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Property I
University of Pennsylvania School of Law
Parchomovsky, Gideon

Professor Parchomovsky
Fall 2010
Property Law
 
 
 
Exam Tips:
v do the questions in order (policy question last)
v neither the cases nor the bottom line answer really matters – you really do not need to decide the case, just do the analysis (mention cases in parenthesis for authority, unless the fact pattern is very similar to the case facts, or if you can distinguish the fact pattern from case facts)
v READ the questions carefully
v Always make sure the answer
v Order of issues is not important, just get to them all
v Never assume a jurisdiction
v Begin by classifying the estate
v Policy questions:
o   Just name everything that comes to mind that would be applicable
o   Applicable social theories:
§ Utilitarianism
§ Redistribution
§ Negative or positive externalities
o   State possible solutions → what should be the optimal policy?
 
 
 
 
 
Introduction
·         Rules of property determine distribution of wealth, therefore distribution of political order
o   Lies at the center of private law
o   Rights in rem against the world
·         Property is a bundle of rights:
o   Right to use
o   Right to exclude others
o   Right to transfer/Alienability
·         Institution of property mediates people’s conflicting desires over resources by allocating rights to them
·         Rules vs. Standards (the dictates of property law):
o   Rule (drive speed limit):
§ More consistency and certainty
§ Communicated to the people systematically
§ Easier/cheaper to enforce
§ Costly to enact
§ Form stronger basis for expectations and foster reliance
§ More power o legislature
o   Standard (drive at reasonable speed):
§ Less costly to enact
§ More expensive to enforce
§ Inconsistency
§ More litigation
§ Takes into account situations not covered by rules
§ Effect shift in institutional power to Courts
·         Fairness vs. Efficiency (our goal to be either one will change over time)
o   Fairness:
§ Justice, Equality
§ Remedy- normally all or nothing split
o   Efficiency:
§ Wealth maximization
§ Remedy- may be some sort of compensation
 
Right to Use/Possess
Possession
 
To have possession, the finder must acquire physical control over the object and have an intent to assume dominion over it
§ Constructive Possession: an owner of land has constructive possession over all the items in the land even if he is unaware of their existence (the law equates constructive possession with actual possession
 
Acquisition of Resources
Acquisition by Capture
Wild Animals
 
Theories of Property Possession:
1.      First in Time/Temporal Priority/First Possession (Pierson) – the person to first possess the resource gains ownership over that resource
2.      Labor Theory of Property – from Locke; ownership should be revealed to others so 3rd parties know who posses it; when you mix labor with external resources, the act of mixing gives you ownership of those resources. You have rights to the property of:
§ Of our own body
§ By our labor
§ By mixing our labor with a resource that doesn’t belong to anyone
However, you cannot commit waste and you must leave as much for others
 
First Possession: Four Methods for Establishing Ownership (first possession) of Property:
                    I. Actual possession (clearest sign of possession): Seizure of animal is needed to claim occupancy; you must have actual corporal possession of them (Puffendorf)
                 II.      Certain control
a.       Pierson v. Post, Supreme Court of NY, 1805 (18)
                                                                    i. Facts: Post’s dogs were pursuing a fox on a beach. Pierson then spotted the fox and killed the fox before Post’s dogs had reached it. Pierson took the fox away. 
                                                                  ii. Rule of Capture: Must kill or cause mortal wounds to the animal “so that the pursuer has an unequivocal intention of using the animal for his individual use, has deprived the animal of its individual liberty, and brought him within his certain control.” 
                                                                iii. Justification: It would be hard to just lay claim on an animal by the pursuit itself, as that would cause too many quarrels and too much litigation
                                                                iv. Dissent: this rule of mortal wounds will discourage the hunting of foxes, and we should instead encourage hunting by allowing pursuit with large hounds to equal possession (Locke’s Theory)
                                                                  v. Policy (Bethany Berge): There was a new economy in the town, which motivated Post to sue to protect old money
b.      Papov v. Hayashi, CA Sup Ct, 2002 (Class)
                                                                    i.      Facts: Barry Bonds home run ball landed in Papov’s glove but crowd makes him drop it and Hayashi picks it up off the ground
                                                                  ii.      Rule: Rule of capture applied even though ball not a wild animal
                                                                iii.      Holding: Ball should be auctioned off and money split
                                                                iv.      Different from Pierson because it would not have made economic sense to split profits because no one would have bid on the fox, not an unique item like the baseball and doesn’t have a market value
               III. Reasonable prospect
              IV. Pursuit with large hounds (weakest control)
 
Labor Theory: the person who actively works for the end product takes the title of his labor
 
Norms/Terms of usage/Industry Practice: When a custom encompasses an industry or is instrumental to an industry’s commercial viability
o   Social Norms:
§ Strong basis for people’s behavior
§ Industry participants have superior info about what works for them
§ Social norm among hunters that Rule 3 would have dominated and Post would have won
§ Social norms will occasionally come into conflict with legal norms and must be resolved. Sometimes social norms themselves are in conflict.
o   Legal Norms
§ Law is effective when its in accordance with the norms
§ At point of termination with property, lose your rights buy liability is likely to continue
o   Epstein: Many policy options to change norms because there are reasons to reject them if they are not beneficial to everyone, may be vague, or may not know ho is responsible for enforcing them
o   Local Custom: dictate the property common law (because locals know what is most fair and efficient)
·         2 types of efficiency:
1.      Aggregate efficiency – demolishing the number of whales will hurt the ecosystem; we care about aggregate efficiency more when the two conflict
2.      Group efficiency – the whaler is concerned with the number of whales he kills
·         Ghen v. Rich, US District Court of MA, 1881 (26) – application of labor, first appropriation and influence of social norm theories:
o   Facts: P killed a whale and then three days later the whale resurfaced 17 miles away on a beach. Ellis found the whale and sold off its parts to the D. Neither Ellis or D knew it was killed by the P, but they should have known that it was killed by someone in this business. In Cape Cod the social norm is that the person who kills the whale owns it. The person who finds the whale gets a small salvage fee for finding the whale and returning it to the rightful owner. 
o   Rule of usageàFirst Appropriation: when the whale was killed and has marks of appropriation, it is the property of that person
o   Social Norm: whale belongs to original killers; industry custom would control property if it embraces entire business and has a limited application
 
Malicious Interference of Trade: “Where a violent and malicious act is done to a man’s occupation, profession, or way of getting a livelihood, there an action lies in all cases.” This is malicious interference of trade. 
·         Keeble v. Hickeringill, Queen’s Bench, 1707(30)
Facts: P owns a plot of land on which he has a decoy pond for the catching of wildfowl. D, on two occasions, came and discharged his gun several times so as to scare away the wildfowl.
Had D built his own po

thers then you can’t do it. Trade system can make the rights below transferable as a common way to regulate:
a.      Absolute Rights (very few states): Can extract even if extractions inhibits neighbors usage
b.      Limitation: no waste
c.       Reasonable Amount (standard): every owner can extract reasonable amount
d.      Correlative rights (rule): each owner entitled to withdraw pre-specified portion to be determined based on percentage
2.      Streams and Lakes: 
a.       Eastern Rule on Redirection Rule of Water Away from Source
                                                                          i.      For use on non-riparian land (by riparian owner): the divergence must not cause actual injury to a lower estate for present or future uses
                                                                        ii.      Stratton v. Mt. Herman Boys’ School, Massachusetts, 1913
1.      Facts: P lives downstream on a river from the D and uses the water to generate electricity. The D was taking water out of the stream at a high rate to fulfill the needs of his Boys’ School. Both the P and D own land next to the river. P upset about D using all his water.
2.      Holding: D did use water on his non-riparian land, and did cause damage to the P’s electric mill, thus the P is entitled to substantial damages. 
3.      Rule: each owner has the right to extract a reasonable amount subject to other riparian owners right to do the same
                                                                      iii.      For use on riparian land: a riparian proprietor may use the water in a stream in connection with his riparian estate when:
1.      Use is within the watershed
2.      He cannot diminish the river more than what is reasonable
b.      Western Rule on Redirection of Water Away from Source 
                                                                          i.      First Appropriation Rule: the first appropriator of water from a natural stream for a beneficial purpose has a right to the water. 
                                                                        ii.      Note: distance from the source has no bearing on the priority of appropriation
                                                                      iii.      Coffin v. Left Hand Ditch Co., Colorado, 1882:
1.      Facts: D is a landowner alongside the St. Vrain creek and uses the creek for natural irrigation. The P diverts the water through a series of ditches to a stream near their land which they then use to irrigate their lands near the Left Hand creek. Dams had been constructed to make this diversion possible. In 1879 there was not enough water for both uses, so the D destroyed the dam diverting water away from the P’s ditch. The P is suing for damages.
2.      Holding: P correct in diverting water, D should not have destroyed dams
3.      Policy Implications: National, state governments encourage the use of diversion of irrigation water to make use of arid land. A great portion of then unproductive land is destroyed if diversions cannot occur, thus much currently productive land in the US would be lost. Want people to keep developing therefore provide them insurances that water would be their property in the long run
4.      Rule: first person who put water to productive use has right over it