Acquisition of Property by Discovery, Capture and Creation
Acquisition by Discovery
Johnson v. Mc’intosh
i. Discovery
1. Acquisition of land by sighting or finding uncharted territory
ii. Conquest
1. Acquisition of land through force
iii. Ultimate Title
1. Right to sell and extinguish lower titles.
iv. Right of Occupancy
1. Grants
a. Possession
b. Protection
c. Convey use rights
v. John Locke and Labor Theory
1. Every man has a right to labor from his hands.
2. Accession
a. When one person adds value to property of another
Acquisition by Capture
Occupancy Theory and Principle of First in Time
i. Pierson v. Post
1. Occupancy theory over wild animals being hunted only takes effect when wild animal is severely injured or captured.
2. If a hunter sees another hunting an animal, he may hunt the same.
ii. Ghen v. Rich
1. Establishes “customs” and “norms” as common law
iii. Keeble v. Hickeringill
1. The theory of malicious interference with trade – can’t come on someone’s land and scare off animals if that person uses animal to provide for their livelihood.
a. Policy goal is to reward increased competition
Constructive Possession (Ratione Soli)
i. Animals (fera naturae)
1. A landowner has constructive possession to animals on their land in an attempt to stop trespassing
2. Wild Animal Rule of Capture
a. When a wild animal escapes and is restored to their natural wild and free state, the last owner loses dominion and control over the animal.
ii. Oil and Gas
1. Law used to be same for minerals as for animals – they belong to the owner of the land so long as they are on it and are subject to the owner’s control. But, when they escape and go onto another’s land or come under another’s control the title of the former owner is gone.
Demsetz Essay
i. Why does private property develop
1. Transaction costs associated with communal property become too great (for example, costs of negotiating or costs of establishing a group to discuss externalitites)
ii. Externalities
1. Costs not taken into account because they fall outside the realm of the decision maker, usually because they don’t cost the decision maker (e.g. If me running water saves me $50 and costs Bill $100, the externality is the $25 extra I could be getting from Bill to not run the water)
iii. Private property results when a community realizes the inherent costs of communal property
1. Overconsumption
2. With externalities the group is always going to act contradictory to the group’s best effort.
iv. Utilitarian Theory of Property
1. Primary function of property rights is to promote the efficient use of resources
v. Alienability
1. Liberates people of one form of dependency (feudal hierarchy) it forces them into another (dependency on the market).
Acquisition by Creation
Property in One’s Ideas and Expressions: Intellectual Property
i. Any expenditure of mental or physical effort as a result of which there is created something, that thing belongs to the person who created it
1. Similar to Locke’s Labor Theory
ii. Policy
1. If a person sinks, time, energy and money into creating a product they should reap the benefits.
2. Promote people to being creative and to have incentive to create innovative and valuable products.
iii. Argument against property rights in creation (patents/copyrights)
1. Goes against best interest of the public because allowing others to copy creations allows for lower prices and evens out supply and demands
2. Limits monopolies
3. Public will get better products at cheaper prices
4. Creators will still have advantages of getting in first
a. Path dependency
b. First in time in the market
c. People want to buy an original
Property in One’s Person
i. Use of bodily parts is not conversion (Moore v. Regents)
1. Policy to keep law as is
a. Creates efficiency in public use because cells are valuable
b. No interference with property rights
c. Because the cells are valuable, they should be common property
d. Also hospital sunk time, effort and money into the development of the cells and it is the responsibility to promote incentives for inventive actions like those taken here
2. Policy against law
a. Individualizing the cells is better use for efficiency because private property promotes greater efficiency than communal property (no transaction costs, less overconsumption, internalizes externalities)
b. Bundle of Rights
i. Right to possess property
ii. Right to use property
iii. Right to exclude property
iv. Right to dispose of that property
c. Alienability of cells – allows for free market – promotes greater efficiency
Right to Include/Exclude
i. Property owner has the right to include and exclude others from using that property
1. When owners grant rights to access of their property they are not unconditionally free to revoke such access.
Subsequent Possession: Acquisition of Property by Find, Adverse Possession and Gift
Acquisition by Find
The title of the finder is good against the whole world but the true owner or prior possessors
i. Policy Reasons
1. Promote peaceful order – stop endless seizures
2. Gives owner a better chance to recoup the property
3. Reward a finder to acquire good title by making a concerted effort to try and locate real finder
Trover
i. Action for money damages from the defendant’s conversion of a chattel that belongs to plaintiff
Replevin
i. A lawsuit where judgment is given in the form of the possession
Hannah v. Peel Rule
i. A person who owns real property owns all things attached and/or under that property
1. However, if an owner has no idea it is there and it is not attached to the property than it is essentially still “lost” and whoever “finds” it has good title against the world
with color of title statute of limitations will be shortened.
ii. Constructive Possession
1. If a person has color of title but is only occupying part of the land that their color of title portrays, often they will be given the entire land when the statute of limitations runs under constructive possession rule.
Doctrine of Agreed Boundaries
i. Generally agreed boundaries by neighbors creates reliance which can lead to adverse possession
Common Boundary Cases (REVIEW BOUNDARY DISPUTE IN GILBERT PAGE 31)
i. When minor encroachments occur along a common boundary often a court will award a cost that can be paid from the trespasser to the occupant if it is clear that the owner did not know of the encroachment
Constructive Knowledge
i. The law may impute knowledge on the true owner that he should have been aware of the adverse possessor (constructive knowledge is all that is needed for regular adverse possession cases)
Actual Knowledge
i. For boundary cases the owner needs to have actual knowledge of the encroachment otherwise there is no open and notorious act to alert the owners.
Note:
i. If adverse possessor enters land when a fee simple owner is in possession of land than the SOL clock begins to run because title is forever, however
ii. If adverse possessor enters land on a life estate during that life estates possession of land than the adverse possessor is establishing a claim against that title, so if the life estate tenant dies than the title reverts to the fee simple owner and adverse possessor must begin possession again.
Adverse Possession of Chattels
i. The Discovery Rule
1. A cause of action will not accrue until the injured party discovers, or by reasonable diligence should have discovered, facts which form the basis of a cause of action (statute of limitations will not begin to run until discovery of location or who is in possession of chattel -> if stolen).
2. Forces test on owner rather than possessor
a. Has the owner acted with due diligence in pursuing his personal property?
i. If so, then acquires possession when discovers location
3. Should be applied over adverse possession because difficult questions of whether open and notorious, etc… Puts onus on the owner.
ii. Tacking is permitted in an adverse possession case
