Property
UNC Law
Wegner
Spring 2012
Intro to Property Law
Property: rights among people that concern things. Package of legally recognized rights held by one person in relationship to others with respect to some thing or other object.
· Property rights exist only if and to the extent that they are recognized by our legal system. This view that rights, including property rights, arise only through government is known as legal positivism
Why Recognize Property? (text 1-20 / und. 11-21)
1. Five Theories of Property
a) Protect First Possession
The first occupancy theory reflects the familiar concept of first-in-time: the first person to take occupancy or possession of something owns it.
Critique: While it helps to explain how property rights evolved, it does not adequately justify the existence of private property. Further, it is counterproductive because it encourages the waste of natural resources.
b) Encourage Labor
People are entitled to the property that is produced by their labor. Mixing your labor with raw materials makes the property yours. John Locke assumes a world in a state of nature without private property ownership. He seeks to explain how unowned natural resources are transformed into private property owned by one person. Four basic steps:
1. Every person owns his body
2. Thus, each person owns the labor his body performs;
3. So, when a person labors to change something in nature for his benefit, he “mixes” his labor with the thing; and
4. By this mixing process, he thereby acquires rights in the thing.
Examples of labor theory today:
· Accession: one who in good faith applies labor to another’s chattel receives title to the resulting product if, for example, the labor greatly increases the value of the original item
· Adverse possession
· Goof faith improver doctrine
· Various Intellectual Property Rules
Critique: At best, the theory should permit a person to receive the value that his or her labor adds to a thing, not title to the thing itself. Another attack: Time- if someone acquires title to land through labor and then hires workers, they don’t get title as well. Finally, the labor theory assumes unlimited supply of land and other natural resources.
c) Maximize Social Happiness
Utilitarian theory views property as a means to an end. Private property exists in order to maximize the overall happiness or “utility” of all citizens. Accordingly, property rights are allocated and defined in the manner that best promotes the general welfare of society.
Critique: Utilitarian theory is effectively meaningless because it is impossible to assess happiness.
c)Law and Economics Approach
Incorporates economic principles into utilitarian theory. While traditional utilitarianism defines human happiness in rather vague terms, the law and economics view essentially assumes that happiness may be measured in dollars. Under this view, private property exists in order to maximize the overall wealth of society. The law enforces property rights in order to motivate individuals to utilize resources “efficiently.” In this sense, an “efficient” allocation of resources is on in which “value” – defined as an individual’s willingness to pay – is maximized.
How can property law encourage P to grow wheat? Posner would answer question in three steps:
1. First, recognize that P holds property rights in Goldacre.
2. Second, define P’s rights so that P has the exclusive right to the use and enjoyment of Goldacre. In this manner, the law will enforce P’s exclusive rights to the wheat he grows.
3. Third, allow P to freely transfer his rights to Goldacre to others, so that illness or other calamity does not impair wheat production.
Critique: One major concern is its assumption that social utility or value is appropriately measured by willingness to pay. Not all human desires or satisfactions can be qualified in dollar terms. Even if all happiness can be reduced to dollars, the “willingness to pay” standard is fundamentally flawed. Why? The existing distribution of wealth in our society is unequal. Implicit in the law and economics approach is an assumption that increasing overall social wealth will benefit all members of society, a view characterized by some critics as “trickle-down economics.”
d) Ensure Democracy
Liberty theory argues that the ownership of private property is necessary for democratic self-government. Property rights provided citizens with economic security that allowed independent political judgment.
Critique: Modern scholars are skeptical of the original assumption that property ownership is essential to political freedom. Further, taken to its logical conclusion, liberty theory seems to support a redistribution of property from the rich to the poor.
e) Facilitate Personal Development
Personhood theory justifies private property as essential to the full development of the individual. Under this approach, certain things – for example, a wedding ring – are seen as so closely connected to a person’s emotional and psychological well-being that they virtually become party of that person.
Critique: At best, it explains the existence of private property rights only in those “things” central to personhood. It does not seek to justify the existence of “fungible property,” that is, rights in money, stocks, bonds, commercial real estate, and other “things” that are less connected to personhood.
2. The Fox and the Celebrity
Pierson v. Post
Who can assert the best property right in fox killed on “open” land: pursuer (hunter) or killer (farmer) (under early NY law)?
◦ Majority’s Test: (held for Pierson, the farmer since requirements stated were not met)
◦ “unequivocal intention of appropriating” +
◦ deprivation of natural liberty +
◦ brought within “certain control”
◦ Dissent’s Test (would hold for Post, the huntsman)
◦ Large dogs?
◦ May be “captured” provided is within reasonable reach or have reasonable prospect of taking…
◦ What he has thus discovered and has intention of converting to his own use
White v. Samsung Electronics America, Inc.
Can celebrity assert “right of publicity” to bar advertiser from parody of her “persona” without payment (under CA law)?
What is Property? (text 25-94 / und. 1-7)
Property can be viewed as a “bundle of rights” in relation to things. The most important in the bundle are: right to transfer, right to exclude, and the right to possess, and the right to destroy. The rights in the bundle can also be divided by time and person.
Real Property consists of rights in land and anything attached to land (e.g., buildings, fences, or trees). It includes certain rights in the land surface, the subsurface (including minerals and groundwater), and the airspace above the surface.
Personal Property
· Chattels are items of tangible, visible personal property.
o Exceptions: Although human kidneys, ova, fingers, etc. may be characterized as “tangible, visible things,” many courts and legislatures have proven reluctant to extend property rights this far. Similarly, deer, foxes, whales, and other wild animals in their natural habitats are deemed unowned.
· Intangible Personal Property
; and much of the rigid common law absolutism has been replaced by a flexible, reasonableness standard that gives more deference to the needs of third parties and society at large.
2. WATER RIGHTS
Water rights in rivers, lakes, streams and other watercourses are allocated through two basic systems. The riparian system dominates in eastern states, where water is usually abundant; the prior appropriation system prevails in western states, where water is typically scarce. The difference between the two is fundamental: the riparian system is based on the location of land, while the prior appropriation system is based on the first use of water.
1. RIPARIAN SYSTEM
A riparian system allocates water right to the owner whose land adjoins a river, lake, stream or other watercourse.
Reasonable Use Doctrine: Today, virtually all riparian jurisdictions follow the reasonable use doctrine, sometimes called the “American rule.” Under this approach, a riparian owner may take water for all reasonable uses that do not unreasonably interfere with the uses of other riparian owners. Whether a particular use is deemed reasonable hinges on a number of factors, including the economic and social value of the use, the purpose of the use, its suitability to the area, the harm cause to other users, the practicality of avoiding the harm, and so forth; domestic uses receive special priority.
While the reasonable use standard facilitates the productive use of land – unlike the “natural flow” rule – it suffers from the usual defects in ad hoc tests: it is unpredictable in result and expensive to administer.
Natural Flow Rule: A few riparian jurisdictions still adhere to the historic natural flow rule. Under this view, the riparian owner may: (1) take an unlimited amount of water for “natural” resources (drinking, bathing, washing); and (2) take water for “artificial” uses (irrigation, mining) so long as the natural flow of watercourse is not substantially diminished in either quantity or quality. As a practical matter, the natural flow rule tends to restrict new uses, and thus impedes development.
2. PRIOR APPROPRIATION SYSTEM
The prior appropriation system is a variant on the familiar first-in-time rule. It allocates water rights to the first person to take water from a watercourse for beneficial use.
· Beyond its fostering the productive use of land, the prior appropriation system as the usual virtue and vice of any capture rule: it provides a predictable “bright line” standard that is easily administered, but tends to encourage wasteful consumption.
· The “beneficial use” requirement somewhat resembles the “reasonable use” standard in riparian jurisdictions. Beneficial use has two dimensions: purpose and quantity. Water may be taken only for a use that has a beneficial purpose (irrigation, recreation). And, in most states, only the quantity of water necessary for the beneficial use may be diverted.
