he was finder and it was his against all claims except that of true owner. No evidence that Peel knew about the brooch, but Peel claimed it as owner of the estate.

Court adopts rule that a man possesses everything which is attached to or under his land. But a man does not necessarily possess a thing that is lying unattached to the surface of his land even though that thing is not possessed by someone else.

The brooch was lost, Hannah found it, so Court follows Hawkesworth and rules for Hannah.

McAvoy v. Medina, Supreme Judicial Court of MA, 1866

∆ was a barber and PL a customer. PL found a pocketbook on table and gave it to ∆ to give back to true owner and to advertise that it was found. Nobody claimed it so PL demanded it back, ∆ refused, and PL sued saying it was his as finder.

Court says this is different from Hawkesworth because the pocketbook wasn’t lost, but was voluntarily placed on the table and forgotten about.

Rule: If it is voluntarily placed somewhere, the item doesn’t belong to the finder.

Reynolds says this is speculating on the intent of the person who lost it – crazy! Court here is making a huge conclusion on mental state (intentionality) of the true owner and makes a rule for it to decide the issue between two parties, neither of which is the true owner!

Findings wrap up:

Inconsistencies in how cases are decided stem from individual courts emphasizing different things

Important to look at: the relationship between the parties, the nature of the object found (i.e. is it moveable or immoveable), mental state of the true owner, relationship between owner of property and possessor (i.e. Hannah), and the whole discussion on possession and what it is (i.e. legal possession v. manual possession)

Courts are sympathetic to broader societal concerns in developing rules (i.e. we might want to prevent trespass, protect the true owner, want predictability, more efficient use of property, a rule arguing for scientific advancement. . . )