Matsumoto, Property I, Fall 2011
ACQUISITION OF PROPERTY RIGHTS
1. To constitute possession, there must be (a) a certain amount of actual control over the property, and (b) an intent to possess the property and exclude others
a. A person can be deemed to have possession of property even though he does not have actual possession of the property as an observable fact, and in such case the person is said to have constructive possession
1. ACQUISITION OF PROPERTY RIGHTS BY CAPTURE
1. Wild Animals and the Rule of Capture
a. Title to wild animals is initially acquired by taking possession of the wild animal
i. General rule is “first in time, first in right”
ii. The mere chasing of an animal, although in hot pursuit, does not give the pursuer a right to possession against another who captures it by intervening
1. POLICY: Certainty in property rights, minimizes quarrels/promotes order and peace, fosters competition, and eases administration
a. May not promote peace, however, if second hunter can swoop in and grab the fox from first hunter
iii. If an animal is mortally wounded, or caught in a trap so that its capture is certain, the hunter acquires a right to possession and title which may not be defeated by another’s intervention, unless the hunter abandons the animal
iv. Title acquired by possession can be lost if the wild animal escapes and returns to its natural habitat
b. Barbeyrac Rule
i. Where a first hunter initiates a chase of a wild animal, but does not acquire physical possession, and a second hunter intervenes in the chase and gains possession, and the chase is on a neutral ground, then the second hunter receives the property in the animal, unless the first hunter has
(a) not abandoned the chase,
(b) manifested the intent to capture the animal,
(c) deprived the animal of its natural liberty, and
(d) brings the animal within certain control (Pierson v. Post)
c. If the animal is not indigenous to the area, it may not be considered wild and a prior possessor, or true owner, may exist, who would have a superior claim to the animal than the capturer
d. When the hunt takes place on one of the hunter’s land, and the other hunter does not have permission to be on the land, then the other hunter is a trespasser and should not benefit from his wrongdoing
i. When the hunt takes place on a third party’s land, the courts will look at whether the hunters had permission to hunt, in which case one or both may be a trespasser
2. Multiple Valid Claims of Possession
a. More than one party may have a valid claim to property when one party takes significant steps towards possession, creating a pre-possessory interest, but is interrupted by unlawful acts which allows another party, who is not a wrongdoer, to gain possession (Popov v. Hayashi)
i. POLICY: Courts do not want to endorse the actions of wrongdoers
2. ACQUISITION OF PROPERTY RIGHTS BY FIND
1. A finder is a person rightfully acquires possession of the property of another that has been lost, misplaced, abandoned, or hidden so as to be classified as treasure trove
a. Lost property consists of personal property whose possession has been parted with casually, involuntarily, or unconsciously
b. Misplaced property refers to personal property which as been intentionally placed somewhere and then unintentionally left or forgotten
i. Ex: Carefully wrapped bills in a location accessible only by removing a panel
c. Abandoned property consists of property that is no longer in the possession of the prior possessor who has intentionally relinquished, given up, or released the property
i. Ex: Money is presumed to not have been abandoned
d. Treasure trove consists of coin or money concealed in the earth or another private place, with the owner presently unknown
2. Rights of a Finder at Common Law
a. A finder of lost property acquires title to the property as against all but the true owner
i. Even if a possessor has obtained his possession wrongfully, he will be entitled to recover from a third person who interferes with that possession
1. POLICY: Any other rule would lead to an endless series of unlawful seizures
b. The prevailing rule is that if a person finds personal property on the land of another, the finder is entitled to the personal property unless the finder is a trespasser or the property is embedded in the land (Favorite v. Miller)
i. Property is embedded if the finder must disrupt the owner’s land in order to recover the property
ii. POLICY: There is a strong preference for finders at common law because it encourages people to find property and bring it back into circulation, thus performing a valuable social function
c. The finder is in a relationship with the true owner similar to that of a bailor-bailee
d. The finder of misplaced property is not entitled to retain the possession of the property as against the owner of the land on which the property was found, rather, the owner of the “locus in quo” is deemed to be the bailee of the goods for the true owner (Benjamin v. Lindner Aviation, Inc.)
i. POLICY: There is a concern of protecting the interests of the true owner – there is a decent chance he returns to LIQ
e. The finder of abandoned property generally is entitled not only to possession but also to ownership as against all others
f. In England, treasure trove is escheated to the crown, while in the United States it is treated as lost property and belongs to the finder
3. Statutes Governing Finders
a. Many states have enacted statutes which give the finder greater rights to found property than the finder had at common law
i. FORK: Generally, these statutes eliminate the distinction between lost, misplaced and abandoned property and treasure trove, and award the found property to the finder in most cases
ii. Frequently statutes require the finder to deposit the found property with local authorities, post a notice attempting to advise the true owner the property has been foun
t term
b. The bailee is liable for conversion, regardless of negligence, if the bailee wrongfully refuses to return the goods or if the bailee delivers the goods to the wrong person (misdelivery)
c. Liability of the bailee is based on negligence if the goods are lost, stolen, destroyed, or damaged during the bailment
i. BURDEN OF PROOF: Typically, the burden is on the bailor to establish that the bailee was negligent, and if the bailor proves delivery of the goods and failure to return them, or re-delivery in a damaged condition, the bailor establishes a prima facie case, and the burden of going forward with evidence shifts to the bailee
1. Presumption of negligence, in essence, when the goods are re-delivered in a damaged condition or not re-delivered at all
d. Generally, provisions which attempt to waive or limit the bailee’s liability are void if the bailor is unaware of the provision
i. Many courts also hold that even where the bailor is aware of the provision, the provision is void on public policy grounds
1. POLICY: Inappropriate for a person to exempt himself from liability for his own negligence
ii. Some courts uphold clauses that merely limit liability to a specific sum but do not disclaim all liability
e. As a general rule a person cannot convey a better title than he or she has to a third person
i. However, it would be inequitable to hold an innocent purchaser for value liable to another for goods purchases from a wrongdoer when the purchaser had no reason to suspect any wrongdoing and paid full value for the goods
1. Bona fide purchaser or a buyer in the ordinary course of business
2. ELEMENTS IN DETERMING WHETHER SOMEONE IS A BUYER IN THE ORDINARY COURSE OF BUSINESS:
a. Buyer purchases property in good faith,
1. Must have both honesty in fact and observance of reasonable commercial standards of fair dealing in trade
b. without knowledge that the sale violate the rights of the true owner,
c. from a person in the business of selling the property
d. and in the ordinary course of business
3. POLICY: Rule of Estoppel, meaning that an owner is estopped from claiming a superior title as against the bona fide purchaser for value because the owner’s acts were largely responsible for the loss and the innocent purchaser was not in a position to protect himself
4. Due diligence by the bona fide purchaser may be required in order to satisfy these elements
