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Property I
University of Pennsylvania School of Law
Parchomovsky, Gideon

Team “We Run the Streets”
Property Parchomovsky Fall 2010
 
I.      What is Property?
II.   Acquisition and Conflicting Claims
III.           Dominion: The Rights of People Who Own Land in Fee Simple
IV.           Possessory Estates
V.      Future Interests
VI.           Co-Ownership and Marital Interests
VII.       Landlord-Tenant Law
VIII.    The Law of Nuisance (Land Use Controls)
IX.           Servitudes
X.      Public Land Use Controls: Zoning
XI.           Eminent Domain & Regulatory Takings
 
 
 
I. What is Property?
 
A. Blackstonian Ideal of Property (1765-98): That sole and despotic dominion which one man claims and exercises over the external things of the world in total exclusion of the right of any other individual in the universe. “There is nothing which generally strikes the imagination and affects mankind as the right of property.”
·         3 core elements:
§ 1. Scope of Owners’ rights and powers (absolute dominion)
§ 2. Number of Owners (ideally, 1)
§ 3. Things (assets) – tangible/intangible
 
B. Modern Definition of Property: “bundle of rights” rather than referring directly to a material object such as parcel of land or tractor that cultivates it.
Right to possess
Right to use
Right to exclude others from property
Right to dispose/transfer of the property by sale or by gift
 
Property rights are not absolute—you can’t do whatever you want. (Ex. You can’t pollute neighbor’s lot, you can’t throw loud parties, can’t discriminate against minorities in commercial property, etc.)
Property mediates people’s conflicting desires over resources by allocating rights to the resources & defining the content to those rights.
Property rights are in rem: against the thing rather than the person.
 
C. Externalities: The effects of one’s actions on other ppl, the cost of which is not fully borne by the actor. (Ex. Littering. If you litter, you get a large marginal benefit, but bear only a minimal marginal cost through municipal taxes, but – externality to others).
“Tragedy of the Commons”: Actors improve their own condition to the detriment of others. Resources in common will always be abused.
Harold Demsetz: “Towards a Theory of Property”:
o    Utilitarian maximizing of welfare: Private property is best way to achieve the internalization of all externalities. Ideal of single owner in which all benefits and costs concentrated.
§ Common Property flawed bc ppl d/n take into acct effects of actions on neighbors. Bc owner c/not exclude others, lacks a direct incentive to economize in the use of land in a way that takes into acct effects on others. Private Property owners, however, will maximize land’s present value (broker whose wealth depends on how well he takes into acct effects of prop)
§ Resources will shift from common ownership/open accessàprivate property (single owner) as it becomes cost effective to make this change.
§ People will always tend to overconsume natural resources. You will never litter in your private property.
§ We will see private property under single owner when costs (1. set up costs, 2. marking boundaries, 3. enforcement of rights) are lower than cost of externality. Benefit of private property under single owner > Benefit under common regime
 
 
II.               Acquisition
Rules vs. Standards:
Rules
Standards
More costly to enact
Easier/cheaper to enforce
Consistent/certain
Institution: Legislature
Not costly to enact
Inconsistent
Vague
Institution: Courts
 
 
Theories of Acquisition of Property:
·         1. First in Time: First to Possess resource gains ownership over it.
*According to First in Time, Pierson should win—first to actually capture.
 
·         2. Labor Theory (Locke): (Pierson dissent). (1) Ownership of Body; (2) Ownership of Labor; (3) Establish rights in external resources by mixing labor w/ external resources.
A.      Starting point of common ownership à Private Property
B.      Application to Pierson: Arguably, no Labor is “mixed” in get

eturns whale (Duty of inquiry notice—send word to find out who owns whale). P killed whale, finder Ellis sold it to Rich. Ghen learned of the sale and initiated a libel action against Rich to recover the value of the whale.
Issue:1-Can the court look to custom within an industry to determine the rule of law re: ownership of property? 2-Who owns the whale?
Holding:Ghen owns whale and gets damages bc of custom. Custom is reasonable. 1-Yes, the court can look to custom. 2-The party who harpoons (kills) the whale is the owner even if it is later discovered on the shore by another.
Rule: The killer of a whale is the rightful owner. Relying on the industry practice of whaling.
Contrast:Pierson v. Post: Did not follow industry practice for fox hunting. Post would have won if they did.
Policy: Efficient to let whales wash ashore—finder’s fee system seems to f(x) well.
Takeaway Pts: Case discusses how you maintain property right after acquiring it.
Acquisition—————————–àMaintenance——————————àTermination
o    NOTE: Often, tension btw Law and Custom. Here Law (Rule of Capture) and Custom à same result
o    Judge thought it was important to refer to industry practices because custom is important to the industry.
(+)’s of Customs/Norms:
·         More readily available
·         Actors behave along social norms
·         Often industry participants know more than judges.
·         Many daily activities are regulated by social norms.
(-)’s of Social Norms:
·         May not represent society as a whole. Can be exclusionary.
·         Can target other groups