PROPERTY (Krier – 2014)
Book: Property Dukeminier 9th Ed.
Introductory Concepts
ACQUISITION by CAPTURE
I. The Rule of Capture
a. The most fundamental rule for determining ownership is that the first person to take possession of a thing owns it.
i. This rule is also known as the “First in Time Rule”
II. Capture of Wild Animals
a. In General
i. Pierson v. Post (1805)
· P pursues a fox for a long time, and right before he captures it, D catches it and kills it.
· Court ruled pursuit alone establishes no right of property, and wild animals become property ONLY when there is capture, or the animal is mortally wounded (a positive sign of intent to capture).
· Main Point: Must capture/mortally wound animal to claim possession
ii. RATIONALE
· Competition- Societal interest to capture foxes (destroy them) or ducks (eat them). To foster competition, society will only reward the captor. This incentivizes rather than discourages hunting.
o Those against this rule state that it discourages hunting. But what they overlook is the fact that if people stop hunting, then those who don’t want to work who are waiting to capture a tired animal will have nothing to capture, so they will start hunting.
o The rule of capture has resulted in an increase in the rate of consumption.
· Ease of Administration- It is easier to figure who captured the animal first than to figure out who saw it first or who first wanted the animal.
iii. RULE versus STANDARD
· Rule- Formalists look to determine what rule applies, attempting to conform case to the rule.
o Rules are advantageous, as they are clearer, they help guide behavior, there is less litigation, and there is less time and effort needed to resolve disputes.
o Rules have disadvantages as well, as they are inflexible, rigid, and often draw arbitrary lines that are counterproductive in reaching the end result that we want.
· Standard- Instrumentalists are more concerned with getting the ends that we want to reach, taking a whole body of rules and applying a basic principle to a case.
o Standards are advantageous in that they are more flexible and adaptive.
o Standards can be disadvantageous in that they are often vague.
· Main Point: A dumb formalist thinks only about the rules. A dumb instrumentalist thinks only about the ends, disregarding the rules. The point is to keep an open mind. We need rules, but we need to be able to apply them.
b. Custom
i. While the general rule is that the captor must acquire physical control over the animal, in some hunting traditions, a custom, thought to be more effective in capturing animals, is used in lieu of the rule of capture.
ii. Ghen v. Rich (1881)
· Whales, when shot with harpoon, sink and rise 1-3 days later. The custom in this town was to shoot the whale with a marked harpoon, and claim it once it surfaces
· The custom is said to advance the killing of whales, as the killer can go out and kill other whales instead of wait for the killed whale to surface.
iii. CAUTION
· Custom often breeds laziness, discouraging ingenuity in creating new techniques for capture.
· Custom should ONLY be observed when it affects us universally, or affects a small group of people who have knowledge of the custom and will observe it.
· Otherwise, custom should not be observed, and new techniques should be developed.
c. Interference and the Notion of Constructive Possession
i. “Rule of Interference”- If a person is in the process of entrapping animals, a competitor who also wants to capture animals can pursue his quest; however, a person who does NOT want to capture animals CANNOT interfere.
· Increased competition helps to meet objective; scaring animals away does not.
ii. Keeble v. Hickeringill (1707)
· P had duck decoy to capture ducks, and D, in order to harm P’s business, shot his gun repetitively to scare ducks away.
· Had D set up his own decoy to capture ducks that would have gone to P, this would be allowed, as the goal of capture is still fulfilled.
· But malicious interference with no intent to achieve social goals is not allowed.
· CONSERVATION
o This rule promotes killing. The goal of society today might be to preserve wild life.
o Therefore, where animals are plentiful, there are no limits; however, when they are scarce, statutes are enacted to regulate the resource.
iii. Hypothetical
· A sets up school. B is not allowed to scare children away, but is allowed to set up school next to A’s school in order to draw students to his school.
· The reason is that we want children to learn, and fierce competition provides for the best education. Scaring children away is contrary to our desired goals.
iv. CONSTRUCTIVE POSSESSION
· A trespasser who captures an animal on the land of another does not have right to it over the landowner.
o We give the trespasser no benefit in order to discourage the practice.
· If trespass were allowed, costs would greatly increase.
o People would take measures to prevent it, trespassers will take greater measures to continue their practice and so on.
· It is easier to discourage trespassing
· Hypothetical
o TO owns item. T1 trespasses and steals it. T2 steals it from T1.
o T1 has a right to the item against the whole world except TO, as T1 is the Prior Possessor.
o TO cannot trespass on T1’s land to retrieve his item; rather, he should take legal action. Of course, if he does trespass and retrieve his item, he can keep it, but he is liable for all damages as a result of the trespass.
d. Animus Revertendi
i. Captured wild animals that have a habit of return continue to belong to the owner. Therefore, if deer are captured, conditioned to a land, and continue to return after wandering away, they are not available for capture by another. Effort to domesticate animal should be rewarded.
ii. CRITICISM
· How is the hunter to know if the animal is domesticated?
· The least cost avoider is he who possesses the animal à put up a fence, attach a bell, etc.
· The outcome of this case would depend on the reasonable knowledge that hunter had or should have had that the animal was domesticated or not.
iii. If undomesticated animal escapes, it is free game to any hunter; however, if animal is not part of the natural environment (elephant in Michigan woods), the hunter should be put on notice that the animal has escaped and actually belongs to another. As this becomes less obvious, the hunter has less chance of liability.
iv. RELIANCE INTEREST
· Hypothetical
o A has a fox that is domesticated. Fox routinely raids B’s chicken coop. B stands guard one night and shoots fox, then skins it and retains the pelt. A sues for return
munity must negotiate to reach an agreement.
i. Since communal owners all have right of use, each member will gobble up every resource he can, and future generations will not be taken into account. Of course, agreements to preserve resources can be made, but negotiation costs are high.
o Costs are carried by others, so there is lack of incentive to care for neighbor, resulting in great externalities.
· Main Point: the more people there are, the harder it will be to coordinate, and the higher chances private ownership will evolve. The smaller the group, the lower the transaction costs.
iii. Externalities
· An externality is not simply an effect on another, but an effect that one does not have to take into account. Once the externality is brought to the creator’s attention, it is no longer an externality.
iv. Communal Forest Example
· Communal ownership of a forest of 1,000 trees by 100 members à each member has an undivided 10% stake in the forest; however, each can exploit the forest at will.
· X chops a tree and becomes private owner; however, the cost is born by all.
o A trader, not part of the group, offers $2 per tree. The wealth of the community increases $2, and the community loses $2 per tree. This balances out.
o However, what we don't take into account is the “future” costs. The cost of actually chopping a tree might be $3, but since it only costs X $0.03 ((3 dollars x 10 trees his allotment) / 1000 total trees), he still makes a profit, and will continue to act in this fashion, regardless of community’s best interest.
o If the resource is vast, the community might not do anything; however, as the resource dwindles, there evolves a need to stop X.
· In order to prevent X from doing this, everyone needs to organize. This is difficult since people behave in their own best interests.
o Even though some will participate in buying X out, some will hold out, becoming a free rider, assuming that others will take care of the problem.
o Still others will join X and cut trees, them too demanding payment to stop.
o Furthermore, even if Y stops X, there is nothing to say that Z won’t do the same thing.
o These transaction and negotiation costs are expensive, and people will exploit rather than conserve the resource. This leads to overconsumption and overinvestment in capture technology.
· Private property evolves à 1,000 trees, 100 people, each person gets 10 trees
o Now, there are no externalities. You chop a tree, you gain it and lose it.
o Automatically, some externalities become internalized. For instance, now X only has to negotiate with people on his borders.
o Furthermore, as your stock depletes through trade, your resources become more valuable, so you raise your prices or decide to hold back and conserve some of your resources.
