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Property I
University of Illinois School of Law
Hamilton, Daniel W.

Property: Spring 2011 w/ Prof. Hamilton ♣

I. PROPERTY AND ITS SOURCES

A. FIRST POSSESSION

· i. ACQUISITION BY CAPTURE

o a. General Rule

§ (Majority) Property right obtained by FIRST POSSESSION

· Pierson v. Post – Gain property right by gaining physical control it through possession, mortal wounding, and certain control

§ (Minority) Reasonable prospect of acquisition gives property right

o b. Equitable Claims

§ (Majority) Pre-possessory property right attaches when certain labor has been expended to attain that property right

· Popov v. Hayashi – When two competing legitimate claims, concept of equitable division

o Pierson v. Post (1905)

§ Facts: To gain property rights of a fox (wild animal) captured on an unpossessed wasteland. Held: for Pierson

§ Rule: Depriving the natural liberty of a wild animal (POSSESSION) gives you property right

· Through Possession, Mortal Wounding, and Certain Control; Mere pursuit vests no property or right in the hunter

· Possession: (1) Intent to control property, and (2) An act of control

§ Policy Goal: Bright Line Rule promote certainty/efficient administration in situations where stakes are not high/not worth a lot of judicial time

§ Note: Lose possession, if animal escapes after having been possessed

· Standard 1: requires certain control, mortal wounding or actual possession as shown in the Pierson v. Post Majority [Possession Theory of Property]

o Shows clarity

· Standard 2: Pierson Dissent reasonable prospect of acquisition [Labor theory of property: enough labor gives you a property interest]

o Popov v. Hayashi (2002)

§ Facts: To gain property interest in a baseball that was abandoned by MLB custom

§ Rules:

· General Rule on Possession of Abandoned Property: Possession requires both physical control over the item and an intent to control it/exclude others from it

· Gray’s Rule (on Possession): The actor must retain control of the ball after incidental contact with people

· Pre-Possessory Interest: Where an actor undertakes significant but incomplete steps to achieve possession of a piece of abandoned personal property and the effort is interrupted by the unlawful acts of others, the actor has a legal pre-possessory interest in the property

§ Equitable Claims

· Doctrine of Equitable Division: When 2+ parties have a valid claim to a single piece of property, the court will recognize an undivided interest in the property in proportion to the strength of the claim

§ Policy Goal: Advancing Fairness in place of Certainty

· ii. ACQUISITION BY CREATION

o a. General Rule

§ (Majority) Property rights acquired by creation (LABOR THEORY OF PROPERTY)

o International News Service v. Associated Press (1918)

§ Facts: AP and INS compete to distribute news. INS gets the news that AP releases and pre-releases it. Held: for AP

§ Rule: There is a quasi-property right in the news. Can prohibit competitors from disseminating information until the novelty has worn off

· Relativity of Title – only good against one’s competitors and not the public

§ Cannot have a property right in facts

§ Property rights are relational and not absolute: limited duration, only against competitors

§ Policy Goal: Reward Enterprise, Skill, and Labor; Incentivize gathering of news

§ Anti-Policy: Copycats serve important societal function (help mechanisms of supply/demand to bring prices down for consumers)

§ Note: Balancing of interests between public interest v. incentive for labor

· iii. ACQUISITION BY CONQUEST

o a. General Rule

§ (Majority) Discovery Doctrine; Conquest gives exclusive title

· US owns property in FEE SIMPLE ABSOLUTE

o Johnson v. M’Intosh (1823)

§ Facts: Johnson bought land from Native Americans. M’intosh bought land from U.S. Held: for M’intosh

§ Rule: Discovery + Possession gives exclusive title

· Native Americans had the right of occupancy but not ultimate title to their lands; did not have right to sell/transfer

· Alienation stick taken away (right to sell land); but right to exclude is still in tact

§ Policy Goal: Utility, Race, Conquest

· (UTILITY) Labor Theory of Justification for acquiring property rights by conquest: They would put land to more efficient use

o US will improve land, whereas Indians will keep it in its natural state

· (RACE) The White European has a better property regime than the fierce savage Indians

· (CONQUEST) Title by conquest is acquired/maintained by force

B. SUBSEQUENT POSSESSION

· i. ACQUISITION BY FIND

o a. General Rule

§ Finder has the superior right to everyone BUT true owner; Prior possessor has the superior right

§ Policy Goals (Owner)

· Encourage productive labor that an owner takes to acquire property

· Security of title necessary to use property for maximum social benefit

· Discourage theft

§ Policy Goals (Finder)

· Return “found” items to productive use, rather than keep it hidden

· Efficient standard to determine ownership with minimal expenditure of societal resources

· Honor reasonable expectations of competing parties

o b. Types of Lost Personal (Moveable) Property

§ LOST: Owner accidentally misplaces it

§ MISLAID: Owner intentionally left it somewhere, then forgets where she put it

§ ABANDONED: Owner forms intent to relinquish all rights in the property

· Lost /Mislaid property may subsequently be Abandoned if the owner intends to give up any claim to the property

· Constructive Abandonment: Someone entrusts property to a person who normally sells that type of property

· Res Derelicatae: Things voluntarily abandoned by their owner with the intention to have them go to the first person taking possession

· Res Nullius: Subject to abandonment without intent; Wild animals, etc.

LOST

O does not notice that his watch slips off

FINDER

Unless trespasser, employee, guest, or licensee

But no claim against true OWNER

MISLAID

O lays watch on counter and does not pick up

OWNER

ABANDONED

O throws his watch away into the garbage

FINDER

o c. Relativity of Title – In a conflict of title between two innocents:

§ Common Law: Vest title in original “true” owner

· You can only convey what you own

· Exception: Bona fide purchaser can get title if the seller/thief regularly deals with this type of object in business

· Policy Goal: Recognize that property is relative, not absolute

§ UCC: Vest title in bona fide purchaser (who has paid Consideration, and has Good Faith belief that seller has title)

· Bona fide purchaser prevails over the true owner when the true ow

possessed property Gobbles.

o Different adverse possessors can be connected via privity to make up the statutory period

§ Policy Goal: Rewards those who use the land productively. A means of clarifying the possession chain; promotes utilization of the land; promotes settling expectations; spreads wealth to those who need it.

o Nome 2000 v. Fagerstrom (1990)

§ Facts: Fagerstroms were seasonally using a piece of land that belonged to Nome 2000 for many years (built a cabin on the land). Nome 2000 brought suit before SOL passed. Held: for Fagerstrom

§ Rules:

· Continuous use is determined by how the average owner of similar property in the local area would use it, not some national criteria

· Adversity determined by Objective standard; Mistake about encroachment doesn’t matter

· You only get what you actually possess

o Actual possession includes: structures built, farming, etc.

o Stakes, berry picking, fishing not enough

o Somerville v. Jacobs (1969)

§ Facts: Jacob built on Somerville’s property in good faith and claim unjust enrichment (accidentally built a building on the neighboring lot)

§ Rule: Improver of land through reasonable mistake is entitled to recover the value of improvements, or to purchase the land (FMV)

· Relative hardship doctrine: If encroachment is innocent result or mistake, harm is minimal, interference is small, and the costs of removal substantial, then allow trespasser to pay owner fair market value for what was lost

§ Policy Goal: Fairness (Good Faith) over Property Rights

§ Note: With chattels, innocent improver acquires title only if there is so great a disparity between original ad improved values that it would be unjust enrichment; if owner retains title, innocent improver awarded value of labor to avoid injustice

II. THE RIGHT TO EXCLUDE

A. IN GENERAL

· i. General Rule: The essence of Private Property is the Right to Exclude

o Exceptions:

§ Competing rights – Constitutional issue

· Property owner’s right to exclude v. intruders right to do what he is doing on the property

· When there are rights of the general public at stake the owner may lose his right to exclude.

§ Supremacy Clause – Federal law trumps state law

B. TRESPASS

· i. In General

o Trespass: An unprivileged intentional intrusion on property possessed by another

§ Protects owner’s right to exclude

§ Distinguished from NUISANCE (Protects owner’s use and enjoyment of the land)

· ii. Questions to ask:

o Was there a trespass?

§ No, if the owner never had the right to exclude

· Potential trespasser’s action did not harm affect the interests protected by trespass law

Innkeepers and common carriers (and other public accommodations in NJ) must have a