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Property I
University of Pennsylvania School of Law
Balganesh, Shyamkrishna

Table of Contents
I.       What is Property?. 3
A.              Two Conceptions of Property. 3
1.         Two Theories of Property. 3
2.         Two Kinds of Rights. 4
B.              The Trespass / Nuisance Divide. 4
1.         Coase Theorem.. 4
C.              Property and Equity. 4
1.         Equity Courts. 4
2.         Repeated Trespass. 5
3.         Building Encroachments. 5
4. Ex Ante vs. Ex Post5
D. Restitution. 5
II.      Acquisition of Property. 6
A.              First Possession. 6
1.         Wild Animals. 6
2.         Open Access & the Commons. 7
B.              Discovery, Novelty. 8
C.              Creation. 9
D.              Principle of Accession. 10
1.         Increase. 10
2.         Doctrine of Accession. 10
3.         Ad Coelum.. 11
4.         Accretion. 11
5.         Fixtures. 11
E.              Adverse Possession. 11
F.              Sequential Possession. 14
G.              Competing Principles. 14
III.     Ownership Values. 15
A.              Moral and Cultural Rights. 15
B.              Theories of Ownership. 15
C.              Public Rights. 16
1.         Navigable Waters. 16
2.         Navigable Airspace. 16
3.         Public Trust Doctrine. 16
IV.     Owner Sovereignty & Its Limits. 17
A.              Criminal Actions. 17
B.              Civil Actions. 18
C.              Self Help & Limits. 20
1.         Exceptions to the Right to Exclude. 21
2. Exception to RTE-Public Accommodation. 21
D.              Licenses. 23
E.              Bailments. 24
F.              Abandonment & Destruction. 25
G.              Transfer Rules. 26
1.         Statute of Frauds. 27
2.         Delivery Requirement27
V.      Forms of Ownership. 27
A.              Division by Time. 27
1.         Present Possessory Estates. 27
2.         Future Interests. 28
3.         Vesting. 28
B.              Divisions by Time. 29
C.              Numerous Clauses. 32
D.              Mediating Conflicts over Time. 33
1.         Waste. 33
2.         Restrains on Alienation. 34
3.         Rule against Perpetuities. 34
4.         Vestigal Maintenance Doctrines. 36
E.              Co-Ownership. 36
1.         Partition. 37
2.         Contribution and Accounting. 38
3.         Severance. 38
VI.     ENTITY PROPERTY.. 39
A.              Leases. 39
a. The Independent Covenants Model39
b . Forfeiture Clauses: Extensions of the Independent Covenants Model40
b. The Model of Dependent Covenants: A paradigm shift41
1. Implied warranty of habitability. 41
Transfer of Interests. 43
1. Assignment and Sublease. 44
Cooperatives, Condominiums, and Common-Interest Communities. 46
C. Non-possessory interests. 47
1. Trusts (property in a trust = trust or trust res)47
a.   Spendthrift Trusts. 47
b. Changed circumstances. 48
 
I.                    What is Property?
A.                  Two Conceptions of Property
 
Jacque v. Steenberg Homes, Inc, Wisconsin, 1997. [RTE, mobile home delivery over farm] ·         Facts – Δ had to deliver mobile home, and plowed a path through π field to do so. π did not want Δ to go over his land.
·         Holding – Jury awarded $1 nominal damages and $100,000 punitive damages.
·         Law of Intentional Trespass: Any intentional intrusion that deprives another of possession of land, even if only temporarily, is considered a trespass.
·         Can apply nominal damages, $1, and then putative damages, $100K, because actual damage done little but deterrence is important. 
·         Values – court allows punitive damages because there are real harms even if there are no monetary damages. Reasons include:
o    Prevention of violence – private landowners might resort to “self-help”
o    Privacy reasons
o    Integrity of legal system
o    No risk AP bc in giving permission to cross land, no AP.
o    Autonomy
o    Locke- when someone extends labor with something (like land) they put something of themselves in it. (you become land). Utilitarian.
o    conflict btwn values: autonomy and efficiency
o    right to exclude or conditional right to exclude?
 
Hinman v. Pacific Air Transport, 9th Circuit, 1936. [BOR, airplane landing next door, airplanes overhead] ·         Facts – Δ’s allegedly flew above π’s land on numerous occasions and at altitudes less than 100 feet above the surface.
·         Holding – 1.   Ad Coelum, owners rights extend from center of earth to high sky, never meant to be taken literally
-Dominion concept: without possession no right in it can be maintained.
-no facts show that π’s current use of land impaired
1.       The owner of land owns as much of the space above him as he uses, but only so long as he uses it.
2.       Damages awarded if close proximity of airplanes impairs π’s full use and enjoyment of his land. 
·         Crt undertook cost benefit analysis. Owner not using land, airline company benefiting society. 
·         Four possible ways to justify:
o    Action for trespass available to people who are in possession of land and using it, dominion.
o    Action for trespass only if the flights cause actual harm to the surface owner, his use of the land.
o    Airplane over flights are technically trespasses but the surface owner isn’t entitled to any damages because he obtains “implicit in kind compensation” from being able to take advantage of the benefits airplane travel has to offer
o    Reclassify airspace as public property – eventually embraced by S. Ct.
 
1.                   Two Theories of Property
·         Penner – “right to exclude” (i.e. Jacque) property is what you have the right to exclude others from. values owner autonomy.
·         Grey – “bundle of rights” (i.e. Hinman) rights, liberties, privileged invested in owner. Exact content of bundle varies from one property owner to another, determined when we have to. Closest value-property relativism.
·         Both incomplete
                        BOR doesn’t say what property is until you get to a case.
                        RTE doesn’t say why right to exclude is property.
·         Both normatively vacuous.
                        What are some values BOR or RTE are trying to promote?
                        Institutional values, natural law, utilitarian social norms, people’s personality, autonomy. 
 
2.                      Two Kinds of Rights
·         In rem – against a large and indefinite class; everyone has duty not to trespass certain land
·         In personam – rights against a small and defined class; usually a contract
B.                  The Trespass / Nuisance Divide
Trespass is an on/off (RTE). no balancing.
Nuisance cause of action requires balancing (BOR)
 
Hendricks v. Stalnaker, S. Ct. of Appeals of WV, 1989. [well and septic tank, no nuisance, balancing utilitarian use of land] ·         Facts – Δ owns land that already had one water-well and π owns adjacent land, which needed a septic system but the only possible location was near Δ’s land. While π was waiting for a permit, Δ also got permit and installed a water-well in the only other possible location, near π’s land. Π’s application was denied because proposed septic

       Facts – Δ built a factory and a wall which ever so slightly happened to overstep bounds onto π’s property (by about 1 ½ inches). Π had called upon district surveyor to locate boundary but had evidentially made a mistake. Π sought injunction
·         Holding – injunction is granted and court orders that Δ should remove offending part
 
Golden Press, Inc. v. Rylands, Colorado, 1951, page 51. [no removal, balancing effort, closer to BOR] ·         Facts – π owned a parcel of land with Δ constructing building on adjoining property. Part of the wall of Δ extended from two to three and a half inches on π’s land and π sought injunction
·         Holding – encroachment was in good faith and so court should weigh circumstances (balancing the equities). Because damages are slight and cost to remove is high, it would be unconscionable to require removal and so injunction is denied
4. Ex Ante vs. Ex Post
Often times, there will be a difference in outcome depending on ex ante or ex post analysis. The direction in which you view a dispute affects which rule can be more effective (i.e. liability rules more effective in an ex post situation such as a building encroacher).
D. Restitution
Contract law consists of bargained for benefits and harms. Tort law consists of non-bargained for harms. Restitution, often covered by property law, consists of non-bargained for benefits. The basic elements of restitution are:
·         An enrichment of the Δ
·         At the expense of the π
·         Under circumstances that are “unjust”
 
Producers Lumber v. Olney Building Co., Court of Appeals of TX, 1960, pg. 68. [tore down his home on other’s land, equity balance RTE of land owner and home owner. Equity, clean hands] ·         Facts – Δ built home on π land accidently, Δ and π tried to negotiate, but couldn’t come to settlement. Δ broke off the negotiations and demolished the house.
·         Holding – When Δ demolished the dwelling without knowledge or consent, he committed waste and must pay cost of dwelling. Δ can’t recover for ordinary restitution damages because he resorted to self-help and took the law into his own hands. Unclean hands.
·         If Δ hadn’t demolished the building, under restitution law, Δ would probably have been able to recover because all the elements are met.   When something like that happens, there are different options:
o    If you can remove improvement without harm, then do it
o    If you can’t, then the improvement value is paid to improver (owner can pay for improvements or improver can pay for unimproved land value)
o    If that doesn’t work, court can order that land be partitioned and sold with the profits divided.
·         Good faith improver has entitlement (under common law) not clear that it’s a property RTE or BOR.
Equity-look to balance conflicting RTE of both π and Δ.