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Property I
University of Pennsylvania School of Law
Balganesh, Shyamkrishna

I: What is Property?
Two views of Property:
1. Right to exclude: (Essentialists) A right to exclude everyone
else from a certain resource
2. Bundle of rights: (Skeptics) property as consisting of a
bundle of rights, liberties, privileges, immunities, that are
vested in an owner. Content varies from one circumstance to
another
Property Rights:
1.     Rights in Rem: A right to a thing enforceable against all the world
2.     Rights in Personam: right binding only to specific others
 
Penner: property rights (exclusion) grounded in right we have in the use
of things
Grey: Impossible to see one def. of property- property defined according
To context and the resource. Property no independent normative defin.
Until you have a resource (bundle of rights)
Bi-Lateral Situation: When decide a dispute, often assume property
right pre-existed, but in reality may arise at the time of the disputed
situation
 
 
                      Cases: What is Property:
 
Hinman v. Pacific Air Transport
Jacque v. Steenberg Homes
 
1000ft airplane fly over (Bundle of Rights)
Mobile Home Delivery (Right to Exclude)
Facts:
D’s commercial airplanes fly less than 100 feet over P’s
property but cause no physical harm to the property. P
sues for damages and injunctive relief.
D wanted to trespass on P’s land to deliver a mobile home b/c the
easiest route was blocked by snow/curve. D asked permission
from P several times which was denied (P had negative previous
experience with adverse possession). D goes ahead despite
protest. No damage to land, so no compensatory damages.
Issue:
1. Is the ad coelum doctrine (whoever owns the soil
owns also the sky and to the depths) the law?
2. Are the appellants entitled to injunctive relief?
Can there be an action for punitive damages for trespass when
there are no compensatory damages?
Rules:
Ad Coelum is a legal fiction. For injunctive relief for
trespass, must be about disputed land that you have asserted
dominion over. Court grants injunction when harms use and
possession of land. 
 
Courts can engaged in cost/benefit analysis for restriction on
Property rights – look at practical consequences. Raises
Transaction costs (Coase). Here: cost of limiting airflight completely b/c of need to negotiate with millions of landowners if apply
 ad Coelum.
 
Loss of right to exclude is actual harm, and punitive
damages can be assessed. Nominal damages may support a
punitive damage award in a trespass. Defer to the owner’s
autonomy interest.
 
Notes:
Diff. from Jacque where law told us not to look at owner’s
Purposes. Jacque was on/off button for trespass – Hinman
Says can look at context
Injunctive Relief: An order from a court asking a party
to do or refrain from doing a certain action. 
Dominion: Must be in possession before can claim trespass
 
Hypo: a lightning tower built on land? What if near airport?
Jim Harris “Minimal Irreducibility of Ownership” –
Defer to autonomy interest of the owner. 
Want to avoid people taking justice into their own hands to
enforce.
 
Hypos: What if there was an emergency and an ambulance
needed to get over the land? Once start admitting that context
matters it becomes a slippery slope for right to exclude.
 
 
 
                                             The Trespass/Nuisance Divide:                                                           COASE:
 
Nuisance: A tort law doctrine
Private Nuisance: a substantial interference with private
use and enjoyment of another’s land that is
1. intentional (actual or constructive knowledge that would
cause harm) 2. Unreasonable
Unreasonableness test: individualized cost/benefit test –
Look at social value of the activity
NOTE: temporal priority is not significant
 
Examples: other possible theories of nuisance 1. Temporal
Priority 2. Physical invasion 3. Neighborliness
 
Diff. btwn Nuisance and Trespass: Trespass is about
Possession / nuisance is about right to use and enjoy
Coase:
Transaction Costs: Costs of actually negotiating a contract
Entitlement: Who wins / had right vested in them all else
being equal
 
Theory: In a world of zero transaction costs, parties will bargain
And will come to a mutually beneficial outcome (wealth-maxim-
izing. Goal is to lower transaction costs. Initial placement of
entitlement makes a difference when there are high transaction
costs for how contract is negotiated. When no transaction costs,
initial entitlement does not matter. Limitation: information
asymmetries
 
Externalities: A cost or benefit that accrues to parties not a part
of transaction. Pigu: Want externalities (ie. Pollution to be felt
by industry) Taxes (gov’t regulation) so price reflects cost
in the market. Coase disagrees: wants market to take care of this.
 
If not clear who is harming the other – causation is
Reciprocal—- get around by minimiz.
transaction costs so parties can find their own solution. 
Cases: Trespass/Nuisance
 
 
Hendricks v. Stalnaker
 
Baker v. Howard County Hunt
 
Well v. Septic Tank (Reasonableness of Harm)
Rabbit farm/ fox hunt — Equitable relief for trespass
Facts:
D built a well near P’s property. P is barred from placing
Septic tank near within 100ft of P’s well (forbidden for
Health reasons) and there is no other place to build it. Sues
for private nuisance.
 
 
P owns a farm where they experiment on rabbits in foxhunting
Country. D is an association of fox hunters whose hounds
repeatedly trespass and cause P bodily injury, hurts rabbits. 
Issue:
Whether the interference, the installation of the water well
was unreasonable. (Factors 1. Intentional 2. Unreasonable)
Can P gain equity and not damages for a trespass that is not continuous?
Rules:
Balancing test: An interference with use and enjoyment is
unreasonable when the gravity of the harm outweighs the
social value of the activity alleged to the cause the harm. 
Here, D’s well was not an unreasonable use of the land so
no private nuisance
Factors to look at when considering if damages is enough?
1. Quantifiability (Is it difficult to measure the actual damage-ie.
Scientific experiments)
2. Numerosity: If damages is the relief, may have to go to court
multiple times for each trespass
3. (Extra factor added by me) Damages may not be enough to
deter future trespass when D is wealthy.
 
 
The court did not really apply balancing test here, but if
Had balanced would look at the benefits of clean water vs.
a septic tank. Also, did not use temporal priority. 
 
Variables: type of dog and likelihood of repeated trespass.
 
Singe occurrence is not necessary- can connect multiple trespasses
to gain injunctive relief
 
Case creates important distinction between law and equity.
 
 
Property/Equity
Equity cts offer injunctive relief and judges decide.
Traditional 4-part (contextual) test for injunctions (eBay v. MercExchange): 1) irreparable harm 2) remedies at law inadequate 3) balance of the hardships 4) public interest.
Ex Ante= analysis before a critical event
·         Ex post tends to focus on fairness and distributional concerns, whereas ex ante more likely to take into account incentives for future conduct
Ex Post= analysis after critical event
Courts drawn to ex post, as

quity, in that principles that form body of law derive from decisions invoking precepts of equity, esp. that of “unjust enrichment”
 
Question: When does restitution apply?
4)       Contract law – bargained-for benefits/harms
5)       Tort law – non-bargained-for harms
1)       Restitution – non-bargained-for benefits
(See Producer’s Lumber case above)
 
II. Original Acquisition
First Possession
·         Possession confers notice.
·         Notice should be clear to encourage bargaining and ward off non-owners
·         Notice is good b/c:
o    Spreads intent to own
o    Avoids disputes
o    People have warning of your intent to exclude
o    Others know who to bargain with
o    Protects investments – once there’s notice, others won’t waste $ to own it for themselves.
How should cts define possession? universal v. contextual rules
Universal principles: looking throughout the ages to determine elements of possession.
Contextual rules: making up our own rule. Talk to other fox hunters, applicable to other areas of possession, more efficient.
Fairness concern: spotting v. wounding.
Wounding gives more notice and shows more effort; anyone can spot it (“I call it”)
 
Cases: First Possession/Wild Animals
 
Pierson v. Post
Ghen v. Rich
Keeble v. Hickeringill
 
Foxes | deprivation of liberty
Whales | custom
Duck pond | nuisance
Facts
Δ hunts fox w/hounds on public land and Π intervenes to catch the fox instead even though he saw Δ on the verge of capturing the fox.
Π lanced a whale, which washed ashore days later, and ∆ took the whale for himself.
P owns a decoy pond on his own land and D scares away ducks by firing his gun in the neighboring land w/o actually trespassing.
·         D’s motive – trying to destroy his competition
Rule
Rule of first possession is that there must be deprivation of liberty in wild animals (ie. Mortal wounding).
 
Fox considered up for grabs as is classified as “ferae naturae”
 
·         The gen’l rule of custom is harpooning the whale = ownership. “Iron holds the whale.”
·         Custom developed b/c whales take several days to wash ashore.
·         Customs can supplant normal possession rules when fair, efficient, developed over time, doesn’t conflict w/the law, universal and isolated to a small group of people àCt decides this by undertaking a reasonableness test and concluding custom is reasonable here
Falls in nuisance not trespass
·         Cant quantify damage, so cant bring trespass charges bc don’t know what he lost
·         P brings action for injury done in the use and enjoyment of land
HINDNRINCE PRINC: This is P’s tradeà he that hinders another in his trade or livelihood is liable to an action for so hindering him
“Where a violent or malicious act is done to a man’s occupation or livelihood, there action lies in all cases”
·         If D had simply set up another decoy to divert ducks from P, that wouldve been lawful