Property – Morriss Spring 2008
I. Property Overview
A. Property is socially contingent. Its meaning varies across cultures and over time, within cultures. At bottom property is whatever interest in a thing the legal system protects against invasion by others. This merely describes the result; it does not explain how we get there. Moreover, property rights are not absolute. Property is relative – it describes the relationship between people with respect to things, not the relationship between persons and things.
B. Theory: The principal theoretical explanations of property are labor theory, utilitarianism, economic efficiency, and custom.
i) Labor theory: Originated by John Locke, the idea that by mixing your labor with something unowned (e.g. catching a wild fish) you would own the resulting mixture of labor and object.
ii) Utilitarianism: Hume and Bentham argued that property was utilitarian – we protect other’s possessions as property because we desire the same protection for our possessions. The implicit root of property in this theory is possession.
iii) Economic efficiency: Property is economically efficient. If everything is unowned, or owned communally, under conditions of scarcity people would deplete the resource because the individual gain from depletion is greater than the individual costs.
ü From society’s perspective, the aggregate gains from depletion are less than the total cost, but to the individual these additional costs are external.
ü Property rights help internalize these costs, so that individuals make economically efficient judgments.
iv) Custom: Property has a customary root. People engaged in a common activity (e.g. whaling or cattle ranching) often develop customs that govern their relationships between themselves and toward their objects of acquisition or husbandry ( e.g. whales or cattle). Some customs acquire force of law.
Doctrine: Property may be broken up into constituent elements:
1) the right to use, the right to exclusive possession and
2) the right to dispose or transfer.
v These elements are important to what constitutes property.
A. Two meanings of possession: Possession of an object implies its ownership.
1. “Possession” has a dual quality – it can mean 1) the physical act of possession and 2) it can mean the legal conclusion that someone is in possession of an object.
2. Usually the first actual physical possession of an unowned object makes you its owner, but even this must be qualified because property rights are relative to others.
ü For example, if you trespass upon your neighbor’s land to dig up a meteorite you see plunging to Earth you don’t own it even though you had first possession.
ü Caution: “Possession” is often used to describe a conclusion – as by saying that your neighbor had first possession because the unowned meteorite came into his “possession” by landing on his farm.
B. Of “unowned” things: Discovery, capture, and creation: There are several methods of acquiring property rights in unowned things.
1. Discovery: Acquisition by discovery is related to 1st possession. If you discover a rare shell on an unowned beach you are simultaneously its discoverer and 1st possessor.
2. Capture: Unowned property that is captured ( e.g. wild animals, fugitive minerals such as oil and gas) becomes the property of the person effecting the capture.
ü The unowned thing must be actually possessed for it to become property.
ü The niceties of what constitutes actual possession of any given type of unowned thing is largely driven
3. Creation: Lots or property is acquired by creation – e.g., copyrights, patents, and trademarks. A key issue w/ respect to intellectual property is the degree of exclusivity the creator ought to have.
4. The right to exclude: Possession contains a corollary right: the right to exclude others from possession, but that right is not absolute. When pressing social necessity requires some modification of this principle, an owner may be required to tolerate some unwanted incursions. This is a matter of degree – a permanent denial by the government of an owner’s right to exclude others may well be a taking of the property.
5. The right to destroy: Generally, you may destroy your own property, but the social disutility of doing so leads some to call for limits of this right.
Possession: Casefile 7.0
I. Acquisition by Capture (Wild animals)– First in Time Rule: The first person to exercise dominion and control over such an animal becomes, with possession, the owner of the animal.
Class discussion: Several theories:
§ Appropriation (Locke) – those who toiled over the land have rights.
§ Lay claim and title by government or King.
§ Might makes right. Right of Conquest.
§ Some claims don’t count – Native American rights
a) Mere pursuit does not constitute the exercise of dominion and control sufficient to give the hunter a property right in the animal.
b) However, where an animal has been mortally wounded so that actual possession is practically inevitable, a vested property right in the animal accrues that cannot be divested by another’s act in intervening and killing the animal.
c) Pierson (D) v. Post (P)(1805): P was chasing after fox with his dogs. D knew that P was chasing but stepped in w/ his gun and killed the fox first and carried it away.
ü Court rules that D has a right to fox because it was an ferae naturae, and that property in such animals is acquired by occupancy only and thus no one had actual corporal possession.
ü W/out having deprived the object of liberty, either by wounding or capturing it, one does not have possession over a wild animal.
ü Actual bodily seizure is not indispensible to acquire right of possession of wild beasts, but mortal wounding, by one not abandoning pursuit may be deemed possession.
d) State v. Shaw (1902): Shaw indicted for larceny but court directed verdict for D, but state excepted. Exceptions sustained by Ohio Supreme Court. D had taken fish from nets, and the nets had an opening which the fish entered but at no time was it shut. Also fish frequently escaped from such nets.
ü Fish are ferae naturae, the pursuer must bring them into his power and control as to show that he does not intend to abandon them again to the world at large.
ü When he has confined them w/in his own private enclosure, subject them to use at his pleasure, and maintains reasonable precautions to prevent escape, they are so impressed with his proprietorship that a felonious taking from his enclosure, whether trap, care, net, or whatever will be larceny.
ü Law doesn’t require absolute security against escape. Fish were confined to nets, from which it was not absolutely impossible for them to escape but practically impossible, for it seems that under ordinary circumstances few if any fish escape.
ü The possessions of the owners of the nets were so complete and certain that the D’s went to the nets and raised them w/ absolute certainty that they would get the fish.
ü Owners having captured and confined the fish, had acquired such a property in them that the taking of them was larceny.
e) Barnard v. Monongahela Natural Gas Co. (1907): D drilled a well in gas territory on his farm so close to the line of the adjoining landowner so as to draw from the land of the latter ¾ of the gas that his well may produce. Did D invade the property rights of the adjoining landowner so as to be legally accountable for.
ü Oil and gas confined in the oil and gas-bearing sands of a farm belongs to the one who holds title to the farm, BUT it is also recognized, both as a question of fact and law, that oil and gas are fugitive in their nature, and will by reason of inherent pressure seek any opening from the earth’s surface that may reach the sand where they are confined.
ü Every landowner or lessee may locate his wells wherever he pleases, regardless of the interest of others. The neighbor can do nothing or do likewise. He must protect his own gas. He knows it is wild and will run away if it finds any opening.
ü The drilling of well by D, as a lessee, is not fraud unless they had done something other than drilling of the well, such as refusing to develop or protect P’s farm.
ü D drilled a well at an angle on P’s farm as well so that P would have gotten some of the gas of his neighbors well, but it turned out to be a dry hole.
Tragedy of Commons:
The tragedy of the commons is class of economic problems where no individual bears the full costs of his/her behavior and there is no means to regulate access to a common resource. In these circumstances each individual’s cost or benefit calculation leads him/her to overuse the resource.
II. Re: Montana Wilderness- Client runs hunting preserve but neighbor is putting our salt to attract the elk, altering their historic path and impacting client’s business.
a) Elk permit – should court be making a policy decision to reward those who are good managers of the elk herd.
b) Potential arguments – client had possession of the trails. If the migration of the elk have changed because of aritificial conditions, ownership could be claimed through trails.
c) Our client hasn’t made enough of an effort under the majority view of Pierson v. Post because h
rue owner establishes title.
c) Michael v. First Chicago Corp. (1985): P received file cabinets a friend purchased from D which contained certificates of deposits inside worth over $6 million, 6 were payable to “Bearer” and other payable to LaSalle Natl Bank, trustee. Bank employee testifies that they didn’t know anything of value was in filing cabinet.
ü First Chicago was only selling used furniture and had not suspected the file cabinets contained anything valuable, no other intent.
ü Where both buyer and seller were ignorant of the existence or presence of the concealed valuable, and the contract was not broad enough to indicate an intent to convey all the contents known or unknown, courts have generally held that as between the owner and purchaser, title to the hidden article did not past.
ü Abandonment is generally defined as intentional relinquishment of a known right – which finder is entitled to keep.
ü Here, the relinquishment of possession, without showing of an intention to permanently give up all rights to the certificates of deposit is not enough to shown an abandonment.
· As Bailey’s lawyer we want to head off abandoned property without being too tricky, send registered letter, sign here, and send it back.
· It’s hard to accuse Bailey of trickery because they all had horse in their possession.
d) Erickson v. Sinykin (1947): P found $760 in D’s hotel while being employed to decorate it as a sub-contractor. D claimed they knew who was the true owner and claimed they’d give it to them.
ü The goods having been in the possession of P (possession being the prima facie evidence of title), he is not bound to show any other title until D has shown a better one.
ü There is no way of knowing beyond the 18-month period how long the $ had been under the carpet and the real owner hasn’t stepped forward; therefore, abandonment is reasonable.
ü If the property is purposely abandoned by the original owner, it is restored to common stock, and afterwards becomes the property of the one who first discovers and takes it into possession
ü If it is really lost property, or if it is treasure trove where money is secreted and found by another, it becomes the property of the finder, against everyone except the true owner.
· Regardless of whether the money was abandoned or lost, the court held the employee’s rights were superior to the hotel owners and operators.
· Sub-contractors and employees, employee works on behalf of employer.
Mislaid – wallet left on table in barbershop – owner of location beats finder
Lost – package of money on floor of store – finder beats owner of location
Abandoned – owner loses possession and intends to relinquish title – finder beats owner of location.
Modern Finder’s Law
Problem: The law of finders is made of intent-based rules, yet we never know owner’s intent.
Legislative solution: Require public depository/notice, than award to finder if unclaimed.
Common law remains relevant – see Benjamin v. Linder Aviation.
Conversion – You are acting inconsistently with my property rights in an object/ denying my rights to the object (i.e. selling it to someone).
Trover – You converted my property and now owe me damages.
Replevin – You converted my property, owe me damages for losses caused by your conversion, and must return my property.
II. Adverse possession:
a) If a person wrongfully possess land long enough in a certain manner, the true owner may be barred from recovering possession by statutes of limitation which prescribe the period within which a suit to recover possession of real property must be brought. Once such an action is barred, the adverse possessor has effectively acquired title.