Theories of Property
A. Locke’s Labor Theory: [1] everyone owns himself; [2] because you own your labor, [3] when you mix that labor with something unowned by anyone; [4] you own the resulting mixture.
a. EX: Robinson Crusoe owns rock because he dug it out of the ground.
b. Haslem v. Lockwood: mixing labor with manure to make it valuable
c. Johnson v. M’Intosh: Indians did not mix enough labor to have right to own land
B. Natural Law Theory: property is a [1] pre-political entitlement; [2] something natural and eternally existing
C. Utilitarian Theories: [1] self-interested acquiescence in social and legal rules; [2] we accept legal protection for other’s property because we desire that protection for our own property
a. Scarcity: need protection due to scarcity, wouldn’t need property rights w/o scarcity
b. Demsetz: private property is more efficient than communal property b/c it’s easier for individual owners to internalize the externalities that come with use of your land (externality – third party effect that actor doesn’t have to take into account, ex: light in front of my house benefits others but I bear whole cost)
i. Internalization of Beneficial and Harmful Effects: main allocative function of property rights
ii. Negotiation: someone who is harmed by the use of land can easily negotiate with one person (rather than a group) to offer payment to landowner to internalize cost
iii. Costs: cost attached to marking off private territories cheaper than not having boundaries
iv. Future Use: Private property owners think about the future use of their land (vague notion according to Simpson)
v. Anthropological Support: private property began when a market for fur arose because it was necessary to mark hunting territory for individual economic needs due to scarcity
vi. Tragedy of the AntiCommons: when nobody can make use of an asset (Ex: in Russia cheaper not to use stores because you had to get so much gov’t permission)
D. Utility and Efficiency: [1] property is an efficient response to scarcity; [2] externalities are internalized making production of goods needed for human life more efficient.
E. Custom: property rights often occur by custom intended to maximize aggregate wealth of the customary participants
First Possession: Acquisition of Property by Discovery, Capture, and Creation
A. Personal Property Rights: a bundle of rights, [1] right to exclude; [2] self-help protection (locks); [3] can sue w/ rights enforceable by courts; [4] sell, trade or give away; [5] can leave and dispose of
a. Power: can do all sorts of things in your home that you can’t do anywhere else
b. Problems: [1] ownership privileges one person and excludes the rest; [2] distribution inequalities; [3] moral problem w/ people having property they have not earned
B. Acquisition by Discovery: sighting or finding frequently accompanied by symbolic taking of possession
a. Johnson v. M’Intosh
i. Facts: Rival claim for ownership. Johnson’s claim of title was as last link in chain of title going back to aboriginal inhabitants of the land. M’Intosh said his title was better because it came from U.S. although after aboriginal conveyance.
ii. Held: For M’Intosh. The Indians only held aboriginal title, a right of occupancy that could be cut off at any moment by US. Title by government acquired by discovery is superior to that of the aborigines.
iii. Lose Right of Occupancy: by [1] US purchasing land; [2] conquest (reminder of socially contingent nature of property); [3] abandonment
b. First in Time: not a question of fact (Ex: law school in possession of chair even though I am sitting on it)
C. Acquisition by Capture: wild animals one of the few things unowned susceptible to capture
a. Actual Possession: usual method of acquiring a property right in wild animal is actual possession
i. Pierson v. Post: trespass on the case action (interference with your person, property, or land)
1. Facts: rival claims to ownership of dead fox. Post chased fox for sport on common/unowned land. Before Post had wounded or captured fox, Pierson intervened, killing and taking fox, although he knew of Post’s pursuit.
2. Held: [1] Post did not own fox until he actually possessed it. [2] Mere pursuit was not enough. [3] Is enough if it is mortally wounded and remain in pursuit since that shows the right intention (makes escape impossible)
a. Intention: determinative here, if you grab something during seizure you may not have possession because of intention
3. Rationale: Rule of actual possession promotes certainty and peace, motivating people to kill foxes.
4. Dissent: [1] better to adopt customs of sportsmen; [2] recognition of a property right when there is a reasonable likelihood of capture would lead to more rapid extermination of foxes.
5. Ferae Naturae: no right to fox unless [1] bringing into possession, or [2] taming
b. Custom: [1] individuals conform to customary rules out of self-interest; [2] maximizes well-being of the group
i. Ghen v. Rich
1. Facts: finder of whale defied custom by selling carcass to Rich, who appropriate whale’s oil and blubber. Whaler, Ghen, had shot whale with identifying lance.
2. Held: custom determined ownership because [1] nature of industry did not allow for acquiring immediate possession; [2] rule of first physical possession would eliminate all incentive to hunt whales thus depriving society of the benefits of supply of blubber
3. Custom: [1] Custom was a reasonable one, and [2] there is general assent to the custom
a. Not in Community: should it be applied to those people?
4. Damages: [1] market value of oil obtained from whale, [2] less the cost of preparing it for market
c. Importance of Policy Ends to the Nature of Property Rights: property rights not entitled entirely from intricate set of logical rules
i. Goals of Property: [1] reward productivity and foster efficiency; [2] create simple, easily enforceable rules; [3] create property rules that are consistent with societal habits and customs, and [4] produce fairness according to cultural expectations
ii. Keeble v. Hickeringill
1. Facts: Keeble maintained decoy pond to attract ducks to be killed for food. Hickeringill frightened ducks away by discharging a shotgun nearby.
2. Held: Hickeringill’s conduct was actionable because he was maliciously interfering with Keeble’s lawful activity.
a. Distinguish from Fair Competition: would be perfectly proper for schoolmaster to lure students to another school by offering better instruction, but not lawful to frighten them away
b. Economic Rationale: [1] fair competition improves society; [2] Hickeringill’s conduct total drag on societal improvement
c. Trade: more of a trade here as distinguished with Post (sport)
d. Relative Title: one person’s claimed property right is almost always good or not good only in relation to others
i. Trespasser: values of first possession and landowner’s right to exclude collide
1. Policy: [1] Landowner would have right if trespasser captured animal on his land. Society wants to discourage trespassing. [2] Trespasser would have relative title against one who took animal from him (prior possessor prevails).
e. Escapees and Domesticated Animals
i. Wild Animals: wild animals that escape are unowned so belongs to the next first possessor
ii. Domesticated Animals: [1] aren’t wild, so [2] continue to belong to their prior possessor when they wander off
1. Becoming Domesticated (Animus Revertendi): wild animal becomes domesticated when it demonstrates a propensity to return home
iii. Policy Tensions: Stephens v. Albers – silver fox native to Canada was confined in Mississippi by owner-possessor, fox escapes and was k
celebrity, even though no use was made of her voice, name, likeness, or signature. [2] Exemption for parodies. [3] Raises questions of censhorship under free speech guarantee.
c. Third Party Liability
i. Infringement: distribution of a commercial product capable of substantial non-infringing uses could not give rise to contributory liability for infringement unless [1] the distributor had actual knowledge of specific instances of infringement, and [2] failed to act on that knowledge (Sony Corp. of America v. Universal City Studios, involved tape recorders)
ii. MGM Studios v. Grokster (file sharing programs)
1. Facts: Copyright holders brought action against distributors of peer-to-peer file sharing computer networking software.
2. Held: Because Ds intended to induce or encourage direct infringement of copyrighted materials by distributing their file sharing software, they were contributorily liable for third party infringement.
3. Mere Knowledge: knowledge of infringing potential or of actual infringing uses not enough to subject distributor to liability
4. Active Encouragement of Direct Infringement: such as [1] advertising an infringing use, or [2] instructing how to engage in an infringing use are sufficient to show intent to induce or encourage infringement
d. Property in One’s Person
i. Moore v. Regens of U of California
1. Facts: Moore’s cancerous spleen was removed and, without his knowledge or consent, a valuable patented cell line was developed. (Simpson: he really wanted a piece of the profits, not his spleen)
2. Held: No cause of action for conversion. Never had ownership because he never expected to retain possession of spleen.
3. Rationale: [1] Chill medical research. [2] Moral issues involved ought to be left to politically accountable legislature. [3] Moore still had available to him claims based on asserted breach of fiduciary duty by his medical providers. [4] Strict Liability (impose burden on researchers to check up on where cell line came from); [5] Can give satisfactory remedy (full-disclosure)
4. Body Parts: View that body parts ought not to be for sale.
5. Legitimate Interest: people may very well have interest in what happens to their bits (Ex: distress may be an interest, dog knowing at your kidney)
6. Balance of Values: [1] Efficiency (fostering the commercial exchange of body parts and aiding scientific discoveries of broad social value); [2] fairness (should people be deprived of the value of their parts?); [3] cultural mores and expectations. [4] Would allowing sale of organs lead individuals to lie about their medical history
7. Concurrence: [1] Legislature should decide this issue (more people involved)
8. Dissent: [1] Property is a bundle of rights. Abstract concept. Still a property interest even if there is a prohibition in some areas. [2] Ban on sale doesn’t mean there are no property rights.
ii. Things that Can’t Be Destroyed: [1] Historic artifacts; [2] animals; [3] flag (laws about this); [4] currency; [5] Causing Pollution (can’t burn certain types of things); [6] Body Parts
e. The Right to Exclude: owners of lands rights to exclude others
i. Jacque v. Steenberg Homes
